Date: 2026-02-23 (revised; supersedes 2026-02-21 draft) Quarter: Q3_FY26 (ended Oct 31, 2025) | Q4_FY26 Preliminary confirmed Feb 4, 2026 Market cap: ~$10.9B | EV/TTM Rev: ~9.0x | Revenue growth: +48.3% YoY (35% normalized)
Q3_FY26 was Rubrik's best public-company quarter: record net new ARR (95M), firstnon − GAAPoperatingprofitability(+10.1M / +2.9%), and FCF inflecting to 22% margin ($76.9M). Crucially, Q3 reverses the Q2 guidance miss — Rubrik beat the Q3 guide by 8.2MaftermissingtheQ2guideby 10M. The Feb 4 Q4 preliminary ("exceeding all guided metrics") extends the momentum. Two persistent concerns cap conviction: NRR has been reported as ">120%" for six consecutive quarters with no re-acceleration signal, and SBC at $83M/quarter remains 24% of revenue — nearly 4x Non-GAAP operating income. At 9x EV/TTM with FCF scaling and platform expansion (Identity, Agent Cloud) credibly underway, risk/reward is favorable. Conviction: 4/5 (raised from prior 3.5).
| Criterion | Threshold | RBRK Q3_FY26 | Pass/Fail |
|---|---|---|---|
| Revenue YoY growth | >30% (>40% preferred) | 48.3% reported / ~35% normalized | PASS |
| Gross margin | >60% (>70% preferred) | 80.5% GAAP / 82.8% Non-GAAP | PASS |
| Revenue per quarter | >$50M | $350.2M | PASS |
| Data availability | 4+ quarters | 12Q in DB | PASS |
| Share dilution | <10% annual | SBC $83M/Q = 24% of revenue; IPO-inflated shares normalizing | CONCERN |
| GAAP profitability trajectory | Improving | Op margin -21.6% vs -52.8% YoY (+31pp); Non-GAAP profitable | PASS |
Dilution note: Post-IPO share count inflated ~58% YoY (Apr-24 IPO) — one-time step-change. Ongoing SBC dilution is the structural concern: $83M/quarter against $22.9M Non-GAAP net income means SBC is 3.6x the non-GAAP bottom line. Must decline as % of revenue to sustain the FCF narrative.
| Factor | Rating | Detail |
|---|---|---|
| Growth | Strong | +48.3% reported, ~35% normalized (material rights +$24M/Q inflates reported). Net new Sub ARR $95M — record. Sub ARR +34.4% YoY. |
| Trajectory | Decelerating / Stable | Reported YoY: 51.2% → 48.3% (Q3), Q4 guide implies ~33%. Material rights distortion makes reported decel misleading. Normalized ~35% stable for 3Q. Q4 preliminary beat suggests underlying holds. |
| Margins | High, expanding | Non-GAAP GM 82.8% (+6.6pp YoY). First non-GAAP op profit ($10.1M). FCF 22.0% and scaling. GAAP operating leverage +31pp YoY. |
| Dominance | Strong | #1 ransomware protection (Gartner Critical Capabilities). Vision Leader in MQ 6 consecutive years. 7th by absolute market share (IDC 1H 2024), growing. Forrester downgrade Q4 2024 (Leader → Strong Performer) is a flag. |
| Valuation | Fair | 9.0x EV/TTM revenue, 42.8x EV/TTM FCF. Stock -50% from $103 peak. ~7x FY27 revenue (SA est.). Reasonable for 35% normalized grower with 80%+ GM and FCF inflection underway. |
| Special | Present | Q4 preliminary beat; March 12 full report as near-term catalyst. Identity ARR 20Mwith40+139M swing). |
Q4_FY25 through Q3_FY26 confirmed from DB (quant-prep Feb-23). Q3_FY25 confirmed via YoY back-calculation. Older quarters from pre-backfill analysis — verify against companies/RBRK.md.
