Samsara (IOT) - 2026 Q2 - Quarterly Report

Special Note Regarding Forward-Looking Statements Forward-Looking Statements Overview This section outlines forward-looking statement risks, emphasizing actual results may differ due to various factors, with no update commitment - Forward-looking statements are identified by terms like "anticipate," "believe," "expect," "will," and relate to future financial performance, product development, market competition, customer relationships, security, regulatory effects, macroeconomic events, strategic initiatives, and intellectual property[8][10] - Investors should not rely on forward-looking statements as predictions of future events, as outcomes are subject to risks, uncertainties, and other factors detailed in the 'Risk Factors' section of this and previous filings[11] - The company operates in a competitive and rapidly changing environment, with new risks emerging, and does not commit to updating forward-looking statements beyond the initial filing date, except as legally required[11][12] PART I—FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Samsara's unaudited condensed consolidated financial statements, covering balance sheets, operations, equity, cash flows, and detailed accounting notes, are presented Condensed Consolidated Balance Sheets The balance sheets present the company's financial position as of August 2, 2025, showing growth in total assets and stockholders' equity | Metric | August 2, 2025 (in thousands) | February 1, 2025 (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :----------------------------- | :------------------------------ | :-------------------- | :------- | | Total assets | $2,207,099 | $2,024,302 | $182,797 | 9.03% | | Total liabilities | $992,326 | $955,106 | $37,220 | 3.90% | | Total stockholders' equity | $1,214,773 | $1,069,196 | $145,577 | 13.62% | | Cash and cash equivalents | $258,472 | $227,576 | $30,896 | 13.58% | | Short-term investments | $443,327 | $467,222 | $(23,895) | -5.11% | | Accounts receivable, net | $246,084 | $234,016 | $12,068 | 5.16% | | Deferred revenue, current | $611,314 | $563,254 | $48,060 | 8.53% | Condensed Consolidated Statements of Operations and Comprehensive Loss Statements of operations show significant revenue growth and reduced net loss for the three and six months ended August 2, 2025, driven by improved gross profit | Metric | Three Months Ended August 2, 2025 (in thousands) | Three Months Ended August 3, 2024 (in thousands) | Change (in thousands) | % Change | | :----------------------------------- | :------------------------------------- | :------------------------------------- | :-------------------- | :------- | | Revenue | $391,480 | $300,202 | $91,278 | 30.40% | | Gross profit | $300,979 | $226,837 | $74,142 | 32.69% | | Loss from operations | $(26,619) | $(58,194) | $31,575 | -54.26% | | Net loss | $(16,800) | $(49,610) | $32,810 | -66.13% | | Net loss per share, basic and diluted | $(0.03) | $(0.09) | $0.06 | -66.67% | | Metric | Six Months Ended August 2, 2025 (in thousands) | Six Months Ended August 3, 2024 (in thousands) | Change (in thousands) | % Change | | :----------------------------------- | :------------------------------------- | :------------------------------------- | :-------------------- | :------- | | Revenue | $758,364 | $580,928 | $177,436 | 30.54% | | Gross profit | $584,694 | $438,938 | $145,756 | 33.21% | | Loss from operations | $(59,874) | $(124,191) | $64,317 | -51.79% | | Net loss | $(38,921) | $(105,899) | $66,978 | -63.25% | | Net loss per share, basic and diluted | $(0.07) | $(0.19) | $0.12 | -63.16% | Condensed Consolidated Statements of Stockholders' Equity Statements of stockholders' equity detail changes in common stock, paid-in capital, and accumulated deficit, reflecting stock-based compensation and net loss | Metric | Three Months Ended August 2, 2025 (in thousands) | Three Months Ended August 3, 2024 (in thousands) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | | Total Stockholders' Equity | $1,214,773 | $964,683 | | Additional Paid-In Capital | $2,861,440 | $2,524,042 | | Accumulated Deficit | $(1,648,926) | $(1,560,997) | | Stock-based compensation expense | $83,733 | $72,714 | | Net loss | $(16,800) | $(49,610) | | Metric | Six Months Ended August 2, 2025 (in thousands) | Six Months Ended August 3, 2024 (in thousands) | | :-------------------------------- | :------------------------------------- | :------------------------------------- | | Total Stockholders' Equity | $1,214,773 | $964,683 | | Additional Paid-In Capital | $2,861,440 | $2,524,042 | | Accumulated