EPS of $-0.09 increased by 18.6% from previous year
Gross margin of 75.6%
Net income of -49.61M
"âWe ended Q2 with $1.26 billion in ARR, growing 36% year-over-year.â" - Sanjit Biswas
Samsara Inc (IOT) QQ2 2025 Results â Durable, MultiâProduct Growth Across Connected Operations Cloud with Asset Tag Acceleration
Executive Summary
Samsara delivered a robust QQ2 2025 performance characterized by durable topâline growth and meaningful operating leverage, underpinned by a broad multiâproduct platform. Ending ARR at $1.264B, up 36% year over year, the company extended its growth runway through stronger largeâcustomer penetration, expanded crossâsell of multiple products within a single platform, and the rapid monetization of newer offerings, notably Asset Tag, Connected Workflows and Connected Training. NonâGAAP gross margin reached a quarterly record of 77% with a 6% nonâGAAP operating margin, highlighting improving operating leverage even as Samsara invests in product development and goâtoâmarket capacity to support multiâproduct adoption.
Management framed the results as validation of the flywheel: a larger data asset base fuels AIâdriven insights, which in turn drives higher adoption of existing products and the onboarding of new ones across a increasingly diversified customer base. Growth is increasingly led by nonâtransport verticals and international markets, with Europe delivering the fourth straight quarter of accelerating ARR growth. The company reaffirmed an upbeat longerâterm trajectory by raising guidance across key metrics for FYâ25, emphasizing ROI for customers and a multiâyear opportunity in digitizing physical operations. Investors should monitor: (1) progression of Asset Tag monetization and its impact on ARR mix, (2) continued crossâsell velocity into large enterprise accounts, (3) international expansion, especially Europe, and (4) sustained nonâGAAP profitability trajectory as the company scales.
Key Performance Indicators
Revenue
300.20M
QoQ: 6.94% | YoY:36.92%
Gross Profit
226.84M
75.56% margin
QoQ: 6.95% | YoY:41.43%
Operating Income
-58.19M
QoQ: 11.82% | YoY:16.57%
Net Income
-49.61M
QoQ: 11.87% | YoY:17.27%
EPS
-0.09
QoQ: 10.40% | YoY:18.55%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $300.202M in Q2â25, up 37% YoY; Q2 revenue growth consistent with the prior two quartersâ YoY pace at larger scale.
ARR: Ending ARR at $1.264B, up 36% YoY; net new ARR of $88.0M (20% YoY).
Gross margin: NonâGAAP gross margin 77% (quarterly record level), GAAP gross margin approximately 75.6%.
Operating leverage: NonâGAAP operating margin 6% (quarterly record), versus GAAP operating loss of $58.194M; EBITDA of â$53.56M.
Large customers: 2,133 customers with $100k+ ARR; 14 customers with $1M+ ARR in the quarter; average ARR per large customer was $318k, up from $306k YoY.
Financial Highlights
Overview of critical metrics and trend signals:
- Revenue: $300.202M in Q2â25, up 37% YoY; Q2 revenue growth consistent with the prior two quartersâ YoY pace at larger scale.
- ARR: Ending ARR at $1.264B, up 36% YoY; net new ARR of $88.0M (20% YoY).
- Gross margin: NonâGAAP gross margin 77% (quarterly record level), GAAP gross margin approximately 75.6%.
- Operating leverage: NonâGAAP operating margin 6% (quarterly record), versus GAAP operating loss of $58.194M; EBITDA of â$53.56M.
- Large customers: 2,133 customers with $100k+ ARR; 14 customers with $1M+ ARR in the quarter; average ARR per large customer was $318k, up from $306k YoY.
- Product mix and crossâsell: 94% of $100k+ ARR customers subscribe to multiple products; 59% subscribe to three or more; two vehicleâbased applications (VideoâBased Safety and Vehicle Telematics) each exceed $500M of ARR; Equipment Monitoring and other emerging products exceed $150M of ARR combined.
- Customer concentration and diversification: 87% of net new ACV from nonâtransport verticals; international contributed 16% of net new ACV in Q2.
