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Samsara Reports Second Quarter Fiscal 2023 Financial Results

·15 min read
  • Q2 revenue of $153.5 million, representing 52% year-over-year growth

  • Ending ARR of $662.8 million, representing 52% year-over-year growth

  • 989 customers with ARR over $100,000, up 61% year-over-year

SAN FRANCISCO, August 31, 2022--(BUSINESS WIRE)--Samsara Inc. (NYSE: IOT), the pioneer of the Connected Operations Cloud, reported financial results for the second quarter ended July 30, 2022, and released a shareholder letter accessible from the Samsara investor relations website at investors.samsara.com.

"We delivered another strong quarter of growth at scale, surpassing $660 million of ARR, growing more than 50% year-over-year," said Sanjit Biswas, co-founder and CEO of Samsara. "Our customers provide the critical infrastructure that powers the global economy. Today’s challenging environment is driven by rising inflation, disrupted supply chains, tight labor markets and geopolitical risks. This is why many of our existing customers are doubling down on their Samsara investment, and new customers are choosing Samsara to provide a rapid return on investment. Samsara’s Connected Operations Cloud helps our customers control costs by running smarter, safer and more efficient operations."

Second Quarter Fiscal 2023 Financial Highlights

(In millions, except percentage, percentage points, and per share data)

Q2 FY2023

Q2 FY2022

Y/Y Change

Annual Recurring Revenue (ARR)

$

662.8

$

436.9

52

%

Total revenue

$

153.5

$

101.0

52

%

GAAP gross profit

$

109.3

$

72.7

$

36.6

GAAP gross margin

71

%

72

%

(1 pt)

Non-GAAP gross profit

$

111.9

$

72.7

$

39.2

Non-GAAP gross margin

73

%

72

%

1 pt

GAAP operating loss

$

(65.8

)

$

(31.2

)

$

(34.6

)

GAAP operating margin

(43

%)

(31

%)

(12 pts)

Non-GAAP operating loss

$

(20.2

)

$

(29.9

)

$

9.7

Non-GAAP operating margin

(13

%)

(30

%)

17 pts

GAAP net loss per share

$

(0.13

)

$

(0.13

)

$

Non-GAAP net loss per share

$

(0.04

)

$

(0.12

)

$

0.08

Net cash used in operating activities

$

(37.0

)

$

(44.8

)

$

7.8

Adjusted free cash flow

$

(38.4

)

$

(46.5

)

$

8.1

Adjusted free cash flow margin

(25

%)

(46

%)

21 pts

We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with generally accepted accounting principles ("GAAP"). See the section titled "Use of Non-GAAP Financial Measures" for an explanation of non-GAAP financial measures and the tables in the section titled "Reconciliation Between GAAP and Non-GAAP Financial Measures" for a reconciliation of GAAP to non-GAAP financial measures.

Financial Outlook

Our guidance includes GAAP and non-GAAP financial measures. For the third quarter and fiscal year 2023, Samsara expects the following:

Q3 FY2023 Outlook

FY 2023 Outlook

Total revenue

$154 million – $156 million

$610 million – $614 million

Year/Year growth

35% – 37%

42% – 43%

Non-GAAP operating margin

(20%)

(18%)

Non-GAAP net loss per share

($0.06) – ($0.07)

($0.21) – ($0.23)

A reconciliation of non-GAAP guidance financial measures to corresponding GAAP guidance financial measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty and potential variability of expenses, such as stock-based compensation expense-related charges, that may be incurred in the future and cannot be reasonably determined or predicted at this time. It is important to note that these factors could be material to our results of operations computed in accordance with GAAP.

About Samsara

Samsara is the pioneer of the Connected Operations Cloud, which allows businesses that depend on physical operations to harness IoT (Internet of Things) data to develop actionable business insights and improve their operations. Samsara operates in North America and Europe and serves tens of thousands of customers across a wide range of industries including transportation, wholesale and retail trade, construction, field services, logistics, utilities and energy, government, healthcare and education, manufacturing, and food and beverage. The company’s mission is to increase the safety, efficiency, and sustainability of the operations that power the global economy.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements may relate to, but are not limited to, expectations of future operating results or financial performance, the calculation of certain of our key financial and operating metrics, our market opportunity, industry developments and trends, customer demand for our solution, and our competitive position, as well as assumptions relating to the foregoing.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and could cause actual results and events to differ. In some cases, you can identify forward-looking statements by terminology such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "goal," "intend," "may," "objective," "ongoing," "plan," "potential," "predict," "project," "seek," "should," "target," "will," "would," or the negative of these terms or other comparable expressions that concern our expectations, strategy, plans, or intentions. You should not put undue reliance on any forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. Forward-looking statements are based on information available at the time those statements are made, including information furnished to us by third parties that we have not independently verified, and/or management’s good faith beliefs and assumptions as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.

