Rapid7, Inc. (RPD) saw its loss narrow to $10.19 million, or $0.25 a share for the quarter ended Sep. 30, 2016. In the previous year period, the company reported a loss of $11.82 million, or $0.79 a share. On the other hand, adjusted net loss for the quarter narrowed to $5.25 million, or $0.13 a share from a loss of $9.08 million or $0.27 a share, a year ago.
Revenue during the quarter surged 42.48 percent to $40.34 million from $28.31 million in the previous year period. Gross margin for the quarter expanded 6 basis points over the previous year period to 75.12 percent. Operating margin for the quarter stood at negative 25.30 percent as compared to a negative 37.08 percent for the previous year period.
Operating loss for the quarter was $10.20 million, compared with an operating loss of $10.50 million in the previous year period.
However, the adjusted operating loss for the quarter stood at $5.26 million compared to operating loss of $7.75 million in prior year period.
"Our third quarter results showed fundamental strength in several important areas, including solid growth in our mid-market customer base, new product adoption, and uptake of our platform-based cloud analytics," said Corey Thomas, president and chief executive officer of Rapid7. "Our pipeline is healthy and while the market demand environment remains strong, our total billings growth in the third quarter was lower than we expected due to larger enterpise and federal deals that did not close in the quarter. We continue to believe that Rapid7 is well-positioned to drive growth due to our continuous technology innovation, robust platform-based data and analytics solutions, as well as strong demand from the growing challenges facing IT and security practitioners."
For fiscal year 2016, Rapid7, Inc. expects revenue to be in the range of $154.60 million to $156 million. The company expects adjusted operating loss to be in the range of $35.50 million to $34.50 million. It projects diluted loss per share to be in the range of $0.87 to $0.84 on adjusted basis.
For the fourth-quarter 2016, Rapid7, Inc. expects revenue to be in the range of $42.20 million to $43.60 million. The company expects adjusted operating loss to be in the range of $11.70 million to $10.70 million. On an adjusted basis, the company projects diluted loss per share to be in the range of $0.28 to $0.26.
Operating cash flow turns positive
Rapid7, Inc. has generated cash of $2.06 million from operating activities during the nine month period as against cash outgo of $1.98 million in the last year period.
The company has spent $3.31 million cash to meet investing activities during the nine month period as against cash outgo of $6.18 million in the last year period.
Cash flow from financing activities was $2.35 million for the nine month period, down 97.54 percent or $93.12 million, when compared with the last year period.
Cash and cash equivalents stood at $87.72 million as on Sep. 30, 2016, down 29.25 percent or $36.27 million from $123.98 million on Sep. 30, 2015.
Working capital drops significantly
Rapid7, Inc. has witnessed a decline in the working capital over the last year. It stood at $1.79 million as at Sep. 30, 2016, down 97.29 percent or $64.36 million from $66.15 million on Sep. 30, 2015. Current ratio was at 1.01 as on Sep. 30, 2016, down from 1.70 on Sep. 30, 2015.
Days sales outstanding went down to 74 days for the quarter compared with 95 days for the same period last year.
At the same time, days payable outstanding went down to 26 days for the quarter from 38 for the same period last year.
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