What changed in this filing

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Item 1. Financial Statements

2026-05-05 compared with 2025-11-05 · 257 added, 253 removed, 396 unchanged (56% of the section changed)

2 unchanged sentences

(in thousands, except share and per share data)

September 30, 2025 December 31, 2024

March 31, 2026 December 31, 2025

Current assets:

1 unchanged sentence

Short-term investments 326,967 228,006

Accounts receivable, net of allowance for credit losses of $ 2,595 and $ 1,833 at September 30, 2025 and December 31, 2024, respectively

Accounts receivable, net of allowance for credit losses of $ 2,063 and $ 2,476 at March 31, 2026 and December 31, 2025, respectively

135,128 167,017

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Preferred stock, $ 0.01 par value per share;

10,000,000 shares authorized at September 30, 2025 and December 31, 2024;

0 shares issued and outstanding at September 30, 2025 and December 31, 2024

10,000,000 shares authorized at March 31, 2026 and December 31, 2025;

0 shares issued and outstanding at March 31, 2026 and December 31, 2025

Common stock, $ 0.01 par value per share;

100,000,000 shares authorized at September 30, 2025 and December 31, 2024;

65,908,155 and 64,067,220 shares issued at September 30, 2025 and December 31, 2024, respectively;

65,337,900 and 63,496,965 shares outstanding at September 30, 2025 and December 31, 2024, respectively

Treasury stock, at cost, 570,255 shares at September 30, 2025 and December 31, 2024

100,000,000 shares authorized at March 31, 2026 and December 31, 2025;

67,342,257 and 66,417,175 shares issued at March 31, 2026 and December 31, 2025, respectively;

66,772,002 and 65,846,920 shares outstanding at March 31, 2026 and December 31, 2025, respectively

Treasury stock, at cost, 570,255 shares at March 31, 2026 and December 31, 2025

( 4,765 ) ( 4,765 )

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(in thousands, except share and per share data)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Product subscriptions $ 204,049 $ 203,935

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Total operating expenses 145,500 150,874

Income from operations 5,903 12,817 9,296 27,756

Loss from operations ( 558 ) ( 101 )

Other income (expense), net:

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Income before income taxes 1,830 4,805

(Benefit) provision for income taxes ( 497 ) 2,952 4,203 12,415

Provision for income taxes 700 2,700

Net income $ 1,130 $ 2,105

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

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited)

(in thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Three Months Ended March 31,

Net income $ 1,130 $ 2,105

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Adjustment for net losses (gains) realized on cash flow hedges and included in net income, net of taxes 927 ( 325 )

827 ( 183 ) 973 ( 656 )

Total change in unrealized (losses) gains on cash flow hedges ( 1,690 ) 1,490

Change in unrealized gains on investments 274 1,123 232 359

Change in unrealized (losses) gains on investments ( 748 ) 134

Total other comprehensive (loss) income ( 2,438 ) 1,624

Comprehensive income

$ 8,754 $ 18,190 $ 23,916 $ 23,939

Comprehensive (loss) income $ ( 1,308 ) $ 3,729

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

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited)

Three Months Ended September 30, 2025 and 2024

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)

Three Months Ended March 31, 2026 and 2025

(in thousands)

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Shares Amount Shares Amount

Balance, June 30, 2025 64,707 $ 646 571 $ ( 4,765 ) $ 1,068,643 $ 3,514 $ ( 977,591 ) $ 90,447

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

Stock-based compensation expense — — — — 18,717 — — 18,717

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Net income — — — — — — 1,130 1,130

Balance, September 30, 2025 65,338 $ 652 571 $ ( 4,765 ) $ 1,096,652 $ 2,459 $ ( 967,782 ) $ 127,216

Common stock Treasury stock Additional

paid-in-capital Accumulated

comprehensive

loss Accumulated

deficit Total

stockholders’

Shares Amount Shares Amount

Balance, June 30, 2024 62,702 $ 628 570 $ ( 4,765 ) $ 957,996 $ ( 851 ) $ ( 1,005,616 ) $ ( 52,608 )

Stock-based compensation expense — — — — 25,738 — — 25,738

Issuance of common stock under employee stock purchase plan 144 1 — — 4,200 — — 4,201

Vesting of restricted stock units 341 3 — — ( 3 ) — — —

Shares withheld for employee taxes ( 21 ) — — — ( 794 ) — — ( 794 )

Issuance of common stock upon exercise of stock options 11 — — — 136 — — 136

Other comprehensive gain — — — — — 2,780 — 2,780

Net income — — — — — — 15,410 15,410

Balance, September 30, 2024 63,177 $ 632 570 $ ( 4,765 ) $ 987,273 $ 1,929 $ ( 990,206 ) $ ( 5,137 )

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

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited)

Nine Months Ended September 30, 2025 and 2024

(in thousands)

Balance, March 31, 2026 66,772 $ 667 571 $ ( 4,765 ) $ 1,142,304 $ 89 $ ( 963,523 ) $ 174,772

Common stock Treasury stock Additional

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Issuance of common stock upon exercise of stock options 157 1 — — 1,588 — — 1,589

Issuance of common stock from acquisition 32 — — — 755 — — 755

Other comprehensive gain — — — — — 1,624 — 1,624

Net income — — — — — — 2,105 2,105

Balance, September 30, 2025 65,338 $ 652 571 $ ( 4,765 ) $ 1,096,652 $ 2,459 $ ( 967,782 ) $ 127,216

Common stock Treasury stock Additional

paid-in-capital Accumulated

comprehensive

loss Accumulated

deficit Total

stockholders’

Shares Amount Shares Amount

Balance, December 31, 2023 61,714 $ 617 570 $ ( 4,765 ) $ 898,185 $ 1,344 $ ( 1,013,560 ) $ ( 118,179 )

Stock-based compensation expense — — — — 80,549 — — 80,549

Issuance of common stock under employee stock purchase plan 292 3 — — 9,243 — — 9,246

