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Rapid7 Announces Fourth Quarter and Full-Year 2018 Financial Results

February 7, 2019 4:05 PM

BOSTON, Feb. 07, 2019 (GLOBE NEWSWIRE) -- Rapid7, Inc. (NASDAQ: RPD), a leading provider of security analytics and automation, today announced its financial results for the fourth quarter and full-year 2018.

“Rapid7 had a great fourth quarter, capping off a very strong 2018. We are particularly pleased with the acceleration in the adoption of our cloud-based offerings. Rapid7 has established itself as a high growth, cloud software company, on a path to profitability.” said Corey Thomas, President and CEO of Rapid7.

“For the sixth quarter in a row, our ARR growth accelerated, reaching 53%, driven by continued strong new customer growth, lower churn and the success of our platform strategy. We again exceeded our growth goals and look forward to another year of ARR growth of over 30 percent with improving operating leverage.”

Fourth Quarter 2018 Financial Results (under ASC 606)

Full-Year 2018 Financial Results (under ASC 606)

Fourth Quarter and Full-Year 2018 Financial Results (under ASC 605)

Three Months Ended December 31, Year Ended December 31,
2018 2017 2018 2017
(in thousands, except per share data)
Revenue $70,638 $57,731 $255,923 $200,940
% growth 22% 27%
GAAP loss from operations $(15,349) $(13,385) $(53,996) $(48,794)
Non-GAAP loss from operations $(7,232) $(7,632) $(21,339) $(26,273)
GAAP net loss $(17,248) $(13,004) $(56,194) $(45,470)
GAAP net loss per share $(0.36) $(0.30) $(1.21) $(1.06)
Non-GAAP net loss $(6,596) $(7,603) $(19,706) $(25,933)
Non-GAAP net loss per share $(0.14) $(0.17) $(0.42) $(0.60)
Adjusted EBITDA $(5,195) $(6,258) $(14,386) $(21,458)
North America revenue $59,942 $49,490 $216,694 $170,667
% of total revenue 85% 86% 85% 85%
% growth 21% 27%
Rest of world revenue $10,696 $8,241 $39,229 $30,273
% of total revenue 15% 14% 15% 15%
% growth 30% 30%

Recent Business Metrics and Highlights

First Quarter and Full-Year 2019 Guidance

Rapid7 anticipates total revenue, non-GAAP income (loss) from operations, and non-GAAP net income (loss) per share to be in the following ranges:

First Quarter and Full-Year 2019 Guidance Under ASC 606 (in millions, except per share data)
First Quarter 2019 Full-Year 2019
Revenue$68.9 to $70.5 $304.0 to $312.0
Year-over-year growth26% 29% 25%to 28%
Non-GAAP (loss) income from operations$(5.5)to $(4.5) Breakeven
Non-GAAP net (loss) income per share$(0.10)to $(0.08) $0.05
Weighted average shares outstanding 47.9 51.9

Guidance for the first quarter and full-year 2019 does not include any potential impact of foreign exchange gains or losses. The weighted average shares outstanding for the first quarter of 2019 represent basic shares outstanding given our projected non-GAAP net loss. The weighted average shares outstanding for full year 2019 represent diluted shares outstanding given our projected non-GAAP net income. Non-GAAP net income for full year 2019 largely represents interest income on projected cash and investments.

Non-GAAP guidance excludes estimates for stock-based compensation expense, amortization of acquired intangible assets, amortization of debt discount and issuance costs, and certain non-recurring items. Rapid7 has provided a reconciliation of historical non-GAAP financial measures to the most comparable GAAP measures in the financial statement tables included in this press release. A reconciliation of non-GAAP guidance measures to the most comparable GAAP measures is not available on a forward-looking basis without unreasonable efforts due to the high variability, complexity and low visibility with respect to the charges excluded from these non-GAAP measures.

Fourth Quarter 2018 Line Items Impacted by the Adoption of ASC 606

For the fourth quarter of 2018, we recognized revenue under ASC 606. For the fourth quarter of 2017, however, we recognized revenue under ASC 605. Therefore, the periods are not directly comparable. In addition, since we adopted ASC 606 using the modified retrospective method, we have presented in the table below, for the fourth quarter of 2018, a summary of certain consolidated financial statement line items impacted by the adoption of ASC 606 with a comparison of these line items to ASC 605.

