Internet of Things Play Samsara Releases Big Earnings Beat

Internet of Things Play Samsara Releases Big Earnings Beat

As investors continue to seek out AI games, perhaps they should also check out Samsara
,

a game about the internet of things (remember that trend?).

The internet of things is indeed a significant development, but not quite on the scale of AI. A few years ago, the C3.ai company changed its name from C3.iot and it turned out to be a good choice. But the IoT landscape is much less crowded, and that’s fine with Samsara.

Samsara (ticker: IOT) provides software and systems to help businesses track physical assets, electric utilities, state and local governments, construction companies, waste management companies and others with large fleets of vehicles and other equipment. As CEO Sanjit Bis noted in an interview with Barronthese companies have some built-in resilience and won’t be impacted by budgetary constraints like other verticals.

Biswas says customers are turning to Samsara to be more efficient, to reduce accidents and insurance rates. We deliver real value to our customers, generating a return on their investment in Samsara software in a year or sometimes as little as six months, he says.

For the fiscal first quarter ended April 29, Samsara reported revenue of $204.3 million, topping both the company’s $190 million to $192 million benchmark range and the Wall Street consensus at 192 million. Millions of dollars.

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Annual recurring revenue increased 41% to $856.2 million. The company reported an adjusted loss of two cents a share, while Street had anticipated a loss per share of five cents. Under generally accepted accounting principles, the company lost 13 cents per share.

Samsara shares are up about 53% so far this year. In late trading on Thursday, the stock jumped 8% to $20.50.

Samsara’s leadership was also strong.

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For the July quarter, the company reports revenue of $206 million to $208 million, up 34% to 35%, and above Street’s consensus forecast of $201 million. It expects an adjusted loss of 2 to 3 cents per share for the period, comparable to Street’s estimate of a 3 cent loss.

For fiscal January 2024, the company raised its revenue forecast to a range of $866 million to $874 million, an increase of 33% to 34%. That’s above Samsara’s earlier forecast of $838 million to $848 million, and well above Street’s consensus of $846 million. The company now sees adjusted profits ranging from breakeven to a loss of 2 cents a share; the street was expecting a loss of 7 cents.

Biswas says the company has barely made a dent in the market, says customers served by Samsara account for 40% of the world’s GDP. The company is in the single digits in terms of potential market share, he adds.

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An obvious question for Samsara is when does the company become profitable. Biswas says the company is focused on adjusted free cash flow, which was a loss of $2.2 million in the April quarter. The company expects to achieve positive and sustainable free cash flow by the fiscal fourth quarter, he added.

As for AI software, Samsara has been using AI in products for a few years now, especially to monitor the safety of the physical operation of trucks and other vehicles, notes the CEO: They use vehicle sensors to collect speed data , queuing and other information about behaviors that could lead to accidents. They don’t generate a lot of text, like Bard or Bing; use the data to train detection models and save customers money.

Email Eric J. Savitz at eric.savitz@barrons.com

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