Samsara Inc. (IOT) Earnings Call Transcript & Summary

Good afternoon, and welcome to Samsara's Investor Day in Austin, Texas. It is amazing to see everyone here in person, and thank you for making the track despite the heatwaves, despite the thunderstorms to be here in person. And for those who join us virtually, it's great to have you on as well. Before we get the show started, let's go through a few legal disclaimers. I know this isn't the first rodeo for everyone here. So let me make two quick points. The first one is that we'll be discussing forward-looking statements today and these statements are subject to risks and uncertainties that are further disclosed in our SEC filings and Investor Relations website. The second point is that we'll be discussing non-GAAP financial metrics today. And these metrics should be used in addition to and not as a substitute for GAAP, and you can find the reconciliation in the appendix of today's presentation. So at Samsara, we are digitizing the world of physical operations and I understand that our markets, our products and our customers are not very well known. So to help you better understand the Samsara story, and we're going to take the business, I'm excited to bring on not just Sanjit and Dominic on stage with us today, but also Lara, our new President; Kiren, our Chief Strategy Officer; Jeff, our Chief Product Officer; and also two our very own customers. And like our customers, we look forward to building a deep relationship with each and every one of you here. And we hope that by the end of today's session, you get a better setting of the multi-decade journey we're trying to embark upon. There's a lot of content here in just 2.5 hours. So I ask you to please save your questions for the Q&A segment at the very end of the session. And with that, I'll pass it over to Sanjit.

Thank you, Mike. And thank you, everyone, for joining us today for Investor Day. So as Mike said, I'm going to start off kind of big picture, talk about our vision and what we're building here at Samsara. And as you also just heard, we are digitizing the world of physical operations. Most of you here are familiar with digital transformation. I can kind of see that from all the iPads out. You've all gone digital, and that's great. And you're also probably familiar with the world of physical operations. If you think about the supply chain, the construction companies, the energy utilities, all of the folks that power our planet. This is infrastructure of the planet. What you may not be as familiar with, though, is that many of those businesses, many of those organizations are still running their day-to-day operations of manual process, basically of pen and paper. And that's what we are here to help transform. We're help -- here to help them move into the 21st century. And that's what we are building out here at Samsara. So what I thought might be helpful is just to start with 5 minutes of context on this world of physical operations, and how it has been transforming and really the role of relationship and how role of technology and that deep relationship that's existed for a very long time. And where I'd like to start is actually with the world's oldest physical operations industry, which is agriculture. You see a rice, paddy out here on the screen. This is an industry that's been around for thousands and thousands of years. Without agriculture, we wouldn't have been able to organize in towns and now cities. And modern life wouldn't be how we know it. And if you take a closer look, you'll see the technology has had a deep role in agriculture, especially in the last couple of hundred years as it's truly modernized and gone through a true revolution. And we started pulling some data to help talk about how this is transformed and how this has happened. And because agriculture is so fundamental because it's so important, it's very, very well studied all the way back to the times of the Romans. And it turns out the Italian government has continued those studies on for thousands of years, and they noticed something that about 200 years ago, there was an inflection point. All of a sudden, the production capacity in agriculture started to change. And the specific measure that we were looking at was how much human labor, how much work is required to work an acre of wheat just as a kind of benchmark or index. And we're talking about all of the kind of human touches from working the soil, to planting the seeds, to harvesting, to milling and so on. And 200 years ago, the curve kind of looked flat, and it took basically 3 weeks of work to work 1 acre of wheat. But then the steam engine showed up and later diesel, combines, tractors and so on. And now we have equipment that looks like the John Deere equipment that you see in the bottom right of the screen. If you take a look at that same metric now, it's just 2 hours of work, it's 100x faster. And that is the effect that technology has had on agriculture. And I know we've got an investor audience here, very interested in compounding rates. So we went and worked out the math. What's the compounding rate look like? Well, it turns out is about a 20% to 25% improvement in efficiency per decade. And this wasn't unique to agriculture because when we looked at other physical operations industries, we saw a very similar pattern. We take a look at mining. And this is, again, very well studied industry. These are some stats from the U.S. government around coal mining. And as many of you probably are aware, coal mining has a reputation of not being the safest industry, especially back at the turn of the 20th century over 100 years ago, and that's the photo you see on the top right. Well, if you take a look at mining today, it's gotten a lot safer. And it became safer because of technology, you think about automation and then all the new sensors that have come out that help understand if there's any kind of hazardous gas out in the mine and so on. It's also become safer because of regulation. So the Safe Mines Act really changed the game when it came to worker safety. Today, mining is 90% safer than it was at the beginning of the 20th century. And if you take a look at the curbs of workplace injuries and mining, it's also improved at that same kind of rate of 20% to 25% every decade. So kind of an interesting pattern. And I've got one more for you, which is a little more recent, which is around sustainability, also critical to the world of physical operations because of its scale. And here, we're looking at emissions versus population growth, and these are some stats from the U.K. And up on the top right, you'll see back at the turn of the 21st century, back in 2001, they measured it was about 9.78 tonnes of CO2 per capita emitted in the U.K. Now that number looks like 5.15 tonnes so roughly half. So they've improved their emissions by 2x in a matter of 20 years, which again is 20% to 25% improvement. This, again, was enabled by technology, slightly more modern technologies. We're talking about renewables like photovoltaics and wind power. We're also talking about hybrid and electric vehicles. These are the kinds of changes that technology is made possible and the kinds of impact that we've seen out in the real world. And so now we're at the point where we have a different kind of technology on our hands, which is digital technology. Everything I talked about so far was really around industrialization, kind of new mechanical processes to do this work to automate things. We are now in the digital era where these new technologies like the ones we have on our tables here are changing the world of physical operations. And we've seen the power of digitization in the corporate office space, in the kind of professional environment many of us are familiar with. If you take a look at the revenue per employee and you map it out over a decade or so and you take a look at reports from companies like Bank of America or AT&T, you see that they become significantly more efficient in the last decade alone by adopting digital technologies. 55% for Bank of America, 43% for AT&T. And this is because they brought in technologies from companies like Salesforce or ServiceNow or Adobe or Workday, and that's modernized how they operate. It's made them much, much more efficient. We believe something very similar is about to happen and is possible now in physical operations. And all of this transformation was possible because those technologies built out systems of record. They created platforms for all this data to exist together to keep it organized, so you could report on it, you could operate on it, connect it to all the different systems. So if you think about what's happened in the world of HR and human capital management, Workday has made it easy to keep all of those records organized. If you think about CRM, it's completely been transformed because of Salesforce. It's an amazing system of record for all of your customer relationships and so on. We believe something very similar is possible now in the world of physical operations, and that's how we are building Samsara and our Connected Operations Cloud to be the system of record for these physical operations industries and these frontline workers who currently don't have that system of record, who are still running on that pen and paper. And in terms of how we're doing it, it's by building out an entire stack. I'm going to walk through how Samsara system works in kind of a simplified way. Down at the bottom, you can see the physical operations of our customers. This is a bit of an example, but we can put sensors and gateways on vehicles, on trailers, on construction equipment, you name it, we can track it. That produces a tremendous amount of data we can send up to our cloud. We can also integrate with OEMs. So if you have a newer piece of equipment, something that's already cellular-enabled, we can get that data to go directly into cloud, and we can pull in data from apps, workflow data, for example. All of that flows up into our cloud, which is where we store it, we normalize it. And once we have clean data, we can operate on it, do things like train AI models to find deeper insights on all that data. We also provide APIs. So it's an open platform. And then for our customers, we have a few different applications that they can license from us, whether it's telematics or video-based safety, workforce apps, as Jeff will talk about or others, and that's how they realize value from all this data. This is about taking in tremendous amounts of data from physical operations, finding insights in it and servicing those insights to our customers in actionable forms, and that's how they go find value. Now many of you are familiar with Samsara and kind of where we got started, and it really began with vehicles. All of these different industries, the ones that I mentioned earlier, whether it's energy, utilities or agriculture, construction, supply chains, they all have vehicles. And so that was our foothold into this market. We started with GPS tracking and driver safety products, which have now become very successful. And then over time, we've expanded our scope. We started tracking the trailers and the construction equipment, the generators and the compressors, and that's connected equipment. We have visibility now into sites. We can see what's going on in a loading dock or warehouse or other remote site. And today, as we announced on stage during the keynote, we now have apps available for workforce. So you can now understand the worker experience and we can transform that as well. This is all about physical operations at scale, complex physical operations, not just vehicles, but the entire thing. And we are excited to continue to expand the scope of what we do because it's based on our customer feedback. You're all here as part of our customer event as well. We love having these conversations with our customers and understanding where the challenges in digitizing when it comes to physical operations. And what's interesting is sometimes simpler than you might expect. I mentioned pen and paper. Well, it turns out a lot of these businesses still run on checklist because that's just part of their process, whether it's a OSHA safety checklist or some other kind of operational checklist. Well, today, as we announced on the main stage, we're digitizing those checklists in what we call connected forms. You see it on the left-hand side. So you can now just walk through any of those on your iPhone or your tablet, which is an incredible experience. It's also transformative because it's real time. So nobody has to get that paper or do data entry and take it to the head office. It can be rich. So it has video and -- photos and video. And what's exciting about this is it's all part of our platform. It's all there in terms of operating context, and that's very important for our customer. So it makes their job so much easier. Now they can just get their job done faster. And then on the right-hand side is our Mobile Experience Management product. This is also something we're incredibly excited about because it solves some real-world problems for our customers who have, in many cases, thousands and thousands of employees who never set foot in their office. Who never come back to a terminal. They're deskless. And for them, if they're stuck in an app, if they can't find a button or if they can't run a workflow, it means they're losing productive time. And so what we've introduced with Mobile Experience Management is the ability to remote into that device from anywhere and get them unstuck, keep them going, keep those operations running. These are very practical problems in physical operations and we're helping solve them with these kinds of new technology. So just to kind of bring all of this to life, I thought it might be helpful just to share what a customer journey looks like with Samsara and what that experience is really like. The customer example that I've got up on the screen is Delta Constructors. They're an oilfield company. They basically help build out oilfields. So everything from the piping, to the infrastructure, to laying it all and even helping run it. They operate in 13 different sites, all over the U.S., all the way up into the remote regions of Alaska, they're in North Dakota, they're down here in the southern states as well. And when we first got to know Delta Constructors, they had a project that was truly focused on their vehicles. They wanted to understand where all those vehicles were and actually where some of their other equipment was as well. So it's telematics-focused in other words. That's how we got to know them back in fiscal year '19, so about 4 years ago. And once they got deployed with Samsara, they realized it was incredibly easy to use and it's transformative for their operations. They were running off that system every single day, and they loved it. And so they asked what more can we do on here. And they had a specific challenge they wanted to solve, which was around video-based safety. They wanted to fundamentally decrease the risk and improve their safety operations across all 13 of their locations. And this actually was around the time of the pandemic. So they weren't able to get on the plane -- get on planes as much and go visit those sites. So they wanted a remote visibility. And they got that with video-based safety. They improved their safety footprint, and then they kept going. Since then, they've added site visibility. So there are site cameras at all those 13 sites, and now they have our workforce apps. All of this has had a huge impact on their business. They're saving tremendous amounts of time. And when it comes to the forms, they're one of our beta customers on forms, they've already started saving over 10,000 hours in terms of OSHA safety forms, just removing some of that paperwork process. And that for them is equivalent of 5 full-time head count. So they're realizing real value, they're realizing it quickly, and we're excited to continue this partnership and see where we can take it next. So hopefully, you kind of get the big picture at this point, which is we are excited to help digitally transform this world of physical operations. The industries that I mentioned earlier, they're fundamental, they're a huge part of our plan is infrastructure, and they make up over 40% of the world's GDP. They also employ a tremendous number of people, hundreds of millions of frontline workers and these are folks that are mostly deskless and have not gone through digital transformation. It's a tremendous opportunity for us. And from a big picture perspective, we're excited to work on some of these hard problems like helping reduce the world's carbon emissions. These businesses, these industries in total represent more than half of the world's carbon emissions. And we're excited to be working on technologies to really move the needle on that as well. So with that, I'm going to turn things over to Lara Caimi, who is going to join me on stage here. And I'll just do a quick introduction for those of you who haven't met Lara. She's our new President of Worldwide Field Operations. I think this is week 3, maybe week 4. So it's all part of onboarding. And Lara is joining us from ServiceNow, and I got to know her as part of our interview process and over the last couple of weeks really well. And I'm really excited to have her join us. Her background is incredible. She's going to talk a little bit about it. But I just love her customer focus over her entire career and especially at ServiceNow. And I also love that she's seen this next phase of growth once before that we're about to head into as we grow from $1 billion in ARR to hopefully many several billions. So that's a technical term. All right. With that, I'm going to hand things over to Lara. Thanks for joining me. All right.

