What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-19 compared with 2025-02-28 · 322 added, 303 removed, 936 unchanged (40% of the section changed)

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Consolidated Statements of Operations

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Changes Stockholders' Equity

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Changes in Stockholders' Equity (Deficit)

Consolidated Statements of Cash Flows

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors

To the Stockholders and Board of Directors

Rapid7, Inc.:

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The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Sufficiency of audit evidence over product subscriptions revenue

Sufficiency of audit evidence over products revenue

As discussed in Note 2 to the consolidated financial statements, the Company derives revenue primarily from product subscriptions revenue which consists of cloud-based subscriptions, managed services, term software licenses, content subscriptions and maintenance and support associated with its software licenses.

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We involved IT professionals with specialized skills and knowledge, who assisted in evaluating the design and testing the operating effectiveness of certain general IT and application controls.

We performed a software-assisted data analysis to test the relationships among certain revenue transactions during the year.

For a sample of product subscriptions revenue transactions, we determined the revenue to be recorded in the current period based on the underlying contract and compared it to the Company's recorded balances.

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(in thousands, except share and per share data)

December 31, 2024 December 31, 2023

Year Ended December 31,

Current assets:

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Short-term investments 228,006 187,025

Accounts receivable, net of allowance for credit losses of $ 1,833 and $ 951 at December 31, 2024 and December 31, 2023, respectively

Accounts receivable, net of allowance for credit losses of $ 2,476 and $ 1,833 at December 31, 2025 and 2024, respectively

167,017 168,242

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Total assets $ 1,726,464 $ 1,652,034

Liabilities and Stockholders’ Equity (Deficit)

Liabilities and Stockholders’ Equity

Current liabilities:

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Total liabilities $ 1,571,734 $ 1,634,323

Stockholders’ equity (deficit):

Stockholders’ equity:

Preferred stock, $ 0.01 par value per share;

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65,846,920 and 63,496,965 shares outstanding at December 31, 2025 and 2024, respectively

Treasury stock, at cost, 570,255 and 569,579 shares at December 31, 2024 and 2023, respectively

Treasury stock, at cost, 570,255 shares at December 31, 2025 and 2024

( 4,765 ) ( 4,765 )

Additional paid-in-capital 1,120,963 1,011,080

Accumulated other comprehensive (loss) income ( 1,205 ) 1,344

Accumulated other comprehensive income (loss) 2,527 ( 1,205 )

Accumulated deficit ( 964,653 ) ( 988,034 )

Total stockholders’ equity (deficit) 17,711 ( 118,179 )

Total liabilities and stockholders’ equity (deficit) $ 1,652,034 $ 1,505,348

See accompanying notes to consolidated financial statements.

Total stockholders’ equity 154,730 17,711

Total liabilities and stockholders’ equity $ 1,726,464 $ 1,652,034

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Operations

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Interest expense ( 10,436 ) ( 10,963 ) ( 64,700 )

Other expense, net ( 3,680 ) ( 14,522 ) ( 1,522 )

Other income (expense), net 6,030 ( 3,680 ) ( 14,522 )

Income (loss) before income taxes 30,181 41,455 ( 153,333 )

Provision for (benefit from) income taxes 15,929 ( 518 ) 2,412

Provision (benefit) for income taxes 6,800 15,929 ( 518 )

Net income (loss) $ 23,381 $ 25,526 $ ( 152,815 )

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Net income (loss) per share, diluted $ 0.36 $ 0.40 $ ( 2.52 )

Numerator used to calculate earnings per share (Note 15)

Basic $ 25,526 $ ( 152,815 ) $ ( 124,717 )

Diluted $ 25,526 $ ( 152,815 ) $ ( 124,717 )

Weighted-average common shares outstanding, basic 64,727,551 62,607,583 60,756,087

Weighted-average common shares outstanding, diluted 65,001,955 63,183,651 60,756,087

See accompanying notes to consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Comprehensive Income (Loss)

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Change in fair value of cash flow hedges 1,590 ( 1,723 ) 797

Adjustment for net (gains)/ losses realized on cash flow hedges and included in net income (loss), net of taxes ( 546 ) 724 4,053

Total change in unrealized (losses) gains on cash flow hedges ( 2,269 ) 1,521 179

Adjustment for net losses (gains) realized on cash flow hedges and included in net income (loss), net of taxes 1,556 ( 546 ) 724

Total change in unrealized gains (losses) on cash flow hedges 3,146 ( 2,269 ) 1,521

Change in unrealized gains (losses) on investments 586 ( 280 ) $ 1,234

Total other comprehensive (loss) income ( 2,549 ) 2,755 ( 599 )

Total other comprehensive income (loss) 3,732 ( 2,549 ) 2,755

Comprehensive income (loss) $ 27,113 $ 22,977 $ ( 150,060 )

See accompanying notes to consolidated financial statements.

RAPID7, INC.CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands)

Common stock Treasury stock Additional

paid-in-capital Accumulated

comprehensive

income (loss) Accumulated

deficit Total

stockholders’

equity (deficit)

The accompanying notes are an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share data)

Common stock Treasury stock Additional paid-in-capital Accumulated other comprehensive income (loss) Accumulated deficit Total stockholders’ equity (deficit)

Shares Amount Shares Amount

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Issuance of common stock upon exercise of stock options 216 2 — — 3,051 — — 3,053

Issuance of common stock in connection with conversion of convertible senior notes — — — — ( 3 ) — — ( 3 )

Issuance of common stock related to acquisition 107 1 — — ( 1 ) — — —

Repurchase of common stock issued in relation to acquisition ( 83 ) ( 1 ) 1 —

Other comprehensive income (loss) — — — — — ( 599 ) — ( 599 )

Repurchase of common stock issued in related to acquisition — — 83 ( 1 ) 1 — — —

Purchase of capped called related to convertible senior notes — — — — ( 36,570 ) — — ( 36,570 )

Reclassification of equity to derivative assets related to capped calls — — — — 33,029 — — 33,029

Repurchase and inducement of convertible senior notes — — — — 35,881 — — 35,881

Other comprehensive income — — — — — 2,755 — 2,755

Net loss — — — — — — ( 152,815 ) ( 152,815 )

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Shares withheld for employee taxes ( 104 ) ( 1 ) — — ( 4,729 ) — — ( 4,730 )

Vesting of equity awards previously classified as liabilities 27 — — — 1,652 — — 1,652

Issuance of common stock upon exercise of stock options 133 1 — — 1,565 — — 1,566

Issuance of common stock related to acquisition 107 1 — — ( 1 ) — — —

Repurchase of common stock issued in related to acquisition — — 83 ( 1 ) 1 — — —

Purchase of capped called related to convertible senior notes — — — — ( 36,570 ) — — ( 36,570 )

Reclassification of equity to derivative assets related to capped calls — — — — 33,029 — — 33,029

Repurchase and inducement of convertible senior notes — — — — 35,881 — — 35,881

Other comprehensive income (loss) — — — — — 2,755 — 2,755

Net loss — — — — — — ( 152,815 ) ( 152,815 )

Repurchase of common stock issued in relation to acquisition — — 1 — — — — —

Other comprehensive loss — — — — — ( 2,549 ) — ( 2,549 )

Net income — — — — — — 25,526 25,526

Balance, December 31, 2024 63,497 $ 635 571 $ ( 4,765 ) $ 1,011,080 $ ( 1,205 ) $ ( 988,034 ) $ 17,711

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Issuance of common stock upon exercise of stock options 357 3 — — 1,586 — — 1,589

Repurchase of common stock issued in relation to acquisition — — 1 — — — — —

Other comprehensive income (loss) — — — — — ( 2,549 ) — ( 2,549 )

Issuance of common stock issued in relation to acquisition 126 1 — — 2,631 — — 2,632

Other comprehensive income — — — — — 3,732 — 3,732

Net income — — — — — — 23,381 23,381

Balance, December 31, 2025 65,847 $ 658 571 $ ( 4,765 ) $ 1,120,963 $ 2,527 $ ( 964,653 ) $ 154,730

See accompanying notes to consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Cash Flows

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Sales and maturities of investments 351,322 250,500 150,450

Purchase of strategic equity investments (See Note 5) ( 5,500 ) — —

Other investing activities 1,786 360 2,710

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Cash flows from financing activities:

Proceeds from issuance of convertible senior notes, net of issuance costs paid of $ 7,909

Proceeds from issuance of convertible senior notes, net of issuance costs paid — — 292,091

Purchase of capped calls related to convertible senior notes — — ( 36,570 )

Payment of debt issuance costs ( 1,693 ) — —

Payments for repurchase of convertible senior notes — ( 199,998 ) ( 12 )

Payments for maturity of convertible senior notes ( 45,992 ) — ( 199,998 )

Payments related to business acquisitions ( 4,091 ) ( 500 ) ( 2,250 )

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Proceeds from stock option exercises 1,589 1,566 3,053

Net cash provided by financing activities 5,582 79,597 7,416

Net cash (used in) provided by financing activities ( 45,504 ) 5,582 79,597

Effect of exchange rate changes on cash ,cash equivalents and restricted cash 5,679 ( 2,756 ) 1,202

Net increase in cash, cash equivalents and restricted cash 127,974 6,323 42,787

Net (decrease) increase in cash, cash equivalents and restricted cash $ ( 95,437 ) $ 127,974 $ 6,323

Cash, cash equivalents and restricted cash, beginning of period 342,101 214,127 207,804

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Cash paid for interest on convertible senior notes 5,768 6,358 4,605

Cash paid for income taxes, net of refunds $ 8,949 $ 1,624 $ 1,571

Cash paid for income taxes, net of payments 7,948 8,489 1,624

Reconciliation of cash, cash equivalents and restricted cash:

Cash and cash equivalents 246,664 334,686 213,629

Restricted cash included in prepaid expenses and other current assets and other assets 7,415 498 517

Restricted cash included in prepaid expenses, other current assets, and other assets — 7,415 498

Total cash, cash equivalents and restricted cash $ 246,664 $ 342,101 $ 214,127

See accompanying notes to consolidated financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

Notes to Consolidated Financial Statements

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108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, and as described further in Note 19, Immaterial Correction of an Error , we evaluated the errors and determined the related impacts were not material to our consolidated financial statements for the prior periods when they occurred, but that correcting the cumulative errors in the period detected would have been material to our results of operations for that period.

