Subscription and Revenue Growth - Subscription ARR as of October 31, 2024, reached $1,002,252, representing a 38% growth compared to $724,811 in 2023[174] - Cloud ARR as of October 31, 2024, was $768,838, showing a 69% growth from $454,866 in 2023[176] - The average subscription dollar-based net retention rate was over 120% as of October 2024, down from over 130% in 2023[180] - The number of customers with $100,000 or more in Subscription ARR increased to 2,085, a 32% growth from 1,581 in 2023[182] - Subscription revenue for the three months ended October 31, 2024, was $221,511 thousand, a 55% increase from $143,363 thousand for the same period in 2023[224] - Total revenue for the nine months ended October 31, 2024, reached $628,444 thousand, up 39% from $452,879 thousand in the prior year[225] - Subscription ARR increased from $724.8 million as of October 31, 2023, to $1,002.3 million as of October 31, 2024, representing a 38% growth[228] - The company had 2,085 customers with $100,000 or more in Subscription ARR as of October 31, 2024, up from 1,581 customers a year earlier[228] - Maintenance revenue represented 2% of total revenue for the three months ended October 31, 2024, down from 5% in the same period of 2023[229] Financial Performance and Cash Flow - Free cash flow for the nine months ended October 31, 2024 was $(53.6) million, compared to $(33.2) million for the same period in 2023, reflecting a modest improvement adjusted for employer payroll taxes[186] - Net cash used in operating activities was $(35.4) million for the nine months ended October 31, 2024, compared to $(17.3) million in 2023, highlighting increased operational expenses[189] - Net cash provided by financing activities was $396.1 million for the nine months ended October 31, 2024, compared to $96.4 million in 2023, indicating a strong financing position[189] - The company reported net cash used in investing activities of $387.6 million for the nine months ended October 31, 2024, primarily due to $641.3 million in purchases of investments[263] - The company generated net cash provided by financing activities of $396.1 million for the nine months ended October 31, 2024, mainly from $815.2 million in proceeds from its IPO[265] - As of October 31, 2024, the company had cash, cash equivalents, and short-term investments totaling $632.0 million[255] - The company expects to continue incurring operating losses, with an accumulated deficit of $(2,722.4) million as of October 31, 2024[255] Expenses and Cost Management - Total operating expenses for the three months ended October 31, 2024, were $304,819 thousand, compared to $197,175 thousand in the same period of 2023[224] - Research and development expenses are expected to increase as the company continues to innovate its platform and product functionality[215] - Sales and marketing expenses are projected to rise as the company expands its sales force and marketing efforts in new markets[217] - General and administrative expenses are expected to increase due to the costs associated with operating as a public company, although they are anticipated to decrease as a percentage of revenue over the long term[218] - Research and development expenses for the three months ended October 31, 2024, increased to $80,050,000, a 56% increase from $51,372,000 in the same period of 2023[238] - Sales and marketing expenses for the three months ended October 31, 2024, were $158,907,000, a 31% increase from $120,847,000 in the same period of 2023[240] - General and administrative expenses for the three months ended October 31, 2024, increased to $65,862,000, a 164% increase from $24,956,000 in the same period of 2023[241] Strategic Initiatives and Market Position - Rubrik transitioned customers from legacy CDM capabilities to RSC, which now represents a majority of total revenue as of the end of fiscal 2024[160] - RSC is primarily adopted as a cloud-native, fully managed SaaS solution, with a specialized version for U.S. public sector organizations called RSC-Government[159] - The company utilizes a land and expand strategy, focusing on acquiring new customers and expanding within existing ones[165] - The transition to subscription pricing models has been a significant part of the company's business evolution since fiscal 2020[158] - The company expects contributions to growth from transitioning existing maintenance customers to subscription editions to subside in fiscal 2026[174] - The company expects the transition of existing maintenance customers to subscription offerings to be largely completed by the end of fiscal 2026[229] - The company anticipates that maintenance revenue will decrease as adoption of RSC increases, affecting overall revenue composition[202] Legal and Compliance Matters - The company is involved in various legal proceedings but does not believe any current litigation will have a material adverse effect on its business[284] - The Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of the company's disclosure controls and procedures, concluding they were effective at the reasonable assurance level[280] - There were no changes in internal control over financial reporting that materially affected the company's reporting during the period covered[281] - The management believes that the company's controls provide reasonable assurance but acknowledges inherent limitations in detecting all errors and fraud[282] Currency and Tax Considerations - The company’s effective tax rate may fluctuate significantly based on earnings in different countries, which could impact overall financial performance[247] - The reporting currency for the company is the U.S. dollar, while foreign subsidiaries operate in their respective local currencies, exposing the company to foreign currency exchange rate fluctuations[278] - The company has not entered into any hedging arrangements for foreign currency risk, but may consider doing so in the future[278] - A 10% increase or decrease in the relative value of the U.S. dollar is not expected to have a material impact on the company's results of operations[278]

Financial Data and Key Metrics Changes - Rubrik surpassed $1 billion in subscription ARR, growing 38% year-over-year [7][43] - Subscription revenue was over $221 million, growing 55% year-over-year [9][46] - Free cash flow was reported at over $15 million for the quarter [10][54] - Subscription ARR contribution margin improved by 1,100 basis points year-over-year, reaching negative 3% [10][52] Business Line Data and Key Metrics Changes - Net new subscription ARR added was $83 million, indicating strong performance in the cyber resilience market [9][43] - Customers with $100,000 or more in subscription ARR reached 2,085, growing 32% year-over-year [10][46] - Cloud ARR reached $769 million, growing 69% [43] Market Data and Key Metrics Changes - Revenue from the Americas grew 46% to $169 million, while revenue from outside the Americas grew 35% to $67 million [47] - Subscription net retention rate remained above 120% [45] Company Strategy and Development Direction - Rubrik focuses on cyber resilience as a key market driver, emphasizing the need for comprehensive solutions across various data environments [11][14] - The company is expanding its product offerings, including the recent addition of Postgres SQL and Red Hat OpenShift virtualization [20] - Rubrik aims to leverage partnerships to enhance its go-to-market strategy, integrating with various technology partners [34][138] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the cyber resilience market and the demand for Rubrik's offerings [55] - The company raised its guidance for the full fiscal year 2025, expecting subscription ARR growth of approximately 35% [58] - Management noted that the transition from maintenance to subscription ARR is moderating, with no expected benefit in fiscal 2026 [60] Other Important Information - Rubrik announced the Rubrik Annapurna API service, aimed at accelerating the development of trusted generative AI applications [31][122] - The company is focused on innovation and long-term growth, with a commitment to building a secure data infrastructure for AI applications [32][124] Q&A Session Summary Question: Insights on cloud backup and third-party data protection tools - Management highlighted the need for a unified policy engine for cyber recovery across diverse data environments, which is why customers prefer Rubrik over native cloud solutions [72][73] Question: Contribution margin improvement and investment pace - Management confirmed that the subscription ARR contribution margin is expected to reach breakeven next fiscal year, with continued focus on efficiency and growth [76][78] Question: DSPM deals and their impact on sales cycles - Management noted that DSPM deals have doubled in volume, providing data risk visibility and enhancing cyber resilience, although they currently represent a smaller part of the business [84][86] Question: Total Addressable Market (TAM) in cybersecurity - Management explained that Rubrik's transformation of the backup and recovery market into a cyber resilience platform has expanded the TAM significantly [99][101] Question: Operating efficiency sustainability - Management expressed optimism about sustaining operating efficiency improvements, driven by higher productivity and a focus on renewals [103][104] Question: Adoption rate of enterprise edition - Management reported that about half of new customers are adopting the enterprise edition, contributing significantly to net retention rate [115] Question: Vision and evolution of Rubrik Annapurna - Management described Annapurna as a long-term strategy to build a centralized data platform for secure AI applications, with plans for market experimentation [122][125] Question: Go-to-market partnerships - Management confirmed increased engagement with VARs and GSIs, enhancing Rubrik's go-to-market strategy [136][140]

