Rubrik (NYSE:RBRK) reported second-quarter fiscal 2027 results that exceeded its guidance, with subscription annual recurring revenue, revenue and free cash flow all rising from a year earlier. The data security company also raised its full-year outlook, citing demand for cyber resilience products and continued expansion among enterprise customers.
Chief Executive Officer Bipul Sinha said the company delivered its 10th consecutive quarter of outperformance as a public company. Subscription ARR reached $1.66 billion, up 33% year over year, while net new subscription ARR was approximately $96 million. Subscription revenue rose 37% to $407 million, and total revenue increased 38% to $427.3 million.
Profitability and balance sheet
On a non-GAAP basis, Rubrik reported an 81% gross margin for the quarter, compared with 81.6% a year earlier. The company said subscription ARR contribution margin for the trailing 12 months ended July 31 was 14%, up from 9.4% a year earlier, representing a 460-basis-point improvement.
Free cash flow was $65.7 million, compared with $57.5 million in the second quarter of fiscal 2026. Choudary attributed the increase primarily to higher sales and improved operating leverage. Rubrik ended the quarter with $1.75 billion in cash equivalents and short-term investments, along with $1.13 billion in convertible debt.
Revenue from the Americas rose 33% to $299 million, while revenue outside the Americas increased 52% to $129 million. The company said total revenue normalized for material rights related to its cloud transformation increased 43% year over year. Material rights contributed about $4.7 million to subscription revenue in the quarter, versus $8.5 million in the preceding quarter.
AI, cyber resilience and product expansion
Sinha emphasized the company’s strategy around what it calls “agentic cyber resilience,” arguing that enterprises need faster recovery capabilities as AI agents become more prevalent in cyberattacks and business workflows. Rubrik operates Rubrik Security Cloud, focused on cyber resilience and recovery, and Rubrik Agent Cloud, which is designed to provide security and governance for customers’ AI agents.
The company said it has more than 15 paying Rubrik Agent Cloud customers and is seeing proof-of-concept engagements convert into production deployments. Sinha said the platform includes agent visibility, identity controls, runtime security through its Semantic AI Governance Engine, and Agent Rewind capabilities intended to undo destructive agent actions.
Rubrik also highlighted growth in its Identity Resilience business. The company said the offering addresses identity recovery, misconfigurations, privilege escalation and malicious changes within identity systems. Sinha said adoption remains early across Rubrik’s customer base but described identity as a significant expansion opportunity, with both existing customers and new customers purchasing identity-focused products.
During the quarter, Rubrik introduced Rubrik Flex, a unified contract vehicle intended to let customers buy multiple cyber resilience capabilities through one license and agreement. The company said it has already closed a handful of Flex deals and expects the offering to become its default sales motion for its largest strategic accounts over time.
Outlook raised
For the third quarter, Rubrik forecast revenue of $429 million to $431 million, representing 23% reported growth, or 31% growth when normalized for material rights. It expects material rights to contribute approximately $2 million to $3 million of third-quarter revenue. The company projected non-GAAP subscription ARR contribution margin of about 14% and non-GAAP earnings per share of $0.07 to $0.09.
For fiscal 2027, Rubrik raised its subscription ARR outlook to $1.88 billion to $1.885 billion, implying approximately 29% year-over-year growth. It forecast full-year revenue of $1.685 billion to $1.693 billion, non-GAAP subscription ARR contribution margin of approximately 15.5%, non-GAAP earnings per share of $0.47 to $0.53, and free cash flow of $323 million to $333 million.
Choudary said the full-year outlook includes approximately $18 million of material-rights revenue, a reduction that will create a headwind to reported revenue growth. He also said the company assumed zero ARR contribution from its acquisition of Strata Identity in both the reported second quarter and its fiscal 2027 guidance.
Management said Rubrik did not see a material impact on subscription ARR from hardware cost increases or supply constraints. While the company sells some hardware in certain regions, it characterized itself primarily as a software company, with growth driven by cloud, self-hosted, SaaS, identity and agent-security offerings.
About Rubrik (NYSE:RBRK)
Rubrik, Inc is a cloud data management and security company that delivers a unified platform for data protection, disaster recovery, compliance and intelligent data governance. Its flagship offering, the Rubrik Security Cloud, enables organizations to automate backup and recovery workflows across on-premises, edge and multi-cloud environments. By combining policy-driven orchestration with real-time threat detection, Rubrik helps clients guard against ransomware, ensure business continuity and enforce data retention requirements.
The company’s platform supports a range of services including backup and restore, long-term data archiving, replication, and disaster recovery as a service (DRaaS).
