01—Abstract
Summary
Summary of the 10-Q filed December 12, 2024. Cited figures are marked; the original filing is the authoritative source.
Rubrik, Inc. (RBRK) filed this Quarterly Report on Form 10-Q for the quarter ended October 31, 2024.
Revenue for the three months ended October 31, 2024 was $236.2 milliona, up from $165.6 million, and for the nine months was $628.4 million versus $452.9 million. Subscription ARR reached $1,002.3 million, up 38% from $724.8 million, and Cloud ARR reached $768.8 million, up 69%. Net loss widened to $130.9 million for the quarter and $1,039.9 million for the nine months, driven largely by stock-based compensation of $827.9 million for the nine months, which the filing ties to equity awards vesting after the April 2024 IPO.
Net cash used in operating activities was $35.4 millionb for the nine months, and free cash flow was $(53.6) million. The company ended the quarter with cash, cash equivalents and short-term investments of $632.0 million and an accumulated deficit of $2,722.4 million. Its IPO in April 2024 generated net proceeds of approximately $710.3 million, with a further $104.9 million from the underwriters' over-allotment option.
The company paid $432.5 millionc in taxes related to net share settlement of equity awards. Debt, noncurrent, was $317.0 million under the Amended Credit Facility. Management states that existing cash is sufficient for at least the next 12 months.
The filing also highlights ongoing revenue-mix transition effects, as customers move from legacy Cloud Data Management licenses to Rubrik Security Cloud subscriptions, which the company expects to affect revenue and gross margin through fiscal 2027. The company disclosed a grand jury subpoena from the U.S. Department of Justice relating to government contracts, under which it is cooperating and conducting an internal investigation, and states that it cannot yet estimate possible consequences.
02—Key points
Key Highlights
- Total revenue rose to $236.2 million for the quarter ended October 31, 2024, from $165.6 million a year earlier, and to $628.4 million for the nine months, from $452.9 million.
- Subscription ARR grew 38% to $1,002.3 million, and Cloud ARR grew 69% to $768.8 million; customers with $100,000 or more in Subscription ARR increased to 2,085 from 1,581.
- Net loss was $130.9 million for the quarter and $1,039.9 million for the nine months, including stock-based compensation of $827.9 million for the nine months following the IPO.
- Gross margin fell to 76% for the quarter from 80% and to 67% for the nine months from 77%, which the filing attributes largely to post-IPO stock-based compensation and hosting costs.
- Cash, cash equivalents and short-term investments totaled $632.0 million, and free cash flow was $(53.6) million for the nine months.
- The company completed its IPO in April 2024 at $32.00 per share, with net proceeds of approximately $710.3 million, plus about $104.9 million from the over-allotment option.
- A DOJ grand jury subpoena related to government contracts is under investigation; the company is cooperating and states it cannot estimate possible consequences.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q3 FY2025, Rubrik lost $0.55.
- Revenue$236.2M100.0%
- Cost of revenue−$56.1M23.8%
- Gross profit$180.0M76.2%
- Operating costs−$304.8M129.1%
- Operating income−$124.8M52.8%
- Interest, other & tax−$6.1M2.6%
- Net income−$130.9M55.4%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed December 12, 2024Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $236.18M$165.60M | +42.6% |
| Cost of Revenue | $56.15M$33.71M | +66.6% |
| Gross Profit | $180.03M$131.90M | +36.5% |
| R&D Expenses | $80.05M$51.37M | +55.8% |
| Operating Expenses | $304.82M$197.18M | +54.6% |
| Operating Income | -$124.79M-$65.28M | −91.2% |
| Interest Expense | $10.31M— | — |
| Net Income | -$130.91M-$86.27M | −51.7% |
| EPS (Basic) | $-0.71$-1.41 | +49.6% |
| EPS (Diluted) | $-0.71$-1.41 | +49.6% |
| Shares Outstanding (Basic) | 183.59M61.02M | +200.9% |
| Shares Outstanding (Diluted) | 183.59M61.02M | +200.9% |
05—Questions
Frequently Asked Questions
How fast is the company growing its recurring revenue?
Subscription ARR was $1,002.3 million as of October 31, 2024, up 38% from $724.8 million a year earlier. Cloud ARR was $768.8 million, up 69% from $454.9 million. The filing notes that 2.0 percentage points of the Subscription ARR growth came from transitioning existing maintenance customers to subscription editions.
Why is the net loss so large compared with revenue?
Stock-based compensation was $827.9 million for the nine months ended October 31, 2024, compared with $2.3 million a year earlier, largely from equity awards that vested after the IPO. Research and development, sales and marketing, and general and administrative expenses rose sharply for the same reason. Loss from operations was $1,017.9 million for the nine months.
Does the company have enough cash and how is it funded?
The company held $632.0 million in cash, cash equivalents and short-term investments as of October 31, 2024, and states this is sufficient to fund operations for at least the next 12 months. Funding came mainly from the IPO, which provided about $815.2 million net of underwriting discounts for the nine months, while $432.5 million went to taxes on net share settlement of equity awards. Noncurrent debt was $317.0 million under the Amended Credit Facility, which matures in August 2028.
What revenue risks should investors watch?
The filing says the transition of existing customers from legacy Cloud Data Management licenses to Rubrik Security Cloud, along with upfront revenue recognition on transitional licenses and Subscription Credits, will cause revenue and gross margin fluctuations through fiscal 2027. Maintenance and Rubrik-branded appliance revenue are expected to decline as the company moves to subscriptions.
Are there any significant legal matters disclosed?
The company disclosed a grand jury subpoena from the U.S. Department of Justice, U.S. Attorney's Office for the District of Maryland, received in October 2023. It is cooperating with the investigation and conducting an internal review, which identified communications among some sales employees that relate to potential violations of federal law in connection with government contracts. The company states it cannot predict the outcome or estimate possible consequences, and that a negative outcome could result in substantial fines or exclusion from federal contracting.
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