Q4 2025 Earnings Summary
- Robust financial performance with impressive top-line growth and strong ARR: Rubrik reported strong financial results, with the top line being "the best we've seen across our entire coverage universe this period." The company is guiding to approximately 30% revenue growth and 24% ARR growth for fiscal 2026, demonstrating confidence in continued growth.
- Strong demand for cyber resilience solutions with no demand shift due to macroeconomic factors: Rubrik continues to see strong secular demand for its products, with cyber resilience remaining the number one topic for cybersecurity. The company is not seeing any demand shift due to macroeconomic factors, indicating resilience in its business model.
- Strategic partnership with Microsoft enhancing market position and driving growth: Rubrik has a deep partnership with Microsoft, resulting in co-engineered products and significant wins, including being showcased at Microsoft Ignite and receiving Microsoft's Partner of the Year awards. This partnership strengthens Rubrik's market position and expands growth opportunities.
- The company's guidance for net new ARR in fiscal '26 is lower than the previous year, indicating expected deceleration in growth despite favorable market conditions.
- They are experiencing billing duration compression, shifting from multiyear contracts to shorter-term contracts, which may impact cash flow and revenue visibility.
- Investments in new initiatives like Annapurna are in early stages and may take time to yield significant results, adding uncertainty to future growth prospects.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | Increased to $258.11 million | Total revenue grew significantly as robust recurring subscription revenue—accounting for roughly 94% of total revenue—continued to drive demand, reflecting an expanded customer base and strong market adoption relative to prior periods. |
Subscription Revenue | Recorded at $243.71 million | Subscription revenue remained dominant, underscoring the company’s focus on recurring revenue streams; its consistency has supported revenue stability compared to previous quarters. |
APAC Revenue | Increased over 11% sequentially (from $10.21 million to $11.35 million) | APAC revenue advanced by over 11% sequentially, indicating improved market penetration and regional performance compared to Q3’s figures, thereby enhancing the geographic revenue mix. |
Gross Profit | Grew by approximately 11% (from $180.03 million to $199.65 million) | Gross profit improvement parallels the increase in total revenue, driven by healthy subscription revenue growth and disciplined cost controls, which contrasted with higher operating expenses in the previous period. |
Operating Expenses | Increased modestly by about 3.6% | Operating expenses rose only slightly due to measured investments in R&D, sales, and marketing—key initiatives that supported growth in revenue—demonstrating effective margin discipline relative to the larger expense escalations seen in earlier periods. |
Net Loss | Narrowed by roughly 12% (from $130.91 million to $114.89 million) | Net loss contracted as higher revenue and improved gross profit margins, combined with a modest increase in operating expenses, offset prior larger losses, signaling better operating performance compared to the previous quarter. |
Net Cash Provided by Operating Activities | Jumped from $23.10 million to $83.60 million | Operating cash flow surged markedly thanks to enhanced customer collections, favorable adjustments involving deferred revenue and non-cash items, which improved liquidity relative to Q3’s performance. |
Cash and Cash Equivalents | Increased by approximately 79% (from $103.90 million to $186.33 million) | Liquidity strengthened considerably as improved operating cash flows and strategic reallocation of funds boosted cash reserves, contrasting with the lower cash levels seen last quarter despite rising investments in operations. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Revenue | Q4 2025 | $231.5M to $233.5M; YoY growth of 32%-33% | No guidance | no current guidance |
Non-GAAP EPS | Q4 2025 | Negative $0.41 to negative $0.37 | No guidance | no current guidance |
Revenue | Q1 2026 | No prior guidance | $259M to $261M; YoY growth of 38%-39% | no prior guidance |
Non-GAAP Subscription ARR Contribution Margins | Q1 2026 | No prior guidance | 4% to 5% | no prior guidance |
Non-GAAP EPS | Q1 2026 | No prior guidance | Negative $0.33 to negative $0.31 | no prior guidance |
Subscription ARR | FY 2025 | $1.057B to $1.061B; 35% growth | No guidance | no current guidance |
Total Revenue | FY 2025 | $860M to $862M; 37% growth | No guidance | no current guidance |
Non-GAAP Subscription ARR Contribution Margins | FY 2025 | Between –3% and –2% | No guidance | no current guidance |
Non-GAAP EPS | FY 2025 | Negative $1.86 to negative $1.82 | No guidance | no current guidance |
Free Cash Flow | FY 2025 | Negative $45M to negative $39M (or adjusted –$22M to –$16M) | No guidance | no current guidance |
Subscription ARR | FY 2026 | No prior guidance | $1.350B to $1.360B; 24% growth | no prior guidance |
Total Revenue | FY 2026 | No prior guidance | $1.145B to $1.161B; 30% growth | no prior guidance |
Non-GAAP Subscription ARR Contribution Margins | FY 2026 | No prior guidance | 4.5% to 5.5% | no prior guidance |
Non-GAAP EPS | FY 2026 | No prior guidance | Negative $1.23 to negative $1.13 | no prior guidance |
