Earnings call transcript Q4 2023

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Mike Chang

Good afternoon and welcome to Samsara’s Fourth Quarter Fiscal 2023 Earnings Call. I am Mike Chang, Samsara’s Vice President of Corporate Development and Investor Relations.

Joining me today are Samsara Co-Founder and Chief Executive Officer, Sanjit Biswas; and our Chief Financial Officer, Dominic Phillips.

In addition to our prepared remarks on this call, additional information can be found in our shareholder letter, press release, investor presentation and SEC filings on our Investor Relations website at investors.samsara.com. The matters we will discuss today include forward-looking statements. materially subject contained described to in SEC differ statements the more may our are and risks filings. results from in those forward-looking fully Actual and uncertainties based make XXXX events, X, we unless or a undertake update law. this we result today, to and that obligation required statements statements as of by forward-looking call Any future are these on no of assumptions March information on as new

growth. results. calculated fourth call, would are presentation. we some discussions quarter and accordance to of point are substitute fiscal for that press like We today with our Reconciliations financial or GAAP. a for All to revenue our out non-GAAP investor financial except in non-GAAP financial today’s of to During results will reports will measures provided XXXX release GAAP measures not our company as superior include discuss addition the financial figures and non-GAAP to and with revenues in

opening highlights dive make Q&A. We into for and for then the up will remarks, open call QX

will hand Sanjit. to over call the I that, With

Sanjit Biswas

platform reflects joining strength with Mike a ended ARR Samsara today. you growing year-over-year. momentum thank million our everyone XX% us and ‘XX large and for ahead of opportunity of for growth us. continued durable FY year ‘XX our and Thanks, of market FY efficient and was the We of $XXX

year-over-year. XXX demand, over X,XXX increase we customers more of headcount we with added over team year, large customers To our to approximately large Samsarians X,XXX to During in XX% support bringing grew the us in than $XXX,XXX representing total. ARR, customer

flow in year-over-year our growth negative flow and adjusted QX, adjusted free by on more company, a free and profitability balancing XX% As we are with margin. cash X% than focused improved margin cash we

still of annual quarterly of consistently also which fiscal basis. be work year, a Rule on but XX quarters two a the and of XX to achieve for is achieved Rule significant there much last milestone, to is the We done

are to government As you by span broad more. to construction I industries the physical know, our around resilience the Many and am impressed from economy customer operations half and world to our backbone over keeps of the and a provide running. been customers are represent have the that of and beverage of challenging the base. diverse food world for no They century and always cycles. critical economic the strangers infrastructure

Digitization today’s in is macroeconomic than more ever climate. important

complex we who customers to with their to challenges difficult Our are faced of on a deals had with large customers ways QX, business quarter continue as single them operating the as operations achieve combined to a cloud investments vehicles of for return and milestone the tractors, their In search goals. infrastructure maximize we into a have such is integrated platform. digitize resonating breadth value at and and buildings. scale and of The their assets connected operations cranes, with

a As platform of the amount insights physical and of tremendous. our record system for savings generate operations, is our can daily cost customers’

sustainability who and use across share a vast starting elevate their their programs and Samsara about few of safety to like efficiency are customers operations. to large our I’d to improve some stories efforts their

education exonerate After a and existing goal Nutrien’s insurance alerts, its from drivers driving promote up-level training. with improvements prevent Samsara, Samsara’s largest mitigate providers services is risks through claims. behaviors Ag the event false accidents, through inputs agriculture nitrogen with producer and Nutrien and analysis, completing safer programs agricultural adopted the ever. They largest of Nutrien to and safety in help new world’s video-based across XX,XXX pilot our solution largest one with roughly start driving Let’s saw safety in-cab significant are Solutions, and behaviors. Nutrien assets. ACV third the transaction world, to

cloud a twin of owned the carrier to trailers better for Samsara’s customer top freight they entire will QX Estes to than operations the lifecycle their improve to privately XX,XXX expects America and XXX is time-intensive help operations them visibility paper-based and the exciting while its increase data digital way creating and connected turn goal in largest own XX a win. costs Express tractors experience. with This shipment employees and drivers XX,XXX uptime, another removing over customers, can reduce achieve real-time provide less-than-truckload their their terminals. processes from and Lines now of Estes staff. more North Let’s carrier

improve $X help alerts million estimated that video-based Our fuel project help and save and $X real-time idling. them in idling XX% applications vehicle costs can using a telematics to We million safety reduce driver reduction to by in an can safety XX% annually.

saving Additionally, automating annual to minutes week in over we savings. $X tasks X drivers lead million per manual by that estimate could

let’s attention use sustainability state-wide its their that expensive and benchmarking critical $X prioritize also million to light-duty just best to make resource can fuel in Finally, ARR. goals are They to time of existing complex build we momentum year. those with We new integrating, to most decisions system, seeing real-time. can the this transition their large And the among this off-road suited identify by These added state them and Department assets sector. to are giving expanded the further are their the nearly deal, which a By prioritize for exceeds on XX customer account, and planning within spending in operations the we assets. data-driven public connected State electric. in into XX,XXX diagnostics coming of snapshot an sector excited assets data another cover state operations. a immediate manage QX state which enterprise public Transportation There now to require use across assets, operations. department cloud customers incredible operation agencies to almost represent accounting Samsara’s in the better The the insights stories

customers of operations. millions for the by of record toughest across your system to their ability operations, a them help physical As points giving challenges we solve expansive analyze data

insights. their achieve customers actionable our help goals into data business we by transforming importantly, More

continues operations miles billion trillion have driven the X more We XX sophisticated, cloud, which and billion for processed and analysis become more grow nearly calls in, with points flowing annually. API been XX investing than over in data to connected

