Samsara Inc.

Previous wording

Please read the following discussion and analysis of our financial condition and results of operations together with our consolidated financial statements and related notes included under Part II, Item 8 of this Annual Report on Form 10-K. Some of the information contained in the following discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that could impact our business. In particular, we encourage you to review the risks and uncertainties described in “Part I, Item 1A. Risk Factors” or included elsewhere in this report. These risks and uncertainties could cause actual results to differ materially from those projected in forward-looking statements contained in this report or implied by past results and trends. Forward-looking statements are statements that attempt to forecast or anticipate future developments in our business, financial condition, or results of operations. See the section titled “Special Note Regarding Forward-Looking Statements” in this report. These statements, like all statements in this report, speak only as of their date (unless another date is indicated), and we undertake no obligation to update or revise these statements in light of future developments. Our fiscal year ends on the Saturday closest to February 1, resulting in a 52-week or 53-week fiscal year. Our fiscal year 2024 was a 53-week fiscal year, with the fourth quarter consisting of 14 weeks, and fiscal years 2023 and 2022 each consisted of 52 weeks, with the fourth quarter consisting of 13 weeks.

Current wording

Please read the following discussion and analysis of our financial condition and results of operations together with our audited consolidated financial statements and related notes included under Part II, Item 8 of this Annual Report on Form 10-K. Some of the information contained in the following discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that could impact our business. In particular, we encourage you to review the risks and uncertainties described in “Part I, Item 1A. Risk Factors” or included elsewhere in this report. These risks and uncertainties could cause actual results to differ materially from those projected in forward-looking statements contained in this report or implied by past results and trends. Forward-looking statements are statements that attempt to forecast or anticipate future developments in our business, financial condition, or results of operations. See the section titled “Special Note Regarding Forward-Looking Statements” in this report. These statements, like all statements in this report, speak only as of their date (unless another date is indicated), and we undertake no obligation to update or revise these statements in light of future developments. Our fiscal year ends on the Saturday closest to February 1, resulting in a 52-week or 53-week fiscal year. Our fiscal years 2025 and 2023 each consisted of 52 weeks, with the fourth quarter consisting of 13 weeks, and our fiscal year 2024 consisted of 53 weeks, with the fourth quarter consisting of 14 weeks.

Previous wording

Our Connected Operations Cloud consolidates data from our IoT devices and a growing ecosystem of connected assets and third-party systems, and makes it easy for organizations to access, analyze, and act on data insights, using our cloud dashboard, custom alerts and reports, mobile apps, and workflows. Our differentiated, purpose-built suite of Applications enables organizations to embrace and deploy a digital, cloud-connected strategy across their operations. With Samsara, customers have the ability to drive safer operations, increase business efficiency, and achieve their sustainability goals, all to improve the lives of their employees and the customers they serve.

Current wording

Our Connected Operations Platform consolidates data from our IoT devices and a growing ecosystem of connected assets and third-party systems, and makes it easy for organizations to access, analyze, and act on data insights using our cloud dashboard, custom alerts and reports, mobile apps, and workflows. Our differentiated, purpose-built suite of Applications enables organizations to embrace and deploy a digital, cloud-connected strategy across their operations. With Samsara, customers have the ability to drive safer operations, increase business efficiency, and achieve their sustainability goals, all to improve the lives of their employees and the customers they serve.

Previous wording

We were founded in 2015 and have achieved significant growth since our inception. For the fiscal years ended February 3, 2024 and January 28, 2023, our revenue was $937.4 million and $652.5 million, respectively, representing year-over-year growth of 44% or year-over-year adjusted revenue growth of 41%. Our net loss was $286.7 million and $247.4 million for the fiscal years ended February 3, 2024 and January 28, 2023, respectively. Our business model focuses on maximizing the lifetime value of our customer relationships, and we continue to make significant investments to grow our customer base.

Current wording

We were founded in 2015 and have achieved significant growth since our inception. For the fiscal years ended February 1, 2025 and February 3, 2024, our revenue was $1,249.2 million and $937.4 million, respectively, representing year-over-year growth of 33%. Our net loss was $154.9 million and $286.7 million for the fiscal years ended February 1, 2025 and February 3, 2024, respectively. Our business model focuses on maximizing the lifetime value of our customer relationships, and we continue to make significant investments to grow our customer base.

Previous wording

In each of the past two fiscal years, we generated approximately 98% of our revenue from subscriptions to our Connected Operations Cloud, which today includes Applications for Video-Based Safety, Vehicle Telematics, Mobile Apps and Workflows, Equipment Monitoring, and Site Visibility. A subscription to our Connected Operations Cloud includes IoT data collection, which usually comes from a Samsara IoT device, such as an internet gateway, camera or sensor, or at times from a third-party solution; cellular connectivity for our IoT devices; access to our cloud Applications, application programming interfaces, and the Samsara App Marketplace; customer support; and warranty coverage. We generally price our subscriptions on a per asset, per application basis. For example, one vehicle using two Applications (Video-Based Safety and Vehicle Telematics) would count as two subscriptions.

