Rubrik Inc Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Saket Kalia - Barclays - Analyst : Okay. Great. Congrats on reaching the $1 billion ARR mark.

Question: Saket Kalia - Barclays - Analyst : Absolutely. Bipul, maybe just to start with you. In your prepared remarks, I thought you had some great examples of customer wins where cloud backup seemed like the main reason for the win. And I think that some of us sometimes wonder what backup for cloud applications and cloud workloads look like since the cloud presumably provides some sort of native backup. So maybe the question is, can you just talk about what you hear from customers about their desire to use third-party data protection tools like Rubrik for cloud workloads versus maybe relying on a backup solution from their cloud provider? There was a lot there, but does that make sense?

Question: Saket Kalia - Barclays - Analyst : Got it. That makes a ton of sense. Kiran, maybe for my follow-up for you. The contribution margin here continues to improve, and it was great to hear that, that can be breakeven next year. And you correct me there if I'm wrong. But maybe the question is, how do you sort of think about that in terms of your pace of investments going into next year? And how long of a lag do you think about sort of reported operating income sort of following that contribution margin?

Question: Fatima Boolani - Citigroup, Inc. - Analyst : Kiran, you made an interesting point on the prepared remarks that I wanted to drill into with regards to DSPM deals doubling in volume sequentially. I wanted to ask about how much this is contributing to the pipeline and/or potentially shortening some of your deal cycles. And then I have a follow-up for Kiran, please.

Question: Fatima Boolani - Citigroup, Inc. - Analyst : And just on the free cash flow outlook, the preliminary outlook you shared for fiscal '26, very much appreciate that color looking out. But you did talk about some consumption-related headwinds that are starting to peak into the profile this year. I'm wondering if you can give us a quick refresher on what sum of the parts of the product portfolio are more tethered to the consumption modality, if you will, of pricing? And how much of an impact that could potentially have as maybe sort of a headwind for next year to think about?

Question: Kash Rangan - Goldman Sachs - Analyst : Congratulations to the Rubrik team. My question to you, Bipul, is -- and I have one for Kiran as well. You've always maintained the view that the TAM for Rubrik in this cycle is not just a replacement of the legacy technology, but also participation of the broader budget pool available to you in cybersecurity, right? I mean that would make it truly a more sustainable growth company. I'm wondering if you could point to any evidence in the quarter and evidence in the pipeline that you see that the TAM in cybersecurity, which is a vast bigger pool of spending than the legacy business, and how that is helping your business? Are you able to participate in those new budgets? And one for Kiran. Congratulations on the operating efficiency improvement. How sustainable is this improvement that we saw going forward?

Question: Andrew Nowinski - Wells Fargo - Analyst : Congrats on another great quarter. And particularly, the improvement in contribution margin, I think, really stood out. I just wanted to ask a question. So coming back from the Wells Fargo TMT conference this week, I mean it was really clear that data protection, DSPM and, of course, cyber resilience, I think, were top of mind for many organizations. That really stood out to us as like the one key takeaway. Based on the strong growth you're seeing in your cloud ARR, I mean, it looks like you're seeing this, too. And I'm wondering if this inflection in demand for DSPM and cyber recovery is related to an inflection maybe in gen AI rollouts. Or is it something else? Just wondering if you could pinpoint what's driving this inflection.

Question: Andrew Nowinski - Wells Fargo - Analyst : And maybe as a follow-up to that, I think your Enterprise Edition gets about a 75% uplift over the Foundation Edition. I'm wondering if you could just give us an update on maybe the adoption rate of the Enterprise Edition over the last six months since your IPO, how that's maybe changed and what you're seeing there.

Question: Brad Zelnick - Deutsche Bank - Analyst : Congrats on the strong execution. The entire team has so much to be proud of. Bipul, I wanted to start by asking you about Annapurna, the goddess of nourishment. Can you talk about the vision and evolution leading up to this week's announcement? What we should expect in terms of availability across other cloud platforms? And is this something you expect to price and monetize implicitly or explicitly?

Question: Brad Zelnick - Deutsche Bank - Analyst : Super exciting, Bipul. Maybe a quick follow-up for Kiran. You're clearly taking market share, and it seems even more so in a quarter like this. Is there anything that you can share with us in terms of win rates and where the share might be coming from?

Question: John DiFucci - Guggenheim - Analyst : Bipul, by the way, the Q&A, this is really helpful and really appreciate, Bipul, your answer to Kash's question. He always asks good ones, but we all get that from investors. Like why is this going to last? And that was helpful. That was really -- that was clear as to why this -- why you're not going to be Veritas in 1999 by the time 2000, I don't know, Ruby came along or whatever. But my question here is on partnerships. You spoke about technology partnerships, but there's -- and by the way, you need to have everything you're talking about. The one thing that really hasn't been hit on here is go-to-market. So can you talk a little bit more about go-to-market partnerships? We all know that you have a really strong go-to-market team, but our field work indicates that you sign more VARs. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 05, 2024 / 10:00PM, RBRK.N - Q3 2025 Rubrik Inc Earnings Call We're just hearing more VARs and more reseller partnerships, and that they want to partner with you. And those that focus on security, and they're already starting to see early traction. This is the traditional way that enterprise security is sold. So can you talk a little bit about your efforts there? And what -- is what we're hearing right? And how should we think about go-to-market partnerships, that contribution going forward?

Question: John DiFucci - Guggenheim - Analyst : And that all makes sense, Bipul. But in the technology partnerships, they come out with big announcements. And we look at those and they're interesting and we hear about them in the field. But are -- is what I said happening? Like am I just like noticing it more? Or are more and more -- and the first two you mentioned, VARs and GSIs, are -- is there greater engagement over the last quarter or two than there has been? Are more -- are you signing more partnerships with VARs and GSIs? Or it's just something that -- I don't know, maybe it's been happening and I just didn't -- I think we're trying to pay attention, but is it happening more?

Question: John DiFucci - Guggenheim - Analyst : Got it. Well, keep it up guys because you know this, what we saw tonight is rare.