Samsara (IOT) - 2025 Q3 - Quarterly Report

Special Note Regarding Forward-Looking Statements This section outlines forward-looking statements concerning the company's future financial performance, product development, market competition, and various operational and regulatory factors - This section contains forward-looking statements regarding the company's future financial performance, product development, market competition, customer relationships, security, regulatory effects, macroeconomic events, strategic initiatives, international expansion, market opportunities, brand development, growth management, employee relations, third-party relationships, accounting pronouncements, intellectual property, and tax obligations[9] - Readers are cautioned not to rely on these statements as predictions of future events, as actual outcomes are subject to risks, uncertainties, and other factors detailed in the 'Risk Factors' section of the Annual Report on Form 10-K[11] PART I—FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents Samsara Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive loss, statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining accounting policies, financial instrument disclosures, revenue recognition, lease information, equity, and income taxes for the reported periods Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific reporting dates Total Assets (in thousands) | Metric | Nov 2, 2024 | Feb 3, 2024 | | :----------- | :---------- | :---------- | | Total Assets | $1,863,868 | $1,734,845 | Current Assets (in thousands) | Metric | Nov 2, 2024 | Feb 3, 2024 | | :------------------------ | :---------- | :---------- | | Cash and cash equivalents | $160,348 | $135,536 | | Short-term investments | $511,564 | $412,126 | | Accounts receivable, net | $178,723 | $161,829 | | Total current assets | $1,039,415 | $886,958 | Total Liabilities and Stockholders' Equity (in thousands) | Metric | Nov 2, 2024 | Feb 3, 2024 | | :------------------------- | :---------- | :---------- | | Total Liabilities | $864,733 | $819,698 | | Deferred revenue, current | $505,557 | $426,369 | | Total Stockholders' Equity | $999,135 | $915,147 | Condensed Consolidated Statements of Operations and Comprehensive Loss This section presents the company's financial performance over specific periods, detailing revenue, expenses, and net loss Revenue and Net Loss (Three Months Ended, in thousands) | Metric | Nov 2, 2024 | Oct 28, 2023 | | :--------- | :---------- | :----------- | | Revenue | $321,981 | $237,534 | | Net Loss | $(37,806) | $(45,531) | | Net Loss Per Share (Basic and Diluted) | $(0.07) | $(0.08) | Revenue and Net Loss (Nine Months Ended, in thousands) | Metric | Nov 2, 2024 | Oct 28, 2023 | | :--------- | :---------- | :----------- | | Revenue | $902,909 | $661,111 | | Net Loss | $(143,705) | $(173,355) | | Net Loss Per Share (Basic and Diluted) | $(0.26) | $(0.33) | Condensed Consolidated Statements of Stockholders' Equity This section details changes in the company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit - Total Stockholders' Equity increased from $915,147 thousand as of February 3, 2024, to $999,135 thousand as of November 2, 2024[28] - Stock-based compensation expense for the nine months ended November 2, 2024, was $212,355 thousand[28] - The accumulated deficit increased from $(1,455,098) thousand to $(1,598,803) thousand for the nine months ended November 2, 2024, reflecting the net loss[28] Condensed Consolidated Statements of Cash Flows This section outlines the company's cash inflows and outflows from operating, investing, and financing activities over specific periods Cash Flow Summary (Nine Months Ended, in thousands) | Metric | Nov 2, 2024 | Oct 28, 2023 | | :-------------------------------------- | :---------- | :----------- | | Net cash provided by operating activities | $77,800 | $30,063 | | Net cash used in investing activities | $(67,103) | $(36,042) | | Net cash provided by financing activities | $15,612 | $12,019 | - Cash, cash equivalents, and restricted cash at the end of the period increased from $154,738 thousand to $180,589 thousand for the nine months ended November 2, 2024[32] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, clarifying accounting policies and specific financial items Note 1. Description of Business This note describes Samsara Inc.'s core business as a pioneer of the Connected Operations Cloud, leveraging IoT data for operational insights - Samsara Inc. (the "Company"), incorporated