Rubrik, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" for the fiscal year ended January 31, 2024 included in the final prospectus for our initial public offering (IPO) dated as of April 24, 2024 and filed with the Securities and Exchange Commission (SEC), pursuant to Rule 424(b)(4) on April 26, 2024 ("Final Prospectus"). Some of the information contained in this discussion and analysis, including information with respect to our planned investments in our research and development, sales and marketing, and general and administrative functions, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note About Forward-Looking Statements” in this Quarterly Report on Form 10-Q. You should review the disclosure under the heading “Risk Factors” in this Quarterly Report on Form 10-Q for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2025, as filed with the SEC on March 20, 2025 (the “Annual Report”). Some of the information contained in this discussion and analysis, including information with respect to our planned investments in our research and development, sales and marketing, and general and administrative functions, includes forward-looking statements that involve risks and uncertainties as described under the heading “Special Note About Forward-Looking Statements” in this Quarterly Report on Form 10-Q. You should review the disclosure under the heading “Risk Factors” in this Quarterly Report on Form 10-Q for a discussion of important factors that could cause our actual results to differ materially from those anticipated in these forward-looking statements.

Previous wording

We built Rubrik Security Cloud ("RSC") with Zero Trust design principles to secure data across enterprise, cloud, and SaaS applications. RSC delivers a cloud native SaaS platform that detects, analyzes, and remediates data security risks and unauthorized user activities. Our platform is architected to help organizations achieve cyber resilience, which encompasses cyber posture and cyber recovery. We enable organizations to confidently accelerate digital transformation and leverage the cloud to realize business agility.

Current wording

We built Rubrik Security Cloud ("RSC") with Zero Trust design principles to secure data across enterprise, cloud, SaaS, unstructured data, and identity providers. RSC delivers a cloud native SaaS platform that detects, analyzes, and remediates data security risks and unauthorized user activities. Our platform is architected to help organizations achieve cyber resilience, which encompasses cyber posture and cyber recovery. We enable organizations to confidently accelerate digital transformation and leverage the cloud to realize business agility.

Previous wording

In fiscal 2023, to meet customer demands for data security and a single, unified cloud-based control plane, we launched RSC, a comprehensive Zero Trust Data Security platform. RSC culminates our early vision of providing one point of control to secure data across enterprise, cloud, and SaaS applications. RSC is primarily adopted by our customers as a cloud-native, fully managed SaaS solution. It is also available as an enterprise-ready, self-managed version ("RSC-Private"), for a few select customers that are subject to stringent data control policies. For U.S. public sector organizations, we also offer a specialized cloud-native fully managed SaaS solution called RSC-Government.

Current wording

In fiscal 2023, to meet customer demands for data security and a single, unified cloud-based control plane, we launched RSC, a comprehensive Zero Trust Data Security platform. RSC culminates our early vision of providing one point of control to secure data across enterprise, cloud, SaaS, unstructured data, and identity providers. RSC is primarily adopted by our customers as a cloud-native, fully managed SaaS solution. It is also available as an enterprise-ready, self-managed version ("RSC-Private"), for a few select customers that are subject to stringent data control policies. For U.S. public sector organizations, we also offer a specialized cloud-native fully managed SaaS solution called RSC-Government.

Previous wording

We began transitioning customers from our legacy CDM capabilities to RSC, which is offered on a subscription basis, in fiscal 2023. As part of this business transition, we began transitioning the sale of Rubrik-branded Appliances from us to our contract manufacturers and stopped offering the Refresh Rights as part of our subscription offerings. In lieu of the outstanding Refresh Rights, upon qualification, we offer Subscription Credits, with an associated expiration date, which, when utilized, are an offset against Subscription ARR and revenue. As of the end of fiscal 2024, RSC represented a majority of our total revenue.

Current wording

We began transitioning customers from our legacy CDM capabilities to RSC, which is offered on a subscription basis, in fiscal 2023. As part of this business transition, we began transitioning the sale of Rubrik-branded Appliances from us to our contract manufacturers and stopped offering the Refresh Rights as part of our subscription offerings. In lieu of offering Refresh Rights, we offer Subscription Credits to qualifying customers. We recognize ratable revenue upon utilization or upfront revenue upon expiration of Subscription Credits, and utilization of Subscription Credits also offsets Subscription ARR for the applicable period. As of the end of fiscal 2024, RSC represented a majority of our total revenue.

Previous wording

We expect new and existing customers to increasingly adopt RSC. Our new customers have generally been rapidly adopting the RSC platform. We are actively migrating our existing customers from our legacy CDM capabilities to RSC. As part of this migration, we expect certain existing customers to consume our platform and products through a mix of RSC and a transitional CDM license ("RCDM-T"), during which time we expect to continue recognizing a portion of the associated revenue from these customers upfront at the time we transfer control of the license to the customer. We cannot predict how long these customers will use this mix before they complete their transition. Our revenue will fluctuate when qualified customers choose to exercise or forfeit their Subscription Credits (which are customer options that are accounted for as material rights) upon their associated expiration date.

