Samsara Inc.

Good afternoon and welcome to Samsara's first quarter fiscal 2027 earnings call. I'm Mike Chang, Samsara's Senior Vice President of Finance. 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 shorter letter, press release, investor presentation, and SEC filings on our investor relations website at investors.samsara.com. The measures 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 forward-looking statements that we make on this call are based on assumptions as of today, June 4th, 2026, and we 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'll discuss our first quarter fiscal 2027 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 tackled in accordance with GAAP. We also report both actual and constant currency growth rates for certain metrics. On the call, we only provide constant currency commentary when there's a 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, then highlights for the quarter, and then open the call for Q&A. With that, I hand over the call to Sanjay.

Thanks, Mike, and thank you, everyone, for joining us today. Samsara delivered a strong start to FY27 with another quarter of durable and efficient growth. We ended Q1 with nearly $2 billion in ARR, growing 30% year-over-year, and achieving our third consecutive quarter of GAAP EPS profitability. We added $101 million in net new ARR, also growing 30% year-over-year, or 27% in constant currency. Our largest customers continue to drive strong growth. We now have over $1.2 billion in ARR from our customers spending $100,000 or more, growing 37% year-over-year and accelerating for the third straight quarter. In Q1, we added 169 customers with $100,000 or more in ARR and 15 customers with $1 million or more in ARR. Large customer wins in the quarter include Hertz, one of the world's largest car rental companies, Foundation Building Materials, a leading North American specialty building materials distributor, the state of Connecticut, and one of the world's largest pizza companies. Over the past few months, I visited dozens of our top customers and prospects in North America and Europe. These operators are being asked to do more than ever, and they're turning to Samsara for help. Three themes emerged as consistent drivers of Samsara adoption. First, customers are scaling rapidly to meet surging global demand for infrastructure buildup and need technology that can grow with them. Second, customers are expanding across our platform. They're adding Samsara's emerging products to further digitize their operations and unlock savings well beyond their core product deployment. And third, interest in operational AI and agents continues to grow rapidly, although most operators are still very early in their adoption journey. Our customers are building the infrastructure for the global economy. For decades, technology investment flowed primarily into the world of bits, software, data, and digital workloads. The next wave is a transition from bits to atoms, applying AI and intelligent systems to the physical world of vehicles, equipment, job sites, and frontline workers. Our customers are at the center of this transition. They're asset-heavy, labor-intensive operators in critical industries, and they spend about 80% of their revenue on operating costs. As their operations scale, so does the number of physical assets and frontline workers they manage. Today, they're seeing extraordinary demand driven by a few tailwinds. The build-out of AI and data centers is driving massive investment across the physical economy. Supporting that build-out requires new power generation, energy systems, cooling infrastructure, and grid and transmission capacity. Additionally, governments are investing in the modernization of aging public infrastructure, and private enterprises are transforming their operations to meet growing customer demand. We believe these tailwinds are only accelerating. According to McKinsey, addressing the global need for new and improved infrastructure will require roughly $106 trillion in investment by 2040. Samsara's customers are at the center of this buildup. and we believe this opportunity will only grow in the years ahead. Companies in the world's most critical industries are choosing Samsara's connected operations platform to improve the safety, efficiency, and sustainability of their operations. As they scale, so does the need for real-time visibility and actionable insights, which is driving more of them to standardize on Samsara. I'd like to share an example of one of our new customers from the quarter who's operating at the center of today's infrastructure buildup. In Q1, we partnered with a global engineering, architecture, and environmental consulting firm with more than 34,000 employees. They're using Samsara to connect and manage their diverse fleet and assets through a single platform. With Samsara's telematics, they're connecting their heavy-duty trucks, medium- and light-duty vehicles, and passenger cars across the U.S. and Canada. They're also using asset tags to track and monitor non-vehicle assets, including trailers, marine vessels, ATVs, and field equipment. Together, these applications provide them with one operational view across distributed projects and unlock new workflow capabilities. For example, they're using Samsara to power an