Samsara Aktie

All right. Good afternoon, and welcome to Samsara's Investor Day. My name is Mike Chang, and I'm SVP of Finance here at Samsara. And first off, just thank you all for making the journey out here to a very, very hot Las Vegas to join us in person. And it's amazing to see so many familiar faces in the audience. And for those who are joining virtually, it's great to have you on as well.

We have an awesome, awesome agenda pack for you today. We have about 2.5 hours full of content, and we're going to talk about how we're bringing AI to the world of physical operations.

Before we get it started, there are a few housekeeping items. The key 2 things is, first, we're going to be assessing forward-looking metrics during today's presentation. These should be taken in addition to -- sorry, these statements contain risks and uncertainties, and these are detailed further in SEC filings and our Investor Relations website. Second, we'll be talking about non-GAAP financial metrics, and those should be taken in addition to our GAAP metrics and reconciliation is provided in the appendix for today's presentation.

So at Samsara, we're connecting our customers' operations, we're bringing AI to the physical world, and we're making a huge impact for our customers. Super exciting. We've reached $2 billion of AUR, and we have over 13,000 core customers worldwide, and we're just getting started. So super excited to bring on Sanjit, our Co-Founder and CEO today; Johan, our Chief Product Officer, David, our VP of Products, Amit, our Chief Revenue Officer, 2 of our own customers with Primoris and Performance Food Group.

And then also Dominic, our CFO. Just like we do with all of our customers, we're trying to build a long-term relationship with each of you. And so we hope that you'll leave today's presentation with a better understanding of this multi-decade journey we're on. So with that, I'd love to bring sanjit on stage and pass it over.

Thanks, Mike, and thank you all, again, for making the trip out. What I'd like to do is start at a very high level with what we're about at Samsara, our mission, and then we'll get into products, and you'll even see some demos for me and Johan in a few minutes.

So starting again with the mission. We're a technology company. And our role in this is to help enable all the physical operations companies you see here at our conference to be safer, more efficient, more sustainable in the operations that they run. And if you think about it, this wave of digitization has been mostly focused on corporate office space enterprises, especially when you think about the impact that AI has been having, which is, of course, the big topic of conversation right now. And at this moment, we're seeing a transition happen where AI is going from those white-collar industries, industries like legal, customer support or finance or even software engineering now into the physical world. We can now apply AI to industries like construction, energy utility, waste management and field services. And you can think of this as this transition that's happening from the world of bits to the world of atoms. And when we think about the why now, there's a number of just amazing, incredible tailwinds that are back. First, there's a broad interest in digitization. So generational change that's happening, especially in these frontline industries where people are in their 40s and 50s. They're saying, well, why am I not able to see this on my phone in the field? And then, of course, with AI, there's a why now that's happening right now, which is that AI is becoming more powerful and more transformative every single year. If we look at these trend lines, if we look at the graphs, you can look on the cost side, where if you think about a certain level of intelligence, the AI models have gone from being models that cost $60 per million tokens down to just $3.30. That's incredible. It's an 18x cost improvement in a span of about 1,000 days. Very few technologies adapt that quickly. And if that wasn't enough, the capabilities made possible by AI are increasing constantly.

And this is coming from all the different Frontier labs competing. We've seen AI capabilities increase from the point where we were a few years ago, where it was a simple chat bot to now where we can build an agent that performs, work, plans out multistep tasks and executes them on behalf of our customer. And that's an incredible breakthrough, of course, that's going to have an impact in the world of our customer.

So at Samsara, we are bringing all of these new technologies like AI into the physical world. And it's important to recognize that this is a multistep, multiphase approach. And again, this is very practical. Most of these industries I talked about earlier, they're largely off-line. They're largely disconnected. So we start with the basics, which we call Phase 1. It's about collecting data. This means deploying hardware out in the field, getting GPS trackers on all kinds of devices, getting cameras out there, so we get visual and situational awareness. And then once we have our hands on data, we can go to Phase 2, which is using AI to go find insights in this data, find the patterns in the data and surface them to our customers. And then at the tip of the pyramid, you'll see Phase 3. This is what agentic automation is all about. Now once you have the data, once you've got AI analyzing, you can start to take action. Most of our customers are in Phase 1 or 2. And most of these industries are actually in Phase 0. They have not yet even deployed all this technology. So we're still very much in the early innings, but these industries are absolutely massive, which brings me to my next point. Because if we go and take a look at the base of the pyramid, the opportunity that we're faced with, it's absolutely enormous because these industries are enormous. They make up about 40% of the world's GDP. You see a bunch of different photos from our customers here. Hopefully, this kind of broadens your thinking about what we mean when we talk about physical operations. We do a lot of work in the world of transportation, logistics and food and beverage distribution. We also have customers that run big fleets of yellow school buses, oil and gas companies that are involved in the energy industry, waste management companies, construction customers and utilities. And if you think about these customers, they have operations that are both asset-heavy and labor-intensive. So we want to help them on both sides of that equation. So if you think more about Phase 1, what you realize is very quickly, we need to collect data about the environment. These are not tokens you're going to find online. They're not build on a website. We need to collect these bits of data from vehicles. So that's why we have products like our Vehicle Gateways. We need data about trailers and construction equipment, which is where our Powered Asset Gateways and Asset Tags come in. And then the visual environment has a tremendous amount of data value as well, which we'll talk about over the course of today. That what our AI cameras do and we want to collect data from people. So we have data from wearables and workflows that come from apps. I mentioned this earlier, but this environment is largely disconnected still. If you zoom out and take a look at all the commercial vehicles on the road here in North America and Eastern Europe and just crack them open, see how many are running connected GPS trackers, you might be surprised to see that only about 1/3, about 34% of them are currently connected from a telematics perspective. If you look at construction equipment, powered equipment on this slide, you see a number that's even smaller. It's only about 13%. And then if you think about unpowered equipment, all the different tools and other assets that are required to perform work in operations, it's very small, sub 1%. So there's a lot of market out there. But deploying this hardware requires assistance. We need to help with change management because we're getting all of this equipment connected, which means bringing it in, putting these devices on there. We're getting apps and hands of frontline workers. Many of these companies have tens of thousands of employees. And this is a new technology that's part of their daily workflow. So we help with that. And this is part of our durable and long-term advantage as well.

And then at Samsara, we love data. We collect a lot of it. And at this point, when we look at how many different data points we've been collecting into our cloud over the years, it totals to a number that's over 60 trillion. These are all different kinds of data points. We've got data from all different types of assets, vehicles powered, unpowered equipment. And like I said, data comes in multimodal forms. So we have GPS location data. We have engine health and diagnostic data. We have video data, both externally and in terms of driver behavior. And we have this in terms of a lot of different customer industries, customer geographies and customer sizes. So this time series data that we've been collecting for over a decade now is leading us to find insights in a way that was never before possible, and that's servicing value for our customers.

Okay. So now moving up the stack to Phase 2 in our strategy. Once a customer's operations are connected, we can find a lot of value in the data I just said. And for the first time, we're able to correlate all the different bits of data together. I'll give you a few examples. So fuel is a big topic of conversation this year. Price of the pump is up 30%, 40%. And so for many of our customers, this is an enormous impact to their operational budget. They are looking for ways to find savings in their fuel spend. We can find in a number of different locations. So one is simply understanding where are they being inefficient. Maybe they're idling their engines too long or maybe they're operating the wrong equipment, they can get better miles per gallon, if they ran something else. Or could be behavioral. It could be training the drivers or rewarding them for eco driving. And it can even be related to where they're buying fuel. Maybe there's a better provider for them if they just drove another half a mile. These are all bits of data that are in our data set. We can find it for our customers, we can surface it in the form of fuel insights. We can do this for benchmarking. We can do it for fleet utilization. We can tell them if their assets are underutilized. Some of these customers, they have balance sheets that are hundreds of millions, even $1 billion plus just in terms of assets. So these are asset-heavy industries. And this list goes on. You can apply this to maintenance, you can apply it to weather, to routing, navigation and so on. And then if you think about this, it's all about ROI. The world of operations, it's an area where ROI is incredibly important. Like I said, these are asset-heavy, labor-intensive industries. And we've seen a survey -- or sorry, a study done by IDC about a year ago where they went and talked to our customers and found there's an 8x ROI that they're getting from utilizing their equipment more efficiently, maintaining their equipment in a more efficient way, fuel savings, accident cost savings. And now as we start shifting our attention to what's possible with agentic AI, we're able to help with task automation, which helps free up some of that labor budget. And we'll increase the ROI as we'll talk about over the course of the afternoon, which brings me to that top of the pyramid, which is Phase 3. We now have the ability to build AI agents that can really perform tasks on behalf of our customer. This morning, I demoed a maintenance agent, and we'll go a little bit deeper into it today. With the maintenance agent, we can do things like understand in a predictive way what's likely to break based on the data we're seeing in the field. We can set up work orders. We can do things like warranty claims, task work that would take hours and hours on a per vehicle basis.

On the safety side, we can automate so much of the task work that has to happen to coach thousands or tens of thousands of drivers at scale. We have worker coaching workflows that are automated. We have ride alongs, as Johan showed this morning, we can do post incident reporting. And then we can even change the safety settings on a driver-by-driver or equipment-by-equipment basis, work that would be too cumbersome to perform manually.

And then this also applies to dispatch. There are so many different back-office tasks, if you think about it, load assignment, providing better ETAs to end customers and even things like shift length compliance. These are the practical day-to-day tasks that have to happen to keep an operation money. And then on top of all this, we can layer things on like 2-way communication with the front line. We can do that with our systems that are deployed in the cab. We can offer automations like weather alerts and start-a-day briefings and workflows. All of this was stuff we demoed on the main stage this morning, and hopefully, you've had a chance to talk to some of our customers here about it.

All right. So I'm going to go a little bit deeper on one of those boxes, which is maintenance. I'm going to put this in the context of the 3 phases to show you how does we collect the data, find the insights and take action for our customers. So the first step, as I mentioned, is Phase I. It's collecting data from the field. The second step will be around finding insights and things like fault codes and diagnostics, predictive models. And then the third phase of this is around automation, so things like warranty claims and order management. I don't have much hardware here on stage. So let me start with the slide explaining what Phase 1 really is about. I think many of you know, we have a Vehicle Gateway product. This plugs into the diagnostic port of a truck and communicates directly with engine computer. It's an amazing source of data because we can get a lot of information about things like fault codes, but also engine performance. How many miles per gallon the truck is getting? How heavily it's loaded when it's going operating different conditions. We also have other forms of data that come in. In a given year, we see north of 300 million vehicle inspection workflows. These are the walk-around inspections that drivers do. And this is a context that's really valuable from a maintenance perspective because you can see the trending, what's happening with the vehicle over time. This is information you're not going to get in the diagnostic report because it will tell you what the conditions look like on the outside. And it's also very unique data. The OEMs don't have it. The service centers don't have it. And then there's additional data from the maintenance shop. We have work orders. We have other kinds of maintenance inputs that come to our API integrations. We can even integrate with OEMs directly cloud to cloud, and it gives us additional context. So this is Phase 1 of the data collection that goes into maintenance. The other 2 phases I'll show you here on the screen. So if we can flip over to the demo. One sec. Okay. So this is our Samsara dashboard. I'll do some demos here and then Johan and David will be up as well. But this is exactly the same system that our customers use. And I'm going to be live demoing it for you, so you can see how this data comes to life. So for a fleet, you will have hundreds, thousands or tens of thousands of vehicles. Most of our fleet customers, they have been used to operating these vehicles for decades. And the maintenance process tends to be pretty manual. They have a combination of paper checklist, so pen and paper workflows that we're going to go check on the vehicles in the yard, interactions that happen with the driver. So if something is wrong with your truck, you'll come in and let the maintenance technician know, and just expert knowledge that comes from years and years of experience dealing with these trucks. So here, what we've done is try to streamline all of that into a single system where the maintenance tech can come in, in the morning, log in, and they can do this from really anywhere and see at a glance the state of their fleet. And we help them prioritize their work. So you can see here that the AI has figured out, there's a couple of units that need a little bit of extra attention this morning. So I'm going to click in on the first one. And like I mentioned earlier, we're collecting data. That's the Phase 1. We've got data off the diagnostics board. In this case, I picked on a truck that's showing a fault code. And we know the make and model and year of the truck. So we know it's a 2024 Freightliner Cascadia. We also know what kind of engine it has. The Cascadia comes with engines from Cummins. It also comes with engines from Detroit Diesel. This one has a DD13 engine, and it's got a fault 3251, which is related to one of the exhaust pressure sensors. There's a bunch of detail here basically explaining what this fault is about and what some of the recommended actions are. Then I'll scroll down. And you'll see the power of this kind of Phase 2 data that we have and the massive data asset, we've accumulated with the 90 trillion data points. Because we've seen millions of vehicles over time, and we've seen the thousands of different fault code combinations they have in the vehicle performance, and we've seen it over a decade plus, we can do things that tell you how big of a deal a fault like this is. These kinds of complex diesel engines, they have engine faults all the time. Many of these are warnings, informational or maybe emissions related. So they don't result in operational downtime. This one, though, shows up as a moderate fault. That means we're going to want to do something about it. You may be wondering how is it that we know that. And it's because in that data set of 90 trillion data points, we've actually seen 107,000 of this specific type of engine. We know what happens to these engines over time. We know how they perform. And so we've analyzed those. And we've seen that only about 0.25% of them never show this fault. So that's really valuable information. And then like I said, we can piece all that information together. So you can see the fault code chain. You can see here that there's an exhaust pressure sensor issue, and the repair cost is $100 to $800. That's handy for the shop tech to know. And there's a predictive insight there. This says 22.8% of these vehicles progress to the next more severe fault code in 518 miles. So it's very technical, but that now gives me a sense as a shop tech of whether I need to take that vehicle off the road, call the driver up and tell them to turn around, disrupt their whole day or whether we can handle this at the end of the day, maybe at the end of the week, very practical decision-making tool.

If I click on this next box here, this is what happens if we don't do anything about it. Default becomes more severe. That's the likely pathway and the repair cost goes up, now it went from a couple of hundred dollars to a couple of thousand dollars. If we don't do anything about that in 175 miles, the repair cost would go up again now to maybe $3,900. For our customers, they spend about 10% of their operating budget on maintenance. That's an enormous expense for them. And so it's helpful if they can get to these tasks early and nip them in the bud, basically save their companies a lot of money in terms of operating budget.

Okay. So this is the Phase 2 side of things. This is the insight that AI can give you. Now let me go up and show you how we can start automating a lot of the task work that has to happen to maintenance. So I'm going to click check warranty coverage here. And again, maybe for some context, most of our customers, they procure hundreds or thousands of vehicles every year to keep their fleet refreshed. They do this. And in that process, in their procurement agreements, they have warranty coverage contracts similar to probably the warranties you will have on your cars. But these end up being custom agreements. It might be based on the workload or the environment they operate in. And they have specific coverage areas that they care about. We can upload all those warranty documents into the Samsara cloud, use it as context to power these AI workflows. So what I did is I clicked on check warranty coverage. It fired the engine. It looked at the warranty coverage docs, looked at the fault code and the specific vehicle and said, yes, actually, this is a covered service task. So that means that this customer could get paid back for those repairs because they're still in the warranty period. It understood the document, so it knows that we're within 60 months or 100,000 miles, and it actually tells you what's covered and what's not covered. So you can see some additional notes here. And then you see it's offering to fill out a workflow -- work order. It could do this automatically by the way, before I came in, but I wanted to do an interactive way to show you sort of the steps that are happening. So we can say, -- yes, thanks. Okay. And now what this is going to do is take those documents. There's a lot of additional context in there about what needs to appear in the work order. It can go and query the vehicle, pull in all the information that's needed for work order and then combine it together in the system, very quick process here. So we see unit 1063, it pulled the odometer, it pulled the engine hours. These are all kind of standard fields in a workflow. It's got the description. Let me just go scroll down here a little bit. And then you see the service tasks. So this is what would be required in order to get coverage from the Detroit Diesel warranty. You usually have to provide some documentation, photos, some checklist, things like that. And it's all here. It's all streamlined. And the reason I wanted to go through the step by step is it gives you a sense of how much work the AI is able to automate and to streamline. If we did this the manual old-fashioned way, you'd be cracking service manuals, understanding what that fault code was, you might be calling drivers and asking them to look at stuff on the engine. And then in order to figure out if it's covered by warranty, you're reading through all the warranty docs. And then the last piece here is you have to figure out exactly the checklist. It's probably 2, 3 hours of work. When we talk to our customers, they tell us, they know a number of their repairs are covered under warranty. They probably only claim about 50% of those warranty dollars because this work, this task work isn't happening on a regular basis.

Okay. And then one more thing here, I can say, do any other trucks, the same fault? And this is, again, something that our customers will often do. They've been in operations long enough to know that if there's something happening on one truck, it might be happening on other trucks at the same time. Again, the system typically does this in an automated way, but it's helpful to see how we can go through a multistep process. You see it broken down there. This ability to plan is what's made these agents truly possible. So it went -- figured out what the code was that we care about, figured out how to ask or interrogate all the engine computers about it, wrote the code, deployed it, ran it and told us the answer. And is saying, yes, there is another unit that's got this issue. So very practical, very real-world use of AI and agents. But this is the kind of thing that we're excited to get in the hands of our customers because now it's possible for them to automate the hours and hours of task work that would have to happen. And then you multiply it out by the size of their fleet, maybe all our different regional operations, and you can see where the value unlock is coming from.

Okay. We can go back to the slides here. So I mentioned earlier, ROI is incredibly important in the world of operations. And we've talked about ROI that we've studied before. ROI that you're going to get from the compliance workflows and the reduced asset downtime. That's about 8x ROI. But then when you layer on the opportunity that comes from this labor automation, the ROI goes up even further. So we can do things like warranty recovery that I just showed you. We can help with things like shop efficiency, scheduling, which order these trucks come in at and whether you combine preventative maintenance with some of these predictive maintenance items. And then there's additional agent ROI opportunities as well. So we think conservatively, this takes ROI from 8x to 10x or even more. And I mentioned that a lot of our customers don't claim all of their warranty dollars. For some of these fleets, that opportunity alone is worth $10 million to $20 million. So there's a significant amount of expense that goes into maintaining large vehicle fleets today. So we're in the early innings of what all this looks like, but we're excited by the initial traction we're seeing. We're excited by the ideas that we're hearing from our customers, about how they want to use all of this stuff.

Okay. And then let's talk a little bit about the data. So I went over it fairly quickly. And a few of you may be wondering, well, would it be possible for a customer to go get those insights else? Could you just put an AI on top of their existing data, maybe API it from a different source. And that would be a reasonable approach. And you'd be able to look at your fleet data. So you can see all of your trucks, for example, and all those current fault codes perhaps. And that would give you insights over about 1,000 vehicles. And you might have, call it, 2-dozen different makes and models operating your fleet. But to get the true predictive insight, you need the volume of data that I talked about earlier. We're talking about millions and millions of vehicles, thousands of different fault code combinations. Engine profile data, you can understand how these actually operate over time. And then you can see it over the span of a decade. That is a tremendous volume of data, which is what powers and unlocks the value that I was talking about earlier.

So I've talked a lot about what we can do today. But for us, as a company, we know we're in the early innings of this opportunity. We know that this is a world that's going to be digitizing very quickly. And our customers are going to be around. They're going to be relevant because we're always going to have physical operations work to do. There will always be new buildings, new data centers that need to come up out of the ground. The grid modernization product or projects are likely to go on for a very long time, and there's always roadways to maintain. So if we think about industries like construction and imagine what these might look like, call it about a decade or so in the year 2035. We see a picture that look something like what you see on the screen here. This morning, David talked about how we're introducing the new Tracking Label. We'll talk more about it here on stage. We see products like the Tracking Label being used for all the building materials, so you can understand where everything is in terms of coming to the site and when the site is ready to perform the work. We see automation coming in, in the form of autonomy and robots. Think about all the materials that have to be moved on site. The heavy lifting, the dangerous work. We see autonomous diggers, forklifts, cranes but also materials movers, all kinds of handling equipment coming on to the job site. We even see drones and humanoids on the horizon. We're not quite there yet, but it's going to happen. There's going to be so many different ones of these, different makes and models, doing different tasks. And we want to be able to orchestrate that. And we see an opportunity to turbocharge or super power, all the people, to help them orchestrate all this work. We're going to be doing this on different kinds of devices. It could be tablets, could be wearable devices like smart glasses, could be in their headsets where they're commanding all these operations by voice. This is super exciting for us because we know that there's so much opportunity here to have an impact. Okay. To tell you more about how we're going to build for this future, I'd like to turn things over to our Chief Product Officer, Johan Land.

All right. Thank you so much, Sanjit. And [indiscernible] it's great to be here with you. Let me back that one. So it's great to be here with you. And I'm excited to talk to you more about physical operation. It's a really, really important part of society. And what we are doing is that we're building the agentic layer for that. As you just heard from Sanjit how agents are now automating tasks, and I want to go deeper into this and talk about the platform that makes this possible. Now before we go there, I'm just going to spend 1 minute. I think this is the first time we meet. So just about myself briefly. So I've been in tech for the better part of my life. And for the last few roles, it's really been in various forms of operations. At Waymo, I built the commercial PM team. Think of that as the -- we built a service on top of the vehicles. So lost and found, repairs, positioning of vehicles, maintenance, charging, refueling, but also the mobile app acquisition, pricing and all those things you need to build a service on top of it, and took that to first revenue.

And my last role was TomTom, which is navigation and routing, both together with OEMs, but also for enterprise. And excites me -- really excited about Samsara is kind of the platform and the ability, like the connection with customers, the deployment of devices, the gathering of data. And that's really the key thing here. It's the data. And we just have an enormous -- and it really means there's enormous amount of data. And effectively, one way of thinking about it is that over the last 10 years, we've pretty much put sensors on everything, millions of equipment and tools and vehicles, and they are sending data back to us. And we're gathering this enormous amount of data that we then can use to build really exciting things. This all sits inside of this platform. And as you can see on this chart, this is the data gathering is just accelerating. And then we use this data to train models. And as we get more and more data, the models get better and better. So that's the basic principle of it. Now Sanjit, Dave and I will cover 3 new products for you now. And the first one is agents, and that's exactly what Sanjit spoke about. The agents sifting through this data, extracting conclusions and taking actions for our customers. And secondly, I want to talk about how we're extending this to operational AI, like these are new capabilities that we're getting from this data and the AI that opens up new problem areas and new markets, things that we haven't done before. And I want to talk a little bit about that.

And lastly, David will talk about the Tracking Label that you saw earlier today. And to put this in context, the new products that we have, the new emerging products are already more than 20% of net new ACV. So this is not something that we're exploring. This is already a key growth driver of the company. And in addition, these new products opens us up for new pricing opportunities, in particular, consumption pricing. And what this creates is an ability for us to really go deeper into the problems together with our customers, solve harder problems that creates more value for them, but we can only do them because we can now build as the AI and the agents take actions and create value. That's the other new thing here. Now we really came from a place, focused on driver safety to the left here. And we started there naturally because that's what our customers asked us to do. Like they get into a lot of accidents and making their operations safer, brought great ROI for them. So we followed the customers. And that's always been the logic. We collect all this data, and then we solve the most important problems and pay points for our customers. And that includes things like drowsiness and mobile phones, following distance and what not. And we're still doing that. And by the way, it's a pretty good market. It's a growing market, and there's lots of room to grow in there. But today, I really want to focus on the left-hand side on this chart, like the new horizon that is opening up because we have all this data from the sensors that we've deployed, like new operational AI detections. And here we use these cameras, right, and combine all of this together with improved AI. And when we do that, just like magic, to call it, whole new use cases open up. These are things like vehicle pushback on a tarmac or road defects that need repairing, and detecting road blockages that we then can route around like things to make it more efficient. And today, I'm going to talk specifically about 2 of these. The first one being waste intelligence, garbage trucks and such and the second one being ground intelligence. Starting off with with waste. And by the way, these industries, they are huge, right? They are often very, very labor intensive, which leans itself really well to AI and agents.

But Waste Management starting off is a $1.6 trillion global industry. And we've already got $7-figure deals in the pipeline on this one. And I want to show you this. If we pull up the dashboard, I can show what this looks like, let's see, there we go. So this is American Waste, and this is their operation in the Tulsa region. And what you see here is it's the routes that they are driving or have driven. There's nothing really new here. We have been doing routes for a long time. But the new thing here is that we're integrating into these garbage trucks, literally connecting to them. We can see things like when the arm goes up to pick up these garbage cans and dump them, of course, we install cameras in them all around up to 10 cameras, by the way. And what this gives us the ability of doing is to see what's actually happening. Like this. There's a pickup, we get the video. We know that the pickup happened because we're connected to the arm that picks up this. So we know therefore that pickup happened. We collect all the data and observe it, right? That may not sound like a lot. But the things that in these types of operations, there's a lot of stuff happening. So drivers would miss a stop like this, or maybe the customer forgot to put out the trash cans. And the way this is handled today is that the customer will call in and say, "Hey, you didn't pick up my trash, right? But because the customers -- the operators of this garbage truck, they don't know why, so they end up sending out another truck, don't worries, we'll send up a truck to pick it up, right? Very simple, which is additional cost for them. But the thing is this. It's actually a billable event. They didn't pick up there -- if they didn't put out their trash cans for pickup, there should be extra charge for that extra drive. So leaving revenue on the table and they're taking extra cost because they don't have the visibility.

Another example of this is overfilled bins. It looks like this. As you can see, it's overloaded. And garbage companies, they have policies for this. It's either 3 or 6 inches, you can overfill. But if you go above that, you got to pay for it. But the thing is that the drivers, they're just getting on with their day, right? They're just trying to get through. A Side loader can have 1 -- upwards of 1,000 pickups in a single day. So the drivers getting through, trying to get through their day. The company doesn't have any visibility, so they don't bill for these ones, right? They just pick it up, take the extra cost for the extra garbage without billing for it. And this enables them to actually charge for it. And by the way, these problems -- another one is -- the list goes on, contamination, customers throw the wrong trash in the wrong bin, they just pick it up and hand it on the backside, by sorting, the list goes on. The thing is that these are problems that they currently cannot solve, right? They're unsolved because they couldn't connect et cetera, and the AI wasn't there, right? The data wasn't there. And by the way, this $1.6 trillion, like, this is what they do. They drive garbage trucks to pick things up. And these things that I just showed you, they're integral to that process, right? It's not a small thing. So this is just 1 example of us taking all this data and the AI and taking the advantage that we have from everything that we already deployed and going deep into a vertical, solving problems and creating value.

But another example of this, we're doing this industry by industry. But another example of this is public sector. In public sector, there are many things that are happening, and we're knocking them off one by one. But one example is potholes. And pothole is a $3 billion or so kind of damage that comes from people driving into them. And the cities are actually liable, if someone drives into them and get damages on the vehicle or even worse. So therefore, they are eager to repair them. It's also very visible to the citizens. Mayors are very focused on this. Those of you from New York. This is like Mamdani's first win, if you saw one. So like mayors really -- we got some laughter. So it's actually very visible, and that's also we approach the mayors for it because they want to show wins to their citizens, and it's also visible to citizens. We don't like to drive into potholes. Now the way that cities handle this today is that they get a 311 call, they answer it, someone claims there's a pothole there. They send a vehicle, drive out and check it and make a determination of whether they want to repair it or not. That's quite a lot of work. So I'll show you what this looks like once you connect it to -- once you use our data, our sensors that are already out there. If we flip to my computer here. So this is -- we call this ground intelligence. And the first thing out there is really like the pothole detection, right? But that is material in itself, but that's just the first thing, like we can use this to see like broken guardrails, we can see low-hanging tree lines or power lines. We can see graffiti, encampments, you name it, like with cameras, and we drive 99% of the roads in the U.S. So we can see it all, right? And by the way, also, we've already ingested this data, right? There's no deployment. I'll go -- get back to that. But here -- so here's the city. This is Kalamazoo. Yes, this is Kalamazoo. So in this case -- and this is a customer that's testing this out right now. So as you can see, there are 4,000 pot holes that we detected here from 28,000-or-so observations that we've gathered. So there's a lot of potholes even in a small city. Imagine answering those calls, sending people out to checking all of these. It kind of doesn't scale, but we have visibility on all of them. And then we can actually in this tool, we can filter down. Let's look at some potholes here. And by the way, there are different flavors of potholes as far as I've learned. But we want to just look at not just crackings and whatnot, but the actual potholes.

Let's take a look at this one. So here -- so here's an example. So here, we're driving past, and you can see the potholes there. Now we detect this not just from the camera but also from the integration into the vehicle and all the other sensors we have. In this case, we're using GeForce to detect it. And then we run AI on top of that to identify the potholes. Now in this case this was on April 29, but we can actually here see how this has progressed over time. And as you, you saw it was a little bit rainy here. Portholes grow. They grow day by day when under certain conditions. So you're sending a vehicle out to check it is not enough. Like you need true visibility onto this. But we can see here how it's developing over time and how it's progressing. You kind of see it's getting deeper here. This is a month later, but they can grow even faster than that. And then towards here, if we scroll down, here, they've actually repaired it, or they have patched it. It's called they have just put -- eventually, they're going to have to repave this one. The point here is they don't have this visibility. They're sending vehicles out to do that, that cost money. They can't do it enough, so they actually don't know where they are. These are progressing quickly. That's a point for them. The point for us is that we already have the vehicles. The vehicle is already camera. We've already taken the cost to upload and handle all the data, right? So this we can deploy and sell without hardware, immediately deployed. We could build this for every city. [indiscernible] go approach them to just show them where the potholes are. So it's a software product in that sense.

So let's see. Yes. So exactly. So that -- so this is just like some examples of the type of operational things that we can do. And we're now working through this, like to see what are the most important problems, what are the verticals that we should go after, et cetera. but it's all enabled by the platform, devices, the sensors that are already out there.

Okay, cool. So with that, how about to hand over to David, and he'll talk a little bit about the Tracking Label.

Good afternoon. my name is David, and I'm Vice President of Products and Engineering for our Connected Equipment business. I want to take a step back to sort of Phase 1 and show you what Phase I actually looks like on a map. So this is the Samsara network. We talked a lot about what this data asset looks like, what we can do with it. This is what generates it. And it's kind of easy to not appreciate what you're seeing on the screen. The depth of it are remarkable. Each one of these dots represents a snapshot in time, a 1-hour snapshot of what our network our installed base looks like. These dots, they're everywhere. From this Zoom level, it's a little tricky to see, but they're on the road, of course, they're in residential areas, from buses and city vehicles, but they're also in intermodal yards. They're in airports like ground service equipment, they're everywhere. This network, as it turns out, is one of the key enablers for us to build new products. So you're selling ground intelligence, that's one of the products you build off of it, Asset Tags and another. Today, we're going to introduce a new one, it's the Tracking Label. But what is each one of those dots? What's actually sitting underneath there? Well, each one of those dots have gateway on there. It's got a camera. we can leverage both of those to build new products. So you just saw some of the ways we can use the network of cameras out there, there are millions of cameras that are buses and bulldozers and trucks. They also have gateways, which have Bluetooth. And so we can use that to build products like the Asset Tag that we launched a couple of years ago. So these 2 together can work to create net new experiences that would not have been possible several years ago. We are able to now change the paradigm from building a product for one vehicle for one customer, to a product or a suite of products that we can now work at scale across multiple. So of course, a few years ago, we introduced Asset Tag, Bluetooth-based device, that was really purpose-built for durable equipment, construction equipment, things like generators, concrete saws, fiber splicers, things that go lost and it's all about theft and lost recovery. A couple of months ago, we introduced a new version of the extra small, XS. And with that because our customers said, we love Asset Tag, but we've got even more equipment out there. Every time we shrink the device, we discover this whole new universe of assets. That's things like PPE and fire extinguishers and trucks and portable gas meters and the like. And we've seen that together, these products have really add a lot of value to our customer, getting ROI through. That's a loss recovery but also through managing this inventory at scale.

Over time, we've also adopted the networks to be more than just location. So of course, you've seen the cameras, but we can use the Bluetooth for data. You can actually transfer data over this Bluetooth layer. And so we introduced a tank level monitor, and that does location and sensor data. Then we introduced a wearable. It does location and sensor data, even voice over Bluetooth. So this network asset is a tremendous backbone for us to be building on top of, and it's been really valuable for us and frankly, an accelerant to build new products and deliver more value to our customers. But today, we launched our brand-new Tracking Label. So this is the TL11. And the way to think about this is that it's a single use purpose-built Asset Tag for shipments. So think about situations where you have one way of visibility. You can consider things like GPUs need to make it to a data center or pharmaceuticals [indiscernible] to make it to hospital, really high-value, really important things that need to make it from point A to point B, where customers are not interested in the reverse logistics or the return of that asset. Just got to go to point B and then never think about it again. and this is a really acute problem in the industry. Customers actually use Asset Tags to do this, but they're just not purpose built for it. So today, we've introduced this thin flexible disposable tag, last 45 days, once it's activated, it's got about a 9-month shelf life when you turn it on and activate it with our new shipment app. The last 45 days, provide visibility from origin to destination. There's no lithium in this. There's no hazardous materials. As soon as it gets the destination, we automatically stop tracking it because we've geofenced that destination. The network density allows us to discover it's been delivered. We stop tracking it, and it can be disposed off safely. We've made it realistic and economical for our customers by putting it on a consumption-based model. So this is not a subscription based, it's a consumption-based model, which is -- makes it palatable for our customers.

One of the interesting aspects of the Tracking Label is it's opening up a new market for us. So we primarily or historically have thought about customers with fleets of vehicles and assets. There's a whole other aspect to this world of physical operations with organizations that don't necessarily have heavy infrastructure in trucks and trailers and so on. They are Shippers, they're actual manufacturers of the goods that this whole ecosystem sort of exists and move their goods around from point A to point B. There are folks in retail like Nike, of course, and electronics, NVIDIA, there are folks in automotive, like Bosch, and these organizations have a real problem on their hands. They've got situations of cargo thefts. We all hear about that. There's also operational visibility and downtime and decision-making that we have to make. And so these are really the motivators for us to think about how to actually go about building a product like this and what caused us to go build Tracking Labels in the shipment center that I'm going to show you soon. We are also using this ourselves. So we have an aspect of our business that is logistics, and that's shipping our hardware devices to our customers. So we've actually been eating our own dog food on us for the past several months and partnering with other customers as they deploy this and getting into beta. And we've seen tremendous impact of us. We're able to make better decisions as a result of knowing where things are. We shift the game from being reactive to proactive. Instead of finding out a shipment is not going to make it on time, we know it -- [indiscernible] the fact, we know about it right now, we can make a decision, maybe ship a new thing, maybe call customer, let them know. But either way, we're not now encumbered by barcode scans that are 12, 18 hours, maybe a week late in certain cases. So how do we do this? Well, obviously, it starts with the network that I just showed you. It starts with the visibility that comes from that Bluetooth network. So we're not now relying on barcode scans at a cross dock or loading dock. We know exactly where it is all the time, and that makes the difference. Then on top of that, we're able to layer our operational visibility. So that's the millions of cameras that are out there that are able to give us context, well, okay, I see where it is on a map, but where is it really? What's going on here? Why is that shipment stopped? And then we're really fortunate to be building this in the age of intelligence, as Sanjit mentioned. So we can do this with AI. Now we can make better decisions. We can take all that data that these shipments are generating, sift through it or allow the AI to sift through it on our behalf and make decisions. For example, how many warehouses do I need? Which carriers do I want to leverage out of which warehouse? Am I serving my customers appropriately? These kinds of decisions, which tremendous -- historically have been tremendously difficult to make. And so now we're able to do it in a matter of seconds.

So I'm going to flip over the laptop and show you kind of how this works. So this is a shipment that came here. We shipped it of our Louisville, Kentucky warehouse and it came to Las Vegas. You see the origin in Louisville, it's to destination is Vegas. That's great. It was delivered. So that's good to know. We're aware of that. We see the contents. It's got 1,000 of these labels in it. We've actually integrated this with our ERP in our warehouse management system. So one of the key investment areas in making this product is how do you make it frictionless and must be frictionless and our operations team really worked with us on this. So this is great. We can see where it is, where it started, where it ended up. But let's look at how it actually gets here. Let's just pause for a second. So that arrow, that is the Tracking Label. Now some context, we intentionally didn't ship this with the same Samsara customer. We want to see what the worst case would look like. So there's no dedicated network infrastructure on here. There's no Vehicle Gateways attached to this, providing this connectivity. This is that label on pallet, inside of a box truck, made out of metal, shooting Bluetooth out of the side, getting picked up by that network that I showed you. And that is why that network is so critical and so important. This is a product that anybody can talk about, but it's much harder to walk the walk. And our network allows us to walk the walk. Now these other gold dots here, these other little pink dots. That's the carrier update. So that is what traditional scanning looks like without a label. You see a scan at a barcode, or barcode scan at a cross doc or loading dock, you see arrived at facility, left facility. That's the visibility that our customers have today. You can appreciate why seeing real time might make a difference. So we'll finish this journey out. We'll see if it came all the way here and delivered. So what are we able to do with this? How do we actually think about this? Well, as I mentioned, we've been using this ourselves. So this is Samsara on Samsara. These are all the shipments going out to our customers right now. And we're not clicking on individual shipments here. We're not going to go individually inspect each one of these. We're going to manage by exception. And so we can do things like look at delayed shipments, and we can click on this one here. And we can see that this was supposed to be delivered a couple of days ago, and it's not yet been delivered. So okay. what do we do about this? Well, all of the AI that we've invested in, all the automation we invested in, this feeds right into it. So our ops team can trigger an agent or have an agent configured, automatically e-mail our customers. It can slack them and let them know, hey, you might need to make a new order for this customer because this is going to arriving late. Now there's another thing that those cameras out there can help us with. Sometimes shipments get stalled. We don't really know why. We don't really know where. And so as I mentioned, we can actually put eyeballs on these shipments. These photographs are very similar to the photos that Johan showed you and you've seen with StreetSense and Weather Intelligence. These are taken from other vehicles in the vicinity, in the vicinity of both time and space to where the shipment is. And earlier today, we investigated a shipment that was stalled, it was stuck. And we were able to see it was stuck in a gas station, slept there overnight. For us going to the gas station is a 15-minute affair. For a driver oftentimes they're parked overnight at a gas station. And then you wonder why this cargo theft. Well, if we see something is stalled, now we can say, "hey, you're not in a secure facility, move that trailer, don't stay at the cargo -- at the rest stop overnight with this precious cargo inside. So this is how Bluetooth and cameras can all start coming together with shipment visibility and provide better and richer context.

Now One of the other use cases for us has been actually making these operational decisions. So how do I actually now they've got the base layer of visibility, the camera layer of operational visibility. How do I leverage AI to make better decisions? Well, one of the questions that we like to answer and think about is how are we performing as an organization. Our customers are asking the same question. So you can imagine that on a quarterly or by quarterly basis, our operations team likes to think about how we do [indiscernible] a report card. We want to see if we're doing all right, we've appropriately balanced our inventory across these warehouses and if we're serving our customers appropriately. Now this type of analysis to ask how my warehouse are performing is really, really burdensome for people. You have to go get CSVs, you have to get G Sheets. You have to get third-party information. And even in the age of Claude and chatGPT, managing this is a pain because you have to go find the data. It's really difficult. It takes several days to put this kind of report together. Well, in a matter of seconds, the AI is able to put this together for us and it's able to benchmark how these warehouses are doing. And we can look at things like, yes, we are doing way more volume out of Kentucky. And that makes a lot of sense because most of our customers -- more densely populated areas on the East Coast. But we may want to reload or rebalance a load. So we have to go deeper and ask, which carriers are best on time, do we want to use different ones for different routes so we have the best possible service for our customers. So these are just a couple of ways we can go back to the slides that we're leveraging Tracking Labels internally and our customers are leveraging them to get ahead of issues.

So in closing, I think the really interesting and important part here is we're seeing an accelerate in the way we're able to develop these products. The products we ship, go out to customers to generate data, which enables us to brand-new products, just like with Asset Tag, just like the tank level monitoring and now, of course, just like Tracking Labels. So we're really excited about this. We're excited about the ROI that we think we're going to see out of this for our customers and the new customer expansion into shippers. And then I'm going to hand it back over to Amit.

Thanks, David. Good afternoon. My name is Amit Vyas and I'm the Chief Revenue Officer at Samsara. And today, I'm excited to talk to you about our go-to-market momentum. As you see here, we are seeing a lot of success selling into various industries. But what I find most impressive is that we are selling to the market leaders in these various industries, companies like Alaska Airlines, Hertz, even Ecolab, all have complex operations at scale and rely on Samsara to solve their problems. So what problems are we solving. When I'm out in the field, these are the 4 things I hear most often. First, rising cost, fuel cost, as Sanjit mentioned, insurance premiums. And these are essential for our customers. They cannot operate without them. So any chance they get to reduce these costs, they're going to take it.

Next is safety, not just for their employees, their assets and their equipment but also the general public. Our customers run critical operations and cannot afford any unexpected downtime. That will cost them millions of dollars in certain cases. So they're always looking for ways for preventive maintenance. All 3 of these things converge to basically an emerging need for digitization. For so long, these customers and physical operations have been ignored by tech and they are now with AI, as Sanjit mentioned, are really reaching out to say how do we go lean in and digitize our operations.

And we're able to show ROI relatively quickly. For example, SD saved $3 million in fuel costs, USC had a 98% reduction in insurance claims and Maxim Crane, saved $13 million on maintenance costs. So one question that I always get from investors is you are solving customer problems, you're showing ROI very quickly when they deploy, why do they choose to do a phased rollout. So to explain this, I'm going to walk you through the customer buying journey at Samsara. So we'll start with the rep qualifying the opportunity. They will do a demo of our dashboard, and then they'll pitch a free trial. Now the free trial is our most powerful sales tool. It allows the customer to try Samsara within their own organization and compare it to the competition. From there, they'll do an initial deployment. Now I used to sell IT, routing, switching. And when you're selling IT, you're just replacing the incumbent in a networking closet and you're able to sell the complete solution. We sell to physical operations. So you have bulldozers out in the field. You have cranes being used. You have vehicles transporting goods. And our customers choose not to stop their operations and install, they rather do a phased approach. To illustrate this point, I'd like to talk about a well-known home improvement company that bought some -- sorry, back in 2019, they bought -- they started with 2 products, safety and telematics. And as they started with a small deployment and then the following year, they bought safety and telematics, but they also bought a third product, Asset Gateways. Now over the next few years, they continue to buy more and then they bought a fourth product, Asset Tags. And then just this year, they bought a fifth product, Connected Workflows. Now when you think about this, my sales rep sold the initial deal. They're also getting to know the customer better, establishing the relationship, but understanding their complex operations better as well. So they can sell and provide solutions as they identify them over -- as they roll out. The other thing I want to point out is this shows how our enterprise customers buy. Look at the confidence. They come back. They do an initial purchase. It's small and then they continue rolling out, but they're adding other products, as they continue their Samsara journey.

I'm going to switch gears and now talk about 3 initiatives that I launched at the beginning of this year. We are seeing success in the enterprise. We are continuing to move upmarket and getting into global accounts. So now we have a global sales team that is dedicated in calling into these accounts. These are our most tenured reps. We also are seeing a lot of success with emerging products. So Johan mentioned, we're rolling out quite a few new products. I don't want to overwhelm the sales team, the main sales team. So we launched product specialists at the beginning of the year. This is a dedicated team with their own quota that sells specific products, co-sells with the main sales team. And this is working out really well. In fact, Q1, our emerging products was over 20% of net new ACV.

And lastly, I'm always looking for ways to increase efficiency of my sales reps. I want them to be able to spend time selling and not doing admin work. So we've launched a lot of homegrown AI tools so that it can automate things like follow-up e-mails, et cetera. I've been at Samsara for almost 10 years. And I have a habit that after every end of the quarter, I call a few select customers and ask them, how did my rep do? How is your buying experience? And tell me why you bought Samsara. And for the last 10 years, the first 5 have been consistent with the newer 1 being actionable AI insights. At the end of the day, I would say Samsara customers buy Samsara and it's working because we have the right people. I know exactly which profile rep to hire for each of my segments. We have the right product. Our product road map is built by customers with their feedback, solving their problems and it's the right time. As I mentioned, there's an emerging trend to really lean in to digitize their operations. This is why Samsara is winning in the market.

Thank you. And now we have a quick break for 10 minutes.

[Break]

All right. Let's get going here. So hey, [ Theo ] and Eric, like thank you so much for being here, like really appreciate it. Sitting down with customers, it's like some of the best things that I do. It's truly an honor to speak to true -- 2 true leaders in the industry. So thank you so much for that. Now you need quite complex operations as such, like I would love for if you could start off with us introducing yourself and maybe a little bit about your companies, maybe starting with you, Eric.

Sure. My name is Eric Amlee, Senior Vice President of Fleet for Primoris Services Corporation. We're a utility scale contractor. We do EPC projects from renewables, solar, power generation, heavy civil. We're basically scaled all over North America, roughly 24,000 pieces of equipment, 8,000 of those are rolling stock units with dual-facing cameras. And my role within the organization is a cradle-to-grave fleet management. So we're a centralized fleet model. Anything from business cases to repair and maintenance, procurement, disposition, all that rolls under my group.

My name is Tom Olitsky, referred to as TO here.

Sorry, it's just that everyone in the industry that knows him, like, that's TO.

TO. That's fine. That's just my initials, but that's -- I've been going by for about 10 years. With Performance Food Group out of Richmond, Virginia, we are a food service distributor, Fortune 100 company, serving over 300,000 locations, including chain, independent restaurants, schools, health care, hospitals. We do movie theaters. We do gas stations, convenience type of stores. So it's pretty much what we like to call the away -- North American food-away-from-home market, right?

Anything in the North American group that does food-away-from-home. We employ about 43,000 associates, over 150 locations with an annual revenue of over $60 billion. In my role as a VP of Safety, I'm responsible for the health and welfare of all of those associates, including protecting the motoring public from what our drivers are in, and those communities that we serve. On the transportation side, we have about 12,000 delivery associates and as many vehicles.

That's some incredible scale here, like you're really powering society here. It would be interesting to hear, like how are you using Samsara day-to-day? Maybe starting with you, Eric.

Yes. So we started using Samsara roughly in 2018. We've grown exponentially since then through acquisition. We currently have 8,000 dual-facing cameras, as I've stated before, so protecting our drivers and the public. We've also used a lot of -- we use yellow iron. So it's equipment that's powered through multiple OEMs. We use trailer tracking devices, asset trackers. And really, the challenge we run into every day is that we use dozens of OEMs and where do we put all that data? How do we aggregate that? Since that's where our partnership has really, really blossomed and developed.

Yes. TO, how are you using it?

