08:58 AM EDT, 06/12/2024 (MT Newswires) -- Rubrik ( RBRK ) is seeing healthy trends in demand according to analysts, after the software company recorded robust results in its first quarter as a public entity.

Shares were up almost 4% before the bell Wednesday after the company reported a 38% rise in revenue in the three months through April to $187.3 million. Rubrik ( RBRK ), which offers cloud data management and data security services, completed its initial public offering in April. Its adjusted loss widened to $1.58 per share from a loss of $1.48 the year before.

"While other software/security vendors have had mixed results and guide, and cited a cautious macro/demand environment with sales cycles extending and deals slipping, (Rubrik ( RBRK )) said that demand trends remained healthy and the company did not see any change to its sales cycles," Wedbush Securities analysts led by Taz Koujalgi wrote in a note.

Subscription ARR surged 46% to $856.1 million, partially helped by maintenance conversion, while cloud ARR more than doubled to $606 million, according to Wedbush. The brokerage reiterated its outperform rating on Rubrik's ( RBRK ) stock and a 12-month price target of $50.

The company showed improving profitability during the quarter with the contribution margin from subscription ARR negative 11% versus negative 32% in the prior-year quarter, Truist Securities said in a note late Tuesday. This reflects "growing operating leverage in the business," while cloud ARR as a percentage of subscription ARR grew to 71% at the end of the first quarter from 22% at the conclusion of fiscal 2022.

For the ongoing quarter, Rubrik ( RBRK ) expects an adjusted loss of $0.48 to $0.50 a share and revenue between $195 million and $197 million. The company anticipates a fiscal 2025 adjusted loss of $2.25 to $2.35 and revenue of $810 million to $824 million.

"Rubrik's ( RBRK ) ability to manage all data types in a variety of deployment environments, increasing number of use cases, technology innovation, and high recurring revenue, have positioned it strongly for durable growth going forward," Truist said in its note. The firm maintained its buy rating and $43 price target on Rubrik ( RBRK ).

Price: 36.19, Change: +0.93, Percent Change: +2.64