Core Viewpoint - Samsara Inc. has shown strong quarterly performance, with revenue growth exceeding 30% year-over-year, despite a recent stock pullback that presents a buying opportunity for long-term investors [2][4]. Financial Performance - Samsara reported Q1 revenue of $366.9 million, marking an increase of over 30% compared to the previous year [2]. - The company consistently beats analyst expectations, which has become a trend [2]. Analyst Sentiment - Analysts have reiterated bullish ratings and raised price targets, with a 12-month forecast price of $50.00, indicating a potential upside of 23.58% from the current price [7]. - Wells Fargo and BMO Capital Markets have both increased their price targets to $50 and $54 respectively, citing strong annual recurring revenue (ARR) growth and resilient demand trends [7][8]. Market Dynamics - The market reaction to Samsara's recent earnings report was influenced by tariff-driven delays in deal closures and updated forward guidance, which some investors found underwhelming [4]. - Despite the pullback, analysts remain confident in the company's growth prospects, indicating a disconnect between market sentiment and analyst expectations [5]. Strategic Initiatives - Samsara is expanding its presence in under-digitized sectors such as public infrastructure and construction, with new product features aimed at improving safety and employee engagement [9]. - The company is leveraging its AI-powered platform to deliver clear ROI, which is expected to drive further margin expansion [3]. Technical Analysis - The stock's relative strength index (RSI) has dipped below 40, suggesting it is nearing oversold territory, which could present a buying opportunity [10]. - It is crucial for the stock to maintain levels above $40 to avoid signaling bearish control in the short term [11].

Core Viewpoint - Samsara Inc. has received an upgrade to Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2][4]. Earnings Estimates and Stock Price Movement - The correlation between changes in a company's future earnings potential and its stock price movements is strong, largely influenced by institutional investors who adjust their valuations based on earnings estimates [3][5]. - An increase in earnings estimates typically leads to higher fair value for a stock, prompting institutional investors to buy or sell, which in turn affects stock prices [3]. Samsara Inc. Specifics - The recent upgrade for Samsara Inc. indicates an improvement in its underlying business, which is expected to positively influence its stock price [4]. - The Zacks Consensus Estimate for Samsara Inc. has increased by 27.1% over the past three months, with expected earnings of $0.41 per share for the fiscal year ending January 2026, showing no year-over-year change [7]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [6]. - The upgrade of Samsara Inc. to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9].

```markdown PART I—FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements for the quarter ended May 3, 2025, show total revenue of **$366.9 million**, a **31% increase year-over-year**, and a reduced net loss of **$22.1 million** compared to **$56.3 million** in the prior year period. Total assets grew to **$2.07 billion**, and the company generated **$52.6 million** in cash from operating activities [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of May 3, 2025, total assets increased to **$2.07 billion** from **$2.02 billion** at February 1, 2025. The increase was driven by growth in cash, investments, and deferred commissions. Total liabilities slightly decreased to **$946.0 million**, while total stockholders' equity grew to **$1.13 billion** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | May 3, 2025 | February 1, 2025 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $259,025 | $227,576 | | Total current assets | $1,132,875 | $1,145,154 | | Total assets | $2,073,617 | $2,024,302 | | **Liabilities & Equity** | | | | Total current liabilities | $741,156 | $761,346 | | Total liabilities | $946,043 | $955,106 | | Total stockholders' equity | $1,127,574 | $1,069,196 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended May 3, 2025, revenue grew **31% year-over-year** to **$366.9 million**. Gross profit increased to **$283.7 million** with a gross margin of **77%**. The company significantly narrowed its loss from operations to **$33.3 million** from **$66.0 million** in the prior-year period, resulting in a net loss of **$22.1 million**, or **($0.04)** per share Statement of Operations Highlights (in thousands, except per share data) | Metric | Q1 FY2026 (ended May 3, 2025) | Q1 FY2025 (ended May 4, 2024) | Change YoY | | :--- | :--- | :--- | :--- | | Revenue | $366,884 | $280,726 | +30.7% | | Gross Profit | $283,715 | $212,101 | +33.8% | | Loss from operations | $(33,255) | $(65,997) | +49.6% (Improvement) | | Net loss | $(22,121) | $(56,289) | +60.7% (Improvement) | | Net loss per share, basic and diluted | $(0.04) | $(0.10) | +60.0% (Improvement) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first quarter of fiscal 2026, net cash provided by operating activities more than doubled to **$52.6 million** from **$23.7 million** in the prior year, driven by a lower net loss and favorable changes in working capital. Net cash used in investing activities was **$18.3 million**, primarily for purchases of investments. Financing activities had a minimal impact Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended May 3, 2025 | Three Months Ended May 4, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $52,612 | $23,670 | | Net cash provided by (used in) investing activities | $(18,289) | $3,051 | | Net cash provided by (used in) financing activities | $(356) | $312 | | Net increase in cash, cash equivalents, and restricted cash | $35,092 | $26,930 | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes detail the company's accounting policies, revenue recognition, and equity structure. Subscription revenue constitutes the vast majority of total revenue. **Remaining Performance Obligations (RPO)** stood at **$2.76 billion**. Stock-based compensation expense for the quarter was **$77.1 million**. The company operates as a single reportable segment - Subscription revenue was **$359.6 million** for the quarter, up from **$276.2 million** in the prior year, representing over **98%** of total revenue[62](index=62&type=chunk) - As of May 3, 2025, **Remaining Performance Obligations (RPO)** totaled **$2.755 billion**, with approximately **$1.311 billion** expected to be recognized as revenue over the next 12 months[64](index=64&type=chunk) - Total stock-based compensation expense for the quarter was **$77.1 million**, an increase from **$64.7 million** in the same period last year. The majority was allocated to Research & Development and Sales & Marketing[90](index=90&type=chunk) - The company operates as a single operating and reportable segment, with the **Chief Executive Officer** acting as the chief operating decision maker (CODM)[98](index=98&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **31% year-over-year revenue growth** to increased customer count and expansion within the existing customer base. Key business metrics showed strong growth, with **Annual Recurring Revenue (ARR)** reaching **$1.54 billion** and the number of customers with over **$100,000** in **ARR** growing to **2,638**. The company achieved a **positive non-GAAP operating income** of **$51.1 million** and **positive free cash flow** of **$45.7 million**, demonstrating improved operational efficiency and a strong liquidity position Key Business Metrics | Metric | As of May 3, 2025 | As of May 4, 2024 | Growth | | :--- | :--- | :--- | :--- | | Annual recurring revenue (ARR) | $1,535,432,000 | $1,175,684,000 | +30.6% | | Customers > $100,000 ARR | 2,638 | 1,953 | +35.1% | - The company's growth strategy focuses on acquiring new customers, expanding within the existing customer base by selling more applications, and investing in innovation and headcount[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) Non-GAAP Financial Highlights (in thousands) | Metric | Q1 FY2026 (ended May 3, 2025) | Q1 FY2025 (ended May 4, 2024) | | :--- | :--- | :--- | | Non-GAAP gross profit | $288,076 | $215,867 | | Non-GAAP operating income | $51,071 | $6,159 | | Free cash flow | $45,692 | $18,608 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is primarily exposed to market risks from fluctuations in interest rates, foreign currency exchange rates, and inflation. As of May 3, 2025, a hypothetical **100 basis point (1%) change** in interest rates would impact the market value of its cash equivalents and investments by approximately **$6.7 million**. Foreign currency and inflation risks are not currently considered to have a material impact - The company's main market risk is interest rate risk on its **$1.023 billion** portfolio of cash, cash equivalents, and investments[166](index=166&type=chunk) - A hypothetical **100 basis point (1%) change** in interest rates would result in a **$6.7 million change** in the market value of the company's investment portfolio as of May 3, 2025[166](index=166&type=chunk) - The company has not entered into any hedging arrangements for foreign currency risk, and a hypothetical **10% change in the U.S. dollar's value** is not expected to have a material impact[168](index=168&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of May 3, 2025. There were no material changes in internal control over financial reporting during the quarter - The **Principal Executive Officer** and **Principal Financial Officer** concluded that disclosure controls and procedures were effective as of the end of the quarter[171](index=171&type=chunk) - No material changes were identified in the company's internal control over financial reporting during the fiscal quarter ended May 3, 2025[172](index=172&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings in the ordinary course of business but does not