EPS of $-0.98 decreased by 113% from previous year
Gross margin of 73.1%
Net income of -176.93M
"Cyber resilience is top of mind for every organization around the world, because what folks have realized is they have invested millions of dollars in cyber prevention tools and they still are not sure whether they can continue operating their business in an event of cyber breach or successful cyber-attack." - Bipul Sinha
Rubrik reported a strong Q2 FY2025 performance, underscored by accelerated subscription ARR growth and improving operating leverage despite ongoing investments in product and go-to-market initiatives. Subscription ARR reached $919 million, up 40% year over year, with subscription revenue of $191 million (+50% YoY) and a subscription net retention rate (NRR) above 120%, signaling robust upsell and expansion within existing enterprise deployments. Management emphasized the differentiated cyber resilience platform (Security Cloud) that combines DSPM with cyber recovery, highlighting Rubrik's unique ability to deliver rapid cyber recovery and pre-attack data posture controls at scale. The quarter included notable customer wins and proof points (e.g., 35 seconds recovery vs. hours with incumbent, large-scale cloud protections, and Azure/Microsoft Healthcare collaboration), as well as expanded DSPM adoption (50+ customers) driven by generative AI considerations and data safety requirements.
From a profitability perspective, management guided improved leverage on the subscription ARR, with subscription ARR contribution margins expanding by approximately 1,300 basis points year over year (negative 8% for last 12 months; adjusted negative 6% excluding one-time payroll tax). Non-GAAP gross margins held at 77%, supported by product mix shifts and improved service efficiency, but cloud hosting costs remain a near-term headwind as Rubrik scales cloud-native protections. The company raised its full-year guidance for subscription ARR to roughly $1.026–$1.032 billion and revenue to $830–$838 million, with non-GAAP subscription ARR contribution margins expected to improve to roughly negative 7% to negative 6% and non-GAAP EPS of around -$2.12 to -$2.06. Free cash flow remains negative in the near term, though management projects a positive free cash flow contribution in the second half of the year.
Strategically, Rubrik continues to broaden its cyber resilience footprint through partnerships (Mandiant/Google Cloud integration; Microsoft Healthcare and Life Sciences Partner of the Year; ongoing Azure/SaaS protection expansions) and an expanding DSPM footprint that complements cyber recovery. The company signals a longer-term growth ambition toward multi-billion dollar ARR (with a stated contemplation of $3B as a next milestone) driven by expanded coverage across enterprise data, cloud, and SaaS environments. Investors should monitor cadence of large ARR adds, progression of cloud/SaaS migrations, competitive dynamics (Veritas/Cohesity backdrop), and the ongoing path to profitability given continued investments in R&D and go-to-market initiatives.
Overview of material metrics and directional insights
- Revenue: $204.951M in Q2 2025; YoY growth 35.25%; QoQ growth 9.42%
- Gross profit: $149.783M; gross margin 73.08%; YoY gross profit growth ~28.96%; QoQ growth 63.99%
- Non-GAAP gross margin: 77% (in line with prior year; up from 70% in 2023)
- Operating income: -$168.293M; operating margin -82.11%
- EBITDA: -$155.565M; EBITDARatio: -0.759
- Net income: -$176.93M; net margin -86.33%
- EPS (GAAP and diluted): -$0.98
- Subscription ARR: $919.0M, +40% YoY; Cloud ARR: $678.0M, +80% YoY
- Subscription ARR contribution margin: -8% (last 12 months); adjusted -6% excluding IPO payroll tax; improvement of ~1,300 basis points YoY
- Free cash flow: -$32.0M for the quarter; operating cash flow: -$27.1M; cash burn influenced by cloud/SaaS growth and one-time IPO payroll tax impact
- Liquidity and capital structure: cash/short-term investments around $601.3M; debt around $307M; total assets ~$1.218B; total liabilities ~$1.718B; stockholders’ equity negative ~$499.3M (reflective of IPO capitalization and accumulated deficits)
- Customer metrics: 1,969 customers with subscription ARR ≥ $100k; up 35% YoY; these large customers account for ~81% of subscription ARR (vs 78% prior year)
- Geographic mix: Americas $147.0M (+36% YoY); outside Americas $58.0M (+34% YoY)
- Management commentary emphasizes ARR growth, operating leverage, and profitability path with continued investment in R&D and GTM to capture a large cyber resilience opportunity
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
204.95M
35.25%
9.42%
Gross Profit
149.78M
28.96%
63.99%
Operating Income
-168.29M
-128.91%
76.78%
Net Income
-176.93M
-118.11%
75.83%
EPS
-0.98
-113.04%
76.39%
Key Financial Ratios
currentRatio
1.15
grossProfitMargin
73.1%
operatingProfitMargin
-82.1%
netProfitMargin
-86.3%
returnOnAssets
-14.5%
returnOnEquity
35.4%
debtEquityRatio
-0.61
operatingCashFlowPerShare
$-0.15
freeCashFlowPerShare
$-0.17
priceToBookRatio
-13.4
priceEarningsRatio
-9.45
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key management takeaways and quotes organized by themes
- Strategy and market position
- Quote: "Cyber resilience is top of mind for every organization around the world... Board of Directors and CEOs are asking for a cyber resilience strategy to ensure that their business get back up and running as fast as possible." — Bipul Sinha
- Quote: "We outperformed across all guided top-line and profitability metrics, and are raising our annual guidance." — Bipul Sinha
- Product and platform differentiation
- Quote: "Rubrik's Security Cloud combines DSPM with cyber recovery in a Zero Trust data security platform. We are the only vendor in the market to offer integrated DSPM plus cyber recovery" — Bipul Sinha
- Quote: "During the proof of concept, we demonstrated a recovery time of about 35 seconds, compared to over five hours for the incumbent." — Bipul Sinha
- Partnerships and ecosystem
- Quote: "Last month, we announced a new partnership and technology integration with Mandiant, part of Google Cloud ... joint customers will be able to ensure that in an event of an attack, the Mandiant and Rubrik team will work together" — Bipul Sinha
- Quote: "Rubrik was named Microsoft Healthcare and Life Sciences Partner of the Year for 2024" — Bipul Sinha
- Customer expansion and DSPM adoption
- Quote: "We now have more than 50 customers using our DSPM product" — Bipul Sinha
- Quote: "This quarter, adoption of additional security functionality now contributes over one-third of our subscription net retention rate" — Kiran Chaudhary
- Financial discipline and profitability trajectory
- Quote: "Subscription ARR contribution margin improved by over 1,300 basis points year over year" — Bipul Sinha
- Quote: "Free cash flow margin improved year-over-year during the first half of this fiscal year, excluding the onetime payroll tax" — Kiran Chaudhary
Cyber resilience is top of mind for every organization around the world, because what folks have realized is they have invested millions of dollars in cyber prevention tools and they still are not sure whether they can continue operating their business in an event of cyber breach or successful cyber-attack.
