00:00People. It's great to have you on the program. It's a tough week to announce earnings. I saw for example
00:07Broadcom forecast more than 200 percent growth in its AI chips and yet the market sold the stock. What's happening
00:15right now.
00:17Matt, thank you for the opportunity. Look, at the end of the day, we created an amazing quarter. If you
00:24look at our top line, we grew 32 percent year over year at 1.57 billion in subscription ARR.
00:31And not only that, we generated 74 million of free cash flow, 19 percent margin. Look, market is market. I
00:40mean, AI trade has been very strong and it continues to have this feeling about up and down and it
00:48will all settle down at the end of the day.
00:50If you have a great business, market will come to recognize it. All right. So it is, as I said,
00:56a tough, tough day, tough week for tech earnings, especially related to AI.
01:00We talked about your connection with Mythos and Frontier AI models that, as you have said, is driving more customer
01:09conversations, I can imagine.
01:11Are they actually converting into bigger contracts today or are you still in the in the education phase with these,
01:17I mean, old and new logos?
01:20If you look at like what is happening with mythos and AI frontier models, it has really brought this reckoning
01:28in business leadership that you can't prevent cyber attack.
01:33You need to be ready for the attacks that comes to you and you need to recover and restart your
01:40business upon an incident.
01:41And this is where we are seeing a significant customer demand.
01:45I mean, if you look at our unique technology, what we call preemptive recovery engine that allows our customers to
01:51recover at AI speed when the AI attack happens, is causing a lot of conversations and the pipe building.
01:58And it is one of the reasons that we have raised the outlook for the year.
02:02I wonder what you think as an aside on Anthropik's call for a pause in in AI development, because there's
02:13a concern that these systems may start to develop themselves.
02:16Are they that powerful?
02:17Is it a concern for you at Rubrik as well?
02:20Look, I mean, Anthropik team is very smart.
02:24They are sitting at the leading edge of AI and they have a full comprehension of what's coming, not just
02:30what's in mythos, but in future models.
02:33But at the end of the day, technology pace will continue.
02:36And if we are not doing this in America, people outside of America will develop newer models.
02:43What we need to do is we need to understand the risk and every business leader has to prepare for
02:48that risk.
02:49And that risk preparation is to understand that AI is now going to attack us more and more.
02:54And as we are rolling out AI agents in businesses, we need to make sure that there's a real-time,
03:01runtime guardrail and controls on those agents.
03:03Because if those agents get compromised, you have a massive insider attack.
03:08You have $74 million in free cash flow.
03:12I see you raised your free cash flow guidance to as much as $303 million for the year.
03:19Are you worried, though, about there's a classic sort of software trade-off.
03:24You have a great growth narrative, but you get margin pressure from compute, R&D, and go-to-market spend.
03:31Does that affect you?
03:32Do you see that happening?
03:34I mean, look, we are a high-growth business, and we are balancing how much AI we infuse in the
03:41business to continue to develop products faster, continue to run our business more efficiently.
03:45At the same time, we are also hiring people.
03:48And we are combining the two to create a long-term, highly profitable growth model.
03:53At the end of the day, look, we'll invest in the business, in AI, where we have to, we'll hire
03:59people where we have to, and we want to build the next 30-, 40-, 50-year company.
04:04In terms of AI agents, agentic AI, do you have ID security for agents?
04:12Because I was talking earlier this week with other security companies who said they'd rather have the customer create those
04:22identity securities.
04:23But I think other analysts expect to have it at the cybersecurity level.
04:30Rubrik does identity resilience for a long time.
04:34And if you look at our recent announcement, we showed that our new product in identity resilience grew to over
04:4150 million ARR in just four to five quarters.
04:44But identity for agentic security is one aspect of agentic security.
04:49You need to have the full platform from understanding of what agents you are running to understanding of this identity
04:56for the agents and the posture
04:58to creating a runtime security for agents, as well as what we call agent rewind, where if the agent make
05:06a mistake, how do you undo the action of agents?
05:09And Rubrik has this full platform from monitoring to posture to runtime security to agent rewind.
05:16And that's where we are actually helping our customers do AI transformation with confidence.
05:22Yeah, I ask because I've read you say agents create 100 times more productivity, but also 100 times more risk.
05:29And I just wonder if you're seeing companies, if your clients are budgeting for that, because I imagine also more
05:36cost.
05:37100% they are budgeting for it, right?
05:40Because look at any new technology.
05:42When you adopt new technology, you need to have a harness to ensure that you actually are managing the risk.
05:47And if you look at the totality of upside and downside, our customers are very excited to do the AI
05:53transformation.
Comments