A maker of data security software, Rubrik helps businesses back up their data and defend against ransomware through its Rubrik Security Cloud platform and its newer Rubrik Agent Cloud for managing AI agents. Four engineers founded the company in 2014 to replace clunky, outdated backup systems. Its name comes from "rubric," a set of rules or a guide—though a job applicant once famously mistook it for the Rubik's Cube.
Operating loss narrowed to $52.6M as revenue rose 39% and free cash flow more than doubled.
Rubrik's operating loss shrank to its narrowest as a public company. rose 39% to $387.1 million and held at 80.5% as the business scaled, while more than doubled to $77.4 million. The company is approaching breakeven, but $1.13 billion in convertible debt now sits on the balance sheet.
Key takeaways
Subscription rose 41% to $374.2 million, driving total revenue growth of 39% to $387.1 million; $8.5 million of the subscription increase came from customers exercising or forfeiting Subscription Credits, a non-recurring benefit that inflated the reported growth rate.
Subscription (ARR) reached $1.57 billion, up 32% , with Cloud ARR rising 43% to $1.39 billion as customers continued migrating to the Rubrik Security Cloud platform.
Operating loss narrowed to $52.6 million from $93.1 million a year ago, as total operating expenses grew only 17% to $364.4 million while rose 39%, demonstrating improved .
What changed
Subscription growth decelerated to 32% from 34% in the prior quarter and 38% a year ago, as the benefit from Subscription Credit exercises began to decline; management had flagged this as a metric to watch.
The improved to negative 13.6% from negative 33.4% a year ago, continuing the trajectory toward breakeven that earlier filings identified as a key milestone now that IPO-related has largely passed through the income statement.
What to watch
Track Subscription growth in Q2 FY2027, when the $8.5 million benefit from Subscription Credit exercises in Q1 is expected to decline further and the rate of the RSC platform will become clearer.
Monitor for continued progress toward breakeven; the Q1 margin of negative 13.6% is the narrowest loss as a public company, and the trajectory suggests breakeven could be within reach in FY2027.
Watch for any disclosure on the DOJ investigation, which was absent from this quarter's risk factors and legal proceedings but has not been publicly resolved.
Section summaries
Management's Discussion and Analysis
Subscription revenue grew 41% YoY to $374M, driven by 32% Subscription ARR growth to $1.57B and improved operating leverage.
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Total increased 39% to $387.1M, with subscription revenue growth of 41% to $374.2M, including $8.5M from non-recurring Subscription Credit benefits.
was 80.5%, up 2.3 points , as subscription growth of 41% outpaced the 29% increase in subscription cost of revenue.
was $77.4 million, up from $36.8 million a year ago, bringing the trailing twelve-month total to $253.3 million as the company collected multi-year upfront subscription payments.
The company ended the quarter with $1.75 billion in cash, equivalents, and short-term investments, and $1.13 billion in from the issued in June 2025.
The Department of Justice investigation into government contract practices was absent from this quarter's risk factors and legal proceedings disclosure, though the company's standard legal proceedings statement notes it is not party to any litigation expected to have a material adverse effect.
The ' impact on diluted share count remains a watchpoint; the notes' fair value fluctuates with the Class A common stock price, and the filing notes the conversion feature could introduce .
Track the ' impact on diluted share count, as their conversion feature fluctuates with the stock price and could introduce .
reached $1.57B, up 32% , while grew 43% to $1.39B, reflecting strong adoption of the RSC SaaS platform.
Subscription improved to 82% from 80%, driven by economies of scale as growth outpaced the 29% increase in subscription cost of revenue.
Operating loss narrowed to $52.6M from $93.1M, as total operating expenses grew only 17% to $364.4M, demonstrating improved .
more than doubled to $73.6M from $33.3M, primarily due to higher sales, improved , and timing of renewals.
The company holds $1.75B in cash and short-term investments and issued $1.15B in convertible notes, fully repaying its prior in June 2025.
Quantitative and Qualitative Disclosures About Market Risk
Interest-rate and foreign-currency exposures are not material to results, while convertible-note fair value moves with the stock price but does not affect cash flows.
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Cash, equivalents, and short-term investments of $1.75 billion are held for ; a hypothetical 1% rate change would not materially affect the portfolio’s fair value.
The $1.15 billion issued in June 2025 carry a conversion feature whose fair value rises and falls with the Class A common stock price, but the fixed debt obligation insulates financial position, cash flows, and results.
All sales contracts are denominated in U.S. dollars, while a portion of operating expenses are incurred in foreign currencies, creating translation exposure on the income statement and cash flows.
The company has not entered into any foreign-currency hedges or other derivatives, though it may do so in the future.
A 10% move in the U.S. dollar is not expected to have a material impact on results of operations.
From time to time, we are involved in various legal proceedings arising from activities in the normal course of business. We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a m…
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From time to time, we are involved in various legal proceedings arising from activities in the normal course of business. We are not presently a party to any litigation the outcome of which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect on our business, financial condition, results of operations, and cash flows. Defending any legal proceedings is costly and can impose a significant burden on management and employees. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
Rapid growth may not be sustainable; the company faces significant risks from its limited operating history, evolving product transitions, and intense competition in the nascent data security and AI market.
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The company's rapid growth and limited history with new offerings like RSC and RAC make future performance difficult to forecast, and past growth should not be relied upon as an indicator.
A failure to attract new customers or retain and expand existing ones, particularly as the company relies on a few large channel partners for a majority of , could materially harm results.
The business is highly dependent on the growth of the early-stage market for data security and AI solutions; a decline in ransomware activity or failure to achieve widespread adoption could reduce demand.
The company faces heightened operational and reputational risks as a data security provider, including from potential security incidents, defects in its complex solutions, and vulnerabilities in its AI tools and third-party cloud infrastructure.
Reliance on a limited number of manufacturers, particularly Supermicro, for compatible servers exposes the company to supply chain disruptions, component shortages, and tariff impacts that could delay customer deployments.
The company has a history of net losses and a significant , and it may not achieve or sustain profitability due to increasing investments in sales, R&D, and cloud infrastructure.