Samsara (IOT) is digitizing the world of physical operations.
The company’s Connected Operations Cloud enables businesses that depend on physical operations—including those in the transportation, construction, energy, utilities and retail industries—to harness and analyze IoT data.
Samsara sees a large market opportunity, as it’s estimated that industries involved in physical operations represent more than 40% of total worldwide GDP.
Samsara co-founders Sanjit Biswas (CEO) and John Bicket (CTO) were also the co-founders of networking vendor Meraki, a start-up that made it easy for enterprises to deploy and manage large WiFi networks. In 2012, Cisco paid $1.2 billion for Meraki, which had only raised about $80 million prior to the buyout. Both co-founders worked at Cisco until starting Samsara in 2015.
Biswas and Bicket believe the next frontier for digital transformation is centered around getting various physical operations connected to the cloud. Plug-and-play digital sensors, wireless technology and the ability to process data using AI in the cloud are the driving forces that are unlocking this next technology wave. Samsara’s core telematics and video-based solutions can help coordinate large field workforces, manage logistics and improve safety.
Many industries with large physical operations have been underserved by technology, leaving them too heavily reliant on manual processes and clunky legacy systems that are siloed and lack cloud observability.
Without connected digital tools, businesses with physical operations struggle with the ability to access real-time data, making it nearly impossible to achieve complete operational visibility or drive meaningful improvements in their productivity.
Samsara’s platform helps enterprises solve the problem of opaque operations and disconnected systems. With the Connected Operations Cloud, customers can visualize all of their physical operations on one integrated platform in real-time. Samsara consolidates data from its IoT devices and a growing ecosystem of connected assets and third-party systems, and makes it easy for customers to deploy its cloud dashboard to access, analyze and then act on data insights.
The Samsara platform collects more than 6 trillion data points annually. This includes video footage, people/motion detection, GPS locations, energy consumption, asset utilization and engine diagnostics. This immense data set powers the company’s AI and provides customers with the ability to achieve higher utilization of physical assets, improve the routing of trucks in the field, drive fuel savings, minimize compliance costs and reduce unplanned asset downtime.
For example, a waste transportation company in Texas used Samsara’s video-based safety solution (enabling HD recording, driver safety coaching and real-time driver feedback) to vastly reduce the number of accidents and save more than $500,000 in annual insurance premiums, with payback in just five months. A leading infrastructure provider serving more than 40 states has deployed Samsara’s equipment monitoring solution to save $11 million from asset optimization.
Samsara will report fiscal Q2 (ended July) results on August 31. The company is forecasting total revenue of $206 million to $208 million (growth of 34% to 35%).
In FQ1 (April), total revenue of $204.3 million gained 43% and beat the consensus estimate by 6.5%. Samsara ended the April quarter with total annual recurring revenue (ARR) of $856.2 million, up 41% from the year-ago level.
The company in FQ1 added a record 138 large customers (ARR over $100,000). It now has a total of 1,375 large customers, up 53% year over year. Large customers are Samsara’s fastest-growing cohort and make up 49% of total ARR. In FQ1, eight of the top 10 net new annual contract value (ACV) deals were customer expansions.
For FY’24 (Jan.), the latest total revenue outlook of $866 million to $874 million represents growth of 33% to 34%. Last year, total revenue advanced 52% to $652.5 million.
Samsara did not have the best timing when it came to its IPO. The company went public at $23 a share in December 2021, just after the peak of the Nasdaq bull market. Within days of the offering, the stock was able to run up to a post-IPO high of $31.41, but it then succumbed to heavy selling pressure, which lasted throughout 2022.
Last November, the shares sunk to a post-IPO low of $8.42. Since then, the stock has rebounded sharply, hitting a 52-week high of $30.91 in June. At the recent price of $25.26, Samsara sports a market cap of $13.3 billion.
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