Rapid7 beats Q2 estimates, raises outlook and cuts 12% of staff

Rapid7 Inc. shares rose more than 8% in late trading after the cybersecurity company beat second-quarter estimates and raised its full-year profit outlook, while also announcing plans to cut about 12% of its workforce.

The company reported adjusted earnings of 44 cents per share on revenue of $210.9 million, down 1.5% year over year. Analysts had expected 35 cents per share on revenue of $208 million.

Rapid7’s board approved the job cuts on Aug. 7, with severance costs estimated at $10 million to $11 million, mostly to be paid by year-end. The company, which had 2,613 employees at the end of December, expects to eliminate roughly 310 positions, though some international cuts may extend beyond the fourth quarter due to local consultation rules.

CEO Wael Mohamed, who took the helm on June 1, said customers are asking for deeper detection and response capabilities and a focus on exposure management. Annualized recurring revenue fell 2% to $824 million.

The company guided third-quarter revenue below expectations at $208 million to $210 million, and narrowed full-year revenue guidance to $837 million to $841 million. Adjusted earnings per share guidance was raised to $1.78 to $1.83, up from a previous top of $1.60.