All right. Well, thank you all for having me here. It's a pleasure to be here, and thank you, Sanjit. So I will spend a few minutes introducing myself and then also talking about why I made the decision to come here to Samsara and why I'm so excited about it. So as Sanjit mentioned, I spent the last nearly 6 years at ServiceNow, where I first reported to John Donahoe and then Bill McDermott. It was an incredible journey there. I started when the company was about $1.5 billion in revenue, and it's now $7.5 billion and growing. And helping to drive and build that company through that period was an incredible opportunity to really shape and form and work with that team to build what is really an incredible company, as you guys all know. The last couple -- 3 years or so, I was the Chief Customer and Partner Officer, where I led everything post sales for ServiceNow, which included professional services, customer success, as well as the partner ecosystem, which was really a bridge presale, post-sale at ServiceNow. And I had 3 separate P&Ls. There was $500 million of bookings every year that I was accountable for -- and -- but I think what I was most proud of in that period was really reinventing customer success, which used to be a services business line. And we created a subscription revenue product that was really focused on customer value acceleration, which became the fastest-growing product in ServiceNow history. And what I learned from that chapter was really that deep focus on the customer can really translate into meaningful business impact for the company, which I see a similar opportunity here at Samsara. Before that, most of my career was really focused on strategy, building strategy, improving operations, determining long-term growth potential for businesses. So I was the Chief Strategy Officer at ServiceNow for a couple of years, and then before that, I spent 17 years at Bain & Company as a partner in the technology practice where I was mainly focused on software companies, whether it was growth strategy, M&A, operational improvement, go-to-market transformation, things like that. And then in 2020, about 6 months before their IPO, I joined Confluent's Board. And it's been a real pleasure advising that company through their transition from a pre-IPO to now a public company and helping on their ongoing growth journey. So let me talk a little bit about why I joined Samsara. As Sanjit said, I see the potential similar to kind of my run at ServiceNow for this company to not just build from the $850 million of ARR that it is today to a multibillion-dollar company that really will have enduring impact in these markets. In the past couple of weeks, since I've been on the ground, I've spent time with customers, I've spent time with employees, lots of time with Sanjit and leadership team, and it only reinforces my excitement and optimism about the future of this company. So let me explain a little bit in terms of how I thought about the opportunity and why I'm so excited about it, and I'll just dig into a couple of these areas. First of all, the market potential is really incredible. So I think it's -- from first glance, you think about Samsara and you think about vertical software. And it's so much more than that. In the first couple of weeks alone, I met with the city government emergency roadside assistance, the largest poultry producer in the country. So the range of industries is absolutely incredible, and when you size it up, that's 40% of the GDP that has some sort of physical operation that's powering their business. That's a massive, massive part of -- massive TAM. But what's more exciting is actually the growth rate. So I think my consultant brain thinks about S curves, adoption curves. And where I came from at ServiceNow, those industries are really kind of at a more mature part of an adoption curve, right? Most companies have transitioned to SaaS, transition to the cloud, et cetera. As Sanjit was talking about physical operations is still at the very early part of the S curve. So the growth potential is incredible, which makes for a super attractive market. From a competitive dynamic, this company has a leading product and is gaining share. I don't see anybody else in the industry that has the same differentiated stack, the same platform vision that Samsara has. And I liken it if I put my ServiceNow analogy to that, it really feels like the early days of ServiceNow, where ITSM was this kind of born in the cloud SaaS offering competing against these legacy incumbent players like BMC. It feels very similar to that, which, of course, is great competitive dynamics. The platform vision, I think, is really unique and super exciting. So customers want a single pane of glass, right? And that's become very, very clear. As I talked to customers this week, they want to see all their data, whether it's their asset data, their telematics data, their security data all in one place, not just to have it, but to really drive their business. And so what they're asking for and what all those integrations suggest is they're trying to pull in more data, have more contacts that they can manage more of their business in Samsara. And they're asking for more, right? Like the fact that the product road map follows the customer's request is such a healthy sign that there's so much opportunity. I mean, you just think about forms and the paper that these customers are using. We digitize that, turn that into workflow. There is a ton of that opportunity out there. Customers are already asking okay, when can I start doing more preventative maintenance on the platform? This is such an exciting sign for me that there's so much opportunity still left for this company to continue to grow. As a sales leader, the customer impact is super exciting because there's tangible hard ROI that the solutions provide really quickly actually. So whether it's -- we talk about safety, we talk about sustainability, we talk about efficiency, there are so many great customer stories. DHL wanted to -- had a material decrease in accidents, which I think, decreased their accident-related costs by 49%. You heard the American -- for those of you who were at the keynote this morning, American Airlines, they're reducing delayed flights, that's material for their operations in addition to saving pretty material fuel savings. I think he said $750 million already, which is incredible -- no, $750,000. And that's only on a small portion of their assets, right, that they've rolled out. So you imagine what that looks like as it expands. And then Sobeys Supermarkets, one of the big supermarket chains in Canada, they're using Samsara to help reduce emissions. And so they're tracking fuel savings, I think it was 76,000 gallons of diesel already saved. And that was just in a 4-month period. So hard, fast, real tangible ROI is meaningful when you're selling value to customers. So all of this, I think, really speaks to the results that the company has seen. So just in 7 years of selling, this company already has $850 million of ARR. That's a true testament to product market fit to a great go-to-market machine and a team that's really focused on customer value. So every Samsaraian that I've met so far deeply cares about the customer and wants to do the right thing for the customer. That's incredibly powerful. But the last thing, and I think perhaps it's the secret sauce, and I give Sanjit and team, a ton of credit for this, is there really is a powerful purpose to this company. And as you all know, purpose can be an incredibly important motivator. And I think for many of our employees and our customers, the fact that we save real lives is meaningful and motivating for people. The fact that we actually are increasing the sustainability of the planet is powerful, and so for me, it's also personal. So as I thought about what I wanted to do next after ServiceNow, I really -- purpose was part of my criteria, what was meaningful for me. And so my story is I'm originally from Iowa, my mom's family were farmers, my dad's family aspired to be farmers. So my dad's dad wanted -- had this dream of owning his own farm. And so he was working multiple jobs, trying to save money so he could buy this farm, and he got into this construction accident when my dad was only 11 years old. A steel beam hit him in the head. He had a traumatic brain injury. He spent a year in the hospital and could never work again. And so my grandma at the time had 3 young kids, and she had to go to work for the first time and support the family. And so she worked at the I-80 Truckstop in Walcott, Iowa, until she was 77 years old, and she was a waitress and then was eventually the cashier. And it was hard. Even though she loved the job and became friends with the customers that came through there, it was a life-changing event for my family. And so I think about our customers here at Samsara and I think about the fact that they have hard enough and dangerous jobs. And the story is about saving individuals' lives are really meaningful. And so I'm incredibly proud to be part of a team that actually is making an impact on people's lives and can avoid the situation that my family had to experience. So that's my story, and I'm thrilled to be here. I'm so excited about the opportunity. I'm really excited to be able to meet all of you over the next couple of hours in the next weeks and months. So I will transition it to Kiren and Jeff to talk about our products.

Thank you, Lara, and welcome again. My name is Kiren Sekar, and I've been part of the leadership team at Samsara since founding. I led our product organization until just about a year ago when Jeff, my partner in crime came aboard, and I moved into my current role as Chief Strategy Officer. Before Samsara, I worked with Sanjit and John, the leadership team at Meraki. And I joined Samsara at founding because I saw the potential for this new generation of technology to create a really big impact in a large part of the world, a large part of the economy and create a very successful long-term enduring business in the process. Now 8 years in, I feel even more strongly about that vision. I'd like to start today by sharing with you what this impact of technology looks like for our customers. We're going to play a short video from one of our customers based here in Texas, Chalk Mountain Services. Let's go ahead and roll the video. [Presentation]