Financial Performance & Growth - Rubrik's Subscription ARR reached $1,002 million, demonstrating 38% year-over-year growth[10] - The company boasts a high Average Subscription Dollar-Based Net Retention Rate (NRR) of over 120%[10] - Rubrik has 2,085 customers with over $100,000 in Subscription ARR[10] - The company anticipates Subscription ARR between $1,057 million and $1,061 million for fiscal year 2025[81] - Rubrik projects total revenue between $860 million and $862 million for fiscal year 2025[81] Market & Product Strategy - Rubrik is focused on cyber resilience, combining backup & recovery with cybersecurity[20] - The company's Rubrik Security Cloud offers data risk, data threat, and cyber recovery solutions[22] - Rubrik estimates a $53 billion projected market opportunity by 2027[10] Financial Metrics - Rubrik's Non-GAAP Gross Margin is 79%[41] - The company is approaching free cash flow breakeven[71] - Rubrik's Non-GAAP Subscription ARR Contribution Margin is improving[76]

Subscription ARR and Revenue Growth - Subscription ARR grew 38% year-over-year to $1,002.3 million[1] - Revenue increased 43% year-over-year to $236.2 million[1] - 2,085 customers with $100K or more in Subscription ARR, up 32% year-over-year[1] - Subscription revenue was $221.5 million, a 55% increase compared to $143.4 million in the same quarter last year[4] - Total revenue for the three months ended October 31, 2023, was $236.178 million, a significant increase from $165.604 million in the same period last year[31] - Subscription revenue for the three months ended October 31, 2023, reached $221.511 million, up from $143.363 million in the previous year[31] - Full Year 2025 Outlook: Subscription ARR between $1,057 million and $1,061 million[14] - Full Year 2025 Outlook: Revenue of $860 million to $862 million[14] Gross Margin and Profitability - GAAP gross margin was 76.2%, compared to 79.6% in the third quarter of fiscal 2024[5] - Subscription ARR Contribution Margin improved to (3)% from (14)% in the same quarter last year[6] - GAAP total gross profit for Q3 2024 was $180.032 million, compared to $131.896 million in Q3 2023, with a GAAP gross margin of 76% vs 80% in the prior year[34] - Non-GAAP total gross profit for Q3 2024 was $187.029 million, compared to $132.712 million in Q3 2023, with a non-GAAP gross margin of 79% vs 80% in the prior year[34] Net Loss and Earnings - GAAP net loss per share was $(0.71), compared to $(1.41) in the third quarter of fiscal 2024[7] - Net loss for the three months ended October 31, 2023, was $130.910 million, compared to $86.267 million in the same period last year[31] - GAAP net loss for Q3 2024 was $(130.910) million, compared to $(86.267) million in Q3 2023, while non-GAAP net loss was $(37.782) million vs $(84.895) million in the prior year[34] Cash Flow and Liquidity - Cash flow from operations was $23.1 million, compared to $6.9 million in the same quarter last year[8] - Net cash used in operating activities for the nine months ended October 31, 2023, was $35.369 million, compared to $17.288 million in the same period last year[33] - Net cash provided by financing activities for the nine months ended October 31, 2023, was $396.100 million, compared to $96.442 million in the same period last year[33] - Free cash flow for Q3 2024 was $15.568 million, compared to $3.455 million in Q3 2023, with a free cash flow margin of 7% vs 2% in the prior year[35] - Net cash provided by operating activities for Q3 2024 was $23.095 million, compared to $6.917 million in Q3 2023[35] - Net cash used in investing activities for Q3 2024 was $(72.139) million, compared to $(99.781) million in Q3 2023[35] - Net cash provided by financing activities for Q3 2024 was $11.726 million, compared to $95.716 million in Q3 2023[35] Balance Sheet and Financial Position - Total assets as of October 31, 2023, were $1.268691 billion, up from $873.610 million as of January 31, 2023[32] - Cash and cash equivalents as of October 31, 2023, were $103.896 million, down from $130.031 million as of January 31, 2023[32] - Proceeds from the initial public offering and underwriters' exercise of over-allotment option, net of underwriting discounts and commissions, were $815.209 million[33] - Total current liabilities as of October 31, 2023, were $816.556 million, up from $656.281 million as of January 31, 2023[32] Operating Expenses and Investments - Research and development expenses for the three months ended October 31, 2023, were $80.050 million, up from $51.372 million in the same period last year[31] - GAAP operating loss for Q3 2024 was $(124.787) million, compared to $(65.279) million in Q3 2023, while non-GAAP operating loss was $(31.218) million vs $(63.859) million in the prior year[34]

Group 1 - The analysis focuses on the growth prospects of companies and utilizes the Discounted Cash Flow (DCF) model for valuation [1] - Insights are provided on cash flow generation under various business models, indicating a thorough examination of financial performance [1] Group 2 - No stock or derivative positions are held by the analyst in the companies mentioned, ensuring an unbiased perspective [2] - The article reflects the author's opinions and is not influenced by compensation from any company [2] - There is no business relationship with any of the companies discussed, further supporting the independence of the analysis [2] Group 3 - Past performance is noted as not guaranteeing future results, emphasizing the need for careful consideration in investment decisions [3] - The article does not provide specific recommendations or advice regarding investment suitability for individual investors [3] - The views expressed may not represent the overall stance of Seeking Alpha, highlighting the diversity of opinions among analysts [3]

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PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Rubrik's revenue grew 37% to **$392.3 million**, but net loss significantly widened to **$(909.0) million** due to **$735.3 million** in post-IPO stock-based compensation [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$1.22 billion** post-IPO, while total liabilities grew to **$1.72 billion**, and stockholders' deficit narrowed to **$(499.3) million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | July 31, 2024 | January 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $888,990 | $548,713 | | Cash and cash equivalents | $142,349 | $130,031 | | Short-term investments | $458,992 | $149,220 | | **Total Assets** | **$1,218,204** | **$873,610** | | **Total Current Liabilities** | $776,715 | $656,281 | | Deferred revenue (Current) | $626,131 | $526,480 | | **Total Liabilities** | **$1,717,498** | **$1,578,154** | | **Total Stockholders' Deficit** | **$(499,294)** | **$(1,419,257)** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Revenue grew 37% to **$392.3 million**, but net loss expanded to **$(909.0) million** due to massive operating expense increases, especially post-IPO stock-based compensation Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended July 31, 2024 | Three Months Ended July 31, 2023 | Six Months Ended July 31, 2024 | Six Months Ended July 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | **$204,951** | **$151,535** | **$392,266** | **$287,275** | | Subscription Revenue | $191,315 | $127,456 | $363,510 | $235,854 | | Gross Profit | $149,783 | $116,145 | $241,119 | $215,994 | | Loss from Operations | $(168,293) | $(73,520) | $(893,130) | $(158,116) | | **Net Loss** | **$(176,930)** | **$(81,121)** | **$(909,021)** | **$(170,394)** | | Net Loss Per Share | $(0.98) | $(1.35) | $(7.42) | $(2.83) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$(58.5) million**, with **$384.4 million** provided by financing activities, primarily from **$815.2 million** IPO proceeds Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended July 31, 2024 | Six