operational billing workflow that tracks vehicle usage by driver, project, and business versus personal use. This helps them build project mileage back to clients and support tax reporting requirements. They're also deploying AI video-based safety to support driver behavior detection, in-cab coaching, and broader safety score improvements. We believe Samsara will help them reduce operational costs by up to 10% within 18 months. We're proud of the impact we're making together with our customers. Our emerging products contributed more than 20% of net new ACV for the second consecutive quarter. As customers realize the value of the platform, they're expanding their partnership with Samsara to take on more of their operational challenges. What often begins as a deployment of our core AI video-based safety or telematics products evolves into broader digital transformation as they adopt additional products to further digitize their operations and increase savings. Connected asset maintenance is one area where we're seeing this play out today. Our customers typically manage tens of thousands of vehicles and assets that degrade over time. Maintenance is one of their largest cost centers, consuming an average of 10% of operational budgets. The average age of light-duty vehicles has increased from 11.5 years to 12.8 years over the past decade, and the parts and labor costs have risen 27% since 2020. Yet many organizations still rely on outdated pen and paper systems that waste time, increase costs, and fail to provide the insights they need to stay ahead of equipment failures. Samsara's connected asset maintenance helps customers shift from time-based and mileage-based maintenance schedules to a data-driven approach. Many organizations today are either over-maintaining assets, wasting money on unnecessary service intervals, or under-maintaining them, risking costly breakdowns and safety incidents. Our maintenance solution brings these capabilities together in a single dashboard, giving organizations a complete view of fleet health across fault code intelligence, real-time vehicle diagnostics, work order management, integrated warranty and inventory management, and a purpose-built technician experience. I'd like to share another customer example, this one being a customer using our maintenance products. In Q1, we expanded our partnership with one of Canada's largest supermarket chains with over 1,600 stores and 128,000 employees. They manage a mixed fleet of tractors, trailers, and refrigerated units across distribution centers nationwide. Their legacy maintenance system didn't integrate their vehicle data, forcing teams to rely on manual processing. They chose Samsara's connected asset maintenance to replace that system and unify their entire maintenance operation on one platform. With telematics and asset gateways already deployed, fault codes and inspection reports now automatically trigger work orders, helping teams detect issues early and reduce unplanned downtime across their temperature-sensitive supply chain. They're building out their full maintenance operation on Samsara, from preventive maintenance scheduling to work orders to vendor management, parts inventory, and AI invoice scanning, it eliminates manual data entry. Warranty recovery and total cost of ownership tracking rounded out with a complete financial picture of every asset. They're a great example of how customers are expanding beyond SEMSAR's core products to digitize their operations and achieve more savings. I consistently hear from customers that one of their biggest constraints on growth is worker capacity. The number of frontline workers required scales directly with revenue, and with turnover rates of 40% to 50%, that's a direct drag on capacity. Many of these roles require specialized workers like electricians, heavy equipment operators, and construction specialists who are increasingly in short supply. This is not a cyclical challenge. It's a structural one, and it's holding back growth for some of the most critical industries in the global economy. We believe operational AI represents one of the biggest opportunities to solve this problem. It uses our camera and sensor data to detect and analyze real-world conditions, with initial detections focused on waste management, public sector, and student transportation. Combined with agents, it automates routine tasks so every worker can accomplish more, reducing the need for additional headcount and helping organizations scale in a tight labor market. In May, we gathered hundreds of public sector customers at our Go Beyond event in Chicago, where we introduced waste intelligence, ground intelligence, and ridership management. We showcased how we're working with some of the largest waste management companies and cities in the U.S. to automate entire frontline operational workflows. We're still in the early innings of this opportunity, and so are our customers, but the early results are compelling, and we see this as one of the most important areas of investment for SimStar in the years ahead. I'd like to highlight the impact of waste intelligence, which helps customers increase revenue, and ground intelligence, which helps them reduce operating costs. Waste management companies are missing revenue opportunities, struggling with worker capacity