Rapid7 (R7D) Q3 2026 Earnings Report

The call conveyed cautious optimism. Rapid7 exceeded Q3 guidance, improved operating discipline, generated strong cash flow, expanded the mix of core ARR, and reported progress in customer retention, sales productivity, AI investments, and Autonomous SOC development. However, total ARR and revenue continued to decline, exposure management and detection and response growth remain below desired levels, non-core runoff is expected to continue, and gross margins are expected to moderate as AWS and AI charges ramp. Management characterized the quarter as increased stability and execution rather than a return to growth.

Rapid7 expects fourth-quarter ARR of approximately $812 million, with combined core platform solutions ARR approximately flat quarter on quarter and expected continued sequential ARR decline from non-core offerings; fourth-quarter revenue is expected in the range of $208 million-$210 million, a year-on-year decline of approximately 4% at the midpoint, and full-year 2026 revenue is expected at $841 million-$843 million, a decline of approximately 2% at the midpoint. Fourth-quarter non-GAAP operating income is expected in a range of $40 million-$42 million, bringing full-year 2026 non-GAAP operating income to $140 million-$142 million, an increase of approximately 4% at the midpoint, or a full year non-GAAP operating margin of 17% at the midpoint; fourth-quarter non-GAAP earnings per share are expected in the range of $0.53-$0.55 per share on approximately 82.1 million fully diluted shares. The company continues to expect free cash flow of approximately $130 million for the full year, total restructuring charges of approximately $11 million, and to exit 2026 at approximately 20% non-GAAP operating margin; gross margins are expected to moderate in Q4 and beyond as AWS and AI charges ramp, and the first generally available Autonomous SOC release is targeted around RSAC 2027.