Current wording

We expect new and existing customers to continue to adopt RSC. Our new customers have generally been rapidly adopting the RSC platform. We are actively migrating our existing customers from our legacy CDM capabilities to RSC. As part of this migration, we expect certain existing customers to consume our platform and products through a mix of RSC and a transitional CDM license ("RCDM-T"), during which time we expect to continue recognizing a portion of the associated revenue from these customers upfront at the time we transfer control of the license to the customer. We cannot predict how long these customers will use this mix before they complete their transition. In addition, our revenue will fluctuate when qualified customers choose to exercise or forfeit their Subscription Credits (which are customer options that are accounted for as material rights) upon their associated expiration date.

Previous wording

Our future success depends in part on the market adoption of our approach to Zero Trust Data Security. Many organizations have focused on preventing cyberattacks instead of protecting their data and having a plan to recover it in case of a cyberattack. We believe that the existing security ecosystem lacks a data security platform that will secure a customer’s data, wherever it lives, across enterprise, cloud, and SaaS applications. RSC is our Zero Trust Data Security platform that addresses the growing demand from organizations of virtually any size, across a wide range of industries, to address data security and cyberattack risks. As the data security market continues to evolve, we expect to continuously innovate our platform and product functionality to keep us in a strong position to capture the large opportunity ahead.

Current wording

Our future success depends in part on the market adoption of our approach to Zero Trust Data Security. Many organizations have focused on preventing cyberattacks instead of protecting their data and having a plan to recover it in case of a cyberattack. We believe that the existing security ecosystem lacks a data security platform that will secure a customer’s data, wherever it lives, across enterprise, cloud, SaaS, unstructured data, and identity providers. RSC is our Zero Trust Data Security platform that addresses the growing demand from organizations of virtually any size, across a wide range of industries, to address data security and cyberattack risks. As the data security market continues to evolve, we expect to continuously innovate our platform and product functionality to keep us in a strong position to capture the large opportunity ahead.

Previous wording

Our ability to retain customers and expand within existing customers is integral to our growth and future success. Our growing base of customers represents a significant opportunity for further expansion across our platform. Our customers typically start with securing data in one or more applications on our platform, and then expand by securing additional applications and increasing the amount of data secured. They further extend their use of our platform through adoption of additional security products. Several of our largest customers have deployed our platform to protect enterprise, unstructured data, cloud, and SaaS applications, securing large amounts of their data. Our ability to expand and extend within our customer base depends on, and has been impacted by, a number of factors, including platform performance, our customers’ satisfaction with our platform, competitive offerings, pricing, overall changes in our customers’ spending levels, and the effectiveness of our efforts to help our customers realize the benefits of our platform.

Current wording

Our ability to retain customers and expand within existing customers is integral to our growth and future success. Our growing base of customers represents a significant opportunity for further expansion across our platform. Our customers typically start with securing data in one or more applications on our platform, and then expand by securing additional applications and increasing the amount of data secured. They further extend their use of our platform through adoption of additional security products. Several of our largest customers have deployed our platform to secure large amounts of their data across enterprise, cloud, SaaS, unstructured data, and identity providers. Our ability to expand and extend within our customer base depends on, and has been impacted by, a number of factors, including platform performance, our customers’ satisfaction with our platform, competitive offerings, pricing, overall changes in our customers’ spending levels, and the effectiveness of our efforts to help our customers realize the benefits of our platform.

Previous wording

Subscription ARR is calculated as the annualized value of our active subscription contracts as of the measurement date, assuming any contract that expires during the next 12 months is renewed on existing terms. Subscription contracts include offerings for our RSC platform and related SaaS products, term-based licenses for our RSC-Private platform and related products, prior sales of CDM sold as a subscription term-based license with associated support and related SaaS products, and standalone sales of our SaaS subscription products like Anomaly Detection and Sensitive Data Monitoring. We believe Subscription ARR illustrates our success in acquiring new subscription customers and maintaining and expanding our relationships with existing subscription customers.

Current wording

Subscription ARR is calculated as the annualized value of our active subscription contracts as of the measurement date, based on our customers’ total contract value, and assuming any contract that expires during the next 12 months is renewed on existing terms. Subscription contracts include offerings for our RSC platform and related data security SaaS solutions, term-based licenses for our RSC-Private platform and related products, prior sales of CDM sold as a subscription term-based license with associated support and related SaaS products, and standalone sales of our SaaS subscription products like Anomaly Detection and Sensitive Data Monitoring. We believe Subscription ARR illustrates our success in acquiring new subscription customers and maintaining and expanding our relationships with existing subscription customers.