Accordingly, we revised previously reported financial information presented herein for such immaterial errors.

Accordingly, we revised previously reported comparative financial information presented herein for such immaterial errors.

(2) Summary of Significant Accounting Policies

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We generate revenue primarily from:

(1) product subscriptions from the sale of cloud-based subscriptions, managed services, term software licenses, content subscriptions and maintenance and support associated with

our software licenses and (2) professional services from the sale of our deployment and training services related to our solutions, incident response services, penetration testing and security advisory services.

(1) product subscriptions from the sale of cloud-based subscriptions, managed services, term software licenses, content subscriptions and maintenance and support associated with our software licenses and (2) professional services from the sale of our deployment and training services related to our solutions, incident response services, penetration testing and security advisory services.

We recognize revenue when a customer obtains control of promised products or services.

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The historical data is aggregated and analyzed by geographic location and selling method to establish a median or average price.

Once SSP is established it is applied consistently to all transactions including that product or service utilizing a portfolio approach.

Once SSP is established it is applied consistently to all transactions including that product or service.

4) Recognize revenue when or as we satisfy a performance obligation

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Product Subscriptions

Product subscriptions consists of revenue from our cloud-based subscription, term software licenses, managed services offerings, content subscriptions and maintenance and support associated with our software licenses.

Product subscriptions consist of revenue from our cloud-based subscription, term software licenses, managed services offerings, content subscriptions and maintenance and support associated with our software licenses.

• We generate cloud-based subscription revenue primarily from sales of subscriptions to access our cloud platform, together with related support services to our customers.

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• Managed services offerings consist of fees generated when we operate our software and provide our capabilities on behalf of our customers.

Revenue is recognized on a ratable basis over the contract term beginning on the date that our service is made available to the customer.

Revenue is recognized on a ratable basis over the contract term beginning on the date that our

service is made available to the customer.

Our managed services offerings generally have annual or multi-year contractual terms which are billed in advance of the annual subscription period and are non-cancellable.

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Cash and cash equivalents are recorded at cost, which approximates fair value.

As of December 31, 2024, we had $ 7.4 million of restricted cash recorded on our consolidated balance sheet as a component of prepaid expenses and other current assets associated with cash collateralized letters of credit with expirations within twelve months of the balance sheet date which relate to certain long-term office space leases.

As of December 31, 2025, we had no restricted cash.

As of December 31, 2024, we had $ 7.4 million of restricted cash recorded on our consolidated balance sheet in prepaid expenses, other current assets in letters of credit outstanding as collateral for certain office space leases.

(e) Investments

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We classify our investments as available-for-sale and record these investments at fair value.

When the fair value of an investment declines below its amortized cost

basis, any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the security, is recognized in our consolidated statements of operations.

When the fair value of an investment declines below its amortized cost basis, any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the security, is recognized in our consolidated statements of operations.

When the fair value of the investment declines below its amortized cost basis due to changes in interest rates, such amounts are recorded in accumulated other comprehensive income (loss), and are recognized in our consolidated statement of operations only if we sell or intend to sell the security before recovery of its cost basis.

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Management regularly reviews the adequacy of the allowance for credit loss based upon historical collection experience, the age of the receivable, an evaluation of each customer's expected ability to pay and current and future economic and market conditions.

Additions to the allowance for credit losses are recorded in general and administrative expense in the consolidated statement of operations.

Additions to the allowance for credit losses are recorded in general and administrative expense in the

consolidated statement of operations.

Accounts receivable deemed uncollectible are charged against the allowance for credit losses.

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Repairs and maintenance costs are expensed as incurred.

Periodically, fully depreciated property and equipment will be written off when no future economic benefits are expected.

(j) Software Development Costs

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We capitalized $ 16.0 million, $ 14.2 million and $ 15.9 million of costs related to software developed for internal use in the years ended December 31, 2025, 2024 and 2023, respectively.

In the years ended December 31, 2024 and 2023, we had impairment losses of capitalized internal-use software projects of $ 0.7 million and $ 3.5 million, respectively, which was expensed within research and development expense in our consolidated statements of operations.

Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

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If such assets or asset groups are considered to be impaired, the impairment recognized is the amount by which the carrying value exceeds the fair value of the assets or asset groups.

For the year ended December 31, 2023, we determined that triggering events occurred which indicated that the carrying value of our ROU and other lease-related assets related to a change in usage of certain idle office space at our corporate headquarters in Boston, Massachusetts as well as idle office spaces located in Plano, Texas;

Los Angeles, California;

and Toronto, Canada may not be fully recoverable.

As a result, we utilized discounted cash flow models to estimate the fair value of the asset groups taking into consideration the time period it will take to obtain sublessees, the applicable discount rate and the anticipated sublease income and calculated the corresponding impairment loss.

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We allocate the fair value of purchase consideration to the tangible asset acquired, liabilities assumed, and intangible assets acquired based on their estimated fair values.

The excess of the fair value of purchase consideration over the fair value of these identifiable assets and liabilities is recorded as goodwill.

The excess of the fair value of purchase consideration over the fair value these identifiable assets and liabilities is recorded as goodwill.

During the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of these assets acquired and liabilities assumed with the corresponding offset to goodwill.

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Significant estimates in valuing certain intangible assets include, but are not limited to, cash flows that an asset is expected to generate in the future, technology migration curves, discount rates, and useful lives.

While we use our best estimates and judgements, our estimates are inherently uncertain and subject to refinement.

While we use our best estimates and judgments, our estimates are inherently uncertain and subject to refinement.

Contingent consideration arising from business combinations is recorded at fair value as a liability on the acquisition date and remeasured at each reporting date.

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Acquisition-related transaction costs are expensed as incurred.

We perform an annual goodwill impairment test on the last day of each fiscal year and whenever events or changes in circumstances indicate that the carrying amount of this asset may exceed its fair value.

We perform an annual goodwill impairment test each fiscal year and whenever events or changes in circumstances indicate that the carrying amount of this asset may exceed its fair value.

For our goodwill impairment analysis, we operate with a single reporting unit.

To test goodwill impairment, we

perform a single-step goodwill impairment test to identify potential goodwill impairment.

To test goodwill impairment, we perform a single-step goodwill impairment test to identify potential goodwill impairment.

The single-step impairment test begins with an estimation of the fair value of a reporting unit.

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In performing the single step of the goodwill impairment testing and measurement process, we estimated the fair value of our single reporting unit using our market capitalization.

Based upon our assessment performed as of December 31, 2025, we concluded the fair value of our single reporting unit exceeded its carrying value and there was no impairment of goodwill.

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In 2025, foreign currency transact ion gains a nd foreign currency re-measurement gains were $ 0.9 million and $ 4.7 million, respectively.

In 2023, foreign currency transaction losses and foreign currency re-measurement losses were $ 1.4 million and $ 0.4 million, respectively.

In 2024, foreign currency transaction gains and foreign currency re-measurement gains were $ 0.6 million and $ 3.8 million, respectively.

(q) Derivative and Hedging Activities

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The actual number of PSUs earned and eligible to vest are determined based on the performance conditions defined when the awards are granted.

We recognize share-based compensation expense for the PSUs on a straight-line basis over the requisite service period for

each separately vesting portion of the award when it is probable that the performance conditions will be achieved.

We recognize share-based compensation expense for the PSUs on a straight-line basis over the requisite service period for each separately vesting portion of the award when it is probable that the performance conditions will be achieved.

We reassess the probability of vesting at each reporting period for awards with performance conditions and adjust stock-based compensation cost based on its probability assessment.

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(u) Net Income (Loss) per Share

We calculate basic net income (loss) per share by dividing our net loss by the weighted-average number of common shares outstanding during the period.

We calculate basic net income (loss) per share by dividing our net income (loss) by the weighted-average number of common shares outstanding during the period.

Diluted net income (loss) per share is computed by giving effect to all potentially dilutive securities, including stock options, RSUs, PSUs, the impact of our ESPP, common shares issued in connection with acquisitions and the impact of our convertible senior notes (“Notes”).

We intend to settle any conversion of our Notes in cash, shares, or a combination thereof.

The dilutive impact of the Notes for our calculation of diluted net income (loss) per share is considered using the if-converted method.

The dilutive impact of the Notes for our calculation of diluted net income (loss) per share is considered

using the if-converted method.

For the years ended December 31, 2025, 2024 and 2023, the shares underlying the Notes were not considered in the calculation of diluted net loss per share as the effect would have been anti-dilutive.

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Accounting Pronouncements Recently Adopted

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures (“ASU 2023-07”) , to improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses on an interim and annual basis.

All disclosure requirements of ASU 2023-07 are required for entities with a single reportable segment.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods for the fiscal years beginning after December 15, 2024, and should be applied on a retrospective basis to all periods presented.

We adopted this standard for our fiscal year beginning on January 1, 2024 and have provided the required disclosures in Note 18, Segment Information and Information About Geographic Areas.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”).

This guidance is designed to enhance the transparency and decision usefulness of income tax disclosures.

The amendments of this update are related to the rate reconciliation and income taxes paid, requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.

We adopted this standard prospectively for our fiscal year beginning on January 1, 2025.

Accounting Pronouncements Not Yet Effective

In November 2024, the FASB issued ASU 2024-04, Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”).

