IOT 10-K & 10-Q changes, risk factors and insider trading

We have been growing rapidly over the past several years. As a result, our ability to forecast our future results of operations is subject to a number of uncertainties, including our ability to effectively plan for and model future growth. Many factors may contribute to declines in our revenue growth rate, including increased competition, slowing demand for our solution from existing and new customers, a failure by us to continue capitalizing on growth opportunities, terminations or downsizing of contracts, full or partial non-renewals of contracts or product returns by our existing customers, the maturation of our business, and macroeconomic factors, among others. Our recent and historical growth should not be considered indicative of our future performance. Even if our revenue continues to increase over the long term, we expect that our revenue growth rate will continue to decline in the future as a result of a variety of factors, including the maturation of our business. We have encountered in the past, and will encounter in the future, risks and uncertainties frequently experienced by growing companies in a rapidly changing environment. If our assumptions regarding these risks and uncertainties, which we use to plan and operate our business, are incorrect or change, or if we do not address these risks successfully, our operating and financial results could differ materially from our expectations, our growth rates may slow and our business, financial condition, and results of operations could be harmed.

WePrior haveto the third quarter of fiscal year 2026, we had incurred net losses in alleach yearsperiod since our incorporation,incorporation. We may not achieve or sustain profitability in future periods and we expect we will continue tomay incur net losses in future quarters.periods. We incurred a net loss of $154.9$9.1 million for the fiscal year ended FebruaryJanuary 1,31, 2025.2026. As a result, we had an accumulated deficit of $1,610.0$1,619.1 million as of FebruaryJanuary 1,31, 2025.2026. We anticipate that our expenses will increase substantially in the foreseeable future as we continue to enhance our Connected Operations Platform, broaden our customer base, expand our sales and marketinggo-to-market activities, including expanding our sales team and customer outcomes team, expand our operations, hire additional employees, invest in emerging technologies, and continue to develop our technology. These efforts may prove more expensive than we currently anticipate, or we may not succeed in increasing our revenue sufficiently, or at all, to offset these higher expenses. Revenue growth may slow, or revenue may decline, for a number of possible reasons, including slowing demand for our Connected Operations Platform or increasing competition, among other reasons. Any failure to increase our revenue as we grow our business could prevent us from achieving our profitability targets, which would cause our business, financial condition, and results of operations to suffer.

Additionally, we have granted restricted stock units (“RSUs”) to certain of our employees and non-employees, with such RSUs vesting upon the satisfaction of certain vesting conditions.non-employees. Our future operating expenses will include a significant amount of stock-based compensation expense with respect to these RSUs, as well as any other equity awards we have granted and may grant in the future, which will have an adverse impact on our ability to achieve our profitability targets.levels.

Our future success depends, in part, on our ability to sell subscriptions to access our Connected Operations Platform to new customers. Our ability to attract new customers will depend in part on the perceived benefits and pricing of our solution and the effectiveness of our sales and marketinggo-to-market efforts. Other factors, many of which are out of our control, may now or in the future impact our ability to attract new customers, including:

•potential customers’ inexperience with or reluctance to adopt software and cloud-based solutions in their physical operations or our failure to adequately demonstrate the return on investment ROI of our solution;

•potential customers’ commitments to or preferences for their existingother vendors;

•technology developments that minimize the demand for our solutionsolution, such as the use of AI to internally develop software solutions instead of procuring them; and

•general macroeconomic conditions, including elevated inflation and interest rates, financial distress caused by bankvolatility failuresin the global banking sector and other recent financial, economic, and political events that may impact our customers and the industries in which they operate.

