Rubrik, Inc. (RBRK) Q3 2026 10-Q Summary
Business Context and Reporting Period
This summary covers Rubrik, Inc.'s unaudited financial results for the quarter ended October 31, 2025 (Q3 of Fiscal Year 2026). Rubrik is a security and AI company providing the Rubrik Security Cloud (RSC) platform for data protection and cyber resilience. The company is transitioning its customer base from legacy perpetual licenses and term-based subscriptions to a fully cloud-native SaaS model (RSC).
Key Financial Metrics
| Metric | Q3 2025 | Q3 2024 | YoY Change |
|---|---|---|---|
| Total Revenue | $350.2 million | $236.2 million | +48% |
| Gross Profit | $282.0 million | $180.0 million | +57% |
| Gross Margin | 81% | 76% | +500 bps |
| Operating Loss | $(75.5) million | $(124.8) million | Improved |
| Net Loss | $(63.8) million | $(130.9) million | Improved |
| Net Loss Per Share (Diluted) | $(0.32) | $(0.71) | Improved |
| Operating Cash Flow (9 Months) | $189.9 million | $(35.4) million | Significant Improvement |
| Free Cash Flow (9 Months) | $167.8 million | $(53.6) million | Significant Improvement |
| Cash & Investments (Oct 31, 2025) | $1.60 billion | $705.1 million | N/A |
Material Changes vs. Prior Period
- Revenue Growth: Subscription revenue grew 52% year-over-year to $336.4 million, driven by a 34% increase in Subscription Annual Recurring Revenue (ARR) to $1.35 billion. Maintenance revenue declined 65% as customers transition to RSC.
- Profitability Improvement: Operating loss narrowed significantly from $124.8 million to $75.5 million. This was primarily driven by a reduction in stock-based compensation (SBC) expenses compared to the prior year, which included a one-time cumulative recognition upon the company's IPO in April 2024.
- Capital Structure Shift: In June 2025, the company issued $1.15 billion in 0.00% Convertible Senior Notes due 2030. Proceeds were used to fully repay the $327.9 million Amended Credit Facility, resulting in a $6.7 million loss on debt extinguishment for the nine-month period.
- Acquisitions: The company acquired Predibase, Inc. in July 2025 for approximately $109.1 million (cash and stock) to accelerate agentic AI capabilities. Two additional immaterial acquisitions were completed in Q3.
- Liquidity: Cash, cash equivalents, and short-term investments increased to $1.60 billion as of October 31, 2025, bolstered by the convertible note issuance and strong operating cash flow.
Guidance, Outlook, and Risks
- Outlook: Management expects revenue growth to fluctuate through fiscal 2027 due to the transition from term-based licenses (which allow upfront recognition) to SaaS subscriptions (recognized ratably). Subscription ARR growth is expected to continue, with Cloud ARR growing 53% year-over-year.
- Key Metrics: Average subscription dollar-based net retention rate remains over 120%. The number of customers with $100,000+ in Subscription ARR grew 27% to 2,638.
- Risks:
- Revenue Recognition Volatility: The mix of upfront vs. ratable revenue recognition makes period-to-period comparisons difficult.
- Customer Transition: Delays in migrating legacy customers to RSC could impact revenue timing.
- Regulatory & Legal: Ongoing DOJ investigation regarding potential violations of federal law in connection with government contracts by a former employee.
- AI & Cybersecurity: Risks associated with the use of generative AI tools and the potential for the company's own systems to be targeted by cyberattacks.
- Unusual Items: The prior year's expenses included significant one-time stock-based compensation related to the IPO. The current period includes a $6.7 million loss on debt extinguishment.
Investor Verification Checklist
- Verify the sustainability of the 34% Subscription ARR growth rate as the company transitions legacy customers to RSC.
- Monitor the impact of the DOJ investigation on government sales and potential fines or penalties.
- Assess the integration progress and revenue contribution of the Predibase acquisition.
- Review the timing of the transition from term-based licenses to SaaS to understand future revenue recognition patterns.
- Confirm the company's ability to maintain gross margins as hosting costs increase with SaaS adoption.