Rubrik Deep Dive: A mission-critical cybersecurity company

This is a deep dive a wrote back in September before I had this website, but it is still very relevant today. When Rubrik first popped up on my radar, I was interested right away. What stood out to me is that they are:

• Founder led
• Mission critical
• Growing revenue over 50% year over year
• Named a data protection leader by Gartner six times

As I dug deeper into the business, their founding story, product portfolio, addressable market, and as I followed their quarterly earnings closely, I became increasingly excited.

In this deep dive I will cover the most important parts of the business and share a nuanced, balanced investment thesis. I originally created this deep dive on 26 October and posted it on X, but this is way better in terms of readability.

Without further ado, let's dive in!

1 - Introduction

In a world where data has become both the most valuable asset and the biggest target for modern businesses, protecting it is no longer optional.

Every decision, transaction, and customer interaction runs on data. Whether it’s an AI agent, customer support rep, or a company’s leadership team. Modern businesses are built on data, and when that data is compromised, so is the business. Rubrik sits right at the center of this new reality.

Early on, Rubrik helped companies backup and restore ¹ data. But as attacks grew more frequent and severe, a simple backup wasn’t enough. Rubrik shifted to Zero Trust Data Security, which you can think of as airport security for your data: everyone gets checked, every time.

Today, Rubrik focuses on actively protecting data, detecting threats early, and recovering fast when incidents happen. It’s not just about saving data; it’s about keeping businesses running safely in a world where attacks are expected.

In short, Rubrik’s story is the evolution from “backup” to data resilience, a shift that meaningfully expands its value and role inside modern enterprises.

2 - Founding story & timeline

Founded in 2014 by Bipul Sinha (CEO), Arvind Nithrakashyap (CTO), Arvind Jain, and John Kreft, Rubrik set out to build more than backups. Their thesis:

"If cyber risk is a board-level threat, backup and recovery must evolve into a cyber resilience ² platform that identifies threats early, limits blast radius and recovers fast".

Rubriks' mission flows from this thesis:

Key facts & figures:
• HQ: Palo Alto with 3,000+ employees across 22 offices (~46% outside the U.S.)
• Customers: over 6,100; 2,381 with $100K+ annual recurring revenue
• Scale: $1.1B revenue run rate in Q2 2025
• IPO: April 2024 at $32, raising $752M (valuation $5.6B vs $15B today)

Timeline:
• 2015: First converged data management appliance for on-premise ³ environments • 2018: Acquires Datos.io to improve cloud data management
• 2020: Buys Igneous assets to strengthen large-scale unstructured data protection • 2023: Acquires Laminar Security to enhance detection and prevention
• 2024: IPO on NYSE, ticker: RBRK
• 2024–2025: Scales past 6,000 customers and >$1.2B revenue run-rate

3 - What makes Rubrik interesting

In a world where cyberattacks are a “when,” not an “if,” keeping data safe, available, and recoverable has become mission-critical.

IBM estimates the global average cost of a breach at $4.45M in 2024, up 15% in three years. Over 83% of organizations experienced more than one breach. In today’s world it is resilience, not prevention alone, that matters.

A close-to-home example: a 2025 breach at a Dutch cancer screening lab exposed sensitive personal and medical data for ~485,000 women, including some of my family members. Incidents like this highlight why organizations need zero trust architectures, tested recovery points, and rapid ransomware remediation that go beyond traditional backups.

This is exactly Rubrik's core competence: helping organization become resilient against data breaches and ensure they keep operations running, while limiting financial and reputational damage. But they are not the only player out there, so let’s take a closer look at the cybersecurity ecosystem as a whole.

4 - Industry positioning

In the overview below, Rubrik is positioned in the data security category. In their investor presentation, Rubrik highlights most cybersecurity vendors focus on prevention, while they focus on resilience: the ability to protect, withstand, and rapidly recover data and systems from any threat.

