Rubrik, Inc.

please stand by we're about to begin good afternoon everyone welcome to the rubric third quarter fiscal year 2025 results conference call at this time all participants are in the listen-only mode later you will have the opportunity to ask questions during the question and answer session you may register to ask a question at any time by pressing star 1 on your telephone keypad also today's call is being recorded and if you should need any operator assistance during the call today please press star zero. Now at this time, I'll turn things over to Melissa Franke, Vice President, Head of Investor Relations at Rubrik. Please go ahead, ma'am.

Hello, everyone. Welcome to Rubrik's third 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 the reconciliation of GAAP to non-GAAP financial results. These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. During this call, we will make forward-looking statements, including statements regarding our financial outlook for the fourth quarter and full fiscal year 2025, 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 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 risks and other factors that could affect our performance and financial results, which we discussed in detail in our filings with the SEC. Rubric 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 Biffle.

Thank you, Melissa. And thank you everyone for joining us today. Now let's get started. Rubrik delivered another outstanding quarter. We not only achieved very strong growth at a scale, but also generated positive free cash flow. We are incredibly proud to have surpassed 1 billion in subscription ARR, growing 38% year over year. And we did this in just over 10 years since Rubrik was founded. a big milestone for us. This quarter, once again, we have exceeded all top-line and profitability-guided metrics. And more importantly, we are raising our outlook for the rest of the fiscal 25. Here are the five key numbers that highlight yet another positive quarter for Rufex. First, and this is a record, we added $83 million in net new subscription ARRs. a clear indication that we are winning the cyber resilience market. Second, our subscription revenue was over 221 million, growing 55% year-over-year. Third, our subscription NRR remained strong, above 120%. Fourth, customers with 100K or more in subscription ARR reached 2,085, growing 32% year-over-year. And finally, on profitability, we once again made material improvement in subscription ARR contribution margin of 1,100 basis point year-over-year. On the cash generation front, we are very happy to report we had over $15 million in free cash flow this quarter. Once again, these results are only possible because Rubrik is winning the cyber resilience market. Now let's look at why we are winning. Cyber resilience is the number one topic in cybersecurity. There is a broad realization that cyber attacks and breaches are inevitable. And therefore, organizations have to be resilient against such attacks. Rubrik has a unique architecture and solution for cyber recovery and resilience. This is what is powering our growth and market momentum. Let me unpack this in three parts. Number one, Rubrik delivers the fastest cyber recovery for our customers. This is due to our unique AI powered zero trust architecture. Number two, Rubrik Security Cloud or RSC offers a differentiated single platform for automated data management and security control, across all workloads, across enterprise, cloud, and SaaS applications. And number three, we are the only vendor in the market that combines fast cyber recovery with data security posture management, or DSPM. We believe DSPM plus cyber recovery is the only way to deliver complete cyber resilience. In summary, Enterprises are turning to Rubrik as their trusted cyber resilience partner because we can confidently meet their cyber recovery time objective or RTO. Let's talk about how our focus on cyber resilience drove these strong results in the third quarter and how our investments in innovation are enabling us to deliver even greater value to our customers over the long run. As the outset, Rubrik built a unique zero trust architecture that combines data and metadata from business applications. This architecture allows us to apply AI and machine learning directly to the business data to provide customers with the visibility into the scope of the attack, the time of infection, the sensitivity of the impacted data, and the ability to do malware hunting and quarantining. We deliver all these functionalities natively, not with bolt-on security tools or third-party integrations. This differentiated architecture enables us to uniquely pre-calculate clean recovery points so that our customers can deliver the fastest cyber recovery times. This transforms cyber recovery from a long, drawn-out affair with significant business disruption and loss to a simple and efficient recovery operation with minimal impact. This is why we continue to win the vast majority of deals in competitive situations. Let me give you a few examples. This quarter, a global engineering and construction service provider selected Rubrik to protect its entire data ecosystem, including SAS data protection for Microsoft 365. This was driven by a board mandate seeking to consolidate multiple backup providers and improve cyber recovery time. In a proof of concept with other new gen backup providers, Rubrik was the only vendor that beat their required RTO of less than four hours for their mission critical applications. Another logo win was with a Fortune 20 healthcare company. That selected Rubrik as their only cyber resilience partner. After a thorough evaluation, we were the only immutable cyber resilience provider that could meet the organization's RTO, both on-premises as well as in the cloud. In addition, adoption of RSC Enterprise Edition allows this customer to rip and replace six disparate new gen and legacy backup vendors while delivering superior cybersecurity functionality. And lastly, we had a win this quarter with Simpler, a healthcare technology company that provides access to systems critical to patient care across 5,000 hospitals and networks in the U.S. Rubric was selected over other new gen and legacy backup vendors due to our strong cyber resilience and cybersecurity capabilities. Simpler CEO remarked, quote, downtime can be a matter of life and death in healthcare industry. Rubik was the only vendor that met our security standards, met recovery objectives for our business, and demonstrated a commitment to continued innovation to combat modern adversaries." We continue to drive innovation to expand the reach of Rubik's Security Cloud Platform. We recently added PostgreSQL and Red Hat OpenShift virtualization to our growing portfolio of hybrid cloud workloads. This expands our wallet share within enterprises that are transforming their hybrid cloud solutions. Turning now to the success we are seeing in protecting public cloud and SaaS applications. Enterprises are adopting rubric cloud protection for our simplified policy management across multiple cloud and SaaS workloads, our fast recovery time, and our ability to drive immediate cost savings. As more businesses move more workloads to public cloud infrastructure and adopt SaaS applications, rubric cloud protection becomes an even more essential component of enterprise security stack. Let me highlight a few examples of new logos as well as