Samsara up 43% in 2 days and no discussion on the board? How odd!

Samsara, better known by its symbol IOT, announced results after the close on Thursday. They closed Friday up 28%, but then on Monday, when people had a chance to think about it, they sold back down! No, that’s not what happened ! After the weekend, when people had a chance to think about it, on Monday they continued on up, finishing today up 43% from Thursday’s close.

Here were a couple of analysts’ comments from the Conference Call. You haven’t been hearing many like this in this macro:

Analyst : I wanted to just ask about the really strong first quarter

Analyst: A truly astounding performance in what is a tough macro where you’re accelerating growth at scale, more large customers, more expansion on a year-over-year basis from existing customers.

Analyst: I want to echo what Alex said around the quarter. A really, really strong quarter.

What were they all so excited about? Well, Samsara beat estimates, raised guidance, record number of $100k customers added, FCF went from minus $51 million to minus $2 million, operating cash flow went from minus $49 million to PLUS $10.5 million, starting to expand internationally, etc, but read the Conference Call.

Disclosure: Samsara is currently my largest position at 16.4%, followed by Monday and Aehr at 14.7% and 14.4%.


Congratulations! I did not follow the company, but did a quick study prior to earnings and I was glad to see they were able to raise guidance and are now projected to grow at 34% which puts it among the elite companies. I’ll continue to monitor, and see if it makes sense to enter in the future. The price was unchanged for a few minutes after posting earnings, but I was too drowsy after just getting of a long flight to pull the trigger :smiley:


At this point I’m mostly watching for evidence that they will, or will not, be able to open up new income steams aside from fleet operations. Along those lines, from the CC:

15% of Q1 net new ACV came from non-vehicle applications, primarily from strength in equipment monitoring, which ended the quarter at approximately $100 million of ARR.

And then I appreciate the additional color around equipment monitoring ARR at $100 million. Nice to see that. Any more details there, growth rates, traction, et cetera? And then maybe anything else from a product perspective, this quarter to point out beyond those core safety and telematics products?

Dominic Phillips
Nothing really to call out of it, and it’s been continued progress on equipment monitoring. So that’s now our third product category that’s at or more than $100 million. I think we’ll share a little bit more detail at our Investor Day coming up in a few weeks. But suffice it to say that equipment monitoring has been growing quite quickly, but we’re seeing really good growth, frankly, across all of our different product categories.

Regarding AI, I’ll also note that in the CC, Dominic made it clear that they are not going to be chasing after customized-per-vertical AI solutions. He said when considering new AI functionality they are looking for functionality that covers 80% or more of all of their customers. They are leaving it to their Customers to build their own custom apps, using their App Marketplace; imo that’s a good approach vs. spinning your wheels trying to predict specialized per-Customer requirements.

Dominic Phillips
So the way we think about highly specialized vertical software is to partner.

We have over 230 partner integrations on our App Marketplace now. Our large customers use more than 6 of them. And that’s a strategy that’s worked really well for us. So it’s very complementary. But our investment in AI is going to be a bit more across the board as opposed to any specific vertical industry.

I’m not as concerned about International expansion as I am about adjacent/durable growth into new categories; nevertheless this was good to hear:

Dominic Phillips
Additionally, a record 17% of Q1 net new ACV came from non-U.S. customers, including a top 10 expansion for one of Canada’s largest grocery retailers.


Honestly, I was wondering too, then I figured we were all waiting on you @SaulR80683 to do a write up. LOL. I started to read through the transcript today and found a couple of points of interest, but not enough for a whole write up…

  • Our technology is driving meaningful business impact for them, and they are asking us to double down on a few things. First, AI-based safety technologies to reduce risk across operations; second, digital workflows to increase efficiency for frontline workers; and last, more platform and data integrations to drive higher asset utilization in the field.

== So they have a LOT of customer engagement, and those customers are literally telling them what they need. This is great if the company will actually listen.

  • AI has been core to how we built our product over the last 5 years, and our data moat is one of our key competitive advantages. The more operational data we unlock and transform into powerful insights for our customers, the bigger the business impact.

