Samsara Inc. Price & Performance (IOT)

Our customers demand data in real time. The vision is simply make shipping for The Samsara platform and the openness of the stack have really been critical for our vision. We automated a lot using SamSAR's functionality. Used a lot of the workflows, built a lot of custom integrations. We increased our automatic departure and arrival by over 40%. That really leads to less manual entry of data in more time driving.

Have employees are a employee that will produce for you and make the customer happy, and that's what all about. When we made the decision to implement Samsara, it was our drivers and our fleet personnel that made the decision. The drivers who tested it put Samsara up top.

Go live was 10,000 vehicle gateways. And 6,500 cameras that needed to be installed. Anytime you're talking about numbers of that size, it's an enterprise effort.

I think the partnership between Semcera and Estes during that time frame was really instrumental. If I had question day or night, somebody was there to answer. CIMSARA plays an important role as that source of truth from a data perspective. We really see Samsara as a partner. It feels like we're really aligning our road maps to to really make sure we're going in the same direction with the same vision. Vision. Good afternoon, and welcome to Same Store's Fourth Quarter Fiscal twenty twenty five Earnings Call. I'm Mike Chang, SameStar's Vice President of Corporate Development and Investor Relations. Joining me today are Samstar's Chief Executive Officer and Co Founder, Sanjay Biswas and our Chief Financial Officer, Dominic Phillips.

In addition to our prepared remarks on this call, additional information can be found in our shareholder letter, press release investor presentation and SEC filings. We our Investor Relations website at investors.simsore.com. [indiscernible] 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. Any forward looking statements that we make on this call are based on assumptions as of today, March 6, 2025, 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, we'll discuss our fourth quarter fiscal twenty twenty five financial results, 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 accordance with GAAP, Reconciliations of GAAP to non GAAP financial measures are provided in our press release and investor presentation We'll make opening remarks dive into highlights for the quarter and then open the call up for Q and A. With that, I'll hand over the call to Sanjit.

Thanks, Mike, and thank you everyone for joining us today. FY 2025 was another year of durable and efficient growth for Sensara.

We ended FY 2025 with $1,460,000,000 in ARR, achieving 32% year over year growth, or 33% year over year adjusted growth. Our growth is driven by our partnership with some of the world's largest and most complex operations organizations. During the year, we grew our customers with more than $100,000 in ARR to 2,506, an increase of 36% year over year. We are operating at a rare combination of growth, scale and profitability. Our momentum reflects the strength of our platform and the large market opportunity ahead of us. We finished the year with a milestone Q4 for large customers. We increased our $100,000 plus ARR customer count by two zero three, a quarterly record. We also increased our $1,000,000 plus ARR customer count by 14, which is tied for a quarterly record. We're now landing large enterprise customers that could become $10,000,000 plus ARR customers over time at a faster rate. These customers are global leaders in each of their industries. In Q4, we won one of the top three telecommunication companies in the world, one of the top three LTL carriers in The U. S. And Bimbo Bakeries, the largest commercial baking company in The US. We're landing these customers with initial footholds that can lead to years of future expansions that drive durable growth.

These larger customers typically have more complex sales cycles that often span several years and are less predictable. We're proud to partner with our customers to transform how the world runs. We're just getting started and are excited for what we can accomplish together in the decades to come. Our customers choose us because we help them operate smarter with our Connect operations platform. This includes smarter safety with AI camera alerts, fuel savings with routing, asset utilization with location tracking alerts, and workflows for frontline workers. Our growing data asset helps our customers work smarter with actionable insights. This improves the safety, efficiency and sustainability of their operations. I'd like to share an example of a customer who's using data to operate smarter. In Q4, we expanded our partnership with one of North America's largest do it yourself moving and storage operators. They operate nearly 200,000 trucks, nearly 140,000 trailers and 250,000 portable storage They also have over 23,000 rental locations, During the quarter, they added more than 10,000 asset tags to track their new portable storage boxes to improve their end customer experience. They previously tried many other solutions, including RFIDs and QR codes. They chose our asset tag because of its reliability and ease of use.

They also expanded into our safety and telematics products in the quarter, In a pilot with us, they estimate that they saved $1,000,000 across safety, idling and maintenance costs. They saw a 61% reduction in safety events, and 82% reduction in distracted driving events and a 47% reduction in harsh driving events.

