Q1 2026 Rubrik Inc Earnings Call
Operator: Good afternoon, ladies and gentlemen, and welcome to the Rubrik first quarter fiscal year 2026 results conference call. At this time, all lines are in listen only mode.
Good afternoon, ladies and gentlemen, and welcome to the real break in the first quarter of fiscal year 'twenty 'twenty six results conference call.
At this time all lines are in a listen only mode.
Operator: Following the presentation, we will conduct a question and answer session. If at any time during this call you require the needed assistance, please press star zero for the operator.
Following the presentation, we will conduct a question and answer session.
So at any time during this call you require you need assistance. Please press star zero for operator.
Operator: This call is being recorded on June 5, 2025.
This call is being recorded in June 2025.
Melissa Franchi: I would now like to turn the conference over to Melissa Franchi, Vice President of Investor Relations. Please go ahead.
Melissa Franke: I'll now like to turn the conference over to Melissa Franke.
Melissa Franke: President of Investor Relations. Please go ahead, Hello, everyone welcome to Rubicon first quarter fiscal year 'twenty 'twenty six financial results conference call on the call with me today are <unk> CEO.
Melissa Franchi: Hello, everyone. Welcome to Rubrik's first quarter fiscal year 2026 financial results conference.
Melissa Franchi: On the call with me today are Bipul Sinha, CEO, Chairman and Co-Founder of Rubrik, and Kiran Choudary, Chief Financial Officer.
Speaker Change: CEO, Chairman and co founder of Rubric, and curious Choudhary <unk> Chief Financial Officer.
Melissa Franchi: Our earnings press release was issued today after the market closed and may be downloaded from the investor relations page at www.ir.rubrik.com. Also on this page, you'll be able to find a slide deck with financial highlights that, along with our earnings release, includes a reconciliation of GAAP and non-GAAP financial These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP.
Melissa Franke: Our earnings press release was issued today after the market closed and may be downloaded from the Investor Relations page.
Melissa Franke: Www dot.
Rubric Dot com.
Also on this page you'll be able to find a slide deck with financial highlights that along with our earnings release includes a reconciliation of GAAP and non-GAAP financial results.
Melissa Franke: These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP.
Melissa Franchi: During this call, we will make forward-looking statements, including statements regarding our financial outlook for the second quarter and the full fiscal year 2026. Our expectations regarding market trends Our market position, opportunities, including with respect to generative AI, growth strategy, product initiatives, and expectations regarding those initiatives and our go-to-market These statements are only predictions that are based on what we believe today, and actual results may differ majorly.
During this call we will make forward looking statements, including statements regarding our financial outlook for the second quarter and the full fiscal year 2026.
Melissa Franke: Our expectations regarding market and our market position opportunities, including with respect to generative AI gross strategy product initiatives and expectations regarding those initiatives.
And our go to market motion.
Melissa Franke: These statements are only predictions that are based on what we believe today and actual results may differ materially.
Melissa Franchi: These forward-looking statements are subject to risks and other factors that could affect our performance and financial results, which we discuss in detail in our filings with our For more information visit www.FEMA.gov Rubrik assumes no obligation to update any forward-looking statements we may make on today's call.
These forward looking statements are subject to risks and other factors that could affect our performance and financial results.
Melissa Franke: We discussed in detail in our filings with the SEC.
Melissa Franke: We work assumes no obligation to update any forward looking statements we may make on today's call.
Bipul Sinha: With that, I'll hand the call over to Thank you, Melissa. I want to start by thanking everyone for joining us today. Our first quarter results were excellent. This quarter, we once again exceeded all guided metrics across top-line and profitable. Here are five key numbers. First, subscription ARR reach approximately 1.2 billion, growing 38% year over year. Net new subscription ARR reached 89 million in the first quarter, a standout for a company at RSC. Second, our subscription revenue was $266 million, growing 54% year-over-year. Third, our subscription NLR remained strong, yet again above 120%. Fourth, customers with 100K or more in subscription ARR reached 2,381, growing 28% year-over-year.
Melissa Franke: With that I'll hand, the call over to that Paul. Thank you Melissa I wanted to start by thanking everyone for joining us today, our first quarter results were excellent. This quarter, we once again exceeded all guided metrics across top line and profitability.
Melissa Franke: That's quite the number but subscription they add at least.
Melissa Franke: Approximately $1 2 billion growing 38% year over year net new subscription add up reached $89 million in the first quarter.
Melissa Franke: Panned out for a company that has scale.
Melissa Franke: Second our subscription revenue was $206 6 million growing 54% year over year, but our.
Melissa Franke: <unk> remained strong yet again enable 120%.
Melissa Franke: Customers with hundred killed more than subscription that reached <unk> thousand 381, growing 28% year over year. Finally on profitability. We once again made material improvements in subscription contribution margin up over 1800 basis point year over year on cash generation.
Bipul Sinha: Finally, on profitability, we once again made material improvements in subscription ARR contribution margin, up over 1,800 basis points year-over-year. On cash generation, we are very happy to report we had over 33 million in free cash flow. This combination of top-line growth and cash-flow margin at our scale is rare.
Melissa Franke: We are very happy to report, we had over $33 million in free cash flow. This quarter. This combination of top line growth and gastro Martinez artist scale is that these outcomes are a result of a very deliberate strategy.
Bipul Sinha: These outcomes are a result of a very deliberate strategy. First, we have a very differentiated product and comprehensive offering for cyber resilience. Second, we offer a true platform that enables multi-product leverage for our Third, Rubrik has a unique innovation engine that delivers a steady stream of new products and solutions that lead and define the future of cybersecurity. And finally, we have a culture of long-term thinking where we continuously conceive yet unproven bold ideas to unlock new markets. As a result, we remain confident about our opportunities.
Melissa Franke: We have a very differentiated product and comprehensive offering for cyber resilience second we offered a group platform that enables multi product leverage for our customers third rubric has a unique innovation engine that delivers a steady stream of new products and solutions that lead and define the future of <unk>.
Melissa Franke: Got it.
Melissa Franke: And finally, we have a culture of long term thinking where we continuously can see yet unproven bold ideas to unlock new market. As a result, we remain confident about our opportunity and we have raised our guidance for the year, Let me start by giving you the broader context on our market opportunity.
Bipul Sinha: And we have raised our guidance for.
Bipul Sinha: Let me start by giving you the broader context on our market. Cyber resilience is the top cyber security priority. My conversations with leading CISOs and CIOs around the world point to a growing recognition that cyber breaches are inevitable in spite of significant investments they make in cyber. At the same time, enterprises are looking to re-platform and modernize their infrastructure in preparation for AI. In this increasingly complex environment, customers are turning to Rubrik for uniform and consistent data policy controls, as well as rapid, accurate recovery from cyberattacks. From our inception, Rubrik was designed to help customers achieve the fastest cyber recovery time.
Melissa Franke: Cyber resilience is a top cyber security priority.
Melissa Franke: My conversations with leading seafood and CIO there around the world point to a growing recognition that cyber breaches are inevitable.
Melissa Franke: Fight off significant investment they make in cyber defensive at the same time enterprises are looking to re platform and modernize their infrastructure.
Melissa Franke: Preparation for the AI in this increasingly complex environment customers are turning to <unk> for a uniform and consistent data policy control as.
Melissa Franke: As well as the rapid accurate recovery from cyber attacks from our inception <unk> was designed to help customers achieve the fastest fiber recovery time.
Bipul Sinha: At the center of our unique architecture is the Rubrik preemptive recovery engine, our natively integrated platform continuously and automatically scans all protected data and identities. across a customer's entire IT ecosystem to pre-calculate clean recovery points. And our ability to pre-compute metadata unlocks the necessary data context and tooling needed to recover quickly from a cyber attack. legacy backup as well as new gen backup vendors can't match this proactive capability because their solutions weren't natively built for it and their capabilities are often bolted on from acquisitions or from third-party For these reasons, we win the vast majority of deals in head-to-head combat.
Melissa Franke: At the center of our unique architecture is the rubric preemptive recovery engine, our natively integrated platform.
Melissa Franke: Honestly and automatically scans, all protected data and identities across our customers' entire ecosystems to recalculate clean recovery points and our ability to recompete metadata.
Melissa Franke: Unlocked the necessary data context, and tooling needed to recover quickly from a cyber attack.
Melissa Franke: Legacy backup as well as new Gen backup vendors.
Melissa Franke: This proactive capability because their solutions wherein natively built for it.
Melissa Franke: And their capabilities are often bolted on from acquisitions or from third party tools.
Melissa Franke: These reasons, we win the vast majority of deals in head to head competition.
Bipul Sinha: Now, let me talk about innovation. We continue to innovate across data security and AI vectors as we tackle more and more complex problems for our. Rubrik employs a unique portfolio approach to S-curves, managing innovations at different stages to maintain maximal momentum while preparing for what's to come.
Melissa Franke: Now, let me talk about innovation.
Melissa Franke: Continue to innovate across data security and AI vectors, as we tackle more and more complex problems for our customers.
Speaker Change: Rubric employs a unique portfolio approach to.
Speaker Change: Managing innovations at different stages to maintain maximum momentum while preparing for what's next let me expand on that for this we live in an age of technology acceleration.
Bipul Sinha: Let me expand on that further. We live in an age of technology acceleration. Microsoft took 20 years to become a household name. Facebook two years and ChatGPT just three months. Rapid technology changes means businesses must reorient and evolve constantly. The key to building an enduring institution in this technology era is to continuously layer concurrent S-curves. To achieve this, we use the combination of forward motion, which focuses on scaling current successes such as our cyber-resilient data protection business, as well as lateral motion, which focuses on a portfolio of new initiatives to unlock shared S-curves. Our Forward Motion team is expanding our cyber-resilient data protection solutions across new applications and workflows.
Speaker Change: Microsoft took 20 years to become a household name Facebook two year <unk> just three months.
Speaker Change: Technology changes means businesses must reorient and evolve constantly Keith.
Speaker Change: Key to building an enduring institution in this technology is to continuously layered concurrent at clubs to achieve this we use the combination of forward motion, which focuses on the scaling current successes such as our cyber resilience data protection business as well as lack of emotion.
Speaker Change: Focusing on our portfolio of new initiatives to unlock that scope.
