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Russian (RU) Tue, Sep 16, 2025, 11:55 AM 3 min read
We came across a bullish thesis on Samsara Inc. on Compounding Your Wealth’s Substack by Sergey. In this article, we will summarize the bulls’ thesis on IOT. Samsara Inc.'s share was trading at $42.09 as of September 5th. IOT’s forward P/E was 104.17 according to Yahoo Finance.
Samsara Inc. (IOT) delivered a strong Q2 FY26 performance, reporting revenue of $391.5M, up 30% YoY and 6.7% QoQ, beating estimates by 5.2%. Non-GAAP gross margin expanded to 78.1%, operating margin to 15.2%, and free cash flow margin to 11.3%, reflecting continued operational leverage. Net margin improved to -4.3%, and EPS of $0.12 exceeded expectations by 71%, underscoring robust profitability gains. ARR reached $1.64B, up 30% YoY, with net new ARR of $105M, driven by 17 new $1M+ customers and growth in the $100K+ cohort to 2,771 clients. Large enterprise adoption was strong, with top accounts expanding across multiple products, highlighting the platform’s stickiness and cross-sell potential.
Samsara’s product innovation, including AI-enhanced safety, telematics, asset tags, preventative maintenance, commercial navigation, and route planning, contributed meaningfully, with emerging products accounting for 8% of net new ACV. OEM pre-install programs and European expansion further reinforce scale and adoption efficiency. Embedded AI and a proprietary dataset enable differentiated insights, while digital workflows and training enhance operational outcomes for customers. The company continues to see ROI-driven adoption, with examples like Maxim Crane and Mohawk Industries demonstrating millions in cost savings and safety improvements.
Guidance for Q3 FY26 is $398–$400M revenue (+24% YoY), with full-year revenue raised to $1.574–$1.578B (+26% YoY), alongside 15% operating margin targets. Challenges include longer large-deal cycles, SBC dilution at 22%, and a still-negative net margin. Nonetheless, Samsara’s durable growth model, anchored in multi-product adoption, AI-driven insights, and enterprise-scale deployments, positions it for sustained expansion, with multiple catalysts for continued ARR growth, margin improvement, and long-term shareholder value.
Previously we covered a bullish thesis on Samsara Inc. (IOT) by Compounding Your Wealth in April 2025, which highlighted strong ARR growth, expanding $100K+ and $1M+ customer cohorts, and AI-driven fleet management solutions. The company's stock price has appreciated approximately 10% since our coverage as the thesis played out with robust Q2 FY26 performance. Sergey shares a similar perspective but emphasizes the latest operational results, margin expansion, and updated guidance.
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