Rubrik, Inc.

Good day, everyone, and welcome to today's rubric second quarter fiscal year 2025 results conference call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. Please note, today's call will be recorded, and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Melissa Franke, Vice President, Head of Investor Relations. Please go ahead.

Hello, everyone. Welcome to Rubrik's second quarter fiscal year 2025 financial results conference call. On the call with me today are Bipul Sinha, CEO, Chairman, and co-founder of Rubrik, and Kiran Chowdhury, Chief Financial Officer. Our earnings press release was issued today after the market closed and may be downloaded from the investor relations page at www.ir.rubric.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 to non-GAAP financial results. During this call, we will make forward-looking statements, including statements regarding our financial outlook, for the third quarter and full fiscal year 2025. Our expectations regarding market trends, our market position, opportunities, including regarding generative AI and growth strategy, product initiatives and expectations regarding these initiatives and our go-to-market motions. These statements are only predictions that are based on what we believe today and actual results may differ materially. These forward-looking statements are subject to risk and other factors that could affect our performance and financial results, which we discussed in detail in our filings with the SEC. Rubrik assumes no obligation to update any forward-looking statements we may make on today's call. With that, I'll hand the call over to Bipul.

Thank you, Melissa, and thank you, everyone, for joining us today. Now let's get started. We delivered an outstanding second quarter. We outperformed across all guided top-line and profitability metrics. and are raising our annual guidance. Here are a few numbers that highlight the quarter. Our subscription ARR reached 919 million, growing 40% year-over-year. Our subscription revenue was 191 million, growing 50% year-over-year. Our subscription NRR remained strong above 120%. And finally, our all-important profitability measure, subscription ARR contribution margin, improved by over 1,300 basis points year over year. We continue to focus and make great strides in improving our business efficiency and profitability. Now let me give you the broader context of our business that enables these great results. Rubrik is winning in the cyber resilience market. As more and more organizations realize that, Cyber attacks and breaches are inevitable. Cyber resilience is becoming the number one topic in cybersecurity. In my conversations with CIOs and CISOs around the world, what is clear is in spite of spending millions of dollars in cyber attack prevention tools, it is not a question of if, but when they will experience a successful cyber attack. Every board of directors is asking for a cyber resilience strategy. ensure that their business gets back up and running as fast as possible. The recent global IT outage is a great reminder that resilience is required in an interconnected digital economy that can easily be disrupted by human error or a threat actor. What is driving Rubrik's results is our highly differentiated platform purpose-built to deliver complete cyber resilience. Rubrik Security Cloud combines DSPM, or data security posture management with cyber recovery in a zero trust data security platform. We are the only vendor in the market to offer integrated DSPM plus cyber recovery, which enables cyber resilience. Our unique AI-powered architecture delivers data risk, data threat, and rapid cyber recoveries at a scale, enabling our customers to deal with situations before during and after cyber attacks. Other products in the market generally make cyber recovery time up to 100 times longer because they can't natively deliver four things needed for fast cyber recovery. Number one, the scope of the attack. Number two, time of infection. Number three, sensitivity of impacted data. And finally, number four, malware hunting and quarantining. These are complex problems to solve. We solve these because our architecture leverages AI and machine learning inside our integrated data threat engine. This is how we deliver cyber resilience natively, not with bolt-on security tools or third-party integrations. Our customers choose Rubrik because we can confidently meet their cyber recovery time objectives. We transform cyber recovery from a long, drawn-out existential affair to a simple, short operation so organizations can continue running their businesses. As a result, we win the vast majority of deals in head-to-head competition. This quarter, a Fortune 500 European automotive supplier selected Rubrik as its de facto cyber resilience platform, replacing their complex legacy data protection solution, which they believed left them vulnerable in case of a cyber event. Another example, an American multinational investment bank and financial services organization replaced a competing new-gen vendor solution with Rubrik, given our superior cyber recovery, speed at scale, and our more robust and integrated security capabilities. We've been in the marketplace because of our differentiated single management and security controls across enterprise, cloud, and SaaS workloads, while delivering incredible simplicity, performance, and scalability. This quarter, a US insurance company replaced its existing data backup and recovery vendor with RFC, or Rubric Security Cloud Enterprise Edition, and SaaS data protection for M365. This customer was dissatisfied with their current