Rubrik (RBRK -4.51%), a data security software company specializing in cloud-native services, reported financial results for its fiscal second quarter on September 9, 2025. The headline was a 51% surge in revenue in Q2 FY2026 compared to the prior year, accompanied by substantial improvement in both non-GAAP earnings per share and free cash flow. Management raised its full-year financial forecasts, describing the quarter as one where it “exceeded all guided metrics,” according to Bipul Sinha. Rubrik’s results signal strong customer demand, expanding recurring revenue, and improving profitability.
| Metric | Q2 FY26(ended July 31, 2025) | Q2 FY25(ended July 31, 2024) | Y/Y Change |
|---|---|---|---|
| EPS (Non-GAAP) | $(0.03) | $(0.40) | 92.5 % |
| Revenue | $309.9 million | $205.0 million | 51 % |
| Gross Margin (Non-GAAP) | 81.6 % | 77.0 % | 4.6 pp |
| Free Cash Flow (Non-GAAP) | $57.5 million | $(32.0) million | $89.5 million |
| Subscription Annual Recurring Revenue (ARR) | $1.25 billion | $919 million | 36 % |
| Subscription ARR Contribution Margin | 9.4 % | (8.2 %) | 17.6 percentage points |
About Rubrik and Its Key Success Factors
Rubrik delivers data security and data protection software, helping enterprises defend against cyberattacks and recover business-critical data across cloud, SaaS, and on-premises environments. Its flagship product is the Rubrik Security Cloud, a platform that uses artificial intelligence (AI) to automate threat detection, backup, and recovery tasks.
The business centers its strategy around a Zero Trust data security architecture. This approach assumes that every component is potentially compromised and puts safeguards in place to defend data directly—using tools like data immutability and threat monitoring. Rubrik’s success increasingly depends on its ability to grow recurring revenue through its cloud-native SaaS (software-as-a-service) platform, innovation in generative AI-powered tools, expanding customer relationships, and forging strong technology partnerships with companies like Microsoft and Amazon.
Second Quarter Performance: What Drove the Numbers
The quarter saw Rubrik surpass its own guidance across all of its main financial and operational metrics. Revenue reached $309.9 million, outpacing the company’s prior quarter guidance range of $281–$283 million. This gain was led by subscription revenue of $297.0 million, showing continued demand for Rubrik’s recurring, cloud-delivered services. Non-GAAP gross margin improved to 81.6%, from 77.0% in the prior-year period.
Free cash flow, a key measure of operating health, was $57.5 million—up from $(32.0) million in the prior year and marking the second consecutive quarter of positive free cash flow. This translates to a free cash flow margin of 19%. Non-GAAP earnings per share came in at $(0.03), a substantial improvement from $(0.40) last year and roughly $0.30–$0.32 ahead of what management had forecast at the end of the last quarter. Cash, cash equivalents, and short-term investments were $1.52 billion, counterbalanced by $1.13 billion in convertible notes issued in the six months ended July 31, 2025.
Subscription annual recurring revenue (ARR) climbed to $1.25 billion—an increase of 36% from a year ago as of July 31, 2025. Large customer adoption also broadened, with 2,505 enterprise accounts now generating at least $100,000 in annual recurring revenue, up 27% year over year as of July 31, 2025.
Rubrik made several notable advances in product development and technology integration. It announced Agent Rewind, a new AI-powered service for its cloud platform designed to improve the security and recovery of generative AI workflows. The acquisition of Predibase, a platform for creating custom AI models and managing inference workloads, further strengthens its AI capabilities. The company also expanded its platform’s support for Amazon’s DynamoDB and PostgreSQL databases, adding features like immutability—an industry term for mechanisms that prevent tampering with data backups. Rubrik retained its ‘Leader’ ranking in Gartner’s Magic Quadrant report for enterprise backup and recovery for the sixth consecutive year in the 2025 report, reflecting ongoing recognition of its product and market standing.
Contribution margin, which measures the profitability of subscription revenue after direct costs, improved significantly year over year. Contribution margin is forecast to dip in Q3 FY2026. The company continues to report a net loss under GAAP accounting, though the loss has narrowed compared to past quarters. Stock-based compensation expense remains high, representing about 28% of total revenue for Q2 FY2026. Additionally, as Rubrik’s sales have scaled, quarter-to-quarter revenue and customer growth rates have moderated when compared to the rapid expansion set in earlier periods.
Looking Ahead
Rubrik raised its financial outlook following the strong quarterly results. The company now projects full-year revenue between $1.227 and $1.237 billion for FY2026. It lifted its full-year subscription ARR guidance to a range of $1.408–$1.416 billion. Free cash flow guidance now stands at $145–$155 million, with a full-year non-GAAP net loss per share of $(0.50) to $(0.44).
Management expects revenue of $319–$321 million in Q3 FY2026 and a non-GAAP net loss per share of $(0.18)–$(0.16) in Q3 FY2026. Subscription ARR contribution margin (non-GAAP) is guided to decrease sequentially in Q3 FY2026, with full-year expectations for this metric set around 7% (non-GAAP). Investors should monitor the pacing of recurring revenue growth, customer expansion rates, and the effect of ongoing investments in innovation, especially AI and cloud-native platform capabilities. Rubrik does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
