Samsara Reports Third Quarter Fiscal 2023 Financial Results

Rhea-AI Summary

Samsara Inc. (NYSE: IOT) reported Q3 revenue of $169.8 million, marking a 49% year-over-year growth. The company achieved an Annual Recurring Revenue (ARR) of $723.7 million, up 47% year-over-year, with 1,113 customers generating over $100,000 in ARR, a 56% increase. Despite growth, Samsara posted a GAAP operating loss of $63.5 million and a net loss per share of $0.11. The outlook for Q4 projects revenue between $170 million and $172 million, with a year-over-year growth of 35%-37%.

Positive

• Q3 revenue of $169.8 million, a 49% year-over-year increase.
• Annual Recurring Revenue (ARR) of $723.7 million, a 47% year-over-year growth.
• Increase in customers with ARR over $100,000 by 56% year-over-year.
• Improved non-GAAP operating margin from -26% to -10% year-over-year.

Negative

• GAAP operating loss of $63.5 million, an increase of $31.2 million year-over-year.
• Net loss per share of $0.11, only a slight improvement from $0.13 in the previous year.
• Adjusted free cash flow margin decreased to -9% from -38% year-over-year.

• Q3 revenue of $169.8 million, representing 49% year-over-year growth
• Ending ARR of $723.7 million, representing 47% year-over-year growth
• 1,113 customers with ARR over $100,000, up 56% year-over-year

SAN FRANCISCO--(BUSINESS WIRE)-- Samsara Inc. (NYSE: IOT), the pioneer of the Connected Operations Cloud, reported financial results for the third quarter ended October 29, 2022, and released a shareholder letter accessible from the Samsara investor relations website at investors.samsara.com.

“We delivered another quarter of durable and efficient growth at scale, including ending ARR of $724 million, growing 47% year-over-year,” said Sanjit Biswas, co-founder and CEO of Samsara. “We partner with customers that power the global economy and span a number of diverse industries. Amid macroeconomic uncertainties, our customers remain focused on delivering profitability. They are focused on asset efficiency, worker availability, and maintaining safe and compliant operations. We are proud to deliver value to our customers in all of these areas by digitizing their physical operations with Samsara’s Connected Operations Cloud.”

Third Quarter Fiscal 2023 Financial Highlights (In millions, except percentage, percentage points, and per share data)
	Q3 FY2023		Q3 FY2022		Y/Y Change
Annual Recurring Revenue (ARR)	$ 723.7		$ 492.8		47%
Total revenue	$ 169.8		$ 113.8		49%
GAAP gross profit	$ 122.5		$ 82.0		$ 40.5
GAAP gross margin	72%		72%		— pt
Non-GAAP gross profit	$ 125.2		$ 82.0		$ 43.2
Non-GAAP gross margin	74%		72%		2 pts
GAAP operating loss	$ (63.5)		$ (32.3)		$ (31.2)
GAAP operating margin	(37%)		(28%)		(9 pts)
Non-GAAP operating loss	$ (16.6)		$ (29.5)		$ 12.9
Non-GAAP operating margin	(10%)		(26%)		16 pts
GAAP net loss per share	$ (0.11)		$ (0.13)		$ 0.02
Non-GAAP net loss per share	$ (0.02)		$ (0.12)		$ 0.10
Net cash used in operating activities	$ (12.9)		$ (41.3)		$ 28.4
Adjusted free cash flow	$ (14.9)		$ (43.0)		$ 28.1
Adjusted free cash flow margin	(9%)		(38%)		29 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 fourth quarter and fiscal year 2023, Samsara expects the following:

	Q4 FY2023 Outlook		FY 2023 Outlook
Total revenue	$170 million – $172 million		$636 million – $638 million
Year/Year growth	35% – 37%		48% – 49%
Non-GAAP operating margin	(16%)		(14%)
Non-GAAP net loss per share	($0.05) – ($0.06)		($0.16) – ($0.17)