Vesting of restricted stock units 1,123 11 — — ( 11 ) — — —

Shares withheld for employee taxes ( 83 ) — — — ( 3,883 ) — — ( 3,883 )

Issuance of common stock upon exercise of stock options 131 1 — — 1,538 — — 1,539

Other comprehensive gain — — — — — 585 — 585

Net income — — — — — — 23,354 23,354

Balance, September 30, 2024 63,177 $ 632 570 $ ( 4,765 ) $ 987,273 $ 1,929 $ ( 990,206 ) $ ( 5,137 )

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

Balance, March 31, 2025 64,182 $ 642 571 $ ( 4,765 ) $ 1,042,355 $ 419 $ ( 985,929 ) $ 52,722

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

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

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Other investing activities — 1,328

Net cash used in investing activities ( 292,182 ) ( 99,488 )

Net cash provided by (used in) investing activities $ 55,255 $ ( 79,213 )

Cash flows from financing activities:

Payment of debt issuance costs ( 1,693 ) —

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

Taxes paid related to net share settlement of equity awards ( 255 ) ( 1,303 )

1 unchanged sentence

Proceeds from stock option exercises — 1,589

Net cash (used in) provided by financing activities ( 40,828 ) 6,799

Net cash provided by financing activities $ 2,634 $ 4,732

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 1,079 ) 1,334

Net (decrease) increase in cash, cash equivalents and restricted cash $ ( 211,488 ) $ 15,978

Net increase (decrease) in cash, cash equivalents and restricted cash $ 96,627 $ ( 43,390 )

Cash, cash equivalents and restricted cash, beginning of period 246,664 342,101

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Cash and cash equivalents 343,291 291,462

Restricted cash included in other assets — 7,537

Restricted cash included in prepaid expenses and other current assets — 7,249

Total cash, cash equivalents and restricted cash $ 343,291 $ 298,711

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Description of Business

and subsidiaries (“we,” “us” or “our”) are advancing security with visibility, analytics, and automation delivered through our platform solutions.

Our solutions simplify the complex, allowing security teams to work more effectively with IT and development to reduce vulnerabilities, monitor for malicious behavior, investigate and shut down attacks, and automate routine tasks.

Immaterial Correction of an Error

During the fourth quarter of 2024, we identified an immaterial error related to stock-based compensation expense associated with certain restricted stock units (“RSUs”) and performance stock units (“PSUs”) granted during fiscal years 2023 and 2024 attributable to an improper valuation of the underlying awards, resulting in an understatement of stock-based compensation expense in 2023 and 2024.

Based on an analysis of quantitative and qualitative factors in accordance with Staff Accounting Bulletin (“SAB”) No.

99, Materiality, and SAB No.

108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, and as described further in Note 15, 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 comparative financial information presented herein for such immaterial errors .

and subsidiaries (“we,” “us” or “our”) specialize in AI-powered managed cybersecurity operations, trusted to advance organizations’ cyber resilience.

Open and extensible, the Rapid7 Command Platform integrates security data, enriching it with AI, threat intelligence, and 25 years of expertise and innovation to reduce risk and disrupt attackers.

With deep expertise in preemptive managed detection and response (MDR), Rapid7 unifies exposure and detection to transform the cybersecurity operations of more than 11,500 customers worldwide.

Basis of Presentation and Consolidation

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These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February, 19, 2026.

The condensed consolidated financial statements include our results of operations and those of our wholly-owned subsidiaries and reflect all adjustments (consisting solely of normal, recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented.

The unaudited condensed consolidated financial statements include our results of operations and those of our wholly-owned subsidiaries and reflect all adjustments (consisting solely of normal, recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods presented.

All intercompany transactions and balances have been eliminated in consolidation.

The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year.

The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes.

The management estimates include, but are not limited to the determination of standalone selling prices in revenue transactions with multiple performance obligations, the estimated period of benefit for deferred contract acquisition costs, the useful lives and recoverability of long-lived assets, the valuation for credit losses, the valuation of stock-based compensation, the fair value of assets acquired and liabilities assumed in business combinations, the valuation of contingent consideration, the incremental borrowing rate for operating leases and the valuation for deferred tax assets.

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Significant Accounting Policies

Stock-Based Compensation

Stock-based compensation expense related to PSU awards with a market condition are measured at fair value using a Monte Carlo simulation model and the expense related to these awards is recognized on a straight-line basis, over the requisite service period of the awards, which is generally the vesting term.

Our significant accounting policies are described in Note 2, Summary of Significant Accounting Policies , to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.

There have been no changes to the significant accounting policies during the nine-month period ended September 30, 2025.

There have been no other changes to the significant accounting policies during the three months ended March 31, 2026 .

Recent Accounting Pronouncements

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.

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, with early adoption permitted.

The Company is currently evaluating the effect of adopting this ASU.

Accounting Pronouncements Recently Adopted

Effective January 1, 2026, the Company adopted ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

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

This guidance is designed to reduce the cost and complexity of the pre-existing application of the current expected credit loss (Topic 326).

It does this by introducing a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of current accounts receivable;

and a separate accounting policy election to consider collection activity after the balance sheet date when estimating expected credit losses.

We adopted the standard prospectively and elected the practical expedient but did not adopt the accounting policy election.

The adoption of ASU 2025-05 did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

Accounting Pronouncements Not Yet Effective

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

Entities are required to disaggregate any relevant expense caption presented on the face of the income statement within continuing operations into the following required natural expense categories, as applicable:

(1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities or other depletion expenses.

Such disclosures must be made on an annual and interim basis in a tabular format in the footnotes to the financial statements.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2027.

Early adoption is permitted.

We do not plan to early adopt this standard and are currently evaluating the effect of adopting this standard.

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”).

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 adopting this standard on our disclosures.

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.

Revenue from Contracts with Customers

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Product Subscriptions

Product subscriptions consists primarily of revenue from our cloud-based subscription, managed services offerings, term software licenses, 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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These contracts generally have terms of one year or less.

For the majority of these contracts, revenue is recognized over time based upon the proportion of work performed to date.

