Q4 2024 Samsara Inc Earnings Call

Physical operations power, our global economy.

Unknown Executive: Physical operations power our global economy. They keep our world running, transporting goods from point A to point B, building the infrastructure we rely on, keeping our essential utilities up and running, and so much more. But the world is rapidly changing. Pen and paper just don't cut it anymore.

Keep our world running.

Transporting goods from point a to point B building the infrastructure, we rely on keeping our essential utilities up and running.

And so much more.

But the world is rapidly changing and then paper just don't cut it anymore.

Unknown Executive: Real-time information is critical. And to thrive in today's world, physical operations need to be faster, smarter, and more efficient. That's why physical operations are transforming into what we call connected operations. But what does it mean to be a connected operation?

Real time information is critical.

And to thrive in today's world physical operations need to be faster smarter more efficient.

That's why physical operations are transforming into what we call connected operations, but what does it mean to be a connected operation.

Unknown Executive: Organizations with connected operations have complete real-time visibility from their vehicles, to their equipment, to their warehouses, to their employees in the field. They connect that data to the cloud, leveraging cutting-edge technology like AI to unlock newfound insights, and they use those insights to make smarter decisions every day so they can operate more safely, efficiently, and sustainably.

Organizations with connected operations have complete real time visibility from.

From their vehicles to their equipment to their warehouses to their employees in the field.

They connect that data to the cloud leveraging cutting edge technology like AI to unlock newfound insights and they use those insights to make smarter decisions every day. So they can operate more safely and efficiently.

And sustainably.

Connected operations.

Mike Chang: The future of how the world operates. Good afternoon, and welcome to Samsara's fourth quarter fiscal 2024 earnings call. I'm Mike Chang, Samsara's Vice President of Corporate Development and Investor Relations. Joining me today are Samsara Chief Executive Officer and Co-Founder Sanjit Biswas and our Chief Financial Officer, Dominic Phillips. In addition to our preferred remarks on this call, additional information can be found in our shareholder letter, press release, investor presentation, and SEC filings on our Investor Relations website at investors.samsara.com. The matters we'll discuss today include four forward-looking statements. Actual results may differ materially from those contained in the forward-looking statements and are subject to risks and uncertainties described more fully in our SEC filing.

The future of how the world operates.

Okay.

Good afternoon, and welcome to <unk> fourth quarter fiscal 2024 earnings call.

I might change I'm, sorry, as vice President of corporate development Investor Relations. Joining me today are Sam sorry, Chief Executive Officer, and co founder Sandeep Biswas, and our Chief Financial Officer, Dominic Phillips and.

In addition to our prepared remarks on this call additional information can be found in our shareholder letter press release, Investor presentation, and <unk> SEC filings on our Investor Relations website at investors that same sorry dot com.

The matters, we'll discuss today include forward looking statements actual results may differ materially from those contained in the forward looking statements and are subject to risks and uncertainties described more fully in our SEC filings.

Mike Chang: Any forelooking statements that we make on this call are based on assumptions as of today, March 7th, 2024, and we undertake no obligation to update these statements as a result of new information or future events unless required by law. During today's call, some of our discussions will include our fourth quarter fiscal 2024 financial results. We'd like to point out that the company reports non-GAAP results in addition to and not as a substitute for or superior to financial measures calculated in question. Reconciliation of GAAP to non-GAAP financial measures is provided in our press release and investor presentation. We'll make opening remarks, dive into the highlights for the quarter, and then open the call up for Q&A. With that, I'll hand over the call to Andrew.

Any forward looking statements that we make on this call are based on assumptions as of today March seven 2024, and we undertake no obligation to update update these statements as a result of new information or future events unless required by law.

During today's call some of our discussions will include our fourth quarter fiscal 2024 financial results.

We'd like to point out that the company reports non-GAAP results. In addition to and not as a substitute for or superior to financial measures calculated according to GAAP.

Reconciliations of GAAP to non-GAAP financial measures are provided in our press release and Investor presentation.

We will make opening remarks diamond highlights for the quarter and open the call up for Q&A with that I'll hand, it over hand over the call Sanjay.

Thanks, Mike and thank you everyone for joining us today.

Unknown Executive: Thanks, Mike, and thank you, everyone, for joining us. Samsara's FY24 was another year of durable and efficient growth. We ended FY24 with an ARR of $1.1 billion, growing 39% year-over-year. During the year, we added 611 customers into our 100k plus ARR cohort, bringing us to 1,848 large customers in total. Our momentum reflects the continued strength of our platform and the large market opportunity ahead of us.

<unk> FY 'twenty four was another year of durable and efficient growth. We ended FY 'twenty four with an error of $1 $1 billion growing 39% year over year.

During the year, we added 611 customers into a 100 K plus are our cohort, bringing us to 1848 large customers in total.

Our momentum reflects the continued strength of our platform and the large market opportunity ahead of us several factors drove our execution.

Unknown Executive: First, we're addressing a large market that's early in its digitization journey. Our customers represent industries that drive more than 40% of the global GDP and are the backbone of the economy. Second, we pioneered the Connected Operations Cloud, a singular system of record for physical operations, to address this. Third, we have built a multi-application platform that solves our customers' most challenging problems. We have a unique IoT data set that includes data from a broad and diverse group of vehicles, equipment, sites, and workers. It is also fed by a growing ecosystem of connected assets and third parties.

First we're addressing a large market that's early in his digitization journey, our customers represent the industries that drive more than 40% of the global GDP and are the backbone of the economy.

Second we pioneered the connected operations cloud a singular system of record for physical operations to address this market.

Third we have built a multi application platform that solves our customers' most challenging problems. We have a unique Iot data set that includes data from a broad and diverse group of vehicles equipment sites and workers is also fed by growing ecosystem of connected assets and third party systems.

Unknown Executive: And last, our increasing scale and strong unit economics drive operational efficiency. While we're still in the early innings of our customers' digitization journeys, we are proud of our progress and impact so far. In just eight years of selling, we're operating at a rare combination of scale, growth, and profit. We're the strategic partner to many of the world's leading and most complex physical operations organizations, and our large customer momentum continues to fuel our growth. We provide visibility into their operations and deliver clear ROI with payback periods often measured in money. Q4 was a milestone quarter for a large customer. We added 185 customers into our 100k plus ARR cohort, and this represents our fastest growing customer base. We also added a record 11 customers to our $1 million plus ARC.

And last our increasing scale and strong unit economics drive operational efficiency.

While we're still in the early innings of our customers Digitization journeys, we're proud of our progress and impact so far in just eight years of selling we're operating at a rare combination of scale growth and profitability.

We are the strategic partner to many of the world's leading and most complex physical operations organizations and our large customer momentum continues to fuel our growth we provide visibility into their operations and deliver clear ROI with payback periods often measured in months.

Q4 was a milestone quarter for our large customers. We added a record 185 customers into a 100 K plus coke are cohort. This represents our fastest growing customer group. We also added a record 11 customers into our 1 million plus are cohort.

Unknown Executive: I'd like to share two examples from this quarter that show our momentum with large. The first is with USIC, which is our largest new logo and our largest net new ACV deal ever. USIC is the leading provider of underground public utility locating services with more than 12,000 technicians and 48 offices. Their technicians mark utility lines to ensure public safety and protect and maintain our critical infrastructure. At the core of ESIC is their safe life culture, which is focused on eliminating at-risk behaviors and empowering their employees to protect themselves, their team members, and their community.

I'd like to share two examples from this quarter that sharp momentum with large customers. The first is with the U S. I C, which is our largest new logo in our largest net new ACB deal ever.

USA <unk> as the leading provider of underground public utility locating services with more than 12000 technicians in 48 states.

Their technicians, mark utility lines to ensure public safety and to protect and maintain our critical infrastructure.

At the core of via SSE as their safe life culture, which is focused on eliminating at risk behaviors and empowering their employees to protect themselves their team members and their communities.

Unknown Executive: They're using our video-based safety application to strengthen their safety, and they have already seen significant results. In a pilot with Samsara, USIC reduced mobile phone usage by 92%, no seatbelt usage by 85%, and rolling stops by 50%. We also expect USAC to increase fuel efficiency across its fleet with our vehicle telematics. This means less carbon emissions and lower fuel.

They are using our video based safety application to strengthen their safety program.

They have already seen significant results in a pilot with <unk> USA see reduced mobile phone usage by 92% no seatbelt usage by 85% and rolling stops by 50%.

We also expect USA to increase fuel efficiency across its fleet with their vehicle telematics. This means less carbon emissions and lower fuel costs.

The second is our expanded partnership with the leading provider of commercial and residential roofing siding windows decking and installation in North American building industry. They are fortune 500 company with more than 2300 vehicles and 7000 team members across 500 locations.

