Palo Alto Networks vs Rapid7: Revenue, Profit and Business Model
Palo Alto Networks had $11.5B of annual revenue in FY2026 and $307M of net income. Rapid7 had $835M of annual revenue in FY2024 and a net loss of $98M.
Latest financial snapshot
Palo Alto Networks
- Latest annual revenue
- $11.5B (FY2026)
- Net income
- $307M
- Net margin
- 2.7%
- Revenue growth
- +23.2% a year, FY2017–FY2026
Rapid7
- Latest annual revenue
- $835M (FY2024)
- Net income
- -$98M
- Net margin
- -11.7%
- Revenue growth
- +25.2% a year, FY2015–FY2024
Financial summary
Palo Alto Networks
Revenue grew from $1.76 billion in fiscal 2017 to $11.48 billion in fiscal 2026 as the company moved from firewall boxes to subscriptions. GAAP profit has been uneven. The company lost money through fiscal 2022, then earned $440 million in fiscal 2023 and $2.58 billion in fiscal 2024 (a figure lifted by a one-time tax benefit). It earned $1.13 billion in fiscal 2025 and $307 million in fiscal 2026, when CyberArk and Chronosphere acquisition costs produced GAAP net losses of $177 million in Q3 and $282 million in Q4. Cash generation is stronger: fiscal 2026 adjusted free cash flow margin was 38.4%, and management targets 40% by fiscal 2028. Palo Alto Networks, Inc. is the absolute largest multinational cybersecurity company in the world, maintaining a massive market valuation generally exceeding $90 billion.
Rapid7
Rapid7's financial profile illustrates steady cloud subscription growth, disciplined operational expense containment, and strong free cash flow generation. In fiscal year 2024, Rapid7 delivered consolidated net revenue of $777.0 million, representing a 14% year-over-year increase compared to $685.1 million in FY2023. Annualized Recurring Revenue (ARR) expanded to $796 million, propelled by double-digit expansion in Managed Detection and Response (MDR) and Cloud SIEM/XDR bookings. GAAP gross margin stood at 70%, while Non-GAAP gross margin reached 74%, benefiting from cloud infrastructure efficiencies on Amazon Web Services. Non-GAAP operating income surged to $95 million, reflecting successful margin optimization and corporate restructuring initiatives. The company generated over $90 million in free cash flow. Rapid7 maintains a solid balance sheet with approximately $415 million in cash, cash equivalents, and marketable securities, ensuring strong financial resilience and self-funded growth.
Revenue and profit by year
Palo Alto Networks
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2026 | $11.5B | $307M | 2.7% | +24.5% | Source |
| FY2025 | $9.2B | $1.1B | 12.3% | +14.9% | Source |
| FY2024 | $8B | $2.6B | 32.1% | +16.5% | Source |
| FY2023 | $6.9B | $439.7M | 6.4% | +25.3% | Source |
| FY2022 | $5.5B | -$267M | -4.9% | +29.3% | Source |
| FY2021 | $4.3B | -$498.9M | -11.7% | +24.9% | Source |
| FY2020 | $3.4B | -$267M | -7.8% | +17.5% | Source |
| FY2019 | $2.9B | -$81.9M | -2.8% | +27.6% | Source |
| FY2018 | $2.3B | -$122.2M | -5.4% | +29.0% | Source |
| FY2017 | $1.8B | -$203M | -11.5% | — | Source |
Rapid7
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2024 | $835M | -$98M | -11.7% | +7.4% | Source |
| FY2023 | $777.6M | -$132.4M | -17.0% | +13.5% | Source |
| FY2022 | $685.1M | -$123.5M | -18.0% | +28.0% | Source |
| FY2021 | $535.4M | -$144.3M | -27.0% | +30.1% | Source |
| FY2020 | $411.5M | -$99.6M | -24.2% | +25.9% | Source |
| FY2019 | $326.9M | -$61.9M | -18.9% | +33.9% | Source |
| FY2018 | $244.1M | -$51.6M | -21.1% | +21.5% | Source |
| FY2017 | $200.9M | -$57.1M | -28.4% | +27.6% | Source |
| FY2016 | $157.4M | -$33.9M | -21.5% | +42.6% | Source |
| FY2015 | $110.4M | -$45.3M | -41.0% | — | Source |
Where the revenue comes from
Palo Alto Networks
- Subscriptions and SupportLargest
Recurring security subscriptions, support, SASE, cloud security, and Cortex products.
- Product RevenueMaterial
Physical and virtual firewall products and related hardware/software sales.
- ServicesEmbedded
Incident response, advisory, and other security services.
Rapid7
- Managed Detection & Response (MDR & InsightIDR)46.0%
24/7 managed security operations center (SOC), cloud SIEM, user entity behavior analytics (UEBA), and incident response.
- Vulnerability Risk Management (InsightVM)34.0%
Continuous network asset scanning, vulnerability remediation prioritization, and live endpoint agents.
- Cloud Security & Application Testing (InsightCloudSec & InsightAppSec)12.0%
Multi-cloud security posture management, container compliance, and dynamic application security testing (DAST).
