Rubrik Earnings Beat; Shares Slip After Rally

Rubrik, Inc. reported second-quarter fiscal 2027 results on Aug. 27 that beat Wall Street revenue and profit estimates and prompted a full-year guidance raise, even as the shares slipped after a steep 2026 rally.

Results and Guidance

Rubrik said total revenue for the quarter ended July 31 was $427.3 million, up 38% year-over-year from $309.9 million. Subscription revenue rose 37% to $407.2 million. Revenue included $4.7 million from material-rights accounting, down from $14.2 million a year earlier; revenue normalized for material rights increased 43%. The results exceeded a consensus revenue estimate of about $396.3 million.

On a non-GAAP basis, Rubrik reported net income of $44.7 million and diluted earnings per share of $0.20, reversing a non-GAAP net loss per share of $(0.03) a year earlier. The consensus non-GAAP EPS estimate had been $0.04. On a GAAP basis, the company recorded a net loss of $61.8 million, or $(0.30) per share. Non-GAAP gross margin was 81.0%, down 60 basis points from 81.6% in the prior year, while GAAP gross margin was 78.4%.

Cash flow from operations rose to $76.8 million from $64.7 million a year earlier, and free cash flow increased to $65.7 million, representing a 15% free-cash-flow margin. Cash, cash equivalents, and short-term investments totaled $1.75 billion at quarter-end, with convertible debt outstanding of $1.13 billion. Management said it exceeded all guided metrics for the quarter and raised full-year fiscal 2027 guidance, setting subscription annual recurring revenue (ARR) between $1.88 billion and $1.885 billion, total revenue between $1.685 billion and $1.693 billion, and free cash flow between $323 million and $333 million. The associated Form 8-K also noted a new board appointment.

Subscription Growth, Cloud Momentum, and Market Reaction

Subscription ARR reached $1.66 billion as of July 31, up 33% year-over-year, with net new subscription ARR of approximately $96 million, a 35% increase. Cloud ARR rose 39% to $1.48 billion, with management noting that about 89% of ARR is now cloud-based. Subscription net retention remained above 119%. Customers with at least $100,000 in subscription ARR totaled 3,084, up 23% year-over-year, while accounts with $1 million or more in subscription ARR grew more than 57%. The company reported a Net Promoter Score above 80.

Operating leverage improved as the last-12-month subscription ARR contribution margin rose to 14%, up 460 basis points from 9.4%. Rubrik positioned itself at the intersection of artificial intelligence and cybersecurity, advancing an "Agentic Cyber Resilience" approach to machine-speed cyber recovery and autonomous runtime AI-agent security.

Despite the revenue and earnings beats and the raised outlook, the stock declined after the report, as investors appeared to take profits following a large year-to-date run-up in 2026. Several analysts upgraded forecasts and praised execution in the days after the earnings release.