Unknown Executive: The second is our expanded partnership with the leading provider of commercial and residential roofing, siding, windows, decking, and insulation in the North American building industry. They're a Fortune 500 company with more than 2,300 vehicles and 7,000 team members across 500 locations. They became a customer a quarter ago with Telematics, and this quarter, they expanded with over $1 million in video-based safety and mobile experience management applications. One of their core values is to make every day safer. They're using video-based safety to improve safety, reduce accidents, and exonerate drivers.

They became a customer a quarter ago with telematics only.

This quarter, they expanded with over $1 million of video based safety and mobile experience management applications.

One of their core values is to make everyday safer, they're using video based safety to improve safety reduce accidents and exonerate drivers. The consolidated three vendors into one with mobile experience management, which theyre using to reduce mobile distractions and keep drivers safe.

Unknown Executive: They consolidated three vendors into one with mobile experience management, which they're using to reduce mobile distractions and keep drivers. In an early pilot with Samsara, they saw an 85% reduction in total safety events, a 91% reduction in distracted driving, and a 77% reduction in collision risk. These results deliver clear ROI to our customers. We are proud to partner with them to achieve their core values and operations. Samsara's connected operations cloud is powered by a flywheel of data from our customers' growing digitization.

And in early pilot with FEMSA. They saw an 85% reduction in total safety events, and 91% reduction distracted driving and a 77% reduction in collision risk events.

These results delivered clear ROI to our customers, we are proud to partner with them to achieve their core values and operational goals.

So I'm sorry, it's connected operations cloud is powered by a flywheel of data from our customers growing digitization efforts.

Unknown Executive: This enables AI-driven insights to help our customers operate more safely, efficiently, and sustainably. We've been investing in our cloud, which continues to grow and become more. Over the last fiscal year, our cloud processed more than nine trillion data points and 75 billion APIs, digitized more than 230 million workflows across our platform, and recorded more than 60 billion miles.

This enables AI driven insights to help our customers operate more safely efficiently and sustainably.

We've been investing in our cloud, which continues to grow and become more sophisticated.

Over the last fiscal year, our cloud processed more than nine trillion data points and 75 billion API calls digitize more than 230 million workflows across our platform and recorded more than 60 billion miles driven.

Unknown Executive: Our partner ecosystem, Samsara's App Marketplace, has also grown to include more than 270 integrations with third-party applications. Our growing data set accelerates our ability to deliver even more insights so our customers can take action and improve their operations. This helps our customers operate their businesses in completely new ways. They can also drive even more business impact while saving money. For example, many of our customers use real-time insights from our connected operations cloud to drive operational action. This results in fuel savings, lower insurance premiums, lower maintenance costs, improved asset utilization, and better worker hiring and retention. As we build for the long term, we are focused on expanding our multiproduct platform, growing our international markets, increasing our investments in security, and scaling our unique culture, which fuels our. This quarter, we released our Connected Forms application into general availability. Connected Forms is a workflow solution that allows our customers' frontline workers to streamline their operations.

Our partner ecosystem, Sam Sars App marketplace has also grown to include more than 270 integrations with third party systems.

Our growing data set accelerates our ability to deliver even more insights. So our customers can take action and improve their operations. This helps our customers operate their businesses in completely new ways. They can also drive even more business impact while saving money. For example, many of our customers use real time insights from our connected operations cloud to drive operation.

Actions. This results in fuel savings lower insurance premiums lower maintenance costs improved asset utilization and better worker hiring and retention.

As we build for the long term, we're focused on expanding our multi product platform growing our international markets and increasing our investments in security and scaling our unique culture, which fuels our growth.

This quarter, we released our connected forms application into general availability.

Connected forms is a workflow solution that allows our customers frontline workers to streamline their operations. This includes inspections and incident reports through digital forms of.

Unknown Executive: This includes inspections and incident reports through digital forms. A good example of how customers are already finding value with Connected Forms is Nextcloud. Next here recently merged with Patterson UTI to form the second largest oilfield services company in the US. They've been a customer since 2021 and expanded their partnership with us in Q4 to use Connected Form. They're using connected forms to help produce operational forms. Connected Forms ensures that each trip is safe and necessary to perform, considering the weather, hazardous road conditions, and driver readiness.

A good example of how customers are already finding value with connected forms is with next year.

Next year recently merged with Patterson UTI to form the second largest oilfield services company in the U S.

They've been a customer since 2021 and expanded their partnership with us in Q4 to use connected forms.

They're using connected forms to help reduce operational risk connected forms ensures that each trip is safe and necessary to perform considering the weather hazardous road conditions and driver readiness.

This quarter was also strong for international growth with 16% of net new ACD coming from non U S geographies.

Unknown Executive: This quarter was also strong for international growth, with 16% of net new ACV coming from non-U.S. geographies. As we look to the future, we're continuing to expand and gain customers in our new frontiers, including Mexico, Canada, and Western Europe. One of our key international wins this quarter is a major European construction services business with over 120 local operating companies and 17,000 employees. They deliver over 25,000 projects annually across many civil engineering construction sectors. We have partnered with them to advance their core values of safety, sustainability, and integrity. They're using Samsara's video-based safety and telematics products to help prevent accidents, reduce idling, lower insurance costs, and transition to an electronic. We've also continued to focus on protecting our customers and their data. Announced today, Samsara has achieved four industry-leading ISO certificates.

As we look to the future, we're continuing to expand and gain customers in our new frontiers, including Mexico, Canada and Western Europe.

One of our key international wins this quarter is a major European construction services business with over 120, local operating companies and 17000 employees. They deliver over 25000 projects annually across many civil engineering construction sectors sensor.

<unk> partnered with them to advance their core values of safety sustainability and integrity.

They're using stem Sars video based safety and telematics products to help prevent accidents reduce idling lower insurance costs and transition to an electric fleet.

We've also continued to focus on protecting our customers and their data announced today, Sam sorry was achieved for industry, leading ISO certifications.

Unknown Executive: This demonstrates our commitment to data security and privacy. It is an important step as we build on our strong foundation of customer data protection, data security, and privacy management. And last, as we grow and scale, our differentiated culture allows us to amplify our impact on our customers and community. In Q4, Glassdoor recognized Samsara as one of the best places to work in 2022.

This demonstrates our commitment to data security and privacy and is an important step as we build on our strong foundation of customer data protection data security and privacy management.

And last as we grow and scale, our differentiated culture allows us to amplify or impact on our customers and communities in Q4 Glassdoor recognized <unk> as one of the best places to work in 2024, and we are thrilled to have received many best places to work recognition throughout the year.

Unknown Executive: And we are thrilled to have received many best places to work recognitions throughout the year. We're proud of this milestone year. We surpassed $1 billion in ARR at 39% year over year growth, became adjusted free cash flow positive, and consistently achieved Rule of 40 in all four quarters. We are operating at a rare combination of scale, growth, and profit. It was an exciting quarter and year delivering on our mission to increase the safety, efficiency, and sustainability of the operations that power the global economy. We're grateful for the opportunity to partner with our customers as they modernize their operations. We look forward to another year of innovating and building solutions for our customers. Thank you to our customers, partners, investors, and Samsarians who are joining us on this call.

We're proud of this milestone year, we surpassed $1 billion near or at 39% year over year growth became adjusted free cash flow positive and consistently achieve rule of 40 in all four quarters.

We are operating at a rare combination of scale growth and profitability.

It was an exciting quarter and year delivering on our mission to increase the safety efficiency and sustainability of the operations of power of the global economy.

We're grateful for the opportunity to partner with their customers as they modernize their operations. We look forward to another year of innovating and building solutions for our customers. Thank you to our customers partners investors and <unk>, who are joining us on this journey.

Unknown Executive: We're also excited to see many of you at our annual customer conference Beyond on June 26 to 28 in Chicago, where we'll also be hosting an investor event. At Beyond, we'll be bringing together leaders across the industries we serve to discuss the state of physical operations, the challenges they're facing, and new ways to use Samsara to deliver value through digitization. We will also be announcing new products to further drive transformation for our community. We hope you'll join us. I'll now hand it over to Dominic to go over the financial highlights. Thank you, Sanjit.

We're also excited to see many of you at our annual customer conference beyond on June 26 to 28 in Chicago, where we'll also be hosting an investor day at beyond we'll be bringing together leaders across the industries, we serve to discuss the state of physical operations the challenges, they're facing and new ways to use time, sorry to deliver value to digitization.

We will also be announcing new products to further drive transformation for our customers, we hope you'll join us.

I'll hand, it over to Dominic to go over financial highlights from the quarter.

Thank you Sanjay It Q4 was another quarter of sustained high growth at scale ending a R. R was $1 1 billion and we added a quarterly record 99 million of net new <unk> or an increase of 39% year over year, our highest growth rate over the past 10 quarters. This was also the fourth consecutive quarter year over year.