We are a Samsara customer for the past 5 years. We did come from a competitor that we've had 10 years prior. So we've been in the camera safety business for a while. But I think that our journey with Samsara has taken us to a totally different level. Safety is paramount for our drivers and for the public that we serve. And we took the platform from going from reactive to proactive, with all of the data and information that you're able to provide on the safety side.

We also are a food company. So we have refrigerated and frozen foods. So we use environmental door monitors and temperature sensors because food safety is critical, and we have to be compliant with the FDA. So that helps us also in a different use case. Sometimes we run out of space in our buildings, and we use our trailers for storage, and they become an extension of our buildings. And Samsara helps us be able to monitor those because before, it was all manual. We just had, hey, some go out and check the refrigeration units every 4 hours, 24 hours a day for 6 months because we have 25,000 turkeys on them. Now, we're able to be able to do that remotely, and that helps us immensely.

And I know that in our industries, like outcomes is what truly matters. So can you maybe share a little bit about how does the ROI work? And what kind of ROI have you seen from using Samsara? Let's start with you, Eric.

Yes, sure. So we -- for years, we used just the GPS telematics and we track drivers through driver scorecards. And then we saw some pretty good impact. But really, the change was when we adopted dual-facing cameras. We ran through a pilot program, and we're a pretty robust company. So we have a lot of union, non-union companies. So working through the unions, getting agreements and proving the value to the employee, not using it as an oversight and like a big brother scenario. And really, we've seen a huge impact. I mean, roughly, we're down 66% in total events, 40% in severe speeding and 42% down in crashes overall with 8,000 units. So that's equating to today roughly $5 million a year in savings from crashes and claims. And really, it's unbelievable to have met the amount. And the adoption rate of that through our organization has been phenomenal.

Everyone, at first, is definitely afraid of it. They're like, oh, everyone is going to quit and leave. We didn't have one person quit and leave. Honestly, we've worked through it. Everyone complains they have some disorder that can't be recorded, and we work through it and explain to them like, it's actually a value to yourself, right? We don't record folks. So everyone thinks that it's being recorded, and we proved everyone. So we actually developed a one pager and showed them like, hey, here's our change management. Here's what we're trying to do, and here's also what we accomplished. And we shared some success stories, really, of allowing how we've been able to get drivers out of infractions because -- to prove that they weren't at fault from where an officer thought they were at fault for it. So when you share those success stories, the adoption rate becomes -- it's just easy. It's naturally you're done, right? And really, the indirect of it is we've reduced our idling by 30%. So with today's fuel cost, it's millions of dollars in savings. So it's been a very, very successful program for us.

TO, how are you experiencing ROI?

Well, as a safety leader, ensuring our people make it home every night is most important to me, obviously. But in the past 10 years, we've seen -- we're battling insurance inflation, catastrophic loss and claims, nuclear verdicts, all of that is a headwind for us. And it just continues to rise at an alarming pace. I would argue with anybody that the system pays for itself in just pure exonerations. From a financial group, I don't know if you count that as an ROI, right, something that didn't happen. But I can tell you, I could look at 10 videos in a year that would cost 3x as much as we're paying you guys just to have the system. So exonerations is important.

But other than that, we forecasted an increase in insurance costs this year for varied reasons, a lot of inflation of $20 million, we expect it to increase $20 million. Now, our fiscal year ends this week. We're a July to June fiscal. And as we finished the year, we realized that we only needed to spend $10 million of that. So that's a weird type of win, but planning for a $20 million loss, and only $10 million is very successful to us. But that doesn't happen easily. It's not luck, right? So it's our dash cam footage. Over the past 3 years, we've seen a 26% decrease in total event rates. 60% in collision risk, 70% traffic signals and signs all through the tech, 23% decrease in harsh rate reduction. One of my favorite, 90% decrease in speeding over 10 miles an hour, 90%. That's just grassroots coaching, which is great. 33% in seatbelt.

But the most important part is repeat behaviors, right? And we love that you give us a repeat behavior percentage. And that has improved by 67% in just the last 12 months. So bottom line is we're moving in the right direction. All the data that you give us helps us be better stewards of our drivers and helps us coach.

Yes. Those are some quite impressive numbers. This takes partnership. So I would love for you to explain -- share a little bit, what is it like to partner with Samsara? And maybe also, what is it to be a part of the broader community? Maybe starting with you this time, TO.

Okay. Yes, I cannot -- I get excited about the partnership. It is so fun to be a part of this -- I feel like I'm part of the company. And I've watched you grow over the past 5 years so greatly. But we came -- again, we came from another vendor for 10 years, and we were -- at that point, we were unheard, and we're a big company. But it became to the point where if you have a suggestion, it was, well, it's going to have to benefit everybody. I'm like, okay, well, it probably will. But then it would just fall flat and nothing would happen. You guys listen and you react.

And it is a community. I could call up anyone, even not in my industry, and talk about -- because everyone's -- road safety is the same for everybody. I don't care what you're delivering or installing or doing things. So it is a community, but we have chances to communicate it beyond. We're on the Customer Advisory Board, which is fantastic, peer-to-peer meetings. Some of my favorite is I sat down twice already with two potential customers in the morning and this afternoon just to talk about -- because they're on the fence.

What do I do? Should I go here? Should I do it? Should I not? How hard is it going to be? And I love sitting down with those customers and telling them, yes, you have to. It's -- you have to take care of the public. And some people will go into this thinking, I don't want all that data because I'm afraid what I might see. That's not the reason to not buy the system, right? Don't say that out loud again to me. You have to face what's out there and you have to coach and make it better, right? Everybody's families are on the road. It's important for everybody.

Yes. So maybe -- by the way, thank you so much for the partnership. Maybe on the topic of new products, Eric, for you, like looking at our road map, what are some of the newer products that you are most excited about?

Yes. I think the 360 camera for us is going to be something that we'll be able to use just to get that bird's eye view. Some of the manufacturers have something of that, but there's a lot of OEM partners that are way, way behind. So we need something that we can put in place today, the avoidance of person detection, object detection, just the amount of -- just in injuries and incidents alone, not just the cost of the unit getting damaged, but taking that unit out of service and disruption of operations and sometimes, they are very hard to measure, and that's really where it affects your margins and your profit margins. And it's all about utilization and getting those going.

And really, we're really after connected assets and using the maintenance program. So we're really ramping up all of our maintenance schedules, preventative maintenance and everything. So really, pushing that through one system. We have -- there's just so many we use today. Having to get fault codes from different systems and different manufacturers and having one place to go and being able to act on that in real time, it just -- that's really, really where we need to be and where we're going to ramp up for sure.

Yes. That's great. What are you excited, TO, about the road map?

I'm like a kid at Christmas. I mean there's just so much good stuff out there. I would agree with Eric that I think multicam is a game changer, having 360-degree visibility around truck and you're now going to have bird's eye [ view ], it amazes me that you can look down and around because we love to pull -- our businesses are in parking lots, right? That's where customers are. So we're pulling in and we're knocking down wires and hitting overhangs and gas stations and tree branches.

We're always looking ahead when no one is looking up, but you get that over, the view around the whole truck really makes you realize what you're about to get into [indiscernible]. So I love multicam and the birds eye. AI-powered ride-along is fantastic. We require our supervisors to go out at least once a year and do a ride with every single driver. Now, this kind of -- it will take us to a different level of, do we really have to go out with all 11,000 drivers? Or can we just go out with the 25% of the drivers that really need a little more TLC? Because everyone else could be monitored through the system, and we could look at that.

And then if you could go out with a ride-along if that trend comes back as a little bit rough. So powered, that's a great one. Two-way conversations is fantastic. We don't want phones in their hands. Phones are an addiction. They love to pick up the phone. I've asked some of our coaches, when you need to get hold of the driver, what do you do? Well, I call them on the phone. Exactly what we don't want to do, right? We tell them don't use the phone and you're calling them on the phone. So this now gives us an avenue to be able to talk to them or be able to talk to them if they have fatigue issues. There's just a lot of tech that's coming out that's really exciting.

Eric, you have started testing autonomous equipment a little bit. So I would love to hear like, how is that working? And also, how do you see Samsara fit into that?

Yes. It's been a challenge. We use a lot of it today based on excavators. So mounted on a CAT excavator, we can overlay a trench and say, dig this trench and it has obstacle avoidance on it. It's been a little bit of a challenge because it's not necessarily faster than an operator is today. The hope is to be able to scale that one operator can run five or six machines. A little bit of difficulties just with getting into the weeds, material sloughs off behind it. The machine doesn't necessarily know that. So I have to go back and clean an edge or if it hits a rock formation and what it has to do to get over that rock. So that's where the operator is a little bit more efficient, but the technology is definitely rapidly approaching.

Where it's very successful today is in our mining facilities. So it's going to load a truck, and then it's going to dump in the same location every time. So like a point-to-point, and that's a fixed location. Some of the industries will get challenged on is in utility structures -- or utility infrastructure, you don't really know what you're getting into until you get on site. So power poles, residential areas, if you have to get traffic control, delineation, things like that, that's where it's kind of a slow progression. But that's definitely the progression of that. And really, where I see Samsara is fitting into that is all this is being engineered by multiple OEMs, multiple third-party companies. And again, we're trying to not get multiple platforms and more platforms. We're trying to condense all that. And really, where I see Samsara is really fitting into that as being the single pane of glass for everything we're doing for maintenance, GPS utilization, AI platform and autonomous platform all being housed in one location.

Yes, that makes sense. Have you started testing any of this, TO, in autonomous vehicles?

It's an interesting conversation for our industry. And I've been in food service distribution for over 40 years. And we're doing exactly today what we did 40 years ago. We are going from point A to point B with 800 cases on a truck, that we have to touch every single case to go to 20 different customers, up and down a ramp. So it's a very -- it's a human operation. And so we have not tested it yet because if we do -- now I fully, especially from a safety perspective, believe in the technology. It's safer.

If everything was autonomous, we wouldn't have accidents because accidents are caused by humans. It's not because of a failure of a vehicle. So we need someone to offload. So I would have a driver sitting next to an autonomous vehicle and then they get to every stop and offload. So we're not saving labor. And the cost is probably 50% more of a regular vehicle. And I'm worried about the infrastructure. So we're cautiously optimistic about it moving quick. But again, we'll always have the labor side in front of us that we're going to face.

Yes. And how would you see Samsara fitting into that when it eventually comes?

You have to build those robots, that's for sure, that are going to offload those trucks. Okay. I don't know what else to do. But no, yes. I know you will find a way. We will work together to figure it out.

It's good. And on the subject of AI, TO, so you've been early adopters of our agents. So I'm curious to see, what are you seeing there?

Drowsy detection. So that's been one of my favorites and one of the things that keeps me up at night. When you see videos of people starting to fall asleep at the wheel going 60 miles an hour, it scares you to death. So now we get alerts, right? We get alerts back at the shop, we get alerts in the truck. Depending on the type of event, if it's egregious enough. We might pull a driver off the road.

When we first started getting the drowsy events from Samsara, what we did is we probably had six drivers we pulled off the road and send them for a fitness test to see if they have obstructive sleep apnea, which tons of people do. And all six came back with obstructive sleep apnea. And all six went on a machine to help them breathe better, and none of them had a distracted event in drowsy again since that. So it's really about the health of the driver, which is fantastic. So I think it's very powerful.

That's cool. And Eric, switching gears here a little bit. I think you've been testing out the asset tags, specifically when it comes to theft and loss. What have you seen there? And what are some stories? Do you think they recovered or...

Yes, definitely. So in the construction industry, a lot of our stuff is parked at a hotel at night, someone's house. It could be a job site that's not secured. It's on the side of a highway, city street. So we do, unfortunately, see a lot of theft, specifically in small tools, whether it's a jackhammer, a saw, and we've been able to put small asset trackers on all of those devices. And in addition to our mini excavators, backhoes, things like that, they are also getting stolen as a redundant device. So we put an earth magnet on that AT11, just put on the machine, whether it's a rental or not, and it's allowed us to recover multiple devices. So for us, recovering one mini excavator or backhoe pays for almost the entire program as a whole to be able to afford us the opportunity to invest in more AT11s, AT12, AT13.

So just last week, we had three separate incidents where trucks were broken into. They stole some partner saws and small hand tools, and we're able to recover all of them. And two of the thefts that were separate were actually recovered at the same site. So it tells you that most of these aren't just random people in the neighborhoods doing things. These are professional rings that are going around. Not necessarily professionals, I wouldn't call them pros by any means. But that's definitely a group of people. And we're rapidly expanding that, especially with the new devices we're coming out and testing. And we've been an early adopter and an early tester of that, and it's -- we bear a lot of fruit with it.

That's great. Hey, I want to thank you so much for a great conversation. And more importantly, thank you so much for your partnership. Thank you so much.

Thank you.

Yes. Thank you. Appreciate it.

Right. I think that's over to you, Dom.

Great. Thank you, and welcome to Investor Day. I'm Dominic Phillips, Samsara's CFO. I have about 20 minutes of content talking about durable and profitable growth, and then we'll bring everyone back up on stage, and we'll do a Q&A for about 30 minutes before wrapping for the afternoon. So before I get into the reasons why we think our growth can be durable and profitable going forward, I first just want to level set with where things stand today. So we had our Q1 earnings call a few weeks ago. And on it, we announced we're doing roughly $2 billion of ARR growing 30% year-over-year. And you can see on this chart that as we've scaled our ARR over the last couple of years, we've really been able to stabilize and level off our overall ARR growth rate at roughly 30%.

And the reason we've been able to maintain this high level of growth as we've scaled is because over the last several quarters, we've been accelerating our net new ARR growth. So this is a look at our net new ARR growth by quarter compared to the same period in the prior year. And you can see that for the last three quarters, net new ARR growth has accelerated compared to last year. And even over on the right-hand side, for the full fiscal year, FY '25 net new ARR growth was 16%, and then we accelerated it to 21% in FY '26. And the big reasons we've been able to drive this growth, first, emerging products. For the last two quarters, emerging product net new ACV has contributed more than 20% of the overall net new ACV.

The second is large customers continue to be our fastest growing. So 62% of our ARR comes from our 100,000-plus customers. That's up from 58% a year ago. And then within that, our $1 million-plus ARR customers now contribute roughly 1/4 of our overall ARR. And the ARR from both of those customer cohorts has now accelerated sequentially for several quarters in a row. And the last reason is international momentum. So in Q1, 18% of our net new ACV came from non-U.S. geographies. That was tied for a quarterly record. So all the emerging products, large customers, international, driving accelerating net new ARR growth, which has allowed us to stabilize our overall ARR growth.

And in addition to sustaining high growth as we've scaled the business, we've also delivered a lot of operating leverage. So on the left-hand side, over the last 2 years, free cash flow margins have improved by 15 percentage points. And on the right-hand side, we've now achieved GAAP EPS. We've been GAAP EPS positive, profitable for the last three quarters and cumulatively, over the last four quarters, which now makes us eligible for some of the larger stock indices like the S&P 500. And this combination of large scale and fast growth and profitability really put us in rarefied air. There are roughly 300 U.S.-listed software companies, of which roughly 60 are doing $2 billion or more of ARR. And then of those roughly 60, there's only three that are still growing north of 30% and are GAAP profitable, Samsara, Palantir and Datadog.

Okay. So that's a quick snapshot of where things stand today and what we've accomplished over the last couple of years. We think that this growth rate can continue to be durable for several key reasons. The first is that we're selling into really large end markets that are growing quickly. The second is that our products address a really large TAM, and we still have a lot of white space opportunity in our core products and in our core geography. The third is that we are really purpose-built for large enterprise customers with complex physical operations, and that continues to be our fastest-growing customer cohort. Fourth, multiproduct adoption is increasing as we add more emerging products into our portfolio.

And then lastly, we have this really nice balance of net new ACV contribution coming from landing new customers as well as driving expansions into our existing customers, and we think that we can maintain that to drive durable growth. So double-clicking on each of those points in a little bit more detail. Again, the first is that we're selling into the world of physical operations, which is massive. These end markets make up more than 40% of global GDP, and they span more than a dozen different end markets. And because our value proposition to customers is universal, we're helping them improve their safety, their efficiency and their sustainability, our ARR across the physical operations end markets is very diversified.

On the right-hand side, this is a look at our ARR broken down by each of the end markets that we're selling into. And you can see there's not one industry that makes up more than 20% of our overall ARR. You have construction at 19%, transportation at 17%, wholesale and retail at 16% and field services at 13%. And beyond those top 4, there's another half dozen end markets that represent between 5% to 10% of our overall ARR. Not only are these end markets very large, but they're also growing very quickly. Over the last 10 years, U.S. GDP has grown 31%. And each of the physical operations end markets is growing faster than that, both individually, which is represented by each of the dotted lines on this chart, as well as in aggregate, which is represented by the black line.

And you can see that overall, physical operations is growing at a rate that is more than 2x U.S. GDP over the last 10 years. And the companies in these industries require a lot of heavy assets and frontline labor to get their work done, which means they have very large operations budgets, which are not -- which are less discretionary. We took a look at our top 10 public customers and found that they spend roughly 80% of their revenue on their operations budget. That includes all of their frontline labor, their assets, their vehicles, their equipment, all of their maintenance, their fuel, their accident costs, their insurance premiums, all of those costs are encompassed in the operations budget. And then they spend only 11% of their revenue on things like their IT budget and other SG&A-related activities.

Because the operations budget is so large, it means that we have a big opportunity to have a lot of customer impact and ultimately drive a lot of ROI for our customers, which you just heard from the customer panel. And because these industries are so asset and labor-intensive, they're also more AI resilient. This is a spider chart that Anthropic put out a few months ago. And around the chart, you see a bunch of different industries. And the ones highlighted in green are the physical operations end market. So you see transportation and installation and repair, construction, agriculture, those are all the industries that we're selling into.

And the way this chart works is where they have highlighted in light blue, those are the industries that they think are the most likely to be disrupted by AI. And you see a lot of light blue shading tied to industries like business and finance and computer and math and legal. And you don't see very much, if any, light blue shading on the physical operations end markets in green. So again, world of physical operations, it's massive. These industries are growing very quickly. Within these industries, we're selling into the operations budget, which is very large and less discretionary, and these end markets are more AI resilient. Second durable growth point is that our products address a really large TAM. Top-down external research estimates that our products address a market opportunity that's $175 billion. Within that, our core products address a $45 billion market. That's our telematics, our AI dash cameras and our powered asset gateways.

And beyond our core products, we have a $130 billion TAM for all of our emerging products that we've announced over the last 2 to 2.5 years, including everything that you've heard about today. Not only do our products address a very large TAM, but our penetration in our core products and in our core geography are really still in the early innings. On the left side of this chart is the North America telematics market that has been around for a few decades. Of the more than 35 million commercial vehicles in North America, only about 50% of them are connected today or using some sort of telematics solution. And that's fragmented across more than 35 different vendors, which means that the other 50% of commercial vehicles are still not yet connected. They have not gone through the Phase 1 transition that Sanjit talked about earlier.

On the right-hand side, the North America AI dash camera market is only 15% penetrated across 10 vendors. And the other 85% of commercial vehicles are still not using an AI dash camera today. So while things like our emerging products and international, those are going to be really important drivers of durable growth, we still have a lot of growth opportunity in just our core products and in our core geography. Next durable growth point is that large customers continue to be our fastest growing. We now have 190 customers that pay more than $1 million of ARR. Those customers represent roughly 1/4 of our overall ARR or just under $500 million. And the ARR from the $1 million-plus customers has now accelerated sequentially for four consecutive quarters.

Not only are our largest customers our fastest growing, but our enterprise customers continue to get larger over time. On the left side here, today, our 10th largest customer is paying $6.6 million of ARR. That's up 4.4x from 5 years ago when our 10th largest customer was paying $1.5 million of ARR. And you can see it's up almost 1.5x in just the last year. You can see that really large step-up from FY '25 to FY '26. In the middle, our 25th largest customer today is paying $4.2 million of ARR. That's up 5.3x over the last 5 years. And on the right-hand side, our 100th largest customer today is paying $1.5 million of ARR, which is the same size that our 10th largest customer was just 5 years ago.

The next durable growth point is that multiproduct adoption is increasing as we're adding more emerging products into our portfolio. On the left, 96% of our large customers and 92% of our core customers subscribe to two or more products. And that has increased slightly over the last couple of years, but we've effectively reached full saturation. Most of our customers at this point are using at least two products on the Samsara platform. In the middle, 70% of large customers and 55% of core customers subscribe to three or more products, and that continues to increase over the last couple of years.

And on the right-hand side, 20% of large customers and 10% of core subscribe to four or more products, which is roughly 2x higher than it was just 2 years ago. And the increase in multiproduct adoption is really being driven by all of these emerging products that we've announced over the last couple of years. So outside of our core three products, telematics, AI dash cameras and powered asset gateways, we've launched another 12 emerging products or product families or categories over the last couple of years, including everything today. These emerging products are now approaching roughly $150 million of ARR.

And as I said earlier, emerging product net new ACV contribution was more than 20% for the last two quarters. And the final durable growth point is that we have this really nice balance of net new ACV contribution coming from landing new logos as well as driving expansions through our existing customers. As you can see on this chart, very consistently over the last three fiscal years, roughly 40% of our net new ACV has come from new logos and the remaining 60% has come from expansions. Within expansions, more of it has come from upsells or license increases.

But you can see in FY '26, cross-sells, the light blue, is picking up as we've rolled out more of these emerging products. Double-clicking on new logos, we still have a lot of opportunity to continue to land more new logos over time. When we look at our CRM, we've identified more than 200,000 core customers that would pay more than $25,000 of ARR. Today, we have roughly 13,000 of them or 6% customer penetration. And even recently, new logos continues to drive a lot of our net new ACV. If I look at just the last three quarters, all three of those quarters are in the top 5 of most new core customers ever added in a given quarter.

We also have a significant opportunity on the expansion side with our existing customers. So if we took all of our existing customers and all of the ARR that they pay us today as 1x, and we were to go wall-to-wall across all of our core products, we were to monetize all of their commercial vehicles with AI dash cameras and telematics, and we were to monetize all of their powered equipment with gateways, and went wall-to-wall across all of the emerging products that we've rolled out, we estimate that the uplift would be more than 8x. And even just within our two core vehicle-based applications, the telematics and AI dash cameras, we estimate that today, we're only roughly 35% saturated in terms of the commercial vehicles that we've monetized within our customers.

And we've seen very consistent expansion within our customers over time. This is a table of our top 20 customers by ARR. And in each row, the light blue rectangle represents the quarter in which these customers first landed with Samsara and the subsequent dark blue rectangles represent each quarter that these customers did an expansion with us, whether that was an upsell or a cross-sell. And you can see how consistent these expansions are over time, even to the customers that have been on the platform for the better part of 5 or 6 years. All 20 of our top 20 customers have contributed some amount of net new ACV over the last four quarters. So this consistency gives us a lot of confidence that expansions are going to continue to drive durable growth for us.

Okay. Those are all the reasons that we think the growth rates can continue to be durable as we scale. We also think we can operate more profitably over time for a couple of reasons. The first, we've demonstrated significant operating leverage as we scale the business, and we think we can continue to do that, most notably in operating expenses. And then secondly, we are hyper focused on managing SBC as a percentage of revenue. So on that first point, we've demonstrated a lot of leverage as we scale the business. On the left, operating margins have improved by 17 percentage points just over the last 2 years.

Again, free cash flow margins have improved by 15 percentage points over the last 2 years, and GAAP EPS has improved by $0.52, and we are now GAAP profitable for three quarters in a row. All of that leverage has really come across all of the functions on the P&L. As I look forward, I don't expect as much near- to medium-term leverage in areas like COGS and in R&D as we have a very ambitious product road map, and we're investing in things like AI and hardware to drive durable growth. But I do expect more near- to medium-term leverage to come from areas like sales and marketing and G&A as we improve productivity and we benefit from a lower cost of sale on a renewed dollar of revenue compared to when we first landed that dollar of revenue.

We're also very focused on continuing to manage SBC leverage as we scale the business. Our biggest expense by far as a company is headcount, and that gets translated into compensation, which can be bifurcated into cash and equity. As we've scaled and started to generate more cash, we've made a number of structural changes to our equity program. So the mix of cash versus equity that we give as part of compensation and the level of employee which participates in the equity program. Our overall headcount hiring plan, who we're hiring and where we're hiring and what are the equity implications of that. And then the vesting length of the equity grants that we're giving out.

And all of those structural changes to the equity program have resulted in a lot of SBC leverage over the last few years. So in FY '24, SBC as a percentage of revenue was 25%. FY '25, we lowered it to 22%. Last year, we got it down to 20%. And this year, we're on track to hit 18%. We really manage equity, and SBC is a real cost of the business, and we expect these metrics will continue to improve as we scale.

Okay. So last slide from me, really just summarizing everything that we've talked about. We think the growth rates can continue to be durable and profitable as we scale, again, because we're selling into really large end markets that are growing quickly. Our products address a really large TAM, but we still have a lot of white space opportunity just in core products and in our core geography. Large customers continue to be our fastest growing, and we think that will sustain. Multiproduct adoption is only increasing as we layer in more of these emerging products into the portfolio. And we think that we can maintain this really nice balance of landing new logos and expanding our existing customers. And underpinning all of those durable growth points is the ability to continue to drive more operating leverage as we scale the business.

So with that, I'll welcome everyone back up on stage, and we'll get into Q&A.

All right. Thank you, everyone. So now we'll move over to the Q&A session. And just to keep the schedule, I'm going to prioritize the sell-side analyst first, and then we'll kind of go from there. So let's start here with Michael Turrin from Wells Fargo.

Thanks, Mike. Appreciate that, and thank you all for the time. It was a really good informative day of material. I guess I want to focus on, first of all, the tracking label seems like a bit of a no-brainer. And so what I'm curious about is we can't see your road map for emerging products and your ability to replenish those and continue to add to the durable growth profile. So I'd love to spend a bit more time on discovery. How much of it comes from unlocking new verticals, finding things like the cargo theft ROI case? And then how should we think about where the budget comes from when you're presenting these new products to customers and we're kind of gathering all of that input.

Sure. So I'll start, and David, if you want to add anything. At Samsara, we run customer feedback loops all the time. So events like this are great. We spend a lot of time out in the field, and that's where we hear about those operational challenges. Cargo theft is an interesting one, in that it's not something that a lot of companies report on, but it is epidemic proportions, like it's happening all over the place. So as we spend time on site, you'll hear, hey, we had an entire trailer stolen. We had a whole load stolen and that kind of thing.

And that's where products like AT11, which is the asset tag that we introduced a few years ago, came from. As we introduce those products, that really catalyzes the discussion for things like the tracking label, right? I don't think we would have gone straight to the tracking label, and customers wouldn't have even thought to ask us for it. But once you show them the tag, they say, this is great, can you make it smaller, right? That same thing is happening on the safety front as we think about the ride-along, like that's a whole new concept. I don't know anyone else in the industry that offers it.

But once we started deploying AI after the edge, once we started talking about looking at the entire drive, the whole driving experience, that's where the conversation organically led us to, you know what, we spent a lot of time and money and effort on ride-along. So we think that this kind of concentric circles approach is the way to go. And if you think about it, the perimeter is just growing and growing. So we don't have any shortage of ideas. But we're always thinking about timing, sequencing, applicability, like which industries is this going to affect. So we've got lots more ideas, I guess, is the short answer.

Great. Next is Alex with Wolfe.

Thanks for a wonderful session. Maybe I'll -- I appreciate the high-level takes from the financial portion. If I push one layer deeper on particularly the shipping label product, which seems like it's getting a lot of excitement, both on the floor and the room. Maybe just at a high level, talk about pricing and TAM. I mean I asked Claude what the TAM could be, and it estimates somewhere in the $30 billion to $50 billion.

And then I look at the TAM slide, and I actually think the TAM this year was less than the TAM last year. So help us understand a little bit of how to think about that. And then given some of the products are now graduating into this consumption motion as you're -- the power of the platform underneath, how does that layer in and factor into the financial profile of the company?

Maybe start with David just on some the tracking label stuff.

Sure. I mean it's early days with the tracking label. We think the market is, obviously, big. And for us, one of the exciting things is that we have customers today that can adopt the product and make use of it right now, and that's what they're doing. But there's also all these other organizations out there that we wouldn't necessarily talk to today. We kind of talked about NVIDIA and some of these other folks. And we think there's going to be broad applicability there. So we're excited to see what the TAM expansion looks like.

And then I think the additional exciting thing is that expanding perimeters as Sanjit just talked about, we get to talk to new customers, that we get to get new ideas and kind of see how the technology tailwinds meet them.

Do you want to cover pricing a little bit, too. I think he had ask a question. So how does consumption pricing work?

Yes. So it is a consumption-based model. Customers commit to buying a certain number of labels a year for the next few years. List price on the label is, per shipment, is $15 per shipment. And then it's enterprise-based discounting like everything else we do.

Okay. Kirk?

Kirk Materne of Evercore. I had a question on sort of on the agentic automation layer, and two, for you all. One, does that compress the phases, meaning as someone starts thinking about AI, do they -- they essentially still need the data. So does that help compress sort of the phasing of -- it might not compress the rollout, but assuming the buying decisions might get faster together? And then secondly, from a go-to-market perspective, when you think about waste intelligence and things like that, those are becoming a much more verticalized offerings.

And is it sort of a natural gravitation for you all to think about more verticalized sales overlay to go after those specific sort of opportunities, whether it's waste intelligence or potholes or actually, you're just selling into government? So just kind of curious about the compression and then sort of the go-to-market around that.

So the phases are really interesting to think about because the kind of initial rollout at Phase 1 ends up often being the bottleneck. Amit talked a little bit about the adoption journey that our customers go on. They're not going to be able to take their whole operation offline. So they have to do it in pieces. They might have 40,000 employees, like you heard from Tom. And so how are we going to get this out there is a real big challenge. So I do think once they get through that hurdle, the Phase 2 part happens pretty quickly. And then Phase 3 is brand new. We just started talking about agents today really on mainstage.

So I'll let you know how it goes. But we think that it will be faster because once you get through that initial adoption hurdle or hump, now you've got the data. That's this huge, huge unlock. And frankly, that is where the most anxiety is, which is we're going to have to deploy and touch 40,000 pieces of equipment, retrain 12,000 drivers, introduce this into the system. So we are very thoughtful about that with our customers. And then do you want to talk a little bit about verticalization and some of the other operational AI?

Yes.

No. I think the question was more around like how we sell...

From a sales perspective, the only verticalization we've done is with public sector, and we're continuing to monitor and eventually at scale, we will explore it.

Okay. Jason?

Jason Celino with KeyBanc Capital Markets. Congrats on the shipping label. It sounds like a great product, but I'll ask a different question. So the -- I found it interesting, the new go-to-market team on the emerging product upsell. Coincidentally or not coincidentally, we've seen kind of the emerging bucket, and net new ARR, also, kind of uptick. How big is that sales organization today? And is that something that could be getting bigger? Are you putting more resources behind it?

So we started this product specialist beginning of the year in Q1. So it's relatively new, and we're seeing early signs of success, but it's something I'm consistently monitoring to see how we continue to invest and at what time as we release future products. And I'd also imagine that certain products will graduate from that.

Andrew?

Andrew DeGasperi from BNP Paribas. Just wanted to ask a question in terms of changes in the regulatory environment. I mean last month was the Supreme Court decision. I think earlier this month, you had the executive order in terms of extending some of the enforcement beyond the freight brokers to also warehouse operators. So I just wanted to understand if maybe this -- have you been hearing more activity from these other customers versus last month? Could this be an incremental opportunity for you in terms of extending your product within these customers?

Maybe Sanjit, do you want to take that one?

Yes, sure. So I think in general, there was already awareness, especially among enterprise customers, that they need to invest in safety because if you heard this term nuclear verdict, these basically are payouts that involve $30 million, $40 million or $50 million kind of payouts when there's these accidents. So that was already sort of out there. A lot of these more recent decisions relate to third parties. So if you're contracting with -- if you're a freight brokerage or you're contracting with a subcontractor, does the risk sort of extend to them? This is all kind of new area.

But I would say, in general, a lot of these prospects are already coming to the table to invest in safety, so the awareness is there. So it hasn't felt like a step change. I don't know, Amit, if you sense anything different among the enterprise customers. But again, the awareness is very high. And then the question is, again, going back to change management, how do we introduce cameras and how do we introduce safety programs at scale into these large frontline workforces?

Chris?

Chris Quintero from Morgan Stanley. I wanted to ask about the infrastructure you've built around the models for your AI intelligence and agents. Are you doing multimodal kind of routing, deterministic elements, probabilistic elements? And it seems like voice is going to be a big way of how your customers are going to interact with your AI and software. So curious kind of how you're thinking about that angle, too. I know you have the investment in HappyRobot. So curious if that's it or you're looking to build something else there?

Yes. I can start.

The three nerds are excited.

Yes. Obviously, yes. So there's a set of things here to our stack that's important to remember. Like many and most of our models run on edge. It's an important element. Those we train ourselves, they're small models, they're efficient, they can run there. It's a key element when it comes to cost as well because that means that we can detect on edge, and we don't have to upload data and whatnot. It scales in a much better way. So that's the first thing to remember. But then we have models that also run in the back end. And there, we use everything, like we train our own models, deterministic, non-deterministic, fine-tune them and whatnot. So like -- and we do tap into all the new models from all the labs as well, including the open source.

Yes. And Chris, you asked about voice. So that's a modality we're excited about. But to the broader point, we are excited about multimodal data in general, right? So images, voice, GPS waypoints, all of these different things coming together. And sometimes different models perform differently, right? And so what's great is there's a diversity of models out there.

To Johan's point, we're fine-tuning, but we're also reevaluating constantly because the landscape is changing so fast. So we tend not to be wedded to a single model. We have routers and we can try different things. We're running evals constantly. And I think by the end of the year, we might shift our model mix, again, based on what's right for the job that our customers trying to run.

Matt?

I wanted to ask a question about agents. Sanjit, you had an interesting slide up there about the ROI potential of the maintenance agent. When you read the IDC study about the core product ROI, there's a lot of really tangible sources of ROI, whether it's insurance premium reduction, fuel savings. How do you think about presenting the ROI of agents to customers? And what are the components we should be thinking about?

Yes. Well, with agents, the key is task automation, right? So you can think of it as -- for ride-along, for example, traditionally, you'd have to put someone in the cab with the driver, you're double paying, right? You've got the driver and the other person. So you can start quantifying what is the value of that and then how many ride-along do they do and what's the savings. Similarly, for warranty claims, you might say, well, what was your claims rate before? How much warranty recovery you're getting, that's where your ROI is going to come from.

So I think it actually is going to vary agent by agent in terms of use case and also, kind of customer by customer, like what's the kind of frequency of use and so on. We're very optimistic there because we know that there's a lot of task automation opportunity here. Many of our customers, they just say, hey, we are bottlenecked right now. We don't have enough labor to do this. And so we are leaving warranty dollars on the floor or on the table, knowing that if we fill out all the paperwork, we'd get more, but we just don't have time right now. So I think we will be able to quantify more as we roll these out at scale, but we know the opportunity is there.

Let's go with Dan.

Dan Jester, Bank of Montreal. So I really appreciate the update on the network density and the ability to use that to build new products. As you think about growing internationally, that's been a place of focus recently. Has the ability to drive density in new international markets, has that sort of changed your thought process about entering new markets? Maybe to ask it a different way, if you're launching all these new products, do you need to expand in new markets with the same urgency that you would have had maybe a few years ago?

I'm happy to start. So we have been focused very deliberately on a couple of the core geographic markets. So in North America and Western Europe, this is where the majority of the physical operations TAM and value lies. And I think we've achieved some really significant network density. David, you had the slides on the network map. You look in Mexico, you look in the U.K., we're there. So we feel really good about that. And that means that we can introduce products like the tracking label into those markets as well.

Over time, we're probably going to expand with our customers into some additional geographies and the density in the network will grow organically there. But right now, we're not bottlenecked on market opportunity by any means.

Let's go with Dylan.

I appreciate everything today. Maybe a dual question for Johan and Amit. It was kind of focused on the product innovation question as well, too. But I think it's interesting with Waste Intelligence and maybe tracking to some extent as well, too, but how you can start to compound that ROI with a revenue-generative kind of value proposition, I guess. Is that a fair characterization? And how do you think about kind of the existing capabilities, but also future capabilities to expand the revenue side of the equation? For Johan.

And then, Amit, as you sell that, right, you have more vectors, more surface area and kind of explaining that ROI across departments, how that helps as you kind of move up into executive level conversations as well?

Yes, I can start off. So first of all, like it's still early days. I can say these are definitive answers, but in both, this example of potholes and waste, we have [ $7-figure ] deals in the pipeline there. And the revenue generation component of it is a part of the story with the customer. So there's certainly something new here because most of what we've done to date has been cost avoidance.

David, maybe talk about revenue generation for tracking labels to that.

Yes, sure. So we partnered with early carriers and DCL is on stage with us today, and they're now operating and offering that label to some of their customers, and they certainly view it as a revenue-generating opportunity. This is an upsell that they can provide a preferred customer experience and monetize it. And so I think, again, early days, but certainly seeing signal and appetite for it.

And then Amit, do you want to cover the go-to market?

Sure. From a go-to-market perspective, we love new products, right? I mean it just makes it so much wider. It makes it stickier with the customer. If you remember that graph I showed you, they buy initial, whatever it is, right, whichever product, safety, telematics, and then they continue to purchase, but now my sales team can talk about all these other products, and it just makes it stickier, and we're able to go wide into accounts.

Alex?

Maybe for you, Amit. This is Alex Sklar with Raymond James. Just following up on that go-to-market. So product breadth as a demand driver, just talk about how that's impacted win rates as the product breadth has really increased over the last 3 years for your core products in that initial land standpoint?

Sure. So we are continuing to see great growth with our core products. And this emerging products, it is helping us just continue, as I mentioned, over 20% of net new ACV in Q1 came from emerging products. The specialists are just able to go in and co-sell really well because they have certain knowledge on that product and can sell it. And then after -- over time, we'll see these graduate, and then there'll be new products that we'll assign specialists to if needed.

Alexei?

[indiscernible] from Alexei's team at JPMorgan. So given the impressive scaling in data points that you've collected and just comparing that figure that you disclosed year-over-year, which specific products or perhaps customer adoption behaviors do you most credit with helping you accelerate that scale? And as you think about that moat going forward, what do you see as the most pivotal method of continuing to scale that data capture going forward?

Let's just start with Sanjit.

You've seen that kind of acceleration in that chart. As we deploy our products, we often come up with creative new ideas for data capture. When we first released the cameras, we weren't taking pictures of garbage bins. But now, we see that there's a lot of value there. The same thing with potholes. So the cameras have now become a general purpose sensor for us. Same thing with diagnostics. Initially, we were just looking at fault codes. We're looking at things like miles per gallon and fuel consumption. Now, we're looking at engine performance.

So oftentimes, what we find is there's a data opportunity, and there's a question of do we want to gather it, move it into the cloud and so on. When we start to sense there's value in that data, we bring it in. And so that's where a lot of that compounding is coming from. It's multimodal, it's video. It's now going to be voice. It's workflows. We have hundreds of millions of workflows that people are running through our system.

And now, it's also data integration. Think about work orders and maintenance kind of work and costing. So a lot of this, again, comes back to the product development philosophy of concentric circles. And what tends to happen is the data follows those ideas. We say, wow, this is a really interesting idea. Let's start gathering the data, and that's what's driving some of that compounding.

Mark?

Mark Schappel with Loop Capital. Sanjit, I wonder if you could just give us an update of your view of the competitive environment and also whether you're seeing some of the platform companies kind of move into industrial operations.

I would say, generally speaking, the competitive set has been consistent with who we've seen in the market for many years. It's the same names, and you should feel free to chime in. And by the way, in different geographies, we'll see different names because they're more regional players. What we've seen though is our differentiation is this platform play. You've seen the multiproduct attach. I think we've done a great job simplifying the operation for the customer. That's playing really well.

And then I think your other question is around the larger platform players. I'm guessing you're referring to Googles and Amazons and so on. Yes. They definitely have a footprint among our customers. They might have Azure for VI software or for ERP or something like that. What we're doing is the kind of hardware, software cloud combination that's quite unique and not something that those players tend to offer. So I would say it's very rare for us to compete against them in a deal.

Any other questions? Sure. Okay.

This is great. I'm just curious how you think about the long-term risk from AVs because you talked in the keynote about robots and others, but one of the automations that are likely to come into a core of your customer base would be autonomous vehicles. How do you think about fitting into that world?

Yes. So AVs are something we've been excited about for a few years, and we're headquartered in San Francisco, which is like where all the AVs seem to be born, right? Like you see them all over the street. So for us, it's really been about expanding the opportunity. We see a way that if you think back to what our customers have talked about on stage, many of them have aspects of their operation where they may be labor or even driver limited. So AVs present an opportunity to move some of that freight from point A to point B.

And so we view it as an and. They're going to want to see it in their operations. We also think there are going to be many different types of AVs. Eric talked a little bit about how they have autonomous diggers and material movers and things like that. Those tend to come from different OEMs. And he also mentioned how looking for a single pane of glass to orchestrate his operations. So we think that's going to be fundamental as well as connecting all the workflows together, driving automation using agents, making decisions and then maybe dispatching AV or dispatching a person or some combination. So that's the opportunity we see.

And it's still, I have to say, very early days on the AV front. Most of our customers have been experimenting a little bit with it, and the counts are still in the thousands. Eventually, it will get to tens, hundreds of thousands, but there's 90 million commercial vehicles in operation between North America and Western Europe. So that's why we see it as an and for many, many years.

[indiscernible]?

Not AV related as much because if you kind of think about more connected devices as in vehicles, whether it's through -- I mean, right now, it's mainly Bluetooth, right, like in terms of what a lot has work on. But if you have direct-to-device connectivity through LEOs and other things over the next few years. Does that open up a surface area for you guys to have sort of more products and capabilities?

Do you want to talk a little bit about Hubble?

Sure. Yes. So we're early investors in Hubble, start-up company that's working on the possibility of Bluetooth to space, Bluetooth in air quotes. And we're excited about what that could open up for our customers and what that can mean for visibility. It means that over the ocean is all of a sudden a possibility. It could be that things get tracked everywhere. It's really early days on it. We're, I think, probably first people experimenting with the certain technology and seeing water can even run through the pipes. We'll see what happens. We're excited about the concept.

Yes. And then expanding that concept, there are a number of new constellations coming up. I think the promise is there, that we will be able to connect directly to the device. Many of our customers operate in really remote areas. They're literally building the roadways or the energy pipelines. So we know there's interest in operational visibility, connectivity and eventually, things like video. Technologies like Hubble would provide us like basic location, things like that. Eventually, we'd love to be able to get streaming video for operational AI and intelligence. So I do think that, that will expand the market opportunity, but we are kind of behind the connectivity coming online.

Alex?

Now it's round 2, so we can get a little spicier here. The other two companies you put on that slide of size, scale and growth, Palantir and Datadog, they have customers that pay them multiple times what some of your largest customers are paying them. Again, given whether it's the shift towards consumption, whether it's the fact that 8x, if you sold everything to everyone at all attached that you can realize in your customer base.

I guess maybe, Sanjit, for you, as you think about the density of absorption within your largest accounts, where you go from 5 million to 10 million to 20 million to 30 million to 40 million, like what does that look like? What has to happen to unlock that opportunity that allows you to kind of take advantage of this much larger pie?

I think Dominic had a really interesting slide that showed our customer profile and how it's been continuing to shift up over time. It's worth noting, our company is 11 years old. And this enterprise opportunity, it takes a while to nurture. You have to have the right sales efforts, and then they have to adopt the technology. So I think over the next decade, you are going to see our largest customers get larger and larger.

And then they have to be ready to adopt. A lot of those -- if you think about a Datadog or Palantir, those are fundamentally IT-oriented products, and the market is primed to consume a bit faster because they don't have to put hardware devices on the bulldozers and that kind of thing. So that's the practical side that we also think about, is in the fullness of time, we know that these customers can get very large. You heard about the scale that Performance Food Group operates at. Like there are so many things we can do for them, but they need to put us on each of those trailers. They need to get this out to the front line. So that's why we think of it as the opportunity is absolutely there. We're going to continue to build out the platform, but it's not going to be all at once. It's very rare for someone to land at that scale.

Maybe Amit, like as Johan and David continue to build more products is awesome. Kind of what's your view from a customer perspective? Do you think about opportunities as you assign them out to accounts? Like does it get bigger, smaller? Like how do you think about that?

I think I would echo what Sanjit said. It will continue to be a bigger opportunity, but the change management on the customer side is a lot. So that's where they'll take time to adopt it.

Michael?

Let me give Dominic a question.

[indiscernible]. I was trying to block him actually.

I noticed.

So one of the questions we get about Samsara is just rising or just across technology, but just rising component costs and impacts to financial profiles. We know you have a sophisticated procurement team. We know there have been periods previously where we've seen some free cash flow margin impacts from ramps in costs. So can you just speak to your ability to manage gross margins and free cash flow margin in a market that's seeing cost escalation?

Yes. I mean -- so for this year, again, I think we're trying to have gross margins be flat to where they were last year. And we've guided to still in this increased price environment, 100 basis points of free cash flow margin. And so I think that we're doing a pretty good job of managing it. And again, we've operated through these cycles before. If you go back to 2022 coming out of COVID, supply chain shut down and couldn't turn on fast enough to kind of meet all of the demand. And we were in a much different financial position at that time.

Now, we've got $1 billion, $1.5 billion of cash. We're generating positive free cash flow. We're well capitalized to be able to handle this. And the supply chain, our team is more sophisticated and the relationships that we have are stronger. So we actually view it as -- we feel very well equipped to handle this period of time, but also as like a strategic advantage in that, we are the biggest company. We're the most well capitalized. We have the best strategic relationships. You can hear the customer demand just from the customers kind of on the panel and their kind of desire to go through digital transformation. And so it's really an opportunity for us to drive more market share gain and really take advantage of our -- how well capitalized we are as like a strategic advantage.

Kirk?

I don't know if this is for Dom again, I won't put you on the spot, or maybe Amit. But just how do you think about scaling internationally right now? You're seeing really good product market fit. There's always a concern that you scale too fast, you have too many people in the field. But how do you think about that right now? Because it would seem all the same opportunities in Western Europe, Mexico exist that they did in the U.S. Just -- I'm just trying to think about the pacing on that, I guess.

I think we really just look at the data and like how productive we are and what we're hearing from kind of customers, and we're very dynamic in the way that we're kind of rolling out how we're allocating capital. We allocate it across different -- obviously, the product features for different geographies have kind of different needs and obviously, on the go-to-market side and how much kind of capacity we're ultimately adding. And so we really just look at the data and respond. we have the advantage of not being in a situation where these international markets are as fragmented as they are in the U.S.

