Samsara Q2 FY2027 Earnings: 30% Revenue Growth Extends GAAP Profitability

Samsara Inc. (NYSE: IOT) reported Q2 FY2027 revenue of $508.4 million, up 30% year over year, while GAAP diluted EPS improved to $0.03 from a loss of $0.03. For the quarter ended August 1, 2026, ending ARR also grew 30% to $2.125 billion, and slower expense growth helped the company remain GAAP profitable for a fourth consecutive quarter.

Core Financial Results

Reported revenue grew 30%, compared with 29% on a constant-currency basis, indicating a modest benefit from exchange-rate movements. Operating expenses increased approximately 18%, slower than revenue, allowing GAAP operating income to turn positive even as the gross margin remained unchanged.

The quarter also produced higher operating and free cash flow, while both GAAP and non-GAAP earnings improved.

Large Customers Continued to Lead ARR Growth

Net new ARR reached $134.1 million, increasing 28% on both a reported and constant-currency basis. Customers generating more than $1 million in ARR collectively contributed over $500 million of ARR, up more than 50% for the third consecutive quarter.

This large-customer cohort grew faster than total ARR, supporting management’s view that enterprise accounts remain the primary source of momentum. CEO and co-founder Sanjit Biswas also said adoption of some newer AI features increased more than fourfold over the preceding two months, although Samsara did not quantify their contribution to revenue or ARR.

Revenue Growth Outpaced Expenses, but Stock-Based Compensation Remained Material

GAAP operating margin improved to 1% from negative 7%, while non-GAAP operating margin rose to 21% from 15%. Non-GAAP operating income was $106.0 million, compared with GAAP operating income of $4.9 million.

Stock-based compensation expense was $96.4 million and accounted for most of the approximately $101.1 million difference between the two operating-profit measures. Samsara’s underlying operating leverage improved, but the size of this non-cash compensation expense remains important when evaluating the gap between GAAP and non-GAAP profitability.

Cash Flow and Balance Sheet

Operating cash flow increased to $73.5 million, or 14% of revenue, and free cash flow rose to $64.7 million, or 13% of revenue. Cash generation exceeded GAAP net income partly because of the $96.4 million non-cash stock-based compensation expense.

Working-capital and operating investments offset part of that benefit. Accounts receivable used $53.1 million of cash during the quarter, connected-device costs used $31.0 million, and deferred commissions used $20.7 million.

At August 1, 2026, Samsara held approximately $1.33 billion in cash, cash equivalents, and short- and long-term investments, up from approximately $1.24 billion at January 31, 2026. Inventory increased to $57.0 million from $48.2 million over the same period.

Guidance

Samsara’s outlook points to a moderation in revenue growth from the 30% reported in Q2. The company nevertheless expects to remain GAAP profitable while maintaining a 21% non-GAAP operating margin in both Q3 and the full fiscal year.

Currency movements are expected to add $2 million to Q3 revenue guidance and $10 million to the full-year outlook.

Recent Insider Transactions

Over the reported six-month period, insiders purchased 8,371,353 shares across 24 transactions and sold 7,236,221 shares across 43 transactions, resulting in net purchases of 1,135,132 shares. The latest 10 reported transactions were all sales, but that fact alone does not establish insiders’ views on the company’s prospects.

Risks for Investors to Watch

• Slower growth in the outlook: Q3 guidance calls for 24% reported revenue growth, below the 30% achieved in Q2. Sustaining ARR expansion as the revenue base grows will be a central operating test.
• A thin GAAP operating margin: Despite turning profitable, GAAP operating margin was only 1%. The company has limited room to absorb a meaningful slowdown or faster expense growth without pressuring operating profit.
• Material stock-based compensation: Quarterly stock-based compensation of $96.4 million created a substantial difference between GAAP and non-GAAP results and contributed significantly to operating cash flow.
• Dependence on continued large-customer expansion: Customers above $1 million in ARR are growing faster than the company overall. Any slowdown in attracting or expanding these accounts could weigh on net new ARR.
• Working-capital investment: Accounts receivable, connected-device costs, and deferred commissions consumed cash during the quarter, partially offsetting the benefit from profitability and non-cash expenses.

Summary

Samsara’s Q2 FY2027 results combined 30% revenue and ARR growth with another quarter of GAAP profitability and higher free cash flow. Large customers remained the main growth engine, while operating expenses rose more slowly than revenue. Investors’ next focus will be whether Samsara can deliver its guided growth moderation without giving back its margin gains, while narrowing the sizable gap between GAAP and non-GAAP earnings.