Dominic Phillips: Q4 was another quarter of sustained high growth at scale. Ending ARR was $1.1 billion, and we added a quarterly record $99 million of net new ARR, or an increase of 39% year over year, our highest growth rate over the past 10 quarters. This was also the fourth consecutive quarter, year over year, net new ARR growth accelerated compared to the same period of the prior year at a larger scale. Q4 revenue was $276 million, growing 48% year-over-year, or 37% adjusted revenue growth. For full-year FY24, revenue was $937 million, an increase of 44% year-over-year or 41% adjusted revenue growth. As a reminder, Q4 of FY24 was a 14-week fiscal quarter, which happens every six years, instead of a typical 13-week quarter.

New AOR growth accelerated compared to the same period of the prior year at a larger scale.

Q4 revenue was $276 million growing 48% year over year or 37% adjusted revenue growth for full year FY 'twenty for revenue was $937 million, an increase of 44% year over year or 41% adjusted revenue growth.

As a reminder, Q4 of FY 'twenty four was a 14 week fiscal quarter, which happens every six years instead of a typical 13 week quarter.

Dominic Phillips: Adjusted revenue and adjusted revenue growth removed the impact of the additional week of revenue recognition in Q4 FY24 to enable comparability across periods. Several factors drove our strong top-line performance in Q4. First, we continue to focus on serving large enterprise customers to drive durable and efficient growth at scale. We now have 1,848 100K plus ARR customers, a quarterly record increase of 185, representing 49% year-over-year growth, the same growth rate as last quarter at a larger scale. We also saw particular strength within our largest customer. We now have 82 $1 million plus ARR customers, a quarterly record increase of 11, representing 61% year-over-year growth, accelerating from 54% growth last quarter at a larger scale. 100k plus ARR customers represent our fastest growing cohort and make up 52% of our total ARR, up from 48% one year ago and 45% two years ago.

Adjusted revenue and adjusted revenue growth removed the impact of the additional week of revenue recognition in Q4, FY 'twenty four to enable comparability across periods.

Several factors drove our strong topline performance in Q4 first we continue to focus on serving large enterprise customers to drive durable and efficient growth at scale. We now have 1848, 100, K plus a or our customers a quarterly record increase of 185, representing 49%.

Year over year growth the same growth rate as last quarter at a larger scale.

We also saw particular strength within our largest customers. We now have 82 $1 million plus a our customers a quarterly record increase of 11, representing 61% year over year growth accelerating from 54% growth last quarter out of larger scale.

100, K plus <unk> customers represent our fastest growing cohort and make up 52% of our total <unk> up from 48% one year ago, and 45% two years ago.

This higher <unk> mix from larger customers coincides with a lower a our mix from smaller customers to reflect this trend and align with where we are investing for future growth. We're updating our definition of core customer from five K plus <unk> customers previously to 10-K plus are our customers.

Dominic Phillips: This higher ARR mix from larger customers coincides with a lower ARR mix from smaller customers. To reflect this trend and align with where we're investing for future growth, we're updating our definition of a core customer from 5K plus ARR customers previously to 10K plus ARR customers. Our non-core customers with less than 10K of ARR represent just 8% of the total ARR mix, down from 14% two years ago, and we expect this mix to continue declining over time.

Our noncore customers with less than 10-K, if air are represent just 8% of total <unk> mix down from 14% two years ago, and we expect this mix to continue declining over time.

Second this quarter was a balanced mix of landing new customers and expanding existing customer relationships.

Dominic Phillips: Second, this quarter was a balanced mix of landing new customers and expanding existing customer relationships. For new logos, we added a quarterly record number of core and large customers in Q4. We also added two $1 million plus new logos, including our largest deal ever with USIC.

For new logos, we added a quarterly record number of core and large customers. In Q4. We also added two $1 million plus new logos, including our largest deal ever with U S. I C and all of our top 10, new customers signed to multi product transactions.

Dominic Phillips: And all of our top 10 new customers signed multiproduct transactions. For expansions, we booked a quarterly record six $1 million plus expansion deals, and eight of the top ten expansions in Q4 were multi-product transactions. Most notably, a large existing customer in the construction industry, already using vehicle telematics, video-based safety, and equipment monitoring, signed a more than $1 million expansion in Q4 to become our largest overall customer. And this was their 20th expansion since becoming a customer back in 2018. Third, we continued to demonstrate strong execution across several frontier markets. First, 16% of net new ACV came from international geographies compared to 14% in Q4 last year, driven by strength in Mexico and Europe.

For expansions, we booked a quarterly record six $1 million plus expansion deals and eight of the top 10 expansions in Q4, who are multi product transactions, most notably a large existing customer in the construction industry already using vehicle telematics video based safety and equipment monitoring signed up more than 1 million dollar expansion.

In Q4 to become our largest overall customer and this was their 20th expansion since becoming a customer back in 2018.

Third we continued to demonstrate strong execution across several frontier markets first 16% of net new ACD came from international geographies compared to 14% in Q4 last year driven by strength in Mexico and Europe. Both regions added a record number of 100, K plus are our customers and accelerate.

Dominic Phillips: Both regions added a record number of 100k plus ARR customers and accelerated year-over-year ARR growth sequentially and compared to Q4 last year at a larger scale. Second, our construction vertical contributed a quarterly record 20% of net new ACV in Q4, the second consecutive quarter that construction was our leading vertical. Additionally, 87% of Q4 net new ACVs came from non-transportation verticals, an increase from 81% in Q4 last year. And lastly, while year over year ARR growth for both video-based safety and vehicle telematics accelerated sequentially in Q4 at a larger scale, we also saw strength in emerging products that provide additional expansion opportunities within our existing customer base. In Q4, we signed our second largest equipment monitoring deal, an approximately $1 million upsell as part of a broader expansion to one of North America's largest full-service grocery wholesalers.

Year over year, AOR growth sequentially and compared to Q4 last year at a larger scale.

Second our construction vertical contributed a quarterly record at 20% of net new ACD in Q4, the second consecutive quarter that construction was our leading vertical.

Additionally, 87% of Q4 net new HCV came from non transportation verticals and increased from 81% in Q4 last year.

And lastly, while year over year AOR growth for both video based safety and vehicle telematics accelerated sequentially in Q4 at a larger scale. We also saw strength in emerging products that provide additional expansion opportunities within our existing customer base.

In Q4, we signed our second largest equipment monitoring deal and approximately $1 million upsell as part of a broader expansion to one of North America's largest full service grocery wholesalers. We also released connected forms into general availability in Q4 and signed up more than 250 K expansion deal with next year oilfield services.

Dominic Phillips: We also released connected forms into general availability in Q4 and signed a more than $250k expansion deal with Nexier Oilfield Services. In addition to driving strong top-line growth, we continue to deliver operating efficiency improvements across our business as we scale. Non-Gap Gross Margin was 76% in Q4, a quarterly record, and approximately 3 percentage points higher year over year, driven largely by optimizing cloud, cellular, warranty, and support costs. Non-GAP operating margin was 5% compared to negative 8% in Q4 last year, an improvement of approximately 13 percentage points year over year, driven by leverage across all functions.

In addition to driving strong top line growth, we continue to deliver operating efficiency improvements across our business as we scale.

non-GAAP gross margin was 76% in Q4, a quarterly record and approximately three percentage points higher year over year, driven largely by optimizing cloud cellular warranty and support costs.

non-GAAP operating margin was 5% compared to negative 8% in Q4 last year, an improvement of approximately 13 percentage points year over year, driven by leverage across all functions.

Dominic Phillips: And adjusted free cash flow margin was 6% in Q4, a quarterly record, compared to negative 3% in Q4 last year, an improvement of approximately nine percentage points, primarily from improved operating leverage and continued working capital optimization. Also of note, in Q4, we settled previously disclosed lease-related litigation. After vacating the building in October 2021, our remaining unpaid lease obligation was more than $130 million, and the settlement included a cash payment of $60 million. Given the non-recurring nature of this legal settlement, it is excluded from adjusted free cash flow.

And adjusted free cash flow margin was 6% in Q4, a quarterly record compared to negative 3% in Q4 last year, an improvement of approximately nine percentage points, primarily from improved operating leverage and continued working capital optimization.

Of note in Q4, we settled previously disclosed lease related litigation after vacating the building in October 2021, our remaining unpaid lease obligation was more than $130 million and the settlement included a cash payment of $60 million.

Given the nonrecurring nature of this legal settlement it is excluded from adjusted free cash flow.

Dominic Phillips: And finally, we reduced our annual equity dilution by almost 40% this year from 4.4% in FY23 down to 2.7% in FY24. Okay, now turning to guidance. As we enter FY25, our third year as a public company, we continue to have more forecast visibility and predictability than in previous years. As a result, our FY25 guidance philosophy will be less conservative than it was in FY24.

And finally, we reduced our annual equity dilution by almost 40% this year from four 4% in FY2023 down to two 7% in FY 'twenty four.

Okay now turning to guidance as we enter FY 'twenty five our third year as a public company, we continue to have more forecast visibility and predictability than in previous years.