So we don't have these like really large competitive incumbents where we have to kind of race out with really bad unit economics to get into these markets to win. We can kind of take our time and pace the investments in the capital based on what we're seeing and making sure that we're not kind of chasing bad unit economics. So I'd say it's very dynamic. International is a huge important part of the durable growth strategy, and we feel good about the investments we're making this year.

Matt?

This is Mike Richards for Matt Hedberg at RBC. Maybe just something we didn't talk a lot about today was Agent Studio. And so I was just curious your thoughts around the ability to productize bespoke agents that these companies are making and how that will accelerate your product road map.

Maybe Sanjit or Johan, kick it off.

Yes. Yes, sure. So in this Agent Studio, that is exactly what it is for. Customers can create bespoke agents, and they can specify them in plain English and what they want them to do. We don't have all capabilities in there, but we see this expanding such that they can truly integrate into their operation and do a multitude of tasks. So as such, we see this as a very exciting path forward, especially as part of the platform and the larger connectivity that we have as part of that.

And the way we think about productization, we've talked about operational intelligence in Johan's demo. So you saw like Waste Intelligence, for example. Some of those, we may see customers be able to get towards with Agent Studio, but maybe to really go big, to really make it amazing, we're going to need the product teams to get involved and build some more capabilities. So this is what we mean by running feedback loops. We're going to keep an eye on, well, which are the breakout templates that people are really attaching to. We're going to spend time with those customers to understand what else could we build. Are they set with Agent Studio and the consumption model there? Or would they like a full-blown product? And that's where we have to be dynamic.

Great. All right. Any other questions? Okay. Let me wrap up then. Okay. Well, thanks for joining us today and learning more about the Samsara story. Goodbye, everyone, and we'll see you again soon.

Good afternoon, and welcome to Samsara's First Quarter Fiscal 2027 Earnings Call. I'm Mike Chang, Samsara's Senior Vice President of Finance. Joining me today are Samsara Chief Executive Officer and Co-Founder, Sanjay Biswas, and our Chief Financial Officer, Dominic Phillips. .

In addition to our prepared remarks on this call, additional information can be found in our shareholder letter, press release, investor presentation and SEC filings on our investor relations website at investors.samsara.com. The matters we'll discuss today include forward-looking statements. Actual results may differ materially from those contained in the forward-looking statements and are subject to risks and uncertainties described more fully in our SEC filings. Any forward-looking statements that we make on this call are based on assumptions as of today, June 04, 2026, and we undertake no obligation to update these statements as a result of new information or future events unless required by law.

During today's call, we'll discuss our first quarter fiscal 2027 financial results. We'd like to point out that the company reports non-GAAP results in addition to and not as a substitute for or superior to financial measures calculated in accordance with GAAP. We also report both actual and constant currency growth rates for certain metrics.

On the call, we'll only provide constant currency commentary when there's a difference. Reconciliations of GAAP to non-GAAP financial measures and additional information on constant currency are provided in our press release and investor presentation. We'll make opening remarks, dive into highlights for the quarter and then open the call for Q&A.

With that, I'll hand over the call to Sanjit.

Thanks, Mike, and thank you, everyone, for joining us today. Samsara delivered a strong start to FY '27 with another quarter of durable and efficient growth. We ended Q1 with nearly $2 billion in ARR, growing 30% year-over-year and achieving our second -- our third consecutive quarter of GAAP EPS profitability. We added $101 million in net new ARR, also growing 30% year-over-year or 27% in constant currency.

Our largest customers continue to drive strong growth. We now have over $1.2 billion in ARR from our customers spending $100,000 or more, growing 37% year-over-year and accelerating for the third straight quarter. In Q1, we added 169 customers with $100,000 or more in ARR and 15 customers with $1 million or more in ARR. Large customer wins in the quarter include Hertz, one of the world's largest car rental companies; Foundation Building Materials, a leading North American specialty building materials distributor; the State of Connecticut; and one of the world's largest pizza companies.

Over the past few months, I visited dozens of our top customers and prospects in North America and Europe. These operators are being asked to do more than ever, and they're turning to Samsara for help. 3 themes emerged as consistent drivers of Samsara adoption. First, customers are scaling rapidly to meet surge in global demand for infrastructure build-out and need technology that can grow with them. Second, customers are expanding across our platform.

They're adding Samsara's emerging products to further digitize their operations and unlock savings well beyond their core product deployments. And third, interest in operational AI and agents continues to grow rapidly, although most operators are still very early in their adoption journey. Our customers are building the infrastructure for the global economy. For decades, technology investment flowed primarily into the world of bits, software, data and digital workflows. The next wave is the transition from bits to atoms, applying AI and intelligence systems to the physical world of vehicles, equipment, job sites and frontline workers.

Our customers are at the center of this transition. They're asset heavy, labor-intensive operators in critical industries, and they spend about 80% of their revenue on operating costs. As their operations scale, so does the number of physical assets and frontline workers they manage. Today, they're seeing extraordinary demand driven by a few tailwinds. The build-out of AI and data centers is driving massive investment across the physical economy. Supporting that build-out requires new power generation, energy systems, cooling infrastructure and grid and transmission capacity.

Additionally, governments are investing in the modernization of aging public infrastructure and private enterprises are transforming their operations to meet growing customer demand. We believe these tailwinds are only accelerating. According to McKinsey, addressing the global need for new and improved infrastructure will require roughly $106 trillion in investment by 2040. Samsara's customers are at the center of this buildout, and we believe this opportunity will only grow in the years ahead.

Companies in the world's most critical industries are choosing Samsara's connected operations platform to improve the safety, efficiency and sustainability of their operations. As they scale, so does the need for real-time visibility and actionable insights, which is driving more of them to standardize on Samsara. I'd like to share an example of one of our new customers in the quarter who is operating at the center of today's infrastructure buildout.

In Q1, we partnered with a global engineering, architecture and environmental consulting firm with more than 34,000 employees. They're using Samsara to connect and manage their diverse fleet and assets through a single platform. With Samsara's telematics, they're connecting their heavy-duty trucks, medium and light duty vehicles and passenger cars across the U.S. and Canada. They're also using asset tags to track and monitor nonvehicle assets, including trailers, marine vessels, ATVs and field equipment. Together, these applications provide them with one operational view across distributed projects and unlock new workflow capabilities.

For example, they're using Samsara to power an operational billing workflow that tracks vehicle usage by driver, project and business versus personal use. This helps them build project mileage back to clients and support tax reporting requirements. They're also deploying AI video-based safety to support driver behavior detection, in-cab coaching and broader safety score improvements. We believe Samsara will help them reduce operational costs by up to 10% within 18 months.

We're proud of the impact we're making together with our customers. Our emerging products contributed more than 20% of net new ACV for the second consecutive quarter. As customers realize the value of the platform, they're expanding their partnership with Samsara to take on more of their operational challenges. What often begins is the deployment of our core AI video-based safety or telematics products evolves into broader digital transformation as they adopt additional products to further digitize our operations and increase savings.

Connected asset maintenance is one area where we're seamlessly at today. Our customers typically manage tens of thousands of vehicles and assets that degrade over time. Maintenance is one of their largest cost centers, consuming an average of 10% of operational budgets. The average age of light-duty vehicles has increased from 11.5 years to 12.8 years over the past decade. And the parts and labor costs have risen 27% since 2020.

Yet many organizations still rely on outdated pen and paper systems that waste time, increase costs and fail to provide the insights they need to stay ahead of equipment failures. Samsara's connected asset maintenance helps customers shift from time-based and mileage-based maintenance schedules to a data-driven approach. Many organizations today are either over maintaining assets, wasting money on unnecessary service intervals or under maintaining them, risking costly breakdowns and safety incidents. Our maintenance solution brings these capabilities together in a single dashboard, giving organizations a complete view of fleet health across fault code intelligence, real-time vehicle diagnostics, work order management, integrated warranty and inventory management and a purpose-built technician experience.

I'd like to share another customer example. This one being a customer using our maintenance products. In Q1, we expanded our partnership with one of Canada's largest supermarket chains with over 1,600 stores and 128,000 employees. They manage a mixed fleet of tractors, trailers and refrigerated units across distribution centers nationwide. Their legacy maintenance system didn't integrate their vehicle data, forcing teams to rely on manual processes.

They chose Samsara's connected asset maintenance to replace that system and unify their entire maintenance operation on 1 platform. With telematics and asset gateways already deployed, fault codes and inspection reports now automatically trigger work orders, helping teams detect issues early and reduce unplanned downtime across their temperature-sensitive supply chain. They're building out their full maintenance operation on Samsara from preventive maintenance scheduling to work orders to vendor management, parts inventory and AI invoice scanning that eliminates manual data entry.

Warranty recovery and total cost of ownership tracking rounded out with a complete financial picture of every asset. It's a great example of how customers are expanding beyond Samsara's core products to digitize our operations and achieve more savings. I consistently hear from customers that one of the biggest constraints on growth is worker capacity. The number of frontline workers required scales directly with revenue and with turnover rates of 40% to 50%, that's a direct drag on capacity.

Many of these roles require specialized workers like electricians, heavy equipment operators and construction specialists who are increasingly in short supply. This is not a cyclical challenge. It's a structural one and is holding back growth for some of the most critical industries in the global economy. We believe operational AI represents one of the biggest opportunities to solve this problem. It uses our camera and sensor data to detect and analyze real-world conditions with initial detections focused on waste management, public sector and student transportation.

Combined with agents, it automates routine tasks so every worker can accomplish more, reducing the need for additional headcount and helping organizations scale in a tight labor market. In May, we gathered hundreds of public sector customers at our Go Beyond event in Chicago, where we introduced waste intelligence, ground intelligence and ridership management. We showcased how we're working with some of the largest waste management companies and cities in the U.S. to automate entire frontline operational workloads. We're still in the early innings of this opportunity, and so are our customers, but the early results are compelling, and we see this as one of the most important areas of investment for Samsara in the years ahead. I'd like to highlight the impact of waste intelligence, which helps customers increase revenue and ground intelligence, which helps them reduce operating costs. Waste management companies are missing revenue opportunities, struggling with worker capacity constraints and spending hours manually resolving service disputes. Samsara's waste Intelligence addresses this directly through 3 core capabilities.

Service verification, which automatically confirms a collection occurred at the scheduled time and location, providing customers a documented proof of service, overfill detection which identifies when containers exceed capacity, allowing operators to document overages and capture additional revenue and contamination detection, which we are developing to identify nonrecyclable or hazardous material and waste streams and helps enforce contamination policies and fees. On the cost savings front, pot holes account for approximately $3 billion in vehicle damages every year in the U.S., yet most cities still rely on 311 calls to identify road defects.

Samsara's round Intelligence solves this problem by leveraging trillions of data points from vehicles across our platform that covers 99% of major U.S. routes. We fuse AI dashcam and multicam data with GeForce data from our telematics devices to assess pot hole type and severity, map defects across the road network and direct public works teams to prioritize payers. New damage is captured immediately after storms or freeze-thaw cycles rather than waiting for outdated payment surveys, giving our customers a continuously updated picture of road conditions before anyone leaves ER. This turns a reactive, complaint-driven process into a proactive data-driven one eliminating guesswork and allowing teams to fix more potholes per shift. It has been an exciting start of the fiscal year, and we remain focused on delivering on our mission to increase the safety, efficiency and sustainability of the operations that power the global economy. We're grateful to partner with our customers as they modernize their operations and build the infrastructure the world depends on. We look forward to seeing many of you at our customer conference Beyond, which is taking place from June 23 to 26 in Las Vegas. At Beyond, we bring together leaders across industries to share learnings on digitization and the future of connected operations. We will also be hosting an Investor Day on June 24. We hope you can join us. I'll now hand it over to Dominic to go over the financial highlights for the quarter.

Thank you, Sanjit. Q1 was another quarter of accelerating growth and improved operating leverage, highlighted by strong performance across several key metrics, including 30% year-over-year net new ARR growth or 27% in constant currency, our second highest growth rate over the past 9 quarters, leading to 30% total ARR growth, which was the same growth rate as last quarter at a larger scale. 31% year-over-year revenue growth or 29% in constant currency, accelerating sequentially at a larger scale. 37% year-over-year ARR growth for $100,000-plus customers, the third consecutive quarter of sequential acceleration and 62% year-over-year ARR growth for $1 million-plus customers, the fourth consecutive quarter of sequential acceleration.

And finally, achieving our third consecutive quarter of GAAP profitability. More broadly, our performance reflects the large still nascent opportunity for digital transformation across physical operations. Looking ahead, we're well positioned to deliver long-term shareholder value for several key reasons. First, we have a unique defensible data advantage. By instrumenting physical assets with IoT hardware, we've created a large, growing proprietary data asset that cannot be easily replicated.

Second, we leverage this data using AI and agents to surface operational insights and automate workflows across our platform. Third, we have exposure to secular growth in physical AI. The AI transition from bits to atoms is underway, and Samsara is at the center of it. End markets such as construction, field services, energy and utilities are not only benefiting from building out global infrastructure, they're increasingly using AI to manage greater scale and complexity. The stock price performance of our top 100 public customers is up more than 30% over the past year.

Fourth, we have a differentiated value prop in mission-critical workflows. Our products deliver fast tangible ROI with quick payback periods. And lastly, we target the large, less discretionary operations budget. Our customers invest approximately 80% of their revenue in managing their operations, and we help them optimize the significant cost base, creating a large opportunity to drive customer impact and sustain long-term growth. Okay. Now turning to our results. Q1 net new ARR was $101 million, an increase of 30% year-over-year or 27% in constant currency, our second highest growth rate over the past 9 quarters. More broadly, net new ARR over the last 12 months was $455 million, growing 27% year-over-year or 25% in constant currency, accelerating for the fourth consecutive quarter. Q1 ending ARR was approximately $2 billion, an increase of 30% year-over-year, representing the same growth rate as last quarter.

And Q1 revenue was $479 million, an increase of 31% year-over-year or 29% in constant currency, accelerating sequentially at a larger scale. Several factors drove our strong top line performance in Q1. First, large customer momentum is leading to higher growth at scale. In terms of large deals, we signed 11 $1 million-plus net new ACV transactions in Q1, our second highest quarter ever. This reflects the success of our R&D and go-to-market investments to support these larger customer opportunities.

In terms of large customers, we ended Q1 with 3,363 $100,000-plus ARR customers, including a quarterly increase of 169. ARR from $100,000-plus customers was $1.2 billion, increasing 37% year-over-year, resulting in the third consecutive quarter of sequential acceleration. 100,000-plus customers represent 62% of total ARR, up from 58% 1 year ago and 56% 2 years ago.

Additionally, we ended Q1 with $191 million-plus ARR customers, a quarterly increase of 15%. ARR from $1 million-plus customers increased 62% year-over-year, representing the fourth consecutive quarter of sequential acceleration at a larger scale. Second, our customers are increasingly using Samsara as a single unified operations platform across multiple applications.

96% of $100,000-plus ARR customers subscribed to 2 or more products and 70% subscribed to 3 or more. In Q1, 9 of the top 10 net new ACV deals included 2 or more products and 4 included 4 or more products. In Q1, we deepened our partnership with the world's largest food service distributor. Since adopting Samsara's AI video-based safety solution in 2018, this customer has completed 20 expansions. This quarter, the company took a significant step forward by replacing its incumbent telematics provider with Samsara and adding asset gateways, commercial navigation and connected workflows, becoming a 5-product customer.

These solutions will help their operators navigate smarter, digitize field work and deliver better on-time performance across its massive distribution network. And strong multiproduct adoption like this helped us achieve our target dollar-based net retention rate of approximately 115% for core customers. And third, we demonstrated strong execution across several frontiers. In terms of emerging products, for the second consecutive quarter, more than 20% of our net new ACV came from emerging products. 7 of the top 10 net new ACV transactions included an emerging product, 42 transactions included more than $100,000 in emerging product net new ACV, and we signed our largest ever connected asset maintenance deal with Hertz, one of the world's largest car rental and mobility solutions providers and a software-only deployment across their North American vehicle fleet.

In terms of end markets, wholesale and retail trade was our largest vertical in Q1, contributing its second highest ever net new ACV mix and the third consecutive quarter of sequential growth acceleration. And construction contributed the second highest net new ACV mix in the quarter. And in terms of international, 18% of net new ACV came from non-U.S. geographies tied for a quarterly record. Europe contributed a record amount of net new ACV mix and landed its largest new logo win to date with a leading U.K. grocery retailer. And Canada net new ACV growth accelerated sequentially for the second consecutive quarter, resulting in its highest net new ACV mix in the last 8 quarters.

In addition to driving strong top line growth, we continue to deliver operating leverage across our business as we scale. Non-GAAP operating margin was 19% in Q1, up 5 percentage points year-over-year. Free cash flow margin was 15%, up 3 percentage points year-over-year, including the 15th consecutive quarter surpassing Rule of 40. And GAAP EPS was a positive $0.08, representing our third consecutive quarter of GAAP EPS profitability. This included a $30 million arbitration award from one of our lawsuits against Modiv for claims of breach of contract, fraud, unfair competition and false advertising.

And GAAP EPS would still be positive, excluding this award. Okay. Now turning to Q2 and FY '27 guidance based on FX rates as of May 2. Our guidance philosophy remains the same and is derisked for potential downside scenarios. For Q2, we expect revenue to be between $482 million and $484 million, representing 23% to 24% year-over-year growth or 22% to 23% growth in constant currency. Non-GAAP operating margin to be 18%, non-GAAP EPS to be between $0.15 and $0.16, and we expect to be GAAP profitable for Q2. For full year FY '27, we expect revenue to be between $2.005 billion and $2.013 billion, representing 24% year-over-year growth or 23% to 24% growth in constant currency. Non-GAAP operating margin to be 20%, non-GAAP EPS to be between $0.70 and $0.72, and we also expect to be GAAP profitable for full year FY '27.

Finally, please see the additional modeling notes in our shareholder letter. To wrap up, in Q1, we delivered accelerating growth at scale while expanding operating leverage. Looking ahead, we believe we're well positioned to sustain durable and efficient growth because we instrument physical assets with IoT hardware to generate a unique defensible data asset. We then harness that data with AI to surface operational insights and automate workflows, driving more customer value. We are at the center of the AI transition from the digital to the physical world and tied to end markets benefiting from major infrastructure initiatives, and we deliver fast, tangible customer ROI with quick payback periods.

We look forward to building on this momentum as we help our customers operate more safely, efficiently and sustainably at a greater scale. And with that, I'll hand it over to Mike to moderate Q&A.

Thanks, Dominic. We will now open the line up for questions. The first question today comes from Derrick Wood with TD Cowen, followed by Alex Zukin with Wolfe Research.

Congrats on another great quarter. I guess I'll start with kind of interesting to hear of a secular trend around customers shifting from time-based and mileage-based maintenance schedules to one that's more data-driven. How would you characterize where the market is today in this journey and how you think it's going to play out over the next few years? And maybe give us a sense as to what percentage of your addressable base is using Samsara Connected Asset Management today?

Sure. So I think this move from time and mileage-based to data-driven, it's still early. Many of the most sophisticated fleets see the value in it because they're either overmaintaining or undermaintaining their assets. They've known that. We now have the data to help them make smarter operational decisions. But if you step back, it is still pretty early in that kind of transition or adoption curve. And that also reflects we've only been offering this product for a few quarters now.

So we're excited to see this initial growth. The deal with Hertz was an exciting one as well, but it's still early days for connected asset maintenance. As a reminder, all of these physical operations, they operate in asset-heavy industries. All of those assets need maintenance. So that's the opportunity we see ahead.

Great. That's exciting. And then maybe, Dom, one for you, just on gross margin. It was down 200 bps year-on-year. It sounds like some of this is due to AI investments. Can you double-click on where this is coming from exactly? And then, of course, we get questions on memory prices and how that may be having any impact to you guys on gross margins or cash flow. So anything to flag on that side as well?

Yes, sure. So we are spending more money on AI and cloud really to drive more products and features. We expect to be able to offset some of those added costs with other COGS-related optimizations as well as OpEx reallocation in the form of go-to-market R&D and primarily in G&A. G&A had 5 percentage points of year-over-year improvement.

So we're able to deploy some of that into COGS as well. We think that we're going to be able to keep gross margins, let's say, roughly flat for FY '27. And really, we're going to show more leverage on the operating margin side. And so we beat our Q1 operating margin guidance, and we were able to raise for the full year from 19% to 20% as well.

The next question comes from Alex Zukin with Wolfe Research, followed by Chris Quintero with Morgan Stanley.

Sanjit, maybe the first one for you. It's pretty exciting, honestly, to see [indiscernible] into visual intelligence. I think it's pretty clear how infusing AI into your platform, leveraging all of the strategic data assets that you've been assembling for years is clearly going to pay off. So maybe just a simple question, how are you going to be charging for these tools? When will we -- or these products, when will we start to see them actually show up in the ACV from new products? And kind of maybe just stack rank where you expect to see some of the most momentum between the 3? And then I've got a quick follow-up, Dom, for you.

Sure. So I think we're excited about visual intelligence as well. We treat these cameras as sensors, and there's just tremendous amounts of value out there. For some of these products like Waste intelligence, these are essentially additional SKUs that get priced alongside of our existing products. So it's quite simple for the customer to budget for them and adopt them. There are others that are priced like the Road Intelligence product that are priced on a per mile basis, which is a data-only offering. So we're experimenting with these different pricing models. And then as we think towards things like agents, we do expect to, at some point, offer a consumption-based model.

We need to test this pricing and make sure it works well with our customers, but that aligns the value they're getting and our costs with how they adopt it. So we're excited about that. To answer the second part of your question around which ones are we most excited about, I think we're going to see how they perform in the market. Like I said earlier, there's a tremendous amount of value around each of these areas. It's hard for us to predict exactly, but the betas have been really strong. Customer feedback has been really positive. So we're excited to get these out there.

Excellent. And Dom, for you, the net new ARR figure in Q1 was pretty incredible. All of your larger cohorts are growing even faster. So was there anything unusual about the quarter? It seems like you went out of your way to kind of pass through a stronger raise than ever from a revenue perspective for the year. And I think you put a comment about the largest customer stock performance. So maybe just connect those dots to the message you're trying to send with your guide here today.

Yes. Well, we were able to pass through not only the Q1 revenue beat, but then -- which was like $23 million and then an extra kind of, I think, $19 million on top of that or getting to $39 million for the overall revenue guidance. So we clearly feel good about the momentum that we're seeing. Nothing really stands out as kind of onetime in nature in Q1 this year, any kind of large deals pushing or pulling. It was a pretty -- it was a quarter that we kind of expected in terms of the deals landing when they did. But clearly, with the large customer momentum, the strength that we're seeing in emerging products, even the international, strongest international quarter that we've had gave us the confidence to raise the guidance above the Q1 beat.

Next question comes from Chris Quintero with Morgan Stanley, followed by Michael Chernin with Wells Fargo.

Congrats on a solid set of results, especially on the GAAP net income side, which, if I'm not mistaken, means you are now eligible for some index inclusion. So congrats on that. Maybe first on the $1 million-plus ARR cohort, really nice to see that acceleration. Maybe could you talk a little bit about what you're seeing and how those discussions are going with some of your largest customers and what's really driving that momentum up there?

Yes, I'll take that one. I think with these large customers, these $1 million-plus customers, they are clearly excited about this connected operations vision. They have very large frontline workforces. They have often tens of thousands of assets, vehicles, trailers, equipment, and they're trying to coordinate all this. And as we now enter into new areas like maintenance and training and qualifications and workflows, they see an opportunity to bring it together on one platform. So the multiproduct land has been really strong. And then the kind of expand motion as they digitize more of their operations also strong. So this has been part of the strategy for many years is to focus on these large complex operations. I think we're seeing it now flow through to the results.

Excellent. And then -- maybe on the go-to-market AI side, like I'm curious as you start to roll out more of this operational AI and intelligence, how you're thinking about the go-to-market motion? Do you need to make any adjustments there? We've seen other software companies start to deploy more of a forward deployed engineer type of model. So curious if that's also something you're considering there.

Chris, we're keeping our ear to the ground in terms of what works well for our customers. There's -- it's actually a very interesting dynamic or backdrop where most of our customers are entering this digital transformation wave really for the first time. So they're less advanced than the kind of IT shops that may be writing a lot of code and kind of doing the forward deployed engineer thing. We are finding that many of our customers are in Phase 1 and Phase 2. So they're simply trying to get data about their operations, get that initial set of insights. And then they're experimenting with newer technologies like our agents and these newer SKUs to see what else they can unlock. So I would say we say we want to stay close to these customers, but it's not exactly the same model that we're seeing in the kind of software IT space.

The next question comes from Michael Turrin with Wells Fargo, followed by Jim Fish with Piper Sandler.

I want to zoom out and just ask one for both Sanjit and Dom. You're reaching $2 billion in ARR scale. You're still growing around 30%. So just one of the questions we field most often is just how to think about the durability of what you're delivering. And for investors who are asking where the next active growth comes for the business? Are there certain products in the emerging bucket or some of the emerging segments or categories you'd point them towards as you're really running into some rare air with that profile.

Yes. I mean you've really seen over the last several quarters, the overall kind of ARR growth rate really stabilized around 30%, hitting 30% again at the same growth rate as last quarter at a larger scale. I think it's really -- what makes us excited is that it's really coming from many different areas. So obviously, large customer momentum has been incredible for us. 62% of ARR coming from our largest customers But both the $100,000 and $1 million plus ARR has been accelerating now at larger scale sequentially for several quarters in a row.

The emerging products have really demonstrated a lot of success over the last year or so, 2 consecutive quarters of more than 20% of our net new ACV [indiscernible] ] And we continue to add more and more products into that emerging bucket. And then even beyond that, things like international, again, really strong quarter, 18% of net new ACV mix. And so I think we have a number of different growth vectors and all of those are really kind of firing on all cylinders, and that's allowing us to really demonstrate durable growth. .

Great. Next question comes from Jim Fish with Piper Sandler, followed by Matt Hedberg with RBC. .

I want to circle back on Derrick's question. I guess, how are you guys feeling about components and supply availability? Because I don't know if you address that one. And then, Dom, just on the expansion side, can you help us in terms of the thought process or what's going on underneath between adding more assets here versus adopting more software modules, especially with some of these new offerings that you have here for the year, and specifically also the way to think about the net new ACV mix this quarter between new and expansion.

Yes. So obviously, I think most investors are aware the kind of DRAM and NAND supply chain-related markets right now are definitely a little bit tighter with prices increasing. I think we've done a pretty good job of almost never running into a situation where we're stocking out. So we're -- we have a pretty, I'd say, scrappy supply chain team and we're able to almost always find all of the supply that we need to meet customer demand. We have another problem there. I'd say the visibility isn't as good as it has been in the past, meaning visibility out for a couple of quarters where you used to have much longer-term visibility but we have confidence that we're going to be able to fund the supply that we need to ultimately meet customer demand as we look through the rest of FY '27. .

I think it's worth also noting just even from a competitive standpoint, we feel like we're really well positioned. We're the best capitalized to navigate through this. And so we view this as an opportunity potentially even to capture some additional market share. So that was the answer to your first question. Secondly, from the expansion standpoint, for us, it tends to be more driven by more assets or licenses on the same product. Many of our customers land with multiple products upfront. So like 9 of the top 10 deals had 2 or more products.

And then customers will do expansions very often with the same products that they have, but they'll add more assets, they'll add more licenses. I called out that large global food distributor that has done 20 expansion since they first landed in 2018. And so that's very common for our customers, more so than doing a cross-sell of a brand new product that they didn't have before that's lesser of a driver of the expansions.

Great. Next question comes from Matt Hedberg with RBC followed by Matt Bullock with BofA..

Great. The emerging product success is obviously great to see, and it feels like there's a number of things I know that you're excited about. I don't think you guys called out asset tag this quarter. I know 4Q was particularly strong. Anything to call out there, any wins, any sort of traction from that front?

It was another strong asset tags quarter. Again, I would say just even more taking a step back looking broadly at the emerging products bucket, again, 20% -- more than 20% of net new ACV. There was, again, not more -- one product did not contribute more than 50% of the overall net new ACV mix so that we've seen that pretty consistently. So I'd say a widespread contribution from things like AI multi-cam asset tags was definitely in that bucket. We had the large connected asset maintenance deal. And so it's really coming widespread, but asset tags was another strong quarter.

that's great. And then building on the questions around the durability of growth. I know you guys have been actively adding quite a bit of capacity over the last several years. How -- I mean with the success that you're seeing now and really just like it feels like you guys should kind of put your foot down on the accelerator. How do you think about capacity adds as we think towards the balance of the year?

Yes, absolutely. Adding more quota-carrying sales reps for a direct sales motion -- for us is a key input to growth. We are definitely adding more headcount, I'd say, pretty aggressively as quickly as we possibly can into this year to kind of meet the demand that we're seeing and kind of make sure that we're able to kind of meet all the customer demand. .

And then for us, it's also thinking about productivity as well, which has been really strong for us, if I think about like our ARR or employee that is up double digits year-over-year and a big driver of headcount is clearly our go-to-market organization. So we're adding more capacity at a high pace and then we're seeing better-than-expected productivity as well.

Great. Next question comes from Matt Bullock with BofA, followed by Kirk Materne with Evercore. .

I wanted to ask about the guide because obviously, a really strong increase to the annual guidance. But as I look at the second quarter revenue guide, it looks like it might have been a little bit softer on a sequential basis. So Dominic, could you help us reconcile those 2 trends? Is there anything to call out in terms of linearity or large deal ramp in the back half?

No. I mean I think the guide that we put up was ahead of consensus expectations for Q2. And then again, I would really look at the full year guide almost doubling the amount of the Q1 beat. And so I think that demonstrates that we feel really good about the quarter, the momentum that we're seeing gives us a lot of confidence to be able to raise the guide, both for Q2 and for the full year ahead of expectations.

Got it. And then just 1 more, if I could. I wanted to ask about new products. Obviously, some really strong momentum on the booking side there, a few quarters in a row of 20% plus mix. Is there anything to call out in terms of comps as we move through the second half of this year given the strength we saw in the second half of last year? Or are you adding enough new products into that bucket that you won't -- you couldn't see a slowdown of momentum from early adopters.

I think we at this point that just given the momentum that we're seeing with the emerging products, we expect it to be a really important contributor. So again, more than 20% for the second consecutive quarter, we're adding more and more products. So we expect that will continue to be a material driver of the overall net new ACV mix.

And then obviously, the other 70-ish percent is coming from the core products, which continue to be strong growers and continue to be the kind of the beachhead into these customer opportunities. We're going to need both of those to continue to be durable growers for us to accomplish the forecast for the rest of the year?

The next comes from Kirk Materne with Evercore followed by Jason Celino with KeyBanc.

Congrats on a nice quarter. I guess I was curious about the software [ only when it hurts ]. And can you just talk about how a deal like that comes about? Is it a little bit of a different sales cycle? And can something that starts software only go back to having a device component to us longer term. And then, Dom, I was just curious, your last couple of years the deals have gotten bigger, you noted there's more volatility in big deals just sort of definitionally. But are you seeing better sort of just cadence through the pipeline on those bigger deals? Are you getting more comfortable, I guess, in terms of just the potential volatility in those.

Sure. I'll take the first part of that, Kirk. So the Hertz deal came together as we were meeting with their EVP of Operations and fleet. As you probably know, Hertz operates one of the largest vehicle fleets in the world, we're talking about 0.5 million vehicles. They have some unique dynamics in terms of how quickly those vehicles turn over.

And so maintenance and this kind of software-only opportunity seem to be what was most relevant to them. That being said, they got to know our entire connected operations platform. They do have other parts of their operations where the hardware products could play a big role. So we view it as an opportunity to really partner deeply, get to know them well, get to understand their operations. and maintenance is just where we're going to start, but there's a lot of different opportunities for us to partner together.

Yes. And on the second question, we feel really good about the pipeline and the demand that we're seeing in terms of large deals for the rest of the year. I think many investors know these are larger enterprise sales cycles, they can take multiple quarters to ultimately land. And so the specific timing of when the deals are going to land, especially as we get into kind of the back half of the year, there's less visibility into that, but just the overall amount of pipeline that we have for the large deals, we feel really good about.

I think that's why we, in this quarter, started talking more about net new ARR in terms of the -- like LTM over the last 12 months as opposed to quarter-over-quarter where you may get some more of that volatility, looking at it on a longer period of time like LTM just likely smooth out those potential for quarter variations.

Great. The next question comes from Jason Celino with KeyBanc, followed by Dan Jester at BMO. .

So how might the recent Supreme Court ruling on broker liability benefits Samsara? Obviously, Samsara has a diversified business and this ruling is specific, only a subsegment of your customer base. But historically, regulation, some mandates have acted as catalysts. Could we see this impact other industries? Or how are you thinking about it for your business?

Sure. I'll take that. So Jason, just maybe background for the others on the call, the Supreme Court basically ruled that freight brokers can be sued for hiring unsafe carriers. This is basically, we think, going to flow through to just heightened focus on being safe on the roads. It just highlights the risk of running these physical operations businesses.

So in that sense, we think that it's good for our business overall because a lot of what we do is in terms of improving safety. Most of our customers tend to be the larger fleets. They are safer by nature. They have larger safety teams. They invest more heavily in safety. So we're excited to be able to continue to partner with them it may impact some of the smaller folks out in the market, the owner operators who we don't tend to focus on. But that's a dynamic. It's right now mostly focused on the brokers and the kind of transportation side of the industry from what we understand. .

Okay. Interesting. And I don't think anyone's asked yet. But what are you seeing from like a macro standpoint? Obviously, the numbers speak for themselves, good. It sounds like you have a lot of momentum. But high oil prices are top of mind and a lot of your customers have that as a feedstock for feed input. Are you seeing anything from like a sales cycle or close rate or anything to share there?

I would say, by and large, our customers are busier than ever. I highlighted some of the industries like construction, where they're building out these data centers, they're modernizing tons of infrastructure, including electrical grids we're seeing in public sector, they're still busy. You're right that there is some increase in input costs. So basically, high oil prices translate to increased price of the pump for fuel that can be anywhere from 30% to 40% for some customers, but they are taking that challenge head on and using technologies like what we offer in our telematics offering to go and optimize things like engine idling and even routes. And so we see this as just kind of a cost of doing business for most of our customers, but their end market demand is strong. And so they, like I said earlier busier than ever.

Great. Next question comes from Dan Jester with BMO, followed by Matt Martino with Goldman Sachs.

Great. Maybe just 1 for me. So -- maybe just it'd be helpful to get an update in terms of how AI is helping you scale the business internally. A lot of great information on the product side today, but inside Samsara, what are you doing today?

How is that scaling? And maybe with the question earlier on hiring. And obviously, part of that was around the go-to-market team. But within the rest of the organization, do you still think you're going to need to hire as many people today as maybe you had thought maybe a couple of quarters ago?

Sure. So we might be able to tag team on this. I would say, in general, we're pretty avid users of AI internally. Certainly, our engineering teams have been using coding bots and agents for quite some time, they're able to develop more features, go deeper with our customers, and we think that's a great thing.

And then we're automating workflows throughout the rest of the business, which is driving efficiencies. I think Dominic could speak to some of the numbers. But Overall, our G&A teams are adopting AI to automate tasks. We're using it throughout our go-to-market functions to do things like account research and really understand customer context. But maybe you want to talk matrics?

Yes. In terms of overall headcount expectations for the year, no changes to what we discussed on the last earnings call. Most of the net headcount increases are going to be in the go-to-market, again, just given that direct selling motion that we have. I would say other functions outside of go-to-market are probably going to be roughly the same size, if not smaller. So we do expect this improved productivity is going to be a bigger driver of growth versus adding more headcount. And we saw that again in Q1, double-digit growth in terms of ARR per employee. So we are seeing more productivity across the business.

Right. The next question comes from Matt Martino at the Goldman Sachs, followed by Mark Schappel with Luke Capital.

Maybe just to hit on the memory dynamic once more. Beyond managing your own margins and inventory, are you actually seeing weaker capitalized competitors pull back or stretch on price and lead times in a way that's opening deals for you? Like in other words, is there a genuine share gain window here that's starting to show up in the pipe?

Yes, Matt, I'll take that. I think it's still too early to say. A lot of these products of this inventory, you have to do supply planning and basically get the inventory built months in advance. So my guess is we'll see some of these [indiscernible] play out in the second half of the year, but that's just my kind of high-level take.

All right. Next question from Mark Schappel with Group Capital followed by Andrew DeGasperi with BNP.

I want to drill into the public sector opportunity. if I could. In May, you had some product announcements on that front. In the public sector, what products are you leading with? And is the product uptake rate, is that consistent with what you're seeing across other industries, such as like construction or large trucking fleets?

Yes. I would say, Mark, the public sector customers tend to adopt a similar set of products, and they're adopting the platform similar to the others that we talked about. So multiproduct lands are quite common. These would be things like telematics, the cameras, but also equipment tractors and connected asset maintenance.

So I think their needs are very similar. There are some slightly different software integrations that we do because they use like a different suite of software for reporting, which we offer. We have 350 integrations on our platform. But the core product dynamics look pretty similar, I would say.

Next question comes from Andrew DeGasperi with BNP followed by Alex Sklar with Raymond James.

Great. I just wanted to follow up on the question asked earlier about the Hertz deal. In particular, I wanted to ask, is there a difference in the economics that is software only versus a more traditional sale that includes hardware? And separately, could you see this type of deal be more popular going forward? Or was this unique to a rental company like Hertz?

Yes. Definitely, software-only deals are definitely gross margin accretive. One of the largest cost of goods sold that we have is the amortization of hardware devices. And so when it's a software-only deal that cost does not hit us, and it's accretive to gross margins. I think more and more of the products that we're rolling out emerging products, we've got a number of these kind of software-only related products.

And so whether it's something like Hertz where it's something we can land with and be large scale or if it becomes an add-on, 7 of the top 10 net new ACV deals included one of these emerging products, I think it gives us opportunities to layer in some of these software-only products in addition to the core products that we've traditionally sold.

Next question comes from Alex Sklar with Raymond James, followed by Jackson with William Blair. .

Great. Sanjit, just on the emerging product success, obviously, a big ROI selling motion for you. But can you talk about what you're seeing from customer budgets over the last few quarters for those newer products? How much of the improved attach is product maturity on the Samsara side? First anything changing on the demand side or tapping into larger operations budgets?

It's an interesting question. I would say awareness is growing, that these products exist now. You can track smaller tools and pieces of equipment with things like asset tags. I mentioned earlier the switch from kind of time-based or mileage-based maintenance to data-driven. So I think it's probably a mix of both, and we have become more mature in terms of how we sell it, how our sales team engages on selling the broader platform opportunity. So it's probably even is my guess.

Next question comes from Jackson Bogli with William Blair, followed by Bella with JPMorgan.

This is Jackson Bogli on for Dylan Becker. So looking at the operational AI with waste intelligence, ground intelligence, that's subscribed as one of your most important long-term opportunities, but it's still very early on. I was just curious to get your thoughts on maybe how you plan to price and monetize agentic capabilities over time. Any thoughts on like what the adoption ramp could look like over the next few years? And how material this could become relative to the core product suite you guys have?

Yes. I would say we're excited to get these out there. Like I mentioned earlier on the call, we are experimenting with different pricing models. Some of these products like waste intelligence are sold alongside existing SKUs. Others like ground intelligence can be sold as a data product to Dominic's software point earlier. So you don't necessarily even need our hardware to get insights into road conditions. And then on the agentic side, we're in beta on that front, and we have a number of agents we're testing out. And so a lot of that is about finding the right applications and fit for those agents and then kind of partnering with the customer to do the discovery.

Great. So our last question today comes from Bella with JPMorgan.

This is Bella on for Alexei Gogolev. So just unpacking the main drivers of net new ARR this quarter, thinking about new logos versus expansion, large customers versus core where do you define that mix today? And how do you see that evolving within the next few quarters?

Yes. Biggest drivers for the 27% net new ARR growth in constant currency, second highest quarter over the last 9 quarters, large customer momentum. Again, the $11 million plus transactions and the strength in the $100,000-plus and $1 million-plus customers. I'd say number two, again, multiproduct adoption, 9 of the top 10, 2 plus products, 4 of the top 10, 4 plus products. And then the last big driver is, obviously, these kind of new frontiers, whether it's a 20% net new ACV mix plus from emerging products or the international or even the specific verticals that you mentioned like wholesale retail trade in the quarter?

Great. So this concludes the question-and-answer portion. Thank you all for attending our Q1 fiscal year 2027 Earnings Call. Before I let go, I have a few short announcements. We will be attending the Mizuho Technology Conference in New York City on June 9, the FBN Virtual Tech Conference on June 10 and the TD Cowen Corporate Access Day in Toronto on June 17.

In addition, we'll be hosting the RBC Bus Tour and the Wolfe Bus Tour on July 7. We hope to see one of these events. Finally, we are hosting our Investor Day on June 24 in Las Vegas. We will provide additional insights into Samsara's trajectory and the overall state of physical operations. Please send an e-mail to [email protected], if you're interested in attending in person. For those who prefer to attend virtually our Investor Relations website will have a link to live broadcast. That's it for today's meeting. If you have any follow-up for questions, you can e-mail at [email protected]. Bye everyone.

[Presentation]

Welcome to Samsara's Fourth quarter Fiscal 2026 Earnings Call. I'm Mike Chang, Samsara's Senior Vice President of Finance. Joining me today are Samsara's Chief Executive Officer and Co-Founder, Sanjit Biswas; and our Chief Financial Officer, Dominic Phillips.

In addition to our prepared remarks on this call, additional information can be found in our shareholder letter, press release, investor presentation and SEC filings on our Investor Relations website at investors.samsara.com.

The matters we'll discuss today include forward-looking statements. Actual results may differ materially from those contained in the forward-looking statements and are subject to risks and uncertainties described more fully in our SEC filings.

Any forward-looking statements that we make on this call are based on assumptions as of today, March 5, 2026, and we undertake no obligation to update these statements as a result of new information or future events unless required by law.

During today's call, we will discuss our fourth quarter fiscal 2026 financial results. We'd like to point out that the company reports non-GAAP results in addition to and not as a substitute for or superior to financial measures calculated in accordance with GAAP. We also report both actual and constant currency growth rates for certain metrics. On the call, we only provide constant currency commentary when there is difference. Reconciliations of GAAP to non-GAAP financial measures and additional information on constant currency are provided in our press release and investor presentation.

We'll make opening remarks, divert highlights for the quarter and open the call up for Q&A. With that, I'll hand the call over to Sanjit.

Thanks, Mike, and thank you, everyone, for joining us today. FY '26 was an outstanding year of durable and efficient growth. We ended the year with $1.9 billion in ARR, growing 30% year-over-year. Our $432 million of net new ARR drove this performance, growing 21% year-over-year and demonstrating our ability to accelerate growth even as we operate at much larger scale.

Our momentum is strongest with our largest customers. We ended the year with $1.2 billion of ARR from our $100,000-plus ARR customers, an increase of 37% year-over-year and our second consecutive quarter of sequential acceleration. As we look back on FY '26, it's clear we are uniquely positioned to help digitize the world of physical operations. We help these industries transform through a combination of hardware devices, cloud connectivity, deep AI and data integrations.

At the heart of our competitive advantage is our proprietary data asset, information that simply isn't found on the Internet. This includes everything from [ Dash Cam imagery ] captured across hundreds of millions of miles of roads daily to specific maintenance inspection workflows and service routes. We now have more than 25 trillion data points flowing through our platform every year. This data provides us with the unique moat that fuels a powerful data network effect, as we add more customers and assets, our AI models become more insightful for everyone on the platform. This creates a compounding advantage that is difficult for others to replicate.

Since our founding in 2015, we've worked towards a vision of fully digitized operations. We see this transformation occurring in 3 distinct phases. Phase 1, connecting the world's physical operations, then Phase 2, analyzing the data to surface actionable operational insights and Phase 3 automating entire workflows with proprietary AI agents.

Let's start with Phase 1. Our customers are service businesses that rely on physical assets and labor and require a wide range of equipment for their operations. This includes light-duty vehicles, school buses, yellow iron construction equipment trailers, tools and even dumpsters. On average, our largest customers spend around 80% of the revenue on these types of assets and workers. By connecting their operations to the cloud using IoT hardware, we're building a massive and proprietary data asset that represents the physical world. This includes real-time data such as video, GPS locations, sensor readings and diagnostics codes which our customers use to gain operational benefits, including protecting frontline workers from fault claims and liability with HD video evidence, delivering best-in-class customer service with live locations to provide accurate ETAs and and ensuring compliance with asset and worker monitoring.

While customers can immediately achieve clear and fast ROI from connecting their operations to the cloud, this digitization is still in its early stages. This is due to the significant change management required to digitize revenue-generating assets. We believe the multi-decade effort to connect the world's physical operations creates a durable long-term growth opportunity for our business. Once we've collected all the data, our customers enter Phase 2.

We trained purpose-built AI to surface deeper cross-functional insights that were previously unattainable. For the first time, our customers can see the direct correlation between worker behavior and long-term vehicle health, how specific service routes impact both fuel efficiency and customer satisfaction and how real-time coaching helps prevent accidents and keep their workers safe. By applying AI to this operational data, our customers are using actionable insights to transform their operations.

This includes identifying safety risks through 40-plus AI detections, like drowsiness, risky weather and passenger left behind, and correlating that risk with the workers' broader safety record, simplifying compliance tracking by automating the verification of worker and asset qualifications and minimizing fuel spend through coaching driving behavior and intelligently suggesting the most cost-effective gas stations along their routes.

Our AI analysis can now go even deeper by expanding the scope beyond a single customer driving actionable insights from analyzing our network of tens of thousands of customers collectively. For example, we can predict asset breakdowns by analyzing sensor data and comparing it against data from tens of thousands of assets of the identical make model and year to understand the average time to failure, analyze weather risk by comparing national weather service data with actual camera footage from Samsara's network of millions of devices, and optimize operational performance by comparing an organization's safety records -- safety scores, utilization rates and fuel efficiency against anonymized data from industry peers to identify specific areas for improvement.

These actionable insights do more than just power dashboards. They build a high-velocity, high-quality data foundation required for automation. You cannot effectively automate what you're not first unified and understood.

Next, our customers enter Phase III. Advances in AI reasoning capabilities allow us to build AI agents to take action and automate entire workflows. We are shifting the paradigm from providing insights in Phase II which require a human to interpret and act to delivering automated outcomes in Phase 3. These agents will supercharge our customers' operations, giving them virtual teammates to completely transform their approach to safety, efficiency and sustainability.

As part of this, we're excited to announce our very first AI agent, the [ AI safety coach ]. It comprehends risk by self-reviewing data sources such as safety event videos, workers' safety records and weather conditions. This depth of understanding allows the agent to deliver automated safety outcomes, providing real-time voice coaching in the cab and personalized end-of-week coaching videos for workers. It even dynamically adjust safety alerts based on risky conditions such as increasing following distances when it begins to snw.

