EPS of $-0.61 decreased by 10.9% from previous year
Gross margin of 77.4%
Net income of -114.89M
"subscription ARR reached $1.093 billion, growing 39% year over year." - Bipul Sinha
Rubrik Inc (RBRK) QQ4 2025 Results: Record Subscription ARR Growth, Cloud Transformation Momentum & Path to Profitability
Executive Summary
Rubrik delivered a milestone Q4 2025, underscoring the companyβs ability to convert rapid ARR growth into improving profitability while expanding addressable markets in cyber resilience and AI-enabled data protection. Total revenue rose 47% YoY to $258.1 million, with subscription ARR totaling $1.093 billion (up 39% YoY) and subscription revenue of $244 million (up 54% YoY). Cloud ARR reached $876 million (up 67% YoY), reflecting sustained demand for Rubrik Security Cloud as customers migrate to multi-cloud and SaaS environments. Net retention remained robust above 120%, and large customers (>=$100k ARR) now account for 84% of subscription ARR, signaling deeper enterprise penetration. In profitability terms, the company reported a quarterly free cash flow of $75 million and a yearly free cash flow of $22 million, while subscription ARR contribution margin improved more than 1,400 basis points to a positive 2% (TTM). Management reiterated a disciplined investment stance, emphasizing AI-era data security, a multi-cloud strategy, and expanding product footprints (DSPM integration, AD/Ent raID recovery, and OpenShift/PostgreSQL support). For FY2026, Rubrik guides to roughly 24% ARR growth (to $1.35β$1.36B), ~30% revenue growth, and a sustained positive contribution margin in subscription ARR (4β5.5%), with free cash flow expected in the $45β$65 million range. The management tone is constructive on secular tailwinds (cyber resilience, regulatory requirements like DORA, and Microsoft ecosystem expansion) and selective capex to scale, while acknowledging near-term seasonality in ARR margins and the transition to annual sales comp plans.
Key Performance Indicators
Revenue
258.10M
QoQ: 9.28% | YoY:47.47%
Gross Profit
199.65M
77.35% margin
QoQ: 10.89% | YoY:47.84%
Operating Income
-116.12M
QoQ: 6.95% | YoY:-39.71%
Net Income
-114.89M
QoQ: 12.24% | YoY:-17.84%
EPS
-0.61
QoQ: -109.59% | YoY:-10.91%
Revenue Trend
Margin Analysis
Key Insights
Q4 2025 total revenue: $258.1M, up 47% YoY; subscription revenue: $244.0M, up 54% YoY.
Gross margin (non-GAAP): 80% in Q4, vs 78% prior-year; GAAP gross margin not disclosed in detail in the transcript.
Operating metrics: operating income of -$116.1M; EBITDA of -$96.2M; net income -$114.9M; EPS -$0.61 (diluted).
Subscription ARR: $1.093B, +39% YoY; net new subscription ARR in Q4: >$90M.
Cloud ARR: $876M, +67% YoY; total ARR contribution margin improved to positive 2% trailing twelve months (vs -12% prior year), an advance of ~1,400 bps.
Financial Highlights
Revenue and profitability highlights:
- Q4 2025 total revenue: $258.1M, up 47% YoY; subscription revenue: $244.0M, up 54% YoY.
- Gross margin (non-GAAP): 80% in Q4, vs 78% prior-year; GAAP gross margin not disclosed in detail in the transcript.
- Operating metrics: operating income of -$116.1M; EBITDA of -$96.2M; net income -$114.9M; EPS -$0.61 (diluted).
- Subscription ARR: $1.093B, +39% YoY; net new subscription ARR in Q4: >$90M.
- Cloud ARR: $876M, +67% YoY; total ARR contribution margin improved to positive 2% trailing twelve months (vs -12% prior year), an advance of ~1,400 bps.
- Customer concentration: 2,246 customers with subscription ARR >=$100k (up 29% YoY); 162 customers >=$1M (up 64% YoY); large customers now account for 84% of subscription ARR (vs 80% YoY).
- Cash generation: quarterly free cash flow >$75M; full-year free cash flow ~$22M; cash position at year-end: ~$705M with ~$322M debt; net debt ~$146M.
- Efficiency and leverage: subscription ARR contribution margin positive for the last 12 months; improvement driven primarily by sales productivity, scale, and cost management (roughly 1,200 bps from S&M, rest from scale efficiencies and R&D productivity).