As a result, our FY 'twenty five guidance philosophy will be less conservative than it was in FY 'twenty for this is the same exact framework, we apply to our initial FY 'twenty four guidance at the beginning of last year, which was also less conservative than our initial FY 'twenty guide the prior year.

Dominic Phillips: This is the exact framework we applied to our initial FY24 guidance at the beginning of last year, which was also less conservative than our initial FY23 guide the prior year. And after analyzing various scenarios, we're also confident that our FY25 guidance is adequately de-risked to account for the potential impact of worsening macroeconomic factors on our business. For Q1 FY25, we expect total revenue to be between $271 and $273 million, representing year-over-year growth between 33 and 34 percent, non-GAAP operating margin to be approximately negative 3 percent, and non-GAAP EPS to be between zero and one cent. For the full-year FY25, we expect revenue to be between $1.186 and $1.196 billion, representing year-over-year growth between 27% and 28%, or between Non-GAAP operating margin is expected to be approximately 2%, and non-GAAP EPS is expected to be between $0.11 and $0.13.

And after analyzing various scenarios. We're also confident that our FY 'twenty five guidance is adequately derisked to account for the potential impact of worsening macroeconomic factors on our business.

For Q1, FY 'twenty five we expect total revenue to be between 271 in 273 million representing year over year growth between 33 and 34%.

non-GAAP operating margin to be approximately negative, 3% and non-GAAP EPS to be between zero and one cent.

For full year FY 'twenty five we expect revenue to be between 1.186, and 1.196 billion representing year over year growth between 27, and 28% or between 29 and 30% after adjusting for the extra week in Q4, FY 'twenty four non-GAAP operating margin to be approximately 2% and non-GAAP.

Yes to be to be between 11 and 13 cents.

Dominic Phillips: And finally, please see the additional modeling notes in our shareholder letter. So to wrap up, we are pleased with our Q4 and full year FY24 performance. This was a year of accelerating growth at a larger scale while continuing to drive more operating leverage. We are digitizing the world of physical operations and helping our customers become safer, more efficient, and more sustainable. With our large markets, products, and customer focus, we are well-positioned to continue delivering durable and efficient growth. And with that, I'll hand it over to Mike to moderate the Q&A. Thanks, Dominic.

And finally, please see the additional modeling notes in our shareholder letter.

So to wrap up we are pleased with our Q4 and full year FY 'twenty for performance. This was a year of accelerating growth at a larger scale, while continuing to drive more operating leverage.

We are digitizing the world of physical operations, and helping our customers become safer more efficient and more sustainable.

With our large markets products and customer focus we are well positioned to continue delivering durable and efficient growth and with that I'll hand, it over to Mike to moderate Q&A. Thanks Dominic.

Mike Chang: We will now open the line up for questions. When it's your turn, please limit your questions to one main question and one follow-up question. The first question today comes from Keith Weiss with Morgan Stanley, followed by Matt Hedberg with RBC. Excellent. Thank you guys for taking the questions and congratulations on a really outstanding quarter. And I guess that's the question.

We will now open the lineup for questions. When it's your turn please limit your questions to one main question and one follow up question.

The first question today comes from Keith Weiss with Morgan Stanley followed by Matt Hedberg with RBC.

Thank you guys for taking the questions and congratulations on a really outstanding quarter and I guess, that's the question.

Keith Weiss: Accelerating net new ACV growth, growing only almost 40 percent in the net new component. And frankly, I mean, I've spent the week at our Morgan Stanley TMT conference, and the spending environment sounds a little bit better, but not that much better at all. The macro environment doesn't seem that much better. So can you help us explain what it was?

Accelerating net new ACD growth Crone, only almost 40% in the net new component and frankly, I mean, I've spent the weekend or Morgan Stanley TMT conference and the spending environment sounds a little bit better, but not that much better at it all the macro environment doesn't seem that much better. So can you help us explain what was it what was the unlock.

Unknown Executive: What was the breakthrough within Samsara over the last couple of quarters that has enabled you guys to accelerate and get to these levels of growth, which we're frankly just not seeing anywhere else in the software landscape right now? Yeah, so maybe I'll take the first part of that. But again, I think it comes down to the fact that we're selling into a slightly different budget than a lot of other software companies. We're selling into the operations budget, you know, which tends to be more resilient. And, you know, also, our solutions are used to drive real hard ROI. So customers are deploying our software, and they're using it to find cost savings and to drive more safety within their organizations.

Within some Sarah over the last couple of quarters that has enabled you guys to accelerate and get to these levels of growth, which were frankly, just not seeing anywhere else in the software landscape right now.

Yeah, So maybe I'll take the first part of that but again I think it comes down to the fact that we're selling into a slightly different budget than a lot of the other software companies were selling into the operations budget, which tends to be more resilient.

And also our solutions are used to drive real hard ROI. So customers are deploying our software and and they're using it to find cost savings and to drive more more safety within their organizations and then the other thing I would point out even internally as we've discussed now for several quarters we.

Unknown Executive: And then the other thing I would point out, internally, as we've discussed now for several quarters, you know, we have made a concerted effort to add more sales capacity to the business. And that sales capacity clearly came online and continued to ramp and drove more overall, you know, productivity. And so we're pleased with both of those results. There may be a follow-up on the back of that.

They have made a concerted effort to add more sales capacity into the business and that sales capacity clearly came online and continue to ramp in.

And drove more overall productivity and so we're pleased with with both of those results.

And then maybe as a follow up on the back of that how should we think about the expansion of that sales capacity into the forward fiscal year.

Unknown Executive: How should we think about the expansion of sales capacity into the forward fiscal year? So I'd say we are ending headcount. You know, we grew it just under 30% in FY24. I would say that our headcount in FY25 will grow at least at a similar rate. Again, we've got a big market opportunity. And, and so we're, you know, we're still aggressively hiring into FY25. Similar to previous years, about half, maybe just under half of our overall net headcount additions will go into sales and marketing, and a portion of that is quota capacity that will lead to, you know, investments for future growth. Outstanding. Congratulations, Kasthuri.

So I'd say, we are ending head count.

Grew at just under 30% in FY 'twenty four I would say that our our head count in FY 'twenty five we'll grow at least at a similar rate again, we got a big market opportunity.

And.

And so we're still aggressively hiring into FY 'twenty five similar to previous years about half maybe just under half of our overall net head count additions will go into sales and marketing and a portion of that is you know quota capacity that will lead to our investments for future growth.

Congratulations guys.

Our next question comes from Matt Hedberg with RBC fall.

Kasthuri Gopalan Rangan: Our next question comes from Matt Hedberg with RBC, followed by Aleksandr Zukin with Wolf. Great. Thanks for taking my questions, guys. And I'll offer my congratulations as well.

By Alex Zukin with Wolfe.

Great. Thanks for taking my questions guys at all for my congrats as well really strong year here.

Matthew George Hedberg: Really strong year here. The other thing that stood out to me was growth in large customers. And I guess, can you put a finer point on what's driving it, like, what are the most important factors driving the strength? And how durable do you think that success is with these large customers? Hey, Matt, this is Sanjit.

The other thing that stood out to me was growth in large customers and I guess you know.

Can you put a finer point on whats driving like what are the most important factors driving the strength and how durable do you think that successes with these large customers.

Hey, Matt This is Sanjay I would say.

Sanjit Biswas: I would say, if you think back to my prepared remarks, we focus on large, complex physical operations companies; they have a lot of real world operational challenges and problems, and those relate to safety. So operational safety out on the front lines, they're trying to reduce risk. In other words, they're finding ways to be more efficient in terms of how they operate their business, how they drive their routes, how they operate their assets, and they're trying to figure out ways to be more sustainable. These are evergreen problems.

If you think back to my.

Prepared remarks, we focus on large complex physical operations companies. They have a lot of real world operational challenges and problems those relate to safety. So operational safety out on the front lines, they're trying to reduce risk in other words, they're finding ways to be more efficient in terms of how they operate their business how they drive their routes how they operate their assets and they're trying to figure.

That would be more sustainable these are evergreen problems and this is a very very large market opportunity. We're talking about a $60 billion Tam growing 20% year over year and I would say these customers largely speaking different sophisticated but there in these early innings of Digitization. So we think that this can go on for some time, yeah, I mean, just and to add on that obviously we.

Sanjit Biswas: And this is a very, very large market opportunity. We're talking about a $60 billion TAM growing 20% year over year. And I would say these customers, largely speaking, they're sophisticated, but they're in these early innings of digitization. So we think that this can go on for a long time. Yeah, I mean, just to add on that, obviously, we accelerated the year-over-year growth for million-dollar-plus customers. This is the fourth consecutive quarter that we had a quarterly record for 100k-plus customer additions. And then, obviously, we signed our largest net new ACV deal ever with USIC.

The year over year growth for a million dollar plus customers. This is the fourth consecutive quarter that we had a quarterly record for 100, K plus customer additions and then obviously, we signed our largest net new HCV deal ever with with U S. I C and so we're seeing a lot of momentum with large customers.

