Earnings call transcript: Rubrik beats Q1 2027 EPS forecast, stock dips

Rubrik Inc. (RBRK) reported a strong start to its fiscal year 2027 with a significant earnings beat in the first quarter. The company posted an earnings per share (EPS) of $0.16, far exceeding the forecasted -$0.53, resulting in a 130.19% surprise. Despite this positive earnings report, Rubrik’s stock fell 3.15% in aftermarket trading, closing at $77, down from its last close of $79.46.

Rubrik’s overall performance in Q1 fiscal 2027 was robust, with the company achieving record highs in several financial metrics. The company reported a 39% year-over-year increase in total revenue, reaching $387 million. This growth was primarily driven by strong demand for subscription services, evidenced by a 41% year-over-year increase in subscription revenue. The company’s strategic shift towards a software-focused model and successful cloud transition have positioned it well in the evolving cyber resilience market.

Rubrik’s Q1 fiscal 2027 EPS of $0.16 significantly outperformed the forecasted -$0.53, marking a 130.19% earnings surprise. This substantial beat reflects the company’s strong operational execution and market demand for its services.

Despite the positive earnings report, Rubrik’s stock fell by 3.15% in aftermarket trading. This decline suggests that investors may have concerns about future guidance or broader market conditions. The stock’s performance is notable given its 52-week range, with a high of $103 and a low of $42.25.

InvestingPro data indicates the stock is currently trading above its Fair Value, suggesting the market may be pricing in aggressive growth expectations. Investors can explore whether RBRK appears on the most overvalued stocks list for additional context.

Rubrik provided forward guidance, projecting continued growth in EPS and revenue for future quarters. The company anticipates EPS of $0.02 for FY2027 Q2 and $0.1 for both FY2027 Q3 and Q4. Revenue projections include $383.8 million for FY2027 Q2 and $415.7 million for FY2027 Q3, indicating confidence in sustained growth.

Wall Street maintains a bullish stance on the stock, with analyst consensus showing a Strong Buy rating and price targets ranging from $70 to $126. Notably, 14 analysts have revised their earnings estimates upward for the upcoming period, according to InvestingPro Tips. For deeper insights into Rubrik’s valuation and growth trajectory, investors can access the comprehensive Pro Research Report, available for RBRK and 1,400+ other US equities on InvestingPro.

Rubrik’s leadership highlighted the company’s strategic transformation, emphasizing its shift from traditional backup solutions to a comprehensive cyber resilience platform. The company’s CEO noted, "Our record performance in Q1 reflects the strong market demand for our solutions and the successful execution of our strategic initiatives."

During the earnings call, analysts focused on Rubrik’s future growth prospects and the sustainability of its current performance. Questions centered around the company’s strategic initiatives in AI and identity resilience, as well as potential impacts of macroeconomic conditions on future growth.

Bipul Sinha, Chief Executive Officer, Rubrik: Thank you, Melissa, and thank you all for joining us today. We are off to a strong start to fiscal 2027 with a record Q1. I’m proud to announce that we have once again exceeded all guided metrics across top line and profitability. Here are the five key numbers. First, subscription ARR reached $1.57 billion, growing 32% year-over-year. Second, our subscription revenue was $374 million, growing 41% year-over-year. Third, our subscription NRR remained strong at approximately 120%. Fourth, customers with 100K or more in subscription ARR reached 2,946, growing 24% year-over-year. Finally, on profitability, we once again made material improvement in subscription ARR contribution margin, up over 500 basis points year-over-year. We generated $74 million in free cash flow this quarter. Let me start with a few observations. We are now in a new era of cybersecurity.

Today, AI agents are attacking us. These autonomous agents can intrude, breach, and encrypt at machine speed. Mythos was a powerful wake-up call for the cybersecurity industry, but it is already something of the past. Better, faster model versions are already in development. Mythos has proven that attack detection is near impossible, and cyber resilience is now the most fundamental cybersecurity requirement for the AI era. In fact, Mythos is driving more customer conversations around cyber resilience and recovery, and that is one of the reasons why we have raised our top-line guidance for the rest of the year. At the same time, AI agents are increasingly running business processes, workflows that assume identities, access sensitive data, and take autonomous action. Once compromised, these agents can potentially inflict 10 times more damage in one tenth of the time.