== So, here we have mention of moat and that they have been in AI before it became a fad in the last two years. (Looking at you MS.)

  • On top of reducing accidents and creating a safer work environment, they’re also gaining a competitive advantage when recruiting talent in a challenging labor market.

== It seems that customers are finding even more benefits than Samsara even expected, so that is great news.

Overall, I am super AMAZED at this one for the last few weeks. Thank you so much Saul for talking through this as much as you did. I finally pulled the trigger about a month and half back. Added a bit over time, but this morning I was like, “Oh, look at that, maybe I should add a bit.” I shuffled some of my ‘safe’ but negative holdings in SHOP and Etsy to get a bit more today…and even THAT is up 2%.

Just moved up out of test position to second lowest, but already is my second highest return for this year. Dang.


Thanks buffy for your kind words. Yes, I also added some on Friday and some this morning. Those are up about 10% by the close. It certainly may sell off a little after a rise like that, but its future looks AWFULLY good.



Applications they provide include

  • Video Based Safety
  • Vehicle Telematics
  • Equipment Monitoring
  • Site Visibility.

So now we know that Vehicle Telematics and Equipment Monitoring are each over $100 million ARR…Dominic said there are three that are over $100 Million…I’ll have to see if I can figure out if the third one is Video Based Safety or if it’s Site Visibility.

In my original post about $IOT, I noted:

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.

…and in this latest CC they said “15% of Q1 net new ACV came from non-vehicle applications.” So it looks like the non-Fleet revenue is holding steady at 15% of total; personally I’d like to see that increasing.

None of this to take away from their growth which I agree is spectacular. Just monitoring for numbers that would cause me to double down :smiley:


Love it!
I bought it on their IPO, so, I’m almost back to break even

Zooming out is POWER


Here are my notes from the Samsara (IOT) William Blair Growth Stock Conference that took place today, 06/06/2023, 10:00 Central Time. A lot of insightful information was shared by Dominic Phillips, CFO. I was quite surprised to see that only +/-20% of IOT’s ARR comes from transportation.

IPO’d at end of 2021
Will be Free Cash Flow (FCF)/Break even by end of 2023
IOT’s customers represent +40% of GDP

Q Target market
A Much more than long haul trucking. A little over 20% of ARR comes from transportation markets. A majority of IOT’s ARR comes from non-transportation verticals. The overall mix of transportation customers is actually coming down relative to their other verticals such as construction, agriculture, utilities, etc.

83% of Net New Annual Contract Values (NN ACV) was from non-transportation customers and 17% of NN ACV was from non-US customers.

Q Value proposition
A Very ROI-driven
Use cases:

  1. Safety
  2. ROI
  3. Eco

Q Quantify $ vs. other software co’s
A Hard ROI savings. Free trial/pilot period. Deploy over a subset of their assets. It’s a different buyer, in lieu of CIO, it’s operations people who they’re targeting in their go to market strategy.

Q Competitors, Why is IOT winning.
A Very fragmented marketplace, mid-market enterprises, many geographies, end markets, connecting many asset types. Real reasons for success is

  1. Size of their data asset (IOT collects +6 trillion data points ANNUALLY). As they connect more assets, they provide more value to customers.
  2. Enterprise grade solution. Scalable, secure, very robust marketplace, robust partner ecosystem.
  3. Product just works very well. Customers can get up and running in just minutes. Very plug an play. Don’t really have services revenue.

Q Greenfield vs. displacing legacy systems?
A Customers are adopting multiple products and not just telematics, video safety, or this or that. Core feature is GPS. Have added a lot of functionality. +50% of vehicles have connectivity. They see building their systems into automotive manufacturers. Just 5% of vehicles have video technology embedded in them. Video based safety is currently their largest category.

Q Where do you see the most potential for IOT?
A Customer feedback, they spend a lot of time identifying customer pain points and solving them. Customers want visibility into their non-vehicle assets such as a dumpster, trailer, construction cranes and equipment. They now have 3 main focuses at IOT: Telematics, video safety and equipment.