Unknown Executive: And so we're seeing a lot of momentum with large customers. Exciting stuff. Dom, one for you.

Exciting stuff Tom one for you.

Dominic Phillips: You don't guide the ARR, but I'm wondering if you could help us with any sort of, you know, guideposts or guardrails. Think about ARR growth, some of the building blocks, maybe relative to your adjusted revenue growth target. I think it was 29 to 30% for the year. Sure, I mean, I would just say, you know, first, obviously, we came off a really strong year in FY24; we added 307 million of incremental ARR, and grew it 30% year over year. That's an acceleration from 9% net new ARR growth in FY23, and obviously at a much larger scale. As I said in my prepared remarks, also, Q4 was the highest net new ARR growth that we've seen in And as we pointed out in our modeling notes, that we think that we can at least match that amount of net new ARR in FY25. We're obviously still monitoring, you know, macro uncertainty, and we are adding a lot of sales capacity.

Don't guide to <unk>, but I'm wondering if you could help us with any sort of.

Guidepost or guardrails.

Think about <unk> growth some of the building blocks may be relative to your adjusted revenue growth target I think it was 29% to 30% for the year.

Sure I mean, I would just say you know first obviously, we came off a really strong year in FY 'twenty four we added $307 million of incremental <unk> grew at 30% year over year, that's an acceleration from 9% net new <unk> growth in FY 'twenty, three and obviously at a much larger scale as I said in my prepared remarks also Q4 was the highest net new <unk> growth that we've seen in the last 10.

Quarters.

And as we pointed this out in our modeling notes that we think that we can at least match that amount of net new <unk> in FY 'twenty five we're obviously still monitoring macro uncertainty and we are adding a lot of sales capacity and so you know monitoring the sales rep productivity.

Dominic Phillips: And so, you know, monitoring sales rep productivity, but if those headwinds don't come to fruition, you know, we like the capacity that we've added, and we're going to continue to add more. So I think I'd say that's how we're thinking about it to start out the year. And, you know, we'll have better visibility as we make our way through FY25. Thanks a lot, guys. The next question comes from Aleksandr Zukin with Wolf, followed by Michael Turrin with Wolf.

But if those if those headwinds don't come to fruition, we like the capacity that we've added and we're going to continue to add more so I think I'd say, that's how we're thinking about it to start out the year and we'll have better visibility as we as we make our way through FY 'twenty five.

Thanks, a lot guys.

The next question comes from Alex <unk> with Wolfe, followed by Michael turn with Wells Fargo.

Hey, guys congrats on that.

Aleksandr J. Zukin: Hey guys, congrats on a truly remarkable quarter. I guess you had a kind of a trifecta of the largest net new deal, the largest amount of 100,000 ads, and also what seems to be accelerating sales cycles, meaning your newest products are getting more traction faster than even your previous cohort of products. So maybe just help us understand on either of those dimensions, what's the incremental significance to future growth, meaning the largest land ever, is that kind of continuing to be a reference customer, and you see, you know, a continual cohort of potentially larger lands now that you're selling a lot more comprehensive of a platform package at, like basically from the start, and therefore, you know, I don't know, it's driving meaningfully higher I would, hey Aleks, it's Dominic. I would say that I think it's just important to also know that the ARR, the year of your ARR growth for our core products, telematics, and safety, accelerated, the overall ARR accelerated sequentially. So it was a very strong, you know, telematics and safety quarter.

A truly remarkable quarter I guess, you had a kind of a trifecta of largest net new.

Deal largest amount of 100000 ads and and also what seems to be accelerating sales cycles, meaning your newest products are getting more traction faster than even your previous cohort of products. So maybe just help us understand on either of those dimension.

<unk>.

What's the incremental significance to the future growth, meaning that the largest land ever is that kind of continuing to levy a reference customer and you see.

A continual cohort of potentially larger lands now that you're selling a lot more comprehensive of a platform package.

Basically from the start and therefore.

It's driving meaningfully higher productivity of reps or how are all three of those things kind of playing together.

Hey, Alex it's Dominic I would say that I think it is important also know that the air are.

The year over year <unk> growth for our core products telematics N safety accelerated the overall AOR accelerated sequentially. So it was a very strong <unk>.

Telematics and safety quarter, but we are starting to see some of these emerging products you know.

Dominic Phillips: But we are starting to see some of these emerging products, you know, be attached to many of the deals, specifically new customers. I called out that all 10 of our top 10 new customers were multi-product transactions. And so I think it just gives us more opportunities to create more value for customers, whether it's a new customer or expanding into an existing customer. And a lot of the new products that we're adding, such as scaling equipment monitoring and mobile experience management connected forms, are just opportunities for us to expand deal sizes. And Sanjit, maybe one for you.

Be attached in and many of the deals specifically new customers I called out that all 10 of our top 10, new customers were multi product transactions and so I think it just gives us more opportunities to create more value for customers, whether it's a new customer or expanding into an existing customer and a lot of the new products that we're adding scaling equipment monitoring.

And mobile experience management connected forms are just opportunities for us to to expand the deal sizes.

Perfect and then Sanjay maybe one for you you referenced some potential exciting new products coming.

Sanjit Biswas: You referenced some potential exciting new products coming later this year in June. And I guess, on the backdrop of your platform having a ridiculous amount of great data for your customers, is there anything exciting to think about with the potential to layer on any kind of AI or generative AI use cases on that corpus of data to be further monetized in the platform? Absolutely. And Aleks, I'm going to have to use that ridiculous amount of good data line. That's fantastic!

Later this year.

In June and I guess on the backdrop of your platform has a.

Ridiculous amount of kind of great data for your customers.

I guess is there anything exciting to think about with the potential to layer on any kind of AI or generative AI use cases on that corpus of data to be further monetizing the platform.

Absolutely and Alex I'm going to have to use a ridiculous amount of good data line. That's fantastic. We absolutely are planning to leverage the platform. That's what the customers come to us for they like that all of these applications running on the same platform sharing data with each other some of the newer applications. We released like connected forms and M M and even equipment monitoring.

Sanjit Biswas: We absolutely are planning to leverage the platform. That's what the customers come to us for. They like that all of these applications are running on the same platform, sharing data with each other. Some of the newer applications we've released, like Connected Forms and MEM, and even Equipment Monitoring, leverage that. And just to give you a sense of how we can use generative AI in the operations use case, if you think about Connected Forms, it's basically digitizing paperwork.

They leverage that and just to give you a sense of how we can use generative AI and the operations use case, if you think about connected forms and it basically is digitizing paperwork and we have a lot of operational context, we know where the user is we know what the asset is that there maybe maintaining are monitoring and we can fill out a lot of these form fields automatically and speed up their workflow.

Sanjit Biswas: And we have a lot of operational context. We know where the user is. We know what the asset is that they're maybe maintaining or monitoring. And we can fill out a lot of these form fields automatically and speed up their workflow. We can also understand sort of what the next step should be, that sort of thing.

We can also understand sort of what the next step should be that sort of thing. So that's a little bit of a preview, but I would encourage you all to come to beyond and hear about the new products in June.

Aleksandr J. Zukin: But I would encourage you all to come to Beyond and hear about the new products in June. I will do. Thank you, guys. The next question comes from Michael Turrin with Wells Fargo, followed by Derek Wood with TD Cowen. Hey, great.

Will do thank you guys.

The next question comes from Michael turn with Wells Fargo, followed by Derrick Wood with TD Cowen.

Hey, great. Thanks, I appreciate you taking the questions.

Michael James Turrin: Thanks. I appreciate you taking the time to answer the questions. Dominic, in the letter and remarks, you mentioned less conservatism in the guide. It sounds like it's slow progress relative to what we saw at the start of last year. But can you just walk us through the rationale and the factors you're considering there alongside what's providing the better visibility over time? Yeah, I would just, again, stress this is the same commentary, the same guidance framework that we provided on the Q4 call last year, the same playbook. It's just that we're entering our third year as a public company. We have more forecast predictability, and therefore, we need less conservatism in our guide than we needed during our second year, where we needed less at that time than during our first year post IPO. And so that is really what's driving the comment. But at the same time, I just want to reiterate that we do recognize that there is macro uncertainty that could have an impact on future demand. We're not seeing it.

Dominic in the letter and remarks, he mentioned less conservatism in the guide it sounds like it's just continued progress relative to what we saw at the start of last year, but can you just walk us through the rationale and the factors you are considering their alongside what is providing better visibility over time, yeah. I would just again stress. This is the same.

Larry same guidance framework that we provided on the Q4 call last year same same playbook is just we're entering our third year as a public company, we have more forecast predictability and therefore, we need less conservatism in our in our guide then we didn't need it during our second year, where we needed less at that time, then during our first year post IPO and so that.

That is really what's driving the comment at the same time I just want to reiterate that we do recognize that there's macro uncertainty that that could have an impact on future demand, we're not seeing yet.

