Samsara (IOT $42.23 +3.05%) reports Q3 FY27 results, for the quarter ended October 31, 2026, on Thursday, December 3. The company announced the date on November 2; its last four reports all came after the US market close, followed by a call with analysts.
The shares closed at $40.98 on November 6, 69% above their February 5 close of $24.25, the low of the past year, and a little above the $38.75 they closed at before the last report. Samsara has beaten the top of its own revenue guide in every quarter on our record, by $16 million to $24 million in each of the last four, and the stock still swung from +19.5% to -1.2% the next day.
Twenty-one analysts expect revenue of $515.2 million, and the highest of them is at $516.1 million, the top of the company's $514 million to $516 million range. We think the guide is lower than the revenue Samsara already had on its books when the quarter began. We forecast $539 million.
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Samsara Q3 FY27 earnings: quick answers
When does Samsara report? Thursday, December 3, 2026, after the market close, as in past quarters.
What do analysts expect? Revenue of $515.2 million (21 analysts, $514.6 million to $516.1 million) and non-GAAP EPS of $0.19 (22 analysts), from the analyst estimates snapshot of October 13. For the fourth quarter the average is $543.0 million, and for the full fiscal year $2,045.4 million.
What did Samsara guide? For the third quarter, revenue of $514 million to $516 million, a non-GAAP operating margin of 21% and non-GAAP EPS of $0.18 to $0.19. For the year, revenue of $2.043 billion to $2.047 billion, a 21% non-GAAP operating margin and non-GAAP EPS of $0.76 to $0.78.
What do we forecast? Revenue of $539 million, ending ARR of about $2.25 billion, non-GAAP operating income of about $119 million and non-GAAP EPS of $0.22: a beat on every line, above every analyst.
How much could the stock move? The December 4 options price a move of about 16.8%, or $6.88, either way from the $40.98 close, in a thinly traded chain (options chain). The last four reports moved the stock +11.1%, +19.5%, -1.2% and +3.7% the next day.
How heavily is Samsara shorted? 32.8 million shares on October 15, about 5.6% of the shares outstanding and 7.4 days of average volume (short interest); the most-shorted stocks (MOST-SHORTED) list shows how that compares.
Why Q3 revenue will beat
Samsara sells subscriptions to its Connected Operations platform: vehicle gateways, AI dash cameras and sensors that feed software for fleets, equipment and sites. About 98% of its revenue comes from those subscriptions, which typically run three to five years and are recognized over the term, according to the 10-K. That makes the quarter unusually easy to model. The company defines annual recurring revenue (ARR) as "the annualized value of subscription contracts that have commenced revenue recognition as of the measurement date."
That definition does most of the work. At August 1, ARR was $2,124.7 million, so the contracts already producing revenue on the first day of the third quarter were worth $531.2 million a quarter. If Samsara signed nothing new and lost nothing, revenue would land near that figure. The guide's $514 million to $516 million sits below it.
| Quarter | ARR at the start | Starting run rate (ARR ÷ 4) | Guide midpoint | Guide as % of run rate | Actual revenue | Actual as % of run rate |
|---|---|---|---|---|---|---|
| Q3 FY26 | $1,640.1M | $410.0M | $399M | 97.3% | $416.0M | 101.5% |
| Q4 FY26 | $1,745.1M | $436.3M | $422M | 96.7% | $444.3M | 101.8% |
| Q1 FY27 | $1,889.9M | $472.5M | $455M | 96.3% | $478.8M | 101.3% |
| Q2 FY27 | $1,990.6M | $497.7M | $483M | 97.1% | $508.4M | 102.2% |
| Q3 FY27 | $2,124.7M | $531.2M | $515M | 97.0% | our $539.2M | 101.5% |
The fourth quarter of fiscal 2026 is derived: the full year less the first nine months. Every guide in the table started about 3% below the run rate already on the books, and every quarter finished 1.3% to 2.2% above it. Applying the lowest of the four actual ratios, 101.3%, to this quarter's starting run rate gives $538.3 million; the highest gives $542.7 million.
The finance chief says as much about the method:
“Our guidance philosophy remains the same and is de-risked for potential downside scenarios.”
