Rapid7 Reports Q1 2026 Results with Revenue Decline and Negative Guidance; $597M Convertible Notes Reclassified to Current Liabilities

summarizeSummary

Rapid7 reported Q1 2026 results with declining revenue and ARR, issued negative revenue guidance, and reclassified $597.6 million in convertible notes to current liabilities, indicating significant near-term debt obligations.

check_boxKey Events

• Q1 2026 Financial Performance

  Total revenue decreased 0.3% year-over-year to $210 million, and annualized recurring revenue (ARR) declined 0.6% year-over-year to $832 million. GAAP net income was $1.1 million ($0.02 per diluted share).

• Negative Revenue Guidance Issued

  The company provided Q2 2026 revenue guidance of $207 to $209 million, representing a 3% to 2% year-over-year decline. Full-year 2026 revenue guidance is $836 to $842 million, also indicating a 3% to 2% year-over-year decrease.

• Significant Debt Reclassification

  $597.6 million in convertible senior notes were reclassified from non-current to current liabilities, indicating a substantial debt maturity within the next year.

• Strong Free Cash Flow

  Despite revenue declines, Rapid7 generated $33.4 million in free cash flow during Q1 2026, exceeding guidance expectations.

auto_awesomeAnalysis

Rapid7, Inc. reported a slight year-over-year decline in Q1 2026 revenue and annualized recurring revenue (ARR), alongside negative revenue growth guidance for both Q2 and the full year 2026. While the company exceeded non-GAAP guidance metrics and generated strong free cash flow, the overall financial trends indicate challenges in growth. Critically, the reclassification of $597.6 million in convertible senior notes to current liabilities signals a substantial upcoming debt maturity, which is a significant financial event given its magnitude relative to the company's market capitalization. Investors should monitor the company's ability to manage this debt and reverse the declining revenue and ARR trends.