in Delaware in 2015, is a pioneer of the Connected Operations Cloud, which leverages Internet of Things (IoT) data to provide actionable insights and improve operations for businesses relying on physical infrastructure[35] Note 2. Summary of Significant Accounting Policies This note outlines the significant accounting policies used in preparing the financial statements, including GAAP conformity, fiscal year definition, and recent accounting pronouncements - The unaudited condensed consolidated financial statements are prepared in conformity with GAAP and SEC rules for interim reporting, and should be read in conjunction with the Company's Annual Report on Form 10-K for the fiscal year ended February 3, 2024[36] - The Company's fiscal year is a 52- or 53-week period ending on the Saturday closest to February 1; fiscal year 2025 consists of 52 weeks, while fiscal year 2024 had 53 weeks[36] - No material changes to significant accounting policies or new accounting pronouncements were adopted during the nine months ended November 2, 2024. The Company is evaluating new ASUs on segment reporting, income tax disclosures, and income statement expense disaggregation for future adoption[39][40][42] Note 3. Cash, Cash Equivalents, Restricted Cash, and Investments This note provides details on the composition and changes in cash, cash equivalents, restricted cash, and the company's investment portfolio Cash, Cash Equivalents, and Restricted Cash (in thousands) | Metric | Nov 2, 2024 | Feb 3, 2024 | | :------------------------------------ | :---------- | :---------- | | Cash and cash equivalents | $160,348 | $135,536 | | Restricted cash | $20,241 | $19,202 | | Total cash, cash equivalents, and restricted cash | $180,589 | $154,738 | - Short-term and long-term investments in marketable debt securities primarily consist of U.S. government and agency securities, corporate notes and bonds, and commercial paper[43] Total Investments (Amortized Cost, in thousands) | Metric | Nov 2, 2024 | Feb 3, 2024 | | :---------------- | :---------- | :---------- | | Total investments | $752,175 | $687,928 | Note 4. Fair Value Measurements This note explains the company's methodology for fair value measurements, categorizing financial assets and liabilities into a three-level hierarchy - The Company categorizes financial assets and liabilities into a three-level fair value hierarchy based on the observability of inputs used in valuation techniques (Level 1 for quoted prices in active markets, Level 2 for other observable inputs, and Level 3 for unobservable inputs)[51][52] Fair Value of Cash Equivalents and Restricted Cash (Nov 2, 2024, in thousands) | Metric | Level 1 | Level 2 | Total | | :----------------------------------- | :-------- | :------ | :-------- | | Money market funds | $82,161 | — | $82,161 | | Commercial paper | — | $7,985 | $7,985 | | Restricted cash—letters of credit | $17,316 | — | $17,316 | | Total cash equivalents and restricted cash | $99,477 | $7,985 | $107,462 | Fair Value of Marketable Debt Securities (Nov 2, 2024, in thousands) | Metric | Level 1 | Level 2 | Total | | :----------------------------------- | :------ | :---------- | :---------- | | Commercial paper | — | $83,680 | $83,680 | | Corporate notes and bonds | — | $432,203 | $432,203 | | U.S. government and agency securities | — | $236,812 | $236,812 | | Total marketable debt securities | — | $752,695 | $752,695 | Note 5. Costs to Obtain and Fulfill a Contract This note details the capitalization and amortization of costs incurred to obtain and fulfill customer contracts, including deferred commissions and connected device costs Deferred Commissions (in thousands) | Metric | Nov 2, 2024 | Feb 3, 2024 | | :----------------- | :---------- | :---------- | | Total deferred commissions | $196,013 | $177,562 | Amortization Expense for Capitalized Commission Costs (in thousands) | Period | Nov 2, 2024 (3 Months) | Oct 28, 2023 (3 Months) | Nov 2, 2024 (9 Months) | Oct 28, 2023 (9 Months) | | :------------------ | :--------------------- | :---------------------- | :--------------------- | :---------------------- | | Amortization expense | $14,757 | $11,856 | $41,564 | $38,267 | Connected Device Costs (IoT Device Costs, in thousands) | Metric | Nov 2, 2024 | Feb 3, 2024 | | :---------------------- | :---------- | :---------- | | Total connected device costs | $349,918 | $334,790 | | Amortization expense (3 Months) | $29,831 | $24,942 | | Amortization expense (9 Months) | $86,313 | $68,509 | Note 