Earnings Recap — Q2 FY2027
CY Q3 2026 · Reported August 27, 2026 · Beat 7 of last 7 quarters
Rubrik, Inc. reported Q2 FY2027 revenue of $427M, a beat of 7.8% against consensus, and EPS of $0.20, a beat of 411.8%.
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Rubrik's results show that the AI buildout is creating a second, fast-growing demand vector beyond compute and storage: securing and governing the data and the AI agents that enterprises are deploying. Management tied accelerating net new ARR to AI-driven cyber risk — describing AI agents attacking at machine speed and enterprise agents needing governance — and said customers are consolidating onto a single platform rather than buying point solutions. The company's disclosure that rising hardware costs and supply constraints had no material impact on subscription ARR suggests its software-centric model may be relatively insulated from the hardware supply chain pressures affecting parts of the AI infrastructure stack.
Rubrik reported Q2 FY2027 subscription ARR of $1.66B, up 33% year-over-year, with approximately $96M in net new subscription ARR, which accelerated from the prior quarter. Subscription revenue was $407.2M, up 37%, and total revenue was $427.3M, up 38%; revenue normalized for material rights increased 43%. Subscription NRR was over 119%, customers with $100K+ subscription ARR reached 3,084 (up 23%) and now represent 88% of subscription ARR, and customers with $1M+ subscription ARR grew over 57%. Subscription ARR contribution margin was 14% on a trailing-12-month basis, up 460 basis points year-over-year, and free cash flow was $65.7M. Management said it saw no material impact to subscription ARR from rising hardware costs or supply constraints, and disclosed that the Strata Identity acquisition contributed 0 ARR in the quarter and 0 is assumed in guidance. Rubrik said it now has over 15 and growing RAC customers, closed a handful of Rubrik Flex deals, and won an Identity Resilience, cloud data and SaaS protection deal with a large online fashion retailer.
Rubrik raised its full-year fiscal 2027 outlook for the second time this year, lifting subscription ARR guidance to $1.88B–$1.885B (about 29% year-over-year growth) and total revenue to $1.685B–$1.693B. The company said the net new ARR growth rate implied by the new guidance is 700 basis points above the previous guide, moving from 7% to 14%, and that guidance was raised by about $24M–$25M versus the prior guide, with zero contribution assumed from the Strata Identity acquisition. For Q3, Rubrik guided revenue of $429M–$431M (up 23%, or up 31% normalized for material rights), non-GAAP subscription ARR contribution margin of approximately 14%, and non-GAAP EPS of $0.07–$0.09. For the full year, it guided non-GAAP subscription ARR contribution margin of approximately 15.5%, non-GAAP EPS of $0.47–$0.53, and free cash flow of $323M–$333M. Management said it will continue investing in R&D across data, security and AI and in go-to-market for regions, verticals and newer products like Identity Resilience and Rubrik Agent Cloud, while noting that the substantial reduction in material rights revenue remains a meaningful headwind to reported revenue growth in fiscal 2027. On RAC, management said there is a minimum assumption in this year's ARR and that the focus is on finding the right product-market fit and making customers successful.
“And this quarter, we accelerated -- yes, let me repeat, accelerated net new subscription ARR growth.”
on Net new ARR acceleration
“We did not see any material impact to our subscription ARR from rising hardware costs or supply constraints. As a reminder, we are primarily in the business of selling software, either in the cloud or self-hosted.”
on Hardware cost and supply chain exposure
“We have a multiproduct motion with multiple products doing reall...”
on Multiproduct platform strategy
How much of the quarter's subscription ARR came from the Strata Identity deal or inorganic contributions in general?
Kiran Choudary said there was 0 ARR from the Strata acquisition in Q2 and that guidance assumes 0 ARR from it as well, both for the quarter and for the year.
Given the strong first-half net new ARR, why does the back-half guidance imply a material step-down in net new ARR growth, and what levers could keep the back half comparable to or better than the first half?
Kiran Choudary said the company took guidance up by the full Q2 beat plus more — about $24M–$25M higher than the prior guide — and that the implied net new ARR growth rate for the year rose 700 basis points, from 7% to 14%. He said the business is run on an annual net basis, with sales compensation and plans set annually, and that with two quarters left to execute he is confident in the pipeline.
On Rubrik Agent Cloud: where does Rubrik expect competition, are the 15 customers paying customers, and could RAC contribute ARR in calendar 2027 or the next fiscal year?
Bipul Sinha said Rubrik has more than 15 paying RAC customers and is seeing a strong proof-of-concept-to-production trend. He said competition comes from point solutions — observability vendors providing agent visibility and identity vendors providing access and governance — while Rubrik's differentiation is watching agent intent with AI plus Agent Rewind, all on a single platform. Kiran Choudary added that the focus is on finding the right product-market fit and making customers successful, with minimum RAC assumption in this year's ARR.