| Q4_FY23 | Q1_FY24 | Q2_FY24 | Q3_FY24 | Q4_FY24 | Q1_FY25 | Q2_FY25 | Q3_FY25 | Q4_FY25 | Q1_FY26 | Q2_FY26 | Q3_FY26 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Period | Jan-23 | Apr-23 | Jul-23 | Oct-23 | Jan-24 | Apr-24 | Jul-24 | Oct-24 | Jan-25 | Apr-25 | Jul-25 | Oct-25 |
| Revenue ($M) | ~$100 | ~$110 | ~$130 | ~$153 | $159.0 | $172.2 | ~$208 | $236.2 | $258.1 | $278.5 | $309.9 | $350.2 |
| YoY% | — | — | — | — | — | ~57% | ~60% | ~54% | +62% | ~62% | ~49% | +48.3% |
| QoQ% | — | — | — | — | — | +8% | ~21% | ~14% | +9% | +8% | +11% | +13.0% |
| GM% [GAAP] | — | — | — | — | ~72% | ~49%* | ~73% | 76.2% | 77.3% | 80.5% | 79.5% | 80.5% |
| GM% [Non-GAAP] | — | — | — | — | ~75% | ~77% | ~79% | 81.2% | 82.0% | 82.1% | 79.4% | 82.8% |
| Op Margin [GAAP] | — | — | — | — | ~-47% | -3.9%* | ~-82% | -52.8% | -45.0% | -33.4% | -30.5% | -21.6% |
| Op Income [Non-GAAP] | — | — | — | — | — | — | — | — | — | — | — | +$10.1M |
| FCF ($M) | — | — | — | — | $8.7 | -$37.1 | -$32.0 | $15.6 | $75.2 | $33.3 | $57.5 | $76.9 |
| FCF Margin | — | — | — | — | 5.0% | -19.8% | -15.6% | 6.6% | 29.1% | 12.0% | 18.6% | 22.0% |
| Sub ARR ($B) | — | — | — | — | 0.784 | 0.856 | 0.919 | 1.002 | 1.093 | 1.181 | 1.252 | 1.347 |
| Net ARR add ($M) | — | — | — | — | 59 | 72 | 63 | 83 | 91 | 88 | 71 | 95 |
| Cloud ARR ($B) | — | — | — | — | — | 0.606 | 0.678 | 0.769 | 0.876 | 0.972 | 1.064 | 1.175 |
*Q1_FY25 GAAP metrics anomalous — IPO costs distort the quarter. Non-GAAP metrics are the relevant comparison.
Key Q2_FY26 context: $309.9M was a guidance miss vs. $319–321M guide. Q3's $350.2M beat reverses this. The reversal is the primary signal from Q3.
Material rights note: ~$24M/quarter of material rights revenue inflates reported figures. Normalized Q3 FY26 revenue ≈ $326M, +35% YoY — the real underlying growth rate.
Prior belief (entering Q3_FY26): Rubrik is a ~35% normalized grower on an operating leverage trajectory, but the Q2 guidance miss introduced execution uncertainty. Watching for: Q3 beat to confirm deal-timing (not structural) miss, ARR re-acceleration, first non-GAAP profitability, NRR signal.
| Metric | Expected | Actual | Verdict |
|---|---|---|---|
| Revenue | $341–343M guide | $350.2M | BEAT +$8.2M (+2.4%) |
| Sub ARR | ~$1.31–1.32B | $1.347B | BEAT — record quarterly add $95M |
| Cloud ARR mix | ~84–85% | 87.2% | BEAT — cloud migration faster than expected |
| Non-GAAP op income | Cross zero (milestone) | +$10.1M (+2.9% margin) | MET |
| FCF margin | ~18–20% | 22.0% ($76.9M) | BEAT |
| NRR trajectory | Some sign of re-acceleration | ">120%" (6th consecutive quarter) | NO NEW SIGNAL |
| $1M+ ARR customers | Incremental progress | 23 net adds (record) | STRONG BEAT |
| Q4 preliminary | TBD | "Exceeding all guided metrics" | POSITIVE |
Delta assessment: The Q3 reversal from Q2's miss is the primary data point. Deal timing was the explanation in Q2; Q3 validated it. The record $1M+ customer quarter (23 adds vs. prior periods unstated) signals large-enterprise momentum accelerating — consistent with management's "security and AI operations company" pivot resonating at the top of the market. NRR non-disclosure remains the analysis gap — six quarters of ">120%" conveys nothing about trajectory.
| Indicator | Q3_FY25 | Q4_FY25 | Q1_FY26 | Q2_FY26 | Q3_FY26 | Signal |
|---|---|---|---|---|---|---|
| Net new Sub ARR ($M) | 83 | 91 | 88 | 71 | 95 | Re-accelerated in Q3 after Q2 dip |
| Cloud ARR mix (%) | 76.7% | 80.1% | 82.3% | 85.0% | 87.2% | Persistent cloud shift; +10.5pp YoY |
| $100K+ ARR customers | 2,085 | 2,224 | 2,376 | 2,505 | 2,638 | Consistent ~130–155 net adds/Q |
| $1M+ ARR net adds | — | — | — | — | 23 (record) | Large-deal momentum inflecting |
| Contrib margin LTM ($M) | -$32.8 | n/a | +$118.3 | +$118.3 | +$139.3 | Turned positive, accelerating |
| Identity ARR ($M) | 0 | 0 | ~$5 | ~$10 | $20 | Doubling each quarter; 40% net-new-to-Rubrik |
| NRR | >120% | >120% | >120% | >120% | >120% | 6-quarter plateau — no improvement signal |
Bullish divergence: Net new ARR, cloud mix, large-customer adds, and contribution margin are all accelerating. Identity is a genuine cross-sell engine with 40% of deals going to customers not previously buying Rubrik products.
Bearish divergence: NRR plateau is the sole but meaningful bearish leading indicator. Sustainable growth requires expansion from the installed base, not just new logos. Six quarters at a disclosed floor — without specifics — is opaque. If NRR is 121% vs. 119% vs. 110%, the implications for FY27 growth are materially different.