For the majority of these arrangements, revenue is recognized over time based upon the proportion of work performed to date.

Contract Balances

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Such amounts are recognized as revenue over the contractual period consistent with the above methodology.

For the three months ended September 30, 2025 and 2024, we recognized revenue of $ 192.7 million and $ 184.6 million, respectively, that was included in the contract liability balance as of June 30 of each respective year.

For the nine months ended September 30, 2025 and 2024, we recognized $ 413.4 million and $ 398.3 million, respectively, that was included in the contract liability balance as of December 31 of the respective preceding year.

For the three months ended March 31, 2026 and 2025, we recognized revenue of $ 182.7 million and $ 185.6 million, respectively, that was included in the corresponding contract liability balance as of January 1 of each respective year.

Deferred revenue that will be realized during the succeeding 12-month period is recorded as current, and the remaining deferred revenue is recorded as non-current.

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Unbilled receivables include amounts related to our contractual right to consideration for both completed and partially completed performance obligations that have not been invoiced.

If the right to consideration is based on satisfaction of another performance obligation in the contract other than the passage of time, we

record a contract asset.

As of September 30, 2025 and December 31, 2024, unbilled receivables of $ 3.1 million and $ 2.5 million, respectively, are included in prepaid expenses and other current assets in our consolidated balance sheet.

As of September 30, 2025 and December 31, 2024, we had no contract assets recorded on our unaudited condensed consolidated balance sheet.

If the right to consideration is based on satisfaction of another performance obligation in the contract other than the passage of time, we would record a contract asset.

As of March 31, 2026 and December 31, 2025, unbilled receivables of $ 3.4 million and $ 2.7 million, respectively, are included in prepaid expenses and other current assets in our unaudited condensed consolidated balance sheet.

As of March 31, 2026 and December 31, 2025, we have no contract assets recorded on our unaudited condensed consolidated balance sheet.

Disaggregated Revenue by geographic location:

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

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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

Three Months Ended March 31,

United States $ 147,025 $ 150,550

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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 September 30, 2025 (in thousands).

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 March 31, 2026 (in thousands).

The estimated revenues do not include unexercised contract renewals.

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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 nine months ended September 30, 2025 and 2024 (in thousands):

Nine Months Ended September 30,

The following table summarizes the activity of the deferred contract acquisition and fulfillment costs, which primarily consist of capitalized sales commissions, for the three months ended March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,

Beginning balance $ 115,348 $ 125,806

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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 .

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.

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.

The approximate $ 6.9 million of the Earnout Consideration that is subject to continued employment will be recognized as stock-based compensation expense over the required employment period.

The fair value of the portion of the Earnout Consideration that is not subject to continued employment is included as part of purchase

consideration at the date of the acquisition.

As of July 3, 2024, we determined the fair value of the contingent purchase consideration to be $ 12.1 million.

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 September 30, 2025 , the fair value of the contingent purchase c onsideration was $ 13.0 million of which $ 7.2 million was recorded within accrued expenses and other current liabilities and $ 5.8 million was reco rded within other liabilities in our unaudited condensed consolidated balance sheet.

For the three and nine months ended September 30, 2025 , we recorded approximately $ 0.2 million and $ 0.6 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, the Company 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 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.

In the three and nine months ended September 30, 2025 , we recognized stock-based compensation expense related to such shares in the amount of $ 1.1 million and $ 3.1 million .

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):

Kenzo Security, Inc.

On March 26, 2026, we acquired all of the equity interest of Kenzo Security, Inc.

("Kenzo"), a United States-based agentic AI security platform built to scale autonomous security investigations , for a purchase price with an aggregate fair value of $ 25.5 million.

The purchase consideration consisted of $ 24.2 million in cash paid at closing and $ 1.3 million of deferred cash payments related to certain indemnities outlined in the purchase agreement.

The acquisition further enhances our Command Platform, accelerating managed detection and response ("MDR") services from AI-assisted workflows to AI-driven, machine-speed security operations.

In connection with the acquisition, we committed to issue an aggregate value of $ 25.3 million of our common stock to two key employees of Kenzo (the "Key Employee Consideration"), subject to continued employment.

These shares will be issued in three equal annual installments over a 36 -month period, starting on the first anniversary of the closing date of the transaction.

The Key Employee Consideration will be recognized as stock-based compensation expense over the required employment period.

For the three months ended March 31, 2026, we recognized stock-based compensation expense related to the Key Employee Consideration of approximately $ 0.1 million.

The number of shares to be issued at each issuance date will be determined by dividing the aggregate value by the 30-day average closing price per share of our common stock as of the issuance date.

The Company's obligations with respect to the Key Employee Consideration will be presented as a liability on our unaudited condensed consolidated balance sheet during the vesting period.

The preliminary allocation of the purchase price is based on our initial estimates of the fair values of assets acquired and liabilities assumed and is subject to revision.

The primary areas of the purchase price allocation that are not yet finalized relate to the fair values of the developed technology intangible asset and goodwill.

These valuations are pending the completion of third-party appraisals.

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):

Consideration:

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Deferred cash consideration 1,348

Contingent consideration 12,055

Fair value of total consideration transferred $ 25,515

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We identified developed technology as the sole acquired intangible asset.

The estimated fair value of the developed technology intangible asset was $ 11.5 million which was based on a valuation using a probability weighted expected return model (“PWERM”).

The estimated useful life of the developed technology is 7 years.

The estimated fair value of the developed technology intangible asset was $ 7.2 million with an estimated useful life of the developed technology is 6 years, which was based on a preliminary valuation using a probability weighted expected return model (“PWERM”).

As part of the PWERM, we made certain assumptions regarding the present value of the after-tax cash flows attributed to the developed technology at discount rate which reflected any risks associated with the developed technology and our weighted average cost of capital.

Any future adjustments made to the fair value of the developed technology, any assets acquired, or liabilities assumed will be adjusted in the period they are determined and recognized with a corresponding adjustment to goodwill.

