Samsara Inc. 2027 Q2 Earnings Call

Thanks, Marty, and thank you everyone for joining us today. Samsara delivered another quarter of durable and efficient growth. In Q2, we crossed $2.1 billion in ARR, growing 30% year-over-year, which was driven by $134 million net new ARR. Our largest customers continue to drive our growth. Our $100,000-plus customers now represent $1.3 billion in ARR, growing 38% year-over-year. In Q2, we added 242 customers with $100,000 or more in ARR and 20 customers with $1 million or more in ARR. Both are quarterly records. Large customer wins in the quarter include APi Group, the global provider of safety, security, and specialty services, Sonepar, the world's largest B2B distributor of electrical products, and one of the world's largest e-commerce companies. As our customer base grows, our data asset scales with it.

This quarter, we surpassed 30 trillion data points collected annually on the Samsara platform, up more than 40% year-over-year. This data spans vehicles, powered and unpowered equipment, job sites, and frontline workers. It covers a wide range of industries, geographies, and customer sizes. Behind that number is the scale of our customers. More than 105 billion miles driven and 340 million workflows digitized over the last year. This is proprietary time series data captured by sensors operating in the physical world. It can't be replicated or found on the internet. Each year of operating history compounds its value, improving our AI models and widening our moat. In June, we hosted Beyond, our annual customer conference. It was our biggest Beyond yet, with over 4,000 attendees from across physical operations. Over three days, leaders shared the challenges they're facing.

They also shared how they plan to solve them with more visibility across their operations and AI to automate work. Their top priorities include safety, operational ROI, real-time visibility, and AI and agentic automation. Our platform, built on one of the world's largest operational data assets, is what helps us address our customers' hardest challenges. At Beyond, we launched our newest wave of products, including the Tracking Label, which is a single-use Bluetooth smart label powered by the Samsara network. It gives near real-time visibility into any shipment across any carrier. 360 Camera, the first camera system built for operated equipment, giving operators complete view around the vehicle. Waste Intelligence, an AI-powered solution that verifies service events and detects overfilled bins. Ground Intelligence, which continuously maps road defects across our data set.

And our agents for safety, maintenance, and dispatch that automate multi-step task work like warranty recovery, coaching workflows, and back-office dispatch. We're seeing good momentum from Beyond, which is showing up in usage. Customer adoption of some of our latest AI features is up more than four times in the last two months. Samsara is built to run the world's largest and most complex physical operations. As these organizations digitize, we've become their platform of choice. Our largest customers are driving our growth. ARR from our $100,000-plus customer cohort accelerated for the fourth straight quarter. Customers choose Samsara because our platform can digitize their vehicles, equipment, sites, and workers at the scale and reliability their operations demand. What often starts as a solution to one operational problem becomes a platform they standardize on. Each new product can deepen their ROI and widen the path to their next expansion.

Our device footprint accelerates that expansion. With multiple products attached to a single hardware device, new products deploy faster with no downtime for asset replacement. Customers get quicker time to value and less installation friction. For example, a Vehicle Gateway powers routing and Connected Maintenance. Our AI Dash Cam and AI Multicam power our new operational AI applications, including Ground Intelligence and Waste Intelligence. I would like to share two expansions from the quarter that show how large customers deepen their partnership with Samsara over time. In Q2, we expanded our partnership with one of the largest cities in the U.S. They landed with us in Q3 last year, starting with Vehicle Gateways and AI Dash Cams for their fleet management division. This quarter, that expanded into a multi-department rollout, connecting assets across the city.

They are extending Vehicle Gateways and AI Dash Cams to every department, including police, fire, parks, public works, and transit. They cover a range of vehicles from police cars and fire trucks to construction equipment and snowplows. For their fire and sanitation fleets, they added AI Multicam to reduce backside and sideswipe accidents in dense urban traffic. Connected Maintenance replaces their existing system and consolidates maintenance management onto one platform. With Ground Intelligence, they now have coverage across 7,600 lane miles for pothole detection, pavement preservation, through mobilization, and 311 calls and claims. We are proud to partner with the city to make even more of an impact together. We also expanded our partnership with a leading heavy civil and general contracting company that has been in business for over 75 years.

They are benefiting from many physical AI tailwinds, including data center, site prep, power and energy systems expansion, and public infrastructure buildup. They have a complex operation and run $1 billion of equipment, including thousands of excavators, skid steers, cranes, and loaders. They were using Vehicle Gateways and came to us to evaluate AI Dash Cams for their fleet. The pilot delivered strong results, with an 83% reduction in safety events. As we dug deeper into their operations, Connected Maintenance became the biggest ROI driver in the deal. The company spends $80 million-$100 million per year on maintenance, but the data is fragmented across their ERP, OEM portals, spreadsheets, and employees. Maximizing maintenance ROI required bringing all their data onto one platform. To solve this, they expanded with AI Dash Cams.