believe any current litigation will have a material adverse effect on its financial condition or operations - The company is not currently a party to any litigation that is expected to have a material adverse effect on its business[175](index=175&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) The company highlights key risks, including its dependence on a limited number of joint design manufacturers and suppliers for its IoT devices, which could be affected by component shortages, geopolitical tensions (especially involving China and Taiwan), and trade policies. It also notes its exposure to macroeconomic pressures such as inflation and economic downturns, which could impact customer spending and lengthen sales cycles - The company depends on a limited number of, and in some cases single, joint design manufacturers, creating risk of shortages, long lead times, and cost increases for IoT device components[177](index=177&type=chunk) - Geopolitical risks, particularly tensions between China and Taiwan where manufacturers and suppliers have a large presence, could disrupt manufacturing operations[178](index=178&type=chunk) - The business is susceptible to macroeconomic conditions like inflation, evolving trade policies, and economic downturns, which may cause customers to slow spending and delay sales[181](index=181&type=chunk)[182](index=182&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or issuer purchases of equity securities during the period - The company reported no unregistered sales of equity securities and no issuer purchases of its equity securities for the quarter[184](index=184&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) The company announced the appointment of Mr. Ben Kirchhoff as Senior Vice President and **Chief Accounting Officer**, effective June 11, 2025. Additionally, it disclosed a modification to an existing **Rule 10b5-1 trading plan** for an executive officer and the termination of a plan for a former officer - On June 4, 2025, the Board appointed Mr. Ben Kirchhoff as the company's principal accounting officer, effective June 11, 2025[187](index=187&type=chunk) - On March 28, 2025, Executive Vice President Adam Eltoukhy modified an existing **Rule 10b5-1 trading plan**[192](index=192&type=chunk) - On March 31, 2025, former **Chief Accounting Officer** James Andrew Munk terminated his existing **Rule 10b5-1 trading plan**[193](index=193&type=chunk) [Item 6. Exhibits](index=40&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications by the CEO and CFO, and XBRL data files - The report includes certifications from the **Principal Executive Officer** and **Principal Financial Officer** as required by Sections 302 and 906 of the **Sarbanes-Oxley Act**[196](index=196&type=chunk) ```

Core Viewpoint - Samsara's stock experienced a significant decline despite reporting better-than-expected quarterly results, primarily due to underwhelming forward guidance [2][4][6] Financial Performance - In fiscal Q1, Samsara reported non-GAAP earnings per share of $0.11 on sales of $366.9 million, surpassing Wall Street estimates of $0.06 per share and $351.44 million in revenue [4] - Year-over-year sales growth was approximately 31%, while adjusted earnings per share increased by about 267% compared to the previous year [4] Future Guidance - For the full fiscal year, Samsara projects sales between $1.547 billion and $1.555 billion, indicating an annual growth rate of roughly 24.5% at the midpoint [5] - Adjusted earnings per share are expected to range from $0.39 to $0.41, suggesting a growth of approximately 54% at the midpoint of the target range [5] Market Reaction - Despite the positive earnings report, Samsara's stock fell by 4.6% on the trading day, having previously dropped as much as 12% [1][2] - The company's valuation remains high, at around 17 times expected sales and 132 times expected adjusted earnings, which may lead to continued volatility in the stock price [6]

Group 1 - Samsara Inc's stock is down 5% to $44.81 due to disappointing current-quarter revenue guidance, despite better-than-expected first-quarter results [1] - The company expects revenue between $371 million and $373 million, indicating a 24% year-over-year growth, which is a slowdown from the previous quarter's 31% growth [1] - Prior to the drop, Samsara's stock had been consolidating under $48 since mid-May, with a year-to-date breakeven level being a key pivot point [2] Group 2 - Today, Samsara has seen 6,874 calls and 14,000 puts exchanged, which is 3.2 times the typical overall options volume for an entire session [3] - The most popular option is the weekly 6/13 40-strike put, with new positions opening there [3] - The company's 50-day put/call volume ratio of 1.82 ranks higher than 86% of readings from the past year, indicating a more bearish sentiment among options traders [4]

