Rubrik Inc Q4 2025 Earnings Call Transcript

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

Question: Saket Kalia - Barclays - Analyst : Okay, great. Hey guys, thanks for taking my question here and nice finish to the year.

Question: Saket Kalia - Barclays - Analyst : I'll keep to one question and Bipul, maybe it's for you. So you've spent a lot of time with customers. How are you feeling about the TAM here for data protection? You talked about how customers need a modern more modern data protection tool as they move to the cloud and deliver Gen AI. I think we see the share shift in numbers, but curious if you feel the TAM here is expanding through that sort of cloud and GenAI transition as well.

Question: Saket Kalia - Barclays - Analyst : Very helpful. Thanks guys.

Question: Kash Rangan - Goldman Sachs - Analyst : Hi, thank you very much. Congratulations on the end of the fiscal year, spectacular finish. What a year it's been. You went public. You've put up a few quarters, nice performance. As you Bipul and team, as you look into the next fiscal year and beyond, there's a core thesis of why Rubrik works so well for your customers. You've been at least 2 to 3 years ahead of your industry and I hope you continue to be that way. But as you look at customers' evolving requirements, what are the new battles to be fought and won. As you look to your most cutting-edge customers that are leading the company into your next 2 or 3 years of strategy, what are your leading edge customers telling you as to what the leading edge requirements are? Because we all know that one way to look at this market is it's merely a replacement market of old technology being replaced with new. But then that's not always right? There are things that you've been doing with your DSPM, et cetera, to extend the frontiers. So what are your best customers telling you as to what you need to be doing for the next 2 to 3 years? And finally, if you can -- if you have the time to comment, your take on the tariffs, et cetera, impacting the economy. And what are your customers saying about their spending priorities with RSC.

Question: Kash Rangan - Goldman Sachs - Analyst : Terrific. Very clear answers. Thank you so much.

Question: Fatima Boolani - Citigroup, Inc. - Analyst : Good afternoon. Thank you so much for taking my questions. Kiran, this one is for you. I wanted to drill in on the very substantial improvement in subscription ARR contribution margin, both in period over the course of last year in this period and what you're contemplating in the outlook. I know you did discuss a lot of the high-level drivers and it seems like the confluence of the business hitting a bigger scale. More rigorous expense management are contributing factors. But I was hoping you could drill in on maybe some micro level factors with respect to sales efficiency potentially being an area where you're seeing some outsized or better leverage as well as just maybe the inference that your deal sizes are getting bigger, your average transaction sizes. So I was hoping you could add a little bit more color outside of just some of those other broader stars aligning and just more disciplined expense management, if there's anything intrinsically inflecting in the business from a deal size perspective? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2025 / 9:00PM, RBRK.N - Q4 2025 Rubrik Inc Earnings Call

Question: Fatima Boolani - Citigroup, Inc. - Analyst : Very helpful. Thank you.

Question: John DiFucci - Guggenheim Securities - Analyst : Thank you. My question, I think, is for Kiran. Kiran, the top line was really impressive as you guys have pointed out, but also the other questions on the call. I think I want to lean more into a little bit more into Fatima's question. By the way, the top line was actually the best we've seen across our entire coverage universe this period. The cash flow was also impressive like -- I mean you're a year ahead of what you thought you'd be at perhaps a year ago. And I know like the top line and bottom line are sort of related because we know the greatest expense in any software company is sales and marketing, and it's that's all spent on new business. And your new business is really what stood out this quarter. At the same time, when you look at your balance sheet, you see accounts receivables up by much more sequentially than they have been in the last two, fourth quarters, which so I was kind of glad it made sense that you said the first quarter and the fourth quarter would be the strongest for cash flow, and we feel good about that for next quarter. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2025 / 9:00PM, RBRK.N - Q4 2025 Rubrik Inc Earnings Call But how should we be thinking about that, especially in the context of your annual guide for moderation of cash flow in fiscal '26. Is that just sort of a place to start at the beginning of the fiscal year? Or is it just -- is it prudent? Or there's something else we should be thinking about when it comes to cash expenses?

Question: John DiFucci - Guggenheim Securities - Analyst : Makes total sense. Thank you very much. Nice job, guys.

Question: Andrew Nowinski - Wells Fargo - Analyst : Okay, thank you for the question this afternoon and Congrats on good results. I wanted to ask about the divergence between revenue growth and ARR, it looks like you guided to about 30% revenue growth for this coming year and 24% ARR growth. And I was thinking maybe it's related to the mix of on-prem and cloud, and how that revenue is recognized. But I'm just wondering if you could provide any more color on what might be driving that divergence between the two growth rates?