To maintain or improve our results of operations, it is important that our customers renew their subscriptions to our Connected Operations Platform when existing contract terms expire and that we expand our commercial relationships with our existing customers. Our contracts are typically for an initial subscription term of three to five years. However, our customers have no obligation to renew their subscriptions after the initial terms expire, and our customers might not renew any or all of their subscriptions for a similar contract period, at the same price, on the same payment terms, with the same or greater number of Applications and IoT devices, or at all. In the past, some of our customers have elected not to renew their subscriptions with us, and it is difficult to accurately predict long-term customer retention. Customers may choose to not renew their subscriptions or to downsize their subscriptions in full or in part for many reasons, including the belief that our solution is no longer required for their business needs or is otherwise not as cost-effective as initially anticipated, a desire to reduce discretionary spending in response to macroeconomic or other factors, our discontinuation of a desired application or loss of applicable regulatory certifications, a dissatisfaction with their overall customer experience, or a belief that our competitors’ offerings provide better value.value, or a belief that they can internally develop alternative solutions. Additionally, our customers might not renew for reasons entirely out of our control, such as mergers and acquisitions that affect our customer base, the dissolution of their business or business unit utilizing our solution, or an economic downturn affecting their industry. A decrease in our renewal rate would have an adverse effect on our business, financial condition, and results of operations.

Another part of our growth strategy is to sell additional subscriptions to existing customers as they increase their number of connected assets, such as vehicles, machinery, warehouses, and factories.factories, or connected employees. However, our customers may shrink or choose to not grow and expand their fleet and physical operations, or may opt not to purchase additional subscriptions from us to cover their broader or expanded operations. A decrease in our ability to sell additional subscriptions to our Connected Operations Platform to our existing customers could have an adverse effect on our business, financial condition, and results of operations.

We market and sell subscriptions to access our Connected Operations Platform primarily through a direct sales model, and we must expand our sales organization to increase our sales to new and existing customers. We expect to continue expanding our direct sales force, both domestically and internationally, particularly our direct sales organization focused on sales to large organizations. We also expect to dedicate significant resources to sales programs that are focused on these large organizations. Once a new customer begins using our Connected Operations Platform, our sales team will need to continue to expand use of our Connected Operations Platform by that customer, including increasing the number of our IoT devices and Applications used by that customer and expanding their deployment of our Applications across other use cases. All of these efforts will require us to invest significant financial and other resources. We have also experienced turnover in our sales and marketing and supporting teams, including within the senior leadership of those teams, which often results in costly training, operational inefficiency, and potential execution risks. If we are unable to expand and successfully onboard our sales force and new sales leaders at sufficiently high levels, our ability to attract new customers may be harmed, and our business, financial condition, and results of operations would be adversely affected. In addition, we may not achieve anticipated revenue growth from expanding our sales force if we are unable to hire, develop, integrate, and retain talented and effective sales personnel,personnel (including by failing to effectively market and sell our Connected Operations Platform, including our IoT devices, Applications, and other products, to prospects and customers and failing to effectively differentiate our platform from competitor offerings), if our new and existing sales personnel are unable to achieve desired productivity levels in a reasonable period of time, if our sales programs are not effective, or if we are not able to accurately account for the impact of sales personnel leaves of absence.

It is difficult to predict exactly when, or even if, we will make a sale to a potential customer or if we can increase sales to our existing customers. Customers with substantial or complex organizations may choose to deploy our solution in large increments on a periodic basis. Accordingly, customers may purchase subscriptions for significant dollar amounts on an irregular and unpredictable basis. Because of the nature of our business, we cannot predict the timing or cost of these sales and deployment cycles. Variations in the sales cycles among our customers based on the size and complexity of their operations, as well as the possibility that customers may purchase new subscriptions sporadically with short lead times, may adversely impact our ability to anticipate the timing and amount of revenueARR, revenue, and contract value from new customers, or from increased sales to existing customers.

