Samsara Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with (1) our audited consolidated financial statements and related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the fiscal year ended February 3, 2024 included in our Annual Report on Form 10-K filed with the SEC on March 26, 2024, and (2) our unaudited condensed consolidated financial statements and related notes and other financial information included under Part I, Item 1 of this Quarterly Report on Form 10-Q. 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. You should review the sections titled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” for a discussion of forward-looking statements and important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. These statements 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 consist of 52 weeks, with the fourth quarter consisting of 13 weeks, and our fiscal year 2024 was a 53-week fiscal year, with the fourth quarter consisting of 14 weeks.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with (1) our audited consolidated financial statements and related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the fiscal year ended February 1, 2025 included in our Annual Report on Form 10-K filed with the SEC on March 25, 2025, and (2) our unaudited condensed consolidated financial statements and related notes and other financial information included under Part I, Item 1 of this Quarterly Report on Form 10-Q. 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. You should review the sections titled “Item 1A. Risk Factors” and “Special Note Regarding Forward-Looking Statements” contained in this report and “Risk Factors” included under Part I, Item 1A. of our Annual Report on Form 10-K filed with the SEC on March 25, 2025 for a discussion of forward-looking statements and important factors that could impact our business and cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis or implied by past results and trends. 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 2026 and 2025 each consist 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 three months ended November 2, 2024 and October 28, 2023, our revenue was $322.0 million and $237.5 million, respectively, representing year-over-year growth of 36%. Our net loss was $37.8 million and $45.5 million for the three months ended November 2, 2024 and October 28, 2023, respectively. For the nine months ended November 2, 2024 and October 28, 2023, our revenue was $902.9 million and $661.1 million, respectively, representing year-over-year growth of 37%. Our net loss was $143.7 million and $173.4 million for the nine months ended November 2, 2024 and October 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 three months ended May 3, 2025 and May 4, 2024, our revenue was $366.9 million and $280.7 million, respectively, representing year-over-year growth of 31%. Our net loss was $22.1 million and $56.3 million for the three months ended May 3, 2025 and May 4, 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

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.

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. 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 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 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 information technology (“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, 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.

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 information technology (“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

Refer to the section titled “Risk Factors” and elsewhere in our Annual Report on Form 10-K filed on March 26, 2024 for further discussion of the impacts of macroeconomic trends on our business.

Current wording

Refer to the section titled “Item 1A. Risk Factors” and “Special Note Regarding Forward-Looking Statements” contained in this report and “Risk Factors” included under Part I, Item 1A and elsewhere in our Annual Report on Form 10-K filed on March 25, 2025 for further discussion of the impacts of macroeconomic trends on our business.

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, 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 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, installation costs, and costs associated with software subscriptions, office facilities, IT-related expenses, and depreciation and amortization of property and equipment.

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, 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 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 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 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.

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

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.

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 generally 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 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, and unallocated lease costs.

Current wording

General and administrative expenses consist primarily 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, and costs associated with software subscriptions, office facilities, IT-related expenses, and depreciation and amortization of property and equipment.

Previous wording

In December 2021, the Organization for Economic Co-operation and Development introduced a new global minimum corporate tax of 15%, commonly referred to as Pillar Two. While the United States has not yet adopted the Pillar Two rules, various other international governments are enacting legislation which will apply to us beginning in fiscal year 2026. We do not currently have material operations in jurisdictions with tax rates lower than the Pillar Two minimum, but we expect to incur additional costs related to compliance with this legislation. There remains uncertainty as to the final Pillar Two model rules and their application. We will continue to monitor United States and global legislative action related to Pillar Two for potential impacts.

Current wording

In December 2021, the Organization for Economic Co-operation and Development introduced a new global minimum corporate tax of 15%, commonly referred to as Pillar Two. While the United States has not yet adopted the Pillar Two rules, various other international governments are enacting legislation which became effective for us beginning in fiscal year 2026. We do not currently expect to experience a material impact from the Pillar Two legislation, but we expect to incur additional costs related to compliance with this legislation. We will continue to monitor United States and global legislative action related to Pillar Two for potential impacts.

Previous wording

Comparison of the Three and Nine Months Ended November 2, 2024 and October 28, 2023

Current wording

Comparison of the Three Months Ended May 3, 2025 and May 4, 2024

Previous wording

Revenue increased by $84.4 million and $241.8 million, or 36% and 37%, for the three and nine months ended November 2, 2024, respectively, compared to the three and nine months ended October 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.