constraints, and spending hours manually resolving service disputes. Samsara's waste intelligence addresses this correctly through three core capabilities. Service verification, which automatically confirms a collection occurred at the scheduled time and location, providing customers a documented proof of service. Overfill detection. which identifies when containers exceed capacity, allowing operators to document overages and capture additional revenue, and contamination detection, which we are developing to identify non-recyclable or hazardous material in waste streams and helps enforce contamination policies and fees. On the cost savings front, potholes account for approximately $3 billion in vehicle damages every year in the U.S., yet most cities still rely on 311 calls to identify road defects. Samsara's ground intelligence solves this problem by leveraging trillions of data points from vehicles across our platform that covers 99% of major U.S. roads. We fuse AI dashcam and multicam data with G-Force data from our telematics devices to assess pothole type and severity, map defects across the road network, and direct public works teams to prioritize repairs. New damage is captured immediately after storms or freeze-thaw cycles rather than waiting for outdated pavement surveys. giving our customers a continuously updated picture of road conditions before anyone leaves the yard. This turns a reactive, complaint-driven process into a proactive, data-driven one, eliminating guesswork and allowing teams to fix more potholes per shift. It has been an exciting start of the fiscal year, and we remain focused on delivering on our mission to increase the safety, efficiency, and sustainability of the operations that power the global economy. We're grateful to partner with our customers as they modernize their operations and build the infrastructure the world depends on. We look forward to seeing many of you at our customer conference, Beyond, which is taking place from June 23rd to 26th in Las Vegas. At Beyond, we bring together leaders across industries to share learnings on digitization and the future of connected operations. We will also be hosting an investor day on June 24th. We hope you can join us. I'll now hand it over to Dominic to go over the financial highlights for the quarter.

Thank you, Sanjay. Q1 was another quarter of accelerating growth and improved operating leverage, highlighted by strong performance across several key metrics, including 30% year-over-year net new ARR growth, or 27% in constant currency, our second highest growth rate over the past nine quarters, leading to 30% total ARR growth, which was the same growth rate as last quarter at a larger scale. 31% year-over-year revenue growth, or 29% in constant currency, accelerating sequentially at a larger scale, 37% year-over-year ARR growth for 100K-plus customers, the third consecutive quarter of sequential acceleration, and 62% year-over-year ARR growth for $1 million-plus customers, the fourth consecutive quarter of sequential acceleration, and finally, achieving our third consecutive quarter of GAAP profitability. More broadly, our performance reflects the large Still Mason opportunity for digital transformation across physical operations. Looking ahead, we're well-positioned to deliver long-term shareholder value for several key reasons. First, we have a unique defensible data advantage. By instrumenting physical assets with IoT hardware, we've created a large, growing proprietary data asset that cannot be easily replicated. Second, we leverage this data using AI and agents to surface operational insights and automate workflows across our platform. Third, we have exposure to secular growth in physical AI. The AI transition from bits to atoms is underway, and Tim Starr is at the center of it. End markets such as construction, field services, energy, and utilities are not only benefiting from building out global infrastructure, they're increasingly using AI to manage greater scale and complexity. The stock price performance of our top 100 public customers is at more than 30% over the past year. Fourth, we have a differentiated value prop in mission-critical workflows. Our products deliver fast, tangible ROI with quick payback periods. And lastly, we target the large, less discretionary operations budget. Our customers invest approximately 80% of their revenue in managing their operations, and we help them optimize the significant cost base, creating a large opportunity to drive customer impact and sustain long-term growth. Okay, now turning to our results. Q1 net new ARR was $101 million, an increase of 30% year-over-year, or 27% in constant currency, our second highest growth rate over the past nine quarters. More broadly, net new ARR over the last 12 months was $455 million, growing 27% year-over-year, or 25% in constant currency, accelerating for the fourth consecutive quarter. Q1 ending ARR was approximately $2 billion, an increase of 30% year-over-year, representing the same growth rate as last quarter. And Q1 revenue was $479 million, an increase of 31% year-over-year, or 29% in constant currency, accelerating sequentially at a larger scale. Several factors drove our strong top-line performance in Q1. First, large customer momentum is leading to higher growth at scale. In terms of large deals, we signed 11 $1 million-plus net new ACV transactions in Q1, our second-highest quarter ever. This reflects the success of our R&D and go-to-market investments to support these larger customer opportunities. In terms of large customers, we ended Q1 with 3,363 100K plus ARR customers, including a quarterly increase of 169. ARR from 100K plus customers was 1.2 billion, increasing 37% year-over-year, resulting in the third consecutive quarter of sequential acceleration. 