Company Overview - Samsara Inc. was founded in 2015 and is listed on NYSE under the ticker IOT [1] - The company specializes in aggregating data from its IoT terminal devices through its Connected Operations Platform [1] - Samsara provides end-to-end solutions aimed at enterprise customers [1] Technology and Solutions - The technology offered by Samsara is designed to help customers capture, aggregate, and analyze data effectively [1]

Core Insights - Samsara Inc. reported quarterly earnings of $0.11 per share, exceeding the Zacks Consensus Estimate of $0.06 per share, and showing an increase from $0.03 per share a year ago, resulting in an earnings surprise of 83.33% [1] - The company achieved revenues of $366.88 million for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 4.39% and up from $280.73 million year-over-year [2] - Samsara Inc. has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The future performance of Samsara Inc.'s stock will largely depend on management's commentary during the earnings call and the sustainability of the recent price movements [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.06 on revenues of $369.05 million, and for the current fiscal year, it is $0.33 on revenues of $1.53 billion [7] Industry Context - The Internet - Software industry, to which Samsara Inc. belongs, is currently ranked in the top 23% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Data and Key Metrics Changes - Samsara reported a strong Q1 with an annual recurring revenue (ARR) of $1,540,000,000, representing a 31% year-over-year growth adjusted for constant currency [5][23]. - Q1 revenue reached $367,000,000, also growing 31% year-over-year or 32% when adjusted for constant currency [24]. - Non-GAAP gross margin was a record 79% in Q1, with a non-GAAP operating margin of 14%, up from 2% in Q1 FY '25 [31]. Business Line Data and Key Metrics Changes - The number of customers with more than $100,000 in ARR increased by 154, a 35% year-over-year growth [5][25]. - ARR per 100k+ customer increased to $338,000, with 58% of ARR coming from these customers, up from 56% a year ago [25][26]. - 95% of 100k+ ARR customers and 85% of core customers subscribed to two or more Samsara products, indicating increased utilization of the platform [26]. Market Data and Key Metrics Changes - 18% of net new annual contract value (ACV) came from international markets, with Europe showing significant growth [29]. - The construction sector contributed the highest net new ACV mix for the seventh consecutive quarter, while transportation achieved its highest year-over-year growth in over four years [30][81]. Company Strategy and Development Direction - The company is focusing on partnerships with OEMs to simplify customer onboarding and enhance data integration [20][39]. - Samsara aims to leverage AI to improve safety and maintenance solutions, addressing customer needs for efficiency and risk management [10][99]. - The strategy includes expanding the ecosystem through partnerships with major vehicle and equipment manufacturers to enhance customer experience [19][20]. Management's Comments on Operating Environment and Future Outlook - Management noted that elongated sales cycles were observed due to macroeconomic uncertainties, particularly related to tariffs [23][44]. - Despite these challenges, the company reported a record pipeline generation in Q1, indicating strong customer interest [36][73]. - The outlook remains positive, with expectations for continued growth and efficiency gains in the upcoming quarters [31][73]. Other Important Information - The company is investing in AI-powered solutions to help customers optimize asset utilization and maintenance [16][99]. - Samsara's customer base includes significant partnerships with large organizations, enhancing its market presence [6][21]. Q&A Session Summary Question: Sales cycle elongation and deal quality - Management indicated that the quality and size of deals remained consistent despite elongated sales cycles, with a record pipeline generation in Q1 [35][36]. Question: OEM investments and competitive positioning - The CEO emphasized the importance of OEM partnerships in reducing friction for customers and enhancing data insights [38]. Question: Impact of macro environment on sales capacity - Management is closely monitoring sales productivity and plans to continue adding sales capacity throughout the year [56][57]. Question: International market momentum - The company has seen significant growth in international markets, particularly in Europe, driven by increased interest in digital technologies [84]. Question: AI's role in customer conversations - AI is increasingly becoming a focal point in discussions with customers, particularly regarding operational efficiency and safety [70]. Question: Preventative maintenance targeting - The company believes that preventative maintenance solutions will be broadly applicable across various industries due to similar asset types [86]. Question: Upgrade program details - The upgrade program aims to facilitate transitions for customers from legacy providers, making it easier for them to adopt Samsara's solutions [90][92].