I believe this is a very important differentiator. As I mentioned earlier: cyberattacks are no longer if but when. Resilience reframes budget from “nice-to-have” to “must-have,” which supports durable demand and multi-year contracts. There are some core competitors that are going after the same market though.

5 - Core competitors

I find the Gartner Magic Quadrant a great way to quickly map the competitive landscape. Gartner has named Rubrik a leader in the backup and data protection platform category for six consecutive years, which is a big achievement.

As the quadrant shows, Rubrik is mainly competing with three other players:

1. Commvault (CVLT): powerful but complex:
   • Enterprise grade with deep support for both legacy ⁴ and modern workloads
   • Very feature rich, but often seen as complex and in need of more tuning and maintenance
   • Rubrik wins on ease of use, a modern interface and strong Zero Trust posture
2. Cohesity: the closest modern rival:
   • Similar modern architecture with a cloud focused, scale out approach and a clean interface
   • Strong in unstructured data and in consolidating different data services
   • Rubrik’s edge is cyber resilience, with deeper integrations around threat detection, identity protection and incident recovery
3. Veeam: the VMware ⁵ specialist:
   • Excellent for VMware and virtualisation heavy environments
   • Fast, simple and widely adopted
   • Rubrik’s edge is vision. Gartner ranks it higher on completeness of vision because it is pushing further into data security and AI, not just backup

In short, Rubrik operates in a very competitive space where each vendor has clear strengths and weaknesses. But instead of just looking at analyst views, it is also important to see what customers are saying, so let us look at that next.

6 - What customers say

High customer satisfaction is at the core of every successful business. That’s why I always check what customers have to say about a business. My main sources for SaaS reviews are G2, Gartner and Reddit.

Review score:
• G2: 4.4/5 star rating (97 ratings)
• Gartner: 4.4/5 star rating (13 ratings)

Customer feedback consistently highlights three themes:

• Ease of use
• Reliable ransomware protection
• Strong cloud experience

Some users cite pricing and flexibility concerns compared to Veeam or Cohesity, but overall satisfaction is high.

This is underscored by a >80 Net Promotor Score (NPS), which places them in the top 1% of enterprise software companies.

Customer quotes

(…) "Most notable are Rubrik's speed and ease of use. With just a few clicks, you can easily set up backups, monitor jobs, and perform restores thanks to the clear and simple user interface. I have total confidence in our data security because of the immutability and ransomware protection features, as well as the quick and dependable backup performance.” ~ August 2025 (G2)

“The Rubrik DPSM product has been great at identifying sensitive and over-shared data in our organization. There have been some hiccups to work through, but Rubrik has stayed on top of it and helped resolve all issues.” ~ February 2025 (Gartner)

“We’ve been using Rubrik for almost 7 years. Overall, it’s a solid product for both on‑premises and cloud backups (…) Rubrik excels in simplicity, scalability, and ransomware protection. However, with the latest firmware you cannot manage SLAs on Rubrik offline.” ~ January 2025 (Reddit)

This clearly shows the strength of Rubrik's product and differentiation. High satisfaction plus mission-critical value supports >120% net retention ⁶ and a durable land-and-expand motion.

But how large is the actual market they can serve? This is especially interesting given their crowded competitive space.

7 – Total addressable market (TAM) and optionality

Gartner estimates Rubrik's core market (data security and cyber resilience) at roughly $53B by 2027.

If Rubrik's reaches ~$1.5B revenue by then, that’s ~3% share, leaving a long runway for growth. But we should also consider the possibility of expanding into adjacencies.

The most likely categories:

1. Identity security and AI: Predibase and Agent Rewind enable generative AI tooling and secure analytics on customer data
2. New modules and services: Data discovery/classification, threat hunting, incident response: valuable subscription add-ons for their land-and-expand strategy
3. Geographic expansion: Only ~31% of FY25 revenue is outside the Americas, leaving room to expand into Europe and Asia.

