RBRK Surges 13% After Crushing Q3 FY26 Earnings

Core Insights - Rubrik (NYSE: RBRK) reported strong fiscal Q3 results, exceeding expectations in both revenue and profitability, leading to a significant stock price increase in after-hours trading [3][5][10] Financial Performance - Revenue reached $350.2 million, surpassing the consensus estimate of $325.6 million, marking a 48% year-over-year increase [6][11] - Subscription revenue grew by 52% to $336.4 million, indicating effective scaling of the business model [6][11] - The company achieved a non-GAAP EPS of $0.10, compared to an expected loss of $0.17, marking a significant positive surprise [5][11] - Free cash flow surged to $76.9 million, up 394% year-over-year, while operating cash flow was reported at $85.5 million [7][11] Profitability Metrics - Non-GAAP gross margin expanded to 82.8%, an increase of 360 basis points from the previous year, reflecting improved operating leverage [7][11] - Rubrik posted its first positive non-GAAP operating income of $10.1 million, signaling progress towards sustained profitability [8][11] Future Outlook - Management raised the full-year revenue guidance to between $1.280 billion and $1.282 billion, with Q4 revenue expected to be between $341 million and $343 million [9][11] - The full-year non-GAAP net loss per share is now projected to be between $0.20 and $0.16, indicating a tighter range and reflecting a shift towards profitability [9][11] Strategic Initiatives - CEO Bipul Sinha highlighted the company's focus on AI transformation and new product launches, including Rubrik Agent Cloud and Rubrik Okta Recovery, which are expected to drive future growth [10] - Partnerships with CrowdStrike and Cognizant were emphasized as strategic moves to enhance offerings in data protection and cyber resilience [10] Market Position - Rubrik's stock trades at approximately 13 times trailing sales, indicating a premium valuation as the market anticipates continued execution on its profitability roadmap [12] - Analysts remain optimistic, with 21 buy ratings and a consensus price target of $114, suggesting potential upside from current levels [12]