There's nothing like a surprise quarterly profit to spark a bull run in a stock. That was the dynamic behind Rubrik's (RBRK +1.15%) share price rise in early December. Although the investor euphoria following the positive news didn't last, the share price ended up increasing by more than 10% in value that month.
The right kind of surprise
Rubrik scored a beat-and-raise quarter in its third frame of fiscal 2026. It reported on Dec. 4 that its total revenue clocked in at over $350 million, for a very strong 52% increase over the same period of fiscal 2025. Within that, subscription revenue also rose by 52% to exceed $336 million. Meanwhile, subscription annual recurring revenue (ARR) improved by 34% to $1.35 billion.
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Those gains were impressive, but the change in the cybersecurity company's bottom-line figure not in accordance with generally accepted accounting principles (GAAP) was even more so. Rubrik flipped to a non-GAAP (adjusted) net income of nearly $22.9 million ($0.10 per share) from a loss of almost $37.8 million in the year-ago quarter.
That net profit came as a surprise to many analysts tracking the stock, as they were collectively modeling an adjusted net loss of $0.17 per share. Rubrik also crushed it on the top line, as the average prognosticator estimate was only $320 million.
Immodestly, although accurately, describing the quarter as "exceptional," Rubrik attributed its considerable gains to sustained customer demand for cybersecurity solutions and artificial intelligence (AI) implementation. Both are services the company offers.
NYSE: RBRK
Key Data Points
Major boosts to guidance
In line with the generally confident tone of Rubrik's earnings release, the company raised its guidance for the entirety of fiscal 2026. It now anticipates earning around $1.28 billion in total revenue for the year, with ARR reaching approximately $1.44 billion. Its adjusted net loss is expected to be between $0.16 and $0.20 per share.
Previously, management forecast that the company's annual revenue would be just under $1.23 billion to almost $1.24 billion, and its net loss would range from $0.44 to $0.50 per share.
Both of Rubrik's raised projections top the consensus analyst estimates. These call for $1.23 billion in revenue, and an adjusted net loss of $0.49 per share for the year.
I see a lot to like in Rubrik's third-quarter release, and little to be concerned about. If I were an investor, I'd be particularly impressed with the company's nimbleness in straddling both the cybersecurity and AI segments, both of which are sure to grow organically in the coming years. This stock is certainly worth consideration as a buy, in my humble opinion.