Current wording

In each of the past two fiscal years, we generated approximately 98% of our revenue from subscriptions to our Connected Operations Platform, which today includes Applications for Video-Based Safety, Vehicle Telematics, Workforce Apps, Equipment Monitoring, and Site Visibility. A subscription to our Connected Operations Platform includes IoT data collection, which usually comes from a Samsara IoT device, such as an internet gateway, camera or sensor, or at times from a third-party solution; cellular connectivity for our IoT devices; access to our cloud Applications, application programming interfaces, and the Samsara App Marketplace; customer support; and warranty coverage. We generally price our subscriptions on a per asset, per application basis. For example, one vehicle using two Applications (Video-Based Safety and Vehicle Telematics) would count as two subscriptions.

Previous wording

Our Connected Operations Cloud is designed to be a digital hub for our customers and a mission-critical part of their operations. Our criticality and integration into existing infrastructure is demonstrated by long contract lengths, which typically span an initial term of three to five years and are generally non-cancelable and non-refundable, subject to limited exceptions under our standard terms of service and other exceptions for public sector customers, who are often subject to annual budget appropriations cycles. We recognize revenue from our subscriptions ratably over the term of the contract. We bill monthly, quarterly, semi-annually, annually, or in advance, depending on the specifics of each contract.

Current wording

Our Connected Operations Platform is designed to be a digital hub for our customers and a mission-critical part of their operations. Our criticality and integration into existing infrastructure is demonstrated by long contract lengths, which typically span an initial term of three to five years and are generally non-cancelable and non-refundable, subject to limited exceptions under our standard terms of service and other exceptions for public sector customers, who are often subject to annual budget appropriations cycles. We recognize revenue from our subscriptions ratably over the term of the contract. We bill monthly, quarterly, semi-annually, annually, or in advance, depending on the specific terms of each contract.

Previous wording

Our go-to-market strategy is focused on landing new customers and expanding their adoption of our Connected Operations Cloud. We primarily sell through a direct sales force, which focuses on landing and expanding large and mid-market customers with numerous physical assets. We also sell through resellers, which expands our reach and allows us to access certain customer channels more efficiently. Additionally, we offer self-service and low-touch inbound sales to attract a broad range of smaller customers onto our platform.

Current wording

Our go-to-market strategy is focused on landing new customers and expanding their adoption of our Connected Operations Platform. We primarily sell through a direct sales force, which focuses on landing and expanding large and mid-market customers with numerous physical assets. We also sell through resellers, which expands our reach and allows us to access certain customer channels more efficiently. Additionally, we offer self-service and low-touch inbound sales to attract a broad range of smaller customers onto our platform.

Previous wording

As our business has scaled, we have increasingly focused our sales efforts on larger customers. As of February 3, 2024, we had more than 16,000 customers, each representing $10,000 or more in annual recurring revenue (“ARR”), or Core Customers 5, and approximately 92% of our ARR came from Core Customers. Our customer counts fluctuate from period to period, including due to customer mergers, acquisitions, consolidations, spin-offs, and other market activity. We have a very diverse customer base and no significant customer concentration, with no single customer accounting for more than 1% of our ARR as of February 3, 2024.

Current wording

As our business has scaled, we have increasingly focused our sales efforts on larger customers. As of February 1, 2025, we had more than 20,000 customers, each representing $10,000 or more in ARR, or Core Customers, and approximately 93% of our ARR came from Core Customers. Our customer counts fluctuate from period to period, including due to customer mergers, acquisitions, consolidations, spin-offs, and other market activity. We have a very diverse customer base and no significant customer concentration, with no single customer accounting for more than 1% of our ARR as of February 1, 2025.

Previous wording

Our solution is used by businesses of varying sizes across a broad range of industries that depend on physical operations, including: transportation, construction, wholesale and retail trade, field services, logistics, utilities and energy, government, healthcare and education, manufacturing, food and beverage, and others. Our industry-agnostic approach and the horizontal applicability of our solution have enabled us to deploy our platform to a diverse set of industries.

Current wording

Our solution is used by businesses of varying sizes across a broad range of industries that depend on physical operations, including: transportation, construction, wholesale and retail trade, field services, logistics, manufacturing, utilities and energy, government, healthcare and education, food and beverage, and others. Our industry-agnostic approach and the horizontal applicability of our solution have enabled us to deploy our platform to a diverse set of industries.