Three Months Ended December 31, 2018
Under ASC 606 Under ASC 605 Difference
(in thousands)
Products $50,420 51,027 $(607)
Maintenance and support 10,246 11,060 (814)
Professional services 8,104 8,551 (447)
Total revenue 68,770 70,638 (1,868)
Cost of revenue - GAAP 19,286 19,268 18
Gross margin - GAAP 72.0% 72.7%
Cost of revenue - non-GAAP 17,632 17,614 18
Gross margin - non-GAAP 74.4% 75.1%
Sales and marketing - GAAP 32,531 38,954 (6,423)
Sales and marketing - non-GAAP 30,607 37,030 (6,423)
GAAP loss from operations (10,812) (15,349) 4,537
Non-GAAP loss from operations (2,695) (7,232) 4,537
Deferred revenue, current portion 189,855 193,763 (3,908)
Deferred revenue, non-current portion 58,716 41,658 17,058
Total deferred revenue 248,571 235,421 13,150

Conference Call and Webcast Information

Rapid7 will host a conference call today, February 7, 2019, to discuss its results at 4.30 p.m. Eastern Time. The call will be accessible by telephone at 877-357-4230 (domestic) or 629-228-0721 (international). The call will also be available live via webcast on the Company’s website at http://investors.rapid7.com. A telephone replay of the conference call will be available at 855-859-2056 or 404-537-3406 (access code 6096466) until February 14, 2019. A webcast replay will be available at http://investors.rapid7.com.

About Rapid7

Rapid7 (Nasdaq: RPD)is advancing security with visibility, analytics, and automation delivered through our Insight cloud. Our solutions simplify the complex, allowing security teams to work more effectively with IT and development to reduce vulnerabilities, monitor for malicious behavior, investigate and shut down attacks, and automate routine tasks. Over 7,800 customers rely on Rapid7 technology, services, and research to improve security outcomes and securely advance their organizations. For more information, visit our website, check out our blog, or follow us on Twitter.

Non-GAAP Financial Measures and Other Business Metrics

To supplement our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States, or GAAP, we provide investors with certain non-GAAP financial measures and other business metrics, which we believe are helpful to our investors. We use these non-GAAP financial measures and other business metrics for financial and operational decision-making purposes and as a means to evaluate period-to-period comparisons. We also use certain non-GAAP financial measures as performance measures under our executive bonus plan. We believe that these non-GAAP financial measures and other business metrics provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making.

The presentation of non-GAAP financial information and other business metrics is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. While our non-GAAP financial measures and other business metrics are an important tool for financial and operational decision-making and for evaluating our own operating results over different periods of time, we urge investors to review the reconciliation of these financial measures to the comparable GAAP financial measures included below, and not to rely on any single financial measure to evaluate our business.

Adjusted EBITDA (non-GAAP). Adjusted EBITDA is a non-GAAP measure that we define as net loss before (1) interest income, (2) interest expense, (3) other income (expense), net, (4) provision for (benefit from) income taxes, (5) depreciation expense, (6) amortization of intangible assets, (7) stock-based compensation expense, and (8) certain non-recurring items. We believe that the use of adjusted EBITDA is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. Adjusted EBITDA should not be considered as a substitute for other measures of financial performance reported in accordance with GAAP. There are limitations to using this non-GAAP financial measure, including that other companies may calculate this measure differently than we do, that it does not reflect our capital expenditures or future requirements for capital expenditures and that it does not reflect changes in, or cash requirements for, our working capital and excludes some items that are cash based.

We also monitor operating measures of non-GAAP gross profit, non-GAAP operating loss, non-GAAP net loss and non-GAAP net loss per share. These non-GAAP financial measures exclude the effect of stock-based compensation expense, amortization of acquired intangible assets, amortization of debt discount and issuance costs and certain non-recurring items such as acquisition-related expenses, follow-on public offering costs, and litigation-related expenses. We exclude litigation-related charges or benefits as well as legal costs associated with significant legal matters, because we do not believe they are reflective of on-going business and operating results. We believe that these non-GAAP financial measures provide useful information about our operating results, enhance the overall understanding of past financial performance and future prospects and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making. While our non-GAAP financial measures are an important tool for financial and operational decision-making and for evaluating our own operating results over different periods of time, you should review the reconciliation of our non-GAAP financial measures to the comparable GAAP financial measures included below, and not rely on any single financial measure to evaluate our business.

