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Internet of Things company Samsara (NYSE:IOT) reported Q2 CY2024 results beating Wall Street analysts’ expectations, with revenue up 36.9% year on year to $300.2 million. The company expects next quarter’s revenue to be around $310 million, in line with analysts’ estimates. It made a non-GAAP profit of $0.05 per share, improving from its profit of $0.01 per share in the same quarter last year.
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Samsara (IOT) Q2 CY2024 Highlights:
- Revenue: $300.2 million vs analyst estimates of $289.5 million (3.7% beat)
- Adjusted Operating Income: $17.55 million vs analyst estimates of -$5.41 million (424% beat)
- EPS (non-GAAP): $0.05 vs analyst estimates of $0.01 ($0.04 beat)
- The company lifted its revenue guidance for the full year to $1.23 billion at the midpoint from $1.21 billion, a 1.4% increase
- EPS (non-GAAP) guidance for the full year is $0.17 at the midpoint, beating analyst estimates by 27.5%
- Gross Margin (GAAP): 75.6%, up from 73.3% in the same quarter last year
- Free Cash Flow Margin: 4.4%, down from 6.6% in the previous quarter
- ARR: $1.26 billion, up 36% year on year
- Market Capitalization: $21.29 billion
One of the few public companies where Marc Andreessen is a Board member, Samsara (NYSE:IOT) provides software and hardware to track industrial equipment, assets, and fleets.
Data AnalyticsOrganizations generate a lot of data that is stored in silos, often in incompatible formats, making it slow and costly to extract actionable insights, which in turn drives demand for modern cloud-based data analysis platforms that can efficiently analyze the siloed data.
Sales Growth As you can see below, Samsara’s 49% annualized revenue growth over the last three years has been incredible, and its sales came in at $300.2 million this quarter.
Unsurprisingly, this was another great quarter for Samsara with revenue up 36.9% year on year. On top of that, its revenue increased $19.48 million quarter on quarter, a very strong improvement from the $4.45 million increase in Q1 CY2024. This acceleration of growth was encouraging to see.
Next quarter’s guidance suggests that Samsara is expecting revenue to grow 30.5% year on year to $310 million, slowing down from the 39.9% year-on-year increase it recorded in the same quarter last year. Looking ahead, analysts covering the company were expecting sales to grow 24.4% over the next 12 months before the earnings results announcement.
Cash Is KingAlthough earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.
Samsara broke even from a free cash flow perspective over the last year, giving the company limited opportunities to return capital to shareholders.
Samsara’s free cash flow clocked in at $13.13 million in Q2, equivalent to a 4.4% margin. This quarter’s result was good as its margin was 2.2 percentage points higher than in the same quarter last year. Its cash profitability was also above its one-year level, and we hope the company can build on this trend.
Over the next year, analysts predict Samsara’s cash conversion will improve. Their consensus estimates imply its breakeven free cash flow margin for the last 12 months will increase to 7.4%, giving it more money to invest.
Key Takeaways from Samsara’s Q2 Results It was good to see Samsara beat analysts’ revenue, adjusted operating income, and EPS expectations this quarter. We were also glad it raised its full-year guidance for all three metrics. Overall, this was a splendid "beat-and-raise" quarter. The stock traded up 6.3% to $41.20 immediately after reporting.