Previous wording

We have extended our Applications over time to address the needs of our customers. We started with Applications for connected fleets, where we observed a large and underpenetrated market opportunity, and then expanded into connected equipment and connected sites, where we observed similar opportunities to improve operations around physical assets. As of February 3, 2024, over 80% of our Core Customers and 90% of our customers representing over $100,000 in ARR are using multiple Applications. Two of our Applications, Video-Based Safety and Vehicle Telematics, each represented more than $400 million of ARR and grew more than 30% year-over-year, and one of our Applications, Connected Equipment, represented more than $100 million of ARR and grew more than 30% year-over-year as of February 3, 2024. We believe this demonstrates the flexibility of our solution and our ability to develop and grow new Applications.

Current wording

We have extended our Applications over time to address the needs of our customers. We started with Applications for connected fleets, where we observed a large and underpenetrated market opportunity, and then expanded into connected equipment and connected sites, where we observed similar opportunities to improve operations around physical assets. As of February 1, 2025, over 80% of our Core Customers and 90% of our customers representing over $100,000 in ARR are using multiple Applications. We believe this demonstrates the flexibility of our solution and our ability to develop and grow new Applications.

Previous wording

Our key focus is multi-application adoption. Customers may land with large-scale, multi-application contracts, or land with one application within one division and expand their adoption over time. Regardless of how our customers land, we focus on expanding their usage of Connected Operations Cloud and encourage full-scale rollouts across their geographies and divisions.

Current wording

Our key focus is multi-application adoption. Customers may land with large-scale, multi-application contracts, or land with one application within one division and expand their adoption over time. Regardless of how our customers land, we focus on expanding their usage of Connected Operations Platform and encourage full-scale rollouts across their geographies and divisions.

Previous wording

While our Connected Operations Cloud is accessible to customers of all sizes and we have achieved rapid adoption over time, we are particularly focused on larger customers representing over $100,000 in ARR. As of February 3, 2024, approximately 52% of our ARR came from customers representing over $100,000 in ARR. These customers generally contribute higher revenue, land with multiple products, have higher retention rates, and demonstrate stronger unit economics. The number of our customers representing over $100,000 in ARR has increased over time from 1,237 as of January 28, 2023 to 1,848 customers as of February 3, 2024. Customers representing over $100,000 in ARR generally adopt more Applications than our overall customer base. For example, as of February 3, 2024, more than 90% of these customers use two or more Applications and more than 50% use three or more Applications.

Current wording

While our Connected Operations Platform is accessible to customers of all sizes and we have achieved rapid adoption over time, we are particularly focused on larger customers representing over $100,000 in ARR. As of February 1, 2025, approximately 55% of our ARR came from customers representing over $100,000 in ARR. These customers generally contribute higher revenue, land with multiple products, have higher retention rates, and demonstrate stronger unit economics. The number of our customers representing over $100,000 in ARR has increased over time from 1,848 as of February 3, 2024 to 2,506 customers as of February 1, 2025. Customers representing over $100,000 in ARR generally adopt more Applications than our overall customer base. For example, as of February 1, 2025, more than 90% of these large customers use two or more Applications and more than 60% use three or more Applications.

Previous wording

We believe that ARR is a key indicator of the trajectory of our business performance, enables measurement of the progress of our business initiatives, and serves as an indicator of future growth. We define ARR as the annualized value of subscription contracts that have commenced revenue recognition as of the measurement date. ARR highlights trends that may be less visible from our financial statements due to ratable revenue recognition. ARR does not have a standardized meaning and is not necessarily comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and is not intended to be combined with or replace it. ARR is not a forecast, and the active contracts at the date used in calculating ARR may or may not be extended or renewed. Our ARR has grown in each of the past two fiscal years, reflecting growth in new customers as well as expanded sales to existing customers.

Current wording

We believe that ARR is a key indicator of the trajectory of our business performance, enables measurement of the progress of our business initiatives, and serves as an indicator of future growth. We define ARR as the annualized value of subscription contracts that have commenced revenue recognition as of the measurement date. ARR highlights trends that may be less visible from our financial statements due to ratable revenue recognition. ARR does not have a standardized meaning and is not necessarily comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and is not intended to be combined with or replace it. ARR is not a forecast, and the active contracts at the date used in calculating ARR may or may not be renewed. Our ARR has grown in each of the past two fiscal years, reflecting growth in new customers as well as expanded sales to existing customers. For all international customer contracts denominated in currencies other than the U.S. dollar, ARR is translated from local currency to U.S. dollar based on the currency exchange rate as of the effective date of the contract.

Previous wording

We believe that we have a substantial opportunity to continue to grow our customer base. We intend to drive new customer acquisition by continuing to invest significantly in sales and marketing to engage our prospective customers, increase brand awareness, and drive adoption of our Connected Operations Cloud. Our ability to attract new customers depends on a number of factors, including the effectiveness of our sales and marketing efforts, macroeconomic factors and their impact on our customers’ businesses, and the success of our efforts to expand internationally.

