Cloud Stocks: Samsara Showcases Use Cases To Prove Resilience To Market Conditions

Photo Credit: Gerd Altmann from Pixabay

According to a recent report, the global Internet of Things market is estimated to grow at 26% CAGR to reach $2,465.26 billion by 2029 from $384.7 billion in 2021. San Francisco-based Samsara (NYSE: IOT) is a leading player in the market that recently announced its second-quarter results.

Samsara’s Financials

For the second quarter, Samsara’s revenues grew 52% to $153.5 million. Net loss was $0.04 per share compared with a loss of $0.08 per share a year ago. The market was looking for revenues of $143.7 million and a loss of $0.15 per share. Among key metrics, ARR grew 52% to $662.8 million, and the numbers of customers with ARR of over $100,000 grew 61% to 989.

For the third quarter, Samsara expects revenues of $154-$156 million and a net loss of $0.06-$0.07. The market forecast revenues of $161.26 million and a loss of $0.06 per share for the quarter. For the fiscal year, it forecast revenues of $610-$614 million and a net loss of $0.21-$0.23. The market expects revenues of $612.87 million and a loss of $0.21 per share for the year.

Samsara’s Growth Focus

While global macroeconomic conditions are hurting several technology players, Samsara felt confident in its ability to weather the conditions. Throughout the quarter, its customer demand was consistent with historical trends, but it had elongated sales cycles.

Samsara believes that it has three key factors that will play in its favor in the current conditions. First, Samsara services a very diverse list of industries. Its industry portfolio includes food distributors, chemical companies, energy utilities, freight carriers, and municipalities – which do not face such a severe macro impact. Second, Samsara’s Connected Operations Cloud is able to offer its customers a deflationary lever that helps control costs by running smarter, safer, and more efficient operations, thus helping these customers manage margin pressure. And, third, its products are making Samsara a system of record, thus making it more difficult for customers to disengage from Samsara.

The importance of its technology can be assessed from some interesting use cases shared by the company. For instance, ArcBest, the 14th largest for-hire fleet in the United States, with over 2,700 city vehicles and over 7,000 drivers is leveraging Samsara to drive efficiency. ArcBest uses Samsara’s open API to create a custom integration that analyzes data from multiple platforms, improves safety, and reduces time spent managing unassigned hours of service by 50%.

Another interesting use case is that of the largest school districts in the State of Georgia serving over 180,000 students in 141 schools. The district uses Samsara’s platform to improve its asset and fuel efficiency. Samsara’s vehicle telematics and several integrations have enabled the district to manage bus routes, make their buses more punctual, and monitor vehicle diagnostics like tire pressure, idling, and accessing Samsara’s fuel reports to save money.

To continue to provide interesting use cases, Samsara is focusing on product upgrades. This quarter, some of the new product features announced include customizable driver workflows, in-cab nudges, multi-stop ETAs, and remote support for administrators to streamline troubleshooting from anywhere. Samsara wants its Connected Operations Cloud to be the system of record for physical operations. As it brings more data into its platform, it is able to provide an increasing number of actionable insights and help improve the way its customers do business.

Its stock is currently at $11.67 with a market capitalization of $6 billion. It hit a 52-week high of $31.41 in December last year and a 52-week low of $8.72 in May this year.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research ...

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