These risks and uncertainties include our ability to retain customers and expand the Applications used by our customers, our ability to attract new customers, our future financial performance, including trends in revenue and annual recurring revenue, net retention rate, costs of revenue, gross profit or gross margin, operating expenses, customer counts, non-GAAP financial measures (such as non-GAAP gross margin, non-GAAP operating margin, and adjusted free cash flow margin), our ability to achieve or maintain profitability, the demand for our products or for solutions for connected operations in general, the impact of the ongoing COVID-19 pandemic, the Russia-Ukraine conflict, geopolitical tensions involving China, and macroeconomic conditions globally on our and our customers’, partners’ and suppliers’ operations and future financial performance, possible harm caused by silicon component shortages and other supply chain constraints, possible harm caused by a security breach or other incident affecting our or our customers’ assets or data, our ability to compete successfully in competitive markets, our ability to respond to rapid technological changes, and our ability to continue to innovate and develop new Applications. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings and reports that we may file from time to time with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.

Except as required by law, we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

Use of Non-GAAP Financial Measures

This document includes certain non-GAAP financial measures. Reconciliations of non-GAAP financial measures to our financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data.

Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for financial information presented under GAAP. There are a number of limitations related to the use of non-GAAP financial measures versus comparable financial measures determined under GAAP. For example, other companies in our industry may calculate these non-GAAP financial measures differently or may use other measures to evaluate their performance. In addition, adjusted free cash flow does not reflect our future contractual commitments or the total increase or decrease of our cash balance for a given period. All of these limitations could reduce the usefulness of these non-GAAP financial measures as analytical tools. Investors are encouraged to review the related GAAP financial measures and the reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures and to not rely on any single financial measure to evaluate our business.

We present these non-GAAP financial measures to assist investors in seeing Samsara’s operating results through the eyes of management, and because we believe that these measures provide an additional tool for investors to evaluate our business.

Expenses Excluded from Non-GAAP Financial Measures—Stock-based compensation expense is excluded primarily because it is a non-cash expense that management believes is not reflective of our ongoing operational performance. Employer taxes on employee equity transactions, which is a cash expense, is excluded because such taxes are tied to the timing and size of the vesting of the underlying equity awards and the price of our common stock at the time of vesting, which may vary from period to period independent of the operating performance of our business. Lease modification, impairment, and related charges are excluded because such charges are not reflective of our ongoing operational performance.

Operating Metrics and Non-GAAP Financial Measures

Annual Recurring Revenue—We define ARR as the annualized value of subscription contracts that have commenced revenue recognition as of the measurement date.

Non-GAAP Gross Profit and Non-GAAP Gross Margin—We define non-GAAP gross profit as gross profit plus stock-based compensation expense-related charges, including employer taxes on employee equity transactions, included in cost of revenue. Non-GAAP gross margin is defined as non-GAAP gross profit as a percentage of total revenue. We use non-GAAP gross profit and non-GAAP gross margin in conjunction with traditional GAAP measures to evaluate our financial performance. We believe that non-GAAP gross profit and non-GAAP gross margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations.

Non-GAAP Loss from Operations and Non-GAAP Operating Margin—We define non-GAAP loss from operations, or non-GAAP operating loss, as loss from operations excluding the effect of stock-based compensation expense-related charges, including employer taxes on employee equity transactions, and lease modification, impairment, and related charges. Non-GAAP operating margin is defined as non-GAAP operating loss as a percentage of total revenue. We use non-GAAP loss from operations and non-GAAP operating margin in conjunction with traditional GAAP measures to evaluate our financial performance. We believe that non-GAAP loss from operations and non-GAAP operating margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations.

Non-GAAP Net Loss and Non-GAAP Net Loss per Share—We define non-GAAP net loss and non-GAAP net loss per share as net loss and net loss per share excluding the effect of stock-based compensation expense-related charges, including employer taxes on employee equity transactions, and lease modification, impairment, and related charges. We use non-GAAP net loss and non-GAAP net loss per share in conjunction with traditional GAAP measures to evaluate our financial performance. We believe that non-GAAP net loss and non-GAAP net loss per share provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations.

Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin—We define adjusted free cash flow as net cash used in operating activities less cash used for purchases of property and equipment, plus non-recurring capital expenditures associated with the build-out of our corporate office facilities in San Francisco, net of tenant allowances. Adjusted free cash flow margin is calculated as adjusted free cash flow as a percentage of total revenue. We believe that adjusted free cash flow and adjusted free cash flow margin, even if negative, are useful in evaluating liquidity and provide information to management and investors about our ability to fund future operating needs and strategic initiatives.