- Guidance for Q1 2026: revenue $259β$261M; non-GAAP subscription ARR contribution margin 4β5%; non-GAAP EPS between -$0.33 and -$0.31; implied quarterly CAGR supports mid-teens ARR expansion.
- Full-year 2026 guidance: subscription ARR $1.35β$1.36B (+ηΊ¦24% YoY); total revenue $1.145β$1.161B (+ηΊ¦30%); non-GAAP subscription ARR margin 4.5β5.5%; non-GAAP EPS between -$1.23 and -$1.13; free cash flow $45β$65M.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
258.10M
47.47%
9.28%
Gross Profit
199.65M
47.84%
10.89%
Operating Income
-116.12M
-39.71%
6.95%
Net Income
-114.89M
-17.84%
12.24%
EPS
-0.61
-10.91%
-109.59%
Key Financial Ratios
currentRatio
1.13
grossProfitMargin
77.4%
operatingProfitMargin
-45%
netProfitMargin
-44.5%
returnOnAssets
-8.07%
returnOnEquity
20.7%
debtEquityRatio
-0.6
operatingCashFlowPerShare
$0.45
freeCashFlowPerShare
$0.42
priceToBookRatio
-24.88
priceEarningsRatio
-29.98
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key management takeaways from the QQ4 2025 earnings call:
- Strategy and market positioning: Bipul Sinha emphasized Rubrikβs role at the nexus of data security and AI, driving cyber resilience across cloud, SaaS, and on-premises environments. He highlighted the expanding TAM from the integration of DSPM with cyber recovery on a single Rubrik Security Cloud platform and the acceleration of cloud and Gen AI transformations as tailwinds for demand.
- Product and platform evolution: Sinha outlined ongoing innovation in identity security (Active Directory/EntraID), orchestrated AD forest recovery, and the integration of DSPM into the Security Cloud to improve data risk visibility and accelerate Copilot adoption and RAG-enabled AI deployments. He underscored Annapurna as a longer-horizon initiative for AI-enabled data insights and recovery.
- Customer wins and macro-tailwinds: The call cited multiple wins across industries (European insurer, Fortune 50 M365 protection, U.S. conglomerate) and highlighted regulatory tailwinds like DORA that reinforce the demand for cyber resilience. DORA-driven requirements were cited as a driver of deal momentum in Europe.
- Financial discipline and profitability trajectory: CFO Kiran Chaudhry emphasized a disciplined investment approach to sustain growth while driving profitability, noting that ~1,200 bps of the 1,400 bps margin improvement came from sales & marketing efficiency and the remainder from scale and cost management. The company expects ARR-driven profitability to improve further into FY2026, with targeted non-GAAP margin expansion and seasonality in ARR contribution margins.
- Outlook and guidance: Management reaffirmed confidence in the cyber resilience market, guiding FY2026 to solid ARR growth (~24%), revenue growth (~30%), and continued improvement in subscription ARR contribution margin (4.5β5.5%), with free cash flow generation in the $45β$65M band.
subscription ARR reached $1.093 billion, growing 39% year over year.
β Bipul Sinha
Subscription ARR contribution margin was positive 2% in the last twelve months ended January 31st, compared to negative 12% in the year-ago period.
β Kiran Chaudhry
Forward Guidance
Rubrikβs forward outlook centers on durable, scalable growth in cyber resilience driven by cloud/SaaS adoption and AI-enabled data protection. Near-term indicators include:
- Q1 FY2026 revenue guidance of $259β$261M (up ~38β39% YoY) with non-GAAP subscription ARR margins of 4β5%, signaling ongoing leverage in the subscription model as the company scales.
- FY2026 guidance for subscription ARR to $1.35β$1.36B (+~24% YoY) and total revenue $1.145β$1.161B (+~30% YoY), suggesting a multi-year mix shift toward higher-margin recurring revenue.
- Free cash flow target of $45β$65M indicates positive operating cash generation despite ongoing investment in R&D and GTM expansion.
- Margin trajectory: Non-GAAP subscription ARR contribution margins expected to rise to 4.5β5.5%, with seasonality implying higher margins in Q4 and lower in Q2/Q3.
