Rapid7 delivered Q2 results that received a positive market reaction, with management attributing performance to disciplined focus on core security offerings and operational changes. CEO Wael Mohamed emphasized that the company’s efforts to streamline the portfolio and align resources behind detection and response, as well as exposure management, supported margin improvement. He noted, “We are not shrinking our way to the future. We are reshaping the company so we can invest more behind the parts of the business that will define it.” The quarter also reflected the ongoing impact from non-core product declines, an issue management is actively addressing through restructuring and reinvestment.
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Rapid7 (RPD) Q2 CY2026 Highlights:
- Revenue: $210.9 million vs analyst estimates of $208 million (1.5% year-on-year decline, 1.4% beat)
- Adjusted EPS: $0.44 vs analyst estimates of $0.35 (26.3% beat)
- Adjusted EBITDA: $35.85 million vs analyst estimates of $31.93 million (17% margin, 12.3% beat)
- The company reconfirmed its revenue guidance for the full year of $839 million at the midpoint
- Management raised its full-year Adjusted EPS guidance to $1.81 at the midpoint, a 15.7% increase
- Operating Margin: 1.4%, in line with the same quarter last year
- Customers: 11,500
- Annual Recurring Revenue: $824 million vs analyst estimates of $820 million (2% year-on-year decline, in line)
- Billings: $202.6 million at quarter end, down 5.6% year on year
- Market Capitalization: $876.2 million
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Rapid7’s Q2 Earnings Call
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Rob Owens (Piper Sandler) asked whether Rapid7’s exposure management platform lacked coverage or specific features, and CEO Wael Mohamed explained that the company had previously spread resources too thin but is now focusing on core enhancements and targeted investments to increase its win rate in this segment.
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Jonathan Ho (William Blair) questioned how Rapid7 balances operating leverage with growth reacceleration, especially after restructuring. Mohamed outlined a phased approach: generating cash, exiting non-core businesses, stabilizing the core, and eventually returning to growth, emphasizing that the turnaround will require multiple quarters.
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Fatima Boolani (Citi) probed the fate of the non-core product portfolio and whether deprecation or customer migration was the goal. Mohamed clarified that Rapid7 will focus on markets where it has a clear leadership position, selectively maintaining some non-core technologies as platform services but moving away from competing directly with pure-play vendors.
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Brian Essex (JPMorgan) asked about pipeline trends and the outlook for core business conversion rates. Mohamed and CFO Rafeal Edgar Brown noted that customer engagement remains high, but buyers are evaluating vendors carefully, making win rates and sales execution under the new leadership team critical for future momentum.
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Adam Tindle (Raymond James) sought quantification of restructuring impacts and the rationale for reinvestments. Brown detailed that cost savings from workforce reductions will be back-end loaded, with most severance costs incurred in the second half of the year, and reiterated that free cash flow guidance incorporates these timing effects.
Catalysts in Upcoming Quarters
In upcoming quarters, our analysts will track (1) the pace and effectiveness of customer migration from non-core to core solutions, (2) progress in deploying AI-driven features and the realization of product modernization goals, and (3) improvements in operating margin and overall cash generation following restructuring. Continued updates on win rates in core categories and integration of new leadership priorities will also be key signals of execution.
Rapid7 currently trades at $12.87, up from $11.61 just before the earnings. Is there an opportunity in the stock? See for yourself in our full research report (it’s free).
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