GAAP to Non-GAAP Reconciliation (Unaudited)(in thousands, except share and per share data) Three Months Ended March 31, 2025 2024GAAP gross profit$150,773 $144,107 Add: Stock-based compensation expense1 2,264 2,671 Add: Amortization of acquired intangible assets2 4,423 4,317 Non-GAAP gross profit$157,460 $151,095 Non-GAAP gross margin 74.9% 73.7% GAAP gross profit - Product subscriptions$149,567 $142,184 Add: Stock-based compensation expense 1,731 2,298 Add: Amortization of acquired intangible assets 4,423 4,317 Non-GAAP gross profit - Product subscriptions$155,721 $148,799 Non-GAAP gross margin - Product subscriptions 76.4% 75.6% GAAP gross profit - Professional services$1,206 $1,923 Add: Stock-based compensation expense 533 373 Non-GAAP gross profit - Professional services$1,739 $2,296 Non-GAAP gross margin - Professional services 27.5% 28.1% GAAP (loss) income from operations$(101) $9,716 Add: Stock-based compensation expense1 27,151 25,745 Add: Amortization of acquired intangible assets2 5,120 5,014 Add: Acquisition-related expenses3 183 — Add: Restructuring expense — (190)Non-GAAP income from operations$32,353 $40,285 GAAP net income$2,105 $1,406 Add: Stock-based compensation expense1 27,151 25,745 Add: Amortization of acquired intangible assets2 5,120 5,014 Add: Amortization of debt issuance costs 1,019 1,053 Add: Acquisition-related expenses3 183 — Add: Restructuring expense4 — (190)Add: Discrete tax items5 — 6,360 Non-GAAP net income$35,578 $39,388 Add: Interest expense of convertible senior notes6 1,571 1,571 Numerator for non-GAAP earnings per share, diluted calculation$37,149 $40,959 Weighted average shares used in GAAP earnings per share calculation, basic 63,835,945 61,907,808 Dilutive effect of convertible senior notes6 11,183,611 11,183,611 Dilutive effect of employee equity incentive plans7 388,471 930,195 Weighted average shares used in non-GAAP earnings per share calculation, diluted 75,408,027 74,021,614 Non-GAAP net income per share: Basic$0.56 $0.64 Diluted$0.49 $0.55 1 Includes stock-based compensation expense as follows: Cost of revenue$2,264 $2,671 Research and development 10,386 7,944 Sales and marketing 7,241 7,137 General and administrative 7,260 7,993 2 Includes amortization of acquired intangible assets as follows: Cost of revenue$4,423 $4,317 Sales and marketing 652 652 General and administrative 45 45 3 Includes acquisition-related expenses as follows: General and administrative$183 $— 4 For the three months ended March 31, 2024 restructuring expense was included within general and administrative expense in our consolidated statements of operations. 5 Includes discrete tax items as follows:Provision for income taxes$— $6,360 6 We use the if-converted method to compute diluted earnings per share with respect to our convertible senior notes.
Consolidated Statements of Cash Flows (Unaudited)(in thousands) Three Months Ended March 31, 2025 2024Cash flows from operating activities: Net income$2,105 $1,406 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 11,665 11,348 Amortization of debt issuance costs 1,019 1,053 Stock-based compensation expense 27,151 25,745 Deferred income taxes — 1,840 Other (1,153) (203)Changes in assets and liabilities: Accounts receivable 27,668 39,529 Deferred contract acquisition and fulfillment costs 5,295 (679)Prepaid expenses and other assets (1,995) (1,223)Accounts payable (6,555) (4,190)Accrued expenses (20,325) (24,890)Deferred revenue (12,874) (21,186)Other liabilities (2,244) 2,520 Net cash provided by operating activities 29,757 31,070 Cash flows from investing activities: Purchases of property and equipment (1,361) (620)Capitalization of internal-use software (3,719) (2,916)Purchases of investments (144,461) (93,158)Sales and maturities of investments 69,000 55,000 Other investing activities 1,328 — Net cash used in investing activities (79,213) (41,694)Cash flows from financing activities: Taxes paid related to net share settlement of equity awards (1,303) (1,764)Proceeds from employee stock purchase plan 4,446 5,046 Proceeds from stock option exercises 1,589 1,080 Net cash provided by financing activities 4,732 4,362 Effect of exchange rate changes on cash ,cash equivalents and restricted cash 1,334 (1,493)Net decrease in cash, cash equivalents and restricted cash (43,390) (7,755)Cash, cash equivalents and restricted cash, beginning of period$342,101 $214,130 Cash, cash equivalents and restricted cash, end of period$298,711 $206,375 Supplemental cash flow information: Cash paid for interest on convertible senior notes 1,571 2,698 Cash paid for income taxes, net of refunds 992 2,352 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents$291,462 $198,716 Restricted cash included in prepaid expenses and other current assets and other assets 7,249 7,659 Total cash, cash equivalents and restricted cash$298,711 $206,375 Note: Certain prior periods reflect immaterial corrections.
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow (Unaudited)(in thousands) Three Months Ended March 31, 2025 2024Net cash provided by operating activities$29,757 $31,070 Less: Purchases of property and equipment (1,361) (620)Less: Capitalized internal-use software costs (3,719) (2,916)Free cash flow$24,677 $27,534 Second Quarter and Full-Year 2025 GuidanceGAAP to Non-GAAP Reconciliation(in millions, except per share data) Second Quarter 2025 Full-Year 2025Reconciliation of GAAP income from operations to non-GAAP income from operations: Anticipated GAAP loss from operations$(2)to$— $(11)to$(1)Add: Anticipated stock-based compensation expense 27 to 27 116 to 116 Add: Anticipated amortization of acquired intangible assets 5 to 5 20 to 20 Anticipated non-GAAP income from operations$30 to$32 $125 to$135 Reconciliation of GAAP net income to non-GAAP net income: Anticipated GAAP net loss$(2)to$— $(9)to$1 Add: Anticipated stock-based compensation expense 27 to 27 116 to 116 Add: Anticipated amortization of acquired intangible assets 5 to 5 20 to 20 Add: Anticipated amortization of debt issuance costs 1 to 1 4 to 4 Anticipated non-GAAP net income$31 to$33 $131 to$141 Add: Anticipated interest expense on convertible senior notes 1.4 to 1.4 5.6 to 5.6 Numerator for non-GAAP earnings per share calculation$32.4 to$34.4 $136.6 to$146.6 Anticipated GAAP net (loss) income per share1$(0.03) $— $(0.14) $0.02 Anticipated non-GAAP net income per share, diluted$0.43 $0.46 $1.78 $1.91 Weighted average shares used in earnings per share calculation, diluted75.3 76.7 1 The anticipated GAAP net loss per share is calculated using basic weighted average shares for periods in which the Company anticipated a GAAP net loss.
The story "Rapid7 Announces First Quarter 2025 Financial Results" has 3388 words across 92 sentences, which will take approximately 15 - 29 minutes for the average person to read.
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