Rubrik continued combining rapid recurring-revenue growth with improving operating leverage during its fiscal second quarter of 2027, with Cloud ARR approaching $1.5 billion and Subscription ARR contribution margin expanding significantly.
Subscription annual recurring revenue increased 33% year-over-year to $1.66 billion as of July 31.
Net new Subscription ARR increased even faster, rising 35%.
Cloud ARR increased 39% to $1.48 billion, while adjusted net new Cloud ARR grew 20%.
The increasing scale of those recurring-revenue streams was accompanied by improving economics.
Subscription ARR contribution margin reached 14% compared with 9.4% a year earlier.
That represents approximately 460 basis points of year-over-year expansion.
Rubrik attributed the improvement to strong net new Subscription ARR and increased operating leverage across the business.
Total revenue increased 38% year-over-year to $427.3 million from $309.9 million.
Subscription revenue increased 37% to $407.2 million from $297 million.
The quarter included $4.7 million of revenue associated with material rights, compared with $14.2 million a year earlier.
After normalizing for the impact of those material rights, total revenue growth was approximately 43%, indicating that underlying growth was even stronger than the reported 38% increase.
Gross margins remained high.
GAAP gross margin was 78.4% compared with 79.5%, while non-GAAP gross margin was 81% compared with 81.6%.
Rubrik also made progress toward profitability.
Non-GAAP diluted EPS reached $0.20 compared with a non-GAAP loss of $0.03 per diluted share a year earlier.
GAAP loss per share narrowed to $0.30 from $0.49.
Cash generation remained positive despite the company’s growth investments.
Operating cash flow increased to $76.8 million from $64.7 million.
Free cash flow increased to $65.7 million from $57.5 million, representing a free-cash-flow margin of approximately 15%.
Rubrik ended the quarter with $1.75 billion of cash, cash equivalents and short-term investments.
Large-customer growth also remained strong.
Rubrik had 3,084 customers generating at least $100,000 of Subscription ARR at quarter-end, an increase of 23% year-over-year.
The company is increasingly positioning its cybersecurity platform around AI agents.
Rubrik launched Rubrik AI as an agentic-first layer spanning Rubrik Security Cloud and Rubrik Agent Cloud.
The technology is designed to autonomously respond to organizational context and changing threat landscapes while operating with defined guardrails.
Rubrik also launched Rubrik Agent Cloud for Anthropic’s Claude Code and announced Project Hourglass, an alliance with Cognizant, Deloitte, HCLTech, NTT DATA and Wipro aimed at enterprise deployment.
Rubrik exceeded all guided Q2 metrics and raised all guided fiscal 2027 metrics following the quarter.
The combination of nearly 40% Cloud ARR growth, improving contribution margins and positive free cash flow demonstrates that the company is increasing scale without sacrificing progress toward greater profitability.
KEY QUOTES:
“Mythos and frontier AI models have fundamentally changed the cybersecurity landscape.”
“We are more confident than ever that we are in the early innings of the AI acceleration opportunity.”
Bipul Sinha, Chief Executive Officer, Chairman and Co-Founder of Rubrik
“Subscription ARR growth of 33%, expanding Subscription ARR contribution margins, and a raised outlook are a testament to our confidence in our solid execution at scale.”
“We are pleased to enter the second half of fiscal year 2027 from a position of strength.”
Kiran Choudary, Chief Financial Officer of Rubrik