In particular, part of our strategy is to target sales to larger customers. Sales to larger customers involve risks that may not be present or that are present to a lesser extent with sales to smaller organizations, such as longer and less predictable sales cycles (which typically last several months and, in some cases, have exceeded one year), more complex customer product requirements and expectations related to invoicing and payment and other commercial and contractual terms, substantial upfront sales costs, and less predictability in completing some of our sales.costs. For example, larger customers often require considerable time to evaluate and test our solution prior to purchasing subscriptions. A number of factors influence the length and variability of our sales cycle, or even if a sale will occur, including the need to educate potential customers about the uses and benefits of our solution, the discretionary nature of purchasing and budget cycles, election cycles, macroeconomic factors, the competitive nature of evaluation and purchasing approval processes, the customer’s contemplated use cases, the specific deployment plan of each customer, the complexity of the customer’s organization,organization and contracting procedures (for example, procurement requirements and budgetary, approval, signature, and other relevant policies and procedures), and the difficulty of such deployment, as well as whether a sale is made directly by us or through resellers or other partners. Moreover, larger customers often begin to deploy our solution on a limited basis but nevertheless may require a greater level of support from our customer support personnel and negotiate higher pricing discounts, which increases our upfront investment in the sales effort withand nocould guaranteereduce thatthe salespotential toprofitability these customers will justifyof our substantialcontracts upfrontwith investment.those customers. If we fail to effectively manage these risks associated with sales cycles, sales timing uncertainty, and collection of payment from our customers, our business, financial condition, and results of operations may be adversely affected.

Our customers depend on our customer outcomes team to resolve issues and realize the full benefits relating to our Connected Operations Platform.Platform, including the IoT devices and Applications used by our customers. If we do not succeed in helping our customers quickly resolve post-deployment issues, providing effective ongoing support and education on our Connected Operations Platform, effectively marketing and selling our Connected Operations Platform to customers and effectively differentiating our platform from competitor offerings, or facilitating a smooth renewal or expansion process, including with respect to any relevant required or desired changes to the customer contract, our ability to sell additional subscriptions to, or renew subscriptions with, existing customers or expand the value of existing customers’ subscriptions would be adversely affected and our reputation with our customers could be damaged. Many larger customers have more complex IT environments and require higher levels of support than smaller customers. If we fail to meet the requirements of these larger customers, it may be more difficult to grow sales with them.

We have experienced and expect to continue to experience rapidRapid revenue growth, whichgrowth has placed, and may continue to place, significant demands on our management, operational, and financial resources and systems. In addition, we operate globally and sell subscriptions to our solution to customers in many countries, and we plan to continue to expand our operations internationally in the future. We have also experienced significant growth in the number of customers, IoT devices and connected assets, and data supported by our solution and our associated infrastructure, which has placed additional demands on our resources, systems, and operations. To manage our current and anticipated future growth effectively, we must continue to maintain and enhance our business processes, systems, and controls. We must also attract, develop, and retain a significant number of qualified personnel without undermining our culture of focusing on customer success, building for the long term, adopting a growth mindset, being inclusive, and winning as a team that has been central to our growth. We will require significant expenditures and the allocation of management resources to grow and change in these areas. If we fail to successfully manage our anticipated growth, the quality and security of our Connected Operations Platform and internal operations may suffer, which could negatively affect our brand and reputation, harm our ability to retain and attract customers, and adversely impact our business, financial condition, and results of operations.

The markets for the Applications and use cases forin which we compete are new and rapidly evolving. Our historical competition has been specific to the individual solution sets that we target, or specific to operational groupings like fleets or facilities. For example, certain of our Applications compete with vendors like Avigilon, CalAmp, Fleet Complete, Geotab, Lytx, Masternaut, Michelin, Motive, Nauto, Netradyne, Omnitracs, Orbcomm, Platform Science, Skybitz, Spireon, TrackUnit, Verizon Connect, Webfleet, and Zonar.

Competition in these markets is based on several factors, including the comprehensiveness of a solution; feature set breadth and extensibility; analytical capability; ease of adoption; platform reliability, security and scalability; customer support; ability to realize cost savings and return on investment; brand awareness and reputation; and the strength of sales and marketinggo-to-market efforts and channel partnerships.

