Rapid7 Reports Q1 2026 Results with Revenue Decline and Negative Guidance; $597M Convertible Notes Reclassified to Current Liabilities
RPD sits 33% above its 52-week low of $4.97.
Summary
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.
Key Events · Earnings and Guidance · RPD
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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).
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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.
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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.
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Strong Free Cash Flow
Despite revenue declines, Rapid7 generated $33.4 million in free cash flow during Q1 2026, exceeding guidance expectations.
Analysis · RPD · Technology
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.
At the time of this filing, RPD was trading at $6.61 on NASDAQ in the Technology sector, with a market capitalization of approximately $446M. The 52-week trading range was $4.97 to $27.10. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.