Rubrik Inc. reported fiscal second-quarter results that exceeded analyst expectations, with adjusted earnings per share of $0.20 versus a $0.04 forecast, and revenue of $427.3 million compared with a $396.3 million consensus. Despite the beat, shares fell 10.4% to $95.94 as investors weighed guidance and valuation multiples.
The company’s annual recurring revenue (ARR) rose 33% year-over-year to $1.66 billion, accelerating from the prior quarter’s 32% growth. Net new subscription ARR totaled $96 million, topping estimates by $20 million. Cloud net new ARR increased 20% year-over-year, in line with the prior quarter when migration effects were excluded. Free cash flow improved to $65.7 million from $57.5 million, while the ARR contribution margin expanded by 460 basis points to 14%, with management targeting approximately 15.5% for the full year.
Rubrik’s non-GAAP gross margin remained stable at 81%. Full-year adjusted EPS guidance was set at $0.47 to $0.53 per share, while the company’s market capitalization stood at roughly $13.7 billion, with a forward sales multiple of 11x to 13x.
The Identity Resilience segment continued its rapid expansion, growing from 400 to over 900 customers in the past year and surpassing $50 million in ARR by the first quarter of fiscal 2027. Management guided for potential $100 million in ARR by the end of the fiscal year, citing a 90%+ competitive win rate against legacy vendors. The recent acquisition of Strata Identity contributed no ARR in the second quarter and was excluded from full-year guidance, with the $24–$25 million increase in net new ARR guidance attributed entirely to organic growth.
Agent Cloud monetization remains in early stages, with 15 paying customers currently. Meanwhile, Scotiabank highlighted a risk from the departure of about 30 sales and marketing professionals to competitor Cursor, led by former Chief Revenue Officer Brian McCarthy. Management described the talent movement as non-disruptive.
All 27 analysts covering Rubrik maintain a "Buy" rating, with a mean price target of $107. DA Davidson raised its target to $115, while Cantor Fitzgerald’s target remains at $120. InvestingPro’s fair value estimate stands at $64.84, citing downside risks from multiple compression in the software sector.
Key catalysts for the coming quarters include third-quarter fiscal 2027 results due in late November 2026, with revenue guidance of $429–$431 million, representing 23% year-over-year growth. Identity Resilience is expected to reach $100 million in ARR by January 2027. Cloud net new ARR reacceleration above 25% is anticipated in the third and fourth quarters, alongside adoption of Rubrik Flex, a unified platform contract vehicle for large accounts. Investors will also monitor talent stabilization over the next two quarters to assess any impact on sales pipelines.
