Samsara has delivered another successful quarter, as CEO Sanjit Biswas continues to double down on the company’s ambition to become the ‘system of record’ for large-scale physical operations. Companies operating in this area have largely been ignored by cloud vendors in recent years and still rely on manual processes to achieve their outcomes - meaning that there is plenty of room for upswing still, for Samsara.
Speaking to analysts this week, Biswas said that Samsara had now exceeded 1,000 customers with an ARR of over $100,000.
Samsara started out by providing fleet management solutions to small and mid-sized trucking businesses, connecting sensors in vehicles to its management software in the cloud to help track mileage and other performance indicators. The company now offers more sophisticated AI-enabled video solutions in-vehicle, where it actually coaches drivers to drive more safely.
It has since expanded to include workflow technologies to companies with huge physical operations and its Connected Operations Cloud uses AI and machine learning to provide companies with the intelligence they need to run either more safely, more sustainably or more efficiently.
The key figures for Q3 2023 include:
Revenue of $169.8 million, representing 49% year-over-year growth
Ending ARR of $723.7 million, representing 47% year-over-year growth
1,113 customers with ARR over $100,000, up 56% year-over-year
1,100 customers paying over $100,000 AAR, up by 120 compared to last quarter
Commenting on the numbers and the current macro headwinds, Biswas said:
During the quarter, Samsara's Chief Product Officer Jeff Hausman, and I met in person with over 30 customers across North America and Europe. I’m always inspired by the strength and resilience of our customer base. Our customers are the critical infrastructure that power the global economy.
And their industries makeup over 40% of the world’s GDP. The span diverse industries that include food distributors, chemical companies, energy utilities, freight carriers, and municipalities.
Many of them have been around for over half a century so they are no strangers to the challenging economic cycles. Our customers are essential. They keep the world running and are incredibly resilient. In this macroeconomic uncertainty, our customers are focused on achieving their business goals.
And in terms of where they are seeking value from with Samsara, Biswas added:
They're looking for new ways to maximize every dollar invested into their businesses. Right now, they're focused on asset efficiency, worker availability, and maintaining safe and compliant operations.
As a system of record for physical operations, Samsara delivers value across each of these areas by digitizing their day-to-day tasks and workflows. Clear and direct ROI continues to be a priority for physical operations customers. They love investing in technology when it's a clear win.
Samsara also added its 200th partner integration to its platform this quarter, which it cites as a sign of a growing ecosystem in its field of connected operations. Current integration partners, which utilize the Samsara Connected Operations Cloud to build applications, already include General Motors and Free2move.
Biswas used the earnings call to run through some examples of how customers are currently using Samsara’s platform to manage their critical infrastructure. For instance, referencing a waste transportation and container rental company in Texas, which is using Samsara to improve driver safety and safeguard drivers from false accusations, Biswas said:
With Samsara's video-based Safety driver coaching, they decreased speeding by 58% in one-year. They also helped exonerate drivers from more than 50% of accidents. This application alone equated to estimated savings of $500,000 in annual insurance premiums, representing a five-month payback period for their entire multi-product investment. They've also turned their safety culture into a retention multiplier.
In this instance, their driver turnover rate dropped to 26%, which is three times lower than the industry average of 80% to 90%. Retaining skilled workers is a massive cost reduction lever and is especially important given today's labor shortage.
Biswas added that inflationary pressures remain top of mind for the vendor’s customers and he argued that Samsara's platform is a deflationary technology that can help buyers control costs. Citing an infrastructure provider that serves more than 40 US states, and is using Samsara’s vehicle telematics, video-based safety, and equipment monitoring solutions, Biswas said:
They saved an estimated $11 million by using Samsara’s Equipment Monitoring to optimize asset usage across their multiple subsidiaries, representing a five-month payback period for their entire multiproduct Samsara investment.
With real time operational data, they've identified inefficiencies in their equipment usage and sold their underutilized equipment, freeing up cash flow to invest in other areas. Optimizing asset utilization is a particularly relevant topic for physical operations customers who now face record wait times for new vehicles and equipment.
Reinforcing that Samsara is aiming to become the system of record of choice for these large scale physical operations companies, Biswas said:
These case studies represent a snap out of how Samsara customers are getting clear and fast ROI to our platform. As a system of record for our customers daily physical operations, the amount of insights and cost savings our platform can generate is tremendous. Trillions of data points now flow through our platform every year, providing companies with rich insights that can help them control costs, improve safety, and reduce emissions.
What makes our data unique is not the sheer volume alone, it's the breadth and depth of the data. We are able to pull data from all aspects of the company's physical operations from vehicles, to equipment, to buildings.
All of this business critical data exists in an open platform and can be seamlessly integrated with a robust ecosystem of partners, including OEMs, IT systems, insurance providers, and vertical specific applications.
Samsara is tackling this industry in a way that others have failed to - holistically. By providing a data-centric platform that caters to specific use cases, those in the world of physical operations are relieved of having to do a lot of the heavy lifting themselves. There is still a change management piece that requires a lot of thought and there are plenty of learnings to be had on that front, but given how this sector has been ignored for so long, there is lots of opportunity here for this vendor. Will it achieve a $1 billion run rate next year? The odds are looking likely.