Samsara Inc. (NYSE:IOT) Q4 2024 Earnings Call Transcript March 7, 2024
Samsara Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good afternoon, and welcome to Samsara’s Fourth Quarter Fiscal 2024 Earnings Call. I am Mike Chang, Samsara’s Vice President of Corporate Development and Investor Relations. 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 7, 2024, 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, some of our discussions will include our fourth quarter fiscal 2024 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 the call up for Q&A. With that, I’ll hand over the call to Sanjit.
Sanjit Biswas: Thanks, Mike, and thank you, everyone, for joining us today. Samsara’s FY ’24 was another year of durable and efficient growth. We ended FY ’24 with an ARR of $1.1 billion, growing 39% year-over-year. During the year we added 611 customers into our $100,000-plus ARR cohort, bringing us to 1,848 large customers in total. Our momentum reflects the continued strength of our platform and the large market opportunity ahead of us. Several factors drove our execution. First, we are addressing a large market that’s early in its digitization journey. Our customers represent the industries that drive more than 40% of the global GDP and are the backbone of the economy. Second, we pioneered the Connected Operations Cloud, a singular system of record for physical operations to address this market.
Third, we have built a multi-application platform that solve our customers’ most challenging problems. We have a unique IoT dataset that includes data from a broad and diverse group of vehicles, equipment, sites, and workers. It is also fed by growing ecosystem of connected assets and third-party systems. And last, our increasing scale and strong unit economics, drive operational efficiency. While we’re still in the early innings of our customers’ digitization journeys, we are proud of our progress and impact so far. In just eight years of selling, we are operating at a rare combination of scale, growth, and profitability. We are the strategic partner to many of the world’s leading and most complex physical operations organizations. And our large customer momentum continues to fuel our growth.
We provide visibility into their operations and deliver clear ROI with payback periods often measured in months. Q4 was a milestone quarter for our large customers. We added a record 185 customers into $100,000-plus ARR cohort. This represents our fastest-growing customer group. We also added a record 11 customers into our $1 million-plus ARR cohort. I’d like to share two examples from this quarter that show our momentum with large customers. The first is with USIC, which is our largest new logo and our largest net new ACV deal ever. USIC is the leading provider of underground public utility locating services with more than 12,000 technicians in 48 states. Their technicians mark utility lines to ensure public safety and to protect and maintain our critical infrastructure.
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Q&A Session
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At the core of USIC is their Safe-Life culture, which is focused on eliminating at-risk behaviors and empowering their employees to protect themselves, their team members, and their communities. They are using our video-based safety application to strengthen their safety program. They have already seen significant results. In a pilot with Samsara, USIC reduced mobile phone usage by 92%, no seatbelt usage by 85%, and rolling stops by 50%. We also expect USIC to increase fuel efficiency across its fleet with our Vehicle Telematics. This means less carbon emissions and lower fuel costs. The second is our expanded partnership with the leading provider of commercial and residential roofing, siding, windows decking, and installation in North American building industry.
They are a Fortune 500 company with more than 2,300 vehicles and 7,000 team members across 500 locations. They became a customer a quarter ago with Telematics only. This quarter, they expanded with over $1 million Video-Based Safety and Mobile Experience Management applications. One of their core values is to make every day safer. They’re using Video-Based Safety to improve safety, reduce accidents, and exonerate drivers. They consolidated three vendors into one with Mobile Experience Management, which they are using to reduce mobile distractions and keep drivers safe. In an early pilot with Samsara, they saw an 85% reduction in total safety events and 91% reduction in distracted driving, and a 77% reduction in collision risk events. These results deliver clear ROI to our customers.
We are proud to partner with them to achieve their core values and operational goals. Samsara’s Connected Operations Cloud is powered by a flywheel of data from our customers’ growing digitization efforts. This enables AI-driven insights to help our customers operate more safely, efficiently, and sustainably. We’ve been investing in our cloud, which continues to grow and become more sophisticated. Over the last fiscal year, our Cloud processed more than 9 trillion data points and 75 billion API calls, digitized more than 230 million workflows across our platform and recorded more than 60 billion miles driven. Our partner ecosystem, Samsara’s App Marketplace, has also grown to include more than 270 integrations with third-party systems. Our growing dataset accelerates our ability to deliver even more insights, so our customers can take action and improve their operations.
This helps our customers operate their businesses in completely new ways. They can also drive even more business impact while saving money. For example, many of our customers use real-time insights from our Connected Operations Cloud to drive operational actions. This results in fuel savings, lower insurance premiums, lower maintenance costs, improved asset utilization, and better worker hiring and retention. As we build for the long term, we are focused on expanding our multi-product platform, growing our international markets, and increasing our investments in security, and scaling our unique culture, which fuels our growth. This quarter, we released our Connected Forms application into general availability. Connected Forms a workflow solution that allows our customers’ frontline workers to streamline their operations.
This includes inspections and incident reports through digital forms. A good example of how customers are already finding value with Connected Forms is with NexTier. NexTier recently merged with Patterson UTI to form the second-largest oilfield services company in the US. They’ve been a customer since 2021 and expanded their partnership with us in Q4 to use Connected Forms. They’re using Connected Forms to help reduce operational risk. Connected Forms ensures that each trip is safe and necessary to perform, considering the weather, hazardous road conditions, and driver readiness. This quarter was also strong for international growth, with 16% of net new ACV coming from non-US geographies. As we look to the future, we are continuing to expand and gain customers in our new frontiers, including Mexico, Canada, and Western Europe.
One of our key international wins this quarter is a major European construction services business with over 120 local operating companies and 17,000 employees. They deliver over 25,000 projects annually across many civil engineering and construction sectors. Samsara has partnered with them to advance their core values of safety, sustainability, and integrity. They’re using Samsara’s Video-Based Safety and Telematics products to help prevent accidents, reduce idling, lower insurance costs, and transition to an electric fleet. We’ve also continued to focus on protecting our customers and their data. Announced today, Samsara has achieved four industry-leading ISO certifications. This demonstrates our commitment to data security and privacy. It is an important step as we build on our strong foundation of customer data protection, data security, and privacy management.
And last, as we grow and scale, our differentiated culture allows us to amplify our impact on our customers and communities. In Q4, Glassdoor recognized Samsara as one of the Best Places to Work in 2024, and we are thrilled to have received many Best Places to Work recognitions throughout the year. We are proud of this milestone year. We surpassed $1 billion in ARR at 39% year-over-year growth, became adjusted free cash flow positive, and consistently achieve Rule of 40 in all four quarters. We are operating at a rare combination of scale, growth, and profitability. It was an exciting quarter and year, delivering on our mission to increase the safety, efficiency, and sustainability of the operations that power the global economy. We are grateful for the opportunity to partner with our customers as they modernize their operations.
We look forward to another year of innovating and building solutions for our customers. Thank you to our customers, partners, investors, and Samsarians who are joining us on this journey. We’re also excited to see many of you at our annual customer conference, Beyond, on June 26th to 28th in Chicago, where we will also be hosting an Investor Day. At Beyond, we’ll be bringing together leaders across the industries we serve to discuss the state of physical operations, the challenges they’re facing and new ways to use Samsara to deliver value through digitization. We will also be announcing new products to further drive transformation for our customers. We hope you’ll join us. I’ll now hand it over to Dominic to go over the financial highlights from the quarter.