In short: Rubrik's has a large TAM, can expand into adjacencies and has plenty of room to grow internationally. Given the large and expanding TAM, I believe there’s room for multiple strong vendors to coexist and succeed alongside.

However: much depends on execution, which is where the leadership team comes into play. Ultimately, it’s this team steering the business into the right direction. So, who are they exactly?

8 - leadership team Founders

1. Bipul Sinha (Co-Founder & CEO/chairman): Sinha is a former venture capitalist at Lightspeed and early investor in Nutanix. Bipul has an engineering background with IIT Kharagpur and Wharton MBA
2. Arvind Nithrakashyap (Co‑founder & CTO): built storage and distributed systems at Oracle and Rocketfuel Executives:
3. Kiran Choudary (CFO): previously VP of Finance & Strategy at Atlassian and Goldman Sachs, with MIT/IIT engineering degrees
4. Peter McGoff (Chief Legal Officer): former legal chief at Box and Informatica.
5. Michael Mestrovich (Chief Information Security Officer): prior CISO at the CIA, leading the agency’s cyber defense operations
6. Giri Iyer (Chief Customer Officer), Brian McCarthy (President, Global Field Operations) and Anneka Gupta (Chief Product Officer) bring experience in customer success, sales and product management.

The board includes technology veterans John W. Thompson (former chairman of the board at Microsoft), Mark McLaughlin (former chairman and CEO of Palo Alto Networks) and Scott Herren (CFO at Cisco), adding governance credibility.

Overall, the leadership teams brings a lot of industry expertise to the table, with entrepreneurial DNA and enterprise experience.

A blend I love to see.

Founders, from left to right: Arvind Nithrakashyap (CTO), Arvind Jain, Soham Mazumdar, Bipul Sinha (CEO)

9 – Value proposition

Winners tend to keep winning. That’s why I always look for product leadership. The product reviews are encouraging so let’s take a closer look at what Rubrik has to offer.

Their core product is Rubrik Security Cloud. It provides one unified solution for cyber resilience across data and identity ⁷.

Key features

• Air‑gapped ⁸, immutable backups: Data is stored in a so-called logical air‑gap and locked so that ransomware cannot overwrite it.
• Cyber recovery: Machine‑learning algorithms that detect anomalies and orchestrate recovery to a clean point-in-time after an attack.
• Identity security and AI: New modules secure identity data across SaaS and cloud. The Predibase acquisition in June 2025 now allows customers to deploy generative‑AI models at scale
• Integrations: The platform integrates with hyperscalers - Microsoft Azure, Amazon AWS, Google Cloud), SaaS applications, and major security partners such as Crowdstrike, ZScaler & Okta.

I find their Predibase acquisition especially interesting. It accelerates agentic AI adoption on secured enterprise data, positioning Rubrik as a platform for secure, scalable AI workloads. There are some downsides though, which I’ll discuss in section 11 – Acquisitions.

10 – Moat: how they stay ahead

The moat is what protects a business from competitors. Given the competitive space Rubrik is operating in, the moat is a crucial part in assessing the long-term potential of the business.

To assess the moat, I like to use the Morningstar framework, which uses five sources of moat. I’ve ranked them from strongest to weakest for Rubrik:

• Switching costs: Very high. Once a company integrates Rubrik into its data workflows, moving away would be a massive effort. Think petabytes of data and redoing complex security policies. That kind of friction helps explain Rubrik's strong >120% net retention (more on that in the financials section).
• Brand & IP (intangible assets): Rubrik's has built a strong reputation as a leader in secure backups, thanks to its innovation around data immutability and threat detection. Partnerships like the one with Microsoft boost its credibility.
• Network effects: Somewhat present. As more customers join, Rubrik's gathers richer threat data to improve detection and response. It’s helpful, but not a core moat like it would be for a social media platform.
• Efficient scale: The market is huge and can support several winners. Rubrik's growth is strong, but scale alone doesn’t lock out competitors like Cohesity or Veeam.
• Cost advantage: Not really. Rubrik's margins come from being software-based, but it doesn’t have a deep cost edge, especially since it relies on cloud infrastructure partners.

