How Rapid7's FY 2025 Numbers Set the Stage for the Next Chapter

Rapid7 (RPD) has wrapped up FY 2025 with fourth quarter revenue of US$217.4 million and basic EPS of US$0.05, alongside net income of US$3.1 million, putting fresh numbers on the table for investors watching its shift in profitability. Over the past six quarters, revenue has moved within a tight band from US$210.3 million to US$217.9 million, while quarterly basic EPS has ranged from a loss of US$0.02 to a profit of US$0.24. This gives a clearer view of how earnings are tracking against fairly steady sales. With trailing 12 month net profit margin sitting in the low single digits and edging down from the prior year, this result sets up a debate about how much earnings power Rapid7 can squeeze from its current revenue base.

See our full analysis for Rapid7.

With the latest figures on the table, the next step is to see how these results line up with the widely followed narratives around Rapid7's growth potential, risk profile, and long term earnings power, and where those stories might need updating.

Tighter Margins With 2.7% Net Profit

• On a trailing 12 month view, Rapid7 generated US$859.8 million of revenue and US$23.4 million of net income, which works out to a 2.7% net profit margin compared with 3.0% a year earlier.
• Consensus narrative expects AI driven automation and higher value platform deals to help margins over time. However, the current 2.7% margin and quarterly EPS moving between US$0.03 and US$0.24 over the past six quarters show that earnings are still sensitive to costs and deal timing rather than clearly tracking the margin lift that bulls are looking for.
  • For example, FY 2025 quarterly EPS ranged from US$0.03 in Q1 to about US$0.15 in Q3 even though revenue stayed in a narrow US$210.3 million to US$218.0 million band.
  • This pattern fits the consensus concern that longer sales cycles and ongoing platform investment can make profitability progress look uneven even when the product story is improving.

Revenue Steady, Earnings Growth Mixed

• Over the last six reported quarters, revenue sat in a tight range around the current US$859.8 million trailing 12 month level, while trailing EPS of US$0.36 compares with US$0.64 a year earlier and the most recent four quarters of net income total US$23.4 million versus US$39.8 million in the earlier period.
• Bulls argue that larger AI driven platform deals can support earnings growth even if revenue grows slowly. The drop from US$39.8 million to US$23.4 million of trailing net income and the dip in margin from 3.0% to 2.7% show that translating those bigger deals into consistent profit is still a work in progress.
  • Trailing 12 month revenue moved from US$833.0 million to US$859.8 million, yet trailing EPS went from US$0.64 to US$0.36, which does not yet line up with the bullish view of stronger earnings leverage.
  • That tension is exactly what bulls need to watch, because their story depends on larger contracts eventually showing up as higher, not lower, earnings per share.

Have a look at how bullish analysts are framing these same numbers in their full narrative and see where you agree or disagree. 🐂 Rapid7 Bull Case

Low P/E And DCF Gap Stand Out

• Rapid7 is trading at a P/E of 20.7x compared with a US Software industry average of 28.7x, and a DCF fair value of about US$19.83 sits well above the current share price of US$7.38.
• Bears focus on softer recent earnings and thin margins. Yet the combination of a 20.7x P/E, 2.7% trailing margin, and a DCF fair value that is materially higher than the market price means their caution on competition and revenue pressure has to be weighed against a valuation setup that already prices in a fair amount of that risk.
  • The trailing 12 month net income of US$23.4 million and revenue of US$859.8 million are what feed into that 2.7% margin, which is modest but still positive as the business invests in R&D and sales.
  • At the same time, the gap between US$7.38 and the DCF fair value of roughly US$19.83 gives you a clear reference point for how much weakness the current price appears to be factoring in.

Skeptics point to competition and cash flow risks, but you can see how far that caution goes by reading the bear case in full. 🐻 Rapid7 Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Rapid7 on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

See the numbers your own way, then turn that view into a full story in just a few minutes with your personalized narrative builder: Do it your way

A great starting point for your Rapid7 research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Explore Alternatives

Rapid7's tight revenue band, thinner 2.7% net margin, and softer trailing EPS of US$0.36 versus US$0.64 highlight uneven earnings strength and limited cushion for setbacks.

If that kind of earnings and margin volatility makes you cautious, take a look at our 85 resilient stocks with low risk scores to quickly focus on companies with more resilient profiles.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.