Previous wording

Subscription ARR does not include any maintenance revenue associated with perpetual licenses, which we generally no longer offer. Of the 38% and 58% growth, 2.0 percentage points and approximately 6.0 percentage points of growth for the twelve months ended

Current wording

Subscription ARR does not include any maintenance revenue associated with perpetual licenses, which we generally no longer offer. Of the 38% and 46% growth, approximately 2 percentage points and 3 percentage points of growth for the three months ended April 30, 2025 and 2024, respectively, were a result of transitioning our existing maintenance customers to our subscription editions. We expect the contributions to growth from these transitions to subside in fiscal 2026.

Previous wording

Free cash flow was $(53.6) million and $(33.2) million for the nine months ended October 31, 2024 and 2023, respectively. Free cash flow for the nine months ended October 31, 2024 includes a cash outlay of $22.8 million for employer payroll taxes due to the vesting of certain equity awards in conjunction with the initial public offering. Adjusting for employer payroll taxes, the modest improvement in free cash flow was primarily due to higher sales that were offset by higher expenses including expenses associated with our acquisition of Laminar which was completed in August 2023, a decrease in contract term due to the growth of our Cloud and SaaS products, and an increasing mix of annual and consumption payments from customers. This trend when combined with changes in new business growth, may result in free cash flow volatility across periods.

Current wording

Free cash flow was $33.3 million, and $(37.1) million for three months ended April 30, 2025 and 2024, respectively. Free cash flow for the three months ended April 30, 2024 includes a cash outlay of $20.6 million for employer payroll taxes due to the vesting of certain equity awards in conjunction with the initial public offering. Adjusting for this, the improvement in free cash flow was primarily due to higher sales that were offset by higher expenses, a decrease in contract term due to the growth of our Cloud and SaaS products, and an increasing mix of annual and consumption payments from customers. This trend when combined with changes in new business growth, may result in free cash flow volatility across periods.

Previous wording

We define Subscription ARR Contribution Margin as the Subscription ARR Contribution (as defined below) divided by Subscription ARR at the end of the period. We define Subscription ARR Contribution as Subscription ARR at the end of the period less: (i) our non-GAAP subscription cost of revenue and (ii) our non-GAAP operating expenses for the prior 12-month period ending on that date. In fiscal 2023, we began transitioning customers from our legacy CDM capabilities to our subscription-based RSC offerings. As a result of differing revenue recognition treatment between CDM and RSC, this business transition causes fluctuations to our total revenue growth and limits the comparability of our revenue with past performance. As a result, we measure the performance of our business on the basis of Subscription ARR. We believe that Subscription ARR Contribution Margin is a helpful indicator of operating leverage during this business transition. One limitation of Subscription ARR Contribution Margin is that the factors that impact Subscription ARR will vary from those that impact subscription revenue and, as such, may not provide an accurate indication of our actual or future GAAP results. Additionally, the historical expenses in this calculation may not accurately reflect the costs associated with future commitments.

Current wording

We define Subscription ARR Contribution Margin as the Subscription ARR Contribution (as defined below) divided by Subscription ARR at the end of the period. We define Subscription ARR Contribution as Subscription ARR at the end of the period less: (i) our non-GAAP subscription cost of revenue and (ii) our non-GAAP operating expenses for the prior 12-month period ending on that date. In fiscal 2023, we began transitioning customers from our legacy CDM capabilities to our subscription-based RSC offerings. As a result of differing revenue recognition treatment between CDM and RSC, including the RCDM-T licenses offered to existing customers, and as qualified customers choose to exercise or forfeit their Subscription Credits, these business transitions cause fluctuations to our total revenue growth and limit the comparability of our revenue with past performance. As a result, we measure the performance of our business on the basis of Subscription ARR. We believe that Subscription ARR Contribution Margin is a helpful indicator of operating

Previous wording

Subscription ARR Contribution Margin was (3)%, and (14)% for the 12 months ended October 31, 2024 and 2023, respectively. For the 12 months ended October 31, 2024, the non-GAAP expenses includes the recognition of $22.8 million for employer payroll taxes due to the vesting of certain equity awards in conjunction with the initial public offering. Adjusting for this, the Subscription ARR Contribution Margin was (1)% for the 12 months ended October 31, 2024. The increase in Subscription ARR Contribution Margin was primarily driven by the strong year-over-year growth in Subscription ARR, compared to year-over-year growth in non-GAAP subscription costs of sales and non-GAAP operating expenses. We believe that this increase in Subscription ARR Contribution Margin reflects increased operating leverage in our business.

Current wording

Subscription ARR Contribution Margin was 8%, and (11)% for the 12 months ended April 30, 2025, and 2024, respectively. For the 12 months ended April 30, 2024, the non-GAAP expenses included the recognition of $22.8 million for employer payroll taxes due to the vesting of certain equity awards in conjunction with the initial public offering. Adjusting for this, the increase in Subscription ARR Contribution Margin was primarily driven by the strong year-over-year growth in Subscription ARR, compared to year-over-year growth in non-GAAP subscription costs of sales and non-GAAP operating expenses. We believe that this increase in Subscription ARR Contribution Margin reflects increased operating leverage in our business.