Current wording

We believe that we have a substantial opportunity to continue to grow our customer base. We intend to drive new customer acquisition by continuing to invest significantly in sales and marketing to engage our prospective customers, increase brand awareness, and drive adoption of our Connected Operations Platform. Our ability to attract new customers depends on a number of factors, including the effectiveness of our sales and marketing efforts, macroeconomic factors and their impact on our customers’ businesses, and the success of our efforts to expand internationally.

Previous wording

We believe that there is a significant opportunity to expand sales to existing customers following their initial adoption of our Connected Operations Cloud. We expand within our customer base by selling more Applications and expanding existing Applications across geographies and divisions. Our ability to expand within our customer base will depend on a number of factors, including our customers’ satisfaction, pricing, competition, macroeconomic factors, and changes in our customers’ spending levels.

Current wording

We believe that there is a significant opportunity to expand sales to existing customers following their initial adoption of our Connected Operations Platform. We expand within our customer base by selling more Applications and expanding existing Applications across geographies and divisions. Our ability to expand within our customer base will depend on a number of factors, including our customers’ satisfaction, pricing, competition, macroeconomic factors, and changes in our customers’ spending levels.

Previous wording

Our performance is driven by continuous innovation on our Connected Operations Cloud and our ability to scale our headcount to grow our business. We continuously invest in adding new data types to our Connected Operations Cloud and innovate with this growing data asset to introduce new Applications over time. Our performance is also impacted by our ability to scale our headcount across our business to support our growth. We have increased our headcount from 2,266 employees as of the last business day of the fiscal year ended January 28, 2023 to 2,895 employees as of the last business day of the fiscal year ended February 3, 2024. We remain committed to investing in our sales and marketing capacity and our research and development organization, and to driving revenue growth globally.

Current wording

Our performance is driven by continuous innovation on our Connected Operations Platform and our ability to scale our headcount to grow our business. We continuously invest in adding new data types to our Connected Operations Platform and innovate with this growing data asset to introduce new Applications over time. Our performance is also impacted by our ability to scale our headcount across our business to support our growth. We have increased our headcount from 2,895 employees as of the last business day of the fiscal year ended February 3, 2024 to more than 3,500 full-time employees as of the last business day of the fiscal year ended February 1, 2025. We remain committed to investing in our sales and marketing capacity and our research and development organization, and to driving revenue growth globally.

Previous wording

Unfavorable conditions in the economy, both in the United States and abroad, may negatively affect the growth of our business and our results of operations. For example, our business and results of operations could be affected by global macroeconomic trends and events such as inflationary pressure, interest rate increases and declines in consumer confidence, widespread disruptions of supply chains and freight and shipping channels, increased prices for many goods and services (including fluctuating fuel costs), labor shortages, delayed or reduced spending on IT products, and significant volatility and disruption of financial markets, as well as other conditions arising from international conflicts, such as the ongoing conflict between Russia and Ukraine, geopolitical tensions involving China, and the conflict in Israel and Gaza, uncertainty around the outcome of political elections, and the emergence of pandemics and epidemics. We are continuously monitoring these global events and other macroeconomic developments and how they may impact us directly or indirectly as a result of the effects on our customers and suppliers.

Current wording

Unfavorable conditions in the economy, both in the United States and abroad, may negatively affect the growth of our business and our results of operations. For example, our business and results of operations could be affected by global macroeconomic trends and events such as inflationary pressure, fluctuations in foreign currency exchange rates, interest rate increases and declines in consumer confidence, widespread disruptions of supply chains and freight and shipping channels, increased prices for many goods and services (including fluctuating fuel costs), labor shortages, delayed or reduced spending on IT products, and significant volatility and disruption of financial markets, as well as other conditions arising from international conflicts, such as the ongoing conflict between Russia and Ukraine, geopolitical tensions involving China, and the conflict in the Middle East, the outcome of political elections, new monetary, fiscal, and trade policies (including tariff policies and import and export restrictions), and the emergence of public health crises. We are continuously monitoring these global events and other macroeconomic developments and how they may impact us directly or indirectly as a result of the effects on our customers and suppliers.

Previous wording

We provide access to our Connected Operations Cloud through subscription arrangements, whereby the customer is charged a per-subscription fee for access for a specified term. Subscription agreements contain multiple service elements for one or more of our cloud-based Applications via mobile app(s) or a website that enable data collection and provide access to the cellular network, IoT devices (which we also refer to as connected devices), and support services delivered over the term of the arrangement. Our subscription contracts typically have an initial term of three to five years and are generally non-cancelable and non-refundable, subject to limited exceptions under our standard terms of service and other exceptions for public sector customers, who are often subject to annual budget appropriations cycles. Our Connected Operations Cloud and IoT devices are highly interdependent and interrelated, and represent a combined performance obligation within the context of the contract.