Deficit | $(1,648,926) | $(1,560,997) | | Stock-based compensation expense | $162,691 | $138,522 | | Net loss | $(38,921) | $(105,899) | Condensed Consolidated Statements of Cash Flows Statements of cash flows illustrate cash generation and usage across operating, investing, and financing activities, showing increased operating cash flow | Metric | Six Months Ended August 2, 2025 (in thousands) | Six Months Ended August 3, 2024 (in thousands) | Change (in thousands) | % Change | | :----------------------------------- | :------------------------------------- | :------------------------------------- | :-------------------- | :------- | | Net cash provided by operating activities | $102,773 | $41,787 | $60,986 | 145.95% | | Net cash used in investing activities | $(86,445) | $(33,238) | $(53,207) | 160.09% | | Net cash provided by financing activities | $18,043 | $15,979 | $2,064 | 12.92% | | Net increase in cash, cash equivalents, and restricted cash | $35,715 | $23,965 | $11,750 | 49.03% | | Cash, cash equivalents, and restricted cash, end of period | $281,509 | $178,703 | $102,806 | 57.53% | Notes to Condensed Consolidated Financial Statements 1. Description of Business Samsara Inc. operates a Connected Operations Platform to enhance efficiency, safety, and sustainability through actionable insights from integrated data - Samsara Inc. is the pioneer of the Connected Operations Platform, which integrates people, devices, and systems to provide actionable insights and improve operational efficiency, safety, and sustainability[33] 2. Summary of Significant Accounting Policies This note outlines the basis of presentation, GAAP adherence, fiscal year, consolidation principles, estimates, and recent accounting pronouncements - The financial statements are prepared in conformity with GAAP and SEC rules for interim reporting, and should be read with the annual 10-K filing[34] - The company's fiscal year ends on the Saturday closest to February 1, with fiscal years 2025 and 2026 consisting of 52 weeks[36] - The company adopted ASU No. 2023-09 (Income Taxes) on February 2, 2025, for annual income tax disclosures, and is evaluating ASU No. 2024-03 (Expense Disaggregation) and ASU No. 2025-05 (Credit Losses) for future adoption[40][41][42] 3. Cash, Cash Equivalents, Restricted Cash, and Investments This note details the composition, fair values, and maturities of cash, cash equivalents, restricted cash, and marketable debt securities, including credit risk management | Metric | August 2, 2025 (in thousands) | February 1, 2025 (in thousands) | | :----------------------------------- | :----------------------------- | :------------------------------ | | Cash and cash equivalents | $258,472 | $227,576 | | Restricted cash | $23,037 | $18,218 | | Total cash, cash equivalents, and restricted cash | $281,509 | $245,794 | | Total investments (Estimated Fair Value) | $829,593 | $749,874 | - Restricted cash primarily consists of letters of credit secured as collateral for office space leases[45] - Investments in marketable debt securities are held with high-quality financial institutions with investment-grade ratings, and the company does not intend to sell securities with unrealized losses before recovery of cost basis[49][51] 4. Fair Value Measurements This note describes the fair value hierarchy (Level 1, 2, 3) for financial assets and presents the fair value of cash equivalents and marketable debt securities - The fair value hierarchy prioritizes inputs: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs)[52][53] | Asset Category | August 2, 2025 (in thousands) | February 1, 2025 (in thousands) | | :----------------------------------- | :----------------------------- | :------------------------------ | | Total cash equivalents and restricted cash (Fair Value) | $196,070 | $190,344 | | Total marketable debt securities (Fair Value) | $829,593 | $749,874 | - Fair values are determined using pricing from service providers and market prices from independent data providers, primarily utilizing Level 1 and Level 2 inputs[55] 5. Costs to Obtain and Fulfill a Contract This note details capitalized and amortized costs for deferred commissions and connected devices, showing increases in both categories | Metric | Three Months Ended August 2, 2025 (in thousands) | Three Months Ended August 3, 2024 (in thousands) | | :-------------------------- | :------------------------------------- | :------------------------------------- | | Capitalized commission costs | $28,816 | $19,641 | | Amortization expense (commissions) | $18,387 | $13,876 | | Capitalized connected device