- Growth drivers and risks: TAM expansion from DSPM, AD forest recovery, and Annapurna; reliance on continued adoption of cloud/SaaS and AI initiatives; regulatory tailwinds (e.g., DORA) and strategic partnerships (Microsoft) bolster a favorable long-term view. Risks include competitive intensity (peer entrants expanding capabilities), macro noise potentially impacting IT budgets, and execution risk in scaling GTM to sustain ARR acceleration. Overall assessment: the FY2026 guide appears achievable given the strong ARR trajectory, improving profitability, and continued product innovation, though investors should monitor ARR lifecycle transitions and the pace of enterprise deals as the company scales.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
RBRK Focus
77.35%
-45.00%
20.70%
-29.98%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Rubrikβs investment case rests on a multi-year trajectory of expanding ARR-based economics, deliberate investment in high-growth capabilities, and expanding data-security-for-AI capabilities. The QQ4 2025 results demonstrate compelling top-line momentum (44β47% YoY revenue growth drivers including 39% ARR growth) and a clear path to profitability as ARR contribution margins turn positive and scale efficiencies accrue. The FY2026 guide (+24% ARR, ~+30% revenue, FCF $45β$65M) suggests a disciplined, profitable growth profile rather than a short-term earnings surge. Key catalysts include (1) DSPM-driven adoption within Rubrik Security Cloud, (2) AD forest recovery and integrity offerings that address enterprise priority around identity resilience, (3) Microsoft partnership and Azure/M365 deployments, and (4) regulatory tailwinds (DORA) that raise the barrier for non-compliant competitors. Risks include potential cyclicality in enterprise budgets, competition intensification, and the need to sustain product integration cadence to monetize Annapurna and related platforms. Overall, for risk-tolerant investors seeking exposure to a high-growth cyber-resilience platform at the intersection of data security and AI, Rubrik offers a compelling long-term thesis supported by solid ARR growth, improving profitability metrics, and strategic platform leverage.
Key Investment Factors
Growth Potential
Strong, multi-faceted growth potential driven by: (1) TAM expansion via Rubrik Security Cloud combining DSPM with cyber recovery, (2) Gen AI/data-security convergence as customers migrate to cloud/SaaS and adopt AI, (3) expanding identity security and AD forest recovery capabilities, and (4) strategic partnerships (Microsoft) and regulatory tailwinds (DORA) that elevate demand for cyber resilience. FY2026 guidance implies ~24% subscription ARR growth and continued total revenue growth around 30%, suggesting durable expansion in ARR-based economics as the business scales.
Profitability Risk
Key risks include: (1) sustained profitability timing as Rubrik continues to invest in GTM and R&D; (2) competitive pressure from incumbents and consolidating vendors (e.g., Veeam, Cohesity/Veritas); (3) potential macro volatility affecting IT budgets; (4) execution risk in integrating DSPM, AD forest recovery, and Annapurna into a coherent, scalable offering; (5) reliance on large enterprise cycles and customer concentration in ARR mix; (6) variability in non-cash or non-recurring revenue components that can skew quarterly results.
Financial Position
Solid balance sheet with substantial cash and investments (~$705M) and limited net debt (~$146M). The company generates meaningful quarterly free cash flow (~$75M in Q4) and targets mid-teens to low-teens cash flow conversion as growth scales. Non-GAAP gross margin at 80% in Q4 and a long-term target range of 75β80% supports durability of gross profits. Subscription ARR contribution margin turning positive (2% LTM) marks a foundational step toward profitability at scale, with management signaling continued leverage through scale, pricing, and product mix.
SWOT Analysis
Strengths
Robust subscription ARR growth (39% YoY) and cloud ARR acceleration (876M, +67% YoY) indicating durable demand for a cyber-resilience platform.
NRR > 120% and large-customer concentration (84% of subscription ARR from >=$100k ARR customers) signaling strong enterprise traction and high retention.
Integrated platform strategy (DSPM + cyber recovery) expands TAM and differentiates Rubrik from legacy/data-protection incumbents.
Strategic partnerships (Microsoft) and regulatory tailwinds (DORA) supporting adoption and expansion in cloud/M365 workloads.
Weaknesses
Negative GAAP/net income and negative EPS in QQ4 2025; ongoing need to demonstrate durable profitability amid heavy investment.
Seasonality in subscription ARR contribution margins and reliance on non-recurring cloud-revenue components creating quarterly volatility.
Leverage on R&D and S&M, with profitability improvements still in progress; execution risk as product breadth expands (AD forest recovery, Annapurna).
Opportunities
DSPM embedded in Rubrik Security Cloud enabling faster adoption and risk visibility for AI initiatives (Copilot, RAG, etc.).
Orchestrated Active Directory forest recovery and EntraID capabilities opening up large enterprise opportunities in identity resilience.
Annapurna as a NextGen data lake framework to empower AI workloads and data governance across multi-cloud environments.