Our Samsara’s also growing than includes XXX partner more App is ecosystem, and integrations. Marketplace now

are customers how seeing our partners platform. providers largest data. and the to and Our of or in from unlocking more are leverage across examples continuing fully specific to our integrations our just customers year. from industry integrations like X using value I’d ROI three On share X rapid their to power average, are API additional plug API customers up of last

expenses of rise start Let’s with premiums. top the for operations customers and insurance are consistently continue one to physical premiums annually. Insurance premiums

appropriate to for and can our run underwrite fleet performance, insurance their feedback ensure analyze XX% fleets, road conditions Fuel provide customers spent. loops providers detects accidents. one those better to continuous preventable real-time behaviors when can this of through take can Safety are areas identify premiums. APIs. action potential remain top and also non-personnel solution, saved fleet and in can causes to prevent the leading they can incidents visibility so access reduced benchmarking of set And into risk a our Insurance goals models cloud of data can proactively represent to prices we Our this use providers improvements. accident. insurance real-time, better drivers in driver and data and mind AI improvement, alert of model a of understand leading to for customers informed the Leveraging own our behaviors, customers Samsara’s

flowing alert for important data business from of With fix tractors Another status is their extending models, through diagnostics, maintenance equipment. before cost spot saving to or to faults mechanics and most place. vehicles costly the proactively assets to customers take major AI real-time our critical priority expensive issues cranes life front-loaders other our

an needs. by do customer through our platform meets feedback data platform innovation powered that continuous We customer’s are focused most on creating pressing loop. this agile We our and

good By business traction in workflows, and spent with of other tasks for is A customers valuable impact critical we freeing reduce manual adopting digital tremendous time customizable platform. outsized work. worker making And digital have our transforming our up it’s example Samsara’s within seen experience. on written time the this how workflows

XX% the a customers. workflows to our quickly increase of million moving system, and we daily operations in the We have vehicle digital including our and year-over-year excited becoming ‘XX, over record physical number over inspection logged XX seen million XXX experience year XX% improvements system the a driver fiscal reports vast increase is in opportunity by to – year-over-year for year-over-year. worker Samsara digitized, truly are for documents the transform of

journey like I’d our us investors end operations. you physical customers, to digitize and to to for with partners, Samsarians the on the joining thank

Dominic to June. are looking for conference are our Austin, we excited over Texas connected financial the year and hand the forward beyond I see you quarter. We of now operations the of customer in cloud. this building to at to over And it will many conference to highlights investor go another

Dominic Phillips

Okay. Thank you, Sanjit.

additional to refer on our shareholder As please and a investors.samsara.com investor letter, results release presentation for our information press and guidance. reminder, financial QX at

QX FY and was operating line by ‘XX top continued highlighted strong improvements. efficiency growth

growth durable physical across of operations. and the world and the large efficient transformation opportunity increasingly Our growing digital for demonstrates

top economic persists, our and global uncertainty expectations While for few profitability a we exceeded line key for metrics reasons.

which we and budget, First, sell generally into non-discretionary. operations is the large

hard by Samsara. deploying generate ROI savings Second, our customers

if resulting a revenue. of business seat-based based customers hiring our finally, And the risk quick have number slows average And contracts. for that predictable of we price solution our has lower produces we in period versus subscription churn Third, months. highly often payback in pricing, a model or on customers assets

ending growing our QX. ARR line Several was QX year-over-year million million and performance factors XX% QX was XX% strong Our top revenue year-over-year. $XXX $XXX drove in growing

have plus XX% ARR focus on now quarterly continue we XXX to large First, XXXK of physical customers. customers, X,XXX year-over-year. operations We a serving or increase

X% We quarterly $X within or year-over-year. saw also customers, our strength increase of XX particular customers. million have plus ARR now XX% largest a We

serving operations core up plus companies make in stronger customers of and a QX while logo to record in just XXXK ARR new was number XX,XXX. quarter, our our investments fastest the now QX, which even up We And from total ago. growing in more year than world Our a continue payoff. total new strong largest it XX% added quarter. ARR XX% an cohort the of expansion was customers represent X physical

represented customers landed new and that same net and monitoring the of million operating ACV equipment costs new leading America data with efficiencies, from $X ACV streamline XX% XX% plus reduce net deals in company reduce year the North video-based the a across safety up QX, New were X quarter last field to including operations. in and X telematics logos, operating and in to new of safety, drive accidents, traffic maintenance leverage services fuel quarter

contribute X than than more of XX% XX% large And to or and of top applications large our our multi-product growth. applications. to more more to continue largest broadly, subscriptions significantly customers transactions XX XX% line more more customers to X and more customers transactions included or than In More subscribe finally, XX% QX, of two or and core to core of three of subscribe customers products.