This new guidance is intended to improve the relevance and consistency in application of the induced conversion guidance in Subtopic 470-20 for (a) convertible debt instruments with cash conversion features and (b) debt instruments that are not currently convertible.

ASU 2024-04 is effective for

fiscal years beginning after December 15, 2026.

Early adoption is permitted.

We do not plan to early adopt this standard.

We are currently evaluating the effect of adoption of this standard to our consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”).

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We do not plan to early adopt this standard.

We are currently evaluating the effect of adoption of this standard to our consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”).

This new guidance is designed to enhance the transparency and decision usefulness of income tax disclosures.

In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date (“ASU 2025-01”), which clarifies that all public business entities initially adopt ASU 2024-03 in the first annual period beginning after December 15, 2026, with interim adoption in annual periods beginning after December 15, 2027.

We are currently evaluating the effect of adopting this standard on our disclosures

In November 2024, the FASB issued ASU 2024-04, Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”).

ASU 2024-04 is effective for fiscal years beginning after December 15, 2026.

Early adoption is permitted.

We do not plan to early adopt this standard.

We are currently evaluating the effect of adopting this standard on our disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”).

The amendments provide a practical expedient for estimating expected credit losses on current accounts receivable and current contract assets arising from transactions accounted for under ASC 606 and, for entities other than public business entities, permit a policy election to consider certain post-balance-sheet collection activity when the expedient is elected.

ASU 2025-05 is effective for annual periods beginning after December 15, 2025, and interim periods within those annual periods;

early adoption is permitted.

We do not intend to early adopt.

We are evaluating the effect on our allowance methodology for trade receivables and contract assets and on related current expected credit losses ("CECL") disclosures;

depending on our election of the practical expedient, we may experience changes in estimation inputs, but we do not currently anticipate a material impact to our consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”).

The ASU modernizes the internal-use software guidance, including removing development “stages,” introducing a “probable-to-complete” recognition threshold and considerations of significant development uncertainty, superseding and relocating website development cost guidance, and enhancing disclosures (including applying certain ASC 360 disclosure requirements to capitalized software costs).

ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual periods;

early adoption is permitted with prospective, modified prospective, or retrospective transition alternatives.

We do not plan to early adopt and are assessing the potential impact on capitalization timing, impairment assessments, useful lives, and expanded disclosures related to our internal-use software projects, including any cumulative-effect adjustments under the selected transition method.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvement to Interim Disclosure Requirements ("ASU 2025-11").

The ASU amends ASC Topic 270 to compile all interim disclosure requirements under one codification, introduces a material events disclosure requirement for interim periods, clarifies presentation of interim

financial statements, allows entities to omit interim disclosures that would substantially duplicate their most recent annual disclosures, and clarifies these disclosure requirements apply to all entities that issue interim financial statements in accordance with U.S.

ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027;

early adoption is permitted and may be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements.

We do not plan to early adopt this standard and are currently evaluating its impact on our interim financial reporting processes and disclosures.

We will continue to monitor developments and implementation guidance related to these new accounting standards and will provide additional information regarding their impact as our evaluation progresses.

(3) Revenue from Contracts with Customers

The following table summarizes the revenue by region based on the shipping address of customers who have contracted to use our product or service for the years ended December 31, 2024, 2023 and 2022:

Disaggregated Revenue by geographic location:

Revenues by geographic area presented based upon the location of the customer are as follows (in thousands):

Year Ended December 31,

2025 2024 2023

(in thousands)

North America $ 643,405 $ 607,448 $ 541,812

United States $ 612,225 $ 614,085 $ 579,025

Rest of world 247,569 229,922 198,682

Total revenue $ 844,007 $ 777,707 $ 685,083

Total $ 859,794 $ 844,007 $ 777,707

Transaction Price Allocated to the Remaining Performance Obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied as of December 31, 2024.

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied as of December 31, 2025 (in thousands).

The estimated revenues do not include unexercised contract renewals.

Next Twelve Months Thereafter

(in thousands)

Product subscriptions $ 565,859 $ 270,397

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Total $ 578,964 $ 275,062

Deferred contract acquisition and fulfillment costs

The following table summarizes the activity of the deferred contract acquisition and fulfillment costs, which primarily consist of capitalized sales commissions, for the year ended December 31, 2025 and 2024 (in thousands):

Year Ended December 31,

Beginning balance $ 125,806 $ 121,609

Capitalization of contract acquisition and fulfillment costs 47,334 57,796

Amortization of deferred contract acquisition and fulfillment costs ( 57,792 ) ( 53,599 )

Ending balance $ 115,348 $ 125,806

(4) Business Combinations

Noetic Cyber, Inc.

On July 3, 2024, we acquired Noetic Cyber, Inc.

(“Noetic”) a provider of cyber asset attack surface management, to extend Rapid7’s security operations platform by unlocking more accessible and accurate asset inventory in order to provide customers more comprehensive visibility to their attack surface, for a purchase price with an aggregate fair value of $ 51.2 million.

On July 3, 2024, we acquired Noetic Cyber, Inc, (“Noetic”) a provider of cyber asset attack surface management, to extend Rapid7’s security operations platform by unlocking more accessible and accurate asset inventory in order to provide customers more comprehensive visibility to their attack surface, for a purchase price with an aggregate fair value of $ 51.2 million .

The purchase consideration consisted of $ 38.6 million in cash paid at closing, $ 12.1 million of contingent consideration and $ 0.5 million of deferred cash payments.

The deferred cash payments were held by Rapid7 to satisfy certain post-closing purchase price adjustments and payment was made during the fourth quarter of 2024.

annually upon the first, second and third anniversaries of the closing date of the transaction (the “Earnout Period”).

Subject to the terms of the merger agreement, we are required to pay consideration of up to $ 20.0 million to Noetic shareholders based on the achievement of certain performance targets (the “Earnout Consideration”), measured annually upon the first, second and third anniversaries of the closing date of the transaction (the “Earnout Period”).

If all performance targets are achieved, approximately $ 13.1 million of Earnout Consideration will be paid in cash, and the remaining $ 6.9 million of Earnout Consideration will be issued to certain employees in the form of shares of our common stock subject to continued employment requirements over the Earnout Period.

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The fair value of the contingent purchase consideration will be reassessed each reporting period and any required adjustment will be recorded to general and administrative expense.

As of December 31, 2024, the fair value of the contingent purchase consideration was $ 12.4 million, of which $ 6.9 million was recorded within accrued expenses and other current liabilities and $ 5.5 million was recorded within other liabilities in our consolidated balance sheet.

In the year ended December 31, 2024, we recorded approximately $ 0.4 million of accretion expense related to the contingent purchase consideration to general and administrative expense.

In connection with the acquisition, we expect to issue an aggregate value of $ 2.3 million of our common stock to two key employees of Noetic in three installments over a 36 -month period following the closing date of the transaction, subject to continued employment requirements (the “Key Employee Consideration”) and therefore will be recognized as stock-based compensation expense over the required employment period.

The number of shares to be issued at each issuance date for both the Earnout Consideration and the Key Employee Consideration shares will be determined by dividing the aggregate value by the fair market value of our common stock on the issuance date, and therefore will be liability-classified until the final issuance dates.

On October 3, 2025, we distributed $ 6.0 million as Earnout Consideration related to the initial Earnout Period.

Of this amount, $ 4.1 million was settled in cash, while the remaining $ 1.9 million was settled through the issuance of 94,229 common stock units, determined by the attainment of certain performance objectives.

As of December 31, 2025 , the fair value of the contingent purchase c onsideration was $ 8.9 million which was recorded within accrued expenses and other current liabilities in our consolidated balance sheet.

For the year ended December 31, 2025 , we recorded approximately $ 0.5 million of accretion expense related to the contingent purchase consideration to general and administrative expense.

In connection with the acquisition, we expect to issue an aggregate value of $ 2.3 million of our common stock to two key employees of Noetic in three installments over a 36 -month period following the closing date of the transaction, subject to continued employment requirements (the “Key Employee Consideration”), which therefore will be recognized as stock-based compensation expense over the required employment period.

In June 2025, we issued 31,911 shares of common stock as the first installment of common stock issued to the two key Noetic employees.

The number of shares to be issued at each issuance date for both the Earnout Consideration and the Key Employee Consideration are determined by dividing the aggregate value by the 30-day average fair market value of our common stock on the issuance date, and therefore will be liability-classified until the final issuance dates.

In the year ended December 31, 2025 , we recognized stock-based compensation expense related to such shares in the amount of $ 4.2 million .

The following table summarizes the preliminary allocation of purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date (in thousands):

The following table summarizes the allocation of purchase price to the estimated fair value of the assets acquired and liabilities assumed at the acquisition date (in thousands):

Consideration:

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The excess of the purchase price over the tangible assets acquired, identifiable intangible asset acquired and assumed liabilities was recorded as goodwill.

We believe that the amount of goodwill reflects the expected synergistic benefits of being able to leverage the integration of the technology acquired with our existing product offerings and being able

to successfully market and sell these new features to our customer base.

The goodwill was allocated to our one reporting unit.

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In the year ended December 31, 2024, we recorded $ 0.8 million of acquisition-related transaction costs related to the acquisition of Noetic to general and administrative expense.

Our revenue and net loss attributable to the Noetic business for the year ended December 31, 2024 was not material.

Minerva Labs Ltd.

On March 14, 2023, we acquired Minerva Labs Ltd.

(“Minerva”), a leading provider of anti-evasion and ransomware prevention technology, for a purchase price with an aggregate fair value of $ 34.6 million .

The purchase consideration consisted of $ 35.0 million paid in cash at closing and a $( 0.4 ) million receivable for purchase price adjustments.

The assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition date.

The excess of the purchase price over the assets acquired and liabilities assumed was recorded as goodwill.

The fair value of net assets acquired (including intangible assets), goodwill and intangible assets were $ 13.9 million , $ 20.7 million and $ 12.8 million , respectively.