Current wording

Revenue increased by $86.2 million, or 31%, for the three months ended May 3, 2025 compared to the three months ended May 4, 2024, primarily due to an increase in customer count and increased purchases of our subscription offerings, including subscriptions to additional Applications, by existing customers.

Previous wording

Cost of revenue increased by $40.0 million, or 22%, for the nine months ended November 2, 2024 compared to the nine months ended October 28, 2023, primarily due to $17.7 million of increased amortization of deferred IoT device costs, $13.9 million of increased infrastructure costs associated with our product offerings, $7.6 million of increased employee-related costs, which included a $6.4 million increase in salaries and benefits and related employer taxes and a $1.3 million increase in stock-based compensation expense, $2.2 million of increased amortization of internally-developed software, and $1.6 million of increased excess and obsolete inventory charges, partially offset by $4.3 million of decreased warranty costs. The increases in amortization of deferred IoT device costs and infrastructure costs were primarily due to increased sales volume year-over-year.

Current wording

Cost of revenue increased by $14.5 million, or 21%, for the three months ended May 3, 2025 compared to the three months ended May 4, 2024, primarily due to $7.9 million of increased infrastructure costs associated with our product offerings, $4.8 million of increased amortization of IoT device costs, $1.4 million of increased employee-related costs, which included a $1.1 million increase in salaries and benefits and related employer taxes and a $0.3 million increase in stock-based compensation expense, $1.1 million of increased amortization of internally-developed software, and $0.9 million of increased warehouse fees and credit card processing fees, partially offset by $1.6 million of decreased excess and obsolete inventory charges. The increases in amortization of infrastructure costs and IoT device costs were primarily due to increased sales volume year-over-year.

Previous wording

Our gross margin increased to 76% for the three months ended November 2, 2024 compared to 74% for the three months ended October 28, 2023, mainly due to operational efficiencies in deferred IoT device costs, direct labor costs, and warranty charges.

Current wording

Our gross margin increased to 77% for the three months ended May 3, 2025 compared to 76% for the three months ended May 4, 2024, mainly due to operational efficiencies in IoT device costs and direct labor costs.

Previous wording

Research and development expense increased by $16.2 million, or 27%, for the three months ended November 2, 2024 compared to the three months ended October 28, 2023, primarily due to a $12.5 million increase in employee-related costs, which included a $7.1 million increase in salaries and benefits and related employer taxes and a $5.4 million increase in stock-based compensation expense, primarily due to increased headcount to support our research and development organization. The increase in our research and development expense was also due to a $1.7 million increase in software subscriptions, IT, hosting and cellular-related costs, a $1.0 million increase in expenses relating to contractor and other professional services, and a $0.4 million increase in prototyping expenses.

Current wording

Research and development expense increased by $10.3 million, or 14%, for the three months ended May 3, 2025 compared to the three months ended May 4, 2024, primarily due to a $7.7 million increase in employee-related costs, which included a $4.1 million increase in salaries and benefits and related employer taxes and a $3.6 million increase in stock-based compensation expense, primarily due to increased headcount to support our research and development organization. The increase in research and development expense was also due to a $2.2 million increase in hosting and software subscription costs and a $1.0 million increase in expenses relating to contractor services, partially offset by a $1.1 million decrease in prototyping expenses.

Previous wording

Sales and marketing expense increased by $33.3 million, or 29%, for the three months ended November 2, 2024 compared to the three months ended October 28, 2023, primarily due to a $25.6 million increase in employee-related costs, which included a $20.2 million increase in salaries and benefits and related employer taxes, a $2.8 million increase in stock-based compensation expense, and a $2.6 million increase in sales commissions, primarily due to increased headcount to support our sales organization. The increase in our sales and marketing expense was also due to a $1.8 million increase in IT-related costs and software subscriptions, a $1.8 million increase in expenses relating to lead generation initiatives, a $1.5 million increase in travel-related costs and expenses relating to our customer visits, conferences, and other events, and a $1.3 million increase in depreciation expense. These increases were primarily to support the growth in our business.

Current wording

Sales and marketing expense increased by $18.0 million, or 12%, for the three months ended May 3, 2025 compared to the three months ended May 4, 2024, primarily due to a $17.8 million increase in employee-related costs, which included a $9.1 million increase in salaries and benefits and related employer taxes, a $5.1 million increase in stock-based compensation expense, and a $3.7 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 $1.2 million increase in expenses relating to campaign marketing and brand awareness and a $0.8 million increase in software subscriptions and IT-related costs, partially offset by a $1.8 million decrease in travel-related costs and expenses relating to our customer visits, conferences, and other events.