So, pretty incredible, right? What did we hear? You heard how Samsara's technology is helping Chalk Mountain's workers come home safely at the end of the day. We heard how the technology is helping to improve the day-to-day experience for their workforce. And what does that mean for their business? It means they have lower labor turnover, and it means they've reduced their preventable accident costs by 87%. It turns out that these results are far from unique. Physical operations and the customers we serve and the industries we serve represent 40% of global GDP. That's everything from construction to energy, to logistics, to local government, to food and beverage production, it's the industries that keep our planet running. And these are industries that have been historically underserved by technology. With Samsara, we are changing that. Before Samsara customers often had multiple silos, 2, 3, 4, 5 legacy systems that they were working out of. They couldn't access the data, they couldn't connect them. Now we're building a system of record for their operations. We're capturing data from their physical assets, their vehicles, their equipment, their trailers, their sites, the frontline workers, centralizing it in the cloud where customers can access that data, they can analyze it and they can act on it. And when they create the system of record in the cloud, we take the problems that operators have focused on for generations, and we can turn them into data problems that they can address with software. These fall into three areas: safety, efficiency and sustainability. And the impact is massive. We estimate that customers have avoided 120,000 accidents using Samsara's technology in the last year. We've helped customers digitize 110 million workflows, that means that workers in the frontline are more productive and back office teams have real-time clean data. And we help customers be more sustainable. Physical operations is responsible for over 50% of global CO2 emissions. And operators are looking to measure their emissions, they're looking to reduce them and they're looking to lower fuel costs in the process. We studied a cohort of 2,500 customers and calculated that they've avoided over 2.3 billion pounds of CO2 emissions by reducing fuel waste with Samsara. These are really exciting and compelling areas of impact for their operations and their businesses and many of them are made possible because of data and AI. We have been building AI into our products and investing in AI technologies for 5 years now. We started with our video-safety products, where we use computer vision and deep learning to take billions of hours of video footage, find the moments of interest and surface them to operators. So they could act on these, to exonerate their drivers, to coach them and prevent accidents before they happen, the cost savings and the safety improvements were massive. So we've been doubling down on AI. We have been extending AI across more of our platform and taking advantage of our growing data asset, building custom models that we train on our proprietary data to make sure that customers get a maximum ROI. We believe that we're still in the early days of the impact of AI on physical operations and new tools like generative AI and large language models open up even more possibilities. We've been delivering customer impact with AI, and we're well positioned to continue to win in AI for 3 core reasons. First, the volume and breadth of data on our platform that we can use to train proprietary models. Second, the infrastructure that we've developed to train and operate these models which enables us to innovate efficiently for our customers. And third, our customer feedback loop that allows us to find the most important problems in physical operations to solve with AI and to make sure that they get an ROI from our solutions. Let's take a moment and talk about each of these three in a bit more detail, starting with data. The data asset that we're collecting is truly unique. We don't know of any other company that has this scale and breadth of data in a single system, and it would be very difficult to recreate. We are ingesting 6 trillion data points into our platform every year. These come from a variety of sources, including drivers who are taking nearly 2 billion trips on Samsara. Now think of each of these trips. From each trip, we're capturing location data, we're capturing fuel efficiency, we're capturing driver safety metrics and driver behavior, was understanding the health of the engine, we're understanding the route timeliness and performance. These trips are covering 99% of the roads in the U.S., we're digitizing tens of millions of documents along the way and processing 55 billion API calls. All of this data comes from a wide variety of assets that are used in physical operations from light- and heavy-duty vehicles to trailers, to construction equipment, to generators, to sites, and we're collecting a wide variety of both structured and unstructured data from digital documents to GPS coordinates, to sensor data, to video. And as we've seen, the world of physical operations is diverse, and we're capturing data across a variety of customer environments from different industries to geographies, to customer sizes. This data allows us to train models that are highly effective in our customers' environments, and we see results like Chalk Mountain using these models to drive down their accident rates, and lower their cost by 87%. Next, let's talk about infrastructure. We have built infrastructure to manage this data at scale and to be able to use the data to train new models, to validate them to make sure that they're highly accurate for our customers and then to run them at scale across tens of thousands of customers. This infrastructure can be used across many models in our platform and will allow us to build future models and AI capabilities efficiently and deliver high-quality results to customers through the [ user ] interfaces that they're already using day-to-day. Third, our customer feedback loop. Customer feedback has been at the core of how we've developed products at Samsara since Day 1. And in a world of AI, it becomes even more important. We are not building AI capabilities for office workers or for developers. We're building it for environments like Chalk Mountain and physical operations. And so it's incredibly valuable that we've developed relationships with over 1,300 large customers who can partner with us to identify the biggest problems to solve in physical operations and address them with AI. We can capture ground-truth data to validate that these models are effective for customers in the field, and we can enable, we can ensure that customers get value and ROI from AI capabilities. That allows us to repeat the loop. Now what I'd like to do is shift gears a little bit and switch to a product demo. So we can see how all of these capabilities come together and deliver ROI for our customers. We're going to do this through the lens of Superior Plus Propane, a propane distribution company that has given us permission to share their dashboard with you. Like all operators, Superior Plus cares about safety, efficiency and sustainability. They are transporting large tanks of flammable liquids down the road at highway speeds and inclement weather, in dense or congested environments. So creating a culture of safety across their 4,500 employees is critical. Their goal is to minimize the number of accidents and to have 0 fatalities. Next, efficiency. They are distributing a commodity product. So operating efficiency is how they can differentiate with better customer service and how they can ultimately improve their operating profits. They're looking to efficiently serve 936,000 customers working out of 200 strategic locations to distribute over 4 billion liters of propane every year. And third, sustainability. Superior Plus markets propane as a low carbon fuel. So sustainability is an important part of their brand. They're looking to report on their emissions, they're looking to minimize the emissions and they're looking to lower cost in the process. So let's flip away from the slides to our browser and take a look at how Superior Plus propane uses connected operations to be safer, more efficient and more sustainable. So what we're looking at here is the Samsara dashboard. This is the live dashboard where we can see their real-time data. This is the exact same interface that their team is working out of right now. And -- from here, they can see all of their operations in 1 place before they might have been logging into 2, 3, 4, 5 different systems. They might have had big paper maps on the wall and stacks of paperwork everywhere. Now they can see vehicles, equipment, sites, frontline workers all in one place. They have a digital reconstruction of their operations in the cloud. And now we can drill into any part of their operations. Let's see what's going on out west in California. We can zoom in and see where their trucks are in real time and with a quick click we can see what's going on with each of them. We can see a photo what the driver is seeing out on the road, great for situational awareness in the back office. We can see the fuel level. We can see their location. We can see which driver is logged in, right? And we can see this across all of the assets in their operations. Now let's go ahead and click into one of these, and launch helicopter view. Here, we can see where the vehicle is in real time, down to almost a second. We show this to customers who are used to a trail of GPS breadcrumbs that maybe updates every 5, 10, 15 minutes, and they say, "Wow, this is incredible. It's like turning on the lights. One of our customers, a fiber optic service company estimates that this real-time visibility has made their dispatch operations 70% more efficient. And let's take a look at the data we're capturing. We have real-time location streaming into the platform, we also have images and videos from their dash camera, right? So we can see what the driver is seeing now out the road. We have information about the vehicle or asset itself, and we have data from the sensors that are built into the vehicle. We can see sensor data like fuel level, odometer, engine hours, things like air inlet temperature that mechanics care a lot about. This is data that was previously inaccessible. You often have to physically take a computer and plug it into a vehicle to get that information, right? Now we have it centralized in the cloud across their operations. We're able to analyze this data and surface insights to customers that allow them to be safer, more efficient, more sustainable. Let's take a look at how that works, starting with safety. Now unfortunately, in a large-scale fleet, accidents are commonplace, they're often a weekly or even daily occurrence. And without video evidence to exonerate a driver, after each accident, operators often end up in costly court proceedings with expensive insurance payouts, and these often end up costing significant amounts to operators even if their driver isn't at fault. Now with Samsara, they have the data, they need to protect and exonerate their drivers. Let's take a look at a near miss, the kind of incident that could easily cause an accident. I'm going to press play, and we're going to see a car come out in front of this driver from the left side. Let's take a look. We can see he's paying attention and out of nowhere, this car swerves into his lane. Fortunately, he hits the brakes, avoid the collision, honks the horn, probably loses his cool less than -- I would have in that situation, avoids an accident and protects the operator. Take a look at that again. Now look at the data that we're collecting during this incident. We, of course, have video front-facing as well as what the driver is doing. We're using AI to determine that this driver is attentive. He has proper following distance. He's not speeding. We can tell that this driver is not at fault. And if this had been an accident, the safety manager would get a real-time alert on their phone. They can log into the app from wherever they are, they can make sure that the driver is okay, get them any assistance they need. And then they can share this video with an officer at the scene with their insurance company, and this never ends up in court. A single exoneration can save customers hundreds of thousands of dollars or in the case of a major injury or fatality, millions of dollars. Now let's take a look at all the data that we're capturing in the process. We talked about distraction following distance, driver behavior, we're also understanding speed or are they on the brake or are they on the gas? Are they using the cruise control. We can see the G-Force of the incident. We can see where on the route, it happened. This means that out of all of the billions of hours of driving, we're able to use data and AI to find moments of interest, analyze them and surface these analytics to operators. Let's take a look at the safety dashboard that a VP of Operations or a VP of Safety would work out of. Here, we can see statistics aggregated across the entire fleet all rolled up in a simple safety score. So we can see Superior Plus is a very safe fleet with a safety score of 96. We can see how that's trended over time and 95 -- bouncing between 95 and 96, and then it actually improved, holding at 96 and now up to 97. So trending in the right direction. Operations leaders will want to see how does the score vary by different parts of their business. So we can drill down by region, how does California compare to the Mid-Atlantic or New York. We can drill down into individual operating teams. We can see, what is driving these scores? From speeding to distraction, and we can identify the top-performing regions, teams and drivers to incentivize and reward them and we can see those who need a little bit of extra coaching and extra help. And when it's time to actually engage with individual drivers on their safety, we can do that through workflows built into the platform. By open our coaching interface, we can actually have structured workflows to engage with drivers on their behavior, be able to positively recognize and reward their safe driving, and also show them where they can get better. Now these tools, this data, these workflows are what customers are using to implement safety programs and actually reduce their accident rates by sometimes over 80% and increased driver retention in the process. So these are a handful of examples of how customers are using Samsara to improve their safety outcomes. Next, let's talk about efficiency. Physical operations are asset and labor-intensive industries. So finding better ways to get utilization out of their assets and make more efficient use of labor is critical. Maintenance is a great example. Here, we can see all of Superior Plus' assets and we can understand the maintenance status and health of each of them. So for each of these vehicles, we can see the battery voltage, the engine hours, the odometer, any fault codes that are being reported. Now this data means that instead of having a schedule-based maintenance program where we maintain a truck every 6 months, every 12 months, we can have a data-driven maintenance program. We might have older assets or assets that are more heavily utilized, assets with engine faults. We can get those in for service faster. We can avoid unplanned downtime, and we can squeeze extra life out of these units. And if we have lightly used assets that are healthy, we can avoid the cost overhead of unnecessary maintenance. We can use the interface to see which assets are maybe at risk of breakdown, which are reporting engine faults. Oftentimes, that check engine light goes off and it might go unreported. Now maintenance teams can see it from the cloud, and we can even create real-time alerts. So if we want to be alerted to a potential maintenance issue that could cause damage to equipment or unplanned downtime, we can take immediate action. Let's see how we can set that up. Search for maintenance alerts. Let's set up an alert if there's a fault code that's reported by a sensor in the engine. Let's focus on the most severe fault codes that we want to be notified about, that are lit for more than 60 seconds. We can set up an alert and have a notification be delivered right to the operator's phone or to the dashboard. They can get that off the road in for service, avoid upsetting a customer, avoid unplanned downtime. Now all of this data from the assets and sensors is incredibly powerful for driving maintenance programs. Equally important is the observations by the workers who are operating the equipment. Now these operators will typically inspect trucks and equipment every day before using them, make sure they're in proper working order. And this has historically been a pen and paper process. It's slow, it's error-prone, and the mechanic might get a big stack of paper at the end of the week to sift through. Now we can actually do these inspections through a guided workflow in our mobile app. The operator is guided through how to perform the inspection or they're checking each area properly. If they find a defect, they can take a photo of it and when they hit submit, it gets sent into the cloud in real time. Now maintenance teams can see all of the inspections as they're flowing in. We can see the safe, healthy inspections, we can see any issues that were reported. And when an issue comes in, we can immediately schedule that vehicle for service and actually manage the entire workflow, see the defects that were reported, leaking oil from the engine, front hood damage. We have photos to see what was going on, right? This is information that's incredibly helpful, that's impossible with pen and paper. And we can manage the workflow from the issue being reported out in the field, fixed by the mechanic and then verified by the worker out in the field again. I talked to a customer earlier this morning, who's deployed this capability. And in the first few months, they've already saved literally thousands of hours of time by digitizing their inspections. And it turns out that these digital workflows are not limited to inspections, they're common across operations. So we built document capabilities into the platform. We can create different types of documents to digitize customers' processes. For example, if we want to make sure that pallets a return to the right place at the end of the day. They don't go lost that crews aren't searching for them in the morning. We can create a digital document. Drivers can submit them at the end of the day, and here, we can see that indeed, the pallet is put back where it's supposed to be. We can see where that was recorded and when. And now we have data to analyze. One of our customers, UFP Industries estimates that by going paperless with Samsara and bringing these processes into digital workflows, they're saving $600,000 a year. Now efficiency is not limited to vehicles. It's equally important in the equipment that our operators use, which is why we built our connected equipment products. Here, we can see a piece of heavy construction equipment that is being monitored through our connected equipment solution. We can see its location out at a job site. We can see the health of the asset, we can see its fuel level, we can see any diagnostics issues, and this is incredibly powerful. We heard from American Airlines, having real-time information about the location, about their equipment, their ground operations means that they're saving thousands of hours of hunting these down. And they're actually by getting them to the right place at the right time, helping make sure that flights take off on time. Think about servicing this asset. As we can see, this is out in the middle of nowhere. If we want to send out a technician to maintain it, it's incredibly helpful to understand, "Hey, does it need service. We can look at its utilization, we can look at its health. And then we can send the technician to the right spot so they're not hunting around this quarry for an hour before they can do their job, incredible labor savings. And by understanding asset location and utilization, we can identify underutilized pieces of equipment and we can redirect them to other operations where they have higher needs so that customers can do more work without having to buy or lease more assets. So these are just a few examples of how customers are using connected operations to make more efficient use of their labor and their assets. Last, let's look at efficiency. Physical operations customers are looking to measure their sustainability. They're looking to measure their emissions and report on them to meet their regulatory requirements. They're looking to lower these emissions and in order to meet their sustainability targets. And in the process, they want a lower cost. They want to eliminate fuel, waste, they want to transition to lower-cost energy sources. And our platform helps them do that. We can see their CO2 emissions right here in the platform, makes their reporting much, much easier. And they can see the efficiency of their assets and the behaviors that are driving those efficiencies like engine idling or driver efficiency. We can have detailed information and the driver behavior that impacts sustainability. We can understand their idling, their speeding, how smoothly are they driving? Are they using the cruise control effectively? And just like safety, we can see this by region, we can see this by driver, and we can create incentive and rewards programs. One of our customers, a logistics operator in the Midwest, implemented a driver efficiency rewards program using this data and through that program, they were able to take countless tonnes of CO2 out of the air and they're actually saving $1 million in fuel cost. And for customers who are transitioning to electric vehicles, they can manage those in our platform as well, so they can see the state of charge, they can optimize their range. They can make sure that they have enough battery charge to complete the jobs that they need to do, and they can optimize their charging schedules. And for customers who are making that transition, we make that easier as well. We can analyze all the data in the system across their vehicles and identify these are the vehicles that are the best candidates to transition to electric. And that's how customers are being more sustainable with data and Samsara. All right. To recap, we've seen how customers can use Samsara to replace multiple siloed legacy systems with a single unified system of record, how they can use that system of record to access and analyze data and ultimately act on it to be safer, to be more efficient and to be more sustainable. But we are continuing to innovate and expand where we can address customers' operations. And to tell you more about that, I'd like to hand it over to Jeff. Jeff?

