Summary
Samsara reported revenue of $169.8 million for the third quarter of fiscal 2023, up 49.2% year over year. Year-to-date revenue of $466.0 million was up 54.0%. Growth came from new customer additions and from existing accounts buying more applications. Ending ARR reached $723.7 million, up 47%, and the number of customers spending more than $100,000 in ARR was 1,113, up 56% from a year earlier. Deferred revenue of $374.2 million rose 30.6% against the prior-year quarter, and remaining performance obligations totaled $1.29 billion. Management cautions that ARR is not a forecast and that the active contracts counted in the metric may or may not be extended or renewed.
The profit picture was less comfortable. Gross margin was 72.2%, flat versus the prior-year quarter, so gross profit dollars tracked revenue almost exactly. Below that line, costs scaled faster than sales, and the company kept spending on sales capacity, research and development, and public company infrastructure. The operating loss widened to $63.5 million, and operating margin fell to -37.4%. Net loss widened to $58.6 million. Diluted net loss per share was $0.11, a narrower loss than the prior-year quarter. The company also recorded lease modification, impairment, and related charges in the prior-year period that did not repeat this quarter.
Non-GAAP results frame the same quarter differently. Non-GAAP loss from operations was $16.6 million, a non-GAAP operating margin of negative 10%, against a non-GAAP operating loss of $29.5 million and negative 26% a year earlier. Non-GAAP gross margin was 74%, and non-GAAP net loss per share was $0.02. Stock-based compensation expense-related charges explain most of the gap between the GAAP and non-GAAP numbers. On cash, net cash used in operating activities was $12.9 million in the quarter, an improvement of $28.4 million from the prior-year quarter, and $98.6 million for the nine months. Adjusted free cash flow, a separate measure that also subtracts purchases of property and equipment, was negative $14.9 million. Capital expenditures were $10.3 million in the quarter, up 179.8%.
Guidance is split between the next quarter and the full fiscal year. For the fourth quarter of fiscal 2023, Samsara guides to year-over-year revenue growth of 35% to 37% and a non-GAAP net loss per share of $0.05 to $0.06. For the full fiscal year 2023, the outlook calls for year-over-year revenue growth of 48% to 49% and a non-GAAP net loss per share of $0.16 to $0.17. The company does not reconcile its non-GAAP guidance to GAAP on a forward-looking basis, citing uncertainty around items such as stock-based compensation that cannot be reasonably determined or predicted.
The risk list in the filing is broad. Samsara cites macroeconomic uncertainty, the ongoing COVID-19 pandemic, the Russia-Ukraine conflict, geopolitical tensions involving China, inflation, and significant interest rate increases. A stronger U.S. dollar against the British Pound and the Euro is a headwind because the company operates in North America and Europe. Silicon component shortages and other supply chain constraints, long sales cycles, competition, and the possibility of a security breach affecting company or customer data all appear among the stated risks. The customer base spans physical operations industries, including transportation, wholesale and retail trade, construction, logistics, utilities and energy, government, healthcare and education, manufacturing, and food and beverage, so a freight or industrial slowdown would show up across the book.
Management expects to keep incurring operating losses and negative cash flows from operations for the foreseeable future and carries a large accumulated deficit. It states that existing cash, cash equivalents, and short-term and long-term investments are sufficient to support working capital and capital expenditure requirements for at least the next 12 months. Samsara also expects to lose emerging growth company status as of January 28, 2023, which moves it onto the standard accounting pronouncement timeline for larger public companies.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2023 | Q2 FY2023 | QoQ | Q3 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $169.8M | $153.5M | +10.6% | — | — |
| Gross profit | $122.5M | $109.3M | +12.2% | — | — |
| Gross margin | 72.2% | 71.2% | +1.0 pp | — | — |
| Research & development | $50.0M | $41.8M | +19.4% | — | — |
| Sales & marketing | $94.1M | $91.8M | +2.4% | — | — |
| General & administrative | $42.0M | $41.4M | +1.5% | — | — |
| Total operating expenses | $186.0M | $175.0M | +6.3% | — | — |
| Operating income (loss) | -$63.5M | -$65.8M | +3.5% | — | — |
| Operating margin | -37.4% | -42.9% | +5.5 pp | — | — |
| Net income (loss) | -$58.6M | -$64.3M | +8.9% | — | — |
| Net margin | -34.5% | -41.9% | +7.4 pp | — | — |
| Diluted EPS | -$0.11 | -$0.13 | +$0.02 | — | — |
Risks
MD&A cites ongoing COVID-19, the Russian invasion of Ukraine, significant inflationary pressure, Federal Reserve rate hikes, and a stronger U.S. dollar versus the British Pound and Euro. Risk factors state elevated inflation and interest rates may cause customers to defer or decrease expenditures and lengthen sales cycles.