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, macroeconomic conditions and any expected benefits of our products, 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, the length of our sales cycles, 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
	October 29, 2022				January 29, 2022
Assets
Current assets:
Cash and cash equivalents	$	447,040			$	921,218
Short-term investments		291,815				—
Accounts receivable, net		90,796				81,987
Inventories		44,501				33,067
Connected device costs, current		72,685				52,519
Prepaid expenses and other current assets		16,196				11,376
Total current assets		963,033				1,100,167
Restricted cash		23,096				23,092
Long-term investments		63,688				—
Property and equipment, net		57,358				36,772
Operating lease right-of-use assets		118,511				134,427
Connected device costs, non-current		180,120				141,292
Deferred commissions		128,212				117,757
Other assets, non-current		15,964				14,422
Total assets	$	1,549,982			$	1,567,929
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	43,366			$	54,705
Accrued expenses and other current liabilities		34,848				31,835
Accrued compensation and benefits		22,511				27,107
Deferred revenue, current		255,420				203,185
Operating lease liabilities, current		21,701				21,447
Total current liabilities		377,846				338,279
Deferred revenue, non-current		118,823				110,501
Operating lease liabilities, non-current		106,182				123,513
Other liabilities, non-current		7,378				6,689
Total liabilities		610,229				578,982
Commitments and contingencies
Stockholders’ equity:
Preferred stock		—				—
Class A common stock		7				6
Class B common stock		23				23
Class C common stock		—				—
Additional paid-in capital		2,055,481				1,909,964
Accumulated other comprehensive loss		(984	)			(96	)
Accumulated deficit		(1,114,774	)			(920,950	)
Total stockholders’ equity		939,753				988,947
Total liabilities and stockholders’ equity	$	1,549,982			$	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								Nine Months Ended
	October 29, 2022				October 30, 2021				October 29, 2022				October 30, 2021
Revenue	$	169,800			$	113,819			$	465,968			$	302,593
Cost of revenue		47,253				31,781				131,128				85,778
Gross profit		122,547				82,038				334,840				216,815
Operating expenses
Research and development		49,970				29,687				132,802				78,668
Sales and marketing		94,056				58,704				273,347				166,569
General and administrative		41,997				24,399				127,098				72,157
Lease modification, impairment, and related charges		—				1,532				1,056				1,532
Total operating expenses		186,023				114,322				534,303				318,926
Loss from operations		(63,476	)			(32,284	)			(199,463	)			(102,111	)
Interest income and other income (expense), net		5,613				(143	)			7,094				241
Loss before provision for income taxes		(57,863	)			(32,427	)			(192,369	)			(101,870	)
Provision for income taxes		692				19				1,455				387
Net loss	$	(58,555	)		$	(32,446	)		$	(193,824	)		$	(102,257	)
Other comprehensive income (loss), net of taxes:
Change in foreign currency translation adjustment		315				46				416				46
Change in unrealized gains (losses) on investments		(1,304	)			—				(1,304	)			—
Other comprehensive income (loss)		(989	)			46				(888	)			46
Comprehensive loss	$	(59,544	)		$	(32,400	)		$	(194,712	)		$	(102,211	)
Basic and diluted net loss per share:
Net loss per share attributable to common stockholders, basic and diluted	$	(0.11	)		$	(0.13	)		$	(0.38	)		$	(0.42	)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted		516,551,258				246,811,235				511,867,718				246,174,612

SAMSARA INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
	Three Months Ended								Nine Months Ended
	October 29, 2022				October 30, 2021				October 29, 2022				October 30, 2021
Operating activities
Net loss	$	(58,555	)		$	(32,446	)		$	(193,824	)		$	(102,257	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		3,345				2,910				8,350				8,217
Stock-based compensation expense		45,538				1,221				133,490				3,988
Lease modification, impairment, and related charges		—				1,532				1,056				1,532
Other non-cash charges		454				(761	)			3,336				5,428
Changes in operating assets and liabilities:
Accounts receivable, net		(14,934	)			(7,663	)			(13,297	)			(23,685	)
Inventories		(5,446	)			(418	)			(11,434	)			(8,635	)
Prepaid expenses and other current assets		(2,388	)			(2,159	)			(5,300	)			(1,819	)
Connected device costs		(22,279	)			(20,378	)			(58,993	)			(62,433	)
Deferred commissions		(4,122	)			(5,919	)			(10,455	)			(14,770	)
Other assets, non-current		(1,590	)			(570	)			(1,520	)			(939	)
Accounts payable and other liabilities		27,820				11,333				(9,398	)			35,468
Deferred revenue		19,673				12,178				60,557				36,825
Operating lease liabilities, net		(404	)			(122	)			(1,216	)			(96	)
Net cash used in operating activities		(12,888	)			(41,262	)			(98,648	)			(123,176	)
Investing activities
Purchase of property and equipment		(10,307	)			(3,684	)			(27,237	)			(9,953	)
Purchases of investments		(355,730	)			—				(355,730	)			—
Investing other		432				(100	)			432				(582	)
Net cash used in investing activities		(365,605	)			(3,784	)			(382,535	)			(10,535	)
Financing activities
Proceeds from issuance of common stock in connection with equity compensation plans		164				232				10,868				965
Proceeds from early exercise of stock options		—				20				—				152
Repurchase of restricted common stock		—				(4	)			—				(5	)
Payment of offering costs		(324	)			(472	)			(2,532	)			(2,160	)
Payment of principal on finance leases		(369	)			(156	)			(856	)			(336	)
Net cash provided by (used in) financing activities		(529	)			(380	)			7,480				(1,384	)
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash		(75	)			46				(471	)			46
Net decrease in cash, cash equivalents, and restricted cash		(379,097	)			(45,380	)			(474,174	)			(135,049	)
Cash, cash equivalents, and restricted cash, beginning of period		849,233				344,640				944,310				434,309
Cash, cash equivalents, and restricted cash, end of period	$	470,136			$	299,260			$	470,136			$	299,260

