0001943896-25-000054
SEC filingSubscription revenue drove 48% YoY total revenue growth, with expanding gross margins and positive free cash flow, signaling operational leverage.
For the nine months ended October 31, 2025, total revenue increased 49% YoY to $938.5 million, driven by subscription revenue growth of 54% to $899.0 million. Subscription revenue now represents 96% of total revenue, up from 93% in the prior year period. Gross profit rose 77% to $746.3 million, with total gross margin expanding from 67% to 80% due to a favorable mix shift toward higher-margin subscription offerings and reduced stock-based compensation expense (down from $827.9 million to $244.5 million). Net loss improved significantly to $(261.9) million from $(1,039.9) million, reflecting operating leverage and lower one-time charges. EPS improved to $(1.34) from $(7.27) per share. Free cash flow turned positive at $167.8 million versus $(53.6) million in the prior year, driven by higher collections and improved working capital.
Subscription: Revenue grew 54% YoY, underpinned by Subscription ARR of $1.35 billion (up 34% YoY). Gross margin improved from 72% to 81% as the mix shifted toward SaaS and away from legacy term-based licenses. Non-recurring revenue from material rights contributed $24.6 million in the third quarter, but management expects this benefit to decline sequentially through fiscal 2026 and further in fiscal 2027.
Maintenance: Revenue declined 61% YoY to $5.8 million as customers transition from perpetual licenses to subscription. Maintenance now represents less than 1% of total revenue, and the transition is expected to be largely complete by end of fiscal 2026.
Other: Revenue increased 19% to $33.7 million, driven by professional services. Gross margin improved to 31% from negative prior year, as cost of other revenue decreased due to lower appliance sales.
Management expects subscription revenue to continue benefiting from material rights in the near term, albeit with a sequential decline. The transition of maintenance customers to RSC subscriptions is expected to be largely complete by fiscal year-end 2026. Subscription ARR growth of 34% and a subscription dollar-based net retention rate above 120% indicate strong customer retention and expansion. Free cash flow is expected to benefit from operating leverage, though volatility may arise from payment term mix. The company’s liquidity position is strong with $1.6 billion in cash, cash equivalents, and short-term investments, sufficient to fund operating and capital needs for at least the next 12 months.
As of October 31, 2025, Rubrik held $307.1 million in cash and cash equivalents and $1.30 billion in short-term investments, totaling $1.60 billion in liquid assets. Total assets were $2.55 billion, while total liabilities stood at $3.07 billion, resulting in a stockholders' deficit of $524.4 million. The company had $1.13 billion in convertible senior notes (net) and no other debt after repaying the $327.9 million Amended Credit Facility in June 2025. Deferred revenue, a key liability, was $1.69 billion ($968.2 million current, $718.4 million noncurrent).
Rubrik disclosed total purchase commitments of $524.4 million as of October 31, 2025. The largest component is $336.3 million remaining under an amended hosting service contract (extended to April 2029, with a $375.0 million increase in minimum spending). Additionally, $188.1 million in other commitments primarily for hosting costs and software/subscription services were noted. Operating lease liabilities totaled $36.8 million, with future payments of $41.7 million through fiscal 2030 and beyond.
No share buybacks or dividends were reported. The primary capital allocation event was the issuance of $1.15 billion in 0.00% convertible senior notes due 2030, with net proceeds of $1.13 billion. Concurrently, the company repurchased $327.9 million of its Amended Credit Facility, incurring a $6.7 million loss on debt extinguishment. Capital expenditures (property and equipment plus capitalized internal-use software) totaled $22.1 million for the nine months ended October 31, 2025, representing 2.4% of total revenue. The company also purchased $88.6 million in capped calls related to the convertible notes.
Rubrik operates as a single reportable segment: software and services. The chief operating decision maker uses consolidated net loss to assess performance. Geographic revenue for the nine months ended October 31, 2025 was: Americas $683.7 million (73%), EMEA $218.5 million (23%), and APAC $36.3 million (4%). The United States alone contributed $657.8 million, or 70% of total revenue.
Rubrik's CFO swung from -$35.4M to +$189.9M, primarily due to a $267M increase in deferred revenue and $244.5M in stock-based compensation (non-cash). Net loss improved to -$261.9M from -$1,040M. Capex of $22.1M was moderate, representing 11.6% of CFO, indicating low capital intensity. The company did not report free cash flow, but CFO comfortably covers capex. Working capital changes included a $42.7M increase in accounts receivable and a $59.7M rise in prepaid expenses, partially offset by strong deferred revenue growth. Financing cash flow of $736M was bolstered by $1.13B from convertible note issuance, offset by $329.6M in debt repayment and $88.6M for capped calls. Overall, cash generation improved significantly, but the positive CFO is heavily reliant on deferred revenue growth and non-cash adjustments.