The goodwill was allocated to our one reporting unit.

The acquired goodwill and intangible assets were not deductible for tax purposes.

Our revenue and net income attributable to the Noetic business for the year ended December 31, 2025 was not material.

(5) Investments

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As of December 31, 2025

Losses Fair Value

(in thousands)

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

U.S government agencies $ 411,424 $ 701 $ — $ 412,125

Total $ 224,187 $ 328 $ ( 216 ) $ 224,299

Total assets $ 411,424 $ 701 $ — $ 412,125

As of December 31, 2024

Losses Fair Value

(in thousands)

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

U.S government agencies 224,187 328 ( 216 ) 224,299

Agency bonds 2,500 — ( 7 ) 2,493

Total $ 225,320 $ 467 $ ( 72 ) $ 225,715

As of December 31, 2024, our available-for-sale investments had maturities ranging from 1 to 17 months.

As of December 31, 2023, our available-for-sale investments had maturities ranging from 1 to 18 months.

Total assets $ 224,187 $ 328 $ ( 216 ) $ 224,299

As of December 31, 2025 and December 31, 2024, our available-for-sale investments had maturities ranging from one to fourteen and from one to seventeen months , respectively.

On October 30, 2025, we entered into a Simple Agreement for Future Equity (“SAFE”) in conjunction with a license and resale agreement with an independent cybersecurity cloud application detection and response organization (“the investee”).

Pursuant to the terms of the agreement, we provided capital in the amount of $ 5.5 million to the investee, which is convertible into shares of the investee contingent upon the attainment of a minimum valuation threshold of $ 70 million.

The SAFE instrument is convertible at the greater of the SAFE price or the discount price, as stipulated in the agreement.

The investment in the SAFE is accounted for at cost, subject to adjustments for impairment and observable changes in fair value, and is presented on the consolidated balance sheets within the category of Other Assets.

For all of our investments for which the amortized cost basis was greater than the fair value at December 31, 2025 and December 31, 2024, we have concluded that there is no plan to sell the security nor is it more likely than not that we would be required to sell the security before its anticipated maturity.

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We consider an active market to be one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis, and consider an inactive market to be one in which there are infrequent or few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers.

The following table presents our financial assets and liabilities measured and recorded at fair value on a recurring basis using the above input categories:

The following table presents our financial assets and liabilities measured and recorded at fair value on a recurring basis using the above input categories (in thousands):

As of December 31, 2025

Level 1 Level 2 Level 3 Total

(in thousands)

government agencies $ 412,125 $ — $ — $ 412,125

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Total assets $ 412,125 $ 1,868 $ — $ 413,993

Contingent consideration (other current liabilities and other long-term liabilities) $ — $ — $ 12,422 $ 12,422

Foreign currency forward contracts designated as cash flow hedges (other current and long-term liabilities) — 1,415 — 1,415

Contingent consideration (other current liabilities) — — 8,864 8,864

Total liabilities $ — $ — $ 8,864 $ 8,864

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Level 1 Level 2 Level 3 Total

(in thousands)

government agencies $ 224,299 $ — $ — $ 224,299

Agency bonds — 2,493 — 2,493

Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets and other assets) — 96 — 96

Total assets $ 224,299 $ 96 $ — $ 224,395

Foreign currency forward contracts designated as cash flow hedges (other current liabilities) $ — $ 55 $ — $ 55

Contingent consideration (other current liabilities and other long-term liabilities) — — 12,422 12,422

Foreign currency forward contracts designated as cash flow hedges (other current liabilities and other long term liabilities) — 1,415 — 1,415

Total liabilities $ — $ 1,415 $ 12,422 $ 13,837

Cash and cash equivalents are excluded from the table above as carrying amounts reported in our consolidated balance sheet equal or approximate fair value.

As of December 31, 2024, the fair value of our 2.25 %, 0.25 % and 1.25 % convertible senior notes due 2025, 2027 and 2029, as further described in Note 11, Debt , was $ 45.2 million, $ 553.5 million and $ 284.1 million , respectively, based upon quoted market prices.

As of December 31, 2025, the fair value of our 0.25 % and 1.25 % convertible senior notes due 2027 and 2029, as further described in Note 10, Debt , was $ 565.5 million and $ 272.9 million, respectively, based upon quoted market prices.

We consider the fair value of the Notes (as defined in Note 10, Debt ) to be a Level 2 measurement due to limited trading activity of the Notes.

As of December 31, 2025, the fair value of our contingent consideration, as further described in Note 4, Business Combinations, was $ 8.9 million and is classified as a Level 3 measurement based on inputs not observable in the market.

Our SAFE investment, as described in Note 5 , Investments , is accounted for as an equity investment under the measurement alternative per ASC 321 as there was no readily determinable fair value.

Accordingly, the investment is measured at cost, less impairment, and adjusted for observable price changes in orderly transactions for an identical or a similar investment of the same issuer.

The investment had a carrying amount of $ 5.5 million as of December 31, 2025 and is included within other assets as a long-term asset on the consolidated balance sheets.

We did not recognize any impairment or observable price changes related to this investment for the year ended December 31, 2025 .

(7) Property and Equipment

Property and equipment are recorded at cost and consist of the following:

December 31, December 31,

(in thousands)

Property and equipment are recorded at cost and consist of the following (in thousands):

As of December 31,

Computer equipment and software $ 23,728 $ 28,789

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We recorded depreciation expense of $ 9.8 million, $ 11.1 million, and $ 14.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.

During the year ended December 31, 2025, we wrote off $ 9.1 million of fully depreciated computer equipment and software, in accordance with our policy as described in Note 2 .

(8) Goodwill and Intangibles

Goodwill was $ 575.3 million and $ 536.4 million as of December 31, 2024 and December 31, 2023, respectively.

The following table displays the changes in the gross carrying amount of goodwill:

(in thousands)

Balance at December 31, 2022 $ 515,631

Minerva acquisition 20,720

Goodwill was $ 575.3 million as of December 31, 2025 and 2024.

The following table displays the changes in the gross carrying amount of goodwill (in thousands):

Carrying Amount

Balance at December 31, 2023 $ 536,351

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Balance at December 31, 2024 575,268

The following table presents details of our intangible assets which include acquired identifiable intangible assets and capitalized internal-use software costs:

Average Estimated Useful Life (years) As of December 31, 2024 As of December 31, 2023

Gross Carrying

Balance at December 31, 2025 $ 575,268

The following table presents details of our intangible assets which include acquired identifiable intangible assets and capitalized internal-use software costs (in thousands):

As of December 31, 2025 As of December 31, 2024

Weighted-Average Estimated Useful Life (years) Gross Carrying

Amount Accumulated

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Amortization Net Book Value

(in thousands)

Intangible assets subject to amortization:

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The table above excludes the impact of $ 6.0 million of capitalized internal-use software costs for projects that have not been completed as of December 31, 2025, and therefore, all the costs associated with these projects have not been incurred.

(9) Deferred Contract Acquisitions and Fulfillment Costs

Year Ended December 31,

(in thousands)

Beginning balance $ 121,609 $ 103,075

Capitalization of contract acquisition and fulfillment costs 57,796 60,528

Amortization of deferred contract acquisition and fulfillment costs ( 53,599 ) ( 41,994 )

Ending balance $ 125,806 $ 121,609

(9) Derivative and Hedging Activities

To mitigate our exposure to foreign currency fluctuations resulting from certain expenses denominated in certain foreign currencies, we enter into forward contracts that are designated as cash flow hedging instruments.

These forward contracts have contractual maturities of eighteen months or less, and as of December 31, 2024 and December 31, 2023, outstanding forward contracts had a total notional value of $ 50.4 million and $ 49.5 million, respectively.

These forward contracts have contractual maturities of eighteen months or less, and as of December 31, 2025 and 2024, outstanding forward contracts had a total notional value of $ 78.8 million and $ 50.4 million, respectively.

The notional value represents the gross amount of foreign currency that will be bought or sold upon maturity of the forward contract.

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2029 Notes March 15, 2029 1.25 % March 15, 2024 1.69 % March 15 and September 15 15.4213 64.85 4.6

The 2025 Notes, the 2027 Notes and the 2029 Notes are senior unsecured obligations, do not contain any financial covenants and are governed by indentures between the Company, as issuer, and U.S.

Trust Company, Bank National Association, as trustee (the “Indentures”).

On May 1, 2025, we paid $ 46.5 million to redeem the outstanding portion of the 2025 Notes, including the outstanding principal amount and accrued interest through the maturity date of the 2025 Notes.

The 2027 Notes and the 2029 Notes are senior unsecured obligations, do not contain any financial covenants and are governed by indentures between us, as issuer, and U.S.

Bank Trust Company, National Association, as trustee (the “Indentures”).

The total net proceeds from the 2025 Notes, the 2027 Notes and the 2029 Notes offerings, after deducting initial purchase discounts and debt issuance costs, were $ 222.8 million, $ 585.0 million and $ 292.0 million, respectively.

As of December 31, 2025, the 2027 Notes and the 2029 Notes were not convertible at the option of the holders.

The 2025 Notes became convertible at the option of the holders effective November 1, 2024.

The holders may convert the 2025 Notes, the 2027 Notes and the 2029 Notes at any time on or after November 1, 2024, December 15, 2026 and December 15, 2028, respectively, until the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the circumstances set forth above.

The holders may convert the 2027 Notes and the 2029 Notes at any time on or after December 15, 2026 and December 15, 2028, respectively, until the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the circumstances set forth above.

Upon conversion, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, in the manner and subject to the terms and conditions provided in the Indentures.