Current wording

We provide access to our Connected Operations Platform through subscription arrangements, whereby the customer is charged a per-subscription fee for access for a specified term. Subscription agreements contain multiple service elements for one or more of our cloud-based Applications via mobile app(s) or a website that enable data collection and provide access to the cellular network, IoT devices (which we also refer to as connected devices), and support services delivered over the term of the arrangement. Our subscription contracts typically have an initial term of three to five years and are generally non-cancelable and non-refundable, subject to limited exceptions under our standard terms of service and other exceptions for public sector customers, who are often subject to annual budget appropriations cycles. Our Connected Operations Platform and IoT devices are highly interdependent and interrelated, and represent a combined performance obligation within the context of the contract.

Previous wording

In each of our past two fiscal years, we generated approximately 98% of our revenue from subscriptions to our Connected Operations Cloud. The remaining portion of our revenue not generated from subscriptions to our Connected Operations Cloud is derived from the sale of replacement IoT devices, including gateways, sensors and cameras, related shipping and handling fees, and professional services.

Current wording

In each of our past two fiscal years, we generated approximately 98% of our revenue from subscriptions to our Connected Operations Platform. The remaining portion of our revenue not generated from subscriptions to our Connected Operations Platform is derived from the sale of replacement IoT devices, including gateways, sensors and cameras, related shipping and handling fees, and professional services.

Previous wording

Cost of revenue consists primarily of the amortization of IoT device costs associated with subscription agreements, cellular-related costs, third-party cloud infrastructure expenses, customer support costs, warranty charges, and employee-related costs directly associated with our customer support and operations, including salaries, employee benefits and stock-based compensation, amortization of internal-use software development and certain cloud computing implementation costs, expenses related to shipping and handling, packaging, fulfillment, warehousing, write-downs of excess and obsolete inventory, and allocated overhead costs.

Current wording

Cost of revenue consists primarily of the amortization of IoT device costs associated with subscription agreements, third-party cloud and cellular infrastructure costs, customer support costs, warranty costs, and employee-related costs directly associated with our customer support and operations, including salaries, employee benefits and stock-based compensation, amortization of internal-use software development and certain cloud computing implementation costs, expenses related to shipping and handling, packaging, fulfillment, warehousing, write-downs of excess and obsolete inventory, and costs associated with software subscriptions, office facilities, IT-related expenses, and depreciation and amortization of property and equipment.

Previous wording

As our customers expand and increase the use of our Connected Operations Cloud driven by additional IoT devices and Applications, our cost of revenue may vary from quarter to quarter as a percentage of our revenue due to the timing and extent of these expenses. We intend to continue to invest additional resources in our Connected Operations Cloud and customer support and operations personnel as we grow our business. The level and timing of investment in these areas will affect our cost of revenue in the future.

Current wording

As our customers expand and increase the use of our Connected Operations Platform driven by additional IoT devices and Applications, our cost of revenue may vary from quarter to quarter as a percentage of our revenue due to the timing and extent of these expenses. We intend to continue to invest additional resources in our Connected Operations Platform and customer support and operations personnel as we grow our business. The level and timing of investment in these areas will affect our cost of revenue in the future.

Previous wording

Research and development expenses consist primarily of employee-related costs, including salaries, employee benefits and stock-based compensation, depreciation and other expenses related to prototyping IoT devices, product initiatives, software subscriptions, hosting used in research and development, and allocated overhead costs. We continue to focus our research and development efforts on adding new features and products and enhancing the utility of our Connected Operations Cloud. We capitalize the portion of our internal-use software development costs that meets the criteria for capitalization.

Current wording

Research and development expenses consist primarily of employee-related costs, including salaries, employee benefits and stock-based compensation, depreciation and other expenses related to prototyping IoT devices, product initiatives, software subscriptions, hosting and cellular-related costs used in research and development, and costs associated with office facilities, IT-related expenses, and depreciation and amortization of property and equipment. We continue to focus our research and development efforts on adding new features and products and enhancing the utility of our Connected Operations Platform. We capitalize the portion of our internal-use software development costs that meets the criteria for capitalization.

Previous wording

We expect our research and development expenses to generally increase in absolute dollars for the foreseeable future as we continue to invest in research and development efforts to enhance our Connected Operations Cloud. Our research and development expenses may fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses.

Current wording

We expect our research and development expenses to generally increase in absolute dollars for the foreseeable future as we continue to invest in research and development efforts to enhance our Connected Operations Platform. Our research and development expenses have fluctuated in the past and may in the future fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses.

Previous wording

Sales and marketing expenses consist primarily of employee-related costs directly associated with our sales and marketing activities, including salaries, employee benefits and stock-based compensation, and sales commissions. Sales and marketing expenses also include expenditures related to advertising, media, marketing, promotional costs, free trial expenses, brand awareness activities, business development, corporate partnerships, travel, conferences and events, professional services, and allocated overhead costs.