Months Ended July 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | $(58,464) | $(24,205) | | Net cash used in investing activities | $(315,461) | $(22,218) | | Net cash provided by financing activities | $384,374 | $726 | - The significant cash inflow from financing activities was due to IPO proceeds of **$815.2 million**, which was partially offset by **$430.3 million** used for taxes related to the net share settlement of equity awards[21](index=21&type=chunk)[204](index=204&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the April 2024 IPO, **$1.51 billion** in remaining performance obligations, and a dramatic **$735.3 million** increase in stock-based compensation - In April 2024, the company completed its IPO, issuing 23.5 million shares of Class A common stock and receiving net proceeds of approximately **$700.0 million**[23](index=23&type=chunk) - As of July 31, 2024, total remaining non-cancellable performance obligations were approximately **$1.51 billion**, with 48% expected to be recognized as revenue over the next 12 months[50](index=50&type=chunk) - Total stock-based compensation expense for the six months ended July 31, 2024, was **$735.3 million**, a dramatic increase from **$1.6 million** in the same period of 2023, primarily due to the IPO[107](index=107&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the subscription model transition, with Subscription ARR at **$919.1 million** and Cloud ARR at **$677.9 million**, and **$601.3 million** in liquidity post-IPO [Overview](index=28&type=section&id=Overview) Rubrik's mission is to secure data via its Zero Trust Data Security platform, Rubrik Security Cloud (RSC), transitioning from perpetual licenses to a subscription model - The company's core offering is the Rubrik Security Cloud (RSC), a Zero Trust Data Security platform designed to secure data across enterprise, cloud, and SaaS applications[117](index=117&type=chunk) - Rubrik has evolved its business model from perpetual licenses to a subscription model, with RSC, launched in fiscal 2023, now representing a majority of total revenue[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) [Key Business Metrics](index=29&type=section&id=Key%20Business%20Metrics) Subscription ARR grew 40% to **$919.1 million**, Cloud ARR grew 80% to **$677.9 million**, and dollar-based net retention remained over 120% Key Business Metrics as of July 31 | Metric | 2024 | 2023 | YoY Growth | | :--- | :--- | :--- | :--- | | Subscription ARR | $919.1M | $655.0M | 40% | | Cloud ARR | $677.9M | $376.8M | 80% | | Customers with >$100k Subscription ARR | 1,969 | 1,463 | 35% | - The average subscription dollar-based net retention rate was over **120%** as of July 31, 2024, indicating strong expansion within the existing customer base[133](index=133&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Total revenue increased 35% to **$205.0 million**, but operating expenses surged 68% due to **$103.8 million** in post-IPO stock-based compensation, leading to a doubled operating loss - Subscription revenue for Q2 FY25 grew **50%** YoY to **$191.3 million**, driven by a **40%** increase in Subscription ARR[172](index=172&type=chunk)[173](index=173&type=chunk) - Total cost of revenue increased **56%** YoY for the quarter, and total operating expenses increased **68%** YoY. The primary driver for these increases was stock-based compensation expense recognized after the IPO[176](index=176&type=chunk)[182](index=182&type=chunk) Stock-Based Compensation Expense (in thousands) | Period | Q2 FY25 | Q2 FY24 | YTD FY25 | YTD FY24 | | :--- | :--- | :--- | :--- | :--- | | **Total SBC Expense** | **$105,018** | **$1,204** | **$735,348** | **$1,632** | [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) Post-IPO, the company has **$601.3 million** in cash and investments, with **$815.2 million** net proceeds from the offering, deemed sufficient for future operations - The company completed its IPO in April 2024 and exercised an over-allotment option in May 2024, resulting in total net proceeds of approximately **$815.2 million**[193](index=193&type=chunk)[204](index=204&type=chunk) - As of July 31, 2024, the company had cash, cash equivalents, and short-term investments totaling **$601.3 million**[194](index=194&type=chunk) - The company has an Amended Credit Facility from August 2023 with a total borrowing capacity of **$330.0 million**, maturing in August 2028[192](index=192&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate and currency risks, but a 10% change in interest rates is not expected to be material, and currency exposure is unhedged - The company's investments are exposed to interest rate risk, but management believes a hypothetical **10%** change in rates would not materially affect the portfolio's fair value[212](index=212&type=chunk) - All sales contracts are denominated in U.S. dollars, but a portion of operating expenses are in foreign currencies, creating currency risk. The company does not currently hedge this exposure[213](index=213&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of July 31, 2024, with no material changes to internal control over financial reporting - Management concluded that as of the end of the period, the company's disclosure controls and procedures were effective at the reasonable assurance level[214](index=214&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[215](index=215&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any litigation expected to have a material adverse effect on its business, financial condition, or results of operations - The company is not presently a party to any litigation that is expected to have a material adverse effect on its business or financials[217](index=217&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) Key risks include a history of operating losses, intense competition, reliance on third-party cloud providers, and an ongoing DOJ investigation related to government contracts - The company has a history of operating losses, with an accumulated deficit of **$(2.6) billion** as of July 31, 2024, and may not achieve or sustain profitability in the future[229](index=229&type=chunk) - In October 2023, the company received a grand jury subpoena from the DOJ regarding potential violations of federal law in connection with government contracts involving a former employee. The investigation is ongoing[316](index=316&type=chunk) - The dual-class stock structure concentrates approximately **97%** of voting power with holders of Class B common stock, limiting the influence of Class A stockholders on corporate matters[373](index=373&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=93&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales occurred; **$815.2 million** in net IPO proceeds were received, with planned use unchanged from the prospectus - The company completed its IPO on April 29, 2024, and the underwriters exercised their purchase option in May 2024, resulting in total net proceeds of approximately **$815.2 million**[398](index=398&type=chunk) [Item 5. Other Information](index=94&type=section&id=Item%205.%20Other%20Information) Several directors and officers adopted Rule 10b5-1 trading plans during the quarter for selling Class A common stock - During the quarter ended July 31, 2024, Chief Revenue Officer Brian McCarthy, board member Yvonne Wassenaar, and Chief Financial Officer Kiran Choudary each adopted Rule 10b5-1 trading plans[400](index=400&type=chunk)[401](index=401&type=chunk)[402](index=402&type=chunk)

Rubrik Reports Second Quarter Fiscal Year 2025 Financial Results • Results exceeded all guided metrics • Subscription ARR grew 40% year-over-year to $919.1 million • Revenue grew 35% year-over-year to $205.0 million • 1,969 customers with $100K or more in Subscription ARR, up 35% year-over-year • Company raises full year guidance across all metrics Palo Alto, California, September 9, 2024 – Rubrik, Inc. (NYSE: RBRK), the Zero Trust Data Security™ company, today announced financial results for the second qua ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents Rubrik, Inc.'s unaudited condensed consolidated financial statements for the period ended April 30, 2024, including balance sheets, statements of operations, comprehensive loss, changes in equity, and cash flows, along with detailed notes explaining significant accounting policies, business operations, and recent events like the IPO and acquisitions [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets present Rubrik's financial position, detailing assets, liabilities, and equity changes, significantly impacted by the IPO Condensed Consolidated Balance Sheets (in thousands) | Metric | April 30, 2024 | January 31, 2024 | | :-------------------------------------------------- | :------------- | :--------------- | | Cash and cash equivalents | $502,614 | $130,031 | | Short-term investments | $103,706 | $149,220 | | Total