IoT solutions provider Samsara (NYSE:IOT) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 30.4% year on year to $391.5 million. Guidance for next quarter’s revenue was better than expected at $399 million at the midpoint, 1.2% above analysts’ estimates. Its non-GAAP profit of $0.12 per share was 65.6% above analysts’ consensus estimates.
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Samsara (IOT) Q2 CY2025 Highlights:
- Revenue: $391.5 million vs analyst estimates of $372.3 million (30.4% year-on-year growth, 5.2% beat)
- Adjusted EPS: $0.12 vs analyst estimates of $0.07 (65.6% beat)
- Adjusted Operating Income: $59.7 million vs analyst estimates of $33.6 million (15.2% margin, 77.6% beat)
- The company lifted its revenue guidance for the full year to $1.58 billion at the midpoint from $1.55 billion, a 1.6% increase
- Management raised its full-year Adjusted EPS guidance to $0.46 at the midpoint, a 15% increase
- Operating Margin: -6.8%, up from -19.4% in the same quarter last year
- Customers: 2,771 customers paying more than $100,000 annually
- Annual Recurring Revenue: $1.64 billion vs analyst estimates of $1.62 billion (29.8% year-on-year growth, 1% beat)
- Billings: $425.9 million at quarter end, up 27.2% year on year
- Market Capitalization: $20.41 billion
StockStory’s Take
Samsara’s Q2 results were marked by robust enterprise demand and new product adoption, leading to a positive market reaction. Management credited the quarter’s momentum to strong growth in large customer cohorts, particularly those spending over $1 million annually, and the rapid uptake of recently launched AI-enabled products. CEO Sanjit Biswas highlighted that Samsara’s “strategy to partner with the world’s largest and most complex operations organizations is working and is fueling our growth at scale.” Expansion in verticals such as construction and public sector, along with the successful onboarding of major clients like Alaska Airlines and SRM Concrete, further contributed to the company’s outperformance.
Looking forward, Samsara’s updated guidance is underpinned by continued investment in product innovation, especially around AI and automation, as well as the growing importance of its unified platform across diverse industries. Management cited accelerating adoption of new offerings such as asset maintenance, commercial navigation, and worker safety as key areas of focus. CFO Dominic Phillips emphasized, “We are aligned with secular growth in physical operations that is poised to benefit from major initiatives such as the global AI infrastructure build-out.” The company aims to drive durable revenue growth by supporting customers’ increasing need for operational efficiency and resilience in the face of ongoing tariff and labor market challenges.
Key Insights from Management’s Remarks
Management attributed Q2’s performance to strong execution in large enterprise sales, rapid product innovation, and expanding use cases for its AI-powered platform.
- Enterprise customer momentum: Samsara set a new record for $1 million-plus annual contract value (ACV) customers, with these large accounts now generating over 20% of annual recurring revenue (ARR). Management highlighted dedicated sales and implementation teams, along with investments in platform security and integrations, as key to landing and expanding within these complex organizations.
- AI and data-powered product launches: The company introduced multiple AI-driven features, such as commercial navigation and real-time weather intelligence, that leverage Samsara’s proprietary dataset. These innovations are designed to improve safety, efficiency, and asset utilization, and management noted that 8% of net new ACV came from products launched within the past year.
- Expansion in key verticals: Construction, public sector, and manufacturing remained growth engines, with construction delivering its highest net new ACV mix in six quarters. Notable customer wins included major state departments and municipalities, as well as large private enterprises.
- International progress, especially in Europe: 15% of Q2 net new ACV came from non-U.S. geographies, led by Europe. Management cited sustained investments in local sales, marketing, and tailored product features as drivers of accelerating growth in these regions.
- Resilience to external pressures: After a temporary impact from tariffs in the previous quarter, management said customers have adapted by focusing on asset efficiency and digital transformation, mitigating further disruption and enabling continued expansion across customer segments.
Drivers of Future Performance
Samsara’s outlook is based on sustained momentum from large enterprise adoption, new product launches, and ongoing investment in AI-powered operational tools.
- AI-driven product expansion: Management expects that new features, such as AI multicam and automated asset maintenance, will increase customer engagement and drive additional upsell opportunities. These enhancements are aimed at solving real-world operational challenges and providing measurable ROI, supporting both revenue growth and customer retention.
- Scaling international and industry reach: Continued penetration into international markets, particularly Europe, and deeper engagement in industries like construction and public sector are anticipated to be important growth levers. The company is investing in region-specific product capabilities and go-to-market resources to support this expansion.
- Operational efficiency and macro risks: While confident in their ability to deliver durable growth, management noted ongoing risks related to tariffs and macroeconomic uncertainty. The company is helping customers adapt by offering digital tools for asset optimization and workforce management, but acknowledged that the timing of large enterprise deals can introduce variability into quarterly results.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) the pace of adoption and revenue contribution from recently launched AI-powered products such as asset maintenance and AI multicam, (2) sustained growth and deal momentum in large enterprise and international segments, and (3) the ability to maintain operating leverage as Samsara balances ongoing investment in R&D and sales capacity. Additional attention will be given to how the company navigates macro pressures like tariffs and labor shortages.
Samsara currently trades at $39.35, up from $35.85 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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