Samsara (NYSE:IOT) Q1: Revenue Beats Expectations, But Shares Fall
Internet of Things company Samsara (NYSE:IOT) reported first-quarter 2024 results that beat Wall Street analysts’ expectations, with revenues up 37.4% year over year to $280.7 million. The company now expects revenues to be in line with analysts’ expectations of $289 million next quarter. GAAP loss per share was $0.10, improving from a loss of $0.13 in the same period last year.
Is now the time to buy Samsara? Find out with our full research report.
Samsara (IOT) Q1 2024 Highlights:
Revenue: $280.7 million, 3.1% above analyst estimates of $272.4 million.
EPS: -$0.10, analysts expected -$0.13 (23.5% higher)
The midpoint of its second-quarter 2024 revenue guidance is $289 million, roughly in line with analysts’ expectations.
Gross margin (GAAP): 75.6% (up from 71.8% in the same period last year)
Free cash flow was $18.61 million, up from -$43.97 million in the prior quarter.
Market cap: $18.73 billion
Samsara (NYSE:IOT), one of the few publicly traded companies with Marc Andreessen serving on its board of directors, provides software and hardware for tracking industrial equipment, assets and vehicles.
Data analysis
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Sales growth
As you can see below, Samsara’s revenue growth has been impressive over the past three years, increasing from $87.73 million in Q1 2022 to $280.70 million in the current quarter.
Samsara Total Revenue
As expected, it was another strong quarter for Samsara this year, with revenue growing 37.4% year over year. However, the company’s revenue only increased by $4.45 million in the first quarter, slowing growth compared to the previous quarter, compared to $38.74 million in Q4 2023. We expect to see further revenue growth quarter over quarter, but one-off fluctuations are typically nothing to be concerned about.
Based on its guidance for the next quarter, Samsara expects revenue to grow 31.8% year over year to $289 million, which would be a slowdown from 42.8% growth in the same period last year. Looking ahead, analysts covering the company had expected sales to grow 24.9% in the 12 months prior to the earnings results.
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Cash is king
If you’ve been following StockStory for a while, you know we love free cash flow. You may be wondering why. After all, we believe cash is king and you can’t use accounting profits to pay your bills. Samsara’s free cash flow was $18.61 million in the first quarter, up 134% year over year.
Samsara Free Cash Flow
Samsara burned through $12.12 million in cash over the last 12 months, resulting in a free cash flow margin of negative 1.2%. This low FCF margin is due to Samsara’s need to constantly reinvest in its business to stay competitive.
Key takeaways from Samsara’s first quarter results
Samsara had a great quarter, beating expectations and delivering profits. In layman’s terms, the company beat analysts’ revenue and EPS expectations, and also beat full-year revenue and EPS expectations. Shareholders should be optimistic about this result, but given the company’s high valuation and the stock’s sharp rise over the past few days, the market was probably expecting more. The company’s shares fell 6.2% after the announcement and are currently trading at $32.65 a share.
So, should you invest in Samsara right now? When making an investment decision, it’s important to consider its valuation, the quality of its business, and what happened in the most recent quarter. We cover that in our full, actionable research report, which you can read for free here.