expansion wins with cloud protection. This quarter, a pharmaceutical giant selected rubric to protect its AWS cloud data estate after evaluating multiple new gen and legacy backup providers. This customer consolidated disparate cloud native and legacy backup deployments into rubrics single platform. This resulted in a 35% total cost of ownership savings for the customer compared to their prior backup solution for AWS. All while providing faster recovery times and superior cybersecurity features. Another new logo is an Indian multinational company that selected Rubrik cloud native protection for their Azure environment in Q3. This company simplified its vendor landscape with Rubrik, replacing multiple legacy and cloud native backup providers. This drove 40% hard cost savings compared to their prior deployment. In a notable expansion deal, a top Japanese automaker selected Rubrik to protect its large and critical M365 environment after evaluating Rubrik against a legacy backup provider. This customer selected Rubrik for our superior security features and ease of use for the IT and security teams. Now moving on to data security posture management or DSPM. DSPM provides visibility into sensitive data exposure to minimize surface area of attack and the risk of data exfiltration. We are the only vendor in the market to offer DSPM plus cyber recovery in an integrated platform. This allows us to deliver complete cyber resilience before, during, and after an attack. Our complete cyber resilience value proposition is resonating with customers as demonstrated by growing volume of DSPM deals. which nearly doubled quarter on quarter in Q3. One example of a DSPM win, a large healthcare organization added DSPM and Rubik's Security Cloud Enterprise Edition for their enterprise workload to their existing Rubik footprint, which was purchased just last quarter. This customer displaced an existing DSPM vendor with Rubik's solution as we offered superior capabilities around managing sensitive data risk as well as the ability to deliver a fast recovery in case of a cyber attack. In addition, the adoption of GenAI applications such as M365 Copilot brings an urgency to DSPM adoption. What makes Copilot such a powerful tool is its ability to leverage content across a company to provide accurate and relevant insight. However, companies need to have the right data security controls in place to ensure Sensitive data remains secure when using AI tools such as Copilot. This quarter we announced Rubrik DSTM for M365 Copilot. This new set of capabilities not only helps enterprises reduce the risk of sensitive data exposure and exfiltration, but also helps them accelerate the secure adoption of Copilot. Rubrik's powerful classification engine is designed to continuously and autonomously discover and classify all known and unknown data at a very rapid rate. Rubik DSPM for M365 Copilot is designed to ensure sensitive data is correctly classified, labeled, and segmented while ensuring right access permissions. This allows customers to leverage the power of Copilot while safeguarding sensitive data from the risk of exposure all within our comprehensive cyber resilience platform. Next, innovation is absolutely critical to building an enduring company. So let's talk about some of the big ideas that we are working on. As some of you might have read in our IPO prospectus, Rubik by design perpetually lives on the frontier of innovation. And our long-term success depends upon our ability to continuously create and commercialize pioneering products. In this vein, just this week at AWS reInvent, we announced Rubrik Annapurna, which along with an exciting new partnership with AWS will accelerate the development of trusted gen AI applications. There are three parts to this groundbreaking innovation. Number one, Rubrik Annapurna API service will allow customers to have ready to go access to all business data to quickly build more powerful and trusted GenAI applications. Number two, Annapurna will deliver secure data embedding powered by RSC. And number three, Rubrik Annapurna leverages all enterprise data and metadata in RSC to easily set and manage data access controls for AI applications. We believe we are uniquely positioned to enable GenAI adoption in a secure and compliant manner, which is a top priority for enterprises. We are excited about what we can do with Annapurna because Rubrik extracts, manages, and secures the most important real estate in the brave new world of GenAI, business data. However, I would like to note that we are in the very early innings of a multi-year strategy for Rubrik to be the secure data infrastructure platform for GenAI applications. We look forward to providing more color on this roadmap as it advances in the next several years. Now let's discuss a few notable updates to our partnership across the security and data landscape, a key component of our go-to-market motion. Our strategic partnership focused first and foremost on creating more value for our joint customers to product integrations so that one plus one equals more than two for our customers. A few examples from Q3. This quarter, Rubrik became the first data security platform vendor to integrate with Okta's identity threat protection. RSC provides visibility into user access to data and automatically monitors for changes to access permissions to sensitive data. The data context from RSC combined with threat context from other security tools allows Okta to orchestrate tailored response based on policy configuration and assist user risk level. This integration helps companies manage risk around sensitive data access and respond to identity-based threats and attacks faster and more effectively. We also announced a new partnership with Pure Storage. joining forces to deliver a complete cyber-resilient solution. This partnership combines the strength of RSC with Pure Storage FlashArray and FlashBlade to deliver a secure approach to data protection across short-term and long-term storage needs. As an example, Rubik plus Pure's FlashArray and FlashBlade can reduce backup windows from hours to minutes, and Rubik allows Pure customers to find anomalies, hunt for threats, and discover sensitive data in their production environment. Lastly, let me discuss business efficiency and profitability. As discussed last quarter, we are focused on delivering leverage and profitability in our business model. Our Q3 results demonstrate this commitment, with subscription ARR contribution margin up by over 1,100 basis points year on year. We look forward to continued improvements based on our increasing scale, our focus on efficiency in the go-to-market, and our disciplined investment for growth. We are incredibly proud to have surpassed $1 billion in subscription ARR with this level of growth and improving profitability. Thank you very much to all rubricants for helping achieve this milestone, and more importantly, for your relentless focus on innovation and creating the next horizon for rubric. We are also very grateful to our customers, partners, and investors for their continued support. But let me be very clear. It is still very early days of the Rubrik story. We are creating a new vision for the cybersecurity industry based on cyber resilience. I'm personally even more excited today than I was at our founding in 2014 for what's ahead for Rubrik. With that, I'm pleased to pass it over to our Chief Financial Officer, Kiran Chaudhary.