current assets | $852,942 | $548,713 | | Total assets | $1,166,372 | $873,610 | | Total current liabilities | $738,045 | $656,281 | | Total liabilities | $1,680,970 | $1,578,154 | | Total stockholders' deficit | $(514,598) | $(1,419,257) | - Total assets increased by **$292.7 million** from January 31, 2024, to April 30, 2024, primarily driven by a significant increase in cash and cash equivalents, likely due to the IPO proceeds[13](index=13&type=chunk) - Stockholders' deficit significantly improved from **$(1,419.3) million** to **$(514.6) million**, reflecting the impact of the initial public offering and related equity transactions[14](index=14&type=chunk) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This statement outlines Rubrik's revenues, expenses, and net loss, highlighting the impact of increased operating costs and subscription growth Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | Metric | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | | :------------------------------------------------------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Total revenue | $187,315 | $135,740 | | Subscription revenue | $172,195 | $108,398 | | Maintenance revenue | $5,667 | $12,288 | | Other revenue | $9,453 | $15,054 | | Total cost of revenue | $95,979 | $35,891 | | Gross profit | $91,336 | $99,849 | | Total operating expenses | $816,173 | $184,445 | | Loss from operations | $(724,837) | $(84,596) | | Net loss | $(732,091) | $(89,273) | | Net loss per share, basic and diluted | $(11.48) | $(1.49) | | Weighted-average shares, basic and diluted | 63,794 | 59,940 | - Total revenue increased by **38%** year-over-year, primarily driven by a **59% increase in subscription revenue**, while maintenance and other revenue decreased[15](index=15&type=chunk) - Net loss significantly widened to **$(732.1) million** in Q1 2024 from **$(89.3) million** in Q1 2023, largely due to a substantial increase in operating expenses, particularly stock-based compensation recognized post-IPO[15](index=15&type=chunk)[170](index=170&type=chunk) [Condensed Consolidated Statements of Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) This statement details Rubrik's net loss and other comprehensive income/loss components, reflecting the overall change in equity from non-owner sources Condensed Consolidated Statements of Comprehensive Loss (in thousands) | Metric | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net loss | $(732,091) | $(89,273) | | Foreign currency translation adjustment, net of tax | $(489) | $513 | | Unrealized gain (loss) on available-for-sale securities, net of tax | $(176) | $106 | | Total other comprehensive income (loss), net of tax | $(665) | $619 | | Comprehensive loss | $(732,756) | $(88,654) | - Total comprehensive loss increased significantly to **$(732.8) million** in Q1 2024, compared to **$(88.7) million** in Q1 2023, primarily reflecting the larger net loss[16](index=16&type=chunk) [Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Deficit](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Redeemable%20Convertible%20Preferred%20Stock%20and%20Stockholders%27%20Deficit) This statement tracks changes in preferred stock and stockholders' deficit, primarily reflecting the conversion of preferred stock and IPO-related equity transactions - As of April 30, 2024, all redeemable convertible preferred stock was converted into Class B common stock and its carrying value of **$714.7 million** was reclassified into stockholders' equity, following the IPO[17](index=17&type=chunk)[86](index=86&type=chunk) - Additional paid-in capital increased substantially from **$265.5 million** as of January 31, 2024, to **$1,902.9 million** as of April 30, 2024, largely due to the IPO proceeds and stock-based compensation[17](index=17&type=chunk) - Accumulated deficit increased to **$(2,414.6) million** as of April 30, 2024, from **$(1,682.5) million** as of January 31, 2024, reflecting the net loss incurred during the period[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes Rubrik's cash inflows and outflows from operating, investing, and financing activities, notably influenced by the IPO proceeds Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(31,381) | $(17,457) | | Net cash provided by investing activities | $40,737 | $5,046 | | Net cash provided by financing activities | $362,182 | $559 | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $371,049 | $(11,339) | | Cash, cash equivalents, and restricted cash, end of year | $508,108 | $129,267 | - Net cash used in operating activities increased to **$(31.4) million** in Q1 2024 from **$(17.5) million** in Q1 2023, primarily due to a larger net loss, partially offset by significant non-cash stock-based compensation[19](index=19&type=chunk)[196](index=196&type=chunk) - Net cash provided by financing activities surged to **$362.2 million** in Q1 2024, mainly driven by **$710.3 million** in net proceeds from the IPO, partially offset by **$350.4 million** in taxes paid for equity award settlements[19](index=19&type=chunk)[200](index=200&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of Rubrik's accounting policies, business operations, and significant financial events, including the IPO and acquisitions [Note 1 – Description of Business](index=11&type=section&id=Note%201%20%E2%80%93%20Description%20of%20Business) This note details Rubrik's Initial Public Offering (IPO), including shares issued, net proceeds, and the conversion of preferred stock to common stock - Rubrik, Inc. completed its Initial Public Offering (IPO) in April 2024, issuing 23.5 million shares of Class A common stock at $32.00 per share, generating approximately **$700.0 million** in net proceeds[22](index=22&type=chunk) - Immediately prior to the IPO, all outstanding redeemable convertible preferred stock (74.2 million shares) and convertible founder stock (5.4 million shares) automatically converted into Class B common stock[23](index=23&type=chunk) - The company recognized **$411.5 million** in stock-based compensation expense for IPO Vesting RSUs upon IPO consummation, with **12.9 million Class A common shares** withheld for tax obligations[25](index=25&type=chunk) [Note 2 – Basis of Presentation and Summary of Significant Accounting Policies](index=11&type=section&id=Note%202%20%E2%80%93%20Basis%20of%20Presentation%20and%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines Rubrik's financial statement preparation, fiscal year, and key accounting policies for revenue recognition and deferred revenue - Rubrik's fiscal year ends on January 31. The unaudited condensed consolidated financial statements are prepared in conformity with U.S. GAAP and SEC rules for interim reporting[26](index=26&type=chunk)[27](index=27&type=chunk) - Revenue is primarily generated from subscription sales, typically invoiced upfront, with recognition over the subscription period for SaaS and hybrid cloud offerings, and partially upfront for term-based licenses[31](index=31&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) - Deferred revenue, representing advance payments from customers, increased, with **$150.0 million** recognized as revenue in Q1 2024 from amounts deferred at the beginning of the period[48](index=48&type=chunk) Revenue by Timing of Recognition (in thousands) | Revenue Type | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Subscription revenue: Products and services transferred over time | $158,020 | $81,649 | | Subscription revenue: Products and services transferred at a point in time | $14,175 | $26,749 | | Maintenance revenue: Products and services transferred over time | $5,667 | $12,288 | | Other revenue: Products and services transferred over time | $7,400 | $7,697 | | Other revenue: Products and services transferred at a point in time | $2,053 | $7,357 | | Total revenue | $187,315 | $135,740 | [Note 3 – Revenue by Geography](index=15&type=section&id=Note%203%20%E2%80%93%20Revenue%20by%20Geography) This note breaks down Rubrik's revenue by geographic region, highlighting the Americas as the largest contributor Revenue by Geographic Area (in thousands) | Geographic Area | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | | :---------------- | :-------------------------------- | :-------------------------------- | | Americas | $134,523 | $91,685 | | EMEA | $45,457 | $38,522 | | APAC | $7,335 | $5,533 | | Total revenue | $187,315 | $135,740 | - The Americas region accounted for the largest share of revenue, increasing from **$91.7 million** in Q1 2023 to **$134.5 million** in Q1 2024. The United States alone contributed **69%** of total revenues in Q1 2024[57](index=57&type=chunk) [Note 4 – Business Combinations](index=15&type=section&id=Note%204%20%E2%80%93%20Business%20Combinations) This note describes Rubrik's acquisition of Laminar Technologies, Inc., including the purchase price and recognized intangible assets and goodwill - In August 2023, Rubrik acquired Laminar Technologies, Inc., a data security posture management platform, for **$104.9 million**, comprising **$90.8 million** in cash and the remainder in common stock[58](index=58&type=chunk) - The acquisition resulted in the recognition of **$11.0 million** in acquired developed technology intangible assets and **$96.1 million** in goodwill, primarily attributed to assembled workforce and technology integration[58](index=58&type=chunk) [Note 5 – Financial Instruments](index=16&type=section&id=Note%205%20%E2%80%93%20Financial%20Instruments) This note details Rubrik's cash, cash equivalents, and short-term investments, and their exposure to market risks Cash and Available-for-Sale Marketable Securities (in thousands) | Metric | April 30, 2024 | January 31, 2024 | | :------------------------------------------ | :------------- | :--------------- | | Total Amortized Cost | $606,395 | $279,150 | | Total Estimated Fair Value | $606,320 | $279,251 | | Cash and Cash Equivalents | $502,614 | $130,031 | | Short-Term Investments | $103,706 | $149,220 | - The company's financial instruments, including cash, cash equivalents, and short-term investments, are primarily held in money market funds, U.S. Treasuries, commercial paper, corporate bonds, and U.S. government agencies[61](index=61&type=chunk)[62](index=62&type=chunk) - As of April 30, 2024, there were no material credit or non-credit related impairments on available-for-sale debt securities with unrealized losses[63](index=63&type=chunk) [Note 6 – Balance Sheet Components](index=17&type=section&id=Note%206%20%E2%80%93%20Balance%20Sheet%20Components) This note provides detailed breakdowns of specific balance sheet accounts, including prepaid expenses, property and equipment, and accrued liabilities Prepaid Expenses and Other Current Assets (in thousands) | Metric | April 30, 2024 | January 31, 2024 | | :------------------------------------------ | :------------- | :--------------- | | Prepaid expenses | $57,024 | $44,721 | | Total prepaid expenses and other current assets | $74,724 | $63,861 | Property and Equipment, Net (in thousands) | Metric | April 30, 2024 | January 31, 2024 | | :------------------------------------------ | :------------- | :--------------- | | Total property and equipment, gross | $108,863 | $129,336 | | Less: accumulated depreciation and amortization | $(62,880) | $(81,463) | | Total property and equipment, net | $45,983 | $47,873 | Accrued Expenses and Other Current Liabilities (in thousands) | Metric | April 30, 2024 | January 31, 2024 | | :------------------------------------------ | :------------- | :--------------- | | Accrued payroll-related expenses, taxes, and benefits | $82,611 | $20,197 | | Total accrued expenses and other current liabilities | $160,334 | $122,934 | [Note 7 – Debt](index=18&type=section&id=Note%207%20%E2%80%93%20Debt) This note outlines Rubrik's debt arrangements, including its amended credit facility and bridge notes issued for IPO-related tax obligations - In August 2023, Rubrik amended its credit facility, increasing total borrowing capacity to **$330.0 million**, consisting of a **$289.5 million** term loan and **$40.5 million** in delayed draw term loans, maturing in August 2028[71](index=71&type=chunk) - The Amended Credit Facility allows for interest payments to be funded by delayed draw term loans, subject to a temporary 0.5% interest rate increase, and offers a 0.5% interest rate reduction if Annualized Subscription Recurring Revenue (ASRR) reaches **$500.0 million**[74](index=74&type=chunk)[75](index=75&type=chunk) - In April 2024, the company issued **$321.4 million** in Bridge Notes to fund tax withholding obligations related to IPO RSU settlements, which matured and were repaid on April 29, 2024[79](index=79&type=chunk)[81](index=81&type=chunk) [Note 8 – Commitments and Contingencies](index=19&type=section&id=Note%208%20%E2%80%93%20Commitments%20and%20Contingencies) This note describes Rubrik's warranty programs, indemnification obligations, and ongoing legal proceedings - Rubrik provides a services warranty program for data recovery and restoration following ransomware attacks, with costs to date being immaterial[84](index=84&type=chunk) - The company typically indemnifies customers against third-party intellectual property infringement claims, with no material liability incurred to date[85](index=85&type=chunk) - Management believes that any liabilities from current legal disputes will not have a material adverse effect on the company's financial statements[83](index=83&type=chunk) [Note 9 – Redeemable Convertible Preferred Stock](index=20&type=section&id=Note%209%20%E2%80%93%20Redeemable%20Convertible%20Preferred%20Stock) This note details the conversion of all redeemable convertible preferred stock into Class B common stock prior to the IPO - Immediately prior to the IPO, all **74,182,559 shares** of redeemable convertible preferred stock were automatically converted into Class B common stock, and their carrying value of **$714.7 million** was reclassified into stockholders' equity[86](index=86&type=chunk) [Note 10 – Stockholders' Deficit](index=20&type=section&id=Note%2010%20%E2%80%93%20Stockholders%27%20Deficit) This note explains changes in stockholders' deficit, including the impact of the IPO, authorized share capital, and stock-based compensation plans - Post-IPO, Rubrik's amended certificate of incorporation authorized **20,000,000 shares** of undesignated preferred stock, **1,070,000,000 shares** of Class A common stock (one vote per share), and **210,000,000 shares** of Class B common stock (20 votes per share)[87](index=87&type=chunk)[88](index=88&type=chunk) - The 2014 Stock Option and Grant Plan was terminated post-IPO, with outstanding awards continuing under its terms, while the new 2024 Equity Incentive Plan reserved **46,073,027 shares** of Class A common stock for future issuance[90](index=90&type=chunk)[91](index=91&type=chunk) - The CEO Performance Award, granted upon IPO, allows the CEO to purchase up to **8,000,000 Class B common shares** across 10 tranches, vesting based on service and stock value targets, with a weighted-average grant date fair value of **$17.37 per share**[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) Total Stock-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Cost of revenue | $48,899 | $5 | | Research and development | $224,149 | $167 | | Sales and marketing | $239,888 | $199 | | General and administrative | $117,394 | $57 | | Total stock-based compensation expense | $630,330 | $428 | [Note 11 – Net Loss Per Share](index=23&type=section&id=Note%2011%20%E2%80%93%20Net%20Loss%20Per%20Share) This note details the calculation of Rubrik's net loss per share, including the treatment of potentially dilutive securities Net Loss Per Share Calculation (in thousands, except per share amounts) | Metric | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | | :------------------------------------------------------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net loss | $(732,091) | $(89,273) | | Weighted-average common stock shares used in computing net loss per share, basic and diluted | 63,794 | 59,940 | | Net loss per common stock share, basic and diluted | $(11.48) | $(1.49) | - Potentially dilutive securities, including common stock options and unvested RSUs, were excluded from diluted net loss per share calculation for both periods as their inclusion would have been antidilutive[110](index=110&type=chunk) [Note 12 – Income Taxes](index=24&type=section&id=Note%2012%20%E2%80%93%20Income%20Taxes) This note outlines Rubrik's income tax benefit/expense and the valuation allowance on its deferred tax assets - For Q1 2024, Rubrik recorded an income tax benefit of **$(1.1) million**, a decrease from an expense of **$1.2 million** in Q1 2023, primarily due to foreign subsidiaries electing U.S. branch treatment for federal income tax purposes[111](index=111&type=chunk)[112](index=112&type=chunk) - The company maintains a full valuation allowance on its U.S. federal and state net deferred tax assets, indicating that realization of these assets is not more likely than not[113](index=113&type=chunk) [Note 13 – Subsequent Events](index=24&type=section&id=Note%2013%20%E2%80%93%20Subsequent%20Events) This note describes events occurring after the reporting period, specifically the underwriters' exercise of their option to purchase additional Class A common stock - In May 2024, underwriters exercised their option to purchase an additional **3,472,252 shares** of Class A common stock at the IPO price of **$32.00 per share**, generating approximately **$104.9 million** in net proceeds for the company[114](index=114&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on Rubrik's financial condition and operational results, highlighting the company's mission to secure data with its Zero Trust Data