Samsara turned in its first adjusted free cash flow positive quarter with revenues up 43% year-on-year to $219.3 million. The Internet of Things data specialist reported a profit of one cent per share on an adjusted basis vs a loss of four cents in the comparable year ago period.
Other stats of note:
- Samsara added $74 million of net new ARR [Annual Recurring Revenue], a quarterly record, representing 33% year-on-year growth.
- Q2 ending ARR was $930 million, growing 40% year-over-year.
- There are now 1,515 customers with $100,000-plus ARR.
- $100,000-plus ARR customers make up 50% of total ARR mix, up from 46% one year ago.
- Seven of the top 10 deals in Q2 were new logos, including three that were greater than $1 million.
- Over 60 customers have ARR of over $1 million.
CEO Sanjit Biswas pointed to continued momentum in winning business with large customers, noting that 140 such enterprises were signed up during the quarter, including New Jersey Transit, National Grid and Boart Longyear, the world’s leading provider of drilling services. The business case for such customers is straightforward, he said:
It is interesting to think about what lessons can we bring over. One of the most fascinating things is a lot of these customers with huge numbers of assets in the field didn’t know that they could track all of that equipment. And so it sounds kind of simplistic, but they thought GPS tracking was really limited to their over-the-road vehicles. And that’s often where we start. So that expansion that we’re talking about, in many cases, will start with telematics. The lessons that we’re able to bring over are really around ROI. What are you doing in terms of understanding your asset utilization, should you be re-marketing some of your assets or utilizing them differently.
He added:
Many of these large customers that have complex physical operations, and they’re using data that’s now in our platform, the system of record for their physical operations, to connect into other systems. So that’s another big tailwind we have – this appetite for data and interest in getting more visibility. And just to put a number on it, they’re connecting us into more than six systems on average. So that’s a really unique position that we have that I think is a functioning as a tailwind for us in the market.
A lot comes down to helping customers realize more ROI from data, he suggested:
For many of them, this is the first Big Data initiative they’ve had. They’ve been in business for decades or in some cases, 50 or 100 years, but they’re not as familiar with using modern technologies, using devices out in the field and getting reporting in the back office and changing their operations that way.
Customers
Biswas picked out logistics giant DHL as good example of what Samsara can deliver for its customers:
DHL is one of the largest logistics companies in the world, serving more than 220 countries and delivering 1.7 billion parcels annually. They have complex global operations and a frontline workforce of 600,000 people. Using Samsara for safety and telematics across 20 sites, DHL Express saw a 26% reduction in accidents and a 49% reduction in accident-related costs. Equally as impressive, the DHL supply chain also saw a 50% reduction in driver turnover reaching their lowest driver vacancy ever. Driver turnover is a major cost for our customers, and it’s incredible to see the positive impact our products can have by helping companies enhance safety and improve retention.
He also highlighted Canadian grocery chain Sobeys, which has more than 200,000 employees across 2,700 locations, as another exemplar:
They have ambitious sustainability goals with a go green target date of 2035 to substantially lower their emissions. Using Samsara, they saved 46,000 gallons of diesel, leading to a savings of 469 metric tonnes of carbon emissions in just four months.
Another key priority for many Samsara customers is re-shaping the worker experience, said Biswas, pointing out that 70%-80% of the global workforce are frontline workers. Saving such employees time with digital workflows and other technologies to modernize their experience can have an outsized impact for an organization, he argued, citing the example of an unnamed large air carrier:
[The carrier] is using Samsara to digitize its ground support equipment operations across some of its major US hubs. They’re using our telematics and equipment monitoring applications to manage thousands of pieces of equipment from baggage carts to passenger boarding stairs and more. They have seen impressive results, saving their employees valuable time by helping them locate equipment often outside in all types of weather conditions in minutes instead of hours.
In one hub alone, they reported saving more than 2,600 hours searching for ground support equipment and it’s already impacting customer experience. They’ve reduced delays in kickoff flights, the first flights of the day, which has a cascading impact on their operational schedule and customer experience.
My take
That free cash flow status is an important milestone for Samsara. And there’s clearly still a lot of runway to explore in terms of the potential customer base – industries involved in physical operations represent more than 40% of total worldwide GDP. Onwards!