Some of our competitors may have greater financial resources, greater brand recognition, larger and more effective sales forces and marketing resources, and broader distribution networks than us. Large corporations, inas particular,well as OEMs, may be able to utilize their distribution networks and existing relationships to offer fleetsolutions managementthat solutions,compete with our Connected Operations Platform, in addition to solutions in other verticals already being provided to customers. We expect additional competition as our market grows and rapidly changes, and we may choose to enter or expand into new markets as well. For example, we rely upon Amazon for AWS web hosting, and we do not currently have an alternative provider. If Amazon decided to compete with us and did not allow us to renew our commercial agreement, this may have a significant impact on our solution and would require that we allocate time and expense to setting up our Connected Operations Platform on an alternative hosting service. We expect competition to increase as other established and emerging companies, such as Netradyne, Platform Science, and Verkada, enter the markets in which we compete, as customer requirements evolve, as the regulatory landscape evolves, and as new products and services and technologies are introduced. Certain of our current and potential competitors have longer operating histories, significantly greater financial, technical, marketing, distribution, professional services, or other resources and greater name recognition than we do. Some of our competitors have engaged in, and may in the future engage in, business practices that we consider to be unlawful. For example, inwe January 2024, wepreviously filed a lawsuitlawsuits against Motive alleging that they have engaged in patent infringement, false advertising, fraud, computer fraud and abuse, and unfair competition, and intheft Novemberof 2024,trade secrets, and we filedmay antake additionalfurther lawsuitaction againstto Motive alleging that they have misappropriatedprotect our tradeintellectual secrets.property rights and business interests. Responding to this and similar misconduct may be costly and time-consuming and may distract management from other business priorities. In addition, certain of our current and potential competitors have strong relationships with current and potential customers and extensive knowledge of industries with physical operations. Other current and potential competitors may be able to more effectively leverage new technologies, such as artificial intelligence,AI, to develop and market new products with comparable or superior functionality to our solution. As a result, our current and potential competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards, or customer requirements or devote greater resources than we can to the development, promotion, and sale of their products and services. Moreover, certain of these companies are bundling their products and services into larger deals or subscription renewals, often at significant discounts as part of a larger sale. In addition, some current and potential competitors may offer products or services that address one or a limited number of functions at lower prices or with greater depth than our solution. As a result, we may experience reduced margins, longer sales cycles, less favorable payment terms, and loss of market share. This could lead us to decrease prices, implement alternative pricing structures, or introduce products and services available for free or a nominal price in order to remain competitive. We may not be able to compete successfully against current and future competitors, and our business, financial condition, and results of operations will be harmed if we fail to meet these competitive pressures.

Our IoT devices are made using a primarily outsourced manufacturing business model that utilizes joint design manufacturers. We depend on a limited number of joint design manufacturers,manufacturers and suppliers, and in some instances, a single joint design manufacturer,manufacturer or supplier, to allocate sufficient manufacturing capacity to meet our needs, to produce IoT devices, or components and materials thereof, of acceptable quality at acceptable yields, and to deliver those devices or components to us on a timely basis. We are subject to the risk of shortages and long lead times in the supply of these devicesdevices, components, and components.materials. In addition, the lead times associated with certain components are lengthy and preclude rapid changes in quantities and delivery schedules. We have in the past experienced and may in the future experience component shortages, and the availability of these components may be unpredictable. For example, over the lastfor several fiscal years, there was an ongoing global silicon component shortage, which resulted in increases in the cost of devices and components and delays in shipments of goods across many industries, including components used in our IoT devices. Global transportation and freight networks were also strained as a result of global health crises, geopolitical conflicts, labor disputes, and other factors, which has caused freight shipping costs and lead times to increase. Increases in the cost of devices or components, or freight to transport those items, could negatively impact our results of operations.

