Rubrik, Inc.

rubric fourth quarter and fiscal year 2025 results conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, March 13th of 2025. I would now like to turn the conference over to Melissa Franchi. Please go ahead.

Hello, everyone. Welcome to Rubrik's fourth quarter and fiscal year 2025 financial results conference call. On the call with me today are Bipul Sinha, CEO, Chairman, and co-founder of Rubrik, and Karen Chaudhry, 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. 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 first quarter and 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 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 discuss in detail with our filings with the SEC. Rupert assumes no obligation to update any forward-looking statements we make on today's call. With that, I'll hand the call over to Bipul.

Thank you, Melissa. I want to start by thanking everyone for joining today. The fourth quarter was an exceptional finish to what has been a milestone year for Rubrik. This quarter, we once again exceeded all top line and profitability guided metrics. There are five key numbers. First, subscription ARR reached a billion 93 growing 39% year over year. Yet again, a clear indication that we are winning the cyber resilience market. Net new subscription ARR reached over 90 million in the fourth quarter, which is a record for us and a standout for a cybersecurity company at our scale. Second, our subscription revenue was 244 million, growing 54% year-over-year. Third, our subscription NRR remained strong above 120%. Fourth, customers with 100K or more in subscription ARR reached 2,246, growing 29% year-over-year. Customers with 1 million or more in subscription ARR reached 162, growing 64%, year over year. Finally, on profitability, we once again made material improvement in subscription ARF contribution margin up over 1400 basis point year over year. On cash generation, we are very happy to report that we had over 75 million in free cash flow this quarter and approximately 22 million in free cash flow for the full fiscal year. Overall, Our total revenue grew 47% year over year, and we generated 29% free cash flow margin in the quarter. We believe this combination of top line growth and free cash flow margin at this scale is rare, which is truly a tremendous achievement. We continue to be very confident about our business and our leadership of the cyber resilience market. Therefore, we are guiding fiscal, 2026 numbers ahead of the consensus. Now let me unpack what is fueling the strong performance of our business. I spend significant time meeting with CIOs and CISOs around the world. In fact, I had over 400 customer meetings last fiscal year. What is clear is that companies are undergoing multiple technology transformations to find success in the AI era. As organizations prepare their infrastructure for generative AI and re-platform to accelerate cloud adoption, they quickly realize the need for a modern data security strategy that provides robust cyber resilience. This is why we continue to win significantly against all our competitors who struggle to deliver cyber resilience across the full breadth of customer transformation initiatives. What we see is that Customers turn to Rubrik to provide cyber resilience as the re-platform across data centers and pivot to multiple clouds. As they deepen their cloud and SaaS investments, we help them orchestrate uniform and consistent data security controls through a single policy engine. When a customer's identity service is compromised, we help them quickly recover by automating a painfully manual recovery process, all while avoiding malware infection. As our customers look to modernize how they manage their unstructured data for GenAI readiness, we help them securely mobilize their unstructured data to the cloud. When our customers halt their GenAI deployment due to overexposed sensitive data, we help them strengthen their data security posture so that they can confidently deliver GenAI services. Our unique platform allows us to solve all these problems and more. First, our differentiated architecture positions us at the nexus of data security and AI. While other players are forced to consolidate, we continue to take market share away from the competition. Second, as companies shift deeper into cloud and gen AI, they choose Rubrik to deliver comprehensive cyber resilience and quicker recovery times across their data from enterprise to cloud to SaaS applications. These are the key contributors to our exceptional growth at this scale. Now let me highlight a few customer wins with cloud and SaaS protection. This quarter, a European insurance company selected Rubrik to provide complete cyber resilience for its critical cloud workloads. Rubrik aligned with its key CEO initiatives to reduce the risk of downtime from a cyber attack ensure DORA compliance, and reduce IT spend. Through a comprehensive proof of concept, Rubrik provided a single pane of glass to manage data security across AWS and Azure, as well as demonstrated a 24% total cost of ownership reduction, plus savings of over $400,000 per year by reducing infrastructure and storage costs. A Fortune 50 organization selected Rubik Security Cloud, or RSC, to protect M365, one of its most critical SaaS applications with tens of thousands of users. Rubik stood above other new gen backup and recovery providers because of our demonstrated expertise in protecting the world's largest M365 environment and our strategic partnership with Microsoft. We also demonstrated an ability to recover 98% faster than native recovery tools, avoiding billions in potential losses upon a successful cyber attack. In the words of the customer, quote, this