Free Cash Flow | FY 2026 | No prior guidance | $45M to $65M | no prior guidance |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Robust Subscription ARR Growth and Overall Financial Performance | In Q3, Q2, and Q1 earnings calls, Rubrik consistently highlighted strong subscription ARR milestones (e.g., surpassing $1B in ARR, high double-digit growth, record net new ARR, and steadily improving operating margins). | Q4 emphasized robust subscription ARR growth with ARR reaching $1.093 billion, record net new ARR, and notably improved profitability metrics such as a positive subscription ARR contribution margin (up from negative figures in previous periods). | Consistent and accelerating growth with enhanced efficiency and margin improvements as the company scales. |
Sustained Demand for Cyber Resilience Solutions through Integrated Cybersecurity Offerings | Across Q3, Q2, and Q1, Rubrik stressed the integration of DSPM, cyber recovery, and Zero Trust into a holistic platform, noting strong customer adoption and market demand driven by digital transformation and proactive risk management. | Q4 continued this narrative by highlighting full DSPM integration into Rubrik Security Cloud, citing multiple key customer wins and expanded use cases, reinforcing their integrated approach to cyber resilience. | Steady and reinforced demand with deeper integration and clearer differentiation in its comprehensive cybersecurity platform. |
Strategic Partnerships with Microsoft Enhancing Market Position | Q2 highlighted key recognitions (e.g., Microsoft Healthcare and Life Sciences Partner of the Year for 2024) while Q1 had no mention and Q3 only indirectly touched on related capabilities (e.g. DSPM for M365 Copilot). | In Q4, Rubrik provided detailed coverage of its strong strategic partnership with Microsoft, including co-engineered products for M365 and Azure environments, significant customer wins, and further recognition from Microsoft. | Renewed and strengthened focus in Q4 with explicit emphasis on collaboration to enhance market position. |
Contract Term and Billing Duration Compression Impacting Cash Flow and Revenue Visibility | Q3, Q2, and Q1 discussions noted shorter contract/invoice cycles and modest impacts on free cash flow and revenue visibility, with management pointing to ARR contribution margins as key performance metrics. | Q4 reaffirmed the impact with a description of high single-digit compression magnitude year-over-year and explicit assumptions of further compression in fiscal 2026, affecting cash flow projections and revenue timing. | Consistent concern across periods, with ongoing emphasis on managing the impact on cash flow and revenue visibility amid the transition to cloud-based billing. |
Evolving Macroeconomic Environment Impact on Demand and Guidance | Q1 and Q2 noted an uneven macro backdrop yet maintained strong demand and cautious guidance, while Q3 indirectly reflected secular demand trends amidst broader market drivers. | Q4 stressed that despite macroeconomic uncertainties, strong secular demand for cyber resilience remains, and guidance is set with prudent caution while leveraging tailwinds from cloud transformation. | Stable demand outlook with cautious yet confident guidance, demonstrating resilience despite macro challenges. |
Emergence of AI-Powered Product Innovations (Ruby AI, Generative AI) | Q1 introduced Ruby AI and broader generative AI themes, Q2 expanded on Ruby AI’s capabilities, and Q3 brought in strategic initiatives (e.g., Annapurna) alongside generative applications like DSPM for M365 Copilot. | Q4 amplified the focus on AI-powered innovation by stressing generative AI readiness, the integration of DSPM for secure AI adoption, and introducing Annapurna as a long-term strategic initiative for trusted generative AI applications. | Evolving emphasis from initial productivity and operational tools toward a broader, strategic integration of AI in the platform, marking a shift to long-term innovation investments. |
Intensifying Competition, Market Consolidation Risks, and Operational Profitability Challenges | Only Q1 explicitly discussed these issues, noting high win rates against competitors, concerns about legacy versus new entrants, and detailing challenges in subscription ARR contribution margins and free cash flow adjustments. | Q4 did not address these topics explicitly, indicating less emphasis on external competition and consolidation risks in the most recent period. | Decreased visibility in later periods suggesting a strategic shift away from overt focus on competitive and consolidation challenges. |
Increased Reliance on Large Transactions and Investments in New Initiatives with Uncertain Outcomes | In Q1, Rubrik underscored the growing importance of large transactions (e.g., deals over $1M) and noted that significant ARR growth was driven by these large deals – though they flagged potential future impacts on net retention rates. Q2 had limited mention, while Q3 revisited the topic with emerging discussion around early-stage initiatives like Annapurna. | Q4 reiterated the reliance on large transactions with record increases in customers contributing $100K+ and $1M+ ARR, and highlighted investments in new strategic initiatives (even if Annapurna wasn’t explicitly detailed in Q4, the commitment to long-term innovation was implicit). | Continued emphasis on large transactions as a growth engine with an evolving focus on strategic innovation investments, alongside cautious acknowledgement of potential impacts on retention metrics. |
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Guidance on Net New ARR Growth
Q: Why is net new ARR guidance lower in FY26?
