IoT solutions provider Samsara (NYSE: IOT) reported revenue ahead of Wall Street’s expectations in Q4 CY2025, with sales up 28.3% year on year to $444.3 million. Guidance for next quarter’s revenue was optimistic at $455 million at the midpoint, 2.6% above analysts’ estimates. Its non-GAAP profit of $0.18 per share was 40.9% above analysts’ consensus estimates.

Is now the time to buy Samsara? Find out by accessing our full research report, it’s free.

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

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Samsara grew its sales at an incredible 45.3% 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.

We at StockStory place the most emphasis on long-term growth, but within software, a half-decade historical view may miss recent innovations or disruptive industry trends. Samsara’s annualized revenue growth of 31.4% 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 28.3%, and its $444.3 million of revenue topped Wall Street estimates by 5.2%. Company management is currently guiding for a 24% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 18.3% over the next 12 months, a deceleration versus the last two years. Still, this projection is admirable and implies the market sees success for its products and services.

ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention.

AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice.

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 $1.89 billion in Q4, and over the last four quarters, its growth was fantastic as it averaged 29.8% 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 represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.

Samsara is very efficient at acquiring new customers, and its CAC payback period checked in at 26.5 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 Q4 Results

We were impressed by how significantly Samsara blew past analysts’ EBITDA expectations this quarter. We were also glad its full-year EPS guidance trumped Wall Street’s estimates. On the other hand, its billings missed and its revenue guidance for next year suggests growth will slow. Overall, we think this was still a solid quarter with some key areas of upside. The stock traded up 14.2% to $34.01 immediately following the results.

Sure, Samsara had a solid quarter, but if we look at the bigger picture, is this stock a buy? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).