Q2 2027 Rubrik, Inc. Earnings Call Transcript
Key Points
- Rubrik Inc (RBRK) delivered its tenth consecutive quarter of outperformance, with subscription ARR reaching $1.66 billion, up 33% year over year, and net new subscription ARR accelerating to $96 million, a 35% year-over-year increase.
- The company achieved strong profitability improvements, with subscription ARR contribution margin up 460 basis points year over year to 14% and free cash flow of $65.7 million, while raising its full-year outlook.
- Rubrik Inc (RBRK) is capitalizing on the growing demand for agentic cyber resilience, driven by AI-powered threats like the Mythos incident, positioning its platform as a board-level necessity for enterprises.
- The launch of Rubrik Flex, a unified platform contract vehicle, is gaining early traction, with a large healthcare system expansion deal highlighting the appeal of a single platform for on-prem, cloud, SaaS, and identity data.
- Identity Resilience and Rubrik Agent Cloud are showing strong momentum, with over 15 paying RAC customers and a record international identity deal, indicating successful expansion into new high-growth product lines.
- The company's land-and-expand model remains robust, with subscription net retention rate over 119% and customers with $100,000+ ARR growing 23% year over year, contributing to durable growth.
- The company's guidance implies a significant deceleration in net new subscription ARR growth in the second half of fiscal 2027, with expectations of mid-single-digit growth compared to the strong first-half performance.
- Rubrik Inc (RBRK) faces a headwind from the substantial reduction in material rights revenue related to its cloud transformation, which will impact reported revenue growth for the full year.
- The Rubrik Agent Cloud (RAC) product is still in early stages, with minimal contribution to ARR expected this year, and the company faces competition from point solutions in observability and identity governance.
- The non-cloud business, while growing, remains a smaller part of the overall portfolio, and the company's cloud net new ARR growth of 20% year over year is still below the total net new subscription ARR growth, indicating a mix shift.
- Rising hardware costs and supply constraints, while not materially impacting subscription ARR, could affect the smaller hardware sales in regions like APAC, and the company acknowledges potential risks in this area.
- The company's guidance for the third quarter revenue growth of 23% year over year is a slowdown from the 38% growth in Q2, reflecting the impact of material rights and potential market uncertainties.
Thank you for joining us, and welcome to the Rubrik second-quarter fiscal year 2027 results conference call. (Operator Instructions)
I will now hand the conference over to Melissa Franchi, Vice President of Investor Relations. Please go ahead.
Hello, everyone. Welcome to Rubik's second-quarter fiscal year 2027 financial results conference call. On the call with me today are Bipul Sinha, CEO, Chairman and Co-Founder of Rubrik, and Kiran Choudary, Chief Financial Officer.
Our earnings press release was issued today after the market closed and may be downloaded from the Investor Relations page at www.ir.rubrik.com.
Also on this page, you'll be able to find a slide deck with financial highlights that, along with our earnings release, includes a reconciliation of GAAP to non-GAAP financial results. These measures should not be considered in isolation from or as a substitute for financial information
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