Beyond safety, our road map includes a suite of specialized AI agents designed to act as force multipliers for back office teams. We're developing additional AI agents to assist with compliance, maintenance and dispatching. By automating these high-frequency complex tasks, we're enabling our customers to scale their operations without the traditional linear increase in administrative costs. To realize the full potential of these 3 phases, technology must be adopted by the people who power the business every day.

Today, the majority of physical operations are moving into Phase 1 or Phase 2 of their digital transformation, which requires installation of our hardware and change management with their frontline workers. From there, the transition to Phase 3 can happen much faster as the core parts of their operation are digitized and prepared for AI automation.

The progress we've made in digitizing the world's physical operations is directly translating to our results. We partner with many of the leading physical operations organizations, including 7 of the top 10 food service companies, 7 of the top 10 waste management companies, and 5 of the top 10 wholesale and retail companies. In Q4, we added 204 new $100,000-plus ARR customers and ended FY '26 with 3,194, $100,000-plus ARR customers. Our large customer momentum is laying the foundation for durable growth as these organizations adopt more products across our platform to achieve additional ROI.

Large customer wins for the quarter include Southern California Edison, [ groundworks ] and Harris County in Texas. I'd like to share 2 examples of how we're expanding with our customers. The first is with 1 of North America's leading freight transportation companies, operating a rail network of more than 30,000 route miles. Since becoming a customer in 2021, they've used our video-based safety and telematics products on their [ freight hospitals ] to build a world-class safety program. This resulted in a 90% drop in safety events and a 97% drop in distracted driving.

In Q4, we expanded our partnership to include AI Multicam as they are growing their safety program. They were a top 10 win for the quarter. We estimate they will save over $12 million per year through fewer and less severe accidents, lower maintenance spend and reduced fuel consumption.

Another example is with Estes, which was also a top 10 win for the quarter. Estes is the largest privately held freight transportation company in North America. They operate over 43,000 trailers and 10,500 tractors to move 70 million pounds of freight daily. After initially partnering with Samsara for video-based safety and Telematics, they expanded in Q4 to add equipment monitoring, Asset Tags and connected asset maintenance, further unifying their operations on our platform.

Estes is deploying asset gateways across their trailer fleet to gain real-time visibility and safety insights. They're using Asset Tags to track thousands of smaller mission-critical assets, including [ dollies ], forklifts and ramps that are essential to their daily dock operations. They're also using connected asset maintenance to detect issues early and reduce unplanned downtime and streamlined shop operations with integrated warranty and inventory management.

We are proud of the impact we're making together with our customers. We introduced the asset tag 18 months ago, and our customers are rapidly adopting them to get better visibility across their operations from heavy-duty assets to smaller tools and equipment. This is only made possible by our industry-leading industrial-grade Samsara network, which continues to get bigger and better.

In just the last 2 years, we doubled our network density and can now detect Asset Tags in near real time. providing visibility at scale that can't be replicated. We are further strengthening our network through an integration with Hubble's terrestrial network of more than 90 million consumer smartphones. This builds on Samsara's strong presence on roads, job sites, and in residential areas by extending visibility inside buildings.

To continue the momentum of our Asset Tags, we are introducing the all-new Asset Tag Access a form factor of 5x smaller than our original asset tech. It is purpose built for more compact, high-value handheld tools and specialized equipment, such as gas meters and IV pumps. Equipment managers can now mix and match Asset Tags based on the size and shape of their assets.

Finally, we also introduced the latest generation of our Asset Tag. It has 6 years of maintenance-free battery life, a 50% increase over the previous generation and improved precision finding and range. We're excited to see the growing impact that asset tags are having on our customers' operations. As we close out a fantastic FY '26, I want to thank our customers for their continued partnership and our team for their relentless focus on innovation. We're in the early innings of a multi-decade opportunity to transform the physical world and have never been more excited about the road ahead.

We also wanted to share that our Chief Product Officer, Kiran Saker has retired. Our CTO and Co-Founder, John Bicket; and SVP of Product Management, Johan Land, will take over leadership of our engineering and product organizations, respectively. We thank Kiran for his outsized impact and customer focus, which were instrumental in growing Samsara from an early-stage idea into a multibillion-dollar business.

Lastly, we're excited to announce that we will be hosting our customer conference Beyond 2026 from June 23 to 26 in Las Vegas. We'll also be hosting an Investor Day as part of the event. Beyond is our opportunity to bring together leaders from across industries to discuss the state of physical operations and new ways to deliver value through digitization. We hope you'll join us and are looking forward to seeing many of you there.

I'll now hand it over to Dominic to go over the financial highlights for the quarter.

Thank you, Sanjit. Q4 was another quarter of accelerating growth and improved operating leverage. The quarter was highlighted by strong performance across several key metrics, including year-over-year net new ARR growth in constant currency, the third consecutive quarter of sequential acceleration and the highest net new ARR growth in the past 8 quarters. leading to 30% total ARR growth also accelerating sequentially at a larger scale. 37% year-over-year ARR growth for $100,000-plus customers, the second consecutive quarter of sequential acceleration at a larger scale, and 56% year-over-year ARR growth for $1 million-plus customers, the third consecutive quarter of sequential acceleration at a larger scale.

A quarterly record $13 million plus net new ACV transactions 23% of net new ACV from emerging products launched over the past 2 years and achieving our second consecutive quarter of GAAP profitability. More broadly, our durable and increasingly efficient growth demonstrates the large yet still early opportunity for digital transformation across physical operations.

Looking ahead, we believe we're well positioned to deliver durable growth and create long-term shareholder value for several key reasons. The first is that we have a unique defensible data advantage. By instrumenting physical assets with IoT hardware, we generate a large and growing proprietary data asset that cannot be easily replicated.

Second, we're leveraging this proprietary data to power a closed loop of intelligence and action. We use AI to surface operational insights and deploy AI agents to take action on those insights and automate workflows across the platform. This drives stronger customer engagement and expands the long-term value of our platform.

Third, we have exposure to secular growth in physical infrastructure. Our business model scales with physical assets rather than headcount or knowledge workers and aligns us with end markets benefiting from major initiatives such as the global AI infrastructure build-out. The stock price performance of our top 100 public customers is up more than 30% over the past year.

Fourth, our products offer a differentiated value prop in mission-critical workflows, delivering fast tangible ROI such as accident reduction, fuel and maintenance savings and improved asset utilization, making us essential to our customers' operations. And lastly, we're targeting the large less discretionary operations budget, which represents approximately 80% of our customers' revenue on average.

And because we help them optimize this significant cost base, we have a large opportunity to drive customer impact and long-term growth. Okay. Now turning to our results. Q4 and FY '26 ending ARR was $1.9 billion, an increase of 30% year-over-year, accelerating sequentially at a larger scale. Within that, we added $145 million of net new ARR in Q4, an increase of 33% year-over-year or 31% in constant currency, resulting in the third consecutive quarter of accelerating sequential growth and the highest net new ARR growth rate in the past 8 quarters. Our overall net new ARR in FY '26 was $432 million, an increase of 21% year-over-year, which also accelerated year-over-year at a larger scale.

And FY '26 revenue was $1.6 billion, an increase of 30% year-over-year or 29% in constant currency. Several factors drove our strong top line performance in Q4. First, large customer momentum is leading to higher growth at scale. In terms of large deals, we signed a quarterly record 13 $1 million plus net new transactions in Q4. This reflects the success of our R&D and go-to-market investments to support these larger customer opportunities. In terms of large customers, we ended Q4 with 3,194, $100,000 ARR customers including a quarterly increase of 204, our second highest quarter ever.

ARR from $100,000-plus customers was $1.2 billion, increasing 37% year-over-year resulting in the second consecutive quarter of sequential acceleration at a larger scale. $100,000-plus customers represent 61% of total ARR, up from 58% 1 year ago and 56% 2 years ago. Additionally, ARR from $1 million-plus customers increased 56% year-over-year, representing the third consecutive quarter of sequential acceleration at a larger scale. Consistently over time, our ARR mix from large customers has increased, while ARR mix from smaller customers has decreased.

To better reflect this trend and align with our capital allocation strategy, we're refreshing our definition of core customers to include customers with more than 25,000 in ARR versus [ 100 ] previously. At the end of Q4, [ 250-plus ] customers contributed 85% of total ARR, up from 83% 1 year ago and 81% 2 years ago. We expect this trend to continue and believe this update also helps investors better understand our focus on larger customers versus other competitors in the space. Second, our customers are increasingly using Samsara as their mission-critical system of action by subscribing to multiple applications on a single unified platform.

96% of our [ 100k ] ARR customers subscribed to 2 or more products and 69% subscribe to 3 or more. In Q4, 9 of the top 10 net new ACV deals included 2 or more products, 8 of the top 10 included 3 or more products and 6 of the top 10 included 4 more products. In Q4, we had a large win with 1 of the Midwest's largest farmer-owned co-ops, following rapid M&A-driven growth that left data fragmented across systems, they consolidated on Samsara. This customer leverages route planning to digitally access daily orders commercial navigation for safe, compliant vehicle aware turn-by-turn directions and connected workflows to streamline proof of delivery and signatures.

Additionally, Telematics and video-based safety provide real-time visibility to enable proactive protection of drivers and reduce risk. In a pilot, they achieved a 65% reduction in safety events an 85% reduction in speeding events and a 45% reduction in idling time. Strong multiproduct adoption like this helped us achieve our target dollar-based net retention rate of approximately 115% for core customers, both for our prior definition of 100-plus ARR customers and our updated definition of [ 250-plus ] ARR customers. And third, we demonstrated strong execution across several frontiers. In terms of emerging products, 23% of net new ACV in Q4 came from new products launched over the past 2 years, including AI multi-cam, asset maintenance, asset tags, commercial navigation, qualifications, routing, training and workflows.

Emerging products now contribute more than $100 million in ARR, 8 of the top 10 net new ACV transactions in Q4 included in emerging product, 58 transactions in Q4 included more than $100,000 in emerging product net new ACV and Asset Tags ending ARR more than tripled year-over-year. In Q4, we signed our largest ever Asset Tags deal with Total Safety, a leading provider of industrial safety services with over 250,000 assets in the U.S. Total safety is deploying asset tags to track critical high-value safety equipment such as breathing air tanks, eyewash stations and small tools to ensure asset visibility critical to their operations. By digitizing their inventory, they are increasing equipment recovery and helping their customers eliminate the high cost of lost assets.

In terms of end markets, we saw strong momentum across construction, wholesale and retail trade and public sector. Construction contributed the highest net new ACV mix of all industries for the tenth consecutive quarter and had its highest net new ACV growth in the last 7 quarters. Wholesale and retail trade was our second largest vertical in Q4 and contributed its highest net new ACV mix in the last 3 years and public sector FY '26 net new ACV growth accelerated for the third consecutive year, including Q4 wins with the state of New York and Harris County, the third largest county in the U.S.

And in terms of international, 15% of net new ACV came from non-U.S. geographies. Europe ARR growth accelerated for the fourth straight quarter, led by our largest ever European net new ACV deal with Dawson Group, the U.K.'s largest independent asset rental leasing and contract hire company. and Canada had a highest year-over-year net new ACV growth in the last 10 quarters. In addition to driving strong top line growth, we continue to deliver operating leverage across our business as we scale.

In FY '26, non-GAAP gross margin was 78%, up 1 percentage point year-over-year. Non-GAAP operating margin was 17%, up 8 percentage points from 1 year ago. and free cash flow margin was 13% in FY '26, up 4 percentage points year-over-year. Okay. Now turning to Q1 and FY '27 guidance based on FX rates as of January 31.

Our guidance philosophy remains the same and is derisked for potential downside scenarios. For Q1, we expect revenue to be between $454 million and $456 million, representing 24% year-over-year growth or 22% to 23% growth in constant currency. Non-GAAP operating margin to be 15%.

Non-GAAP EPS to be between $0.12 and $0.13. For full year FY '27, we expect revenue to be between $1.965 billion and $1.975 billion, representing 21% to 22% year-over-year growth or 21% growth in constant currency, non-GAAP operating margin to be 19%, non-GAAP EPS to be between $0.65 and $0.69. And we also expect to be GAAP profitable for full year FY '27. We Finally, please see the additional modeling notes in our shareholder letter.

To wrap up in Q4 and in FY '26, we delivered accelerating growth at scale while expanding operating leverage across the board. Looking ahead, we believe we're well positioned to sustain durable and efficient growth because we use hardware to generate a unique defensible data asset we harness with AI to surface operational insights and automatically take action to drive more customer value.

We are aligned with the secular growth in physical operations and markets that are benefiting from major initiatives such as the global AI infrastructure build-out and we deliver large tangible customer ROI with fast payback periods. We look forward to building on this momentum as we help our customers operate more safely, efficiently and sustainably at a greater scale.

And with that, I'll hand it over to Mike to moderate Q&A.

Thanks, Dominic. We will now open the line up for questions. [Operator Instructions] The first question today comes from Matt Hedberg with RBC followed by Keith Weiss with Morgan Stanley.

Can you hear me?

Yes.

Great. And great job this quarter. A lot of positives to pick through here. The emerging product success was certainly a standout reaching 2 really significant milestones. I guess, as you look to the future, and by the way, I think you guys outlined a really, really compelling reason why data is at the core of Samsara and why that is extremely defensive and in fact, offensive in an AI environment.

Can you talk about, though, where you're seeing some of the best adoption rates for some of these emerging products? Is it across all your customers? Is it some of your larger customers, particular verticals? Any sense for just kind of how those emerging products are distributed.

Matt, this is Sanjit. I'll take that one. So I would say we are seeing very strong momentum, especially with large customers because they have the most complex physical operations thousands of in tens of thousands of frontline workers and similar, probably a larger number of assets. So when we introduce new technologies like commercial navigation, maintenance, training, they're very well received because they know immediately how to put that technology to work. So I would say if I had to choose a pattern, it would be among these larger customers where they're set up to absorb these new products.

The next question comes from Keith Weiss with Morgan Stanley, followed by Alex Zukin with Wolfe.

Congratulations on a really outstanding quarter and into year year. really 2 questions I want to ask 1 more tactical, 1 more strategic. On the more tactical side of the equation, the acceleration that we've seen over the past couple of quarters in net new ARR. Is it too simple to say that this is sort of asset tags and that new solution ramping up within the product portfolio?

Or is there like a broader set of drivers that are behind that acceleration? And then on the more strategic side, coming out of the Morgan Stanley TMT Conference. We've been talking a lot about proprietary data. And 1 of the debates that emerged is the, how the value of data sustains over time? And I'd love to hear your guys' view on it in terms of the relative value of the data when it's brand new and it's just coming off of the devices versus how much value it retains as it becomes older and older and becomes part of that like bigger data set that you have over time?

It's Dominic. I'll go for the first 1 and then Sanjit can take the second one. I think the acceleration, the net new ARR acceleration over the last 3 quarters has been much broader than something just simply as asset tax. I think broadly as a bucket, the emerging products have definitely been a big contributor. So going from 8% of the net new ACV mix in Q2 to 20% in Q3 and then it's 23% in Q4.

Asset Tags has been important within that. But once again, we didn't see 1 product within the emerging products driving more than 50% of that contribution. I think it's been a lot of large customer momentum and success. Again, a quarterly record $131 million plus net new ACV transactions, our second highest quarter ever of 100,000-plus ads.

We're seeing good momentum internationally. And then in specific verticals, again, things like construction and wholesale and retail and public sector this quarter were all strong. So emerging products definitely playing a role, but it's been -- the strength and the growth has been much more broad than that.

And Keith, on the proprietary data angle, we think there's a lot of value in the sort of accumulation and really the data asset that builds up over time. And I'll give you 1 or 2 just kind of concrete examples. Maintenance is actually 1 that our customers have really started taking to. We have a tremendous amount of information about what happens with the specific make model year of a truck. So for example, if you have a 2020 Freightliner Cascadia, how does it wear over time? What have others seen? Where does it start to break down? Where does the maintenance cost go up? That is from the accumulation of a lot of data over time.

The same philosophy applies to things like risk data. You want to understand how millions of drivers over different weather conditions over time, different tenures of their company and different risk patterns behave. So it's not just in the moment data, that's, of course, valuable, but it's really being able to look at it over time and across customers, that's where it accumulates to be something really interesting.

The next question comes from Alex Zukin with Wolfe Research, followed by Michael Turrin with Wells Fargo.

Yes, I echo my congratulations on really, really strong quarter. Maybe first 1 for you, Sanj, just the AI offering that you launched the Agentic offering. Maybe just help us understand a little bit of how you plan to monetize that within your customer base and kind of how -- I think listed a few that are on the maybe horizon.

Maybe talk to us a little bit about your vision for introducing that type of functionality and maybe how the pricing evolves around that. And then Dom, it's your largest net new ARR beat as a public company. Despite the conservatism you always embedded in the guidance, I think we're starting with a 2 percentage point expansion on a larger scale, implying the largest starting incremental margin guidance for a fiscal year guide. So maybe walk through kind of just the momentum that you're seeing in existing and new customers that gives you that confidence to embed that sales efficiency to start the guidance.

Sure. I'll start with the agentic question. So AI agents are sort of new concept to the world and very new in the world of our customers. We are getting these products out there to understand better how they're going to use the agents how often they're used the patterns and so on.

And that will give us the data we need to figure out the right pricing model. both is a fair share of value but also matches how the customers use the product. So we'll have more to come there. We'll really get these out there starting in the summer with Beyond. And we are excited, not just about the safety agent, but also the maintenance compliance and the other sort of virtual team members we can add to our customers' teams.

Yes. And I would say that we've -- again, Q4 was fantastic, but we've really had 3 consecutive quarters now of accelerating net new ARR growth. And so a lot of great momentum, obviously, to end FY '26 and then taking us into FY '27. I think not only have we demonstrated a lot of accelerating growth, but we've also done so by getting more efficient, again across the board. And so we're finding ways to operate more efficiently. We're using a lot of AI tools internally to drive a lot more productivity. Even looking at something as simple as like ARR per employee, that has increased every year over the last several years, I think it's like up like more than 30% over the last 3 years.

And so we're able to drive a lot more top line scale while doing so much more efficiently. And that gives us confidence that we can continue to do that into FY '27.

The next question comes from Michael Turrin with Wells Fargo, followed by Matt Martino with Goldman Sachs.

Echo my congrats as well. The 4Q results are really impressive even for Samsara in Q4. So the first question is just, you got a lot of rich detail in there, but just help us understand where the sources of upside came from? And if anything at all, surprised you relative to what you're expecting? And as sort of the second part to that, just how that shades what you're framing to us for fiscal '27 as well done.

Yes. Again, as I -- we just kind of talked with Alex a third consecutive quarter of net new ARR acceleration, strongest net new ARR growth in 8 quarters. And then -- and so much net new ARR acceleration that the overall $1.9 billion of ending ARR accelerated back up to 30%. Again, large customers, a lot of large deals, the record 13 $1 million-plus transactions and then the 200 and 400 0-plus adds was was very strong.

I think tied into the emerging products, we're just seeing much larger multiproduct transactions. So 9 of the top 10 deals, 2-plus products, 8 of the top 10, 3 plus and then 6 of the top 10, 4 plus. So a lot of multiproduct strengths driving the growth. And then we're getting contribution from these emerging frontiers, whether it's the emerging products at 23%, international or again some of these verticals. And so 3 consecutive quarters, I'd say, of acceleration and a lot of growth strength, and that gives us a lot of good momentum going into '27.

Congrats again.

Next question comes from Matt Martino with Goldman Sachs, followed by Matt Bullock with BofA.

Sanjit, for you, Asset Tags clearly feels like something much bigger. So as you introduce the excess form factor, bring in Hubble to extend the network, how should we think about the strategic end state there? Is this mainly about driving deeper adoption within the base? Or does this really start to open up an entirely broader asset visibility platform for you guys?

Yes, Matt, I would say it's definitely both. The world of physical operations has a ton of assets. There's, of course, vehicles and trailers and construction equipment, but I mentioned a lot of the smaller handheld assets, there's tools, there's dollies and so on.

So really, our first priority here is, like I said, with Phase 1, we're just simply trying to digitize and get this information into the cloud so we can start operating on it. As we do that, I think it does open up a lot of interesting use cases. Many of our customers are interested in things like asset dormancy, which piece of equipment haven't moved, maybe they don't need to own them and they could rent them instead there are definitely sophisticated ways to kind of load balance where those assets are placed.

And then I do think there's this agentic opportunity. All of that will appeal to our existing customers. And I do think this will open up some new possibilities of maybe some customers that don't have a tremendous number of vehicles, but have a lot of other kinds of field assets. We highlighted total safety, for example, they have about 250,000 assets. That will be a good example of one.

Great. The next question comes from Matt Bullock with BofA, followed by Derrick Wood with TD Cowen.

Sanjit, I wanted to ask about the public sector. Annual net new ACV growth accelerated for the third consecutive year here. It's now a $100 million plus ARR business that's pretty clearly benefiting from network effects. My question was about legislation or the policy environment. We noticed that Samsara presented to Congress twice during February. What was that about specifically? And are there any kind of legislative tailwinds that we should have on our radar as we enter fiscal '27?

Yes, absolutely. So we are very excited about momentum in the public sector. Just as a reminder, the public sector, they have a lot of physical operations that are required to maintain and really run all of our communities. There -- a lot of the reason that we're providing so much information in Congress is simply to educate. We want them to understand the benefit of these technologies, not just in the public sector, but even in the private sector, our products have a huge impact on safety, on efficiency, and it's part of this bigger digitization trend.

So there, I would say the work has really been around kind of education, first and foremost. And then in the public sector itself, I think we are seeing some great network effects, as you highlighted, cities and states that are not competitive with 1 another. So when you unlock value for one, they tend to talk about it and tell others about it.

That's fantastic. And if I could squeeze 1 more in for Dom, if I could. Obviously, the large deal momentum was excellent in 4Q. But I wanted to ask about helping frame the contribution from large deals that were ramping from 2Q and 3Q? Just helping us understand kind of what the contribution was from prior deal momentum in 4Q given the pretty huge net new ARR number.

Yes. Most of the Q4 performance and results were driven by new deals booked and signed in the quarter. The -- I assume the 1 that you're referring to in Q2 is the first student transaction. That was a large deal that we signed in Q2 and is a phased rollout. And so we got some of that contribution in Q4 will continue to be rolled out over time. But most of the bookings and ARR, the net new ARR in Q4 were the result of new deals, whether they are expansions to existing customers or signing new customers, but that were booked in the quarter.

The next question comes from Derrick Wood with TD Cowen followed by Jim Fish with Piper Sandler.

Great. My congrats as well. I guess, Sanjit, just going back on vertical discussion, construction, 10th sequential or 10th quarter in a row of strength outsized. How much of that is being driven by physical AI data center infrastructure build-out? And what are some of the other drivers? And then just -- I mean, given the projected tens of gigawatts of data center capacity expected to be stood up over the next couple of years, are you -- can you just talk about the strength of your pipeline, not only in construction but those other verticals, energy, utilities, field services that are tied to data center builds.

Sure. So Derrick, Construction was absolutely another strong vertical for us this quarter. I would say that a significant number of our customers are involved in this AI data center build-out, but they're also helping build and maintain roadways and buildings and kind of all the infrastructure that powers the planet. So while it has been a kind of tailwind in general in the construction industry, there are a number of different sort of areas of interest there.

But on the utility side, we see electrical utilities, other trades. We work with a lot of electrical contracting companies, for example, they are all involved in this AI data center build-out. So it's really been an interesting kind of macro tailwind or effect in that industry. But at the adjacent industries, as you highlighted, utilities and field services, too.

Great. And if I could squeeze 1 for Dom, speaking of macro. I -- We have been getting questions on whether the rise in memory prices would have any impact on your margins or cash flow or supply chain dynamics or anything that flagged to think about potential impact on the model?

Yes. We're definitely seeing some increase in memory for us. It's more on the storage side. more on the NAND side than on the memory side. I think we've operated through different supply chain disruptions. We have a very kind of nimble supply chain team that's really well prepared to kind of handle and navigate the current dynamics. We kind of went through something similar in 2022.

And I think most importantly, we were able to meet all customer demand while driving free cash flow leverage, and we feel like we're in a similar position now we factored this into the -- in the modeling notes and the gross margin and the 100 basis points of free cash flow leverage that we started with in the notes.

I think, also something that we think about it from a competitive standpoint, we think that we're best positioned and best capitalized to navigate through this. This could be an opportunity for us to increase more market share and then ultimately, we obviously think that the prices are going to stabilize over time, and we don't see any long-term structural changes to our financial profile.

The next question comes from Jim Fish with Piper Sandler, followed by Alex Sklar with Raymond James.

Thanks for the question here. Look, I think a lot of people here are impressed by the emerging product side of things. Dom, another quarter north of 20% here. It seems like this is starting to become the new norm. I guess, how are you guys thinking about it for the annual guide here? And was it fairly balanced again or a few few of the products underneath starting to lead a little bit more. And Sanjit, just for [indiscernible] a customer-driven ask? Or why this version? How should we think about capability difference or pricing difference?

Yes. From the emerging products side, very similar to the previous quarters. It was very widespread. There wasn't 1 of the kind of emerging products that drove more than 50% of the bookings. And so we saw pretty broad-based strength, and we have good momentum across all of those products going to '27.

Yes. And in terms of Asset Tag excess, it very much was customer-driven. Customers tried the original Asset Tags. They really like the functionality. Many of these customers, they have smaller, often handheld tools where they needed something that basically had less volume. So that's where that ask came from, and that's why we built excess. The pricing is similar to the original Asset Tag family. It's really the form factor that's different.

The next question comes from Alex Sklar with Raymond James, followed by Peter Berkly with Evercore.

This is Jonathan McCarrey on for Alex. So Sanjit, I'll start with you. You guys called out success in Europe again this quarter. So I wanted to think ask how you're thinking about resourcing to that region as we head into fiscal '27. And then conceptually, how much of a priority is geo expansion over the next few years?

And then tangentially for Dom, I wanted to ask on the hiring embedded in the outlook for the year. continued success in Europe, but you're also seeing product velocity that seems like it continues to pick up. So curious where you're adding more manpower across the business? And then which areas are driving the leverage embedded in the guide.

Yes. I'll take the first part of that. So we're, again, very pleased with the progress in Europe. Dawson Group [ petite for SDA ], Fraga. These have all been huge lands for us are very well-known companies in the geo. So I think it's just going to be continued investment and effort. We're planning to just be consistent there.

And we're making the product investments that are required as well in terms of the features and functionality that are required. But if we take a step back, we play in some of the most important geographic markets today between North America and Western Europe. So I think it's really about to follow through and really helping digitize these large-scale operations. We still have a long way to go, which we're excited about.

Yes. And then on the hiring front, I touched on this a little bit earlier. But again, we expect FY '27 is going to be another year of productivity improvements. I use the stat that over the past 3 years, the ARR per employee is up more than 30%. We expect it will increase again in FY '27. Most of the hiring in FY '27 will be in our go-to-market and sales-related roles. Most of the other functions are going to be roughly the same size, maybe some smaller, which we expect will drive leverage across all of the OpEx line items.

. The next question comes from Peter Berkly with Evercore followed by Jackson with William Blair.

This is Pete Burkly on for [indiscernible] on a really strong quarter here. So just want to sort of focus in on, again, on the large customer segment and really strong growth and acceleration, the $100,000 ARR segment and the $1 million-plus segment as well. So I'm curious if you could just sort of unpack some of that strength, whether it's primarily multiproduct attach some of the emerging products like Asset Tags and AI Multicam or if you're just seeing a broader fleet and asset expansion sort of underneath those and some of those larger customers.

And then just curious how much runway sort of remains to continue to expand ARPU within that really large large ARR customer base.

Yes, I'd say on the large customers, it was weighted a little bit more towards existing customers doing expansions, multiproduct adoption across the board definitely drove strength. And again, almost all of those licensing the core kind of vehicle-based products, telematics and video by safety.

But as I said, things like 8 out of the top 10 had 3-plus products and 6 of the top 10 at 4 or more. So licensing something outside 1 of these emerging products, which is also quite strong for us. And similarly, even on the new logo side, the new customer lands, the large ones, all had or multiproduct transactions out of the gate.

The next question comes from Jackson with William Blair, followed by Jason Celino with KeyBanc.

This is Jackson on for doing [ Becker ]. We've talked about the substantial data set. We have more than 25 trillion data points on the platform. Large customers are doing more. There's more products in earlier stages of development and adoption altogether, I was curious if you could speak to how all of these things really allow you to accelerate the time to value with customers and really support the already considerable value proposition that you guys offer customers?

Yes. I think, first of all, we're excited to be able to expand the platform. This really expands areas of value more than anything else. So for example, with maintenance, that was something weren't doing as much in before, but it's a tremendous area of expense for our customers who have a lot of assets. Time to value continues to be strong.

Our customers realize this ROI within a year. So that's never really been an issue of like how do we speed that up. I'm excited about helping just kind of drive that already 8x ROI that we see with customers even broader as we expand into kind of more adjacent areas like maintenance, training, qualifications, workflows and so on.

Got it. That's super helpful. And then 1 more quickly, if I could. There's a lot of geopolitical turmoil going on in multiple regions. How should we think about the impact to the business' international expansion plans? Like would you even say the heightened uncertainty may provide a tailwind or headwind to potential adoption? I'm just curious any color you guys would have on the current macro landscape.

I think it's -- for us, again, as I said on an earlier question, we're pretty focused on North America and Western Europe. There's 35 million commercial vehicles here in North America. There's 45 million in Western Europe. So we feel that the markets we're selling in are ready for this kind of digital transformation, they're adopting these technologies. So we're going to stay focused in the geographies we're in.

Great. Next question comes from Jason Celino with KeyBanc, followed by Nick Altmann with BTIG.

Maybe my first one, I think it was mentioned that you have 40 different AI detections I don't know if this is a new way to frame it, but how many of these are powered by like AI-type models? Or can they be powered by kind of the same models. And then when we think about the categories of some of these detections, are they more than just safety-based detections.

Sure. So these are all different forms of AI detection. Some of them involve technologies like large language models, others or kind of more time series based models. So we are continuously expanding the library of types of detections. And safety is, of course, an important area for these detections, but are thinking about AI models much more generally.

So we look at things like weather conditions and road conditions. We're looking at other kind of health vehicle and asset health related AI models. So we're continually expanding, but they build on a number of different technologies.

Okay. Great. And then maybe just a quick 1 for Dom. SPC philosophy. I know you're guiding to GAAP full year profitability, which is refreshing. But maybe refresh us on how you're thinking about SBC as a whole and its trajectory.

Yes. We view equity-based compensation as a real cost of the business. We forecast that we're driving leverage. I think we were in the kind of the high 20s 4 years ago, when we went public. We got it down into that low 20s last year in FY '26, the 10-K will come up earth in the press release, but it was 20%, we'll be below that again in FY '27 and expect it to go down even further from there.

So this is a big area of focus for us. and pleased that we were able to get to GAAP profitability now for 2 consecutive quarters. I think it will probably go a little bit negative in Q1, where we tend to spend a little bit more money, not on the SBC side, but on the OpEx side. but then we've got a path to getting it to positive for the full year.

The next question comes from Nick with BTIG, followed by Mark with Loop Capital.

You mentioned you doubled the network density, and that is enabling you guys to detect the asset tags in near real time. So can you just talk about how much of an unlock those new real-time detection capabilities could be for both customers who are looking to adopt asset tags or even existing asset tags customers who are potentially looking to expand their footprint.

Yes, absolutely. So the network density is an interesting 1 because it lets us basically increase the frequency and fidelity of the data we're getting back. This is especially helpful in a scenario like [indiscernible] . A lot of these assets get lost or sold, and they walk away from job sites and so on. So customers are looking to go recover those. They need to know where they are if they're moving and so on. So it definitely helps there.

And then we also embed this technology in other areas like our worker safety wearable. And so even if someone is not near a vehicle, we're able to help keep them safe outside of the cap. So for field services workers, for example, this is a helpful technology. So I think it just increases the number of applications we can address from kind of basic asset tracking, doing much more fine-grain analytics on these assets because we get much more frequent data updates.

The next question comes from Mark with Loop followed by Andrew with BNP.

Congrats on the strong quarter here. Sanjay, typically at the start of the year is when software companies will adjust their sales orgs and the go-to-market strategies. I was wondering if you're planning any meaningful changes on the sales front in the coming year.

No. I would say, Mark, we're always looking at efficiencies, trying to make sure we're approaching the market in the best way possible. We're very happy with our structure, nothing significant to report there. I don't know, Dominic, if you want to add anything?

I think more like evolutionary changes. And so having kind of more global account specialists for these like larger multinationals, we're experimenting and we'll make more investments in things like product sales specialists to cover all of these emerging products, but nothing hugely structurally different going into FY '27.

Our next question comes from Andrew with BNP followed by Junaid with Truist. Andrew? Okay. Let's pass there. Okay. Our last question today comes from Junaid with Truist.

Great. Given the scale of your network now and with offerings like AI Multicam, 360, real-time weather intelligence. How do you see these capabilities, positioning the platform as fleets begin adopting higher levels of autonomy. And how should we think about the monetization potential of that proprietary data in an autonomous future context?

Yes. From our perspective, autonomy is an exciting technology. It's been on the horizon for some time, and it's starting to come to fruition on the consumer side at least. We kind of view operations as a whole. So autonomy is an add for us. We're going to start seeing autonomous vehicles and devices appear in our customers' operations at some point.

We do think that will help expand the number of types of asset -- number and types of assets and the applications we address. So you're going to see more workflows, more automation happening where people and these autonomous vehicles are working together. We don't have plans to take this video data and sell it to the autonomous providers or anything like that. But for us, we're really just tracking it as more of a technology.

All right. So this concludes the question-and-answer portion. Thank you all for attending our Q4 fiscal year 2026 earnings call. Before I let you go have a few short announcements.

We'll be attending the Loop Capital Markets Conference on March 10 and the Wells Fargo Symposium on April 8. We'll also be hosting the William Blair Bus Tour on March 16 and the Goldman Sachs Bus Tour on April 13 in San Francisco. We hope to see it 1 of these events.

Finally, we are hosting our Investor Day, as Sanjit mentioned, this June in Las Vegas. Please send an e-mail to [email protected], if you're interested in attending in person. For those who prefer to attend virtually our IR website will have a link to a live broadcast. That's it for today's meeting. If you have any follow-up questions, you can e-mail at [email protected]. Bye everyone.

[Presentation]

Good afternoon, and welcome to Samsara's Third Quarter Fiscal 2026 Earnings Call. I'm Mike Chang, Samsara's Vice President of Corporate Development and Investor Relations. Joining me today are Samsara Chief Executive Officer and Co-Founder, Sanjit Biswas; and our Chief Financial Officer, Dominic Phillips.

In addition to our prepared remarks on this call, additional information can be found in our shareholder letter, press release, investor presentation and SEC filings on our Investor Relations website at investors.samsara.com.

The matters we'll discuss today include forward-looking statements. Actual results may differ materially from those contained in the forward-looking statements and are subject to risks and uncertainties described more fully in our SEC filings. Any forward-looking statements that we make on this call are based on assumptions as of today, December 4, 2025, and we undertake no obligation to update these statements as a result of new information or future events unless required by law.

During today's call, we'll discuss our third quarter fiscal 2026 financial results. We'd like to point out that the company reports non-GAAP results in addition to and not as a substitute for or superior to financial measures calculated in accordance with GAAP. We also report both actual and constant currency growth rates for certain metrics. On the call, we'll only provide constant currency commentary when there's a difference. Reconciliations of GAAP to non-GAAP financial measures and additional information on constant currency are provided in our press release and investor presentation.

We'll make opening remarks, dive into highlights for the quarter and then open the call up for Q&A. With that, I'll hand over the call to Sanjit.

Thanks, Mike, and thank you, everyone, for joining us today. Samsara delivered another strong quarter of durable and efficient growth. We ended Q3 with $1.75 billion in ARR, growing 29% year-over-year. We also achieved our first quarter of GAAP profitability. In Q3, we added 219 customers with $100,000 plus in ARR, a quarterly record. Our $100,000-plus ARR customers now contribute more than $1 billion of ARR, growing 36% year-over-year. We also added 17 $1 million-plus ARR customers tied for a quarterly record.

Our growth is driven by our strategy to partner with the world's largest and most complex operations organizations. Q3 was a milestone quarter for large customers, and we partner with many new organizations, including the state of New York, one of the world's largest providers of oilfield services and one of the world's largest and most diversified media corporations. We're proud to partner with these industry leaders, driving safer and more efficient operations together.

Large enterprises are quickly digitizing their operations, and they're demanding a partner that delivers scale and performance. We've become their platform of choice for a few key reasons. First, we unified data from many disparate systems across all their vehicles, equipment and frontline teams in a single system of record. Second, we solve challenges across their operations with our broad multi-application platform. Third, we use our massive data asset and AI to deliver actionable insights that save our customers money. Fourth, we provide an enterprise-grade platform that delivers the scalability, reliability and security our customers require. And lastly, we provide world-class support and expertise to help our customers drive change management and deliver outcomes, resulting in clear and fast ROI.

I'd like to share 2 stories of new customers from Q3 that are using Samsara to transform their operations. The first is in student transportation, which is a complex and highly regulated network responsible for the safe transit of 26 million students every day. After landing First Student, the largest school bus provider in North America, in Q2, we partnered with another 1 of the top 5 largest school bus providers in Q3. They transport over 1 million students today in more than 500 school districts across 30-plus states and provinces. Their initial purchase included our Video-Based Safety, Telematics and AI Multicam products. They're looking for a highly accurate and reliable AI solution to enforce their 0 tolerance policy on driver mobile use and eliminate in-cab distractions and driver drowsiness. With Samsara, they'll be able to detect, alert and reduce these behaviors.

The second example is with one of the largest mechanical contractors in the U.S. They have over 5,000 employees specializing in custom HVAC and plumbing systems for commercial and industrial projects. They help build major sports stadiums and critical medical and research facilities, and they also design and install the complex systems that power many modern data centers as part of the AI infrastructure build-out. The company is using our Video-Based Safety, Telematics, Connected Training and Driver Qualification products to ensure their complex field operations remain safe and efficient. In their pilot with Samsara, they saw a 44% reduction in the total safety event rate and a 72% reduction in mobile usage. We're proud of the impact we're creating together, and we're excited for the decades-long opportunity ahead.

Physical operations are the mission-critical infrastructure to keep the world running, representing over 40% of global GDP. These asset-heavy and labor-intensive organizations typically spend around 80% of their revenue on labor and assets. Running these complex operations carries significant inherent risk, from driving large commercial vehicles carrying hazardous materials to deploying frontline workers for services to operating heavy machinery.

Unfortunately, a frontline worker dies from a work-related injury approximately every 99 minutes in the U.S. We help our customers protect their workers and support their top safety goals that have a material impact on their financials, brand and talent. This work is critical because accidents and noncompliance directly translates to substantial financial costs, including higher insurance premiums and large payouts. And these costs are increasing with the rise of large nuclear verdicts and accident litigation.

Our customers also care about protecting their reputation to maintain a competitive edge, which can be hurt by a weak safety culture or history of incidents. And lastly, employees stay with companies that demonstrate their commitment to keeping them safe, which is important in a tight labor market.

As we look ahead, we see a huge opportunity for AI to transform safety coaching and more broadly, automate coaching across operations. This will help our customers scale their coaching programs without adding more head count.

We recently added -- we recently launched new AI-powered coaching features: Automated Coaching, Group Coaching and Workflow Automations. Starting with Automated Coaching. This is the first advanced automated coaching to help with the entirety of the driver experience, including safety, compliance, idling and more. Coaches can quickly create their own digital doubles or use premade avatars to create tailored coaching videos for each worker.

Next, Group Coaching helps managers recognize and coach front-line workers in group settings using operational data. It uses AI to generate ready-to-use coaching session that highlights positive recognition, fuel efficiency, compliance and safety.

Last, Workflow Automations is a no-code workflow builder that uses our data asset to streamline coaching and training processes. It allows for the intelligent management of compliance and safety programs, automatically directing lower priority events to the driver for self-review while ensuring that high priority incidents are flagged for manager coaching. We're excited to introduce these new AI-powered features for our customers.

All of our innovation is translating to real-world customer impact. We recently released our safety report, which analyzed data from over 2,600 Samsara customers operating medium and large fleets. Fleets using are dual-facing AI dash cameras, real-time in-cab alerts and driver coaching saw an aggregate 37% reduction in accidents after the first 6 months, and this increased to a 73% reduction in accidents after 30 months. These are life-saving outcomes that show our platform is transforming safety culture and demonstrating measurable results for our customers.

Now I'd like to turn to the international growth opportunity. I've met with dozens of customers in our international markets this year. Every time I meet with them, I'm inspired by the long-term opportunity to expand our impact. There are a few reasons for this. First, the international market is very large. There are more assets and frontline workers in Europe, Canada and Mexico than in the U.S. Second, the international market is less penetrated than the U.S. and earlier in its digitization journey. Third, we believe the opportunity for impact and customer ROI is similar to the U.S. These customers are achieving similar savings from insurance payouts and premiums, fuel costs, improve worker retention and asset utilization.

Over the last few months, we hosted our annual Go Beyond customer events in London and Mexico City. During these events, we brought together hundreds of local customers and prospects to share new product innovations and best practices across the community. At Go Beyond U.K., we announced a new feature for our European customers, Samsara Smart Compliance. This helps fleet use in-cab audio alerts to prevent costly driving time infringements before they occur. Both of these events were a great opportunity to hear our customers' top operational challenges and continue the feedback loop.

We've also continued to strengthen our ecosystem through industry-leading partnerships in the U.K. and Mexico. This quarter, we announced a new partnership with Allianz, one of the largest general insurers in the U.K. This partnership gives Allianz insured commercial customers preferred access to Samsara's AI safety cameras and our connected operations platform.

Also, building on our successful relationship with Element Fleet Management, we extended our partnership to the Mexico market. Together, we are providing organizations with an integrated full life cycle solution that drives down operational costs and enhances safety and efficiency in the region. We're excited about the impact we're making for our customers every day, transforming their operations to be safer, more efficient and more sustainable. We're just getting started and look forward to the multi-decade opportunity ahead.

We're also proud that our long-term growth potential was recognized by Fortune this quarter, ranking us seventh on their Fortune Future 50 list. We want to thank all of our Samsarians, customers, partners and investors for joining us on this journey.

I'll now hand it over to Dominic to go over the financial highlights for the quarter.

Thank you, Sanjit. Q3 was another quarter of durable growth and improved profitability. The quarter was highlighted by strong performance across several key metrics, including 23% year-over-year net new ARR growth in constant currency, our highest growth rate in the past 7 quarters; 219 $100,000-plus ARR customers added, a quarterly record; and 17 $1 million-plus ARR customers added, tying a quarterly record; 8 $1 million-plus net new ACV transactions in Q3, also tying a quarterly record; 20% of net new ACV from emerging products launched since last year; and achieving our first quarter of GAAP profitability.

More broadly, our durable and increasingly efficient growth demonstrates the large yet still early opportunity for digital transformation across physical operations. Looking ahead, we believe Samsara is well positioned to deliver durable growth and create long-term shareholder value for several key reasons.

First, we have a unique defensible data advantage. By instrumenting physical assets with IoT devices, we generate a large and growing proprietary data asset that cannot be easily replicated or sourced elsewhere. Second, AI is accelerating our innovation, enabling us to release new products and meaningful features at a faster pace, driving higher customer engagement and usage. Third, our business model scales with fiscal assets rather than head count or knowledge workers and aligns us with end markets poised to benefit from major initiatives such as the global AI infrastructure build-out.

Fourth, our products have a differentiated value prop and mission-critical workflows, delivering fast, tangible ROI and quick payback periods that make us essential to our customers' operations. And lastly, we're targeting the large and less discretionary operations budget, which represents approximately 80% of our customers' revenue on average. And because we help them optimize the significant and durable cost base, we have a large opportunity to drive customer impact and long-term growth.

Okay. Now turning to our results. Q3 ending ARR was $1.75 billion, an increase of 29% year-over-year. Within that, we added $105 million of net new ARR, an increase of 24% year-over-year or 23% in constant currency, resulting in the second consecutive quarter of accelerating sequential growth and the highest net new ARR growth rate in the past 7 quarters. And Q3 revenue was $416 million, growing 29% year-over-year.

Several factors drove our strong top line performance in Q3. First, large customer momentum is leading to higher growth at scale. In terms of large deals, we signed 8 $1 million-plus net new ACV transactions in Q3, tying a quarterly record. This reflects the success of our R&D and go-to-market investments to support these larger customer opportunities. At the same time, these larger deals have inherently longer and less predictable sales cycles, which could introduce more variability into our quarterly ARR results than in the past.

In terms of large customers, we ended Q3 with 2,990 $100,000-plus ARR customers, a quarterly record increase of 219. ARR from $100,00-plus customers exceeded $1 billion, increasing 36% year-over-year, resulting in accelerating sequential growth at a larger scale. $100,000-plus ARR customers now represent 60% of total ARR, up from 57% 1 year ago. We also ended Q3 with 164 $1 million-plus ARR customers, tying a quarterly record increase of 17, $1 million-plus ARR customers contributed more than 20% of total ARR, and year-over-year ARR growth from this cohort accelerated sequentially for the second consecutive quarter at a larger scale.

Second, our customers increasingly utilize Samsara as a system of record for physical operations by subscribing to multiple applications on a single unified platform. Over 95% of our $100,000-plus ARR customers subscribe to 2 or more products, and approximately 70% subscribe to 3 or more products. In Q3, 10 of the top 10 net new ACV deals included 2 or more products and 9 of the top 10 included 3 or more products. In Q3, we signed a large expansion with one of the world's largest home improvement retailers.

In the quarter, they increased their total licenses for video-based safety, vehicle telematics and Connected Equipment after achieving significant ROI, including a more than 50% reduction in total auto liability claims by leveraging Samsara's AI detections. In Q3, they also added Connected Workflows to digitize and streamline operational processes for vehicle life cycle management and driver activities, covering everything from preventative maintenance and incident review to vehicle disposal and ride-along compliance. As a result of our strong multiproduct adoption, we achieved our target dollar-based net retention rate of approximately 115%.

And third, we demonstrated strong execution across several frontier markets. In terms of emerging products, 20% of our net new ACV in Q3 came from our new products launched since last year, including AI Multicam, Asset Maintenance, Asset Tags, Connected Training and Connected Workflows. 34 transactions in Q3 included more than $100,000 in emerging product net new ACV. 8 of the top 10 net new ACV transactions included an emerging product, and Asset Tags ARR grew more than 400% year-over-year.

