Samsara Q2 2024 Earnings Analysis
Dive into $IOT Samsara’s Q2 2024 earnings with review of financial performance, key metrics, operating expenses, dilution, customer growth, future outlook
Financial Results:
↗️$300.2M rev (+36.9% YoY, +37.4% LQ) beat est by 3.7%
↗️GM* (76.9%, +2.2 PPs YoY)
↗️Operating Margin* (5.9%, +8.6 PPs YoY)🟢
↗️FCF Margin (4.4%, +2.2 PPs YoY)
↗️EPS* $0.05 beat est by $0.04🟢
*non-GAAP
Key Metrics
➡️NRR $10K+ ARR 115% (115% LQ)
➡️NRR $100K+ ARR 120% (120% LQ)
➡️ARR $1.26B (+35.9% YoY, +88 net new ARR)🟡
➡️Billings $335M (+36.0% YoY)🟡
Customers
↗️2,133 $100k+ customers (+41.0% YoY, +169)
↗️ $1M+ customers (+14) 🟢
Operating expenses
↘️S&M*/Revenue 42.9% (-2.3 PPs YoY)
↘️R&D*/Revenue 16.4% (-1.8 PPs YoY)
↘️G&A*/Revenue 11.7% (-2.2 PPs YoY)
Quarterly Performance Highlights
↗️Net New ARR $88M (+19.3% YoY)
↗️CAC* Payback Period 25.4 Months (18.3 LQ)
Dilution
↘️SBC/rev 25%, -0.5 PPs QoQ
↘️Basic shares up 4.2% YoY, -0.1 PPs QoQ🟡
↘️Diluted shares up 2.3% YoY, -6.5 PPs QoQ
Guidance
↗️Q3'24 $309.0 - $311.0M guide (+30.5% YoY) beat est by 0.4%
↗️$1,224.0 - $1,228.0M FY guide (+30.8% YoY) raised by 1.2% beat est by 1.3%
Key points from Samsara’s Second Quarter 2024 Earnings Call:
Financial Performance:
Samsara reported $1,260,000,000 in Annual Recurring Revenue (ARR), a 36% year-over-year growth.
A quarterly record was achieved for non-GAAP operating margin.
Leadership Updates:
Elyssa Henry Joined Samsara's Board of Directors, bringing over 25 years of experience from influential technology companies including roles as CEO at Square (part of Block) and senior leadership positions at Amazon and Microsoft.
Megan Eisenberg Appointed as Chief Marketing Officer, joining from Lacework where she served through their recent acquisition by Fortinet, and previously held the CMO position at TripActions and MongoDB. Her experience is geared towards engaging customers, driving growth, and building brands.
Product innovations
Asset Tag:
Samsara launched the industry's first industrial-grade Bluetooth asset tag designed to help customers track and manage small, high-value assets ranging from toolboxes and chemical totes to engines and hand carts.
Expected to save customers millions of dollars annually by increasing asset utilization, preventing asset loss, and improving worker efficiency by reducing time spent locating lost or stolen assets.
In its first quarter of selling asset tags, Samsara achieved approximately $1,000,000 in net new Annual Contract Value (ACV).
Connected Workflows:
This new product aims to digitize and orchestrate multi-step workflows. It can automatically assign forms, manage approvals, and create tasks based on contextual insights.
An example mentioned is De Silva Gates, a leading construction company in California, which is using connected workflows to automate truck inspections, leading to significant cost savings.
Connected Training:
This product facilitates remote training opportunities through the Samsara mobile app, allowing customers to build customized learning itineraries for workers to reduce safety incidents.
Emory Sapp and Sons, a major construction contractor, saw a 40% reduction in safety events using connected training.
Customer Engagement:
Samsara continues to expand its customer base significantly with notable wins across various sectors. They added 169 new customers with over $100,000 in Annual Recurring Revenue (ARR) and 14 new customers with over $1,000,000 in ARR during the quarter.
Major new wins included the State of Maine, one of the largest supermarket chains in the U.S., and one of the largest retail-owned hardware cooperatives globally.
These engagements underscore Samsara’s appeal to large and complex operations, highlighting its scalability and the breadth of its IoT and AI solutions.
Customer Success Stories
Home Depot:
Named as Samsara’s “safest operator winner in the Americas,” Home Depot utilized Samsara’s video-based safety application in partnership with TEMCO Logistics. This collaboration led to an 80% reduction in auto incidents, demonstrating significant improvements in operational safety.
Sterling Crane:
Awarded for “excellence and efficiency,” Sterling Crane saved $1,200,000 by using Samsara's solutions to enhance driver productivity and compliance. They also anticipate saving an additional $2,500,000 in major maintenance costs.
TransCore:
This company, specializing in innovative tolling solutions, adopted Samsara’s asset tags for inventory management, loss prevention, and to enhance hardware functionality, showcasing the versatility and effectiveness of Samsara’s new asset tag product.
Challenges:
The leadership acknowledged the challenges related to the pace of technology adoption among customers, especially those in physical operations sectors that are traditionally slower to integrate new technologies. Managing change, ensuring return on investment, and supporting customers through their digital transformation journey are pivotal challenges.
Future Outlook:
Samsara is focused on increasing its product offerings and deepening integration with customer operations. The company plans to continue penetrating large enterprise sectors with complex operations, leveraging its growing suite of applications to enhance customer retention and satisfaction.
Management comments on the earnings call.
Product Innovations
Sanjit Biswas, CEO: "At Beyond, we launched a new product, our asset tag, the industry’s first industrial-grade Bluetooth tag to help our customers track and manage their small high-value assets... We expect over time this will help our customers save millions of dollars a year."
Customers
Sanjit Biswas, CEO: "Our growing dataset unlocks unique insights that help our customers tackle their toughest challenges... We're proud to partner with our customers to make a real-world impact on their operations."
Sanjit Biswas, CEO: "These conversations [with customers] are critical as they shape where we prioritize our R&D efforts to maximize customer impact... It's about delivering great value for our customers."
Sanjit Biswas, CEO: "Adopting technology in physical operations requires significant change management, which can be a challenge. But we're committed to supporting our customers every step of the way."
Future Outlook
Dominic Phillips, CFO: "We're raising our guidance across all key metrics because of our Q2 performance and outlook for the rest of FY '25... We continue to invest in our leadership and our culture."