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

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

Our revenue and net income attributable to the Noetic business for the three and nine months ended September 30, 2025 were not material.

In the three months ended March 31, 2026, we recorded $ 0.5 million, of acquisition-related transaction costs related to the acquisition of Kenzo to general and administrative expense.

Our revenue and net income attributable to the Kenzo business for the three months ended March 31, 2026 was not material.

Noetic Cyber, Inc.

On July 3, 2024, we acquired Noetic Cyber, Inc, (“Noetic”) for an aggregate fair value of $ 51.2 million, which included a contingent consideration arrangement (the “Earnout Consideration”) of up to $ 20.0 million, measured annually over a three-year period (the "Earnout Period") based on the achievement of certain performance targets and continued employment requirements.

If all performance targets are achieved, approximately $ 13.1 million of Earnout Consideration will be paid in cash, and the remaining $ 6.9 million will be settled in common stock, with the stock settled portion recognized as stock-based compensation expense over the required employment period.

The cash-settled portion was included in purchase consideration at acquisition and is remeasured each reporting period, with changes recorded to general and administrative expense.

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.

As of March 31, 2026 , 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 unaudited condensed consolidated balance sheet.

For the three months ended March 31, 2026 , we recorded approximately $ 0.1 million of accretion expense related to the contingent purchase consideration to general and administrative expense.

In the three months ended March 31, 2026 , we also recognized stock-based compensation expense related to these share-based awards in the amount of $ 1.0 million .

Refer to our Annual Report on Form 10-K for the year ended December 31, 2025 for additional information regarding the Noetic business combination.

Our revenue and net income attributable to the Noetic business for the three months ended March 31, 2026 was not material.

Our investments, which are all classified as available-for-sale, consisted of the following (in thousands):

As of September 30, 2025

As of March 31, 2026

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value

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

As of September 30, 2025 and December 31, 2024, our available-for-sale investments had maturities ranging from one to nineteen and from one to seventeen months , respectively.

For all of our investments for which the amortized cost basis was greater than the fair value at September 30, 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.

As of March 31, 2026 and December 31, 2025, our available-for-sale investments had maturities ranging from one to eleven months and from one to fourteen months , respectively.

On October 30, 2025, we entered into a $ 5.5 million investment in a privately-held cybersecurity company via a Simple Agreement for Future Equity (“SAFE”).

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 unaudited condensed consolidated balance sheets within the category of Other Assets.

During the three months ended March 31, 2026, we did not identify any impairments or observable price changes that would require an adjustment to the carrying value.

For all of our investments for which the amortized cost basis was greater than the fair value at March 31, 2026 and December 31, 2025, 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.

In making the determination as to whether the unrealized loss is other-than-temporary, we considered the length of time and extent the investment has been in an unrealized loss position, the financial condition and near-term prospects of the issuers, the issuers’ credit rating and the time to maturity.

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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 September 30, 2025

As of March 31, 2026

Level 1 Level 2 Level 3 Total

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Total assets $ 326,967 $ 626 $ — $ 327,593

Contingent consideration (other current liabilities and other long-term liabilities) — — 12,972 12,972

Contingent consideration (other current liabilities) — — 8,947 8,947

Total liabilities $ — $ — $ 8,947 $ 8,947

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

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

Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets) — 1,868 — 1,868

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 liabilities and other long term liabilities) — 1,415 — 1,415

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

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

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

As of September 30, 2025, the fair value of our 0.25 % and 1.25 % convertible senior notes due 2027 and 2029, as further described in Note 9, Debt , was $ 560.6 million and $ 264.9 million, respectively, based upon quoted market prices.

We consider the fair value of the Notes (as defined in Note 9, Debt ) to be a Level 2 measurement due to limited trading activity of the Notes.

As of September 30, 2025, the fair value of our contingent consideration, as further described in Note 3, Business Combinations, was $ 13.0 million and is classified as a Level 3 measurement based on inputs not observable in the market.

As of March 31, 2026, the fair value of our 0.25 % and 1.25 % convertible senior notes due 2027 and 2029, as further described in Note 9, Debt , was $ 563.4 million and $ 251.3 million, respectively, based upon quoted market prices.

We consider the fair value of the Notes (as defined in Note 9, Debt ) to be a

Level 2 measurement due to limited trading activity of the Notes.

As of March 31, 2026, the fair value of our contingent consideration, as further described in Note 3, 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 4 , Investments , is accounted for as an equity investment under the measurement alternative per ASC 321 as there was no readily determinable fair value.

The SAFE had a carrying amount of $ 5.5 million as of March 31, 2026 .

Property and Equipment

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

As of September 30, 2025 As of December 31, 2024

As of March 31, 2026 As of December 31, 2025

Computer equipment and software $ 23,375 $ 23,728

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Property and equipment, net $ 30,492 $ 31,990

We recorded depreciation expense of $ 2.3 million and $ 2.7 million for the three months ended September 30, 2025 and 2024, respectively, and $ 7.5 million and $ 8.4 million for the nine months ended September 30, 2025 and 2024, respectively.

We recorded depreciation expense of $ 2.4 million and $ 2.8 million for the three months ended March 31, 2026 and 2025, respectively.

During the three months ended March 31, 2026, we wrote off $ 0.8 million of fully depreciated computer equipment and software, in accordance with our policy as described in Note 2, Summary of Significant Accounting Policies , included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Goodwill and Intangibles

Goodwill was $ 575.3 million as of September 30, 2025 and December 31, 2024.

Goodwill was $ 593.3 million as of March 31, 2026 and $ 575.3 million as of December 31, 2025.

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

Carrying Amount

Balance at December 31, 2025 $ 575,268

Kenzo acquisition 18,066

Balance at March 31, 2026 $ 593,334

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 September 30, 2025 As of December 31, 2024

As of March 31, 2026 As of December 31, 2025

Weighted Average Estimated Useful Life (years) Gross Carrying

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Intangible assets are expensed on a straight-line basis over the useful life of the asset.