6. Balance Sheet Components This note provides a breakdown of specific balance sheet components, including property and equipment, internal-use software development costs, and related depreciation and amortization Property and Equipment, Net (in thousands) | Metric | Nov 2, 2024 | Feb 3, 2024 | | :------------------------ | :---------- | :---------- | | Property and equipment, net | $56,418 | $54,969 | | Internal-use software development costs | $46,313 | $32,137 | Depreciation and Amortization Expense (in thousands) | Period | Nov 2, 2024 (3 Months) | Oct 28, 2023 (3 Months) | Nov 2, 2024 (9 Months) | Oct 28, 2023 (9 Months) | | :------------------ | :--------------------- | :---------------------- | :--------------------- | :---------------------- | | Depreciation and amortization expense | $6,757 | $3,646 | $15,845 | $10,839 | Note 7. Revenue, Accounts Receivable, Deferred Revenue, and Remaining Performance Obligations This note details the company's revenue recognition, accounts receivable, deferred revenue, and remaining performance obligations, including subscription and other revenue streams Revenue Breakdown (in thousands) | Metric | Nov 2, 2024 (3 Months) | Oct 28, 2023 (3 Months) | Nov 2, 2024 (9 Months) | Oct 28, 2023 (9 Months) | | :----------------- | :--------------------- | :---------------------- | :--------------------- | :---------------------- | | Subscription revenue | $316,157 | $232,857 | $887,675 | $647,520 | | Other revenue | $5,824 | $4,677 | $15,234 | $13,591 | | Total revenue | $321,981 | $237,534 | $902,909 | $661,111 | - The allowance for credit losses on accounts receivable was $8.6 million as of November 2, 2024[64] - Deferred revenue (end of period) was $639,722 thousand as of November 2, 2024, up from $503,721 thousand as of October 28, 2023[65] - Remaining Performance Obligations (RPO) were $2,429.1 million as of November 2, 2024, with approximately $1,160.8 million expected to be recognized over the next 12 months[66] - No single customer accounted for greater than 10% of the Company's total revenue or accounts receivable for the periods presented[66][67] Note 8. Leases This note describes the company's operating lease agreements for office space, including lease terms, costs, and related impairment charges - The Company leases office space under non-cancelable operating lease agreements with remaining terms ranging from one to approximately seven years[68] Total Lease Cost (in thousands) | Period | Nov 2, 2024 (3 Months) | Oct 28, 2023 (3 Months) | Nov 2, 2024 (9 Months) | Oct 28, 2023 (9 Months) | | :--------------- | :--------------------- | :---------------------- | :--------------------- | :---------------------- | | Total lease cost | $5,685 | $5,814 | $16,781 | $18,414 | - A sublease executed in September 2024 resulted in a $3.6 million impairment charge to the related right-of-use (ROU) asset and fixed assets, recognized in 'Lease modification, impairment, and related charges'[71] - The weighted-average remaining lease term for operating leases was 5.5 years as of November 2, 2024, with a weighted-average discount rate of 4.93%[71] Note 9. Commitments and Contingencies This note outlines the company's purchase commitments, outstanding letters of credit, and involvement in legal proceedings, assessing potential material exposure - The Company's purchase commitments include contractual arrangements with software-as-a-service providers and non-cancelable purchase orders for inventory[74] - Letters of credit outstanding were $17.3 million as of November 2, 2024, primarily in favor of landlords for office space[75] - The Company is involved in various legal proceedings but has determined there is no material exposure to loss on an aggregate basis for proceedings with a reasonable possibility of loss[76][77] Note 10. Equity This note details the company's equity structure, including common stock outstanding, shares reserved for future issuance under incentive plans, and stock-based compensation expense - As of November 2, 2024, there were 268,848,415 shares of Class A common stock and 292,349,200 shares of Class B common stock issued and outstanding[79] Common Stock Reserved for Future Issuance | Plan | Nov 2, 2024 | Feb 3, 2024 | | :------------------------------------ | :---------- | :---------- | | 2015 Equity Incentive Plan (Options outstanding) | 5,635,770 | 6,165,885 | | 2015 Equity Incentive Plan (RSUs outstanding) | 1,727,814 | 6,654,559 | | 2021 Equity Incentive Plan (RSUs outstanding) | 25,121,928 | 28,716,715 | | 2021 Equity Incentive Plan (Shares available for future grants) | 90,063,448 | 68,321,018 | | 2021 Employee Stock Purchase Plan (Shares available for future issuance) | 21,719,508 | 16,875,966 | | Total shares of common stock reserved for future issuance | 144,268,468 | 126,734,143 | - Unrecognized stock-based compensation expense related to outstanding unvested RSUs was approximately $532.6 million, expected to be recognized over a weighted-average period of approximately 1.3 years[88] Total Stock-Based Compensation Expense (in thousands) | Period | Nov 2, 2024 (3 Months) | Oct 28, 2023 (3 Months) | Nov 2, 2024 (9 Months) | Oct 28, 2023 (9 Months) | | :--------------- | :--------------------- | :---------------------- | :--------------------- | :---------------------- | | Total stock-based compensation expense | $72,592 | $59,791 | $208,852 | $172,395 | Note 11. Income Taxes This note explains the company's income tax provision, effective tax rate, and the valuation allowance maintained against U.S. deferred tax assets Effective Tax Rate and Provision for Income Taxes (in thousands) | Metric | Nov 2, 2024 (3 Months) | Oct 28, 2023 (3 Months) | Nov 2, 2024 (9 Months) | Oct 28, 2023 (9 Months) | | :------------------------- | :--------------------- | :---------------------- | :--------------------- | :---------------------- | | Effective tax rate | (1.3%) | (0.3%) | (1.3%) | (0.9%) | | Provision for income taxes | $493 | $142 | $1,911 | $1,503 | - The Company maintains a full valuation allowance against its U.S. federal and state deferred tax assets due to the existence of cumulative losses, indicating that it is not more likely than not that these assets will be fully realizable[99] - There were no material changes to the total amount of unrecognized tax benefits during the nine months ended November 2, 2024, and no significant changes are expected in the next 12 months[99] Note 12. Net Loss Per Share, Basic and Diluted This note presents the basic and diluted net loss per share and explains the exclusion of potentially dilutive securities due to the company's net loss Net Loss Per Share (Basic and Diluted) | Period | Nov 2, 2024 (3 Months) | Oct 28, 2023 (3 Months) | Nov 2, 2024 (9 Months) | Oct 28, 2023 (9 Months) | | :------------------ | :--------------------- | :---------------------- | :--------------------- | :---------------------- | | Net loss per share attributable to common stockholders, basic and diluted | $(0.07) | $(0.08) | $(0.26) | $(0.33) | - Potentially dilutive securities, including outstanding stock options, RSUs, and employee stock purchase rights, were excluded from the computation of diluted net loss per share because their inclusion would have been antidilutive due to the Company's net loss[101] Note 13. Segment Information This note clarifies that the company operates as a single reportable segment and provides a breakdown of revenue by geographic area - The Company operates as a single operating and reportable segment, with the Chief Executive Officer reviewing financial information on a consolidated basis for decision-making[102] Revenue by Geographic Area (in thousands) | Geographic Area | Nov 2, 2024 (3 Months) | Oct 28, 2023 (3 Months) | Nov 2, 2024 (9 Months) | Oct 28, 2023 (9 Months) | | :---------------- | :--------------------- | :---------------------- | :--------------------- | :---------------------- | | United States | $278,979 | $207,949 | $782,429 | $581,164 | | Other | $43,002 | $29,585 | $120,480 | $79,947 | | Total revenue | $321,981 | $237,534 | $902,909 | $661,111 | - No individual country other than the United States exceeded 10% of the Company's total revenue or long-lived assets for any period presented[103] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Samsara's financial condition and results of operations, highlighting key business metrics, factors influencing performance, and detailed analysis of revenue, costs, and expenses. It also discusses non-GAAP financial measures, liquidity, capital resources, and cash flow activities for the periods presented Overview This overview highlights Samsara's mission to enhance physical operations through its Connected Operations Cloud and summarizes key financial performance metrics - Samsara's mission is to increase the safety, efficiency, and sustainability of physical operations by leveraging its Connected Operations Cloud to harness IoT data for actionable insights[106][107] Revenue and Net Loss Overview (in thousands) | Metric | Nov 2, 2024 (3 Months) | Oct 28, 2023 (3 Months) | Nov 2, 2024 (9 Months) | Oct 28, 2023 (9 Months) | | :--------- | :--------------------- | :---------------------- | :--------------------- | :---------------------- | | Revenue | $322,000 | $237,500 | $902,900 | $661,100 | | YoY Growth | 36% | | 37% | | | Net Loss | $(37,800) | $(45,500) | $(143,700) | $(173,400) | Key Business Metrics This section presents key performance indicators such as Annual Recurring Revenue (ARR) and customer growth, reflecting the company's business performance and future potential Key Business Metrics (in thousands) | Metric | Nov 2, 2024 | Oct 28, 2023 | | :----------------------- | :---------- | :----------- | | Annual recurring revenue ("ARR") | $1,348,859 | $1,002,729 | | Customers > $100,000 ARR | 2,303 | 1,663 | - ARR is defined as the annualized value of subscription contracts that have commenced revenue recognition, serving as a key indicator of business performance and future growth[109] - The number of customers with over $100,000 in ARR has grown, reflecting successful sales efforts on larger customers, investment in the partner ecosystem, and expansion of Applications[111] Factors Affecting Our Performance This section discusses critical factors influencing the company's performance, including customer acquisition, expansion within the existing base, continuous innovation, and macroeconomic trends - The Company's ability to acquire new customers depends on significant investment in sales and marketing, macroeconomic factors, and international expansion[112] - Expansion within the existing customer base is driven by selling more Applications and extending existing Applications across geographies and divisions, influenced by customer satisfaction, pricing, competition, and macroeconomic conditions[113] - Continuous innovation on the Connected Operations Cloud, adding new data types, introducing new Applications, and scaling headcount are critical for future growth and performance[114] - Unfavorable macroeconomic trends, such as inflation, interest rate increases, supply chain disruptions, labor shortages, and international conflicts, may negatively affect business growth and results of operations[115] Components of Results of Operations This section breaks down the elements contributing to the company's financial results, including revenue streams, cost of revenue, operating expenses, and tax provisions - Revenue is primarily generated from subscriptions to the Connected Operations Cloud (approximately 98%), with the remainder from sales of replacement IoT devices, shipping, and professional services. Subscription contracts typically have initial terms of three to five years[116][118] - Cost of revenue includes amortization of IoT device costs, cellular-related costs, cloud infrastructure expenses, customer support, and employee-related costs. These costs are expected to vary with sales volume and continued investment in the Connected Operations Cloud[119] - Operating expenses, including Research and Development, Sales and Marketing, and General and Administrative, are expected to increase in absolute dollars as the Company continues to invest in innovation, expand its customer base, and support overall business growth[120][121][123] - Lease modification, impairment, and related charges consist of impairment charges related to sublease and abandonment of facilities. Interest income and other income, net, primarily includes income from money market funds and marketable debt securities, subject to foreign currency fluctuations[125][126] - Provision for income taxes primarily relates to foreign jurisdictions, with a full valuation allowance maintained against U.S. deferred tax assets due to cumulative operating losses[127] Results of Operations This section provides a detailed analysis of the company's financial performance, including revenue, cost of revenue, gross profit, and operating expenses for the reported periods Revenue Performance (in thousands) | Metric | 3 Months Ended Nov 2, 2024 | 3 Months Ended Oct 28, 2023 | Change | % Change | | :--------- | :------------------------- | :-------------------------- | :----- | :------- | | Revenue | $321,981 | $237,534 | $84,447 | 36% | | | | | | | | Metric | 9 Months Ended Nov 2, 2024 | 9 Months Ended Oct 28, 2023 | Change | % Change | | :--------- | :------------------------- | :-------------------------- | :----- | :------- | | Revenue | $902,909 | $661,111 | $241,798 | 37% | Cost of Revenue, Gross Profit, and