We're proud to partner with our customers to achieve these incredible outcomes. With better insights, they're operating smarter with data. In our first decade as a company, we've been helping our customers digitally transform They typically spend the vast majority of their revenue on their operations, which are asset heavy and labor intensive. We began by digitizing their vehicles with safety and telematics. Then we expanded to include heavy machinery, buildings, frontline workers and smaller high value assets. [indiscernible] We've now built one of the world's largest operational data assets. We processed over 14,000,000,000,000 data points annually reflecting over 50% year over year growth. We also saw more than 120,000,000,000 API calls in the last year, also 50% year over year growth. This is having an incredible impact. In FY 2025 with our customers, we helped prevent 250,000 accidents. Digitized 300,000,000 workflows and saved more than 3,000,000,000 pounds of CO2. We're in a strategic position to combine AI with our large and unique data asset to make an even greater impact for our customers. We are entering a new age of intelligence. In just the last two years, AI has become 100 times less expensive. It's more widely available than ever before, will become significantly more abundant.

This means that over time, we'll be able to apply it everywhere. Our customers are already using AI on our platform for proactive maintenance, training, detecting risky behaviors like drowsiness and more. We believe AI will completely transform our customers' operations. In the future, our customers will use AI to dynamically monitor operations to enhance safety and efficiency, adjust delivery routes based on weather and traffic, and anticipate customer requests. By automating these tasks, AI will help fill labor shortages in skills gaps in operations.

We're excited about how this will make our customers' operations safer, more efficient and sustainable. We're looking forward to partnering with our customers to build this future. We believe we are uniquely positioned to amplify our customer impact and achieve durable growth in the next decade. This is a result of several key factors. First, we are in the early stages of digitizing a massive market. We're generating over $1,000,000,000 in ARR from our core vehicle applications alone. Today, less than half of North American commercial vehicles use telematics and only about 10% use safety products. As our customers prioritize vehicle digitization first, we see a clear path to expanding our core applications into a multibillion dollar business.

More broadly, the market opportunity beyond vehicles is even earlier in We see an enormous opportunity for sustained growth. Second, we're achieving strong momentum with our large enterprise customers. This is driven by a few factors. We're focused on innovation for the enterprise, and we're building products to solve challenges for their complex operations. We're also continuing to invest in enterprise focused go to market motion, and we're adding more enterprise sales capacity to target this opportunity. As I shared at the top of this call, we we had a record number of new large enterprise customers for the year.

They provide significant benefits, including valuable feedback to fuel our innovation, higher retention rates, greater expansion opportunities. Third, we're continuously innovating and expanding our multiproduct platform solve our customers' toughest challenges. Since founding, we've successfully built and scaled more than eight products. We're seeing our customers use us as a single system of record increase the use of our products across their operations. Currently, 62% of our large customers use three or more products, up from fifty eight percent one year ago and fifty four percent two years ago.

As we expand our platform to serve our customers better, we create future expansion opportunities to drive growth. And lastly, we're heavily investing in our team and company culture to serve our growing customer base better. We're proud of the recent awards that we've won that recognize this, including Frost and Sullivan's 2024 Company of the Year [indiscernible] 2025 best U. S. Large company to work for and our inclusion in Fortune's 2024 Change the World List. We're operating at a rare combination of scale, growth and profitability. We're approaching $1,500,000,000 in ARR, with 33% year over year adjusted growth and 9% adjusted free cash flow margins. It's been an exciting quarter and year to deliver on our mission to increase the safety, efficiency and sustainability of the operations that power the global economy.

We're grateful to partner with our customers as they modernize our operations. We'd like to thank all of our customers, partners, investors and Semsarians for joining us on this journey. We also wanted to share that our President of Worldwide Field Operations, Lara Cammie, will be leaving Samsara following a personal leave of absence. However, she will serve as an advisor over the next few months to ensure a smooth transition. Our Chief Revenue Officer, Amit Vias and our Chief Operating Officer for Go to Market Robert Stobaugh, will take over her responsibilities. Both Amit and Robert have extensive experience leadership experience at Samsara, each with a strong track record over six years, we're confident in their ability to lead. As always, I'll continue to be heavily involved in the go to market function. We win as a team and are grateful for Lara's time with us over the past couple of years. Lastly, we're excited to see many of you at Beyond, our annual customer conference, It will be taking place this June in San Diego, where we will also be hosting an Investor Day. At Beyond, we'll be bringing together leaders across industries to discuss the state of physical [indiscernible] We will also be announcing new products to further drive transformation for our customers.

We hope you will join us. I'll now hand it over to Dominic to go over the financial highlights for the quarter. Thank you, Sanjit. Q4 was another quarter of durable and efficient growth.