on we In addition to focus improvements top as business delivering growth, our continue strong efficiency across driving operating we line scale. to

year-over-year cash points a negative free adjusted across quarters. for by percentage points XX of or XX% or QX capital percentage XX% approximately and was driven X As leverage leverage across all major X%, more annual XX% gross leverage all we functions. was flow and result, improvements. from operating annual primarily saw has QX flat And improvement margin year-over-year, year-over-year X%, improved than an XX%, more above improvement operating was than an margin XX stabilized negative year-over-year consecutive QX working margin functions. of

XX% a be Rule X Rule second in a priority quarter continues highest by Efficient of and quarter to our XX XX our consecutive years. in as last the growth of QX, demonstrated

to While XX consistently Rule is on we accomplishment, with necessary annual goal achieve continue improvements basis. the making this are would our that a of and quarterly us allow to pleased

And adding headcount. year-over-year, the XX% input more incremental to with final hiring a headcount future approximately QX FY point regarding investments. make ‘XX than we to employees is key X,XXX as continue I discipline ended to We driving or want with operate and but growth, making growth while

ago. than of all-time XXX,XXX, at more it high X and than Our end an Xx the ARR ‘XX FY was employee was higher years per

guidance. to turning now Okay,

our public than our conservative company, be our will we As as a less guidance philosophy second we year enter year. expect first during

of However, after it worsening on impact also our business. potential believe adequately analyzing for de-risked we macroeconomic to is various factors scenarios, account the

negative million million year-over-year between QX XXX to operating million to we margin For $XXX negative and ‘XX, and $X.XX weighted between non-GAAP $XXX $X.XX XX% to negative total XX%, non-GAAP FY approximately average between be be representing revenue outstanding. growth and XX%, EPS be shares expect and assuming

approximately and outstanding. For XX%, between year-over-year negative revenue EPS negative full ‘XX, XXX year to X% $XXX $X.XX, XX% to weighted expect to $XXX million between non-GAAP $X.XX FY assuming million margin average we and shares be be be between operating million growth and negative and representing non-GAAP

a And modeling notes. few additional finally,

margin gross percent. will ‘XX non-GAAP expect low-XXs the we First, be FY for in

between free expect we we reach flow expect last cut ‘XX free please breakeven notes And and be finally, cash of to in and Second, QX this expect FY modeling included negative note longer and annual adjusted goal letter. And equity we dollars X% cash FY to to year’s shareholder dilution are is QX in half our dilution year. equity our X%. ‘XX for in less FY than adjusted additional flow term and ‘XX that in X%

performance public up, So uncertain an are company. with we wrap while year are pleased our macroeconomic as in to very we a our operating environment, during first

customer’s our of operating to improvements We the We system profitability and connected the markets, operations continue growth world remain investments platform are path we our believe the record. focus continued delivering to that our to of our is cloud are durable profitability. on highest making of business. physical in improving and efficiency ROI on digitizing with well-positioned committed and operations our our We while efficiency, areas to

over to Q&A. Mike moderate to With will hand I that, it

Mike Chang

Dominic. Thanks,

question. We it’s questions your questions. follow-up for limit will your please now to question and one turn, open line main When the one

first Auty The question at Morgan Weiss at comes followed MoffettNathanson, Keith today from Stanley. Sterling by

Sterling Auty

me, you Can okay? hear

Mike Chang

can hear we you. Yes,

Sterling Auty

guys. Thanks, Alright.

the if impacts side? are or characterize look sales help just days of curious pipelines maybe you just doing understand So us what versus execution the you like macro ago on quarter what sales dynamics can to the versus exiting XXX XX

Sanjit Biswas

Sure. that. I’ll answer

are not sales a We pipeline. of lot to change seeing

in sales I QX cycles saw persist overall or pipeline within really we elongated QX. analysis, the win change think saw some organization, the we trials, are called in quarter. to in but look conversion we that QX. are do not But out validating necessarily the that We continue elevating the longer pipeline that customers the and seeing of or we decisions pleased see with exiting ROI free the rates, up but pipeline we at higher a the

Sterling Auty

also to gross QX. margins the mentioned are remind Excellent. that, margins low-XXs, us ‘XX? uptick and And number had nice Dominic, throughout here the flow some a gross dynamics you sequential in had in that of Can what that then going ebb real you fiscal in you are

Sanjit Biswas

gross to business most approximately look into that’s You drive year-over-year. flow margin are not margins and really QX out this as was in seeing below are And again leverage a margins. gross going leverage even of of the we margins better flat to year, really and of lot come cash going next operating better free

I think is like and our optimizations do things to cellular costs. there cloud room better and some

improvements – as its hardware chain more overall way But that ‘XX. are FY gross of We supply through a cost expect some work wouldn’t and just look obviously seeing I into the and will I eventually that of margins. in out lot we

Sterling Auty

you. Thank Understood.

