Shares in Rapid7 Inc. plunged more than 18% in late trading today after the cybersecurity solutions provider gave forecasts below expectations amid slowing growth, despite reporting earnings and revenue beats in its fiscal 2025 fourth quarter.

For the quarter that ended on Dec. 31, Rapid7 reported adjusted earnings per share of 44 cents, down from 48 cents per share in the same quarter of 2024, on revenue of $217 million, up 1% year-over-year. Both figures were ahead of the 41 cents per share and revenue of $215.39 million expected by analysts.

Rapid7 saw product revenue in the quarter of $209 million, up 1% year-over-year, net cash flow from operating activities through the quarter came in at $37.6 million and as of the end of the December, the company had annual recurring revenue of $840 million, no change from the same quarter in 2024.

Business highlights in the quarter included the launch in November of Curated Intelligence Rules for AWS Network Firewall, a new feature that allows Amazon Web Services Inc. customers to leverage curated threat intelligence directly within their native AWS environments. The offering is aimed at strengthening protection against threats by simplifying how organizations apply and operationalize threat intelligence at the network level in one of the most widely used cloud infrastructures.

In December, Rapid7 announced a partnership with HITRUST to automate cybersecurity assurance for regulated industries. The collaboration is aimed at helping organizations reduce the cost and complexity of meeting key compliance standards at a time when there is increasing regulatory focus on data protection and risk management.

December also saw the company being granted its 300th cybersecurity patent, marking a significant expansion of its intellectual property portfolio. Rapid7 now holds more than 80 patents that focus primarily on advanced artificial intelligence and machine learning technologies implemented across its products, platform and security operations center services.

For the full year, Rapid7 reported adjusted earnings per share of $2.08, down from $2.28 in 2024, on revenue of $860 million, up 2% year-over-year.

“Rapid7 exited 2025 delivering outperformance against fourth-quarter ARR, revenue and profitability guidance,” Chief Executive Corey Thomas said in the company’s earnings release. “Our differentiated approach to AI security operations continues to resonate with customers and gain market recognition.”

For its fiscal 2026 first quarter, Rapid7 expects adjusted earnings per share of 29 to 32 cents on revenue of $207 million to $209 million. Both figures were significantly short of the 47 cents per share and $213.3 million in revenue expected by analysts.

There was a similar shortfall with the full-year outlook, with Rapid7 expecting adjusted earnings of $1.50 to $1.60 and revenue of $835 million to $843 million, versus the $1.98 per share and revenue of $869.9 million expected by analysts.

While none of Rapid7’s fundamentals are necessarily bad, projected growth of about 2% to 3% in a market that sees other tech and cybersecurity companies growing far more quickly was enough to spook investors.

Photo: Rapid7