Previous wording

General and administrative expense increased by $14.3 million, or 30%, for the three months ended November 2, 2024 compared to the three months ended October 28, 2023, primarily due to an $8.6 million increase in employee-related costs, which included a $4.6 million increase in stock-based compensation expense and a $4.0 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. Our increase in general and administrative expense was also due to a $5.1 million increase in other professional services fees.

Current wording

General and administrative expense increased by $10.6 million, or 18%, for the three months ended May 3, 2025 compared to the three months ended May 4, 2024, primarily due to a $7.0 million increase in professional services fees and a $5.0 million increase in employee-related costs, which included a $3.4 million increase in stock-based compensation expense and a $1.6 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. These increases were partially offset by a $0.8 million decrease in bad debt expense and a $0.7 million decrease in rent and related expenses.

Previous wording

Interest income and other income, net, increased by $0.7 million, or 7%, for the three months ended November 2, 2024 compared to the three months ended October 28, 2023. $1.5 million of this increase was primarily due to interest income earned on a larger investment base of our managed portfolio of marketable debt securities and $0.3 million of this increase was due to a decrease in foreign currency losses. These increases were partially offset by a $0.9 million decrease in interest income earned on our cash balances due to a smaller balance in our money market funds.

Current wording

Interest income and other income, net, increased by $2.6 million, or 26%, for the three months ended May 3, 2025 compared to the three months ended May 4, 2024. This increase was due to $1.9 million in foreign currency gains, as well as an increase of $1.6 million due to interest income earned on a larger investment base of our managed portfolio of marketable debt securities and an increase of $0.9 million due to higher interest income earned on our cash balances as a result of a larger balance in our money market funds. These increases were partially offset by a $1.7 million decrease in the net accretion of discounts on our marketable debt securities.

Previous wording

The provision for income taxes increased by $0.4 million and $0.4 million, or 247% and 27%, for the three and nine months ended November 2, 2024, respectively, compared to the three and nine months ended October 28, 2023, primarily due to higher expected taxes related to our foreign jurisdictions.

Current wording

The provision for income taxes increased by $1.2 million, or 323%, for the three months ended May 3, 2025 compared to the three months ended May 4, 2024, primarily due to higher taxes related to our operations in foreign jurisdictions.

Previous wording

To supplement our condensed consolidated financial statements prepared in accordance with generally accepted accounting principles (“GAAP”), we review the following non-GAAP financial measures to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions (in thousands, except percentages):

Current wording

To supplement our condensed consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), we review the following non-GAAP financial measures to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions (in thousands, except percentages):

Previous wording

Stock-based compensation expense-related charges include the amortization of deferred stock-based compensation expense for capitalized software and employer taxes on employee equity transactions. Stock-based compensation expense-related charges are excluded because they are primarily a non-cash expense that management believes is not reflective of our ongoing operational performance. Employer taxes on employee equity transactions, which are a cash expense, are excluded because such taxes are directly tied to the timing and size of employee equity transactions and the future fair market value of our common stock, which may vary from period to period independent of the operating performance of our business.

Current wording

Stock-based compensation expense-related charges include the amortization of deferred stock-based compensation expense for capitalized software and employer taxes on employee equity transactions. Stock-based compensation expense is excluded because it is a non-cash expense and is dependent on our stock price, which is beyond our control. Further, because of varying available valuation methodologies and award types, we find it useful to exclude stock-based compensation expense in order to better understand our ongoing operational performance. Employer taxes on employee equity transactions, which are a cash expense, are excluded because such taxes are directly tied to the timing and size of employee equity transactions and the future fair market value of our common stock, which may vary from period to period independent of the operating performance of our business.

Previous wording

(1)Stock-based compensation expense-related charges included approximately $0.3 million and $0.2 million of employer taxes on employee equity transactions for the three months ended November 2, 2024 and October 28, 2023, respectively.

Current wording

(1)Stock-based compensation expense-related charges included approximately $0.4 million and $0.4 million of employer taxes on employee equity transactions for the three months ended May 3, 2025 and May 4, 2024, respectively.

Previous wording

Non-GAAP Income (Loss) from Operations and Non-GAAP Operating Margin

Current wording

Non-GAAP Operating Income (Loss) and Non-GAAP Operating Margin

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, 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 from operations to our GAAP loss from operations for the periods presented (in thousands, except percentages):

Current wording

We define 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 operating income (loss) and non-GAAP operating margin in conjunction with traditional GAAP measures to evaluate our financial performance. We believe that non-GAAP operating income (loss) 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 operating income to our GAAP loss from operations for the periods presented (in thousands, except percentages):

Previous wording

(1)Stock-based compensation expense-related charges included approximately $4.5 million and $2.9 million of employer taxes on employee equity transactions for the three months ended November 2, 2024 and October 28, 2023, respectively.