Previous wording

We generate revenue primarily from sales of subscriptions and typically invoice our customers at the inception of the contract. Revenue is recognized ratably over the term of the subscription for these sales of RSC subscriptions.

Current wording

We generate revenue primarily from sales of subscriptions and typically invoice our customers at the inception of the contract.

Previous wording

Our revenue will fluctuate based on the timing for transitioning our existing customers to RSC and when qualified customers choose to exercise or forfeit their customer options that are accounted for as material rights. These expected trends, when combined with the transition of the sale of Rubrik-branded Appliances from us to our contract manufacturers, will limit and cause fluctuations to our revenue growth through fiscal 2027. We primarily measure our business on the basis of Subscription ARR, as we believe it best reflects our actual growth and our growth prospects.

Current wording

Our revenue will fluctuate based on the timing for transitioning our existing customers to RSC, including the RCDM-T licenses offered to existing customers, sales of RSC-Private, and when qualified customers choose to exercise or forfeit their Subscription Credits, the customer options that are accounted for as material rights. These expected trends, when combined with the transition of the sale of Rubrik-branded Appliances from us to our contract manufacturers, will limit and cause fluctuations to our revenue growth through fiscal 2027. We primarily measure our business on the basis of Subscription ARR, as we believe it best reflects our actual growth and our growth prospects.

Previous wording

SaaS includes SaaS subscription products like Anomaly Detection and Sensitive Data Monitoring sold standalone or with prior sales of term-based license offerings of CDM prior to the launch of the RSC platform as well as sales of RSC. RSC is offered as a fully-hosted subscription or a hybrid cloud subscription. RSC is a fully-hosted subscription in the case of protection of cloud, SaaS, and unstructured data applications. When RSC is securing enterprise applications, it is a hybrid cloud subscription which includes software hosted from the cloud (as a service) and an on-premise license for securing enterprise applications. The hybrid cloud subscription is accounted for as a single performance obligation because the software hosted from the cloud (as a service) and the on-premise software licenses are not separately identifiable and serve together to fulfill our promise to the customer, which is to provide a single, unified data security solution. Our subscription capabilities are primarily sold as editions which bundle multiple products and include the Foundation Edition, Business Edition, Enterprise Edition, and Enterprise Proactive Edition. Subscription revenue related to SaaS is recognized ratably over the subscription period.

Current wording

SaaS includes SaaS subscription products like Anomaly Detection and Sensitive Data Monitoring sold standalone or with prior sales of term-based license offerings of CDM prior to the launch of the RSC platform as well as sales of RSC. RSC is offered as a fully-hosted subscription or a hybrid cloud subscription. RSC is a fully-hosted subscription in the case of protection of cloud, SaaS, unstructured data, and identity providers. When RSC is securing enterprise applications, it is a hybrid cloud subscription which includes software hosted from the cloud (as a service) and an on-premise license for securing enterprise applications. The hybrid cloud subscription is accounted for as a single performance obligation because the software hosted from the cloud (as a service) and the on-premise software licenses are not separately identifiable and serve together to fulfill our promise to the customer, which is to provide a single,

Previous wording

As customers continue to adopt or transition to RSC, we expect the ratable portion of our subscription revenue to increase. We expect certain customers to consume our platform and products through a mix of RSC and RCDM-T as they complete the migration, which will result in a recognition of a portion of the associated revenue for these customers upfront. Furthermore, our subscription revenue will also fluctuate when qualified customers choose to exercise or forfeit their customer options that are accounted for as material rights. The combination of both of these factors will limit and cause fluctuations in our subscription revenue growth through fiscal 2027, depending in part on the timing of our existing customers’ transition to RSC.

Current wording

As customers continue to adopt or transition to RSC, we expect the ratable portion of our subscription revenue to increase. We expect certain customers to consume our platform and products through a mix of RSC and RCDM-T as they complete the migration, which will result in a recognition of a portion of the associated revenue for these customers upfront. Furthermore, our subscription revenue will also fluctuate when qualified customers choose to exercise or forfeit their customer options that are accounted for as material rights. In fiscal 2025, subscription revenue saw some modest benefits as customers exercised or forfeited their Subscription Credits. We expect to see some further benefits in fiscal 2026 that we do not expect to continue in the long-term, with the impact declining in fiscal 2027 and substantially completed by fiscal 2028. The combination of both of these factors will limit and cause fluctuations in our subscription revenue growth through fiscal 2027, depending in part on the timing of our existing customers’ transition to RSC and exercises or forfeitures of Subscription Credits.