All right. Good afternoon, everybody. Great to be with all of you. For those of you who I have not met, Jeff Hausman, I'm our Chief Product Officer. And I've now been with Samsara for not quite 11 months. And I figure it might be beneficial. I'll give you a little bit of background on me before we dive in. So I've been -- as I announced earlier today, I've been working in the area of digital transformation with IT organizations for quite a long time. Most recently, I led what was called the Operations Management portfolio at ServiceNow for 3.5 years. And I previously spent time in other large technology companies, Veritas, Hewlett Packard, Symantec, McAfee and others. One of the things that really excites me -- and Lara talked about purpose, Sanjit and Kiren shared vision and opportunity, one of the things that really excites me is the opportunity to take all the learnings and knowledge, partner with our customers and transform the way the world works in physical operations. And that's why I'm here. And if you think about all of the road map and all of the innovation that we deliver, it is fueled by our customers. I talked about this earlier here and just shared a bunch of capabilities. A lot of our innovation is driven by the fact that our technology and R&D teams, they're constantly out there, meeting with customers. We had several customer advisory councils literally yesterday. We tested some new ideas. We got their continued feedback. In the past, that's led to things like AI-powered dash cameras, driver workflows or end of day, beginning of day workflows, the fuel and energy insights that he just shared. I've also been in my first 11 months here spending a lot of time with customers personally. So I've met over 75 of our customers face-to-face across North America and Europe. And there are a couple of common themes that I kind of tend to hear from them. Number one, they see data as a critical unlock to help them drive and do things differently as we heard earlier. The other thing that I hear is I hear customers who start to appreciate that not all technology is solving their needs. And so what I talked about earlier this morning are a number of new innovations that are focused on reshaping the worker experience because we talk about the fact that data is critical. Data can inform things, but ultimately people drive transformation. So we shared earlier this morning about how we are driving innovations in the areas of personalized experiences, connected experiences and integrated experiences. From a personalized standpoint, our customers have all manner of different types of workers that are out in the field, helping them operate more safely, more productively, I'll show you some of the new things that we're doing there. They also have a very vast set of operations. They have all different types of jobs that they do, all different types of sites that they operate in, connecting across that entire workforce from sites to vehicles, to assets, critically important. And finally, as we just shared, the integration of various different systems, systems that are used by our customers, their customers, their partners, those are unlocking effectively new value streams or new use cases and breaking down data silos. So let's dive into personalized. One of the biggest challenges, whenever I survey the room, I ask our customers, how many of you have 100% utilization? How many of you have full staff? Not one raises their hands. They are all struggling with the opportunity and the betterment and the way to engage and retain their drivers, their field workers, et cetera, critical problem. They're looking for ways to drive better experiences. Here in mention, and we saw in the Chalk Mountain video, how a number of customers use our AI-powered information to understand and better self-coach on behavioral situations and improved driving behavior, and we're helping them with these in-cab alerts and nudges to self-correct, and then they can resolve those issues in real time, not having to wait until a coaching session necessarily, but they're able to improve their safety scores and improve the overall safety and operations of their business and their overall organization. But we also saw that there are a number of other challenges that they have. Most of our customers have hundreds, if not thousands or tens of thousands of workers, and they're operating in all kinds of different locations. So imagine, I described this, this morning. It's 3 a.m. in the morning. Some workers out in that -- I don't know that quarry that was shown out in the middle of nowhere, having trouble with an app or a workflow, what do we do? How do we help them actually get this working properly? Or they're driving in the middle of a rush hour traffic and they're getting incessant notifications, texts, TikTok, whatever, right? We knew we could do better. And so this morning, I introduced one of our new solutions, a software-based solution called Mobile Experience Management. Mobile Experience Management is going to allow our customers to simplify mobile management at scale. And they can personalize the mobile experience for specific personas. So for instance, if you are a field service tech, I can define what specific applications and workflows are appropriate for you. If you are a construction worker, I could do the same. If you're a long-haul driver, I can do the same for you. So I can personalize it, and make sure you're getting what you need. And there are really 2 [indiscernible] benefits. The first benefit that we talk a lot with customers about is go back to that 3 a.m. scenario. We could provide a lifeline from Central HQ out to that worker. We can make sure that they get an application downloaded and working, a workflow operating, fix a configuration issue, if that's what it is, get them up and running, wherever, whenever they need it from a remote location. That's keeping them connected and productive, which is critical for the efficiency and driving of that business. The second thing is something that's focused more on drivers. It's called focus mode. This is going to allow you to determine what applications and workflows are available to that persona while a vehicle is in motion. It's going to more proactively avoid even further sets of distractions or disruptions while a vehicle is in motion. So these two benefits, fantastic, very powerful, great to hear about them, but I want to conduct a quick little video demonstration of remote support to share with you how this actually works. So let's bring up the little remote demo, and I'll talk to it. Now this remote support feature, it's the only integration and opportunity in the market that's tied directly into our platform. And if somebody is in need of a solution, you can go find a particular device, you can click into remote session with that particular worker's device. And you see here, this is the dashboard view from back office and the same view that the actual worker has in their mobile device. I can now go in, in real time, and I can drive, if you will, and address and fix whatever challenge or in this case, I'm literally starting and helping them drive a start-of-day workflow. I can literally provide complete support wherever and however they need it to make them more productive. We're pretty excited about this, and frankly, so is the audience from this morning. But beyond personalized experiences. Again, our customers are operating in vast connected large sets of complex operations. We need to drive connected experiences for them. So picture, for instance, the volume and the type of jobs that our customers are performing. We saw how -- we have all different types of organizations. We have people managing deliveries, people performing service field work. They're operating in hazardous conditions, often with dangerous equipment. We've got to help them with better visibility into how things are working. So one of the things that we saw is we saw an opportunity to help them rethink and leverage the feedback from them on how they actually manage things like intensive amounts of paperwork and pen and paper processes. Every single one of our customers has lots of these. Beyond, as Kiren showed, the vehicle inspections, think about OSHA safety. Our customers fill out massive paperwork, it takes tremendous amounts of time. Sanjit talked about one of our customers who is taking them not only thousands of hours to actually fill these all out. It takes days for that paperwork to get back to a central office and be able to be used. So we have worked on and focused on complete digitize or digitizing this process, helping make it easier and better for workers with what we call connected forms. It was talked about briefly. I shared it this morning. This is another software-only solution. This is going to bring the power of mobile workflows everywhere within physical operations. Think about how you can now digitize any type of challenge. And I'll, in a moment, show it to you. But there are a couple of key things. This is going to help save hours. It's going to improve efficiency. It's going to avoid mistakes, it's going to help you avoid costly fines you might have, particularly in regulated or OSHA-type compliance, and this is something that can be delivered seamlessly to anybody with a mobile device, which pretty much everybody in this room has and most of our customers now have. So let's do this. It's great to hear me talk about it, but we're going to do a live demo. So CJ in the back of the room, you're ready, you look ready. All right. We're going to do a live demo for you of connected forms. You can see the digitization of forms, it starts in the familiar Samsara mobile app, and you see on the upper right there, this great new tile says forms. Through that, we can pump from the connected operations cloud down to this mobile device, all manner of various different types of inspections for all manner of different types of things. And CJ is showing you a selected list we could customize and do all manner. These could be safety inspections, specialized equipment inspections, anything that you need to do we can customize and put directly into a mobile workers device. Now we did this earlier today, so we're going to do the same one today. So we don't -- we have good Karma. We are here in a tight little space. There's only 2 egress. So we have fire safety challenges, right, CJ. Let's do the OSHA fire safety inspection form. So as he goes in, this is so easy for him to fill out and complete. CJ is not a fire safety expert. He doesn't understand OSHA regulations. Well, maybe he does, but we'll say he doesn't for this. He has prompted to automatically go through all these checklists, all the different items and to identify if there are any issues. And you can see he did find an issue. He found that somebody blocked fire doors out there or somewhere. What he's able to do, he's able to add notes. He's able to add photo directly in to prove that there is an issue so that he can submit it back to HQ. So he's going to go ahead and hit submit. And that is in real time, translated up into the Samsara connected operations cloud. So every customer can get real-time immediate visibility into all these issues and submissions. Now let's shift gears, CJ. Let's go to the team at HQ. So now we are the safety and maintenance team at company X. What CJ is showing you is a list of all the different submissions from throughout the organization, and they're sorted by where they were -- who they were submitted by and the time they were submitted but he can also look at it. As you know, we have an enterprise-grade platform by tags, by the form type, by a variety of different other factors to organize us the way he wants. And if he clicks into the specific one that we just did, you'll see additional context besides the answers that will come to in a minute, shows he did it, when he did it, where he did it. You saw him do it. He did it right here in Austin, Texas. This is live. And then if he scrolls out, he can scroll down and show you the answers. He can show you the text and the photo of his proof, and now he's easily able to make sure this is passed on and resolved, and I'll come back to that more in a minute. But let's also think about another challenge that customers bring to us. What happens when I need to go back and find one of those forms submissions from a year ago, 3 months ago, what have you. What do they do today? They're rummaging through file cabinets or sifting through mounds of paper. Now you can simply go to the issues page. Every historical submission is now in one single place right here. It's organized by, when it's due, but he can look at it by status or who it's assigned to. And CJ, maybe if we just go as a last step here, drill into our -- here you go. -- doors blocked by mountains of boxes, lovely. He can also assign it to somebody. He can put the priority in it. He can start and kick off another workflow from this. So rest assured, he'll make sure that our boxes get removed safely and we're all good. Bottom line is connected forms is going to change the way that our entire operations customer base works. It's going to give them that power of connected digital workflows throughout their operations into all of their workers, incredibly powerful, and we're really excited about this. So they have a live demo of connected forms, all right? Thank you, CJ. All right. Now beyond those personalized and connected experiences, our customers also need integrated experiences. So we have one of the largest sets of capabilities from a platform standpoint, we have the largest set of operational data on an open integrated platform in our industry. We have over 240 different integrations. Our platform operates at enterprise scale. You already heard about the 6 trillion data points that we get. You heard about the, what I said this morning, it was 40 billion collective miles and the diagnostics off that, that come into our system every single year. We have capabilities that our enterprise customers expect. Tags, which you saw, single sign-on, roles-based, all of the things that our largest customers and enterprise-grade customers expect. And you also see that on average, they use 6 various different integrations. They're driving a lot of value in addition and outside. So let me talk about a few of our types of integrations. And these are just a few, we have 240. Let's start with OEMs. We can bring data in from tractor or tractor providers, refrigerated trailer providers, specialty equipment providers, Thermo King, Stellantis, John Deere, GM, Ford, et cetera. And if those organizations already have a way to bring data into a cloud, we can do cloud-to-cloud integration with them. It's providing additional insight and value to help our customers manage their entire portfolio of fleets. And frankly, most of our customers are not homogenous. They have multiple sets of equipment and providers. It's very important for us to be able to get the information for them, however and wherever we need it. Second, IT data. And I'll extend it, say, IT and financial data. We have all manner of different types of integrations with these types of systems. Some of you who were here last year, probably remember the story of Michael sharing Liberty Energy situation. They were able to -- because of the way that they lease back equipment into their organization, they were able to use our data on location to improve tieback into their financial systems and drive localized tax savings throughout their operations to the tune of more than $10 million in a year. That's pretty powerful. From an insurance standpoint, we help organizations tie into insurance organizations, and there's a great win-win-win story there. When companies are using our capabilities, their safety is better. That actually helps the insurance companies, and it reduces the payouts, so they get lower premiums. The story I shared this morning was a company called Fraley & Schilling. They operate 41 fleets across the Eastern U.S. Those fleets drive 4.5 million miles a month. They've been able to improve safety scores, and they've lowered insurance costs by over 36%. That's fantastic. And then the last area that I'm highlighting on this slide is vertical-specific. So one specific example that I'm going to highlight is RUBICONSmartCity. They leverage our APIs. There are water and recycling kind of management software solution for cities and using our data, they integrate our data via API, and they're able to, in real time, share with their customers, both routes and the expected time of pickup and whatnot, helping drive more efficiency and better customer success and customer service. So you can see the power of our platform and how we're able to drive integrated experiences to break down data silos and unlock new value streams and new outcomes for them. And you're going to even hear a little bit when I come back with two of our customers about how they're using data and integrations in driving outcome in all the areas that we talked about around efficiency, safety and sustainability. So I'm going to close out here, excuse me. Look, we're helping our customers solve really tough challenges. We're helping speed their digital transformation by reshaping the worker experience and we're doing it to drive efficiency, safety and sustainability. We continue to drive innovation, listening to our customers. We continue to invest in expanding our ever enterprise-grade scale. We continue to focus on driving AI and innovation in that arena and we will continue to be delivering outcomes for customers. So with that, I think we are going to wrap and take a little break and how much time do people have Mike? 5 minutes, and we'll be back on here. Thank you. [Break]