costs | $40,482 | $33,655 | | Amortization expense (connected devices) | $34,141 | $28,827 | | Metric | Six Months Ended August 2, 2025 (in thousands) | Six Months Ended August 3, 2024 (in thousands) | | :-------------------------- | :------------------------------------- | :------------------------------------- | | Capitalized commission costs | $52,511 | $37,689 | | Amortization expense (commissions) | $35,637 | $26,807 | | Capitalized connected device costs | $79,055 | $67,369 | | Amortization expense (connected devices) | $66,723 | $56,482 | - Total deferred commissions increased from $209.3 million as of February 1, 2025, to $226.2 million as of August 2, 2025[57] - Total connected device costs (current and non-current) increased from $362.3 million as of February 1, 2025, to $374.6 million as of August 2, 2025[58] 6. Balance Sheet Components This note breaks down inventories and property and equipment, net, highlighting changes in finished goods and capitalized internal-use software costs | Metric | August 2, 2025 (in thousands) | February 1, 2025 (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------ | | Raw materials | $7,269 | $8,452 | | Finished goods | $40,307 | $30,459 | | Total inventories | $47,576 | $38,911 | | Property and equipment, net | $70,438 | $58,151 | | Internal-use software costs | $65,834 | $51,410 | - Capitalized internal-use software costs included $4.1 million of stock-based compensation expense for the six months ended August 2, 2025, up from $2.3 million in the prior year[60] | Metric | Six Months Ended August 2, 2025 (in thousands) | Six Months Ended August 3, 2024 (in thousands) | | :----------------------------------- | :------------------------------------- | :------------------------------------- | | Depreciation and amortization expense | $10,541 | $9,088 | | Amortization of capitalized internal-use software costs | $6,300 | $4,000 | 7. Revenue, Accounts Receivable, Deferred Revenue, and Remaining Performance Obligations This note details revenue recognition policies, disaggregates revenue by type, and provides information on accounts receivable, deferred revenue, and RPO - Subscription revenue, derived from the Connected Operations Platform and IoT devices, constitutes approximately 98% of total revenue and is recognized over the subscription period[63][125] | Metric | Three Months Ended August 2, 2025 (in thousands) | Three Months Ended August 3, 2024 (in thousands) | | :------------------- | :------------------------------------- | :------------------------------------- | | Subscription revenue | $383,890 | $295,324 | | Other revenue | $7,590 | $4,878 | | Total revenue | $391,480 | $300,202 | | Metric | Six Months Ended August 2, 2025 (in thousands) | Six Months Ended August 3, 2024 (in thousands) | | :------------------- | :------------------------------------- | :------------------------------------- | | Subscription revenue | $743,494 | $571,518 | | Other revenue | $14,870 | $9,410 | | Total revenue | $758,364 | $580,928 | - Remaining Performance Obligations (RPO) totaled $3,165.5 million as of August 2, 2025, with approximately $1,401.8 million expected to be recognized over the next 12 months[67] 8. Leases This note outlines operating lease agreements for office space, including costs, cash payments, and future minimum lease payments, with a March 2025 amendment | Metric | Six Months Ended August 2, 2025 (in thousands) | Six Months Ended August 3, 2024 (in thousands) | | :-------------------------- | :------------------------------------- | :------------------------------------- | | Total lease cost | $9,407 | $11,096 | | Cash paid for operating leases | $12,631 | $13,933 | | Operating lease ROU assets obtained | $6,768 | $0 | - As of August 2, 2025, the weighted-average remaining lease term for operating leases is 5.2 years, with a weighted-average discount rate of 5.36%[70] | Fiscal Year Ending | Amount (in thousands) | | :------------------- | :-------------------- | | Remainder of 2026 | $7,642 | | 2027 | $17,487 | | 2028 | $16,034 | | 2029 | $15,744 | | 2030 | $15,223 | | 2031 and thereafter | $17,222 | | Total future minimum lease payments | $89,352 | | Less: imputed interest | $(12,174) | | Total operating lease liabilities | $77,178 | 9. Commitments and Contingencies This note details commitments and contingencies, including leases, purchase commitments, letters of credit, and litigation, with no material loss exposure identified - Purchase commitments include contractual arrangements with SaaS providers and non-cancelable purchase orders for inventory[75] - Letters of credit