If we undergo a fundamental change (as set forth in the Indentures) at any time prior to the maturity date, holders of the Notes will have the right, at their option, to require us to repurchase for cash all or any portion of their Notes at a repurchase price equal to 100 % of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

equal to 100 % of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

In addition, following certain corporate events that occur prior to the maturity date or following our issuance of a notice of redemption, in each case as described in the Indentures, we will increase the conversion rate for a holder of the Notes who elects to convert its Notes in connection with such a corporate event or during the related redemption period in certain circumstances.

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The debt issuance costs are amortized to interest expense using the effective interest method over the contractual term of the Notes.

The net carrying amount of the Notes as of December 31, 2024 and December 31, 2023 was as follows (in thousands):

The net carrying amount of the Notes as of December 31, 2025 and 2024 was as follows (in thousands):

2025 Notes 2027 Notes 2029 Notes

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Amortization of debt issuance costs — 97 97 — 2,520 2,520 — 1,408 1,408

Principal payment upon maturity ( 45,992 ) — ( 45,992 ) — — — — — —

Balance at December 31, 2025 $ — $ — $ — $ 600,000 $ ( 3,044 ) $ 596,956 $ 300,000 $ ( 4,672 ) $ 295,328

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2025 2024 2023

2025 Notes 2027 Notes 2029 Notes Total 2025 Notes 2027 Notes 2029 Notes Total 2025 Notes 2027 Notes Total

2025 Notes 2027 Notes 2029 Notes Total 2025 Notes 2027 Notes 2029 Notes Total 2025 Notes 2027 Notes 2029 Notes Total

Contractual interest expense $ 345 $ 1,500 $ 3,750 $ 5,595 $ 1,035 $ 1,500 $ 3,749 $ 6,284 $ 3,795 $ 1,500 $ 1,167 $ 6,462

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Total interest expense $ 442 $ 4,020 $ 5,158 $ 9,620 $ 1,342 $ 4,013 $ 5,184 $ 10,539 $ 58,750 $ 3,987 $ 1,561 $ 64,298

In connection with the offering of the 2025 Notes, the 2027 Notes and the 2029 Notes, we entered into privately negotiated capped call transactions with certain counterparties (the “2025 Capped Calls”, “2027 Capped Calls” and “2029 Capped Calls”) (collectively, the “Capped Calls”).

We entered into privately negotiated capped call transactions with certain counterparties in connection with the issuance of the 2025 Notes (the "2025 Capped Calls"), the 2027 Notes (the "2027 Capped Calls"), and the 2029 Notes (the “2029 Capped Calls” and, together with the 2025 Capped Calls and the 2027 Capped Calls, the “Capped Calls”).

The Capped Calls are expected to reduce potential dilution to our common stock upon conversion of a given series of notes and/or offset any cash payments that we are required to make in excess of the principal amount of converted notes of such series, as the case may be, with such reduction and/or offset subject to a cap.

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Expiration dates March 4, 2025 - April 29, 2025 January 1, 2027 - March 11, 2027 February 13, 2029 - March 13, 2029

The 2025 Capped Calls expired in full on April 29, 2025.

We did not elect to exercise any portion of the 2025 Capped Calls prior to expiration.

For accounting purposes, the 2025 Capped Calls, the 2027 Capped Calls and the 2029 Capped Calls are separate transactions, and not part of the terms of the 2025 Notes, the 2027 Notes and the 2029 Notes.

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Credit Agreement

In April 2020, we entered into a Credit and Security Agreement, with KeyBank National Association that provided for a $ 30.0 million revolving credit facility, with a letter of credit sublimit of $ 15.0 million and an accordion feature under which we could increase the credit facility to up to $ 70.0 million.

In May 2020, we utilized the accordion feature to increase the credit facility to $ 50.0 million.

In December 2021, we entered into an Amendment Agreement in respect of our Credit and Security Agreement (as amended, the "Credit Agreement"), with KeyBank National Association, to, among other things, increase the credit facility from $ 50.0 million to $ 100.0 million and extend the maturity date to December 22, 2024.

The Credit Agreement provided for a $ 100.0 million revolving credit facility, with a letter of credit sublimit of $ 15.0 million, and an accordion feature under which we could increase the credit facility to up to $ 150.0 million.

We incurred fees of

$ 0.4 million in connection with entering into the Credit Agreement, which were recorded in other current assets on the consolidated balance sheet and amortized on a straight-line basis over the contractual term of the arrangement.

The commitment fee of 0.2 % per annum on the unused portion of the credit facility is expensed as incurred and included within interest expense on the consolidated statement of operations.

The Credit Agreement contained certain financial covenants including a requirement that we maintain specified minimum recurring revenue and liquidity amounts.

The borrowings under the Credit Agreement bear interest, at our option, at a rate equal to either (i) term SOFR plus a credit spread adjustment of 0.10 % per annum plus a margin of 2.50 % per annum or (ii) the alternate base rate (subject to a floor), plus an applicable margin equal to 0 % per annum.

As noted above, the Credit Agreement matured on December 22, 2024.

On June 25, 2025 (the "Closing Date"), we entered into a credit agreement (the "Credit Agreement"), by and among us, Rapid7 LLC, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent, that provides for a $ 200.0 million revolving credit facility with a letter of credit sublimit of $ 20.0 million.

The Credit Agreement allows for incremental facilities up to the greater of $ 141 million or 75 % of Consolidated EBITDA (as defined in the Credit Agreement), which we currently would be able to utilize, if needed.

Additional incremental facilities may be incurred, subject to certain conditions.

We incurred fees of $ 1.7 million in connection with entering into the Credit Agreement.

The fees are recorded in other current and non-current assets on the consolidated balance sheet and are amortized on a straight-line basis over the contractual term of the arrangement.

Under the terms of the Credit Agreement, we are required to pay a commitment fee on the unused portion of the credit facility.

The commitment fee rate is determined by our total net leverage ratio and that of our subsidiaries, ranging from 0.20 % to 0.25 % per annum on the unused portion of the credit facility.

The commitment fee is expensed as incurred and included within interest expense on the consolidated statement of operations.

The Credit Agreement matures on the fifth anniversary of the Closing Date or, if certain specified liquidity conditions are not satisfied, 91 days prior to the earliest maturity date of either the 2027 or the 2029 Notes.

The Credit Agreement also contains certain affirmative and negative covenants, including a requirement to maintain a minimum interest coverage ratio for the duration of the Credit Agreement and a maximum net leverage ratio.

The borrowings under the Credit Agreement bear interest at a variable annual rate based on either the Secured Overnight Financing Rate (SOFR) subject to a floor of zero or alternate base rate plus, in each case, a fixed margin, which varies depending on our net leverage ratio.

As of December 31, 2025, we did not have any outstanding borrowings under the Credit Agreement.

We recorded $ 0.2 million of amortization of debt issuance costs related to the Credit Agreement for the year ended December 31, 2025.

As of December 31, 2025, we had a total of $ 5.6 million in letters of credit outstanding as collateral for certain office space leases which reduce the amount of borrowing availability under our Credit Agreement.

Our leases primarily relate to office facilities that have remaining terms of up to 6.3 years, some of which include one or more options to renew with renewal terms of up to 5 years and some of which include options to terminate the leases within 1 year .

All of our leases are classified as operating leases.

The components of lease expense were as follows:

The components of lease expense were as follows (in thousands):

Year Ended December 31,

(in thousands)

Operating lease costs $ 15,730 $ 16,129

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Supplemental balance sheet information related to the operating leases was as follows:

As of December 31, 2024 As of December 31, 2023

Weighted average remaining lease term (in years) - operating leases 4.9 5.7

Weighted average discount rate - operating leases 6.4 % 6.4 %

Supplemental cash flow information related to leases was as follows:

As of December 31,

Weighted average remaining lease terms (in years) 4.1 4.9

Weighted average discount rate 6.4 % 6.4 %

Supplemental cash flow information related to leases was as follows (in thousands):

Year Ended December 31,

(in thousands)

Cash paid for amounts included in the measurement of lease liabilities $ 22,528 $ 22,870

ROU assets obtained in exchange for new lease obligations $ 7,795 $ 4,488

Maturities of operating lease liabilities as of December 31, 2024 were as follows (in thousands):

Maturities, which are the undiscounted cash flows, of operating lease liabilities are as follows (in thousands):

As of December 31, 2025

2026 $ 20,699

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Total $ 76,084

office space at our corporate headquarters in Boston, Massachusetts as well as idle office spaces located in Plano, Texas;

Los Angeles, California;

and Toronto, Canada may not be fully recoverable.

During the year ended December 31, 2023, we determined that triggering events occurred which indicated that the carrying value of our right-of-use (“ROU”) and other lease-related assets related to a change in usage of certain idle office space at our corporate headquarters in Boston, Massachusetts as well as idle office spaces located in Plano, Texas, Los Angeles, California, and Toronto, Canada may not be fully recoverable.

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We recognize stock-based compensation expense for all awards on a straight-line basis over the applicable vesting period, which is generally three to four years .

Stock-based compensation expense for restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”), stock options, purchase rights issued under our employee stock purchase plan (“ESPP”) and earnout consideration and key employee consideration shares related to acquisitions was classified in the accompanying consolidated statements of operations as follows:

Stock-based compensation expense for restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”), stock options, purchase rights issued under our employee stock purchase plan (“ESPP”), and earnout consideration and key employee consideration shares related to acquisitions was classified in the accompanying consolidated statements of operations as follows (in thousands):

Year Ended December 31,

2025 2024 2023

(in thousands)

Stock-based compensation expense:

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The unrecognized stock-based compensation expense and estimated weighted average amortization periods remaining at December 31, 2025 was as follows:

Unrecognized Compensation Expense Weighted-Average Amortization Period Remaining

(in thousands) (in years)

Unrecognized Compensation Expense (in thousands) Weighted-Average Amortization Period Remaining (in years)

RSUs and PSUs $ 109,985 2.0

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Earnout and key employee consideration shares $ 2,835 0.9

Our Compensation Committee adopted and approved the performance goals, targets and payout formulas for our 2024, 2023 and 2022 bonus plans, including permitting our executive officers and certain other employees the opportunity to receive payment of their earned bonuses in the form of common stock (in lieu of cash).