The quarter was highlighted by achieving several new records across important operating metrics, including surpassing $100,000,000 in quarterly net new ARR, adding two zero three one hundred ks plus ARR customers and $141,000,000 dollars plus ARR customers, and achieving quarterly records for gross margin, operating margin and free cash flow margin. Q4 revenue was $346,000,000 an increase of 25% year over year or 36% adjusted growth, which is the same growth rate as last quarter, but at a larger scale. FY 2025 revenue was 1,250,000,000.00 increase of 33% year over year or 37% adjusted growth. Adjusted revenue growth enables comparability across periods and contains two items, First, Q4 of last year was a fourteen week quarter in instead of a typical thirteen week quarter. Removing the extra week from the prior period results in an additional 10 percentage points of Q4 FY twenty twenty five revenue growth and an additional three percentage points of full year FY twenty twenty five revenue growth. Second, constant currency removes the impact of foreign currency exchange rate fluctuations period over period and results in an additional one percentage point of Q4 FY 'twenty five revenue growth and an additional one percentage point of full year FY [indiscernible] Q4 net new ARR was $109,000,000 an increase of 10% year over year or 12% adjusted only for constant currency.

FY 2025 net new ARR was $356,000,000 an increase of 16% year over year or 17% adjusted for constant and ending ARR was 1,460,000,000.00 an increase of 32% year over year or 33% adjusted for constant currency. Several factors drove our strong top line performance in Q4.

First, we focus on serving large enterprise customers to drive durable and efficient growth at scale. In FY 2025, we further prioritize landing the very largest and most strategic enterprise customers and learned the following. One, we've successfully proven we have an enterprise grade platform, differentiated product portfolio and operational support required to win the largest enterprise accounts at a high rate. Two, large strategic enterprise sales cycles can span multiple years and are often much more longer and more variable than sales cycles in smaller customer segments. And lastly, many of our largest enterprise customers and prospects have clear paths to becoming $10,000,000 plus ARR customers we expect these customers to mostly expand over time versus purchasing wall to wall upfront.

We ended Q4 with two thousand five hundred and six one hundred ks plus ARR customers, growing 36% year over year, including a quarterly record increase of two zero three. We also ended the quarter with $1,181,000,000 dollars plus ARR customers growing 44% year over year, including a quarterly increase of 14, which is tied for a quarterly record. In addition to adding more large customers, we also grew our average ARR 100,000 plus customer to 323,000 up from 313,000 one year ago. And the combination of adding more large customers and a higher average ARR resulted in increased ARR mix for 100 ks plus customers to 55% in Q4, up from fifty two percent one year ago and forty eight percent Two years ago, Second, this quarter included a balance [indiscernible] For new logos, we added over 1,000 core customers for the sixth consecutive quarter. Additionally, a quarterly record 90 of the two zero three one hundred ks plus ARR customers added were new logos. Also nine of the top 10 new customers signed with multiple products. One of our largest new of gas and water distribution systems with more than 1,000 field technicians, 2,000 field assets and 700 vehicles.

Their initial purchase included five products across our platform, telematics, video based safety, equipment monitoring, connected workflows and connected training. With connected training, they achieved a 98% on time completion rate, and created more than 20 custom courses using our new AI course builder. They also achieved immediate results by deploying asset tags and reducing the $500,000 they lost annually for misplaced assets. Overall, they expect an ROI of more than 7x. For expansions, 14 of our top 20 customers expanded in Q4, and seven of the top 10 Q4 expansions included multiple products. Our strength in expansions also allowed us to achieve our target dollar based net retention rate of approximately 115120% for core and large customers, respectively. And third, we demonstrated strong execution across several came from international geographies in Q4, tied for the second highest quarterly contribution ever. The international strength was driven by Mexico and The UK, both of which accelerated net new ACV growth sequentially. The UK also contributed its highest quarterly net new ACV mix and Mexico contributed its second highest net new ACV mix. We also saw momentum across construction, food and beverage and public sector end markets. Construction drove the highest net new ACV mix of all industries for the sixth consecutive quarter.

Food and beverage contributed its highest net new ACV mix in over three years. Led by our largest expansion in Q4 with Bimbo Bakeries, the largest commercial baking company in The U. S. With more than 20,000 workers, 5,500 vehicles, 2,500 trailers, three fifty tractors and 11,000 distribution routes. With Samsara, they saw a 70% reduction in collision risk, a 64% reduction in harsh events and a 49% reduction in violations. Public sector had its highest year over year growth rate of the year in Q4 led by Miami Dade, the seventh largest county in the country. Miami Dade signed a more than $1,000,000 transaction for the Department of Transportation and Public Works, and the Department of Solid Waste Management. In Q4, 15% of net new ACV came from non vehicle products the highest mix in the last ten quarters. Four of the top 10 new customers included non vehicle product, and equipment monitoring accelerated year over year net new ACV growth for the third consecutive quarter driven by strength in asset tags. In addition to driving strong top line growth, we continued to deliver operating We delivered quarterly records across all key non GAAP profitability metrics, a 14% free cash flow margin.