Annualized Recurring Revenue (ARR). ARR is a financial measure that we define as the annual value of all recurring revenue related contracts in place at the end of the period. ARR should be viewed independently of revenue and deferred revenue as ARR is an operating metric and is not intended to be combined with or replace these items. ARR is not a forecast of future revenue and can be impacted by contract start and end dates and renewal rates, and does not include revenue reported as perpetual license or professional services revenue in our consolidated statement of operations.

Calculated Billings (non-GAAP). Calculated billings is a non-GAAP measure that we define as total revenue recognized in accordance with GAAP plus the change in deferred revenue from the beginning to the end of the period. Historically, we have considered calculated billings to be a useful metric for management and investors, as a supplement to the corresponding GAAP measure of total revenue, because billings drive deferred revenue, which is an important indicator of the health and visibility of trends in our business. With the expansion of our subscription, cloud-based product offerings (InsightVM, InsightIDR, InsightAppSec, InsightOps, and InsightConnect) on the Insight platform, the shift of our other products to subscription pricing, and the shift of our sales compensation plans to ARR, we believe calculated billings is a less meaningful metric for our operations. Our use of calculated billings has limitations as an analytical tool and should not be considered in isolation or as a substitute for revenue recognition or revenue measurement, or an analysis of our results as reported under GAAP. Also, it is important to note that other companies, including companies in our industry, may not use calculated billings as a measure of their business, may calculate billings differently, may have different billing frequencies, or may use other financial measures to evaluate their performance, all of which could reduce the usefulness of calculated billings as a comparative measure.

While a reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis as a result of the uncertainty regarding, and the potential variability of, many of these costs and expenses that we may incur in the future, we have provided a reconciliation of historical non-GAAP financial measures and other business metrics to the nearest comparable GAAP measures in the accompanying financial statement tables included in this press release.

Cautionary Language Concerning Forward-Looking Statements

This press release includes forward-looking statements. All statements contained in this press release other than statements of historical facts, including, without limitation, statements regarding demand for our product and service offerings, expectations regarding our growth, including annualized recurring revenue growth, and our future financial and business performance for the first quarter and full-year 2019, features and availability of InsightConnect and automation functionality in InsightIDR and InsightVM, and the potential benefits of the acquisition of tCell, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of risks and uncertainties, including, without limitation, risks related to our rapid growth and ability to sustain our revenue growth rate, the ability of our products and professional services to correctly detect vulnerabilities, competition in the markets in which we operate, market growth, our ability to innovate and manage our growth, our ability to integrate acquired operations, our ability to operate in compliance with applicable laws as well as other risks and uncertainties set forth in the “Risk Factors” section of our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission for the quarter ended September 30, 2018 filed with the Securities and Exchange Commission on November 7, 2018, and subsequent reports that we file with the Securities and Exchange Commission. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, we cannot guarantee future results, levels of activity, performance, achievements or events and circumstances reflected in the forward-looking statements will occur. We are under no duty to update any of these forward-looking statements after the date of this press release to conform these statements to actual results or revised expectations, except as required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.

Investor contact:

Neeraj Mahajan, CFAVice President, Investor Relations[email protected](857) 990-4074

Press contact:

Caitlin Doherty[email protected](857) 990-4240

RAPID7, INC.Consolidated Balance Sheets (Unaudited)(in thousands)
December 31, 2018 December 31, 2017
Under ASC 606 Under ASC 605 Under ASC 605
Assets
Current assets:
Cash and cash equivalents $99,565 $99,565 $51,562
Short-term investments 159,210 159,210 39,178
Accounts receivable, net 74,935 74,935 73,661
Deferred contract acquisition and fulfillment costs, current portion 12,321 — —
Prepaid expenses and other current assets 9,746 9,281 8,877
Total current assets 355,777 342,991 173,278
Long-term investments 44,892 44,892 1,102
Property and equipment, net 17,523 17,523 8,589
Goodwill 88,420 88,420 83,164
Intangible assets, net 23,955 23,955 16,640
Deferred contract acquisition and fulfillment costs, non-current portion 27,634 — —
Other assets 1,168 1,168 1,363
Total assets $559,369 $518,949 $284,136
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $7,048 $7,048 $2,240
Accrued expenses 37,376 37,376 29,728
Deferred revenue, current portion 189,855 193,763 155,811
Other current liabilities 707 707 1,706
Total current liabilities 234,986 238,894 189,485
Convertible senior notes, net 174,688 174,688 —
Deferred revenue, non-current portion 58,716 41,658 68,689
Other long-term liabilities 3,660 2,912 1,809
Total liabilities 472,050 458,152 259,983
Stockholders’ equity:
Common stock 476 476 441
Treasury stock (4,764) (4,764) (4,764)
Additional paid-in-capital 556,223 556,223 463,428
Accumulated other comprehensive loss (31) (31) (39)
Accumulated deficit (464,585) (491,107) (434,913)
Total stockholders’ equity 87,319 60,797 24,153
Total liabilities and stockholders’ equity $559,369 $518,949 $284,136

