Rubrik's Q2 Revenue Surges 13% Year-Over-Year, Beats Expectations

Rubrik, a leading network security company, reported its financial results for the second quarter of the 2026 fiscal year after the U.S. market closed on Tuesday. The company achieved total revenue of 309.9 million dollars, surpassing the expected 282.26 million dollars. Subscription revenue grew by 55% year-over-year, reaching 297 million dollars, while the annual recurring revenue (ARR) from subscriptions increased by 36% year-over-year to 12.5 billion dollars. The adjusted loss per share was 0.03 dollars, compared to the market's expectation of a 0.34 dollars loss per share. Free cash flow reached 57.5 million dollars, a significant improvement from the negative 32 million dollars in the same period last year.

Looking ahead, Rubrik forecasted third-quarter revenue of 321 million dollars, up from the previous estimate of 302 million dollars. The company also projected a loss per share between 0.18 dollars and 0.16 dollars, an improvement from the previous expectation of a 0.26 dollars loss per share. Additionally, Rubrik expects its annual subscription recurring revenue to be between 14.1 billion dollars and 14.2 billion dollars, exceeding the previous estimate of 13.8 billion dollars.

Rubrik's strong second-quarter performance and optimistic outlook have reinforced its leadership position in the data security sector, prompting several major investment banks to raise their price targets for the stock. Despite a significant drop of over 18% in the stock price on Wednesday, some analysts attributed this decline partly to the stock's substantial gains over the past year.

One prominent investment bank reiterated its "buy" rating on Rubrik, increasing its price target from 117 dollars to 120 dollars. The analysts noted that the market's reaction might be due to the lack of a significant increase in the annual recurring revenue for the 2026 fiscal year and the market's realization that part of the quarter's revenue exceeded expectations due to one-time "material rights" income. Despite this, the underlying business momentum remains strong, with a 13% growth in net new annual recurring revenue, positive free cash flow for the fourth consecutive quarter, and a 13% increase in new large customers. New products, such as identity recovery, also showed early growth potential with over 200 customers.

Another investment bank maintained its "overweight" rating on Rubrik, raising its price target from 114 dollars to 117 dollars. The analysts highlighted that the 310 million dollars in revenue, a 51% year-over-year increase, exceeded market expectations of 282 million dollars. Subscription revenue of 297 million dollars, a 55% year-over-year increase, also surpassed expectations. The analysts noted that part of the revenue growth was due to one-time income related to "material rights" and early renewals.

A third investment bank kept its "overweight" rating on Rubrik with a price target of 115 dollars. The analysts pointed out that Rubrik's proactive market expansion strategy, potential integration of identity and data security capabilities, and the trend of customer integration on the platform make it an attractive long-term investment. They also noted the company's operational leverage and the increasing importance of network resilience.

Another investment bank maintained a "neutral" rating on Rubrik with a price target of 97 dollars. The analysts acknowledged Rubrik's strong focus on data protection and operationalization, as well as its leading ransomware defense capabilities. However, they noted that the stock's price has increased by over 200% since its IPO in mid-2024 and by 51% year-to-date, suggesting that the stock may be fairly valued.