Okay. Now turning to guidance. Assuming FX rates as of February 1. For Q1, we expect revenue to be between $350,000,000 and $352,000,000 representing 25% year over year growth or between 2627% constant currency growth including a $5,000,000 impact to Q1 revenue. Non GAAP operating margin to be 7% non GAAP EPS to be between $0.05 and $0.06 For full year FY 2026, we expect revenue to be between $1,523,000,000 and 1,533,000,000.000 representing year over year growth between 2223% or between 2324% adjusted for constant currency including an $11,000,000 impact to FY 'twenty six revenue. Non GAAP operating margin to be approximately 11% and non GAAP EPS to be between $0.32 and $0.34 And finally, please see the additional modeling notes in our shareholder letter.

To close, Q4 punctuated a year in which we saw continued momentum in a very large, very early market opportunity. The world of physical operations is in the early innings of digital transformation, and companies' willingness to adopt new technologies to improve their safety, efficiency and sustainability is rapidly increasing as the ROI benefits become even more evident. Most physical operations businesses have large operating budgets consisting of physical assets and frontline workers which consume most of their revenue. Even slight operational improvements can result in millions of dollars of savings for our customers significantly impacting their bottom line. And Samsara continues to be best positioned to benefit from these long term market your turn, please limit your questions to one main question and one follow-up question. The first question today comes from Matt Hedberg with RBC. Followed by James Fish with Piper Sandler.

Great. Thanks for taking my questions, guys. Another great year.

Maybe I'll start Dominic, one for you. Thanks for quantifying the extra week impact on revenue, super helpful.

I noticed you didn't talk about it from an ARR perspective. You clarified for constant currency, but wondering if you could provide any sort of color on how we should think about ARR perhaps adjusted for the week?

Yes, absolutely, Matt. So as we've said before, it's really difficult to week in Q4. It's very easy for revenue because of ratable revenue recognition, but to determine the impact on bookings is much more challenging, which is why we didn't adjust it out of Q4 last year. We or in the Q4 results that we just gave today. If you did use the same framework that we use for revenue, if you remove onefourteen of the $99,000,000 from net new ARR from Q4 of last year, that extra selling week net new ARR in Q4. But again, really difficult to hone in and really quantify that. And just even broader than that with regards to the to the year over year growth, I think it's also just worth reminding investors that Q4 last year was definitely a tough comp even beyond that extra week. It was a quarter in which we landed our largest net new ACV deal ever. We had a record number of $1,000,000 plus net new ACV deals in the quarter. And so when you consider all that in, we're happy with the net new AR growth this Got it. That's super helpful. Maybe about a kind of bounce to maybe a point headwind.

That's helpful. And then Sanjay, for you, obviously, I think a lot of us coming out of your user event last year were just enamored with the opportunity for asset tag. Tags and it shows up in a number of checks that we do sort of in areas or customers that you wouldn't necessarily think would be Samsara customers. I guess can you provide some perspective on how you might think asset tags could impact fiscal twenty six ARR?

Yeah. You know, first of all, the reception around asset tags has been great. I think people are finding lots of use cases where they have these small high value assets that they want to understand the location of.

There's really kind of three use cases that we've seen emerge and this is across industries. The first is around locating stolen or lost assets. The second is actually around locating those construction or job site and then also around understanding asset utilization. Again, these are benefits that apply across multiple industry verticals. In terms of impact, on FY '26, it's really too early to say. We are seeing good attach, but we're also seeing customers experiment. So I think it takes some time to figure out, well, this is net new functionality. How will I use it? How do I get value from it? And then how do we practically roll it out across thousands or tens of thousands of assets as I described earlier in the prepared Our next question comes from Jim Fish with Piper Sandler followed by Dylan Becker with William Blair.

Hey guys, thanks for the questions here.

Maybe just at a high level, Sandeep, given the latest macro uncertainty and turbulence we're all seeing, especially in The U. S. Now, Given you guys are exposed to physical operations and that being 40% or more GDP Some concerns around GDP is slowing, potentially declining.

Do you guys expect to see any sort of pressure to unfold this year around that? Or is the ROI [indiscernible] able to kind of get through these potential macro headwinds?

I'll start and Dominic, if you want to So I think at a high level, it's important to remember that our customers are very large scale in terms of our operations. So we're talking about asset heavy, labor intensive businesses. And so they're always trying to find ways to be more efficient. To put that in perspective, for every dollar of revenue they earn, somewhere between $0.6 and $0.8 is spent on those operations. And we help optimize those operations. So I think in times like this where customers are trying to figure out how to drive efficiencies, the data is incredibly valuable. We're really helping them get leverage, and they're seeing that ROI. It's too early. It's too hard to say what these macro impacts will be, but for them, there's a lot of optimization opportunities below the line. I don't know if you to add anything. A similar line. These are customers that have operated many of them for over one hundred years. They've operated through many different kind of economic cycles. And I think just the early innings of this digital transformation and the the power of the data, their ability to drive more efficiencies in their business is they're looking through that and ultimately adopting this technology at faster rates.