Also, Q3 included our largest ever Asset Tags deal with a global leader in chemistry solutions and engineered equipment for the oil and gas industry. The company manages thousands of reusable chemical totes but has historically lacked visibility into where these high-value assets are deployed, how long they remain at customer sites and overall inventory levels. By adopting Samsara's Level Monitoring Asset Tags, they'll gain real-time visibility for the first time, unlocking the ability to improve their tote fleet efficiency by 25% and through the elimination of excess inventory and more efficient utilization. Additionally, the customer expects to cut the manual labor required for quarterly inventory checks by more than 90%, driving immediate productivity gains and significant cost savings.

In terms of end markets, we saw strong momentum across construction and public sector. Construction contributed the highest net new ACV mix of all industries for the ninth consecutive quarter and public sector contributed its highest ever net new ACV mix with wins across Texas, New York, Massachusetts and Chicago.

Also, public sector net new ACV grew approximately 100% year-over-year, its highest growth rate in almost 3 years and crossed more than $100 million in ending ARR. And in terms of international, 16% of net new ACV came from non-U.S. geographies. Europe contributed its highest ever quarterly net new ACV mix, and year-over-year net new ACV growth in Europe accelerated for the second consecutive quarter, resulting in its highest growth rate in the last 7 quarters. And as a result, Europe's overall ARR growth rate also accelerated for the second consecutive quarter.

In addition to driving strong top line growth, we continue to deliver operating leverage across our business as we scale. Non-GAAP gross margin was 78% in Q3, a slight increase year-over-year. Non-GAAP operating margin was a quarterly record 19%, up 9 percentage points from 1 year ago, and free cash flow margin was 13% in Q3, up 4 percentage points year-over-year.

Okay. Now turning to guidance based on FX rates as of November 1. For Q4, we expect revenue to be between $421 million and $423 million, representing 22% year-over-year growth or 21% growth in constant currency; non-GAAP operating margin to be 16%; and non-GAAP EPS to be between $0.12 and $0.13. For full year FY '26, we expect revenue to be between $1.595 billion and $1.597 billion, representing 28% year-over-year growth; non-GAAP operating margin to be 16%; and non-GAAP EPS to be between $0.50 and $0.51. And finally, please see the additional modeling notes in our shareholder letter.

So to wrap up, in Q3, we delivered high growth at scale while also delivering operating efficiency gains. Looking ahead, we believe Samsara is well positioned to sustain durable and efficient growth because we generate a unique defensible data asset that powers differentiated AI innovation and deeper customer engagement. We are aligned with secular growth in physical operations that is poised to benefit from major initiatives such as the global AI infrastructure build-out, and we deliver tangible ROI through mission-critical workflows, helping customers achieve fast payback periods on their investments. We look forward to building on this momentum as we help our customers operate more safely, efficiently and sustainably at a greater scale.

And with that, I'll hand it over to Mike to moderate Q&A.

Thanks, Dominic. We will now open the line up for questions. [Operator Instructions] The first question today comes from Michael Turrin with Wells Fargo, followed by Alex Zukin with Wolfe.

Sanjit, the large customer momentum, really standing out the past couple of quarters here. Can you just speak to what's enabling that from a product perspective and how significant a competitive advantage that is becoming for Samsara here?

Sure. So we've been investing in the sort of scale and security and infrastructure needed to serve large customers for a number of years, both on the R&D and the go-to-market side. I would say on the product side, it's our ability to just manage these massive amounts of data, also customize the product to the needs of these large complex organizations and their org structures. And then on the go-to-market side, we really operate as a true partner to these companies, understanding their business, figuring out how to unlock the most value for them, and then we tailor the use of the product to meet those needs. I think the combination of those 2 has been the big unlock, and we're seeing it come through in the numbers now.

Just to follow on, Dom, I know it's early, but you have a fairly good level of visibility in this model. Is there any high-level commentary you're willing to give us on fiscal '27 that's just helpful as we're rolling through some of the results from the rest of the year here?

Yes. So look, yes, we're not in a position obviously to give formal guidance for next year. Q4 tends to be our seasonally largest quarter, and so we really need to get through the next couple of months before we finalize our FY '27 plan. I will say that based on our current outlook, I would expect that our initial FY '27 revenue guide in terms of the dollars will be higher than where current consensus is right now just given the Q3 outperformance.

The next question today comes from Alex Zukin with Wolfe Research, followed by Keith Weiss with Morgan Stanley.

Sanjit, maybe for you. The contribution from new products, that jumped to 20% of net new ACV from 8% last quarter. Maybe just dig a little bit deeper of kind of what went better or what's outperforming your expectations to drive that kind of inflection. And then I've got a quick follow-up.

Sure. So we launched a number of new products at the customer conference earlier this year, and I think it took a few months for customers to trial them out, see how they worked. And it's been great to see the contribution early on from these new products. So that 20% up from 8%, I think, reflects growth across a number of different products. So it was no single product but really kind of balanced across a number of different products.

Perfect. And then, Dom, maybe for you. It's a little bit -- it's great and rare to see sequential growth in net new ARR for you guys in a Q3, particularly given some of the mechanics around some deals pushing out from 1Q to 2Q. So maybe can you just highlight like what drove that strength? Maybe comment on the First Student deal. Was that more impactful in Q2 or Q3? And anything else that we should keep in mind?

Yes. Thanks. So yes, so Q2, obviously, we talked about this 3 months ago, and we had the benefit of some of the deals from Q1 that slipped into Q2, and we closed those in May at the beginning of the quarter. And so we called that out last quarter.

In terms of First Student, that was a deal that we signed in Q2. It's going to be a phased rollout. So the ARR will be added over time. That's very common for our large deals to do these phased rollouts. We actually added more ARR from that deal in Q2 than we did in Q3, so it really wasn't much of a contributor to this quarter.

Q3 was really driven by things like the record number of large customers that we added, both $100,000 and $1 million plus, we tied the quarterly record again for $1 million-plus net new ACV transactions, all of the emerging product strength that Sanjit just mentioned and in some of the industries like construction, public sector, Europe, all of those contributed to a really strong quarter.

Congrats, guys.

The next question comes from Keith Weiss with Morgan Stanley, followed by Matt Bullock with BofA.

Congratulations on a really solid quarter. I wanted to dig in on sort of the 20% from emerging products. It seems like with the broader product portfolio that you guys have put out there, now you're seeing traction across multiple products. You're seeing those multiproduct deals really hit. Any sense you could give us on kind of the latent opportunity, if you will, within the customer base? Like how expansive could these products be within existing customers? How much further can you go in terms of growing existing customers with the expanded product portfolio?

Yes. I mean most of our net new ACV or slightly more of it generally comes from expansions to existing customers, even within our core products, and so that's definitely also the case in these emerging products. We're really just scratching the surface. Again, these are products in totality that have been rolled out going back to the beginning of last year, but they're really allowing us to land larger in some of these customers.

We called out that 9 of the top 10 net new ACV deals included 3 or more products. So that includes things outside of our core products. And that just wasn't the case before the beginning of last year, and so we're really seeing good momentum from the emerging products. And Sanjit said, it's not any one given product. We're really seeing good uptake across the board.

Got it. I mean is there any kind of rule of thumb that you could kind of point us to if your average like $100,000-plus customers paying you $350,000 per year, today, if they fully buy in across the solution portfolio? Can that go to $700,000? Like is it like a 2x, 3x uplift potential from the expanded solution portfolio?

I don't think there's like a really good rule of thumb for that. Some customers may have more assets out in the field or more frontline workers than they do commercial vehicles. Some of these deals are more of the net new ACV is coming from the emerging products than the kind of the core products. And so there's not really one rule of thumb, but it's just giving us more opportunities to land broader, again, really thinking about Samsara as a system of record and providing more kind of full-scale ROI for the customers.

Got it. And then maybe just as a follow-up. Taking the combination of the first 2 questions that my colleagues asked. The last 2 quarters have been pretty remarkable in terms of the acceleration and the net new ARR growth. It sounds like it's a combination of like more products hitting into the existing accounts and large customer go-to-market motion hitting. Is that it? Like is it just like your initiatives are sort of compounding against each other to drive that? Or is there something else under the hood that's enabling you guys to see this type of acceleration in the net new?

Yes. I mean, yes, and if you go back to Q2 where we had accelerating net new ARR growth versus Q1, obviously, again, we had the benefit of the Q1 deals that slipped in and we talked about First Student with Alex' question, Q3 was just really strong across the board. Again, quarterly record number of large customers added, tying a quarterly record in terms of largest deals, strength across emerging products, strength in international. It was just -- it was really strong across the board kind of firing on all cylinders versus kind of one thing that drove the second consecutive quarter of accelerating growth.

The next question comes from Matt Bullock with BofA, followed by Matt Hedberg with RBC.

Excellent. I wanted to ask a quick follow-up to Alex' question to clarify some of the math I've done over here because I have to admit, looking at the initial stock reaction relative to that reported net new ARR number, I'm a little bit confused here. So even in our more aggressive upside model, $105 million in net new ARR was well above our estimate when you adjust for that approximately $5 million in incremental net new ARR tailwinds that you had in 2Q from the Liberation Day slippage. Am I correct in saying this will be the first sequential growth quarter in 3 years at about 5% plus or so when you do some of that math? Or do I have my numbers correct there?

Yes. I don't think we've like commented exactly on what the Q1 Liberation Day kind of impact was. We did say mid-single digits, and that is an amount that slipped out of Q1 and we landed in Q2. And so that definitely had an impact. I think if you look back over the last couple of years, even beyond that, Q3 has been a little bit below Q2. And so I think sequentially, that's one way to look at it. The other way is obviously just the overall net new ARR growth rate. It's not only is it the second consecutive quarter of accelerating. It's the highest net new ARR growth rate in the last 7 quarters. So again, not one thing to call out that really drove that strength. It was really across the board.

Awesome. And then a quick follow-up if I could. On the First Student deal, obviously, a huge amount of vehicles, 46,000. You're attaching video, telematics, commercial NAV, impressive deal. But over the long term, it looks to me, even when you underwrite conservative pricing assumptions, this could be $30 million, $40 million-plus ACV customer. Maybe just help us think about how deals of this magnitude typically roll out, right? Obviously, they're staged rollouts. But what percentage of those 46,000 you think can be deployed in the first 6 months to a year?

It really depends. It's customer by customer. I mean some customers can deploy a lot faster. There's a lot of change management, project management required internally at the customers to deploy these systems, and so it really is customer by customer in terms of how long they will get rolled up. But many customers of this size or our largest deals get phased out over several quarters.

The next question comes from Matt Hedberg with RBC, followed by Jim Fish with Piper Sandler.

Great. I'll offer my congrats as well. I mean seeing this kind of growth at scale and GAAP profitability is elite to say the least. Sanjit, I wanted to ask about international, something that we've been -- and you have been focused on over the last several years, and it's great to see the progress there. I think you said Europe accelerated now for the second straight quarter. It's still early clearly from an international perspective, less penetrated in the U.S. If you were to sort of like look at a scorecard and say we think we're in the X inning of this journey, where are we? And as we think forward in the future, I mean, this feels like it could be a significant driver of total ACV growth. Just thoughts on kind of where we're at in this international journey.

Yes. Matt, I would agree with you that we're early. For us, international has always been an exciting long-term opportunity. We talked about this on the prepared remarks. There are more assets. Basically, there's more physical operations out in Europe, Mexico and Canada than there are in the U.S., so more vehicle count and so on. That being said, they're earlier in their digitization journey, so they're maybe kind of earlier on how they're piloting these technologies, how they're implementing them. So we're kind of in the early innings is the way I would put it, and we're investing for the long term. We want to make sure we have a great product market fit. We're spending time out in the field with those customers. I referenced our local customer conferences. They've been awesome. So we're going to continue to invest there, but it really is against that long-term opportunity to digitize operations at a more global scale.

Got it. And then on AI, you continue to roll out new products at your user conference. I'm just curious, like philosophically speaking, how do you think AI itself contributes to growth? Like is it additive to growth? And I guess, in the future, do you see pricing and packaging evolving when you continue to layer on more AI and GenAI features?

Well, I think of AI as just being an incredible unlock for this customer value. So we have this data asset that we've been compounding that gives us a lot of visibility into the physical operations, but it's way more data than any team of people can look at. And so I talked about automations, for example, being able to scale the impact of this product using AI, that's powered by LLMs, GenAI and a bunch of the newer technologies you've been hearing about.

So again, I think of it as an unlock of what's going to make it possible for these industries to digitize in a practical way without having to add a ton of head count, get value from that data. So that both improves our ability to deliver the existing products that enhances them, and it creates a possibility for some of the newer products that we launched beyond. So it really is sort of being applied across the board on both existing and new products.

The next question comes from Jim Fish with Piper Sandler, followed by Kirk Materne with Evercore.

Nice quarter. Maybe just going back to the school bus example. I mean, it's the second big school bus provider win. I guess, is there a way to think about how big of a vertical this is today? I assume very small, but really the crux of my question is how big of an opportunity in the U.S. alone it is as we think about your TAM.

I don't have an exact number for you in terms of how big the school bus vertical is off the top of my head. One of the exciting things we've seen is once these industry verticals start to open up, they really go. So we've seen this with construction as we've gotten adoption. We've seen it in segments like building materials. And now with student transportation, I think landing the largest -- landing another top 5, we're really starting to see the entire industry say, "Hey, this is a technology we need to implement because it massively improves safety. It helps us be competitive". So we look forward to seeing more growth in the student transport industry, but unfortunately, I don't have a specific number off the top of my head for you.

All good. And just on the newer products, I mean, Asset Tags ended -- ending ARR growing over 400%. I assume that's a reacceleration, albeit off of a smaller base. Is there a way to think about how that sizing now compares to that $10 million ARR given at Beyond? And more on the emerging products, how commercial navigation is going at this point?

We'll give Asset Tag kind of ARR as we cross like important milestones, but you're right. I mean it was very strong growth. And I think one thing that's really helping to open that up is that we're really expanding what Asset Tags can do. We rolled out the kind of first version of it last year. And then this year, we rolled out the tank level monitoring aspects in addition to kind of the Bluetooth location. And so we'll continue to add more and more products on to the Samsara network, and that's just another kind of extension, which has allowed us to -- again, to win our largest deal, Asset Tags deal ever in Q3.

Great. The next question comes from Kirk Materne with Evercore, followed by Dylan Becker with William Blair.

Sanjit, I want to follow up a little bit on Matt's question earlier about AI. And I was kind of curious, when your customers are thinking about their budgets next year, are they thinking about apportioning part of that towards AI? And do you guys get the benefit from that as a platform that obviously sort of future proofs them when it comes to that technology longer term? I'm just kind of curious if the discussions with bigger customers are actually benefiting from the fact that you're a platform that sort of will embed AI for them over time.

Yes. I think, first of all, the budget we sell into is the operations budget. That tends to be the largest operational budget in these companies, and they are really thinking about how do they get value. Where is the ROI going to come from? AI is, I think, intuitive to a lot of buyers now. This is going to be an unlock, but ultimately, they want to see savings when it comes to safety and efficiency and kind of the core tenets of their operation.

So I do think it's a nice tailwind for us in some of these deals. It helps us articulate why it is possible now to see this kind of value unlock. But I wouldn't say that they're pulling from a discrete AI budget within their own budgets.

Okay. That's helpful. And then, Don, just a follow-up for you. Obviously, international, another nice quarter. What's sort of the thought process on expanding go-to-market reach in those territories as you go into next year? And kind of how should we think about that from an investment perspective for you all?

I think it will be very similar to what we've done over the last couple of years. We tend to invest a little bit more internationally. Again, as Sanjit alluded to in his prepared remarks, there are more physical operations assets and frontline workers in Europe and Canada and Mexico, and those markets are even less penetrated than what we see in the U.S.

So we still see a lot of white space opportunity in our core market in the U.S., but these international markets are going to be -- continue to be more important as we think medium and long term and the durability of the growth. And so we will be making more investments in terms of our R&D go-to-market resources in international going into FY '27.

The next question comes from Dylan Becker of William Blair, followed by Alex Sklar with Raymond James.

Appreciate it. Maybe, Sanjit, just starting with you on the public sector strength. I think it's 100% growth in kind of new ACV or net new ARR there. I know we've got a dedicated team in place, and we've kind of worked through the FedRAMP process. But maybe if you could kind of double click on what that continues to unlock, how we should think about kind of what the public sector opportunity looks like and how we would expect sustained momentum from this segment in particular.

Sure. So one thing that's worth noting is in the public sector for physical operations, most of the work is actually done on the state and local level. So that's where the physical operations are taking place, whether it's maintaining roadways or sort of all the other work that happens. So we're excited to have wins like the City of Los Angeles and Chicago. I think state of New York was another big one.

And what's exciting about that is that these state and local customers, they're not competitive with one another. In other words, they share notes. They're happy to share win stories of how they're getting value, and so that's been a big part of the unlock, is kind of growing momentum that this is now possible. You can fundamentally improve safety. You can improve efficiency of asset use. And so it's not about a Fed opportunity as much as it is SLED in our business at least.

Perfect. Okay. No, that's very helpful. And then maybe for Dom on the enterprise traction piece. Obviously, another very strong quarter with $1 million and $100,000 customers, continues to accelerate and become an increasingly larger share of the overall mix. I guess, how should we think about kind of sustainability? Obviously, the opportunity is significantly large here but within that enterprise cohort and maybe how that helps drive conviction in your guys' outlook or confidence in the durability of the growth framework.

Yes. Yes, this is enterprise or strategic areas that we've been investing in for several years, again, from an R&D perspective to make sure that our platform is scalable and secure and that we have more than 350 technology integrations and then on the go-to-market side, making sure that we have the right kind of strategic AE resources but also the kind of the front-end sales engineers and customer successes required to really service these really large enterprises. So a lot of investment, a lot of -- is driving a lot of the momentum. And we feel really good about the size of the opportunity and this continuing to be a big driver of growth for us over time.

I will say that, obviously, as I kind of mentioned in my prepared remarks, these larger deals, they're a little bit longer. They're a little bit less predictable on a kind of quarter-to-quarter basis. And so the kind of the timing of when they close could be a little bit different than more of our mid-market customers that just have a lot more predictability in terms of what the sales cycle links. So I think if you're looking at the growth rate over an extended period of time, maybe multiple quarters over a year, we feel really good about the durability. There may be some more variability on a quarter-to-quarter basis.

The next question comes from Alex Sklar with Raymond James, followed by Derrick Wood with TD Cowen. Alex? Okay. Let's ask...

Sorry. Sanjit, just first one for you, following up on Dylan's question. Just given some of the success verticalizing that public sector sales force, has that changed your thought process at all on go to market for some of your other end markets?

Well, in general, we are always relooking at what's the best way to sell to these different kinds of customer segments. Nothing specific to announce at this point, but we've been happy with the public sector team. It is quite a different buyer persona and industry vertical than some of the others we sell into. But every year, as we go through the planning process, we have a number of different debates and discussions about how to organize.

Okay. Great. And Dominic, just a follow-up for you. Just given the traction on newer products we've talked about, any change to how you're thinking about the expansion motion as part of that 115% NRR framework? Is that something we could see step up as you continue to add products to the overall platform?

Our business has been very consistent over the last several years and very balanced in terms of roughly half of the business -- roughly half of the new bookings in a given period coming from new logos and the other roughly 50% coming from expansions. I think there's clearly a lot of expansion opportunity in front of us with some of these larger customers and phased rollouts and all of the newer products that we're releasing, but there's still a lot of opportunity on the new logo side as well. And so I think I would expect it to be pretty balanced going forward, but again, on the expansion side, still a lot of opportunity to grow within the existing customers we've landed.

The next question comes from Derrick Wood with TD Cowen, followed by Mark Schappel with Loop Capital.

Congrats on my end. Sanjit, the -- I just wanted to ask about the new tariffs that went into effect in November on foreign trucks and truck parts. Just are you seeing this shape customer demand one way or the other? Like does this drive more companies to turn to Samsara to extend lifespan of assets owned? Or just curious how this may have had any impact on end market behavior.

Yes. So Derrick, I was out on the road a lot last quarter, and I asked many of our customers what they thought about the tariffs, how it impact their operations. And really, they didn't think it was going to have much of a change in how they were behaving. You mentioned extending asset life spans. That is something we've seen interest in really for the last several years, which is these trucks have been getting more and more expensive over time. But they're also possible to run for a few more years if you maintain them well.

So we launched Connected Maintenance, for example. We have a lot of fault code insights and other AI that we're applying to helping extend asset lifespan. So that is, I think, more of an evergreen thing that we're seeing in the customer base, where they're always trying to figure out can we run these assets a little bit longer by maintaining them in a smarter way but not linked to the recent tariff needs at all.

Got it. Dom, in your prepared remarks, you called out selling into areas like construction, field services, energy, utilities. These are all impacted by physical AI infrastructure build-out. So could you double click on what you're seeing in that arena, how all the investments in CapEx on AI data centers may be impacting demand from those verticals and how you see that playing out over the next couple of years?

Yes, definitely. I mean we called out that construction was our largest industry in terms of net new ACV mix for the ninth consecutive quarter and it's obviously a direct beneficiary of the AI build-out. I think even more broadly, though, just the digital transformation for these physical operations businesses in all these industries really transcends what's going on in kind of in the broader economy. And so I think both of those are contributing to continued success in the industries you mentioned.

Our last question today comes from Mark Schappel with Loop Capital.

Sanjit, could you share more detail on what you're currently seeing in the telematics market, including any evidence of an accelerating replacement cycle? And then also, too, along those lines, is it fair to assume that you're still seeing high win rates versus some of the legacy providers there?

Yes, absolutely. So I would say telematics, it's part of the market that's been around for some time, really since probably the late '90s, early 2000s. So we are seeing sort of aging incumbents that haven't been able to keep up. Customers are kind of looking for other solutions, and we're very well positioned for that. So that's really this kind of modernization going on.

And then more broadly, safety is driving a lot of these new expansions and then new wins. So that's an area where we've seen a lot of strength. And the legacy telematics vendors that have been truly point solutions, they've either partnered for that or have implemented kind of basic safety products. So what we're seeing in the market is people are looking for a broader platform, something that's modern, something where they can really put multiple applications up and get a system of record going. That's different than the kind of telematics point solutions that were common about 20 years ago.

This concludes the question-and-answer portion. Thank you all for attending our Q3 fiscal year 2026 earnings call. Before I let you go, I have a few short announcements. We will be attending the Raymond James TMT and Consumer Conference in New York on December 9 and the FBN Virtual Technology Conference on December 12. We'll also be hosting the Piper Sandler Bus Tour on December 9, the Rothschild Bus Tour on December 9, the Evercore Bus Tour on January 5, the Bank of America Bus Tour on January 5 and the Jefferies Bus Tour on January 6. We hope to see you at one of these events. That's it for today's meeting. If you have any follow-up questions, you can e-mail us at [email protected]. Bye, everyone.

Good afternoon, and welcome to Samsara's Second Quarter Fiscal 2026 Earnings Call. I'm Mike Chang, Samsara's Vice President of Corporate Development and Investor Relations. Joining me today are Samsara Chief Executive Officer and Co-Founder, Sanjay Biswas; and our Chief Financial Officer, Dominic Phillips. .

In addition to our prepared remarks on this call, additional information can be found in our shareholder letter, press release, investor presentation and SEC filings on our Investor Relations website at investors.samsara.com. The matters will discuss today include forward-looking statements. Actual results may differ materially from those contained in the forward-looking statements and are subject to risks and uncertainties described fully in our SEC filings.

Any forward-looking statements that we make on this call are based on assumptions as of today, September 4, 2025, and we undertake no obligation to update these statements as a result of new information or future events unless required by law. During today's call, we will discuss our second quarter fiscal 2026 financial results. We'd like to point out that the company reports non-GAAP results in addition to and not as a substitute for or superior to financial measures calculated in accordance with GAAP.

We also report both actual and constant currency growth rates for certain metrics. On the call, we will only provide constant currency commentary when there is a material difference. Reconciliations of GAAP to non-GAAP financial measures and industrial information on constant currency are provided in our press release and investor presentation. We'll make opening remarks, debt highlights for the quarter and then open the call for Q&A.

With that, I'll hand over to Sanjit.

Thanks, Mike, and thank you, everyone, for joining us today. Samsara delivered another strong quarter of durable and efficient growth. We ended Q2 with $1.6 billion in ARR, growing 30% year-over-year. Our $100,000-plus ARR customers now contribute close to $1 billion of ARR, up 35% year-over-year and now represent 59% of our total ARR. .

In Q2, we added 17 customers with more than $1 million in ARR, a quarterly record. Our $1 million-plus ARR customers crossed an important milestone in Q2 and they now generate more than 20% of our ARR or approximately $350 million. Our strategy to partner with the world's largest and most complex operations organization is working and is fueling our growth at scale. In Q2, we partnered with many large enterprises, including Alaska Airlines, the fifth largest airline in the U.S., SRM concrete, the largest ready-mixed concrete provider in the U.S. and one of the largest Fortune 1000 rental equipment companies in North America. We're excited to work with these industry leaders and help them operate smarter.

As we grow our customer base, we're also scaling our data asset. We reached another company milestone in Q2. We now process approximately 20 trillion data points annually on our platform. Our unique and proprietary data asset is not found on the Internet. It pulls data from gateways, cameras and sensors that we've deployed across our customers' vast operations with breadth across diverse asset types, end markets and geographies. We're proud to partner with our customers to build the world's largest physical operations data set which provides us unique visibility into where and how customers run their operations. Combining this with AI, we're delivering actionable insights that solve their toughest challenges.

In June, we hosted our biggest customer conference yet, Samsara Beyond. During the 3-day event, thousands of leaders joined us to hear about how our newest innovations and to share their feedback and insights. We also learned about the challenges they're facing, including increased demand to build AI infrastructure, safety risks, capital expenditure costs and employee churn. These conversations make our customers' top priorities clear. We're seeing a notable shift towards AI and automation as they modernize manual processes. They want a single unified platform to manage their complex operations, and they want to extend risk management from vehicles into the field to protect their workers and to use digital tools to help with high employee turnover and labor shortages.

Our customers are increasingly turning to AI to help them scale their output while running safer, more efficient and more sustainable operations. Dearing beyond, we also hosted our Connected Operations award ceremony. We celebrated 17 global customers who achieved an outsized impact of our platform. I'd like to share some of the highlights from a few of our winners.

Maxim Crane, a leading crane rental company in the U.S. was our most innovative workforce winner. They saved $13 million in maintenance costs by shifting their maintenance program from reactive to proactive. They also saw a 94% reduction in harsh driving and an 87% reduction in speeding. Another winner was Mohawk Industries, the largest flooring manufacturer in the world. They want excellence in systems efficiency. They saved $7.75 million by using planned versus actual analysis to reduce their mileage by 4.2 million miles. They saved an additional $500,000 from rightsizing their fleet. They also saw safety gains, including a 54% reduction in speeding.

We are proud to partner with our customers to make a real-world impact on their operations. Our connected operations platform is solving our customers' toughest challenges. As we scale to over 20,000 core customers, our flywheel of innovation is accelerating. We build products for our customers that deliver a clear and fast ROI. As our customers use these products, they contribute data to the platform. This growing data asset then allows us to build new products. This is fueling the expansion of our platform at an unprecedented rate, and I'm excited about the opportunity to deliver even more customer impact through our platform.

At Beyond, we announced a record number of new products and features. These products help our customers by protecting their frontline workers, modernizing the frontline worker experience, improving asset maintenance and optimizing asset utilization. Safety is a top priority for leaders. Driving is one of the 10 most dangerous jobs in the U.S. with fatal crashes up 49% in the past decade and insurance premiums up 40%.

Leaders also want to modernize the frontline worker experience to improve productivity and are looking for new ways to improve asset maintenance and utilization as rising costs and high interest rates are creating pressure to reduce capital expenditures. To help our customers with these challenges, we launched new products, including asset maintenance, which helps organizations monitor and manage the upkeep of their vehicles and equipment, commercial navigation, which is tailored to the unique constraints of large commercial vehicles, route planning, which creates and optimizes routes with fewer miles and vehicles, AI multi-cam, which gives drivers real-time 360-degree video coverage around any vehicle and worker safety which protects frontline workers wherever they work. It's never been a more exciting time partnering with our customers to improve their operations.

As we build for the long term, we're investing in innovation to meet our customers' evolving needs. Our open platform and partner ecosystem, and our leadership and culture. First, we announced many new features and in addition to our new products at beyond. For our customers' frontline workers, we redesigned our driver app to be more intuitive and engaging with streaks and short training videos. We also built new AI-enhanced [indiscernible] to help workers improve compliance and accuracy. To help produce risk, we built weather intelligence, which provides real-time ground-level weather insights. All of these new features are broadly available to our customers, and we're looking forward to increasing our customer impact.

Second, our open ecosystem and the work of our partners are central to our success. We've now expanded our partner ecosystem to over 350 integrations and our largest customer, on average, are using 6 of them. This demonstrates the value of partnerships and helping customers unify their operations. We're continuously building on this by adding dozens of new partners, including Element, Rivian, Happy Robot and Marsh. And we're also deepening our existing integrations to provide even greater value.

Lastly, I'm happy to share that Gary Steele has joined our Board of Directors. Gary is a proven leader with over 30 years of leadership experience in the technology industry. His expertise in enterprise software and AI will be invaluable as we continue to drive multiproduct adoption and deliver clear ROI for our customers. We're confident that his contributions will be a great asset, and we look forward to working with him.

We're seeing great customer impact as we continue to scale. Our connected operations platform now sees approximately 20 trillion data points, 300 million digitized workflows and 90 billion miles annually. With this data, we're driving actionable AI-powered insights to help our customers achieve even more ROI from our platform. Each year, we compound the impact we can make for our customers, and we're excited for the decades-long opportunity ahead. We want to thank all of the Samarias, customers, partners and investors for joining us on this journey.

I'll now hand it over to Dominic to go over the financial highlights for the quarter.

Thank you, Sanjit. Q2 was another quarter of durable growth and improved profitability. The quarter was highlighted by strong performance across several key metrics, including another quarter of 30%-plus year-over-year growth at a larger scale, 19% year-over-year net new ARR growth, which accelerated sequentially at a larger scale. 17 new $1 million plus ARR customers, which was a quarterly record, more than 20% of total ARR from $1 million-plus customers and year-over-year ARR growth for this cohort accelerated sequentially at a larger scale. Approximately $1 billion of ARR from 100,000-plus ARR customers, an increase of 35% year-over-year and representing 59% of total ARR and 8% of net new ACV from new products launched since last year. .

And while we experienced a few elongated sales cycles in Q1 following Liberation Day, all of the impacted larger transactions closed in Q2, which contributed to our strong growth and we didn't experience further tariff-related impact in the quarter. Looking ahead, we believe we are well positioned to deliver durable growth and create long-term shareholder value for a few key reasons. First, we have a unique defensible data [indiscernible] by instrumenting physical assets, we generate a large and growing proprietary data asset that cannot be replicated or sourced from the Internet.

Second, AI is accelerating our innovation, and we are releasing new products and meaningful features at a faster pace driving higher customer engagement and usage. Third, our business model scales with physical assets rather than head count or knowledge workers and aligns us to end markets that are poised to benefit from major initiatives like the global AI infrastructure build-out. Fourth, our products have a differentiated value prop and mission-critical workflows that delivers fast intangible ROI with quick payback periods that make us essential to our customers' operations. And lastly, we're targeting the large and less discretionary operations budget, which represents approximately 80% of our customers' revenue on average. And because we help them optimize this significant and durable cost base, we have a large opportunity to drive customer impact and long-term growth.

Now taking a look at our Q2 results. Q2 ending ARR was $1.64 billion, an increase of 30% year-over-year. Within that, we added $105 million of net new ARR, an increase of 19% year-over-year or accelerating sequential growth at a larger scale. And Q2 revenue was $391 million, growing 30% year-over-year or 31% in constant currency. Several factors drove our strong top line performance in Q2. First, we focus on serving large enterprise customers to drive efficient growth at scale. In terms of large deals, we signed 7 $1 million-plus net new ACV transactions in Q2, our second highest quarter ever. This reflects the success of our investments to support larger customer opportunities.

At the same time, larger deals have inherently longer and less predictable sales cycles which means that their timing may introduce more variability into our quarterly results than in the past. In terms of large customers, we ended Q2 with approximately $1 billion of ARR from 100k-plus ARR customers an increase of 35% year-over-year, representing 59% of total ARR, up from 57% 1 year ago.

We also ended Q2 with 147 $1 million plus ARR customers, including a quarterly record increase of 17. $1 million-plus ARR customers contributed more than 20% of total ARR and year-over-year growth from this cohort accelerated sequentially at a larger scale. Second, landing new customers remains a key driver of our growth strategy that fuels future expansion opportunities.

In terms of new customers, we added our third highest number of net new core customers in Q2, surpassing more than 1,000 for the fourth time in the past 5 quarters. Nine of the top 10 new logos adopted 2 or more products and 8 of the top 10 adopted 3 or more products in their initial transactions. These new logos included 2 public sector customers, 1 with a state-level department and another with one of the largest counties in the U.S., a top 5 U.S. airline, one of the largest employee-owned electrical contractors and the U.K. subsidiary of one of the largest global retailers, which adopted 4 products in its initial contract. Video-based safety, vehicle telematics, connected workflows and connected training.

In terms of expansions, all 10 of the top 10 expansions in Q2 included at least 2 products and 5 of the top 10 included 3 or more products. Additionally, 15 of our top 25 ARR customers expanded in Q2, and we achieved our target dollar-based net retention rate of approximately 115% for core customers. And third, we demonstrated strong execution across several frontier markets. In terms of international, 15% of net new ACV came from non-U.S. geographies, the largest of which was Europe, which accelerated net new ACV growth sequentially to its highest level in the last 4 quarters.

In terms of end markets, we saw momentum across construction, public sector and manufacturing. Construction drove the highest net new ACV mix of all industries for the eighth consecutive quarter and delivered its highest net new ACV mix in the last 6 quarters. Public sector strength came from wins across several state departments, including Nebraska DOT as well as large municipalities, including the city of Nashville and a leading passenger transit agency in Los Angeles. And manufacturing delivered its highest net new ACV mix ever led by SRM concrete, the largest U.S. ready-mixed concrete provider. Their initial purchase included video-based safety, vehicle telematics, equipment monitoring, connected workflows and commercial navigation.

In a pilot, they saw faster accidents response times with connected workflows, exonerated drivers and not adult accidents, improve job site efficiency with real-time visibility and improved customer experience through more on-time deliveries using commercial navigation. And in terms of emerging products, 8% of our net new ACV in Q2 came from our new products launched in the past year. led by asset tags, connected workflows, connected training, asset maintenance, AI multi-cam and commercial navigation.

This quarter, we signed our largest ever asset tags deal with Bonnie plants the largest U.S. supplier and producer of vegetable and herb plants. They deployed 15,000 asset tags to track their owned and leased car fleet reducing asset loss and theft while improving worker efficiency. In addition to driving strong top line growth, we continue to deliver operating leverage across our business as we scale. Non-GAAP gross margin was 78% in Q2, up 1 percentage point year-over-year. Non-GAAP operating margin was 15%, up 9 percentage points from 1 year ago, and free cash flow margin was 11% in Q2, up 7 percentage points year-over-year.

Okay. Now turning to guidance, which is based on FX rates as of August 2. For Q3, we expect revenue to be between $398 million and $400 million, representing 24% year-over-year growth or 23% to 24% growth in constant currency. Non-GAAP operating margin to be 15% and non-GAAP EPS to be between $0.11 and $0.12. For full year FY '26, we expect revenue to be between $1.574 billion and $1.578 billion, representing 26% year-over-year growth. non-GAAP operating margin to be 15% and non-GAAP EPS to be between $0.45 and $0.47.

And finally, please see the additional modeling notes in our shareholder letter. To wrap up, in Q2, we delivered high growth at scale while also delivering operating efficiency gains. Looking ahead, we believe Samsara is well positioned to sustain durable and efficient growth because we generate a unique, defensible data asset that powers differentiated AI innovation and deeper customer engagement. We are aligned with secular growth in physical operations that is poised to benefit from major initiatives such as the global AI infrastructure build-out, and we deliver tangible ROI through mission-critical workflows and help customers achieve fast payback periods on their investments. We look forward to building on this momentum as we help our customers operate more safely, efficiently and sustainably at a greater scale.

And with that, I'll hand it over to Mike to moderate Q&A.

Thanks, Dominic. We will now open the line up for questions. [Operator Instructions] The first question today comes from Alex Zukin with Wolfe followed by Matt Hedberg with RBC.

Maybe the first one is just in terms of the early customer conversations coming out of Beyond when you stack rank some of the new product launches that are getting the most traction, where you've seen the fastest movement from interest to pilot or deployment kind of walk through those a little bit and maybe help shape how we should think maybe for the -- even the full year as you look at your guidance, that net new ACV growth from new products kind of trending? And I have a quick follow-up.

Sure. I'll take that one. Alex, this is Sanjit. So Beyond was great. I think a lot of enthusiasm and excitement from the customer base, especially for the new products and features we launched. I would say a number of them are hitting and resonating well. We launched routing and commercial navigation that's relevant in a number of industries that improve safety and efficiency for their operations. We also saw a lot of interest around maintenance and then continued interest in things like asset tags that we launched the previous year that are gaining momentum. .

With all of these products, it takes some time for these customers to figure out how they're going to adopt them on the platform and the change management for the front line. These folks often have tens of thousands of frontline workers. So putting a new app in front of them is a big change. That being said, I think we're seeing really positive momentum, trials and pilots in a number of accounts across different industries. We'll come back to you and report on that continued revenue growth. But as Dominic highlighted, 8% of the new ACV was coming from these other applications. So we're really pleased with the initial momentum.

Perfect. And then maybe just as a follow-up, Don, the net new ARR, $105 million accelerating growth, strong large deal and logo momentum. It seems like you really kind of hit it out of the park this quarter with sales execution. Maybe just help us understand how this performance kind of this bounce back after Q1. How much of that was macro kind of figuring itself out, how much of that was new product, how much of that was linearity from some of the deals that slipped. Give us a sense for how to think about both that and kind of the -- what looks like a pretty conservative guide for the second half.

Yes. Maybe I'll just bifurcate the quarter in kind of the 2 components, the kind of the macro tariff and then just the strength in the quarter. I think as I called out in the prepared remarks, as we discussed last quarter, there were a few larger deals, I'd say, kind of totaling mid-single-digit millions of net new ACV that we originally had forecasted would come into Q1, but ultimately pushed to Q2 after the liberation Day tariff announcements. .

All of those larger impacted deals closed in Q2, we didn't experience any further impact in the quarter. And so really, if you look at the net new ARR growth really for the first half of the year, combining both kind of this Q1 and Q2, it was in the low double digits. I'd say beyond that, Q2 was really strong, and I think the call out is just the large customer momentum, now doing almost $1 billion of ARR from our 100,000-plus ARR customers, up 35% year-over-year. And then really, we're starting to see more traction out of our $1 million-plus ARR customers landing a quarterly record 17 and that cohort is now driving more than 20% of overall ARR. And so that definitely also contributed to the strength in the quarter.

The next question comes from Matt Hedberg with RBC followed by Chris with Morgan Stanley. .

Congrats from me as well. Really strong results. I'm curious building on the new product success your traction in AI is notable. And in a market where investors are concerned about AI disrupting software it feels like you guys are well positioned to actually benefit from that. And it seems like that was a real focus and beyond. I guess my question is, do you think broader about the product portfolio and the build-out -- do we need to think about new ways to sort of monetize and price and package AI-based functionality? Does any of that evolve as you continue to roll out functionality leveraging the existing data on the platform?

Yes, absolutely. So I think we have a lot of exciting things going on with AI. One is it's enhancing the core product experience, which is really beneficial for our customers as they think about their safety and efficiency. So we're able to surface deeper insights, help them really make sense of all of this data. And then as you mentioned, as a byproduct of all this data flowing into the platform, these 20 trillion data points we can identify new sources of value.

So for example, one of the features we launched and beyond was this ability to go see at a moment's notice the weather -- the current welter status anywhere on the roads in the U.S. and really like up-to-the-minute sort of views. That's not something that was possible until we have the scale of data and then AI to process it, understand these conditions help provide it in a privacy preserving sort of way. So I think over time, we will be able to introduce net new products that are enabled by AI, but I would also expect that our current products get better and better because of what we're doing with AI.

That's great. And then, Don, you mentioned the largest ever Acotec deal with Bonnie Plants. Great to hear the success. I think we all we're excited coming out of that initial product launch. I'm wondering on a deal like that, is there any way to think about how that adds to customer ACV -- and really, how that customer thought about the ROI. You mentioned some of the key reasons in terms of asset inventory. But could you walk us through maybe just some rough idea of sort of an economics of a deal like that?

Yes, that's an interesting deal because the asset tag was the biggest component of it, but because of the asset tag opportunity, it allowed us to also land with some of our core products, telematics and safety. So that really was a big expansion. -- of that. And I think -- and use cases around asset tags are really replacing nothing. So they were losing these owned and leased carts. And so now being able to track them, they're going to be able to save a lot of money in asset loss and theft. And so a lot of the customers are coming from no technology. They're really just kind of starting out on their digital transformation journey. And so being able to deploy technologies to these use cases really can drive a lot of ROI.

Great. The next question comes from Chris with Morgan Stanley followed by Michael Turrin with Wells Fargo.

This is Chris on for Keith Weiss here. I wanted to ask about the large customer momentum that you've got going on here, really encouraging to see. You mentioned some of the investments you've been making there to support those larger deals. So -- can you remind us kind of what those were and how those have progressed versus your expectations? And kind of how you look on a go-forward basis of streamlining some more of those bigger deals?

I'll take that one. So we've been making investments to support these large customers across the board. On the sales side, we have a dedicated team focused on these strategic accounts, but -- more broadly, we have teams that are set up to help them with implementation and change management, adoption of these products across the board, their sustained sort of use and kind of value unlock and then on the software side and the product side, we've been making a lot of investments around security, making sure the integrations and the APIs are really robust set up to operate at scale, technologies like FirstNet which are relevant for a lot of these large enterprises and more.

So I would say that it's been a company-wide effort to support the large enterprise. It's great to see us breaking records on that front. The $17 million plus customers was a quarterly record. So I think we're going to continue to invest in that area. And the other exciting thing is these are very large complex operations where there's a lot of opportunity to unlock more value. So these core products are doing great. But as we get to know these customers, we're starting to do workshops with them and find additional areas of value that we can really help.

Got it. That's super helpful. And then I wanted to also follow up on the European success. Another quarter of accelerating net new ACV growth there. Are there any specific unlocks or learnings that you've gathered over the past few months and years as you've penetrated into that market that you can bring to the broader international rollout.

I think it actually kind of dovetails off of what changes said around the large customers. It's just been a sustained investment in some of these regions where there's more commercial vehicles in Europe than there are in North America, but making steady investments around go-to-market, sales reps, sales engineers, the marketing resources, landing lighthouse customers that can be referenceable to other accounts and then making all of the kind of R&D investments required around the platform, the security, the scalability -- we've called out in previous quarters that there are product-specific features that are required, like in Europe, ridgestrikes is really critical. And so making those investments has allowed us to have some continued success there.

The next question comes from Michael Turrin with Wells Fargo, followed by Jim Fish with Piper Sandler.

Okay. Sorry, I just clicked over Okay. Excellent. I wanted to just spend a few moments on a couple of just key points that you're flagging in the prepared remarks. You mentioned the AI infrastructure built out specifically in the latter -- would be curious to just hear you speak more to where your customers fit within those end markets and how you're prioritizing that opportunity from a go-to-market perspective? And also curious to hear any commentary around what you're seeing from public sector we can appreciate the diversification. But those 2 areas, I think, are particularly in focus right now.

Sure. I'll take that one. AI infrastructure build-out is a really interesting theme. If you think about who our customers are, they're the world of physical operations. These are folks like the construction companies, the field services companies like the electricians, for example that are involved in these projects as well as the electric utilities. So almost all of them are trying to find ways to keep up with this demand and operate smarter. -- very compressed schedules, they demand a lot of efficiency, and they also have to be safeful. They're doing all this work. So those would be the end markets that we're seeing that kind of traction in.

Specifically, construction had the highest contribution to our net new ACV mix for the eighth quarter in a row. So it's really this kind of continued push that we're seeing from these industries. And then somewhat related to that in the public sector, this is an area where there are a lot of assets. If you think about all of our towns and cities that we live in, they require infrastructure to operate everything from waste management and school buses to the folks running inspections on the roads. And so what we're seeing there is that this end market is waking up to how much money can be saved for their citizens by more efficient operations. And I think we've built the right feature set, and we've also done the right security work to meet the standards that many of these folks have in the state and local opportunities. .

The next question comes from Jim Fish with Piper Sandler, followed by Matt Bullock with BofA.

I wanted to follow up on one of the prior questions around the big quarter for $1 million-plus ARR deals. Is there a way to think about how much of that 20% is being I'll say, more of a mid-market that is consolidated on top of Samsara as kind of the base versus a very upper end of the market, [indiscernible]. And -- and sort of why now we're starting to see that $1 million cohort really coming on. And Don, for you, how you're navigating these larger deals in the context of your projections, given the timing uncertainty.

Yes. Definitely, there are examples of some smaller customers that have really expanded and gone more wall-to-wall across our operations on Samsara. But primarily, the majority of the $147 million plus AR customers that we have today are really large enterprises with complex physical operations, and we're really just scratching the surface in terms of getting started with them often in our core products. But as we've really picked up the pace of our innovation over the last couple of years. I called out a number of deals where customers are landing with 3, 4, 5 products out of the gate. And so we're finding more of these use cases with the large customers and -- and again, that was a big driver of the growth in the quarter.

Okay. Next question comes from Matt Bullock with BofA, followed by Kirk Materne with Evercore.

Fantastic. Great to hear that there was no tariff impact during the quarter. But Sanjit, I would love to hear about how some of those conversations have evolved exiting April as things settle down, customers figured out some of those asset procurement strategies. I guess asked a different way, do we think we're out of the woods here and customers have done kind of the groundwork to continue to stay nimble in an evolving tariff environment?

Yes. Matt, I think you sort of put your finger on it, which was that back in April, it was a little bit of a shock to the system, especially for our customers. These are people operating in very heavy asset-heavy industries, and so they procure a lot of equipment and they had to really take a moment to figure out what their strategies would look like.

At this point, there's still uncertainty on the tariff rates themselves, but tariffs appear to be here to stay. What I'm hearing from customers is they've adapted to the environment. they've made their plans. They are trying to find ways to be more efficient with the assets they have. So we're seeing them trying to essentially stretch asset life spans. They do that through smarter asset maintenance programs, which is what we're offering on our platform now. They're also trying to optimize the efficiency and the utilization of these assets, which again, we can provide with our asset products. And so I think we're well set up to help solve these real problems for them. But while there's still uncertainty on the horizon of the specific tariff rates, I think the customers have really adapted to this new environment.