Amortization expense was $ 8.9 million and $ 8.5 million for the three months ended September 30, 2025 and 2024, respectively, and $ 26.8 million and $ 25.1 million for the nine months ended September 30, 2025 and 2024, respectively.

Estimated future amortization expense of the acquired identifiable intangible assets and completed capitalized internal-use software costs as of September 30, 2025 was as follows (in thousands):

2025 (for the remaining three months) $ 8,641

Amortization expense was $ 8.8 million and $ 8.9 million for the three months ended March 31, 2026 and 2025, respectively.

Estimated future amortization expense of the acquired identifiable intangible assets and completed capitalized internal-use software costs as of March 31, 2026 was as follows (in thousands):

2026 (for the remaining nine months) $ 22,491

2031 and thereafter 2,653

Total $ 62,463

The table above excludes the impact of $ 5.7 million of capitalized internal-use software costs for projects that have not been completed as of September 30, 2025, and therefore, all the costs associated with these projects have not been incurred.

The table above excludes the impact of $ 5.1 million of capitalized internal-use software costs for projects that have not been completed as of March 31, 2026, and therefore, all the costs associated with these projects have not been incurred.

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 nineteen months or less, and as of September 30, 2025 and December 31, 2024, outstanding forward contracts had a total notional value of $ 84.6 million and $ 50.4 million, respectively.

These forward contracts have contractual maturities of fifteen months or less, and as of March 31, 2026 and December 31, 2025, outstanding forward contracts had a total notional value of $ 55.7 million and $ 78.8 million, respectively.

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

During the three and nine months ended September 30, 2025 and 2024, all cash flow hedges were considered effective.

During the three months ended March 31, 2026 and 2025, all cash flow hedges were considered effective.

Refer to Note 5, Fair Value Measurements , for the fair values of our outstanding derivative instruments.

Convertible Senior Notes

In May 2020, we issued $ 230.0 million aggregate principal amount of convertible senior notes due May 1, 2025 (the “2025 Notes”), in March 2021, we issued $ 600.0 million aggregate principal amount of convertible senior notes due March 15, 2027 (the “2027 Notes”), and in September 2023, we issued $ 300.0 million aggregate principal amount of convertible senior notes due March 15, 2029 (the “2029 Notes”) (collectively, the “Notes”).

In March 2021, we issued $ 600.0 million aggregate principal amount of convertible senior notes due March 15, 2027 (the “2027 Notes”), and in September 2023, we issued $ 300.0 million aggregate principal amount of convertible senior notes due March 15, 2029 (the “2029 Notes”) (collectively, the “Notes”).

In September 2023, we used $ 201.0 million of the proceeds from the issuance of the 2029 Notes to repurchase and retire $ 184.0 million aggregate principal amount of the 2025 Notes and paid accrued and unpaid interest thereon.

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Issuance Maturity Date Interest Rate First Interest Payment Date Effective Interest Rate Semi-Annual Interest Payment Dates Initial Conversion Rate per $1000 principal Initial Conversion Price Number of shares (in millions)

2025 Notes May 1, 2025 2.25 % November 1, 2020 2.88 % May 1 and November 1 16.3875 61.02 0.8

2027 Notes March 15, 2027 0.25 % September 15, 2021 0.67 % March 15 and September 15 9.6734 103.38 5.8

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

On May 1, 2025, the Company 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 the Company, as issuer, and U.S.

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

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 September 30, 2025, the 2027 Notes and the 2029 Notes were not convertible at the option of the holders.

As of March 31, 2026, the 2027 Notes and the 2029 Notes were not convertible at the option of the holders.

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.

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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.

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.

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.

For additional details on the terms of our Notes, see Note 10, Debt , to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Accounting for the Notes

In accounting for the issuance of the Notes, the principal less debt issuance costs are recorded as debt on our unaudited condensed consolidated balance sheet.

In accounting for the issuance of the Notes, the principal less debt issuance costs are recorded as debt on our consolidated balance sheet.

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 September 30, 2025 and December 31, 2024 was as follows (in thousands):

2025 Notes 2027 Notes 2029 Notes

Principal Unamortized debt issuance costs Total Principal Unamortized debt issuance costs Total Principal Unamortized debt issuance costs Total

The net carrying amount of the Notes as of March 31, 2026 and December 31, 2025 was as follows (in thousands):

2027 Notes 2029 Notes

Principal Unamortized debt issuance costs Total Principal Unamortized debt issuance costs Total

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

Amortization of debt issuance costs — 619 619 — 338 338

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

Balance at September 30, 2025 $ — $ — $ — $ 600,000 $ ( 3,684 ) $ 596,316 $ 300,000 $ ( 5,037 ) $ 294,963

Balance at March 31, 2026 $ 600,000 $ ( 2,425 ) $ 597,575 $ 300,000 $ ( 4,334 ) $ 295,666

Interest expense related to the Notes was as follows (in thousands):

Three Months Ended September 30,

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

Contractual interest expense $ — $ 375 $ 938 $ 1,313 $ 258 $ 375 $ 938 $ 1,571

Amortization of debt issuance costs — 639 363 1,002 79 634 455 1,168

Total interest expense $ — $ 1,014 $ 1,301 $ 2,315 $ 337 $ 1,009 $ 1,393 $ 2,739

Nine Months Ended September 30,

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

Three Months Ended March 31,

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

Contractual interest expense $ 375 $ 938 $ 1,313 $ 259 $ 375 $ 937 $ 1,571

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Total interest expense $ 994 $ 1,276 $ 2,270 $ 331 $ 990 $ 1,269 $ 2,590

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 2027 Notes (the "2027 Capped Calls") and the 2029 Notes (the “2029 Capped Calls” together with 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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The following table sets forth other key terms and premiums paid for the Capped Calls related to each series of Notes:

Capped Calls Entered into in Connection with the Issuance of the 2025 Notes Capped Calls Entered into in Connection with the Issuance of the 2027 Notes Capped Calls Entered into in Connection with the Issuance of the 2029 Notes

Capped Calls Entered into in Connection with the Issuance of the 2027 Notes Capped Calls Entered into in Connection with the Issuance of the 2029 Notes

Initial strike price, subject to certain adjustments $ 103.38 $ 64.85

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Total premium paid (in thousands) $ 76,020 $ 36,570

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.