RAPID7, INC.Consolidated Statements of Operations (Unaudited)(in thousands, except share and per share data)
Three Months Ended December 31, Year Ended December 31,
2018 2018 2017 2018 2018 2017
Under ASC 606 Under ASC 605 Under ASC 605 Under ASC 606 Under ASC 605 Under ASC 605
Revenue:
Products $50,420 $51,027 $34,012 $168,571 $175,146 $116,748
Maintenance and support 10,246 11,060 12,474 42,223 45,767 46,268
Professional services 8,104 8,551 11,245 33,297 35,010 37,924
Total revenue 68,770 70,638 57,731 244,091 255,923 200,940
Cost of revenue:
Products 11,430 11,415 8,428 39,810 39,761 25,583
Maintenance and support 1,921 1,921 2,024 7,678 7,678 7,491
Professional services 5,935 5,932 6,748 23,595 23,577 23,836
Total cost of revenue 19,286 19,268 17,200 71,083 71,016 56,910
Total gross profit 49,484 51,370 40,531 173,008 184,907 144,030
Operating expenses:
Research and development 17,828 17,828 14,102 67,743 67,743 50,938
Sales and marketing 32,531 38,954 31,427 123,310 136,167 111,593
General and administrative 9,937 9,937 8,387 34,993 34,993 30,293
Total operating expenses 60,296 66,719 53,916 226,046 238,903 192,824
Loss from operations (10,812) (15,349) (13,385) (53,038) (53,996) (48,794)
Other income (expense), net:
Interest income 1,709 1,709 196 3,229 3,229 862
Interest expense (3,253) (3,253) (6) (4,934) (4,934) (87)
Other income (expense), net (269) (269) (36) (336) (336) 313
Loss before income taxes (12,625) (17,162) (13,231) (55,079) (56,037) (47,706)
Provision for (benefit from) income taxes 395 86 (227) 466 157 (2,236)
Net loss $(13,020) $(17,248) $(13,004) $(55,545) $(56,194) $(45,470)
Net loss per share, basic and diluted $(0.27) $(0.36) $(0.30) $(1.20) $(1.21) $(1.06)
Weighted-average common shares outstanding, basic and diluted 47,397,034 47,397,034 43,723,696 46,456,825 46,456,825 42,952,950