Mike Chang

Great.

at next Our from by comes Stanley, at question Pfau Weiss Blair. Matt followed Keith William Morgan

Keith Weiss

that end you coming potential environment strong year transportation really customers. of just the those in end question there? ROI there, of for value like your you like quarter customers XXXK to of other and and you sort terms on much so number the to the end. customer of pipeline going but it top of we up this through is of conversations conversion? seeing in part class for get And It of working out guys year difficult and two-part to What’s of that sort evidence of companies the getting taking have what still that, XX two, this some it seen then customers, what really, there? What terms throughout be to this like, strong question. – is out capped enabling successful striking seem platform is a definitely Are guys turned the does you you customer of propositions, that’s a so like guys year? Thank and really a Excellent. and Kind really the nice is off not that largest

Sanjit Biswas

is take the Thank first will Sanjit. you. This part. I

perspective, from So strong case. ROI it’s an a absolutely

of it’s the fuel be yearly routes on millions side opportunities Similarly, even customers them save fuel, assets in these operations for the it complex to can avoid accidents then save a multiple basis. safety and to customers, dollars That’s the value really accidents a to drivers to to can compelling. on comes more efficient year. customers And these story, coaching workloads for fuel drivers reduced and same helping when exonerate or efficiently have place. risk physical a scale the the large little of dollars our the from provide and first millions it to operate optimizing We

case ROI strong, is Dominic remains conversion that So what spite strong. cycle. of that a mentioned, pipeline in bit elongation of sales And on really is there the where

that stable. I The very, got think very good compelling value we And have continue we a rates win So proposition. a be feel to large market. it’s

of of in Western talking are even We here tens commercial Europe. the U.S. in more about vehicles millions

I just think and is this So much in environment. our of our for proposition, this customers market tuned terms as ways there value very of core the in core ROI think are save to they and money

Dominic Phillips

the will it’s Dominic. I Keith, part. And answer second

new is the deals, for terms largest typically seasonality. in think, I our net ACV QX of quarter large

a that for those we of on to the in have are segment find many investments and So But we role segment this. been some making yield or enterprise played years in large investments. the definitely starting now customer

as and built or required are have talked product is investments the in average, now longer. of and of investments investments. flexibility sure some And integrations different enterprise R&D, a platform up can we four a real made consistent the so all customers We building R&D along big The on to made these for there that grade, a customers. scalability that making out got go from time well. very go-to-market these have that starting And the we into made lot six we lot mid-market. integrations, the of lot see of using about investments The a lot than then the to investments right security largest And it’s have now results sales cycles made as motion have is we we sales are be the with customers. large

Keith Weiss

guys. you, Thank Excellent.

Mike Chang

Great. Thanks, Keith.

Matt Wolfe. let’s Our Alex by Zukin comes Okay, Pfau, keep from William at question you Blair next moving. Matt, are followed there?

go to Wolfe. let’s our question, So Alex Zukin at next

Alex Zukin

me hear you Can guys. Hey, okay?

Mike Chang

Yes, Alex.

Alex Zukin

or Yes. in about talk industry, Congrats Samsara letter go-to-market the almost And Sanjit with guess script to force and partner comments you the that a interesting. that unpack us become that how opportunity little that just that with partner much with one opportunity multiplier? opportunity to want force of both channel like kind were that on excellent the the really quarter. your a another thing this the with can for And future me from a – struck area I to channel? a about I insurance almost Maybe that could bit multiplier. current understand to about an is just

Sanjit Biswas

that. to Happy chat Alex. Yes, about

So we because us are these with so insurers. for aligned closely insurance exciting is area an

Our quickly. field. products it exoneration, are helping reduce in much case these more the physical claims operations resolve of in out the risk customers And helps

speaking, don’t The investing have insurers we that your important this the logos insurers is number App area the So, And from if partnerships of perspective. to absolutely kind sell technology. Typically a question, of with take in we technology kind or of have available an to look. signed channel are a get are and a that resell Marketplace to it Samsara in want large you us. up

really partners are referral mostly are going But partnerships ours. of the they today, well. So

and large customers types of introduced getting both other are through We midsize customers fleet to that. and

because value it’s continue in, is think area to value are going an so there to much in invest So we I alignment.

Alex Zukin

And hardware line, quarters on for multiple year. capacity your then, the find just about the incremental continue quota hiring guys efficiencies now, business in maybe coming the also a of just carrying I you sales associated the year? the in And margin be if Dom, expectations even about margins you look the for continue exiting for and case remind with little adjusted solid, the free maybe us to Perfect. over what to bottom bit lean how cost flow for to think know, purposes, business, least exclude core that would it’s – cash in kind from, that next the and at illustrative metric but

Dominic Phillips

Sure.

made employee. able ‘XX improve in we FY think growing while I in ARR lot being XX% headcount So a per our investments year-over-year overall of to overall

into I open As look hire have more than wrecks now. we XXX ‘XX, FY website our on XXX to continue around right we or

if next If will I look so to a the headcount our growth still sales the And drive we at capacity. metrics We to really obviously overall be of investment productivity into subcomponent and year be see that expect going decisions. productivity really see to probably can new rep ACV confidence quickly. we and we pull we us go accounts cutting to that and means too down, programs gives to we need net improving then back that are it that continue hire, territories

So we sales to to we are continue data ‘XX so help ‘XXbut monitor do into FY four won’t ramp more us new in we quarterish FY I expect next continue use that in for will hire given necessarily that to build to going how capacity year. reps. the will really more But that

about on inventory. spent on your IoT was and devices in of revenue question, On our on second our inventory, so XX% QX

cash And would for been so dollars margin going free out inventory free X% our margin, the flow sans a XX%. with minus positive cash have door flow

just we overall that the So, investors in longer kind in devices, component that of think to our term operating. IoT service significant the we this are goes obviously recognize which in of show or a that, but leverage I efficiency business

Alex Zukin

Perfect. you, again. Thank Congrats guys.