Helpful. And Dom, for you, I guess what's giving the confidence in the stable to potentially even up NRR for the core customers And can we get the percentage of new ACV from new customer versus existing here at year end?

Sorry, I missed the first part, but the mix was pretty balanced this year. It was just it was basically fifty-fifty new logos, expansions in terms of net new ACV mix for the quarter.

The first part was just the core NRR potentially being stable to up. You said 115 plus or minus two, I guess what's given the confidence behind that?

Because just to the consistency and the expansions that we're seeing in the business, we've we were at kind of approximately 115 for FY 2025 and that's what we're targeting for FY 2026 as well. A big chunk of our business comes from expansions. And then if you think about all of the new products that we're rolling out, customers landing in specific use cases and then expanding and adding us to more frontline workers and more physical assets we expect expansions to continue to be an important growth driver in FY 2026. The next question comes from Dylan Becker with William Blair. Followed by Kirk Materne with Evercore.

Perfect. Thanks guys. Maybe essentially starting with you It's really impressive the data scale that you guys have and maybe even more so the 50% growth kind of annually on top of that giving you a lot of of network density obviously. At the same time, I mean, there's there's plenty of white space here. So wondering how you're thinking about kind of the network density benefit and your opportunity to go and capture kind of more assets from the net new user side, which feels pretty balanced.

But also the ability to kind of go deeper with the existing customers and kind of more ingrain your and understand, the entirety of kind of their physical operations workflows.

Yes. So Dylan, we're very much doing both. First of all, it I think in terms of network density, that helps us with coverage. For new products like the Asset Tag, which I talked about earlier, it also gives us much more visibility over operational behaviors. So what's driving risk out there, down to fuel consumption trends by make and model of vehicle or piece of equipment. So there's a lot of benefits to having this data at scale. We are still only kind of low double digits percent penetrated. There's a lot of opportunity to see more assets, see more miles on the road, see more, you know, frontline workers use the product. So I think you'll see us continue investing going broader. We go deeper, it helps enable some of these newer AI driven products for example, around maintenance. So the more fault code data we see we see over a billion fault codes a year. We can really understand what's going on inside these assets, leads to failures, which ones need maintenance, that sort of thing. So I think the depth will also benefit us, but this is really a decades long journey as we really compound on this data asset.

Perfect. That's helpful. And maybe a good segue to sticking with you here on kind of the AI use cases that you're seeing There's obviously, significant kind of tangible tangible external value here and and maybe come as we think about that. How are you guys thinking about leveraging it internally? Right? There's a lot of room for internal efficiency in your core operations. I would think it can help accelerate product development. That's very clear. Kind of with your innovation engine, but maybe the kind of the internal leveraging of AI as well, if you don't mind.

Yeah. There's a lot of potential both external and internal. Like you said, we're very much invested in this and the product. And then the way we build the product, so we use modern, AI coding tools. We're using it on the sales side to help us better understand customer accounts, do research, answer questions. So our sales and go to market teams have kind of all the information at their fingertips that they can be helpful with. And then on functions like support, we're able to do a lot, especially in the way and in the speed at which we can respond to any, support questions. So pretty much every team, every department at Samsara is using AI in in an interesting way. And we're excited because the potential for the technology just seems to be expanding. It's kind of exceeded our expectations.

Great. Thank you. Next question comes from Kirk Baterne with Evercore. Followed by Chris Contreras with Morgan Stanley.

Hi guys. Thanks. It's Pete Berkley on for Kirk Materne. Appreciate taking the question.

So really strong large customer momentum to get it quarterly.

Record for $100,000 customer adds. Construction vertical I'm curious as you keep landing these larger customers, are there any verticals in particular that are structurally more in line with there's just an opportunity to be bigger within those customer verticals. And then maybe just as a quick follow on to that, is there any thought as you do continue to grow in these verticals of sort of verticalizing the go to market efforts at all? Or is the sort of horizontal nature of your solutions just continuing to resonate to where that's not necessary at this point? [indiscernible] Take the first part of that question and then Dominic can cover the second. So in terms of industry verticals, we are seeing strong traction across a number of different industries. They're the same ones that we talked about at Investor we still early innings. There's a lot of room for digitization. When we think about industries like construction, historically didn't buy a lot of telematics products or video based safety. They're seeing tangible ROI benefits. They're seeing decreased risk related costs. They're seeing better fuel consumption. So I do think industries like that that historically hadn't bought a lot of this technology are really starting to digitize.

