(Another) Samsara introduction ( $IOT )

Thank You to Saul, the Moderators and to everyone on this board for all you do.
$IOT has been proposed previously; I’m hoping to keep the conversation going for $IOT.


  • *) Samsara utilizes installed Internet-of-Things ("IOT") endpoints, cell communications, cloud data storage, data Analytics/ML/AI to produce actionable information (Real-time and Compliance Alerts for example) that can make, and save, money.

  • *) Applications they provide include Video Based Safety, Vehicle Telematics, Equipment Monitoring and Site Visibility.

  • *) They have an App ecosystem that 125 partners have utilized to develop custom integrations and workflows.

  • *) Primary revenue is from vehicle fleet customers, but about 15% of revenue comes from other industries. They hope to leverage their technology into (many) more industries to produce durable growth.

  • *) Mission is “To increase the safety, efficiency, and sustainability of the operations that power the global economy.”
  • Rapidly improving metrics: Revenue Growth
    YE Feb 1 2020 : 119M
    YE Jan 30 2021 : 250M

    202203 : 126M 66% YOY
    202206 : 143M 62% YOY
    202208 : 154M 52% YOY
    202212 : 170M 49% YOY

    Rapidly Improving Metrics: Gross Margins
    YE Feb 1 2020 : 11%
    YE Jan 30 2021 : 20%
    Currently : 71.3%

    …so it looks to me like Gross Margins are improving; they went from 11% in 2019 to 20% in 2021 and are now at 71.3%.

    Recurring Revenue
    They run a per-truck subscription model.
    ARR went from 492,838 (YE Oct 30 2021) to 723,667 ( YE Oct 29 2022 ) which is +46% YOY

    Their Sales Pitch
    *) 50% reduction in driver accidents
    *) 40% decrease in idling time per subscribed truck (…which they claim is worth $2500/year)
    *) 76% increase in Dispatch productivity “improving service and the bottom line” resulting in a 20% increase in vehicle utilization.
    *) They claim significant tonnage of reduction in CO2 emissions.
    …all for an annual cost of $400 per truck!

    *) They have a data moat based on being an early mover not only in collecting, but in ML/AI-driven analysis of data. For instance: they processed 38 BILLION minutes of video in 2020.
    *) Their capability to deliver actionable insights increases as more parties add data to the system.
    *) A flywheel results whereby better insights lead to improved outcomes for customers, making it easier to obtain still more customers.

    Founder-Led / Inside Ownership
    Sanjit Biswas has 27% of Class B Common stock
    John Bicket has 26% of Class B Common stock

    My commentary:

  • *) They've had four years now of increased revenue every single quarter, with a corresponding steady improvement of Gross Margins. Revenue is rising faster than expenses.
  • *) They also deliver REAL-TIME alerts, such as alerting the driver to tailgating, Distracted Driving etc. in real-time. This occurs via local "Edge" computing right on their installed devices with no requirement to even utilize their Internet connection or cloud servers. The system can alert that you are braking too hard, turning too suddenly etc. and this improves the drivers' safety habits over time.
  • *) This strikes me as EXTREMELY easy to sell, because the system more-than pays for itself, per-truck, just from reduced Idling Time, and with an almost-immediate ROI!
  • *) It reminds me of old-school infomercials: "What if I can demonstrate that we can cut your accidents IN HALF for only $400/year per truck? Would you be interested? BUT WAIT there's more! You also get $2500 PER YEAR BACK, PER TRUCK in reduced idling expenses!
  • *) Durable growth might come from expansion into other industries, but currently Fleet Operations accounts for 85% of revenue



    Many thanks for the post/reminder.

    Here are the last Q results and EC transcript.

    I own it indirectly in my 401k anyway (it is a real exposure in a concentrated ETF not a 0.07% position), but I have not owned it directly. What I like, using the last call to pull the info:

    –Offers fast (less than a year) and easily quantifiable ROI;
    –It is a great example of tech cutting costs so it could do ok in tight times;
    –By cutting fuel costs it fits both the bean-counting and ESG paradigms;
    –Offers a complete platform: safety, fuel usage, paperwork;
    –Decreases speeding, exonerates drivers, and helps with retention in a high-turnover industry in which proven workers have been in short supply;

    –ARR grew 47% YoY and had record QoQ growth of 100,000+ customers. By signing up 120 new ones, it now boasts 1,100 in the category. As an analyst notes, this is impressive considered the issues others had closing that kind of deals.
    –Non GaaP OpMargins improved as did FCF margins.
    –It saw no deterioration from Q2 to Q3; no failed closings but extra approvals/time to closing over those two quarters (we shall see Q4 on March 2) with robust pipeline and converting better than ever per the call.
    –Not sure how retention rates work for a business like this but they claim 125% for their 100k+ customers and 115 for “core” customers.

