Samsara Inc.
For the period ended Aug 2, 2025. Filed Sep 9, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Aug 2, 2025 · Filed Sep 9, 2025
IOT$40.98-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-05-03; filed 2025-06-10.
0001642896-25-000058
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-08-02; filed 2025-09-09.
0001642896-25-000074
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 117 previous paragraphs and 122 current paragraphs.
79 unchanged; 37 reworded; 5 added; 1 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 14 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Cost of revenue increased by $17.1 million, or 23%, for the three months ended August 2, 2025 compared to the three months ended August 3, 2024, primarily due to $6.4 million of increased cloud and cellular costs associated with our product offerings and $7.6 million of increased connected device costs. The increases in connected device costs and cloud and cellular costs were primarily due to increased sales volume year-over-year.
Current report
Research and development expense increased by $19.4 million, or 13%, for the six months ended August 2, 2025 compared to the six months ended August 3, 2024, primarily due to a $12.5 million increase in employee-related costs, which included a $7.5 million increase in stock-based compensation expense and a $5.0 million increase in salaries and benefits and related employer taxes, primarily due to increased headcount to support our research and development organization. The increase in research and development expense was also due to a $2.0 million increase in costs associated with software subscriptions and office facilities and a $2.0 million increase in expenses directly related to the development of our IoT devices.
Current report
Sales and marketing expense increased by $22.6 million, or 15%, for the three months ended August 2, 2025 compared to the three months ended August 3, 2024, primarily due to a $17.2 million increase in employee-related costs, which included a $10.3 million increase in salaries and benefits and related employer taxes, a $4.4 million increase in sales commissions, and a $2.4 million increase in stock-based compensation expense, primarily due to increased headcount to support our sales organization. The increase in sales and marketing expense was also due to a $3.5 million increase in expenditures incurred to generate demand through various marketing channels and promotional events, including our annual conference.
Current report
General and administrative expense increased by $10.8 million, or 19%, for the three months ended August 2, 2025 compared to the three months ended August 3, 2024, primarily due to a $5.0 million increase in employee-related costs, which included a $2.8 million increase in stock-based compensation expense and a $2.2 million increase in salaries and benefits and related employer taxes, primarily due to increased headcount. The increase in general and administrative expense was also due to a $4.8 million increase in consulting and professional services fees.
Current report
Interest income and other income, net, increased by $4.4 million, or 23%, for the six months ended August 2, 2025 compared to the six months ended August 3, 2024. This increase was favorably impacted by $2.9 million in higher foreign currency gains and $1.6 million in higher interest income earned on a larger balance of our marketable debt securities and money market funds.
Removed paragraphs (1)
Previous report
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.
Reworded paragraphs (37)
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 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.
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 Quarterly Report on Form 10-Q 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, as supplemented by our subsequent Quarterly Reports on Form 10-Q, 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 Quarterly Report on Form 10-Q, 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
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.
Current wording
We were founded in 2015 and have achieved significant growth since our inception. For the three months ended August 2, 2025 and August 3, 2024, our revenue was $391.5 million and $300.2 million, respectively. Our net loss was $16.8 million and $49.6 million for the three months ended August 2, 2025 and August 3, 2024, respectively. For the six months ended August 2, 2025 and August 3, 2024, our revenue was $758.4 million and $580.9 million, respectively. Our net loss was $38.9 million and $105.9 million for the six months ended August 2, 2025 and August 3, 2024, respectively. Our business model focuses on maximizing the lifetime value of our customer relationships, and we continue to make significant investments to expand our customers’ use of our Connected Operations Platform.
Previous wording
To better reflect the structure of our largest enterprise customers, who often have multiple subsidiaries and grow through mergers and acquisitions, we have adjusted our definition of a customer. Previously, separate entities within a larger organization were counted as individual customers. We now define a customer as an entity, or group of affiliated entities with a shared parent organization, that has ARR of greater than $1,000 at the end of a reporting period. This better aligns with our current go-to-market strategy and how we assign sales representatives to customer accounts. Determinations regarding the relationship between customer entities are primarily based on publicly available information and information supplied to us by our customers, and we have not independently verified the legal relationship between entities in all cases. Our customer count is subject to adjustments for mergers and acquisitions, spin-offs, segmentation by geography, and other market and commercial activity.
