Shares in Rapid7 Inc. fell in late trading after the company predicted lower-than-expected revenue in its latest earnings report.

For its fourth quarter that ended Dec. 31, Rapid7 reported earnings before costs such as stock compensation of 35 cents a share, up from a loss of 17 cents a share in the same quarter of last year. Revenue rose 22% from a year ago, to $184.5 million. Analysts had expected earnings of 18 cents a share on revenue of $179.5 million.

The company’s numbers were up across the board, with product revenue up 22% year-over-year, to $172.9 million, and professional revenue up 12%, to $11.6 million. Adjusted net income was $22.5 million, compared with a loss of $8.9 million in the fourth quarter of 2022, and net cash provided by operating activities was $40.2 million, up from $4.7 million.

Highlights in the quarter included the Rapid7 showcasing several new cloud security capabilities at AWS re:Invent, including agentless vulnerability assessment and cloud detection and response. In October, Rapid7 achieved ISO27001 certification for information security management, which the company claims validates the high standard of its security strategy and processes.

For the full fiscal year 2022, Rapid7 reported adjusted earnings of 35 cents a share, up from a loss of five cents the year prior, on revenue of $685 million, up 29% year-over-year.

“Rapid7 ended the year with revenue, operating profit, and free cash flow that exceeded our targeted ranges,” Corey Thomas, chairman and chief executive officer of Rapid7, said in a statement. “Amidst an evolving economic landscape, we see customers continuing to expand their wallet share around our leading Insight platform, with ARR per customer growing double-digits from the prior year.”

For the first quarter of 2023, Rapid7 predicts adjusted earnings of seven to 10 cents a share on revenue of $180 million to $182 million. Analysts had been expecting seven cents and $185.7 million.

For its full fiscal year, the company expects adjusted earnings of 81 to 88 cents a share on revenue of $771 million to $778 million. Analysts had expected 49 cents and $789.82 million.

With the exception of its quarterly and full-year revenue outlook, Rapid7 reported strong figures, but it wasn’t enough for investors. Shares in Rapid7 were down almost 3% in late trading.

The earnings report comes a week after it was reported that Rapid7 was exploring a sale. The company is said to have received takeover interest from multiple potential buyers, including private equity firms.

Image: Rapid7