Question: Andrew Nowinski - Wells Fargo - Analyst : Thank you very much.

Question: Brad Zelnick - Deutsche Bank - Analyst : Perhaps what an amazing end to a great year. My question is for, I guess, for Bipul and Kiran, we'd love to hear whoever wants to speak to it, but I'm curious why now is the right time to move from 6-month comp plans to 12-month comp plans? And what behavior you're incentivizing this year? And what impact do you expect that these changes might have beyond the seasonality impact that you've called out?

Question: Brad Zelnick - Deutsche Bank - Analyst : No, that makes perfect sense, and I appreciate it, and we've seen it as companies mature and any company of your scale would typically do this. I was also asking beyond that at the beginning of a fiscal year is often when we see companies make changes to go to market, other changes to the comp plan and was just asking if there was any other behaviors that also you were looking to incent, but that was very clear. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2025 / 9:00PM, RBRK.N - Q4 2025 Rubrik Inc Earnings Call

Question: Eric Heath - Keybanc Capital Markets - Analyst : Hey, thanks for taking the question. I thought it was interesting in terms of the announcement you made with DSPM to make it native inside the RSC console. So I was just curious if you could talk about the benefit you expect to see and how maybe this could accelerate adoption now that it's native into the console and then users could probably more easily pivot and explore and tinker with that new capability.

Question: Eric Heath - Keybanc Capital Markets - Analyst : Thanks.

Question: Gregg Moskowitz - Mizuho Securities - Analyst : Okay, thank you. And I'll add my congratulations on a very good Q4 and a terrific year. Bipul, you alluded to this briefly, I think in your script, but what are you hearing or seeing so far from your European customers following the implementation of DORA, the digital Operational Resilience act. And what do you think the impact of DORA will be on Rubrik going forward?

Question: Gregg Moskowitz - Mizuho Securities - Analyst : Great, thank you.

Question: Joel Fishbein - Truist Securities - Analyst : Thank you and Congrats on a great quarter and solid execution. My question is around sales capacity and channel traction with the channel partners. If you could just give us an update there on how you're thinking about your coverage for 2026 and 2027 from a sales capacity perspective, that would be great.

Question: Joel Fishbein - Truist Securities - Analyst : Great, thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2025 / 9:00PM, RBRK.N - Q4 2025 Rubrik Inc Earnings Call

Question: Keith Bachman - BMO Capital - Analyst : Yes, thank you very much for taking the question, Kiran, I think this is for you. I wanted to understand a little bit of context around the guidance. So in this past year, you did $309 million of net new, two really strong quarters to end the year, not just Q4, Q3 was very strong. And you're guiding

Question: Keith Bachman - BMO Capital - Analyst : Okay, many thanks.

Question: James Fish - Piper Sandler - Analyst : Hey guys, nice way to finish the year. First, I just wanted to understand what you're seeing on the competitive landscape in DSPM given competitors, and in some cases, your partners are more like data in motion players than sort of data at rest. And second, any way to think about the penetration of DSPM either into the entire installed base or even just the greater than $100,000 ARR customer cut, especially as you guys think about that enterprise plus addition being bundled. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 13, 2025 / 9:00PM, RBRK.N - Q4 2025 Rubrik Inc Earnings Call

Question: Shrenik Kothari - Baird - Analyst : Yeah, We'll echo my congrats on the great quarter and execution. Bipul, you mentioned about Microsoft-related developments, the 365 copilot data protection and active directory recovery. Can you elaborate on how Rubrik's strategic partnership with Microsoft has evolved and strengthening our position? And how do you see it evolve further to address the emerging challenges, opportunities in Azure environments and Microsoft environments?

Question: Param Singh - Oppenheimer - Analyst : Yeah, hi, thank you for taking my question. And always good to see a company executed well in a tough environment. Now my question was, as you look to your quarter and towards '26 fiscal, what part of your ARR do you think is coming from greenfield versus brownfield opportunities where you're taking share? And in that vein, have you seen any change in the competitive environment as Veeam is trying to push more upstream and now that Cohesity has closed the acquisition of Veritas.

Question: Param Singh - Oppenheimer - Analyst : Got it. And if I could really squeeze in 1 on Annapurna, I wanted to get a sense of what early conversations have you had around that? And would you need to expand Annapurna's capabilities beyond bedrock to see more meaningful adoption across LLMs.

Question: Param Singh - Oppenheimer - Analyst : Got it. Thank you so much for sharing that. Appreciate it.