Webcast Information and Shareholder Letter

An investor presentation and accompanying shareholder letter is accessible from the Samsara investor relations website at https://investors.samsara.com/. Samsara will host a live webcast to discuss the results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) today. The live webcast may be accessed at https://investors.samsara.com/. Following the webcast, a replay will be accessible from the same website.

SAMSARA INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

As of

July 30, 2022

January 29, 2022

Assets

Current assets:

Cash and cash equivalents

$

826,138

$

921,218

Accounts receivable, net

77,396

81,987

Inventories

39,055

33,067

Connected device costs, current

79,112

52,519

Prepaid expenses and other current assets

14,288

11,376

Total current assets

1,035,989

1,100,167

Restricted cash

23,095

23,092

Property and equipment, net

56,682

36,772

Operating lease right-of-use assets

123,435

134,427

Connected device costs, non-current

151,414

141,292

Deferred commissions

124,090

117,757

Other assets, non-current

14,318

14,422

Total assets

$

1,529,023

$

1,567,929

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

20,430

$

54,705

Accrued expenses and other current liabilities

40,323

31,835

Accrued compensation and benefits

20,453

27,107

Deferred revenue, current

238,969

203,185

Operating lease liabilities, current

21,635

21,447

Total current liabilities

341,810

338,279

Deferred revenue, non-current

115,601

110,501

Operating lease liabilities, non-current

111,967

123,513

Other liabilities, non-current

6,507

6,689

Total liabilities

575,885

578,982

Commitments and contingencies

Stockholders’ equity:

Preferred stock

Class A common stock

6

6

Class B common stock

23

23

Class C common stock

Additional paid-in capital

2,009,323

1,909,964

Accumulated other comprehensive income (loss)

5

(96

)

Accumulated deficit

(1,056,219

)

(920,950

)

Total stockholders’ equity

953,138

988,947

Total liabilities and stockholders’ equity

$

1,529,023

$

1,567,929

SAMSARA INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

(Unaudited)

Three Months Ended

Six Months Ended

July 30, 2022

July 31, 2021

July 30, 2022

July 31, 2021

Revenue

$

153,523

$

101,043

$

296,168

$

188,774

Cost of revenue

44,257

28,368

83,875

53,997

Gross profit

109,266

72,675

212,293

134,777

Operating expenses

Research and development

41,847

25,451

82,832

48,981

Sales and marketing

91,842

55,579

179,291

107,865

General and administrative

41,359

22,874

85,101

47,758

Lease modification, impairment, and related charges

1,056

Total operating expenses

175,048

103,904

348,280

204,604

Loss from operations

(65,782

)

(31,229

)

(135,987

)

(69,827

)

Interest income and other income (expense), net

1,541

224

1,481

384

Loss before provision for income taxes

(64,241

)

(31,005

)

(134,506

)

(69,443

)

Provision for income taxes

40

368

763

368

Net loss

$

(64,281

)

$

(31,373

)

$

(135,269

)

$

(69,811

)

Other comprehensive income (loss), net of taxes:

Change in foreign currency translation adjustment

(77

)

101

Comprehensive loss

$

(64,358

)

$

(31,373

)

$

(135,168

)

$

(69,811

)

Basic and diluted net loss per share:

Net loss per share attributable to common stockholders, basic and diluted

$

(0.13

)

$

(0.13

)

$

(0.27

)

$

(0.28

)

Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted

511,758,439

246,332,034

509,526,709

245,781,701

SAMSARA INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Three Months Ended

Six Months Ended

July 30, 2022

July 31, 2021

July 30, 2022

July 31, 2021

Operating activities

Net loss

$ (64,281)

$ (31,373)

$ (135,269)

$ (69,811)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

2,645

2,823

5,005

5,307

Stock-based compensation expense

44,340

1,314

87,952

2,767

Lease modification, impairment, and related charges

1,056

Other non-cash charges

765

3,703

2,882

6,189

Changes in operating assets and liabilities:

Accounts receivable, net

6,427

(6,629)

1,637

(16,022)

Inventories

2,937

(8,036)

(5,988)

(8,217)

Prepaid expenses and other current assets

84

(771)

(2,912)

340

Connected device costs

(20,402)

(22,896)

(36,714)

(42,055)

Deferred commissions

(4,075)

(6,011)

(6,333)

(8,851)

Other assets, non-current

(2,922)

1,305

70

(369)

Accounts payable and other liabilities

(26,986)

13,038

(37,218)

24,135

Deferred revenue

24,712

8,852

40,884

24,647

Operating lease liabilities, net

(222)

(163)

(812)

26

Net cash used in operating activities

(36,978)

(44,844)

(85,760)

(81,914)

Investing activities

Purchase of property and equipment

(6,262)

(2,761)

(16,930)

(6,269)

Investing other

(482)

(482)

Net cash used in investing activities

(6,262)

(3,243)

(16,930)

(6,751)

Financing activities

Proceeds from issuance of common stock in connection with equity compensation plans