Gross Margin (in thousands) | Metric | 3 Months Ended Nov 2, 2024 | 3 Months Ended Oct 28, 2023 | Change | % Change | | :---------------- | :------------------------- | :-------------------------- | :----- | :------- | | Cost of revenue | $76,027 | $61,585 | $14,442 | 23% | | Gross profit | $245,954 | $175,949 | $70,005 | 40% | | Gross margin | 76% | 74% | +2% | | | | | | | | | Metric | 9 Months Ended Nov 2, 2024 | 9 Months Ended Oct 28, 2023 | Change | % Change | | :---------------- | :------------------------- | :-------------------------- | :----- | :------- | | Cost of revenue | $218,017 | $178,008 | $40,009 | 22% | | Gross profit | $684,892 | $483,103 | $201,789 | 41.8% | | Gross margin | 76% | 73% | +3% | | Operating Expenses (in thousands) | Metric | 3 Months Ended Nov 2, 2024 | 3 Months Ended Oct 28, 2023 | Change | % Change | | :------------------------- | :------------------------- | :-------------------------- | :----- | :------- | | Research and development | $76,990 | $60,820 | $16,170 | 27% | | Sales and marketing | $150,065 | $116,780 | $33,285 | 29% | | General and administrative | $62,660 | $48,354 | $14,306 | 30% | | Lease modification, impairment, and related charges | $3,609 | $4,762 | $(1,153) | (24%) | | Interest income and other income, net | $10,057 | $9,378 | $679 | 7% | | Provision for income taxes | $493 | $142 | $351 | 247% | | | | | | | | Metric | 9 Months Ended Nov 2, 2024 | 9 Months Ended Oct 28, 2023 | Change | % Change | | :------------------------- | :------------------------- | :-------------------------- | :----- | :------- | | Research and development | $226,439 | $185,155 | $41,284 | 22% | | Sales and marketing | $448,995 | $353,643 | $95,352 | 27% | | General and administrative | $177,410 | $139,888 | $37,522 | 27% | | Lease modification, impairment, and related charges | $3,609 | $4,762 | $(1,153) | (24%) | | Interest income and other income, net | $29,767 | $28,493 | $1,274 | 4% | | Provision for income taxes | $1,911 | $1,503 | $408 | 27% | Non-GAAP Financial Measures This section presents non-GAAP financial measures, such as gross profit, operating income, net income, and free cash flow, used by management to assess underlying business performance - Non-GAAP financial measures, including gross profit, operating income, net income, and free cash flow, are used by management to evaluate performance and make strategic decisions, excluding stock-based compensation, lease modification/impairment, and legal settlements[141][143][144] Non-GAAP Performance Financial Measures (Three Months Ended, in thousands) | Metric | Nov 2, 2024 | Oct 28, 2023 | | :---------------------------- | :---------- | :----------- | | Non-GAAP gross profit | $249,833 | $179,049 | | Non-GAAP gross margin | 78% | 75% | | Non-GAAP income from operations | $33,916 | $12,707 | | Non-GAAP operating margin | 11% | 5% | | Non-GAAP net income | $43,480 | $21,943 | Non-GAAP Liquidity Financial Measures (Nine Months Ended, in thousands) | Metric | Nov 2, 2024 | Oct 28, 2023 | | :-------------------- | :---------- | :----------- | | Free cash flow | $62,970 | $21,205 | | Free cash flow margin | 7% | 3% | Liquidity and Capital Resources This section discusses the company's sources of liquidity, capital requirements, and ability to fund operations and future growth - As of November 2, 2024, the Company's principal sources of liquidity were cash, cash equivalents, and short-term and long-term investments totaling $913.0 million[154] - The Company has an accumulated deficit of $1,598.8 million as of November 2, 2024, and plans to continue investing in its business, potentially requiring additional capital resources[154] - Existing cash, cash equivalents, and investments are believed to be sufficient to support working capital and capital expenditure requirements for at least the next 12 months[154] - Future capital requirements depend on growth, customer acquisition/retention, market acceptance, R&D spending, and macroeconomic conditions; additional equity or debt financing may be required and may not be available on acceptable terms[156] Cash Flows This section analyzes the company's cash flows from operating, investing, and financing activities, detailing the primary drivers of changes in cash Cash Flow Summary (Nine Months Ended, in thousands) | Metric | Nov 2, 2024 | Oct 28, 2023 | | :-------------------------------------- | :---------- | :----------- | | Net cash provided by operating activities | $77,800 | $30,063 | | Net cash used in