Super helpful, Sanjit. And then a quick 1 for Dominic, if I could. Certainly, a larger net new ARR beat than I think we were all expecting, particularly in the enterprise segment. Can you maybe just help us think about sales productivity trends within that sales organization versus -- I know you're obviously building out and adding additional resources in that market specifically. But maybe help us parse through what you think drove that larger beat.

Yes. I'd say the growth in -- and this quarter, Q1, the first half of this year has really been more balanced than maybe it has been in previous years where a couple of years ago, we were really adding a lot more capacity and before that coming out of COVID, more of the growth was driven out of productivity with lower capacity. I think going into FY '26, we've really found a nice balance of continuing to add more sales capacity, but seeing really good productivity being driven by a lot of the efforts of the R&D organization building a lot of the new products that are allowing us to solve even more use cases for customers and allowing our sales reps to be even more productive. So we feel good about the balance, and it's going to allow us to continue to make capacity investments going into the second half of the year. .

Nice question comes from Kirk Materne with Evercore followed by Alex Sklar with Raymond James. .

So, I was just wondering, you guys obviously have a much more expansive product portfolio today than you did a couple of years ago. From a go-to-market perspective, how do you make sure that each of these newer products, each of which have a big opportunity in front of them. get the right type of care and feeding from the sales organization? Are you doing anything in terms of SPF, uncertain project or products or specialized sales reps. Just kind of wondering how you're balancing the fact that you guys just have a much more broad-based product portfolio today than a couple of years ago.

Yes. Kirk, I think you put your finger on a very practical problem for us, which is we do have a lot to offer our customers -- we highlight the value of the platform first and foremost. Most of our customers are not looking to solve just 1 problem, but they often have many different operational challenges they want technology for. So we do have generalist sales reps that are familiar with the portfolio. They have sales engineers and specialists that can call in for additional help if they need to talk about a specific integration or specific feature on there. And then over time, we do experiment with things like [indiscernible], with specialists and other kind of tactics, I guess, to help with that, but it's an area that we're continuing to focus on. We want to make sure all of these products are successful. And most importantly, that we get the customers the assistance that they're really looking for.

Okay. And you highlighted a number of your integration partners this quarter. I was just kind of curious, having those integrations, I think you mentioned your biggest customers have 6 integrations or thereabouts. Is that sort of a check the box for your big partner or your big customers, meaning if you didn't have those that would make the conversation more difficult? Or is it a real sort of differentiator when you're going up against other competitors in the market? .

I would say much more of the latter. We are the first company to offer this sort of widespread integration ability and the quality of the integration matters, too. It's one thing to sign a partnership. It's another thing for the data to flow really well for us to have bidirectional data feeds, things like that. And it's an area that our customers are getting a lot of value from. They have been waiting for a company to come in and integrate all of this or really unify all of this data in 1 place. And that's everything from OEM telematics to fuel cards to insurance integrations, payroll providers, there's a lot you can do with this data, a lot of value for the customer. So I think it's a huge differentiator for us.

And Again, the quality of these integrations really matters. These customers have often been burned in the past by vendors that they've said they'll do an integration, but it doesn't really work for them. When we were able to show these working out of the box and the quality is excellent, they get excited and they want to do more with us.

The next question comes from Alex Sklar with Raymond James, followed by Dan Jester with BMO. .

This is Jessica on for Alex. Yes. Just a one quick question from us. Has there been anything structural about international opportunity and differences in competitive environment that you think could be [indiscernible] from achieving growth at level similar to what you've been seeing in domestically the last few years has been really impressive. And also, have you been seeing anything about competitors being more aggressive on pricing as we're trying to be winning deals from you. How is this all interacting?

I'll take that one. I would say the set of competitors has been pretty consistent for the last several years for us. There are several of them, many of them are point solutions or regional players. But we're kind of seeing the same names come up over and over -- and the way we differentiate again is the sort of platform approach, the way we engage with our customers, the amount of value we're able to unlock across their operations. And then to the second part of your question around pricing, that is often where some of these competitors go is they'll just discount very heavily in order to try to compete for these deals.

We again try to really demonstrate that we can do more for these customers, help them find more value, around 80% of their revenue is invested in their operations. So this is a huge area of expense for them. And so if we can find additional areas of savings, things like that, they're not focused on price. They're focused on what can I do with all this technology.

The next question comes from Dan Jester with BMO, followed by Dylan Becker with William Blair.

A couple of weeks ago, you announced a pre delivery installation program to get your hardware into the trucks before customers buy them. And I think in the press release, it said that you expect this to be the standard for the industry over time. Maybe can you just expand on the value of the pre-installation and what kind of maybe competitive moats that provides if you can get the hardware in before the truck even gets shipped to the customer.

Yes, absolutely, Dan. So I think maybe just for a little bit of customer context, if you're a larger enterprise and you've got 5,000 or 10,000 trucks -- in a given year, you're swapping out 1,000 of them, which means that sometimes in a given month or even a week, you've got dozens of vehicles getting changed out. For us to be able to deliver -- have those vehicles be delivered with Samsara on board, it really helps eliminate a huge operational headache.

And again, those vehicles may be delivered to different cities all over the country. So it's an area where we're able to streamline our customers' operations. It provides a much better experience for them. It makes sure those vehicles are ready to go on day 1. And it's something that customers have been asking for and we're excited to be able to offer because of our scale and our presence in the market. So very glad to get that program off the ground. And we're continuing to expand that program, partnering with even more OEMs. So hopefully, more good news to come on that front.

Great. And then maybe just to revisit the sort of strengthen the performance in sort of larger customers from a different angle. I know it's less of a focus, but maybe you can talk about what you're seeing with some of your smaller and midsized customers that maybe do have maybe a little bit more macro impact? Are you seeing any change in their behavior or have been pretty consistent?

Yes. Dan, it's Dominic. Yes, it was very consistent. And while we had a very strong large customer, $100,000-plus, $1 million-plus ARR quarter, we also saw a lot of strength in commercial mid-market. So -- maybe if you just look at the numbers, the ARR mix from 100-plus customers was 58% last quarter and went up to 59%. So it's definitely growing faster than our overall base, but it's not like it's stepped up exponentially which implies that the mid-market and kind of SMB part of our business also had strong growth in the quarter.

The next question comes from Dylan Becker with William Blair, followed by Derek Wood with TD Cowen. .

Maybe, Don, starting with you. If we look at the on the revenue line kind of a notable step up here. I was wondering if you could kind of help us parse through that a little bit more whether that was kind of conservatism, given some of the uncertainty we saw last year, any linearity of kind of ramp and go-lives. Obviously, some large customer momentum, but help us parse through kind of the revenue outperformance, if you would, please?

Yes. Thanks for asking that. Yes, I'd say overall, even going into the quarter. And as I look into the back half here, like no change to our guidance philosophy. We're still going to try to ensure that we're setting revenue guidance with a lot of confidence that accounts for various downside scenarios. If we don't see those scenarios ultimately play out, it generally results in us being able to outperform the guidance. .

For Q2 specifically, there was even more outperformance than normal. Obviously, we got some revenue benefit from the stronger bookings linearity with some of those Q1 deals slipping in and closing in early in Q2, we don't have that same dynamic into Q3. And so that started the quarter off strong in terms of bookings linearity and you saw that outperformance flow through to the beat in the quarter.

Very helpful. And then maybe for you or Sanjit as well, too, obviously, the emphasis coming out of Beyond was on kind of the accelerated cadence of new product innovation wonder how maybe at the advent of AI, kind of the cost of building and introducing new products and capabilities is helping contribute to kind of some of this enterprise and million-plus strength that we're seeing kind of the receptivity and willingness for them to try more products, but also your ability and appetite to have more irons in the fire over time as well.

Yes. Dylan, I think the interest in AI, it's certainly strong in the enterprise. We do see it in the mid-market as well. We collect a tremendous amount of data on the platform. There's a lot of value in that data, but you really do need AI to help you -- so if through it all, find insights and really help change behavior, and that's ultimately where the value comes from. That's how they get the safety and efficiency gains.

I think we're getting a lot of new ideas from our enterprise customers because they have large complex operations, they're really experts in their various industries. And so they often lead us to really innovative new solutions, and we kind of codevelop them together. But for us, we're excited about what AI is able to do and the capability sets just changing every year. whether it's large language models or some of these vector databases and other technologies coming to market. So we're generally excited about being able to find new sources of value for all kinds of customers, especially in the enterprise, but down in the mid-market in SMB as well.

The next question comes from Derrick with TD Cowen followed by Janet with Truist.

Congrats on a great quarter. It's been over a year since the release of asset tags and -- just curious how is the product done versus your expectations? And should we think of this as kind of a long tail growth dynamic? Or is this something that could really start to contribute to larger deals and move the needle more on overall growth as we look out over the next 12 to 18 months?

Yes. We're really pleased with the performance of asset tax. I think it's just notable that it's -- it's a product that's addressing a really large problem where technology frankly doesn't exist today. So we've got these customers, and they've got all kinds of assets and machinery out there and they can't locate them, they got lost. They don't know where they are. And so this is really the first time that this kind of technology using Bluetooth technology has really been available for these customers.

And so -- the product has been out for a year. We've had a lot of good conversations and trials with customers and then starting to result in some pretty big deals where you called out [indiscernible] plant is our largest [indiscernible], deal ever, 15,000 asset tax in the quarter. And so -- we had another really large one, I think, in Q4, a couple of quarters ago. And so we do expect this will continue to pick up as customers are more aware that this technology exists.

And I would just add, it takes some time for them to realize that this is now possible. Many of them spend tens of millions of dollars replacing these last to assets. You spent a lot of time searching for these assets in their operations. And they've done it that way for 25, 50, 100 years. So they're starting to realize technology can help, but it's an education process for us.

Interesting. And I guess, Tom, I mean, of the 8% of net new ACV from new products, is asset tagged the biggest component of that? And is there maybe a clear #2 within that mix that you'd highlight?

It was actually pretty spread out across all of the products that I mentioned. So like asset tax definitely had a great quarter, but commercial NAV, workflows, maintenance, navigation, all contributed to the 8%.

The next question comes from Junaid with Truist followed by Matt with Goldman Sachs. .

Okay. Let's move on to Matt with Goldman Sachs.

Let's do Junaid first, and then we'll go to Matt .

It seems like you're continuing to add sales capacity and feel pretty confident about the significant opportunity going forward. But I just wanted to ask you how you're looking at the growth versus profitability framework going forward?

Yes. I mean both of them are important to us. We really focus on kind of balance both growth and profitability. I think this is the both consecutive quarter we've been north of a rule of 40. And then obviously, even within that, we were able to accelerate our net new year-over-year growth at a larger scale and continue to grow really quickly as a result of the large customer momentum and the strong kind of land and expand quarter and then the contribution of the emerging products in new frontiers. And so within the construct of wanting to kind of balance both growth and profitability, being over a rule of 40, we feel good about that and then wanting to continue to try to make the investments to grow as fast as we can be on that.

Great. And Dom, just on the gross margin, that continues to tick up. I know you've talked about that historically that most of the margin improvement is going to be below that line. But could you just call out some of the the reasons for the strength there? And if you can continue to sustain that?

Yes. It comes really across our entire COGS stack. And I think we're up kind of 1 percentage point year-over-year. So not a lot of leverage. And I think going from here, we feel good with where gross margins are. And expect much more of the leverage to come from the other OpEx line items. But in terms of supply chain and inventory efficiencies, cloud and cellular efficiencies more leverage out of customer support, all of those kind of line items within COGS or getting a little bit more efficient year-over-year, and we feel good with those results.

The next question comes from Matt with Goldman Sachs, followed by Andrew with BNP.

This is Matt on for Kash. Sanjit, maybe going back to the emerging product net new ACV strength in the quarter. You flagged contributions from a few of the announcements from beyond 25 asset maintenance, AI multi-cam commercial NAV only been in market for a couple of months. I'm curious if you expected this level of momentum this early into the launch and how this may inform your view on emerging product net new ACV contributions looking ahead?

Yes. I would say, Matt, we're -- a number of these customers that purchased in the quarter, they had been design partners with us, they're going much bigger with it. So it's exciting to see that the ready to go and the products are working for them at scale. I do think every product has a natural revenue ramp that takes the number of quarters. And we plan to continue enhancing these products over that -- over the next couple of quarters, too. It's not just that this is the release and that's it. So we're going to keep investing. We're going to keep getting more trials in action, but we are very pleased with that initial response we're seeing from the customer base.

Great. The next question comes from Andrew at BNP, followed by Mark with Loop Capital. .

I guess looking at your net new customers that you added over 100,000 looking how it trended relative to last year, while still good, I noticed it's slowed down slightly. Just wondering, is this a function of the fact that you're landing larger customers? Or am I missing something?

Yes. I would say, overall, it was a really strong large customer quarter. The 100,000 plus AR customers are now doing about $1 billion of ARR, up 35% year-over-year. They're contributing 59% of the overall ARR, which is up from 57% last year. So this is clearly our fastest-growing cohort. I think it's important to consider the ARR, the growth rates, the ARR mix, not just the customer counts. But beyond that, we obviously added a quarterly record 17 $1 million-plus ARR customers and that's becoming more meaningful to our results as well. .

And then 1 on the R&D. Just wondering if in terms of this quarter was, would you expect this to continue to grow at the consistent rate? Or is there something like in terms of efficiency that you've achieved on that that makes it a driver of bringing leverage going forward?

I think R&D is going to continue to be one of our big areas of investment. We're obviously -- you're really focused on adding AI throughout the platform and in all of the products. And then the pace of innovation and products that we've announced over the last couple of years has really picked up, which requires a lot of R&D investment. So I don't expect it to materially decrease in terms of the overall leverage, but I also don't expect it to be an area where we're going to start to see the percentage of revenue go in the opposite direction as well. .

The next question comes for Mark with Loop Capital followed by Alexei with JPMorgan.

Sanjit, the number of products the company sells has increased meaningfully during the past year or so, which can often complicate the selling process. Could you just discuss a little bit about how you've adapted your selling process to accommodate all the new products?

Sure. I would say, again, we focus on the value of the platform. We really want to understand our customers' operations -- typically speaking, they'll have vehicles, and so safety and telematics will be lead products. And those are products that I think the market is generally familiar with. But along the way, they'll discover that, hey, there's an opportunity to improve training for a lot of these frontline workers or maybe there's a maintenance opportunity. really, we try to, again, show our customers the entire platform. We do a lot of demos where they're able to see the breadth of what we offer. And many times, the customers will self-select and say, "Hey, I actually have a lot of construction equipment in my business or we're really trying to think through how we do commercial navigation because we have an issue with hazmat or bridge strikes and all these kind of real-world problems. So I view it as rather than focusing on selling products, really understand the customers' operations, their environment and then work backwards from that. And I think our sales team does a great job of really kind of engaging at that level.

Great. And then, Dominic, could you just discuss the hiring that took place in the quarter? And just remind us of how you're thinking about hiring for the balance of the year?

Yes. I think what we've disclosed is that the that after 2 years of really elevated hiring growth that we are going into this year, we're still adding more head count but at a lower rate than what we had to do over the last 2 years to kind of catch up. We're on track to do that. So kind of the plan that we set out at the beginning of the year, we're on track with that and expect to continue to add more head count into the back half of the year as well.

Our last question comes from Alexei with JPMorgan. .

This is Ella Smith on for Alexei Gogolev. So first, I was hoping to ask about landing new customers as that is a focus for you. Are you primarily landing these new customers through telematics and video-based safety? Or is it becoming more common to land customers via a non-fleet solution?

Yes, it's definitely becoming more common. I think we called out the number of new logos that added 2 or more or 3 more products in the prepared remarks. The majority of the largest new logos. And then we give a number of examples of the products that customers are adopting. So that is becoming increasingly more common customers often will land with video-based safety and vehicle telematics, but increasingly, we're seeing monitoring in a number of the newer emerging products that we've announced over the last couple of years land in the initial transaction. .

Got it. And for my follow-up, you're experiencing strength in the construction segment for some time now despite the macro data for that industry being somewhat weak. I was curious if you could shed some light on your conversation with your construction customers.

Yes, I'll take that one. I think it's important to understand the construction industry and the context they're coming from. These are customers where they have very asset and labor-intensive operations for them to get deep visibility into which assets are being used and how much? And if they're operating safely, if they can find labor efficiencies, it makes a really big difference in their operations. This is also an industry that's relatively early in the digitization journey. Most of that yellow iron equipment that you see at job sites isn't well tracked and doesn't have real-time telematics or video safety on it. Most of the small tools that you'll see in the construction side don't have any kind of tracking on them. So there's a lot of greenfield opportunity. It's a market that is starting to really wake up to the value of technology, and it's complex. So they have to digest it over time, but we're excited by what we're seeing.

Okay. So this concludes the question-and-answer portion. Thank you all for attending our Q2 fiscal year 2026 earnings call. Before I let you go out a few short announcements. We will be attending the Goldman Sachs Communacopia Conference in San Francisco on September 8, the Wolf Technology Conference in San Francisco on September 10. The Piper Sandler Growth Frontiers conference in Nashville on September 10 and Evercore bus tour on September 17. We hope to see at one of these events.

That's it for today's meeting. If you have any follow-up questions, you can e-mail at [email protected]. Bye everyone.

All right. Good afternoon, everyone, and welcome to Samsara's Investor Day. My name is Mike Chang, and I'm the Vice President of Corporate Development and Investor Relations here at Samsara. Welcome to sunny San Diego and it's incredible to see so many familiar faces out in the crowd. And for those who are joining us virtually, it's great to have you on as well.

Before we get the show started, 2 quick disclaimers. The first is we're going to be making forward-looking statements during today's presentation, and these statements are subject to risks and uncertainties described more fully in our SEC filings and Investor Relations website. And second, we're discussing non-GAAP financial measures today. These measures should be taken in addition to and not as a substitute for GAAP.

All right. So at Samsara, we are transforming the role of physical operations, and we pause to think about it. It's pretty incredible the amount of momentum we had in the last decade since we're founded. So today, we're more than $1.5 billion of annual recurring revenue. We have over 20,000 customers. And so to give you a better understanding if we're planning to take the business. I'm excited to bring on Sanjit, our Co-Founder and CEO; Kiren, our Chief Product Officer; Amit, our Chief Revenue Officer, 2 of our very own customers with American Airlines and new NFI and Dominic, our Chief Financial Officer. And just like we do with each and every one of our customers, we're looking to build a deeper relationship with each and every one of you. And so we hope that todays presentation gives you a better understanding of this multi-decade journey we're just embarking upon.

So with that, I'll pass it over to Sanjit.

All right. Thanks, Mike. It's great to see you all. So I'm going to walk you all through a little bit of context and background on Samsara, what it is, who we're building for and then demo some of the newer features and the functionality of the platform. So I'd like to start, first of all, big picture in terms of what we're doing as a company. And our mission is to serve the world of physical operations. This is like you just saw on the video, the infrastructure of our planet. And we want to help make those frontline jobs safer, more efficient and make their operations more sustainable.

And this is across a number of different industries. In terms of who we serve at Samsara. It's a variety of different industries that have these kinds of asset-intensive -- asset heavy, labor-intensive operations. We're talking about the construction companies, the energy utilities, the logistics companies, even the local governments that run our towns and communities. And these folks in aggregate, really make up the backbone of the world economy. If you look at how many vehicles they have, for example, all of them use vehicles to run their operations, they have about 150 million vehicles.

If you look at how many people they employ in those frontline jobs, it's a very large number. It's close to 2 billion folks around the world. And then if you take a look at the amount of GDP that these companies in aggregate are responsible for is absolutely massive. It's about 40% of global GDP. And in Samsara, we focused on some of the largest in physical operations to better understand their challenges and look for commonalities across these industries. On the slide here, you see some stats. We serve 6 of the top 10 waste management companies, for example, 6 of the top 10 chemicals carriers, 7 of the top 10 food service companies.

And like I said earlier, these are asset heavy, labor-intensive businesses. They have a number of shared challenges. And because we serve so many of them across these different industries and across these geographies, we can see patterns and then build technologies to go solve those problems. So in terms of those problems themselves, I'd like to just bring them to life for you. Some of them are simple and they're very intuitive, but they're significant because of the scale. A lot of these companies that I mentioned earlier, they have huge footprints in terms of the amount of equipment that they need to run their operations.

And so they're asking themselves questions like which assets need to be maintained and repaired. They might have $0.5 billion or multibillion-dollar balance sheet of equipment. So they want to be as efficient as possible with that equipment. That relates to the second question that's on their mind, which is how much of this equipment is underutilized, can I maybe solve some of it off? Should I be renting it instead of owning it. These are very practical financial questions for them. Then they're thinking about their efficiency. They're trying to figure out how can we operate efficiently with tens of thousands of folks on the front line, what's the right order in which to visit our customers, who are the right people to visit them. Can I be more efficient in terms of how all that stuff is orchestrated that directly translates to how much they spend on labor, how much they spend on fuel.

They're also trying to figure out who's trained, who's ready to go see that customer at the next job. These are workforces that have high rates of turnover and so they need to make sure they're positioning the right people in the right places. And related to that is risk profile. If your big frontline workforce, they're out driving all this equipment on the roads, they're at risk of getting to accidents. Most of these companies are self-insured. So they bear the direct financial liability or risk attached to that. So they want to make sure they're training folks up, making sure they're safe as they can be on the roads and in the rest of their job.

And then they're also thinking about new challenges, like how do they transition to electric and other forms of sustainable energy. And with all of this, there's a simple answer, which is data and information helps you make smarter decisions. And so what we're doing at Samsara is building technologies to help them collect data about their operations, building new layers of intelligence with artificial intelligence and AI. And the idea here is to surface insights so then they can take action and operate smarter.

Now you all here are familiar with systems of record. They're quite common in the back office. If you think about systems of record for IT or for HR, but what we found is in talking to all these companies, no one had built a system of record for these frontline operations. And that's what we're building at Samsara. And these all kind of connect together in a similar way. And to double click on that a little bit, I want to show you how it is that we collect all this data and how we surface these insights. So down at the bottom of this chart is you can see us collecting data from assets that are out in the field. This could be vehicles, could be yellow iron construction equipment. It could be from mobile workflows being performed on an iPhone or an iPad.

It can even be from OEM connections that we built some of our OEM partners were downstairs. We pull all of that data into our cloud, which is where we process it, we normalize it, we won workflows on it. And then it manifests in the form of a number of different applications as well as some open APIs that we have to our ecosystem. Some of these applications include worker safety. Others are around telematics. We have applications around routing and navigation, which Kiren will demo for you in a little bit.

And the whole idea here is our customers are able to solve real-world problems using all this data. We make it easy, we make it intuitive, and we make it practical. If you take a look at the scale of the operational data we've amassed in the platform, it's absolutely massive. As Mike mentioned, we've been around for about 10 years at this point. And we've seen about 14 trillion data points flow through our system. All different kinds, GPS data, video data, equipment, fault codes, all kinds of data.

And this is a number that's growing very, very quickly for us. It's growing about 50% year-over-year. So it's compounding at a high rate. And that's helping us drive even more insights for our customers. Related to that, I mentioned we have an open platform. So people are connecting Samsara as that system of record for their physical operations to other systems. And so we have a number of API calls we keep an eye on how many there are. And last year, we saw 120 billion API calls. That's also growing 50% year-over-year.

So we really are becoming this hub for all this operational data. And we're out there at scale. So we see 99% of the U.S. roads, which gives us a tremendous amount of visibility and a very literal sense of what's going on out there, helps us understand risk, helps us understand weather conditions. It's really incredible, valuable data that no one else is able to have because of the scale at which we're operating.

And for us, we're excited about all this data because we can surface insights from it, which provides value to our customers. We're doing this, of course, with AI, and we have a few different manifestations of it in the product, which we'll demo for you here.

The first is the Samsara Assistant. This is basically a chatbot that is tuned and connected to these operational data sets that are proprietary to our customers. It's tied into all kinds of information about everything from fuel efficiency to safety to engine fault codes and more. It can provide specialist guidance, so it can help you troubleshoot a problem with an engine or with a specific kind of vehicle, it can help you with compliance questions, and it's tied into all of our knowledge bases and even OEM information about some of this equipment.

So that's one side of AI for us. And then the other piece of this is we're infusing AI throughout our product to make the user experience even smarter, even more useful for our customer. And we do this across all the different applications that I mentioned earlier.

All right. So I'd love to bring this to life for you all. And we have a customer who's graciously agreed to let us demo their operational environment. I think that's a really great way for you to see how all this connects together. This customer is called Rasmussen Group. They're a construction company based out of the Midwest. There's some stats up here on the screen about who they are and where they operate.

They have about 1,000 employees. They're a holding company, which has about 11 operating companies inside of it. And so basically, all different forms of construction, and this is a company that's been around for about 100 years. So they've seen a lot. They've experienced a lot. And you can see some of their equipment up here on the right, amazing operation and what I'll do is we'll flip over the laptop, and I'll just show you what it looks like in the Samsara dashboard, and we'll use that to demo some of the newer features that we launched today. Okay. It looks like we're up here on the screen, zoom in here.

Okay. So like I said, this is a company that operates out in the Midwest. So I just zoomed in on Iowa. And I'll first just orient you all to the Samsara dashboard. I don't have time to do a full tour here, but it's a good way to quickly get a sense of what's going on.

So here's an example of a vehicle that's operating in the system. It's a real-time system that we're connected in, and what you'll see is I just pulled out the dashboard. I clicked it on a vehicle who's moving, and we can see it's a 2025 Kenworth, it's going 65 miles an hour down that looks like Interstate 35, we can see who's driving, what they're seeing, what they're experiencing, if they're stuck in traffic. We have all that operational context.

On the left-hand side, we can see all kinds of details about whether the seatbelt is buckled, how the engine is doing. The RPMs, all this information is built here into the system. And so this is kind of that birds eye view that a lot of our operators are spending their time in. But we can also zoom out at kind of the fleet level because these guys have a lot of assets. We can start asking questions in aggregate because a lot of what operators are trying to figure out is who's the safest, who's the most fuel efficient, all those kind of practical questions.

And you'll notice down here in the corner, this little icon, that's our Samsara assistant. So you don't need any training to use the system. You can just interact with it in natural language. And I'll just ask a simple question. Let's see who are my most fuel-efficient drivers? And this will go and reason. So you see a query a bunch of different data sources beyond the scenes. It pulled vehicle information, driver information. And now we've got a table that ranks all the drivers in terms of fuel efficiency score, miles per gallon.

And something you're going to notice here is these MPGs are lower numbers than what you're probably used to experiencing on your cars or your SUVs at home. And that's because this is heavy construction equipment. They care a lot about miles per gallon because it has a direct impact on their fuel spend. So they always encourage everyone to be as efficient as possible.

And then you can actually go deeper. So you can say, what makes -- we can just pick someone here. And again, I'm just asking kind of plain English, right? Or so great at MPGs and give the system one second, did a live data search pulled through the tables and actually analyze at a really fine-grain level what was special about this driver. So we can see strong safety score, great fuel efficiency, and the reason for that green band driving.

So green brand driving is basically staying in the right engine RPM range as you're driving, coasting anticipation and then low idling, idling of 14% or less. So relative to the rest of our fleet, this person is doing a great job. This would be an example of someone you might want to recognize or give some kudos to. You may also want to basically make a positive example of them to the whole team and say, let's kind of send out a cool e-mail about this and maybe try to get people into a contest to see if they can beat this individual.

So I'm going to ask the Assistant to help me write that e-mail. You can say draft an e-mail showcasing great driving and announced a contest. What do you think $25 Starbucks gift card? How about making it $50, we're generous today?

Okay. So large language model behind the scenes, tied in the operational data. This saved me a bunch of time, right? So highlighted what makes this person so great in terms of miles per gallon, broken into plain English and then kind of made it, hey, we're launching a friendly contest. Whoever beats a safety score, fuel efficiency score wins a $50 gift card. This is the kind of stuff that happens day in and day out in operations. It's how these teams get a little bit better every single day, and it's how company's end up saving money on things like fuel.

So again, very practical use of AI, large language models, but also all the proprietary operational data that I was talking about earlier. Okay. So let's take this to the next level. I want to talk about recognizing drivers. So if you think about these companies, they're large, complex operations, there's a lot of risk associated with those operations, and that translates directly to operational costs, maybe in terms of settling claims when it comes to accidents, translates to other costs in terms of fuel, as I mentioned earlier. And there's all kinds of other features that they're trying to coach on. A lot of what drivers are doing every single day is positive. It's good behavior. 80% of the fleet is operating in a good way.

And so what we noted is that a number of companies didn't just want to say, hey, we're going to coach the bottom 20%. They also wanted to do basically an employee of the month style recognition program for a bunch of different behaviors. And we make that easy to do from the Samsara system. So we can see here, we've got a number of different folks that have been doing a great job in this. We can see the drivers to recognize up here on top. We've got the safety score and the efficiency score.

It looks like Chris here hasn't sped at all since January 8. That's pretty incredible. It's been about 6 months. So we might say, "Awesome, we want to be able to recognize you." And we can say you've been doing a great job with speeding. It's a simple message that goes out into the driver app, but it's all here. We can say great job, we can toss some emojis on there if we want, hit recognize the driver, it pops straight to their phone, can make their day.

We want to take it to the next level, press the reward button. We can add $50 to a Starbucks gift card, they can redeem it, by the way, not just at Starbucks but Bass Pro or whatever they're into. We've got about 150 different partners on that platform, and they can exchange it for whatever works for them. That's the kind of stuff that really makes a difference on the frontline, works at scale, and we're making it easy because no one had to dig through all the data. They didn't have to do an Excel report or pivot table or any of that kind of stuff.

It's just here in the system. And it's also aware of tag groups and hierarchy. So if I'm the supervisor for the Northeast, I see a different set of people than if I'm handling the central and that sort of thing.

Okay. So that's the recognition side and the assistance side. I'm going fairly quickly, but I want to give you all a sense of how people are using the platform. The next thing I'm going to show is around maintenance. So I mentioned companies like Rasmussen. They have a lot of assets. They're always trying to figure out what are my total operating costs because there's the cost of acquisition, but then there's actually the cost of ownership. I got to maintain these things, change out filters, sometimes there's repairs that are needed. And you want to be able to see all of that in one place.

Now we're able to show you that in Samsara, we're starting to centralize all of this intelligence as well. So you can see how much did you spend on the total cost for maintenance? How much of that was labor versus parts versus fuel. And we make all of that easy here and you can again see dashboards in different forms. And if we want to go deeper, you can start saying, okay, for a given piece of equipment, let me take a closer look. Let me understand what's going on with this freightliner, for example.

And you can see here, there is an oil change that's supposed to happen. These vehicles need oil changes just like everyone's car. But you can also see there's a couple of active faults that are showing up on this truck. That's pulling off the engine computer. We're seeing it all in one dashboard. I can see it here. You can see it looks like a diesel exhaust fluid property issue. So we can click in on it. We can get more details. We could ask the bot by the way, if we needed some help of what tools do I need to fix this. We can get all that information here.

And so it becomes a hub for maintenance of these assets. And at this point, we might say, okay, this looks like we should take this truck offline. We don't want this to fail out in the field. So I'm going to go send it out to a shop. And these shops do a lot of work for our customers, but they're not operating necessarily with the same cost in codes, right? There may be different classifications for all this work.

And you get an invoice back from the shop. Let me see if I can show you what that looks like. We got a sample here. It looks something like this, right? We've all seen this from a mechanic shop. It's got an oil filter on there. It's got some labor. It's got a bunch of other parts codes. But this is what's specific to this shop, right? So the item codes here don't really mean anything to Rasmussen. They mean something to [ M&P Repair Co. ] And a lot of these companies have stacks and stacks of these invoices and receipts that come back from these repairs. They end up essentially with the data entry clerk or an analysts and then need to kind of get mapped into the system. And that was painful. A lot of companies don't get around to doing it. And the result is you don't have visibility. You don't really know what it is that's going on with these assets. So what we did is we said, well, this is something where I can really make a practical difference.

I'm going to make this easy here. I'm going to upload that invoice one sec. And it's simple. We're taking that PDF or a scan of that invoice. We're digitizing. We got uploaded to the cloud. Large language model went through it. And actually reason about it.

Didn't just OCR it and understand what the words were, but actually understood, okay, this is related to an oil change. Let me scroll down here in a second, you can see, okay, that's the engine oil, and that's the oil filter. Those pieces and the labor costs are associated with the oil change. There's also a tire replacement that happen. We can see the cost of the tire, the valve stem caps, even the lug nuts, you can see the labor cost and it's going and classifying it into the different subtypes, you can see that original invoice. There's a little cost summary here.

And then when we hit save, it will get itemized just like you saw on that dashboard. Very practical. This is what it means to get deep insights into the maintenance of these expensive assets and something that our customers have been hungry for but haven't practically been able to get around to because they don't have infinite number of people behind the scenes to go and do the data entry and all the stuff.

Okay. So going through a lot here. Hopefully, that gives you a better sense of maintenance, why it's so useful to our customers. I'm going to shift gears one more time and talk about safety. This is core to so many of our customers because it's a huge operating expense, and they want to keep their frontline safe. And with safety, there's been a lot of focus on negative behaviors. So don't speed. Don't look at your mobile phone, all that kind of stuff. And while that's important, it's not the best experience for the driver because it feels like they're getting nagged all the time. If we can also recognize them. And if we can do that a good fraction of the time, it actually creates a positive feedback group. It sets the right cultural tone. It's what a lot of these companies are trying to do every single week, and we're making that easier and easier for them with AI once again.

So I think everybody here is familiar with dash cameras. These are road-facing and inward-facing cameras. We have these as part of our solution. They run AI models on them. We also run some AI in the cloud. And what I'll show you here are 2 examples of dash camera clips where we're using AI to understand positive behaviors, good behaviors that we want to recognize and reward or at least kind of send a positive message around.

I'm going to play this video and keep your eye on the left here. No one is going to get hurt in any of these videos, so you don't have to stress. But I'll play this and you'll see what the driver sees, one sec here, that's playing. Okay?

So busy New York Street, this driver had a green light, so they were kind of going for it safe speed, and then they got cut off by NYPD car. So this is the kind of stuff the drivers have to be attentive to and responsive to. In this case, you're seeing in the top right-hand corner that the AI watched this video as it came in. It did this automatically and said, yes, this is a harsh braking event, but the driver braked defensively to avoid a collision with an NYPD vehicle emerging from the right, reacted within 2 seconds. So this is awesome. This driver did a great job. And it's the kind of thing that the driver probably knew like, okay, nice. But the fact that the supervisor got notified of this and it says needs recognition, that could make their day, right?

And even if it doesn't get recognized by the coach that day, it made their driver safety score go up. A lot of our customers pay out safety bonuses. They want to incentivize this kind of behavior. So this is reinforcing good behavior. And again, 80% of the time, driver is doing the right thing out there. So this is a great way to build up kind of positive feedback loop, positive culture.

What you'll also see here is the AI has classified this as defensive driving. It noticed there are pedestrians present, noticed there's light traffic. So there's a lot of additional context clues here that often humans miss because we're just not looking at every last frame of video data. So that's one example.

And I'll show you one more here. And that's related to drowsiness. So this is another big problem. Many of our customers, they are shift workers. They're on shift for 8, 10, even 12 hours, and they end up getting fatigued. And this is the kind of thing where everyone wants to know and you want to keep people safe on the roads. Drowsiness and fatigue is a huge problem when it comes to collision risk.

So I'm going to show you this video here. And on this time, watch the right-hand side. So you'll see this individual is pretty tired. And this is a model that's very sophisticated is looking at how you're moving your body, your eyelids, your yawning behaviors. And you can see here that we've noticed a couple of times that there's been drowsiness incidents and it's kind of escalating throughout the day. So this is the sort of thing that's running in the device at the edge, so it's a model. It's also notifying us in the back office and making sure everyone is aware that there's an issue here. So the AI is, of course, detecting this. And then it's also saying, okay, we're going to notify the driver, and I'm going to scroll down here if my mouse cooperates, there we go.

We can see all that context of where they were and we can alert them in that incident, but we can also assign them a training. We can say, you know what, we'd like you to do a short course on fatigue management because it seems like this is an issue. We've seen a couple of these. But you don't need to come in to do it. We're going to send it to your mobile device, and then we'll give you a short quiz at the end. This is what Johan this morning, our SVP of Safety, is referring to as snackable content.

The whole idea is this is designed for the Instagram, TikTok generation, where we'll all have shorter attention spans. But if we can get something in the moment, if it's conceptual, it actually makes a huge difference in terms of outcomes. So again, very practical. We're using AI, but combining with the kinds of problems that they see on the front lines, helping make them safer and more efficient.

All right. If we can go back to the slides. So last one for me. I mentioned safety and efficiency. What I wanted to end with is the problems that we're working on, these are evergreen problems in operations. These are asset-heavy industries, labor-intensive industries. We're talking about frontline workforces of tens of thousands of individuals who are turning over on an annual basis. So they're always trying to find ways to improve their risk profile and the risk footprint. Some of that is on the road when they're driving, as I just showed you with those dash cam videos. Some of it is in the field when they're performing their jobs, and we're able to help with that as well. And they also want to do things like provide training and coaching to these drivers.

They're also always trying to be more efficient in their operations. If you think about a company like Rasmussen or any number of the construction and utilities and other companies out here, they spend the majority of their revenue on their operations. It's absolutely massive how intensive these industries are in terms of cost. So they're always trying to find ways to be smarter about how they're routing all their drivers around. They appreciate having simple workflows that are easy and intuitive. The chatbots and copilots save them a ton of time because they don't have enough people to go analyze all this data.

And then the last piece is on sustainability. They're trying to reduce their carbon emissions footprint. They're trying to be more fuel efficient. We have a number of customers that have tens of millions of dollars in fuel spend. Some customers have hundreds of millions of dollars in fuel spend. So when we can find those efficiencies through coaching, through idling reduction, those kinds of programs, it makes a huge difference.

Okay. So we're excited. We have a lot that's going on. We launched a lot of new products and features this morning, and we have a lot more in the pipeline. I'm going to invite Kiren on to walk you through a couple more demos, but thank you again for coming out.

Good afternoon, everyone. You just saw from Sanjit a few practical examples of how these new AI technologies, combined with all of the data in our platform can create incredible value for customers in physical operations. And it turns out that these AI advancements happen to be coming at really an ideal time in Samsara's evolution.

A decade ago, we started building our platform with a single application, vehicle telematics. And we expanded from there through concentric circles into video-based safety, into equipment monitoring, into connected workforce management. And in the process, we built out the system of record for physical operations. We created an incredible breadth of data in the platform that could solve a wide variety of problems for customers, all in a single pane of glass that their frontline teams are living in day in and day out.

And in the process of building this platform, we have seen a flywheel emerge, a very powerful flywheel. This flywheel starts with products. We build products that solve the most important problems in physical operations. We then introduce these products to our customers. We make it very easy for customers to see the product through a demo to try it in their operations. And then when they purchase and deploy the products, they get very rapid ROI. And in the process of getting this value, they start contributing data into the platform. And this data at scale actually enables entirely new products that we couldn't have built without that underlying data. These new products help us attract and onboard new customers who contribute more data, which then enables more products. And we have seen this flywheel accelerating.

Over the past 3 years, we have more than doubled the number of core customers on our platform. We've more than tripled the number of data points to over 14 trillion, and these have enabled us to launch 5 new products over the last 3 years, which brings us to today. We have the most scale we've ever had in our platform, and this is being really turbocharged by these new advancements in AI technology. And as a result, we were able to have our largest set of new product announcements ever this morning with over half a dozen new products on our platform that are enabled by this data and by new AI technologies.

And I'd like to share a few of them with you now, starting with route planning. So when customers' fleets are operating routes, when they're executing routes and their vehicles are on the road, Samsara gives them great tools to increase efficiency and to keep their drivers safe on the road. But when it comes to actually planning these routes before the vehicles hit the road, historically, that's happened outside of Samsara.

Our customers have teams of route planners who take their customer orders from an order management system or an ERP system, and then they need to assemble these into sequences of stops and assign them out to their vehicles and drivers. And this is a very labor-intensive painstaking process. They typically will use these legacy applications, legacy software to help them. And these apps, they don't have access to all the data that you would really need in order to have an optimal route. And they generally don't have modern AI technologies.

And so as a result, they're not taking into account things like historical route run times or how long drivers spend at each stop. They don't have access to traffic data, upcoming weather data and even their road and mapping information can get out of date. And so it is very painstaking and labor-intensive to create these routes, and these routes end up using more fuel, more hours and more cost than they really need to, and you have much higher variability in service to your end customers. So we said, let's build enterprise-grade data-driven, intelligent route planning and optimization that takes advantage of all of the data in our platform and help our customers plan more efficient routes before their vehicles hit the road.

So if we pull up the dashboard, we can take a look and see what this looks like. So here, we're looking at the dashboard of a food and beverage distribution fleet. Imagine that we distribute food products to restaurants and to event venues across the country, including here in San Diego. Now for our route planners to plan their routes in Samsara, they can do that in just a handful of clicks. We will start by importing our orders for the day. So we can connect the system with our ERP system or our order management system.

Here, I'm just going to go ahead and upload a CSV. And it's going to pull this into the system and actually plot each of the stops on a map. And now we have information about each of these orders. We've got a total of about 75 of them. And for each, we can see who the end customer is, their address, how long the driver needs at each stop. We know how many items there are, how much they weigh. And then we see the skills required to execute this order. So we see about half of these orders require refrigeration, the other half don't.

Other things you could encapsulate with skills are these heavy loads that require a lift gate on a truck or a portable forklift. Do these require drivers who have hazardous material certifications or maybe training to service specific types of equipment? All of that can be included right here for our optimization.

So now from here, I can say how I want to go ahead and optimize these routes. We pull in information about the vehicles we have available, which, of course, we have already in Samsara. Here, we can see we've got 8 trucks available, 4 are refrigerated, 4 are non-refrigerated. And the system is actually smart enough to know that the refrigerated trucks, these cost more per mile or per hour to operate. They've got these refrigeration units that make them more expensive assets. They consume more fuel, they require more maintenance, and it's going to be able to take that into an account when it's doing its planning.

Now we have a lot of different advanced options in terms of how these routes can be planned for different industries and different use cases. Here I'm going to keep it really simple and just find a way to fulfill these orders at the lowest overall cost. So I'll hit save and generate routes.

And now what the system is doing in the background is it's looking at all these different constraints. How far apart are the different stops? What roads are these large commercial vehicles allowed to travel on? What are the historic traffic patterns? How many items can I fit on each of these trucks, which need refrigeration, et cetera? And in less than a minute, it was able to assemble these 75 orders into a set of routes to fulfill all of these orders. And this would have taken a human doing this by hand a ton of work. And even with software tools, it's a very slow pain-staking process. But most importantly, this actually had a more intelligent and more efficient route plan than we could do by hand or with legacy tools.

We can see up top, it managed to fit all 75 orders in just 5 routes. We gave it 8 vehicles. It didn't have to use them all. It only needed 5. And that means that the customer can take the remaining 3 vehicles and use those to do more work and grow their revenue. So this is route planning in Samsara. We've been testing this with early customers, and they've been really ecstatic with the efficiency gains it's meant for their back-office teams.

Now if we can go back to the slides. Route planning and optimization is very powerful for the back-office teams, but we wanted to help the drivers who are executing these routes as well. When we plan the routes in Samsara, we had published and they get sent to the driver's mobile app, the Samsara driver app.

And from there, they can see all of their routes for the day along with their various other workflows. But when it comes time to actually navigate from stop to stop to stop, historically, they have used third-party navigation apps. And these apps are often consumer-grade apps like Google Maps or Waze or Apple Maps. And these work great for you and me, but it turns out that they're not suited for commercial use cases. These consumer-based mapping products, they don't know about commercial road restrictions.

So you've probably seen signs on the road about weight limits on a bridge or height limits under an underpass or axle limits or truck length limits in residential neighborhoods. These are all critical when you're navigating commercial vehicles and their capabilities that consumer-based mapping products just don't have.

So then what customers will try to do is they will download commercial trucking applications. And these tend to be older technology. They're slow, they're laggy. And most importantly, their road information is often out of date. They don't have weather. They don't have traffic. They don't have the data that you need to navigate efficiently.

And in the end, what happens is that drivers will end up on a route that is not compliant for their vehicle. In the best case, they'll turn around, find another way and they're 45 minutes late for their stop. In the worst case, they're having fines or even accidents. So we built a new product, commercial turn-by-turn navigation directly into the Samsara driver app to help solve this problem. It has commercial vehicle-specific navigation. And most importantly, it knows about all of the customers' data such that we can navigate that driver efficiently. It knows their route stops, their address book entries everywhere that their drivers will need to go. And it knows about the characteristics of the vehicle. It's height, it's weight, the number of axles, what types of hazardous materials it's transporting. And it can make sure to send the driver on a compliant, safe route that's also going to be as efficient as possible.

So that's commercial turn-by-turn navigation in the driver app. So these are 2 examples of new products that are enabled by data in our platform. And as our platform has grown, we have seen a new phenomenon emerge, which is that not only is there a tremendous amount of data in our cloud, but there's an incredible density of Samsara connected assets out in the physical world. There are now millions of vehicles, trailers, heavy construction equipment and other assets with Samsara IoT gateways that are connected into the cloud. And they are everywhere that operations happen.

Here in the slide, for example, we can see a visualization of that density. Each dot on that image represents a single asset, and this is just over a 2-hour window. So these things are practically everywhere. And this network is enabling some really new, differentiated and powerful product experiences.

Last year, for example, we launched the asset tag. This was the first product to take advantage of the Samsara network. The asset tag is a small device that customers can use to track virtually any kind of asset. And what's really remarkable about this device is that it doesn't have to connect over the cellular network. It instead uses our industrial-grade Bluetooth technology to connect to one of the many nearby Samsara assets, whether that's in a customer's organization or from another customer who has the Samsara device connected. Does this all seamlessly and securely. And it means that customers can get near real-time visibility into their assets with a small device with a battery that lasts multiple years.

And the reception has been tremendous. In less than a year since general availability, we have crossed over $10 million in ARR with the asset tag, and our customers have deployed over 100,000 of these out in the field. And they're getting tremendous value in being able to recover lost or stolen assets and make sure they have the right equipment in the right place at the right time for their crews. So we are doubling down on the Samsara network.

For example, today, we launched a new tank monitoring product that extends the concept of the Samsara network and allows us to actually transport not just location information, but sensor data. It turns out that a lot of customers are putting asset tags on tanks that get used across remote environments in many different industries. These can hold fuel or chemicals or fertilizer or water or wastewater. These are all operationally critical. But customers don't just want to know where they are, they want to know the level of the goods in that tank because often, those supplies, they're operationally critical. If the tank level goes down to 0, that can bring a job site down to a halt.