For the years ended December 31, 2024, 2023, and 2022, we recognized stock-based compensation expense related to such bonuses in the amount of $ 0.9 million, $ 1.6 million and $ 1.0 million, respectively, based on the probable expected performance against the pre-established corporate financial objectives as of December 31, 2024, 2023 and 2022.

For employees, including executive officers, who elect to receive their bonuses in the form of common stock (in lieu of cash), the payouts are expected to be made in the form of fully vested stock awards in the first quarter of the following year pursuant to our 2015 Equity Incentive Plan, as amended.

The number of shares underlying such awards is determined by dividing the dollar value of the actual bonus award payment by the closing price per share of our common stock on the date of grant.

Our Compensation Committee adopted and approved the performance goals, targets and payout formulas for our 2025, 2024, and 2023 bonus plans, including permitting executive officers and certain other employees the opportunity to receive payment of their earned bonuses in the form of common stock (in lieu of cash).

In the fourth quarter of 2025, the Compensation Committee approved the elimination of the option for certain employees to receive earned bonuses in common stock (in lieu of cash).

For the year ended December 31, 2025, no stock-based compensation expense was recognized related to such bonuses.

During the years ended December 31, 2024 and 2023, we recognized expense of $ 0.9 million and $ 1.6 million, respectively, based on the probable expected performance against the pre-established corporate financial objectives as of December 31, 2024 and 2023.

For employees, including executive officers, who elect to receive their bonuses in the form of common stock (in lieu

of cash), the payouts are expected to be made in the form of fully vested stock awards in the first quarter of the following year pursuant to our 2015 Equity Incentive Plan, as amended.

The number of shares underlying such awards is determined by dividing the dollar value of the actual bonus award payment by the 30-day average closing price per share of our common stock on the date of grant.

(b) Restricted Stock, Restricted Stock Units and Performance-Based Restricted Stock Units

RSUs and PSUs activity during 2024, 2023, and 2022 was as follows:

Shares Weighted-

Average Grant

RSUs and PSUs activity during the years ended December 31, 2025, 2024 and 2023 was as follows:

Restricted Stock Units Weighted

Unvested balance as of December 31, 2022 3,001,443 $ 83.88

Granted 2,327,216 86.78

Unvested balance as of Granted 2,304,140 48.83 (1)

Vested ( 1,453,713 ) 73.29 (1)

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Refer to Note 19, Immaterial Correction of an Error , for further information.

In January 2024, our Compensation Committee awarded 279,570 PSUs that required the achievement of net annualized recurring revenue (“Net ARR”) and Adjusted EBITDA targets for the 2024 full-year to earn any payout.

In January 2025, our Compensation Committee awarded 181,067 PSUs that required the achievement of net annualized recurring revenue (“Net ARR”) and Adjusted EBITDA targets for the 2025 fiscal-year to earn any payout.

Net ARR is defined as the change in the annual value of all recurring revenue related to contracts in place at year end.

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The PSUs have a performance period of one year and the earned PSUs will vest in three equal installments following each of the first, second and third anniversary of the vesting commencement date, subject to the participant’s continuous service as of each such date.

The 2024 target level attainment was 50 % and in the year ended December 31, 2024, we recorded $ 3.4 million of stock-based compensation expense related to these PSUs based on that level of attainment of the performance criteria.

In July 2024, our Compensation Committee awarded 19,605 PSUs that required the achievement of certain milestones related to the integration of Noetic.

The PSUs have three measurement and vesting dates through September 15, 2025, subject to the participant's continuous service as of each such date.

If the milestones are not achieved, no PSUs will be earned.

In the year ended December 31, 2024, we recorded $ 0.6 million of stock-based compensation expense related to these PSUs based on estimated achievement of the performance criteria.

The 2025 target level attainment was 50 %, and in the year ended December 31, 2025, we recorded $ 1.7 million of stock-based compensation expense related to these PSUs based on level of attainment of the performance criteria.

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As of December 31, 2025, the shares of common stock authorized to be issued under the ESPP totaled 6,005,108 and there were 3,327,135 shares of common stock available for grant.

Under the ESPP, employees may set aside up to 15 % of their gross earnings, on an after-tax basis, to purchase our common shares at a discounted price, which is calculated at 85 % of the lesser of:

Under the Rapid7, Inc.

2015 Employee Stock Purchase Plan ("ESPP"), employees may set aside up to 15 % of their gross earnings, on an after-tax basis, to purchase our common shares at a discounted price, which is calculated at 85 % of the lesser of:

(i) the market value of our common stock at the beginning of each offering period and (ii) the market value of our common stock on the applicable purchase date.

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Grant date fair value per share $ 5.61 - $ 6.34 $ 9.96 - $ 17.25 $ 11.70 - $ 20.07

$ 11.70 – $ 20.07

$ 15.50 –$ 29.58

The following table provides the number of common shares issued to employees, the purchase prices and aggregate proceeds for the purchase dates in the years ended December 31, 2025, 2024 and 2023:

1 unchanged sentence

Common shares issued 198,074 186,793 144,445 147,445 152,419 177,886

Purchase prices $ 29.08 $ 33.78 and $ 39.78

$ 33.78 $ 34.71 $ 45.31 $ 67.59 and $ 81.37

Aggregate proceeds $ 4.2 million $ 5.0 million $ 5.1 million $ 6.1 million $ 6.2 million $ 5.7 million

Purchases prices $ 16.52 $ 23.79 $ 29.08 $ 33.78 and $ 39.78 $ 33.78 $ 34.71

Aggregate proceeds (in millions) $ 3.3 $ 4.4 $ 4.2 $ 5.0 $ 5.1 $ 6.1

(13) Income Taxes

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federal, state, and foreign income taxes for all tax jurisdictions in which we operate.

Income (loss) before income taxes included in the consolidated statements of operations was as follows:

Year Ended December 31,

Income (loss) before income taxes included in the consolidated statements of operations was as follows (in thousands):

As of December 31,

2025 2024 2023

(in thousands)

United States $ 21,244 $ 35,699 $ ( 139,295 )

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Income (loss) before Income taxes $ 30,181 $ 41,455 $ ( 153,333 )

Income tax expense included in the consolidated statements of operations was as follows:

Income tax expense included in the consolidated statements of operations was as follows (in thousands):

Year Ended December 31,

2025 2024 2023

(in thousands)

Federal $ ( 948 ) $ 2,426 $ 428

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Total deferred tax expense (benefit) ( 1,690 ) 791 ( 5,624 )

Total income tax expense (benefit) $ 15,929 $ ( 518 ) $ 2,412

The reconciliation of the federal statutory rate of 21% to the effective income tax rate for the years ended December 31, 2024, 2023 and 2022 was as follows:

Income tax expense (benefit) $ 6,800 $ 15,929 $ ( 518 )

As of January 1, 2025, we elected to adopt ASU 2023-09 prospectively.

Refer to Note 2, Summary of Significant Accounting Policies - Accounting Pronouncements Recently Adopted, for additional detail regarding our adoption.

The reconciliation of the federal statutory rate of 21% to the effective income tax rate for the year ended December 31, 2025 subsequent to the adoption of ASU 2023-09 was as follows (in thousands, except for percents):

As of December 31,

Federal Statutory Tax Rate $ 6,338 21.0 %

State and Local Income Tax, Net of Federal Income Tax Effect* 2,400 8.0 %

Effect of Cross-Border Tax Laws

Subpart F Income 650 2.2 %

Global Intangible Low Tax Income 5,128 17.0 %

Other 187 0.6 %

Research and Development Credits ( 2,578 ) ( 8.5 ) %

Changes in Valuation Allowances ( 27,430 ) ( 90.9 ) %

Nontaxable or Nondeductible Items

Stock Compensation Adjustment 14,689 48.7 %

Excess Officer's Compensation 2,135 7.1 %

Other 253 0.8 %

Other Adjustments

Impact of Filed Tax Returns 1,920 6.4 %

Other 816 2.5 %

Foreign Tax Effects

Withholding Tax 390 1.3 %

Impact of Filed Tax Returns ( 317 ) ( 1.0 ) %

Other 51 0.2 %

Impact of Filed Tax Returns 600 2.0 %

Stock Compensation Adjustment 1,159 3.8 %

Tax Effect from Repatriation of Foreign Earnings 324 1.1 %

Other ( 355 ) ( 1.2 ) %

United Kingdom

Changes in Valuation Allowances 2,628 8.7 %

Impact of Filed Tax Returns 721 2.4 %

Stock Compensation Adjustment ( 4,135 ) ( 13.7 ) %

Withholding Tax 1,008 3.3 %

Other ( 122 ) ( 0.4 ) %

Other Jurisdiction 122 0.4 %

Changes in Unrecognized Tax Benefits 218 0.7 %

Effective Tax Rate $ 6,800 22.5 %

*State taxes in CA, FL, IL made up the majority (greater than 50 percent) of the tax effect in this category

The reconciliation of the federal statutory rate of 21% to the effective income tax rate for the years ended December 31, 2024 and 2023 prior to the adoption of ASU 2023-09 was as follows:

Year Ended December 31,

2024 2023 2022

Federal statutory rate 21.0 % 21.0 %

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Stock-based compensation 15.7 ( 7.0 )

Research and development credits ( 18.5 ) 0.9 1.4

Federal research and development credit ( 18.5 ) 0.9

Foreign rate differential 3.0 0.3

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Effective income tax rate 38.4 % 0.3 %

Net deferred tax assets and liabilities, as set forth in the table below, reflect the impact of temporary differences between the amounts of assets and liabilities recorded for financial statement purposes and such amounts measured in accordance with tax laws:

Income taxes paid during the year ended December 31, 2025 subsequent to the adoption of ASU 2023-09 was as follows (in thousands):

As of December 31,

(in thousands)

US Federal Taxes

United States $ 559

US State and Local Taxes

California 461

Total US State and Local $ 1,915

Czech Republic $ 687

United Kingdom 939

Total Foreign $ 5,474

Total $ 7,948

Year Ended December 31,

Deferred tax assets:

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Stock-based compensation 14,042 12,290

Tax credits — 1,148

Other 31 3,369

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Total deferred tax liabilities $ ( 37,059 ) $ ( 39,550 )

Net deferred tax liabilities $ ( 685 ) $ 112

As of December 31, 2024, we had federal and state net operating loss (“NOL”) carryforwards in the United States of $ 265.6 million and $ 306.0 million, respectively.