investing activities | $(67,103) | $(36,042) | | Net cash provided by financing activities | $15,612 | $12,019 | - Operating cash flow for the nine months ended November 2, 2024, was $77.8 million, primarily driven by net loss adjusted for non-cash charges (stock-based compensation, depreciation) and changes in operating assets and liabilities (deferred revenue increase, lower prepaid expenses, higher inventories/deferred commissions/device costs)[158] - Investing activities used $67.1 million, mainly due to purchases of investments and capital expenditures, partially offset by proceeds from maturities and sales of investments[159] - Financing activities provided $15.6 million, primarily from employee stock purchases and option exercises, offset by payments of principal on finance leases[162] Contractual Obligations and Commitments This section summarizes the company's estimated future obligations, including leases and non-cancelable purchase commitments - The Company's estimated future obligations consist of leases and non-cancelable purchase commitments, with additional details provided in Notes 8 and 9 to the condensed consolidated financial statements[163] Critical Accounting Policies and Estimates This section confirms that there were no material changes to the company's critical accounting policies and estimates during the reported period - There were no material changes to the Company's critical accounting policies and estimates during the nine months ended November 2, 2024[164] Recent Accounting Pronouncements This section directs readers to Note 2 for information on recently issued accounting pronouncements relevant to the company's financial statements - For information on recently issued accounting pronouncements, refer to Note 2 to the condensed consolidated financial statements[165] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section outlines the Company's exposure to market risks, specifically interest rate risk, foreign currency exchange risk, and inflation risk, and discusses their potential impact on financial statements Interest Rate Risk This section assesses the company's exposure to interest rate fluctuations on its cash, cash equivalents, and investment holdings - As of November 2, 2024, the Company held $913.0 million in cash, cash equivalents, and short-term and long-term investments, primarily in marketable debt securities[167] - A hypothetical 100 basis point increase or decrease in interest rates would result in a $6.0 million decrease or increase, respectively, in the market value of these holdings[167] Foreign Currency Exchange Risk This section discusses the company's exposure to foreign currency exchange rate fluctuations, primarily impacting operating expenses in international jurisdictions - The Company's reporting currency is the U.S. dollar, and a substantial majority of sales are U.S. dollar-denominated, limiting significant foreign currency risk on revenue[169] - Operating expenses are denominated in the currencies of countries where operations are located (primarily U.S. and U.K.), exposing the Company to fluctuations in foreign currency exchange rates[169] - The Company has not entered into any hedging arrangements for foreign currency risk to date[169] Inflation Risk This section evaluates the potential impact of inflation on the company's financial statements, noting no material impact to date but acknowledging future risks - Inflation has not had a material impact on the condensed consolidated financial statements to date[170] - Significant inflationary pressures on costs, if not offset by price increases, could materially impact the Company's financial statements[170] Item 4. Controls and Procedures This section details management's evaluation of the effectiveness of the Company's disclosure controls and procedures and internal control over financial reporting, concluding on their effectiveness and noting no material changes during the quarter. It also acknowledges inherent limitations of control systems Evaluation of Disclosure Controls and Procedures This section confirms management's conclusion that the company's disclosure controls and procedures were effective as of the reporting date - Management concluded that the Company's disclosure controls and procedures were effective as of November 2, 2024, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[171] Changes in Internal Control Over Financial Reporting This section states that no material changes occurred in the company's internal control