SAMSARA INC. RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL MEASURES (In thousands, except percentages and per share data) (Unaudited)
	Three Months Ended								Nine Months Ended
	October 29, 2022				October 30, 2021				October 29, 2022				October 30, 2021
Gross profit and gross margin reconciliation
GAAP gross profit	$	122,547			$	82,038			$	334,840			$	216,815
Add:
Stock-based compensation expense-related charges (1)		2,685				9				7,043				10
Non-GAAP gross profit	$	125,232			$	82,047			$	341,883			$	216,825
GAAP gross margin		72	%			72	%			72	%			72	%
Non-GAAP gross margin		74	%			72	%			73	%			72	%
Operating loss and operating margin reconciliation
GAAP loss from operations	$	(63,476	)		$	(32,284	)		$	(199,463	)		$	(102,111	)
Add:
Stock-based compensation expense-related charges (1)		46,869				1,221				136,093				3,988
Lease modification, impairment, and related charges		—				1,532				1,056				1,532
Non-GAAP loss from operations	$	(16,607	)		$	(29,531	)		$	(62,314	)		$	(96,591	)
GAAP operating margin		(37	) %			(28	) %			(43	) %			(34	) %
Non-GAAP operating margin		(10	) %			(26	) %			(13	) %			(32	) %

__________
(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						Nine Months Ended
	October 29, 2022			October 30, 2021			October 29, 2022			October 30, 2021
Cost of revenue	$	2,685		$	9		$	7,043		$	10
Research and development		18,420			219			46,287			550
Sales and marketing		12,701			84			41,759			381
General and administrative		13,063			909			41,004			3,047
Total stock-based compensation expense-related charges (2)	$	46,869		$	1,221		$	136,093		$	3,988

__________
(2)	Stock-based compensation expense-related charges included approximately $1.3 million and $2.6 million of employer taxes on employee equity transactions for the three and nine months ended October 29, 2022.

	Three Months Ended								Nine Months Ended
	October 29, 2022				October 30, 2021				October 29, 2022				October 30, 2021
GAAP net loss	$	(58,555	)		$	(32,446	)		$	(193,824	)		$	(102,257	)
Add:
Stock-based compensation expense-related charges, net of applicable taxes		46,869				1,221				136,093				3,988
Lease modification, impairment, and related charges, net of applicable taxes		—				1,532				1,056				1,532
Non-GAAP net loss	$	(11,686	)		$	(29,693	)		$	(56,675	)		$	(96,737	)

SAMSARA INC. RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL MEASURES (In thousands, except percentages and per share data) (Unaudited)
	Three Months Ended								Nine Months Ended
	October 29, 2022				October 30, 2021				October 29, 2022				October 30, 2021
GAAP net loss per share attributable to common stockholders, basic and diluted	$	(0.11	)		$	(0.13	)		$	(0.38	)		$	(0.42	)
Total impact on net loss per share, basic and diluted, from non-GAAP adjustments		0.09				0.01				0.27				0.03
Non-GAAP net loss per share attributable to common stockholders, basic and diluted	$	(0.02	)		$	(0.12	)		$	(0.11	)		$	(0.39	)

	Three Months Ended								Nine Months Ended
	October 29, 2022				October 30, 2021				October 29, 2022				October 30, 2021
Net cash used in operating activities	$	(12,888	)		$	(41,262	)		$	(98,648	)		$	(123,176	)
Purchase of property and equipment		(10,307	)			(3,684	)			(27,237	)			(9,953	)
Purchase of property and equipment for build-out of corporate office facilities		8,309				1,901				21,874				3,606
Adjusted free cash flow	$	(14,886	)		$	(43,045	)		$	(104,011	)		$	(129,523	)
Adjusted free cash flow margin		(9	) %			(38	) %			(22	) %			(43	) %

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221201005170/en/

Investor Contact:

Mike Chang

ir@samsara.com



Media Contact:

Adam Simons

media@samsara.com

Source: Samsara

FAQ

What were Samsara's Q3 revenues for FY2023?

Samsara reported Q3 revenues of $169.8 million, representing a 49% growth year-over-year.

What is the Annual Recurring Revenue (ARR) for Samsara in Q3 FY2023?

The Annual Recurring Revenue (ARR) for Samsara in Q3 FY2023 was $723.7 million, a 47% increase year-over-year.

What is Samsara's guidance for total revenue in Q4 FY2023?

Samsara expects total revenue in Q4 FY2023 to be between $170 million and $172 million.

What were the net losses reported by Samsara for Q3 FY2023?

Samsara reported a net loss per share of $0.11 for Q3 FY2023.

How many customers does Samsara have with over $100,000 in Annual Recurring Revenue?

Samsara has 1,113 customers with ARR over $100,000, which is a 56% increase year-over-year.