Dominic Phillips: And we've run a number of different downside scenarios on our operating plan as well, and we're confident that we can hit this initial guidance, regardless of what happens. And that is the de-risk commentary as well. If we don't see the macro headwinds, we obviously have an opportunity to raise our guidance throughout the year. It just won't be at the same rate that it has been in previous years, and we just want to make sure that investors appreciate that going into FY25. All make sense.

And we've run a number of different downside scenarios on our operating plan as well and we're confident that we can hit this initial guidance regardless of what happens and that is that the DRAM commentary as well if we don't see the macro headwinds. We obviously you have opportunity to raise our guidance throughout the year. It just won't be at the same rate that it has been in previous years and we just want to make sure that investors appreciate that going into FY <unk>.

Five.

All makes sense. The letter also mentioned your expansion targets are unchanged, even our increasing scale the 115% to 120% target. So can you just.

Dominic Phillips: The letter also mentioned your expansion targets are unchanged, even at increasing scale, the 115 and 120% targets. So can you just spend some time with us on the drivers of durable expansion within the model and how we should think about just underlying expansion with the core products versus the evolution of cross-sell into that emerging product bucket over time and what keeps those expansion rates holding relatively consistent here? Yeah, thanks.

Spend some time with us on the drivers of durable expansion within the model and how we should think about just underlying expansion with the core products versus the evolution of cross sell into that emerging product bucket over time, and what keeps us expansion rates holding relatively consistent here.

Yeah. Thanks, we just had a really consistent balanced mix within our net new ATV of new logos and expansions in this quarter, 53% of net new HCV came from expansions, 47% from from new logos. So that that's been very consistent and then within the expansions, there's a really healthy mix of both upsells to existing customers.

Dominic Phillips: We just had a really consistent balanced mix within our net new ACV of new logos and expansions. In this quarter, 53% of net new ACV came from expansions, and 47% from new logos. So that's been very consistent.

Dominic Phillips: And then within the expansions, there's a really healthy mix of both upsells to existing customers where they're doing a phased rollout of existing products across a broader set of assets or employees, as well as cross-sells into new products. And so I think many of our customers, our larger customers, will roll out over time. And that allows us to have confidence in durable upsell growth. And then, obviously, as we increase our product velocity, we're seeing more and more adoption of new products. And that gives us confidence. Thanks very much.

They're doing a phased rollout of existing products across a broader set of of assets or or or employees as.

As well as cross sells and to enter into new products and so I think many of our customers our larger customers, we'll rollout over time and that that allows us to have confidence in and durable upsell growth and then obviously as we increase our product velocity, we're seeing more and more attach of new products and that gives us the confidence.

Thanks very much.

The next question comes from Derrick Wood with TD, Kalla, and followed by Matt Pfau with William Blair.

James Derrick Wood: The next question comes from Derek Wood with TD Cowell and is followed by Matt Pfau with William Blair. Hey, guys. Thanks. Congrats on just an amazing quarter, an amazing year. Sanjit, I'll start with you.

Hey, guys. Thanks, Congrats on just an amazing quarter, an amazing year Sanjay will start with you.

Sanjit Biswas: Interesting to hear about that vendor consolidation taking place with the Roofing Products Company. And one of those points of consolidation you mentioned was the displacement of an enterprise mobility management solution. That's a pretty sizable software category in itself with a different set of vendors than I think you've historically competed against. Can you talk about kind of what the value pitch is to get customers to replace existing solutions there? And then just talk about what the landscape looks like around the enterprise mobility management market. Is it like the telematics market with a bunch of older legacy vendors, or what does that look like today? Sure. So in terms of what's in it for the customer, it's really that connectivity with the rest of the data on our platform. The way that our mobile experience management solution works is it's able to lock a tablet if it's in a vehicle that's moving more than 30 miles per hour. You can set the threshold.

Interesting to hear about that vendor consolidation, taking place with the roofing products company and one of those points of consolidation you mentioned was a displacement of an enterprise mobility management solution.

That's a pretty sizeable software category in of itself with a different set of vendors that I think you've historically competed against can you just talk about kind of what's the value pitch is to get customers to displace existing solutions there.

And then just talk about what the landscape looked like around that that enterprise mobility management market is it like the telematics market with a bunch of older legacy vendors or what does that look like today sure. So in terms of what's in it for the customer it's really that connectivity with the rest of the data on our platform the way that our mobile experience management solution works is it's able to.

Locke of tablet if it's in a vehicle that's moving more than 30 miles an hour you can set the threshold. So that's an example of something that we can do that our existing legacy M. M player camps. We can also customize the screen, we can integrate with those workflows. So theres a lot there for the customer and most importantly, it's targeted to the operations user in the operations by.

Sanjit Biswas: So that's an example of something that we can do that an existing legacy MEM player can't do. We can also customize the screen. We can integrate with those workflows, so there's a lot there for the customer. And most importantly, it's targeted to the operations user and the operations buyer as opposed to needing to be something that IT needs to take on as a project. So it's really us who are there with the buyer who's in operations. We're solving some very real world problems, and they're coming to us saying, "We wish we had a way that we could manage these devices where, you know, they can only use a couple of apps that they need to be on the job." They're not distracted on the road.

Here as opposed to needing to be something that I need to take on as a project. So it's really.

We're there with the buyer who's in operations, we're solving some very real world problems and they're coming to us, saying, we wish we had a way that we can manage these devices, where they can only use a couple of apps that they need to to be on the job they're not distract on the road. It helps improve their safety. So I think we're at the right place at the right time with the buyer in terms of that landscape.

Sanjit Biswas: It helps improve their safety, so I think we're in the right place at the right time with the buyer. In terms of that landscape, I would say, generally speaking, it's also fragmented. Like you said, there are different players, but we're very unique in our offering in that it's connected to the rest of our connected operations.

I would say generally speaking it's also a fragmented like you said they are different players, but we're very unique in our offering and that it's connected into the rest of our connected operations platform.

Got it that is helpful and I don't know whether fewer Don but I wanted to ask about the construction vertical things like that I mean.

Dominic Phillips: That is helpful. And I don't know whether or not you're Dom, but I wanted to ask about the construction vertical. Seems like that's humming quite nicely for you guys.

Right nicely for you guys now two quarters in a row, what makes this vertical stand out above and beyond the others right now and I guess, how are you feeling about momentum and sell in video not into vehicles, but video into sites site locations.

Dominic Phillips: Now, two quarters in a row. What makes this vertical stand out above and beyond the others right now? And I guess, how are you feeling about momentum and selling video, not into vehicles, but video into sites, site locations? Yeah, I think, you know, the point of the kind of emerging products commentary, you know, every quarter is to make the point that we're really selling into a broad set of industry verticals, physical operations, making up, you know, 40% of global GDP. And we don't have one industry vertical, you know, of customers that makes up the majority of our ARR. And, you know, we've had some success in industries like the public sector this year that we've called out. And over the last two quarters, construction has, has, you know, been stronger.

Yeah, I think you know that.

The point of the kind of emerging products commentary every quarter, just just as to make the point that we're really selling into a broad set of industry verticals physical operations, making up 40% of global GDP and we don't have one industry vertical of.

Customers that makes up the majority of our of our our and we've had some success in industries like public sector. This year that we've called out in over the last two quarters.

Construction has has you know has been stronger and we're seeing all of our products within within that sector safety and telematics a lot of equipment and then some of these newer products M M and connected forms and so.

Sanjit Biswas: And we're seeing all of our products within that sector, safety and telematics, a lot of equipment, and then some of these newer products, MEM, and connected forms. And so the customer that I mentioned on the call that did their 20th upsell since 2018, that is now our largest customer in the construction vertical. And so when you get some kind of chunky expansion deals like that in the quarter, that definitely helps that overall net new ACV mix. If I can add a little bit of customer perspective, also, I would say the video-based safety application where we're in the vehicle is, relatively speaking, underpenetrated.

The the the customer that I mentioned on that on the call that did their 20th upsell. Since 2018 that is now our largest customers in the construction vertical and so when you get some kind of chunky expansion deals like that in the quarter that that definitely helps that overall net new ACD mix, if I can add a little bit of a customer perspective also I would say the video based safety application, where we are in there.

So relatively speaking Underpenetrated this is not a.

Sanjit Biswas: This is not an industry segment that has adopted the legacy product, so they're seeing value really for the first time. So they're very excited about it. And many customers have shared with me that a lot of the risk actually occurs when they're driving around. It's when they're driving to and from the job site when they're driving on the road.

The industry segment that had adopted the legacy products. So theyre seeing value really for the first time, so they're very excited about it and many customers have shared with me that a lot of the risk actually occurs when they're driving around its when they're driving to and from the job site when they're driving over the road. So while it's not typically considered a telematics or video based safety use case construction.

Sanjit Biswas: So while it's not typically considered a telematics or video-based safety use case, construction is an exciting industry where we can solve a lot of problems. Awesome, thanks. The next question comes from Matt Pfau with William Blair, followed by Junaid with Truist.

