Samsara Inc.

Good afternoon and welcome to Samsara's second quarter fiscal 2026 earnings call. I'm Mike Chang, Samsara's Vice President of Corporate Development and Investor Relations. Joining me today are Samsara Chief Executive Officer and Co-Founder Sanjay 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.samisaro.com. The matters we'll discuss today include forward-looking statements. Actual results may differ materially from those contained in the forward-looking statements and are subject to risks and uncertainties described more fully in our SEC filings. Any forelooking statements that we make on this call are based on assumptions as of today, September 4th, 2025, and you undertake no obligation to update these statements as a result of new information or future events unless required by law. During today's call, we will discuss our second quarter fiscal 2026 financial results. We'd like to point out that the company reports non-GAAP results in addition to and not as a substitute for or superior to financial measures calculated in accordance with GAAP. We also report both actual and constant currency growth rates for certain metrics. On the call, we will only provide constant currency commentary when there is a material difference. Reconciliations of GAAP to non-GAAP financial measures and additional information on constant currency are provided in our press release and investor presentation. We'll make opening remarks, dive into highlights for the quarter, and then open the call for Q&A. With that, I'll hand over to Sanjay.

Thanks, Mike. And thank you, everyone, for joining us today. Samsara delivered another strong quarter of durable and efficient growth. We ended Q2 with $1.6 billion in ARR, growing 30% year-over-year. Our $100,000-plus ARR customers now contribute close to $1 billion of ARR, up 35% year-over-year, and now represent 59% of our total ARR. In Q2, we added 17 customers with more than $1 million in ARR, a quarterly record. Our $1 million-plus ARR customers crossed an important milestone in Q2. They now generate more than 20% of our ARR, or approximately $350 million. Our strategy to partner with the world's largest and most complex operations organizations is working and is fueling our growth at scale. In Q2, we partnered with many large enterprises, including Alaska Airlines, the fifth largest airline in the US, SRM Concrete, the largest ready-mix concrete provider in the US, and one of the largest Fortune 1000 rental equipment companies in North America. We're excited to work with these industry leaders and help them operate smarter. As we grow our customer base, we're also scaling our data asset. We reached another company milestone in Q2. We now process approximately 20 trillion data points annually on our platform. Our unique and proprietary data asset is not found on the internet. It pulls data from gateways, cameras, and sensors that we've deployed across our customers' vast operations with breadth across diverse asset types and markets and geographies. We're proud to partner with our customers to build the world's largest physical operations dataset, which provides us unique visibility into where and how customers run their operations. Combining this with AI, we're delivering actionable insights that solve their toughest challenges. In June, we hosted our biggest customer conference yet, Samsara Beyond. During the three-day event, thousands of leaders joined us to hear about how our newest innovations and to share their feedback and insights. We also learned about the challenges they're facing, including increased demand to build AI infrastructure, safety risks, capital expenditure costs, and employee churn. These conversations make our customers' top priorities clear. We're seeing a notable shift towards AI and automation as they modernize manual processes. They want a single, unified platform to manage their complex operations. And they want to extend risk management from vehicles into the field to protect their workers and to use digital tools to help with high employee turnover and labor shortages. Our customers are increasingly turning to AI to help them scale their output while running safer, more efficient, and more sustainable operations. During Beyond, we also hosted our Connected Operations Awards Ceremony. We celebrated 17 global customers who achieved an outsized impact with our platform. I'd like to share some of the highlights from a few of our winners. Maxim Crane, a leading crane rental company in the U.S., was our most innovative workforce winner. They saved $13 million in maintenance costs by shifting their maintenance program from reactive to proactive. They also saw a 94% reduction in harsh driving and an 87% reduction in speeding. Another winner was Mohawk Industries, the largest flooring manufacturer in the world. They won excellence in systems efficiency. They saved $7.75 million by using planned versus actual analysis to reduce their mileage by 4.2 million miles. They saved an additional $500,000 from rightsizing their fleet. They also saw safety gains, including a 54% reduction in speeding. We are proud to partner with our customers to make a real-world impact on their operations. Our connected operations platform is solving our customers' toughest challenges. As we scale to over 20,000 core customers, our flywheel of innovation is accelerating. We build products for our customers that deliver a clear and fast ROI. As our customers use these products, they contribute data to the platform. This growing data asset then allows us to build new products. This is fueling the expansion of our platform at an unprecedented rate, and I'm excited about the opportunity to deliver even more customer impact through our platform. At Beyond, we announced a record number of new products and features. These