Rapid7 Inc

Rapid7 posted a stronger-than-expected third quarter, with non-GAAP diluted EPS of $0.57 clearing the $0.46 consensus estimate by nearly 25%, even as the cybersecurity firm navigated a period of slowing top-line momentum. Revenue came in at $217.96 million, edging past estimates by 0.84% and rising 1.5% year-over-year, with product subscriptions carrying nearly all of that growth while professional services revenue fell 14% to $7.81 million. The headline earnings beat, however, obscures meaningful margin compression; non-GAAP operating income declined to $36.91 million from $43.95 million a year ago as the company absorbed higher spending in both research and development and sales and marketing. Customer count remained essentially flat at 11,618, though ARR per customer ticked up to $72,100. Looking ahead, Rapid7 guided Q4 revenue of $214 million to $216 million, implying year-over-year growth of negative 1% to flat, a cautious outlook that fits a broader narrative of a stock down roughly 66% over the past year even as analysts project meaningful earnings improvement over the longer term.