All right, and we are back. Everybody's still here. So listen, after hearing about -- that maybe we go to the next slide, after hearing about our product update, we thought it would be great to hear from two of our esteemed customers that represent two different industries, two different areas. So I'm very pleased to welcome to the stage, I guess I'll do it in order of Jonathan first and then Travis. So Jonathan, who is VP of transformation to get it right at Maxim Crane works. They are the largest crane rental company in the United States. Did I get that right?

Yes.

So tell us a little bit about your role [indiscernible].

Thanks, Jeff. So yes, I'm Jonathan Vinson. I'm the Vice President of Transformation for Maxim Crane Works. As Jeff alluded to, we are the largest crane rental company in North America, with 2,500 lifting assets and over 5,000 support fleet being tractors, trailers and mechanic trucks. We've had a relationship with Samsara since June of last year with full implementation taking place in January of this year.

That is fantastic. And we have Travis, I'll let you introduce yourself. Senior Director of Systems and Strategy, you get a new title on me, which is great at Univar Solutions. Univar is a global chemicals and ingredients distributor. They are #369, not 370 369 on the Fortune 500. So tell us a little bit about them.

Yes. No, thank you, Jeff. Thank you again for inviting me to be here again. My focus with Univar Solutions is really maximizing our capabilities in transportation through leveraging data and technology. And Univar Solutions, we're a large organization. 10,000 employees, global organization, our private fleet, 5,000-plus assets, identified as a top 50 private fleet asset in the nation. So we're super excited to be partnered with Samsara, but -- we've been a customer for 2-plus years now. Last year, [ Nathan Slimmons ] on our IT team actually won the Connected Operations Award for Technology Leader of the Year. For his great implementation in 2021, 7 months, we implemented those assets with no downtime. So happy to be back beyond for the second year in a row.

That is fantastic. And it's great to have both of you. Thank you for sharing your stories with everybody. I'm going to start the questions with let's talk a little bit about operational challenges because obviously, both of you have very complex large operations I'm going to start with Jonathan. Tell me a little bit about some of the challenges that you saw that led you to explore and think about Samsara.

Yes. With our lifting capacity and our fleet, the complexity of the projects that we work on are varied. So one of the biggest challenges that we face as an organization is we have a very manual process. So when it comes to the evaluation of our equipment, pre- and post-job, payroll, billing, everything along the lines of maintenance. So there's so many touch points where one ticket will go to somebody in payroll. Another ticket will go to somebody in billing. Another ticket will go to somebody in maintenance. So those are some of the challenges that we're working through with Samsara and trying to avoid, one, the loss of those tickets as well as making sure that it's as efficient and as automatic as possible.

Yes. And you have, what, 2,300 cranes or something like that?

A little over 2,300 cranes and over 5,000 tractor trailers and mechanic trucks.

And then explain a little bit about the relationship between the rigging and the creams just to give people some perspective of other scale of assets.

Yes. In addition to the fleet that I mentioned before, we have over 20,000 ancillary pieces of equipment that we're managing on a day-to-day basis. So depending on the lift that we're working on for a project, there could be dozens, if not hundreds of different configurations that we're working through as part of that project. So the complexity of that is quite significant in our industry.

Yes. That's great. And Travis, same question for you.

Yes. Before Samsara, we have 100 terminals across the nation. And we're working off different data sets, different connected platforms, well, non-connected platforms actually. And it was great this morning in one of the breakout sessions next door. We were talking about some of the document process flows and how we're bringing all that data together, and that was our challenge. We didn't have a holistic way to look at our organization to run efficiently, to operate and to keep safety as our prime focus. And so now with Samsara since the implementation, we've been able to take all the different data connection points of different vendors in the data space, put it together through Samsara. Pull out the data we need to make decisions, and now we've got 100 different locations playing off the same playbook. And so it's really unique.

You also -- I know you both have this challenge, but you also have had faced some labor challenges where this is helping you as well. Maybe share a little bit about that before we dive in.

The previous couple of years, we've had labor challenges. And by putting Samsara in our assets. It's helped us -- and I think we're going to get to it a little bit later also is really keep our driver retention rates high. And so those labor challenges, the supply chain challenges, being able to tell our customers when we expect something to deliver and having that confidence that what we're striving to do.

That's fantastic. And listen, I know for both of you. I've been to your side. I haven't yet been to your site, but it's only been 11 months. You're both -- safety is it's job number one. So Jonathan, just tell us a little bit about what are you doing from a safety standpoint. How is Samsara helping you drive safety?

Yes. I'm sure it's very similar to Travis' business. Safety is our #1 priority. Our #1 priority being in a very risk-adverse environment because of the potential complexity of our projects and the risk of accidents. The #1 priority for our company is to have our employees go home to their family safe. One of the key things with our partnership with Samsara is, on average, for the last 4 years, we averaged 20 rear ending accidents with our equipment on the road annually. Since the implementation of Samsara in June of last year, starting with our pilot, we've had 0, and I have to knock on wood every single time I say that, but that's one of those things. In addition to keeping our employees safe, it's a significant financial savings for our company to avoid those types of accidents.

And you also have a long-term goal from a broader savings standpoint. Maybe you could share a little bit about what you want to do there?

Absolutely. So one of the key things as part of our ROI for our investment with Samsara was to reduce our insurance claims for over-the-road accidents and on-site job accidents. Our goal is to reduce that by 30% over the course of the next 5 years, which is upwards to several million dollars in savings during that period of time.

That is fantastic. Great. Great to hear. And Travis, obviously, safety is important to you. So tell us a little about what you've seen in terms of...

I don't want to echo Jonathan here, but yes, safety is extremely valuable and having best-in-class data and technology. It drives that comfort for the driver to know that we're focusing on their safety as well as the communities that we work and live in as one of our purposes with the organization. And what's quite unique about that is we weren't confident with the data sets we had before Samsara, and now we are. And some stats that we've seen implemented the safety protocols is we've had a 40% reduction in harsh events, and we've taken this step further. We've reduced our in-cab alerts from 60 seconds down to 20 seconds, which is unique because it's not just having that after the effect coaching. The drivers get the instantaneous feedback. So there's a coach in the cab. And something unique about Univar is any time we have more than 2 individuals on any phone call or meeting, we do a safety share. We spend 2 to 3 minutes talking about safety in some aspect from suntan lotion to crossing the road the right way. And recently, we've implemented what we call Dashcam diaries, company-wide. So we're taking the Dashcams from Samsara from incidents, near incidents or just great reactions from our highly qualified drivers, and we're sharing it across the full organization. So the 4 organization, weekly, monthly, daily has access to these cameras to say, "Hey, look what Johnny did over there. This is phenomenal. You should pay attention when you're on the road doing these things.

That is great. Dashcam diaries, you should go to marketing. All right. Listen, great to hear about safety. Another area that we have talked about and you both have some very interesting feedback on is around sustainability. What you're doing, particularly as it relates to safety, obviously, is a component of the S part of ESG, keeping driver safe, community safe, et cetera. I'll start with John -- with Travis this time. Tell me a little bit about what you're doing?

Sustainability is at the core of what we do, being really tied to the environmental aspect of our organization. And I would ask everybody to go to our website, see our goals, they are quite aggressive. But for transportation, we focus really on 3 areas. The 3 areas we focus on are first minimize miles, second, efficient equipment and third, targeting behaviors. And going back, minimize miles, that's payload optimization, network optimization, but more importantly, route optimization. So with the integration into SAP, we can actually look at our drivers' routes to make sure they have high route compliance. We can give them coaching on active route delays or challenges of that nature to make sure we're driving the safe route. Secondly, when we go to the equipment, we look at our [indiscernible]. We look at how is the equipment performing. So reducing our emissions through gaining that MPG, gaining the fuel reduction, and we can get that feedback directly through the connections with our fuel provider, right into Samsara. So we get these reports and we could look at the monthly, daily, et cetera. And then lastly, targeted training. And this focuses on the behaviors that the driver does inside the cab to be more eco-friendly. We've got the scorecard. Samsara provides us scorecards. They provide us all those details. But now we're actually taking it a step further, just try to figure out how can we create an eco-friendly driving module, so that we can pull the drivers out and not just say, "Hey, you're breaking too hard". We can coach them and show them how to effectively break, that wouldn't be available if it wasn't for your back-end API.

That is fantastic. And again, I said to the audience, you would talk about the integrations of value coming. There are some of them. Jonathan, over to you.

Yes, very similar to Travis. One of the two things that I think is the most important when it comes to the ESG component of what we're looking to achieve here. First is idling. We have heavy equipment that is typically waiting at a gate on a construction site for a trailer, somebody else to be there to help unload, to get the crane ready for a project. And a lot of times, we had -- well, currently, we had 0 visibility to any type of idling impact to our business. So we were wasting significant amounts of fuel. When we started the pilot, we were at 40% idle time. When we were working with Samsara, they told us basically the industry standard was around 25%, so our goal was to reduce just 5% in year 1, which was going to save upwards to $750 million a year. In addition to that, we had absolutely zero visibility with regards to the carbon footprint on our massive pieces of equipment. So now we actually have that visibility, we can track it and we can actually improve it over the course of the next several years.

That is fantastic to hear, and speaking of assets and tracking and whatnot, I'm going to come back to you from an asset utilization standpoint, when you think about the fact that you've got and we described as the relationship between the cranes and the rigging, talk to us about -- what are your challenges? And how are you using Samsara around asset tracking and asset utilization?

So I think one of the key things, and I think we're going to get into it a little bit later with regards to the capital investment in both of our companies. We had zero visibility to the dormancy of our equipment. So we have a massive fleet that is wide range of age of pieces of equipment. That allowed us to be able to take a look at where to re-deploy assets to different areas of the company, where to retire assets and then ultimately where we were going to ultimately reinvest in the business.

That's fantastic. And Travis, maybe let's talk a little bit about workflows because you have an organization that similar to Jonathan's heavily out in the field, right? Talk to us a little bit about how you're looking at various different ways to improve kind of the use of workflows and change what you're doing.

