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Get filing alertsRapid7 cuts 12% of workforce, reports declining ARR and revenue, lowers full-year guidance
Filed August 10, 2026 · Period ending August 7, 2026 · ~1 min read
Key Changes
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high
Board approved 12% workforce reduction to simplify operations and realign resources with core platform; expects $10-11M in restructuring charges, primarily severance, to be incurred in Q3-Q4 2026.
Item 2.05 verify on EDGAR → -
high
Q2 2026 revenue declined 1.5% year-over-year to $210.9M; annualized recurring revenue fell 2.0% to $824.0M, signaling headwinds in the subscription business despite $31.9M free cash flow.
Exhibit 99.1 view on EDGAR → -
high
Q3 2026 guidance projects ARR down 3% year-over-year to ~$812M and revenue down 4-5% to $208-210M; full-year 2026 revenue expected at $837-841M, down 2-3% year-over-year.
Exhibit 99.1 view on EDGAR → -
medium
CEO outlined strategic shift to focus on core Detection and Response and Exposure Management capabilities rather than broader expansion, with resources realigned around core platform and AI foundation.
Exhibit 99.1 view on EDGAR → -
medium
Launched Cyber Governance Risk and Compliance platform, announced distribution agreement with Mindware for MDR services, and secured early access to Anthropic and OpenAI frontier AI models.
Exhibit 99.1 view on EDGAR →
Summary
Rapid7 disclosed a 12% workforce reduction as part of a restructuring plan approved August 7, 2026, designed to simplify operations and focus resources on its core cybersecurity platform. The company lowered its full-year 2026 guidance, projecting revenue of $837-841 million (down 2-3% year-over-year) and Q3 ARR declining 3% to approximately $812 million.
CEO Wael Mohamed framed the restructuring as a strategic refocusing on core Detection and Response and Exposure Management capabilities, moving away from broader expansion. While Rapid7 generated solid free cash flow of $31.9 million in Q2 and announced AI-powered product launches and partnerships with Anthropic and OpenAI, the combination of workforce cuts, declining ARR, and lowered guidance signals operational challenges. Investors should monitor whether the restructuring stabilizes revenue trends and whether the narrowed strategic focus can reignite growth in subsequent quarters.
Section-by-Section Diff
Event · Item 2.05 — Costs Associated with Exit or Disposal Activities
Item 2.05 — Costs Associated with Exit or Disposal Activities filed; see Key Changes for terms.
Added in current filing · verify on EDGAR →
On August 7, 2026, the board of directors of the Company approved a restructuring plan that is designed to simplify the Company's operations, align resources and investments with its core platform, and create capacity to reinvest in capabilities and solutions that improve the customer experience and strengthen the Company's competitive position (collectively, the “2026 Restructuring Plan”). The 2026 Restructuring Plan includes a reduction of the Company’s workforce by approximately 12%.
The board approved a restructuring plan on August 7, 2026, that will reduce the workforce by approximately 12%. The plan aims to simplify operations, align resources with the core platform, and create capacity for reinvestment in customer experience and competitive capabilities.
Added in current filing · verify on EDGAR →
The Company expects that the majority of the restructuring charges will be incurred in the third and fourth quarters of 2026 and that the execution of the 2026 Restructuring Plan, including cash payments, will be substantially complete by the end of the fourth quarter of 2026.
Most restructuring charges will be incurred in Q3 and Q4 2026, with execution and cash payments expected to be substantially complete by the end of Q4 2026. However, position eliminations in certain countries may extend beyond Q4 2026 due to local law and consultation requirements.
Event · Exhibit 99.1
Rapid7 reported Q2 2026 results with declining ARR and revenue, announced a 12% workforce reduction, and lowered full-year guidance.
Added in current filing · view on EDGAR →
Total revenue of $210.9 million, a decrease of 1.5% year-over-year. Product revenue of $205.1 million, a decrease of 1.5% year-over-year. ... Annualized recurring revenue of $824.0 million, a decrease of 2.0% year-over-year. ... GAAP income from operations of $3.0 million; Non-GAAP income from operations of $28.9 million. ... GAAP net income of $6.1 million or $0.09 per diluted share and non-GAAP net income of $33.0 million or $0.44 per diluted share. ... Net cash provided by operating activities of $37.0 million and free cash flow of $31.9 million.