Current wording

(1)Stock-based compensation expense-related charges included approximately $6.5 million and $7.0 million of employer taxes on employee equity transactions for the three months ended May 3, 2025 and May 4, 2024, respectively.

Previous wording

Since our founding, we have financed our operations primarily through the sale of equity securities and payments received from our customers. In December 2021, we completed our initial public offering (“IPO”), which resulted in aggregate net proceeds of $846.7 million, including proceeds from the underwriters’ exercise of their option to purchase additional shares of our Class A common stock in January 2022 and net of underwriting discounts and commissions. We have generated significant operating losses from our operations, as reflected in our accumulated deficit of $1,598.8 million as of November 2, 2024. We intend to continue investing in our business, and as a result, we may require additional capital resources to execute on our strategic initiatives to grow our business, particularly if we generate negative cash flows in future quarters. We believe that our existing cash, cash equivalents, and short-term and long-term investments will be sufficient to support working capital, including our non-cancelable arrangements, and capital expenditure requirements for at least the next 12 months.

Current wording

Since our founding, we have financed our operations primarily through the sale of equity securities and payments received from our customers. In December 2021, we completed our initial public offering (“IPO”), which resulted in aggregate net proceeds of $846.7 million, including proceeds from the underwriters’ exercise of their option to purchase additional shares of our Class A common stock in January 2022 and net of underwriting discounts and commissions. We have generated significant operating losses from our operations, as reflected in our accumulated deficit of $1,632.1 million as of May 3, 2025. We intend to continue investing in our business, and as a result, we may require additional capital resources to execute on our strategic initiatives to grow our business, particularly if we generate negative cash flows in future quarters. We believe that our existing cash, cash equivalents, and short-term and long-term investments will be sufficient to support working capital, including our non-cancelable arrangements, and capital expenditure requirements for at least the next 12 months.

Previous wording

As of November 2, 2024, our principal sources of liquidity were cash, cash equivalents, and short-term and long-term investments of $913.0 million. Cash and cash equivalents consisted of cash on deposit with banks as well as highly liquid investments with an original maturity of 90 days or less, when purchased. Our investments primarily consisted of U.S. government and agency securities, corporate notes and bonds, and commercial paper. Our primary uses of cash include personnel-related costs, third-party cloud and cellular infrastructure expenses, sales and marketing expenses, overhead costs, and funding other working capital requirements, such as inventory and related connected device costs to meet our performance obligations related to our Connected Operations Cloud.

Current wording

As of May 3, 2025, our principal sources of liquidity were cash, cash equivalents, and short-term and long-term investments of $1,023.2 million. Cash and cash equivalents consisted of cash on deposit with banks as well as highly liquid investments with an original maturity of 90 days or less, when purchased. Our investments primarily consisted of U.S. government and agency securities, corporate notes and bonds, and commercial paper. Our primary uses of cash include employee-related expenditures, third-party cloud and cellular infrastructure costs, sales and marketing expenses, overhead expenses, and funding other working capital requirements, such as inventory and related connected device costs to meet our performance obligations related to our Connected Operations Platform.

Previous wording

Our future capital requirements will depend on many factors, including, but not limited to, our growth, our ability to attract and retain customers, the continued market acceptance of our solution, the timing and extent of spending necessary to support our efforts to develop our Connected Operations Cloud and meet our performance obligations related to our Connected Operations Cloud, the expansion of sales and marketing activities, and the impact of macroeconomic conditions on our and our customers’ and partners’ businesses. Further, we may in the future enter into arrangements to acquire or invest in businesses, products, services, and technologies. We may be required to seek additional equity or debt financing. In the event that additional financing is required, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition, and results of operations could be adversely affected.

Current wording

Our future capital requirements will depend on many factors, including, but not limited to, our growth, our ability to attract and retain customers, the continued market acceptance of our solution, the timing and extent of spending necessary to support our efforts to develop our Connected Operations Platform and meet our performance obligations related to our Connected Operations Platform, the expansion of sales and marketing activities, and the impact of macroeconomic conditions on our and our customers’ and partners’ businesses. Further, we may in the future enter into arrangements to acquire or invest in businesses, products, services, and technologies. We may be required to seek additional equity or debt financing. In the event that additional financing is required, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition, and results of operations could be adversely affected.