Workflows are key. And by digitizing some of these workflows, such as our pre-trip, post-trip and DBIRs it shows the value -- we've got to ensure that we have healthy equipment on the road. We've got to ensure, again, focusing on these drivers that they're in the best assets we can put them in. So by digitizing these workflows, we've actually been able to continue to identify the source spots, replace and maintain them. And our DOT stats actually violations are less than 0.2 of a percent. That's less than 0.2% as well as since Samsara's inception, we've actually been able to increase our preventative maintenance compliance nationally across the -- all the 100 terminal locations from lower than 60% to 80% -- plus. And I've got to throw one more thing in there. From one of the breakouts today, I'm really excited. We've got this opportunity where we're pumping many chemicals and ingredients into facilities we've never been to, and we call these things site bulk profiles. And they're very hard to maintain. Its paper profiles that we communicate, and actually, today, after one of these sessions, we're already communicating back to the team is how do we build one of those templates, give it to the driver to where he can create a ticket for a bulk site profile so that the next time we go to deliver, we know how many feet of hoses we need, et cetera. It's phenomenal to workflow capabilities.

That is fantastic to hear. So another beta customer because -- he is a beta customer already. Let's talk a little bit about the things you're doing with DBIR as well as other workflows to improve. Operations?

Absolutely. So the DBIR process prior to our relationship with Samsara was 100% manual. It was an actual paper ticket that we were expecting a driver to one, complete; two, actually give it to somebody on our service and maintenance department and then them to actually act upon it. So that process and that flow of information could take weeks, if not be lost altogether. Now we have an automated process where our service managers are notified of DBIR at the time of the post inspection, they can act upon any type of maintenance issues real time. So we can get out ahead for preventative maintenance situations, and it's a huge cost savings and efficiency for our business and to also provide lower downtime for our customers.

And then you saw other potential opportunities around broader workflows throughout the organization. So share what you're trying to do there, around the connected forms?

Absolutely. So we are looking at the connected forms for not only our pre- and post-job maintenance evaluations, our payroll, our billing and our job tickets for our customers. All of those, as I kind of indicated earlier, are completely manual today, and it is a very -- it's an extremely inefficient process. So this relationship with Samsara and the integrated forms and the connected forms are going to be an absolute game changer for Maxim.

Yes, it's going to be -- I think you shared this with me, it's really going to help open this up and unlock to all different types of workers, if you will, throughout the organization, which is great. All right. I do want to come back to -- I touched on it a little bit briefly with earlier with you around capital investment strategy and the use of data and how those things kind of come together because both of you have very capital-intensive business you can share, kind of the magnitude of cost of some of the equipment you guys are operating. But let me start Travis with you. Can you share a little bit of how you're leveraging that data to streamline your capital investment strategy and how the data and the integrations are playing into that?

The data is key. The data really -- a matter of fact, when we spoke earlier, you said data informs, people transform. And I hadn't remembered that until just now, and I love it to this day, but -- the data is key. We're a large cap organization, we spend a large bill every year to ensure that we're healthy replenishing our fleet. And in order to capture the assumed MPG that the OEMs are telling us that we should receive, It's again, these connected data workflows -- excuse me, the connected data pipelines, to ensure that we're getting the MPG, to ensure that we're getting the maintenance and the longevity of these vehicles. But not only that, we've got the capabilities again to rightsize our fleet based off dormancy reports, tractor trailer utilization reports and many other facets of reporting that we actually even take that data, again, connected and we put it into a visual system such as Tableau so that we can then share it. And we believe that we haven't even unlocked the full potential yet, which is why we've actually invested and brought a large amount of individuals from our organization here today who are in multiple different tracks and break rooms and checking in with me to come back with different ideas of how we can further unlock that data such as instantaneous idle notifications, et cetera, again, to drive our capital investments and support our investments themselves.

Yes. I don't know if you want to say anything more about the asset map stuff that you're looking at as well.

Exactly asset mapping. As we get new individuals that come to the organization, the ability to understand, hey, where their assets are, the size of their assets and then mapping those assets, and we can even share that with customers. So integrating that into a customer notification process that we actually have. So as soon as it outgates, again, our customers are then instantaneously being notified based off the data sensors providing.

That is fantastic. Thank you. Over to you, Jonathan.

Yes. Our capital investment is also fairly sophisticated and the use of the data and analytics that Samsara provides has provided an unlocked the ability for us to evaluate the unit economics with regards to our fleet. Our biggest challenge is the lead time for a crane that can lift 500 tons is not tomorrow. It's 12 months, if I put an order in today, I'm getting it maybe mid-'24. So we have to be very strategic and the use of the data analytics has been critical for us, very similar to Travis about identifying where are we going to invest the significant amount of money in -- I don't think I can share because we're privately held, but it's millions and millions of dollars. An average price for a crane is upwards to 7 figures, and we're buying 100 of them a year. So being able to use this information to make an informed decision on where to go with everything, it's a game changer.

That is really powerful and great to hear that you are getting that. Let's wrap this up. Talk about the Samsara partnership. You're both driving a lot of great outcomes. You gave the audience a number of really compelling statistics and benefits. What else would you like to share with the group about your relationship and partnership with Samsara? Maybe I'll start with you, Travis.

I see and we see Samsara as a true partner, really helping us drive for that fully connected integrated ecosystem, supporting our advancements in collaboration. And one key item that I've got to really call out is the ability to have open dialogue to provide feedback, to get ideas, but also to gain solutions. And secondarily, to move at the pace we want to move it. If we're ready to go, you're always ready to go. If we're not ready to go and we want to tailor back a bit, the teams are on standby always providing us details. So really, we see this as a long-term standing partnership that's going to continue to improve our organization and again, get to that point to where we can continue to tell customers when and where they expect their deliveries on time, with confidence and it's because of Samsara. So thank you again for having me here today.

Thank you.

Yes. Thank you, Jeff. One of the key things, I think, with our relationship with Samsara, and we're still kind of in the infant stages today. We're right at 12 months since the inception of our first pilot, this has truly been transformational. This partnership and I'll echo Travis here really has been a partnership. This is our -- over the course of the last 15 years is our fourth telematics provider that we've utilized. The other three, I can't say were partners. They were clients, they were vendors, but the relationship and what you have been able to provide and even kind of giving us insight into the future of not only what we're utilizing today but what can we utilize 6, 12, 18, 24 months into the future? It's been absolutely amazing, and I thank you for having me today.

That is great. Well, listen, I want to thank both of you so much for taking the time, come, partner with us, share to the audience, the power and the benefits that you're getting and it's been fantastic to learn from both of you gather the feedback and have it help drive what we do. So with that, maybe give our guests a round of applause. And with that, we're going to turn it back over to Dominic.