Our manufacturers and suppliers will continue to face the risk of temporary or permanent disruptions in their manufacturing operations due to component or material shortages, cost increases (such as increases in the cost of memory, storage and computing), equipment breakdowns, labor strikes or shortages, natural disasters, disease outbreaks and resulting lockdowns, energy crises and power outages, geopolitical disputes (such as ongoing conflicts between China and other countries),tension, civil unrest, hostilities or wars (such as the ongoing conflict between Russia and Ukraine and the conflict in the Middle East), component or material shortages, cost increases,wars, trade policies, tariffs, acquisitions, insolvency, changes in legal or regulatory requirements, or other similar problems. Our manufacturers, suppliers, and sub-tier suppliers have a large presence in China and Taiwan. Any increase in tensions between China and Taiwan, including threats of military actions or escalation of military activities, could adversely affect our suppliers’ and joint design manufacturers’ operations in Taiwan and secondary locations in Asia. Although we have extended our supply orders to the latest quoted lead timestimes, qualified additional components, and have in the past made preemptive spot purchases to build out our inventory, we cannot guarantee that we will have sufficient inventory for our needs or that future disruptions to our supply of IoT devices or materials will not occur. Any delay in the shipment of IoT devices or any other necessary materials delays our ability to recognize revenue for subscriptions purchased by our customers.

In addition, some of our suppliers, joint design manufacturers, and logistics providers may have more established relationships with larger-volume device manufacturers, and as a result of such relationships, such suppliers may choose to limit or terminate their relationship with us. For example, in light of silicon component shortages, we expect that our suppliers’ larger volume customers may be able to exert more influence to purchase components from our suppliers than us, and accordingly, we bear significant risk if we are unable to successfully source components for our IoT devices. Developing suitable alternate sources of supply for these devices and components may be time-consuming, difficult, and costly, and we may not be able to source these devices and components on terms that are favorable to us, or at all, which may adversely affect our ability to meet our requirements or provide our customers with needed IoT devices in a timely or cost-effective manner. Because our customers often must install IoT devices before being able to fully utilize our Connected Operations Platform, any interruption or delay in the supply of any of these devices or components, or the inability to obtain these devices or components from alternate sources at acceptable prices and within a reasonable amount of time, would harm our ability to onboard new customers.

TradeEvolving barriers,trade policies, including tariffs,the importimposition of tariffs and exportother restrictions,trade barriers by the United States and evolvingother geopoliticalcountries, tradecan policieshave the effect of increasing production costs and creating disruptions and delays in supply chains. We expect that the occurrence of these developments in regions where we operate, such as North America and Europe, maywould likely increase the cost of our devices, disrupt supply chain logistics, and affect our ability to efficiently transport, store, and deliver our IoT devices to customers, which could negatively impact our revenue growth and operating margins. Our efforts to optimize our supply chain and manufacturing practices in light of evolving trade policies, component, production, and transportation costs, and other factors can be expensive, time-consuming, ineffective, and disruptive to our business and results of operations and may not succeed.

Our third-party manufacturers and suppliers procure components for our IoT devices based on our forecasts, and we generally do not hold significant inventory for extended periods of time. These forecasts are basedinformed onby estimateshistorical oftrends, futuremarket analysis, and anticipated demand for our solution,solutions; whichhowever, cantheir accuracy cannot be adjusted based on historical trends and analysis and for overall market conditions, and we cannot guarantee the accuracy of our forecasts.guaranteed. In order to reduce manufacturing lead times and plan for adequate component supply, from time to time we may issue forecasts for components and products that are non-cancelable and non-returnable.

Our inventory management systems and related supply chain visibility tools may be inadequate to enable us to accurately forecast and effectively manage supply of our IoT devices. SupplyThese managementsystems remainsand antools increasedalso arearely on the availability, accuracy, and timeliness of focusdata asfrom wethird balanceparties, theand needany disruptions, inaccuracies, or delays in such data could impair our ability to maintaineffectively forecast demand and manage inventory. We may not succeed in maintaining supply levels that are sufficient to ensure competitive lead times againstwhile thealso riskavoiding obsolescence of obsolescenceour inventory because of rapidly changing technology and end-customer requirements. If we ultimately determine that we have excess and obsolete supply, we may have to record a reserve for excess material costs, or reduce our prices and write-down inventory, either of which in turn could result in lower margins. Alternatively, insufficient supply levels may lead to shortages that result in delayed revenue or loss of sales opportunities altogether as potential end customers are unable to access our Connected Operations Platform and, as a result, turn to competitors’ products that are readily available. Additionally, any increases in the time required to manufacture our IoT devices or ship these devices could result in supply shortfalls. If we are unable to effectively manage our supply and inventory, our results of operations could be adversely affected.