Risk factors state COVID-19 has increased the average length of sales cycles to onboard new customers, in some cases by more than several weeks or months, and large customer sales cycles typically last several months and have exceeded one year. MD&A also notes delayed or reduced spending on information technology products.
Net loss widened to $193.8 million for the nine months ended October 29, 2022 from $102.3 million in the prior-year period, and operating loss widened to $199.5 million from $102.1 million. Accumulated deficit was $1,114.8 million as of October 29, 2022, and Q3 stock-based compensation was $41.5 million with $379.0 million of unrecognized RSU expense.
The company depends on a limited number of joint design manufacturers and suppliers, and risk factors cite the ongoing global silicon component shortage, freight cost increases, China-Taiwan tensions, and the Russia-Ukraine conflict. Continued cost increases for devices, components, or freight could negatively impact gross margins and cash flow margins.
Risk factors describe intense and increasing competition from vendors such as Verizon Connect, Geotab, Omnitracs, Lytx, SmartDrive, Orbcomm, ZTR, Avigilon, Netradyne, Platform Science, and Verkada. Competitors may bundle products at significant discounts, leading to reduced gross margins, longer sales cycles, less favorable payment terms, and loss of market share.
Risk factors state the company relies on Amazon for AWS web hosting and does not currently have an alternative provider. If Amazon decided to compete and did not allow renewal of the commercial agreement, it could significantly impact the solution and require time and expense to set up the Connected Operations Cloud on an alternative hosting service.
Risk factors highlight security breaches, ransomware, phishing, nation-state actors including those connected to the Russia-Ukraine conflict, and a U.S. government Shields Up alert. The company also notes employee access to customer video footage and features that can control large industrial assets.
Risk factors state the ability to grow depends on hiring, retaining, and managing qualified personnel, particularly key personnel. The company has experienced turnover in sales team members, resulting in costly training and operational inefficiency.
Risk factors include that issues in the use of artificial intelligence in the solution may result in reputational harm or liability. This is a specific emerging risk as the company expands AI and video analytics capabilities.
The company is expanding from fleet Applications into sites and equipment use cases where it has limited operating experience. Risk factors state this may bring increased business, technology, economic, and regulatory risks, and there is no guarantee these efforts will be successful.
Risk factors state managing the supply of IoT devices is complex; insufficient supply may cause lost sales or delayed revenue, while excess inventory may harm gross margins. The company issues non-cancelable and nonreturnable forecasts for components and products.
Based on market value as of July 30, 2022, the company expects to cease being an emerging growth company as of January 28, 2023. It will then be required to comply with new or revised accounting pronouncements applicable to public companies and may face auditor attestation on internal control over financial reporting.
MD&A notes the U.S. dollar increased in value relative to currencies of other countries where operations are located, including the British Pound and Euro. Risk factors state currency exchange rate fluctuations could adversely affect results of operations reported in U.S. dollars.
MD&A reports a $3.1 million increase in litigation-related costs for the nine months ended October 29, 2022. Risk factors state future litigation could divert management attention and resources and result in substantial liabilities.
Risk factors state rapid growth makes it difficult to evaluate future prospects and increases the risk that the company will not continue to grow at or near historical rates. Revenue grew 49% in the quarter and 54% year to date, but the growth rate is expected to decline as the business matures.
SaaS KPIs
All quarters →Non-GAAP Operating Margin
Adjusted Free Cash Flow Margin
Customers > $100,000 ARR
Annual Recurring Revenue (ARR)
Adjusted Free Cash Flow
Summary, forecast, risks and KPIs are extracted from Samsara Inc.'s SEC filings for Q3 FY2023 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.