And so by extending the Samsara network and being able to send tank level data over it, customers now have an easy way to have visibility across their tanks. They can make sure that they have enough -- they have a high enough fill level to get through the next shift, the next cycle, and they can be sending out trucks to refill or service these tanks on demand. They avoid downtime and they avoid excess truck rolls, lowering their cost. So this is a great example of an extension of the Samsara network beyond just location to include sensor data and solve new problems in operations that apply across industries.

We're also extending the concept of the Samsara network beyond just sensor data and location and expanding to the concept of visual data that is fueled by the millions of AI dash cameras out across our customers' operations. These dash cameras form a collective set of eyes across everywhere that operations happens, and this is enabling entirely new product experience as well.

Earlier today, we launched our first new solution that uses the Samsara network for visual intelligence, and we call weather intelligence that I'd like to show you now. So weather is an inconvenience for you and me. It is a really critical factor in physical operations. Weather will -- supply chains. It will bring roads to a halt. It will shut down job sites. It will damage assets out in the field. And most importantly, it is a major safety hazard with 1 in 5 accidents on the road being weather related. So our customers care a lot about weather, and we're using this new technology to help them understand their weather hazards and be able to mitigate them using the intelligence of the Samsara network.

So here in the dashboard, we are looking at a fleet that operates nationwide. They've got nearly 20,000 assets in the platform. And so if there's a weather event anywhere, chances are it's impacting them. Now from here, we can see where their assets are, and we can all see all the radar information so we can understand where the storms are, we can see a forecast. We can also see public weather alerts. So these are the public advisories of the most critical weather events.

So we can see that there's quite a lot going down here -- on here down near Albuquerque. You can look at this, and we see that we've actually got a flood watch. And this customer has 6 assets in that zone. That's something they care about. So we can pull up details, we can see all the information about this event. We can see the feeds from the National Weather Services. And this is great. But really what customers want to be able to do is not just see the radar chart, they want to actually see conditions on the ground. Is this a safety hazard? Is this going to interrupt operations? And now they can see just that. See one of this customer's vehicles or assets in the area has a dash camera.

And when we pull up the on-the-ground view, we can see what their driver is seeing. And here, we see that, hey, there's some clouds, but it doesn't look too bad, unlikely to impact their operations quite yet. But what they really want to know is not just what's going on where their assets are. They want to know what's going on where their assets are heading, which are always on the move. And with the collective intelligence of the Samsara network, they can now do that. So we built this new feature called StreetSense that is now pulling in visual intelligence from across the network of Samsara's connected dash cameras.

And now we can see a much broader view. And we can see how recent these images are. This image is 22 seconds old, 23 seconds, 23 seconds. This is near real-time on-the-ground visibility. I can zoom in here, and we can see details of this flood watch. We could see that it's starting to come down pretty hard, right? We might see some road closures. We're certainly going to see some slowdowns. This is all done in a way that's very powerful to protect customers and also preserve their privacy.

So we're using AI to actually remove any personally identifiable information, limit this to public roads, so you won't see private property and provide what's effectively like a collection of millions of traffic or weather cameras or something like Google Street view that's updated continuously in real time for customers to manage their operations. And that's weather intelligence.

Customers are very excited about this ability to understand operational context and mitigate risk. If we go back to our slides, I'd like to show one final example of a new product that is enabled by the Samsara network, which is worker safety.

Weather is an example of one of the threats that our customers face. We'll have customers who might be unloading a truck in snow, in icy conditions, they can easily slip, fall, hurt themselves. Oftentimes, there's no one to see that, no one to help them out. We have customers who are repairing high-voltage electrical equipment, even customers making deliveries late at night in a high crime area.

Virtually all of our customers face threats to their workers that increase risk, increase cost, and these often happen outside of the vehicle. So our customers told us, our safety solutions have made a massive impact to their safety on the road. How can we help their workers when they're outside of the vehicle? So we built a new solution to do just that, call it worker safety. And at the heart of the solution is a new device, the Samsara wearable.

The Samsara wearable is a way for workers to get help when they need it, when they're outside of the vehicle. And what's really disruptive about this product is that it takes advantage of the Samsara network. See, historically, worker safety devices have connected to the cellular network, meaning they're large, relatively expensive, and you have to charge the battery every night. And that makes them too complex to manage for most operational industries.

With this device, it connects over the Samsara network. So a worker can use it to get help, and that message will be broadcast to any of the nearby Samsara assets or mobile devices with the Samsara app and their back office will get alerted and can get help on the way.

As you can see, it's small, it's sleek, but it's built tough for a customer's rugged environments. It's got a panic button, so easy one tap for a worker to get help. It's got a screen on it, a speaker, a microphone. So proactive notifications can go out to workers in the field, let them know about threats and hazards. And it's got an over a 1-year battery life. So a customer can simply clip it into their safety vest or their tool belt, they can forget about it. It's with them when they need it. All right.

So let's take a look at the experience of how we can use this technology and our platform to get work -- get a worker help when they're outside of the vehicle. I'm going to go ahead and hit the panic button here. We have it on silent mode to spare our ears, and it's going to record a voice message. Help, I'm demoing at Investor Day, and I forgot the talking points that Dom and Mike had for me. And it's going to record this message along with the alert and send it up to the cloud.

So now if we pull up the dashboard again, we can see this event that's popped in right alongside the rest of our operational context. We can see details here, and we have really great situational awareness. Again, this is for the back office team who can now respond to this worker in need. We can see who's nearby, all of the nearby vehicles and drivers, maybe there's someone close by who we can dispatch to go help this worker.

The audio message got uploaded. We could listen to it now, but the AI has already listened to it for us and transcribed it right here. We got all the information about the worker, the vehicle that they're associated with. And since I'm connected to this truck, we can actually see a view from the dash camera of the vehicle. This happens to be our Samsara truck in the main stage down the hall. All of this is available right here. It makes it incredibly easy to send someone to go help this driver or even with one click, dispatch 911 services and they'll be directed directly to this worker's location. So this is worker safety. It's the newest addition of the Samsara network and really excited to get this out into our customers' hands.

So next, we turn back to the slides. I want to talk about what this means for our customers and our sales group. To share that with you, please welcome our Chief Revenue Officer, Amit Vyas.

Good afternoon. My name is Amit Vyas, and I'm the Chief Revenue Officer at Samsara. And I'm excited to talk to you about our go-to-market strategy and enterprise momentum.

I have a unique perspective because I started at Samsara virtually from the beginning. I started in 2016, 1 year after the company was founded as the 48th employee, and our revenue was below $1 million in ARR. As a sales leader, I was in the field, cold calling, trying to figure out the pitch and figure out what resonates with customers. I've been on thousands of customer calls and figured out and crafted our sales playbook. I've also been fortunate enough to not just witness our amazing growth, but I help build it. And I share all of this with you today because we sell to a very unique industry.

Unlike DevOps or IT, to understand our customer, institutional knowledge matters. And that knowledge allows me to know how Samsara operates and how our customers think. And I'm able to connect those 2.

During my tenure here, we've launched several go-to-market initiatives. The 3 that I'm most excited about to talk to you today are enterprise, international and public sector. These 3 initiatives have gained tremendous traction, especially the enterprise. And that's why last year, we launched the strategic segment to serve the world's largest operators.

Speaking of world's largest operators, these are just a few of our Fortune 500 customers. These various companies are the very best and largest in their respective industries. And what's most important is they can afford to pick whoever they want. They can choose the very best because they are the best, and they choose Samsara because of our enterprise capabilities. And these aren't just customers. You'll see there's cross-industry adoption, which speaks to our platform versatility.

Our ROI story is both consistent and compelling across our enterprise customer base. In fact, most customers see an 8x return on their Samsara investment. One of the most interesting things here is that you're not just seeing one ROI fact. You see millions saved in fuel. You see millions across maintenance costs or liability claims.

Now I'm going to shift and talk about our go-to-market strategy. Our sales team is organized by both cohort and geography. On the left, you'll see we have 3 major sales segments: mid-market, enterprise and strategic. Our mid-market team sells to our medium-sized businesses. Sales cycle is roughly 2 to 3 quarters, and most of the selling is done over the phone or Zoom.

Next, our enterprise, our more complex, larger customers. These customers, the sales cycle is roughly a year plus, and most of the selling is done in person. And lastly, strategics, again, which we launched last year, is a 2-year plus sales cycle, and it's one of the most complex customers of the Fortune 500. And most of the selling is not only done in person, but it's multiple visits and a team effort. You have customer success with them sales engineering.

To the right, you'll see that we have -- predominantly most of the sales team is in the U.S. because we have a lot of white space there to go after. But we have launched international in Mexico, Canada and Europe. And we're seeing phenomenal traction there. In fact, we saw the highest record-breaking 18% contribution from our international markets last quarter.

Now I'm going to walk you through the customer buying journey at Samsara. Typically, a customer will come in and they'll talk to a rep, they'll get a few questions answered and then the rep will do a demo. After that, the sales rep will offer a free trial. The free trial is our most powerful sales tool. My sales team loves it. In fact, they'll often say, "Hey, don't take my word for it. Why don't you take a trial and see for yourself how it works in your own environment and compare us to the competition. And we convert most of our free trials.

The free trial is also unique because you're able -- the customer is able to see ROI very, very quickly. In a matter of days, they're able to see improved driver safety scores. They're able to see fuel savings. And so our free trial is a very powerful tool. After the free trial, they're going to do an initial purchase. That initial purchase will not be a wall-to-wall deployment because our customers cannot afford to stop their critical operations. So they'll start with a specific geo or hub. After that, they'll continue to do a phased rollout and continue to buy.

Now while they're doing that, they'll also explore other Samsara products. To highlight this, I'd love to talk about Lanes Group, a prominent provider of wastewater solutions out of the U.K. Back in FY '21, they bought safety and telematics. And as they were doing a phased rollout, in FY '23, they bought equipment monitoring. And what you'll notice is then they're continuing to roll out equipment monitoring, but they're also continuing to buy in FY '25, connected forms and connected training, and they're still buying equipment monitoring, safety and telematics.

Now this isn't unique to Lanes Group. This is very common of how Samsara customer buys. In my almost 9 years at Samsara, I have a habit of always calling a few select customers at the end of the quarter and just saying, "Hey, how did my sales rep do? And what made you buy? And what's been consistent for the almost 9 years are these 5 things. When we talk about single pane of glass, the customer is used to having 10 windows open, jumping from different systems, their ERP to payroll to TMS, Samsara gives them one holistic platform, one dashboard to go look and get all their equipment and look at all their critical operations. And why that's important is because they need this data to make business-critical decisions, and Samsara is allowing them to go to one place to see it.

Enterprise grade. Our customers run very critical operations. They cannot afford downtime. They need a reliable enterprise solution, and Samsara is that for them. Ease of use is one of my favorites.

From the beginning, it's easy to install Samsara. It's easy to roll out. It's easy to administer. And this is what makes the product very sticky. Our customer success and support consistently ranks at the top. And that's important because, again, running business-critical operations, our customers need a reliable vendor that they can call and get support from.

And continuous innovation. As you heard from Kiren and Sanjit, we are many times the first in the industry to introduce a product. And that's really important and resonates with our customer base and prospects. And the reason being is our road map is partially created by our customers. We are constantly asking for feedback. And in fact, they trust us so much that they very proactively offer, Hey, you guys do this really well. How about do this? And that's what guides our product road map, which really separates us from everybody out there and makes Samsara a reliable and trusted partner.

All right. Thank you. And we're off to a 10-minute break, I believe. And we'll see you back for a fireside chat.

[Break]

All right. Welcome back, folks. We are very excited to have 2 amazing Samsara customers join us for a fireside chat today. I'm going to go ahead and hand it over. We have Antonello Davi from American Airlines and Nick Selders from UNFI. And we're going to go ahead and start with some brief intros, how about you can start us off, Antonello?

Thank you. Thanks for being here and allowing me to be here. I've got a quick question for you. Being in the airline industry, how was your flight in to San Diego? Good. I heard magical. I heard magical. Right, well, not speaking for American, but 98% load factor, mid-June with everybody traveling. I vote right now that we do beyond in October. What do you say? Okay. I'm kidding. All right.

I had to start with that. 35 years with American Airlines. This last 2 decades, I've been managing ground equipment, stuff that's below the wing that moves aircraft, that moves people, move baggage. Just really, really excited to be here and to talk about just the opportunities that we have and the challenges that we have.

Awesome. Great. How are you, Nick?

Yes. Welcome, everybody. The beautiful San Diego. Nick Selders, United Natural Foods, and I don't know where you're going to ask questions, so I have one now, too, since ask one. But who shops at Whole Foods? Anybody in here shops?

Well, if you -- anything you get at Whole Foods, I can guarantee it comes from UNFI. So our biggest customer, nationwide -- Whole Foods I've been with UNFI for 22 years. I'm the Vice President of Outbound Transportation. So all transportation functions fall under my umbrella from routing to our fleet shops to purchasing tractors, trailers, things like that. So UNFI is the North America's -- one of the North America's largest natural organic food distributors, primarily all refrigerated cold chain deliveries. So...

So when something goes wrong, you know who to count to. That's right there.

So no secret, it's been in the news, those that shop at Whole Foods probably dealt with some empty shells here over the last couple of weeks. We were unfortunately hit with a little cyberattack at UNFI, but we've got through it. We're back on our feet and back to normal now. So...

All right. Thanks, Nick. All right. To kick us off. Why don't you share some core operational challenges that you guys faced before adopting Samsara? Antonello, let's start with you.

Okay. Thank you. Well, American Airlines, we operate 6,800 flights a day. It's 6,800 flights to get it wrong. And what is the most important flight out of those 6,800? It's yours. It is, right? You don't care about anybody else's flight. And the challenge is that we got to get the equipment where it needs to be to support those flights. I call it controlled chaos.

I'm going to offer this up to you folks. And any time you travel through DFW, please see me, come see me. Let's do a below-the-wing tour. You sign a nondisclosure. I only make you look at the good stuff, not the bad stuff, look at a shiny airplane, not that burning bag, that kind of thing. But truly, truly, you need to see our challenges firsthand and then how we talked about how Samsara's platform that we've been with these guys for 5 years have really, really made a difference.

Great. How about you, Nick, what were your...

Yes. So for us, it was -- we had a lot of, I'll call it, opportunities before Samsara, and most of it was around fragmented data, multiple systems for trucks and trailers and tracking temps. Our port dispatchers that are 55 locations, distribution centers across the center, we're logging into multiple systems to answer one simple question. So the single source login now with Samsara is amazing. But most of it was around data, obstacles and challenges. And listen, the legacy provider just was unreliable, and that's certainly opposite now with Samsara. So those are the biggest challenges around data.

It sounds like both of you were dealing with significant complexity and lack of unified visibility. Nick, can you perhaps tell us a little bit about the single pane of glass concept?

Yes. Listen, it goes back to what I said, having a single-source login and the ease of use, telematics, cameras, temp tracking, all in 1 system, 1 login, 1 screen to answer all the questions that a customer or a salesperson or whoever it maybe might have for our dispatchers answering those phones. So that's the biggest.

Great. How about you, Antonello?

Well, we'll go back a little bit to the challenges that kind of showed that. But -- so DFW Airport is an example, you can put the entire island of Manhattan, New York in it. And our ground equipment is mobile. That means it moves around a lot. And we've got to have the right platform, the right opportunities to find that equipment back in the day, we would dispatch someone to find that critical piece of equipment. Here we would be gone on for hours, literally, right?

We would paint specific equipment red in a sea blue. I mean the guy comes back, he's got him saying, which where you've been, Oh, I met my girlfriend but here is it, here's a piece of equipment. But having everything on the same platform, having something that's readable, that's easily accessible is huge for us.

I've got a crew chief that operates a gate in Charlotte, and he starts his shift 1 hour early on his own dime just to find his ground equipment. Today, he's got in on his phone and he loves it, which is perfect. And we have so much information on that phone, on that platform that it connects with all the people that need to interact with that equipment.

Love it. And when you were evaluating, how did Samsara stand out?

On my end? So 2 decades, 15 different GPS providers I've gone through. They only just want to sell you GPS. There's no support afterwards. I will say it 5x over, an engineering group that we have with Samsara makes everything possible to empower the employee which is what it's really about, right? We want to get the employee the empowerment and not surveillance. It's not about that. But just understanding our challenges, our controlled chaos, and rising to that challenge, best product out there. I truly mean it.

We have a roomful of investors. So let's talk about ROI. What are some -- what's the ROI you've seen with Samsara? And can you quantify it, Antonello?

Absolutely. Well, my first thing is what kind of ROI -- what is the return on investment by having the employee come to work and feel confident that he or she has their horse to go in the battle, right? You can't put a dollar amount on that. And that's what makes it really important. We start with that. But if you want to talk to the finance person, the guy with Earth calculator, right, the same, what's my return?

Jet engines burn jet fuel like they're drinking out of a fire house. And we install generators with Samsara. We install generators to have Samsara platform on it, so we can turn those jet engines off.

One example of return on investment is that only 72 generators in our system just started. We've already saved $3 million in turning those engines off. Just recently, we moved a $250,000 lab truck from Charlotte to Minneapolis because it was being underutilized. $250,000 for a lab truck. I'm in the wrong business seriously. But those are the kind of return on investments that we have. And it's really -- it's fantastic seeing it over the years, the buy-in from the employees, the expansion, we were at one city at the beginning. Now we're over 25. We have 350 destinations.

And I got to end this statement with this. Every airline operates the same way. You fly [ United Rock ] on, right? It's because you're going out of, I don't know, Chicago, right? Dallas is going to be American, Delta is going to be -- you fly who you are. We're all the same under that shiny skin. Confused, frustrated, seeking help. So -- but yes, that's our return on invest.

Great. How about you, Nick?

Yes. Well, we just finished our full implementation in May of over -- a little over 2,200 tractors, 4,000 trailers. So it hasn't been that long. But already, we've recovered some lost equipment, as Antonello spoke about, the improved safety with the cameras and being able to exonerate drivers with those cameras is already coming into play. So again, we're super excited and we are already starting to see just since May, a lot of things like that, that we know is going to pencil out just like we planned before we did this.

Excellent. Looking ahead, you're both leaders in your fields constantly innovating. What new projects or capabilities are you exploring with Samsara? And how do you envision these will further transform your operations, particularly like sustainability for UNFI or proactive fleet help for American Airlines? Nick, let's start with you.

Yes. Listen, for us, it's Samsara and using the powers at Samsara to monitor as we go into the EV world. our either electric tractors, electric trailers, everything from monitoring charge status to range. We're requesting trailer monitoring right now, which Samsara has been amazing to work with integrating with our electric trailer company that doesn't have a traditional OEM reefer unit on it. It's an in-house fully electric reefer that Samsara is going to help integrate, so we can get the data out of it, which we need. So a lot of stuff like that, that we're looking forward to in the future.

Love it. And how about virtual coach and Samsara assistant?

Yes. Listen, super excited about that. And to have that access at our fingertips and to be able to use it is going to be a game changer for everything from coaching to training to really getting a hold of anybody at Samsara, and there's always a subject matter expert at the end of the line whenever we reach out for support. So it's been good.

Love it. How about you, Antonello?

What he said. No, it's the absolute truth. I mean the support is there. We have gone from just finding the equipment to actually learning its health and knowing if it's ready. I'm going to coin a phrase called right starts. Every airline has their flights in the morning that have to leave on time. And that means they're going to travel through the system, hopefully on time.

It's like going to a doctor. If you go in the morning, you got a better chance of leaving -- arriving on time. In the afternoon, he might -- he or she might be delayed. But we now, with the platform and moving forward, we can see that piece of equipment, not only where it is, but is it ready for the next day. Is it fuel? Is it charged? Is it communicating properly? And you do that on the third shift overnight before those flights kick out, and that means everything. The most frustrating thing in my world is when I get on an airplane first thing in the morning that sat overnight and it takes a delay, right, for a maintenance issue. I have to cover up my AA badge, and I'm like in a back with the spears and like, no, American sucks. Sorry.

All right. Let's talk about something that's really important for any company, right? It's customer support. Can you share Nick, your experience with Samsara's customer support?

Yes. Listen, I'm going to steal a line here from my partner. I've been doing this a long time, and there's a lot of people that sell equipment and sell services like this, but the game changer here has been the support after the fact. They don't just sell it and walk away. It's -- somebody always answers, somebody always responds and somebody who knows what they're talking about, there's an expert on the end of the line that's there to help solve any issue or problem or opportunity we may have, whether it's something we haven't had this yet, something not working right. But the biggest one so far has been, hey, we'd like to do this. Could we integrate and do this? And it's always met with open mind and willingness to do it. So that's been huge compared to companies we've used in the past for the same services.

Great to hear. How about you, Antonello?

If the engineers were in here and I'd ask them to stand up because every one of them loves the challenge. They came to the airport. They looked at us. They didn't say, you're going to buy this out of the box. They sat down and said, what can we do for you? And then they continue to strive to do the what if. What if we did this? And then we give it back to the employee, and we say, what's your challenge? What do you want? And when they say, hey, I want to know if it's fueled.

How many people have gone and -- gotten in their spouse's car and it's out of gas. Right? Yes. I thought it could have been just me. But literally, that's what we do. If we hand the tractor or whatever piece of equipment, the next guy is going to fuel the next guy, and it's 25 below 0, nobody wants to drive it over there. But we sat with Samsara, with the engineering team, the support and said, hey, how do we measure fuel on the simplest dumb animal, simple tractor right up to something that has a canvas or computer in it, and we're getting there.

And this is an industry first with American Airlines. Now it will guarantee you others are going to want to follow. We'll guarantee you because we're all that convoluted mess. We truly are. And this is what's great. But the engineers outside, my hand is up to them. They're great support.

Great to hear again. What is your favorite feature, Nick, of Samsara and why?

Well, listen, it's probably not same answer that the folks on my team who are buried into it every day. But for me, it's important feature. And I mentioned already is the support is usually when there's a problem at the DC level and it makes it to me that I'm the one making the call. And again, it's -- the support is spot on, always there to help fix any issues or obstacles we have. So that's probably a lame answer for my favorite feature. But to me, that's a really important feature.

That's what he said.

You can't keep doing that. I'm not going to let you do that, Antonello. Give me another one.

No, it's absolutely the support. It's the thinking outside the box. It's the challenge in rising to the challenge of what we do. I mean our jobs are messy. Stuff moves around. And we've got -- you got to make sense of where it is, but then you also have to give the employees it in a language they can understand or a format. We talk about we want to access that tractor like I'm accessing an ATM machine. 3 buttons I get my cash, right?

If you've got to go -- I've had platforms where you're going through and you're signing in, you're doing that, giving the social security number, why, right? Date of birth, I don't -- I mean, I didn't make that purchase honey, that wasn't me. But they do it proper and they do it great, and that's the support that I really enjoy. And that's what makes them so different.

I'll add. As I think about it and thinking about our legacy providers and companies we've used in the past, just to me, it's really cool maybe because I'm a simple [ tent ], but the real-time tracking that we've never had before, right? We're literally watching a driver walk through the store with this pallet jack watching. I mean, down to that accurate of live tracking is a really cool feature that we've never had before. So.

Awesome. So you have a peer at another company who is exploring connected operations technology. What would you -- what advice would you give them? For Nick.

Yes. Well, listen, I've had lots of conversations with peers already this week from much larger companies than us that are maybe not as deep with Samsara yet, and I couldn't tell them strongly enough, you need to get rid of the rest of the platforms you have and make the switch 100% to your company because it's going to be game changing when you have -- again, we're -- I don't consider us a huge fleet at 2,200 tractors, but to be able to know where every one of those tractors is at all times, every one of our trailers, what the temperature is, is game changing.

And it's hard to believe when I tell people this, but it does happen all the time. I could see it maybe in the airport losing stuff, but we deal with the same stuff. You would be blown away at how many tractors we used to -- it's embarrassing to say lose or trailers we used to lose because we couldn't track them or the system wasn't working or there was bad cell coverage or whatever they used back then.

And -- but we haven't lost a single one, and I don't think we will because it's being able to see it. It's improved our utilization because we can see -- as you go into our distribution centers, the first thing I look at is I see these trailers sitting and I'm like, how long have they been sitting here?

Well, a simple report now will tell me the last time these trailers were used. And from my perspective, I can quickly tell somebody to the D.C. if you haven't used this trailer in a week, I can easily determine we don't need it. And so we're rightsizing our fleet and getting to where we need to get all because of Samsara.

It's amazing. Anything you want to add about integrations with your existing other systems?

No. Well, it's been great with our routing platform road map to our payroll system to Cronos, everything we use, it's just been -- I mean, I can't emphasize enough how simple it's been. And before we started, I was thinking, oh, man, this is -- I never like going through projects like this when you're either changing routing platforms or changing a system, which to me is the biggest reason people probably don't do it is it's hard work, right? And so it's easier -- like staying in a bad marriage, right? It's easier just to do it sometimes and not do it.

I disagree with that.

I'd had a couple of chances...

Let's have a discussion about that. Tell me really.

The house I bought now is going to be mine. That's -- over to you.

I'm sorry, forget it. From my end, if I was speaking to somebody who want -- give them a try, right? Let them solve to your X. I mean every company might think they want to see something differently. Different airlines, they might say, well, I really want to do this, let them solve to that. They love the challenge. And when I -- when they first walked in, an airline, like I said, 6,800 flights a day. In Dallas, we're going to be upwards of 1,200 soon, more than Atlanta in a couple of more years. Nobody wants anything to disrupt that flight. That flight has to go out.

And if you bring in a special snake oil, there's a lot of skepticism with it. And that's why we went through a lot of GPS companies, but they were surgical. We were surgical. We went in slow. We bought that got the buy-in and they give us the opportunity and the support. And it's -- I mean, if you were to say today, it's -- the sky is the limit. It's fantastic.

Amazing. And it's -- I'd just add, it's, again, not being the biggest company, but we make roughly 1.8 million deliveries a year. So when we made this decision to do this, this is a big deal, right? I mean $31 billion in sales a year and 1.8 million deliveries, we had to get it right. There's no -- I have to get it right. There was no making a mistake on this, and I can tell you we got it right.

Awesome. Great to hear. Well, I want to sincerely thank both of you for sharing your stories about Samsara and how it's helped your companies. How about a big round of applause for Nick and Antonello. Thank you, guys.

All right. Up next, we have Dominic Phillips, our CFO.

All right. Hey, everyone. Thanks for attending our Investor Day. I have about 20 minutes of content focused on key drivers of durable and efficient growth. We'll have everyone come back up. We'll do a little bit of Q&A before wrapping for the afternoon.

Right. So before I get into the reasons why we expect our growth rate to be durable and efficient going forward, I first just want to level set with where things stand today. So we've crossed more than $1.5 billion of ARR. We're still growing north of 30% year-over-year, and we've been able to achieve all of this in about 10 years. We've been able to achieve this level of scale and growth in such a relatively short period of time for a couple of reasons.

The first is that our products address a really large market opportunity that's growing quickly. And the second is that we're executing well across a number of frontiers. So we have multiple products at scale all on one unified platform. We're selling into many different geographies. We're selling into different customer segments, both mid-market and enterprise are growing quickly. And we're selling into a number of different industries and end markets. And because we're executing well across all of those fronts, again, we've been able to demonstrate a lot of scale and growth in a relatively short period of time.

And just to provide some additional context into our scale, there are more than 10,000 enterprise software companies today, less than 1% of them are executing at this scale or greater, more than $1.5 billion of ARR. And we're one of the fastest to get there in just 10 years. If you look at other larger enterprise software businesses in terms of scale, they've ranged from 10 to 22 years.

In addition to driving large scale and still growing quickly, we've also demonstrated a lot of operating leverage, especially over the last few years. So our operating margins have improved by 36 percentage points over the last 3 years. Free cash flow margin has improved by 51 percentage points over the last 3 years. And this combination of large scale, fast growth and profitability has really allowed us to execute in rarefied air. So there are roughly 300 U.S.-listed software companies today, of which only roughly 60 of them are operating at our level of scale or greater, more than $1.5 billion of ARR. And then of those roughly 60 at-scale U.S.-listed software companies, Samsara is 1 of only 2 that is still growing north of 30% year-over-year and is generating positive free cash flow. So that's a look at what we've accomplished over our first decade.

As we look forward over the next decade, we believe our growth rate can continue to be durable for several reasons. The first is we have a highly predictable subscription revenue business model. Second, our products address a really large market opportunity that is growing quickly. And within that, we're still in the early innings of digitization within our core products and core geographies. We sell into large, fast-growing and a diverse set of end markets. And within those industries, we're selling into the operations budget. And for our customers, the operations budget is large, it's critical and therefore, less discretionary.

Customers deploy our service for real, hard, tangible ROI, and they're able to pay back their Samsara investment very quickly. We are purpose-built for large enterprise customers with complex physical operations, and this continues to be our fastest-growing customer segment. And then lastly, multiproduct adoption continues to increase. The majority of our customers are using 2 or more products, which opens up a lot of opportunity for more land and expand in the future.

So double-clicking into each of these durable growth points. Again, the first is we have a highly predictable subscription revenue business model. That means that more than 98% of our revenue is recurring. We sell 3- to 5-year contracts across all of our products, and then we recognize the revenue ratably over the life of the contract, which gives us a lot of visibility into future revenue because we're selling medium- and longer-term customer contracts. Second durable growth point, again, our products address a really large market opportunity that is growing quickly. Industry research estimates that the connected operations market opportunity is $137 billion. That encompasses all of the products we sell today, including everything that we announced at Beyond today.

Within Connected Operations, our core product opportunity is connected fleet. which encompasses all of our vehicle-based applications, so video-based safety, vehicle telematics and some of the newer products we've recently announced, vehicle maintenance, commercial navigation and routing. Industry research estimates that the connected fleet opportunity is $51 billion. So not only do our products address really large market opportunities, but these markets are also growing very quickly as physical operations customers are increasingly adopting this technology to digitize their operations. And what's really exciting is that we're still in the early innings of digitization within our core product opportunity, connected fleet.

So on the left side, this is a look at the North America vehicle telematics market. This is a market that's been around for the last 20 or 30 years. Of the more than 35 million commercial vehicles in North America, roughly 50% of them are using some technology today. It's fragmented across more than 35 different vendors, which we already have a market-leading position. But you can see with the dark blue pie slice that we're still less than 10% of the market share. So there's not one dominant player in this market.

The other 50% of commercial vehicles are not using anything today. This is a huge white space opportunity. On the right side, North America video-based safety market looks a little bit different. This is a much newer market. Some of the underlying technologies like AI and computer vision and 4G, 5G connectivity and HD video have only been available for the last 5 to 10 years. As a result, 9 out of 10 commercial vehicles in North America are not using any video-based safety solutions. And the 1 out of 10 that is, Samsara has a market-leading position here, and the rest is fragmented across roughly 10 other vendors that are typically different than the vendors we see in the telematics market.

So while the dynamics of these 2 markets look a little bit different, the key takeaway is that in our core products and in our core geography, we still have a lot of opportunity to replace legacy incumbents and continue to capture more market share as we've done consistently quarter-over-quarter. But there's an even larger opportunity to attack this white space and put technology into the hands of customers that are not using anything today.

And the opportunity is actually even larger when we look to Europe. There are more commercial vehicles in Europe than there are in North America, more than 45 million, but very similar dynamics. Only roughly 30% of commercial vehicles in Europe are using telematics today and less than 5% are using video-based safety. So again, an opportunity to replace legacy incumbents, but a much larger opportunity to go after this white space and help these customers digitize their operations.

The next durable growth point is that we are selling into the world of physical operations, which makes up 40% of global GDP. Not only are these large end markets, but over the last 10 years, they're growing very quickly, much faster than the U.S. economy as measured by GDP. So on this chart, the red line is GDP growth over the last 10 years, and each of the individual dotted lines represent the industries that we're selling into. So you see transportation and construction, wholesale and retail, field services, each of these end markets is growing faster than GDP individually as well as in aggregate, which is the black line. Large markets, large industries that are growing quickly. And we're selling into a diverse set of industries.

This first column is a look at our ARR mix by industry 3 years ago versus the second column, our ARR mix by industry today. And you can see down at the bottom, even though that we've almost tripled our ARR over the last 3 years, our ARR mix has been very consistent. So transportation has decreased by 4 percentage points of ARR mix over the last 3 years. Construction has increased by 3 percentage points of ARR mix, but all of the other industries are kind of plus or minus 1%.

So again, large markets growing quickly. We're selling a diverse set of industries, which creates a lot of demand stability. And within these industries, we're selling into the operations budget. And again, for our customers, the operations budget tends to be the largest, most critical and least discretionary.

If you look at our top 10 public customers, on average, these customers are spending roughly 80% of their revenue on their operations budget and only about 8% of their revenue on all of their other expenses, including things like SG&A and IT. Within the operations budget, it's all of their revenue-generating investments. So all of their assets, their equipment, their vehicles, all of their frontline workers as well as all of the supporting costs to support those revenue-generating investments. So fuel, maintenance, insurance, accident costs, all of that is housed within the operations budget. And because these operating budgets are so large, we have a lot of opportunity for customer impact.

And that opportunity for impact comes through in the form of ROI. We had IDC go out and survey more than 150 of our customers and IDC found that customers that deployed Samsara on average generated more than an 8x ROI. Not only are they getting a lot of cost savings, but they're able to pay back their Samsara investment very quickly. This is a plug-and-play solution. Customers can get up and running very quickly. You don't need to hire system integrators to come in and install the service, which allows customers to start collecting data quickly and pay back their Samsara investment often in months.

Next driver of durable growth is large customer momentum continues to increase. We now have more than 2,600 customers that pay more than $100,000 of ARR. On average, these customers pay $338,000 per customer. And this combination of adding more large customers and increasing the average ARR per customer has resulted in more and more of our ARR mix coming from enterprise customers. So today, 58% of our ARR comes from enterprise. A year ago, it was 56%. 2 years ago, it was 52%.

Not only is this our fastest-growing customer segment, but our large enterprise customers continue to get larger over time. So today, our 10th largest customer pays $4.6 million of ARR. 5 years ago, our 10th largest customer paid $1.1 million of ARR. So it's increased 4.3x over the last 5 years. Our 25th largest customer is paying $2.9 million of ARR. That's up 4.9x over the last 5 years. And our 100th largest customer is paying $1.2 million of ARR, which is the same size that our 10th largest customer was just 5 years ago. That's up 6.1x over the last 5 years. So enterprise customer segment is the fastest growing and our largest enterprise customers continue to get larger over time. And the last driver of durable growth is that multiproduct adoption continues to increase.

On the left here, 95% of our enterprise customers and 85% of all of our core customers subscribe to 2 or more products. That's basically full saturation across our customer base. And you can see how consistent that saturation has been over the last couple of years. In the middle, 66% of our large customers and 38% of core customers subscribe to 3 or more products.

By definition, that means something outside of the vehicle because we only have 2 vehicle-based applications. And you can see how that multiproduct adoption has increased over the last couple of years. And what's really exciting is that with the rapid innovation and the acceleration of our product road map, particularly over the last 12 to 18 months, more and more customers have adopted 4 or more products. So now 13% of enterprise customers and 3% of core customers are using 4 or more products on the Samsara platform.

In addition to increasing multiproduct adoption, we're seeing more of our products increase in overall scale. Today, our largest product by ARR is Video-Based Safety. It's crossed more than $700 million of ARR. It's still growing north of 30% year-over-year. Our second product, Vehicle Telematics has crossed more than $600 million of ARR, still growing north of 25% year-over-year. And all of our other non-vehicle-based applications, so equipment monitoring, asset tags, site visibility, all of our workforce applications collectively is doing more than $200 million of ARR, still growing more than 30% year-over-year.

And over on the right-hand side, while our non-vehicle applications represent roughly 15% of ARR, the customer usage and adoption has been much higher. So roughly 50% of all of our core customers and roughly 70% of our enterprise customers are using a non-vehicle-based application, which give us a lot of confidence that we have a lot of opportunity for future upsells.

Okay. So those are all the reasons that we expect over the next decade, our growth rate will be durable. We also think we can get more efficient as we scale the business for a few reasons. The first, again, going back to this subscription business model with very strong unit economics. We're committed to driving more operating leverage across our functions as we scale. And then we're also really focused on effectively managing dilution.

So on this first point, again, we have a subscription revenue business model. Like all subscription models, we spend a lot of money upfront to acquire customers. And once we acquire a customer and they begin paying a subscription fee, we start to recover the upfront cost until they finally break even. And then if we can continue to renew customers over time, they become very profitable over the long run, so much so that our customer lifetime value to customer acquisition cost ratio has been more than 8x, which means that for every $1 we invest to acquire a new customer, we drive more than $8 of profit over that customer's lifetime, which leads to a lot of long-term profitability. And you're starting to see some of that profitability flow through our business results.

So our operating margins improved by 21 percentage points over the last 2 years. Our free cash flow margins have improved by 26 percentage points over the last 2 years. Going forward, we expect most of the near-term leverage to come from sales and marketing and from G&A.

On the sales and marketing side, most of it will come from renewals. The cost of sale on a renewed dollar of revenue is a lot lower than the cost of sale on a new dollar of revenue, whether that's from a new logo or from an expansion to an existing customer. And as more and more of our ARR base comes up for renewal, that will drive natural leverage in sales and marketing.

In G&A, we're going to benefit from things like economies of scale, introducing more automation and hiring and lower-cost geos. Medium and long term, I do think that there is opportunity for more leverage in COGS and in R&D. On the COGS side, a lot of the new products that we're announcing are gross margin accretive, and there's opportunities for more cost optimizations in our COGS in the medium and long term. On the R&D side, less incremental investment will be required in our core at scale products as they continue to grow.

And then lastly, we're really focused on effectively managing our dilution. Our largest expense as a company is head count and the corresponding compensation that supports that head count. Many of our head count receive equity as part of that compensation. And we've made a number of structural changes to our equity program over the last few years to drive leverage. And you're starting to see that come through in our annual equity dilution.

In FY '23, the year after the IPO, our annual equity dilution was 4.4%. The next year, we dropped it to 2.7%. This last year, it was down at 1%. And you're starting to see the impacts of that annual equity dilution flow through our SBC as a percentage of revenue, being in the high 20s coming out of the IPO, dropping it all the way down to the low 20s last year with a path to getting it into the teens in the near to medium term.

Okay. So those are all the reasons, again, that we feel like our growth rate can be durable and efficient going forward. So just to re-summarize some of the points that we've covered. We're selling into large, fast-growing and a diverse set of end markets. Within those industries, we're selling into the operations budget.

Again, for our customers, the operations budget is by far the largest and most critical. Customers are deploying us and they're getting real, tangible, clear ROI. They're able to pay back their Samsara investment very quickly. Our products address a really large market opportunity that is growing very quickly, but we're still in the early innings of digitization in some of our core products and core geographies. Large customer momentum continues to increase. It is still our fastest-growing customer segment and multiproduct adoption continues to increase as we add more and more products to the platform. And underpinning all of these durable growth points is a commitment to delivering more and more operating leverage across all of our business functions as we scale.

So with that, I'm going to welcome everyone back up, and we'll get into a little bit of Q&A before wrapping.

All right. Great. So we're going to start the question-and-answer portion. Just raise your hand real quick if you want to ask a question, and then guys can go from there. Okay. So we could start with Alex Zukin here in the front.

Alex Zukin from Wolfe Research. Again, fantastic presentation, both the keynote, Sanjit, and today, I guess I got -- I have 2-part questions. First one, maybe for Dom and then Sanjit you. During your presentation, you made a comment that stuck with me at least in the very beginning when you said our growth rates are durable. That seems to be increasingly hard to come by, also maybe outside of Palantir in software because a lot of investors have a terminal value anxiety with seat-based models, as you may have heard these days. When you think about growth rate durability, what is behind that comment. And I'm not asking for a long-term guide. I really despise those. But what kind of growth rate over what time feels like it's not aspirational.

And then Sanjit, for you, again, really enjoyed the -- some of the safety innovation that you guys made particularly on the wearable. I'll call it a wearable. I won't say the B word. When you think about what's given you from a go-to-market perspective, the confidence to go into that sector or segment, given what you've seen with asset tax, maybe what are some of the learnings that you've had and confidence that gives you to be successful there?

Yes. I mean starting off on the durability of growth. It is -- our largest focus as a company is to sustain high levels of growth for as long as we can. We think we can do it for a really long period of time, and it's for all of the reasons that I just went through. I think that we have the benefits in uncertain macroeconomic environments where we've got a subscription business model. So if you're signing medium- to long-term contracts, you get a lot of visibility into what future revenue will be. Even in our core products in our core geographies, we still have more white space than we do the opportunity to replace legacy incumbents.

And I think you've seen us over the last, again, 12 to 18 months with a high velocity of product innovation. You heard from some of our customers that they're increasingly adopting more and more products. So I think across all of those vectors, it gives us confidence that it's a really big opportunity. And in addition to that, we're investing to really go after those high levels of growth and sustain them for as long as we can.

And I'll take the one on the wearables. So we're excited to get it out, and it really was based on customer feedback. A lot of our customers, some of whom you've heard from here on stage and are present here at the conference, they've shared with us these stories of they're making food deliveries at 3:00 a.m. in a high crime area and that driver is on their own. Their delivery person, they're also stocking the shelf and they're unloading with a pallet jack and something might happen back there.

We hear lots of stories of slip, trip and fall kinds of injuries. So we know the problems are there. This is not a space that I would say is heavily penetrated. Most of these folks on the front line, they don't have any kind of panic button or other accessory. They're out on their own. And maybe they have their cell phone in their pocket, maybe they're left in the cab. So we are really thinking about what else can we do outside of the cab and think more holistically about safety. You drew a parallel to asset tags, I think, earlier in the question.

I think that's another really great example of if you look at the photos that Kiren had on this slide, they showed the use cases. So porta potties, small tools, like all kinds of different things that are used in operations. Most of those are not tracked. Folks have no idea where they are. And Antonello shared some of that, right? And we've heard that from other customers here as well, which is there's so much that's in operations that is untracked, no idea where it is. It's clipboards, it's very old school. So we see a long-term opportunity to really start digitizing both safety and the efficiency sides of things.

Next one is Jim Fish.

Kiren, my questions are mainly for you. Route planning to me was one of the more interesting announcements today. How long, though, should we expect the average enterprise implementation to occur given you have a lot of customization underneath. You even heard Nick talk about the fact that he has his own sort of route planning underneath like behind the scenes that you guys look into. So how do you deal with that sort of DIY replacement factor?

And then just second part on pricing, how does that get priced given you're replacing really humans? And is there a way to think about pricing for what Alex just asked about with wearables relative to maybe asset tags?

Yes. Well, on pricing first, route planning as well as the other products that we announced today are all per unit per month subscriptions, consistently with our other products. And for a customer looking at deploying the route planning solution, that might be displacing an existing legacy application that has a similar pricing structure or they can look at it and actually, as customers have been evaluating the product in beta, actually seeing and putting it in their team's hands allows them to complete all of their orders with fewer hours, fewer miles and lower cost, and they see a clear ROI that makes it easy to justify that cost. So that's on the pricing side.

In terms of deployment, we'll need to get into the market and see. We're launching the product this summer. But we see that customers actually have a wide variety of environments. Some have existing solutions that their teams are using, and this would be an opportunity to replace that existing application. Many other customers actually don't have systems at all. They're using Google Maps, they're using spreadsheets, and it's actually replacing that kind of cobbled together manual process. So we will learn more about that deployment cycle as we get into the market, but we think we really see that there's going to be a variety of use cases and methods for customers to adopt the product.

And many customers actually grow by acquisition, right? We talked about Rasmussen. They've got 11 operating companies. Even within a customer, there are different environments where some of those can be much faster adoption in terms of getting their hands on the technology and then expanding from there. So we'll learn more about the specifics as we get further into the market with the product, but I think we're going to see a variety of use cases.

Let's go with Chris from Morgan Stanley.

Chris from Morgan Stanley, sub in for Keith here. One of the most common questions we get from investors is what's the competitive moat? What makes Samsara special? And it seems like you're getting at a scale from the network and data perspective that it's increasing the product velocity. And so kind of a 2-part question. First, do you feel like you're at an inflection point for product velocity related to the network? And then two, how do you think -- how does that also inform your R&D dollars and your product road map as you look out both near term and longer term?

Kiren, do you want to start?

Yes. Starting with the network, right? If we think about the network as an enabler for new products, last year, 12 months ago, we launched the first product ever that took advantage of that network with the asset tag, and it was really multiple years of building up that critical mass of scale. And that product has been doing really well. Customer adoption has been strong. And they're saying, hey, the quality of the product experience is really fantastic, right? This really works in a way that it wouldn't have if we had a smaller scale. And so that was really what got us excited to double down and say, what other problems can we solve with this enabling technology. And so we launched one product in the asset tag last year. This year, we announced our tank monitoring, our Samsara wearable and the StreetSense for weather intelligence. So we're seeing more use cases and seeing those accelerate.

If I can build on that, you heard from both customers on stage the importance of quality and how in the past, they've been let down by providers. We find it's very important for us to truly deliver for these customers. I think it's easy in industries like this to say you do something and say like, hey, everything is the same. It's very hard to deliver with consistency and quality.

And as you've seen in Dominic's slides, the majority of our revenue now comes from enterprises. These are large complex operations. This is mission-critical stuff. It needs to really work for them. And so one of our priorities has always been build with quality in mind, make sure that's a core part of the experience, deliver just awesome customer service and really help with the implementation, make sure they understand how to use it. And I think that is something that, over time, helps us build a really strong reputation in the market.

I'm sure at some point, competitors will see everything we launch today and want to offer it and say, "Hey, we've got that on our platform, too. We always believe that the details really matter. And I think our customer community reflects that because they don't implement the stuff easily. Many, many of them have been burned in the past. And so we want to make sure that we're able to deliver for them.

We always talk about like our scale is something we're proud of, how large we're getting and how fast we're going. Whenever we talk about scale, Sanjit says, the reason he gets excited about the scale because the bigger we are, the more money he gets in R&D that he can like invest in more products. We will spend more money on R&D this year than other competitors generate an overall revenue. And so the bigger we get, the faster we grow, the more money we can pour back into product innovation at a scale that is just unmatched.

And I think that is what allows us to have a complete offering. When we think about the platform, being able to have safety and telematics and equipment, but then being able to add maintenance and route planning and navigation and do these all at an enterprise grade. That requires the scale of investment that we're able to make. But it's what customers are really looking for in terms of having that single pane of glass, a single system that all works seamlessly and it's easy for their teams to work out of.

Great. Next question here.