Current wording
To better reflect the structure of our largest enterprise customers, who often have multiple subsidiaries and grow through mergers and acquisitions, we adjusted our definition of a customer in the fiscal quarter ended May 3, 2025. Previously, separate entities within a larger organization were counted as individual customers. We now define a customer as an entity, or group of affiliated entities with a shared parent organization, that has ARR of greater than $1,000 at the end of a reporting period. This better aligns with our current go-to-market strategy and how we assign sales representatives to customer accounts. Determinations regarding the relationship between customer entities are primarily based on publicly available information and information supplied to us by our customers, and we have not independently verified the legal relationship between entities in all cases. Our customer count is subject to adjustments for mergers and acquisitions, spin-offs, segmentation by geography, and other market and commercial activity.
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, 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.
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, conflicts in the Middle East, and geopolitical tensions involving China, the outcome of political elections in the United States and abroad, 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 “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.
Current wording
Refer to the section titled “Item 1A. Risk Factors” and “Special Note Regarding Forward-Looking Statements” contained in this Quarterly Report on Form 10-Q and “Risk Factors” included under Part I, Item 1A and elsewhere in our Annual Report on Form 10-K filed on March 25, 2025, as supplemented by our subsequent Quarterly Reports on Form 10-Q, for further discussion of the impacts of macroeconomic trends on our business.
Previous 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.
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, 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, 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.
Current wording
Cost of revenue consists primarily of the amortization of connected device costs associated with subscription agreements, third-party cloud and cellular costs, employee-related costs directly associated with our customer support and operations, including salaries, benefits and stock-based compensation, amortization of internal-use software costs, fulfillment costs, warranty costs, write-downs of excess and obsolete inventory, and costs associated with software subscriptions and office facilities.
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 Platform. 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, benefits and stock-based compensation, associated with improvements to our platform and the development of new product offerings, expenses directly related to the development of our IoT devices, and costs associated with software subscriptions and office facilities. We continue to focus our research and development efforts on adding new features and products and enhancing the utility of our Connected Operations Platform.
Previous 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.
Current wording
Sales and marketing expenses consist primarily of employee-related costs, including salaries, benefits, stock-based compensation, and sales commissions, incurred to acquire new customers and increase product adoption with our existing customers. Sales and marketing expenses also include marketing activities, promotional events, and costs associated with software subscriptions and office facilities.
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 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.
Current wording
We plan to continue to invest in sales and marketing to expand our customers’ use of our Connected Operations Platform 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 promotional events in the first half of our fiscal year.
Previous 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.
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, benefits and stock-based compensation. General and administrative expenses also include costs related to fees paid for professional services, including legal, accounting, recruiting and other consulting services, as well as costs associated with software subscriptions and office facilities.
Previous 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.
Current wording
Interest income and other income, net, consists primarily of income earned on our money market funds and marketable debt securities, including amortization of premiums and accretion of discounts. It also includes the effect of changes in foreign currency exchange rates. As we have expanded our global operations, our exposure to fluctuations in foreign currencies has increased, and we expect this to continue.
Previous wording
Comparison of the Three Months Ended May 3, 2025 and May 4, 2024
Current wording
Comparison of the Three and Six Months Ended August 2, 2025 and August 3, 2024
Previous 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.
Current wording
Revenue increased by $91.3 million and $177.4 million, or 30% and 31%, for the three and six months ended August 2, 2025, respectively, compared to the three and six months ended August 3, 2024, primarily due to an increase in new customers and increased purchases of subscriptions to our solution, including subscriptions to additional Applications, by existing customers.
Previous 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.
