The company develops security data and analytics products, enabling organizations to implement an active approach to cyber security. It specifically focuses on "SecOps", described as the practice of aligning security, IT, and DevOps teams through sharing data and tools. RPD's Insight Platform unifies data collection, providing visibility, analytics, and automation for all teams.
RPD's offerings fall under three different categories:
- Threat Management: Addresses the lack of comprehensive, real-time visibility organizations have over critical points of IT security by simulating real-world attacks through an automated system.
- Incident Detection & Response: Provides organizations with the ability to rapidly detect and respond to cyber security incidents and breaches.
- Security Advisory Services: Provides customers with critical security strategy expertise that help organizations develop a holistic approach to their cyber security programs and implement an analytics-driven security strategy.
Circling back to its Q2 results, RPD posted a loss per share of ($0.13), beating the consensus by $0.05. Revenue jumped by 30% to $61.6 mln with recurring revenue accounting for 77% of the total, up from 70% in 2Q17. As we noted above, RPD has been transitioning to a subscription-based model due to the benefits of recurring revenue. In fact, Q2 was its first full quarter of offering all of its products on a subscription basis.
There are a couple of bullish operating metrics underlying the strong headline numbers. For instance, the renewal rate hit 122%, driven by up-sells and cross-sells. This is strong evidence that RPD's "land and expand" approach is resonating well as customers continue to add new products to their coverage.
Additionally, its customer base expanded by 10% to 7,200 customers at the end of the quarter.
Both the impressive recurring revenue performance, and the addition of 720 new accounts, demonstrate that customers have embraced the new subscription pricing, which RPD says is a result of the ease and simplicity of the pricing packages. It also demonstrated that RPD's sales teams have transitioned and adapted quickly and effectively.
Looking at its guidance, RPD raised its FY18 revenue guidance to $237-240 mln, ahead of the $234 mln consensus. It also issued inline EPS guidance of ($0.52)-($0.45) vs. the ($0.50) consensus. Broadly speaking, the company believes the ever-increasing complexity of IT environments, together with many IT departments still not being focused enough on the maintenance and management of these environments, will continue to be a catalyst.
From a more company-specific standpoint, RPD is enthusiastic about its new product on its Insight Platform called Komand -- a security orchestration and automation solution. RPD acquired Komand last year, providing it with an easy-to-install and use toolbox for security teams. During the conference call last night, management commented that customer response to the product has been strong.
To conclude, RPD's transition to a subscription-based model is progressing well and is paying dividends. Combined with a positive business climate for cyber-security companies, and, the launch of new products, RPD seems poised to continue delivering solid growth in the quarters ahead.