Dominic Phillips

you. Thank

Mike Chang

Matt Let’s by Blair at Pfau Wood followed back Derrick TD at William to Cowen. go

Matt Pfau

monetization of with in customers, customers makes APIs system potential But to of used thanks. more on seeing as happens? stickier. you your use as I ask them are record that incorporate view your workflows. more being Hey, assume I and what more as wanted terms a more opportunities about that

Sanjit Biswas

will I Matt, that. take So

letter. of lot talked this momentum. in a seeing the are we shareholder We So about

API calls increased the other that last growing API also to the we XX features based have year-over-year billion XX% added of and workflows terms are Xx year system, had about year-over-year. it’s calls, digital software and that or whether In overall, documents and we XX%

a value is the Today, as part available of there So, lot there license. for it’s the of customer. made

with want But price the to no to it. are we there constantly break it best package looking and and what and customers platform separately. today, consume our We at need plans is they how that how out monetize align to

source We what adoption are really possible, customers much this is get and better of data behind makes the with be trying can like ultimately has value data essential things to as And have because models that high-quality drive that get for to benchmarking and us customer. the then that’s to to AI that. also we and as as from a value system of record clean data do scenes other train datasets

Matt Pfau

you was lines, important, called largest quarter? become deal Great. out seeing same that I OEM along those integrations know And in signed that the in more are you the

Sanjit Biswas

We are.

equipment, assets integrate the the kinds of we different of into seeing on directly front, connectivity OEMs OEM all themselves. are So

Caterpillar is that’s partnering OEMs so other Deere, it’s build been manufacturers others. John kinds heavy equipment light just And whether us of like a with duty, long-term and for duty,

So, couple something that think area going, see of. really but years an are starting take the I we that that’s a it’s of get will beginnings to

Matt Pfau

Great, you. thank

Mike Chang

So RBC. Cowen Hedberg Wood Derrick Matt comes followed at our from next at question by TD

Derrick Wood

deals, new that this not kind economy especially larger It’s size. rising ones to guys. where Great. in that mix are of Hey, to Thanks. in see sign it’s often customer new harder common

selling? to that that on see accelerating. recognition? is that’s highlight solutions your I a does more a little more is just try to bit mean, new more be but markets those If street that would out? obviously, customer could factors like So that Is more. feet that unpack and aging prop, the just at effective And wanted key that wondering value seem activity legacy of metrics. it great? brand to your ROI compelling, you I so And just Is great couple

Dominic Phillips

Derrick. Yes. Hey, Dominic. It’s

XX% I expansion. came XX% logos net you in mentioned ACV from think new the of from new as came quarter

maybe very overall was color, balanced, net of but was it a goal last QX only of I bit logos, So was just in XX% it our little new year, think, at more drive adding ARR. new point, just ACV as is logos don’t, differently for new incentivize to we it We like just expansions, $X net and this as increase sales $X. versus ACV reps view of new

bit you new QX, QX in flipped, really was little were it was stronger. saw So expansions a strong quarter logo

balancing so on had pretty quarters, were the that other over half overall logos, we last really new expansions good, now, really right coming from we’ve balance the consistently. and just And focused from good a half several almost

Derrick Wood

larger a back But pretty seasonal I motion, have for because loaded suspect with budgets. end Got while. guess, you. of seasonality engaging around to more and been Dominic, comments one this more saw guys that bit it. more ARR be I for your I you’re has a Makes respect companies you to it’s the And been sense. a consistent it another build for with how expecting

for macro the cycles? loaded? longer sales the different reason for we more this as Is year, that what’s So of perhaps contemplate back and and end part

Dominic Phillips

No.

if more, faster. cohort it’s de-emphasizing of less that the continue pay so that more now – about I to at just time, customers first little see customers expect of point that year it’s the growing is made, just, plus is coming is that steady ago that you it’s where we’re would consistent. and of the XX% ARR mix And the you a throughout think XXX,XXX than $X,XXX look customers you more bit at from XX% bookings much we’ve we ARR, at that same talked year,

a what happen. expect that to But extreme. more, We expect linearity trend into to we that’s continue bit a ARR to little ‘XX new continue be seen. don’t we’ve lead to that And expect back FY so, as it trend net would than end that to we ARR,

Derrick Wood

on Congrats Thanks. great a Great. quarter.

Mike Chang

So from at Goldman Matt Kash our RBC, by next Rangan followed comes Sachs. at Hedberg question

Matt Hedberg

will for guys, question the shareholder my to $X public million out bunch thanks guess. sector exciting super letter. deal well my as as That’s me, government state Hi, congrats offer in called you Sanjit, I is, I your other a taking wins My questions. for well. as that of a could sector for domino you? And good how of big could when a state the isn’t a once large contract state is vertical one others? I one like for looks almost be standardization, bit you’ve public what’s good create of a that think effect

Sanjit Biswas

Sure, Matt.

