Rapid7 Inc

Item 1A. Risk Factors.

Except as follows below, there have been no material changes to the risk factors disclosed in Part 1, Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the SEC) on February 26, 2024 (the Annual Report) and in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024, filed with the SEC on August 7, 2024 (the Q2 Quarterly Report). Our operations and financial results are subject to various risks and uncertainties that, if they materialize, could adversely affect our business, financial condition and results of operations. In that event, the trading price of our common stock could decline. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors described in Part I, Item 1A. Risk Factors of our Annual Report and Q2 Quarterly Report. We may disclose additional changes to risk factors or disclose additional factors from time to time in our future filings with the SEC. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business.

We may have exposure to greater than anticipated tax liabilities.

We are subject to U.S. federal, state, local and sales taxes in the United States and foreign income taxes, withholding taxeOur business could be negatively affected as and transaction taxes in numerous foreign jurisdictions. We generally conduc result our internaf actional operations through wholly-owned subsidiaries and report our taxable income in various jurisdictions worldwide based upon our business operations in those jurisdictions. Our intercompany relationships are and will continue to s of activist stockholders or others.

We may be subject to complex transfer pricing regulaactions administered by taxing authorities in various jurisdictions. Significant judgment is required in evaluating our tax positions and our worldwide provision for proposals from stockholders or taxes. During the ordinary course of business, there areothers that many activities and transactions for which the ultimate tax determination is uncertain and y not align with our business strategies or the relevant taxing authorities may disagree withinterests of our determinations as to the income and expenses attributable to specific jurisdictions. In addition, our tax obligations and effective tax rates could be adversely affected by changes in the relevant tax, accounting and other laws, regulations, principles and interpretations by recognizing tax losses or lower than anticipated earnings in jurisdictions where we have lower statutory rates and higher than anticipated earnings in jurisdiother stockholders. Such activist stockholders frequently propose to involve themselves in the governance, strategic directions where we have higher statutory rates, by changes and operations of companies, in foreign currency exchange rates, or by changes in the valuation of our deferred tax assets and liabilities. We may be audited in various jurisdictions, and such jurisdictions may assess additional taxes, sales taxes, and value-added taxes against us. If we are unsuccessful in suscluding companies' efforts regarding environmental, sustaining our tax positions, our financial conditionability and results of operations would be adversely affectedgovernance standards. For example, during the quJANA Parter ended June 30, 2024, we received an initial assessners Management from the Israel Tax Authority of approximately 324 million Israeli New Shekels in relation to the fiscal year 2021 operation, LP, an activist investor, has reported, as of one of our subsidiaries in Israel. If we are unsuccessful in sustaining our tax position in this matter, our financial condition and results of operations would be adversely affected. See Note 13, Commitments and Contingencies, in the notes to the condensed consolidated finanSeptember 2024 that it holds an approximate 5.8% beneficial statements includedownership in Part I, Item 1, of this Quarterly Report on Form 10-Q for further information.

Our business could be negatively affected as a result of actions of activist stterest in our outstanding common stockholders or others.

We may be subject. Responding to actions or proposals from stockholders or others that may not align with our business strategies or the interests of our other stoactivist stockholders. Responding to such actions can  can be costly and time-consuming, disrupt our business and operations, and divert the attention of our board of directors, management, and employees from the pursuit of our business strategies. Such activities could interfere with our ability to execute our strategic plan. Activist stockholders or others may create perceived uncertainties as to the future direction of our business or strategy which may be exploited by our competitors and may make it more difficult to attract and retain qualified personnel and potential customers, and may affect our relationships with current customers, vendors, investors, and other third parties. In addition, a proxy contest for the election of directors at our annual meeting would require us to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and our board of directors. The perceived uncertainties as to our future direction also could affect the market price and volatility of our securities.

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