Rubrik Shares Drop After Gross Margin Declines

Rubrik shares fell more than 7% after the company released second-quarter results that showed a decline in gross margin. The stock had reached a record intraday high of $107.70 on Thursday before pulling back and retesting the $100 level.

Rubrik reported revenue of $427 million for the quarter, up 38% year over year, and free cash flow of $76.8 million. The number of customers spending at least $100,000 annually exceeded 3,000.

Management flagged a drop in gross margin in the quarterly disclosure, a detail investors focused on after the report.

The company gave third-quarter revenue guidance of $429 million to $431 million and raised its fiscal-year revenue target to a range between $1.685 billion and $1.693 billion. Rubrik also reiterated an estimate that its total addressable market could reach about $125 billion by 2029.

In a statement, Rubrik chief executive Bipul Sinha wrote, ‘Mythos and frontier AI models have fundamentally changed the cybersecurity landscape.’ The statement described Rubrik’s Agentic Cyber Resilience as providing machine-speed recovery and autonomous runtime AI agent security to enable trusted AI transformation.

Rubrik provides data backup and recovery across on-premises systems, cloud platforms and databases, and offers ransomware protection and cloud data security. Customers include PepsiCo, Iron Mountain, Adobe and The Home Depot. The company referenced recent model-driven breaches reported by developers including Anthropic and OpenAI.

Rubrik remains unprofitable on a net basis, with more than $2 billion in cumulative net losses in recent years and a market capitalization above $22 billion.

The stock has risen sharply this year, moving from about $42.40 in May to the recent peak before the earnings-related pullback. Technical analysts note the shares have stayed above key moving averages and formed an inverted head-and-shoulders pattern; some technicians identified a possible upside target near $120 while saying the trend would remain if the stock stays above its 50-day moving average.

The quarterly report combined faster top-line growth and improved cash flow with margin pressure and ongoing net losses.