Q4 Earnings Highlights: Rapid7 (NASDAQ:RPD) Vs The Rest Of The Cybersecurity Stocks
Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Rapid7 (NASDAQ:RPD) and the best and worst performers in the cybersecurity industry.
Cybersecurity continues to be one of the fastest-growing segments within software for good reason. Almost every company is slowly finding itself becoming a technology company and facing rising cybersecurity risks. Businesses are accelerating adoption of cloud-based software, moving data and applications into the cloud to save costs while improving performance. This migration has opened them to a multitude of new threats, like employees accessing data via their smartphone while on an open network, or logging into a web-based interface from a laptop in a new location.
The 9 cybersecurity stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 1.1% while next quarter’s revenue guidance was in line.
While some cybersecurity stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.2% since the latest earnings results.
Rapid7 (NASDAQ:RPD)
Founded in 2000 with the idea that network security comes before endpoint security, Rapid7 (NASDAQ:RPD) provides software as a service that helps companies understand where they are exposed to cyber security risks, quickly detect breaches and respond to them.
Rapid7 reported revenues of $216.3 million, up 5.4% year on year. This print exceeded analysts’ expectations by 1.9%. Despite the top-line beat, it was still a weaker quarter for the company with full-year guidance of slowing revenue growth and full-year EPS guidance missing analysts’ expectations significantly.
“As we reflect on 2024, I’m proud of the progress we made to position Rapid7 for long-term growth and success. We achieved $840 million in ARR and delivered over $150 million in free cash flow, while advancing our strategic priorities to innovate, scale, and empower our customers to consolidate and secure their operations more effectively. Continued momentum in Managed Detection and Response and the launch of our Exposure Command platform have further strengthened our ability to deliver measurable value for customers,” said Corey Thomas, Chairman and CEO of Rapid7.
Rapid7 Total Revenue
Rapid7 delivered the weakest full-year guidance update of the whole group. The company added 108 customers to reach a total of 11,727. Unsurprisingly, the stock is down 19.2% since reporting and currently trades at $29.69.
After successfully selling all four of his previous cybersecurity companies, Jay Chaudhry's fifth venture, Zscaler (NASDAQ:ZS) offers software-as-a-service that helps companies securely connect to applications and networks in the cloud.
Zscaler reported revenues of $647.9 million, up 23.4% year on year, outperforming analysts’ expectations by 2.1%. The business had a very strong quarter with an impressive beat of analysts’ annual recurring revenue and EBITDA estimates.
Zscaler Total Revenue
The market seems content with the results as the stock is up 4% since reporting. It currently trades at $204.55.
Founded by a duo of former Israeli Defense Forces cyber warfare engineers, Varonis (NASDAQ:VRNS) offers software-as-service that helps customers protect data from cyber threats and gain visibility into how enterprise data is being used.
Varonis reported revenues of $158.5 million, up 2.9% year on year, falling short of analysts’ expectations by 4.2%. It was a softer quarter as it posted full-year EPS guidance missing analysts’ expectations and a significant miss of analysts’ EBITDA estimates.
Varonis delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 9.1% since the results and currently trades at $42.62.
Founded by George Kurtz, the former CTO of the antivirus company McAfee, CrowdStrike (NASDAQ:CRWD) provides cybersecurity software that protects companies from breaches and helps them detect and respond to cyber attacks.
CrowdStrike reported revenues of $1.06 billion, up 25.2% year on year. This result beat analysts’ expectations by 2.4%. Overall, it was a strong quarter as it also recorded a solid beat of analysts’ billings estimates and an impressive beat of analysts’ EBITDA estimates.
CrowdStrike pulled off the biggest analyst estimates beat among its peers. The stock is down 3.1% since reporting and currently trades at $377.91.
Founded in 2002 by three cybersecurity veterans, Tenable (NASDAQ:TENB) provides software as a service that helps companies understand where they are exposed to cyber security risk and how to reduce it.
Tenable reported revenues of $235.7 million, up 10.5% year on year. This print surpassed analysts’ expectations by 1.8%. Taking a step back, it was a mixed quarter as it also logged an impressive beat of analysts’ EBITDA estimates but EPS guidance for next quarter missing analysts’ expectations.
The stock is down 14.3% since reporting and currently trades at $37.04.
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