    I think IOT fits into a debate of what actually means “durable growth.” Do we mean durable as in “can last a long time like a decade?” Or do we mean durable as in resilient in cost-cutting times? Ideally, a business would be both but how many are? Analytics allows companies to prevent things like the nonsensical overstocking with items experienced in 2020-21 and to increase visibility and maximize return on dollars spent in tough times. I would like to think that IOT is of this type, a company that can secure quick and obvious ROI plus added benefits (like retention rates) and thus hopefully do well in uncertain times.

    But it has not been on my short list so far. Thanks for giving me one more thing to think about in what will be a hectic week anyway :slight_smile:


    Samsara (IOT) might be considered a poster-child for expanding margins, expanding cashflow margins and improving operational efficiency.

    See the numbers and trends for the past 4 quarters in this financial map:

    Additional metrics to note:

    • They are expected to be cashflow positive by the end of 2023. Very impressive for such a young company
    • RPO growth has been accelerating for the past 4 quarters. See qoq growth rate



    Durable means that growth will last for many years (“like a decade”). We’re never too precise about exactly how much growth and for how long, because we can’t know the future. If growth holds up enough for long enough for a company, its stock will crush the market.

    The elusiveness of predicting this is (to me) a reason to have Samsara in the portfolio, as it’s probably driven by different drivers than a Datadog or Snowflake or BILL. I think you’re right that the ROI Samsara offers customers supports its resilience in tough times, which is also helpful of course.



    Thanks intjudo for your excellent introduction to Samsara, I especially liked your section called “Their Sales Pitch” and the other about why it’s such an easy sell.:grinning:


    “Lantronix” is another Internet-of-Things company with fleet solutions

    They seem more like a DIY company: they provide parts and their Customers assemble them in to custom solutions.

    By comparison, $IOT seems like much more of a turnkey opportunity for their Customers, with pre-defined, packaged solutions and predictable ROI.


    Hi intjudo

    From Lantronix’s last earnings report in February,

    · Second Quarter Net Revenue of $31.5 million, down 6% yoy and 1% sequentially

    To put it in perspective, considering that:

    Samsara had $187 million in revenue, which was six times as much revenue as Lantronix in the quarter,

    Samsara revenue was UP 48% yoy while Lantronix revenue was DOWN 6%, and

    Samsara’s revenue was UP 10% sequentially while Lantronix’s revenue was DOWN 1% sequentially

    I don’t think Lantronix is much of a threat for Samsara ($IOT) :grinning:




    Hi all,

    thanks much for all the insights so far and @intjudo for bringing up Samsara on this board (and to my attention, I wasn’t aware of them before :blush:)

    I did some research to evaluate if I would like to own it or not, and share my notes here.

    Generally, I find Samsara quite intriguing and a bit outside of my regulars for several reasons:

    • Samsara generates hard and quick ROI:
      • Hard ROI means that they offer significant cost savings that are easily quantifiable . They provide numerous examples of this on their website.
      • Quick payback period: Samsara’s customers generally enjoy a payback period of only a few months. For reference, in SaaS, we usually aim for a maximum payback period of one year, so Samsara is performing exceptionally well. This makes it relatively easy to sell.
    • Samsara sells to companies’ operations budget, which is “large and generally non-discretionary,” meaning that they are less affected by IT budget scrutiny these days.

    Samsara may not be literally mission-critical, but it provides significant value to its customers by saving costs, digitizing operations, and improving compliance and efficiency. Companies that do not utilize these benefits and operate manually will eventually fall behind. Therefore, the more businesses that use services like Samsara, the more companies will need to follow suit. Thus, Samsara meets my criteria for a strong business model and value add.

    Top-line Growth

    Samsara is reporting revenue and ARR growth as indicators of their top-line growth. Last quarter, its revenue came in at $187M, representing 48% YoY growth. Full fiscal year revenue growth was 52% YoY, so we currently are definitely in a high-growth territory here.

    The company has a recurring revenue stream through its “subscription business model that produces highly predictable revenue and [is priced] based on the number of assets versus seat-based pricing, resulting in a lower risk of churn if our customers’ hiring slows or contracts.”

    I like that their pricing is based on assets versus seats, as this aligns value creation for their customers more closely with costs and makes the business model more resilient during slowed-down hiring or workforce reduction times (such as these days…).

    In March last year, Samsara claimed that 98% of revenue is subscription-based (per assets), typically ranging from 3 - 5 years in commitment.

    While Samsara is quite heavily focused on transportation and fleet management, this chart from June 2022, as well as recent customer highlights, show that it operates in multiple industries:

    Although Samsara remains relatively resilient in the market, its YoY growth is slowing down. The growth rate has decreased from 65.7% to 62.6%, and then to 52%, 49.2%, and 48.3%. As a result, the Q1 2024 midpoint guide is 34%. For the full year, Samsara forecasted revenue of $838M - $848M, which represents 28% - 30% YoY growth.

