Samsara (IOT) Q3 2026: $105M Net New ARR Fueled by 20% Emerging Product Mix
Samsara’s third quarter delivered a decisive inflection in large customer expansion and product breadth, with emerging products now comprising 20% of net new ACV. Multi-product adoption and international acceleration are amplifying Samsara’s durable, efficient growth engine, while management signals confidence in outpacing consensus for FY27. Investors should focus on the compounding effects of platform breadth, customer cohort scaling, and the operational leverage emerging in both legacy and frontier markets.
Summary
- Emerging Product Momentum: New offerings now drive one fifth of net new ACV, broadening platform relevance.
- Large Customer Cohort Scaling: Record additions in $100K and $1M ARR customers underline enterprise traction.
- International and Public Sector Upside: Europe and SLED markets are accelerating, with management targeting continued investment.
Performance Analysis
Samsara’s Q3 performance was defined by accelerating momentum in both customer scale and product diversification. The company added $105 million in net new annual recurring revenue (ARR), marking a 24% year-over-year increase and the highest net new ARR growth rate in seven quarters. Notably, 20% of net new annual contract value (ACV) came from emerging products, a sharp increase from 8% last quarter, reflecting broad-based adoption across offerings such as AI multicam, asset maintenance, asset tags, and connected workflows.
Large customer expansion remains the core engine. Samsara recorded a quarterly record of 219 new $100K-plus ARR customers and 17 new $1M-plus ARR customers, with the $100K-plus cohort now comprising 60% of total ARR. This cohort’s ARR grew 36% YoY, and $1M-plus ARR customers contributed over 20% of total ARR, with sequential acceleration. Multi-product adoption is deepening: over 95% of $100K-plus customers subscribe to two or more products, and approximately 70% use three or more, driving a stable net retention rate near 115%.
- Net New ARR Acceleration: Q3 marked the second consecutive quarter of accelerating net new ARR, a rarity at this scale.
- Multi-Product Penetration: Nine of the top ten net new ACV deals included three or more products, underscoring platform stickiness.
- Frontier Market Expansion: Construction, public sector, and Europe each delivered record or near-record contributions to growth.
Operating leverage was evident, with non-GAAP operating margin reaching a quarterly record 19%, up 9 points YoY, and free cash flow margin improving to 13%. Samsara’s ability to compound growth while expanding margins signals a maturing, capital-efficient SaaS model.
Executive Commentary
"We ended Q3 with $1.75 billion in ARR, growing 29% year over year. We also achieved our first quarter of GAAP profitability. Our $100,000-plus ARR customers now contribute more than $1 billion of ARR, growing 36% year-over-year. Our growth is driven by our strategy to partner with the world's largest and most complex operations organizations."
Sanjay Biswas, Chief Executive Officer and Co-Founder
"20% of net new ACV in Q3 came from our new products launched since last year, including AI multicam, asset maintenance, asset tags, connected training, and connected workflows. In terms of end markets, we saw strong momentum across construction and public sector. Construction contributed the highest net new ACV mix of all industries for the ninth consecutive quarter, and public sector contributed its highest ever net new ACV mix."
Dominic Phillips, Chief Financial Officer
Strategic Positioning
1. Multi-Application Platform Drives Expansion
Samsara’s value proposition centers on its unified platform for physical operations, integrating video-based safety, telematics, asset tracking, and workflow automation. This breadth enables deep customer expansion, with most large customers layering multiple products for operational visibility, safety, and compliance. The platform’s system-of-record status for physical assets creates high switching costs and durable retention.
2. Emerging Products Unlock New TAM
Emerging products are rapidly scaling, now representing 20% of net new ACV. Innovations like AI multicam and asset tags are landing in large deals, with asset tags ARR up over 400% YoY and the largest-ever asset tags deal signed in Q3. This product velocity expands Samsara’s total addressable market (TAM) and provides new entry points into existing and new verticals.
3. Large Customer and Enterprise Focus
Record additions in $100K and $1M ARR customers signal successful enterprise penetration. These customers are increasingly adopting Samsara as a core operational system, with phased rollouts and multi-year expansions. While sales cycles are longer and less predictable, management is investing in enterprise-grade infrastructure and go-to-market to sustain this motion.
