Samsara's 2026 Q2 Earnings Call: Contradictions in Customer Demand, Gross Margins, AI Innovation, and International Markets

The above is the analysis of the conflicting points in this earnings call

Date of Call: September 4, 2025

Financials Results

• Revenue: $391M, up 30% YOY (31% in constant currency)
• Gross Margin: 78%, up 1 percentage point YOY
• Operating Margin: 15%, up 9 percentage points YOY

Guidance:

• Q3 revenue expected at $398M–$400M, up ~24% YOY (23%–24% in constant currency)
• Q3 non-GAAP operating margin expected at 15%
• Q3 non-GAAP EPS expected at $0.11–$0.12
• FY26 revenue expected at $1.574B–$1.578B, up ~26% YOY
• FY26 non-GAAP operating margin expected at 15%
• FY26 non-GAAP EPS expected at $0.45–$0.47

Business Commentary:

* Strong Revenue and ARR Growth: - Samsara ended Q2 with $1.6 billion in ARR, growing 30% year-over-year. The ARR from $100,000-plus customers now contributes $1 billion, up 35% year-over-year. - Growth was driven by efficient expansion with large enterprise customers and the adoption of multiple products by customers.

• Large Customer Momentum and New Product Adoption:
• Samsara added 17 customers with more than $1 million in ARR, a record, and 7 $1 million-plus net new ACV transactions.

• New products and features, such as asset maintenance, AI Multicam, commercial navigation, and asset tags, contributed to the growth, with 8% of net new ACV coming from new products launched in the last year.

• Operational Efficiency and Margin Improvement:

• Non-GAAP operating margin improved to 15%, up 9 percentage points from the previous year.

• This improvement is attributed to strong execution across operational areas, including reduced sales cycles, effective change management, and efficient use of resources.

• Geographic and Product Expansion:

• Europe contributed to 15% of net new ACV, with a sequential acceleration in growth.

• The expansion of product offerings, such as asset tags, and integration with existing systems in Europe, aided in this growth.

• AI Infrastructure and Public Sector Opportunities:

• Samsara's solutions are well-positioned to benefit from major initiatives like the global AI infrastructure build-out and public sector demand for efficiency.
• The company sees opportunities in end markets like construction, public sector, and manufacturing, with significant ARR growth from these segments.

Sentiment Analysis:

• ARR reached $1.64B, up 30% YOY; revenue grew 30% to $391M. Record 17 customers above $1M ARR; $100K+ cohort ARR up 35% YOY to 59% of total. Non-GAAP gross margin 78% (+1 pp), operating margin 15% (+9 pp), FCF margin 11% (+7 pp). ‘We didn’t experience further tariff-related impact in the quarter.’ Guidance implies continued growth with Q3 revenue up ~24% and FY26 up ~26%.

Q&A:

• Question from Aleksandr Zukin (Wolfe Research): Which new products from Beyond show fastest traction, and how should we think about net new ACV from them this year?
  Response: Routing/commercial navigation, maintenance, and asset tags are gaining momentum; 8% of Q2 net new ACV came from products launched in the past year, with adoption ramping via trials/pilots.

• Question from Aleksandr Zukin (Wolfe Research): What drove the $105M net new ARR and the bounce-back after Q1, and how should we view the conservative 2H guide?
  Response: All tariff-delayed large deals closed in Q2; strength concentrated in large customers with $1M+ cohort now >20% of ARR; first-half net new ARR growth was low double digits.

• Question from Matthew Hedberg (RBC Capital Markets): How will you monetize AI—new pricing/packaging or embedded in current products?
  Response: AI will both enhance core products and enable new AI-driven offerings; expect monetization through new products while existing products improve via AI.

• Question from Matthew Hedberg (RBC Capital Markets): Any color on economics/ROI of the Bonnie Plants asset tag deal?
  Response: Asset Tags replace ‘no tech,’ reducing loss/theft and improving efficiency; deal also expanded into core telematics and safety, lifting ACV.

• Question from Christopher Quintero (Morgan Stanley): What investments enabled large-deal momentum, and how will you streamline future big deals?
  Response: Dedicated strategic account teams, robust implementation/change management, and product/security/integration work drove a record 17 $1M+ ARR adds; continued investment planned.

