So there have only been 3 SaaS IPOs since 2021. Just 3. But all 3 are pretty good ones: Klaviyo, blowing past $1B in ARR; OneStream, growing 37% at $500m ARR; and Rubrik, growing a stunning 35% at $920,000,000 in ARR. (Note: Rubrik’s ARR and growth numbers remain a bit confusing as it transitions 100% to SaaS-based revenue).
Woah. The demand for cybersecurity products that work remains unbowed!
Still, the public markets are only valuing even these epic numbers at $5B or so, so just over 5x ARR. Why? Most likely because it’s not cash flow positive yet.
Our outstanding second quarter results show fast growth at scale and business momentum, highlighting the demand by our customers for complete cyber resilience.@RubrikInc’s first months as a public company have been strong, and there’s enormous potential ahead.… pic.twitter.com/w14pzOVQdF
— Bipul Sinha (@bipulsinha) September 9, 2024
5 Interesting Learnings:
#1. 120% NRR Fuels 35% Growth
It’s hard to keep growth above 30% if your NRR is suffering. Rubrik’s isn’t. It’s at a super impressive 120%
#2. Not Profitable Yet — And Probably Taking a Short-Term Hit Because of It
Rubrik’s growth is one for the record books, but it’s still investing heavily in growth and isn’t getting more efficient. Free cash flow margins are still negative at -12%. And this is likely why it’s only trading at just over 5x ARR …
#3. From $180m ARR 3 years ago to $920m ARR today
It’s just breathtaking to see how high-growth compounds in SaaS and Cloud:
#4. 114 $1m+ ARR Customers
Cybersecurity often swings big here. When you protect every employee in a BigCo from a serious threat — you can charge millions. And they are up to 1,800 $100k+ customers, up from 1,300 a year ago.
#5. 32% of Revenue From Outside U.S.
Go global folks as early as practical!
And a few other interesting learnings:
#6. Most Contracts Are Multi-Year Deals
Not a surprise, just a reminder of how common this is in bigger enterprise deals with a trusted vendor.
#7. No “Downturn” or Macro Impacts in Cybersecurity, But Deals Take Longer to Process
Cybersecurity demand is stronger than ever. But CEO Bipul Sinha says it still takes more work to get a deal through procurement now!
#8. AI a Focus, But Not at The Heart of Growth
AI is part of Rubrik’s pitch, but not at its core. AI isn’t changing everything overnight.
#9. NRR Growth is 60% from Data Growth, 40% From Buying More Security Products
Both together drive 120% NRR.
Go Rubrik, Go!