But we see opportunity across the board because we talked about this briefly, but over half the vehicles on the road still don't have telematics.

Only about 10%, have video based safety. So there's opportunity again in really every major industry vertical and physical operations.

Yes. And on the verticalized sales strategy, that's not something that we're planning on doing formally in FY '26. There's still enough commonality in the use cases across these experts selling into them. I think that that's something that we consider more gradually as we kind of think about how we map accounts to individual reps and try to group them together tied to industries? And maybe longer term when we're at at a larger scale, it's a strategy that could make sense. The only area that we do it today is within public sector where the selling motion is a little bit different. But other than that, sales reps are tied to patches, geographies to sell into many different industries.

Next question comes from Chris Cantero with Morgan Stanley followed by RSNA with Hey, Sanjit.

Hey, Dominic.

Thanks for taking our questions on for Keith here.

Wanted to hit on international. Really great to see that new ACV growth in both Mexico and The UK accelerate. What's working well there? And how does that inform your plans for 2026 international expansion?

Yes, I think it's just a these are areas where we've made a lot of [indiscernible] on the last call, we announced a few product specific features for those markets where we've obviously been investing in beyond R and D into the go to market, winning some of these larger customers and then having referenceability has definitely helped. And then I think just the broader fact that there are more physical operations assets in frontline workers in these international markets even than in The U. S. And so very similar use cases and areas where we expect to continue to invest.

Got it. That's super helpful, Dominic. And then she wanted to ask on hiring. You guys keep winning a lot of these, you know, best company you work for. And so I'm just curious how that's helped enable bringing in new talent into the organization. What kind of talent are you getting? And how's that helping as you continue to scale through the current revenue base?

Well, I think for us, talent is important across the board. From a sales perspective, it gives us capacity to work with more customers. We're investing in our long term customer relationships as well. So the go to market side, the investment is very clear. On the engineering side, we have a lot of different products that we're developing on the platform. And so scaling up those teams All that being said, we want to keep a very close eye on culture and make sure we're scaling that up along with the headcount. So we take a balanced approach to it make sure we stay very involved in the operations.

Excellent. The next question comes from Arsenay with Wolfe followed by Matt.

Or Matt with BofA. Hi, this is Arsenio on for Alex.

Given the uncertainty on potential macro impacts from some of the geopolitical tensions, is there any increased conservatism in the guide given the continued traction internationally, how have conversations with those large customers internationally changed or remained the same given some of the geopolitical tension fears?

I would just say high level guidance for FY 2026 the philosophy hasn't changed. It's not more or less conservative than the initial guidance in FY 2025. I think we're always wanting to make sure that we're providing guidance with a lot of confidence and especially to start the year, we feel good about being able to hit the numbers that we put out. And we obviously factor in all of the broader macro implications and potential outcomes [indiscernible] on the customer side, most of these companies are providing services like construction, they're field services, they're in food and beverage. So they're very much focused on their kind of critical infrastructure jobs.

Got it. That's really helpful. And you're continuing to see strong new large logo ads I guess how much of those large new logo ads are from competitors versus completely new adopters? And with like new large logo strength, particularly in the back half of fiscal twenty twenty five, How should we think about this for fiscal twenty twenty six?

It really depends on the specific situation. There's a number of kind of products that we have that tend to be more greenfield opportunities. So I mean, for example, video based safety 90% of commercial vehicles, even in The U. S. Aren't using technology. And so those can be more greenfield opportunities versus kind of telematics is product that's been around for GPS has been around for decades. Still less than 50% have have telematics, but much more so than on the video based safety side. And so those can be we tend to see more competitors in those spaces. So it really kind of depends on the use case. Some of the newer products that we're rolling out, again, we're replacing manual work. And so in those cases not competing against other technology vendors. So it really kind of depends on the use case.

Very helpful. Thank you. The next question comes from Matt with BofA.

Followed by David Wells Fargo.

Great. Thanks.

Taking the questions. Maybe just a couple for Dominic. Wanted to double tap on hiring intentions fiscal year twenty six. Anything you can tell me in terms of percentage of growth you intend to grow the workforce, any additional color on, you know, sales and marketing versus the other area that areas of the business or geography would be helpful.

Yes. I mean, we're definitely [indiscernible] the majority of it will go into go to market. We're always obviously trying to add more capacity to keep pace with the scale and of the business. I think we're also really focused on finding ways to improve our productivity. That's the other kind of input into growth and to drive more efficiency. There's obviously a lot of new opportunities with some of the recent technology advancements. And so productivity improvements and enhancing that is also a big focus for us.