Dominic Phillips, CFO, Q2 FY27 earnings call
Net new ARR adds on top of the starting run rate. A contract that begins in the middle of the quarter contributes about half a quarter of revenue, so each $10 million of net new ARR added evenly through the quarter is worth about $1.25 million of third-quarter revenue. Net new ARR was $134.1 million in the second quarter, up 28% from a year earlier, and $485 million over the last twelve months.
Net new ARR is the change in ARR between quarter ends, from the company's releases. Last year the third quarter added $105.0 million, about the same as the second, before the fourth quarter jumped to $144.8 million.
Our forecast for Q3 and Q4
| Q2 FY27 actual | Q3 FY27 forecast | Q3 consensus | Q3 guide | Q4 FY27 forecast | Q4 consensus | |
|---|---|---|---|---|---|---|
| Net new ARR | $134.1M | $130.0M | n/a | n/a | $159.3M | n/a |
| Ending ARR | $2,124.7M | $2,254.7M | n/a | n/a | $2,414.0M | n/a |
| Revenue | $508.4M | $539.2M | $515.2M | $514M to $516M | $571.9M | $543.0M |
| Non-GAAP operating income | $106.0M | $118.6M | n/a | about $108M (21%) | n/a | n/a |
| Non-GAAP EPS | $0.20 | $0.22 | $0.19 | $0.18 to $0.19 | n/a | $0.21 |
How we get there:
- Net new ARR of $130 million. Slightly below the second quarter's $134.1 million, because last year the third quarter matched the second rather than beat it, and 24% above last year's $105.0 million, a little slower than the 28% to 30% growth of the first two quarters. Ending ARR would be $2,254.7 million, up 29.2% from a year earlier.
- Revenue at 98.5% of average ARR. Revenue has run at 97.8% to 98.8% of the average of opening and closing ARR, divided by four, over the last six quarters, and at 98.8% in the second quarter. We use 98.5%, because Mr. Phillips expects bookings to land later in the quarter than they did in the second (below). Average ARR of $2,189.7 million gives $539.2 million.
- The bridge from the second quarter. A full quarter of the August 1 ARR adds $22.7 million to the second quarter's $508.4 million, net new ARR signed during the quarter adds $16.3 million, and the usual gap between revenue and ARR takes off $8.2 million.
For the fourth quarter we add $159.3 million of net new ARR, only 10% above last year's seasonally strong $144.8 million, and use 98.0% of average ARR, close to last year's fourth-quarter 97.8%, for $571.9 million. The full year would then be $2,098.4 million, $51.4 million above the top of the company's guide and $53.0 million above the consensus. The guide's own fourth quarter, the full-year midpoint less the first half and the third-quarter midpoint, is only $542.7 million, 96.3% of the $563.7 million quarterly run rate our ARR forecast implies at October 31: the same discount Samsara has built into every recent guide.
Upside case, $542.7 million: net new ARR of $145 million, about 38% above a year earlier, on more large deals and AI Multicam upgrades, with revenue at the second quarter's 98.8% of average ARR.
Downside case, $532.2 million: net new ARR falls to $95 million, below last year's $105.0 million, and revenue runs at 98.0% of average ARR as bookings slip to the end of the quarter. Even then revenue clears the top of the guide by about $16 million in our model. With no net new ARR at all and revenue at 97.8% of ARR, the weakest ratio of the last six quarters, it would still be $519.4 million, above the top of the range.
The second-quarter linearity question
The one reason to expect a smaller beat is in the call. Samsara's second-quarter revenue was helped by deals that started earlier in the quarter than usual, and management does not expect that to repeat:
“Q2, you know, revenue outperformance was driven by really strong bookings and slightly better linearity than what we've seen in previous quarters. As I think about the guidance that we've provided for the rest of the year, we're expecting more kind of normalized bookings linearity in those quarters in the way that that results in revenue.”
Dominic Phillips, CFO, Q2 FY27 earnings call
The numbers back him up: the second quarter's 98.8% revenue-to-average-ARR ratio was the highest of the last six quarters. But linearity moves the ratio by about one point, worth about $5 million, while the gap between the guide and the starting run rate is $16 million. The table above already shows four quarters of normal and better-than-normal linearity, and every one of them beat the top of the guide by about $16 million or more.
The guide's 24% growth also compares with 28% to 31% reported growth in each of the last four quarters. The company assumes currency adds about $2 million to third-quarter revenue, so constant-currency growth of 23% to 24% would be a sharp slowdown from the 29% of the second quarter, with no sign of one in ARR, which grew 30% for the third straight quarter.