A significant part of our business strategy is to focus on long-term growth over short-term financial results. For example, for the fiscal year ended FebruaryJanuary 1,31, 2025,2026, we increased our operating expenses to $1,140.9$1,294.7 million as compared to $1,013.7$1,140.9 million for the fiscal year ended February 3,1, 2024.2025. We expect to continue making significant expenditures on hiring, sales,sales and marketinggo-to-market efforts, and expendituresinvestments to develop new features, integrations, capabilities, and enhancements to our solution and further expand the use cases addressed by our Applications. We have been engaged in strategic initiatives to expand the scope of our core business to increase long-term stockholder value, to improve our cost structure and efficiency, and to increase our selling efforts and develop new business, and we expect to continue making significant expenditures in pursuit of these initiatives. We may not be able to successfully execute these or other strategic initiatives or deliver these initiatives on our expected timetable. If we are not successful in executing on our strategic initiatives, our business, financial condition, and results of operations could be harmed.

Our ability to attract new customers and increase revenue from existing customers depends in large part on our ability to enhance and improve our existing offerings and to introduce compelling new Applications, hardware, and featurestechnologies that reflect the changing nature of our customers’ needs and the regulations to which they are subject. The success of any enhancement to our Connected Operations Platform depends on several factors, including timely completion and delivery, competitive pricing, adequate quality testing, integration with existing technologies and our platform, and overall market acceptance. Factors outside of our control, such as developing laws and regulations, regulatory orders, competitive product offerings, rising AI infrastructure costs, and changes in demand for our solution may also materially impact the successful implementation of new Applications. Any new features or products that we develop may not be introduced in a timely or cost-effective manner, may contain bugs or other defects, or may not achieve the market acceptance necessary to generate significant revenue.

Further, the development and introduction of new Applicationstechnologies can be difficult, time-consuming, and costly. There are inherent risks and uncertainties associated with offering new Applications,technologies, especially when new markets are not fully developed, related technology standards are not mature, or when the laws and regulations regarding a new applicationtechnology are evolving. If we are unable to successfully develop and timely introduce new Applications, enhance our existing Connected Operations Platform to meet customer requirements, or otherwise gain market acceptance, our business, financial condition, and results of operations would be harmed.