Q Customers
A IOT is built for and gives the most ROI value to enterprise customers. Have more than 50 customers who contribute over $1M to ARR per year. 49% of their customers are their large customers who contribute +$100K/year, and this large customer segment grew 53% y/y.

Q IOT has been doing AI for a long time. Why is it difficult for competitors to replicate this.
A IOT has a large team of data scientists. Differentiators include:

  1. Size of their data to provide more insights
  2. Training data and bringing it together to provide actionable outcomes
  3. Using customer feedback and specific use cases to deploy AI in a way that meets their customers’ needs.

Q Cross-selling opportunities.
A Overall expansion mix has increased. +60 % of new revenue has come from existing customers, and 8 of their 10 largest deals in the last quarter were from existing customers. Land and expand. Existing customer expansion is driving growth and scale. Many of their customers are multi product customers. With a majority of their customers they’re just scratching the surface. Customer expansion is very common.

Q Highlights from earnings announcement last week:
A Customer demand continues to be very strong. Key advantages
Subscription model (not usage based) not tied to head count, rather tied to the number of assets
Sell into the operations department not IT department (less competitive than calling on the IT department as a result)
Payback period can be seen in a matter of months.

Q Net new ARR growth accelerated over the year. What are the drivers?
A Productivity. Net new ARR was 24% this Q1 and 20% ARR growth a year ago. 15% of net new ARR came from new geographies.

Q Break even FCF by end of 2023
A Focusing on balance. Want to grow more efficiently. IOT has achieved the Rule of 40 for the 3rd consecutive quarter. Seeing leverage across the business. Gross margin is in line with their goals. A lot of their leverage comes from sales and marketing. The commission for sales people is much lower than with new logos. SG&A leverage is lower in year after you IPO than the first year. Supply chain is much less of an issue now than a year ago. Working capital benefits are making FCF/break even happen.

Q Balancing growth and margins?
A Balancing this really matters. Getting to FCF/Break even is critical. Growth will be very durable. You can expect us to gain efficiencies to drive profitability margins.

A $30B TAM now and $50B in the future. Very fragmented marketplace. There’s not a clear competitor they see every time, rather they see a wide variety of competitors.

Q Channel vs. direct to customers?
A 90-95% of their business is direct, rather than in the channel w/ resellers. They can provide more value to customers if they deal directly with them.

Q OEM relationships
A App marketplace is part of how IOT brings value to customers, as IOT has +230 apps with which IOT’s customers can integrate their data . Allows customer data to the cloud through IOT. Telematics, which is one of IOT’s focuses is 40% penetrated, but IOT believe they can expand the TAM.

Q Electric vehicles vs. Internal combustion engines.
A Customers use IOT’s data to help determine if they should go from internal combustion engines to electric vehicles.



Actually here is a quote from their Q2 2023 conference call:
“More broadly, more than 70% of core customers and more than 90% of large customers subscribe to multiple applications. We’re also seeing multi-product strength at scale. Our video-based safety product crossed the $300 million ARR milestone and vehicle telematics ended at more than $250 million of ARR.”

So at that time vehicle telematics and video safety were both about 50% of ARR. I was really happy to see that equipment monitoring is now above $100M. So those are the three above $100M. Is Site Visibility really a separate product?

A couple of notable things from this last earnings (notable to me anyway).

  • They highlighted a company that had a 4 month ROI!!! The ROI is a huge story for Samsara and may be why they continue to perform in a tough economic environment.
  • They still have a relatively small percentage of revenue generated outside the US, but it is growing very quickly. They have said multiple times that the EU market is larger than the US market in number of assets that IOT can attach to.
  • The equipment monitoring contributing a meaningful amount to revenue.

One large criticism or risk I have with IOT is there lack of new products. Even in this conference call someone asked about it. They gave a two part answer in saying they still have a lot of growth potential from the current products and that any new products will be discussed the investor day on June 22.


Investor Day link for which free live streaming is available June 21-23. Agenda of topics, speakers, use cases, etc. available allowing virtual attendees to focus on most relevant subject matter.

Samsara Beyond 2023: The premier connected operations conference