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

Expiration dates January 1, 2027 - March 11, 2027 February 13, 2029 - March 13, 2029

For additional details on the terms of our Capped Calls, see Note 10, Debt , to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.

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.

The 2025 Capped Calls, 2027 Capped Calls and 2029 Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives.

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

The 2027 Capped Calls and 2029 Capped Calls are recorded in stockholders' equity and are not accounted for as derivatives.

Credit Agreement

On June 25, 2025 (the "Closing Date"), the Company entered into a credit agreement (the "Credit Agreement"), by and among the Company, 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).

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.

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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 the total net leverage ratio of the Company and its 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 condensed consolidated statement of operations.

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 the Company’s net leverage ratio.

As of September 30, 2025, we did not have any outstanding borrowings under the Credit Agreement.

The Company recorded $ 0.1 million of amortization of debt issuance costs related to the Credit Agreement for the three and nine months ended September 30, 2025.

As of September 30, 2025, we had a total of $ 6.0 million in letters of credit outstanding as collateral for certain office space leases which reduce the amount of borrowing availability under our Credit Agreement.

As of March 31, 2026, we did not have any outstanding borrowings under the Credit Agreement.

We recorded less than $ 0.1 million of amortization of debt issuance costs related to the Credit Agreement for the three months ended March 31, 2026.

As of March 31, 2026, 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.

Stock-Based Compensation

Stock-based compensation expense for restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”), stock options and purchase rights issued under our employee stock purchase plan was classified in the accompanying unaudited condensed consolidated statements of operations as follows (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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, and earnout consideration and key employee consideration shares related to acquisitions was classified in the accompanying unaudited condensed consolidated statements of operations as follows (in thousands):

Three Months Ended March 31,

Stock-based compensation expense:

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Total stock-based compensation expense $ 19,890 $ 27,151

The Company recognizes compensation cost of all awards on a straight-line basis over the applicable vesting period, which is generally three to four years .

The Company's Compensation Committee adopted and approved the performance goals, targets and payout formulas for the 2025 and 2024 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).

During the three

months ended September 30, 2025, the Company recognized a reduction to stock-based compensation expense related to such bonus of less than $ 0.1 million resulting from a revision in estimated achievement of the pre-established corporate objectives.

During the three months ended September 30, 2024, the Company recognized an expense of $ 0.4 million.

The reversal of expense recognized during the three months ended September 30, 2025 reflects a revision in the estimated achievement of the pre-established corporate financial objectives.

During the nine months ended September 30, 2025 and 2024, the Company recognized stock-based compensation expense in the amount of $ 0.7 million and $ 0.5 million, respectively, based on the probable expected performance against the pre-established corporate financial objectives as of September 30, 2025 and 2024.

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.

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 .

Our Compensation Committee adopted and approved the performance goals, targets and payout formulas for our 2026 and 2025 bonus plans.

In 2025, this approval included 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), which was subsequently eliminated by the Compensation Committee in the fourth quarter of 2025 and not offered in 2026.

For the three months ended March 31, 2025, we recognized stock-based compensation expense related to such bonuses in the amount of $ 0.3 million, based on the probable expected performance against the pre-established corporate financial objectives as of March 31, 2025.

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

RSUs and PSUs activity during the nine months ended September 30, 2025 was as follows:

Restricted Stock Weighted

Equity-classified RSUs and PSUs

RSUs and PSUs activity classified as equity during the three months ended March 31, 2026 was as follows:

Shares Weighted

Unvested balance as of December 31, 2025 3,970,517 $ 33.48

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Forfeited ( 478,009 ) 33.93

Unvested balance as of September 30, 2025 3,627,925 $ 40.85

As of September 30, 2025, the unrecognized compensation expense related to our unvested RSUs and PSUs was $ 68.0 million.

This unrecognized compensation expense will be recognized over an estimated weighted-average amortization period of 1.08 years.

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.

In addition, the portion of the PSUs that are earned would be capped at a maximum of 200 % of the target level payout and if certain net ARR or Adjusted EBITDA goals were not met, no PSUs will be earned.

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.

In the three and nine months ended September 30, 2025, we recorded $ 0.7 million and $ 1.8 million, respectively, of stock-based compensation expense related to these PSUs based on estimated achievement of the performance criteria.

Unvested balance as of March 31, 2026 6,114,656 $ 18.51

As of March 31, 2026, the unrecognized compensation expense related to our unvested equity-classified RSUs and PSUs was $ 98.8 million, which will be recognized over an estimated weighted average amortization period of 2.29 years.

In March 2026, our Compensation Committee awarded 467,945 RSUs and 1,051,538 PSUs as inducement grants concurrently with the acquisition of Kenzo.

The PSUs require the achievement of certain milestones based on our attainment of year over year managed MDR and security information and event management ("SIEM") annualized recurring revenue goals.

The PSUs have two measurement and vesting dates through March 31, 2029, subject to the award recipients' continuous service as of each such date.

If achievement of the milestones are not met, no PSUs will be earned.

In the three months ended March 31, 2026, we recorded less than $ 0.1 million of stock-based compensation expense related to these PSUs based on estimated achievement of the performance criteria.

In February 2026, our Compensation Committee awarded 567,108 PSUs based on achievement of total new annualized recurring revenue ("New ARR") and adjusted EBITDA (pre-bonus) targets for fiscal year 2026, with each metric weighted 50 %.

New ARR is defined as the annual value of new recurring revenue from new and existing customer contracts executed during fiscal year 2026.

Adjusted EBITDA Pre-Bonus is a non-GAAP measure that we define as net income before interest income, interest expense, other income (expense), net, provision for income taxes, depreciation expense, amortization of intangible assets, stock-based compensation expense, acquisition-related expenses, litigation-related expenses, impairment of long-lived assets, restructuring expense, and corporate bonus expense.

Payout ranges from 0 %- 150 % of targets, with no PSUs earned if minimum performance thresholds are not achieved.

The performance period is one year , and any earned PSUs will vest in three equal annual installments, subject to the participants' continuous service.

For the three months ended March 31, 2026, we recorded $ 0.2 million of stock-based compensation expense related to these PSUs based on estimated achievement of the performance criteria.

Liability-classified PSUs

PSUs activity classified as liability during the three months ended March 31, 2026 was as follows:

Shares Weighted

Unvested balance as of December 31, 2025 — $ —

Granted 2,188,750 2.00

Unvested balance as of March 31, 2026 2,188,750 $ 2.00

As of March 31, 2026, the unrecognized compensation expense related to our unvested liability-classified PSUs was $ 4.2 million, which will be recognized over an estimated weighted average amortization period of 3.0 years.

In March 2026, the Company's Compensation Committee granted 2,188,750 PSUs to executive officers and other key employees under the 2015 Plan.

These PSUs were granted under two separate plan designs with distinct payout targets, with 726,250 shares issued under Plan 1 and 1,462,500 issued under Plan 2.

These PSUs contain market-based performance conditions tied to the achievement of specified stock price hurdles for our common stock over a three-year performance period ending March 31, 2029.

The PSUs are structured to be settled in cash upon vesting, unless the Compensation Committee makes a one-time irrevocable election to settle the awards in shares of Rapid7 common stock in lieu of cash.

Once an election to settle the PSUs in common stock is made, it cannot be revoked, and the award will be settled exclusively in shares.

Absent such an election, the awards will be settled in cash based on the fair market value of our common stock on the settlement date.

The number of shares that may ultimately vest is based on the specified price hurdles when our common stock closes at or above the specified price for 30 consecutive calendar days.

The PSUs are also subject to continued employment through the end of the performance period, except in the case of certain qualifying terminations.

The stock price thresholds and related payout percentages between the two plans are as follows:

Price Hurdles

Below $15.00 $15.00 $17.50 $20.00 $25.00 $30.00 or Higher

Plan 1 — % 50 % 75 % 100 % 125 % 150 %

Plan 2 — % — % — % 100 % 125 % 150 %

Given these PSUs contain a market-based vesting condition, we estimate the fair value of the awards using a Monte Carlo simulation model, which is required because the stock price hurdles affect the number of shares that will ultimately vest.

The simulation models tens of thousands of potential stock price paths for the Company to estimate the probability of achieving various stock price hurdle outcomes.

The expense is recognized over the requisite service period based on the award's fair value remeasured at each reporting date using a Monte Carlo simulation model, with cumulative expense adjusted in the period of each remeasurement to reflect changes in fair value.

The following table summarizes the assumptions used in the Monte Carlo simulation model to estimate the fair value of the liability-classified PSUs as of March 31, 2026:

Plan 1 Plan 2

Expected term (in years) 3 3

Expected volatility 50.1 % 50.1 %

Risk-free interest rate 3.85 % 3.85 %

Expected dividend yield — % — %

Fair value per unit $ 2.37 $ 1.81

As the awards default to cash settlement, the awards are classified as liabilities until such time as the Compensation Committee makes an irrevocable election to issue shares.

As of March 31, 2026, the Compensation Committee has not approved a settlement in shares;

therefore, these PSUs remain classified as a liability.

The liability associated with these awards is initially measured at the estimated fair value of the award that is ultimately expected to vest on the grant date and is subsequently

remeasured to fair value at each reporting date until the earlier of (i) settlement in cash or (ii) the election to settle the PSUs in shares.

Changes in fair value are recognized as compensation expense (or a reduction thereof) in the period of change.

The stock-based compensation expense associated with these awards will be recognized over the three-year performance period associated with the awards.

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Outstanding as of December 31, 2025 223,232 $ 13.38 $ 498

Exercised ( 157,317 ) $ 10.10 $ 4,541

Forfeited/cancelled ( 2,000 ) 12.80

Outstanding as of September 30, 2025 425,121 $ 13.23 0.8 $ 2,371

Vested and exercisable as of September 30, 2025 425,121 $ 13.23 0.8 $ 2,371

Outstanding as of March 31, 2026 221,232 13.39 0.73 —

Vested and exercisable as of March 31, 2026 221,232 $ 13.39 0.73 $ —

(d) Employee Stock Purchase Plan

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(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.

On March 14, 2025, we issued 186,793 sha res of common stock to employees, with a purchase price of $ 23.79 per share, for aggregate proceeds of $ 4.4 million.

On September 15, 2025, we issued 198,074 shares of common stock to employees with a purchase price of $ 16.52 per share, for aggregate proceeds of $ 3.3 million.

On March 13, 2026, we issued 498,051 shares of common stock to employees, with a purchase price of $ 5.80 per share, for aggregate proceeds of $ 2.9 million.

We provide for income taxes during interim periods based on our estimate of the effective tax rate for the year.

Our effective tax rates for the three and nine months ended September 30, 2025 and 2024 are as follows:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Our effective tax rates for the three months ended March 31, 2026 and 2025 are as follows:

Three Months Ended March 31,

Effective Tax Rate 38.3 % 56.2 %

The primary reconciling items between the Federal statutory tax rate of 21% and our overall effective rate for the three and nine months ended September 30, 2025 were due to foreign taxes on our international operations, state income taxes, and the impact of valuation allowance on deferred tax assets.

The primary reconciling items between the Federal statutory tax rate of 21% and our overall effective rate for the three and nine months ended September 30, 2025 were due to foreign taxes on our international operations, state income taxes, the impact of valuation allowance on deferred tax assets, and certain discrete items.

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

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

The income tax effects of a change in tax law on current taxes related to current year ordinary income and changes to deferred taxes arising subsequent to the date of enactment are included in the annual effective tax rate, beginning in the period of enactment.