In short: Rubrik's moat is stickiness, trust and a mission-critical platform. In budget cuts, this category is one of the last to go because it protects the business itself.

11 – Culture

I think culture is an underappreciated and often overlooked part of investing. Ultimately, it’s the people who make the business. My primary sources to get an idea of a company’s culture are through Glassdoor and Fishbowl.

The tricky part about using sites like Glassdoor and Fishbowl is that they often don’t paint the full picture. People usually post when they’ve had a bad experience or are on their way out, so the feedback can lean overly negative or extreme.

Though Glassdoor’s data isn’t perfect, it’s a useful directional signal. Rubrik scores 3.7/5 overall (854 reviews), with 64% recommending and 87% approving of CEO Sinha which is a great sign.

Positives include pace, vision, and product; negatives cite hectic pace and work-life balance in some groups. I don’t see major red flags in the employee reviews, though I would like to see their review score inch higher over time.

If it were to drop significantly, it might be a signal of a deteriorating company culture. When it comes to company culture, integrating acquisitions with very different values can be tricky. This brings me to Rubrik's acquisitions so far and my take on them.

12 – Acquisitions

Since 2018, Rubrik has acquired:

• Datos (NoSQL backup)
• Igneous (primarily for intellectual property)
• Laminar (cloud data security)
• Predibase (AI modeling/inference tooling) & most recent acquisition.

I prefer organic growth, but these acquisition are logical, additive tuck-ins rather than defensive buys.

As long as they are complementary and Rubrik can integrate them effectively into the core business, I’m not too worried. It is something to closely monitor though, especially given the competitive landscape of Rubrik. In my view, Rubrik should not become over-reliant on acquisitions to grow and stay competitive.

13 - Numbers deep dive

Now we know the main value proposition, industry positioning and those who lead Rubrik, let’s have a look how that translates into the financials of the company. This can be a bit dry stuff, but it’s an important section. Bare with me!

13.1 - Revenue by geography

In 2025 about $636M (72%) of revenue came from the Americas, with $214M (24%) from EMEA and $36M from Asia‑Pacific (4%). Recently, Bipul Sinha noted a “substantial international opportunity,” and "plans to expand our global footprint".

13.2 - Revenue and free cash flow growth

Rubrik's revenue is driven by subscriptions (96%), which are typically 1–3 year terms and are invoiced upfront or periodically, creating a backlog of predictable revenue streams.

Total revenue grew from $150M in Q1 2022 to $299M in Q2 2025. In Rubrik's latest quarter (Q2 2025), revenue grew 51% YoY, which is their fastest growth to date.

Sidenote: growth is somewhat inflated due to "material rights" revenue recognition. It is related to legacy customers converting to the cloud, rather than organic demand for the core product. It added ~5% of revenue growth on top of their regular cloud revenue growth.

More on what’s driving regular growth in paragraph 13.5 “ARR growth over time”.

Free cash flow grew from -$20M in Q1 2022 to $20M in Q2 2025 and now had four consecutive quarters of positive free cash flow.

13.3 - Gross and free-cash-flow margins

Both Rubrik's gross margins and free cash flow margins are trending in the right direction. Increasing gross margins signal a strong competitive position, while free cash flow margins show profitability at scale.

This kind of operating leverage is exactly what I’d like to see in a scaling business.

13.4 - How they make money

Right now, Rubrik is in hypergrowth mode and currently unprofitable. As margins showed, operating leverage is kicking in though. Free cash flow turned positive over the past quarters with 20% free cash flow margin.

I don’t worry about Rubrik being unprofitable right now. They’ve shown they can deliver positive free cash flow at scale and I’m confident they can further increase this over the next quarters as they continue to scale.

