Samsara Posts 30% Revenue Jump in Q2

Key Points

• Revenue grew 30% year over year to $391.5 million in the quarter, beating management's prior guidance by about $19 million.

• Non-GAAP earnings per share rose to $0.12, well above guidance and more than doubled from the prior year.

• Annual recurring revenue reached $1.64 billion.

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Samsara (NYSE:IOT), a software platform company focused on digitizing physical operations, released earnings on September 4, 2025. The report revealed standout results: revenue (GAAP) was $391.5 million, up 30% year over year and about $18.5 million above the high end of company guidance. Non-GAAP earnings per share reached $0.12, up from $0.05 last year and above the expected $0.10. Annual recurring revenue increased to $1.64 billion while Non-GAAP operating margins expanded significantly. Overall, the period showed strong performance in demand, profitability, and customer expansion, but forward guidance suggests moderating top-line growth ahead.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2026 earnings report.

What Samsara Does and Where it Focuses

Samsara operates a cloud-based Connected Operations Platform. This platform combines hardware (such as sensors and telematics devices) with software, helping companies monitor fleets, equipment, and workers in real time. With the system, organizations can collect, analyze, and act on data to improve efficiency and safety.

The business serves customers across transportation, construction, utilities, and logistics. The recent focus has been on expanding adoption of its platform among large enterprise clients. Other critical priorities include driving digital transformation of physical operations, continually innovating with artificial intelligence (AI) and cloud analytics, and expanding internationally. Key to its success are deep relationships with high-value customers, growing recurring revenue, and the pace of new product releases.

Quarter Highlights: Financial and Operational Developments

During Q2 FY2026, Samsara posted GAAP revenue of $391.5 million—about $18.5 million over the top of guidance issued June 5, 2025. This result marked 30% year-over-year growth. Management attributed the outperformance partly to a “catch-up” in sales delayed from the prior quarter, alongside strong underlying demand.

The company’s profitability improved sharply. Operating margin (Non-GAAP) ticked up to 15%, from 6% a year ago. Non-GAAP operating income reached $59.7 million, up from $17.6 million a year ago. Net income per share (Non-GAAP) was $0.12, 20% above expectations. On a GAAP basis, however, the company continued to post a net loss—driven in part by $86.3 million in stock-based compensation expense—though the loss narrowed compared to the same quarter last year.

Samsara’s business remains driven by recurring revenue from its platform subscriptions. Annual recurring revenue (ARR) climbed to $1.64 billion, up 30% year over year. The number of customers generating over $100,000 in ARR grew to 2,771, up from 2,120 a year ago.

The Connected Operations Platform—Samsara’s core product—continued to be a key focus. This platform integrates data from internet-of-things (IoT) devices, artificial intelligence, and third-party systems to give organizations a unified view of their physical operations. Management highlighted growing adoption of two or more product families among large customers and continued rapid product innovation with AI features. The company also noted stable expansion in Europe, with international revenue now around 13% of total sales in FY2025; however, segment-level details or major geographic wins were not specified in the release.

The quarter did not include any major one-time events or major changes in policy. Samsara does not currently pay a dividend.

Looking Ahead: Guidance and What to Watch

Management expects total revenue in the range of $398 million to $400 million for Q3 FY2026, which represents about 24 % growth at the midpoint. Non-GAAP net income per share is expected to range from $0.11 to $0.12, with non-GAAP operating margin is set to remain around 15% for FY2026. Samsara raised its revenue outlook to a range of $1.574 billion to $1.578 billion for FY2026. This guide suggests about 26% year-over-year revenue growth, but points to quarter-to-quarter deceleration compared to the 30% achieved in Q2 FY2026.

Investors should keep an eye on several key factors in the coming periods. These include the sustainability of large-enterprise customer growth, the ongoing expansion of recurring revenue, and whether innovation in AI and product features continues to drive adoption. Signs of growth moderation, especially in company guidance, merit attention. Profitability improvements will depend on balancing operating leverage with continued investment, as well as controlling stock-based compensation, which remains a significant cost. Competition from other telematics and operations platform providers is likely to intensify.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Motley Fool Markets Team is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. The Motley Fool takes ultimate responsibility for the content of these articles. Motley Fool Markets Team cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool recommends Samsara. The Motley Fool has a disclosure policy.