Previous wording

Our largest source of operating cash is payments received from our customers. Our primary uses of cash from operating activities are for employee-related expenses, sales and marketing expenses, inventory and related connected device costs, third-party cloud and cellular infrastructure expenses, and overhead expenses. We have generated negative cash flows from operations in each of the past two fiscal years, and have supplemented working capital through net proceeds from the sale of equity securities.

Current wording

Our largest source of operating cash is payments received from our customers. Our primary uses of cash from operating activities are for employee-related expenditures, sales and marketing expenses, inventory and related connected device costs, third-party cloud and cellular infrastructure costs, and overhead expenses. Although we generated positive operating cash flows beginning in fiscal year 2025, we generated negative cash flows from operations in the preceding two fiscal years. We have supplemented working capital through net proceeds from the sale of equity securities.

Previous wording

Cash provided by operating activities mainly consists of our net loss adjusted for certain non-cash items, including stock-based compensation, depreciation and amortization of property and equipment, net accretion of discounts on marketable debt securities, lease modification, impairment, and related charges, and non-cash operating lease costs, and changes in operating assets and liabilities during each period.

Current wording

Cash provided by operating activities mainly consists of our net loss adjusted for certain non-cash items, including stock-based compensation, depreciation and amortization of property and equipment, net accretion of discounts on marketable debt securities, and non-cash operating lease costs, and changes in operating assets and liabilities during each period.

Previous wording

Cash provided by operating activities was$30.1 million for thenine months ended October 28, 2023. This consisted of a net loss of$173.4 million, adjusted for non-cash charges of$177.3 million, and changes in our operating assets and liabilities of$26.1 million. The non-cash charges were primarily composed of stock-based compensation expense of$172.4 million, depreciation and amortization of$10.8 million, and lease modification, impairment, and related charges of$4.8 million, partially offset by net accretion of discounts on marketable debt securities of$12.7 million. Changes in our operating assets and liabilities during thenine months ended October 28, 2023 reflect increases in deferred revenue due to the growth of our business, lower inventories due to operating efficiencies in our order fulfillment processes, and lower operating lease ROU assets, partially offset by higher connected device costs, higher deferred commissions, and higher prepaid expenses and other current assets during thenine months ended October 28, 2023.

Current wording

Cash provided by operating activities was $52.6 million for the three months ended May 3, 2025. This consisted of a net loss of $22.1 million, adjusted for non-cash charges of $79.3 million, and changes in our operating assets and liabilities of $4.6 million. The non-cash charges were primarily composed of stock-based compensation expense of $77.1 million and depreciation and amortization of $5.1 million, partially offset by net accretion of discounts on marketable debt securities of $2.6 million. Changes in our operating assets and liabilities during the three months ended May 3, 2025 reflect higher vendor payments and higher deferred commissions and connected device costs due to the growth of our business, partially offset by increases in deferred revenue also due to the growth of our business and higher cash collections from customers during the three months ended May 3, 2025.

Previous wording

Cash provided by operating activities was $77.8 million for the nine months ended November 2, 2024. This consisted of a net loss of $143.7 million, adjusted for non-cash charges of $220.1 million, and changes in our operating assets and liabilities of $1.4 million. The non-cash charges were primarily composed of stock-based compensation expense of $208.9 million, depreciation and amortization of $15.8 million, and lease modification, impairment, and related charges of $3.6 million, partially offset by net accretion of discounts on marketable debt securities of $12.2 million. Changes in our operating assets and liabilities during the nine months ended November 2, 2024 reflect increases in deferred revenue due to the growth of our business and lower prepaid expenses and other current assets, partially offset by lower cash collections from customers, higher levels of inventories to meet anticipated demand requirements, higher deferred commissions, higher connected device costs, and higher vendor payments during the nine months ended November 2, 2024.

Current wording

Cash provided by operating activities was$23.7 million for thethree months ended May 4, 2024. This consisted of a net loss of$56.3 million, adjusted for non-cash charges of$66.4 million, and changes in our operating assets and liabilities of$13.5 million. The non-cash charges were primarily composed of stock-based compensation expense of$64.7 million and depreciation and amortization of$4.5 million, partially offset by net accretion of discounts on marketable debt securities of$4.0 million. Changes in our operating assets and liabilities during thethree months ended May 4, 2024 reflect increases in deferred revenue due to the growth of our business, higher cash collections from customers, and lower prepaid expenses and other current assets, partially offset by higher vendor payments, higher levels of inventories to meet anticipated demand requirements, higher connected device costs, and higher deferred commissions during the three months ended May 4, 2024.