4. International and Public Sector Acceleration
International markets, especially Europe, are accelerating, with Europe delivering its highest net new ACV mix and ARR growth rate in seven quarters. Public sector (SLED: State, Local, and Education) delivered 100% YoY net new ACV growth, crossing $100M in ARR. Dedicated teams and verticalized go-to-market are unlocking these underpenetrated markets.
5. AI and Automation as Differentiators
AI is central to Samsara’s product roadmap, powering features like automated coaching, group coaching, and workflow automation. These capabilities drive tangible ROI by reducing accidents, insurance costs, and manual processes—key for asset-heavy, labor-intensive industries. AI is a strategic unlock for scaling value delivery without proportional headcount growth.
Key Considerations
This quarter’s results reflect compounding advantages from platform breadth, large customer focus, and operational leverage, but also introduce new variables for investors to monitor as the business scales.
Key Considerations:
- Expansion Motion Depth: Most net new ACV comes from existing customers, with multi-product adoption driving wallet share.
- Sales Cycle Complexity: Larger deals increase variability in quarterly results, requiring a multi-quarter lens for growth assessment.
- International Investment: Management is prioritizing R&D and go-to-market spend in underpenetrated regions, betting on long-term global digitization trends.
- Public Sector Playbook: Verticalized teams and peer-driven adoption are catalyzing SLED momentum, a model that may be replicated in other verticals.
- AI Monetization Path: AI features are enhancing product value, but direct monetization and pricing strategies are still evolving, with ROI remaining the primary customer driver.
Risks
Quarterly variability in large deal timing may introduce lumpiness as enterprise and public sector cohorts grow. International expansion requires sustained investment and local adaptation, with no guarantee of U.S.-like adoption curves. Legacy telematics competitors are being displaced, but rapid product innovation is required to maintain differentiation as the market matures. Management notes that while AI is a tailwind, customer budgets are still anchored to core operational ROI, not discretionary AI spend.
Forward Outlook
For Q4, Samsara guided to:
- Revenue of $421 to $423 million (22% YoY growth)
- Non-GAAP operating margin of 16%
- Non-GAAP EPS of $0.12 to $0.13
For full-year FY26, management maintained guidance:
- Revenue of $1.595 to $1.597 billion (28% YoY growth)
- Non-GAAP operating margin of 16%
- Non-GAAP EPS of $0.50 to $0.51
Management highlighted several factors that will drive results:
- Large customer momentum and phased rollouts underpin visibility into FY27
- Emerging products and international expansion are expected to be key growth levers
Takeaways
Samsara’s Q3 demonstrates the compounding power of a platform business model in physical operations, with emerging products and international markets unlocking new vectors for durable growth. Investors should track the sustainability of large customer expansion, the operational leverage from multi-product adoption, and the evolving monetization of AI-driven features.
- Platform Expansion: Multi-product adoption and emerging products are driving both wallet share and new logo wins, especially in large enterprises and public sector.
- Margin and Growth Balance: Operating leverage is emerging even as Samsara invests in new markets and products, a rare combination at this growth stage.
- Future Watchpoint: Monitor the cadence of large deal closures, international scaling, and the translation of AI features into direct revenue or retention upside.
Conclusion
Samsara’s Q3 marked a pivotal step-change in product breadth and enterprise scale, underpinned by robust operational performance and forward investment in global and vertical expansion. The platform’s compounding strengths and management’s confidence in outpacing consensus set a constructive tone for FY27 and beyond.
Industry Read-Through
Samsara’s results highlight accelerating digital transformation across asset-heavy industries, with demand for unified platforms that integrate safety, compliance, and operational efficiency. The rapid adoption of AI-powered automation and multi-product suites is setting a new standard for SaaS providers in physical operations. Legacy telematics and point solution vendors face increasing displacement risk as customers consolidate spend on platforms delivering measurable ROI. The public sector’s embrace of digital workflows signals a broader shift in government technology procurement, while international momentum underscores the global nature of the digitization wave. Investors should look for similar product expansion and international scaling signals in adjacent SaaS and industrial technology names.