DEF: Rapid7 2026 Proxy Statement Overview

Rapid7, Inc. has released its 2026 proxy statement detailing director elections, executive compensation, and the ratification of its independent auditor.

Summary

• The 2026 Annual Meeting of Stockholders is scheduled for June 9, 2026, to be held virtually.
• Stockholders will vote on the election of eleven directors, the ratification of KPMG LLP as the independent auditor for 2026, and an advisory vote on executive compensation.
• The record date for voting is April 15, 2026.
• 2025 financial highlights included $840 million in ARR, $860 million in total revenue, and $130.1 million in free cash flow.
• The company has transitioned to a virtual-only meeting format for the 2026 Annual Meeting.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral filing; while the company maintains strong cash flow and governance, the failure to meet key growth targets and the resulting impact on executive compensation reflect current operational headwinds.

Positives

• Achieved 2025 Adjusted EBITDA target of $161.9 million.
• Maintained strong free cash flow of $130.1 million for 2025.
• Successfully transitioned to a separated CEO and Chairman leadership structure to enhance oversight.
• Maintained a high level of performance-based compensation, with approximately 95% of the CEO's target total direct compensation being performance-based.

Negatives

• Annualized Recurring Revenue (ARR) of $839.8 million fell short of the target set for executive compensation plans.
• Total revenue growth slowed to 2% year-over-year in 2025.
• Performance-based restricted stock units (PSUs) earned only 50% of the target amount due to missing ARR growth thresholds.
• Annual performance bonus payouts were limited to 50% of target due to missed ARR goals.

Risks

• Failure to meet ARR growth targets impacts executive compensation and may signal slower market adoption.
• Cybersecurity industry competition remains intense, potentially impacting future growth and margins.
• Reliance on forward-looking statements which are inherently uncertain and subject to material differences in actual results.
• Potential for future accounting restat-risk compensation to be impacted by stock price volatility, as seen in the decline of fair value of equity awards in 2025.

Future Outlook

The company continues to focus on its AI-powered managed cybersecurity operations strategy, aiming to balance durable top-line growth with disciplined expense management and profitability.

Management Comments

• The Board believes the current leadership structure, with a separate CEO and Chairman, is effective and in the best interest of stockholders.
• Management emphasizes the importance of balancing durable growth with scaling profitability as a core framework for long-term value creation.

Industry Context

StockSavvy.ai notes that Rapid7 is navigating a maturing cybersecurity market where investors are increasingly prioritizing profitability and cash flow over pure top-line growth, a trend reflected in the company's shift toward equal weighting of ARR and Non-GAAP Operating Income in its incentive plans.

Comparison to Industry Standards

• The company's peer group for compensation benchmarking includes competitors such as SentinelOne, Tenable Holdings, and Zscaler.
• The use of a 50/50 split between RSUs and PSUs for long-term incentives aligns with evolving market practices for software companies.
• The company's clawback policy is compliant with recent SEC and Nasdaq requirements.

Management Changes

Corporate Governance

Legal Proceedings

• None disclosed.

Related Party Transactions

• None disclosed beyond standard compensation arrangements.

Stakeholder Impact

• Shareholders are asked to vote on director elections and executive compensation.
• Employees are subject to the company's compensation and equity incentive plans.
• The company continues to emphasize long-term value creation for stockholders.

Next Steps

• Hold the 2026 Annual Meeting of Stockholders on June 9, 2026.
• Ratify the selection of KPMG LLP as the independent auditor.
• Conduct the advisory vote on executive compensation.

Key Dates

Recommendation

The company shows stable cash flow and disciplined governance, but the missed growth targets and decelerating revenue growth suggest a 'hold' position until there is clearer evidence of re-accelerating top-line performance.

Keywords

Rapid7, Proxy Statement, Cybersecurity, Executive Compensation, Corporate Governance, Annual Meeting, ARR, AI-powered security