- Asset Tag ramp: First quarter of Asset Tag selling delivered approximately $1.0M in net new ACV, with additional expansion in the quarter (> $0.3M) for select customers.
- Efficiency and cash flow: Operating cash flow of $18.1M; free cash flow of $13.1M; net change in cash â$3.19M; cash position $159.3M; net debt remained negative (net cash) of approximately $71.6M, reflecting a strong liquidity position.
- Guidance: Q3âFY25 revenue guidance of $309â$311M (+30â31% YoY); nonâGAAP op margin ~4%; nonâGAAP EPS $0.03â$0.04. Fullâyear FY25 revenue guidance raised to $1.224â$1.228B; nonâGAAP op margin ~5%; nonâGAAP EPS $0.16â$0.18.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
300.20M
36.92%
6.94%
Gross Profit
226.84M
41.43%
6.95%
Operating Income
-58.19M
16.57%
11.82%
Net Income
-49.61M
17.27%
11.87%
EPS
-0.09
18.55%
10.40%
Key Financial Ratios
currentRatio
1.61
grossProfitMargin
75.6%
operatingProfitMargin
-19.4%
netProfitMargin
-16.5%
returnOnAssets
-2.72%
returnOnEquity
-5.14%
debtEquityRatio
0.09
operatingCashFlowPerShare
$0.03
freeCashFlowPerShare
$0.02
priceToBookRatio
20.33
priceEarningsRatio
-98.81
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Key management takeaways and quotes from the QQ2 2025 earnings call:
- Growth and platform adoption: Sanjit Biswas highlighted the durability of growth, noting ARR of $1.264B and âa durable and efficient growth at greater scale.â He emphasized that customers are using Samsara as a system of record, subscribing to multiple products, which reinforces stickiness and ROI.
- Asset Tag momentum: In his remarks, Sanjit stated, âIn Q2, our first quarter of selling Asset Tags, we reached approximately $1 million in net new ACV,â underscoring the early but meaningful traction of the new hardware asset tracker and its potential to drive asset utilization and shrinkage losses.
- Crossâproduct elevator: Dominic Phillips stressed that multiâproduct adoption is core to Samsaraâs strategy: â94% of our $100,000+ ARR customers subscribed to multiple products and 59% subscribed to three or more.â He also noted the ability to upsell in frontier markets and drive international net new ACV.
- Margin and leverage: Phillips called out that ânonâGAAP gross margin was 77% ⌠nonâGAAP operating margin was a quarterly record 6%,â demonstrating operating leverage as the business scales, even as Samsara continues to invest in R&D and GTM expansion.
- International and industry mix: Both Sanjit and Dominic highlighted Europeâs continued ARR acceleration (fourth straight quarter of YoY growth acceleration) and the broad diversification into construction, field services, and other nonâtransport verticals (87% of Q2 net new ACV from non-transport verticals).
- Product roadmap and AI: Sanjit reiterated commitment to AIâdriven insights and the ongoing rollout of Connected Workflows, Connected Training, and Charge Insights; Matt Hedbergâs questions on AI use cases were echoed by managementâs emphasis on practical, ROIâdriven AI capabilities.
âWe ended Q2 with $1.26 billion in ARR, growing 36% year-over-year.â
â Sanjit Biswas
âIn Q2, our first quarter of selling Asset Tags, we reached approximately $1 million in net new ACV.â
â Sanjit Biswas
Forward Guidance
Guidance assessment and outlook:
- Nearâterm outlook (Q3 FY25): Revenue expected to be between $309M and $311M, representing 30â31% YoY growth; nonâGAAP operating margin targeted around 4%; nonâGAAP EPS in the range of $0.03â$0.04. This implies a modest margin expansion constraint in Q3 relative to the Q2 level, suggesting ongoing investment in product and GTM capacity while maintaining operating leverage.
- Full year FY25: Revenue guidance raised to $1.224â$1.228B, representing roughly 33â34% YoY growth; nonâGAAP operating margin around 5%; nonâGAAP EPS $0.16â$0.18. The raised guide reflects confidence in durable crossâsell momentum, the Asset Tag ramp, and continued demand across nonâtransport verticals and international markets.
- Assessment: The companyâs guidance acknowledges the macro environment while emphasizing its multiâproduct flywheel and ROI per customer. Given the strong QoQ progression in ARR, largeâcustomer additions, and Europeâs accelerations, the guidance is achievable if Samsara sustains its crossâsell cadence and maintains its enterprise sales capacity. Investors should monitor: (i) pace of Asset Tag adoption and enterprise expansion into Connected Workflows/Training, (ii) contribution from international markets (especially Europe) to net new ACV, (iii) gross and operating margin trajectory as R&D and field GTM investments normalize, and (iv) potential macro headwinds that could influence enterprise capex cycles.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
IOT Focus
75.56%
-19.40%
-5.14%
-98.81%
S
74.50%
-39.90%
-4.23%
-25.87%
CFLT
72.40%
-46.00%
-10.30%
-25.35%
MDB
73.20%
-14.90%
-4.00%
-85.09%
GTLB
88.30%
-22.50%
2.01%
157.93%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Samsaraâs QQ2 2025 results reinforce a constructive longâterm thesis centered on a multiâproduct platform that increasingly serves as the system of record for physical operations. The combination of steady ARR growth (36% YoY to $1.264B), expanding largeâcustomer engagement, and a rapidly growing Asset Tag business supports a scalable, AIâdriven flywheel. The companyâs emphasis on crossâproduct adoption, international expansion (notably Europe), and AI enhancements should sustain pricing power and higher retention as customers derive more ROI from multiple modules. The raised FY25 guidance reflects confidence in durable demand and continued operating leverage; however, the valuation remains rich relative to many software peers, given the P/S multiple around 65x. Investors should monitor crossâsell velocity, Asset Tag ramp, and margin expansion trajectory as Samsara scales toward profitability on a nonâGAAP basis while preserving its growth cadence.
Key Investment Factors
Growth Potential
Longâterm growth driven by an expanding platform flywheel: a Connected Operations Cloud that crosses multiple product lines (VideoâBased Safety, Vehicle Telematics, Equipment Monitoring, Asset Tag, Connected Workflows, Connected Training) with a growing pool of assets, data points (10 trillion data points annually) and API calls (85 billion) enabling AIâpowered insights. Key accelerants include: (1) Asset Tag scaling across asset classes beyond vehicles, (2) higher multiproduct adoption among large customers (54% of $100k+ ARR customers are in the 2+ product tier), and (3) international expansion, notably Europe, which posted the fourth consecutive quarter of accelerating ARR growth.
- Market expansion: Broad crossâindustry applicability outside traditional transportation (87% of net new ACV from nontransport verticals). This reduces dependency on a single vertical and broadens total addressable market.
- Product and data leverage: AI detections, Smart Trailers, Charge Insights, and new workforce products (Connected Workflows and Connected Training) extend the platformâs value proposition and deepen customer ROI, supporting higher net dollar retention and larger deal sizes.
Profitability Risk
Upside and downside risks to monitor include: (1) GAAP profitability normalization versus ongoing nonâGAAP leverage deltas, (2) execution risk in sustaining crossâsell velocity across a growing product suite and in large enterprise sales cycles, (3) currency and macroeconomic sensitivity impacting enterprise capex, (4) hardware monetization and costs related to Asset Tag governance, battery life expectations, and gateway density requirements, and (5) competitive dynamics in the IoT/edge software market as incumbents and startups optimize goâtoâmarket strategies.
Financial Position
Balance sheet highlights demonstrate liquidity and a favorable capital structure: cash and cash equivalents of $159.3M, shortâterm investments of $513.4M, total cash and shortâterm investments of $672.6M, and net debt of about â$71.6M (net cash). Total assets stood at $1.826B with total liabilities of $861.5M and total stockholdersâ equity of $964.7M. The company generated $18.1M in operating cash flow and $13.1M of free cash flow in the quarter, underscoring improving cash generation even as R&D and GTM spend remains elevated. Strong ARR growth pairs with a scalable cost structure (nonâGAAP gross margin 77%) to support a disciplined path toward higher profitability over the medium term.
SWOT Analysis
Strengths
High growth, diversified ARR base with material upside from multiproduct adoption