Speaker Change: Our fiber portion team is expanding our cyber resilient data protection solutions across new applications and workloads.
Bipul Sinha: while exploring new routes to market, accelerating distribution networks, serving new customers, and expanding our value proposition within our customer. But you can't just rely on forward motion to achieve sustained success. Failing to innovate could lead to eventual stagnation. In fact, we deploy a specialized team as Lateral Motion to discover new product market fit and launch innovative initiatives to unlock the next S-curves. We already have a track record here, as we have successfully built our M365 protection solution from a scatch to a scale-down. We are using the same approach to introduce a new identity-resilient solution that brings identity and data context together for the first time in their lives.
Speaker Change: While exploring new routes to market accelerating distribution network, serving new customers and expanding our value proposition within our customer base.
Speaker Change: But you can't just rely on forward motion to achieve sustained success.
Speaker Change: Failing to innovate could lead to eventual stagnation in fact, it deploys a slice team as lateral motion to discover new product market fit and launch innovative initiatives to unlock the next S curve, we already have a track record here as we have successfully built our <unk> hundred 65 protection.
Speaker Change: Solution from a sketch to scale business.
Speaker Change: We are using the same approach to introduce new identity resilient solution that brings identity and data context together for the first time in the industry.
Bipul Sinha: Rubrik's innovation engine is powered by our unique platform. One that combines data and metadata across enterprise, cloud, and SaaS applications. as well as Identity. The Rubrik platform uniquely brings data security and cyber recovery together to deliver comprehensive cyber resilience for both data and IT. This makes us a true platform.
Speaker Change: Robotics innovation engine is powered by our unique platform architecture.
Speaker Change: One that combines data and metadata.
Speaker Change: <unk> enterprise cloud and SaaS applications as well as identity providers the.
Speaker Change: The rubric platform uniquely bring data security and cyber recovery together to deliver a comprehensive cyber resilience for both data and identity.
Speaker Change: This makes us a true platform company, let me explain further Ruby.
Bipul Sinha: Let me explain further. Rubrik manages mission-critical business data as the common unit of currency across the whole organization. Our platform strategy allows us to innovate faster and deliver effective solutions to critical challenges at the epicenter of data security. All our solutions leverage the same underlying preemptive recovery engine to deliver risk and remediation solutions across data and IT. In fact, our customers realize more value from the Rubrik platform as they adopt more Rubrik products. This is because our platform gets smarter as we cover more of our customers' data and identity landscapes.
Speaker Change: <unk> manages mission critical business data as the common unit of currency across the whole organization.
Speaker Change: Our platform strategy allows us to innovate faster and deliver effective solutions to critical challenges at the epicenter of data security and AI all our solutions leverage the same underlying preemptive recovery engine to deliver risk and remediation solutions across data and identity.
Speaker Change: In fact, our customers to realize more value from the ruble platform as they adopt more rubric products and solutions. This is because our platform gets smarter as we go with more of our customers' data and identity landscape.
Bipul Sinha: Let me detail some of the opportunities and wins across our initiatives at varying. If you recall, our forward motion is propelling our cyber-resilient data protection business from scale to super-scale. As companies shift deeper into cloud and gen AI, they choose Rubrik to deliver comprehensive cyber resilience and quicker cyber recovery time across clouds.
Speaker Change: Let me detail some of the opportunities and wins across our initiatives aggregating a scale.
Speaker Change: You'll recall our forward motion is propelling our cyber resilience data protection business from a scale to super scale.
Speaker Change: As companies shift deeper into cloud engine AI tools.
Speaker Change: <unk> rubric to deliver a comprehensive cyber resilience and quicker recovery times across clubs. After many examples let me give you a specific wins from this quarter.
Bipul Sinha: Of the many examples, let me give you two specific wins from this quality. The first, a major U.S. pharmacy solutions company selected Rubrik as their cyber-resilience partner for their cloud. We not only replaced a long-time legacy vendor, but also out-competed a new-gen vendor. Key differentiators included Rubrik's clean and rapid cyber recovery, hybrid cloud scalability, and the simplicity of our Rubrik Security Cloud or RSC. The customer adopted RSC Enterprise Edition. unstructured data protection and SAS data protection for M3C. This customer also combined our DSPM and identity recovery solutions for complete cyberism. while being a design partner for our Annapurna AI.
Speaker Change: The first a major U S pharmacy solutions company selected Rubig.
Speaker Change: Cyber resilience partner.
Speaker Change: Their cloud transformation.
Speaker Change: We not only replace a longtime legacy vendor, but also out compete at our new Gen vendor.
Speaker Change: <unk> included Rubik's clean and rapid recovery hybrid cloud scalability and the simplicity of a rubik's security cloud our Odyssey platform the customer adopted Odyssey Enterprise edition.
Speaker Change: Unstructured data protection and SaaS data protection for MTI 65.
Speaker Change: This customer also combined our DSP EM and identity recovery solution for complete cyber resilience.
Speaker Change: While being a design partner for our <unk> AI products.
Bipul Sinha: And the second, a large European insurer chose Rubrik. RSC Enterprise Edition with unstructured data protection to protect critical structured and unstructured data across cloud and enterprise environments. Rubrik was chosen over competitors.
Speaker Change: And the second a large European insurers chose rubric.
Speaker Change: Odyssey Enterprise edition with unstructured data protection to protect critical is structured and unstructured data across cloud and enterprise environments.
Speaker Change: We were chosen over competitors.
Bipul Sinha: for our ability to meet and exceed board level cyber recovery time objectives for critical business.
Speaker Change: Our ability to meet and exceed board level cyber recovery time objectives for critical business services.
Bipul Sinha: This customer also noted our simplicity, cost effectiveness, and superior performance in securing significant cloud Let me shift gears and talk about four key cloud innovations that deliver differentiated First, we introduced Code2Cloud Cyberism. As a result, we can now protect from the first line of code to the full stack of applications in product. Second, we created new purpose-built technology for advanced protection of cloud-relational databases, starting with AWS. Third, we expanded our cyber resilience capabilities for Google Cloud. And finally, we also introduced Rubrik for Oracle Cloud Infrastructure, essentially strengthening critical coverage of all four major hyperscalers.
Speaker Change: This customer also noted our simplicity cost effectiveness and superior performance in securing significant cloud workloads.
Speaker Change: Let me shift gears and talk about four key cloud innovations that deliver differentiated product.
Speaker Change: First we introduced core to cloud cyber resilience.
Speaker Change: As a result, we cannot protect from the first line of code to the full stack of applications in production.
Speaker Change: We created new purpose built technology for advanced protection of cloud relational databases, starting with AWS ideas.
Speaker Change: We expanded our cyber resilience capabilities for Google Cloud and finally, we also introduced rubric for Oracle cloud infrastructure essentially strengthening critical coverage of all four major Hyperscale is ultimate.
Bipul Sinha: Ultimately, our differentiation in cloud protection is built on our assumed breach approach. To deliver this, we combine DSPM and cyber recovery natively on our RSC platform. which is powered by our native data threat and preemptive recovery engines to achieve complete cyberism.
Speaker Change: Ultimately our differentiation and cloud protection is built on our assume breach approach.
Speaker Change: To deliver this we combined DSP and cyber recovery natively on our Odyssey platform, which is powered by our native data cut and preemptive recovery engines.
Speaker Change: Achieved complete cyber resilience.
Bipul Sinha: No one else.
Speaker Change: No one else does this.
Bipul Sinha: Now let me highlight a few customer wins with cloud and SaaS. This quarter. A Fortune 500 financial services company expanded its Rubrik deployment by adding Cloud Protection Enterprise Edition for its complete Azure environment. Our POC showed not only significantly faster recovery time, but also a 25% saving in cloud costs over three years compared to their existing cloud-native backup. This customer also added Identity Recovery for Entra ID, enhancing their M365 protection for more than $10,000.
Speaker Change: Now, let me highlight a few customer win with cloud and SaaS protection this quarter.
Speaker Change: A fortune 500 financial services company expanded its deployment by adding cloud protection Enterprise edition, what is complete agile environment.
Speaker Change: Our POC sword, not only significantly faster recovery times, but also a 25% savings in cloud cost over three years.
Speaker Change: <unk> to their existing cloud native backup solution.
Speaker Change: This customer also added identity recovery for <unk> enhancing the empty 65 protection for more than 10000 users a global quantum computing company chose the rubric this quarter to safeguard their vital that data resilience and availability are crucial in their industry their legacy backup provider.
Bipul Sinha: A global quantum computing company chose Rubrik this quarter to safeguard their vital SAS data. Resilience and availability are crucial in their industry. Their legacy backup provider posed too many security vulnerabilities and was ill-equipped to secure cloud workloads at speed and scale.
Speaker Change: <unk>.
Speaker Change: Too many security vulnerabilities and was elected to secure cloud workloads at the speed and scale.
Bipul Sinha: In under two months, they transitioned to Rubrik as their unified platform, now securing critical workloads such as M365, Jira, and As I mentioned before, we are leveraging the lateral motion approach to scale our data security posture management, or DSTM, and identity resilience. Together these solutions help customers achieve cyber resilience by bringing identity and data context together with cyber recovery to solve cyber security challenges before, during, and after an Let me discuss our opportunity in identity. Active Directory and Enter ID are the backbones of identity for companies. However, their ubiquity makes them prime targets The attackers go after identity infrastructure because it gives them access to all the critical And when identity systems are compromised...
Speaker Change: In under two months the transition to rubric as their unified platform now securing critical workloads, such as <unk> hundred 65 data and Salesforce.
Speaker Change: As I mentioned before we are leveraging the lateral motion approach to scale, our data security posture management, our DSP EM and identity resilient solutions together. These solutions help customers achieve cyber resilience by bringing identity and data context, together with Teva recovery to solve cyber security.
Speaker Change: LNG is before during and after an attack let me discuss our opportunity in identity resilience.
Speaker Change: And then right at the backbones of identity for companies worldwide.
Speaker Change: Via the ubiquity makes them prime targets for attacks.
Speaker Change: Attackers Walker identity infrastructure.
Speaker Change: Because it gives them access to all the critical data.
Speaker Change: And then I think it is systems are compromised.
Bipul Sinha: Every subsequent recovery effort becomes exponentially more. see a huge opportunity in securing.
Speaker Change: The subsequent recovery effort becomes exponentially more complex.