RAPID7, INC.Consolidated Statements of Cash Flows (Unaudited)(in thousands)
Three Months Ended December 31, Year Ended December 31,
2018 2018 2017 2018 2018 2017
Under ASC 606 Under ASC 605 Under ASC 605 Under ASC 606 Under ASC 605 Under ASC 605
Cash flows from operating activities:
Net loss $(13,020) $(17,248) $(13,004) $(55,545) $(56,194) $(45,470)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 3,360 3,360 2,324 11,097 11,097 7,628
Amortization of debt discount and issuance costs 2,535 2,535 — 3,831 3,831 —
Stock-based compensation expense 6,594 6,594 4,803 27,593 27,593 19,541
Provision for doubtful accounts 260 260 396 740 740 905
Deferred income taxes (69) (387) (228) (69) (387) (2,860)
Foreign currency re-measurement loss (gain) 191 191 46 757 757 (364)
Other non-cash items (161) (161) (5) (506) (506) 209
Changes in operating assets and liabilities:
Accounts receivable (20,972) (20,972) (25,347) (1,685) (1,685) (25,217)
Deferred contract acquisition and fulfillment costs (6,405) — — (12,790) — —
Prepaid expenses and other assets 2,147 2,353 (675) (287) 146 (74)
Accounts payable 3,110 3,110 (1,935) 3,675 3,675 (2,257)
Accrued expenses 8,192 8,192 5,955 6,018 6,018 6,758
Deferred revenue 25,183 23,118 35,857 22,870 10,614 55,437
Other liabilities 989 989 15 367 367 (950)
Net cash provided by operating activities 11,934 11,934 8,202 6,066 6,066 13,286
Cash flows from investing activities:
Business acquisitions, net of cash acquired (14,460) (14,460) — (14,460) (14,460) (14,717)
Purchases of property and equipment (4,409) (4,409) (1,318) (12,813) (12,813) (4,824)
Capitalization of internal-use software costs (760) (760) (406) (3,265) (3,265) (1,162)
Purchases of investments (54,476) (54,476) (13,506) (233,421) (233,421) (35,190)
Sales/maturities of investments 30,650 30,650 9,150 70,226 70,226 33,672
Net cash used in investing activities (43,455) (43,455) (6,080) (193,733) (193,733) (22,221)
Cash flows from financing activities:
Proceeds from issuance of convertible senior notes, net of issuance costs paid of $6,880 (408) (408) — 223,121 223,121 —
Purchase of capped calls related to convertible senior notes — — — (26,910) (26,910) —
Proceeds from secondary public offering, net of offering costs of $608 — — — 30,907 30,907 —
Deferred business acquisition payment — — — — — (796)
Taxes paid related to net share settlement of equity awards (485) (485) (230) (2,197) (2,197) (698)
Proceeds from employee stock purchase plan — — — 3,637 3,637 2,914
Proceeds from stock option exercises 1,085 1,085 853 7,606 7,606 5,848
Net cash provided by financing activities 192 192 623 236,164 236,164 7,268
Effect of exchange rate changes on cash, cash equivalents and restricted cash (266) (266) (38) (694) (694) 281
Net (decrease) increase in cash, cash equivalents and restricted cash (31,595) (31,595) 2,707 47,803 47,803 (1,386)
Cash, cash equivalents and restricted cash, beginning of period 131,160 131,160 49,055 51,762 51,762 53,148
Cash, cash equivalents and restricted cash, end of period $99,565 $99,565 $51,762 $99,565 $99,565 $51,762

