Samsara Plunges 10.79% Despite Strong Q1 Earnings

Samsara's stock price dropped by 10.79% in pre-market trading on June 6, 2025, despite the company reporting better-than-expected financial results for the first quarter of the fiscal year 2025.

Samsara reported a 30.7% year-on-year increase in revenue, reaching $366.9 million, which exceeded analysts' estimates. The company's non-GAAP profit of $0.11 per share was significantly higher than analysts' consensus estimates. Additionally, Samsara's adjusted operating income of $51.07 million surpassed expectations, with a 13.9% margin. The company also raised its full-year revenue guidance to $1.55 billion and its adjusted EPS guidance to $0.40.

Despite these positive financial results, investors expressed caution due to signs of slowing growth. The company's operating margin improved to -9.1% from -23.5% in the same quarter last year, but its free cash flow margin decreased to 12.5% from 14% in the previous quarter. The number of enterprise customers paying more than $100,000 annually increased to 2,638, but the growth rate slowed compared to previous quarters.

Samsara's CEO, Sanjit Biswas, highlighted the company's strong performance in the first quarter, with revenue growing 32% year-over-year in constant currency. The company's long-term sales performance has been impressive, with an annualized revenue growth of 40.3% over the last three years. However, sell-side analysts expect revenue growth to decelerate to 21.1% over the next 12 months, which may have contributed to investor caution.