Security platform (RSC), its go-to-market strategy, key performance drivers, and a detailed comparison of financial results for the three months ended April 30, 2024, and 2023. It also discusses liquidity, capital resources, and critical accounting policies [Overview](index=25&type=section&id=Overview) This section introduces Rubrik's mission to secure data with its Zero Trust Data Security platform (RSC) and its transition to subscription-based offerings - Rubrik's mission is to secure the world's data through its Zero Trust Data Security platform, Rubrik Security Cloud (RSC), which provides cyber resilience across enterprise, cloud, and SaaS applications[117](index=117&type=chunk)[118](index=118&type=chunk) - The company transitioned from perpetual licenses and Cloud Data Management (CDM) to subscription-based RSC offerings, with RSC representing a majority of total revenue by the end of fiscal 2024[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) - Revenue from RSC (excluding RSC-Private) is recognized ratably over the subscription term, while RSC-Private sales recognize a portion upfront and the remainder ratably[122](index=122&type=chunk) [Our Go-to-Market Strategy](index=26&type=section&id=Our%20Go-to-Market%20Strategy) This section details Rubrik's 'land and expand' strategy for customer acquisition and growth, emphasizing the value of its data security platform - Rubrik employs a 'land and expand' strategy, acquiring new customers by securing private cloud, enterprise NAS, cloud, and SaaS applications, then expanding usage through data growth, new applications, and additional security products[124](index=124&type=chunk) - The platform's value increases as customers manage more data with RSC and adopt additional data security products, leading to deeper insights, stronger security posture, and reduced compliance risk[124](index=124&type=chunk) [Key Factors Affecting Our Performance](index=26&type=section&id=Key%20Factors%20Affecting%20Our%20Performance) This section identifies critical factors influencing Rubrik's future success, including market adoption, innovation, customer acquisition, and retention - Future success depends on market adoption of Zero Trust Data Security, continuous innovation of the platform, and effective management of growth in a competitive and rapidly changing environment[125](index=125&type=chunk) - New customer acquisition relies on product breadth, scaling sales and marketing, strong partnerships, and brand enhancement[126](index=126&type=chunk) - Customer retention and expansion are crucial, driven by platform performance, customer satisfaction, competitive offerings, and the ability to demonstrate platform benefits[127](index=127&type=chunk) [Key Business Metrics](index=26&type=section&id=Key%20Business%20Metrics) This section presents Rubrik's key performance indicators, such as Subscription ARR, Cloud ARR, and customer growth, demonstrating business momentum Key Business Metrics (in thousands, except percentages) | Metric | April 30, 2024 | April 30, 2023 | YoY Growth | | :------------------------------------------ | :------------- | :------------- | :--------- | | Subscription ARR | $856,051 | $587,454 | 46% | | Cloud ARR | $605,574 | $296,917 | 104% | | Customers with $100,000 or more in Subscription ARR | 1,859 | 1,314 | 41% | | Average subscription dollar-based net retention rate | over 120% | over 140% | - | - Subscription ARR grew **46%** year-over-year to **$856.1 million**, with approximately **three percentage points** of growth attributed to transitioning existing maintenance customers to subscription editions[129](index=129&type=chunk)[172](index=172&type=chunk) - Cloud ARR more than doubled, growing **104%** year-over-year to **$605.6 million**, indicating strong adoption of cloud-based subscription offerings[131](index=131&type=chunk) [Non-GAAP Financial Measures](index=29&type=section&id=Non-GAAP%20Financial%20Measures) This section provides reconciliations and explanations for Rubrik's non-GAAP financial measures, including free cash flow and subscription ARR contribution margin Free Cash Flow Reconciliation (in thousands) | Metric | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(31,381) | $(17,457) | | Less: purchase of property and equipment | $(3,639) | $(3,373) | | Less: capitalized internal-use software | $(2,103) | $(2,416) | | Free cash flow | $(37,123) | $(23,246) | - Free cash flow was **$(37.1) million** in Q1 2024, a decrease from **$(23.2) million** in Q1 2023, including a **$20.6 million** cash outlay for employer payroll taxes due to equity award vesting post-IPO[139](index=139&type=chunk) Subscription ARR Contribution Margin (Twelve Months Ended, in thousands, except percentages) | Metric | April 30, 2024 | April 30, 2023 | | :------------------------------------------ | :------------- | :------------- | | Subscription ARR | $856,051 | $587,454 | | Non-GAAP subscription cost of revenue | $(112,094) | $(71,371) | | Non-GAAP operating expenses | $(834,504) | $(703,103) | | Subscription ARR Contribution | $(90,547) | $(187,020) | | Subscription ARR Contribution Margin | (11)% | (32)% | - Subscription ARR Contribution Margin improved from **(32)%** to **(11)%** for the twelve months ended April 30, 2024, reflecting increased operating leverage driven by strong Subscription ARR growth[143](index=143&type=chunk) [Components of Results of Operations](index=31&type=section&id=Components%20of%20Results%20of%20Operations) This section analyzes the drivers of Rubrik's revenue and cost of revenue, highlighting the shift towards subscription models and expected expense trends - Revenue is primarily from subscriptions, recognized ratably over the term, with fluctuations expected due to customer transitions to RSC and the exercise/forfeiture of material rights (Subscription Credits)[146](index=146&type=chunk)[147](index=147&type=chunk) - Subscription revenue includes SaaS and term-based licenses, with SaaS recognized ratably and term-based licenses having an upfront component. Maintenance revenue is expected to decrease as customers adopt RSC[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk)[152](index=152&type=chunk) - Other revenue, mainly from Rubrik-branded Appliances and professional services, is expected to decrease as appliance sales transition to contract manufacturers[153](index=153&type=chunk) - Cost of revenue is expected to generally decrease as a percentage of revenue long-term due to the transition of appliance sales. Operating expenses are expected to increase in absolute terms but decrease as a percentage of revenue long-term[154](index=154&type=chunk)[163](index=163&type=chunk) [Comparison of the Three Months Ended April 30, 2024 and 2023](index=33&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20April%2030%2C%202024%20and%202023) This section provides a detailed year-over-year comparison of Rubrik's financial results, focusing on revenue, cost of revenue, gross profit, and operating expenses Revenue Comparison (in thousands) | Revenue Type | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | $ Change | % Change | | :---------------- | :-------------------------------- | :-------------------------------- | :------- | :------- | | Subscription | $172,195 | $108,398 | $63,797 | 59% | | Maintenance | $5,667 | $12,288 | $(6,621) | (54)% | | Other | $9,453 | $15,054 | $(5,601) | (37)% | | Total revenue | $187,315 | $135,740 | $51,575 | 38% | Cost of Revenue Comparison (in thousands) | Cost of Revenue Type | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | $ Change | % Change | | :------------------------ | :-------------------------------- | :-------------------------------- | :------- | :------- | | Subscription | $73,725 | $21,637 | $52,088 | 241% | | Maintenance | $3,609 | $2,271 | $1,338 | 59% | | Other | $18,645 | $11,983 | $6,662 | 56% | | Total cost of revenue | $95,979 | $35,891 | $60,088 | 167% | Gross Profit and Margin Comparison (in thousands, except percentages) | Metric | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | $ Change | % Change | | :---------------- | :-------------------------------- | :-------------------------------- | :------- | :------- | | Total gross profit | $91,336 | $99,849 | $(8,513) | (9)% | | Total gross margin | 49% | 74% | - | - | | Subscription gross margin | 57% | 80% | - | - | | Maintenance gross margin | 36% | 82% | - | - | | Other gross margin | (97)% | 20% | - | - | Operating Expenses Comparison (in thousands) | Operating Expense Type | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | $ Change | % Change | | :-------------------------- | :-------------------------------- | :-------------------------------- | :------- | :------- | | Research and development | $285,379 | $46,266 | $239,113 | 517% | | Sales and marketing | $379,329 | $115,362 | $263,967 | 229% | | General and administrative | $151,465 | $22,817 | $128,648 | 564% | | Total