TSP Weekly Tech Stock Update—Aug 17, 2024
This Week: MNDY delivers strong Q2 results, NVDA rebounds, SMAR new 52-week high, PANW/SNOW/WDAY earnings previews, RBRK is one to watch, Fidelity builds its AVGO position, cloud demand trends & more.
Hello from Rob…
— We’ve added Rubrik (RBRK, $33.41), a provider of a data management and security software platform, to the TSP Watch List because the company is a prime vendor disrupting the fragmented legacy $12-billion backup and recovery market.
Founded in 2013, Rubrik’s platform secures data and enables organizations to implement an effective cyber resilience strategy. Rubrik introduced its first product in 2015. The company went public in April 2024 with an offering price of $32.
These days, data sprawl has expanded the surface area of a potential attack. Legacy backup and recovery solutions (from companies such as IBM and Dell EMC) are often highly ineffective because they were only designed primarily for operational recovery, not to enable reliable recovery from cybersecurity incidents. With cyberattacks being inevitable, enterprises need a strategy to both minimize operational disruptions during a breach and quickly recover.
Introduced in FY’23 (Jan.), Rubrik Security Cloud (RSC) is the company’s main growth driver. It’s a full platform to help organizations protect their data across enterprise, cloud and SaaS applications. RSC combines data protection and cyber resilience into a single, cloud-native SaaS platform that detects, analyzes and remediates cybersecurity risks and unauthorized user activities across enterprise data estates. It’s easy to use and connects to other systems via APIs.
Rubrik offers various products built on top of RSC, including Anomaly Detection (for ransomware monitoring and investigation) and Sensitive Data Monitoring. Rubrik’s newest product, DSPM Everywhere, is now generally available. It’s a cyber resilience offering that combines data security posture management with cyber recovery. DSPM Everywhere provides full visibility into where data lives, who has access to the data and how the data is being used.
In terms of the go-to-market strategy, Rubrik sells into mid-level and larger enterprises via channel partners, while field sales reps work with global and regional systems integrators at the very upper end. Inside sales and resellers are deployed at the lower end. In FY’24, the company’s three largest channel partners generated about 76% of total revenue. Rubrik continues to expand internationally, with revenue from outside the U.S. accounting for nearly a third of total revenue.
In June, Rubrik delivered its initial quarterly results as a public company. Total revenue in FQ1 (April) rose 38% to $187.3 million, topping the consensus by 9%. Subscription revenue of $172.2 million rose 59%. Subscription annual recurring revenue (ARR) gained 46% to $856.1 million. Rubrik added $72 million of net new subscription ARR, up 32% from the year-ago level. Cloud ARR jumped 104% to $606 million. Gross margin of 75.4% rose from 73.6% a year ago.
Rubrik’s customer base totals 6,100+, up from 5,000 in January 2023. There are 1,859 customers with subscription ARR of $100k or more, up 41% year over year. Overall subscription dollar-based net retention in FQ1 topped 120%. Three main vectors power expansion at Rubrik: (1) growth of data from applications that are already being secured on the platform, (2) the addition of new applications to be secured and (3) adoption of additional security products.
*Inside This Issue: A New Activist Investor For Smartsheet
—Paid subscribers will receive the September 2024 PDF of Tech-Stock Prospector (TSP #271) via email on Tuesday, September 10.
—Paid subscribers have access to the TSP Market Overview and TSP Portfolio Updates sections inside this issue.