Speaker Change: We see a huge opportunity in securing identity.
Bipul Sinha: Our newly released Identity Recovery Solution has seen notable momentum due to our unique ability to orchestrate hybrid cloud recovery across Active Directory and Enter ID, all while avoiding malware. This transforms identity recovery times from weeks to under.
Speaker Change: Our newly released identity recovery solution has seen notable momentum due to our unique ability to orchestrate hybrid cloud recovery across active directory and <unk>.
Speaker Change: All while avoiding malware introduction.
Speaker Change: This transforms identity recovery times from weeks to Enernoc.
Bipul Sinha: I already mentioned a few customer wins for identity recovery, but let me add a few more. A major U.S. hospital network added Rubrik Identity Recovery in Q1.
Speaker Change: I already mentioned, a few customer wins for identity recovery, but let me add a few more a major U S Hospital network added rubric identity recovery in Q1.
Bipul Sinha: Choosing Rubrik over a stand-alone identity recovery complex. This represents the customer's third expansion. Since their initial purchase in August. Additionally, a large U.S.
Speaker Change: Using rubric or Standalone identity recovery compensated.
Speaker Change: This represents the customers' current expansion.
Speaker Change: Since their initial purchase in August of last year.
Speaker Change: Additionally, a large use of state county expanded with rubric to bolster their cyber resilience after a significant ransomware attack impacted a nearby county.
Bipul Sinha: state county expanded with Rubrik to bolster its cyber resilience after a significant ransomware attack impacted a nearby county. This customer added rubric AD Forest Recovery and added RSC Enterprise Edition to ensure minimal disruption in the face of an inevitable pandemic.
Speaker Change: This customer added rubric 80 forest recovery and added Odyssey enterprise edition to ensure minimal disruption in the face of an inevitable cyber attack loss.
Bipul Sinha: Thank you.
Bipul Sinha: Lastly, I'll spend a minute talking about some of our longer term initiatives, such as Rubrik. Rubrik Annapurna is designed to help break through the barriers preventing Gen-AI applications from broad-based enterprises. This solution enables secure and scalable Gen-AI by leveraging Rubrik's unique ability to extract, manage, and secure business data.
Speaker Change: Lee I'll spend a minute talking about some of our longer term initiatives that says it will break and importantly, we will be kind of a coordinated designed to help break through the barriers preventing Jenny I applications from broad based enterprise deployment.
Speaker Change: This solution enables secure and scalable danai by leveraging <unk> unique ability to extract managed and secured business data. The most important real estate in genetics and a corner now integrates with Google agent space facilitating secured <unk> deployment.
Bipul Sinha: The most important realist. Annapurna now integrates with Google Agent Space, facilitating secure Gen-AI deployment. on Google.
Speaker Change: Google Cloud.
Bipul Sinha: We are in the early phases of optimizing product market fit for Rubrik. We plan to add more capabilities and investment. to help organizations deliver secured Gen AI applications.
Speaker Change: We are in the early phases of optimizing product market fit for it will be kind of format, we plan to add more capabilities and investment.
Speaker Change: To help organizations deliver secure gen AI applications faster.
Bipul Sinha: As a reminder, this is a multi-year initiative to bring our Gen-AI solution. from zero to one and then to it. Just as our successes in cyber resilience was built through the years of dedicated effort and calculated.
Speaker Change: As a reminder, this is a multiyear initiative to bring our Gen AI solutions from.
Speaker Change: From zero to one and then to escape.
Speaker Change: Yes.
Speaker Change: And cyber resilience was built through the years of dedicated effort and calculated market risk <unk>.
Bipul Sinha: In closing, I would like to share my personal First, thank you to my fellow Rubrik Inc. Your unwavering customer focus and disciplined execution have given us an incredibly strong start to the year. As a result, we continue to win the cyber resilience market, and I believe our opportunity is bigger.
Speaker Change: In closing I would like to share my personal gratitude.
Speaker Change: Thank you to my fellow Rubicon, your unwavering customer focus and disciplined execution have given us an incredibly strong start to the year.
Speaker Change: As a result, we continue to win the cyber resilience market and I believe our opportunity is bigger than ever.
Bipul Sinha: Also, a big thank you to our customers and partners, your trust in us to secure your data and business pushes us to continue to define the frontiers of cybersecurity. And lastly, thank you to you, our shareholders, for your continued support and trust. We are just getting started. The best is yet to come.
Speaker Change: Also a big thank you to our customers and partners.
Speaker Change: Trust in us to secure your data and business processes to continue to define the frontiers of cyber security.
Speaker Change: And lastly, thank you to you our shareholders for your continued support and trust.
Speaker Change: We're just getting started the best is yet to come that I am pleased to pass it over to our Chief Financial Officer Darren chartering.
Kiran Choudary: With that, I'm pleased to pass it over to our Chief Financial Officer, Kiran Choudary. Thank you, Bipul. Good afternoon, everyone, and thank you for joining us today. Q1 was a strong start to our fiscal year, demonstrating our continued leadership in the growing market for cyber resilience. Strong market drivers, a competitive positioning, and a unique land-and-expand strategy fueled another quarter of solid top-line growth at scale. We also saw strong and continued improvement in profitability.
Speaker Change: Thank you good.
Speaker Change: Good afternoon, everyone and thank you for joining us today.
Speaker Change: Q1 was a strong start to our fiscal year, demonstrating our continued leadership in the growing market for cyber resilience.
Speaker Change: Strong market drivers, our competitive positioning and our unique land and expand strategy fueled another quarter of solid top line growth at scale.
Speaker Change: We also saw strong improvement in profitability we.
Kiran Choudary: We are pleased to have exceeded all guided metrics in Q1, and we are raising our out... Let me start by briefly recapping our first quarter fiscal 2026 financial results.
Speaker Change: We are pleased to have exceeded all guided metrics in Q1, and we are raising our outlook.
Speaker Change: Let me start by briefly recapping, our first quarter fiscal 2026 financial results and key operating metrics and then I'll provide guidance for the second quarter and full year fiscal 2026.
Kiran Choudary: key operating metrics and then I'll provide guidance for the second quarter and full year fiscal 2022. All comparisons, unless otherwise noted, are on a year-over-year basis. We are very pleased to have ended Q1 with subscription ARR of $1.18 billion, growing 38%. We added $89 million in net new subscription ARR. We continue to drive adoption of our Rubrik security cloud, which resulted in $972 million of cloud ARR up 60%. Our differentiated LAN and expand model benefits from multiple avenues to gain new customers and grow our footprint after the initial contract. Expansion occurs through increased data and existing applications, securing more applications, or adding more security functionality.
Speaker Change: All comparisons unless otherwise noted.
Speaker Change: On a year over year basis.
Speaker Change: We are very pleased to have ended Q1 with subscription error of one product one 8 billion growing 38%.
Speaker Change: Added $89 million and net.
Speaker Change: Naval subscription era.
Speaker Change: We continue to drive adoption of our robotics equity cloud, which resulted in $972 million.
Speaker Change: They are up 60% or.
Speaker Change: Our differentiated a land and expand model benefits from multiple avenues to gain new customers and grow our footprint. After the initial contract expansion in our customer increased data and existing applications for carrying more applications are adding more security functionality.
Kiran Choudary: As a result, we continue to see a strong subscription net retention rate, which remained over 120% in the first quarter. All vectors of expansion are healthy contributors to our NRR. Highlighting the meaningful runway, we have to more deeply penetrate our customer base. Adoption of additional security functionality contributed slightly more than 30% of our subscription net retention rate in the quarter. We ended the first quarter with 2,381 customers with subscription ARR of $100,000 or more, up 28%. These larger customers now contribute 85% of our subscription ARR up from 81% in the year-ago period, as we become an increasingly strategic partner to our enterprise customers.
Speaker Change: As a result, we continue to see a strong subscription net retention rate, which remained over 120% in the first quarter.
Speaker Change: All vectors of expansion of our healthy contributors to R&R highlighting the meaningful runway, we have to more deeply penetrate our customer base.
Speaker Change: Adoption of additional security functionality contributed slightly more than 30% of our subscription net retention rate in the quarter.
Speaker Change: We ended the first quarter were 2381 customers with subscription and <unk>.
Speaker Change: <unk> thousand dollars are more up 28%.
Speaker Change: These larger customers now contribute 85% of our subscription IRR up from 81% in the year ago period, as we become an increasingly strategic partner to our enterprise customers for our first quarter subscription revenue was $266 million.
Kiran Choudary: For our first quarter, subscription revenue was $266 million, up 54%. Total revenue, $278 million, up 49%. Revenue in Q1 benefited from our strong ARR growth and tailwinds from our cloud transformation journey. We also saw higher non-recurring revenue, which was accounted for as material rights related to our cloud transformation. This contributed approximately 7 percentage points to revenue growth this quarter, which was a few percentage points above our expectations. Turning to the geographic mix of revenue, revenue from the Americas grew 51% to $203 million, revenue from outside the Americas grew 43% to $75 million.
Speaker Change: 54% total revenue $278 million up 49% revenue in Q1 benefited from a strong ore growth and tailwind from a cloud transformation journey.
Speaker Change: We also saw higher nonrecurring revenue, which was accounted for as material rights related to our cloud transformation.
Speaker Change: <unk> contributed approximately seven percentage points to revenue growth this quarter, which was a few percentage points of our expectations.
Speaker Change: Turning to the geographic mix of revenue revenue from the Americas grew 51% to $203 million Rev.
Speaker Change: Revenue from outside the Americas grew 43% to $75 million.
Kiran Choudary: Before turning to gross margins, expenses, and profitability, I would like to note that I'll be discussing non-GAAP results going forward. Our non-GAAP gross margin was 80.5% in the first quarter compared to 75.4% in the year ago. Our gross margin benefited from the revenue and performance, including higher non-recurring revenue and the improved efficiency of our customer support organization. We anticipate total gross margin to remain within our long-term target of 75% to 80% in fiscal 2021. As a reminder, we look at subscription ARR contribution margin as a key measure of operating level. We believe the improvement in our subscription AR contribution margin demonstrates our ability to drive operating leverage and profitability at scale.
Speaker Change: Before turning to gross margins expenses and profitability I would like to note that I'll be discussing non-GAAP results going forward.