An exciting industry, where we can solve a lot of problems for the customer.

Awesome. Thanks.

The next question comes from Matt Pfau, with William Blair fell by <unk> with tourists.

Matthew Charles Pfau: Great, congrats on the results, and thanks for taking my question. First, just wanted to better understand, within those customers that are doing a million plus in ARR, what is the remaining opportunity there? Is there the potential to get a good portion of these customers to 5 million plus, 10 million plus in ARR? Are they sort of at the point of being fully penetrated? Definitely not fully penetrated.

Okay, great Congrats on the results and thanks for taking my questions.

Just wanted to better understand within those customers that are doing $1 billion plus in a.

What is the remaining opportunity there is there the potential to get a good portion of these customers to $5 million plus 10 million plus and they are are they sort of at the point of.

Being fully penetrated.

Definitely not fully penetrated I again, I would just go back to the the customer that is now our largest customer for all they've done 20 expansions since 2018, and so I think that.

Dominic Phillips: Again, I would just go back to the customer that is now our largest customer overall. They've done 20 expansions since 2018. And so I think that the expansion opportunity, whether it's cross-selling some of these newer products or more phased rollouts of their existing products, gives us a lot of opportunity to grow our overall net new ACV within some of these largest accounts. I think within our million-dollar-plus customers, they can be many multiples the size that they are today on average. I got it.

That expansion opportunity, whether it's cross sells if some of these newer products or more phased rollouts of of their existing products gives us.

A lot of opportunity to grow.

Our overall net new ACD within within some of these largest accounts I think within our $1 billion plus customers that they can they can be many multiples the size that they are today on average.

Got it and sort of a follow up on a previous question.

Dominic Phillips: And sort of a follow-up on a previous question. Historically, your split in that new ARR has been roughly even between new customers and existing customers, which move around a bit quarter to quarter. But as you land larger and larger with new customers on the initial sale, do you expect any material shift in that split longer term? You know, I don't know how it's going to play out.

Historically your split in net new <unk> has been roughly even between new customers and existing customers move around a bit quarter to quarter, but as you land larger and larger with new customers on the initial sale do you expect any material shift in that split longer term.

I don't know, how it's going to play out it's interesting because we we don't incentivize the our sales organization to sell new versus experiences they retire quota on net new ACD.

Dominic Phillips: It's interesting because we don't incentivize our sales organization to sell new versus expansions. They retire a quota on net new ACV, and they're clearly doing a pretty balanced job of landing new logos and expanding existing customers. I think if we started to see it skew one way more than the other, we could potentially consider that, but it's happening exactly. We like it to be balanced.

And they are clearly doing a pretty balanced job of landing new logos and expanding existing customers I think if we started to see it skew one way more than the other we could potentially consider that but it's but it is happening exactly we like it to be balance we need more new logos today that we can expand in the future and obviously, we want to we want to expand wallet share within our.

Dominic Phillips: We need more new logos today that we can expand in the future. And obviously, we want to expand wallet share within our existing customers as much as we can. I think a lot of our larger customers tend to do more of a phased rollout over time because they just have complex operations in so many assets. And so, as more and more of our net new ACV and our ARR mix moves into larger customers, that could push more of the mix to expansions over time. But it's been very balanced over the last couple of years. Great, thank you. The next question comes from Junaid with Truist, followed by Jim Fish with Piper Sandler.

<unk> customers as much as we can I think.

A lot of our larger customers tend to do more of a phased rollout over time, because they just have complex operations in so many assets and so as more and more of our net new ACD and our IRR mix moves into larger customers.

That could push more of the mix to two expansions over time, but it's been it's been very balanced over the last couple of years.

Great. Thank you.

The next question comes from <unk> with Truest, followed by Jim Fish with Piper Sandler.

Great. Thanks for taking my question you had an exceptionally strong quarter on the gross margin line.

Junaid Hamid Siddiqui: Great, thank you for taking my question. You had an exceptionally strong quarter on the gross margin line. I think you've talked about before that most of the leverage is going to be coming below the gross margin line. So if you could just maybe, you know, expand on, you know, going forward, should we still expect most of the leverage coming in? Or should we see strong gross margin performance, you know, going forward as well? Yeah, I mean, you even saw it in the results in Q4. Gross margin improved three percentage points year over year, but operating margin improved 13 percentage points year over year.

I think you've talked about before that most of the leverage is going to be coming below the gross margin line.

And if you could just maybe.

Expand on you know going forward should we still expect most of that leverage coming in or should we see strong gross margin performance going forward as well.

Yes, I mean, you even saw it in the results in Q4 and gross margin improved three percentage points year over year, but operating margin improved 13 percentage points year over year, and so I think that's indicative of what to expect in the future that more of the operating leverage will continue to come from our opex leverage sales and marketing.

Dominic Phillips: And so I think that's indicative of what to expect in the future that more of the operating leverage will continue to come from our OPEX leveraged sales and marketing. Primarily, again, the cost of sale on a renewed dollar of ACV is much lower than it is when we, you know, land or expand ACV dollars. And then obviously, we expect more and more leverage to come out of GNA as we continue to grow and scale. And so I think that's where I would point investors looking for additional leverage. Great, thank you. And just to follow up, is there any update that you can provide us on the lawsuit against Moda? Sure, I'll take that one.

Primarily again the cost of sale on a renewed dollar of of ACB is much lower than it is when we land or expand a C V dollars.

And then obviously, we expect more and more leverage to come out of G&A as we continue to grow and scale and so I think that's where I would point investors to looking for additional leverage.

Great. Thank you and just a follow up is there any.

Date that you can provide us on the law suit against motive.

Sure I'll take that one.

Sanjit Biswas: In terms of update, it's a relatively recent suit, so no big update. In terms of context of why we're even filing the suit, it is to protect our investment, innovation, and IP. This is a patent infringement claim.

In terms of update.

Relatively recent suite so no big update in terms of context of why we're even filing the suit is to protect our investment innovation and IP. This is a patent infringement claim and we've seen that their senior leadership team was in our product Guinea access copying features of our platform. Many of those were patented features so there's more information on our.

Sanjit Biswas: And, you know, we've seen that their senior leadership team was in our product, gaining access, copying features of our platform, many of those were patented features. So there's more information on our microsite. But that's, that's kind of where we are today. Thank you. The next question comes from Jim Fish with Piper Sandler, followed by Daniel Jester with BEMA.

Microsite.

But that's that's kind of where we are today.

Great. Thank you.

And the next question comes from Jim Fish with Piper Sandler followed by Daniel Jester with BMO.

James Edward Fish: Hey, great quarter, guys. Thanks. Thanks for the question. You guys are doing really well internationally. I think it was 16% of net new ACV you called out. At what point do you get more aggressive in other regions, really not in, or just smaller in?

Hey, great quarter guys. Thanks, Thanks for the question you.

You guys are doing really well internationally I think it was 16% of net new ACB you called out at what point do you get more aggressive in other regions really not and are just smaller.

Unknown Executive: Is this where, Dom, you kind of alluded to headcount additions? Is that where they're going to be added? Are there any new geographies going to be supported by this, No, I think we feel like we've got a lot of market opportunity in front of us. First of all, I mean, just in our core US market, but you know, Canada, Mexico, Western Europe, the countries, the key regions in Western Europe that we're addressing, that's where our focus is. And we feel like we've got a lot of market opportunity within those regions. And then, obviously, on the product development side, which is another key area where we're allocating more capital. But we feel like we've got enough market opportunity with the current geographies. It makes sense.

Is this where Tom you've kind of alluded to head count additions is that works can be added where there any new geography is going to be supported this year.

No.

I think we feel like we've got a lot of market opportunity in front of us for first of all I mean, just in our core.

U S market, but Canada, Mexico, Western Europe, the countries that the key regions in Western Europe. They were that were addressing that's where our focus is and we feel like we've got a lot of market opportunity within those those those regions and then obviously on the product development side is another key area, where we're allocating more more capital.

But we feel like we've got enough market opportunity with the current geographies.

It makes sense just as a follow up to Matt's earlier question I mean, how do you see the pipeline of these large opportunities entering the year versus.

Unknown Executive: Just as a follow-up to Matt's earlier question, I mean, how do you see the pipeline of these large opportunities entering the year versus last year? And are there any larger kind of renewal opportunities on the horizon with some customers understanding you guys, you know, typically upsell, and cross sell throughout the life of the contract? I think it doesn't look terribly different than it has in previous years.

Last year and are there any larger kind of renewal opportunities on the horizon with with some customers understanding you guys typically upsell cross sell throughout the life of the contract I. It doesn't look terribly different than it has in previous years and we feel good about that the customer demand and the conversations that we're having.

Unknown Executive: I you know, we feel, you know, good about the customer demand, and the conversations that we're having, you know, they build off the momentum that we demonstrated in FY 24 and Q4. You know, and we've really kind of nailed down our renewal motion over the last couple of years. And that's driving a lot of success. And so, again, we feel we are good, you know, heading into FY 25. Thanks. The next question comes from Daniel Jester with BMO, followed by Kirk Materne with Everett.