Previous wording

Maintenance revenue represents fees earned from software updates on a when-and-if-available basis, telephone support, integrated web-based support, and Rubrik-branded Appliance maintenance relating to our perpetual licenses. Maintenance revenue is recognized ratably over the term of the service period. We expect our maintenance revenue to decrease as we drive adoption of RSC for existing maintenance customers.

Current wording

Maintenance revenue represents fees earned from software updates on a when-and-if-available basis, telephone support, integrated web-based support, and Rubrik-branded Appliance maintenance relating to our perpetual licenses. Maintenance revenue is recognized ratably over the term of the service period. We expect our maintenance revenue to decrease as we drive adoption of RSC for existing maintenance customers and the transition to be largely completed by the end of fiscal 2026.

Previous wording

Other revenue represents fees earned from sales of Rubrik-branded Appliances and professional services. Revenue for Rubrik-branded Appliances is recognized when shipped to the customer. When we sell our software license with our Rubrik-branded Appliances, revenue for both the Rubrik-branded Appliances and software licenses are recognized at the same time. Revenue related to professional services is typically recognized as the services are performed. In the third quarter of fiscal 2023, we began transitioning the sale of Rubrik-branded Appliances from us to our contract manufacturers. We expect other revenue as a percentage of total revenue to decrease over time as we continue this transition.

Current wording

Other revenue represents fees earned from sales of Rubrik-branded Appliances and professional services. Revenue for Rubrik-branded Appliances is recognized when shipped to the customer. When we sell our software license with our Rubrik-branded Appliances, revenue for both the Rubrik-branded Appliances and software licenses are recognized at the same time. Revenue related to professional services is typically recognized as the services are performed. In the third quarter of fiscal 2023, we began transitioning the sale of Rubrik-branded Appliances from us to our contract manufacturers and this was largely completed in fiscal 2025. We expect other revenue to be largely driven by sales of professional services in the future and as a percentage of total revenue to decrease over time.

Previous wording

Cost of revenue primarily includes employee compensation and related expenses associated with customer support, certain hosting costs, amortization of capitalized internal-use software, and cost of Rubrik-branded Appliances.

Current wording

Cost of revenue primarily includes employee compensation and related expenses associated with customer support, certain hosting costs, amortization of capitalized internal-use software, amortization of finite-lived intangible assets and cost of Rubrik-branded Appliances.

Previous wording

Cost of subscription revenue primarily includes employee compensation and related expenses associated with customer support for our subscription offerings, certain hosting costs, and amortization of capitalized internal-use software. We expect our cost of subscription revenue to increase as our subscription revenue increases.

Current wording

Cost of subscription revenue primarily includes employee compensation and related expenses associated with customer support for our subscription offerings, certain hosting costs, amortization of capitalized internal-use software, and amortization of finite-lived intangible assets. We expect our cost of subscription revenue to increase as our subscription revenue increases.

Previous wording

Cost of other revenue primarily includes the cost of Rubrik-branded Appliances and professional services. We expect cost of other revenue as a percentage of total cost of revenue to decrease due to the sales of Rubrik-branded Appliances transitioning from us to our contract manufacturers.

Current wording

Cost of other revenue primarily includes the cost of Rubrik-branded Appliances and professional services. We expect cost of other revenue as a percentage of total cost of revenue to decrease due to the sales of Rubrik-branded Appliances transitioning from us to our contract manufacturers which was largely completed in fiscal 2025. Over the long-term, we expect the cost of other revenue to be largely driven by sales of professional services.

Previous wording

With increased adoption of RSC, we expect SaaS revenue to increase as a percentage of total revenue, which we expect will result in an increase in associated hosting costs. As customers adopt RSC, we expect our subscription gross margin to fluctuate through fiscal 2027. This is due to the revenue being recognized ratably over the subscription term rather than a portion being recognized upfront from subscription term-based licenses and associated increases in hosting costs for our SaaS solutions.

Current wording

With increased adoption of RSC, we expect SaaS revenue to increase as a percentage of total revenue, which we expect will result in an increase in associated hosting costs. As customers adopt RSC, we expect our subscription gross margin to fluctuate through fiscal 2027. This is due to the revenue being recognized ratably over the subscription term rather than a portion being recognized upfront from subscription term-based licenses and associated increases in hosting costs for our SaaS solutions. We expect our subscription gross margin to fluctuate as customers adopt data security SaaS solutions on the RSC platform.

Previous wording

We expect sales of Rubrik-branded Appliances to decrease as we transition the sale from us to contract manufacturers, which will result in a decrease in associated Rubrik-branded Appliance costs. We expect our other gross margin to fluctuate through fiscal 2025 as we are transitioning the sale of Rubrik-branded Appliances from us to our contract manufacturers.

Current wording

We expect sales of Rubrik-branded Appliances to decrease as we transition the sale from us to contract manufacturers, which will result in a decrease in associated Rubrik-branded Appliance costs. The transition of the sale of Rubrik-branded Appliances to our contract manufacturers was largely completed in fiscal 2025. Over the long-term, we expect other gross margin to be largely driven by sales of professional services.