vendor provider. A competing new gen vendor, as it could not operate at the scale and speed the business required, nor protect the M365 environment. During the proof of concept, we demonstrated a recovery time of about 35 seconds, compared to over five hours for the incumbent. The customer security team also endorsed rubrics for our suite of native security features, such as anomaly detection, threat hunting and monitoring, and sensitive data discovery, which their existing vendor lacked. We are also striking a chord with customers operating in the public cloud due to our ability to drive immediate cloud cost savings while delivering fast cyber recovery times. A Fortune 500 global leader in prestige beauty, expanded their RSC footprint by purchasing cloud native protection for Azure, extending rubric for complete cyber resilience across both data center and cloud workloads. This customer selected rubric for our ability to deliver complete cyber resilience in addition to significant cloud cost savings. We also significantly expanded our cyber resilience footprint at ARIA, the innovation company in Italy across cloud native and unstructured workloads to secure companies' digital transformation. ARIA manages sensitive healthcare data of 10 million Lombardi citizens. In addition, we have helped hundreds of customers quickly come back online after the recent global IT disruption. Our customers were grateful for our ability to get their business back up and running quickly. An IT leader at a large hospital network wrote Quote, rubric was instrumental in helping the hospital continue services during this massive outage. We did not have to cancel any appointments and we were able to provide all services to patients. It would have been a different story with our previous solution, unquote. What rubric does matters. Now moving on to DSPM, our view is that Cyber resilience not only requires cyber recovery, but also data security posture. Cyber recovery is about wartime, while data posture is about before and during cyber attack preparation. DSPM gives visibility into sensitive data exposure to minimize surface area of attack and the risk of data exfiltration. This quarter, a large European agricultural company expanded Rubrik cyber resilience footprint by adding Rubrik DSPM to reduce the risk of data exposure and exfiltration. This customer displaced their existing DSPM vendors, noting Rubrik's superior ease of use and greater visibility across multi-cloud environments. Another example, a US consumer services company added Rubrik DSPM to provide visibility into where its sensitive data resides and reduce its attack surface. Rubric automated the discovery and classification of companies' sensitive data in only a few hours, which would have otherwise taken months of manual work across 10 full-time employees, according to the customer. In addition, what we are seeing is that generative AI brings urgency to DSPM. Before an organization's proprietary data gets fed into LLM, Data sensitivity and user access must be managed. AI trust, safety and preparation must be established and DSPM plays a critical role in this. Now let's talk about our partnership across security and data landscape. These relationships are a key part of our go-to-market motion. We recently made a few notable announcements that deepened and widened our partner relationships. Last month, we announced a new partnership and technology integration with Mandiant, part of Google Cloud. This collaboration offers our customers a tightly integrated end-to-end solution spanning cyber threat detection, incident response, and data recovery. Through this partnership, joint customers will be able to ensure that in an event of an attack, the Mandiant and Rubric team will work together to help the business get back up and running as fast as possible. We continue to strengthen our partnership with cloud providers as well. As an example, this quarter, Rubrik was named Microsoft Healthcare and Life Sciences Partner of the Year for 2024. This award comes from the heels of our wins last year as Microsoft Partner of the Year in the US and in the UK. This accolade represents our commitment to protecting all data, including patient data, while enabling seamless operations in healthcare organizations and driving innovative solutions in partnership with Microsoft. Now let's turn to business efficiency and profitability. This quarter, we improved our subscription ARR contribution margin by over 1,300 basis points year on year. We are pleased with the margin improvement, and we are relentlessly focused on opportunities to continue these improvements. While we invest in our innovation platform and go-to-market engine to capture the cyber resilience opportunity, Let me be very clear. We are equally focused on delivering leverage and profitability in our business model. These are key components to building an enduring business, and we are executing well on that path. A big thank you to all rubricans around the world for their hard work and diligent focus. In closing, I will leave you with three takeaways. First, cyber resilience is where the cybersecurity market is going, and we are a leader in cyber resilience. Second, we are winning against the competition because of our highly differentiated and unique architecture. This is why our customers can rapidly recover from cyber attacks at scale. And finally, in addition to growth at scale, we believe our path to profitability is clear, and we continue to make great strides in building a durable business. With that, I'm pleased to pass it over to our Chief Financial Officer, Kiran Chaudhary.