Samsara reports its fiscal third quarter, August to October, on Thursday, December 3, after the close. The stock closed at $40.98 on November 6, 69% above its February low close of $24.25.
This quarter is easier to model than most. About 98% of Samsara's revenue comes from subscriptions to its fleet and equipment platform, typically three to five years long and recognized over the term. The company counts a contract in annual recurring revenue (ARR) only once it has "commenced revenue recognition".
The guide starts below the run rate. ARR was $2,124.7M on August 1, so contracts already producing revenue on the first day of the quarter were worth $531.2M a quarter. The guide of $514M to $516M sits about 3% below that. The last four guides did the same, and the last four quarters finished 1.3% to 2.2% above the starting run rate, beating the top of the guide by $16M to $24M each time.
Management says so itself. The finance chief called the guide "de-risked for potential downside scenarios" on the last call.
Our build. Net new ARR of $130.0M, a little below the second quarter's $134.1M and 24% above last year's $105.0M, takes ending ARR to $2,254.7M. Revenue at 98.5% of average ARR gives $539.2M: 4.7% above the $515.2M consensus from 21 analysts and above the highest estimate, $516.1M. We get non-GAAP operating income of $118.6M and EPS of $0.22 against $0.19.
The downside still clears the guide. With net new ARR of $95M, below last year, revenue comes to $532.2M. With no new ARR at all and the weakest revenue ratio of the last six quarters, it is $519.4M, still above the top of the range.
The one caveat. Second-quarter revenue was helped by deals that started earlier in the quarter than usual, and the finance chief expects "more kind of normalized bookings linearity" from here. That trims the size of the beat, not its direction.
What to watch: net new ARR, the fourth-quarter guide against our $571.9M, and whether the full-year guide of $2.043B to $2.047B moves toward our $2.098B.
The full preview, with the run-rate table, the revenue bridge and the scenario range, is here: Samsara (IOT) Q3 FY27 Earnings Preview and Forecast.
Source: Equibles. Consensus as of October 13; stock price as of November 6.
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