So there you are there. physical operations. complex like they states multiple about large out have we are excited And said, because governments

across state is from sees it something value we applicable as do, So board. that referenceable, what becomes and one is the

state that sector also that challenge buying Now commercial is cycles you with are need see of bit we with software often on get longer, they with they of integrate out pieces these the have a contract customers. some do different to public don’t the then vehicles. as little And

that’s the I as process us, government, within Canada, the is could it’s the a state integrations. vertical Western we for well. highlight to also the operations of for are top largest of continue and and necessary Mexico, our out here markets, the And us all so be should in Europe, excited international we’re And us, in just it because public we’re believe sort for XX building industry not really opportunity distributed. local but and also in to U.S., sector So team, invest. But

Matt Hedberg

sort in years think, those term more in economy? opportunity at those yield you, than did then I you then? is contracts you tighter maybe contracts, you’re now back you I obviously lot what How more the Can product a that looking got a getting trending, from obviously back lot And on X Dominic about ago because some are renewal a are these you’ve longer for X, renewing. talk signed Fantastic. of guys know of

Dominic Phillips

renewal mean, in I was for motion Yes, XX. FY newer us

in it to of years X-year almost Xx, that FY amount Given X in ‘XX. was and ‘XX, ACV what old, was we signed renewal X FY we’re these the contracts,

we’re So a lot. learning

Fortunately, And go we we’re as they’re rates, we’re that anecdotally, and seeing good legacy well, really as incumbents. very renewal seeing consistent. in replace

some that for replacing We’re been solutions embedded have decades.

And rates, things FY so and that get increases, continue good a and very we job with add strong those conversation. to renewal value pleased in know expect there go ‘XX. see we’re and to and can And the that terms doing of performance in that all would we’re of price we the and into renewal of

Matt Hedberg

guys. lot, a Thanks

Mike Chang

Goldman Followed at Materne Sachs. by Rangan question at next Kirk Our from Evercore. comes Kash

Kash Rangan

the enterprise workflows Great, for of a you look increasingly the topology sophisticated, lot for into getting one being getting thank at customers. the system, applications Sanjit, your much stored you within very more these more product Dom. is when Sanjit, deeper documentation are quarter, there’s your congrats that one on aspects customer on

for one and within multiple into other when customer leading driven you great is product although or there you you – these to the leading days. consumption, Wall base? opportunities, be these And not acquisition. models But it’s a look of pegged the workflows – of vectors, that you which company, customer Dom, new avenues what workflows Street thing at part are one is on growth is consumption growth regardless, So are the could your but these to word somewhat new pricing by

keep future because of as up smaller any you become should and you words the capable attain the if scale that both the there the growth get some not could is you’re So free you way to of entails the and have want to you a you things to there ultimately, will down Is recurring point the working so requirements much. get that Is there and the the best with at levels drive down got order continue inventory Thank keep and flow have be to up cash slow growth we to could acquisition. around you way settle inventory new a way base. requirements to when into that generating? ARR the that growth percentage ramp rate, customer capital of still to able way obviously in to etcetera? no growing Or buildup

Sanjit Biswas

and Hi, second I to part, think, question. maybe your is part actually the link first the take I’ll of it’ll Kash, this Sanjit.

great digital So the shareholder seeing with remarks, vehicle using we documents, we Digital front, driver workflows workflows about we talked customers, that That app. XX about and on million the through offer we use get reports saw are documents, XXX million up traction out the prepared in filled was the and letter digital digitally tablets. again, these this we inspection saw XX% smartphones about year-over-year.

XX% year-over-year. up that’s So

as value. it’s do hardware, and driving pen another the necessarily paper of for And actually moving factor that basically these area companies it’s not from So that engagement tied we highlight apps. reason see I growth to to using process. clipboards a these And us are usage is digital

used to that for there an cases earlier, Are customer. about about we’re Can can the us focused shift? of other So the the deliver at but these be Today, use end more value a thinking to exciting safety? or areas on applications. I beginning work for and that’s an generally are a area talked we workflows shift they of

that you’ll continue And part may SaaS year some we decoupled it’s have to of yet. that that our we about point, invest there. X existing model, might X of earlier see asset-based that usage But model see base, if have we start we we that available us So package at from out family. to do today, or kind it licensing plans break seed as product we it gets no differently, price talked but the traditional that to to

Kash Rangan

it? Got

Dominic Phillips

if And take I’ll would I’m But relatively here. decoupled. free directly. a to cash just I would feel at follow-up I question second growth I free view crack it is point in I’m not just think this your if addressing flow and at

growing are We fast can. we as as

case that as leverage And devices of collections and We’re we business spend to chain the inputs business supply growth optimizing capital into of on drive more going IoT job incredible dollars working OpEx forward, cash out of the working and those decoupled. and as and relatively leverage capital, get more to would And better a putting we’re are and we’re that out quickly we’re time, at improvements, going of continue out same the including to like. and be things driving to can. doing expect the getting we our the

as we the we we’re continue out to business. more So that and grow to of fast think can scaling while drive more continuing leverage