Source: stages/scuttlebutt/RBRK/2026-02-23.md
| Metric | Current | 1Y Ago | Peer Median | Assessment |
|---|---|---|---|---|
| EV/TTM Revenue | ~9.0x | ~20x+ (post-IPO) | CRWD ~18x, NET ~12x, PANW ~13x | Cheap vs. security peers |
| EV/TTM Gross Profit | ~11x | — | — | Reasonable |
| EV/TTM FCF | ~42.8x (was n/a) | n/a (FCF negative) | — | High but compressing fast |
| P/E [GAAP] | n/a (GAAP loss) | n/a | — | — |
| Market cap | ~$10.9B | ~$18B+ | — | -40% from IPO |
| EV/FY27E Revenue | ~7x (SA est.) | — | — | Approaching fair for 35% grower |
Relative: At 9x EV/TTM, Rubrik is at a 50% discount to CrowdStrike (18x) and 25% discount to Cloudflare (12x) on similar-or-higher growth rates. The discount reflects: NRR opacity, SBC overhang, #7 market share position, shorter public track record. If RBRK re-rates to 12–13x (parity with NET/PANW), that implies $14–15B market cap vs. current $10.9B — ~30–40% upside from current.
FCF math: FY26 9-month FCF = $33.3 + $57.5 + $76.9 = $167.7M. Guide for FY26 FCF: $194–202M. Q4 needs only $26–34M — very achievable given Q4_FY25 printed 75.2M.IfQ4beatssimilarly, FY26FCF 220–240M. At $10.9B market cap, that's ~45x FCF on a 22%+ and growing FCF margin. Not cheap but compressing meaningfully.
Secular tailwind: Ransomware is growing as a threat vector (FBI IC3 data: #1 cyberattack category by financial impact). Cyber resilience has become non-discretionary for regulated enterprises. This is sticky spend that doesn't get cut in a downturn.
Platform depth: Rubrik Security Cloud (RSC) is a genuine unified platform: backup + recovery + threat detection in one system. Extensions:
TAM penetration: Rubrik claims $65B+ TAM. At $1.35B ARR, penetration is ~2%. Even haircut the TAM by 50%, penetration is <5%. The platform expansion (Identity, DSPM, Agent Cloud) adds new TAM layers on top of the base backup/recovery market.
Moat: Switching costs are high. RSC sits at the core of enterprise recovery infrastructure. Immutable, air-gapped snapshot architecture creates deep integration that enterprises do not rip out without compelling reason. Customer scuttlebutt confirms this.
NRR plateau. Six quarters of ">120%" with no improvement disclosed. If NRR is declining within the bucket, growth depends entirely on new logos — harder and less capital-efficient than expansion. Investors are flying blind.
SBC and dilution overhang. $83M/quarter SBC against $22.9M Non-GAAP net income. Non-GAAP profitability is partly a SBC exclusion story. FCF is real, but SBC represents genuine per-share dilution. Needs to decline meaningfully as % of revenue.
Forrester downgrade + competitive execution. Commvault (with Appranix acquisition), Cohesity-Veritas (post-merger scale advantages), and Veeam (pricing + installed base) are all competitive threats. Forrester downgrade signals current product breadth gaps. Management needs to close these or cede ground in the mid-market.
Material rights revenue cliff. ~$24M/quarter of material rights revenue inflates reported figures. Any shift in product mix or customer renewal terms could create a reported headwind that overstates underlying deceleration.
Q2 miss track record. One quarter of execution miss in Q2_FY26 (missed guide by ~$10M) introduces caution about deal-timing reliability in the sales model. Sustained Q3 + Q4 beats would resolve this, but it needs more quarters of confirmation.
Q4_FY26 full earnings (March 12, 2026). "Exceeding all guided metrics" prelim sets up a beat. Sub ARR print vs. $1.439–1.453B guide, FY27 guidance (especially normalized growth framework), and NRR disclosure will drive next re-rating.
NRR disclosure. If management ever moves from ">120%" to a specific number, it is the single highest-impact data point. A confirmed 125%+ is materially bullish; 115% is materially bearish.
Identity ARR trajectory. $20M ARR in Q3, doubling each quarter, 40% net-new-to-Rubrik. If it reaches $100M ARR by FY27 end, it validates the platform expansion thesis and adds a new growth vector that the current multiple doesn't price in.
Agent Cloud GA and pricing. Beta with Copilot Studio and AWS Bedrock. GA timing and pricing structure will determine whether this creates incremental ARR or is bundled. AI cyber operations is a large nascent category.
FCF margin expansion toward 30%. If FCF scales from 22% to 30% (contribution margin trajectory supports it), EV/FCF compresses toward 30–35x on current market cap — clearly fair for a 35% grower. This would catalyze a security-peer valuation re-rating.
Position disclosure: No position held by the author of this analysis.