Samsara (IOT 4.37%), a leading provider of Internet of Things (IoT) solutions, delivered a fiscal Q2 2025 earnings report on Sept. 5 that exceeded expectations. For the quarter that ended Aug. 3, revenues rose by 37% year over year to $300.2 million, surpassing management's guidance range of $288 million to $290 million. Samsara's non-GAAP operating margin was 6% -- far better than the negative 2% margin that had been expected. Non-GAAP net income came in at $0.05 per share while the guidance range had been for no more than $0.01 per share.
| Metric | Q2 Fiscal 2025 Result | Q2 Fiscal 2025 Guidance | Q2 Fiscal 2024 Result | % Change (YoY) |
|---|---|---|---|---|
| Revenue | $300.2 million | $288 million to $290 million | $219.3 million | 37% |
| Non-GAAP operating margin | 6% | (2%) | (3%) | N/A |
| Non-GAAP net income per share | $0.05 | $0.00 to $0.01 | $0.01 | 400% |
| GAAP operating income | ($58.2 million) | N/A | ($69.8 million) | N/A |
| Annual recurring revenue | $1.264 billion | N/A | $930 million | 36% |
Source: Management's guidance from Samsara's fiscal Q1 2025 earnings report, released on June 6.
Understanding Samsara
Samsara specializes in IoT solutions that connect physical operations to the cloud through software and hardware. Its primary markets include transportation, logistics, construction, and public services. Samsara focuses on providing actionable data insights to improve operational efficiencies, safety, and sustainability outcomes for its customers.
Recently, it has concentrated on expanding its customer base, enhancing its differentiated platform, and leveraging AI and advanced technologies. The company aims to deliver strong returns on investment to its customers while fostering a robust ecosystem of partners for continued growth and innovation.
Quarterly Highlights
Samsara reported significant growth in its customer base. The company now has 2,133 customers providing it with annual recurring revenue (ARR) of more than $100,000, a 41% increase from 1,511 in the prior year. This notable rise reflects Samsara's focus on targeting large enterprises.
The platform's differentiation and integration capabilities were instrumental in helping the company boost its non-GAAP gross margin by 2 percentage points year over year to 77%. This improvement demonstrates the value of Samsara's Connected Operations Cloud, which now processes over 10 trillion data points annually, enhancing its operational insights.
Samsara's GAAP operating loss decreased to $58.2 million from $69.8 million, and its GAAP gross profit increased to $226.8 million from $160.4 million, reflecting increased cost management and customer value delivery.
Revenue from large customers and sectors early in the digital adoption process were crucial drivers of the company's results. Samsara leveraged its extensive partnership ecosystem and strong innovation pipeline to maintain its competitive edge. Its continually improving financial and operational metrics allude to robust, sustainable growth.
Non-GAAP operating income stood at $17.6 million, compared to an operating loss of $5.9 million in the prior-year period. Adjusted free cash flow increased to $13.1 million from $4.7 million. Inventory levels rose to $38.6 million compared to $22.2 million in February 2024, likely to meet the increasing demand for connected devices.
Looking Ahead
For fiscal Q3, Samsara's management anticipates revenue between $309 million and $311 million, with a projected non-GAAP operating margin of 4%. Non-GAAP net income per share is expected to be in the $0.03 to $0.04 range. These projections reflect confidence in sustained growth and operational efficiency improvements.
For fiscal 2025, revenue guidance was raised to between $1.224 billion and $1.228 billion. Non-GAAP net income per share is now forecast to be between $0.16 and $0.18, an increase from the previous guidance range of $0.13 to $0.15.
