Samsara Inc.IOT used its second-quarter fiscal 2027 earnings call to emphasize large-customer expansion, emerging-product adoption and its operational-data advantage. Management paired that momentum with a free-cash-flow margin outlook below fiscal 2026 tied to device demand, inventory purchases and elevated supply-chain costs.
Non-GAAP EPS of $0.2 beat the Zacks Consensus Estimate of $0.17, while revenues of $508.4 million topped the $483.3 million estimate. The call focused more on sustaining growth and expanding product use.
Samsara Inc. Price, Consensus and EPS Surprise
Samsara Inc. price-consensus-eps-surprise-chart | Samsara Inc. Quote
IOT Guides Growth With Cash Flow Trade-Offs
Executive VP and CFO Dominic Phillips guided third-quarter fiscal 2027 revenues to $514-$516 million, up 24%, with a 21% non-GAAP operating margin and non-GAAP EPS of $0.18-$0.19.
For fiscal 2027, Phillips guided revenues to $2.043-$2.047 billion, up 26%, with a 21% non-GAAP operating margin and non-GAAP EPS of $0.76-$0.78. GAAP profitability is expected for both periods.
Phillips also expects free cash flow margin to be about 100 basis points below fiscal 2026 as stronger growth requires more devices, inventory prebuys and elevated supply-chain costs.
Samsara's Large-Customer Engine Deepens
Phillips said that ending ARR reached $2.125 billion, up 30%, while net new ARR was $134.1 million, up 28%. Samsara ended the fiscal second quarter with 3,605 customers above $100,000 in ARR.
That cohort added a record 242 customers and represented 63% of total ARR. Customers above $1 million in ARR reached 210 after a record 20 additions.
A BofA Securities analyst asked whether customers were landing larger or expanding faster. Phillips said that expansion contributed more, with emerging products helping existing customers broaden deployments.
IOT Expands Revenue per Device
Co-founder, CEO and Chairman Sanjit Biswas said that existing devices increasingly support multiple applications, allowing customers to add software without replacing hardware. Gateways and cameras can support telematics, maintenance and operational intelligence.
Phillips mentioned that emerging products generated more than 20% of net new ACV for the third straight quarter, while more than 60 transactions included over $100,000 of emerging-product net new ACV.
A Wolfe Research analyst asked whether AI Multicam was driving a refresh cycle. Biswas called demand additive, not replacement-driven, while saying new applications can monetize camera data beyond core safety use cases.
Samsara Keeps AI Agents in Early Stage
Biswas said that adoption of some recent AI features increased more than fourfold in two months, with more than 1,000 customers engaged across safety, maintenance and task-automation use cases.
Biswas highlighted voice-based driver alerts and warranty-recovery workflows. The product strategy uses operational data and connected hardware to automate tasks that otherwise require manual attention.
A JPMorgan analyst asked where agents were moving into production fastest. Biswas said that customers often adopt multiple agent use cases, but deployments remain early and require configuration and change management.
IOT Broadens Vertical and Overseas Momentum
Phillips mentioned that field services was Samsara's largest second-quarter vertical and delivered its highest net new ACV mix in more than two years. Public sector posted its second-highest net new ACV mix.
An RBC Capital Markets analyst asked about federal year-end seasonality. Phillips said that most public-sector activity comes from state and local governments, making demand more consistent through the year.
Internationally, Phillips said that 18% of net new ACV came from outside the United States, tied for a quarterly record. Europe posted its second-highest net new ACV mix.
Samsara's Focus Remains Scale and Efficiency
Biswas centered the long-term message on expanding Samsara's operational data asset and using AI to deepen customer ROI. Large enterprises remain central because their operations span more assets, workers and workflows.
Phillips maintained that near-term cash-flow pressure reflects faster growth and supply-chain conditions. Management's stated priorities remain growth at scale, product expansion, GAAP profitability and operating leverage.
Zacks Signals for IOT
IOT carries a Zacks Rank #3 (Hold). Its Growth Score of A and Momentum Score of A are favorable, while the Value Score of F indicates weak value characteristics. The VGM Score of B reflects a stronger blended profile across the three styles.
The Zacks Style Score complements the Zacks Rank, with the strongest combinations centered on Zacks Rank #1 (Strong Buy) or Zacks Rank #2 (Buy) stocks paired with A or B scores. IOT's Zacks Rank #3 is not among those top-ranked combinations and can change as earnings estimates are revised after the reported quarter. You can see the complete list of today's Zacks #1 Rank stocks here.
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Samsara Inc. (IOT) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