Financial Data and Key Metrics Changes - Samsara reported a strong Q1 with an annual recurring revenue (ARR) of $1,540,000,000, representing a 31% year-over-year growth adjusted for constant currency [4][21] - Q1 revenue reached $367,000,000, also growing 31% year-over-year or 32% when adjusted for constant currency [22] - Non-GAAP gross margin was a record 79% in Q1, with non-GAAP operating margin at 14%, up from 2% in Q1 FY '25 [29] Business Line Data and Key Metrics Changes - The number of customers with more than $100,000 in ARR increased by 154, a 35% year-over-year growth [4][22] - ARR per 100k+ customer increased to $338,000, with 58% of ARR coming from these customers, up from 56% a year ago [22] - 95% of 100k+ ARR customers and 85% of core customers subscribed to two or more Samsara products, indicating increased utilization of the platform [24] Market Data and Key Metrics Changes - 18% of net new annual contract value (ACV) came from international markets, with Europe showing significant growth [27] - The construction sector drove the highest net new ACV mix for the seventh consecutive quarter, while transportation achieved its highest year-over-year growth in over four years [28] - Public sector growth was the highest in over three years, driven by wins with major municipalities [28] Company Strategy and Development Direction - Samsara is focusing on enhancing safety and efficiency through AI-powered solutions, addressing customer needs for risk management and operational efficiency [5][9] - The company is expanding its ecosystem through partnerships with OEMs to simplify the digitization of assets and improve customer experience [17][18] - The strategy includes integrating directly with vehicle and equipment manufacturers to facilitate seamless data connectivity [17][78] Management's Comments on Operating Environment and Future Outlook - Management noted that while there were elongated sales cycles due to macroeconomic uncertainties, customer demand remains strong, with a record pipeline generated in Q1 [21][35] - The company is optimistic about its growth trajectory, expecting continued strong performance despite potential timing risks in deal closures [21][72] - Management emphasized the importance of AI in driving operational efficiency and safety, aligning with customer interests in digital transformation [70][97] Other Important Information - Samsara's new positive recognition tools aim to improve employee engagement and safety outcomes through gamification [10] - The company is actively addressing customer feedback regarding maintenance complexities and supply chain resilience [13][14] Q&A Session Summary Question: Sales cycle elongation and deal quality - Management indicated that the quality and size of deals closed in May remained consistent, despite macro uncertainties impacting timing [33][35] Question: OEM investments and competitive positioning - Management highlighted that partnerships with OEMs facilitate easier data integration and enhance customer insights, strengthening competitive positioning [36][78] Question: Impact of macro environment on sales capacity - Management stated that sales productivity remains strong, allowing for continued investment in sales capacity [56] Question: International market momentum - Management noted that 18% of net new ACV came from international markets, particularly Europe, which has shown increased interest in digital technologies [84] Question: AI's role in customer conversations - Management confirmed that AI is increasingly a focal point in discussions with customers, who are interested in its application for operational efficiency [70] Question: Dollar-based net retention rate - Management reported a strong dollar-based net retention rate of approximately 115%, indicating robust customer expansion [111]

Samsara, Inc. IOT released its first-quarter results after Thursday's closing bell. Here's a look at the key figures from the quarter. The Details: Samsara reported quarterly adjusted earnings of 11 cents per share, beating the consensus estimate of six cents. Quarterly revenue came in at $366.9 million, beating the Street estimate of $351.42 million. Read Next: Trump Announces China Trade Talks, Tesla Stock Slumps: What’s Driving Markets Thursday?“We delivered a strong first quarter of the new fiscal year ...