Rubrik Inc (RBRK) is a leading cybersecurity company on a mission to secure the world's data. Founded in 2013, the company has quickly established itself as a dominant player in the rapidly growing data security market. With its innovative Rubrik Security Cloud platform, Rubrik is revolutionizing the way organizations approach data protection and cyber resilience.
Business Overview
Rubrik's journey began in December 2013 when it was founded as ScaleData, Inc., a Delaware corporation. The company changed its name to Rubrik, Inc. in October 2014 and is headquartered in Palo Alto, California. Rubrik offers data security solutions to organizations ranging from the largest companies worldwide to mid-sized and smaller customers.
In fiscal 2016, Rubrik launched its first enterprise software product, Converged Data Management, which combined data and metadata into a single layer of software to offer Zero Trust data protection. This product was initially sold as a perpetual license with associated maintenance contracts. In fiscal 2019, the company extended data protection to cloud-native applications and rebranded Converged Data Management to Cloud Data Management (CDM).
Rubrik's business model evolved further in fiscal 2020 when the company transitioned to a subscription pricing model, offering its CDM platform as a subscription term-based license with associated support. This subscription included Refresh Rights, which provided qualified customers with next-generation Rubrik-branded commodity servers at no additional cost. However, as of February 1, 2022, Rubrik discontinued offering CDM as a perpetual license.
In fiscal 2023, Rubrik launched its Rubrik Security Cloud (RSC), a comprehensive Zero Trust Data Security platform designed to meet customer demands for data security and a single, unified cloud-based control plane. RSC is primarily adopted by customers as a cloud-native, fully managed SaaS solution. Additionally, Rubrik offers a specialized cloud-native fully managed SaaS solution called RSC-Government for U.S. public sector organizations. As part of this business transition, Rubrik began transitioning the sale of Rubrik-branded Appliances to its contract manufacturers and discontinued offering Refresh Rights as part of its subscription offerings.
Rubrik's flagship product, the Rubrik Security Cloud, is a cloud-native platform that delivers comprehensive data security across enterprise, cloud, and SaaS environments. The platform utilizes advanced technologies, including artificial intelligence and machine learning, to detect, analyze, and remediate data security risks. By offering a unified approach to data protection, Rubrik enables organizations to achieve cyber resilience and quickly recover from ransomware attacks and other security incidents.
Financial Performance
Rubrik's financial performance has been robust, with the company consistently delivering strong top-line growth and improving profitability. In the company's latest fiscal year, ended January 31, 2025, Rubrik reported annual revenue of $1.145 billion, representing a year-over-year increase of 30%. The company's subscription annual recurring revenue (ARR) reached $1.35 billion, growing 24% year-over-year.
For the fiscal year ended January 31, 2024, Rubrik reported revenue of $453 million, net income of -$257 million, operating cash flow of $17 million, and free cash flow of $33 million. In the most recent quarter (Q3 FY2025) ended October 31, 2024, Rubrik reported revenue of $258 million, net income of -$115 million, with revenue growing 55% year-over-year. The increase in revenue was driven by strong subscription ARR growth and an increase in non-recurring revenue associated with the company's cloud transformation efforts.
Rubrik's focus on expanding its customer base and deepening existing relationships has also paid off. The company ended the fiscal year with 2,246 customers with $100,000 or more in subscription ARR, up 29% from the prior year. Additionally, the number of customers with $1 million or more in subscription ARR increased by 64% to 162.
The company's profitability has also shown significant improvement, with Rubrik's subscription ARR contribution margin reaching 4.5% to 5.5% in fiscal 2026, up from negative 12% in the prior year. This improvement in operating leverage has enabled Rubrik to generate positive free cash flow, which is expected to range between $45 million to $65 million in the current fiscal year.
Liquidity
Rubrik's liquidity position has improved significantly alongside its financial performance. The company's strong cash flow generation and disciplined capital management have resulted in a healthy balance sheet. As of October 31, 2024, Rubrik maintained $104 million in cash and cash equivalents and $528 million in short-term investments. The company also had $317 million in non-current debt. Rubrik's current ratio and quick ratio were both 1.13 as of the same date, indicating a solid short-term liquidity position.