Understood. Thanks. And then just one quick follow-up on operating margin. Obviously, a great quarter, I think 700 basis points above the guide. Can you just help us understand the drivers of that outside of, you know, just revenue outperformance? Anything in the quarter that stood out in terms of productivity or efficiency?

No. Yeah. Most of it came from the revenue outperformance. There's kind of puts and takes to expenses. Most of our margin leverage tends to come in the back half of the year. We front load a lot of our OpEx. And so Q4 tends to be one of our largest operating margin quarters and most of it came from the revenue out Got it. Thank you. Next question comes from David with Wells Fargo followed by Andrew with BNP.

Hey, thank you for taking our questions tonight. Appreciate it. Obviously, really like all the charts throughout your decks. You guys do a great job. Question on the massive market pie charts. Can you just talk through maybe at a high level the newer products added since FY 'twenty one, such as segment stability, connected forms, outside type, etcetera, and how we should think about the competitive dynamics seeing in those products today versus the competitive dynamics you saw in Telematics and safety when you first disrupted the space back in FY 'seventeen, 'eighteen? [indiscernible] Yes. Let me take a kind of first pass to that. And, Dominic, if you want to add anything. So some of these newer products Forms is a great example, Assatag is another one. They're really net new. These are not products that were widely available in the industry. A lot of our customers were coming off manual workflow like pen and paper process. And so it's a different competitive dynamic compared to say telematics where as Dominic mentioned earlier on the call, people have had GPS tracking for decades, in some cases So there was more kind of incumbency and sort of existing [indiscernible] more net new.

That being said, there's competitors for each of these products, but we're really unique in terms of how we structured the whole two They use us for compliance and for safety. Some of them, you know, clock in and clock out on the Samsara system. We're integrated with 300 different technology partners. And that's what makes us different. And that's also what makes it easier to adopt these products and add on. So the majority now of our large customers are using three or more products that continues to accelerate. So all of this is to say that while these are newer products, we're able to attach them quite easily in some of these accounts once we get to know the nature of their business.

Thank you. I appreciate that. And just one follow-up.

Would you mind just talking through the opportunity set in front of you as it relates to the public sector? As we think through their focus on efficiency and optimization?

Yes. I mean, it's an area that we've been focused on for so Rios. As I said earlier, it's the one industry where we have a vertical specific sales organization. And unlike some other software businesses where there's a large federal presence for our industries, most of these physical operations and frontline workers are housed within the state local level. And so that's really where we've been focused. And, you know, we saw, again, the strongest the strongest growth for public sector took place in Q4. And was led by Miami Dade again, the seven country. And so I think that's indicative of, you know, a million dollar plus [indiscernible] so that's an area of continued investment and focus for us going into FY '26.

Thank you very much. The next question comes from Andrew with BNP followed by Dan with BMO.

Thanks.

Maybe to start, I know you addressed the geopolitical issues. Just sort of curiosity just to educate us because I don't think we've been through this since you've been public, but How much of your exposure is to cross border traffic? I know you're not transportation specifically, but you do have exposure to food and beverage. Energy and construction. So I'm just wondering do you have any data that would indicate that look you're not as exposed to any tariff blowback or things of that nature and I have a follow-up.

I don't have any data at my fingertips. In terms of the cross border, but the majority of our customers operate within their countries. They're in the domestic operations. Like if you think about food and beverage distribution, they're delivering restaurants, retail stores, that sort of thing. Same thing with construction, a Domino's just talked about public sectors. So while we have some customers across [indiscernible] Or across various borders, most of their work tends to be in their countries.

Great. And then for my follow-up, just in terms of your comments on ARR, the extra week in FX, I'm just wondering, is the 10 percentage point swing or 11 Should we apply that to billings as well just for apples to apples comparison? There was a above or below that.

Yeah.

I mean, I would really just focus it on revenue and then obviously net new ARR, there's the currency impact. And as we said, just the impact of the additional week, a lot less clear. So I mean, those are the two metrics that I would focus you on.

Great. Thank you.

The next question comes from Dan with with BMO followed by Mark with Loop.

Capital. Hi. Thanks for taking my question. Maybe two for Dominic.

One, with regards to tariffs in your own supply chain, things like gateways and cameras and asset tags Refactoring any impact on that or maybe help us think about how that could potentially impact your business this year? And then secondly, on the comments about free cash flow margin being roughly similar in fiscal twenty twenty six versus 2025. Can you help us understand sort of the why that is relative to the EBIT margin expansion, if there's anything you call out specific to cash flow 'twenty six, that'd be helpful. Thank you.