RAPID7, INC.GAAP to Non-GAAP Reconciliation (Unaudited)(in thousands, except share and per share data)
Three Months Ended December 31, Year Ended December 31,
2018 2018 2017 2018 2018 2017
Under ASC 606 Under ASC 605 Under ASC 605 Under ASC 606 Under ASC 605 Under ASC 605
Total gross profit (GAAP) $49,484 $51,370 $40,531 $173,008 $184,907 $144,030
Add: Stock-based compensation expense1 371 371 270 1,692 1,692 1,085
Add: Amortization of acquired intangible assets2 1,283 1,283 908 3,985 3,985 2,639
Total gross profit (non-GAAP) $51,138 $53,024 $41,709 $178,685 $190,584 $147,754
Gross margin (non-GAAP) 74.4% 75.1% 72.2% 73.2% 74.5% 73.5%
Gross profit (GAAP) - Products $38,990 $39,612 $25,584 $128,761 $135,385 $91,165
Add: Stock-based compensation expense 69 69 94 493 493 336
Add: Amortization of acquired intangible assets 1,283 1,283 908 3,985 3,985 2,639
Total gross profit (non-GAAP) - Products $40,342 $40,964 $26,586 $133,239 $139,863 $94,140
Gross margin (non-GAAP) - Products 80.0% 80.3% 78.2% 79.0% 79.9% 80.6%
Gross profit (GAAP) - Maintenance and support $8,325 $9,139 $10,450 $34,545 $38,089 $38,777
Add: Stock-based compensation expense 72 72 35 233 233 247
Total gross profit (non-GAAP) - Maintenance and support $8,397 $9,211 $10,485 $34,778 $38,322 $39,024
Gross margin (non-GAAP) - Maintenance and support 82.0% 83.3% 84.1% 82.4% 83.7% 84.3%
Gross profit (GAAP) - Professional services $2,169 $2,619 $4,497 $9,702 $11,433 $14,088
Add: Stock-based compensation expense 230 230 141 966 966 502
Total gross profit (non-GAAP) - Professional services $2,399 $2,849 $4,638 $10,668 $12,399 $14,590
Gross margin (non-GAAP) - Professional services 29.6% 33.3% 41.2% 32.0% 35.4% 38.5%
Loss from operations (GAAP) $(10,812) $(15,349) $(13,385) $(53,038) $(53,996) $(48,794)
Add: Stock-based compensation expense1 6,594 6,594 4,803 27,593 27,593 19,541
Add: Amortization of acquired intangible assets2 1,323 1,323 950 4,144 4,144 2,813
Add: Acquisition-related expenses3 — — — 115 115 167
Add: Secondary public offering costs4 — — — 205 205 —
Add: Litigation-related expenses5 200 200 — 600 600 —
Loss from operations (non-GAAP) $(2,695) $(7,232) $(7,632) $(20,381) $(21,339) $(26,273)
Net loss (GAAP) $(13,020) $(17,248) $(13,004) $(55,545) $(56,194) $(45,470)
Add: Stock-based compensation expense1 6,594 6,594 4,803 27,593 27,593 19,541
Add: Amortization of acquired intangible assets2 1,323 1,323 950 4,144 4,144 2,813
Add: Acquisition-related expenses3 — — — 115 115 167
Add: Secondary public offering costs4 — — — 205 205 —
Add: Litigation-related expenses5 200 200 — 600 600 —
Add: Release of valuation allowance, acquisition-related — — — — — (2,632)
Add: Tax adjustment for impact of tax reform — — (352) — — (352)
Add: Amortization of debt discount and issuance costs 2,535 2,535 — 3,831 3,831 —
Net loss (non-GAAP) $(2,368) $(6,596) $(7,603) $(19,057) $(19,706) $(25,933)
Net loss per share, basic and diluted (non-GAAP) $(0.05) $(0.14) $(0.17) $(0.41) $(0.42) $(0.60)
Weighted-average common shares outstanding, basic and diluted 47,397,034 47,397,034 43,723,696 46,456,825 46,456,825 42,952,950
1 Includes stock-based compensation expense as follows:
Cost of revenue $371 $371 $270 $1,692 $1,692 $1,085
Research and development 2,422 2,422 2,017 10,822 10,822 7,205
Sales and marketing 1,885 1,885 1,062 7,569 7,569 5,756
General and administrative 1,916 1,916 1,454 7,510 7,510 5,495
2 Includes amortization of acquired intangible assets as follows:
Cost of revenue $1,283 $1,283 $908 $3,985 $3,985 $2,639
Sales and marketing 39 39 38 154 154 152
General and administrative 1 1 4 5 5 22
3 Includes acquisition-related expenses as follows:
General and administrative $— $— $— $115 $115 $167
4 Includes secondary public offering costs as follows:
General and administrative $— $— $— $205 $205 $—
5 Includes litigation-related expenses as follows:
General and administrative $200 $200 $— $600 $600 $—

RAPID7, INC.Reconciliation of Total Revenue to Calculated Billings (Unaudited)(in thousands)
Three Months Ended December 31, Year Ended December 31,
2018 2018 2017 2018 2018 2017
Under ASC 606 Under ASC 605 Under ASC 605 Under ASC 606 Under ASC 605 Under ASC 605
Total revenue $68,770 $70,638 $57,731 $244,091 $255,923 $200,940
Add: Deferred revenue, end of period 248,571 235,421 224,500 248,571 235,421 224,500
Less: Deferred revenue, beginning of period 223,088 212,004 188,643 225,393 224,500 169,063
Calculated billings $94,253 $94,055 $93,588 $267,269 $266,844 $256,377

Reconciliation of Net Loss to Adjusted EBITDA (Unaudited)(in thousands)
Three Months Ended December 31, Year Ended December 31,
2018 2018 2017 2018 2018 2017
Under ASC 606 Under ASC 605 Under ASC 605 Under ASC 606 Under ASC 605 Under ASC 605
Net loss $(13,020) $(17,248) $(13,004) $(55,545) $(56,194) $(45,470)
Interest income (1,709) (1,709) (196) (3,229) (3,229) (862)
Interest expense 3,253 3,253 6 4,934 4,934 87
Other (income) expense, net 269 269 36 336 336 (313)
Provision for (benefit from) income taxes 395 86 (227) 466 157 (2,236)
Depreciation expense 1,870 1,870 1,374 6,486 6,486 4,815
Amortization of intangible assets 1,490 1,490 950 4,611 4,611 2,813
Stock-based compensation expense 6,594 6,594 4,803 27,593 27,593 19,541
Acquisition-related expenses — — — 115 115 167
Secondary public offering costs — — — 205 205 —
Litigation-related expenses 200 200 — 600 600 —
Adjusted EBITDA $(658) $(5,195) $(6,258) $(13,428) $(14,386) $(21,458)

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