over financial reporting during the fiscal quarter - There has been no material change in the Company's internal control over financial reporting during the fiscal quarter ended November 2, 2024[172] Limitations on Effectiveness of Controls and Procedures and Internal Control Over Financial Reporting This section acknowledges the inherent limitations of control systems, which provide reasonable but not absolute assurance against misstatements - Management acknowledges that control systems provide only reasonable, not absolute, assurance and have inherent limitations, such as faulty judgments, errors, circumvention by individuals, or management override[173] PART II—OTHER INFORMATION Item 1. Legal Proceedings The Company is involved in various legal proceedings arising from its normal course of business but does not believe any current litigation would individually or in aggregate have a material adverse effect on its business, operating results, cash flows, or financial condition - The Company is not presently a party to any litigation that, if determined adversely, would have a material adverse effect on its business, operating results, cash flows, or financial condition[176] - Litigation, even if not meritorious, can require significant financial and operational resources and divert management's attention[176] Item 1A. Risk Factors This section refers readers to the comprehensive discussion of risks and uncertainties in the Company's Annual Report on Form 10-K, which could materially affect its business, operations, financial condition, growth prospects, and stock price - Readers should carefully consider the risks and uncertainties described in the 'Risk Factors' section of the Annual Report on Form 10-K filed on March 26, 2024[177] - These factors, among others, could cause actual results to differ materially from historical results and forward-looking statements[177] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The Company reported no unregistered sales of equity securities or issuer purchases of equity securities during the period - No unregistered sales of equity securities occurred during the period[178] - No issuer purchases of equity securities occurred during the period[179] Item 3. Defaults Upon Senior Securities This item is not applicable to the Company for the reported period - This item is not applicable[180] Item 4. Mine Safety Disclosures This item is not applicable to the Company for the reported period - This item is not applicable[180] Item 5. Other Information This section discloses Rule 10b5-1 trading arrangements entered into by certain directors and executive officers, detailing the number of shares involved and the plan termination dates - Jonathan Chadwick (Director) entered a Rule 10b5-1 trading plan to sell up to 90,000 shares of Class A common stock, terminating on December 19, 2025[181] - Adam Eltoukhy (EVP, Chief Legal Officer) entered a Rule 10b5-1 plan to sell up to 385,835 shares of Class A common stock (plus net shares from vesting awards), terminating on December 20, 2025[181] - Sanjit Biswas (CEO) and John Bicket (EVP, CTO) entered Rule 10b5-1 plans on behalf of affiliated family trusts to sell an aggregate of up to 5,000,000 shares of Class A common stock each, terminating on December 31, 2025[183] Item 6. Exhibits This section lists the exhibits filed as part of the Form 10-Q, including the Inline XBRL Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Definition Linkbase, Label Linkbase, Presentation Linkbase Documents, and Cover Page Interactive Data File, along with Section 302 and 906 Certifications - The exhibits include the Inline XBRL Instance Document and related Taxonomy Extension Schema, Calculation, Definition, Label, and Presentation Linkbase Documents[186] - Section 302 Certifications of the Principal Executive Officer and Principal Financial Officer are included as exhibits[188] - Section 906 Certifications of the Principal Executive Officer and Principal Financial Officer are attached but are not deemed 'filed' for purposes of Section 18 of the Securities Exchange Act of 1934[186][188] SIGNATURES This section contains the official signatures of the company's principal executive and financial officers, certifying the accuracy of the report - The report was signed by Sanjit Biswas, Chief Executive Officer (Principal Executive Officer), on December 10, 2024[193] - The report was signed by Dominic Phillips, Chief Financial Officer (Principal Financial Officer), on December 10, 2024[193]