Speaker Change: Our non-GAAP gross margin was 85% in the first quarter compared to 75, 4% in the year ago period.
Speaker Change: Gross margin benefited from the revenue outperformance, including higher nonrecurring revenue and the improved efficiency of our customer support organization.
Speaker Change: We anticipate total gross margin to remain within our long term target of 75% to 80% in fiscal 2026.
Speaker Change: As a reminder, we look at subscription contribution margin as a key measure of operating leverage.
Speaker Change: We believe the improvement of our subscription contribution margin demonstrates our ability to drive operating leverage and profitability at scale.
Kiran Choudary: Subscription ARR contribution margin was positive 8% in the last 12 months ended April 30th compared to negative 11% in the year ago period, an improvement of over 1,800 basis. When normalizing for the $23 million in employer payroll taxes associated with the IPO in the prior period, the improvement was over 1,500 basis points. The improvement in subscription ARR contribution margin was driven by higher sales, the benefits of scale, and improving efficiencies and management of costs across the business.
Speaker Change: Subscription that our contribution margin was positive <unk>, 8% in the last 12 months ended April 30, <unk> compared to negative 11% in the year ago period, an improvement of over 800 basis points.
Speaker Change: When normalizing for the $23 million in employer payroll taxes associated with the IPO in the prior period the improvement was our 1500 basis points.
Speaker Change: The improvement in subscription air our contribution margin was driven by higher sales to the benefits of scale and improving efficiencies in the management of cost across the business.
Kiran Choudary: Pre-cash flow was positive $33 million compared to negative $37 million in the first quarter of fiscal 2025, or negative $16 million when adjusting for the $21 million in employer payroll taxes associated with IT. This increase was driven by higher sales and improved operating leverage, offset by an increasing mix of annual and monthly payment terms and shorter contract terms related to the year-over-year period.
Speaker Change: Free cash flow was positive $33 million compared to negative $37 million in the first quarter of fiscal 2025 or negative $16 million when adjusting for the $21 million and employer payroll taxes associated with our IPO.
Speaker Change: This increase was driven by higher sales and improved operating leverage offset by the increasing mix of annual and monthly payment terms and shorter contract terms related to the year ago period.
Kiran Choudary: Turning to our balance sheet, we ended the quarter in a strong cash position with $762 million in cash, cash equivalents, restricted cash, and marketable securities, and $323 million in debt.
Speaker Change: Turning to our balance sheet, we ended the quarter in a strong cash position with $762 million in cash cash equivalents restricted cash and marketable securities and $323 million index.
Kiran Choudary: Let me now provide some context or outlook for fiscal 2020. We remain confident about the strength of the cyber resilience market and demand for a differentiated offer. We believe these drivers, alongside our strong and consistent execution, will deliver strong subscription ARR growth ahead. In terms of operating investments, we'll continue to invest in R&D to drive innovation in the large and growing markets we operate in across data, security, and AI. We'll also continue to make investments and go to market where we see the most compelling ROI across select regions and verticals and to find product market fit and scale our new innovation.
Speaker Change: Let me now provide some context for our outlook for fiscal 2026.
Speaker Change: We remain confident about the strength of the cyber resilience market and demand for our differentiated offerings.
Speaker Change: We believe these drivers alongside our strong and consistent execution will deliver strong subscription growth ahead.
Speaker Change: In terms of operating investments, we will continue to invest in R&D to drive innovation in the large and growing markets, we operate in across data security and AI.
Speaker Change: Also continued to make investments in go to market, where we see the most compelling ROI across select regions and verticals and to find product market fit and scale up new innovations let.
Kiran Choudary: Let me discuss our current outlook on quarterly seasonality. After our strong Q1, we anticipate that the first half of the fiscal year will contribute approximately 46% of the total net new subscription ARR with the remaining approximately 54% expected in the second half. In addition, subscription ARR contribution margin has some seasonality due to the timing of net new subscription ARR and operating expenses each quarter. Based on our current net new ARR linearity and investment plan. We continue to anticipate that subscription contribution margins will be the seasonally lowest in Q3 before moving higher in Q4.
Speaker Change: Let me discuss our current outlook on quarterly seasonality.
Speaker Change: After a strong Q1, we anticipate that the first half of the fiscal year will contribute approximately 46% of the total net new subscription <unk> with the remaining approximately 54% expected in the second half in addition.
Speaker Change: Descriptions are our contribution margin has some seasonality due to the timing of net new subscription <unk> and operating expenses each quarter.
Speaker Change: Based on our current net new era linearity and investment plans we.
Speaker Change: Continue to anticipate that subscription contribution margins will be the seasonally lowest in Q3 before moving higher in Q4.
Kiran Choudary: Please see additional modeling points for fiscal 2026 on slide 31 of our investor presentation. which can be found on our Investor Relations website.
Speaker Change: Do you see additional modeling points for fiscal 2026 on slide 31 of our Investor presentation, which can be found on our Investor Relations Web site.
Kiran Choudary: Now turning to our guidance for the second quarter and full year fiscal 2020. In Q2, we expect revenue of $281 million to $283 million, up 37% to 38%. We expect non-GAAP subscription AR contribution margins between 4.5% and 5.5%. We expect non-GAAP earnings per share of negative $0.35 to negative $0.33 based on approximately 196 million weighted average shares outstanding.
Speaker Change: Now turning to our guidance for the second quarter and full year fiscal 2026 in Q2, we expect revenue of $281 million to $283 million up 37% to 38%, we expect non-GAAP subscription ore contribution margins between four 5% and five 5% we expect non.
Speaker Change: GAAP earnings per share of negative <unk>.
Speaker Change: <unk>.
Speaker Change: The negative 33 based on approximately 196 million weighted average shares outstanding.
Kiran Choudary: For the full year fiscal 2026, we expect subscription ARR in the range of $1,380,000,000 to $1,388,000,000, reflecting a year-over-year growth rate of 26% to 27%. We expect total revenue for the full year of fiscal 2026 in the range of $1,179,000,000 to $1,189,000,000, reflecting a year-over-year growth rate of 33% to 34%. We expect non-GAAP subscription ARR contribution margins of approximately 6%. We expect non-GAAP earnings per share of negative $1.02 to negative $0.96 based on approximately 198 million weighted average shares outstanding for the full year.
Speaker Change: Full year fiscal 'twenty for Asics, we expect subscription <unk> in the range of $1 $380 million to $1.388 billion, reflecting a year over year growth rate of 26% 27%.
Speaker Change: We expect total revenue for the full year fiscal 226 in the range of $1 billion $179 million.
Speaker Change: $1 billion $189 million.
Speaker Change: Reflecting a year over year growth rate of 33%, 34% <unk>.
Speaker Change: We expect non-GAAP subscription contribution margins of approximately 6%, we expect non-GAAP earnings per share of negative $1 <unk> to negative 96.
Speaker Change: Based on approximately 198 million weighted average shares outstanding for the full year.
Kiran Choudary: We expect free cash flow, $65 million to $75 million.
Speaker Change: We expect free cash flow $65 million or <unk> $75 million.
Kiran Choudary: In closing, we are pleased with a strong start to our second year as a public company and a higher outlook for fiscal 2020. We remain confident in our ability to deliver efficient and durable growth as a market leader in cyber resistance.
Speaker Change: In closing we are pleased with our strong start to our second year as a public company and a higher outlook for fiscal 2026, we remain confident in our ability to deliver efficient and durable growth as a market leader in cyber resilience with.
Operator: With that, we'd like to open up the call for any questions. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touchstone phone. You will hear a prompt that your hand has been raised. If you would like to decline from the polling process, please press star followed by the number 2. We will be taking only one question per participant. If you are using a speakerphone, please make sure to lift your handset before pressing any key.
Speaker Change: That we'd like to open up the call for any questions.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: Should you have a question. Please press star followed by the number one on your Touchtone phone, you'll hear a prompt that your hand has been arranged she'd.
Speaker Change: I would like to decline from the polling process. Please press star followed by the number too.
Speaker Change: We will be taking only one question per participant.
Speaker Change: You are using a speaker phone. Please make sure that you lift your handset before pressing any case on.
Operator: One moment while we prepare our Q&A roster.
Speaker Change: One moment, while we prepare our Q&A roster.
Saket Kalia: Your first question comes from the line of Saket Kalia from Barclays. Please go ahead. Okay, great. Hey guys, thanks for taking my question here. A nice start to the year. Thank you.
Speaker Change: Your first question comes from the line of <unk>.
Speaker Change: From Barclays. Please go ahead.
Speaker Change: Okay, Great Hey, guys. Thanks for taking my question here and nice start to the year.
Speaker Change: Thank you.
Saket Kalia: Bipul, maybe I'll make them one question. You know, I think we all We all think about the share shift that's happening in this market from legacy to next gen, which is clearly benefiting. But I'm curious, how long of a runway do you think that has? And particularly with some of the points that you're making on identity. Do you think the move to cyber resilience is expanding this TAM at all that's available for Brooklyn? Does that make sense?
Speaker Change: People, maybe maybe I'll make the one question for you.
Speaker Change: I think we all.
Speaker Change: We all think about the share shift that's happening in this market from legacy to Nextgen, which is clearly benefiting rubric.
Speaker Change: But I am curious how long of a runway do you think that has.
Speaker Change: And particularly with some of the points that you are making on identity do.
Speaker Change: Do you think the move to cyber resilience is expanding the Tam at all that's available for for conversion does that makes sense.
Bipul Sinha: Absolutely. So Saket, if you take a step back, Rubrik is a two-platform company. We actually took on legacy backup and recovery and transformed that into a data security platform to deliver cyber resilience. And this Rubrik security cloud has built in preemptive recovery engine that takes the cyber recovery time from weeks and months to hours. And that is what is making us win. We are the only vendor that provides comprehensive cyber resilience across data and identity, both across risk and remediation. And because of our unique offering and platform approach, we are winning customers, and we are winning vast majority of the deal in head-to-head competition.
Speaker Change: Absolutely.
Speaker Change: Two socket.
Speaker Change: Step back rubric as.
Speaker Change: Platform company.
Speaker Change: Chile took on legacy backup and recovery and transform that into a data security platform to deliver cyber resilience and this will be security cloud has built in preemptive recovery engine that takes the fiber recovery timeframe.
