What They Do
Rubrik provides cloud-based data security and cyber resilience solutions, helping enterprises protect, recover, and govern their data across hybrid cloud environments. Their customers are primarily large enterprises who pay subscription fees for data protection, ransomware recovery, and identity security services. The company has evolved from traditional data backup into a comprehensive cyber resilience platform that's become critical infrastructure when ransomware attacks occur.
Investment Thesis
**Explosive growth acceleration**: Subscription ARR jumped 34% YoY to $1.46B with record $115M net new ARR in Q4, significantly beating expectations**Margin expansion story**: Free cash flow surged 10x to $238M while ARR contribution margins improved 950 bps to 12%, showing strong operating leverage**Market dominance**: 90%+ competitive win rates in Q4 with 2,805 customers spending $100K+ annually, demonstrating strong product-market fit in the critical cyber resilience marketKey Risks
**Early-stage AI pivot**: New Agent Cloud for AI governance is still in POC phase with unclear commercialization timeline and competitive positioning**Go-to-market transition**: Recent CRO change during rapid scaling phase could disrupt sales execution and customer acquisition momentumGrowth Story
Rubrik is riding the cyber resilience wave as ransomware threats make data recovery mission-critical for enterprises. Revenue grew 46% YoY in Q4 to $378M, with cloud ARR representing 88% of total subscription revenue growing 48% annually. The company is expanding beyond data protection into identity security (900+ customers, up from 400 last quarter) and emerging AI governance markets, targeting a massive TAM as digital transformation accelerates.
Profitability Profile
The company has hit an inflection point on profitability with gross margins expanding to 84% and free cash flow generation of $238M (vs $22M prior year). ARR contribution margins improved dramatically to 12% from 2% a year ago, demonstrating strong unit economics. Management guides to ~13% ARR contribution margins in FY27 with continued free cash flow growth to $265-275M, showing a clear path to sustainable profitability.
Competitive Position
Rubrik has established dominant positioning in the cyber resilience market with 90%+ win rates against legacy data protection vendors and strong momentum in enterprise displacement deals. Their cloud-native architecture and comprehensive platform approach (data protection + identity + AI governance) creates switching costs and competitive moats. The company's focus on "when ransomware inevitably hits" resonates strongly with CIOs prioritizing business continuity over cost optimization.
Recent Momentum
Q4 results were exceptional across all metrics—revenue beat by 7.7%, EPS beat by $0.15, and ARR growth accelerated well beyond expectations. The market has responded positively to consistent execution (4 straight quarters of revenue/EPS beats) and the emerging AI opportunity with Agent Cloud POCs at multiple Fortune 500 companies. Management's confident tone and raised guidance suggest momentum is sustainable into FY27.
What Wall Street Thinks
Analysts are increasingly bullish on Rubrik's ability to deliver accelerating growth while expanding margins simultaneously—a rare combination at this scale. Key debates center on the commercialization timeline for Agent Cloud AI governance and the size of the sovereign cloud opportunity. The consistent beat-and-raise pattern has built credibility with investors focused on the company's execution in the large cyber resilience TAM.
The Bottom Line
Rubrik has reached a sweet spot of accelerating growth (34% ARR) with rapidly improving profitability (10x FCF growth), positioning it as a premium play on the mission-critical cyber resilience market that's only becoming more important as ransomware threats intensify.