10,455

221

10,704

733

Proceeds from early exercise of stock options

132

Repurchase of restricted common stock

(1)

Payment of offering costs

(466)

(1,388)

(2,208)

(1,688)

Payment of principal on finance leases

(246)

(107)

(487)

(180)

Net cash provided by (used in) financing activities

9,743

(1,274)

8,009

(1,004)

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash

(205)

(396)

Net decrease in cash, cash equivalents, and restricted cash

(33,702)

(49,361)

(95,077)

(89,669)

Cash, cash equivalents, and restricted cash, beginning of period

882,935

394,001

944,310

434,309

Cash, cash equivalents, and restricted cash, end of period

$ 849,233

$ 344,640

$ 849,233

$ 344,640

SAMSARA INC.

RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL MEASURES

(In thousands, except percentages and per share data)

(Unaudited)

Three Months Ended

Six Months Ended

July 30, 2022

July 31, 2021

July 30, 2022

July 31, 2021

Gross profit and gross margin reconciliation

GAAP gross profit

$

109,266

$

72,675

$

212,293

$

134,777

Add:

Stock-based compensation expense-related charges (1)

2,598

4,358

1

Non-GAAP gross profit

$

111,864

$

72,675

$

216,651

$

134,778

GAAP gross margin

71

%

72

%

72

%

71

%

Non-GAAP gross margin

73

%

72

%

73

%

71

%

Operating loss and operating margin reconciliation

GAAP loss from operations

$

(65,782

)

$

(31,229

)

$

(135,987

)

$

(69,827

)

Add:

Stock-based compensation expense-related charges (1)

45,557

1,314

89,224

2,767

Lease modification, impairment, and related charges

1,056

Non-GAAP loss from operations

$

(20,225

)

$

(29,915

)

$

(45,707

)

$

(67,060

)

GAAP operating margin

(43

) %

(31

) %

(46

) %

(37

) %

Non-GAAP operating margin

(13

) %

(30

) %

(15

) %

(36

) %

__________

1)

Stock based compensation expense related charges were included in the following line items of our condensed consolidated statements of operations and comprehensive loss as follows:

Three Months Ended

Six Months Ended

July 30, 2022

July 31, 2021

July 30, 2022

July 31, 2021

Cost of revenue

$

2,598

$

$

4,358

$

1

Research and development

14,347

159

27,867

331

Sales and marketing

14,699

109

29,058

297

General and administrative

13,913

1,046

27,941

2,138

Total stock-based compensation expense-related charges (2)

$

45,557

$

1,314

$

89,224

$

2,767

__________

2)

Stock-based compensation expense-related charges included approximately $1.2 million and $1.3 million of employer taxes on employee equity transactions for the three and six months ended July 30, 2022.

Three Months Ended

Six Months Ended

July 30, 2022

July 31, 2021

July 30, 2022

July 31, 2021

GAAP net loss

$

(64,281

)

$

(31,373

)

$

(135,269

)

$

(69,811

)

Add:

Stock-based compensation expense-related charges, net of applicable taxes

45,557

1,314

89,224

2,767

Lease modification, impairment, and related charges, net of applicable taxes

1,056

Non-GAAP net loss

$

(18,724

)

$

(30,059

)

$

(44,989

)

$

(67,044

)

SAMSARA INC.

RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL MEASURES

(In thousands, except percentages and per share data)

(Unaudited)

Three Months Ended

Six Months Ended

July 30, 2022

July 31, 2021

July 30, 2022

July 31, 2021

GAAP net loss per share attributable to common stockholders, basic and diluted

$

(0.13

)

$

(0.13

)

$

(0.27

)

$

(0.28

)

Total impact on net loss per share, basic and diluted, from non-GAAP adjustments

0.09

0.01

0.18

0.01

Non-GAAP net loss per share attributable to common stockholders, basic and diluted

$

(0.04

)

$

(0.12

)

$

(0.09

)

$

(0.27

)

Three Months Ended

Six Months Ended

July 30, 2022

July 31, 2021

July 30, 2022

July 31, 2021

Net cash used in operating activities

$

(36,978

)

$

(44,844

)

$

(85,760

)

$

(81,914

)

Purchase of property and equipment

(6,262

)

(2,761

)

(16,930

)

(6,269

)

Purchase of property and equipment for build-out of corporate office facilities

4,797

1,091

13,565

1,705

Adjusted free cash flow

$

(38,443

)

$

(46,514

)

$

(89,125

)

$

(86,478

)

Adjusted free cash flow margin

(25

) %

(46

) %

(30

) %

(46

) %

View source version on businesswire.com: https://www.businesswire.com/news/home/20220831005239/en/

Contacts

Investor Contact:
Mike Chang
ir@samsara.com

Media Contact:
Adam Simons
media@samsara.com