- Professional Security Advisory & Incident Response8.0%
Elite penetration testing, Metasploit Pro commercial tools, and emergency breach forensics.
Business model and strategy
Palo Alto Networks
How it makes money
Palo Alto Networks makes most of its money from recurring subscriptions and support, with the rest from firewall products. Customers buy hardware and virtual next-generation firewalls and then pay yearly for threat prevention, URL filtering, DNS security and SD-WAN services.
Growth strategy
Since early 2024, Palo Alto has pursued 'platformization'. It offers customers free or discounted periods so they can move off rival tools before their contracts expire, in exchange for long-term commitments to its platforms.
Competitive advantage
Palo Alto's edge is breadth combined with a large installed firewall base. Few vendors can sell network security, SASE, cloud security, SOC automation and identity security under one contract, and the PAN-OS policies that enterprises have built up over years make firewall replacement slow and risky. Telemetry from that base feeds Unit 42 threat research and the AI models in Cortex.
Rapid7
How it makes money
Rapid7 operates an enterprise Software-as-a-Service (SaaS) subscription and managed services business model with strong recurring revenue and high customer lifetime value: (1) Insight Platform SaaS Subscriptions (~80% of revenue), billed annually on a per-asset, per-user, or data-ingestion basis across InsightVM (vulnerability management), InsightIDR (cloud SIEM/XDR), InsightCloudSec (cloud security), and InsightConn…
Growth strategy
Under CEO Corey Thomas, Rapid7 is executing a four-pillar growth strategy: (1) Expanding MDR Market Leadership: Scaling Managed Detection and Response services to mid-sized enterprises facing severe cybersecurity talent shortages, delivering enterprise-grade 24/7 SOC protection at a fraction of internal build costs;
Competitive advantage
Rapid7's foundational competitive moat combines deep attacker-centric threat intelligence with integrated human-in-the-loop security operations.
Questions about Palo Alto Networks vs Rapid7
Which company has higher revenue — Palo Alto Networks, Inc. or Rapid7?
Palo Alto Networks, Inc. had $11.5B (FY2026), while Rapid7 had $835.0M (FY2024). By latest annual revenue, Palo Alto Networks, Inc. is the larger business, with Rapid7 showing a smaller revenue base. Note: these are from different fiscal years and are not a direct like-for-like comparison.
What is the market cap of Palo Alto Networks, Inc. vs Rapid7?
Palo Alto Networks, Inc.'s market capitalisation stands at $306.5B, while Rapid7's is $2.5B. Palo Alto Networks, Inc. carries the higher market valuation, reflecting investors' expectations of its future earnings power relative to Rapid7.
How does revenue per employee compare for Palo Alto Networks, Inc. and Rapid7?
Palo Alto Networks, Inc. has $714k / employee in revenue per employee, while Rapid7 has $363k / employee. Headcounts may use different dates, so the ratio alone does not establish which business operates more efficiently.
How do Palo Alto Networks, Inc. and Rapid7 make money?
Palo Alto Networks, Inc. and Rapid7 generate revenue in fundamentally different ways. Palo Alto Networks, Inc.: Palo Alto Networks makes most of its money from recurring subscriptions and support, with the rest from firewall products. Rapid7: Rapid7 operates an enterprise Software-as-a-Service (SaaS) subscription and managed services business model with strong recurring revenue and high customer lifetime value: (1) Insight Platform SaaS Subscriptions (~80% of revenue), billed annually on a per-asset, per-user, or data-ingestion basis across InsightVM (vulnerability management), InsightIDR (cloud SIEM/XDR), InsightCloudSec (cloud security), and InsightConnect (SOAR automation); (2) Managed Detection and Response (MDR) Services (~15% of revenue), providing 24/7/365 managed threat monitoring, human-led threat hunting, and automated incident response delivered by Rapid7's elite global Security Operations Centers; and (3) Professional Security Services & Metasploit Pro (~5% of revenue), encompassing adversary emulation, red-teaming penetration testing consulting, and commercial Metasploit software licensing.
Which company is valued higher relative to revenue — Palo Alto Networks, Inc. or Rapid7?
On a price-to-sales (P/S) basis, Palo Alto Networks, Inc. trades at 26.7x P/S and Rapid7 at 3.0x P/S. Palo Alto Networks, Inc. commands a higher revenue multiple, typically indicating that investors expect faster growth or higher future margins compared to Rapid7. A higher multiple is not inherently better — it may also signal that the stock is priced for perfection.
Is Palo Alto Networks, Inc. bigger than Rapid7?
By last reported revenue, Palo Alto Networks, Inc. ($11.5B (FY2026)) is the larger company compared to Rapid7 ($835.0M (FY2024)). Revenue scale is one dimension of size — market capitalisation, employee count, and geographic reach are also relevant depending on the context.
Figures come from each company's filings and the sources linked beside them. Amounts reported in another currency are shown in US dollars at an approximate rate and marked with ~. Back to the Palo Alto Networks vs Rapid7 overview