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IoT solutions provider Samsara reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 29.2% year on year to $416 million. Guidance for next quarter’s revenue was better than expected at $422 million at the midpoint, 0.7% above analysts’ estimates. Its non-GAAP profit of $0.15 per share was 26.4% above analysts’ consensus estimates.

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Samsara (IOT) Q3 CY2025 Highlights:

• Revenue: $416 million vs analyst estimates of $399.4 million (29.2% year-on-year growth, 4.1% beat)
• Adjusted EPS: $0.15 vs analyst estimates of $0.12 (26.4% beat)
• Adjusted Operating Income: $79.79 million vs analyst estimates of $59.41 million (19.2% margin, 34.3% beat)
• Revenue Guidance for Q4 CY2025 is $422 million at the midpoint, roughly in line with what analysts were expecting
• Management raised its full-year Adjusted EPS guidance to $0.51 at the midpoint, a 9.8% increase
• Operating Margin: -0.4%, up from -14.7% in the same quarter last year
• Customers: 2,990 customers paying more than $100,000 annually
• Annual Recurring Revenue: $1.75 billion vs analyst estimates of $1.73 billion (29.4% year-on-year growth, 1.1% beat)
• Billings: $430.2 million at quarter end, up 26.9% year on year
• Market Capitalization: $23.35 billion

StockStory’s Take

Samsara delivered a quarter that exceeded Wall Street’s expectations, with revenue growth fueled by continued expansion among large enterprise customers and increasing multiproduct adoption. Management highlighted that momentum was particularly strong in segments such as construction, public sector, and international markets, where the company saw accelerating growth. CEO Sanjit Biswas attributed this to Samsara’s ability to unify data and deliver actionable insights for complex operations, noting, “Large enterprises are quickly digitizing their operations, and they’re demanding a partner that delivers scale and performance.”

Looking ahead, management’s outlook is shaped by sustained demand for digital transformation in physical operations, ongoing expansion into international markets, and the rollout of new AI-driven features. CFO Dominic Phillips stated that Samsara’s defensible data asset and expanding product portfolio position the company for durable growth, while acknowledging that larger deals may introduce more variability in quarterly results. Biswas emphasized, “We see a huge opportunity for AI to transform safety coaching and more broadly, automate coaching across operations.”

Key Insights from Management’s Remarks

Management credited Q3’s performance to broad-based strength: large enterprise deals, adoption of new products, and international expansion all contributed meaningfully.

• Enterprise customer momentum: Samsara saw record additions of $100,000+ annual recurring revenue (ARR) customers, driven by its multiproduct platform and tailored solutions for complex organizations. New wins included major state contracts and large industrial firms, reflecting growing adoption across regulated and asset-intensive sectors.

• Multiproduct adoption: Over 95% of large customers now use two or more Samsara products, and approximately 70% use three or more. This trend is enabling deeper integration into customer operations, with management highlighting that 9 of the top 10 net new ACV (annual contract value) deals included three or more products.

• Emerging product traction: Products launched over the past year, such as AI Multicam, Asset Tags, and Connected Workflows, accounted for 20% of new contract value—a notable increase from the prior quarter. The company’s largest-ever Asset Tags deal was signed in Q3, unlocking substantial operational efficiencies for the customer.

• International and public sector growth: Europe delivered its highest-ever net new ARR growth, and public sector bookings doubled year-over-year. Partnerships with major insurers and fleet management providers are helping Samsara penetrate less digitized markets, while state and local government contracts are becoming a more significant revenue stream.

• Operating leverage and margin expansion: Non-GAAP operating margin improved to a quarterly record, supported by increased gross margin and disciplined cost management. Management pointed to the scalable business model—aligned with physical asset growth rather than headcount—as a key driver of both efficiency and profitability.

Drivers of Future Performance

Samsara’s forward guidance centers on continued enterprise expansion, new AI product adoption, and international market penetration, balanced by the unpredictability of large deal timing.

• AI-powered product innovation: Management believes that ongoing investment in AI-enabled features—such as automated coaching, workflow automation, and data analytics—will enhance customer ROI and expand the use case for Samsara’s platform, supporting future upselling and retention.

• International market expansion: The company is investing in local product adaptation and go-to-market resources, particularly in Europe, Canada, and Mexico, which are less penetrated and earlier in their digital transformation journeys. Management expects these markets to contribute increasingly to total growth, though they note implementation cycles may be longer.

• Variability from large enterprise deals: While large customer wins are driving growth, CFO Dominic Phillips cautioned that these deals tend to have longer and less predictable sales cycles, which could introduce fluctuations in quarterly ARR. Management is focused on balancing new customer acquisition with deepening existing relationships to mitigate this risk.

Catalysts in Upcoming Quarters

As we look to the next few quarters, our team will monitor (1) the pace of multiproduct adoption and upsell within Samsara’s expanding enterprise customer base, (2) progress in international market penetration, especially in Europe and Latin America, and (3) the contribution of new and emerging AI-powered products to both revenue growth and customer retention. Additionally, the timing and size of large enterprise contracts will be a key indicator of consistency in top-line growth.

Samsara currently trades at $47.31, up from $40.73 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).

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