products help our customers by protecting their frontline workers, modernizing the frontline worker experience, improving asset maintenance, and optimizing asset utilization. Safety is a top priority for leaders. Driving is one of the 10 most dangerous jobs in the U.S., with fatal crashes up 49% in the past decade and insurance premiums up 40%. Leaders also want to modernize their frontline worker experience to improve productivity and are looking for new ways to improve asset maintenance and utilization as rising costs and high interest rates are creating pressure to reduce capital expenditures. To help our customers with these challenges, we launched new products including asset maintenance, which helps organizations monitor and manage the upkeep of their vehicles and equipment, commercial navigation, which is tailored to the unique constraints of large commercial vehicles, route planning, which creates and optimizes routes with fewer miles in vehicles, AI multicam, which gives drivers real-time 360-degree video coverage around any vehicle, and worker safety, which protects frontline workers wherever they work. It's never been a more exciting time partnering with our customers to improve their operations. As we build for the long term, we're investing in innovation to meet our customers' evolving needs, our open platform and partner ecosystem, and our leadership and culture. First, we announced many new features in addition to our new products at BEYOND. For our customers' frontline workers, we redesigned our driver app to be more intuitive and engaging with streaks and short training videos. We also built new AI-enhanced DVIRs to help workers improve compliance and accuracy. To help reduce risk, we built weather intelligence, which provides real-time, ground-level weather insights. All of these new features are broadly available to our customers, and we're looking forward to increasing our customer impact. Second, our open ecosystem and the work of our partners are central to our success. We've now expanded our partner ecosystem to over 350 integrations, and our largest customer on average are using six of them. This demonstrates the value of partnerships in helping customers unify their operations. We're continuously building on this by adding dozens of new partners, including Element, Rivian, Happy Robot, and Marsh. And we're also deepening our existing integrations to provide even greater value. Lastly, I'm happy to share that Gary Steele has joined our board of directors. Gary is a proven leader with over 30 years of leadership experience in the technology industry. His expertise in enterprise software and AI will be invaluable as we continue to drive multi-product adoption and deliver clear ROI for our customers. We're confident that his contributions will be a great asset, and we look forward to working with him. We're seeing great customer impact as we continue to scale. Our connected operations platform now sees approximately 20 trillion data points, 300 million digitized workflows, and 90 billion miles annually. With this data, we're driving actionable AI-powered insights to help our customers achieve even more ROI from our platform. Each year, we compound the impact we can make for our customers, and we're excited for the decades-long opportunity ahead. We want to thank all of the Samsarians, customers, partners, and investors for joining us on this journey. I'll now hand it over to Dominic to go over the financial highlights for the quarter.

Thank you, Sanjit. Q2 was another quarter of durable growth and improved profitability. The quarter was highlighted by strong performance across several key metrics, including another quarter of 30% plus year-over-year growth at a larger scale, 19% year-over-year net new ARR growth, which accelerated sequentially at a larger scale, 17 new $1 million plus ARR customers, which was a quarterly record, more than 20% of total ARR from $1 million-plus customers, and year-over-year ARR growth for this cohort accelerated sequentially at a larger scale, approximately $1 billion of ARR from 100k-plus ARR customers, an increase of 35% year-over-year and representing 59% of total ARR, and 8% of net new ACV from new products launched since last year. And while we experienced a few elongated sales cycles in Q1 following Liberation Day, all of the impacted larger transactions closed in Q2, which contributed to our strong growth, and we didn't experience further tariff-related impact in the quarter. Looking ahead, we believe we are well positioned to deliver durable growth and create long-term shareholder value for a few key reasons. First, we have a unique defensible data advantage. By instrumenting physical assets, we generate a large and growing proprietary data asset that cannot be replicated or sourced from the internet. Second, AI is accelerating our innovation and we are releasing new products and meaningful features at a faster pace, driving higher customer engagement and usage. Third, our business model scales with physical assets rather than headcount or knowledge workers and aligns us to end markets that are poised to benefit from major initiatives like the global AI infrastructure build-out. Fourth, our products have a differentiated value prop and mission-critical workflows that delivers fast and tangible ROI with quick payback periods, And lastly, we're targeting the large and less discretionary operations budget, which represents approximately 80% of our customers' revenue on average. And because we help them optimize this significant and durable cost base, we have a large opportunity to drive customer impact and long-term growth. Now taking a look at our Q2 results, Q2 ending ARR was $1.64 billion, an increase of 30% year-over-year. Within that, we added $105 million of net new ARR, an