Shares in Rubrik Inc. sagged more than 4% in late trading today despite the company reporting better-than-expected earnings and revenue in its fiscal 2026 second quarter and giving guidance ahead of what analysts were expecting.

For the quarter that ended on July 31, Rubrik reported an adjusted earnings per share loss of three cents, down from a loss of 40 cents in the same quarter of the previous fiscal year, on revenue of $309 million, up 51% year-over-year. Both figures were well ahead of the 34 cents-per-share loss and revenue of $282 million expected by analysts.

Rubrik saw subscription revenue in the quarter of $297 million, up 55% year-over-year and subscription annual recurring revenue as of the end of July was $1.25 billion, up 36% year-over-year. The strong numbers were driven by customer growth, with Rubrik having 2,505 customers with subscription annual recurring revenue of $100,000 or more, up 27% year-over-year.

Cash flow from operations came in at $64.7 million, up from a loss of $27.1 million in the same quarter of the previous year and Rubrik was sitting on $1.532 billion in cash, cash equivalents and short-term investments as of July 31.

The biggest news in the quarter for Rubrik was the company’s announcement on June 25 that it will acquire Predibase Inc., a startup that develops software for fine-tuning apps, in a deal that was estimated to be in the range of $100 million to $500 million.

In a statement at the time, Rubrik said the acquisition would allow it to accelerate agentic artificial intelligence adoption from pilot to production at large scale. The company added that the introduction of Predibase’s technology would deliver “radical simplicity” in models and data, resulting in improved accuracy, lower costs, better performance and automated data governance.

Other business highlights in the quarter included the launch of Agent Rewind, powered by Predibase’s AI infrastructure. The service is designed to allow organizations to undo mistakes made by agentic AI by tracking agent actions and undoing changes to applications and data.

Rubrik also announced expanded immutability for Amazon RDS for PostgreSQL and comprehensive protection for Amazon DynamoDB, which it says strengthens its leadership in cloud data protection.

“We delivered a strong quarter with exceptional top-line growth and significant cash flow margin. We continue to build towards a highly profitable growth business,” co-founder and Chief Executive Bipul Sinha said in the company’s earnings release. “We continue to build towards a highly profitable growth business.”

For its fiscal third quarter, Rubrik expects an adjusted earnings per share loss of 16 to 18 cents on revenue of $319 million to $321 million. Analysts were expecting a loss of 26 cents per share.

For its full fiscal year, the company expected an adjusted earnings per share loss of 44 to 50 cents and revenue of $1.227 billion to $1.237 billion. Analysts were expecting a loss of 97 cents per share and revenue of $1.19 billion.

With beats across the board, the question arises as to why investors sold off Rubrik shares after hours and it could be a case of Rubrik being too successful in the quarter. After reporting an adjusted earnings per loss of three cents in the quarter, the third quarter outlook then dropped to a loss of 16 to 18 cents; while ahead of analysts expectations, the outlook figure is not an improvement over the second quarter.

Photo: Rubrik