As part of our business, we process, store, and transmit our customers’ information and data as well as our own, including in our platform, devices, networks, and other systems, and we also rely on third parties that are not directly under our control to do so. We and many of our third-party partners, including our subprocessors and service providers, have security measures and disaster response plans in place that are designed to help protect our customers’ data, our data, our solution, and other systems against unauthorized access. However, we cannot assure that these security measures and disaster response plans will be adequate or effective against all security threats, including those from malicious insiders, ransomware and other malware, denial of serviceservice, supply chain, and other attacks,attacks; and natural disasters and other sources of disruptions, to the operation of our Connected Operations Platform, our devices, or our or our third-party partners’ operations, including power outages, telecommunications, and other failures. Our orinternal ourand third-party partners’ systems and security measures have in the past been and may in the future be breached or otherwise compromised, disrupted, or disabled, including as a result of actions by malicious insiders or third parties (including nation-state actors, such as those acting in connection with ongoing geopolitical tensions), such as intentional misconduct by computer hackers, phishing (including impersonating us by using domain names that are confusingly similar to ours), and other means of social engineering, including fraudulent inducement of employees or customers to disclose usernames, passwords, or other sensitive information, and employee or contractor error or malfeasance. For example, as a result of the ongoing conflict between Russia and Ukraine, the U.S. government issued a “Shields Up” alert in 2022 and other warnings for American organizations noting the potential for Russia’s cyberattacks on the Ukrainian government and critical infrastructure organizations to impact organizations in the United States. More generally, we and other American organizations may face increased risk of cyberattacks related to geopolitical tensions and events such as the Russia-Ukraine conflict and the conflictconflicts in the Middle East. If such cyberattacks were to occur and were to impact us or our third-party partners, the relevant systems and security measures might provide inadequate protection. In addition, technological advances in(including computerwith capabilities, new technological discoveriesAI) or other developments may introduce novel cybersecurity threat vectors, or may result in cyberattacks becoming more sophisticated and more difficult to detect.detect and protect against. Any breach, incident, compromise, or failure of, or impacting, our systems or those of our third-party partners could result in the loss, corruption, or unavailability of our or our customers’ data,data; loss of intellectual property,property; someone obtaining unauthorized access to, modifying, exfiltrating, or otherwise processing without authorization our customers’ data or our data,data; or someone disrupting or obtaining unauthorized access to our Connected Operations Platform or other systems. Because a security breach or incident could materialize and techniques used by malicious actors continue to evolve, we and our third-party partners may be unable to anticipate security breaches or incidents and implement adequate preventative measures. We incur costs in our efforts to detect and prevent security breaches and other security-related incidents and we expect to incur additional costs in connection with improvements to our systems and processes in ongoing efforts to prevent such breaches and incidents. In the event of a future breach or incident, we could be required to expend additional significant capital and other resources to prevent further breaches or incidents, which may require us to divert substantial resources. Moreover, we could be required or otherwise find it appropriate to notify regulators, customers, and/or impacted third parties of, and otherwise address, the incident or breach and its root cause. In the United States, for example, the SEC has also adopted rules for mandatory disclosure of material cybersecurity incidents experienced by public companies, as well as cybersecurity governance and risk management practices. Complying with these obligations could cause us to incur substantial costs and could increase negative publicity surrounding any incident that compromises sensitive data. Any failure or perceived failure by us to comply with these laws may also subject us to enforcement action or litigation, any of which could harm our business.

Third parties may also conduct attacks designed to temporarily deny customers access to our Connected Operations Platform or disrupt or otherwise impede such access or our platform’s performance. They may also conduct attacks designed to interfere with the operation of our AI models or the accuracy of our data insights. Our presence in the IoT industry with offerings of telematics products and services, including vehicle telematics, could also increase our exposure to potential costs and expenses and reputational harm in the event of cyberattacks or vulnerabilities impacting our solution. For example, in July 2020, the U.S. Federal Bureau of Investigation issued a private industry notification alerting industry participants to cyber-threats targeted at ELDs. Compromise of our IoT devices could pose a health and safety hazard if a malicious actor exploits a vulnerability that allows for control of or interference with the operation of our customers’ equipment. Any actual or perceived security breach or incident affecting our platform or other aspects of our systems, networks, or operations, such as any compromise of our IoT devices, any denial of service attack, or any other disruption to our Connected Operations Platform, affecting data we or our service providers process or maintain, or affecting our customers’ equipment or operations, could result in a loss of customer confidence in the security, integrity, or safety of our solution and damage to our brand and reputation,reputation; reduce the demand for our solution,solution; disrupt our normal business operations,operations; require us to spend material resources to correct the breach or incident and otherwise respond to it,it; expose us to legal liabilities, including claims and litigation by private parties, regulatory investigations and other proceedings, fines, penalties, and indemnity obligations,obligations; and materially and adversely affect our business, financial condition, and results of operations. These risks will increase as we continue to grow the scale and functionality of our Connected Operations Platform and as we store, transmit, and otherwise process increasingly large amounts of information and data, which may include proprietary, sensitive or confidential data, or personal or identifying information. Our liability in connection with any security breaches, incidents, cyberattacks, or other disruptions to our solution or operations may not be adequately covered by insurance, and such events may result in an increase in our costs for insurance or insurance not being available to us on economically feasible terms, or at all. Insurers may also deny us coverage for any future claim. Any of these results could harm our growth prospects, financial condition, business, results of operations, and reputation.

