Rapid7 Q2 2026 earnings beat estimates as company plans 12% workforce cut
Rapid7 beat Q2 estimates and lifted profit targets while keeping its revenue midpoint unchanged and planning a 12% workforce reduction.
By Dominic Okoye · Staff Writer
· 3 min read
Rapid7 Q2 2026 earnings exceeded reported Wall Street estimates, while the cybersecurity company said it would reduce its workforce by about 12% and lifted its full-year profit outlook. The results point to a higher margin target without a higher sales target: Rapid7 kept the midpoint of its full-year revenue guidance at $839 million.
For the quarter ended June 30, Rapid7 reported revenue of $210.9 million, down 1.5% from a year earlier, and non-GAAP diluted earnings of $0.44 a share. Reported analyst consensus called for roughly $208 million in revenue and $0.35 a share in adjusted earnings, according to SiliconANGLE and Investing.com.
The company also reported GAAP operating income of $3 million and GAAP net income of $6.1 million. Non-GAAP operating income was $28.9 million, while free cash flow was $31.9 million. Rapid7 ended the quarter with $702.6 million in cash, cash equivalents and government securities, according to a summary of its SEC filing.
What did Rapid7 change in its 2026 outlook?
Rapid7 narrowed its full-year revenue forecast to $837 million to $841 million, from $836 million to $842 million in May. Both ranges have a $839 million midpoint. It raised projected non-GAAP operating income to $129 million to $133 million, from $112 million to $118 million, and increased non-GAAP EPS guidance to $1.78 to $1.83 from $1.52 to $1.60.
The operating-income midpoint therefore rose $16 million, to $131 million from $115 million. Free-cash-flow guidance remained about $130 million. The unchanged revenue midpoint alongside higher operating-income guidance suggests a greater emphasis on margins; management said restructuring savings were expected to begin affecting results in the fourth quarter, according to Investing.com.
Rapid7’s second-quarter numbers also exceeded its own May outlook, when it forecast revenue of $207 million to $209 million, non-GAAP operating income of $24 million to $26 million, and non-GAAP EPS of $0.33 to $0.36.
How large is Rapid7’s workforce reduction?
The board-approved restructuring plan will affect approximately 12% of the workforce, with employees in affected roles already notified, according to the filing summary. Rapid7 expects $10 million to $11 million in charges, mainly severance and related employee costs. It expects substantially all related cash payments in the third and fourth quarters of 2026, though local consultation requirements could delay some job eliminations.
The company did not disclose a current headcount or a precise number of roles being eliminated. Its year-end 2025 filing reported more than 11,500 customers, but that does not establish the number of employees currently affected.
Chief Executive Wael Mohamed said customers wanted the company to go deeper in detection and response and exposure management rather than extend its portfolio more broadly. The restructuring is intended to simplify operations and concentrate investment on core platform and AI capabilities, according to the SEC filing summary.
The stated focus comes as the company continues to report declining revenue and annual recurring revenue. ARR, which tracks the annualized recurring subscription base rather than total revenue or profit, was $824 million in the second quarter, down 2% year over year. For the third quarter, Rapid7 forecast revenue of $208 million to $210 million and ending ARR of about $812 million.
Rapid7 shares rose in after-hours trading following the announcement on Aug. 10, though supplied market reports put the increase in a range of roughly 6% to 9% at different points in the session.
This story draws on original reporting from SiliconANGLE.