Previous wording

Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses. Personnel costs are the most significant component of operating expenses. We also incur other non-personnel costs such as colocation and certain hosting costs, office space costs, fees for third-party professional services, and costs associated with software and subscription services. We expect our operating expenses, exclusive of stock-based compensation expense, to generally decrease as a percentage of revenue over the long term.

Current wording

Our operating expenses consist of research and development, sales and marketing, and general and administrative expenses. Personnel costs are the most significant component of operating expenses. We also incur other non-personnel costs such as colocation and certain hosting costs, office space costs, fees for third-party professional services, and costs associated with software and subscription services. We expect our operating expenses will continue to increase as our business grows. We also expect our operating expenses, exclusive of stock-based compensation, as a percentage of revenue to generally decrease over the long term.

Previous wording

Sales and marketing expenses consist primarily of employee compensation and related expenses including sales commissions, marketing programs, and travel-related costs. We expect our sales and marketing expenses will increase over time and continue to be our largest operating expense for the foreseeable future as we expand our sales force, increase our marketing efforts, and expand into new markets. We also expect our sales and marketing expenses, exclusive of stock-based compensation, as a percentage of revenue to generally decrease over the long term.

Current wording

Sales and marketing expenses consist primarily of employee compensation and related expenses including sales commissions, marketing programs, and travel-related costs. To capture share in the ever-growing data security market, we expect to continuously expand our sales force, increase our marketing efforts, and expand into new markets. We expect our sales and marketing expenses will continue to increase as our business grows. We also expect our sales and marketing expenses, exclusive of stock-based compensation, as a percentage of revenue to generally decrease over the long term.

Previous wording

General and administrative expenses consist primarily of employee compensation and related expenses for administrative functions, including finance, legal, human resources, information technology, and fees for third-party professional services. We expect to incur additional general and administrative expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations, and increased expenses for investor relations and third-party professional services. We expect that our general and administrative expenses will also increase as our business grows, although we expect our general and administrative expenses, exclusive of stock-based compensation, as a percentage of revenue to generally decrease over the long term.

Current wording

General and administrative expenses consist primarily of employee compensation and related expenses for administrative functions, including finance, legal, human resources, information technology, and fees for third-party professional services. We expect our general and administrative expenses will continue to increase as our business grows. We also expect our general and administrative expenses, exclusive of stock-based compensation, as a percentage of revenue to generally decrease over the long term.

Previous wording

Comparison of the Three and Nine Months Ended October 31, 2024 and 2023

Current wording

Comparison of the Three Months Ended April 30, 2025 and 2024

Previous wording

Our Subscription ARR grew from $724.8 million as of October 31, 2023 to $1,002.3 million as of October 31, 2024, representing a 38% increase. Of the increase in Subscription ARR, 2.0 percentage points are a result of transitioning our existing maintenance customers to our subscription editions. A further indication of our ability to expand revenue from existing customers is through our average subscription dollar-based net retention rate which was greater than 120% as of October 31, 2024. We had 2,085 customers with $100,000 or more in Subscription ARR as of October 31, 2024, increasing from 1,581 as of October 31, 2023.

Current wording

Our Subscription ARR grew from $856.1 million as of April 30, 2024 to $1,181.3 million as of April 30, 2025, representing a 38% increase. Of the increase in Subscription ARR, 2 percentage points are a result of transitioning our existing maintenance customers to our subscription editions. A further indication of our ability to expand revenue from existing customers is through our average subscription dollar-based net retention rate which was over 120% as of April 30, 2025. We had 2,381 customers with $100,000 or more in Subscription ARR as of April 30, 2025, increasing from 1,859 as of April 30, 2024.

Previous wording

Maintenance revenue associated with sales of perpetual licenses of our legacy CDM product decreased for the three and nine months ended October 31, 2024. Maintenance revenue represented 2% and 5% of total revenue for the three months ended October 31, 2024 and 2023, respectively and 2% and 7% of total revenue for the nine months ended October 31, 2024 and 2023, respectively. We expect the transition of existing maintenance customers adopting RSC subscription offerings to be largely completed by the end of fiscal 2026.

Current wording

Maintenance revenue associated with sales of perpetual licenses of our legacy CDM product decreased for the three months ended April 30, 2025. Maintenance revenue represented 1% and 3% of total revenue for three months ended April 30, 2025 and 2024, respectively. We expect the transition of existing maintenance customers adopting RSC subscription offerings to be largely completed by the end of fiscal 2026.

Previous wording

Other revenue, which consists primarily of sales of Rubrik-branded Appliances and professional services, decreased for the three and nine months ended October 31, 2024. Sales of Rubrik-branded Appliances decreased by $2.3 million and $11.2 million for the three and nine months ended October 31, 2024, respectively, as we are transitioning sales of our Rubrik-branded Appliances from us to our contract manufacturers and no longer offer new perpetual licenses. We expect our other revenue as a percentage of total revenue to continue to decrease.

