Samsara delivers strong growth with large customers as its Connected Operations Cloud continues to gain momentum

Derek du Preez Profile picture for user ddpreez March 8, 2024
Summary:
Despite challenging macroeconomic conditions, Samsara and its Connected Operations Cloud continue to thrive, as the vendor achieves $1.102 billion in ARR.

Image of someone holding a smartphone with a connected city in the background
(Image by Gerd Altmann from Pixabay )

Connected Operations Cloud vendor Samsara has delivered a strong set of Q4 and Full Year 2024 earnings, showcasing the momentum of its Connected Operations Cloud - particularly with larger industrial customers. Despite challenging macroeconomic conditions, Samsara’s successful financial year is likely an indication of the amount of headroom it has in focusing a largely untapped physical operations market. 

When diginomica sat down with Samsara CEO Sanjit Biswas at the end of last year, he said that the company’s $1 billion annual run rate is significant, but added that it is still early days in terms of market penetration - given how long physical operations buyers have had to rely on manual processes and tools. 

The key numbers released this week include: 

  • Q4 revenue of $276.3 million, representing 48% year-over-year growth, or 37% year-over-year adjusted revenue growth

  •  Ending ARR of $1.102 billion, representing 39% year-over-year growth

  • 1,848 customers with ARR over $100,000, up 49% year-over-year

  • In Q4 Samsara added 11 customers to the $1 million+ ARR cohort

Commenting on the results, Biswas said: 

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 solves 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 a 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.

Customer insights

Biswas was keen to note that Samsara’s large customer momentum continues to fuel the vendor’s growth, with the CEO stating that the Connected Operations Cloud delivers buyers visibility into their operations and “clear ROI with payback periods often measured in months”. 

During the earnings call, Biswas highlighted two such examples from Q4. The first was USIC, a provider of underground public utility locating services, which has more than 12,000 technicians in 48 states. USIC is Samsara’s largest new logo and largest net new ACV deal ever, with Biswas stating: 

Their technicians mark utility lines to ensure public safety and to protect and maintain our critical infrastructure. 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 customer example was an expanded partnership with a leading provider of commercial and residential roofing, siding, windows decking and installation in the North American building industry. Biswas said that the customer is a Fortune 500 company with more than 2,300 vehicles, 7,000 team members, across 500 locations. He said: 

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.

Outside of the US, Biswas said that Q4 was also strong for international growth, with 16% of net new ACV coming from non-US geographies. The CEO said that expanding reach and gaining new customers in Mexico, Canada and Western Europe is key to the company’s future growth. Commenting on one customer example, Biswas said: 

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.

My take

No denying that this was an excellent set of results for Samsara, which has had a successful year despite challenging conditions. It’s evident that the key to its success has been delivering results quickly for companies that have long been ignored by the enterprise software market. Whilst others try to squeeze more juice out of digitally mature organizations to deliver growth, Samsara has plenty of headroom to in a market that is looking for solutions. 

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