The Company concluded the OBBBA did not have a material impact on the Company's provision for income tax.

As a result of the application of OBBBA, the Company recorded a benefit to the tax provision for the three months ended September 30, 2025.

Net Income per Share

The following table summarizes the computation of basic and diluted net income per share of our common stock for the three and nine months ended September 30, 2025 and 2024 (in thousands, except share and per share data):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Net income attributable to common stockholders, basic and diluted $ 9,809 $ 15,410 $ 20,252 $ 23,354

The primary reconciling items between the Federal statutory tax rate of 21% and our overall effective rate for the three months ended March 31, 2026 were due to foreign taxes on our international operations, US federal and state income taxes, the impact of valuation allowance on deferred tax assets, and a discrete tax benefit related to our acquisition of Kenzo.

The primary reconciling items between the Federal statutory tax rate of 21% and our overall effective rate for the three months ended March 31, 2025 were due to foreign taxes on our international operations, state income taxes, and the impact of valuation allowance on deferred tax assets.

Net Income (Loss) per Share

The following table summarizes the computation of basic and diluted net income per share of our common stock for the three months ended March 31, 2026 and 2025 (in thousands, except share and per share data):

Three Months Ended March 31,

Net income (loss) attributable to common stockholders, basic and diluted $ 1,130 $ 2,105

Weighted average common shares outstanding, basic 66,174,341 63,835,945

Weighted average effect of dilutive shares:

Dilutive effect of employee equity incentive plans 214,827 455,396 286,430 652,017

Dilutive effect of convertible senior notes — 11,183,611 — 11,183,611

Dilutive effect of equity incentive plans 730,651 388,471

Weighted average common shares outstanding, diluted 66,904,992 64,224,415

Net income per share attributable to common stockholders, basic $ 0.15 $ 0.24 $ 0.31 $ 0.37

Net income per share attributable to common stockholders, diluted $ 0.15 $ 0.21 $ 0.31 $ 0.31

Net income (loss) per share attributable to common stockholders, basic $ 0.02 $ 0.03

Net income (loss) per share attributable to common stockholders, diluted $ 0.02 $ 0.03

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 three and nine months ended September 30, 2025, 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 September 30, 2025, the 2027 Notes and the 2029 Notes were not convertible at the option of the holder.

As of September 30, 2024, 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 unaudited condensed consolidated financial statements.

For the three months ended March 31, 2026 and 2025, 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 2027 Notes and the 2029 Notes, we entered into the 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 March 31, 2026, the 2027 Notes and the 2029 Notes were not convertible at the option of the holder.

As of March 31, 2025, 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.

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

For disclosure purposes, we have calculated the potentially dilutive effect of the conversion spread, which is included in the table below.

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted average shares outstanding for the respective periods below because they would have been anti-dilutive:

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Options to purchase common stock 5,130 584,078 991 584,078

Unvested restricted stock units 3,341,018 3,105,684 2,936,257 3,105,684

Three Months Ended March 31,

Common shares issued in conjunction with acquisitions 2,474,514 309,561

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(a) Purchase Obligations

In January 2025, we amended our contract with a cloud services provider which increased our total purchase obligation to $ 660 million, including a minimum purchase commitment of $ 125.0 million in 2025, 2026, 2027, 2028 and 2029, and an additional $ 35.0 million obligation over the five-year period.

During the three months ended March 31, 2026 there have been no material changes outside the ordinary course of business to the Company’s contractual obligations and commitments from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

We provide limited product warranties.

10 unchanged sentences

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.

(d) Income Taxes

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

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 $ 97 million, based upon current exchange rates between the Israeli New Shekel and the US Dollar) related to fiscal year 2021.

(e) Income Taxes

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 March 31, 2026 between the Israeli New Shekel and the US Dollar) related to fiscal year 2021.

Based on our interpretation of the regulations and available case law, we believe that the tax positions we have taken on our filed tax return in Israel are sustainable and we intend to defend our position through all available means.

As such, we have not recorded any impact of the ITA assessment in our unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2025.

As such, we have not recorded any impact of the ITA assessment in our unaudited condensed consolidated financial statements for the three months ended March 31, 2026.

We are continuing to monitor developments related to this matter and its impact on our existing income tax reserves for all open years.

2 unchanged sentences

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 1, Summary of Significant Accounting Policies .

The operating segment’s accounting policies are consistent with those described in Note 2, Summary of Significant Accounting Policies , to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.

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

One of the measures of profit or loss that is used by our CODM to assess performance and allocate resources is consolidated net income, as reported in the condensed consolidated statements of operations.

One of the measures of profit or loss that is used by our CODM to assess performance and allocate resources is consolidated net income, as reported in the unaudited condensed consolidated statements of operations.

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 and other segment expenses for the three and nine months ended September 30, 2025 and 2024 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

The following table includes segment revenue, segment profit or loss, significant segment expenses and other segment expenses for the three months ended March 31, 2026 and 2025 (in thousands):

Three Months Ended March 31,

Total revenue $ 209,691 $ 210,253

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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 (benefit) provision for income taxes.

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

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

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

As of September 30, 2025 As of December 31, 2024

As of March 31, 2026 As of December 31, 2025

United States $ 16,888 $ 18,243

1 unchanged sentence

Total $ 30,492 $ 31,990

Immaterial Correction of an Error

During the fourth quarter of 2024, we identified an immaterial error related to stock-based compensation expense associated with certain RSUs and PSUs granted during fiscal years 2023 and 2024 attributable to an improper valuation of the underlying awards, resulting in an understatement of stock-based compensation expense in 2023 and 2024.

In accordance with Staff Accounting Bulletin (“SAB”) No.

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 have corrected the errors by adjusting prior period financial statements as of and for the three and nine months ended September 30, 2024.

Refer to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 for detailed tables showing the effect of the immaterial error corrections to certain line items of our unaudited condensed consolidated statements of operations and unaudited condensed consolidated statements of cash flows for the interim period ended September 30, 2024.

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-Q

Item 1. Financial Statements