Jim Cramer questioned the reaction to Rubrik, Inc.’s (NYSE:RBRK) latest earnings report during the September 2 episode of Mad Money, as he said:
What just happened to the stock of Rubrik? That’s the data security company, reported a seemingly very strong quarter last week… The stock dropped 13% the next day. Darn thing’s been drifting lower ever since. Now, this is kind of crazy, people. Rubrik posted a big revenue beat. Earned 20 cents per share when the analysts were looking for 4 cents. They raised their full-year forecast for revenue. Annual recurring revenue was sensational. Margins, free cash flow good too. Stock got hurt. Now some of that’s because Rubrik’s billings, some people say, came in a little light. I think it’s supposedly because the stock had run up like crazy in the month before the quarter. It just came in maybe too hot. The stock’s up 14% for the year.
Rubrik Earnings Beat Estimates and Raise Full-Year Guidance
Rubrik, Inc. (NYSE:RBRK) reported revenue of $427.3 million for the second quarter fiscal year 2027, up 38% year over year and above Wall Street’s roughly $396 million estimate. Non-GAAP diluted earnings were $0.20 per share, compared with a non-GAAP loss of $(0.03) per share a year earlier and a $0.04 consensus estimate. Subscription ARR increased 33% to $1.66 billion, while net new subscription ARR rose 35% to approximately $96 million.
Management raised its fiscal 2027 outlook. Revenue is now expected at $1.685 billion to $1.693 billion, subscription ARR at $1.880 billion to $1.885 billion and free cash flow at $323 million to $333 million. Third-quarter revenue guidance of $429 million to $431 million also implies continued strong growth.
Moreover, management said demand is being driven by cyber resilience, platform consolidation and expansion into identity resilience. Customers with at least $100,000 of subscription ARR increased 23% to 3,084, while customers generating more than $1 million grew by more than 57%. Rubrik’s newer Agent Cloud product remains early, with more than 15 paying customers and only a minimal ARR contribution included in the fiscal-year outlook.
Bear Case is About the Price of Growth
Rubrik, Inc.’s (NYSE:RBRK) biggest risk is that expectations have moved faster than the financial results. Shares rose about 48% in August before earnings, which leaves little room for disappointment. It generated $65.7 million of free cash flow in the quarter, up 14% year over year, compared with 38% revenue growth. Free-cash-flow margin declined to about 15% from 19% a year earlier. It remained GAAP-unprofitable, reporting a $61.8 million net loss, or $0.30 per diluted share.
