Rubrik (RBRK) Q3 FY27 Earnings Preview and Forecast

Rubrik (RBRK $111.22 +5.17%) reports Q3 FY27 results, for the quarter ended October 31, 2026, in early December. The company has not announced the date. It reported the same quarter last year on Thursday, December 4, 2025, and its last four reports all landed on a Thursday, so we expect Thursday, December 3, 2026 (estimated, about 24 days out).

Rubrik has beaten the midpoint of its own revenue guide by 5.8% to 10.4% in each of the last four quarters. We expect another beat, but a smaller one. The reason is arithmetic: this time the guide sits almost exactly on the subscription run rate Rubrik already had on August 1, while the last three guides sat 3 to 8 points below it. The stock closed at $105.75 on November 6, down 22.2% from $136.00 on October 28, so the print lands on a name that has already been marked down.

Why Q3 will beat, by less than usual

Rubrik sells mostly subscriptions. About 89% of subscription ARR ($1.48B of $1.66B at July 31) is cloud, recognized evenly over the contract, so the ARR a quarter starts with sets most of that quarter's subscription revenue. The rest is self-hosted software, part of which is recognized upfront when sold, plus a shrinking line of "material rights" revenue left over from Rubrik's move to the cloud.

We strip material rights out and divide subscription revenue by a quarter of the ARR at the start of the quarter. That share has been rising as non-cloud sales recovered: 92.4% in Q1 FY26, 95.8% in Q2 FY26, then 103.0%, 100.1% and 102.9% in the last three quarters with known material rights.

Then we run the same test on each guide: the guide midpoint, minus the material rights the quarter actually carried (guided for Q3), minus about $13M of other revenue, divided by the starting run rate.

The gap between guide and outcome was 10.6 points in Q4 FY26, 5.9 in Q1 and 6.2 in Q2. The Q3 guide leaves only about 2 points if the quarter lands at our 102.0%, the average of the last three quarters. That is why our beat is $10.7M (2.5%) rather than the $21M to $36M beats of the last four quarters.

Two things make even that smaller beat likely. First, the run rate is already booked: at 100.1%, the weakest of the last three quarters, subscription revenue excluding material rights would be $415.4M, and with $2M of material rights and $13M of other revenue the total is $430.4M, exactly in line. Second, management raised the annual guide by more than the full Q2 beat, so it is not counting on a weak second half. The CFO's own words:

“And when I look at the guidance, we took the guidance up by the full beat in Q2, as well as raised some more.”

Kiran Choudary, Chief Financial Officer, Q2 FY27 earnings call, August 27, 2026

Our forecast for Q3 and Q4

For the full year, Rubrik guides revenue of $1,685M to $1,693M and subscription ARR of $1,880M to $1,885M. Consensus revenue is $1,690.6M (28 analysts). Our quarters add to $1,721.8M, and our year-end ARR of $1,886.9M is just above the top of the ARR guide.

The analyst estimates on the Rubrik estimates page were captured on November 6. Sixteen analysts raised their Q3 EPS estimate in the prior seven days and one lowered it; the Q3 EPS average moved from $0.056 90 days ago to $0.082.

The bridge from Q2 to Q3

Q2 revenue was $427.3M. Three things move it.

• Run-rate growth adds $20.9M. Subscription revenue excluding material rights rises from $402.5M to our $423.4M, which is 102.0% of the $415.2M starting run rate.
• Material rights fall by $2.2M, from $4.7M to the guided $2M to $3M (we use $2.5M).
• Other revenue falls by $5.1M. It was $20.1M in Q2, against $12.8M to $13.8M in each of the five quarters before. The CFO tied the jump to “the higher price and volume of hardware” in regions such as APAC where Rubrik still resells it. We assume $15.0M, part of the way back.

Net new ARR is the real test

Revenue is mostly decided before the quarter begins. Net new subscription ARR is not, and it sets Q4 and next year. Rubrik added $103.0M in Q1 (+16.2% year on year) and $95.8M in Q2 (+34.6%), with no contribution from the Strata.io identity acquisition in either quarter, according to the CFO.

The full-year ARR guide of $1,880M to $1,885M leaves $219.1M to $224.1M for the second half. Last year's second half added $209.7M ($94.4M in Q3 and a record $115.3M in Q4). So the guide implies second-half growth of 4.5% to 6.9%, after 24.4% in the first half. Citi's analyst asked about exactly that step down on the Q2 call.

We forecast $105M in Q3, 11% above last year's $94.4M: well below the first-half pace and above what the guide implies. The CEO's answer to Citi suggests the guide is a floor management expects to clear:

“If you look at where we started the fiscal year in terms of our net new ARR for the year, we have in two quarters, we have raised the net new ARR by 45 million, which is more than 10% from the beginning of the year number that we projected. And that is without any inorganic.”

Bipul Sinha, Chief Executive Officer, Q2 FY27 earnings call, August 27, 2026

The mix is shifting too. Cloud ARR grew 39% to $1.48B, but adjusted net new cloud ARR grew only 20%, because the non-cloud business is growing again after years of migrations.

“The non-cloud business is largely directed towards folks who are in the regulated industry, government agencies as such on-prem who do not want to use the cloud. And that business has started to grow.”

Kiran Choudary, Chief Financial Officer, Q2 FY27 earnings call, August 27, 2026

That matters for revenue because self-hosted sales carry upfront revenue, which is part of why the run-rate share climbed above 100%.

Margins

Non-GAAP gross margin fell from 83.7% in Q4 FY26 to 81.0% in Q2 as high-margin material rights rolled off and hardware sales rose. We assume 80.5% in Q3, a little lower again as material rights shrink. Subscription ARR contribution margin, Rubrik's preferred profit measure, rose from -3.3% in Q3 FY25 to 14.0% in Q2; the Q3 guide is about 14%.

