Rocketship Rubrik’s revenues roar robustly to record

Security-focussed data protector Rubrik saw revenues rocket upwards as it landed new customers, expanded sales to existing ones and recast itself as a security and AI operations company..

Revenues in its third fiscal 2026 quarter, ended October 31, rose 48 percent to $350.2 million, exceeding its high-end $320 million guidance, with a GAAP loss of $63.8 million, much improved from the year-ago $130.9 million loss.

CEO, Co-founder and Chairman Bipul Sinha said: “Our third quarter results were exceptional. Every quarter for the past several quarters, we have successfully delivered, in many cases, record numbers. In fact, this quarter has been our best ever. We have not only added record net new subscription ARR, but also generated tremendous free cash flow. And I’m happy to report we once again exceeded all guided metrics across top line and profitability.”

He added: “This combination of top line growth and cash flow margin at our scale is best in class.”

Financial summary

• Subscription ARR: $1.35 billion up 34 percent Y/Y
• Gross Margin: 80.5 percent compared to 76.2 percent a year ago
• Operating cash flow: $85.5 million vsy ear-ago $223.1v million
• Free cash flow: $77 million vs year-ago $16 million
• Cash, cash equivalents, restricted cash, and marketable securities: $1.6 billion

Rubrik is not profitable yet but its rising free cash flow and reducing losses suggest a controlled expansion with profitability an outcome possibility, we think, in its y2028.

Rubrik had 2,638 customers with subscription ARR at the $100,000 level or above, a 27 percent increase Y/Y. It added a record 23 new customers with subscription ARR of $1 million or more driving over 50 percent growth in its $1 million subscription base.

It’s predominantly a cloud SaaS business now, but it still has some non-subscription business, which it calls material rights. These contributed $25 million in revenues in the quarter and are expected to decline over the next few quarters.

Where did the growth come from? It was attributed to land and expand in its two main businesses: data protection and identity resilience. A third business is its nascent but developing AI operations.

Sinha said: “in the third quarter, bookings from legacy replacements accelerated year on year, surpassing the growth rate seen in the first half of the year.”

The identity business: “achieved significant momentum in just over three quarters of the first general availability, reaching about $20 million in subscription ARR. In Q3 alone, we more than doubled the total number of identity customers. In fact, 40 percent of those identity customers added in the third quarter were net new to Rubrik.”

Sinha said: ”We are still in the initial phase of a multi-year effort to scale Rubrik’s AI solutions.” Included in this effort is Rubrik Agent Cloud, which: “is currently in beta, but we are very excited about the early customer enthusiasm.”

Asked how additive identity deals were to data protection deals, Sinha said: ”Identity is a completely additive to the deal. So it is a net new buyer for Rubrik. We are selling identity to the CISO organization, to IAM persona.” This is land and expand exemplified.

Rubrik is now outpacing rival Commvault in revenue growth;

Commvault passed the $1 billion mark in ARR growth in its latest results with Rubrik eclipsing that with its $1.35 billion.

We think it probable that Rubrik is now number three revenue-wise, in the data-protection and security market, behind leader Veeam and second-placed Cohesity.

Rubrik and AI

Sinha said: “Looking ahead, we are committed to leading and pioneering new advancements at the intersection of data protection, cyber resilience, and enterprise AI acceleration.” AI increases the threat risk, with Sinha saying: “Organizations are now facing a new cyber landscape with AI potentially enabling threat actors to inflict 10x more damage in 1/10 of the time.”

Rubrik wants to monitor and manage its customers’ AI Agents, with the ability to unwind agent actions on data should the agent mis-behave. It sees agents as quasi-people – non-human resources we might say – and says their identity and actions need monitoring.

Sinha said: “An agent operates within an organization’s environment runs business processes, assumes identity, touches critical data and impacts mission-critical applications at unprecedented speed and scale. These agents are effectively superhuman, but organizations don’t yet have the guardrails to monitor and contain what they do.”

Rubrik’s Agent Cloud will provide the guardrails needed.

Rubrik is famously a zero-trust company for human and application access to data resources and will, logically, extend this approach to AI agents. It wants to help its customers operationalize agents.

It will also use Gen AI LLMs and agents to help customers manage and monitor their data protection and security environments, and also feed the data it protects, which forms a “secure data lake”, to AI pipelines, with security and access controls of course.

Turning to the outlook, Sinha said: “We remain confident about the opportunity ahead, and thus we are again raising our outlook for the year. … We are confident in closing out this year strong and continuing our great momentum into the next year and beyond.”

The outlook is for revenue of $342 million +/ $1 million, up 33 percent. Rubrik is expecting a strong close to its fiscal year. The full fy2026 revenue outlook has been raised from last quarter’s $1.233 billion, +/- $5 million, to $1.281 billion +/- $1 million, up 44 percent Y/Y at the mid-point.