13.5 - ARR growth over time

When looking into SaaS businesses, annual recurring revenue (ARR) is a crucial metric. Over the past quarters, Rubrik's ARR scaled at 36% year-over-year growth reaching $1.2B in Q2 2025.

Dollar-based net retention is over 120% which is a great sign. It means that even without adding any new customers, the company grew its revenue from existing customers by 20%.

This is a very important metric to track because Rubrik relies on a land-and-expand strategy: first they land a small deal with a customer, often just one team, department, or use case and then expand over time to serve more users, teams, or products within that same customer.

13.6 - $100K+ client growth

As of Q2 2025, Rubrik has 2,505 customers with >$100K ARR. This number skyrocketed from just 23 back in 2019. It shows Rubrik provides great value to their customers, and the land-and-expand strategy is working.

13.7 - Financial health

As of Q2 2025, Rubrik held $322.7M in cash and $1.20B in short‑term investments, for total of $1.52B. Short‑term investments consist of money‑market funds, U.S. treasuries, corporate bonds and other securities.

They hold $1.128B in long-term debt. This brings their total net cash to $355M (total cash + short-term investments - long term debt).

Having cash on hand gives Rubrik wiggle room to invest for future growth, expand into new markets, and boost R&D to push innovation while also weathering potential economic downturns.

13.8 - Insider ownership & dilution

Rubrik is effectively a founder-controlled company, even though much of the economic interests are now in the hands of institutions and public shareholders.

All executives and directors (11 individuals) collectively control:

• 4.5M class A shares (3.7%)
• 58M class B shares (79.8%)
• 73.9% of total voting power

I prefer to see some more insider ownership on the class A shares to align the economic interest of the leadership team with those of shareholders, because 3.7% is rather low.

On the flip side, it’s great to see that they still hold most of the voting power. Share dilution of Rubrik was extremely high in the aftermath of their IPO (+200% in Q1 2025) but dropped to 8.4% in Q2 2025.

This is however still well above peers like Crowdstrike (2%) and Commvault (1.5%). I personally prefer not to see >2% dilution for high-growth software names.

You survived the financial section, nice one! I hope the visuals helped you through. Now onto another important part; are there important red flags?

14 – Abnormalities & red flags

I always check for red flags for any business I research. Some of these include:

• Fraud & scandals
• Events that damage the trustworthiness of management
• Excessive marketing spend, no path to profitability
• Drowning in debt

For Rubrik, I have not found any of these, though share dilution is important to keep an eye on. It directly impacts your ownership as a shareholder and weakens long-term compounding.

As mentioned earlier, I’d also have a close eye on future acquisitions.

Customer concentration
Being overly reliant on a small number of customers can be detrimental for a business when one decides to part ways. According to Rubrik management, no customer represented more than 5% of revenue, which doesn’t come as a surprise given Rubrik serves over 6100 customers. Sales are concentrated in the Americas but it’s growing internationally.

So no major red flags here, but there are some other risks to consider though.

15 – Risks

When looking at risk, I rank them based on probability and potential impact over a five‑year horizon.

In this section, I’ve only highlighted businesses-specific risks because that’s what Rubrik can (somewhat) control. There are of course external events that could also affect the business, such as a macroeconomic slowdown or some kind of black swan event.

The top 5 risks I see for Rubrik:

15.1 – Competition (high)

Rubrik's success depends on continued growth of the data‑security market. In their investor presentation, they warn that market growth rate and the ability to introduce new products are uncertain.

Large competitors discussed before (Veeam, Commvault, Cohesity) and cloud providers (AWS, Microsoft) offer backup and security services that compete with Rubrik and could impact future growth rates.

15.2 – Execution (high)
Rubrik is a young company with a limited operating history. Continuous innovation and scaling the business requires continued investment. Failing to deliver on their product roadmap, growth opportunity, and successful integration of acquisitions could impair growth.