• Question from Christopher Quintero (Morgan Stanley): What unlocked accelerating Europe growth, and can learnings scale internationally?
  Response: Sustained GTM and R&D investment, local feature needs (e.g., bridge-strike avoidance), and lighthouse customers boosted Europe; approach is scalable to other regions.

• Question from Michael Turrin (Wells Fargo Securities): Where do you fit in the AI infrastructure build-out, and what are you seeing in public sector?
  Response: Construction, field services, and utilities are key beneficiaries; construction was top net new ACV mix for the 8th straight quarter; public sector adopting for efficiency with required security.

• Question from James Fish (Piper Sandler): Are $1M+ ARR customers mostly large enterprises or expanded mid-market, and how do you model timing variability?
  Response: Primarily large enterprises expanding across multiple products; $1M+ cohort now >20% of ARR; acknowledges longer, less predictable cycles can add variability.

• Question from Matthew Bullock (BofA Securities): Have tariff-related customer uncertainties eased, and are customers now better prepared?
  Response: Customers have adapted to a tariff-steady state, focusing on extending asset lifespans and utilization; Samsara’s maintenance/asset tools directly support this.

• Question from Matthew Bullock (BofA Securities): How did sales productivity vs capacity contribute to the beat?
  Response: Balanced growth from added capacity and higher productivity enabled by new products; will keep investing in capacity in H2.

• Question from S. Kirk Materne (Evercore ISI): How do you ensure broad product coverage in GTM—generalists, specialists, spiffs?
  Response: Lead with platform value via generalist reps supported by specialists; selectively use spiffs; focus on solving multi-problem operational needs.

• Question from S. Kirk Materne (Evercore ISI): Are integrations a checkbox or a real differentiator?
  Response: They are a key differentiator; depth/quality and bidirectional data flows across 350+ integrations deliver tangible customer value.

• Question from Jessica Wang (Raymond James): Any structural international differences or pricing aggression from competitors affecting growth?
  Response: Competitive set is stable; Samsara differentiates via a unified platform and ROI; competitors may discount, but customers prioritize value over price.

• Question from Daniel Jester (BMO Capital Markets): What’s the value/defensibility of your pre-delivery OEM installation program?
  Response: Pre-install simplifies large-fleet deployments, enabling day-1 readiness across dispersed locations and strengthening OEM partnerships.

• Question from Daniel Jester (BMO Capital Markets): Any changes in SMB/mid-market behavior versus enterprise strength?
  Response: Growth was broad-based; $100K+ ARR mix rose only from 58% to 59%, implying mid-market/SMB also grew well.

• Question from Dylan Becker (William Blair): What drove revenue outperformance—conservatism, linearity, go-lives?
  Response: Guidance philosophy unchanged; Q2 benefited from early closing of Q1-slipped deals and strong bookings linearity that flowed into revenue.

• Question from James Wood (TD Cowen): One year in, how is Asset Tags performing and can it move the needle?
  Response: Asset Tags address a large greenfield need; awareness is rising and large wins (e.g., 15,000 tags at Bonnie Plants) signal growing impact.

• Question from Junaid Siddiqui (Truist Securities): How are you balancing growth vs profitability going forward?
  Response: Maintaining a balance and staying above Rule of 40; investing to sustain rapid growth while expanding margins.

• Question from Junaid Siddiqui (Truist Securities): What’s driving gross margin strength and can it persist?
  Response: Improvements across supply chain, cloud/cellular, and support; expect more leverage below gross margin, with GM roughly stable.

• Question from Matthew Martino (Goldman Sachs): Did new products ramp faster than expected, and what does that mean for future ACV?
  Response: Early momentum came from design partners scaling; expect multi-quarter ramps with ongoing enhancements and broader trials.

• Question from Andrew DeGasperi (BNP Paribas Exane): New $100K+ customer adds slowed; is this due to landing larger customers?
  Response: Focus on ARR impact: $100K+ cohort ARR up 35% YOY to ~59% of total; added a record 17 $1M+ customers.

• Question from Mark Schappel (Loop Capital Markets): How have you adapted the sales process for a larger product set?
  Response: Lead with platform demos and operational discovery; customers self-select use cases (e.g., safety, maintenance, navigation) for multi-product lands.

• Question from Eleanor Smith (JPMorgan): Are you increasingly landing customers via non-fleet solutions?
  Response: Yes; more new logos land with multiple products, often beyond telematics/safety, including equipment monitoring and newer apps.