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In Rubrik's (RBRK -6%) second earnings report since going public in April, the cybersecurity firm registered upbeat numbers similar to its first earnings report, exceeding Q2 (Jul) earnings and sales estimates, projecting Q3 (Oct) figures ahead of consensus, and lifting its FY25 (Jan) outlook. However, these lively results are not keeping the stock from sliding today.

As an unprofitable security software provider trading at a frothy forward sales multiple, RBRK's quarterly reports are prone to heightened scrutiny. The market likely anticipated another beat-and-raise in Q2 following the company's successful IPO and energetic Q1 report in June. While RBRK hiked its FY25 outlook by more than the size of its top and bottom-line beats, it was a relatively tame increase. Meanwhile, RBRK's Q2 earnings beat was by a slimmer margin than in Q1. Similarly, revenue upside in the quarter was lighter than in the company's first quarterly report.

Also, following the CrowdStrike (CRWD) outage in July, the importance of cybersecurity intensified, making it critical for organizations to allocate more capital toward IT security. Operating in the cyber resilience market, which focuses not on preventing attacks but ensuring that businesses return to full strength as quickly as possible following an attack, RBRK's lifted guidance does not underscore a rapid uptick in cybersecurity demand. Management mentioned that the CrowdStrike outage triggered plenty of discussion, with many Boards asking questions about resilience; perhaps this will eventually drive future growth.

Adding it all up triggered a sell-the-news reaction today, clouding an otherwise decent report.

• Despite operating in a macroeconomic environment causing elevated deal scrutiny, RBRK narrowed its net losses from last quarter, posting earnings of $(0.40) per share. Revenue growth cooled moderately, expanding by 35.2% yr/yr to $204.95 mln compared to a +38.0% jump last quarter.
• RBRK sustained its momentum in large deals, with customers with subscription annualized recurring revenue (ARR) of $100K or more up 35% yr/yr to 1,969. These larger customers contributed 81% of its total subscription ARR, which climbed by 40% to $919.1 mln, up 3 pts from last year. Other security firms have discussed the resilience of enterprises lately, including SentinelOne (S) and Okta (OKTA), which noted that enterprises can weather an economic storm better than small and medium-sized businesses (SMBs).
• Looking ahead, RBRK is committed to balancing growth at scale with improving profitability. The company expects Q3 adjusted EPS of $(0.41)-$(0.39) and revs of $216.5-218.5 mln, both modestly ahead of consensus. For FY25, RBRK projects adjusted EPS of $(2.12)-$(2.06), revs of $830-838 mln, and subscription ARR of $1.026-1.032 bln, improved from its previous outlook of ($2.35)-($2.25), $810-$824 mln, and $983-997 mln, respectively.

RBRK maintained its impressive growth in Q2, supporting its raised guidance. However, buoyant numbers were already priced in ahead of time. Meanwhile, rich multiples are keeping expectations elevated. Still, RBRK is a solid cybersecurity name worth keeping on the radar, especially given how severely a software update gone wrong can impact the global economy, such as in the case of CrowdStrike.