100K plus customers represent 62% of total ARR, up from 58% one year ago and 56% two years ago. Additionally, we ended Q1 with 190 $1 million plus ARR customers, a quarterly increase of 15. ARR from $1 million plus customers increased 62% year over year, representing the fourth consecutive quarter of sequential acceleration at a larger scale. Second, our customers are increasingly using Samsara as a single unified operations platform across multiple applications. 96% of 100k plus ARR customers subscribe to two or more products, and 70% subscribe to three or more. In Q1, nine of the top 10 net new ACV deals included two or more products, and four included four or more products. In Q1, we deepened our partnership with the world's largest food service distributor, Since adopting Samsara's AI video-based safety solution in 2018, this customer has completed 20 expansions. This quarter, the company took a significant step forward by replacing its incumbent telematics provider with Samsara and adding asset gateways, commercial navigation, and connected workflows, becoming a five-product customer. These solutions will help their operators navigate smarter, digitize fieldwork, and deliver better on-time performance across its massive distribution network. And strong multi-product adoption like this helped us achieve our target dollar-based net retention rate of approximately 115% for core customers. And third, we demonstrated strong execution across several frontiers. In terms of emerging products, for the second consecutive quarter, more than 20% of our net new ACV came from emerging products. Seven of the top 10 net new ACV transactions included an emerging product, 42 transactions included more than 100K in emerging product net new ACV, and we signed our largest ever connected asset maintenance deal with Hertz, one of the world's largest car rental and mobility solutions providers, and a software-only deployment across our North American vehicle fleet. In terms of end markets, wholesale and retail trade was our largest vertical in Q1, contributing its second highest ever net new ACV mix and the third consecutive quarter of sequential growth acceleration. And construction contributed the second highest net new ACV mix in the quarter. And in terms of international, 18% of net new ACV came from non-U.S. geographies, tied for a quarterly record. Europe contributed a record amount of net new ACV mix and landed its largest new logo win to date with a leading U.K. grocery retailer. And Canada net new ACV growth accelerated sequentially for the second consecutive quarter, resulting in its highest net new ACV mix in the last eight quarters. In addition to driving strong top-line growth, we continue to deliver operating leverage across our business as we scale. Non-GAAP operating margin was 19% in Q1, up 5 percentage points year-over-year. Pre-cash flow margin was 15%, up 3 percentage points year-over-year, including the 15th consecutive quarter surpassing Rule of 40. And GAAP EPS was a positive 8 cents, representing our third consecutive quarter of GAAP EPS profitability. This included a $30 million arbitration award from one of our lawsuits against Motive for claims of breach of contract, fraud, unfair competition, and false advertising. And GAAP EPS would still be positive, excluding this award. Okay, now turning to Q2 and FY27 guidance based on FX rates as of May 2nd. Our guidance philosophy remains the same and is de-risked for potential downside scenarios. For Q2, we expect revenue to be between $482 and $484 million, representing 23% to 24% year-over-year growth, or 22% to 23% growth in constant currency. Non-GAAP operating margin to be 18%, non-GAAP EPS to be between 15 and 16 cents, and we expect to be GAAP profitable for Q2. For full-year FY27, we expect revenue to be between $2.005 and $2.013 billion, representing 24% year-over-year growth or 23% to 24% growth in constant currency, non-GAAP operating margin to be 20%, non-GAAP EPS to be between $0.70 and $0.72, and we also expect to be GAAP profitable for full-year FY27. Finally, please see the additional modeling notes in our shareholder letter. To wrap up, in Q1, we delivered accelerating growth at scale while expanding operating leverage. Looking ahead, we believe we're well-positioned to sustain durable and efficient growth because we instrument physical assets with IoT hardware to generate a unique defensible data asset. We then harness that data with AI to surface operational insights and automate workflows, driving more customer value. We're at the center of the AI transition from the digital to the physical world and tied to end markets benefiting from major infrastructure initiatives. And we deliver fast, tangible customer ROI with quick day-back periods. 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.