    Since the company has an (arguably short) history of strong beats and raises, the guidance is considered conservative, or as they called it, “de-risked”. However, similar beats as in fiscal 2023 are not expected as Samsara stated that they do not anticipate repeating their 8-ish % guidance beats.

    The Q1 sequential guide is very low at 2% - 3%, dropping from sequential growth north of 10% in most quarters. Seasonally, Q1 should be rather strong, as far as the short history of IOT as a public company suggests.

    The ARR came in at $795M, growing 42% YoY last quarter, and pretty much mirrors Samsara’s revenue curve.

    Comparing their growth durability with my other companies, it appears on the higher end of growth durability, close to Cloudflare, CrowdStrike, and Monday.

    Bottom-line Growth

    Although Samsara is not yet FCF positive, the company is showing a clear and consistent trend toward achieving this goal, with each quarter producing better results.

    In Q4, adjusted FCF was negative $6M, an improvement from negative $50M a year ago. FCF margin was negative 3% in Q4, up from negative 40% a year ago.

    Looking at the broader fiscal 2024 outlook, Samsara expects to reach adjusted FCF breakeven by the end of this year. The company also plans to cut negative FCF in half, meaning it would produce negative $55M in adjusted FCF for the full year.

    Equity dilution is expected to be around 3% - 5% in fiscal 2024 (yes, they use a notable share of stock-based compensation).

    Non-GAAP gross margin has improved and appears to have settled around 73%, where it is expected to remain for the remainder of this year. In the long term, the Samsara expects this indicator to be in the high 70s% (specifically, 74-76%).

    All in all, it is not there yet in terms of positive non-GAAP profitability, but Samsara is marching towards it with strong and reliable steps, supported by their fiscal 2024 outlook.


    When searching for new investments, I place great importance on moats, as they make a business more resilient and set it up for long-term success and growth durability.

    In the case of Samsara, there are certainly other competitors in the market. However, the company provides three interesting points of differentiation, aka, moats:

    • Single, integrated platform: Samsara does not only provide “point solutions” like many of its competitors that address only specific use cases. Instead, it allows customers to fully integrate their asset operations into the platform and gain valuable insights and digitization.
    • Data & AI moat: With nearly 6 trillion data points, 50 billion API calls processed, and 50 billion miles driven for analysis annually, Samsara sits on a large mass of data. It uses this data to power its AI models and continuously increase value for customers.
    • Partner Ecosystem moat: Samsara’s App Marketplace is growing and includes over 220 integrations that are heavily used by its larger customers. Additionally, it has quite some insurance and OEM partners in its ecosystem.

    TAM + Market

    Overall, Samsara seems well-positioned and benefits from technology and ecosystem leverage. However, the IoT space is not a hidden gem, and other companies (such as Aeris, for instance) also want their share of the cake. Therefore, the moat needs to be followed closely going forward.

    Fortunately, the market is large and mostly not very digitized yet: Samsara operates in a large and fast-growing market.

    According to its investor presentation, the Total Addressable Market (TAM) for 2024 will be $97B, with a Compound Annual Growth Rate (CAGR) of 21% between 2021 and 2024. I expect them to update the CAGR sometime this year, as it is only indicated until 2024.

    In addition to secular tailwinds such as digitization, compliance, and increasing efficiency, Samsara is also benefiting from several technological tailwinds, such as increasing number of devices connected through IoT, improving sensor and cellular network technology.

    Besides that, Samsara has a comparatively small market cap of around $10B, so technically, it potentially has a lot of runway to grow.

    Go-to-Market Strategy + Execution

    Samsara has been showing healthy development in Sales & Marketing spending as a percentage of revenue, which has led to the acquisition of more customers with less $$$. In their latest report, they mentioned elongated sales cycles but reported no changes in their pipeline. (Does this sound familiar? :scream:)

    Samsara isn’t only using its sales force to target (large) customers, but it also benefits from a strong partner ecosystem, especially with insurers who act as referral partners. Insurance companies benefit from Samsara because it helps them resolve claims more quickly and effectively. Insurers don’t have the technology, access, and data to do it themselves.

    Therefore, Samsara has formed mutually beneficial partnerships with many, including large, insurance companies.

    Product Strategy + Execution

    Samsara seems to have a very customer-centric product strategy and focuses on driving adoption and value creation above monetization at all costs. An example of this:

    An analyst asked if IOT plans to become a digital record company and monetize that (records meaning that truck drivers must keep records of their driving times, and Samsara is allowing them to digitize that): “[…] price and package the platform to best align with what our customers need and how they want to consume it. But today, there are no plans to break that out and monetize it separately. We’re trying to drive adoption and really get customers to get as much value from this data as possible because that’s ultimately what makes us essential as a system of record, is to be that source of data to have a high-quality clean data, and that has value for the customer and then we can also do things like better train AI models and other benchmarking data sets behind the scenes with that.”