operating expenses | $816,173 | $184,445 | $631,728 | 342% | - The significant increase in operating expenses across all categories (R&D, Sales & Marketing, G&A) was primarily driven by substantial stock-based compensation expense recognized due to the IPO completion[180](index=180&type=chunk)[181](index=181&type=chunk)[183](index=183&type=chunk)[170](index=170&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses Rubrik's sources of funding, cash position, and ability to meet future liquidity needs, emphasizing the impact of the IPO - Rubrik's operations are financed through equity financings, term loan credit facilities, and customer payments. The IPO in April 2024 generated approximately **$710.3 million** in net proceeds[190](index=190&type=chunk) - As of April 30, 2024, the company held **$606.3 million** in cash, cash equivalents, and short-term investments. Management believes existing liquidity will fund operations for at least the next 12 months[190](index=190&type=chunk)[192](index=192&type=chunk) - Operating cash flows may fluctuate due to seasonality, timing of billings, and customer payment preferences (multi-year upfront vs. annual/consumption payments), with a shift towards annual/consumption payments observed[195](index=195&type=chunk)[270](index=270&type=chunk) [Critical Accounting Policies and Estimates](index=40&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section outlines Rubrik's significant accounting policies and estimates, particularly those requiring complex judgments like common stock valuation and revenue recognition - Key estimates include common stock valuations prior to IPO, volatility for CEO Performance Award fair value, identification of performance obligations in RSC, and material rights for Refresh Rights and Subscription Credits[30](index=30&type=chunk)[204](index=204&type=chunk)[358](index=358&type=chunk) - The CEO Performance Award's grant date fair value was estimated using a Monte Carlo simulation model, with expected volatility being a significant judgmental assumption[204](index=204&type=chunk) [Recently Issued Accounting Pronouncements](index=40&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section details Rubrik's assessment of new accounting standards and their potential impact on future financial disclosures - Rubrik is assessing the timing and impact of adopting ASU 2023-07 (Improvements to Reportable Segment Disclosures) and ASU 2023-09 (Improvements to Income Tax Disclosures), both effective for annual periods beginning after December 15, 2024[55](index=55&type=chunk)[56](index=56&type=chunk)[205](index=205&type=chunk) [JOBS Act Accounting Election](index=40&type=section&id=JOBS%20Act%20Accounting%20Election) This section explains Rubrik's election as an 'emerging growth company' to use an extended transition period for new accounting standards - As an 'emerging growth company' under the JOBS Act, Rubrik has elected to use the extended transition period for complying with new or revised accounting standards, which may result in financial statements not being comparable to other public companies[205](index=205&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines Rubrik's exposure to market risks, specifically interest rate risk and currency risk, and assesses their potential impact on the company's financial condition and results of operations [Interest Rate Risk](index=41&type=section&id=Interest%20Rate%20Risk) This section assesses Rubrik's exposure to interest rate fluctuations on its cash and investments, and its potential financial impact - Rubrik's cash, cash equivalents, and short-term investments of **$606.3 million** are held for working capital and are exposed to interest rate fluctuations, though a hypothetical 10% change is not expected to materially affect their fair value[207](index=207&type=chunk) [Currency Risk](index=41&type=section&id=Currency%20Risk) This section evaluates Rubrik's exposure to foreign currency exchange rate fluctuations, primarily from operating expenses, and its current hedging strategy - While all sales contracts are in U.S. dollars, a portion of operating expenses are in foreign currencies, exposing the company to currency exchange rate fluctuations. A 10% change in the U.S. dollar's value is not expected to have a material impact on results[208](index=208&type=chunk) - Rubrik does not currently use hedging arrangements for foreign currency risk but may consider them in the future if risk increases[208](index=208&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details management's evaluation of Rubrik's disclosure controls and procedures and internal control over financial reporting, concluding on their effectiveness and acknowledging inherent limitations [Evaluation of Disclosure Controls and Procedures](index=41&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section presents management's conclusion on the effectiveness of Rubrik's disclosure controls and procedures as of April 30, 2024 - As of April 30, 2024, Rubrik's management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level[209](index=209&type=chunk) [Changes in Internal Control over Financial Reporting](index=41&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes in Rubrik's internal control over financial reporting during the period - There were no changes in internal control over financial reporting during the period ended April 30, 2024, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[210](index=210&type=chunk) [Inherent Limitations on Effectiveness of Controls](index=42&type=section&id=Inherent%20Limitations%20on%20Effectiveness%20of%20Controls) This section acknowledges the inherent limitations of control systems in providing absolute assurance against errors or fraud - Management acknowledges that control systems, by their inherent nature, can only provide reasonable, not absolute, assurance of achieving their objectives and may not prevent or detect all errors and fraud[211](index=211&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) Rubrik is involved in various legal proceedings in the normal course of business but does not believe any current litigation, individually or collectively, would have a material adverse effect on its financial condition or operations - Management believes that current legal proceedings will not have a material adverse effect on the company's business, financial condition, results of operations, and cash flows[212](index=212&type=chunk) - Defending legal proceedings is costly and can impose a significant burden on management and employees, with uncertain outcomes that could adversely impact the company[212](index=212&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) This section details various risks that could significantly impact Rubrik's business, financial condition, and stock price. These include risks related to the company's rapid growth, market adoption of data security solutions, limited operating history, ability to attract and retain customers, profitability, product performance, cybersecurity threats, use of AI tools, revenue predictability, reliance on third-party cloud providers, competition, and dependence on key personnel. Additionally, risks associated with common stock ownership, such as stock price volatility and the dual-class structure, are highlighted [Risks Related to Our Business](index=43&type=section&id=Risks%20Related%20to%20Our%20Business) This section details risks associated with Rubrik's business operations, including growth, profitability, product performance, cybersecurity, and reliance on third parties - Rubrik's rapid growth may not be indicative of future performance, and its limited operating history, especially with RSC, makes future results difficult to forecast, with revenue growth expected to fluctuate or slow due to the transition to SaaS subscriptions[214](index=214&type=chunk)[220](index=220&type=chunk) - The company has a history of operating losses and may not achieve or sustain profitability due to significant investments in product development, sales and marketing, and increased public company compliance costs[224](index=224&type=chunk) - Failure of data security solutions to perform as intended, or real/perceived defects, errors, or vulnerabilities, could harm Rubrik's brand, reputation, and business, especially given its focus on data security[227](index=227&type=chunk) - Rubrik's information technology systems or data, or those of third parties it relies on, are targets for cyberattacks, which could lead to significant adverse consequences including regulatory actions, litigation, and reputational harm[233](index=233&type=chunk)[234](index=234&type=chunk) - The use of generative AI tools may pose risks to proprietary software, subject the company to legal liability (e.g., IP infringement, data leakage), and could reduce customer adoption, particularly in highly regulated