Speaker Change: The weeks and months to hours.
Speaker Change: And that is what is making us when we add the only vendor.
Speaker Change: That provides comprehensive cyber resilience across.
Speaker Change: Data and identity, both across risk and remediation and because of our unique offering and platform approach. We are winning customers and we are winning vast majority of the deal in head to head competition.
Bipul Sinha: And this new identity resilience angle is expanding our time. because not only data risk comes from ransomware and other data sensitivity, but the identity stealing and identity-based attacks are on the rise in a very significant way. And we are giving our customer a peace of mind against those attacks. And that's what is helping us to deliver end-to-end cyber resilience, which is very unique in the marketplace. And we are the only ones doing it.
Speaker Change: And this new identity resilience angle is expanding our Tam.
Speaker Change: Because not only data risk comes from ransomware, and and other data sensitivity, but the identity stealing and identity based attacks are on the rise and a very significant way and we are giving our customer a peace of mind against those attacks and Thats why.
Speaker Change: It is helping us to deliver end to end cyber resilience, which is very unique in the marketplace and we are the only ones doing it to give you. An example, a world renowned cancer Medical center to replace their legacy back a vendor and we also hold competed and associated new Gen vendor.
Bipul Sinha: To give you an example, a world-renowned cancer medical center replaced their legacy backup vendor. And we also out-competed an associated new-gen vendor. And they chose RSC Enterprise Edition because of our demonstrated ability to not only deliver the fastest cyber recovery at scale, but also give them the complete risk information.
Speaker Change: And they chose RFC enterprise edition because of our demonstrative the ability to not only deliver the fastest fiber recovery.
Speaker Change: Scale, but also give them the complete risk information.
Saket Kalia: So this is an example of why customers are choosing us, how we are displacing legacy vendors, and expanding the market and TAM by combining data and identity. Very helpful. Thanks, guys. Thank you.
Speaker Change: So this is an example of why customers are choosing us how we are displacing legacy vendors and expanding the market and Tam by combining data and identity.
Speaker Change: Very helpful. Thanks, guys.
Kasthuri Rangan: Next question. Your next question is from the line of Kasthuri Rangan from Goldman Sachs. Please ask your question. Yeah, thank you very much and congratulations to the Rubrik team on a spectacular start to the fiscal year. Bipul, one for you, as you continue to innovate, add functionality at a pretty rapid pace, and the market continues to be receptive in that it's not just replacement time, but replacement time and some more. What is happening to sales cycles, the broader awareness of what Rubrik can do, replacement cycles of older legacy technology? Could we be at a point where we're at the front end of what could be an S-curve of adoption, and we maybe are at a point where what used to be obscure in the backwaters is now all of a sudden more front and center?
Speaker Change: Thank you next question.
Speaker Change: Your next question is from the line of Cashback Rangan from Goldman Sachs. Please ask your question.
Cashback Rangan: Yes, Thank you very much and congratulations rubric team on a spectacular start to the fiscal year.
Cashback Rangan: Before one for you as you continue to innovate add functionality.
Speaker Change: Pretty rapid pace.
Speaker Change: The market continues to be receptive and that this is not just a replacement.
Speaker Change: For replacement Tam and some more.
Speaker Change: What is the.
Speaker Change: What is happening to sales cycles, the broader awareness award rubric can do.
Speaker Change: Replacement cycles of older legacy technology could could we be at a point where we're at.
Speaker Change: At the front end of what could be an S.
Speaker Change: Curve of adoption.
Speaker Change: Maybe you are at the point, where what used to be obscure and the back orders is now all of a sudden more front and center and maybe I'm overstating the case, but I'm sure you have a strong view of that thank you.
Kasthuri Rangan: Maybe I'm overstating the case, but I'm sure you have a strong view on that.
Bipul Sinha: Absolutely, Kash. If you if you think about the current market environment we are in, which is generative AI and productivity gain Genitive AI is pushing all enterprises and governments to really re-platform and modernize their infrastructure to take care of, to take advantage of Genitive AI opportunity. But Genitive AI is all about data and understanding data, integrity in the data, and security in the data. And that's Rubrik's business. We have picked our whole company on data security. That's what we built a data security platform by transforming legacy backup and recovery. So we definitely believe that we are on the front end of a very long, large, secular trend around data, security, and AI.
Speaker Change: Absolutely Kash.
Speaker Change: If you think about.
Speaker Change: The current market environment, we are in which is generative AI and productivity gains.
Speaker Change: <unk> is pushing.
Speaker Change: All enterprise and governments to really re platform and modernize their infrastructure to take care of to take advantage of generative AI opportunity. What <unk> is all about data and understanding data integrating the data and security in the data.
Speaker Change: <unk> business.
Speaker Change: We have baked our whole company and data security because that's what we built a data security platform by transforming legacy backup and recovery. So we are definitely believe that beyond the front end of a very long large secular trend.
Speaker Change: Round data security and AI.
Bipul Sinha: And as our customers transform and adopt more cloud as they use Gen-AI, we are actually helping them have confidence and peace of mind that their services will be up. They can actually feed safe data into their Gen-AI application. Just to give you a sense of what is happening with replacement, a very large Japanese industrial company that had multiple native cloud backup tools, they replaced all of them with Rubrik security cloud protection to safeguard critical AWS, Azure plus Oracle workloads. And Rubrik was selected over a new gen vendors because of our unique ability to mitigate cyber threats and deliver cyber resilience, cyber recovery at lower cost.
Speaker Change: And as our customers transform.
Speaker Change: And adopt more cloud as they use gen. AI, we are actually helping them have confidence and peace of mind that their services will be up they can actually feed safe data into the igen applications just to give you a sense of what is happening with replacement.
Speaker Change: A large Japanese industrial company.
Speaker Change: It had multiple native cloud backup tools. They replaced all of them that rubric security cloud protection to safeguard critical AWS Azure, plus Oracle workloads and Ruby was selected over a new gen vendors because of our unique ability to mitigate I would think.
Speaker Change: And and deliver cyber resilient cyber recovery at lower cost and we are serving cloud cost. So in some ways we are in.
Bipul Sinha: And we are saving cloud costs. So in some ways, we are delivering double impact. cyber resilience, plus cost saving, and making our customers secure and giving them the ability to take secure data and feed into gen AI, giving them the ability to confidently do cloud transformation. And these are some of the trends that are propelling us.
Speaker Change: Delivering double impact.
Speaker Change: Our resilience.
Speaker Change: Cost savings and making our customer secured and giving them the ability to take secured data and feed into ginnie Mae, giving them the ability to constantly.
Speaker Change: <unk> cloud transformation and these are some of the trends that are propelling us.
Kasthuri Rangan: Fantastic. Thank you so much. Thank you, Kash.
Speaker Change: Fantastic. Thank you so much.
Cashback Rangan: Thank you Kash next question.
Operator: Next question.
Andrew Nowinski: Your next question is from the line of Andrew Nowinski from Wells Fargo, please go ahead. Okay, thanks. Thanks, Melissa, for the question. Great quarter. I wanted to ask another question around identity resilience that you introduced at RSA. I think it's a really interesting product. It really could be a game changer, because no one else is combining identity with cyber resilience. So I'm wondering, I guess, first, is the integration with Laminar complete? And then with this new capability, allow customers to replace any sort of point products they may be using? with other identity security vendors?
Speaker Change: Your next question is from the line of Andrew The Winski from Wells Fargo. Please go ahead.
Speaker Change: Okay. Thanks, Thanks, Melissa for the question.
Speaker Change: Great quarter I wanted to ask another question around identity resilience that you introduced at RSA I think it's a really interesting product.
Speaker Change: It could be a game changer, because no one else is combining.
Speaker Change: Kennedy with cyber resilience. So I'm wondering I guess first is the integration with lamina are complete and then with this new capability allows customers to replace any sort of point products. They may be using with other identity security vendors.
Bipul Sinha: Thank you for this question. Let me give you a broader sense of our strategy and what we are doing. As I said before, Rubrik pegged its future on data security. But the source of data risk is both from the intrinsic data sensitivity plus the identity interaction on the data. And we have this strong point of view that to secure data, you need to understand data and understand data risk, as well as understand identity risk on data. The first step of this strategy was to acquire DSPM Laminar product that we have fully now integrated on the Rubrik platform.
Speaker Change: Thank you for this question, let me give you a broader sense of our strategy and what we are doing.
Speaker Change: As I said before rubric pegged as future on data security.
Speaker Change: But the source of data risk is both from the intrinsic data sensitivity.
Speaker Change: The identity interaction on the data.
Speaker Change: And we have this a strong point of view that through secured data you need to understand it.
Speaker Change: And understand data risk as well as understand identity with funded the first step of this strategy was to acquire ESPN.
Speaker Change: Product that we have fully now integrated on the <unk> platform in fact, our DSP and <unk> was up over 300% year over year this quarter, but that's not the point the point is cyber resiliency required both data resilience and identity raising.
Bipul Sinha: In fact, our DSPM ARR was up over 300% year over year this quarter. But that's not the point. The point is cyber resiliency requires both data resilience and identity resilience together. together in a single platform, delivered in a single way. Because you need to understand what data you have, what is the sensitivity of the data, who has access to the data, and who is doing what to your data. And by combining identity security with data context and data security, so essentially identity plus DSTM together, we are forging a whole new world of data security, which is complete and comprehensive.
Speaker Change: <unk> together.
Speaker Change: Together in a single platform delivered in a single single way because you need to understand what data you have.
Speaker Change: What is the sensitivity of the data who has access to the data and who is doing what your data and by combining.
Speaker Change: Identity.
Speaker Change: Curative mid data context, and data securities essentially identity, plus DSP them together, we are forging a whole new world.
Speaker Change: Off data security, which is complete and comprehensive.
Bipul Sinha: And that is our opportunity to replace point products across DSTM or purely identity recovery, because these two separate products don't create as much value when you bring it identity and data all together. And that's where we are seeing great momentum in identity recovery. Just to give you an example, a very large healthcare org experienced an outage with EntraID. And it took them a week to recover with the competing solutions that they had, and they brought in Rubrik to deliver faster cyber recovery and increase their resilience posture. And if you think about the identity and data combination I talked about, European Financial Institution chose Rubrik to put to detect and mitigate exfiltration risk, and which is around data, and that allowed them to be in compliance with DORA.