    Additionally, adoption metrics indicate that Samsara is successfully fulfilling its mission of providing maximum value. The number of adopted modules, used workflows, digitized documents, and logged reports are all significantly outpacing revenue growth year over year. This suggests that Samsara is currently generating more value than it charges for, providing a cushion for future revenue momentum.

    Samsara is also continuing to invest in its ecosystem and product integrations, such as with OEMs and payroll, which is particularly important for its data moat and enterprise customers. Speaking of customers…

    Customer Activity

    Samsara’s customer metrics look very promising and outgrow current and projected revenue and ARR, which is a positive indicator for me:

    • $100K Customers:
      • Samsara added 124 large customers in Q4, resulting in a total of 1,237. This cohort grew 53% YoY and is now making up 48% of our total ARR (up from 45% a year ago).
    • $1M Customers:
      • It added 5 super large customers in Q4 and now has 51, representing 65% YoY growth of this cohort.
    • Added a record of new logos Q4, core customers (>5K in ARR) are now more than 19,000.
    • New customers represented 51% of net new ACV in Q4, up from 44% in the same quarter last year.
    • DBNRR was 125%+ for large customers and is expected to remain above 120+% throughout 2024, reduced due to macro uncertainty)

    Especially the large customer metrics are a positive result. And not by accident:

    • Samsara made significant investments in its product development to make the platform “enterprise-grade”. That means integrations, scalability, flexibility, and security, are all built into the product.
    • Sales & Marketing investments: The go-to-market motion in the large customer segment is very different from the midmarket, and Samsara made the adjustments necessary.

    Another noteworthy highlight was Samsara’s first $1M ARR government deal. The public sector is interesting for Samsara, as it involves many complex, large, physical operations. Once some US states implement Samsara’s platform, it can serve as a reference.

    However, the sector also has challenges, such as longer sales cycles and the need for additional integrations. Nevertheless, the public sector could become one of Samsara’s top 10 industries not only in the US, but also in Canada, Europe, and Mexico.


    An obvious risk for all companies is a decline in the moat and strengthening competition: According to the company, competition remains consistent with previous quarters.

    Samsara differentiates itself by “being a modern platform, a platform where the majority of our customers now are using multiple apps, which is exciting to see. And it’s also – we’re differentiated in the sense that we’re open in the number of integrations that we offer, which is now up over 220.”

    However, we cannot exclude emerging competition, potentially also from the OEMs themselves (e.g. Scania). In this case, however, I expect Samsara still has the data moat advantage, as well as the equivalent of a “multi-cloud compatibility”, which I like to see in my other software stocks. Meaning, it is compatible with multiple OEMs, systems, insurance, and other third-party parties involved.

    Another noteworthy risk is that Samsara’s services are not purely software-based and rely on some hardware components, which are manufactured in Taiwan. While Samsara claims to have very good relationships and visibility into its work with multiple suppliers, there is a risk of geopolitical issues, supplier concentration, and supply-chain problems. This is the most important risk that needs to be considered.

    My Thoughts & Investment Decision

    Overall, I view Samsara as a great addition to my portfolio: The company enjoys many SaaS-like benefits, such as high growth, scalability, recurring revenue, and high gross margins. Yet, it provides some diversification in that it

    • sells into a different budget (operations versus IT budget),
    • provides a quick and easily quantifiable ROI (easier to prove than SaaS),
    • is emerging in a massive worldwide TAM that is largely undigitized so far.

    The company has shown relatively durable growth, yet it surely is no fully resilient, 100% YoY-growing magic pill. Despite not having achieved non-GAAP profitability yet, Samsara is on a clear path toward profitability.

    While there are risks related to potential supply chain issues and competition, I appreciate Samsara’s deliberate and customer-centric strategy, which positions them for future success.

    Although Samsara’s valuation may not be cheap after a 67%-YTD run-up, I prioritize investing in great companies rather than solely focusing on valuation.

    With a large TAM and strong market position, I see a lot of future potentials to grab for Samsara.

    For now, I have a 2% starter position and may opportunistically increase it to 5%.

    And here you have it, I hope this was helpful :blush:


    PS: If you are interested, I also wrote a more extensive review with graphics and stuff in @mooo and my investment diary: Samsara Stock: The IoT Company with Promising Potential?


    Wow, Lisa, your post on Samsara yesterday sent it up 7%. That was a power post! :grinning::grinning::grinning:


    If only I had the power to do that with all our stocks… :sunglasses::grinning: