Rapid7 exhibits a solid gross margin at 70.3%, only marginally below its ten‑year average of 71.0% and sitting in the 30th percentile, indicating that cost of revenue remains well‑controlled despite modest YoY improvement of +0.1%. The operating margin has turned positive at 1.3% after a historically negative ten‑year average of -17.7%, placing the company in the 94th percentile; however, a recent YoY decline of -2.8% marks one consecutive year of deterioration, suggesting that cost discipline on the SG&A side may be slipping. Net margin sits at 2.7%, also well above its ten‑year average of -20.1% and near the top of its historical distribution (99th percentile), yet it recorded a slight YoY dip of -0.3%, indicating a potential early sign of earnings pressure despite overall strong performance.

Rapid7, Inc. exhibits a markedly elevated leverage profile that diverges from its historical norm. The debt-to-equity ratio of 6.65x sits well above the ten‑year average of 4.75x and falls in the 23rd percentile of its own decade‑long distribution, indicating that the company carries substantially more equity‑backed financing than it has historically tolerated. More concerning is the Net Debt/EBITDA metric, which currently stands at 9.1x—far exceeding the 4x threshold commonly viewed as a warning sign and placing Rapid7 at the 100th percentile of its ten‑year range, where prior periods have shown negative or modestly positive values (average -2.9x). This sharp deterioration signals that earnings are insufficient to comfortably service the accumulated debt, raising questions about cash‑flow sustainability over the next 6‑12 months.

Rapid7 generates modest operating cash flow of $200 million, roughly double its ten‑year average of $100 million, indicating a solid earnings conversion capability. However, free cash flow has slipped to $100 million from an already low baseline, with year‑over‑year declines of $23.7 million, suggesting that capital expenditures and other outflows are consuming a sizable share of operating cash. Short‑term liquidity remains adequate; the current and quick ratios sit at 1.20×, modestly above the 1.0× safety threshold and consistent with historical averages, while the cash ratio is weaker at 0.43×, reflecting limited cash on hand relative to short‑term liabilities.

Rapid7’s earnings are strongly supported by cash flow, as evidenced by an operating‑cash‑flow to net‑income ratio of 6.51×, far exceeding the ten‑year average of 1.00× and indicating that each dollar of reported profit is backed by more than six dollars of cash generated. However, the accrual ratio of -0.075, which sits at the 100th percentile of its historic range, signals a pronounced reliance on non‑cash accounting adjustments; the negative sign reflects aggressive revenue recognition or expense deferral that diverges from actual cash movements. Stock‑based compensation (SBC) remains material at 12.1% of revenue, still above the informal 10% threshold and only modestly improving year‑over‑year, while capital expenditures are minimal relative to operating cash flow (5%), suggesting low capital intensity but also a potential underinvestment risk if growth initiatives require future spending.