Shares of Rubrik Inc. (RBRK) plummeted 9.04% in Wednesday's trading session, extending losses from the previous day's after-hours trading. The sharp decline comes despite the data security firm reporting better-than-expected second-quarter results, as investors focused on weaker-than-anticipated third-quarter guidance and growing concerns about the company's path to profitability.

For the second quarter ended July 31, Rubrik posted impressive results, with a non-GAAP net loss of $0.03 per share, significantly outperforming analyst expectations of a $0.34 loss. Revenue surged 51% year-over-year to $309.9 million, handily beating the consensus estimate of $282.22 million. The company's subscription Annual Recurring Revenue (ARR) also showed strong growth, increasing 36% year-over-year to $1.25 billion.

However, Rubrik's guidance for the third quarter fell short of analyst expectations, overshadowing the Q2 beat. The company forecasts a non-GAAP net loss per share between $0.18 and $0.16 for Q3, worse than the consensus estimate of a $0.26 loss. While Rubrik raised its full-year fiscal 2026 outlook, projecting revenue of $1.227 billion to $1.237 billion, investors seem to be reassessing the company's valuation in light of its projected losses. The steep drop may also reflect some profit-taking, as Rubrik's shares had risen 46.3% year-to-date prior to the earnings release.