IPO Alert: What’s in store for IPO-bound IoT platform Samsara

The proliferation of connected technology and embedded systems accelerated during the pandemic as businesses shifted their digital assets to the cloud en masse. The software-centric solutions offered by Samsara Inc., a pioneer in connected operations cloud, have never been more relevant. The company recently revealed plans to become public to expand the business.

To List on NYSE

Samsara provides futuristic information technology solutions to multiple industries, ranging from transportation and logistics to healthcare and education. It allows enterprises that depend on physical operations to harness internet-of-things data to improve operations by creating useful business insights. Since the company has not revealed the offer price and the number of shares being offered, it is too early to assess the valuation.

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Read management/analysts’ comments on quarterly reports

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Once approved by the Securities and Exchange Commission, the stock will trade on the New York Stock Exchange under the symbol IoT. The group of book-runners in the offering will be led by Morgan Stanley, Goldman Sachs, JP Morgan, and Allen & Company.

The company is well-positioned to tap into emerging opportunities in industries focused on physical operations, since the majority of its existing and potential customers are still in the early stages of digital adoption. It can play a key role in enabling digital transformation across industries by leveraging advancements in artificial intelligence, IoT connectivity, video imaging, and cloud computing.

Real-time Data

The company looks to leverage the growing need among enterprises to access and process real-time data because it has become imperative for businesses to stop relying on manual processes and legacy systems and migrate to more advanced solutions.

Samsara’s bottom-line performance improved significantly in recent quarters, compared to the pre-pandemic period, and net loss narrowed in the last fiscal year. But the tech firm is yet to become profitable and that could be a concern for stakeholders and potential investors, who will be closely following its future performance looking for updates on the management’s turnaround strategy.

13K Customers

The company has more than 13,000 core customers, of which around 89% generate more than $100,000 in revenues and subscribe to multiple applications. Most importantly, its total addressable market is expected to reach $97 billion by 2024, representing a compound annual rate of 21%.

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In fiscal 2020, Samsara’s revenues more than doubled to $249.9 million, mainly reflecting the demand growth triggered by the pandemic. Consequently, net loss narrowed to $210.2 million or $0.92 per share from $225.2 million or $0.98 per share in fiscal 2019, despite an increase in operating expenses.