What Happened?

Shares of ioT solutions provider Samsara (NYSE: IOT) jumped 15.7% in the afternoon session after the company reported strong third-quarter financial results that surpassed expectations, highlighted by a significant beat on revenue and adjusted profit. 

Samsara announced revenue of $416 million, a 29.2% increase year-over-year, beating analysts' forecasts. Its adjusted earnings per share came in at $0.15, well ahead of the $0.12 consensus estimate. While the company posted a small operating loss on a GAAP basis (Generally Accepted Accounting Principles), its strong non-GAAP profitability was a key milestone for investors. Additionally, Samsara's Annual Recurring Revenue grew by 29.4% to $1.75 billion, driven by strong growth in customers paying over $100,000 annually. The company also provided upbeat revenue guidance for the next quarter, and following the strong performance, several analysts raised their price targets on the stock.

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What Is The Market Telling Us

Samsara’s shares are very volatile and have had 23 moves greater than 5% over the last year. But moves this big are rare even for Samsara and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 14 days ago when the stock gained 5.3% on the news that comments from a key Federal Reserve official bolstered hopes for an interest rate cut. 

The positive sentiment followed comments from New York Federal Reserve President John Williams, a voting member of the rate-setting Federal Open Market Committee (FOMC), who indicated he sees room for further policy easing. Following his remarks, the probability of a December rate cut surged from 39% to 71%, according to the CME FedWatch Tool, causing Treasury yields to fall. Lower interest rates can be particularly beneficial for growth-oriented sectors like software, as they increase the present value of future earnings. This renewed hope provided a boost to the sector, which had recently faced pressure from concerns over high valuations in artificial intelligence.

Samsara is up 4.9% since the beginning of the year, but at $46.15 per share, it is still trading 24.3% below its 52-week high of $60.96 from February 2025. Investors who bought $1,000 worth of Samsara’s shares at the IPO in December 2021 would now be looking at an investment worth $1,868.

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