They also licensed Powered Asset Gateways for the large machinery and Asset Tags for the smaller assets, like fueling tanks, containers, and excavator buckets. They added AI Multicams for their vehicles and Connected Forms to digitize their paper workflows. Together, these give them one view of every asset they own so they can improve utilization and maintenance. As we build for the long term, we are investing in continuous innovation to meet our customers' changing needs, strengthen our platform, and extend our AI leadership. In addition to the new products at Beyond, we unveiled AI-powered features that make our customers' operations smarter and safer. This includes voice agents through the AI Dash Cam, which closes the gap between a manager or agent detecting a risk and the driver hearing about it.

Agents can proactively alert drivers to geofence-based risks, like speed limit changes and towing zones, and managers can reach drivers instantly when conditions change. New AI Multicam detections, including rear collision warning and vehicle and blind spot detection. These detections process camera feeds on the edge to alert workers to hazards in the moment before an incident happens. Shipment Center, an AI-powered command center for shipments. Customers can ask questions in plain language, like which deliveries are at risk from a storm, and get instant answers with recommended actions across their entire shipment network. Bird's Eye View, a configurable top-down 360-degree view of vehicle and its surroundings. This gives drivers full situational awareness during high-risk maneuvers, like reversing and tight turns in crowded yards and job sites. Each of these features addresses a priority customers have been raising.

We're excited to see the impact they will have with our customers as they start to adopt these in their operations. At Beyond, we also launched the Samsara Community, a global online hub that connects operators across the world of physical operations. More than 5,000 members have already joined. The Samsara Community gives our tens of thousands of customers in North America and Europe direct access to each other's expertise. This deepens engagement with our platform as customers become advocates who tell their peers about what's working. It also speeds up time to value. Customers pass along deployment and change management best practices to help others ramp faster and see ROI sooner. The community compounds our product feedback loop, giving us an always-on channel of customer input at scale. We're excited about the impact we're making for our customers as we cross $2 billion in ARR.

We're now operating at a massive scale, with more than 30 trillion data points, 340 million workflows digitized, and 105 billion miles driven over the last year. Our growing data asset is what powers our AI insights and drives the customer actions that deliver more ROI from our platform. I want to thank all 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 highlighted by accelerating growth and improved operating leverage, demonstrated by strong performance across several key metrics, including 28% year-over-year net new ARR growth in constant currency, representing accelerated growth both sequentially and compared to Q2 last year, as well as our second highest growth rate over the past 10 quarters. 30% total ARR growth, which was the same growth rate as the last two quarters at a larger scale. 242 100K-plus ARR customers added, a quarterly record, resulting in 38% year-over-year ARR growth, the fourth consecutive quarter of sequential acceleration at a larger scale. 21 million-plus ARR customers added, also a quarterly record, resulting in 50%-plus year-over-year ARR growth for the third consecutive quarter. More than 20% of net new ACV coming from emerging products for the third consecutive quarter, and achieving our fourth consecutive quarter of GAAP profitability.

More broadly, our performance reflects the large, still-nascent opportunity for digital transformation across physical operations. Looking ahead, we are 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 have created a large, growing, proprietary data asset that is hard to replicate. Second, we leverage this data using AI and agents to surface operational insights and automate workflows across our platform. Third, we benefit from secular growth in physical AI. End markets such as construction, field services, energy, and utilities are not only busy building out global infrastructure, they are increasingly using AI to manage greater scale and complexity. Fourth, we have a differentiated value prop and mission-critical workflows. Our products deliver fast, tangible ROI with quick payback periods. Lastly, we target the large, less discretionary operations budget.

Our largest customers invest approximately 80% of their revenue on their operations, and we help them optimize this significant cost base, creating a large opportunity to drive customer impact and sustain long-term growth. Okay, now turning to our results. Q2 net new ARR was $134 million, an increase of 28% year-over-year, accelerating both sequentially and compared to Q2 last year. This also represented our second highest constant currency growth rate over the past 10 quarters. More broadly, net new ARR over the last 12 months was $485 million, growing 27% year-over-year in constant currency, accelerating from 14% in Q2 last year. Q2 ending ARR was $2.1 billion, an increase of 30% year-over-year, representing the same growth rate as the last two quarters at a larger scale.