Rubrik Locks In. Okta Locks Out.
Rubrik’s land-and-expand engine prints cash. Okta’s cross-sell story runs dry.
Model Portfolio Action: Long RBRK / Short OKTA
Model Weighting: 2% (1% each side)
Risk Management (Stop Reference): -15% each
Initial Profit Target (Guidance): Subject to fundamental validation and market context.
This position is part of our illustrative model portfolio and is presented for informational purposes only. It does not constitute personalized investment advice.
While both firms operate at the intersection of enterprise security and digital transformation, their operational trajectories have sharply diverged.
Rubrik is emerging as the de facto cyber resilience platform for enterprises modernizing around AI and cloud workloads. Its integrated suite, spanning backup, data security posture management (DSPM), cyber recovery, and identity resilience, has become mission-critical, particularly in Microsoft-centric environments. Financially, Rubrik is executing at an elite level: FY25 revenue grew 47%, and Q4 free cash flow margin reached 29%, placing it among the few scaled software vendors achieving Rule of 70+ performance.
In contrast, Okta, despite a strong Q4 headline, continues to grapple with structural sales challenges, fragmented platform integration, and a stagnant net retention rate (NRR). FY26 revenue is guided to grow just 9% – 10%, with no expected NRR improvement despite heavy investment in Governance, Privileged Access Management (PAM), and AI-powered threat protection.
Rubrik: Multi-Layered Bull Case
A. Platform Built for the AI-Centric Enterprise
Rubrik is not just a backup vendor. Its architecture embeds DSPM directly into its Rubrik Security Cloud (RSC), providing real-time visibility across structured, unstructured, SaaS, and cloud data. This native capability recently enabled a Fortune 100 financial firm to confidently roll out Microsoft Copilot only after halting GenAI adoption due to data exposure risks.
“Our DSPM empowered them to quickly and securely adopt Copilot and realize the full productivity gain they anticipated.”
This positioning, at the intersection of AI, compliance, and cyber resilience, places Rubrik in the direct flow of AI-first budget allocation.
B. Financial Execution and Operational Leverage
Rubrik is scaling with exceptional efficiency:
Revenue Growth (FY25): +47% YoY
Free Cash Flow Margin (Q4): 29%
Non-GAAP Gross Margin: 80%
ARR Contribution Margin: Improved from -12% to +2% YoY (1,400bps swing)
“Out of the 1,400bps improvement, 1,200bps came from sales and marketing efficiency… more products to sell, greater productivity, better enablement.” — CFO Kiran Choudary
This leverage is translating into higher-value customer cohorts—customers >$100K ARR now represent 84% of total, up from 80% YoY.
C. Durable NRR with Embedded Upsell Engines
Rubrik’s NRR remains above 120%, driven by:
Growing data within existing applications
Expansion to new workloads (e.g., M365, unstructured data, Google Cloud)
Adoption of new security modules (DSPM, Active Directory Forest Recovery)
“Over one-third of our NRR now comes from adoption of additional functionality—up from ~29% last year.”
This reflects a true expansion engine, not just renewals.
D. Competitive Takeouts Accelerate
Rubrik is displacing legacy (Veritas, Dell EMC) and next-gen (Cohesity, Veeam) players alike. Even regulated entities, such as a Southeast Asian government, have selected Rubrik for superior security features and faster recovery times.
A Fortune 50 customer reported 98% faster M365 recovery with Rubrik vs. Microsoft-native tools:
“It was about the survival of our company.”
Okta: Structural Headwinds & Execution Gaps
A. Anemic Growth, Flat NRR
Despite a record Q4 ($1B+ bookings, 25 new $1M+ customers), Okta’s FY26 guidance is just 9%–10% revenue growth. NRR remains flat at ~107%.
“Our model suggests [NRR] is roughly 107%, maybe ±1 point.” — CFO Brett Tighe
This implies weak follow-through and a lack of durable expansion.
B. GTM Specialization Adds Complexity
Okta's decision to split go-to-market into Okta/Auth0 teams reflects internal complexity, not customer clarity.
“Transitioning to specialization took a couple quarters… products are more detailed and in more sub-markets.” — CEO Todd McKinnon
Platform integration remains aspirational. Identity Governance, PAM, and Posture modules still require orchestration across separate tools, a stark contrast to Rubrik’s single-policy engine model.
C. Monetization Trails Product Expansion
Over 20% of Q4 bookings came from new SKUs, but monetization lags:
OIG: 1,300 customers, $100M ACV
PAM: Not yet scaled; growth concentrated in single deals
The pitch of a unified identity platform remains unfulfilled.
D. Competitive Moat Eroding
The identity market is consolidating, Microsoft Entra, Cisco, and private equity roll-ups (e.g., ForgeRock/Thoma Bravo) are crowding out Okta’s “neutral” positioning.
Okta’s complexity now resembles the legacy stacks it once sought to replace.
TLDR
Long Rubrik (RBRK):
True cloud-native platform with AI-resilient architecture
Category leader in DSPM, recovery speed, and enterprise-grade data protection
Exceptional financial execution (FCF 29%, GM 80%)
Durable, monetizable expansion (NRR >120%)
Strong Microsoft alignment and regulatory tailwinds (e.g., DORA)
Short Okta (OKTA):
Fragmented product stack with weak integration
GTM motion adds friction, not lift
Flat NRR and lackluster monetization of new products
Competitive pressure from Microsoft, Cisco, and IAM consolidators
FY26 growth guide of 9–10% despite elevated spend
Model Portfolio Action: Long RBRK, Short OKTA
Model Weighting: 2% (1% each)
Risk Management Level (Stop Reference): -15% each
Initial Profit Level (Guidance Range): Subject to fundamental validation and market context.
This position reflects an allocation within our illustrative model portfolio and is presented for informational purposes only. It does not constitute personalized investment advice.
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Looks like this turned out well