Shares of Rapid7 Inc. rose more than 8% in late trading today after the cybersecurity company beat second-quarter earnings and revenue estimates while disclosing plans to cut roughly 12% of its workforce.

For the quarter ended on June 30, Rapid7 reported adjusted earnings of 44 cents per share, down from 58 cents a year earlier, on revenue of $210.9 million, a decline of 1.5% year-over-year. Analysts were expecting 35 cents per share on revenue of $208 million.

Rapid7 said about 12% of its workforce has been notified that their positions are affected. Its board approved the plan on Aug. 7. The cost will run $10 million to $11 million, most of it severance, and the company expects to have paid out substantially all of it by the end of the year. Rapid7 employed 2,613 people at the end of December.

That puts the cut at roughly 310 jobs. Eliminations in some countries have to clear local consultation rules first, and those may run past the fourth quarter.

“Rapid7 is a good company ready to be great, but getting there requires clear choices, strong execution and the discipline to focus on what matters most,” Chief Executive Wael Mohamed said in the earnings release.

Mohamed said customers have been asking the company to go deeper in detection and response rather than broaden the portfolio. Exposure management is the other area he named. Rapid7 previously cut 18% of its staff in August 2023.

Annualized recurring revenue was $824 million, down 2%. A year earlier it stood at $841 million. Rapid7 counts more than 11,500 customers, and annual recurring revenue per customer came in around $70,000, down from $72,000.

Adjusted income from operations was $28.9 million. On an unadjusted basis, it was $3 million, with stock compensation accounting for most of the difference. Unadjusted net income was $6.1 million, or 9 cents per share. Free cash flow reached $31.9 million and the company closed the quarter with $702.6 million in cash, equivalents and government securities.

Third-quarter guidance came in light. Rapid7 is forecasting revenue of $208 million to $210 million, a drop of 4% to 5% year-over-year. Analysts had been looking for about $211 million. Adjusted earnings are pegged at 44 to 47 cents per share. Annual recurring revenue is expected to land near $812 million, a 3% decline.

Full-year revenue guidance moved little. Rapid7 now sees $837 million to $841 million, narrowed from $836 million to $842 million. The profit forecasts went up. Adjusted earnings per share are pegged at $1.78 to $1.83. The top of that range was $1.60 in May. Adjusted income from operations for the year is forecast at $129 million to $133 million, against prior guidance of $112 million to $118 million. Free cash flow should come in at about $130 million.

Mohamed took the chief executive job on June 1 from Corey Thomas, who had held the position for more than 13 years and is now executive chairman. Mohamed’s experience includes working in an operations role at Forescout Technologies Inc. and founding an investment firm. Earlier in his career, he worked at Trend Micro Inc. for 11 years, including as president and chief operating officer.

Photo: Rapid7/X