Cloud Stocks: Rapid7 Targets $1B ARR By 2025

Rapid7 (NASDAQ: RPD), a leading provider of security analytics and automation, recently announced its long-term plans. The company is targeting an annual revenue run rate of more than $1 billion by 2025. It is looking to acquisitions and partnerships to help drive this significant growth.

Rapid7’s Financials

Rapid7’s revenues for the fourth quarter grew 23.5% to $113.16 million, ahead of the market’s expectations of $108.79 million. Non-GAAP net loss was $3.7 million or $0.07 per share compared with the Street’s forecast of a loss of $0.08 per share. Total ARR grew 28% to $432.9 million.

By segment, revenues from products grew 25.8% to $104.4 million and professional services revenues grew 1.4% to $8.8 million.

By region, revenues from North America grew 23% to $93.8 million and the Rest of the World revenues grew 26% to $19.4 million.

For the full year, revenues grew 26% to $411.5 million and loss was $0.10 per share.

For the first quarter, Rapid7 forecast revenues of $113.2-$114.8 million with a loss of $0.08-$0.06 per share. The Street was looking for revenues of $111.82 million and a loss of $0.04 per share. Rapid7 expects to end the current year with revenues of $488-$496 million and earnings of $(0.03) to $0.04 per share. The market had forecast revenues of $482.87 million with earnings of $0.15 per share.

Rapid7’s Acquisition

During the quarter, Rapid7 announced the acquisition of Tel Aviv-based Alcide for an undisclosed amount. Prior to the acquisition, Alcide had raised $12.3 million in four rounds of funding from investors Elron Electronic Industries, Intel Capital, and CE Ventures (CEIIF). Founded in 2016 by Gadi Naor and Ranny Nachmias, Alcide is a Kubernetes network security leader that empowers DevOps and security teams to protect and secure their Kubernetes deployments.

The acquisition will allow Rapid7 to expand and strengthen its cloud security offering. It plans to combine Alcide’s cloud workload protection capabilities with Rapid7’s cloud security posture management and infrastructure entitlements capabilities to provide customers with a unified and holistic experience for controlling the challenges with cloud-native application security.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations and risk appetite. This article expresses my own opinions based on my own ...

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