Rapid7, Inc. · NASDAQ:RPD
Rapid7 — Investor Presentation (December 2017)
14 slides from Rapid7's investor presentation, Dec 12, 2017
Slide 1: 30% ARR Growth Through 2020
Exhibit 99.1 30% ARR GROWTH THROUGH 2020 Incident Detection Vul bility & Response ulnerabili Management $1 8m ARR Expect 50%+ $123m aes ARR Expect 15%t+ Growth
Slide 2: Reiterating Q4 2017 & Full-Year 2017 Guidance
Reiterating Q4 2017 & Full-Year 2017 Guidance Rapid7 anticipates total revenue, non-GAAP loss from operations, non-GAAP loss per share and Calculated Billings to be in the following ranges for Q4 2017 and the full-year 2017: Total Revenue $53.9 to $55.3 million Loss From Operations (non-GAAP) $(7.9)
Slide 3: Adoption of ASC 606
ADOPTION OF ASC 606
Slide 4: Adoption of ASC 606
ADOPTION OF ASC 606 = Adopt January 1, 2018 under modified retrospective approach Perpetual license recognized either upfront or over the expected economic life = Commissions to be capitalized and amortized over either economic life for new bookings or contract term for renewals
Slide 5: ASC 606 - What Changes
ASC 606 - What Current Treatment ASC 606 SAAS/Managed Services Ratable* Ratable* Perpetual Licenses With content subscriptions Ratable* Ratable over economic life (5 years) Without content subscriptions Ratable* Upfront Term Licenses With content subscriptions Ratable* Ratable* Without content subsc
Slide 6: ASC 606 - 2018 Financial Impact
ASC 606 - 2018 Financial Impact ($10m-$7m) ($10m-$7m) Perpetual Licenses Professional Services ($3m-$1m) ($3m-$1m) Commissions Expense $8m-$11m Net Impact ($13m-$8m) ($5m) - $3m The above estimated revenue impact is subject to change based upon the value of our Q4 17 and 2018 bookings, the mix and c
Slide 7: Expected Impact of Shift to Subscription
EXPECTED IMPACT OF SHIFT TO SUBSCRIPTION Revenue = Total revenues to continue to grow through transition = Recurring Revenue to increase as percent of total revenue Operating Margin (non-GAAP) = Continue to make strategic investments in shift to subscription in 2018 = Operating leverage improves in
Slide 8: Growth and Profitability Framework
GROWTH AND PROFITABILITY FRAMEWORK
Slide 9: Revenue Growth Framework
REVENUE GROWTH FRAMEWORK 20% Total revenue 30% Recurring revenue CAGR from 2017 to 2020 CAGR from 2017 to 2020 RAPID
Slide 10: Professional Services Revenue
PROFESSIONAL SERVICES REVENUE Services grew Services grew +52% in 2016 +29% YTD Q3 17 re Te
Slide 11: Gross Margin Framework
GROSS MARGIN FRAMEWORK Gross Margin (Non-GAAP) By Segment = Products shift towards SaaS, some pressure on Product GM 100% = Anticipate 80% Professional Services con to represent lower mix of revenues bid 20% = Anticipate Total GM to be in the range of SaaS companies (mid-low 70's) eeee Total Gross M
Slide 12: 2018 Framework
2018 FRAMEWORK - 605 Anticipated Revenue Anticipated Expenses = Less Perpetual, = GM: Low to mid-70’'s, in line more subscription with other SaaS companies Some headwind due to VM = Overall Opex Growth (Non-GAAP): perpetual to Saa$ transition Points of Leverage: = Services growth slower » Sales and
Slide 13: Impact of New HQ
IMPACT OF NEW HQ = In 2H19, Rapid7 is planning to consolidate Boston and Cambridge into new headquarters building, under 10.5 year lease. = Approximately $24m in total capex; capex spending : is anticipated to begin in tlt MA, VERN id 2H18. Lie
Slide 14: 2020 Non-GAAP Targets
2020 NON-GAAP TARGETS ARR at 12/31 $90m $121m +30%+ ARR growth ~$350m Total Revenues $110.5m $157.4m eerie Cao ~$350m Total Gross Margin* 75% 76% Y In line with SaaS peers 73%-75% Greater renewals mix, rep efficiencies, S&M % of Revenue" 58% 53% y ae as 37%-39% R&D % of Revenue* 27% ee eae sale= 20%