outstanding totaled $17.8 million as of August 2, 2025, primarily for office space landlords[76] - The company is involved in various legal proceedings but has determined there is no material exposure to loss on an aggregate basis for matters with a reasonable possibility of loss, and amounts recorded for probable losses were not material[77][78] 10. Equity This note details common stock, equity incentive plans (2015, 2021, ESPP), and stock-based compensation expense, including options and RSUs activity | Common Stock Class | August 2, 2025 (Shares Outstanding) | February 1, 2025 (Shares Outstanding) | | :------------------- | :---------------------------------- | :------------------------------------ | | Class A | 348,744,278 | 295,839,286 | | Class B | 224,890,359 | 269,879,953 | | Class C | 0 | 0 | | Reserved Shares Category | August 2, 2025 | February 1, 2025 | | :----------------------------------- | :------------- | :--------------- | | 2015 Equity Incentive Plan (Options) | 5,599,181 | 5,632,520 | | 2015 Equity Incentive Plan (RSUs) | 76,229 | 790,123 | | 2021 Equity Incentive Plan (RSUs) | 20,965,069 | 21,520,741 | | 2021 Equity Incentive Plan (Available for future grants) | 112,775,180 | 90,518,967 | | 2021 Employee Stock Purchase Plan (Available for future issuance) | 26,358,940 | 21,284,493 | | Total shares reserved for future issuance | 165,774,599 | 139,746,844 | | Stock-Based Compensation Expense | Three Months Ended August 2, 2025 (in thousands) | Three Months Ended August 3, 2024 (in thousands) | | :--------------------------------- | :------------------------------------- | :------------------------------------- | | Stock options | $0 | $773 | | RSUs | $78,086 | $67,630 | | Employee stock purchase plan | $3,049 | $3,201 | | Total | $81,135 | $71,604 | | Stock-Based Compensation Expense | Six Months Ended August 2, 2025 (in thousands) | Six Months Ended August 3, 2024 (in thousands) | | :--------------------------------- | :------------------------------------- | :------------------------------------- | | Stock options | $0 | $1,557 | | RSUs | $152,148 | $128,498 | | Employee stock purchase plan | $6,066 | $6,205 | | Total | $158,214 | $136,260 | 11. Income Taxes This note details effective tax rates, income tax provision, and a full valuation allowance against U.S. deferred tax assets, also evaluating OBBBA impact | Metric | Three Months Ended August 2, 2025 | Three Months Ended August 3, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Effective tax rate | (10.6%) | (2.1%) | | Provision for income taxes | $1,607 (in thousands) | $1,042 (in thousands) | | Metric | Six Months Ended August 2, 2025 | Six Months Ended August 3, 2024 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Effective tax rate | (8.9%) | (1.4%) | | Provision for income taxes | $3,196 (in thousands) | $1,418 (in thousands) | - A full valuation allowance is maintained against U.S. federal and state deferred tax assets due to cumulative losses, indicating that realization is not more likely than not[98] - The company is evaluating the potential impact of the recently signed One Big Beautiful Bill Act (OBBBA) on its current fiscal year effective tax rate, which includes reinstating 100% tax bonus depreciation[101] 12. Net Loss Per Share, Basic and Diluted This note presents basic and diluted net loss per share calculations, which are identical, and lists potentially dilutive securities excluded due to antidilutive effect | Metric | Three Months Ended August 2, 2025 | Three Months Ended August 3, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss per share, basic and diluted | $(0.03) | $(0.09) | | Weighted-average shares | 571,738,084 | 553,917,926 | | Metric | Six Months Ended August 2, 2025 | Six Months Ended August 3, 2024 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss per share, basic and diluted | $(0.07) | $(0.19) | | Weighted-average shares | 569,739,406 | 551,285,115 | | Antidilutive Securities | August 2, 2025 | August 3, 2024 | | :-------------------------- | :------------- | :------------- | | Outstanding stock options | 5,599,181 | 5,854,565 | | RSUs | 21,041,298 | 31,327,886 | | Employee stock purchase rights | 660,406 | 712,979 | | Total antidilutive securities | 27,300,885 | 37,895,430 | 13. Segment Information This note confirms the company operates as a single segment, with the CEO reviewing consolidated financials, and provides revenue and long-lived assets by geographic area - Samsara operates as a single operating and reportable segment, with the Chief Executive Officer (CODM) making decisions based on consolidated