Large customers are carrying the growth
Customers with more than $100,000 of ARR reached 3,605 at August 1, after a record 242 were added in the quarter, and they account for $1.3 billion of ARR, up 38% from a year earlier and 63% of the total, from 59% a year before. Customers above $1 million rose by a record 20 to 210, with more than $500 million of ARR, growing more than 50% for the third straight quarter. Nine deals of more than $1 million of net new annual contract value were signed in the quarter.
Mr. Phillips said more than 20% of net new annual contract value came from what Samsara calls emerging products, such as AI Multicam, connected asset maintenance and Ground Intelligence, for the third straight quarter, and that core products still have room:
“50% of commercial vehicles in North America are still not connected, and 85% of commercial vehicles don't have an AI dash camera.”
Dominic Phillips, CFO, Q2 FY27 earnings call
Contracted revenue supports the run rate. Remaining performance obligations were $4,285.2 million at August 1, of which about $1,838.9 million is expected to become revenue in the next twelve months, according to the 10-Q. Current deferred revenue rose to $728.9 million from $679.3 million at January 31.
Margins
Non-GAAP gross margin has held between 76.5% and 78.5% for six quarters, and non-GAAP operating margin has risen from 13.9% to 20.8%. Samsara guided 21% for the third quarter. It beat its operating-margin guide by 2.8 to 4.7 points in each of the last four quarters, mostly because the revenue beat fell through to profit.
We forecast a 22.0% operating margin, $118.6 million, one point above the guide rather than the usual three to five, because device costs are rising. Samsara buys the gateways and cameras up front and recognizes the revenue over the contract, and the company has warned that its hardware is getting more expensive:
“We now expect free cash flow margin to be approximately 100 basis points lower than FY26, primarily due to more IoT devices required to support our stronger growth outlook, proactively purchasing more inventory to create a buffer given the strong customer demand we're seeing, and elevated supply chain costs in the second half of the year.”
Dominic Phillips, CFO, Q2 FY27 earnings call
Adding the $11.4 million of interest and other income net of tax from the second quarter and dividing by about 591.5 million diluted shares gives non-GAAP EPS of $0.22, against $0.19 expected. GAAP profit is thin: operating income was $4.9 million in the second quarter, after $101.1 million of stock-based compensation and related charges, about 20% of revenue. The company expects to stay GAAP profitable in the third quarter, its fifth in a row.
Balance sheet and dilution
Samsara had $291.4 million of cash and $537.5 million of short-term investments at August 1, $828.9 million in all, and no borrowings. Inventory was $57.0 million and capitalized device costs, the hardware deployed at customers and expensed over the contract, $333.9 million, up from $297.2 million at January 31, which is where the higher device costs show up first.
Basic weighted shares rose 2.2% from a year earlier, to 584.1 million in the second quarter; diluted shares were 590.5 million. The 10-Q reports no share repurchases.
What management said
On adoption of the newest products, in the second-quarter release:
“Our large customers continue to drive our momentum, and customer adoption of some of our latest AI features is up more than 4x in the last two months.”
Sanjit Biswas, CEO and co-founder, Q2 FY27 release
On the public sector, asked whether the September end of the US federal fiscal year matters:
“Yeah, we don't have the same dynamic that other software companies have with the federal government having a 3Q year end. most of our public sector, you know, are state and local municipalities, and so it's a little bit more consistent throughout the year”
Dominic Phillips, CFO, Q2 FY27 earnings call
So the third quarter should not depend on a federal budget flush, unlike software companies that sell to agencies. The public sector still contributed its second-highest share of net new annual contract value in the second quarter, led by a top-five US city, the MBTA and the state of Louisiana.
Positioning
- Short interest. 32.8 million shares on October 15, 7.4 days to cover, down from 42.2 million on June 30 (short interest). Short sellers covered into the summer rally and have added about 4 million shares since mid-August.
- Options. The December 4 options price a move of about 16.8%, with at-the-money implied volatility of 79.1%. Open interest is small, 318 calls and 102 puts on November 5, so the chain says little about positioning.
