Samsara's Q1 Earnings Beat Estimates, Revenues Up Y/Y

Samsara IOT reported non-GAAP earnings of 3 cents per share in first-quarter fiscal 2025, beating the Zacks Consensus Estimate of 2 cents. The company reported a loss of 2 cents in the previous year.
Revenues came in at $281 million, up 37% year over year. The figure beat the Zacks Consensus Estimate by 3.02%.

Top-Line Details

In the fiscal first quarter, Samsara concluded with Annual Recurring Revenues of $1.18 billion, up 37% year over year. The upside was driven by strong large customer momentum, including wins with significant clients like the Department of Transportation for Iowa and Kansas and VINCI, a major construction company.
The number of customers with ARR surpassing $100,000 reached 1,964 and increased 43% year over year. The average ARR per $100,000-plus customer also increased from $305,000 to $316,000, which is notable.

In the first fiscal quarter, Samsara saw increased adoption of its platform, with customers subscribing to multiple applications. Notably, 94% of more than $100,000 ARR customers and 83% of core customers used multiple Samsara products.
IoT's key products, which include Video-Based Safety, Vehicle Telematics and Smart Equipment & Other, showed strong growth in first-quarter fiscal 2025.
Video-Based Safety achieved more than $450 million in ARR with a remarkable year-over-year growth of over 30%. The application has proven to be a game-changer for Nutrien NTR, a leading agricultural company.
By using Samsara's video-based safety application, Nutrien achieved a 40% reduction in unsafe driving practices across their fleet of more than 11,000 vehicles in the fiscal first quarter.
Vehicle Telematics recorded substantial ARR and surpassed $450 million, up more than 30% year over year.
Utilizing Samsara's telematics application, Frontier Communications saved 320,000 gallons of fuel in 2023, equivalent to more than 6 million pounds of carbon emissions.
Smart Equipment & Other generated significant ARR that exceeded $125 million, up 30% year over year.
IOT's expansion into international markets has been a key catalyst. It achieved a quarterly record with 18% of net-new Annual Contract Value (ACV), which came from international geographies, driven by strong performance in markets such as Mexico and Europe.

Operating Details

In first-quarter fiscal 2025, non-GAAP gross profit rose 44.2% year over year to $215.9 million. Gross margin expanded 360 basis points to 77%.
Total operating expenses increased 24.9% year over year to $278.1 million, mainly due to higher research and development (up 20.9% year over year), sales and marketing (up 23.9% year over year) and general and administrative costs (rising 33.3% year over year).
Operating income was $6.2 million against an operating loss of $19 million reported in the year-ago quarter.

Balance Sheet & Cash Flow

As of May 4, 2024, cash and cash equivalents were $163 million compared with $136 million as of Feb 3, 2024.
In the fiscal first quarter, cash provided by operating activities was $23.6 million compared to the prior quarter's cash usage of $41.8 million.
Adjusted free cash flow was $18.6 million compared with $16 million reported in the previous quarter. Adjusted free cash flow margin for the fiscal first quarter was 7%.

Guidance

For the second quarter of fiscal 2025, Samsara expects revenues between $288 million and $290 million, representing 31-32% year-over-year growth.
The non-GAAP operating margin is anticipated to decline 2%.
Non-GAAP earnings for the fiscal second quarter are expected to be between 0 and 1 cent per share.

Zacks Rank & Stocks to Consider

Currently, Samsara has a Zacks Rank #3 (Hold).
Samsara's shares have gained 4.4% compared with the Zacks Computer and Technology sector's rise of 19.3% in the year-to-date period.
Some better-ranked stocks in the broader technology sector are Arista Networks ANET and Badger Meter BMI, each sporting a Zacks Rank #1(Strong Buy) at present.

Arista Networks' shares have gained 26.2% in the year-to-date period. The long-term earnings growth rate for ANET is pegged at 15.68%. 

Badger Meter's shares have gained 21.5% in the year-to-date period. The long-term earnings growth rate for BMI is currently projected at 15.57%.

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