IoT solutions provider Samsara (NYSE: IOT) beat Wall Street’s revenue expectations in Q2 CY2026, with sales up 29.9% year on year to $508.4 million. Guidance for next quarter’s revenue was better than expected at $515 million at the midpoint, 1% above analysts’ estimates. Its non-GAAP profit of $0.20 per share was 27.4% above analysts’ consensus estimates.
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Samsara (IOT) Q2 CY2026 Highlights:
- Revenue: $508.4 million vs analyst estimates of $483.4 million (29.9% year-on-year growth, 5.2% beat)
- Adjusted EPS: $0.20 vs analyst estimates of $0.16 (27.4% beat)
- Adjusted Operating Income: $106 million vs analyst estimates of $87.09 million (20.8% margin, 21.7% beat)
- The company lifted its revenue guidance for the full year to $2.05 billion at the midpoint from $2.01 billion, a 1.8% increase
- Management raised its full-year Adjusted EPS guidance to $0.77 at the midpoint, a 8.5% increase
- Operating Margin: 1%, up from -6.8% in the same quarter last year
- Free Cash Flow Margin: 12.7%, down from 15.3% in the previous quarter
- Annual Recurring Revenue: $2.13 billion (29.6% year-on-year growth, beat)
- Billings: $530.2 million at quarter end, up 24.5% year on year
- Market Capitalization: $21.44 billion
Company Overview
From sensors on vehicles to AI-powered cameras that help prevent accidents, Samsara (NYSE: IOT) is a cloud-based Internet of Things platform that helps businesses improve the safety, efficiency, and sustainability of their physical operations.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Samsara grew its sales at an incredible 41.1% compounded annual growth rate. Its growth surpassed the average software company and shows its offerings resonate with customers, a great starting point for our analysis.
Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. Samsara’s annualized revenue growth of 29.9% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
This quarter, Samsara reported robust year-on-year revenue growth of 29.9%, and its $508.4 million of revenue topped Wall Street estimates by 5.2%. Company management is currently guiding for a 23.8% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 19.2% over the next 12 months, a deceleration versus the last two years. Still, this projection is admirable and indicates the market sees success for its products and services.
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Annual Recurring Revenue
While reported revenue for a software company can include low-margin items like implementation fees, annual recurring revenue (ARR) is a sum of the next 12 months of contracted revenue purely from software subscriptions, or the high-margin, predictable revenue streams that make SaaS businesses so valuable.
Samsara’s ARR punched in at $2.13 billion in Q2, and over the last four quarters, its growth was fantastic as it averaged 29.6% year-on-year increases. This performance aligned with its total sales growth and shows that customers are willing to take multi-year bets on the company’s technology. Its growth also makes Samsara a more predictable business, a tailwind for its valuation as investors typically prefer businesses with recurring revenue. 
Customer Acquisition Efficiency
The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.
Samsara is very efficient at acquiring new customers, and its CAC payback period checked in at 24.5 months this quarter. The company’s rapid recovery of its customer acquisition costs indicates it has a highly differentiated product offering and a strong brand reputation. These dynamics give Samsara more resources to pursue new product initiatives while maintaining the flexibility to increase its sales and marketing investments. 
Key Takeaways from Samsara’s Q2 Results
We were impressed by how significantly Samsara blew past analysts’ adjusted operating income expectations this quarter. We were also glad its full-year EPS guidance trumped Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 12.1% to $43.65 immediately after reporting.
Sure, Samsara had a solid quarter, but if we look at the bigger picture, is this stock a buy? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