Welcome to Investor Day. I have about 25 minutes of content, and then we're going to bring everyone back up and we'll do a little bit of Q&A. And with that, the theme of my section is driving durable and efficient growth. And before I get into the reasons why we expect our growth will be durable and more efficient going forward, I first want to level set with where we are today in terms of scale and growth. And then I want to touch on a few of the key advantages that we have that have allowed us to operate with strength and with consistency during this period of economic volatility. So on this first point, we had our Q1 earnings call a few weeks ago. And on it, we announced that we ended the quarter with 856 million of ARR growing 41% year-over-year. We've been able to achieve this level of scale and growth because we're executing well across a number of different fronts. So we're selling into multiple customer segments, both mid-market and enterprise. We're selling into many different geographies, North America, Western European countries. We're selling into many different end markets and industry verticals. And we have multiple products at scale all on one unified platform. And because we've been able to execute well across all of those different vectors, we've been able to deliver more than $850 million of ARR and a little more than 7 years of selling. And because of that strong execution, we're really now starting to pull away from the rest of the pack. There are roughly 200 U.S.-listed software companies. Of those, only 58 are expected to end this year, CY '23 at or above $1 billion of ARR. And of those 58 at-scale U.S.-listed software companies, only 6 are expected to still be growing north of 30% and to be free cash flow positive by the end of the year and Samsara is one of those 6. So our strong execution across all of those fronts has really allowed us to start to operate in [indiscernible]. And while the macro uncertainty has definitely taken the toll on a number of those 200 U.S.-listed software companies, Samsara has been able to operate with strength and with consistency because we have a few key advantages listed here. The first is that we have a subscription business model, which provides a lot of visibility into our future revenue and therefore, allows us to set expectations with a lot of confidence. The second is that we're selling into an operations budget, which tends to be large and less discretionary. And the third is that customers deploy Samsara for real hard ROI savings and they're able to pay back their investment in a very short period of time. So just double-clicking on each of those items. Again, the first is 98% of our revenue comes from subscriptions. We sell 3- to 5-year licenses across all of the products listed here on the left and with those subscriptions, customers get access to a common set of services. They get data collection, whether that comes from a Samsara IoT device or whether we're able to pull that data directly into a third-party cloud integration. They get cellular connectivity. They get access to a cloud-based platform where we're pushing more than one new software feature release every workday on average. And then they get some ancillary benefits like customer support and warranty and all of those common services are included in the subscription. We don't sell any of those on a stand-alone basis or recognize the revenue separately and then we recognize the revenue ratably over the life of the contract, which again provides a lot of visibility into future revenue. It provides a lot of predictability into our forecast and then allows us to set expectations with a lot of confidence. On the top right, within the software industry, there are obviously a number of different business models, and we've just touched on the strengths and the key advantages of the subscription business model. We have further key advantages in the way that we price our subscriptions on a per asset per month basis as opposed to a per seat or per headcount basis, which really helps to insulate us from the risk of ACV contraction if our customers were to do head count reduction. On the bottom right, we're also able to monetize physical operations assets a number of times over. So for example, one commercial vehicle could have both vehicle telematics and the video-based safety subscription attached to it. So again, overall, the subscription business model in this economic environment provides a lot of predictability and visibility into future revenue and allows us to set expectations with confidence. The second key advantage that we have is we're selling into a different buyer. We're selling into the operations budget, which tends to be large, it tends to be a more resilient and there are fewer vendors calling into this budget, which makes it a little less competitive. More so than the IT budget, where many of the other 200 U.S.-listed software companies are selling into. Recent survey data showed that it's expected that 35% of IT budgets are expected to decrease in CY '23, conversely, only 10% of operations budgets are expected to decrease this year. So again, a slightly different buyer, large, more resilient and fewer vendors calling into this budget, which makes it a little less competitive. And the third key advantage we have is that customers deploy Samsara for real hard ROI savings. You just heard it from some of our customers. Almost universally, if customers deploy Samsara, they will save money on fuel, they will lower their insurance premiums. They will reduce their accidents, both on the road and in the workplace. They will reduce their maintenance costs, they will improve their asset utilization. They will save money on higher hiring win rates and better retention. And with all of the savings across those items, they're able to pay back their Samsara investment in a very short period of time, which is typically measured in months. What's really interesting though is that when customers get up and running and start to realize these benefits, there are often expansion ROI opportunities that they find that are very specific to their business. So for example, we had one customer that generated an extra $8 million in revenue from tracking vehicle detention. We had another customer that was able to pull in $30 million of collections faster than they would have by tying Samsara to their invoice automation process. We had another customer save $6 million a year by creating a temperature alerting system and saving money on premature exotherm costs. There are countless examples like this where customers are able to find expansion ROI opportunities that are really specific to their business. Okay. So hopefully, you have a sense of where we are today in terms of scale and growth and how we benchmark across other software public companies and some of the key advantages that have really allowed us to operate with strength and with consistency throughout our first 6 quarters as a public company. I now want to transition into why we think our growth will be durable going forward, and it's for these 5 reasons. The first is that we have a horizontal platform and a set about applications that are addressing 40% of global GDP, our products today address a really large market opportunity that is growing very quickly. Samsara is selling into multiple different customer segments, but we are really purpose-built for large enterprise customers with complex operations, and we're seeing a lot of momentum in that customer segment. Fourth is that the majority of our customers subscribe to multiple products, which opens up a lot of opportunity for cross-sells in the future. And lastly, an increasing portion of our net new ACV is coming from expansions to our existing customers, which creates a nice floor for long-term durable growth. So getting into each of those durable growth items, again, the first is that we serve a broad set of customers and end markets. The world of physical operations is more than 40% of global GDP and these industries are very underserved by technology. And like we've experienced in our consumer lives and in the workplace, the world of physical operations is really in the early innings of digital transformation, and there's a tremendous opportunity to take more data and use technology to really change the way that these industries operate. On the left, you can see a pie chart of more than a dozen end markets that we sell into, the largest of which is transportation, but it only makes up about 20% of our ARR. And then you see a number of other pie slices between 5% and 15% of ARR such as wholesale retail, construction, field services, logistics, utilities, energy and so on. On the right, you can see a visual representation of many of the customers and types of assets that we're bringing into the Samsara Cloud. And with the data, you can see that we're often serving the market leaders within these industries. And so what we really want investors to appreciate is that this is a horizontal platform and a set of applications that's really applicable to many different end markets. We're not selling an application to one specific vertical. And the second is that these are really large markets, 40% of global GDP, and they've been underserved by technology, which creates a very big opportunity for long-term durable growth. The second driver of durable growth is that our products today address a really large market opportunity that is growing very quickly over the next few years. Third-party research estimates that the connected operations market is $60 billion today, growing at a 22% CAGR over the next 3 years to $117 billion. Within connected operations, our core products address connected fleet, which is made up of video-based safety and vehicle telematics. Third-party research estimates that connected fleet is a $41 billion market today growing at a 25% CAGR over the next 3 years to $79 billion. So not only do our products address large markets today, but they're growing very quickly and the driver of high growth is the digital transformation point that I made on the previous slide. More and more of these physical operations assets are being embedded with connectivity, opening up more opportunities for data and to change the way that these assets are being managed. And we're seeing an increase in the adoption of newer technology. Video-based safety, which is our leading product category, simply did not exist in its current form 5 years ago, the technologies just did not exist. Less than 5% of commercial vehicles today are using an AI dash camera and the adoption of that technology is also driving the high rate of growth within these markets. Third driver of durable growth is really the momentum that we're seeing in the large customer segment. We've invested heavily in large customers over the last handful of years. On the go-to-market side, we've added a lot of pre-sales engineers. We've added business value strategists to align with customers on ROI before they sign their contracts. We've added a lot of enterprise field sales reps. We've built out a customer success organization. We have a world-class go-to-market partner ecosystem. On the R&D side, there are more than 240 technology integrations in the Samsara app marketplace. These large customers are using 6 integrations on average, up from just 4 a year ago. As I said earlier, we are pushing more than 200 software feature releases a year to our platform. We've invested heavily in the scalability and security and the results are shown in the charts below. We now have 1,375 customers paying more than $100,000 of ARR. That's up 53% year-over-year. Within that, 55 customers are paying more than $1 million of ARR. That's up 62% year-over-year. And on the right-hand side, 49% of our ARR now comes from these large enterprise customers paying more than $100,000. That's up from 45%, 1 year ago and up from only 40%, 2 years ago. So this is our fastest-growing customer segment and these customers are incredibly important. They expand, they grow with us over time. They're a key driver of our product road map and innovation. And obviously, they have the strongest customer unit economics and retention rates. Fourth driver of durable growth is the momentum that we're seeing around multiproduct adoption. On the left, customers that subscribe to at least two products on Samsara. Dark blue represents our core customers. Light blue is the large 100,000-plus enterprise customers. Almost 75% of core customers and more than 90% of large customers subscribe to at least 2 products. On the right-hand side, 25% of our core customers and more than 50% of large customers subscribe to 3 or more products. And you can see on both of these charts how this has trended up over time. And it's even more stark when you look at our top 20 customers by ARR. All 20 of them are multiproduct customers. 75% of these customers subscribe to at least 3 product categories, and 3 of them were 15% subscribed to 4 or more product categories. What's also interesting is the industry column here, the second from the left. And you can see the diversity of our customers and the end markets that we're selling into, even within our largest customers. You see field services, wholesale, retail, logistics, utilities and energy, transportation, construction, so on and so forth. This is very similar to the pie chart that I showed you a few slides ago and shows the diversity of industries that we sell to. Not only are we seeing an increasing trend of multiproduct adoption, but we now have multiple products at scale. We have 3 product categories that are doing more than $100 million of ARR. Video-based safety is our largest product category, doing more than $350 million of ARR. Right behind it, vehicle telematics is also doing more than $350 million of ARR, and then smart equipment and other are non vehicle-based subscriptions is doing more than $100 million of ARR. Not only are all 3 of these product categories at scale but they're all growing north of 30% and contributing meaningfully to our overall ARR mix. What's also worth calling out is that while the smart equipment and other of the non-vehicle applications represent a little bit more than 10% of our overall ARR mix, the customer usage and adoption is much higher than that. About 1/2 of our multi-product core customers and about 2/3 of our multi-product large customers are using a non-vehicle application today, which means that we're really just scratching the surface with customers that are already using these non-vehicle applications and there's a significant opportunity to go back in there and get more assets into the Samsara cloud to drive more monetization in the future. The last driver of durable growth is the increase in expansions that we're seeing. Back in FY '21, about 1/3 of our net new ACV came from expansions to existing customers, the other 2/3 came from new logos. In Q1 of FY '24, the quarter that we just reported, 60% of our net new ACV came from expansions and 40% came from new logos. As we've moved more upmarket and we've continued to sell more into the enterprise, these customers buy and expand over time. They do upsells across a broader set of assets. They do cross-sells of more products and more and more of our net new ACV is trending towards expansion. I think this case study on the right is really illustrative of how many of our largest customers grow with us over time. This is a large utilities customer. They landed in FY '20 with $2.9 million of ARR and they licensed both telematics and safety upfront. So a really large new logo and a multi-product adopting customer right out of the gate. They came back in FY '21, 1 year later and added another $1.6 million of ARR. They added more telematics and safety, which means a broader rollout across assets. And then they did a cross-sell and added equipment and moved into non-vehicles. They came back again in FY '22 and did another $1.4 million ARR expansion and did an upsell across all of their products, telematics safety and equipment. They then came back again in FY '23 and added another $900,000 of ARR, expanded across telematic safety equipment and they added connected sites. This customer now pays us almost $7 million of ARR with room to grow, and they're doing $2.3 million ARR versus their original land with us. This is very common for many of our customers. They will upsell over time, they will cross-sell into new products and grow their relationship with Samsara over time. Okay. So now hopefully, you have a sense of why we think that the growth will be durable going forward. We're also very focused on ensuring that it continues to be efficient as we scale. And we think we can do it for these reasons. The first, again, is that we have a subscription business model with really strong customer unit economics that lead to long-term profitability. The second is that we've demonstrated incredible operating and free cash flow margin leverage over the last couple of years and we expect that we can show even more leverage as we scale the business. And the last is that we're super focused on effectively managing dilution as we grow. So again, on this first point, 98% of our revenue comes from subscriptions. And like all subscription businesses, we spend money upfront to land new customers. And then over time, as customers pay their subscription fee and renew with us, they become very profitable such that our customer lifetime value to customer acquisition cost ratio has been more than 8x, which means that for every $1 that we spend to land a new customer, we drive more than $8 of profit over that customer's lifetime which leads to a lot of long-term profitability. The second driver of efficient growth is that we've demonstrated an incredible amount of leverage, both operating margin and free cash flow margin over the last couple of years. On the left, looking at operating income and operating margin, we've improved operating margin by 59 percentage points over the last 2 fiscal years. When you look at Q1 of FY '24 versus Q1 of FY '23 over the last 12 months, we've improved operating margin by 9 percentage points. This leverage has really come throughout the entire P&L. Gross margin, sales and marketing, R&D, G&A have all improved dramatically. Looking forward, most of the leverage as we continue to scale the business will come from sales and marketing. The cost of sale on a dollar renewed is significantly lower than when we first land a new customer when they do an expansion. I don't expect as much near-term or medium-term leverage out of gross margins or out of R&D, and we will get more leverage out of G&A as we lap these initial public company costs and as we implement more systems and automation and look at hiring geographies to drive more leverage there. Similar story over on the right, looking at adjusted free cash flow. We've improved free cash flow margin by 59 percentage points over the last 2 years. And when you look at Q1 of FY '24 versus Q1 of FY '23, we improved by 35 percentage points. When we were here a year ago at Investor Day and we had just reported our Q1 FY '23 results, we burned $51 million. In Q1 '24, the quarter we announced 2 weeks ago, we burned $2 million. A tremendous amount of leverage in just the last 12 months. A lot of that has come from the operating leverage that I just mentioned, but we're also getting more efficient in our working capital. Supply chain costs have come down, hardware costs have come down, and we are getting a lot better in managing our collections and payables. We're also very focused on balancing growth and profitability. And the simple framework that we use internally to track that is Rule of 40. And you can see down at the bottom, in Q1 of FY '23, a year ago, our Rule of 40 was only 27%, and in Q1 of FY '24, that increased to 42%. Our third consecutive quarter being at or above 40%, and this is something that we're very focused on going forward. And we want to make the -- continue to make the operating improvements that would allow us to achieve this consistently on both a quarterly and an annual basis. And the third driver of efficient growth is really effectively managing our dilution. Our largest cost as a company is headcount and really the compensation that is associated with the headcount. Our compensation can really be broken down into these 3 buckets. Salary, some sort of variable cash and equity. We view all 3 of these as real cost of the business. They are all interchangeable, and we budget and manage them accordingly. Double-clicking on equity on the right-hand side, our dilution in FY '23 was 4.4%, in FY '24, we're forecasting dilution of between 3% to 4%, and that's an improvement from the previous guidance that we provided of 3% to 5%. Longer term, we think we can get equity dilution to be less than 2%, which is an improvement from the less than 3% we shared previously. A couple of levers -- a few levers that we're evaluating to manage dilution going forward. The first is just compensation mix. As I said, we view these compensation buckets as interchangeable. And so as we generate more free cash flow, potentially balancing the amount paid in cash versus equity is one lever headcount, how many people we hire, where we hire them, what job levels they come in as another lever. The vesting duration or grants 1 year, 2 year, 3 year, 4 year, that is a potential lever. And finally, something that is not being considered actively right now but is obviously a lever in the future as we generate more free cash flow is stock buybacks. So what I think we want to make sure that investors appreciate is -- we are shareholders of the business. This is something that we're very focused on. We view equity as a real cost of the business, and we budget, we forecast and we manage it accordingly. Okay. So hopefully, now you have a better sense of why we expect the growth will be durable and efficient going forward. I just want to leave you with a few key highlights. Again, the first is that we're selling into really large end markets. 40% of global GDP, these markets have been very underserved by technology, and it's a big opportunity for us to grow the business going forward. The second is we're selling into a different buyer. The operations budget tends to be large, tends to be less discretionary for our customers, and there are fewer vendors generally calling into this budget, which makes it a little less competitive. The third is customers deploy this for real hard ROI savings. They're able to find expansion ROI opportunities and they can repay their Samsara investment in a very short period of time. Fourth, we have multiple products at scale, multiple products, both vehicle and non-vehicle based applications, all doing more than $100 million of ARR and all growing very quickly, which opens up a lot of great cross-sell opportunities in the future. Fifth, almost half of our ARR is now coming from these large customers that expand with us over time that drive a lot of our product road map and that have really strong unit economics. And the last is that we've demonstrated incredible leverage over the last 12 years and really, again, specifically over the last 12 months, going from $51 million of negative free cash flow to negative $2 million in just 12 months with a clear path to free cash flow positive by the end of the year and more leverage to come as we scale the business. So with that, I will now welcome everyone back up and we'll do a little bit of Q&A.

15, 20 minutes for Q&A. There will be a few microphones running around. Just raise your hand to ask a question. So let's go with Derek Wood first row. [indiscernible]

Yes. Let me start with the fact that you're right great question. If you look at what we are now able to do there was the slide that showed the concept of moving from vehicles into sites and equipment and now into workforce. We're now helping to digitize so much more. You even heard live Travis tell me that earlier this morning, he noticed, "Hey, here's a way that I can apply that in other areas. So I think it's still going to be related to operational efficiency but it will, I think, be influenced and tied potentially to other areas of the business. You also heard Jonathan talk about how he wants to use it to do digital transformation for things related to payroll, right? Maintenance, other types of inspections and whatnot. So I think it does broaden the surface area for us, but I think it's still rooted in sort of our operational buyer in our operational markets. There was another part of your question. I lost the train of thought.

On -- I mean if it's payable and stuff like that, it will pull another day to day as part was just around the competitive.

