Rubrik's Share Increase and Earnings Report

On Friday, Rubrik's shares saw a notable 22% increase in US premarket trading following the data management company's announcement that it surpassed earnings expectations and raised its full-year revenue guidance. Analysts attribute the company's strong performance to the growing demand for data security, which has been a key driver behind the impressive results.

Truist Securities, maintaining a 'buy' rating on the stock, has increased Rubrik's price target to $75 from the previous $50. The firm recognizes Rubrik's unique market position as the sole provider of both cyber resiliency and data security management. The third-quarter results were bolstered by the public cloud, software as a service (SaaS), and data security sectors.

KeyBanc, holding an 'overweight' stance, echoes the sentiment regarding the company's momentum in data security, prompted by an uptick in ransomware attacks. The firm has upped its price target for Rubrik to $75 from $57, signaling confidence in the company management.

BMO Capital Markets, with an 'outperform' rating, has also raised its price target significantly to $72 from $38, citing the quarter's results as impressive. Analysts at BMO anticipate that the wider adoption of GenAI technology could fuel long-term growth, with the current demand for Rubrik's platform remaining robust.

In the third quarter, Rubrik reported an adjusted loss per share of 21 cents, which was significantly better than the estimated loss of 40 cents per share. Total revenue reached $236.2 million, surpassing the $217.6 million estimate, with subscription revenue accounting for $221.5 million, against a $205.2 million forecast. Maintenance revenue was reported at $4.34 million, slightly above the $4.03 million estimate. The company's subscription Annual Recurring Revenue (ARR) touched $1.00 billion, exceeding the anticipated $975.3 million. The number of customers with $100K or more in subscription ARR was 2,085, just shy of the 2,092 estimate based on two forecasts. Lastly, Rubrik achieved a free cash flow of $15.6 million.

Looking ahead to 2025, Rubrik forecasts revenue between $860 million and $862 million, an increase from the previous $830 million to $838 million range, with the consensus estimate at $834.9 million. The company expects an adjusted loss per share of $1.82 to $1.86, an improvement from the earlier forecast of $2.06 to $2.12 loss per share, against an estimate of a $2.09 loss per share. Subscription ARR is projected to hit $1.06 billion, aligning with previous forecasts. The anticipated adjusted subscription ARR contribution margin is now -2% to -3%, better than the previously expected -6% to -7%. Furthermore, Rubrik projects a narrower range of negative free cash flow, from $39 million to $45 million, compared to the earlier $57 million to $67 million estimate, with a consensus estimate of negative $61.2 million.

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