Pete Burkly from Evercore here on behalf of Kirk Materne. So just curious, and it's more of a high-level sort of philosophical question, I guess, but as you continue to broaden out the platform, adding all these new features and functionalities. And as you were just discussing sort of increasing the network effects as it continues to grow, I'm curious how you think about pricing from a direct monetization versus a platform stickiness type of play. So things like StreetSense, for instance, which feels like it's more of a stickiness and added feature versus obviously something like the wearables is very directly monetizable. So just trying to understand how you maybe think through that as you continue to innovate at sort of this rapid pace that you have been?

I'll start and if you want to add on. Dominic showed a couple of pie chart slides in his section where it reflects just the penetration rates in this market. If you look at safety, for example, most of those pie charts are gray. And that basically reflects what we see in the field, which is most of these companies don't have this technology. So a lot of what we're trying to do is simply activate these customers to digitize to say, "Hey, it's possible now. It's going to result in great ROI, go for it. StreetSense will help with that as well a lot of the other platform.

We're not in the position where we're trying to optimize the pie of what we have. We're really trying to unlock the majority of the market. And this is a market that's very busy. It's very large, but it's -- they have a lot of other competing priorities. So I think of it as if we can show up really well, if we can demonstrate clear ROI, get them to success, the rest will come. And then we can think about, okay, how do we optimize pricing over time, but we really are building for the long term in that sense.

Dylan?

Dylan Becker, William Blair. Maybe for Sanjit or Kiren here. If we think about the routing solution or the maintenance solution, it was pretty impressive kind of the ROI that customers talked about on stage. How do you think about those solutions kind of sitting relative to the core value prop of Telematics, Video-Based Safety, some of the other things you're doing today from a share of spend perspective and maybe the opportunity of, again, more than 1 plus 1 equaling 2 tying into 3 as we can address more of kind of the end-to-end connectivity from a physical operations perspective?

I think from an ROI perspective, thematically, these new products are in the same veins as our more mature products. If customers are looking to increase their operational efficiency, right? That means getting better utilization out of their assets, their labor hours, reduce their fuel costs. They're looking to reduce their accident-related and safety-related spend, right? So less liability and insurance premiums. And so these new products, they fit in those same themes and those same value propositions.

In terms of how that ROI is delivered, we think that there's a lot of potential for ROI in these new products with maintenance, for example, reducing maintenance costs and increasing asset utilization or route planning, reducing fuel and labor spend. These products are early. We're getting them out into beta now, and we will be iterating on pricing as we make contact with the market. But to Sanjit's earlier point, we want to make sure that we're -- have a fair exchange of value, but also that we're optimizing for bringing customers onto the platform and really thinking about all of that white space and maximize that penetration and value and then we have opportunities to optimize more over time.

Andrew?

Andrew DeGasperi from BNP. I saw an interesting slide earlier about the penetration, the competitive landscape in Europe. And obviously, since last quarter, you came in at a pretty high mix from international. Just wondering given that it looks less competitive and a much bigger opportunity from a connected vehicle standpoint, are you going to invest more in that region?

I think it's an and. We're -- there's still so much opportunity in North America as well. There's a lot of gray space, again, in the video-based safety market, 9 out of 10 commercial vehicles of the more than 35 million are still not using any video-based safety technology. The willingness to adopt new technology is maybe slightly higher today in North America than it is in Europe. But you see us making a lot of investments. It's a very similar direct go-to-market motion. We've been introducing a number of European-specific product features over the last couple of quarters, winning more lighthouse and referenceable customers. All of those are required to drive more growth in those regions. And you're starting to see it come through the results again with a quarterly record net new ACV mix from international in Q1.

Junaid?

Junaid Siddiqui, Truist Securities. Sanjit, safety is a significant use case for your customers. Just wanted to ask about autonomous trucking, even though we are some ways away, but how does the ROI paradigm change for customers considering there are not going to be any drivers and theoretically much safer vehicles. So -- and what's the value proposition that Samsara brings in that scenario?

Yes. Autonomy is something we've been thinking about for some time being based in San Francisco, Waymo, Zoox at the time, Cruise, everyone was testing in their neighborhood. So we've always kind of seen it as it's going to happen. It's inevitable.

If you take a look at the industry mix in the pie chart there, I think what you'll notice is the majority of our industries are, a, not in kind of long-haul trucking. They're actually performing some kind of service. So if you think about field services, we have a number of customers field services, construction utilities. So there's still going to be a person that's going out to the job site. And we're thinking about safety holistically for them, but there's also not the same compelling sort of financial case for, okay, you're just moving a trailer from point A to point B. They're actually going to perform some work somewhere. So our industries are a bit more nuanced than just long-haul trucking, for example. And even within those, I think there's a bigger safety opportunity, and we talked about that with the safety wearable, with weather, there's a lot of other factors here that we're thinking about.

So I kind of view it as, at some point, those autonomous vehicles will show up in the Samsara system. We're doing those OEM partnerships with some of the players there. But it's an and where we're going to extend our platform to include autonomy, and that's similar to what we've seen in the manufacturing and the warehousing environments where autonomy has been added into the operation, not displacing the operation.

And some of the recent products that we're announcing fit into that as well. So if you have an autonomous vehicle, maintenance is going to be really important. Routing is going to be very important. If you have a worker, keeping that worker safe, so the wearable worker safety is going to be important as well. And so expanding the platform just beyond driver safety.

Dan, do you have a question?

Dan Jester, BMO, very simple one. The blog post today announcing all of these product announcements, it kind of like reads like a novel. There's so much out there. I know you love all your children equally, but maybe just help us understand which of these announcements today maybe is the biggest needle mover over the near and medium term?

Someone asked me this question in the hallway earlier. I will say it is exciting for us to be able to release these all sort of in conjunction with each other. They do interconnect and interplay with each other as well. So routing and commercial navigation, for example, I think, are 2 kind of logical pairings. It's going to be interesting to see how these are adopted and at what rate because there is a question of how much can the customer start with all at once. So I actually think it's going to be interesting to see. We don't know -- we don't have like an internal estimate of this product is going to grow at this rate versus the other. We have received a lot of positive feedback in the betas for each of these products. Now we need to get it in the hands of the customer and then see the adoption cycle.

Bella Camaj on behalf of Alexei Gogolev at JPMorgan. I just wanted to ask, given your success utilizing a dedicated sales team, to capture your government customer opportunity. Are you thinking of applying this dedicated sales team to maybe other customer groups or possibly expanding to other customer segments with a similar dedicated sales team strategy?

Sure. So what we found is, when we did -- any time we have a focused sales team, we see a huge benefit from it. So we're always evaluating. And I'm consistently looking at, hey, is this a segment we want to actually go and now double down and have a specific sales team for. So we're always evaluating.

And so for public sector, we have a dedicated team for them. We're not at the point where we're going to go split down to every vertical, but we've seen the benefits of it. It's also something where we have a lot of different markets we want to serve, and we don't want to over optimize.

Great. Matt Bullock?

Matt Bullock, BofA. I had a quick one on the multicam offering. How should we be thinking about vehicle types and verticals in terms of what investors should expect the uptake to be most rapid in? Should this be garbage trucks, buses or is it much broader? And then how should we be thinking about installation complexity relative to traditional VBS as it pertains to being a material NRR driver going forward?

Yes. In terms of adoption, we actually started shipping a high-definition camera connector for external cameras several years ago, and that had an interface for a single camera. And we saw adoption really across industries, but particularly where you have larger or more complex vehicles and you have that safety risk outside of the vehicle on the sides and the rear, and it's not like a sedan or SUVs that might have that visibility built in, which you don't find in the commercial side.

So really, it was cross-cutting across industries, but all these vehicles end up navigating in these environments where they're looking for that extra visibility. And so we heard customers saying, hey, this is great with a single camera. We would love to have more visibility and we would love to have AI. And so that was the genesis for the multicam. And so I would expect similar adoption mix in terms of our current product with respect to the industries and types of vehicles that it's serving, which is pretty broad.

Alex?

I'll do another 2-parter. I'm going to ask Daniel's question again because I really like it. If you think about all the innovation launched today, calibrate investor expectations for where we should think about incremental growth opportunities, most meaningfully.

And then Sanjit, for you the AI question. Look, clearly a lot on the table today. It has a different feel than last year where you guys had a really cool demo. Now you're deploying voice models in the field, you're natively leveraging AI in the use case almost very organically and seamlessly for real impact. How do we think about AI monetization? How are you thinking about AI monetization, a year in? It's an open debate topic across the ecosystem right now?

Maybe I'll start on the first one, just in terms of capital allocation strategy. I think we believe that our core products and core geographies still have a ton of white space to go after that these could be really large products and really large drivers of durable growth for many years to come. Having said that, we also believe that we need to make a number of other investments, whether it's in different industries or different geographies or in different product categories. The incremental cost in terms of R&D for us to stand up a new product because we've already built out this platform with all of this data is relatively small.

So our belief is we're going to take a lot of shots on goal. We don't know which of these are ultimately going to work. We have good kind of heuristics. And so when things aren't working, I think we do a really good job of reallocating the capital to other bets. And when things are working, we will double down on them.

And so asset tags had a good first year, and we're extending the Samsara network with things like tink level monitoring and even the wearables is part of the Samsara network. And so we -- a lot of product innovation, a lot of shots on goal. And some of those are going to work out really well. Some of them ultimately may not. We don't know it. We need to go get feedback from customers. But it's so inexpensive for us to try a lot of things that you're going to see us continue to roll out more and more products.

And on the second question related to AI. I view AI as this incredible unlock for the product in terms of how it gets used by the customer. A great example of this is with the dash cameras that we launched a couple of years ago. Dash cameras had been in the market, but they weren't incredibly popular because there wasn't any one around that will go watch other footage and go figure out what happened. When we introduced AI-based coaching, it changed the game that a customer could get instant feedback. It was just something that simply wasn't possible before. I see analogies of that in some of the newer stuff that we released today.

And we have even more that we're working on where these are areas that our customers don't have a lot of extra head count. They don't have people that have time to look at every last GPS trail to figure out who is late and who wasn't. And the demo we did with Voice AI is another great example. You're not going to call 75 end customers if you're 10 minutes delayed because you just don't have the bandwidth but maybe an AI could. And so that's where we're excited about the unlock of this may accelerate digitization in a market that otherwise has been kind of slow to do it for a very practical set of reasons.

Okay. So it looks like this wraps up our Q&A session. Thank you, everyone, for joining us today. It was amazing to see you, and we look forward to seeing you again soon.

Good afternoon, and welcome to Samsara's First Quarter Fiscal 2026 Earnings Call. I'm Mike Chang, Samsara's Vice President of Corporate Development and Investor Relations. Joining me today are Samsara Chief Executive Officer and Co-Founder, Sanjit Biswas; and our Chief Financial Officer, Dominic Phillips.

In addition to our prepared remarks on this call, additional information can be found in our shareholder letter, press release, investor presentation and SEC filings on our Investor Relations website at investors.samsara.com. The matters we'll discuss today include forward-looking statements. Actual results may differ materially from those contained in the forward-looking statements and are subject to risks and uncertainties described more fully in our SEC filings. Any forward-looking statements that we make on this call are based on assumptions as of today, June 5, 2025, and we undertake no obligation to update these statements as a result of new information or future events unless required by law. During today's call, we'll discuss our first quarter fiscal 2026 financial results.

We'd like to point out that the company reports non-GAAP results in addition to and not as a substitute for or superior to financial measures calculated in accordance with GAAP. Reconciliations of GAAP to non-GAAP financial measures are provided in our press release and investor presentation. We'll make opening remarks, dive into highlights for the quarter and then open up the call for Q&A.

With that, I'll hand over the call to Sanjit.

Thanks, Mike, and thank you, everyone, for joining us today. Samsara delivered a strong Q1 of our new fiscal year, surpassing $1.5 billion in ARR. We ended Q1 with $1.54 billion in ARR, growing 31% year-over-year adjusted for constant currency. During the quarter, we grew our customers with more than $100,000 in ARR by 154, an increase of 35% year-over-year. Our durable and efficient growth is a testament to the strength of our platform and our partnership with customers to address their critical needs. In Q1, we partnered with some of the largest organizations in physical operations, including 7-Eleven, the largest convenience store chain in the world, the Dallas-Fort Worth Airport, the second largest airport in the U.S. and one of the largest counties in the U.S., which has more than 10 million residents. We're proud to work with these industry leaders and help them operate smarter.

Over the past few months, I visited some of our top customers and prospects in North America and Europe. They're focused on a few key priorities: increasing the focus on safety to reduce accident payouts and lower insurance premiums, using preventative maintenance to extend the life of their equipment and reduce capital expenditures and improve asset utilization to run smarter and more efficient operations. Across the board, our customers are digitizing their operations and using AI to help them get more out of their existing labor and assets. They're investing in technology to run safer, more efficient and more sustainable operations. Our customers have large complex operations. They rely on commercial vehicles to move goods and services to power infrastructure.

According to the National Highway Traffic Safety Administration, there are more than 500,000 accidents involving large trucks in the U.S. every year. Commercial accidents not only cause injuries, but are a source of reputational risk and potentially millions of dollars in insurance payouts and premiums. To better understand our customers' safety challenges, we surveyed more than 1,500 commercial drivers. They represent 21 industries spanning 7 countries. We found that 79% have had a near miss while driving distracted and 67% have experienced drowsiness while driving. When asked about how to reduce this risk, 95% of surveyed drivers agreed that coaching positively impacts their habits on the road.

This shows the importance of technology to identify risk and help drivers avoid distractions on the road. Doing this at scale is a tremendous challenge. Our customers recognize that this is largely a data problem, and they're using AI and automation to improve their safety. We built Samsara's AI-powered safety solutions to directly manage risk at enterprise scale. Our platform provides comprehensive AI alerts covering a wide range of safety concerns. This includes collision risk, traffic violations, policy violations, harsh driving, driver fatigue, speeding and distracted driving events like mobile phone use, smoking and eating and drinking. Our new intelligent safety inbox and AI-powered insights give our customers a smarter way to identify risk and coach drivers based on patterns, not just incidents.

With high turnover rates and driver shortages, recognition is critical for our customers to keep their best drivers. We're doubling down on safety and recently launched new positive recognition tools within the Samsara platform. This includes streaks and milestones, personalized kudos and shared visibility. These features use gamification to help our customers drive improvements in employee engagement and overall safety outcomes. We're excited to help our customers reduce risk, protect their workers and save millions of dollars.

I'd like to share an example of a customer using AI to improve their safety. In Q1, we partnered with one of the largest retail propane companies in the U.S. They have over 3,000 vehicles and 2,300 employees that deliver propane to residential, industrial, commercial and agricultural customers. They also provide portable propane tank exchange operations. They first landed with telematics in Q3 of fiscal year '24. In Q1, we had one of our largest expansions with them, signing a deal for Samsara's video-based safety. In a pilot, they saw a 75% reduction in safety events and a 71% reduction in mobile usage. From pilot to partnership, they said the key differentiator for Samsara was the impact of our AI on the safety of their operations.

A large portion of our customers' operating budgets goes towards physical assets like vehicles, forklifts, cranes and other equipment. These assets have hundreds of moving parts. They're put to heavy use under demanding conditions and inevitably break down over time. As a result, most organizations allocate about 10% of their operational budget for repairs and maintenance. In today's environment, our customers are focused on maximizing the value of their assets and optimizing maintenance spend. In particular, they're interested in extending the usable lifespan of these critical resources. Recently, they've been sharing feedback on the complexities of maintenance at scale, the impact of tariffs and the challenges with resilience of their supply chains.

To address this, they're seeking AI to drive proactive maintenance to improve the operations with healthier assets. We're keeping our customers -- we're helping our customers achieve their maintenance goals with our AI-powered maintenance solutions. At the core of our solution is our massive data asset that powers our AI. We have millions of assets on our platform that collectively travel more than 80 billion miles each year. This provides us real-world data on how assets run and how they break. We digitize all this information through real-time diagnostics and the nearly 230 million vehicle inspections we see annually. This real-world data powers our AI to provide unique insights on the severity of fault codes and common vehicle repairs. We can then help our customers transform these insights into action by starting a maintenance workflow using our work order creation forms with pre-populated data.

We're just getting started on the maintenance journey with our customers and are excited for the opportunities ahead. I'd like to share an example of a customer using AI to transform their maintenance. Sterling Crane is one of the world's largest mobile crane rental companies. They rent, supply and service cranes through 16 branches in Canada and have equipment across hundreds of job sites. They face unique operational challenges like maintaining cranes in remote locations and keeping the cranes road safe during Canada's difficult winters and wide-ranging terrain. With Samsara, they reduced their unplanned maintenance from 34% to 20%. This saved 10,000 hours of technicians time, which equals to $500,000 of annual maintenance labor saved.

They also report over $3 million saved in equipment maintenance and replacement costs with over $2 million saved for on-road equipment and an additional $1 million saved on off-road equipment. We're proud to partner with Sterling Crane to help them save money and time and better maintain their assets.

As we build for the long term, we're investing in our ecosystem through OEM relationships. Vehicle and equipment manufacturers are building modern assets that are pre-connected to the cloud right off the assembly line. To create a seamless customer experience, we're integrating directly with the OEMs, so customers can deploy Samsara without installing any hardware. This helps our customers who have complex operations to simplify the digitization of their assets.

This quarter, we continue to expand our ecosystem. First, we're partnering with Hyundai Translead, a leading manufacturer of semitrailers in North America to improve trailer visibility. This marks our first OEM integration that supports Samsara's video-based safety features. Second, we're partnering with Stellantis, one of the world's largest vehicle manufacturers. We expect this integration will allow over 14 million vehicles to connect directly to Samsara's connected operations platform. And third, we're partnering with Rivian, who's an electric vehicle leader to streamline electric fleet management. We will integrate essential Rivian data directly into the Samsara platform and provide a single pane of glass.

It was a strong start to the new fiscal year. We're grateful to our customers, partners, investors and the Samsara team around the world for their shared commitment to increasing the safety, efficiency and sustainability of the operations that power the global economy. We're excited for the year ahead. We're looking forward to seeing many of you at Beyond, our annual customer conference and an Investor Day in a few weeks in San Diego. At Beyond, we'll be bringing together leaders to discuss the state of physical operations and new ways to deliver value through data and AI. We'll also be announcing new products and features. We hope you can join us.

I'll now hand it over to Dominic to go over the financial highlights for the quarter.

Thank you, Sanjit. Q1 FY '26 was highlighted by strong top line growth and continued efficiency gains. After a strong start to the quarter, we experienced instances of elongated sales cycles on some transactions in the period following liberation day in April as some customers prioritize spending on tariff-impacted goods such as vehicles, equipment and other assets. Despite the current macro uncertainty, we're encouraged that a number of these transactions closed in May, that we generated record pipeline in Q1 and that our win rates remain generally consistent and healthy, all of which signal continued strong customer interest in our platform and the clear and fast ROI it delivers.

Q1 ending ARR was $1.54 billion, growing 31% year-over-year, both as reported and in constant currency. Q1 revenue was $367 million, growing 31% year-over-year or 32% adjusted for constant currency. Several factors drove our top line performance in Q1. First, we focus on serving large enterprise customers to drive efficient growth at scale. To better reflect the structure of our largest enterprise customers who often have multiple subsidiaries and grow through M&A, we have adjusted our definition of a customer. Previously, separate entities within a larger organization were counted as individual customers. Our updated methodology counts affiliated entities within the same parent organization as a single customer.

This better aligns with our current go-to-market strategy and how we assign customer accounts to our sales reps. Overall, this change has a small impact on our large customer-related metrics and a more detailed comparison using the previous and updated methodologies can be found in the appendix of our investor presentation.

We ended Q1 with 2,638 $100,000-plus ARR customers, growing 35% year-over-year, including a quarterly increase of 154 compared to 105 in Q1 1 year ago. ARR per 100,000-plus customer increased to $338,000 and the combination of adding more large customers and a higher average ARR resulted in ARR mix from $100,000-plus ARR customers of 58%, up from 56% 1 year ago and 52% 2 years ago. Second, our customers are increasingly utilizing Samsara as a system of record for physical operations by subscribing to multiple applications on a single unified platform. 95% of our $100,000-plus ARR customers and 85% of core customers subscribe to 2 or more Samsara products. And 66% of our $100,000-plus ARR customers and 38% of core customers subscribe to 3 or more products. We also saw a number of large multiproduct transactions in Q1. 8 of the top 10 new logos in Q1 included at least 2 products and 5 included at least 3 products.

One of our largest new customers in Q1 was Knife River, a leading U.S. construction materials and contracting company operating across 14 states with over 5,700 employees. The company has made over 100 acquisitions over the last 30-plus years, helping revenue grow to more than $2.8 billion annually. Their initial purchase included video-based safety, telematics and equipment monitoring. In a pilot study, they observed a significant reduction in total safety events and AI coaching had an immediate impact on both distracted driving and seatbelt usage. And 8 of the top 10 expansions in Q1 included at least 2 products and 7 included at least 3 products. One of our largest expansions in the quarter was with a leading provider of vegetation management, line clearance and electric utility line construction.

This customer has expanded with us 15x since becoming a customer in 2019. In Q1, they added more video-based safety, telematics and equipment monitoring licenses, deploying Samsara on our recently acquired company. As a result of our strong expansion results, we achieved our target dollar-based net retention rate of approximately 115% under both the previous and updated customer count methodology. And third, we demonstrated strong execution across several frontier markets. 18% of net new ACV came from international geographies, which was tied for the highest quarterly contribution ever. The biggest area of international strength was Europe, which accelerated net new ACV growth sequentially and contributed its highest quarterly net new ACV mix ever. We also saw momentum across construction, transportation, field services and public sector end markets.

Construction drove the highest net new ACV mix of all industries for the seventh consecutive quarter. Transportation was our second largest vertical this quarter, achieving its highest year-over-year growth in over 4 years. Field services contributed its highest quarterly net new ACV mix in over 5 years. And public sector achieved its highest year-over-year growth in over 3 years, driven by wins with the state of South Carolina, City of Houston and one of the largest counties in the United States. And last, we also saw strength in emerging products. Equipment monitoring accelerated year-over-year net new ACV growth for the fourth consecutive quarter, driven by another strong quarter from Asset tags. In addition to driving strong top line growth, we continued to deliver operating leverage across our business as we scale. Non-GAAP gross margin was a quarterly record 79% in Q1. Non-GAAP operating margin was 14% compared to 2% in Q1 FY '25, and adjusted free cash flow margin was 12% in Q1 compared to 7% in Q1 last year.

Okay. Now turning to guidance, which is based on FX rates as of May 3. For Q2, we expect revenue to be between $371 million and $373 million, representing 24% year-over-year growth, both as guided and in constant currency. Non-GAAP operating margin to be 9% and non-GAAP EPS to be between $0.06 and $0.07. For full year FY '26, we expect revenue to be between $1.547 billion and $1.555 billion, representing year-over-year growth of 24% or between 24% and 25% adjusted for constant currency. Non-GAAP operating margin to be approximately 13% and non-GAAP EPS to be between $0.39 and $0.41. And finally, please see the additional modeling notes in our shareholder letter.

To wrap up, in Q1, we continued high growth at scale while also continuing to deliver operating efficiency gains. Looking forward, we believe we're well positioned to continue delivering durable and efficient growth. And we're excited to continue helping our customers operate more safely, efficiently and sustainably.

And with that, I'll hand it over to Mike to moderate Q&A.

Thanks, Dominic. We will now open the line up for questions.

[Operator Instructions]

The first question today comes from Alex Zukin with Wolfe, followed by Keith Weiss with Morgan Stanley.

Maybe just the first one, with regards to the sales cycle elongation commentary, maybe just talk about -- you mentioned, I think, some of those deals closed in May, just the quality, the duration of those deals, the size of those deals in terms of were they the same as originally constructed? And maybe just also talk a little bit about the pipeline construction in this period? Is it kind of back to normal or maybe just a little bit of those impacts?

Yes. So I would say the construction of the deals didn't change. We ended up closing a number of them in May. I don't think it makes sense to kind of fully quantify the amount from Q1 into Q2 because there's still a lot of macro uncertainty that can create more timing risk when deals close. I think I would say in Q1, it was more than hundreds of thousands. It was in tens of millions. It was a multimillion dollar impact. On the pipeline point, the pipeline was good. We had a record pipeline generation quarter in Q1. That doesn't necessarily obviously benefit us in Q1. These are enterprise sales cycles, so that they take time to kind of play out. But I think it goes more to just demonstrate the point that customer demand remains strong. This is a large market. It's growing quickly. We're providing real tangible ROI, quick payback periods. And customers are interested in that. There's just a lot of macro uncertainty with tariff-related news.

Got it. And then maybe as a follow-up, Sanjit, for you, the OEM investments and relationships were quite notable this quarter. Maybe just talk through the expanded opportunities this opens up for you, maybe how it changes or strengthens your competitive positioning in the field? And any other impacts we should think through or think about from those deals this year?

Sure, Alex. I think about it through the customer lens. We're just trying to make it as easy as possible for our customers to get their operations into the Samsara Connected Operations Cloud. This essentially makes it a cloud-to-cloud connection. So as they get delivery of these new vehicles, they're already easily populated up in our cloud. And that's been the strategy for a couple of years. We've been doing partnerships with light and heavy-duty manufacturers, yellow iron, so construction equipment like Caterpillar and John Deere, refrigeration manufacturers. So the whole idea is just get as much data into the cloud as possible. And we think that will help us get deeper insights into the performance of these assets and like I said, just reduce friction in terms of how these things get turned on.

The next question comes from Keith Weiss with Morgan Stanley, followed by Michael Turrin with Wells Fargo.

Congratulations on a strong start to the fiscal year. I was looking to drill down into a couple of Alex's 12 questions that he asked on his prior question. One on the sort of deal cycle elongation. You guys are selling a broader solution into the end customer. You're seeing more attach across multiple products. You're doing more with sort of like bigger deals. How do you sort of tell the difference between what's like a macro-related deal cycle elongation versus just like deal cycle elongation from having to sell a bigger deal and having to sell a more sort of integrated set of technologies?

I mean it's just having direct conversations with customers, like Liberation Day hits, higher tariffs come on board than I think what anyone kind of expected and then customers saying, "Hey, I'm buying a lot of tariff-impacted vehicles and assets and other equipment, and I'm focused on prioritizing my strategies and how I'm going to purchase these things, and that becomes kind of a near-term concern because those are assets that they ultimately use to drive revenue. And so hey, I still plan on digitizing my operations. I understand that there's real ROI here, and I'm excited about the payback period. But in this kind of period of uncertainty, I need to make sure that I'm focused on some of these tariff-impacted goods, and that can just delay conversations.

Got it. And then as a follow-up, were there specific verticals that you're selling into that you saw bigger impacts than others? And if so, which one saw the bigger impacts?

No. I think it was widespread. I think across all of our end markets, they're asset and people-intensive businesses. And so they're all purchasing, again, vehicles, heavy machinery equipment assets and a lot of those goods are impacted by tariffs.

Got it. And then just one on the margins. Gross margins continue to expand really well. Perhaps you could kind of unpack some of the drivers and how much room is there for further expansion there? And does the expansion of OEM relationships like just being able to go kind of straight to the data and not have to put your data collection device in there, does that help with the gross margin trajectory?

I think it can in the future. It's not today. It's just -- it's not a material part of the business. We're really excited about all these partnerships we have, and we can kind of meet customers where they are, if they've got connected vehicles and assets, we can pull that data directly in through an OEM cloud. If they don't, we can provide them a gateway or a device to ultimately collect the data into the cloud. And so as more and more customers have those assets, that can benefit them. On the gross margin side, I would just say we're really pleased with a quarterly record 79%. I don't expect a lot of near-term leverage in gross margin. I think that as we're rolling out a number of software-only SKUs and products, even things like asset tags, all of those are gross margin accretive. And so as those products scale, that can open up more opportunities for gross margin benefits in the future. And then obviously, as we continue to scale and get larger, there's opportunities on the cost side as well to get more economies of scale.

The next question comes from Michael Turrin with Wells Fargo, followed by Matt Hedberg with RBC.

We've been hinting at the macro, but if I listen to the prepared remarks and look at the letters, construction, seventh straight quarter of highest mix, public sector showing through as a stronger vertical. Can you just speak to what you're seeing within those emerging verticals that's resonating in the current environment and public sector specifically, it's an area we've gotten a lot of questions from investors around what you're enabling that's allowing the -- just the product set to really resonate there.

Sure. I'll take that one. So I think across both construction and public sector, it's really being driven by a desire to increase efficiency, especially I've been spending a lot of time with some state and local customers and prospects, and they're all looking to find savings and operational budgets without having to cut down staff. And that might be something as obvious as fuel savings from putting telematics devices out there and reducing engine idling. And then it can also mean reducing insurance claims for some of these large municipalities. So that's kind of the practical side of things. I think that's unchanged given the macro environment in terms of that interest. And really, these are areas that haven't digitized as heavily as you might expect. So as we kind of look industry by industry, construction and public sector are both areas where they historically had not bought a lot of telematics or safety monitoring systems that were connected. And now they see the value in it and they're looking to digitize.

Excellent. And Dominic, maybe just on broader margin. As you work through a more fluid environment, remind us how you approach the trade-off signals you're watching and how you're thinking about things like sales capacity within the current environment?

Yes. I mean we are looking at kind of a forecast on a monthly and quarterly basis. And on sales capacity, we're really looking at kind of the productivity from the sales reps. And if productivity is in line with where it was in previous years or if it's up, that gives us confidence that we can continue to add more capacity, and we saw that in Q1. So sales productivity was good. We've been adding more sales capacity, and we plan to continue to do so throughout the year.

The next question comes from Matt Hedberg with RBC, followed by Kirk Materne with Evercore.

Dom, you called out asset tags as part of the success you're seeing in equipment monitoring. That's great to hear. And I know it's still early. But when you are seeing wins, can you talk about what it's doing to ACV at this point?

It depends on a given deal. In some cases, it can be kind of the leading product for the customer use case. In some cases, it could be an add-on. In many of the examples, customers are trying it out on kind of one subset of assets before they're rolling it out wall-to-wall. We haven't really seen any kind of full deployments across a set of assets. But kind of 3 consistent case study -- use cases that we're seeing. First, lost or stolen asset. So if an item is missing, being able to find it very quickly. Second is really around worker efficiency. So cutting down the time that it takes for a worker to go out and find an asset somewhere. And then the last one is really around utilization. So if these things are moving or being used, we can pick that up and then it can help inform if customers should -- how they should manage their assets, if they need to buy more of them or if they can redeploy them to other areas.

So we're excited with the progress. We've been selling it now for about a year. And yes, it's been a good point of strength for equipment monitoring.

That's great. And then you noted that net new grew 8% constant currency in 1Q. And you're talking about kind of flattish or at least flattish net new for the remainder of the year. I'm curious, post Liberation Day and some of these deals that slipped, are you applying additional conservatism now to that guidance philosophy from an ARR perspective? Because previously, we talked about flat net new as well. So I'm just kind of curious on like sort of what the assumptions were in that net new commentary.

Yes. I mean, I would say for net new, where we provide some color on the modeling notes and revenue, our guidance philosophy is similar to previous quarters. We're trying to make sure that we're setting guidance with a lot of confidence and that accounts for various downside scenarios. If those downside scenarios don't ultimately play out, it has generally resulted in more outperformance, and you saw that obviously in Q1. So I think that's kind of how we're thinking about things. We feel good about being able to hit that even with downside scenarios. And if we don't see those come to fruition, we'd like to be able to do better than that.

The next question comes from Kirk Materne with Evercore, followed by Jim Fish with Piper Sandler.

On a nice start to the year. Sanjit, I was just wondering, can you talk a little bit about whether just AI in general is coming into the conversations with your clients? I realize they're really looking to have you guys help them with their operations with safety. But I'm just kind of curious about the role AI is now playing in those conversations as it's become just a bigger part of the broader zeitgeist in IT.

Yes, Kirk, I think absolutely, everyone that I've spoken with has interest in AI, and they see it as a transformational technology. That being said, our customers are really focused on clear and fast ROI. These are industries where they have a lot of operational complexity and they're looking for what can I really do with this AI. We've shown that with safety. We're able to really show that now on the efficiency side where we can really help you find signals and patterns in the data by having AI crunch through it. and then using our kind of vast data asset, as I was talking about with the workflow side of things.

So I think they're very interested in AI as a technology, but really as it applies to their operations and then what sort of savings can it help drive or what kind of risk can it help reduce.

That's super. And then just one follow-up for Dom, sort of similar and some other ones. But just visibility for you heading into the rest of the year, it sounded like you had a really good pipeline build quarter. Can you just talk a little bit about sort of visibility maybe today versus 3 months ago or just kind of how you're feeling about sort of the overall pipeline formation for the year?

Yes. I mean we're feeling good about the pipeline. And again, I think that taking a step back, like big market growing quickly, big opportunity for digital transformation. We add a ton of value for customers in terms of ROI very quickly. And I think the pipeline demonstrates the customer demand and interest. I think the visibility point is just around kind of what happens in the broader kind of macro environment and what impact does that have on our customers and therefore, on the kind of near-term priorities. So I think near term, the macro uncertainty provides some timing risk to deals. But more medium and long term, we feel really good about the position and the momentum.

The next question comes from Jim Fish with Piper Sandler, followed by Dan Jester with BMO.

Sanjit, circling back on the OEM side, how should we think or how should we expect both the exclusivity you have with the 3 that you have versus what you are looking to do with other OEMs? And could we see more partnerships?

And then, Don, for you around this, and I know Keith has multiple questions here asked around near-term gross margins. How should we think about the impact more longer term...

Sure. I'll cover the product side of things. So OEMs, more broadly speaking, are embedding this connectivity. They're doing it largely for their own reasons. They want to basically be able to service these assets more efficiently and get information back into the cloud. So that's where the partnerships lie is directly with the OEM. It's kind of a cloud-to-cloud connection. The majority of these partnerships are not exclusive. And I think it is just part of this kind of connected data strategy that many of them have.

That being said, our customers are looking for a single pane of glass. They want to not just see their trucks, but their construction equipment, their refrigeration units, they want to see it all in one place. And that's really unique in terms of what we're able to offer in terms of the scale and breadth. We have a large number of these OEM partnerships, and that's going to continue to be our strategy is get more folks on to the cloud.

And on the longer-term gross margin question, again, today, it's not a significant part of our ARR of our net new ACV in any given period, and so not a lot of impact to gross margins. Medium and longer term, it could be beneficial. I would expect it to be more gross margin accretive than the kind of the offering where we provide a device. But we would need to see that kind of part of the business scale up dramatically, and that's really driven by kind of customer interest.

Got it. And look, you guys called out the highest growth on transportation in 4 years, I believe, in the prepared remarks. But what are the drivers of that? And I guess, pun intended?

I would say, in general, transportation is an industry where efficiency and safety are really top priorities. So they're continuing to digitize. We've been gaining market share among the top and like leading transportation companies. So I think we're becoming better known. It was another strong quarter. I think it was our second largest vertical. So we expect to see it continue to grow, and there's a lot of trucks out there.

Okay. The next question comes from Dan Jester with BMO, followed by Matt Bullock with BofA.

Great. Maybe on the international side, great to hear the momentum in the business there. Maybe it's tough to break out, but I'd love just to hear your perspective on how much of that has just been from you building sales capacity in those regions versus some sort of discrete regulatory things that seem to be happening in Europe.

Yes, I'll take that one. We have been investing in the region for some time. We're excited to see 18% of net new ACV come from international. Europe has been a good driver of that. So we have achieved the product market fit, and that's been over a couple of years. I wouldn't say that there's any specific new regulatory tailwind other than now we're seeing more interest in digital technologies and digital transformation than maybe we were seeing 5 years ago.

Okay. Great. And then on the preventative maintenance piece, is that going to be something that's going to be targeted to specific types of businesses first? Or do you think that, that's going to be useful for the entire industry set in which you cover?

Yes. I think Dominic made the point earlier, but our customers across industries, they buy similar types of assets. If you think about the trucks, they show up with the same kinds of trucks in transportation as utilities and construction. So we do see kind of broad-based use of this product feature set. And from there, we'll expand based on customer feedback, but we believe it's going to be quite general.

The next question comes from Matt Bullock with BofA, followed by Dylan Becker with William Blair.

I wanted to ask a quick one on the upgrade program you launched this quarter. Are there any incremental details you can provide on the program? Has it catalyzed conversations on potential displacements? Did it contribute to the pipeline expansion you saw in 1Q? And then anything on incremental discounts through the program would be helpful.

Sure. So what we've been doing for a couple of years is helping customers do the transition. Some of these customers have legacy providers that they've been working with. They might be frustrated or looking for more functionality. And so in a number of these arrangements, that are 3- to 5-year contracts. As customers are coming towards the end of them, we've helped buy out the contracts. So really, this program is kind of making that a little more templatized, making it an easier on-ramp. So that's the context there. And in this macroeconomic environment, I think people are looking to find ways to go drive that efficiency, find those savings, and we want to make it easy for them to pick up Samsara and adopt it. That would be the high level. I don't think it's fundamentally changed the discounting and deals or anything like that. It's really just kind of made it easier for customers to understand we have an option for them if they're currently under contract with somebody else.

Got it. And then one quick follow-up, if I could. Could you provide an update on how the conversations are generally trending with some of those more strategic accounts, those accounts with 100,000-plus vehicles. Are those deals moving to the pipe as expected? What are you hearing from customers in general?

Sure. I'm happy to cover that one as well. So I think these customers are very interested in what we're doing. They are large, very complex operations. They often have many operating divisions. And so for them to either make a change or adopt a new technology for some of these companies, they don't have digital technologies deployed across their entirety of their fleet. It's a lot of change management. So I would say it continues to progress in terms of how they're working in the funnel, but these are multiyear sales cycles when you talk about strategic deals of that scale.

Next question comes from Dylan Becker with William Blair, followed by Mark Schappel with Loop Capital.

Maybe, Sanjit, for you, on the predictive or preventative piece, I wonder how you think about maybe in a tightening macro, kind of the growing importance with fewer excess assets out there, the kind of the strategic value of that solution as maybe customers think about optimizing kind of throughput and run time of existing assets and ensuring that those are fully operational for maybe as long as possible.

I think you put your finger on it. So this is exactly what we're hearing from customers is in this kind of environment where equipment is becoming either more expensive to procure, lead times might be changing, they're really trying to drive up utilization and get as much value as they can and perhaps run these assets a little bit longer by maintaining them in a smarter way. So our technologies really help with both of those. Dominic mentioned this with asset tags, but our connected equipment portfolio in general, we help you understand what assets are being used where, how often should you rebalance them.

And then as we're going deeper with our work in AI as it relates to fault codes and kind of diagnostics, that's an area where we can help you essentially extend the lifespan or the effective use life of these assets.

Okay. Great. And then maybe, Dom, for you, too, as we think about kind of the non-vehicle strength in the business as well, too, could you give us a sense of maybe the directional kind of attach where we sit today and maybe how you expect that to trend as well, too as more of these larger enterprise customers tend to land kind of multiproduct in nature?

Yes. It's been pretty consistent. It's kind of in the mid-teens in terms of overall ARR. We're continuing to grow and scale equipment monitoring and other and all these other kind of workflow applications. I think the usage continues to be much higher than the ARR mix. So more than 50% of our core customers and more than 2/3 of our large customers are using a non-vehicle-based application, and we're seeing that adoption pick up as we release more and more of these new products. And so I think that, that gives us a lot of excitement about the ability to kind of go more wall-to-wall in some of these customers with these non-vehicle assets to increase that overall ARR mix over time.

The next question comes from Mark Schappel with Loop Capital, followed by Alexei Gogolev with JPMorgan.

Sanjit, I was wondering if we could just circle back on the international opportunity. It's good to see the strength in Europe this quarter. I was wondering if you could give us a better sense, though, of where Europe is with respect to the U.S. in areas such as like video-based safety or next-gen telematics. How far behind, for example, are they in your view? And also, too, do you see a different set of competitors over there?

Sure. So I would say, first of all, our presence in the European market is a little uneven in the sense that we've been in the U.K. and Ireland the longest, and that's where we have the most presence there. There's, I think, good acceptance of video-based safety. They're very comfortable with connected cameras. And really, what's different is perhaps how mature their driver safety coaching programs are and things like that, but they're not very far behind. It's very similar to what we see in the U.S.

It's a little different on the continent in terms of in France and Germany, those are newer markets for us. We're making good headway there. And I think there, we've also seen certain industry verticals pick up the technology a little bit sooner and faster. And so I would say it still feels relatively early for us as we're a couple of years in the market. And I think -- I don't know, Dominic, if you want to add anything on Europe?

Yes. I just -- I think it's been a number of years of solid kind of investment focus and execution. Obviously, we talked about launching a few new products in Europe, the bridge striking alerting and the electronic brake monitoring. We've also been landing more and more lighthouse customers. You've heard us talk about companies like VINCI, Fortune 500 construction company and a number of others. And so just a lot of kind of steady progress and investment there.

And I think the second half of your question was around competition. It is a different set of competitors there. They tend to be more regionally focused. And so we're showing up with a fairly mature technology platform that has a lot of functionality, and we're in the process of tweaking the product to meet the needs of each region.

The next question comes from Alexei Gogolev with JPMorgan, followed by Alex Sklar with Raymond James. Okay. Let's go to Alex Sklar with Raymond James.

Dominic, on the dollar-based net retention, another strong quarter at 115%. Is that still...

Okay. I think we lost Alex there.

Let's go with Derrick Wood with TD Cowen. Derrick?

Hopefully, this hasn't been asked. But just with the extra market uncertainty out there, I'm wondering if perhaps in times like this, there could -- this opens up a window to gain share from legacy vendors. So I just -- I'm curious kind of what you're seeing out of the competitive landscape? And kind of do you have new strategies to look to drive up win rates or competitive displacements?

I don't think it's terribly different than when there is more macro stability. Again, I think we're coming, as Sanjit just said, with a platform with a lot of kind of functionality. And often cases, customers have not adopted any sort of digital technology around their operations, and we've got a market-leading product. And so I don't think that's any different now versus other periods of time. I think just more broadly, the kind of prioritization for customers with a lot of uncertainty around their near-term cost structure can create timing risk on some deals.

Sure. Don, just to follow up too. I know you guys have indicated that you expected to temper hiring this year. Any change in how to think about headcount growth plans? And has that changed since the beginning of the year?

No changes from the beginning of the year. I think just as a reminder, I think over the last couple of years, we really didn't make -- coming out of COVID, we really were kind of behind on hiring, and we really used the last kind of couple of years as catch-up years. And so this year was much more -- was planned to and continues to be planned to be more of a balanced year where productivity has been solid in Q1 and gives us the confidence to continue to add sales capacity, but we're kind of on track with what we expected at the beginning of the year.

Let's go back to Alex this time again to his connection back.

Great. Can you all hear me? Yes. All right. Sorry about that. So on the dollar-based net retention, 115%, again, another strong quarter. Is that still the right anchor for the rest of the year? And then when you look at the drivers behind that, any change in terms of contribution from growth in vehicles or units versus solutions versus kind of pricing at renewal?

No, yes. I think that's still our target for the year. We were able to achieve that in Q1, and that's what we're expecting for the rest of the year. Similar to in previous quarters and years, more of our expansion tends to come from upsells of existing licenses. So customers will land with multiple products out of the gate, but they'll just do it on a subset of their assets or their workers. And then over time, they'll come back and they'll buy more licenses of their existing products across a broader set of assets, whether it's geographies or different operating companies. And that's what we saw in Q1.

Okay. Great. And then maybe for you, Sanjit. You called out accelerating results from the field services end market. You had some PR earlier this week on that end market as well. Can you just talk about your focus there? Any particular solutions that you're focused on that are more tailored to that end market versus some of your others?

Well, it continues to be an area of interest. So in field services, the operations are a little different than in transportation and logistics. They have more site visits. They have more equipment. So areas like the asset tag or new products like the asset tag are helpful there in terms of filling out the portfolio. They're also now starting to adopt driver safety. Historically, it had been industries like long-haul transportation that have bought cameras. Most of the market, if you think about most of the commercial vehicles on the road, 80%, 90% of them don't have any kind of connected driver safety coaching program. Our field services customers, they think of their teams more as technicians or workers as opposed to drivers, and they're starting to see that they could actually reduce risk with technologies like this. So I think it's really just this is a segment of the market that's kind of activating and adopting these new technologies.

The next question comes from Junaid with Truist, followed by Alexei with JPMorgan.

Sanjit, I just wanted to ask about the adoption of some of your products around worker experience like workflows and training and how they're contributing to increased platform sales.

Sure. So on the workflow side, I mentioned earlier, there are some fairly standard workflows that we see hundreds of millions flow through our system on. So good adoption of those kind of digital technologies. I think there's increasing sort of awareness among the frontline workers in the market that digital is better. It's a better experience for them. They can attach photos from their smartphone and so on. So that's been really strong. We've enhanced that with some more recent AI functionality where we can now -- it's a visual intelligence feature where we can understand what exactly is in a scene from a photograph. So that's an area where we're seeing a lot of interest.

And on the training side, that's really part of this broader worker safety push that I was talking about earlier. You can see risk reduction come from in-cap coaching. You can see it come from sit-down coaching as well. But then being able to do relevant trainings, especially on a mobile device, especially in context of what's happened, that results in additional risk reduction, and we're seeing customers start to realize that, and that's drawing some of the sales through.

Okay. Our last question today comes from Alexei with JPMorgan.

Thank you, Mike. Sanjit, I had a question about this massive win with one of the largest counties. You've already provided broader public safety examples, but anything specific about that customer? What were the features that this customer was looking for? And was that decision perhaps related to the natural disasters in the area?

Sure. I would say there's really kind of 2 key use cases in that specific example. One is around just driving higher levels of efficiency. That's a better understanding of asset utilization, reducing areas like fuel consumption. So that would be one kind of cluster of interest from the customer. I will say for some of these counties that are in hazardous areas where they get affected by natural disasters, being able to locate assets like generators, for example, after a storm is very valuable. And then we shared a case study of the City of New Orleans, for example, they're trying to keep their citizens safe, being able to know where all these teams are at all times is helpful, especially in a disaster scenario. So efficiency, but also being able to be reactive and responsive for their citizens.

Great. This concludes the question-and-answer portion. Thank you all for attending our Q1 fiscal year 2026 earnings call. Before I let you go, I have a few short announcements.

First, we'll be attending the BMO Virtual Software Conference on June 9, the Mizuho Tech Conference in New York City on June 10 and the FBN Virtual Software Conference on June 11. We hope to see you at one of these events. Second, we are hosting our Investor Day on June 24 in San Diego, where we will provide additional insights into Samsara's trajectory and the overall state of physical operations. Please send an e-mail to [email protected], if you're interested in attending in person. For those who prefer to attend virtually, our Investor Relations website will have a link to a live broadcast.

That's it for today's meeting. If you have any follow-up questions, you can e-mail us at [email protected]. Bye, everyone.