increase of 19% year-over-year, or accelerating sequential growth at a larger scale. And Q2 revenue was $391 million, growing 30% year-over-year, or 31% in constant currency. Several factors drove our strong top line performance in Q2. First, we focus on serving large enterprise customers to drive efficient growth at scale. In terms of large deals, we signed seven $1 million plus net new ACV transactions in Q2, our second highest quarter ever. This reflects the success of our investments to support larger customer opportunities. At the same time, larger deals have inherently longer and less predictable sales cycles, which means that their timing may introduce more variability into our quarterly results than in the past. In terms of large customers, we ended Q2 with approximately 1 billion of ARR from 100K plus ARR customers, an increase of 35% year over year, representing 59% of total ARR, up from 57% one year ago. We also ended Q2 with 147 $1 million plus ARR customers, including a quarterly record increase of 17. $1 million plus ARR customers contributed more than 20% of total ARR, and year-over-year growth from this cohort accelerated sequentially at a larger scale. Second, landing new customers remains a key driver of our growth strategy that fuels future expansion opportunities. In terms of new customers, we added our third highest number of net new core customers in Q2, surpassing more than 1,000 for the fourth time in the past five quarters. Nine of the top 10 new logos adopted two or more products, and eight of the top 10 adopted three or more products in their initial transactions. These new logos included two public sector customers, one with a state-level department and another with one of the largest counties in the U.S., a top five U.S. airline, one of the largest employee-owned electrical contractors, and the UK subsidiary of one of the largest global retailers, which adopted four products in its initial contract, video-based safety, vehicle telematics, connected workflows, and connected training. In terms of expansions, all 10 of the top 10 expansions in Q2 included at least two products, and five of the top 10 included three or more products. Additionally, 15 of our top 25 ARR customers expanded in Q2, and we achieved our target dollar-based net retention rate of approximately 115% for core customers. And third, we demonstrated strong execution across several frontier markets. In terms of international, 15% of net new ACV came from non-US geographies, the largest of which was Europe, which accelerated net new ACV growth sequentially to its highest level in the last four quarters. In terms of end markets, we saw momentum across construction, public sector, and manufacturing. Construction drove the highest net new ACV mix of all industries for the eighth consecutive quarter and delivered its highest net new ACV mix in the last six quarters. Public sector strength came from wins across several state departments, including Nebraska DOT, as well as large municipalities, including Newtown. the city of Nashville, and a leading passenger transit agency in Los Angeles. And manufacturing delivered its highest net new ACV mix ever, led by SRM Concrete, the largest U.S.-ready mixed concrete provider. Their initial purchase included video-based safety, vehicle telematics, equipment monitoring, connected workflows, and commercial navigation. In a pilot, they saw faster accidents response times with connected workflows, exonerated drivers and not-at-fault accidents, improved job site efficiency with real-time visibility, and improved customer experience through more on-time deliveries using commercial navigation. And in terms of emerging products, 8% of our net new ACV in Q2 came from our new products launched in the past year, led by asset tags, connected workflows, connected training, asset maintenance, AI multicam, and commercial navigation. This quarter, we signed our largest ever asset tags deal with Bonnie Plants, the largest U.S. supplier and producer of vegetable and herb plants. They deployed 15,000 asset tags to track their owned and leased cart fleet and reducing asset loss and theft while improving worker efficiency. In addition to driving strong top-line growth, we continue to deliver operating leverage across our business as we scale. Non-GAAP gross margin was 78% in Q2, up 1 percentage point year over year. Non-GAAP operating margin was 15%, up 9 percentage points from one year ago. And free cash flow margin was 11% in Q2, up 7 percentage points year over year. Okay, now turning to guidance, which is based on FX rates as of August 2nd. For Q3, we expect revenue to be between 398 and 400 million, representing 24% year-over-year growth or 23 to 24% growth in constant currency. Non-gap operating margin to be 15% and non-gap EPS to be between 11 and 12 cents. For full year FY26, we expect revenue to be between $1.574 and $1.578 billion, representing 26% year-over-year growth, non-GAAP operating margin to be 15%, and non-GAAP EPS to be between $0.45 and $0.47. And finally, please see the additional modeling notes in our shareholder letter. To wrap up, in Q2, we delivered high growth at scale while also delivering operating efficiency gains. Looking ahead, we believe Samsara is well-positioned to sustain durable and efficient growth because we generate a unique, defensible data asset that powers differentiated AI innovation and deeper customer engagement. 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. And we deliver tangible ROI through mission-critical workflows and help customers achieve fast payback periods on their investments. We look forward to building on this momentum as we help our customers operate more safely, efficiently, and sustainably at a greater scale. And with that, I'll hand it over to Mike to moderate Q&A.