Sure. Yes. So I mean from a cash expense standpoint, we don't have any concentrated exposure to any one country with regards to importing devices. We obviously are planning for a bunch of different scenarios. We've got a number of different strategies in place to kind of best mitigate any any potential impact. And obviously, all of that then is factored into the the guidance. For both operating margin and free cash flow margin, the free cash flow margin was in the modeling notes and so not really formal guidance. But I think that at a minimum, we feel like we can drive the same amount of free cash margin that we did in FY 2025. And obviously, as we get through the year, as we've done in previous years, ideally, we we can move that up based on what we're seeing. But we feel like that's a good place just to start.

Okay. Thank you.

The next question comes from Mark with Loop Capital followed by Lexi with JPMorgan.

Hi.

Thank you for taking my question.

Sanjay, just building on an earlier question around your public sector business, In public sector, Doge has kind of been kind of a hot topic of late. [indiscernible] your business there is state and local, it's not federal, but there is some momentum building.

Around state level Doge type initiatives. And I'd just be curious to get your take on how you think that may or may not affect your business down the road.

Sure. So as you just highlighted, most of our business is in state and local. In general, if you think about what our platform does, it really helps enable focus on efficiency. You can understand asset utilization, you can be more efficient about how you're using those assets, how people are performing work. So that ultimately will help [indiscernible] public departments save money. And that's why I think we're already seeing momentum in the product. Absent of a formal effort.

Great. Thank you. That's all for me. Next question comes from Alexi with JPMorgan. Followed by Janae with Truist.

Hi, this is Ella Smith on for Alexi. Thank you so much for taking our question. So first, we did want to ask about the penetration of telematics in North America. We're surprised as to where it is and we're curious in your conversation with customers, what's holding back customers from maybe adopting them faster?

It's hard to say. It is an interesting statistic in terms of fraction of adoption of telematics and then even the safety cameras in some cases, the payback periods are measured in months or in most cases, for our customers. So in, it really is something that that seems like it makes a lot of sense for basically every company. In many cases, I would say there's operational inertia There's change management. You need to deploy this across thousands or tens of thousands of assets retrain frontline workers. And so that's something we also help We build great technology, but we also help these companies digitally transform, which means figuring out how do you deploy technology out to the front line. And that's how they really get the value from technologies like telematics and safety.

And for a quick follow-up, we spoke a lot this evening about the strength in the construction business, and it's very clear to us that part of the reason part of your value proposition is driving ROI for your customers. But it is a surprising statistic given the pressure in the non residential construction market. So is there any other color or context as to why construction companies are choosing Samsara now given the pressure in their underlying market?

Well, I think I would direct you back to the the gains we can drive for efficiency. If you think about a business like construction, it's labor intensive, it's asset heavy. And so even simple things like understanding which of your assets should be owned by the company versus what should be rented on an as needed basis can have millions of dollars of impact some of these larger construction companies. And then again, these are historically industries that had not adopted a lot of the products like telematics or safety. So when it comes to safety, a lot of the risk in constructions when they're driving to and from these job sites they're at risk over the road. And so understanding to distracted driving, falling distance, all those kind of risky behaviors makes a huge bottom line impact for them. So I'd hard for me to speak about their top line business in terms of what's driving their revenue, but there's a lot of opportunity for savings and efficiency in terms of how they operate.

Makes a lot of sense. Thanks so much. The next question comes from Janae with Truist. Followed by Cole with TD Cowen.

Okay, let's pass. Our last question today comes from Cole with TD Cowen.

Great.

This is Cole on for Derek.

Could you just dive in on Monetization levers for Samsara Intelligence and when we can maybe see that start to show up in the model?

Yes, we're still in beta with those products. I think important part of the process for us is going through this customer feedback loop, understanding the use cases, how they're applying it. I mentioned the new logo that's using the AI course builder to build through connected trading. So that's a really interesting [indiscernible] How we're going to price it and package it and how it will ultimately impact the model. [indiscernible] Thanks, Cole.

This concludes the question and answer portion. Thank you all for your tenure Q4 fiscal year twenty twenty five earnings call. Before I let you go, I have a few short announcements. We will be attending the Loop Capital Markets Conference on March 11 in the Wells Fargo Symposium on April 9. We will also be hosting the Nomura Bus Tour on March 13 and the Morgan Stanley Bus Tour on April 14 in San Francisco. We hope to see you at one of these events.

Finally, we are hosting our Investor Day this June in San Diego you're interested in attending in person. For those who prefer to attend virtually, our IR website will have a a web link to the live broadcast. That's it for today's meeting. You have any follow-up questions, you can email us at ircmstar dot com. Thanks everyone. Bye.