DEF 14A: Rapid7, Inc. Announces Details for 2024 Annual Stockholders Meeting

Rapid7, Inc. has released its proxy statement and notice of the 2024 Annual Meeting of Stockholders, scheduled to be held virtually on June 13, 2024.

Summary

• Rapid7, Inc. is holding its 2024 Annual Meeting of Stockholders virtually on June 13, 2024, at 11:30 a.m. Eastern Time.
• Stockholders of record as of April 15, 2024, are entitled to vote at the meeting.
• The meeting will address the election of eight directors, ratification of KPMG LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2024, and an advisory vote on executive compensation.
• The board recommends voting for all director nominees, for the ratification of KPMG, and for the advisory approval of executive compensation.
• The company achieved annualized recurring revenue of $806 million, a 13% year-over-year increase, and total revenue of $778 million, a 14% year-over-year increase in 2023.
• The company ended 2023 with 11,526 total customers, a 5% year-over-year increase, and ARR per customer of approximately $69.9 thousand, a 7% year-over-year increase.
• The full-year GAAP loss from operations was $(81) million, while non-GAAP income from operations was $102 million.
• The company reported full-year net cash provided by operating activities of $104 million and free cash flow of $84 million.
• The executive compensation program is designed to align executive pay with financial and operational performance, with a significant portion of compensation being performance-based.
• In 2023, the annual performance bonus paid out at 70% of target due to the company's performance against financial targets.
• The company's long-term incentive program includes both time-based restricted stock units (RSUs) and performance-based restricted stock units (PSUs).
• No PSUs were earned in 2023 as the company did not meet the rigorous performance thresholds required for vesting.
• The company maintains a clawback policy for recouping certain executive compensation in the event of an accounting restatement.

Sentiment

Score: 6

Explanation: The document presents a mix of positive and negative financial results, with growth in revenue and ARR offset by a GAAP loss from operations and failure to meet PSU vesting targets. The overall tone is neutral, focusing on factual information and governance procedures.

Positives

• The company achieved significant growth in annualized recurring revenue (ARR) and total revenue in 2023.
• The company increased its customer base and ARR per customer in 2023.
• The company has a clawback policy in place to recoup executive compensation in certain circumstances.
• The company's executive compensation program is designed to align executive pay with company performance.

Negatives

• The company experienced a GAAP loss from operations of $(81) million in 2023.
• No performance-based restricted stock units (PSUs) vested in 2023 due to not meeting performance thresholds.

Risks

• The document includes forward-looking statements that are subject to risks and uncertainties, as described in the company's 2023 Annual Report on Form 10-K.
• The company's future performance could be affected by various factors, including those described in its 2023 Annual Report on Form 10-K.

Future Outlook

The document includes forward-looking statements regarding the company's diversity, equity, and inclusion efforts, sustainability initiatives, business plans, and focus, which are subject to risks and uncertainties.

Management Comments

• Corey Thomas, Chief Executive Officer and Chairman of the Board, expressed gratitude for stockholders' ongoing support and interest in Rapid7 and looked forward to seeing them at the Annual Meeting.

Industry Context

The document highlights Rapid7's position as a global cybersecurity software and services provider, emphasizing its mission to offer customers greater clarity and control of their attack surface.

Comparison to Industry Standards

• The document uses a peer group of comparable public companies in the software industry to inform executive compensation decisions.
• The peer group includes companies such as AppFolio, Q2 Holdings, BlackLine, Qualys, Elastic N.V., Tenable Holdings, Everbridge, Varonis Systems, Five9, Workiva, New Relic, Zscaler, and PagerDuty.
• The company benchmarks its executive compensation against the 25th, 50th, and 75th percentiles of market data from its peer group and custom data cuts from the Radford Global Compensation Database.

Corporate Governance

Stakeholder Impact

• Stockholders are provided with information to make informed decisions regarding the election of directors, ratification of the auditor, and executive compensation.
• Employees are impacted by the company's compensation policies and benefits programs.
• Customers benefit from the company's efforts to improve its security offerings.

Next Steps

• Stockholders are encouraged to vote by proxy online, by telephone, or by mail prior to the Annual Meeting.
• Stockholders can attend the virtual Annual Meeting on June 13, 2024, to vote and submit questions.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Executive Compensation, Board of Directors, KPMG, ARR, Revenue, Stockholders, Governance, Rapid7