Key Highlights
- Samsara delivered Q1 fiscal 2027 adjusted EPS of $0.17, surpassing analyst expectations of $0.13, while revenue reached $478.8 million versus the projected $455.2 million.
- The company achieved a major milestone with annual recurring revenue reaching $2 billion, representing 30% year-over-year growth, while ARR from customers spending over $1 million annually soared 62%.
- Management elevated fiscal 2027 revenue projections to $2.005–$2.013 billion, exceeding both previous guidance and Wall Street forecasts.
- Shares declined approximately 3% in premarket activity to $34.18, following the previous session’s close at $35.21.
- RBC Capital upgraded its price target from $41 to $42 while keeping an Outperform rating, though the adjustment failed to stem the decline.
Samsara (IOT) delivered impressive quarterly results Thursday, yet shareholders opted to book profits regardless. The stock retreated to $34.18 during Friday’s premarket session, representing roughly a 3% decline from its $35.21 closing price.
The IoT technology provider reported adjusted earnings per share of $0.17 for its fiscal 2027 first quarter, significantly exceeding the analyst consensus of $0.13. Top-line performance reached $478.8 million, marking 31% year-over-year expansion and comfortably beating expectations of $455.2 million.
The company reached a significant milestone as annual recurring revenue surpassed $2 billion for the first time, climbing 30% compared to the prior year period. Net new ARR increased 30% to $100.7 million, while ARR from enterprise customers spending more than $1 million annually accelerated 62% — marking the fourth consecutive quarter of acceleration in this metric.
Adjusted operating margin improved to 19% compared to 14% in the year-ago period. Management attributed the margin expansion to enhanced operational efficiency spanning sales operations, research and development, and administrative functions.
CEO Sanjit Biswas emphasized the achievement of GAAP earnings per share profitability for three straight quarters. He identified increasing labor shortages at customer sites as a primary catalyst driving adoption of Samsara’s artificial intelligence-enabled automation solutions.
AI Infrastructure Boom Creating New Opportunities
Samsara management also emphasized the accelerating construction of AI data centers as a favorable secular trend. The company noted that infrastructure spending — encompassing power generation systems, cooling infrastructure, and electrical grid enhancements — is increasingly flowing toward the physical industries within its addressable market, establishing sustained demand patterns.
The quarter concluded with 3,363 customers generating at least $100,000 in ARR and 190 customers exceeding the $1 million ARR threshold. Management closed 11 new contracts worth over $1 million in net new annual contract value, representing the company’s second-strongest quarter on record for such deals.
Emerging product offerings accounted for more than 20% of net new annual contract value for the second straight quarter.
Raised Forecast Falls Short of Elevated Expectations
For the complete fiscal 2027 year, Samsara increased adjusted EPS projections to $0.70–$0.72 from the previous range of $0.65–$0.69, surpassing the consensus estimate of $0.68. Revenue guidance was elevated to $2.005–$2.013 billion, up from prior guidance of $1.965–$1.975 billion and exceeding Wall Street’s $1.971 billion projection.
Second quarter revenue guidance was set at $482–$484 million compared to analyst expectations of $480 million — a modest outperformance that failed to ignite investor enthusiasm.
This limited upside buffer appears to explain the market’s negative reaction. IOT shares had already rallied approximately 20% following the previous quarter’s report in March, establishing a higher threshold for sustained momentum following earnings announcements.
RBC Capital elevated its price objective to $42 from $41 while maintaining its Outperform rating, representing a positive yet measured response.
The stock remains notably below its 52-week peak of $47.47, though continues trading above its 52-week low of $23.38.
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