Product Segments
Rubrik operates in two main product segments: Subscription and Maintenance. The Subscription segment, which includes the Rubrik Security Cloud (RSC) platform, is the company's primary focus and growth driver. For the nine months ended October 31, 2024, subscription revenue was $585 million, representing 93% of total revenue. The Maintenance segment, which consists of revenue from software updates, technical support, and appliance maintenance for legacy perpetual license products, has been declining as the company transitions to a subscription-based model. Maintenance revenue was $15 million for the same period, representing only 2% of total revenue.
Competitive Landscape and Growth Drivers Rubrik operates in a highly competitive data security market, facing off against established players such as Dell-EMC, IBM, and Commvault, as well as newer entrants like Cohesity and Veeam. However, Rubrik's differentiated approach to data security and its ability to provide a unified platform for data protection, security, and recovery have allowed the company to carve out a strong position in the market.
The growing demand for cyber resilience solutions is a key driver of Rubrik's growth. As organizations increasingly adopt cloud infrastructure and SaaS applications, the need for robust data security and recovery capabilities has become paramount. Rubrik's ability to secure data across enterprise, cloud, and SaaS environments, as well as its focus on identity-based threats and data recovery, have positioned the company as a strategic partner for many customers.
Additionally, the company's strategic partnership with Microsoft has further strengthened its position in the market. Rubrik's deep integration with Microsoft 365 and Azure has made it a preferred data security solution for many Microsoft-centric organizations.
Industry Trends
The data security market is experiencing rapid growth, with IDC estimating that the $13 billion data protection market saw revenue growth accelerate from low single digits in 2020/2021 to 10% in the first half of 2024, with expectations of continued double-digit growth into 2025. This growth has been driven by increased customer recognition of the importance of data protection as a defense against ransomware attacks.
Risks and Challenges Despite Rubrik's strong performance, the company faces several risks and challenges that investors should be aware of. The cybersecurity market is highly competitive, and Rubrik may face increasing pressure from larger, well-established players as they seek to expand their data security offerings. Additionally, the company's reliance on a limited number of cloud providers, such as Amazon Web Services, Microsoft Azure, and Google Cloud, exposes it to potential service disruptions or pricing changes.
Rubrik's success is also heavily dependent on its ability to continue innovating and staying ahead of the rapidly evolving threat landscape. The company must invest heavily in research and development to maintain its technological edge and deliver new features and capabilities to its customers.
Finally, Rubrik's transition to a subscription-based business model may introduce some short-term revenue volatility as the company shifts away from its legacy perpetual licensing model. The company's ability to manage this transition and continue driving strong customer adoption of its subscription offerings will be crucial for its long-term success.
Guidance and Outlook For fiscal year 2026, Rubrik has provided guidance indicating continued strong growth and profitability improvement. The company expects subscription ARR to reach $1.35 billion to $1.36 billion, reflecting 24% year-over-year growth. Total revenue is projected to be between $1.145 billion and $1.161 billion, implying 30% growth. Rubrik also anticipates improvement in its non-GAAP subscription ARR contribution margin, guiding for 4.5% to 5.5%. The company expects non-GAAP EPS to be between ($1.23) and ($1.13), and free cash flow is projected to be between $45 million and $65 million.
Conclusion
Rubrik Inc (RBRK) has firmly established itself as a leader in the rapidly growing data security market. With its innovative Rubrik Security Cloud platform, the company is revolutionizing the way organizations approach data protection and cyber resilience. Rubrik's strong financial performance, growing customer base, and strategic partnerships position the company for continued success in the years ahead. While the company faces competitive and operational challenges, its focus on innovation and its ability to deliver comprehensive data security solutions make it a compelling investment opportunity in the cybersecurity space. As Rubrik continues to execute on its growth strategy and improve its profitability metrics, it remains well-positioned to capitalize on the increasing demand for data security and cyber resilience solutions in an increasingly digital world.