financial performance[104][105] | Revenue by Geographic Area | Three Months Ended August 2, 2025 (in thousands) | Three Months Ended August 3, 2024 (in thousands) | | :------------------------- | :------------------------------------- | :------------------------------------- | | United States | $334,958 | $260,430 | | Other | $56,522 | $39,772 | | Total revenue | $391,480 | $300,202 | | Revenue by Geographic Area | Six Months Ended August 2, 2025 (in thousands) | Six Months Ended August 3, 2024 (in thousands) | | :------------------------- | :------------------------------------- | :------------------------------------- | | United States | $651,950 | $503,450 | | Other | $106,414 | $77,478 | | Total revenue | $758,364 | $580,928 | | Long-Lived Assets, Net, by Geographic Area | August 2, 2025 (in thousands) | February 1, 2025 (in thousands) | | :----------------------------------------- | :----------------------------- | :------------------------------ | | United States | $124,068 | $118,808 | | Other | $10,340 | $4,207 | | Total long-lived assets, net | $134,408 | $123,015 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Samsara's financial condition and results, covering key metrics, performance factors, operational components, cash flows, and liquidity | Metric | Three Months Ended August 2, 2025 (in thousands) | Three Months Ended August 3, 2024 (in thousands) | | :------------------- | :------------------------------------ | :------------------------------------ | | Revenue | $391,500 | $300,200 | | Net loss | $(16,800) | $(49,600) | | Metric | Six Months Ended August 2, 2025 (in thousands) | Six Months Ended August 3, 2024 (in thousands) | | :------- | :------------------------------------ | :------------------------------------ | | Revenue | $758,400 | $580,900 | | Net loss | $(38,900) | $(105,900) | | Key Business Metric | August 2, 2025 (in thousands) | August 3, 2024 (in thousands) | | :-------------------------- | :----------------------------- | :------------------------------ | | Annual Recurring Revenue (ARR) | $1,640,113 | $1,263,950 | | Customers > $100,000 ARR | 2,771 | 2,120 | - The company's business model focuses on maximizing the lifetime value of customer relationships, with significant investments in expanding the use of its Connected Operations Platform[114] Overview Samsara's mission is to enhance operational safety, efficiency, and sustainability via its Connected Operations Platform, achieving significant growth and reduced net losses - Samsara's Connected Operations Platform integrates IoT devices, connected assets, and third-party systems to provide data insights for safer, more efficient, and sustainable operations[112][113] Key Business Metrics This section defines and presents key business metrics, including Annual Recurring Revenue (ARR) and customers with over $100,000 ARR, crucial for performance and growth - ARR is defined as the annualized value of subscription contracts that have commenced revenue recognition, serving as a key indicator of business trajectory and future growth[116] - The definition of a customer was adjusted in the fiscal quarter ended May 3, 2025, to reflect an entity or group of affiliated entities with ARR greater than $1,000, better aligning with the company's go-to-market strategy for large enterprise customers[118] Factors Affecting Our Performance Samsara's performance is influenced by customer acquisition, expansion, innovation investment, and macroeconomic trends - Key performance drivers include acquiring new customers through sales and marketing, expanding existing customer relationships by selling more applications and extending geographic reach, and continuous investment in platform innovation and headcount[119][120][121] - Macroeconomic trends such as inflation, foreign currency fluctuations, interest rate changes, supply chain disruptions, labor shortages, and geopolitical conflicts can negatively affect business growth and results of operations[122] Components of Results of Operations This section details Samsara's financial results components, including revenue, cost of revenue, operating expenses, interest income, and income taxes - Revenue is primarily generated from subscriptions to the Connected Operations Platform, which includes cloud-based applications, IoT devices, and support services, typically with initial terms of three to five years[124] - Cost of revenue includes amortization of connected device costs, third-party cloud and cellular costs, employee-related costs for customer support, and amortization of internal-use software[126] - Operating expenses are