Current wording

Other revenue increased for the three months ended April 30, 2025 due to an increase in professional services. We expect our other revenue as a percentage of total revenue to continue to decrease.

Previous wording

Cost of subscription revenue increased for the three and nine months ended October 31, 2024 primarily due to the recognition of stock-based compensation expense of $4.6 million and $45.3 million, respectively, after and as a result of the completion of our IPO, an increase in $13.1 million and $36.9 million, respectively, in hosting costs due to the launch and adoption of more SaaS products by our customers, and an increase of $2.6 million and $9.3 million, respectively, from growth in our customer support organization.

Current wording

Cost of subscription revenue decreased for the three months ended April 30, 2025 primarily driven by $31.2 million decrease in stock-based compensation expense as a result of higher RSU expense in the prior period related to the recognition of cumulative stock-based compensation expense upon our IPO, partially offset by an increase of $7.0 million in hosting costs due to the launch and adoption of more SaaS products by our customers.

Previous wording

Subscription gross margin decreased for the three and nine months ended October 31, 2024 due to the stock-based compensation expense we recognized after and as a result of the completion of our IPO and an increase in hosting costs associated with our development and launch of more SaaS products.

Current wording

Subscription gross margin increased for the three months ended April 30, 2025 as a result of higher RSU expense in the prior period related to the recognition of cumulative stock-based compensation expense upon our IPO, partially offset by an increase in hosting costs associated with our development and launch of more SaaS products.

Previous wording

Interest income increased for the three and nine months ended October 31, 2024 due to higher cash, cash equivalents, and investment balances and higher interest rates.

Current wording

Interest income increased for the three months ended April 30, 2025 due to higher cash, cash equivalents, and investment balances.

Previous wording

Our income tax expense decreased for the nine months ended October 31, 2024 due to the impact of integrating the operations of Laminar during the three months ended October 31, 2023 and several of our foreign subsidiaries making an election in the current year to be treated as U.S. branches for federal income tax purposes effective in fiscal 2024.

Current wording

Our income tax expense increased for the three months ended April 30, 2025 due to a one-time benefit associated with several of our foreign subsidiaries making an election to be treated as U.S. branches for federal income tax purposes effective in fiscal 2024, partially offset by tax benefits from stock-based compensation deductions in the UK for three months ended April 30, 2025.

Previous wording

Our effective tax rate may fluctuate significantly on a quarterly basis and could be adversely affected to the extent that earnings are lower than anticipated in countries that have lower statutory tax rates and higher than anticipated in countries that have higher statutory tax rates. In addition, tax authorities may challenge our transfer pricing policies, resulting in a higher effective tax rate.

Current wording

Our effective tax rate may fluctuate significantly and could be adversely affected to the extent that earnings are lower than anticipated in countries that have lower statutory tax rates and higher than anticipated in countries that have higher statutory tax rates. In addition, tax authorities may challenge our transfer pricing policies, resulting in a higher effective tax rate.

Previous wording

In May 2024, our underwriters exercised their option to purchase an additional 3,472,252 shares of our Class A common stock at the IPO Price of $32.00 per share. We received net proceeds of approximately $104.9 million, net of underwriters’ discounts and commissions.

Current wording

We have financed our operations principally through private placements of our redeemable convertible preferred stock, our term loan credit facility, and payments received from customers. In April 2024, we completed our IPO which resulted in proceeds of approximately $710.3 million, net of underwriting discounts and commissions. In May 2024, our underwriters exercised their option to purchase an additional 3,472,252 shares of our Class A common stock at the IPO Price of $32.00 per share. We received net proceeds of approximately $104.9 million, net of underwriters’ discounts and commissions.

Previous wording

Our billings grow with new business growth. The majority of our billings are driven by invoicing our customers for multi-year commitments. However, this may evolve as customers have opted to, and may continue to opt to, pay us on an annual or consumption basis based on products purchased due to the growth in our SaaS product offerings. In addition, our billings are subject to seasonality, with billings in the fourth quarter being substantially higher than in the other three quarters. As of October 31, 2024, we had cash, cash equivalents, and short-term investments of $632.0 million. Our cash equivalents and investments primarily consist of money market funds, U.S. treasuries, commercial paper, corporate bonds, and U.S. government agencies securities. We have generated significant operating losses from our operations as reflected in our accumulated deficit of $(2,722.4) million as of October 31, 2024. We expect to continue to incur operating losses, and our operating cash flows may fluctuate between positive and negative amounts for the foreseeable future due to the investments we intend to make as described above. As a result, we may require additional capital resources to execute strategic initiatives to grow our business.