Current wording

Sales and marketing expenses consist primarily of employee-related costs directly associated with our sales and marketing activities, including salaries, employee benefits, stock-based compensation, and sales commissions. Sales and marketing expenses also include expenditures related to advertising, media, marketing, promotional costs, free trial expenses, brand awareness activities, business development, corporate partnerships, travel, conferences and events, professional services, and costs associated with software subscriptions, office facilities, IT-related expenses, and depreciation and amortization of property and equipment.

Previous wording

We plan to continue to invest in sales and marketing to grow our customer base and increase our brand awareness. As a result, we expect our sales and marketing expenses to increase in absolute dollars for the foreseeable future. Our sales and marketing expenses may fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses.

Current wording

We plan to continue to invest in sales and marketing to grow our customer base and increase our brand awareness. As a result, we expect our sales and marketing expenses to increase in absolute dollars for the foreseeable future. Our sales and marketing expenses have fluctuated in the past and may in the future fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses, including seasonally higher spend on conferences and events in the first half of our fiscal year.

Previous wording

General and administrative expenses consist of employee-related costs for executive, finance, legal, human resources, facilities, and certain IT personnel, including salaries, employee benefits and stock-based compensation, professional fees for external legal, accounting, recruiting and other consulting services, bad debt, allocated overhead costs, and unallocated lease costs.

Current wording

General and administrative expenses consist of employee-related costs for executive, finance, legal, human resources, facilities, and certain IT personnel, including salaries, employee benefits and stock-based compensation, professional services fees for external legal, accounting, recruiting and other consulting services, bad debt, costs associated with software subscriptions, office facilities, IT-related expenses, and depreciation and amortization of property and equipment.

Previous wording

We expect our general and administrative expenses to continue to increase in absolute dollars for the foreseeable future to support our growth and because of additional costs associated with legal, accounting, compliance, insurance, investor relations, and other areas associated with being a public company. Our general and administrative expenses may fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses.

Current wording

We expect our general and administrative expenses to continue to increase in absolute dollars for the foreseeable future to support our growth. Our general and administrative expenses have fluctuated in the past and may in the future fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses.

Previous wording

Lease modification, impairment, and related charges consist of impairment charges related to the sublease and abandonment of facilities, as well as the derecognition of operating lease liabilities and right-of-use (“ROU”) assets in connection with a lease modification and related accelerated depreciation expense, if any.

Current wording

Lease modification, impairment, and related charges consist of impairment charges related to the sublease and abandonment of facilities.

Previous wording

Legal settlement expenses consist of charges related to significant legal settlements.

Current wording

Legal settlement expenses consist of charges incurred to resolve legal proceedings.

Previous wording

Interest income and other income (expense), net, consists primarily of income earned on our money market funds included in cash and cash equivalents, restricted cash, and our short-term and long-term investments, including amortization of premiums and accretion of discounts related to our marketable debt securities, net of associated fees. We also have foreign currency remeasurement gains and losses and foreign currency transaction gains and losses. As we have expanded our global operations, our exposure to fluctuations in foreign currencies has increased, and we expect this to continue.

Current wording

Interest income and other income, net, consists primarily of income earned on our money market funds included in cash and cash equivalents, restricted cash, and our short-term and long-term investments, including amortization of premiums and accretion of discounts related to our marketable debt securities, net of associated fees. We also have foreign currency remeasurement gains and losses and foreign currency transaction gains and losses. As we have expanded our global operations, our exposure to fluctuations in foreign currencies has increased, and we expect this to continue.

Previous wording

Revenue increased by $284.8 million, or 44%, for the fiscal year ended February 3, 2024 compared to the fiscal year ended January 28, 2023, primarily due to an increase in customer count and increased purchases of our subscription offerings, including subscriptions to additional Applications, by existing customers, as well as due to an extra week in our fiscal year 2024.

Current wording

Revenue increased by $311.8 million, or 33%, for the fiscal year ended February 1, 2025 compared to the fiscal year ended February 3, 2024, primarily due to an increase in customer count and increased purchases by existing customers of our subscription offerings, including subscriptions to additional Applications, partially offset by an extra week in our fiscal year 2024.

Previous wording

Cost of revenue increased by $64.4 million, or 35%, for the fiscal year ended February 3, 2024 compared to the fiscal year ended January 28, 2023, primarily due to $32.4 million of increased amortization of deferred IoT device costs, $14.8 million of increased employee-related costs, which included an $11.2 million increase in salaries and benefits and related employer taxes and a $3.6 million increase in stock-based compensation expense, $8.3 million of increased infrastructure costs associated with our product offerings, $4.0 million of increased warranty costs, and $3.3 million of increased operational costs to support the growth of our subscription offerings. The increases in amortization of deferred IoT device costs and infrastructure costs were primarily due to increased sales volume year-over-year. The increase in cost of revenue was also due to an extra week in our fiscal year 2024.