Speaker Change: And that is our opportunity to replace point products across the ESPN are purely identity recovery because these two separate products.
Speaker Change: Don't create as much value when you bring it identity and data altogether, and that's where we are seeing.
Speaker Change: Great momentum in identity recovery.
Speaker Change: Just to give you an example.
Speaker Change: The large healthcare experience an outage with anti Ied.
Speaker Change: And it took them a week to recover with the competing solutions that they had.
Speaker Change: The broader rubric to deliver faster cyber recovery and.
Speaker Change: Increased resilience posture.
Speaker Change: And if you think about.
Speaker Change: The identity and data combination I talked about European financial institution chose rubric.
Speaker Change: To detect and mitigate acceleration risk and which is around data and that allowed them to be in compliance with data.
Bipul Sinha: So we have a number of significant tailwinds, both in and around data and identity, and we are taking the unique approach of combining these two into a singular strategy, singular platform, singular product. And again, we always take a very long-term view of these things. Again, we are experimenting, iterating, figuring out how we package, how we sell, which solutions work with what, and we'll update you as we evolve our strategy, but we are definitely seeing great traction.
Speaker Change: So we have a number of significant.
Speaker Change: Tailwind.
Speaker Change: In and around data and identity and we are taking a unique approach of combining these two into a singular strategy similar platform similar product and again, we always take a very long term.
Speaker Change: View of these things again, we are experimenting a trait in figuring out how we package, how we sell which solutions work with what.
Speaker Change: Update you as we evolve this strategy, but we are definitely seeing great traction in this space.
Andrew Nowinski: That's very helpful, thank you. Thank you, Andy.
Speaker Change: That's very helpful. Thank you.
Speaker Change: Thank you Andy next question.
John DiFucci: Next question. Your next question is from the line of John DiFucci from Guggenheim Securities. Please ask your question. Thank you. My question is more of sort of a macro question. You're near the end of the reporting companies for this quarter. And we've generally seen some sort of suppressive effects of an uncertain macro backdrop, especially in security. Though I think of one other exception, just one, it has to do with identity, which you're talking about. It was CyberArk, but this is, you know, the suppressive effects don't show up in your numbers at all.
Speaker Change: Okay.
Speaker Change: Your next question is from the line of John <unk> from Guggenheim Securities. Please ask your question.
John: Thank you.
John: My question is more of sort of a macro question Youre near the end of the reporting companies for this quarter and we've generally seen some sort of suppressed as effects of an uncertain macro backdrop, especially in security.
John: I think of one other exception just one and it has to do with identity, which youre talking about.
Speaker Change: <unk>.
Jim: This is Jim.
Jim: The suppressive effects don't show up in your numbers at all so first I guess, how would you characterize the demand environment in general and that's beyond rubric.
Bipul Sinha: So first, I guess, how would you characterize the demand environment in general? And that's beyond Rubrik. And how are you able to execute against that environment? And if you can sort of talk about product, go-to-market prowess, and then the general demand in your end markets. Thank you. Thanks, John. That's a that's a insightful question.
Jim: How are you able to execute against that environment, and if you could sort of.
Jim: Talk about product go to market prowess in general demand in your end markets. Thank you.
Speaker Change: Thanks, John.
Speaker Change: Insightful question.
Bipul Sinha: Let me give you my my context on my understanding of where things Rubrik is creating a new future for cyber security. The last 30 years of cyber security has been buying 80 to 100 different tools around prevention and detection of attacks. And everybody has indigestion right now with different tools, different vendors, in some cases, hundreds of vendors. And what to pick, what not to pick, it's like a whack-a-mole that you have a new threat and you buy a new tool to prevent and detect.
Speaker Change: Let me give you my my context on my understanding of where things are.
Speaker Change: The rubric is creating a new future for cyber security. The last 30 years. So cyber security has been buying 200 different tools around prevention and detection of attack.
Speaker Change: Everybody had has indigestion right now with different tools different vendors in some cases hundreds of vendors and what to pick what not to take.
Speaker Change: A whack a mole that you have a new threat and you buy a new tool to prevent and detect.
Bipul Sinha: We created this cyber-resilience market. And our vision is, while prevention and detection is important, You cannot prevent the unpreventable. You need to have a recovery and resilience strategy. And we created a purpose-built platform around cyber resilience across data, identity, risk, and remediation. And because of this comprehensive nature of our platform, and what we do is not an optional thing, it's not one of the five tools that they are buying and you are increasing the posture by 1%, 2%. We are a quantum shift in terms of their security posture. So in my discussions with CIOs and CISOs around the world, cyber resiliency is the top cybersecurity priority, and we are not seeing any change in our demand environment.
Speaker Change: We created this cyber resilience market and our vision is while prevention and detection is important.
Speaker Change: You cannot prevent the uncertainty you need to have a recovery and resilience of our strategy and we created a purpose built platform.
Speaker Change: <unk> cyber resilience across data identity risk and remediation.
Speaker Change: And because of this comprehensive nature of our platform and what we do is not optional thing it's not one of the five pools that we're buying and you are increasing the posture by 1%, 2% we had a quantum shift in terms of their security posture.
Speaker Change: So in my discussions with <unk> around the world Cyber resiliency is desktop cyber security priority and we are not see any change in our demand environment.
Bipul Sinha: And again, we are very confident about the numbers that we have put up. We believe that we'll end this year very strong, and we continue to transform and help our customers with. Cyber resilience, posture, giving them peace of mind.
Speaker Change: And.
Speaker Change: Again, we are very confident about the numbers that we have put us we believe that will.
Speaker Change: And this year is very strong and we continue to transform and help our customers.
Speaker Change: Great.
Speaker Change: Cyber resilience.
Speaker Change: Sure, giving them peace of mind and what is also interesting is we are operating in a $50 billion market and identity resilience and identity security really standing back market.
John DiFucci: And what is also interesting is we are operating in a $50 billion market. and Identity Resilience and Identity Security is only expanding that market. and as at the end of this quarter we are 1.2 billion ARR. So we are not opportunity constrained, we are not market constrained or demand constrained. We believe that we are positioned well, we have a unique offering in the marketplace and we'll continue to innovate and scale. Thank you. That's all clear. And thanks again, Bipul. I love you. You give us quotes all the time. They whack them all. So thank you.
Speaker Change: And as at the end of this quarter, we had $1 $2 billion. So we're not opportunity constrained, we're not market constrained or demand constraints.
Speaker Change: We believe that we are positioned well and we have a unique offering in the marketplace and will continue to innovate and scale.
Speaker Change: Thank you that's all clear and thanks again before I Love you gave us all the time the whack a mole so thank you.
Bipul Sinha: Thank you, John.
Speaker Change: Thank you John next question.
Eric Heath: Next question. Your next question is from the line of Eric Heath from Quebec Capital Markets. Please ask your question. Hey, good afternoon. Thanks for taking the question and congrats on the strong results as well. But I wanted to come back to the identity opportunity again. Clearly, it was a huge focus. call today and it's been a big focus in cyber more broadly. Maybe just wanted to maybe help contextualize. Cool. The way to think about the identity opportunity, at least to start with, is the following. How do you know? Identities is at the heart of cyber strategy for everybody.
Speaker Change: Your next question is from the line of Eric <unk> from Keybanc capital markets. Please ask your question.
Eric: Hey, good afternoon. Thanks for taking the question congrats on the strong results as well.
Speaker Change: To come back to the kind of the opportunity again, clearly was a huge focus.
Speaker Change: And in the call today, and it's been a big focus in cyber more broadly so maybe just wanted to maybe help contextualize.
Speaker Change: The size of this opportunity if you will and maybe how we should think about this workload opportunity relative to some other popular workloads like $3 65, and Kieran if theres any sort of color on how much of a contributor to that is today that'd be that'd be great. Thanks.
Speaker Change: So.
Speaker Change: The way to think about.
Speaker Change: The identity opportunity at least.
Speaker Change: To start with is the following.
Speaker Change: As you know.
Speaker Change: Identity is at the heart of <unk> strategy for every business.
Bipul Sinha: And identity-based compromises and attacks have turned out to be near number one attack vector. And origin of identity, which is the identity service provider, has become the ground zero for cyber attacks. And the way identity recovery or identity resilience is built is not built with the modern cyber attack principles and how to understand data risk with identity. And that's what we are doing. We're bringing these two things together.
Speaker Change: And identity based compromises and attacks.
Speaker Change: Turned out to be near number one attack vector.
Speaker Change: And or do you know if identity, which is identity service provider has become the ground zero for cyber attacks.
Speaker Change: And the way identity recovery.
Speaker Change: Our identity.
Speaker Change: Our resilience is built is not built with the modern cyber attack.
Speaker Change: Like principles.
Speaker Change: How to understand detailed risk with identity and Thats, what we are doing of bringing these two things together. So again. These are early days for us in identity and we believe that this is a very large opportunity that we are going after.
Kiran Choudary: So again, these are early days for us in identity. And we believe that this is a very large opportunity that we are going after. And we believe that the identity security and data security will eventually merge. And it will be a singular strategy around how do we protect data across human, non-human identity across the whole enterprise.
Speaker Change: And we believe that the identity security and data security will will eventually mud.
Speaker Change: And it'll be a singular strategy around how do we protect data.
Speaker Change: Ross and human and nonhuman identity.
Speaker Change: Across the whole enterprise.
Eric Heath: Eric, this is Kiran. Just to add to your second part, we got off to a good start in terms of interest and demand, but it's still very early. We keep you updated as we progress more. Understood. Thanks, Bipul. Thanks. Thank you, Eric.
Karen: Eric This is Karen just to add to your second part.
Speaker Change: We got off to a good start in terms of interest and demand, but it's still very early.
Speaker Change: We'll keep you updated as we progress.
Speaker Change: Understood. Thanks, Pavel Thanks, Karen.
Speaker Change: Thank you Eric next question.
Gregg Moskowitz: Next question. Next question is from the line of Gregg Moskowitz from MISRO. Please ask your question. Okay, thank you very much for taking the question. I also actually wanted to ask about identity resilience because it is a clearly important area within cyber, at least identity as a construct overall. Bipul, can you talk about the incremental investment to go after this, including how you expect to market the solution to prospective... Identity is definitely an area of investment for us. We are focused on identity security as opposed to identity infrastructure. And we want to ensure that we combine our data security and identity security capabilities, features, so that we give our customers a complete business understanding of risk.
