Samsara (US:IOT)2025-06-10 20:18markdown 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)