The EPS beat is entirely non-operational (cost cutting, restructuring), while the core business is shrinking (ARR -2%, revenue -1.5%). The 12% workforce reduction confirms the revenue headwinds are structural, not temporary. Watch for execution risk on the restructuring and whether the new CEO's focus on depth over breadth yields any ARR re-acceleration in H2 2026. Short-term, the sliding guidance and declining ARR should pressure the stock despite the EPS beat.
Price Chart
Executive Summary
Rapid7 reported Q2 2026 revenue of $210.9M (-1.5% YoY), missing the $208.2M consensus by 1.3%. Non-GAAP EPS of $0.44 beat the $0.35 consensus by 25.7%, but the beat was driven by cost cuts and share buybacks, not operational strength. The company also announced a restructuring plan cutting 12% of the workforce with $10-11M in charges, signaling management's recognition of persistent topline challenges. Combined with ARR declining 2% YoY to $824M and full-year revenue guidance of $837-841M (below prior $836-842M midpoint), the report paints a picture of a shrinking business aggressively managing costs.
Key Financial Metrics
Key Facts
- Q2 2026 revenue $210.9M, down 1.5% YoY, vs $208.2M consensus (in-line on revenue)
- Non-GAAP EPS $0.44 vs $0.35 consensus (beat by 25.7%) — heavily cost-driven
- ARR declined 2% YoY to $824M, continuing Q1's decline trajectory
- Restructuring: ~12% workforce reduction, $10-11M total charges, mostly in H2 2026
- Q3 2026 revenue guidance $208-210M (down 4-5% YoY), below Q2 actual and consensus
- Full-year 2026 revenue guidance $837-841M, slightly narrowed from $836-842M (midpoint unchanged)
- GAAP operating income improved to $3.0M from $3.5M YoY, but GAAP net income fell to $6.1M from $8.3M
- Free cash flow $31.9M, down 24.5% YoY from $42.3M
- Cash and investments $702.6M, up from $670M at Q1 end
- New CEO Wael Mohamed acknowledged need for 'clear choices, strong execution'
Financial Impact
Revenue decline of 1.5% YoY, guided Q3 decline of 4-5% YoY, ARR down 2% YoY, free cash flow down 24.5% YoY; $10-11M non-cash restructuring charges
Risk Factors
- Restructuring execution risk: failure to achieve planned cost savings or revenue disruption from headcount cuts
- Further ARR deceleration: guided Q3 ARR ~$812M (-3% YoY) vs Q2's -2% — trend worsening
- Convertible note maturity: $598.2M current portion on balance sheet, potentially requiring refinancing or cash deployment
- Competitive pressure from CrowdStrike, SentinelOne, and Palo Alto Networks in core MDR/exposure management markets
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 5 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001560327-26-000043 |
| Document: 0001560327-26-000043-index-headers.html | 0001560327-26-000043 |
| Document: 0001560327-26-000043-index.html | 0001560327-26-000043 |
| Document: 0001560327-26-000043.txt | 0001560327-26-000043 |
| 8-K Data (Synthetic) | 0001560327-26-000043 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Sep 4, 2026 7w ago | 144 | $11.00 $12.36 | ▲ +12.36% | ▲ +11.76% | $17.53 (+59.36%) |
Aug 31, 2026 8w ago | 8-K | $12.01 $12.22 | ▲ +1.75% | ▲ +1.43% | $17.53 (+45.96%) |
Aug 10, 2026 11w ago | 8-K | $13.38 $10.56 | ▲ +21.08% | ▲ +20.02% | $17.53 (−31.02%) |
Aug 10, 2026 11w ago | Press Release | $13.38 $10.56 | ▲ +21.08% | ▲ +20.02% | $17.53 (−31.02%) |
Jul 14, 2026 14w ago | Press Release | $12.25 $12.27 | ▲ +0.16% | ▼ −2.18% | $17.53 (+43.10%) |
Jun 1, 2026 21w ago | DEFA14A | $8.74 $8.10 | ▼ −7.32% | ▼ −6.02% | $17.53 (+100.57%) |
Jun 1, 2026 21w ago | 8-K | $8.74 $8.10 | ▼ −7.32% | ▼ −6.02% | $17.53 (+100.57%) |
Mar 30, 2026 30w ago | DEFA14A | $5.51 $5.76 | ▲ +4.54% | ▼ −4.89% | $17.53 (+218.15%) |
Mar 26, 2026 30w ago | Press Release | $5.27 $5.98 | ▲ +13.47% | ▲ +0.73% | $17.53 (+232.64%) |
Mar 26, 2026 30w ago | Press Release | $5.27 $5.98 | ▲ +13.47% | ▲ +0.73% | $17.53 (+232.64%) |
US Market Status
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