Current wording

Cost of revenue increased by $51.3 million, or 21%, for the fiscal year ended February 1, 2025 compared to the fiscal year ended February 3, 2024, primarily due to $22.0 million of increased amortization of IoT device costs, $19.1 million of increased infrastructure costs associated with our product offerings, $7.9 million of increased employee-related costs, which included a $6.5 million increase in salaries and benefits and related employer taxes and a $1.4 million increase in stock-based compensation expense, $3.1 million of increased excess and obsolete inventory charges, and $2.2 million of increased amortization of internally-developed software, partially offset by $4.6 million of decreased warranty costs. The increases in amortization of IoT device costs and infrastructure costs were primarily due to increased sales volume year-over-year. The increase in cost of revenue was partially offset by an extra week in our fiscal year 2024.

Previous wording

Our gross margin increased to 74% for the fiscal year ended February 3, 2024 compared to 72% for the fiscal year ended January 28, 2023, mainly due to operational efficiencies in infrastructure costs.

Current wording

Our gross margin increased to 76% for the fiscal year ended February 1, 2025 compared to 74% for the fiscal year ended February 3, 2024, mainly due to operational efficiencies in IoT device costs, direct labor costs, and warranty charges.

Previous wording

Sales and marketing expense increased by $116.6 million, or 31%, for the fiscal year ended February 3, 2024 compared to the fiscal year ended January 28, 2023, primarily due to a $74.3 million increase in employee-related costs, which included a $56.6 million increase in salaries and benefits and related employer taxes and a $17.7 million increase in stock-based compensation expense, primarily due to increased headcount to support our sales organization. Our increase in sales and marketing expense was also due to a $16.8 million increase in IT-related charges, software subscriptions, and rent, an $8.9 million increase in expenses relating to lead generation initiatives, an $8.1 million increase in travel-related expenses and expenses relating to our customer visits, conferences, and other events, and a $2.9 million increase in expenses relating to professional services. The increase in sales and marketing expense was also due to an extra week in our fiscal year 2024.

Current wording

Sales and marketing expense increased by $115.0 million, or 24%, for the fiscal year ended February 1, 2025 compared to the fiscal year ended February 3, 2024, primarily due to a $88.2 million increase in employee-related costs, which included a $69.4 million increase in salaries and benefits and related employer taxes, a $13.7 million increase in stock-based compensation expense, and a $5.1 million increase in sales commissions, primarily due to increased headcount to support our sales organization. The increase in sales and marketing expense was also due to a $10.0 million increase in travel-related costs and expenses relating to our customer visits, conferences, and other events, a $7.1 million increase in IT-related costs and software subscriptions, a $3.1 million increase in expenses relating to campaign marketing and brand awareness, a $2.8 million increase in expenses relating to professional services, and a $1.7 million increase in free trial expense. The increase in sales and marketing expense was partially offset by an extra week in our fiscal year 2024.

Previous wording

General and administrative expense increased by $24.3 million, or 14%, for the fiscal year ended February 3, 2024 compared to the fiscal year ended January 28, 2023, primarily due to a $36.0 million increase in employee-related costs, which included a $23.8 million increase in salaries and benefits and related employer taxes and a $12.2 million increase in stock-based compensation expense, primarily due to increased headcount to support the growth of our finance, accounting, human resources, and legal functions. Our increase in general and administrative expense was also due to a $6.5 million increase in expenses relating to legal fees and professional services. The increases in general and administrative expense were partially offset by a $19.5 million decrease in IT-related costs and rent. The increase in general and administrative expense was also due to an extra week in our fiscal year 2024.

Current wording

General and administrative expense increased by $39.6 million, or 20%, for the fiscal year ended February 1, 2025 compared to the fiscal year ended February 3, 2024, primarily due to a $28.0 million increase in employee-related costs, which included a $16.5 million increase in stock-based compensation expense and a $11.6 million increase in salaries and benefits and related employer taxes, primarily due to increased headcount to support the growth of our finance, accounting, human resources, and legal functions. The increase in general and administrative expense was also due to a $14.7 million increase in expenses relating to professional services and a $2.2 million increase in software subscriptions, partially offset by a $4.1 million decrease in bad debt expense. The increase in general and administrative expense was partially offset by an extra week in our fiscal year 2024.

Previous wording

In the first quarter of fiscal year 2023, we executed a sublease for certain office space that resulted in a $1.1 million impairment to the related ROU asset, which we recognized in lease modification, impairment, and related charges for the fiscal year ended January 28, 2023.

Current wording

In the third quarter of fiscal year 2025, we executed a sublease for certain office space that resulted in a $3.6 million impairment to the related right-of-use (“ROU”) asset and fixed assets, which we recognized in lease modification, impairment, and related charges for the fiscal year ended February 1, 2025. Additionally, in the fourth quarter of fiscal year 2025, we incurred early termination fees on another leased office space, and as a result, we recognized $0.4 million in lease modification, impairment, and related charges for the fiscal year ended February 1, 2025.

