Summary
Rubrik reported total revenue of $205.0 million for the second quarter of fiscal 2025, up 35.2% from $151.5 million in the prior-year quarter. Subscription revenue did most of the work at $191.3 million, a 50% increase, while maintenance revenue and other revenue both declined as the company moved customers off legacy perpetual licenses and shifted appliance sales to contract manufacturers. Subscription ARR reached $919.1 million as of July 31, 2024, up 40% year over year, and Cloud ARR rose 80% to $677.9 million. Rubrik counted 1,969 customers with $100,000 or more in Subscription ARR, up from 1,463, and the average subscription dollar-based net retention rate stayed above 120%.
Profitability moved the other way. GAAP gross margin slipped to 73.1% from 76.6% in the prior-year quarter, a decline of 3.6 percentage points, as hosting costs rose and stock-based compensation landed in cost of revenue. Non-GAAP gross margin was 77.0%, against 76.7% a year earlier. The GAAP operating loss widened to $168.3 million from $73.5 million, and operating margin fell to -82.1% from -48.5%. Net loss widened to $176.9 million from $81.1 million. Diluted loss per share was $0.98, narrower than the $1.35 loss a year ago. Weighted-average shares rose to 179.9 million from 60.3 million after the April 2024 initial public offering. Stock-based compensation accounted for $105.0 million of the quarter's costs, compared with $1.2 million a year earlier, driven by vesting of equity awards tied to the offering.
Cash flow weakened. Operating cash flow was negative $27.1 million for the quarter, compared with negative $6.7 million a year earlier, and free cash flow was negative $32.0 million against negative $13.4 million. Free cash flow is a non-GAAP measure that subtracts purchases of property and equipment and capitalized internal-use software from operating cash flow. Capital expenditures were $2.6 million, down 42.4% from $4.5 million. Cash, cash equivalents and short-term investments totaled $601.3 million as of July 31, 2024. Current deferred revenue was $626.1 million and remaining performance obligations were $1.51 billion. The accumulated deficit reached $2,591.5 million, and management expects to keep incurring operating losses.
Guidance for the third quarter of fiscal 2025 includes a non-GAAP Subscription ARR contribution margin of approximately (8)% to (7)%, non-GAAP EPS of $(0.41) to $(0.39) and about 185 million weighted-average shares. For the full fiscal year 2025, the company raised guidance across all metrics. Full-year Subscription ARR is guided to $1,026 million to $1,032 million, with a non-GAAP Subscription ARR contribution margin of approximately (7)% to (6)%, non-GAAP EPS of $(2.12) to $(2.06), about 155 million weighted-average shares and free cash flow of $(67) million to $(57) million, including $23 million of one-time payroll taxes tied to the public offering.
Subscription ARR contribution margin was (8)% for the twelve months ended July 31, 2024, compared with (22)% for the twelve months ended July 31, 2023, and (6)% after adjusting for $22.8 million in employer payroll taxes from the first quarter of fiscal 2025. Management says the shift to Rubrik Security Cloud will limit and cause fluctuations in revenue growth through fiscal 2027, because term-based licenses recognize revenue upfront while SaaS subscriptions recognize it ratably. Maintenance revenue should keep falling, and other revenue is expected to decline as a percentage of total revenue. Billings are seasonal, with the fourth quarter substantially higher than the other three, and more customers are opting for annual payments over multi-year commitments. Rubrik lists a limited operating history, competition, international expansion, new product introductions and the use of AI in its products among its risks.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $205.0M | $187.3M | +9.4% | — | — |
| Gross profit | $149.8M | $91.3M | +64.0% | — | — |
| Gross margin | 73.1% | 48.8% | +24.3 pp | — | — |
| Research & development | $86.2M | $285.4M | -69.8% | — | — |
| Sales & marketing | $167.9M | $379.3M | -55.7% | — | — |
| General & administrative | $63.9M | $151.5M | -57.8% | — | — |
| Total operating expenses | $318.1M | $816.2M | -61.0% | — | — |
| Operating income (loss) | -$168.3M | -$724.8M | +76.8% | — | — |
| Operating margin | -82.1% | -387.0% | +304.8 pp | — | — |
| Net income (loss) | -$176.9M | -$732.1M | +75.8% | — | — |
| Net margin | -86.3% | -390.8% | +304.5 pp | — | — |
| Diluted EPS | -$0.98 | -$11.48 | +$10.50 | — | — |
| Customers | 1,969 | 1,859 | +5.9% | — | — |
| Net retention rate | 120.0% | 120.0% | ±0.0 pp | — | — |
Risks
Net loss widened to $176.9 million for the quarter ended July 31, 2024 from $81.1 million in the prior-year quarter, and operating margin fell to negative 82.1% from negative 48.5%. Accumulated deficit was $2,591.5 million as of July 31, 2024, and the company expects RSC and appliance transitions to pressure revenue and profitability through fiscal 2027.
