Rubrik plans $1 billion convertible note offering

PALO ALTO, Calif. - Rubrik, Inc. (NYSE: RBRK), a cloud data management company with a market capitalization of $18.02 billion and impressive year-to-date returns of 42.52%, announced its plans to offer $1 billion in Convertible Senior Notes due 2030 in a private placement to qualified institutional buyers. The company also intends to grant an option for the purchase of an additional $150 million in notes. According to InvestingPro data, Rubrik maintains strong gross profit margins of 76.45% despite operating at a loss.

The notes, set to mature on June 15, 2030, will be general unsecured obligations of Rubrik, with interest payable semiannually. The conversion terms will allow note holders to receive cash, shares of Rubrik’s Class A common stock, or a combination thereof at Rubrik’s discretion upon conversion.

Rubrik aims to use the net proceeds to fund capped call transactions to minimize share dilution, repay existing loans totaling $327.9 million, and for general corporate purposes, which may include potential acquisitions, investments, working capital, and capital expenditure needs.

In conjunction with the note offering, Rubrik plans to enter into capped call transactions to reduce potential dilution from the conversion of notes or to offset cash payments required upon conversion. The initial purchasers of the notes or their affiliates are expected to engage in derivative transactions with Rubrik’s Class A common stock, which could affect its market price.

The capped call transactions are also expected to involve secondary market activities, including purchasing or selling Rubrik’s securities, which could impact the market price of both the Class A common stock and the notes.

Rubrik clarifies that the notes and the Class A common stock to be issued upon conversion have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the U.S. without registration or an exemption from registration requirements.

This press release contains forward-looking statements regarding the offering, capped call transactions, and the use of proceeds. These statements are based on current assumptions and are subject to risks that may cause actual results to differ materially.

The information in this article is based on a press release statement from Rubrik.

In other recent news, Rubrik Inc has seen a series of positive developments following its strong quarterly performance. The company reported an impressive increase in annual recurring revenue (ARR), with net new ARR reaching $89 million, surpassing estimates. This strong performance has led Rubrik to raise its fiscal year 2026 ARR guidance. Analysts from multiple firms have responded by raising their price targets for Rubrik. BMO Capital increased its target to $110, Goldman Sachs to $117, Truist Securities to $110, Piper Sandler to $115, and KeyBanc to $113. Each firm maintained a positive rating on the stock, with analysts highlighting Rubrik’s robust growth in areas like data security and cyber-resilience. Goldman Sachs noted a 7% revenue increase compared to consensus estimates and a 60% growth in Cloud ARR. Piper Sandler and KeyBanc also emphasized Rubrik’s expanding product scope and strategic focus on identity resilience and next-generation backup solutions. These developments reflect a strong confidence in Rubrik’s market position and future growth potential.

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