Samsara's GAAP Operating Income Was $4.9 Million and Its Adjusted Operating Income Was $106.0 Million. Stock Compensation of $101.1 Million Is Almost the Whole Gap.
Samsara reported its fiscal second quarter after Thursday's close, and the release carries two operating-income figures that are more than twenty times apart. On a GAAP basis, the company earned $4.9 million from operations, a 1% margin. On a non-GAAP basis it earned $106.0 million, a 21% margin. Both numbers appear in the company's Sept. 3 announcement distributed on Business Wire, and both describe the same three months.
The distance between them is one line item. Stock-based compensation was $101.1 million in the quarter, according to the same release, and the reconciliation table in that release shows it as the only item bridging the two operating-income figures: $4.9 million of GAAP income from operations plus $101.1 million of stock-based charges equals the $106.0 million non-GAAP figure. That expense is roughly 95% of the non-GAAP operating income line. Non-GAAP operating income is what remains after the expense is excluded; GAAP operating income is what remains after it is charged. Neither presentation is wrong, but the reader has to know which one is on the page.
The top line was strong on any basis. Revenue was $508.4 million, up 30% year over year and up 29% in constant currency, with the constant-currency-adjusted figure given as $506.1 million. Ending annual recurring revenue reached $2.125 billion, also up 30%, and net new ARR in the quarter was $134.1 million, up 28% from the year-ago period.
Measured against the company's own forecast, this was a wide beat. In its first-quarter release on June 4, filed with the Securities and Exchange Commission as an exhibit, Samsara guided fiscal second-quarter revenue to $482 million to $484 million, a non-GAAP operating margin of 18%, and non-GAAP diluted earnings per share of $0.15 to $0.16. For GAAP, the second-quarter row of that guidance table read simply 'GAAP Profitable,' with no range attached. Revenue came in $24.4 million above the top of that range. The non-GAAP margin came in three points above the guide. Non-GAAP EPS came in at $0.20, four cents above the top.
The GAAP series tells a quieter and more awkward story. In the first quarter, which ended May 2, 2026, Samsara reported revenue of $478.8 million and GAAP operating income of $7.2 million, a 2% margin. In the second quarter, which ended Aug. 1, 2026, revenue was 6.2% higher by our arithmetic on the two releases, and GAAP operating income was lower, at $4.9 million. Revenue rose and GAAP operating profit fell.
The mechanism is visible in the same two documents. Stock-based compensation went from $83.8 million in the first quarter to $101.1 million in the second, an increase of about 21% sequentially, more than three times the sequential revenue growth rate. Because the non-GAAP presentation removes that expense, the non-GAAP margin expanded from 19% to 21% over the same stretch that the GAAP margin contracted from 2% to 1%.
Below the operating line, both quarters show GAAP net income running above GAAP operating income. In the first quarter, GAAP net income of $44.5 million exceeded GAAP operating income of $7.2 million by $37.3 million. In the second quarter, GAAP net income of $16.2 million exceeded GAAP operating income of $4.9 million by $11.3 million. The narrowing of that below-the-line contribution is why GAAP diluted EPS fell from $0.08 to $0.03 across a quarter in which revenue grew, while non-GAAP diluted EPS rose from $0.17 to $0.20. Anyone tracking Samsara on one EPS line saw improvement; anyone tracking the other saw deterioration.
Cash generation also stepped down sequentially even as revenue stepped up. Operating cash flow was $73.5 million and free cash flow was $64.7 million, a 13% free cash flow margin, according to the second-quarter release. The first-quarter release put free cash flow at $73.2 million.
The forward guidance is where the construction matters most. For the fiscal third quarter, Samsara guided revenue of $514 million to $516 million, growth of 24% year over year, a non-GAAP operating margin of 21%, and non-GAAP diluted EPS of $0.18 to $0.19. That EPS range sits below the $0.20 the company had just delivered, even though the revenue guide sits above the quarter just reported. The company again said it expects to be GAAP profitable without attaching a number.
The full-year guide was raised on every non-GAAP measure Samsara guides. Fiscal 2027 revenue went from a $2.005 billion-to-$2.013 billion range in the June release to $2.043 billion to $2.047 billion now. The non-GAAP operating margin went from 20% to 21%. Non-GAAP diluted EPS went from a $0.70-to-$0.72 range to $0.76 to $0.78.
The size of the raise is worth doing by hand, because it separates a company banking a good quarter from a company genuinely lifting the rest of the year. At the midpoints, the full-year revenue guide rose from $2,009 million to $2,045 million, an increase of $36.0 million. The second-quarter revenue beat against the midpoint of the prior quarterly guide was $25.4 million. That leaves roughly $10.6 million of the raise attributable to a better expectation for the balance of the year rather than to the quarter already in the bank. Those are our subtractions from company-published figures, not company disclosures.
Working the same arithmetic forward, the midpoint of the full-year guide less the two reported quarters and the midpoint of the third-quarter guide leaves about $542.8 million implied for the fiscal fourth quarter. Again, that is our subtraction; Samsara does not publish a fourth-quarter number.
The raised guidance has no numeric GAAP counterpart. In both the June and the September tables the GAAP line is a label rather than a range: in September it reads simply 'GAAP Profitable' for the third quarter and for the year, and in June the full-year row read 'GAAP Profitable (excluding $30 million arbitration award)' — a qualifier that no longer appears. Samsara states that, other than for revenue growth adjusted for constant currency, a reconciliation of its non-GAAP guidance measures to the corresponding GAAP guidance measures is not available on a forward-looking basis without unreasonable effort. That is unremarkable in itself. It also means the 21% margin guide and the $0.76 to $0.78 EPS guide cannot be checked against a GAAP forecast, and that the gap between the two operating-income lines, which widened from $83.8 million in the first quarter to $101.1 million in the second on our subtraction of company figures, is not forecast at all.
On the results, chief executive and co-founder Sanjit Biswas described the quarter as another period of durable and efficient growth and pointed to ARR crossing the $2.1 billion mark. The company's fiscal calendar is conventional here: the first quarter closed May 2 and the second closed Aug. 1, a span of 91 days, or exactly 13 weeks.
As for the tape, a Benzinga item timed at 5:00 p.m. on Sept. 3 reported that Samsara stock 'was up 13.32% to $43.91 in Thursday's extended trading.' That is an after-hours figure with the publisher's own timestamp, not a closing price. Friday's session was still open as this was written, around 11:20 a.m. Eastern, so no close exists for today and none is quoted here.
