Rapid7, Inc. (NASDAQ:RPD) Q4 2018 Earnings Conference Call Transcript

Feb 07, 2019 • 04:30 pm ET

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Rapid7, Inc. (NASDAQ:RPD) Q4 2018 Earnings Conference Call Transcript

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Q & A
Operator
Operator

Thank you. (Operator Instructions) Our first question comes from Rob Owens of KeyBanc Capital Markets. Your line is now open.

Analyst
Elizabeth Wymond Verity

Hi. This is Liz on for Rob. Thanks for taking the question. Really nice to hear the strength in IDR this quarter. Would love to expand on what percentage of new -- the new ARR deals include multiple products versus starting with VM and expanding there? Thanks.

Executive
Corey E. Thomas

Yes. This is Corey, so one, thank you for joining us and Jeff and I can tag team it. We didn't give a detailed breakdown of the call. I think one of the key underlying questions that I think you're getting to is that are we growing the business outside of VM? And the answer is absolutely yes, we are. One of the statistics I shared on the call is that if you look at new ARR, almost 40% of our new ARR in Q4 came outside of vulnerability management. In a quarter, by the way, where we have very healthy growth with inside of vulnerability management itself. And so from our perspective, if you think about our IDR business is being the largest driver of that business, even though all the different crock (ph) areas are performing well, we have a very, very healthy business both with VM and outside of VM.

Executive
Jeff Kalowski

Yes, I'll just point out that, our platform customers grew again this quarter. And the products for customer -- for platform customers, are higher than our average, which is 1.5. Also, we have free drivers of growth. We have new customers, cross-sell and up-sell, and all three segments grew nicely this quarter and also evidenced by our 120% overall rate, renewal rate.

Analyst
Elizabeth Wymond Verity

Great. Thanks. And then just quickly would love an update on how the tCell acquisition is being incorporated? And maybe how that factors into expectations for 2020? Thanks.

Executive
Corey E. Thomas

Yes. So when we have a great traction overall in application security with our DAS solution. As you point out, we acquired tCell at the end of last year to really position us as one of the leading cloud AppSec companies where we're actually looking at both application security testing, monitoring and in-app protection. tCell is in its incubation and inclusion to our platform stage right now. We have not built in significant contribution to our overall model for this year, as per our habit, as we actually build out new product offerings, we really focus on now and the customer use case, building a strong value proposition and demand. So you'll see that come in subsequent years, but it's not back in heavily into our expectations for this year.

Analyst
Elizabeth Wymond Verity

Great. Thanks.

Executive
Corey E. Thomas

Thank you so much.

Operator
Operator

Thank you. Our next question comes from Saket Kalia of Barclays. Your line is now open.

Analyst
Saket Kalia

Hi guys, thanks for taking my questions here. And nice finish to the year.

Executive
Corey E. Thomas

Thank you.

Analyst
Saket Kalia

Corey, maybe starting with you. It's a question I asked last quarter, but it's interesting to look at it again. Obviously, a lot