Kash Rangan

so much. you Thank

Mike Chang

Fargo. comes at Evercore David Our at Kirk Unger by from next followed Materne Wells question

Peter Burkly

Peter take questions. to hi, taking some appreciate actually the on time the Burkly Kirk. on guys. and for quarter Congrats Yes, It’s

a just maybe Dom, So, couple of quick ones you. for

I curious assuming large then of slight NRR sort just First am range, the segment down to next stand of of for your shareholder decline but notice that year sort in forward-looking the above XXX% letter, all, XXX%. customer

my second that guidance just about were would adequately at of sort conservative just law de-risked choppy have going to continued a there to is while still less if a be mostly could So deteriorate. macro And this play one you year, also add are or is mentioned curious you being you dynamic color the it’s a just approach to I this then macro numbers or am of any there? if large

in that So, there? just top assuming, this or you curious what’s if methodology mean, color better guidance wondering can on is any of rates add changed? just or terms of I funnel change conversion

Dominic Phillips

target above one, Yes, XXX% ‘XX for on retention and for are core our XXXK QX, the FY Sure. XXX% customers for net so we of plus.

setting strong we really just you our expansion differently uncertainty I happened point ‘XX really FY QX impact experienced a As and also that at cycles for have for which I mentioned, it logo quarter. we made expansions. earlier that in new that, the don’t for QX on ‘XX, XXX% of logos target a is incentivize the are the sales sales an could given just of timing FY was and quarter. be some reps would to the macro we and stronger echo elongated or XXX% expansions. new actually

really was XX% QX. new from net ACV logos, And came of at so the we overall from balance just looking XX% are it expansions and in again, new

and we are so to what’s ultimately us. good seeing balance that’s And important

to finished FY initially letter shareholder guide ‘XX, saying guided in that you the the ultimately that FY remarks. prepared conservatism like in growth ‘XX what XX% we and comment and Really, if is was XX% back growth. the On I to go revenue made we the am XX%

X%, what of FY are at ‘XX QX, to for seeing are X%, is guidance we QX we beats entailed XX%. and QX, in the X% that X%, So starting QX, XX%

We have beats same will level those in FY not of ‘XX.

those do is in ‘XX that If lot our to won’t the that macro opportunity go see a guide. There throughout but same the obviously move guidance, that below conservative think it the call XX%. than those to we reduce do ‘XX is need will why similar did we not magnitude So, lot we FY we we we have less we see we beats. of uncertainty. of to not initial it expect If is we a de-risked, FY of XX% up will to guidance don’t year, headwinds, what headwinds,

mid on I revenue not any sort kind in see that the do beats we trying that’s was single-digit quarterly home, basis And uncertainty. macro really drive to so more a to point low of that of if

Peter Burkly

sense. Dom. Makes Thanks,

Operator

Wells Fargo Our by at from next at Gogolev question JPMorgan. David Alexei comes Unger followed

David Unger

me hear okay? Hi, you can

Sanjit Biswas

can we Yes, you. hear

David Unger

Okay, thanks.

are the to Just for Thank then just you past gains, which for year? Can environment, competitive you long-term? we And ahead long-term think opportunity could any just you the changes line do the the for seeing with just me. be couple talk meaningful over most you. about efficiency looking the

Sanjit Biswas

number point of marketplace environment say products pretty seen. offer with So, safety the we GPS some that familiar platform solutions do we we of just are consistent also customers I the what majority a the David, ourselves a – for either with remains competitive being will this or XXX. differentiating our driver modern sense question. apps, now are in been exciting or just we using time. we have are which that take would where offer, legacy customers and by – our the the is the in differentiated are now up to They are that Most so multiple which is tracking on. it’s platform, I number of the And have competitive incumbents see. integrations in of that open over And do

environment is there remains years. what competitive say just we would of the with previous very So kind saw in a summary consistent I quick

Dominic Phillips

kind the And through be and gross can XX%. term in the I longer the take leverage IPO we margins point. think the think to XX% long-term again, of will had model I mid-XXs, would on question second I the we say

see likely we where plateau that’s So, out. that

is like the come I sale of it for renewal think significantly as is on again Sales of our is really subscription OpEx. of is – largest the going area from base most the to of leverage spend lower. most more business in and and the more our businesses renews cost marketing is that

area. will an there public year company don’t company, get then G&A where expect a will don’t to ‘XX another there And we was revenue in more I the of R&D at I out periods. those is in and expect of as natural costs lot there. rate in public we Obviously, investments costs. much we grow that. inflection more as leverage FY first as future lot so leverage area of get leverage same make an And a a is scale. to

David Unger

Thank Congratulations. you. Excellent.

Operator

next question Our comes BMO. JPMorgan from of at followed Alexei Jester Dan by

Alexei Gogolev

Thank you, you okay? hear Can me, Mike.

Mike Chang

hear can we Yes, you.