15.3 – Profitability and dilution (Medium)
Despite high gross margins, Rubrik is still loss‑making. Operating losses and heavy stock‑based compensation could persist if growth slows. Free cash flow recently turned positive but it’s dependent on upfront billings; a slowdown in new bookings could lead to cash burn.

15.4 – Breaches (Medium – Low)
As a security vendor, Rubrik must maintain impeccable security. A breach of its own systems or customers’ data would damage trust and lead to lawsuits.

15.5 – Founders leaving (Low)
Rubrik is founder‑led so the departure of Bipul Sinha and/or CTO Arvind Nithrakashyap could impact innovation and culture. Especially given the fact that Sinha gets an 87% approval rate from employees, which is hard to replace.

Here's the top 3 visualized:

16 – Valuation

A great business can still be a bad investment if you pay too much. So, let’s have a closer look at the price tag you have to pay for Rubrik and compare them to their closest publicly listed peers.

16.1 Historical valuation and peer comparison
Software businesses are generally valued on their next-twelve-month enterprise value divided by their revenue. In short: NTM EV/REV multiple.

Rubrik is currently trading at ~12x NTM EV/REV, which is around 20% above their 1-year average. However: Rubrik now grows at the fastest pace to date, which to me warrants a higher multiple. It gets increasingly interesting when we compare them to peers along with their growth rates and revenue base.

Bottom line
Rubrik grows over twice as fast versus peers, trades at double the valuation of Commvault and half the valuation of Crowdstrike.

16.2 Discounted cash flow model
I’m always cautious when using a discounted cash flow model (DCF) because you can tweak the inputs in such a way that fits the narrative. It’s garbage in, garbage out so always take it with a grain of salt.

It’s especially challenging for Rubrik because they just turned free cash flow positive. It’s still a good exercise to think in scenarios though. Below are the bear, base and bull cases along with the assumptions for a 5-year time horizon.

I believe the bear case is overly pessimistic, especially given the runway for growth I mentioned earlier. I think ~30% margin is achievable along with sustained revenue growth well above 25% for the foreseeable future. Mainly driven by market share expansion, adding new modules, net retention >120% and expanding into adjacent markets.

Looking at what the market is currently pricing in at ~$77 (at the time of writing), using a time horizon of 5 years:
~ 25% free cash flow margin
~ 38% free cash flow growth
~ 22x free cash flow multiple

For an implied 15% annual return for the next 5 years.

I think that’s definitely achievable for a company like Rubrik. At its current price, I believe Rubrik has limited downside and significant upside if they continue to execute like they’ve done so far.

Even when using a margin of safety versus the base case, their fair value would be around ~$100 for a 15% annual return, posing ~25% upside from today’s price. Right now, Rubrik is by far the best priced cybersecurity name I know of, given their growth rate.

Let’s zoom in on which factors could influence the bull and bear case for Rubrik.

17 - Bull & bear case

Bull case

1. Large market with a mission critical product: Cyber resilience is now a must and Rubrik sits at the center of it. They targets an estimated $53 billion market by 2027, which supports multi-year growth above 25% if they continue to execute.
2. Quality of growth: A strong subscription engine with revenue growth of 51% and net retention above 120% fueled by satisfied customers. Gross margin near 80% and positive free cash flow margin show operating leverage.
3. People, partnerships, and balance sheet: Founder leadership focused on long-term success with a culture that fosters innovation and learning, deep ties with major tech firms, and a cash position that funds product, go to market, and selective M&A without stressing the model.
4. Product and platform edge: Rubrik Security Cloud ties backup, security analytics, identity protection, and guided recovery into one platform that reduces tool sprawl and speeds clean restores.