Current wording
Our gross margin increased to 77% for the three months ended August 2, 2025 compared to 76% for the three months ended August 3, 2024, mainly due to operational efficiencies in connected device costs and direct labor costs.
Previous 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.
Current wording
Cost of revenue increased by $31.7 million, or 22%, for the six months ended August 2, 2025 compared to the six months ended August 3, 2024, primarily due to $14.3 million of increased cloud and cellular costs associated with our product offerings, $10.3 million of increased amortization of connected device costs, and $2.6 million of increased employee-related costs, which included a $1.9 million increase in salaries and benefits and related employer taxes and a $0.7 million increase in stock-based compensation expense. The increases in amortization of connected device costs and cloud and cellular costs were primarily due to increased sales volume year-over-year.
Previous 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.
Current wording
Research and development expense increased by $9.1 million, or 12%, for the three months ended August 2, 2025 compared to the three months ended August 3, 2024, primarily due to a $4.7 million increase in employee-related costs, which included a $3.9 million increase in stock-based compensation expense and a $0.8 million increase in salaries and benefits and related employer taxes, primarily due to increased headcount to support our research and development organization. The increase in research and development expense was also due to a $1.9 million increase in expenses directly related to the development of our IoT devices and a $1.1 million increase in costs associated with software subscriptions and office facilities.
Previous 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.
Current wording
Sales and marketing expense increased by $40.6 million, or 14%, for the six months ended August 2, 2025 compared to the six months ended August 3, 2024, primarily due to a $35.0 million increase in employee-related costs, which included a $19.4 million increase in salaries and benefits and related employer taxes, a $8.1 million increase in sales commissions, and a $7.5 million increase in stock-based compensation expense, primarily due to increased headcount to support our sales organization.
Previous 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.
Current wording
General and administrative expense increased by $21.5 million, or 19%, for the six months ended August 2, 2025 compared to the six months ended August 3, 2024, primarily due to an $11.8 million increase in consulting and professional services fees and a $10.0 million increase in employee-related costs, which included a $6.3 million increase in stock-based compensation expense and a $3.7 million increase in salaries and benefits and related employer taxes, primarily due to increased headcount.
Previous 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.
Current wording
Interest income and other income, net, increased by $1.8 million, or 19%, for the three months ended August 2, 2025 compared to the three months ended August 3, 2024. This increase was favorably impacted by $1.0 million in higher foreign currency gains and $0.8 million in higher interest income earned on a larger balance of our marketable debt securities and money market funds.
Previous 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.
Current wording
The provision for income taxes increased by $0.6 million and $1.8 million, or 54% and 125%, for the three and six months ended August 2, 2025, respectively, compared to the three and six months ended August 3, 2024, primarily due to higher taxes related to the growth of our operations in foreign jurisdictions.
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 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.
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 a non-cash expense and is dependent on our stock price, which is beyond our control. Accordingly, 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 $0.4 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.
Current 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 August 2, 2025 and August 3, 2024, respectively.
Previous 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):
Current wording
We define non-GAAP operating income (loss) as operating income (loss) 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 $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.
Current wording
(1)Stock-based compensation expense-related charges included approximately $4.4 million and $3.6 million of employer taxes on employee equity transactions for the three months ended August 2, 2025 and August 3, 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 $1,632.1 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.
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 $1,648.9 million as of August 2, 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 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.
Current wording
As of August 2, 2025, our principal sources of liquidity were cash, cash equivalents, and short-term and long-term investments of $1,088.1 million. Cash and cash equivalents consisted of cash 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 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 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.
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 customers, 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 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.
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 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 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.
Current wording
Cash provided by operating activities was $102.8 million for the six months ended August 2, 2025. This consisted of a net loss of $38.9 million, adjusted for non-cash charges of $162.7 million, and changes in our operating assets and liabilities of $21.0 million. The non-cash charges were primarily composed of stock-based compensation expense of $158.2 million and depreciation and amortization of $10.5 million, partially offset by net accretion of discounts on marketable debt securities of $5.0 million. Changes in our operating assets and liabilities during the six months ended August 2, 2025 reflect an increase in deferred commissions, connected device costs, and accounts receivable from customers due to the growth of our business, an increase in vendor payments as well as inventory levels to meet anticipated demand requirements, partially offset by increases in deferred revenue due to the growth of our business during the six months ended August 2, 2025.
Previous 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.
Current wording
Cash provided by operating activities was$41.8 million for thesix months ended August 3, 2024. This consisted of a net loss of$105.9 million, adjusted for non-cash charges of$138.8 million, and changes in our operating assets and liabilities of$8.9 million. The non-cash charges were primarily composed of stock-based compensation expense of$136.3 million and depreciation and amortization of$9.1 million, partially offset by net accretion of discounts on marketable debt securities of$8.3 million. Changes in our operating assets and liabilities during thesix months ended August 3, 2024 reflect increases in deferred revenue due to the growth of our business and lower prepaid expenses and other current assets, partially offset by increased accounts receivable from customers, higher levels of inventories to meet anticipated demand requirements, higher connected device costs, and higher deferred commissions during the six months ended August 3, 2024.
Previous wording
Cash used in investing activities was $18.3 million for the three months ended May 3, 2025, which primarily consisted of $173.1 million of purchases of investments and $6.9 million of capital expenditures for internal-use software development costs and our office facilities, partially offset by $162.0 million of proceeds from maturities and redemptions of investments.
Current wording
Cash used in investing activities was $86.4 million for the six months ended August 2, 2025, which primarily consisted of $421.9 million of purchases of investments and $12.9 million of capital expenditures for internal-use software costs and our office facilities, partially offset by $348.6 million of proceeds from maturities and redemptions of investments.
Previous wording
Cash provided by investing activities was$3.1 million for thethree months ended May 4, 2024, which primarily consisted of$150.4 million of proceeds from maturities and redemptions of investments, partially offset by$142.3 million of purchases of investments and$5.1 million of capital expenditures for internal-use software development costs and our office facilities.
Current wording
Cash used in investing activities was$33.2 million for thesix months ended August 3, 2024, which primarily consisted of$330.1 million of purchases of investments and$10.1 million of capital expenditures for internal-use software costs and our office facilities, partially offset by$305.7 million of proceeds from maturities and redemptions of investments and$1.2 million of proceeds from sales of investments.
Previous wording
Cash used in financing activities was $0.4 million for the three months ended May 3, 2025, which primarily consisted of $0.4 million in payments of principal on finance leases.
Current wording
Cash provided by financing activities was $18.0 million for the six months ended August 2, 2025, which primarily consisted of $18.7 million of proceeds from employee stock purchases under the 2021 Employee Stock Purchase Plan (the “2021 ESPP”) and exercises of stock options, partially offset by $0.7 million in payments of principal on finance leases.
Previous wording
Cash provided by financing activities was$0.3 million for thethree months ended May 4, 2024, which primarily consisted of$0.8 million of proceeds from exercises of stock options, partially offset by$0.5 million in payments of principal on finance leases.
Current wording
Cash provided by financing activities was$16.0 million for thesix months ended August 3, 2024, which primarily consisted of$16.9 million of proceeds from employee stock purchases under the 2021 ESPP and exercises of stock options, partially offset by$0.9 million in payments of principal on finance leases.
Previous wording
There were no material changes to our critical accounting estimates during the three months ended May 3, 2025.
Current wording
There were no material changes to our critical accounting estimates during the six months ended August 2, 2025.
Previous wording
For information on recently issued accounting pronouncements, see Note 2 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Current wording
For information on recently issued accounting pronouncements, see Note 2, “Summary of Significant Accounting Policies,” to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Our gross margin increased to 77% for the six months ended August 2, 2025 compared to 76% for the six months ended August 3, 2024, mainly due to operational efficiencies in connected device costs and direct labor costs.