As you can see, both threat actors and business operators are now agentic. This is not about instilling fear. This is about helping institutions be better prepared and putting every effort into staying ahead of the new cyber risk that could dramatically affect their operations. As I mentioned before, in this new cyber reality, prevention and detection are no longer enough. What you will need, in addition, is preemptive risk assessment, real-time guardrail, and machine-speed system remediation. In short, agentic cyber resilience. Rubrik has led in cyber resilience for years, delivering machine speed, cyber recovery for thousands of businesses around the world. That work helped us build for AI agents and have full awareness that technology leaps like Mythos were on their way. While this may seem grim, we believe Rubrik is and will continue to be the answer to helping institutions stay ahead.

Along these lines, Rubrik recently joined Anthropic’s Project Glasswing and received early access to the Claude Mythos research preview, putting the new models to work directly to ensure we can serve our customers better when cyber breaches inevitably happen. This partnership aligns to our vision of agentic cyber resilience, defending a world where AI agents are both the cyber attacker as well as the business executor. It is clear that cyber resilience is now the most fundamental cybersecurity strategy for the agentic era. Let me talk about why our products are transformative. We are a multi-product company built on a unique and differentiated platform that solves the most consequential problems across data, identity, and AI. On top of this platform, we deliver two solution suites, Rubrik Security Cloud for cyber resilience and Rubrik Agent Cloud for trusted, accelerated AI transformation. Let me start with Rubrik Security Cloud, or RSC.

Our platform has the unique ability to bring together time series data and metadata across complex enterprise environments spanning on-premises, sovereign, cloud, SaaS, and identity providers. We believe our depth and breadth of enterprise context is unmatched by other solutions in the marketplace. This architectural advantage allows us to deliver our proprietary Preemptive Recovery Engine, which continuously pre-calculates clean points of recovery across data and identity before an attack occurs. The Preemptive Recovery Engine is the backbone of Rubrik agentic cyber resilience. Our RSC platform orchestrates resilience continuously and proactively, not reactively, post-breach. This is how we deliver record-fast recovery when our customers are breached or agents get compromised. This is why we continue to grow while the competition has stalled. There are many examples I can talk about, but let me just share two specific customer examples of legacy replacement in very large enterprises.

First, a large U.K. public sector organization chose Rubrik this quarter to fully displace a decade-long legacy incumbent across on-premises, cloud, NAS, and identity workloads. Outcompeting several legacy and new-gen vendors, Rubrik was recognized for delivering comprehensive cyber resilience across every workload. With Rubrik, this customer can consolidate a fragmented environment of 400-plus legacy backup policies into a single unified platform. Second, a Global 2000 insurer chose Rubrik this quarter to displace a legacy incumbent and native cloud backup across their full enterprise footprint, including on-premises and cloud workloads. Rubrik was selected for our single pane of glass across all key workloads and for our ability to deliver demonstrable cyber recovery readiness, unmatched by incumbent and competitive alternatives. The cyber resilience market is consolidating around platforms, not point solutions.

When CIOs and CSOs rationalize their vendor portfolios, Rubrik wins because we deliver complete cyber resilience across on-premises, sovereign, cloud, SaaS, and identity in a single unified architecture. This is because Rubrik is built on the principle of complementary network effects. What that means is, every new product we build makes every other product on the platform more powerful. When a customer adopts Rubrik, they are not just buying a solution, they are stepping into an ecosystem. For example, when a Rubrik data protection customer adopts Rubrik’s Identity Resilience product, they not only achieve cyber resilience across data and identity, but also gain a complete understanding of the blast radius and characteristics of a cyber attack across data and identity through the Rubrik platform. This is the additional platform value. Customers do not simply use Rubrik, they rely on it to deliver resilient, minimal viable business.

The more they use it, the more indispensable it becomes. That is the value creation that endures. Now let’s talk about our identity business. Our identity solutions continue to gain momentum as the rise in identity-based attacks has increased the need to protect both data and identity simultaneously. Identity continues to be highly