Again, I think because of the trust that our customers now have in us around physical operations, because of the unique understanding and relationship and partnership, frankly, that we have with them, they definitely see us as the right provider, if you will, for this. I don't think there's a big -- honestly, we're competing with pen and paper processes and filing cabinets. It's not like we're necessarily competing with other people in this case. I think we've found a way to unlock for our customers a whole new area. That's how I'd answer that.

And if I can just add on one thing, Derek, in terms of the MEM product, what's unique and differentiated about us is it's tied into the telematics. So when the truck is moving, if it's going over 5, 10, 20 miles an hour, you can lock it out and reduce the scope to those handful of apps. That's something that we can do because we have that content -- and so that's kind of how we're coming to this is through the lens of that operations user, what does that driver care about? How do we remote troubleshoot them? How do we keep them safe, so they're not distracted by the tablet.

Next question from Sterling.

Sterling Auty from up of Nathanson. Lara, I understand you had a really good Partner Day yesterday. I guess from RC, how should we think about what are the milestones that we should be watching to see to measure the success of how you might expand the go-to-market efforts specifically through partners over the next 12 to 24 months?

Yes, thanks. I'd first say, I am definitely still in drinking through the fire hose mode. I've only been here for 3 weeks. So it's a little early for me to state what the go-forward strategy changes are going to be. But I would say that my observation, having watched that dynamic really grow at ServiceNow was that partners can truly become a force multiplier for the business. And so you saw it in the integrations, you'll definitely see that grow as we continue to expand into connected forms. And increasingly, you see us win because we have a partnership with an insurance provider that's providing a discount because of the Samsara connection. And I think probably there's an opportunity as we think about even SIs, right, in the future and what role they're going to play for these big, largest enterprises in the world, driving their digital transformation and making sure they understand the power of Samsara and what we can do in their stack. So I see a lot of opportunity but I don't yet have the specifics of what that is going to look like.

Great. next question for Michael Turrin.

Michael Turrin with Wells Fargo. I appreciate all of the content today. I'd like to spend a little bit of time on the marketplace strategy, if we could. The stats you shared moved up from last year. I think it's 6% on average, it was 4% last year. I'd be curious to just hear more around how important that is in your customers' decision process. There are moats that you see that, that enables or anything you can share on the economic profile that enables for a customer? And then second small question, Kiren. I think your slide had copilot technology on the future road map. And so small font, but I think expanding on that would be useful because it's clearly top of mind across software right now.

So first talking about partnerships. I think it's the fact that the average partnerships -- our average integrations of large users for 4 to 6 is really a testament to how valuable the data is. And when customers start collecting the data and building the system of record, they want to find ways to leverage it across their operations. And that's, I think, a reflection of what we're seeing is customers say, okay, now that I'm able to action on the data in the dashboard, how do I connect this to my payroll, how do I use this to optimize my maintenance or asset purchasing, et cetera. So that's really a continuation, I think, of the momentum that we shared last year and it's continuing to grow, both with the number of partners in our ecosystem as we're continuing to add more partners into our marketplace as well as how those are being leveraged by the customers. In terms of AI, certainly thinking about generative AI and large language models as a new tool in the tool -- we're doing a lot with AI today. These open up new possibilities. And one of them is how do we help customers complete tasks that might be a driver, right? How do we help give them safety feedback, but something that we're doing today, and we'll continue to do more of. Also thinking about the admin experience and how we can help them make better decisions and act on the data in the pool.

Great. A nice question for Matt Pfau.

Yes. Great. Matt Pfau with William Blair. I wanted to ask about your entrance into providing more of workforce solutions. How do you think about that longer term in terms of what you want to address and what you don't want to address. A lot of your customers are doing many different processes and procedures that can be digitized what do you leave for partners? What do you do? And then how do you think about monetizing those? Are those more of seat-based versus some other monetization model?

I guess I'll start. So I think the #1 thing that I would say is we'll continue to work with our customers to understand what are those different types of workflows that they want to digitize, they need to digitize. That's going to help us understand what are the things that we are best suited to do and what are things that relate to other third parties. And even building on the last question, we have so many partners coming to us now to actually integrate. And I announced this morning, we have new data connectors to allow us to communicate better. We have new developer tools. So I think we will learn that over time. I'm also not going to announce pricing yet for connected forms. It's not even GA. But we'll get there, and we are learning and working through things. We want to make sure that it is obviously an appropriate fair exchange of value. It's also able to be understood. So I share experiences from others, there I say, battle wounds of different ways of pricing tables at another big company that didn't go over so well because it's very hard for the customer to appreciate and understand. So we're being very thoughtful about how we are actually going to monetize that. So stay tuned, we'll come back to you on that one.

Right here. And next question for Peter.

It's Peter Burkly with Evercore ISI, filling in for Kirk Materne. So Dominic, maybe for you. Just curious, great progress on the margin front. As you guys get to the free cash flow positive, just thinking about the sales and marketing leverage, sort of where you see the ability to drive further leverage from here? And maybe does the mix of net new ARR coming from lands versus expansion play into that equation at all?

It doesn't because the way that we compensate our sales organization is really around net new ACV. So they get the same -- there's the same kind of cost of sale for a new logo versus an expansion. Maybe the expansions have a little bit faster of a sales cycle. But I think the bigger point is we've gotten to the scale in 7-plus years of selling, we sell 3- to 5-year contracts. And so we're really learning a lot about our renewal motion and the majority of our ARR still has not yet been renewed. But as that happens, again, the cost of sale of the commission rate associated with that renew dollar of ARR is much lower, which is going to continue to drive more and more leverage out of the business.

Our next question for Chris.

Chris Quintero from Morgan Stanley. I think it was this time last year at the Analyst Day, where you talked about how we were thinking about better monetizing the business with pricing tiers kind of mentioned as a potential. So just -- and you've hired a lot of senior people from ServiceNow. So just curious if you can provide any detail on those kind of plans or thought process?

Sure. Good question. Listen, the notion of pricing and packaging is something that we regularly think about. We look at it on an annual basis, pretty carefully. As I think you know, last fall, we did increase pricing for our existing products. I think that was the first time that had been done in a while. We are being thoughtful about what it takes and what's appropriate to do. I do have experience as Lara, as Dominic with various different models, whether that's good, better, best type pricing and from other places. There's nothing that I've got to announce right now. We are looking at things carefully and it does take time. We have to make sure that we're internally ready, that our customers, that our partners are all part of that process. So Stay tuned. We'll come back to you when the time is right, but we are absolutely looking at both how to monetize new things and how we might change if we do structures of existing things.

Our next question here for Junaid Siddiqui.

Junaid Siddiqui from Truist Securities. Sanjit, you mentioned Western Europe to be potentially an even bigger opportunity for you than here in North America. How should we think about investments there going forward as you continue to expand there? And maybe if you could share some insights there from some similarities and differences between customers and partners and from a competition perspective?

Yes. So we're excited about the Western European market because of its scale. In terms of scale, it is a bit larger than North America in terms of number of commercial vehicles, Mike, you may remember the stats a little better than I do, but it's really significant because there are so many major economies. The other interesting thing is they are mirror images of the industries we serve today. So if we think about food and beverage distribution, utilities, all of those businesses we talked about, they exist in Europe. So the needs are very similar. Now what's different is there are regional differences in terms of regulation. So the French rules are a little bit different than the U.K. rules are different than the rules in the dock region so we need to make sure that we are appropriately customized on those kind of localization topics. The usability of the product also matters a lot of local language support and then just understanding some of the norms and nuances maybe insurance payouts are a little bit different in some of those regions, things like that. So I would say it's an 80-20, where 80% is a very similar kind of carbon copy or mirror image of what we see here in North America and 20% is a little different. Our strategy has been to actually break Europe up into multiple regions, U.K. and Ireland being the kind of beachhead that we've landed with. We've been in that region for a few years. We're seeing great progress. We're now starting to expand onto the continent, but it's a long-term strategy for us. It's not something we're trying to rush into.

Quintin Gabrielle from Piper Samir here for Jim Fish. Wanted to touch kind of on the last question. We've talked about expansion to other geographies outside of Europe. When I talk to some of the larger kind of global customers here at the expo, what they say is we love Samsara, we want to use them outside of North America and outside of Europe. So -- can you talk about your strategy for where you're looking at expanding? Is it driven by customers? Is it driven by demand? Basically, how are you thinking about where you're going to expand from Europe?

Do you want to take that?

So we think about the size of the opportunity, right, how big is the market? And then what would it take to win? And then we look at the customer overlap the customer needs and are they consistent with the customers we're serving in North America and Western Europe. We have a lot of market ahead of us in the geographies that we're in. So -- we're in no rush to add on new geographies. We can keep growing for a long time in the geographies that we're playing in. And it's important to us that we don't spread ourselves too thin and not execute. So that's how we're thinking about expansion through that...

And maybe just to add one smaller point on that. Some of these regions also regulatory compliance matters as part of our product offering, and that's a big part of physical operations. So getting regulatory compliance right in kind of the long tail it takes a lot of additional efforts. So that's why we can't just open the gates.

Great. Next question from Dan Jester.

Dan Jester, Bank of Montreal. Maybe just -- it's a big picture question, but talk about electrification of the fleets so much of the ROI comes from fuel savings. Obviously, different types of fleets, the electrification is going to be in different stages. But how does that affect sort of your ability to go into different markets, different geographies -- and how do you change pricing electrification versus traditional fleets today?

I'll take this one. So First, fuel savings is just one of many areas of ROI for customers, right? We saw today, we're looking at asset utilization. We're looking at safety outcomes, et cetera. With electric vehicles, a lot of those areas of ROI are the same, but how they're powered is different. And for EVs, customers don't necessarily care about engine idling, but they care a lot about when are the vehicles charged, right? Are they charging all of their vehicles at the same time, putting more load on the grid and paying higher prices? Or can they optimize that charging, spread it out and be able to complete their jobs on time but also be able to lower their costs, right? They're looking at managing range and battery health. So we are seeing lots of opportunities for delivering value for electric vehicles. We have a number of customers using EVs on the platform today. To your point, it does vary in terms of maturity by region and by vertical. But we're seeing really strong results with the customers who are using EVs today.

Jeff, do you want to follow up?

I think the only thing I'd add is one of the important aspects, obviously, is also the sustainability side and what that does. And so certainly helping people to understand that opportunity to shift and how that changes, Kiren showed you in the demo, the fuel and energy insights and how we can help people understand the benefits of electrification from a sustainability standpoint. So...

Sandy Manovich here for Alex Zukin from of Research. How important are new product offerings helping continue this strong contribution from expansion ACV, should we expect the new product offerings to continue driving this mix in favor of expansion? Or do new logos land with larger ACV with mix moving more balanced to net new logos versus expansion. And a quick follow-up just on that. In your mind, how much TAM do you feel you will unlock with the new product offerings you released today? And in general, do you expect future TAM expansion to be product-driven?

Yes. So on the expansion front, really, as I showed you on the example with the large utilities customer, it really is a mix of customers doing a phased rollout and bringing more assets onto the platform over time as well as cross-selling into new products. And so new product introduction and innovation is going to be incredibly important to future growth. And we have now 3 products at scale growing quickly. We need to continue to add 4, 5, 6, and that is kind of our goal is to have a broad suite of products that we can offer to customers. And that will also drive the expansion going forward.

Okay. Last question from Jacob.

Jacob Staffel here from Goldman. Doing my best to imitate cash. Yes. I'm here to be a bit longer and my wardrobe needs to be a bit better. So a very simple question just around like gross margin leverage from the software-only SKUs. Like how should we think about that going forward? As I imagine, more newly announced products will be maybe on the software-only side versus the -- like the actual physical products like telematics or video camera?

Yes. I think that the gross margin associated with software-only SKUs is definitely going to be better than our current gross margin, which is a large component of our COGS is the amortization of hardware. But again, these are new products that are going to take a while to scale. And so at least in the near and medium term, I wouldn't think about a lot of additional leverage coming out of gross margin.

All right. So this wraps up the Q&A segment. Thank you, everybody, for spending the day with us to learn more about Samsara story. Goodbye and see you again soon.