Rubrik's stock pops in IPO debut as CEO sees big opportunity in data protection

By Emily Bary

The cybersecurity company raised $752 million through its offering

Rubrik Inc. seemed to check off the right boxes for investors Thursday as its stock surged in its public debut.

Shares of Rubrik (RBRK) opened at $38.60, 21% above their initial-public-offering price of $32. The first trade was executed at 12:47 p.m. Eastern time, for 2.7 million shares. The stock pared its gains in afternoon trading and was recently up 16%.

The cybersecurity company offered 23.5 million shares in its IPO to raise $752 million.

See also: Rubrik prices its IPO at $32, above expected range

Rubrik, founded in 2013, specifically focuses on data security. The company sees opportunities to help customers access and monitor their data, while also giving them the ability to retrieve it in the event of a cyberattack.

"Our goal is to lead the data-security market, which we believe is the future of cybersecurity," Chief Executive Bipul Sinha said in a letter to potential investors that was included in Rubrik's prospectus.

Rubrik also sees itself as a play on the artificial-intelligence trend that has driven the tech sector's stock-market gains recently.

"Generative-AI breakthroughs have ushered in a technological paradigm shift that promises huge productivity gains for organizations," the company said in its prospectus. But the leaders of tech companies need to ensure data privacy and security in doing so, Rubrik added.

The company further noted that generative AI could end up making cyber incidents more advanced, growing the need for customers to invest in data-security software.

Rubrik says its technology proves helpful when a business must continue operating while suffering from a cyberattack. For instance, a hospital still has to treat and admit patients even if its systems are under attack, Sinha said in an interview with MarketWatch on Thursday.

"Protecting data means you are allowing businesses to continue to operate, and that's where we are focused," he said.

Sinha told MarketWatch that Rubrik will be able to balance its priorities now that it's a public company.

"The long-term companies are public companies, because it teaches you the skill set of delivering the short-term outcomes with a long-term vision and focus," he said.

Revenue at Rubrik grew to $627.9 million in its most recent fiscal year, which ended in January. That compared with $599.8 million in the previous fiscal year.

But the company's losses expanded, climbing to $354.2 million from $277.7 million a year earlier.

"Rubrik is in a very exciting market with a highly differentiated product," Sinha said. The company is "configuring" itself to have a path to profitability as it also balances growth opportunities.

Sinha is new to leading a public company, and acknowledged that Wall Street can be focused on different things than a private-company CEO might be.

"When you have a baby and you have been working for 10 years on strategy and product, all of it, you put so much time and energy thinking about it," he said.

"But ultimately, for the markets, it comes down to one number that everybody focuses on," he acknowledged - that number being the stock price.

-Emily Bary

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04-25-24 1537ET

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