Bear case

1. Competition and convergence: Veeam, Cohesity and Commvault are credible, and hyperscalers can bundle. Feature catch up or pricing pressure could slow growth or pressure margins.
2. Execution and dilution: Sustaining growth above 25% while reducing sales and marketing spend is hard. Additionally, stock-based compensation and investment needs can dilute owners if operating leverage slips or bookings timing soften which would weaken the thesis.
3. Acquisitions: So far, Rubrik did some great tuck-in acquisitions, but overreliance on acquisitions might at some point backfire when they do not successfully integrate them into their core business. It can lead to permanent destruction of capital and a lot of time and effort wasted.
4. Valuation sensitivity: At about 12x forward EV/Revenue, I do not consider Rubrik a bargain. Though they are priced much better than close peers, taking their growth into account. Any growth slowdown, lower net retention, or sector multiple compression can diminish returns.

Bull & bear case visualized:

18 – My thesis

What I like most about Rubrik is that they sit at the intersection of three durable forces: data, security and AI. Enterprises create and rely on more data every quarter, there's no AI without trustworthy and safe data and threat actors force corporate boards to plan for failure.

Rubrik's platform focuses on resilience rather than prevention alone. Immutable backups, anomaly detection, identity protection, and guided recovery translate into fast and clean restores when it really matters and business continuity is at risk.

The numbers support a strong product market fit. Revenue growth around 51%, net retention above 120%, and gross margins near 80% indicate that satisfied customers expand usage and the operating model scales efficiently.

Founder leadership and a culture that values innovation, learning and transparency are visible in the roadmap and the speed of new module introductions, including identity and AI.

The balance sheet provides room to expand into adjacent markets and mitigates financial risk. If the company maintains >30% revenue growth and improves operating leverage to generate 25%+ FCF margin, I believe the stock could meaningfully outperform over the next five years.

19 – Thesis breakers

Before I make an investment, I always think about possible scenarios which would make my change my mind. It helps me to move quickly when such a scenario plays out.

Here’s what would change my mind on Rubrik:

• Revenue growth slows below 20% due to competitive pressures
• Free cash flow margin fails to expand, indicating that high sales/marketing spend is structural, with no operating leverage kicking in
• The data‑security TAM proves smaller or more competitive than expected with customers opting for cheaper native cloud backups
• Overreliance on acquisitions to stay competitive
• A major security breach damages Rubrik’s long-term reputation and causes customer to churn. It does depend on how management handles this though
• Multiple key C-level executives leaving in a short period of time (including founders)

20 – Metrics to watch

It’s crucial to know what to look for to verify if the thesis is still on track. For Rubrik the most important metrics I would track:

1. Competitive landscape: Monitor new entrants and pricing pressure, especially from hyperscalers. The Gartner Magic Quadrant is perfect to track this

2. New product adoption: Track growth of identity security and AI modules, Predibase cross‑sell, and partnership contributions

3. Customer concentration and diversification: Watch geographic expansion and penetration into mid‑market vs enterprise

4. Subscription revenue & retention: Subscription ARR growth and dollar‑based net retention should remain >30% and >120%, respectively.

5. Gross margin: Stable around ~80% and preferably inching towards ~85%

6. Free cash flow margin: a clear path towards consistent positive FCF with margin above 25%

7. Operating expense ratio: Watch whether sales & marketing and R&D expenses decline as a percentage of revenue, showing operating leverage

8. Share count: Monitor stock‑based compensation and any conversion of convertible notes.

Final thoughts

Rubrik is my top pick in the cybersecurity sector and has a lot of characteristics to become a long-term compounder and potential multi-bagger. It's definitely worth a consideration for long-term, growth‑oriented investors but you have to be able to stomach some level of volatility as the business continues to execute on their mission to secure the world’s data.

Note: as of September 2025, I own shares of Rubrik at an average price of ~$76.

Thank you for reading, I truly appreciate you taking the time to read this piece which I loved writing. Let me know in the comments what your thoughts are and feel free to ask me anything.

As always, none of this is financial advice. It is my attempt to lay out how I see the business and the trade off between quality and price. Always do your own due diligence before making an investment decision that fits your own risk tolerance and time horizon.