The transition to RSC involves enforcement of migration deadlines that may be perceived negatively by customers and cause delays; revenue may fluctuate as customers consume a mix of RSC and RCDM-T, with some revenue recognized upfront, and could decline if migrations complete sooner than expected. MD&A expects these factors to limit and cause fluctuations in revenue growth through fiscal 2027.
Gross margin declined to 73.1% in the quarter ended July 31, 2024 from 76.6% in the prior-year quarter, and subscription gross margin decreased to 76% from 82%, due to stock-based compensation after the IPO and higher hosting costs for more SaaS products. The company expects subscription gross margin to fluctuate through fiscal 2027 as SaaS revenue grows and hosting costs increase.
Competitors are investing in AI technology to improve data security products, which could let them respond more quickly to new threats and changes in customer requirements. Rubrik may also face new competitors such as public cloud providers and SaaS companies with native data security and management solutions, and the market is intensely competitive with larger vendors such as Dell-EMC, IBM, Commvault, Veeam, and Cohesity.
Use of third-party generative AI tools to generate code and materials may limit IP protection, expose the company to infringement claims, data leakage, and regulatory fines under laws such as the EU AI Act and Colorado AI Act. Adoption of Generative AI Products could also be reduced by customer reluctance in regulated industries or by claims arising from erroneous output.
As a data security company, Rubrik is specifically targeted by threat actors; a March 2023 unauthorized access to a non-production testing environment had limited impact, but a future incident could be catastrophic, cause customer loss, regulatory investigations, litigation, and reputational harm. The company notes heightened ransomware targeting given its data security solutions and marketing.
A large majority of customer enterprise data secured relies on Rubrik-branded Appliances built on servers supplied and designed by Supermicro. If Supermicro delays, constrains capacity, or stops producing servers, customer ability to procure appliances would be impaired and sales could suffer, and there are limited compatible commodity server manufacturers.
Subscription Credits issued in lieu of Refresh Rights expire, and if customers do not utilize them before expiration it could cause dissatisfaction and lost purchases. Average subscription dollar-based net retention rate was over 120% as of July 31, 2024, compared with over 140% as of July 31, 2023, and a decline in retention could reduce Subscription ARR.
Macroeconomic concerns and customer financial difficulties may cause current and prospective customers to delay or cut security and IT operations spending. The company notes customers have opted to pay annually rather than multi-year due to growth in SaaS products and the uncertain macroeconomic environment, which can affect billings and cash flow.
The dual class structure gave Class B holders approximately 97% of voting power as of July 31, 2024, and the company may be excluded from certain indices such as the Russell 2000, which could reduce demand for Class A common stock. Lock-up agreements expire after the earnings release for the quarter ended July 31, 2024, and future sales could depress the stock price.
The Amended Credit Facility imposes operating and financial restrictions, including limits on additional indebtedness, dividends, investments, liens, and asset transfers. Failure to comply could result in an event of default and required repayment before the August 2028 maturity date, and the facility carries prepayment premiums.
SaaS KPIs
All quarters →Average Subscription Dollar-Based Net Retention Rate
Cloud ARR
Subscription ARR
Free Cash Flow
Free Cash Flow Margin
Non-GAAP Gross Margin
Customers with $100K or More in Subscription ARR
Summary, forecast, risks and KPIs are extracted from Rubrik, Inc.'s SEC filings for Q2 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.