industries[244](index=244&type=chunk)[245](index=245&type=chunk) - Reliance on third-party cloud providers for hosting data security solutions exposes Rubrik to service interruptions, which could adversely affect business, financial condition, and results of operations[248](index=248&type=chunk)[249](index=249&type=chunk) - The data security market is highly competitive, with numerous established players and new entrants. Failure to compete effectively on factors like product functionality, integration, and price could harm Rubrik's business[251](index=251&type=chunk)[252](index=252&type=chunk) - Rubrik relies heavily on Channel Partners for sales and distribution; any failure to maintain these relationships or if partners underperform could limit market reach and adversely affect financial results[273](index=273&type=chunk)[274](index=274&type=chunk) - Sales to government entities are subject to challenges including high competition, lengthy processes, and regulatory scrutiny, including an ongoing Department of Justice investigation into potential federal law violations related to government contracts[307](index=307&type=chunk)[310](index=310&type=chunk) [Risks Related to Ownership of Our Common Stock](index=81&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) This section outlines risks pertinent to owning Rubrik's common stock, such as voting control, stock price volatility, and future share sales - The dual-class common stock structure concentrates voting control with Class B holders (executive officers, directors, and affiliates), limiting Class A stockholders' influence on corporate matters and potentially affecting stock price[365](index=365&type=chunk)[366](index=366&type=chunk) - Rubrik's stock price may be highly volatile due to factors like financial performance fluctuations, changes in revenue mix, competitive announcements, security incidents, and general economic conditions[368](index=368&type=chunk) - Future sales of Class A common stock in the public market, especially after lock-up periods expire, or the perception of such sales, could depress the market price and impair the ability to raise additional equity capital[370](index=370&type=chunk)[371](index=371&type=chunk) - The company does not intend to pay dividends in the foreseeable future, meaning investor returns will depend solely on stock price appreciation[375](index=375&type=chunk) - Anti-takeover provisions in charter documents and Delaware law could make an acquisition more difficult, limit stockholder influence, and potentially reduce the market price of Class A common stock[380](index=380&type=chunk)[381](index=381&type=chunk) [General Risk Factors](index=86&type=section&id=General%20Risk%20Factors) This section covers broad risks that could impact Rubrik, including litigation and catastrophic events - Future litigation, including intellectual property or employment claims, could be costly, time-consuming, and divert management resources, potentially harming the business[385](index=385&type=chunk) - Catastrophic events like natural disasters, cyberattacks, or pandemics could disrupt business operations, cause system interruptions, and harm reputation and financial results[386](index=386&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=86&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details Rubrik's unregistered equity security sales during Q1 2024, including stock options and restricted stock units granted to employees, and outlines the use of proceeds from its recent IPO - From February 1, 2024, to April 25, 2024, Rubrik granted **8,000,000 stock options** to its CEO and **9,383,173 restricted stock units** to employees, all settled in Class B common stock under the 2014 Plan[387](index=387&type=chunk) - The company issued **641,537 shares** of Class B common stock upon option exercises for an aggregate purchase price of **$3.6 million** during the same period[387](index=387&type=chunk) - The IPO, completed on April 29, 2024, generated approximately **$710.3 million** in net proceeds from the sale of **23,500,000 Class A common shares**, with no material change in the planned use of proceeds as described in the Final Prospectus[389](index=389&type=chunk)[390](index=390&type=chunk) [Item 3. Defaults Upon Senior Securities](index=88&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Rubrik reported no defaults upon senior securities for the period [Item 4. Mine Safety Disclosures](index=88&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Rubrik, Inc [Item 5. Other Information](index=88&type=section&id=Item%205.%20Other%20Information) Rubrik reported no other information for the period [Item 6. Exhibits](index=89&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including the Amended and Restated Certificate of Incorporation, Bylaws, Equity Incentive Plan, Employee Stock Purchase Plan, and various certifications - Key exhibits include the Amended and Restated Certificate of Incorporation and Bylaws, the 2024 Equity Incentive Plan, and the 2024 Employee Stock Purchase Plan, all filed in connection with the IPO[391](index=391&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2) are furnished with the report but not deemed 'filed' for Section 18 of the Exchange Act[390](index=390&type=chunk)[391](index=391&type=chunk) [Signatures](index=90&type=section&id=Signatures) The report is duly signed on behalf of Rubrik, Inc. by its Chief Executive Officer, Bipul Sinha, and Chief Financial Officer, Kiran Choudary, on June 13, 2024 - The report is signed by Bipul Sinha, Chief Executive Officer, and Kiran Choudary, Chief Financial Officer, on June 13, 2024[392](index=392&type=chunk)[393](index=393&type=chunk)

Revenue Growth - Subscription Annual Recurring Revenue (ARR) reached $856.1 million, up 46% year over year[1] - Total revenue for the first quarter was $187.3 million, reflecting a 38% increase compared to the previous year[1] - Subscription revenue specifically was $172.2 million, a 59% increase from $108.4 million in Q1 fiscal 2024[4] - The number of customers contributing $100K or more in Subscription ARR increased to 1,859, up 41% year over year[10] - Net new Subscription ARR was $72 million, representing a 32% year-over-year growth[3] - Full year 2025 Subscription ARR is projected to be between $983 million and $997 million[17] - Subscription ARR for the twelve months ended April 30, 2024, was $856,051,000, up from $587,454,000 in the previous year[38] Financial Performance - GAAP net loss per share was $(11.48), compared to $(1.49) in the same quarter last year[7] - Net loss for the quarter was $732.1 million, compared to a net loss of $89.3 million in the same quarter of the previous year[34] - The company reported a net cash used in operating activities of $31.4 million for the quarter, compared to $17.5 million in the same period last year[36] - Free cash flow for Q1 2024 was $(37,123,000), a decline from $(23,246,000) in Q1 2023, resulting in a free cash flow margin of (20%) compared to (17%) in the previous year[37] Operating Expenses - Operating expenses surged to $816.2 million, a significant increase from $184.4 million in the prior year, driven by higher R&D and sales and marketing costs[34] - The company reported a significant increase in research and development operating expenses on a GAAP basis, rising to $285,379,000 from $46,266,000 in Q1 2023[37] - Non-GAAP operating expenses for the twelve months ended April 30, 2024, totaled $834,504,000, an increase from $703,103,000 in the previous year[38] Profitability Metrics - Gross profit for the quarter was $91.3 million, compared to $99.8 million in the same quarter last year, reflecting a decrease in gross margin[34] - GAAP total gross profit for Q1 2024 was $91,336,000, down from $99,849,000 in Q1 2023, resulting in a GAAP total gross margin of 49% compared to 74% in the previous year[37] - Non-GAAP total gross profit for Q1 2024 increased to $141,153,000, with a non-GAAP total gross margin of 75%, unchanged from Q1 2023[37] - GAAP operating loss for Q1 2024 was $(724,837,000), significantly higher than $(84,596,000) in Q1 2023, while non-GAAP operating loss was $(93,589,000) compared to $(84,106,000) in the prior year[37] - The net loss on a GAAP basis for Q1 2024 was $(732,091,000), compared to $(89,273,000) in Q1 2023, with a non-GAAP net loss of $(100,961,000) versus $(88,799,000) last year[37] Market Outlook - The company expects second quarter revenue to be between $195 million and $197 million[16] - The total addressable market is projected to reach $53 billion by 2027, with significant segments including $6.9 billion in Cloud Security and $11.1 billion in Backup and Recovery Software by 2024[32] - The company anticipates continued growth in its subscription services, supported by its Zero Trust Data Security™ framework[33] New Initiatives - Rubrik announced the launch of DSPM Everywhere, a comprehensive cyber resilience offering[12]