Rapid7, Inc. (Nasdaq: RPD), a cybersecurity company specializing in extended risk and threat detection, reported its financial results for the first quarter of 2025, illustrating a stable condition with slight growth. The company ended the quarter with annualized recurring revenue (ARR) of $837 million, marking a 4% increase over the previous year. However, this ARR result fell short of expectations, attributed in part to macroeconomic pressures and slower deal cycles.

Total revenue for the quarter reached $210 million, reflecting a 3% year-over-year increase. Product subscriptions revenue totaled $204 million, also up 4% compared to the same period last year. Conversely, professional services revenue declined 23% year-over-year, amounting to $6.3 million.

Operating income was reported at $32 million, exceeding the company’s guidance. The non-GAAP operating margin for the quarter stood at 15%, down from 20% in the prior year. The non-GAAP net income for the quarter was $35.6 million, or $0.49 per diluted share, compared to $39.4 million, or $0.55 per diluted share in the same quarter last year.

Operating cash flow was $30 million, leading to a free cash flow of $25 million. Rapid7 ended the quarter with cash, cash equivalents, and investments totaling $593 million, and fully repaid the remaining balance on its 2025 convertible notes in early May.

As part of its guidance, Rapid7 forecasts ARR for the full year 2025 between $850 million and $880 million, which translates to growth of 1% to 5%. Revenue is expected to fall between $853 million and $863 million, also a growth of 1% to 2% over the previous year. The company anticipates non-GAAP operating income for the year to be in the range of $125 million to $135 million, with non-GAAP net income per share projected between $1.78 and $1.91.

For the second quarter of 2025, Rapid7 expects revenue between $211 million and $213 million, suggesting a year-over-year growth of 1% to 2%. Non-GAAP operating income is projected to be between $30 million and $32 million, and non-GAAP net income per share is anticipated to range from $0.43 to $0.46.

The results underscore the company’s focus on its core detection and response business, which remains a vital growth driver despite facing challenges in the broader risk and exposure management sector. Rapid7 continues to navigate a complex macro environment, adjusting its guidance in light of observed sales cycle variability.