Net deferred tax assets (liabilities) $ 1,004 $ ( 685 )

Valuation Allowance

As of December 31, 2025, we have evaluated the need for a valuation allowance on our deferred tax assets.

In making this determination, management considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The valuation allowance decreased by $ 30.2 million for the year ended December 31, 2025, primarily due to the utilization of US federal and state net operating loss ("NOL").

This compares to a decrease of $ 2.4 million for the year ended December 31, 2024.

We continue to record a full valuation allowance against our net deferred tax assets in the United States and U.K.

We may release additional valuation allowances in future periods if positive evidence, such as projection of sustained future growth, supports the realization of such deferred tax assets.

Release of all or a portion of these valuation allowances would result in a decrease in the provision for income taxes in the period of the release.

Net Operating Loss Carryforwards and Research and Development Credits

As of December 31, 2025, we had federal and state NOL carryforwards in the United States of $ 222.6 million and $ 240.3 million, respectively.

Of these amounts, $ 219.1 million of federal and $ 30.9 million of state NOLs can be carried forward indefinitely.

We had foreign NOL carryforwards of $ 215.5 million that can be carried

forward indefinitely.

We also had federal, state and foreign research and development credit carryforwards of $ 9.3 million, $ 4.1 million and $ 0.3 million as of December 31, 2024, respectively.

The remaining NOLs and credits expire at various dates beginning in 2025.

The remaining NOLs expire at various dates beginning in 2033.

We had foreign NOL carryforwards of $ 234.2 million that can be carried forward indefinitely.

We also had federal and state research and development credit and other state tax credit carryforwards of $ 10.8 million, $ 4.5 million and $ 1.0 million as of December 31, 2025, respectively.

These credit carryforwards expire at various dates beginning in 2025.

As of December 31, 2025, our ability to utilize NOLs remains limited under IRC Sections 382 and 383 due to an ownership change we experienced in January 2018.

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Subsequent ownership changes may further affect the limitation in future years.

Beginning January 1, 2022, the Tax Cuts and Jobs Act eliminated the option to deduct research and development expenditures in the current year and requires taxpayers to capitalize such expenses pursuant to Internal Revenue Code Section 174.

The capitalized expenses are amortized over a 5-year period for domestic expenses and a 15-year period for foreign expenses.

We have included the impact of this provision, which results in additional deferred tax assets of approximately $ 91.0 million and $ 63.2 million as of December 31, 2024 and 2023, respectively.

During the fourth quarter of 2024, we completed an analysis of our U.S.

federal research and development tax credits.

As a result, we recorded additional credits of $ 4.2 million , which have a full valuation allowance and are subject to the potential limitations discussed above.

Valuation Allowances

As of December 31, 2024, we have evaluated the need for a valuation allowance on our deferred tax assets.

In making this determination, management considered whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company's valuation allowance decreased by $ 2.4 million for the year ended December 31, 2024, due primarily to a decrease in operating losses, as well as a decrease of $ 1.7 million related to release of our valuation allowance related to our net deferred tax assets in Israel, offset by an increase related in capitalized research and development.

The release of the valuation allowance in Israel was primarily the result of an internal restructuring, which changed the overall deferred tax position of the Israeli subsidiary.

Due to our history of generating losses, we continue to record a valuation allowance against our net deferred tax assets in the United States and U.K and against the net operating loss carryforwards of our Ireland subsidiary.

We may release additional valuation allowances in future periods if objective negative evidence of cumulative losses is no longer present and positive evidence, such as projection of future growth, supports the realization of such deferred tax assets.

Release of all or a portion of these valuation allowances would result in a decrease in the provision for income taxes in the period of the release.

Unrecognized Tax Benefits

We file income tax returns in all jurisdictions in which we operate.

In the normal course of business, we are subject to examination by federal, state, and foreign tax authorities, where applicable.

In the normal course of business, we are subject to

examination by federal, state, and foreign tax authorities, where applicable.

The statute of limitations for these jurisdictions is generally three to seven years .

However, to the extent we utilize net operating losses or other similar carryforward attributes such as credits, the statute remains open to the extent of the net operating losses or credits that are utilized.

We are currently under tax examination in the state of Massachusetts for tax years 2023 through 2024 and in Israel for tax years 2018 through 2022.

We are currently under tax examination in Israel for tax years 2018 through 2023.

The following is a reconciliation of the beginning and ending balances of unrecognized tax benefits (excluding interest and penalties), in thousands:

Balance, January 1, 2025 $ 9,876

Additions based on tax positions related to the current year 4,520

Additions for tax positions of prior years 113

Reductions for tax positions of prior years ( 315 )

Settlements —

Balance, December 31, 2025 $ 9,674

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The reserves have been established based upon our assessment of the potential exposure.

The change in our reserves during the year ended December 31, 2024 primarily relates to an intercompany sale of

intellectual property as part of a post-acquisition integration strategy related to our acquisition of Minerva Labs Ltd.

We recorded $ 0.4 million of interest in 2024 related to unrecognized tax benefits.

During the next twelve months, the Company does not expect any change to its unrecognized tax benefits other than the accrual of interest in the normal course of business.

We recognize interest and penalties related to unrecognized tax benefits in the income tax line of the statement of operations.

From time to time, we may receive income tax assessments from taxing authorities asserting additional tax liabilities owed by the Company.

The change in our reserves during the year 2025 consists of $ 0.2 million of U.S.

state reserves related to unrecognized tax benefits.

During the next twelve months, we do not expect any change to our uncertain tax positions other than the accrual of interest in the normal course of business.

From time to time, we may receive income tax assessments from taxing authorities asserting additional tax liabilities owed.

During the quarter ended June 30, 2024, we received an initial assessment from the Israel Tax Authority (“ITA”) of approximately 324 million Israeli New Shekels (approximately $ 102 million, based upon exchange rates as of December 31, 2025 between the Israeli New Shekel and the US Dollar) related to fiscal year 2021.

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Other Tax Matters

On July 4, 2025, President Donald Trump signed the One Big Beautiful Bill Act ("OBBBA").

The OBBBA changes the current tax law related to both corporate income taxes and deferred tax assets and liabilities, which we currently accounts for under ASC 740, Income taxes ("ASC 740").

The provisions include the immediate expensing of domestic research and development costs which reduced our U.S.

federal cash tax payments for the remainder of 2025.

Overall, OBBBA did not have a material impact on our financial statements

As of December 31, 2025, we have accumulated earnings generated by foreign subsidiaries.

We have not recognized a deferred tax liability for the majority of these unremitted earnings as our intention is to indefinitely reinvest these accumulated earnings in our foreign subsidiaries.

During the fourth quarter of 2024, we made the determination that the unremitted foreign earnings associated with our Israel legal entity are no longer indefinitely reinvested.

We recorded a liability of $ 0.1 million related to the taxes expected to be imposed upon the repatriation of these unremitted foreign earnings that are not considered indefinitely reinvested.

Except for unremitted earnings associated with our Israel legal entity, we have not recognized a deferred tax liability for the majority of these unremitted earnings as our intention is to indefinitely reinvest these accumulated earnings in our foreign subsidiaries.

During 2025, we recorded an incremental liability of $ 0.4 million related to the taxes expected to be imposed upon the repatriation of these unremitted foreign earnings from our Israel legal entity that are not considered indefinitely reinvested.

The Organization for Economic Co-operation and Development (“OECD”) Pillar Two Model Rules (“Pillar Two”) for the global 15% minimum tax have been adopted in a number of jurisdictions in which we operate.

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(14) Net Income (Loss) per Share

The following table summarizes the computation of basic and diluted net income (loss) per share of our common stock for the years ended December 31, 2024, 2023 and 2022:

The following table summarizes the computation of basic and diluted net income (loss) per share of our common stock for the years ended December 31, 2025, 2024 and 2023 (in thousands, except share and per share data):

Year Ended December 31,

2025 2024 2023

(in thousands, except share and per share data)

Net income (loss) used to calculate net income (loss), basic $ 25,526 $ ( 152,815 ) $ ( 124,717 )

Net income (loss) attributable to common stockholders, basic and diluted $ 23,381 $ 25,526 $ ( 152,815 )

Weighted-average common shares outstanding, basic 64,727,551 62,607,583 60,756,087

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Weighted-average common shares outstanding, diluted 65,001,955 63,183,651 60,756,087

Net income (loss) per share, basic $ 0.41 $ ( 2.52 ) $ ( 2.13 )

Net income (loss) per share, diluted $ 0.40 $ ( 2.52 ) $ ( 2.13 )

We intend to settle any conversion of our 2025 Notes, 2027 Notes and 2029 Notes in cash, shares, or a combination thereof.

The dilutive impact of the Notes for our calculation of diluted net income (loss) per share is considered using the if-converted method.

For the years ended December 31, 2024, 2023 and 2022, the shares underlying the Notes were not considered in the calculation of diluted net income (loss) per share as the effect would have been anti-dilutive.

