Cybersecurity company Rubrik (RBRK) reported its first earnings since its successful IPO on April 25. The Q1 results justify investor enthusiasm for its $750 million deal. Specializing in data security and recovery, Rubrik delivered a strong beat-and-raise performance despite a challenging enterprise IT spending environment. Recent earnings in the cybersecurity sector have been mixed, with Palo Alto Networks (PANW), SentinelOne (S), and Okta (OKTA) issuing disappointing results. However, CrowdStrike (CRWD) stood out positively.
- Rubrik's strong results are impressive given the elongated sales cycles and increased deal scrutiny in the current buying climate. Its Subscription Annual Recurring Revenue (ARR) grew 46% year-over-year to $856.1 million, exceeding expectations. Unlike many enterprise software companies, Rubrik is seeing an upswing in large deals, similar to the trend experienced by CrowdStrike.
- Net new Subscription ARR grew 32% year-over-year to $72.0 million, driven by an increase in large transactions. The rise of AI and the data powering AI technologies is creating new security risks, boosting demand for Rubrik's Zero Trust Data Security platform. Despite macroeconomic headwinds, demand for Rubrik's solutions is rising as enterprises prioritize and consolidate their spending.
- Despite strong revenue and ARR growth, Rubrik is not yet profitable and doesn't expect to be until FY25. Its FY25 EPS guidance of ($2.35)-($2.25) exceeded expectations but indicates that profitability is still a few years away. For now, the focus remains on demand, with the midpoint of FY25 Subscription ARR guidance at $983-$997 million, representing healthy year-over-year growth of about 26%.
Overall, Rubrik's first earnings report as a publicly traded company was promising. With a total addressable market of approximately $53 billion by 2027, according to Rubrik, the company is just beginning its growth journey.