— Bipul Sinha
We ended Q2 with 1,969 customers with subscription ARR of $100,000 or more up 35%.
— Kiran Chaudhary
Forward Guidance
Outlook and catalysts for the remainder of FY2025 and beyond
- Q3 FY2025 guidance: Revenue of $216.0M to $218.5M (+31% to +32% YoY); non-GAAP subscription ARR contribution margin of -8% to -7%; non-GAAP EPS of -$0.41 to -$0.39 on ~185M weighted-average shares.
- Full-year FY2025 guidance: Subscription ARR of $1.026B to $1.032B (+31% to +32% YoY); total revenue of $830M to $838M (+32% to +33%); non-GAAP subscription ARR contribution margin of -7% to -6%; non-GAAP EPS of -$2.12 to -$2.06 on ~155M average shares; free cash flow of -$67M to -$57M (or -$44M to -$34M excluding the $23M IPO payroll tax) implying positive FCF in H2.
- Key drivers of growth remain: reinforced multi-cloud and SaaS data protection footprint; the convergence of DSPM with cyber recovery; expanding enterprise land-and-expand with higher attach rates to security products; priority customers including large healthcare, financial services, and consumer/retail.
- Risks and caveats to monitor: macro-driven IT budget volatility, elongation of decision cycles in large enterprises, competitive dynamics (Veritas/Cohesity/MaaS vendors), execution risk in scaling GTM and R&D investments, and the path to profitability given cloud hosting costs and potential migration timelines.
- Investment thesis: Rubrik’s leadership in cyber resilience (single platform for DSPM + cyber recovery) and expanding DSPM adoption position it well to capture the growing demand for data protection in a post-CrowdStrike outage environment; partnerships with Google Cloud/Mandiant and Microsoft Healthcare strengthen its go-to-market parity across cloud, SaaS, and on-premises environments. The long-term target of reaching multi-billion ARR (Rubrik’s stated aspiration of $3B and beyond) remains a credible objective if the company can sustain ARR growth, improve gross and operating leverage, and convert capital into positive free cash flow in subsequent years.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
RBRK Focus
73.08%
-82.10%
35.40%
-9.45%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Rubrik is positioning itself as a leader in cyber resilience with a differentiated, integrated platform (DSPM + cyber recovery) and an expanding DSPM footprint driven by AI and data security requirements. The q2 results demonstrate meaningful YoY ARR expansion, robust NRR, and continued acceleration in cloud adoption, supported by substantive partnerships and customer wins. While profitability remains negative in the near term, the improved subscription ARR contribution margin (down to -7% to -6% guidance) and the raised full-year targets indicate a path toward leveraged growth as the company scales. Investors should monitor: (1) cadence of large ARR adds and net-new ARR, (2) progression and monetization of DSPM, (3) cloud hosting cost trajectory as Rubrik intensifies cloud-native protections, and (4) the momentum and integration outcomes from strategic partnerships (Mandiant/Google Cloud, Microsoft Healthcare). The company’s long-term aspiration to reach $3B+ ARR remains ambitious but plausible if Rubrik sustains its multi-app protection strategy and converts operating leverage into positive free cash flow over time.
Key Investment Factors
Growth Potential
Significant upside from cyber resilience market growth, DSPM expansion, and enterprise land-and-expand. Subscription ARR of $919M (+40% YoY) and cloud ARR of $678M (+80% YoY) indicate strong monetization and cloud/SaaS migration tailwinds. Management guides to a $1.026–$1.032B subscription ARR for FY25 and contemplates a path toward a $3B ARR milestone, signaling a long runway for growth.
Profitability Risk
Near-term profitability remains negative (GAAP and non-GAAP) with ongoing investments in R&D and GTM. Macro headwinds and potential churn in larger deals could pressure margins. Competitive dynamics (Cohesity, Veritas, other incumbents) and integration/rationalization post-merger activity in the broader data-protection market could impact share gains. Execution risk in scaling DSPM adoption and cloud-native offerings is present as Rubrik continues to invest in product expansion.
Financial Position
Solid liquidity and balance sheet resources underpin expansion: cash/short-term investments ~$601M and debt around $307M per the quarter’s data; management indicated a strong cash position (~$607M) and maintained confidence to invest in growth. However, reported equity is negative, reflecting IPO capitalization and accumulated deficits; the company’s cash flow remains negative in the near term, with free cash flow of -$32M in Q2 and guidance for continued negative FCF in FY25, improving in H2.