is about the survival of our company, unquote. A U.S. business conglomerate bought our RSC Enterprise Edition, including Rubrics Universal Cloud License, task data protection for M365, and unstructured data protection. This organization's CIO and CISO selected Rubik due to our superior capabilities, such as threat hunting and faster recovery times compared to legacy and new gen alternatives. With this purchase, the company was also able to consolidate nine backup and recovery tools into a single platform for complete cyber resilience. The move to public cloud infrastructure and greater adoption of SaaS applications is also driving strength in Rubrik's data security posture management, or DSPM, business. This quarter, we announced the full integration of our DSPM into Rubrik Security Cloud, allowing customers to rapidly enable DSPM for increased data visibility and sensitive data control from their existing RSC instance. Our integrated DSPM solution empowers organizations to proactively reduce data risk across fragmented cloud, SaaS, and enterprise environments and ensures their sensitive data remain protected regardless of where it lives. Rubric DSPM plus Rubric Cyber Recovery offers complete cyber resilience, and this makes us unique in the marketplace. Let me give you an example. This quarter, an existing large financial services customer upgraded their highest RFC addition for access to Rubik DSPM and enhanced protection for their cloud and enterprise workloads. This customer also expanded Rubik data protection to include critical structured and unstructured workloads in their AWS environment. With this purchase, this customer addressed a key business challenge of identifying where sensitive data lives on-premises and in the cloud. The customer was also able to retire several legacy backup tools. CIOs look to Rubrik as a trusted partner in their journey to secure their critical enterprise databases and modernize their data centers with replatformization initiatives. Along these lines, we recently announced our expanded support for Red Hat OpenShift virtualization and PostgreSQL databases will continue to expand our capabilities to cover critical platforms across traditional and modern infrastructures. Companies are also turning to Rubik to secure their massive unstructured data estates, a trend we believe will continue as enterprise AI initiatives gain more speed. In Q4, a US airline expanded their Rubik footprint by adding unstructured data protection. We demonstrated a 65% reduction in operating expense over 36 months by freeing up data center capacity while enhancing the protection of the critical data sets. This quarter, we also added a lighthouse government organization in Southeast Asia. This customer elected to replace their legacy backup vendor with Rubrik across structured and unstructured data in their data center as well as their cloud. Our functionality was unmatched by legacy incumbent and new gen competition. Additionally, this customer noted our robust and built-in security features, including threat monitoring and anomaly detection. This purchase also included Rubik DSPM for complete cyber resilience and cyber preparedness. We continue to accelerate innovation to keep ahead of the threat landscape. Over a year ago, we launched our capabilities to secure Microsoft Active Directory, or AD, and Entra ID. These identity services are universally used and are primary targets for attackers. In fact, 90% of global 1,000 use AD to authenticate and authorize users. Over the past year, we have seen significant customer adoption of our immutable access control backups for Active Directory and Entra ID. Our customers can leverage their existing Rubric Security Cloud platform to restore their AD and intra-AD services without reintroducing malware or misconfiguration. This quarter, we deepened our innovation in identity with the general availability of orchestrated Active Directory forest recovery. When an attack compromises Active Directory domain controllers, recovering the entire AD forest becomes an administrative nightmare. particularly for large organizations. Our orchestrated AD forest recovery allows enterprises to rapidly and automatically recover entire AD forests to desired point in time while avoiding malware reintroduction. What once was a manual recovery that can span weeks is now transformed into recovery within an hour. We have already seen a number of wins across orchestrated AD forest recovery which is currently sold as a standalone offering. One highlight is with a state lottery organization that is standardized on Rubrik Security Cloud this quarter. Adding Rubrik orchestrated AD forest recovery. Already protecting enterprise data, they also added cloud native workloads for Azure, SaaS data protection for N365, and Rubrik DSTM to enhance cyber preparedness. In addition, a global investment bank purchased Rubik orchestrated AD Forest recovery this quarter to shorten the recovery of Active Directory to just few hours versus five days previously. In closing, I'm proud of our unwavering customer focus and relentless execution as we create a new vision for the cybersecurity industry based on cyber resilience. However, we are still early in Rubik's journey to realize the company's full potential. In calendar 2025, we aim to accelerate our product innovation, generate groundbreaking ideas, and lay foundation for continued future growth. I'm confident that what is ahead of us is even more important and exciting than what we have previously achieved. Thank you to all our Rubricans, as well as our customers and partners around the world. The best is yet to come. With that, I'm pleased to pass it over to our Chief Financial Officer, Kiran Chaudhary.