- Insiders. No open-market purchases. Co-founders Sanjit Biswas and John Bicket sold about $32.4 million of Class A stock each between September 29 and October 29, at $37.67 to $45.00, all under 10b5-1 plans, and each gave 305,000 shares as gifts in mid-September (insider trading). CFO Dominic Phillips sells on a monthly schedule, most recently on November 2 at $41.47. In mid-September the two founders still held about 58 million and 62 million Class B shares indirectly.
- Valuation. At $40.98 the market value is about $24.0 billion, or about $23.2 billion after cash and investments: 12.5 times trailing revenue and 11.0 times our fiscal 2027 forecast, against a peer median price-to-sales of 5.3 times for similar-size infrastructure software companies (financials). The stock is priced for growth near 30% to continue.
Our assumptions
| Assumption | Value | Basis |
|---|---|---|
| Q3 net new ARR | $130.0M | Q2 $134.1M; Q3 FY26 $105.0M; 24% growth |
| Q3 revenue as % of average ARR ÷ 4 | 98.5% | 97.8% to 98.8% over six quarters; Q2 98.8% |
| Q4 net new ARR | $159.3M | Q4 FY26 $144.8M plus 10% |
| Q4 revenue as % of average ARR ÷ 4 | 98.0% | Q4 FY26 97.8% |
| Q3 non-GAAP operating margin | 22.0% | Guide 21%; beats of 2.8 to 4.7 points, less device costs |
| Non-GAAP interest and other income, net of tax | $11.4M | Q2 FY27 |
| Diluted shares | 591.5M | Q2 590.5M plus issuance |
Risks to our forecast
- Currency. 18% of net new annual contract value came from outside the US in the second quarter. The guide uses exchange rates of August 2, and a stronger dollar since then would cut reported revenue by a few million dollars.
- Bookings linearity. If most third-quarter contracts started in late October, revenue could run nearer 97.8% of average ARR, the low end of the range, worth about $4 million less than our base case.
- A slowdown in net new ARR. Fleets in trucking, construction and field services are cyclical. A quarter well below $105 million would not threaten revenue, which is set by the opening ARR, but it would hurt the fourth quarter and the stock.
- Device costs. Higher prices for memory and other components raise the cost of each gateway and camera. They reach the income statement slowly, through capitalized device costs, but they are already cutting the free cash flow outlook.
- Expectations. At 12.5 times trailing revenue, a revenue beat of the usual size may already be expected by investors, if not by the published consensus. The stock fell 1.2% after the first-quarter beat and gave back most of a 15.9% opening gain after the second.
What to watch on the call
- Net new ARR against $105.0 million, last year's third quarter. Growth of 20% or more would keep the 30% ARR growth rate intact for a fourth quarter.
- The fourth-quarter guide. The current full-year guide implies about $543 million. If ARR ends near our $2.25 billion, the usual 97% discount would put the new fourth-quarter guide near $547 million; a guide well below that would be the first sign of real caution.
- Free cash flow and inventory. Whether the 100-basis-point cut to the free cash flow margin outlook grows, and how much inventory Samsara bought ahead of price increases.
- $100,000-plus customer additions after the record 242, and whether products launched in the last few years stay above 20% of new annual contract value.
- AI features. Adoption figures for AI Multicam and the agents shown at the Beyond conference, which management says are the newest source of upsell on hardware already in the field.
Sources
- Q2 FY27 release, 8-K filed 2026-09-03, accession 0001628280-26-060438: ARR, net new ARR, revenue, margins and Q3 and FY27 guidance.
- Q2 FY27 10-Q, filed 2026-09-08, accession 0001628280-26-060909: balance sheet, remaining performance obligations, share counts.
- Q1 FY27 release, 8-K filed 2026-06-04, accession 0001628280-26-040788.
- Q4 FY26 release, 8-K filed 2026-03-05, accession 0001628280-26-015170.
- Q3 FY26 release, 8-K filed 2025-12-04, accession 0001628280-25-055355.
- Q2 FY26 release, 8-K filed 2025-09-04, accession 0001642896-25-000070.
- Q2 FY27 earnings call, September 3, 2026.
- Analyst consensus: Equibles analyst estimates, snapshot of October 13, 2026. Short interest: FINRA, settlement of October 15, 2026. Options: December 4, 2026 expiry, open interest of November 5. Prices: closes through November 6, 2026.
This article is our analysis of public filings and our own financial model. It is not investment advice, and forecasts can be wrong. Equibles staff may hold positions in the securities discussed.