Time to catch up on the IoT-based platforms of Samsara and Axon. Both are well-positioned with the ongoing modernization & digitization efforts finally spreading into in-the-field operations. These platforms leverage proprietary IoT hardware (with cloud-connected sensors and cameras) to collect a growing volume of real-time data, and are now leveraging AI over that pool of operational data to help automate workflows, create new products or add-ons, and further improve outcomes for customers.

Between the two, I have had a heavier position in Axon over the past year and a half, given its consistently strong growth at a larger scale, and the allure of the new AI add-ons being integrated across its software and hardware stacks (such as enhancing body cams with real-time translation and a voice-based AI "dispatcher"). It also didn't help that Samsara's fancy new pager wearable announced at Beyond left me underwhelmed, compared to Axon's new Body Workforce Mini for front-line workers that embeds a voice-based AI Assistant.

Samsara remains a very steady company with an extremely sticky platform that is vital to physical operations with vehicle and equipment fleets. I continue to like its positioning and product moves. Beyond the continued land-and-expand of their core (telematics, video safety, and equipment monitoring), Samsara has a lot of room to grow internationally and in emerging products. While I would have liked to see their FY27 guide show an uptick over last year's, I think Samsara can push on both of these areas to help growth reaccelerate.

  • The company continues to show a gradual topline slowdown. A wide set of newly emerging products is helping offset this decline, and the company has a number of software & AI directions it can go from here.
  • Samsara's data moat is accelerating. This is not only due to growth in the number of customers and assets tracked, but also the adoption of new software products and ecosystem integrations. This data moat enables them to move into even more software products.
  • Mgmt has shown a heavy focus on improving GAAP profitability over the past 2 years. GAAP TTM op margin rose +31pp over the past 2 years.
  • They've been GAAP net profitable for 2 quarters now, and op margin swung positive this quarter. While margins are likely to dip back to negative next quarter, FY27 was guided to be GAAP profitable.
  • They have consistently been at a Rule of 42 TTM over the past year.
  • They initially guided FY27 to +22.0%, which tracks closely with last year's initial guide (of +22.7%, which ended 7pp higher at +29.6%). To start the year off right, they gave the highest sequential guide in over a year for the coming Q1 (+2.6% seq vs +1.7% last year).
  • Int'l continues to grow faster than the US. It is only ~15% of the mix, indicating a long runway to continue expanding in newer geos (Canada, Mexico, UK, EU).
  • They just saw the highest seq growth in ARR in 2 years (+8.3%) and added record net new ARR (+$145M), which was way over the prior record (+$109M last Q4). This was clearly bolstered by the record net new from large customers (+$112M).
  • Large customers are growing ARR faster (+36.8%, +10.7% seq), and the largest customers (>$1M) even more so (+56%). Both have accelerated over the past 2Qs.
  • RPO grew to $3.77B (+42.1%, +11.5% seq), reaccelerating over the past 3Qs. cRPO grew faster than sub revenue.
  • Emerging product contribution has heavily increased over the past 2Qs. It has gone from 8% of net new ACV in Q2 to now 23%.
  • Asset Tag beacons continue to do well. They have improved battery life, added a smaller model, and expanded the Samsara Network to better track them indoors.
  • They just debuted a new embedded AI agent (Samsara Coach) to continually monitor driver safety and provide real-time feedback and post-event coaching. The AI appears as a customizable avatar in coaching videos and real-time audio. This is the first of several embedded AI agents to come, with hints of future ones for maintenance, compliance, and dispatching that help automate back-office processes.
  • The EU's strict tachograph regulations are expanding to light-duty vehicles in 3 months, increasing the number of commercial vehicles subject to these regulations by ~5x. Samsara is well-positioned to take advantage.
  • Motive is about to IPO. Despite being founded 2 years earlier, the S-1 shows they are 3 years behind Samsara in profitability, 4 years behind in revenue, and have ~1/6th of the large customers. Their platform is closest to Samsara's, but they are well behind Samsara in beacons. They do have some interesting product strategies that Samsara could eventually adopt, if desired.
  • Meanwhile, other competitors seem to be falling behind. Powerfleet seems likely to miss its organic guidance after lapping 2 massive mergers, and legacy player Geotab is finally moving into equipment monitoring (non-powered asset gateways and asset tags).

The market seems unsure about Samsara's prospects. Since the stock peaked in the mid-50s in late 2024 into 2025, it then bounced between the mid-30s and low-40s for the rest of the year. To start off 2026, the market had taken Samsara down another 28% from there, as part of the ongoing general malaise in software.

However, after Samsara recently reported Q426, the market seemed to wake up to the fact that, as a centralized system of record for fleet-based physical operations , Samsara isn't hurt by AI, but helped. The stock had recovered back to flat YTD, but then drifted down to  -11% YTD over the past few days. I think it remains attractive here.

Sections:

  • Q426 financial results
  • Major wins & public sector
  • Legal battle update
  • International push & EU regulatory changes
  • Product moves (Asset Tags & Samsara Coach)
  • Competitor review (Geotab, Powerfleet, & Motive)