Speaker Change: Next question is from the line of Gregg Moskowitz from Mizuho. Please ask your question.
Speaker Change: Okay. Thank you very much for taking the question I also actually wanted to ask about identity resilient because it is clearly important area within that within cyber or at least I thought any of the contract overall.
Speaker Change: Can you talk about the incremental investment to go after this including how you expect the market the solution.
Speaker Change: To prospective customers.
Speaker Change: I think it is definitely an area of investment for us.
Speaker Change: Focused on identity security as opposed to identity infrastructure, and and we want to ensure that we combine our data security and identity security capabilities.
Speaker Change: Capabilities features so that we give our customers a complete.
Speaker Change: Business understanding of risk.
Bipul Sinha: and how do we solve it as opposed to different tools. So you'll see a lot from us in this space as we evolve and again, continue to build. Again, Rubrik has this, we have this long-term vision about things and what we truly believe is, delivering the right data to the right user at the right time on the right platform for the right duration is Rubrik's business. And everything that comes with it, we are going to continue to innovate and evolve. And that's what we are doing here. And obviously, a lot to share as we make progress here.
Speaker Change: And how do we solve it as opposed to different tools.
Speaker Change: So you'll see a lot from us in this space as they evolve.
Speaker Change: And again continuing to build again <unk> has this.
Speaker Change: We have this long term vision about things and what we truly believe is <unk>.
Speaker Change: Delivering the right data to the right user at the right time on the right platform. The right duration is robotics business.
Speaker Change: And everything that comes with it we are going to continue to kind of to innovate and evolve.
Speaker Change: And that's what we are doing here and.
Speaker Change: Obviously, a lot to share as the as we make progress here.
Gregg Moskowitz: Terrific. Thanks very much. Thank you.
Speaker Change: Terrific, Thanks very much.
Speaker Change: Thank you your next question.
Operator: Next question.
Todd Copeland: Your next question is from the line of Todd Copeland from CIBC. Please go ahead. Yeah, good evening, everyone.
Speaker Change: Your next question is from the line of Todd Coupland from CIBC. Please go ahead.
Todd Coupland: Yes, good evening, everyone I wanted to come back to what seems to be a conservative guide, even with a 7% growth headwind in in Q1.
Kiran Choudary: I wanted to come back to what seems to be a conservative guide, even with the 7% growth headwind in in Q1. Why are you thinking about the guide below trend given all the the tailwinds that we've talked about over the last Talk, talk about Hi, this is Kiran. Thanks for the question.
Todd Coupland: Okay.
Speaker Change: Why are you thinking about the guide below trend given all of the tailwind that we've talked about over the last five.
Todd Coupland: Minutes or so.
Todd Coupland: Talk about that please thanks.
Karen: I thought that this is Karen thanks for the question just to clarify.
Kiran Choudary: Just to clarify, the 7% we referred to was actually a tailwind to revenue growth in the quarter. And that is from an accounting concept called material rights rate to a cloud transformation. But in terms of the guide, both from a ARR and revenue perspective, and as you know, we focus on ARR as the best performance metric for the business, given our cloud journey. We had a strong quarter. We grew Net New ARR 23%. And from a guidance perspective, we raised it a few points in terms of total growth, as well as Net New ARR, essentially passing the full beat from Q1 as well as raising a little bit.
Todd Coupland: The 7% we referred to was actually.
Todd Coupland: Tailwind to revenue growth in the quarter.
Speaker Change: And that is from an accounting concept of material rights to a cloud transformation, but in terms of the guide both from a revenue perspective.
Speaker Change: As you know we focus on here is the best performance metrics of the business.
Speaker Change: Kevin.
Speaker Change: Our cloud journey.
Speaker Change: We had a strong quarter.
Speaker Change: We grew net new where our 23% and from a guidance perspective, we raise debt a.
Speaker Change: A few points in terms of total growth as well as net new era essentially passing.
Speaker Change: Beat from Q1, as well as raising a little bit more.
Speaker Change: Thank you.
Todd Copeland: Thank you, Todd.
Speaker Change: Thank you next question.
Joel Fishbein: Next question. The next question is from the line of Joel Fishbein from Tourist Securities. Please ask your question. Thanks for taking the question and great execution.
Speaker Change: The next question is from the line of Charles Fishman from tourists Securities. Please ask your question.
Charles Fishman: Thanks for taking my question and great execution.
Bipul Sinha: Bipul, you've covered a little bit of this, but I'd love to take a broader look out at the cyber resilience market, including identity. If you're looking at like 12-18 months, how will this space evolve? And, you know, looking at it from that perspective, what are the top three priorities for Rubrik to continue to be the dominant shareholder? Thank you.
Speaker Change: You've covered a little bit on this but I'd love to take a broader look.
Speaker Change: Cyber resilience market, including identity over the.
Speaker Change: If youre looking at like 12 to 18 months, how will this space evolve.
Speaker Change: And.
Speaker Change: And looking at it from that perspective, and what are the top three priorities for rubric to continue to be the dominant share there.
Speaker Change: Thank you.
Bipul Sinha: So if you, if you look at what we have done, from day one of Rubrik, we built a data security platform. And we took a two-platform strategy across all data landscapes, from enterprise data, to cloud data, to SaaS data. Now identity is a single policy engine. It's a single control plane. It's a single orchestration of data security across all three. Now we are getting into the identity, and we will cover the identity in the similar vein.
Speaker Change: So if you.
Speaker Change: If you look at what we have done from day, one of rubric, we built a data security platform.
Speaker Change: And we took a true.
Speaker Change: Platform strategy, if cros all data landscape from.
Speaker Change: Enterprise data to cloud data to SaaS data no identity is a single policy engine is a single.
Speaker Change: Control plane is a single orchestration of data security across all three <unk>, we are getting into the identity and will cover the identity.
Speaker Change: In the in the similar vein.
Bipul Sinha: What we see is Cybersecurity market tends to be very tool centric. and you have many, many tools. We took a strategy of a platform. And what does platform mean? Platform means that you have a single preemptive recovery engine, a single native dataset engine across all your data lines. And how do you correlate those threads? How do you present a singular view of the data security without loading the logs of different tools in a third-party platform and having some other third-party tool analyze it? That we believe is the result of a very archaic development of this whole space.
Speaker Change: What we see is.
Speaker Change: Cyber security market tends to be very <unk> centric.
Speaker Change: And you have many many tools.
Speaker Change: We took the strategy of our platform and water platform mean platform means that you have a single preemptive recovery engine, a single native dataset engine across all your data landscape.
Speaker Change: And how do you correlate to spread how do you present a singular.
Speaker Change: <unk> view of the of the data security without loading the logs of different tools.
Speaker Change: Third party platform and having.
Speaker Change: Some other third party tool analyze it that we believe is the result of a very archaic development of this world space. So.
Bipul Sinha: So we want to create a singular platform around data and identity across all the data landscape, ensuring that our customers have peace of mind, that when the inevitable cyber attacks comes to them, they can recover quickly, keep their services up and running, and more importantly, understand the risk.
Speaker Change: So we want to create a singular platform around data and identity.
Speaker Change: Across all of the data landscape, ensuring that our customers have peace of mind that when the inevitable cyber attacks comes to them.
Speaker Change: They can recover quickly keep your services up and running and more importantly understand the risk.
John DiFucci: Okay, thank you, John.
John: Thank you. Thank you John next question.
Keith Bachman: Next question? Your next question comes from the line of Keith Bachman from DMO. Please go ahead. Hi, thank you very much. Lots of interesting growth factors. If you think about more apps, more data, you're adding identity.
Speaker Change: Your next question comes from the line of Keith Bachman from BMO. Please go ahead.
Keith Bachman: Hi, Thank you very much lots of interesting growth vectors, if you think about <unk>.
John: More apps more data youre, adding identity.
Kiran Choudary: Kiran, I didn't know if you would offer us some thoughts then on how you're thinking about the sustainability expansion, any comments on the expansion rate, the net expansion rate? I understand it's a backwards looking metric. But if you think over the next number of quarters, any comments on how you think that may evolve, particularly given all the what seems to be very interesting portfolio expansion?
John: And I didn't know if you would offer some thoughts on how youre thinking about.
John: The sustainability expansion any comments on the expansion rate the net expansion rate and I understand it's a backwards looking.
John: Metric, but if you think over the next number of quarters.
John: Any comments on on.
John: How do you think that may evolve.
John: Particularly given all the what seems to be very interesting portfolio expansion.
Kiran Choudary: Thanks, Keith, for the question. So we're really pleased with our NRR of greater than 120% over the past four quarters. As you know, we disclosed an average. The business model and the product platform lends itself to a high NNR as we have multiple products in the portfolio which you can land with as well as expand. And historically, you know, we've spoken about it, we try hard to split the growth between new and expansion. Obviously, with scale, expansion tends to be a little bit bigger than the new business in terms of contribution. But just commenting on the expansion rate itself, in the past we have benefited a bit more from our model transition from maintenance to subscription, and that has normalized, but we do expect the NRR to moderate over time, because we are also landing bigger now with multiple products, and that is a little bit of a headwind to NRR, but we still expect our NRR to be pretty strong.
Speaker Change: Thanks, Keith for the question.
John: So we're really pleased with our MLR of greater than 130%.
John: Over the past four quarters.
John: Close on average.
Speaker Change: The business model and the product platform lends itself to a higher number as we have multiple products in the portfolio with which you can land width as Glenn expand.
Speaker Change: And historically.
Speaker Change: We have spoken about it we try hard to split the growth between new and expansion of its obviously with scale.
Speaker Change: Expansion tends to be a little bit bigger.
John: The new business in terms of contribution.
John: But just commenting on the expansion rate itself in the past we have benefited a bit more from our model transition from maintenance to subscription and that is normalized but we do expect it to the MLR to moderate over time.
John: Because we are lesser landing bigger now with multiple products in that.
John: A little bit of a headwind.
John: We still expect that to be pretty strong.
Kiran Choudary: All right, thank you very much. Thank you, Keith.
John: Alright, Thank you very much.
Speaker Change: Thank you Keith next question.