Alexei Gogolev

on you are details bit more with Great. Maybe Taiwan. from give wondering that some suppliers many have if a provide how could and detail Thank your you relationship the IoT relationships us to if I are are Should you. of was customer importantly, further demand supply how but exclusive, meet you another you case constraint geopolitics escalate devices? more going we see in have in of Taiwan? considered there

Sanjit Biswas

basically product We manufacturers I with customers. work multiple Alexei, that it’s ecosystem. This large manufacture these for that are one. thriving Sanjit. So multiple suppliers. is will ODM a And take And

work the and also direct component the key with. So, a suppliers, selection manufacturers we suppliers maintain suppliers we with the upstream. of we words, is And key multiple other relationships multiple use that we in news that chipset good have can about

pretty that in So visibility. sense, good we have

over relationships And geopolitical this actually while it to We XX have on is we we a relying these are very improve have that uncertainty, seen circumstances bit quite through there strong by relationships. strong managing XX the we months. And have. last

Alexei Gogolev

X looks Sanjit. you mean, significantly like broadly based per completely last your on ARR but productivity unchanged, XX% you, provide see employee? of it on years I the remained And could employee. versus from I that’s year, growth, Thank ago, some also Great. that increased it thoughts figure has per

capacity added So just sales kick in? is improving productivity to and that think you wondering, going when

Dominic Phillips

will take I Yes, that.

and ‘XX, ‘XX ended we where or over So, sub-component that Xx more more in the will ‘XX. of capacity up yes, was did capacity add up X was productivity years will drive ARR headcount FY XX% sales ‘XX. sales is grow employee We FY again by FY per in the in FY that, last that and over

proxy If negative, use think starts interesting we quickly. an the I go think – to But equal. and created just is us I right pace. really to not that cost we makes too question, it’s it and business that hiring hiring think headcount all are really are we at our obviously, about

to cost have a we from. and really are think aperture lower started better I of job regions in do broadening our of much hiring hiring we where

all appropriate just we not pace. equal, cost are it ensure is headcount level And is an but use that created so, hiring a we at to that high proxy

Alexei Gogolev

Great. Thank you.

Operator

Alright.

Our last Dan? question Jester today comes from BMO. Dan at

Dan Jester

Great. for question. Thanks taking the

real ones. two Just quick

you is and is the needs place Like dynamic it get we growth there? lot strong that they should comfort of the I the new secondly, of what that of app’s possible the of sort API of in from there of get ecosystem an most are what any the as First, Rule are And to profitability scale? Is with in going? in improvement on be just then guess that’s sure XX comfortable what’s sort you customers, macro? in ecosystem along to going keep where investing make which saying a put obviously perspective with growth metric, large as doing similarities year sort the in the ahead especially growth terms for you to framework thinking mentioned to you Thanks. and Is that that mentioned, about? it

Dominic Phillips

first will XX. take I Yes, one on Rule the of

that calculation portion that So, I it flow – free of seasonal very a and our is is to business. it’s for understand it’s important think cash

first the the it saw the we QX. and cash worse breakeven in can second So, it are in to confident that why of we in half year free will likely improve we what That’s get to adjusted similar ‘XX. half year flow the of be will in FY

to consistently, of the consistently, that of XX bigger beyond come likely and cash a again, on have see that we And and I think or half in more the do through free have able expenses the above to more half we outflows a XX And Rule so the as at first being so year. will see obviously metric that we back in cash few that of flow move at starting impact that also level are year. additional

Sanjit Biswas

API Great. will question. take I growth And the

So saw as last year XX I billion -over-year. the we API earlier, up mentioned Xx that’s and calls year in

what physical enable of their get of simply lifecycle. doing lot our is customers value digital today of the to are a take advantage to So early operations we transformation Many more APIs companies in from and these are data. these

tie tools experience the sorts to this those adopt ERPs real-time starting customer things. into now their notifications, are real-time end intelligence of and and they data improve So through business

early internally So invest customer the enablement also that And that we are with we great to journey. continuing teams in have some help in then process partnerships.

earlier, XXX mentioned App the I Marketplace. as about So have on partners Samsara we

are those which well. we about insurance companies, of as Some talked

we have We data. to have integrated even payroll OEMs, with more get that system providers, ERPs,

So pull to do to we in invest us continue use up API and technology are the make on the this we now partnerships, are of think data real are for has unlock how going but customers most been to the to I that we get do how waking this opportunity starting really it.

Dan Jester

Great. Thank much. you very

Mike Chang

and Thank operations was conversation. portion. quarter year concludes call. Samsara’s efficient a continued growth momentum. past question-and-answer QX XXXX for reinforced company, This and That of our you of earnings a durable the this customer year So, connected the cloud the great attending for and capped fiscal off all strength

as our lie we look the you that only progress forward getting are updating pursue and We opportunities on ahead. we started big to

you let I go, a Before announcements. few I have short

Technology, we on Software Conference XX. Wells on March Media & attending Telecom will the be First, Fargo April Stanley and Symposium the X Morgan

one see those at hope person we So, in events. you of to

on an Second, Texas. send interested Please in Austin, we attending June are in if hosting ir@samsara.com are you our Investor XX person. to Day in email

to IR prefer a virtually, That’s to those web for broadcast. live will it a have – attend our today’s link a meeting. For that website link

have you ir@samsara.com. questions, any can e-mail Thanks follow-up everyone. If us at you again. Bye

Samsara (IOT) 2 Mar 232023 Q4 Earnings call transcript