A: Kiran explained that while pleased with FY25 growth, the net new ARR guidance for FY26 reflects the absence of a 2-point benefit from transitioning maintenance to subscription, which impacted net ARR more than the ARR base in FY25. They aim to be thoughtful in their first annual guide as a public company, ensuring confidence in their numbers despite continued strong demand for cyber resilience. -
Revenue vs ARR Growth Divergence
Q: What drives the divergence between revenue and ARR growth?
A: Kiran noted that due to their cloud transformation, revenue growth now has tailwinds and is catching up to ARR growth. In FY26, they expect revenue growth of approximately 30% compared to ARR growth of about 24%, benefiting from a few points of nonrecurring upfront revenue related to material rights in the cloud transformation. -
Subscription ARR Contribution Margin Improvement
Q: What's driving the improvement in subscription ARR contribution margin?
A: Kiran highlighted that they improved subscription ARR contribution margin by over 1,400 basis points year-over-year, mainly due to sales and marketing efficiencies, increased productivity, and scale leverage from renewals. They also benefit from cost leverage in R&D by hiring globally, including in India and Israel. Larger deal sizes contribute, with customers of $100,000 or more in subscription ARR now accounting for 84% of total ARR. -
Cash Flow Guidance and Expenses
Q: How should we think about cash flow guidance amid improved performance?
A: Kiran emphasized a cautious approach in guiding free cash flow for FY26, despite meaningful year-over-year improvement. They assume continued compression in billing durations and, being early in the year, want to be thoughtful and prudent in their guidance. -
Sales Compensation Plan Changes
Q: Why switch from 6-month to 12-month sales comp plans now?
A: Kiran explained that moving to annual comp plans aligns the sales team's execution with how the business is run and planned. As a company over $1 billion in ARR, this change is consistent with industry practices and may impact seasonality, which is factored into their guidance. -
Sales Capacity and Channel Traction
Q: How are you approaching sales capacity and channel partners?
A: Bipul stated they have the right sales capacity to execute opportunities but continuously look for high-ROI market pockets for investment. They have the right number of channel partners in all major markets and aim to deepen relationships with existing partners to build a strong ecosystem. -
Impact of DORA on Business
Q: What is the impact of DORA on Rubrik's business?
A: Bipul noted that regulations like DORA create secular tailwinds for their business. Customers need to ensure compliance and operational resilience, which drives demand for Rubrik's cyber resilience solutions. He cited a European insurance company win where DORA was a key factor. -
Strategic Partnership with Microsoft
Q: How is your partnership with Microsoft evolving?
A: Bipul highlighted a strong partnership with Microsoft, including co-engineered products for Azure and M365. Rubrik was recognized as Microsoft's Partner of the Year in the U.S. and U.K., and they're collaborating on security initiatives like Microsoft's security graph. This relationship helps protect large M365 environments and drives joint customer wins. -
Future Strategy and Customer Requirements
Q: What are customers' evolving requirements shaping your strategy?
A: Bipul emphasized a focus on cyber resilience, data security, and identity security to meet customers' needs amid AI and cloud transformations. They're investing in areas like Annapurna to leverage data for customers' AI applications, ensuring they continue to drive profitable growth and stay ahead of customer requirements. -
Total Addressable Market and Growth Drivers
Q: How do you view the TAM expanding with cloud and GenAI?
A: Bipul stated that by combining DSPM and cyber recovery, they've created a data security platform addressing a TAM over $50 billion. The shift to cloud, SaaS, and AI initiatives expands their opportunities, and they're uniquely positioned at the intersection of data security and AI. -
Competition in DSPM and Product Penetration
Q: How do you see the competitive landscape in DSPM?
A: Bipul observed that DSPM is an early market with growing awareness. Rubrik's strategy combines DSPM with cyber recovery to offer complete cyber resilience, setting them apart from competitors focused on infrastructure security. This unique approach drives success and displaces both legacy and next-gen vendors. -
Market Share and Competitive Landscape
Q: How are you addressing competition from Veeam and Cohesity's acquisition of Veritas?
A: Bipul stated that Rubrik replaces both legacy and new-gen technologies. They continue to win significant deals by offering a single pane of glass for faster cyber recovery, securing cloud workloads, and providing comprehensive cyber resilience, which sets them apart from competitors like Veeam and Cohesity. -
DSPM Integration and Adoption
Q: What benefits do you expect from integrating DSPM into RSC?
A: Bipul explained that integrating DSPM into Rubrik Security Cloud allows customers to easily enable data risk visibility and control from their existing platform. This integration accelerates adoption and, combined with cyber recovery, offers unique cyber resilience. For example, a financial services organization added DSPM to securely adopt Microsoft Copilot and realize productivity gains.
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