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Updated: 14-Mar-25 11:14 ET
Rubrik surges as data security company achieves record subscription revenue growth in Q4 (RBRK)
Recent earnings reports from the cybersecurity space have been mixed-at-best, so sentiment was skewing on the cautious side ahead of Rubrik's (RBRK) Q4 results. The cloud data management and data protection company, though, delivered another impressive beat-and-raise performance featuring record subscription revenue growth of 54% to $243.7 mln, indicating that it's gaining market share amid a choppy demand environment.
One of the main knocks against RBRK is that the company is not profitable. However, RBRK is making considerable progress in this area as non-GAAP EPS improved to $(0.18) from $(1.52) in the prior-year period. Additionally, the company is cash flow positive, diminishing the concerns surrounding profitability. In fact, in Q4, cash flow from operations increased by 553% yr/yr to $83.6 mln.
A combination of demand-related factors and better operational efficiency is fueling RBRK's stronger financials.
One of the main knocks against RBRK is that the company is not profitable. However, RBRK is making considerable progress in this area as non-GAAP EPS improved to $(0.18) from $(1.52) in the prior-year period. Additionally, the company is cash flow positive, diminishing the concerns surrounding profitability. In fact, in Q4, cash flow from operations increased by 553% yr/yr to $83.6 mln.
A combination of demand-related factors and better operational efficiency is fueling RBRK's stronger financials.
- One of the most closely watched metrics for RBRK is subscription ARR, which grew by a robust 39% yr/yr to $1.093 bln, surpassing expectations. The company is seeing strong demand for its flagship Cloud Data Management product. This unified platform manages data across on-premises, hybrid, and multi-cloud environments, providing data backup, recovery, and data recovery capabilities.
- New customer acquisitions and effective cross-selling efforts are also bolstering subscription ARR growth. In Q4, RBRK saw a 29% yr/yr jump in customers with $100,000 or more in subscription ARR, for 2,246 such customers. Once on-boarded, RBRK's customers are tacking on additional products, as reflected by a subscription net revenue retention (NRR) rate that's consistently north of 120%.
- While RBRK's expenses are rising sharply -- they were up by 45% yr/yr in Q4 to $315.8 mln -- the company is benefitting from enhanced operational efficiencies and better operating leverage. Consequently, subscription ARR contribution margin expanded to 2% compared to -12% in the year-earlier period.
- Cybersecurity companies CrowdStrike (CRWD), Akamai Tech (AKAM), and SentinelOne (S), issued soft guidance in recent weeks, putting RBRK's guidance under the spotlight. The company didn't disappoint as its EPS and revenue outlooks for both 1Q26 and FY26 exceeded expectations. Along with the tailwinds of an ongoing cloud transition across enterprises, new product momentum -- particularly around AI -- should provide a lift in FY26. For instance, Annapurna is RBRK's new technology that's designed to facilitate the development of GenAI applications by providing secure, API-driven access to enterprise-wide data. The product integrates seamlessly with platforms such as Amazon Bedrock.
Bolstered by effective cross-selling efforts, new customer acquisitions, and resilient demand for its data management and protection platform, RBRK easily surpassed Q4 expectations, while providing a bullish outlook for FY26. The company's impressive results and outlook stand in contrast to other cybersecurity names like SentinelOne (S), which issued soft guidance on Wednesday night.