Previous wording

Legal settlement expense increased by $68.7 million for the fiscal year ended February 3, 2024 compared to the fiscal year ended January 28, 2023, related to a settlement agreement reached with a landlord in January 2024, wherein we made a cash payment of $60.0 million and forgave an $8.7 million drawdown against a letter of credit made by the landlord in November 2021. Refer to Note 9, “Commitments and Contingencies,” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for further detail.

Current wording

Legal settlement expense decreased by $67.8 million for the fiscal year ended February 1, 2025 compared to the fiscal year ended February 3, 2024, primarily due to a $68.7 million settlement agreement reached with a landlord in January 2024, wherein we made a cash payment of $60.0 million and forgave an $8.7 million drawdown against a letter of credit made by the landlord in November 2021.

Previous wording

Interest income and other income (expense), net, increased by $24.3 million, or 156%, for the fiscal year ended February 3, 2024 compared to the fiscal year ended January 28, 2023. $25.0 million of this increase was primarily due to higher interest yields on investments and cash, higher net accretion of discounts, and a larger investment base of our managed portfolio of marketable debt securities.

Current wording

Interest income and other income, net, decreased by $0.4 million, or 1%, for the fiscal year ended February 1, 2025 compared to the fiscal year ended February 3, 2024. $2.8 million of this decrease was due to an increase in foreign currency losses and $1.9 million of this decrease was due to lower interest income earned on our cash balances as a result of a smaller average balance in our money market funds. These decreases were partially offset by a $4.1 million increase due to interest income earned on a larger investment base of our managed portfolio of marketable debt securities and the net accretion of discounts on these securities.

Previous wording

We define non-GAAP gross profit as gross profit excluding the effect of stock-based compensation expense-related charges, including employer taxes on employee equity transactions, included in cost of revenue. Non-GAAP gross margin is defined as non-GAAP gross profit as a percentage of total revenue. We use non-GAAP gross profit and non-GAAP gross margin in conjunction with traditional GAAP measures to evaluate our financial performance. We believe that non-GAAP gross profit and non-GAAP gross margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations. The following table presents a reconciliation of our non-GAAP gross profit to our GAAP gross profit for the periods presented (in thousands, except percentages):

Current wording

We define non-GAAP gross profit as gross profit excluding the effect of stock-based compensation expense-related charges included in cost of revenue. Non-GAAP gross margin is defined as non-GAAP gross profit as a percentage of total revenue. We use non-GAAP gross profit and non-GAAP gross margin in conjunction with traditional GAAP measures to evaluate our financial performance. We believe that non-GAAP gross profit and non-GAAP gross margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations. The following table presents a reconciliation of our non-GAAP gross profit to our GAAP gross profit for the periods presented (in thousands, except percentages):

Previous wording

(1)Stock-based compensation expense-related charges included approximately $0.8 million, $0.3 million, and $0.3 million of employer taxes on employee equity transactions for the fiscal years ended February 3, 2024, January 28, 2023, and January 29, 2022, respectively.

Current wording

(1)Stock-based compensation expense-related charges included approximately $1.0 million, $0.8 million, and $0.3 million of employer taxes on employee equity transactions for the fiscal years ended February 1, 2025, February 3, 2024, and January 28, 2023, respectively.

Previous wording

We define non-GAAP income (loss) from operations, or non-GAAP operating income (loss), as income (loss) from operations excluding the effect of stock-based compensation expense-related charges, including employer taxes on employee equity transactions, lease modification, impairment, and related charges, and legal settlements. Non-GAAP operating margin is defined as non-GAAP operating income (loss) as a percentage of total revenue. We use non-GAAP income (loss) from operations and non-GAAP operating margin in conjunction with traditional GAAP measures to evaluate our financial performance. We believe that non-GAAP income (loss) from operations and non-GAAP operating margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations. The following table presents a reconciliation of our non-GAAP income (loss) from operations to our GAAP loss from operations for the periods presented (in thousands, except percentages):

Current wording

We define non-GAAP income (loss) from operations, or non-GAAP operating income (loss), as income (loss) from operations excluding the effect of stock-based compensation expense-related charges, lease modification, impairment, and related charges, and legal settlements. Non-GAAP operating margin is defined as non-GAAP operating income (loss) as a percentage of total revenue. We use non-GAAP income (loss) from operations and non-GAAP operating margin in conjunction with traditional GAAP measures to evaluate our financial performance. We believe that non-GAAP income (loss) from operations and non-GAAP operating margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations. The following table presents a reconciliation of our non-GAAP income (loss) from operations to our GAAP loss from operations for the periods presented (in thousands, except percentages):