Building off the momentum that we demonstrated FY 'twenty four and in Q4.

<unk>.

And we've really kind.

Kind of nailed down our renewal motion over the last couple of years and that's driving a lot of success and so again, we feel we feel good heading into FY 'twenty five.

Thanks.

The next question comes from Dow gesture with BMO, followed by Kirk <unk> with Evercore.

Daniel William Jester: Great, thanks for taking my question. Maybe to follow up on the earlier one, and maybe in a different way, you highlighted in the prepared remarks, sort of a really big renewal that happened kind of one quarter after or really the expansion one quarter after a new customer was signed. And I mean, the velocity there is really impressive. Are you seeing the speed of that expansion change? Is this a one-off sort of unique case?

Great. Thanks for taking my question, maybe to follow up on an earlier, one and maybe a different way.

You highlighted in the prepared remarks.

Really big renewal that happened kind of one quarter after our really be expansion one quarter. After new customer was signed and the velocity. There is really impressive are you seeing actually the speed of that expansion change is this a one off sort of a unique case due to sales capacity anything that.

Dominic Phillips: Is it due to sales capacity? Anything that is sort of different in terms of the speed in which you're able to go and reattack these customers? I don't think every sales cycle is different. It really kind of depends on where the customer is, and their kind of internal resources, and how much of the platform or products that they can digest up front.

Sort of different in terms of the speed in which you are able to go and re attack these customers.

I don't think I think ever.

Every <unk>.

Sales cycle is different it really kind of depends on where the customer is in their kind of internal resources and how much of the of the platform of products that they can digest upfront and so some customers are able to move very very quickly with deployments some customers take a more phased rollout approach and so we're not really seeing any any differences there it really comes down to.

Dominic Phillips: And so some customers are able to move very, very quickly with deployment; some customers take a more, you know, phased rollout approach. And so we're not really seeing any differences there; it really comes down to kind of customer readiness and project prioritization. Okay, great. That's helpful.

Customer readiness and project prioritization.

Okay, Great that's helpful and then.

Daniel William Jester: And then to follow up on the sort of comment about construction being a more historically under penetrated industry vertical. As you look across the verticals today, are there any others that you'd call out where you see potential change in the opportunity or, you know, direction of how you think the year will progress in 2025? Thanks. I don't, I don't think so.

To follow up on the sort of comment about construction earlier being.

More historically under penetrated industry vertical as you look across the verticals today are there any others that you'd call out where you see.

Potential change in the opportunity or.

Direction of.

How do you think actually the year progressed in 2025.

I don't I don't think so I mean, we usually at our Investor Day, We'll show this error or a mix pie chart by by industry vertical and it's been pretty consistent at it moves around kind of.

Dominic Phillips: I mean, at our investor day, we usually show this error, mixed pie chart by industry vertical. And it's been pretty consistent; it moves around kind of, you know, a few percentage points within individual verticals, but we're not seeing anything really stand out within one specific vertical that creates more of a catalyst than others. I think we're very focused on having this horizontal platform of applications that's really used by many different end markets. And, you know, that's been the case since kind of the founding of the company, and I would expect that to be the case going into FY25 as well. Okay, great. Thank you. Our last question today comes from Kirk Materne with Evercore. Yeah, thanks very much.

A few percentage points within individual verticals, but we're not seeing anything really standout within one specific vertical that that creates more of a catalyst than others. I think we're very focused on having this horizontal platform of applications. That's really used by many different end markets and that's been the case.

Since kind of the founding of the company and I would expect that to be the case going into FY 'twenty five as well.

Okay, great. Thank you.

Our last question today comes from Kirk mature with Evercore.

Hi, yes, thanks, very much I'll echo the congrats on the quarter.

Kirk Materne: I'll echo the congratulations on the quarter. Sanjit, I was wondering if you could just comment a little bit on, you know, the idea of your platform and, you know, as you get up to having customers that have a million plus in recurring revenue, are the people that are accessing the data in the platform expanding beyond the operational or the operations folks? Meaning, you know, I imagine finance wants to look at this, and I imagine legal in some cases wants to have access to the data coming off, you know, off your platform. So can you just talk about what that means from a longer-term perspective in terms of getting, you know, connected forms into, I'm just trying to get a sense of, it feels like we're scratching the surface in terms of where you could go within an organization, even Yeah, Kirk, we would agree with you.

Just wondering if you could just comment a little bit on the idea of your platform.

As you get up to having customers that have a million plus in IRR are the people that are accessing that data in the platform expanding beyond the operational or the operations folks meeting.

Imagine finance wants to look at this I imagine legal in some cases want to have access to the data coming off.

If your platform. So can you just talk about what that means from a longer term perspective in terms of getting connected forms into I'm, just trying to get a sense on it feels like we're scratching the surface in terms of where you could go within an organization even outside of operations.

Yeah, Kirk we would agree with you so in large enterprise customers. There are many different personas that use the system you'll have the back office.

Sanjit Biswas: So in large enterprise customers, there are many different personas that use the system; you'll have the back office, folks that might be the fleet managers and dispatchers, you will see finance teams using this data to drive everything from tax reporting to carbon reporting, and so on. And then we do have a bunch of other use cases that we can kind of go through. But like you said, with connected forms, we start to expand the horizon of what you can do with the product; it's not necessarily tied to a vehicle.

Folks that might be the fleet managers and dispatchers you will see finance teams using this data to drive everything from tax reporting to carbon reporting and so on.

And then we do have a bunch of other use cases that we can kind of go through but like you said with connected forums, we start to expand the horizon of what you can do on the product is not necessarily tied to a vehicle and we're already seeing that with things like equipment, where we've got asset managers in a different sense.

Sanjit Biswas: And we're already seeing that with things like equipment, where we've got asset managers, in a different sense, keeping an eye on asset utilization of construction equipment, that sort of thing. So I think that's exactly right in terms of platform expansion and user expansion. And we're excited to kind of lean into that with new products like forms. That's really helpful. And Dom, just a quick one to finish up.

Keeping an eye on asset utilization of construction equipment that sort of thing so.

I think that's exactly right in terms of platform expansion user expansion and we're excited to kind of lean into that with new products like forms.

That's really helpful and Tom just a quick one to finish up obviously you are adding a lot more sales folks to mix. This year can you just talk about how if there's any changes to the go to market or how are you feeling about those people just more overlay salespeople just expanding within existing regions. I guess just the broader question is any real changes to the go to <unk>.

Dominic Phillips: Obviously, you'll be adding a lot more sales folks to the mix this year. Can you just talk about how, you know, if there are any changes to the go-to-market, or how you feel about those people, just more overlay salespeople just expanding, you know, within existing regions? I guess just the broader question: are there any real changes to the go-to-market as we had in Fiscal 25? Thanks. Yeah. Hey, Kirk, no major changes. We don't use overlay sales, you know, for products.

As we head into fiscal 'twenty five.

Yeah, Hey, Curt no no major changes, we don't we don't use overlay.

Sales for for products.

Dominic Phillips: The go-to-market motion is clearly working really well. And so, like every year, we will have some evolutionary kind of changes as we prepare for more and more scale, but no major changes. You know, capacity going into our core markets but also some of our emerging frontiers, whether that's geography or into specific industry verticals like public sector. But again, more evolutionary changes than large whole-scale changes.

The go to market motion is clearly working really well and so like like every year, we will have some evolutionary kind of changes as we prepare for more and more scale, but no no major changes.

<unk> going into our core markets, but also some of our emerging frontiers, whether that's a geography or in a specific industry verticals like public sector, but again more more evolutionary changes then than that.

And then the large wholesale changes.

Mike Chang: Thanks very much. All right, so this concludes the question and answer portion. Thank you all for attending our Q4 fiscal year 2024 earnings call. Before I let you go, I have a few short announcements. First, we'll be attending the Wells Fargo Software Symposium on April 10th, so we hope to see you there. And then, second, we're hosting our Investor Day on June 27th in Chicago. Please send an email to ir@samsara.com if you're interested in attending in person. For those that prefer to attend virtually, our IR website will have a web link to a live broadcast. That's it for today's meeting. If you have any follow-up questions, you can email us at ir at samsara.com. Thanks again. Bye, everyone.

Thanks very much.

Alright. So this concludes our question and answer portion. Thank you all for attending our Q4 fiscal year 2024 earnings call before I. Let you go out a few short announcements first we will be attending the wells Fargo software Symposium on April 10th So we helped US you there.

And then second we are hosting our Investor day on June 27th in Chicago. Please send an email to IR at <unk> Dot com, if you're interested in attending in person for those that prefer to attend virtually our IR website will have a web link to a library broadcast that's it for today's meeting do you have any follow up questions. You can email us at IR at some startup com. Thanks, again bye everyone.