The EPS guide is where the cushion is widest. Non-GAAP operating income was $24.6M in Q1 and $33.5M in Q2. A $0.08 guide midpoint on 230 million shares is about $18.4M of non-GAAP net income, which after roughly $11.2M of net interest income and tax (the Q2 gap between operating and net income) leaves about $7.2M of operating income. That needs non-GAAP operating expenses of about $339M, up 8.4% from Q2's $312.6M, against 5.5% growth from Q1 to Q2. If expenses grow 5.6% to $330M and revenue lands at our $440.9M, operating income is $25.0M and EPS is $0.16.

Balance sheet and dilution

Rubrik ended Q2 with $1.75B of cash, cash equivalents and short-term investments against $1.13B of convertible debt. Free cash flow was $73.6M in Q1 and $65.7M in Q2, or $139.3M for the half, against a full-year guide of $323M to $333M that needs a stronger second half, as it had last year. The guide assumes about 230 million weighted shares for Q3, up from roughly 224 million diluted shares implied by Q2's non-GAAP EPS. GAAP results remain loss-making: the Q2 GAAP net loss was $61.8M, or $0.30 a share, on the income statement.

What management said

On hardware costs, a question several analysts raised:

“We did not see any material impact to our subscription ARR from rising hardware costs or supply constraints.”

Kiran Choudary, Chief Financial Officer, Q2 FY27 earnings call, August 27, 2026

On the guide for Q3:

“We expect material rights related to our cloud transformation to contribute approximately $2 to $3 million to revenue in the third quarter.”

Kiran Choudary, Chief Financial Officer, Q2 FY27 earnings call, August 27, 2026

On how deals close, six weeks into the quarter at the Goldman Sachs Communacopia conference:

“Obviously, Rubrik is a considered purchase. We are not like a Facebook app that millions of people download overnight and we won the market. So there will be a process.”

Bipul Sinha, Chief Executive Officer, Goldman Sachs Communacopia + Technology Conference, September 10, 2026

The full call and every analyst question are on the Q2 FY27 call page, and the rest of Rubrik's calls are in our earnings call transcripts.

Positioning

• Short interest: 13.24 million shares at the October 15 settlement, 4.6 days of average volume, down from 15.23 million on August 31 (short interest history). FINRA publishes the October 30 figure on November 10.
• Options: the December 4 expiry, the first after the expected date, priced a move of about 19.5% ($20.65 on the $106 straddle) at the November 6 close, with at-the-money implied volatility of 90.6%. That covers four weeks of trading, not only the report, and open interest leans to calls (475 against 219 puts) (options chain).
• Insiders: CTO Arvind Nithrakashyap sold 12,820 shares a day on November 2, 3 and 4 under a 10b5-1 plan, converting the same number of Class B shares each day; he still holds about 9.96 million Class B shares. Directors John Thompson and Yvonne Wassenaar also sold under plans. Planned sales of this size say little about the quarter (insider trades).
• Valuation: a market value of $21.9B is 14.2 times trailing revenue of $1,542.2M, against a median of 4.7 times for 49 similar-size infrastructure software peers.

Our assumptions

The scenarios move only the run-rate share, other revenue and net new ARR:

• Upside, $448.1M and EPS $0.20: another quarter at Q2's 102.9% run-rate share, other revenue of $18M and $115M of net new ARR.
• Downside, $430.4M and EPS $0.08: the run-rate share falls back to Q1's 100.1%, other revenue returns to $13M, and net new ARR is $95M. Revenue would then match consensus to within $0.3M.

Risks

• Upfront revenue is lumpy. The run-rate share swung from 103.0% to 100.1% and back to 102.9% in three quarters. A quarter with fewer self-hosted deals lands at the guide, not above it.
• Hardware reverses. Q2's $20.1M of other revenue carried hardware price and volume that may not repeat.
• Net new ARR slows toward the guide. If Q3 adds close to $95M, the full-year ARR guide only holds, and a growth stock trading at 14 times sales needs more than that.
• Costs rise faster. Strata.io brings costs while the guide assumes no ARR from it, and Rubrik said it will keep investing in go-to-market for identity resilience and Rubrik Agent Cloud.
• The stock is already volatile. Shares fell 22.2% in the seven sessions to November 6, and options price large swings in either direction.

What to watch on the call

• Net new subscription ARR against our $105M and last year's $94.4M.
• The Q4 revenue guide against $446.2M consensus, and whether the full-year ARR guide rises above $1,885M.
• The split between cloud and non-cloud net new ARR, and the upfront revenue that came with it.
• Other revenue, and whether hardware stays near Q2's level.
• Rubrik Agent Cloud traction: a BMO analyst noted on the Q2 call that management had told investors not to expect ARR from it this year.

Sources

• Q2 FY27 results 8-K, August 27, 2026, SEC accession 0001943896-26-000055
• Q1 FY27 results 8-K, June 4, 2026, SEC accession 0001943896-26-000041
• Q4 FY26 results 8-K, March 12, 2026, SEC accession 0001943896-26-000004
• Q3 FY26 results 8-K, December 4, 2025, SEC accession 0001943896-25-000050
• Q2 FY27 10-Q, filed September 1, 2026, SEC accession 0001943896-26-000060
• Q2 FY27 earnings call transcript, August 27, 2026
• Goldman Sachs Communacopia + Technology Conference transcript, September 10, 2026
• Analyst consensus captured November 6, 2026; short interest from FINRA settlement October 15, 2026; options and prices at the November 6, 2026 close.

This article is our analysis of public filings and our own financial model. It is not investment advice, and forecasts can be wrong. Equibles staff may hold positions in the securities discussed.