Shrenik Kothari: Next question. The next question comes from the line of Shrenik Kothari from Meredith. Please go ahead.
Speaker Change: The next question comes from the line of <unk> <unk> from Baird. Please go ahead.
Shrenik Kothari: Hey guys, this is Zach Offer Shrinik. Thanks for taking the question. Congrats on the great results. So curious what percent of large enterprise accounts have adopted the proactive addition skew today? And are reps really leading with proactive as a primary skew in new lands? Or is it more of a post land upsell motion? Any color there would be great. Thanks.
Speaker Change: Hey, guys. This is zach on for Sean Thanks for taking the question and congrats on the great results. So curious what percent of large enterprise accounts have adopted the proactive addition, SKU today and our reps really leading with proactive as a primary SKU and new lands or is it more of a post land up sell motion any color there would be great.
Speaker Change: Yes.
Speaker Change: Yeah.
Bipul Sinha: So our strategy is that we deliver to cyber resilience. And cyber resilience has two core components, risk and cyber recovery, cyber risk and cyber recovery. And for the cyber risk piece, we deliver, we combine ESPM and identity pieces. And some of the identity piece also bleed into the cyber recovery. And then we provide enterprise edition as a complete cyber recovery tool. And that's the strategy we are taking across all the workloads as we kind of land and expand our customers. And that's what is leading to a strong product adoption and overall strong growth. Great, thank you.
Speaker Change: So our strategy here is that we deliver to.
Speaker Change: Cyber resilience and cyber resilience has two core components risk and cyber recovery cyber risk and cyber recovery.
Speaker Change: And for the cyber risk piece, we deliver we combine ESPN and identity pieces and some of that entity piece also bleed into the cyber recovery and then we provide enterprise edition is a complete site, where it can be too.
Speaker Change: And Thats the strategy, we are taking gross all the workloads and as we kind of land and expand our customers and that's what is leading to.
Speaker Change: Strong product adoption and overall strong growth.
Speaker Change: Great. Thank you.
Bipul Sinha: Thank you.
Speaker Change: Thank you next question.
Operator: Next question. Your next question comes from the line of Param Singh from Oppenheimer. Please go ahead.
Speaker Change: Your next question comes from the line of <unk> from Oppenheimer. Please go ahead.
Param Singh: Hi, thank you for taking my question. I know, you know, we've talked about identity security ad nauseum today, but from my understanding, resilience for Entry ID and Active Directory has existed for a very long time, and it's What is unclear to me from our conversation today and from your press releases, what are some of the technical advantages and benefits that Rubrik specifically brings to the market that may not be available today? So I'd love for you to educate me on why Rubrik should be winning in identity security.
Speaker Change: Yeah, Hi, Thank you for taking my question.
Speaker Change: I know, we've talked about identity security ad-nauseum today, but.
Speaker Change: From my understanding.
Speaker Change: Resilience for <unk>, an actor directly I think this has existed for a very long time and instead of product available for a lot of the companies in this market.
Speaker Change: What is unclear to me from our conversation today and from your press releases what are some of the technical advantages and benefits that will be specifically brings to the market that may not be available today. So I'd love for you to educate me on widely break should be winning and identity security and resilience.
Bipul Sinha: This is a really good question. So, as I was saying before, that Rubrik combines identity and data security in a single platform. And what that allows us to do is that not only we create the backup copy of identity in a cyber resilient immutable way, but upon recovery, we stop the reintroduction of malware. And so if you think about that, we have a very strong end-to-end solution. The second thing is that we also combine Active Directory and Enter ID recoveries in a hybrid cloud manner, which is very unique. And this hybrid cloud understanding and replicated state to be able to deliver fully orchestrated identity recovery that takes the identity recovery time from like a week to 10 days to really minutes by creating a wizard style click, click, click, done.
Speaker Change: This is a really good question, so as I was saying before that really combines.
Speaker Change: The entity and data security in a single platform and.
Speaker Change: And what that allows us to do is that not only create the backup copy of identity.
Speaker Change: Cyber resilient immaterial way, but upon recovery, we stopped the reintroduction of malware.
Speaker Change: And so if you think about that we have a very strong end to end solution. The second thing is that we also combine.
Speaker Change: Active directory and enter I'd.
Speaker Change: Recoveries in a hybrid cloud model, which is very unique.
Speaker Change: And this hybrid cloud understanding.
Speaker Change: And replicated the state to be able to deliver fully orchestrated.
Speaker Change: The recovery that the extra identity recovery time from from like a week to 10 days to really minutes.
Speaker Change: <unk> reserved the style click click click done.
Bipul Sinha: And so we have really brought the Rubrik's core simplicity, deep technology, ability to deliver clean recovery fast into identity and combine that with the data security.
Speaker Change: And so we have really brought the rubrics core simplicity deep technology.
Speaker Change: The ability to deliver clean recovery fast into identity and combine that with the data security.
Bipul Sinha: Thank you so much, that's brilliant. Thank you.
Speaker Change: Got it. Thank you so much that's really insightful I appreciate it.
Speaker Change: Thank you we'll take the next question.
Operator: We'll take the next question.
Jonathan Reithaver: The last question is from the line of Jonathan Reithaver from Panther. Please ask your question. Yeah, congrats on the good quarter. Bipul, your comments on Anna Purin seem very topical. I saw a quote from Gartner that predicts that at least 30% of Gen AI projects will be abandoned after proof of concept this year. And one thing that we hear about from users is an impediment to those workloads. It's just the multitude of disparate data stores, both on premise and in the cloud, and specifically the challenge around real-time identification and classification, which seems increasingly foundational to building data security.
Speaker Change: Your last question is from the line of Jonathan <unk> from Cantor. Please ask your question.
Speaker Change: Yes, congrats on the good quarter.
Speaker Change: Before your comments on and a pure seems to be very topical.
Speaker Change: From Gartner predicts of at least 30% of Gen. Eight Gen. AI projects will be ended after proof of concept. This year and one thing that we hear about from us or is it as an impediment to those workloads. There's just the.
Speaker Change: <unk> disparate data stores, both on premise and in the cloud.
Speaker Change: Typically the challenge around real time identification and classification, which.
Speaker Change: Seems increasingly foundational to build a data security so.
Bipul Sinha: So what I would like to know in more detail is just how specifically do you see that issue, and how does Rubrik differentiate around identification and classification? So if you if you look at our platform, from the very beginning, we combine security and data management in a single platform. And to deliver clean recovery, we need to understand the integrity of the data, sensitivity of the data by doing the classification and ability to have a full understanding of user and user interaction on the data. And then a couple of years ago, we realized was that this actually data and security coming together in a compliant and in a full governance mode allows us to supply the right data to the right user on the right platform at the right time for the right duration.
Speaker Change: What I would like to know in more detail.
Speaker Change: How specifically.
Speaker Change: Do you see that issue and how does mover differentiate around identification and classification.
Speaker Change: So if you if you look at our platform from the very beginning we combined security and data management in a single platform.
Speaker Change: And to deliver clean recovery, we need to understand the integrity of the data.
Speaker Change: Sensitivity of the data by doing the classification.
Speaker Change: And the ability to have a.
Speaker Change: Full understanding of the user and user interaction on the data.
Speaker Change: And then a couple of years ago, we realized was that this actually data and security coming together in a compliant and go in a full golan and smooth allows us to supply the right data to the right user at the right on the right platform at the right time for the right duration and it could be very appropriate for.
Bipul Sinha: And it could be very appropriate for us to give this data to a generative AI applications, LLM applications, and that's when we started this whole Annapurna effort. So, again, it is very early in our journey. We believe that we are a unique company that sits at the intersection of data security and AI, and we have a unique way to accelerate gen AI adoption by delivering input security and the data at the same time. Again, this is a long term effort for us three to five years out, we are we are figuring out product market fit, we are figuring out how customer would buy, how they would consume.
Speaker Change: To give this data to generative AI applications LLM applications and Thats. When we started this whole unimportant nine foot.
Speaker Change: So again it is very early in our journey.
Speaker Change: We believe that we are a unique company that sits at the intersection of data security and AI.
Speaker Change: And we have a unique way to accelerate <unk> adoption by delivering input security.
Speaker Change: And the data at the same time.
Speaker Change: Again.
Speaker Change: This is a long term referred for us three to five years out.
Speaker Change: We are figuring out product market fit we are figuring out how customer by Hollywood would consume.
Bipul Sinha: Again, it is one of those S curves that we are building as part of our portfolio of risks that we built as part of our lateral motion. And again, we want to build the next 100 year company and that long term company will only be built if we think ahead, understand where the market trends are, align our strategy and product thinking in those lines, and deliver the right product at the right time. Understood.
Speaker Change: Again it is one of those schools that we are building as part of our portfolio of risk that we built as part of our lateral motion.
Speaker Change: And again, we want to build the next 100 year company in that long term company will only be built if we think ahead understand where the market trends on the line out his strategy and product thinking in those lines and deliver the right product at the right time.
Operator: Thank you.
Speaker Change: Understood. Thank you.
Speaker Change: Thank you.
Operator: There are no further questions at this time.
Speaker Change: There are no further questions at this time I would like to turn the call over to be pull Shanghai for closing comments. Sir. Please go ahead.
Bipul Sinha: I'd like to turn the call over to Bipul Sinha for closing comments. Sir, please go ahead. So in closing, I want to thank to all Rubrik Inc, all our customers and partners. All of you on this call who help us understand the market better, keep us disciplined. And to everybody in the ecosystem, we are very early in our journey. We are just 11-year-old company. We have large ambitions. We want to build a platform company across data, security, and AI. And I will repeat, the best is yet to come.
Speaker Change: So.
Speaker Change: In closing I want to thank to all Rubicon, all our customers and partners.
Speaker Change: All of you on this call who help us understand the market better keep us disciplined.
Speaker Change: And to everybody in the ecosystem.
Speaker Change: At a very early in our journey, we are just 11 year old company.
Speaker Change: Have large ambition, we want to build a platform company across data security and AI and I will repeat the best is yet to come. Thank you so much and have a wonderful day.
Operator: Thank you so much, and have a wonderful day.
Operator: This concludes today's conference call. Thank you very much for your participation. You may now disconnect.
Speaker Change: This concludes today's conference call. Thank you very much for your participation you may now disconnect.
Speaker Change: [noise].