Net income (loss) per share attributable to common stockholders, basic $ 0.36 $ 0.41 $ ( 2.52 )

Net income (loss) per share attributable to common stockholders, diluted $ 0.36 $ 0.40 $ ( 2.52 )

We intend to settle any conversion of our 2027 Notes and 2029 Notes in cash, shares, or a combination thereof.

The dilutive impact of the Notes for our calculation of diluted net income per share is considered using the if-converted method.

For the years ended December 31, 2025, 2024 and 2023, the shares underlying the Notes were not considered in the calculation of diluted net income per share as the effect would have been anti-dilutive.

In connection with the issuance of the 2025 Notes, the 2027 Notes and the 2029 Notes, we entered into the 2025 Capped Calls, 2027 Capped Calls and 2029 Capped Calls, which were not included for the purpose of calculating the number of diluted shares outstanding, as their effect would have been anti-dilutive.

As of December 31, 2025, the 2027 Notes and the 2029 Notes were not convertible at the option of the holder.

As of December 31, 2024, the 2025 Notes were convertible at the option of the holder, however, the 2027 Notes and the 2029 Notes were not convertible at the option of the holder.

As of December 31, 2023, and 2022 the 2025 Notes, the 2027 Notes and the 2029 Notes were not convertible at the option of the holder.

We had not received any conversion notices through the issuance date of our consolidated financial statements.

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Unvested restricted stock units — — 2,983,020

Common stock issued in conjunction to acquisitions 227,316 115,051 74,627

Common shares issued in conjunction with acquisitions — 227,316 115,051

Shares to be issued under ESPP 173,166 91,634 103,778

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2026 $ 152,789

Thereafter 295,417

Total $ 715,013

In January 2025, we amended our contract with a cloud services provider which increased our total purchase obligation by $ 93.8 million in 2025, and $ 125.0 million in each of 2026, 2027, 2028 and 2029, respectively, for a total additional $ 593.8 million incremental to the amounts that are included in the table above.

In addition, the amended contract includes an additional $ 35.0 million obligation over the five-year period.

We provide limited product warranties.

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We agree to standard indemnification provisions in the ordinary course of business.

Pursuant to these provisions, we agree to indemnify, hold harmless and reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally our customers, in connection with any United States patent, copyright or other intellectual property infringement claim by any third party arising from the use of our products or services in accordance with the agreement or arising from our gross negligence, willful misconduct or violation of the law (provided that there is not gross or willful misconduct on the part of the

other party) with respect to our products or services.

The term of these indemnification provisions is generally perpetual from the time of execution of the agreement.

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We have never incurred costs to defend lawsuits or settle claims related to these indemnification provisions.

As permitted under Delaware law, we have entered into indemnification agreements with our officers and directors, indemnifying them for certain events or occurrences while they serve as officers or directors of the company.

(e) Income Taxes

From time to time, we may receive income tax assessments from taxing authorities asserting additional tax liabilities owed by the Company.

From time to time, we may receive income tax assessments from taxing authorities asserting additional tax liabilities owed.

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employees above the age 18 are eligible to participate after they have been employed for us for 90 days following the applicable date of hire.

Matching contributions to the 401(k) plan can be made at our discretion.

contributions to the 401(k) plan can be made at our discretion.

In 2025, 2024 and 2023, we made discretionary contributions of $ 3.3 million, $ 3.5 million and $ 4.3 million, respectively, to the plan.

(17) Segment Information and Information about Geographic Areas

We operate in a single reportable segment, providing product subscriptions and professional services to our customers.

The segment’s accounting policies are consistent with those described in Note 2, Summary of Significant Accounting Policies .

We operate in a single reportable operating segment, providing product subscriptions and professional services to our customers.

The operating segment’s accounting policies are consistent with those described in Note 2, Summary of Significant Accounting Policies .

Our chief operating decision maker (“CODM”) is our Chief Executive Officer.

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Consolidated net income is used by our CODM in monitoring actual versus budgeted results as well as in benchmarking against our competitors, which are used in assessing performance of the segment.

The following table includes segment revenue, segment profit or loss, significant segment expenses regularly provided to the CODM and other segment expenses for the years ended December 31, 2024, 2023 and 2022:

The following table includes segment revenue, segment profit or loss, significant segment expenses and other segment expenses for the years ended December 31, 2025, 2024 and 2023 (in thousands):

Year Ended December 31,

2025 2024 2023

(in thousands)

Total revenue $ 859,794 $ 844,007 $ 777,707

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57,161 55,792 53,374

Other segment expenses 2

Other segment expense, net (2)

112,351 137,982 255,036

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Adjusted sales and marketing excludes the impact of stock-based compensation and amortization of acquired intangible assets.

Adjusted general and administrative excludes the impact of stock-based compensation, amortization of acquired intangible assets, acquisition-related expenses and litigation-related expenses.

2 Other segment expenses include stock-based compensation expense, amortization of acquired intangible assets, acquisition-related expenses, litigation-related expenses, impairment of long-lived assets, restructuring expense, interest income, interest expense, other income (expense) and provision for (benefit from) income taxes.

Adjusted general and administrative excludes the impact of stock-based compensation, amortization of acquired intangible assets and acquisition-related expenses.

(2) Other segment expenses include stock-based compensation expense, amortization of acquired intangible assets, acquisition-related expenses, restructuring expense, interest income, interest expense, other income (expense) and provision for income taxes.

See the consolidated financial statements for other financial information regarding our operating segment.

Net revenues by geographic area presented based upon the location of the customer are as follows:

Property and equipment, net by geographic area was as follows (in thousands):

Year Ended December 31,

2024 2023 2022

(in thousands)

North America $ 643,405 $ 607,448 $ 541,812

Rest of world 200,602 170,259 143,271

Total $ 844,007 $ 777,707 $ 685,083

Property and equipment, net by geographic area was as follows:

As of December 31, 2024 As of December 31, 2023

(in thousands)

North America $ 22,613 $ 27,609

United States $ 18,243 $ 22,613

Rest of World 13,747 9,632

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(18) Restructuring

On August 7, 2023, our board of directors approved a restructuring plan that was designed to improve operational efficiencies, reduce operating costs and better align the Company’s workforce with current business needs, top strategic priorities and key growth opportunities (collectively, the “Restructuring Plan”).

The Restructuring Plan included a reduction of the Company’s workforce by approximately 16 %.

In 2023, we incurred $ 22.2 million of restructuring charges which were recorded within restructuring in the condensed consolidated statements of operations.

On August 7, 2023, our board of directors approved a restructuring plan that was designed to improve operational efficiencies, reduce operating costs and better align our workforce with current business needs, top strategic priorities and key growth opportunities (collectively, the “Restructuring Plan”).

The Restructuring Plan included a reduction of our workforce by approximately 16 %.

In 2023, we incurred $ 22.2 million of restructuring charges which were recorded within restructuring in the consolidated statements of operations.

In addition, we incurred $ 1.3 million of stock-based compensation expense related to acceleration of share-based awards.

In 2023, we permanently closed certain idle office spaces in Plano, Texas;

Los Angeles, California;

and Toronto, Canada, which resulted in an impairment loss of $ 3.6 million.

In 2023, we permanently closed certain idle office spaces in Plano, Texas, Los Angeles, California and Toronto, Canada, which resulted in an impairment loss of $ 3.6 million.

Refer to Note 11, Leases , for further details on the impairment of long-lived assets.

As of December 31, 2023, the restructuring liability accrued but not paid totaled $ 3.8 million, which was included within accrued expenses in the condensed consolidated balance sheets.

During the first quarter of 2024, the execution of the Restructuring Plan was completed and we recorded $( 0.2 ) million of restructuring charges within general and administrative expense in the consolidated statements of operations.

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99, Materiality , and SAB No.

108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements , the Company evaluated the errors and determined that the related impact was not material to results of operations or financial position for any historical annual or interim period.

As a result, we are correcting the errors by adjusting prior period financial statements as of and for each of the quarterly and year-to-date periods shown below.

Additionally, Note 13, Stock-Based Compensation, Note 14, Income Taxes and Note 15, Net Income (Loss) per Share, have been adjusted to reflect the correction of the immaterial errors.

The following table sets forth the effect of the immaterial error correction to certain line items of our consolidated statement of operations, consolidated balance sheet and consolidated statement of cash flows as of and for the year ended December 31, 2023:

108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements , we evaluated the errors and determined that the related impact was not material to results of operations or financial position for any historical annual or interim period.

As a result, the errors were corrected in our 2024 financial statements by adjusting prior period financial statements as of and for each of the quarterly and year-to-date periods shown below.

Additionally, Note 12, Stock-Based Compensation, Note 13, Income Taxes and Note 14, Net Income (Loss) per Share, were adjusted in our 2024 financial statements to reflect the correction of the immaterial errors.

Year Ended December 31, 2023

As Reported Adjustment Revised

(in thousands, except per share amounts)

Consolidated Statement of Operations:

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As Reported Adjustment Revised

(in thousands)

Consolidated Balance Sheet:

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The following tables set forth the effect of the immaterial error corrections to (i) certain line items of our unaudited condensed consolidated statements of operations for the interim periods ended March 31, 2023, June 30, 2023, September 30, 2023 and December 31, 2023, as well as (ii) certain line items of our unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of cash flows for the interim periods ended March 31, 2024, June 30, 2024 and September 30, 2024.

Prospectively, we will effect an immaterial error correction of these unaudited condensed consolidated financial statements for the 2024 interim periods as those statements are reproduced on a comparative basis in our Quarterly Reports on Form 10-Q throughout fiscal year 2025:

The immaterial error correction of these unaudited condensed consolidated financial statements for the 2024 interim periods was reflected when those statements were reproduced on a comparative basis in our Quarterly Reports on Form 10-Q throughout fiscal year 2025:

Three Months Ended March 31, 2023 Three Months Ended June 30, 2023

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data