Samsara Inc. (NYSE:IOT) Beats Q3 Estimates and Raises Outlook Despite After-Hours Dip

Samsara Inc. (NYSE:IOT), a leader in connected operations technology, delivered third-quarter financial results that surpassed analyst expectations on both the top and bottom lines. However, the initial market reaction in after-hours trading was negative, with shares declining approximately 3.1% despite the strong performance and an improved full-year outlook.

Earnings and Revenue vs. Estimates

The company’s results for the quarter ended November 1, 2025, demonstrated robust growth, exceeding the forecasts set by Wall Street analysts.

• Revenue: Samsara reported total revenue of $416.0 million, a 29% increase year-over-year. This figure came in ahead of the analyst consensus estimate of approximately $402.5 million.
• Earnings Per Share (Non-GAAP): The company posted non-GAAP earnings per share (EPS) of $0.15, significantly higher than the $0.12 per share analysts had anticipated.

The beat was driven by strong execution and continued demand for its platform, which helps businesses manage physical operations like fleets, equipment, and frontline workers.

Market Reaction and Outlook

The post-earnings stock price decline presents a nuanced picture. While the quarterly results were solid, investor sentiment may be influenced by the company's guidance for the upcoming fourth quarter and the broader valuation context following a recent share price rally.

Samsara provided an outlook that aligns closely with, or slightly exceeds, current analyst expectations:

• Q4 FY2026 Revenue Guidance: The company expects revenue between $421 million and $423 million. The midpoint of $422 million is slightly above the analyst estimate of $423.3 million.
• Full-Year FY2026 Revenue Guidance: Samsara raised its full-year revenue outlook to a range of $1.595 billion to $1.597 billion, up from previous expectations and representing 28% year-over-year growth. This compares to an analyst consensus of approximately $1.593 billion.

The guidance suggests management confidence in continued growth, albeit at a slightly moderated pace for the next quarter. The market's muted reaction could reflect a "sell the news" dynamic after recent share strength, or perhaps a desire for an even greater guidance raise given the strong Q3 beat.

Key Highlights from the Quarterly Report

Beyond the financial figures, Samsara's earnings release highlighted several significant operational milestones:

• Record Large Customer Additions: The company added a record 219 customers with over $100,000 in Annual Recurring Revenue (ARR) and tied its record with 17 new customers exceeding $1 million in ARR.
• First Quarter of GAAP Profitability: Samsara achieved its first-ever quarter of profitability on a GAAP basis, a notable inflection point for the high-growth company.
• Strong ARR Growth: Ending ARR grew 29% year-over-year to $1.75 billion, with customers generating over $100,000 in ARR now representing more than $1 billion of the total.
• Product Innovation Driving Sales: 20% of net new Annual Contract Value (ACV) came from products launched in the last year, including AI-powered solutions for safety coaching and workflow automation.
• Improved Profitability Metrics: Non-GAAP operating margin expanded to 19%, up from 11% in the year-ago quarter, and operating cash flow increased significantly.

Conclusion

Samsara's third-quarter report paints a picture of a company executing at a high level, successfully scaling its operations while moving into profitability. The double beat on revenue and earnings, coupled with a raised full-year forecast, underscores the underlying strength of its business model and market demand for its Connected Operations Platform.

The disconnect between the strong fundamentals and the negative after-hours price action highlights how market expectations and technical factors can influence short-term trading. Investors will now focus on the company's ability to maintain its growth trajectory and expanding margins as it moves into the next fiscal year.

For a detailed look at Samsara's historical earnings, future estimates, and analyst projections, you can review the data here.

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