Rapid7 reported second quarter 2026 revenue of $210.9 million, down 1.5% year-over-year, with annualized recurring revenue declining 2.0% to $824.0 million. The company achieved GAAP operating income of $3.0 million and non-GAAP operating income of $28.9 million, while generating $31.9 million in free cash flow. The revenue and ARR declines indicate headwinds in the company's core subscription business.
Added in current filing · view on EDGAR →
During the second quarter of 2026, the Company initiated a restructuring plan to streamline its organizational structure and better align resources and investments with its Core Platform Solutions, under which approximately 12% of the Company's workforce was notified that their positions would be affected. In connection with this plan, the Company expects to incur restructuring charges of approximately $10 million to $11 million, consisting primarily of severance and related employee costs, substantially all of which are expected to be paid during the third and fourth quarters of 2026
Rapid7 announced a restructuring affecting approximately 12% of its workforce to streamline operations and focus resources on its core platform solutions. The company expects to incur $10 million to $11 million in restructuring charges, primarily for severance, to be paid in Q3 and Q4 2026. This represents a significant organizational change aimed at improving operational efficiency.
Added in current filing · view on EDGAR → · paraphrased
ARR Approximately $812 million ... Year-over-year growth (3)% ... Revenue $208 to $210 ... Year-over-year growth (5)% to (4)% ... Non-GAAP income from operations $34 to $36 ... Non-GAAP net income per share, diluted $0.44 to $0.47 ... Revenue $837 to $841 ... Year-over-year growth (3)% to (2)% ... Non-GAAP income from operations $129 to $133 ... Non-GAAP net income per share, diluted $1.78 to $1.83 ... Free cash flow Approximately $130 million
Rapid7 guided Q3 2026 ARR to approximately $812 million (down 3% year-over-year) and revenue to $208-$210 million (down 4-5% year-over-year). For full-year 2026, the company expects revenue of $837-$841 million (down 2-3% year-over-year), non-GAAP operating income of $129-$133 million, and free cash flow of approximately $130 million. The guidance reflects continued revenue pressure but improved profitability.
Added in current filing · view on EDGAR →
In July, Rapid7 announced general availability of Rapid7 Cyber Governance Risk and Compliance, becoming the first major security operations platform to connect GRC workflows with live Security Operations data in one platform. ... In July, Rapid7 announced a strategic distribution agreement with Mindware to scale regional availability of its managed detection and response (MDR) services and AI-powered platform. ... In June, Rapid7 announced its participation in Anthropic’s Project Glasswing, obtaining early access to Claude Mythos Preview ... In May, Rapid7 announced access to OpenAI's Trusted Access for Cyber (TAC) program, integrating frontier models such as GPT-5.5 into its Agentic SOC workflows to accelerate telemetry triage and reduce false-positive queue times by 25%.
Rapid7 announced several strategic initiatives including the general availability of its Cyber Governance Risk and Compliance platform, a distribution agreement with Mindware for MDR services, and partnerships with Anthropic and OpenAI to integrate advanced AI models into its security operations platform. These moves demonstrate the company's focus on AI-powered cybersecurity and platform consolidation.
Added in current filing · view on EDGAR →
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 ... they want us to go deeper in Detection and Response and Exposure Management, not wider. The steps we're taking align our resources and investment behind our core platform and the AI foundation that connects it
CEO Wael Mohamed outlined a strategic shift toward focusing on core Detection and Response and Exposure Management capabilities rather than broader expansion. The company is realigning resources and investments around its core platform and AI foundation, with recent leadership additions in CFO, Chief Commercial Officer, and Chief Product and Technology Officer roles to support this transformation.
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Figures/quotes linked to EDGAR · Narrative written by AI · Aug 11, 2026 · How we verify