Current wording

Our billings grow with new business growth. The majority of our billings are driven by invoicing our customers for multi-year commitments. However, this may evolve as customers have opted to, and may continue to opt to, pay us on an annual or consumption basis based on products purchased due to the growth in our SaaS product offerings. In addition, our billings are subject to seasonality, with billings in the fourth quarter being substantially higher than in the other three quarters. As of April 30, 2025, we had cash, cash equivalents, and short-term investments of $762.1 million. Our cash equivalents and investments primarily consist of money market funds, certificate of deposit, U.S. treasuries, commercial paper, corporate bonds, and U.S. government agencies securities. We have generated significant operating losses from our operations as reflected in our accumulated deficit of $(2,939.4) million as of April 30, 2025. We expect to continue to incur operating losses, and our operating cash flows may fluctuate between positive and negative amounts for the foreseeable future due to the investments we intend to make as described above. As a result, we may require additional capital resources to execute strategic initiatives to grow our business.

Previous wording

Our longer-term future capital requirements will depend on many factors, including our subscription growth rate, subscription renewal activity, including the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts, the introduction of new and enhanced products, and the continuing market adoption of our platform. We may in the future enter into arrangements to acquire or invest in complementary businesses, services, and technologies, including intellectual property rights. We continue to assess our capital structure and evaluate the merits of deploying available cash. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition, and operating results would be adversely affected.

Current wording

Our longer-term future capital requirements will depend on many factors, including our subscription growth rate, subscription renewal activity, including the timing and the amount of cash received from customers, the expansion of sales and marketing activities, the timing and extent of spending to support development efforts, the introduction of new and enhanced products, and the continuing market adoption of our platform. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities, available cash and long-term investment balances, and our Amended Credit Facility, and potential future debt or equity financings. We may in the future enter into arrangements to acquire or invest in complementary businesses, services, and technologies, including intellectual property rights. We continue to assess our capital structure and evaluate the merits of deploying available cash. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, or if we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition, and operating results would be adversely affected.

Previous wording

For the nine months ended October 31, 2024, net cash used in operating activities of $35.4 million resulted primarily from a net loss of $1,039.9 million, partially offset by $827.9 million of stock-based compensation, $66.4 million of amortization of deferred commissions, $29.1 million for non-cash interest related to debt, $21.5 million for depreciation and amortization, and $62.8 million of net cash inflow from changes in operating assets and liabilities. The net cash inflow from changes in operating assets and liabilities was primarily the result of a $177.0 million increase in deferred revenue from increased billings and a $3.9 million increase in accounts payable. The cash inflow was partially offset by a $90.4 million increase in deferred commissions, a $14.3 million increase in prepaid expense and other assets and a $14.3 million increase in accounts receivable.

Current wording

For the three months ended April 30, 2025, net cash provided by operating activities of $39.7 million resulted primarily from a net loss of $102.1 million, partially offset by $73.5 million of stock-based compensation, $24.8 million of amortization of deferred commissions, $8.1 million for depreciation and amortization, and $35.1 million of net cash inflow from changes in operating assets and liabilities. The net cash inflow from changes in operating assets and liabilities was primarily the result of a $89.7 million increase in deferred revenue from increased billings and a $12.0 million decrease in accounts receivable. The cash inflow was partially offset by a $36.8 million decrease in accrued expenses and other current liabilities, a $21.4 million increase in deferred commissions, and a $7.8 million increase in prepaid expense and other assets.

Previous wording

For the nine months ended October 31, 2023, net cash used in operating activities of $17.3 million resulted primarily from a net loss of $256.7 million, partially offset by $56.7 million of amortization of deferred commissions, $17.8 million for depreciation and amortization, $10.1 million for non-cash interest related to debt, and $152.4 million of net cash inflow from changes in operating assets and liabilities. The net cash inflow from changes in operating assets and liabilities was primarily the result of a $230.4 million increase in deferred revenue from increased billings, a $13.1 million decrease in accounts receivable and a $5.9 million decrease in prepaid expense and other assets. The cash inflow was partially offset by a $75.8 million increase in deferred commissions and $20.7 million decrease in accrued expenses and other liabilities.

Current wording

For the three months ended April 30, 2024, net cash used in operating activities of $31.4 million resulted primarily from a net loss of $732.1 million, partially offset by $630.3 million of stock-based compensation, $20.4 million of amortization of deferred commissions, $9.7 million for non-cash interest related to debt, $7.2 million for depreciation and amortization, and $33.2 million of net cash inflow from changes in operating assets and liabilities. The net cash inflow from changes in operating assets and liabilities was primarily the result of a $53.5 million increase in deferred revenue from increased billings and a $36.2 million decrease in accounts receivable. The cash inflow was partially offset by a $23.2 million increase in deferred commissions, a $22.1 million decrease in accrued expenses and other liabilities, and a $13.9 million increase in prepaid expenses and other assets.