In order to provide real-time support to our customers,customers and improve and develop our products, we have created internal platform controls and system tools that are used by our employees to diagnoseaccess and correct customer issues.data. If our employees were to intentionally or negligently abuse or misuse these platform controls and system tools, for example, by interfering with or altering our IoT devices or our customers’ connected assets and accessing our customers’ data, or otherwise violate company policies, our customers could be significantly harmed. For example, our employees have historically had broad access to customers’ video footage,footage and other customer data, and although we have implemented greater access controls over time,controls, such controls may not ensure that our employees’ access to and use of customers’customer video footagedata is in all cases appropriate. Additionally, some of our Applications have features allowing them to control large industrial assets,assets andor interact with some operations of vehicles through their ignition or other lines; any abuse or misuse of these capabilities could cause substantial disruption or damage to our customers. Any abuse or misuse by our employees of our internal platform controls and system tools, even if inadvertent, could result in potential legal liability and reputational damage to our customers, our partners, and us. Accordingly, any improper conduct, abuse or misuse, intentional or otherwise, of our platform controls and system tools could significantly and adversely harm our business and reputation.

We are continuing to implement enhanced access controls to limit employee access to our platform controls and system tools in an effort to further improve security and reduce the risk of human error or malfeasance. If it becomes necessary to further restrict the availability or use of our platform controls and system tools by our employees in response to any abuse or misuse, our ability to deliver high-quality and timely customer support could be harmed.

Business disruptions or performance problems associated with our technology and infrastructure, including interruptions, delays, or failures in service from our third-party data center hosting facilities and other third-partythird services,parties, could adversely affect our business, financial condition, and results of operations.

Continued adoption of our solution depends in part on the ability of our existing and potential customers to access our solution within a reasonable amount of time. We have experienced, and may in the future experience, disruptions, data loss, data corruption, outages, and other performance problems with our solution and infrastructure due to a variety of factors, including infrastructure changes, introductions of new functionality, human or software errors, capacity constraints, or security-related incidents. If our solution is unavailableunavailable, corrupted, or if our users and customers are unable to access or trust our solution within a reasonable amount of time, or at all, we may experience a decline in renewals, damage to our brand, or other harm to our business. The impact upon our customers may be further heightened by the nature of our solution connecting to their physical infrastructure, which may impede or harm their fleet, equipment, sites, or other physical operations. To the extent that we do not effectively address capacity constraints, upgrade our systems as needed, and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology,technology and business needs, our business, financial condition, and results of operations could be adversely affected.

We rely on third-party software to provide many essential financial and operational services to support our business, including enterprise resource planning, customer relationship management, AI efficiency enhancements, and human capital management. Many of theseour vendors are less established and have shorter operating histories than traditional software vendors. Moreover, many of these vendors provide their services to us via a cloud-based model instead of software that is installed on our premises. We depend upon these vendors to provide us with services that are always available and are free of errorserrors, security vulnerabilities, or defects that could cause disruptions in our business processes. Any failure by these vendors to do so, or any disruption in our ability to access the internet, would materially and adversely affect our ability to effectively manage our business.

We rely on industry standards and technology developed and maintained outside of our control. For example, many of our Applications depend on cellular, satellite, Bluetooth, Wi-Fi, and Wi-FiAI technology and are built upon such technologies. We do not control the development of such technologies, and so it may be possible in the future that the components of the underlying technologies that interface with or are built into our solution develop in ways that are not beneficial to our growth and technological capabilities. If these technologies do not continue to be improved or are replaced with alternative technologies that we do not effectively adapt to, our ability to innovate may be diminished and our market appeal and value to customers may be harmed.

Two critical links in our current Applications are between IoT devices and satellitecellular networks and between IoT devices and cellularsatellite networks, both of which allow us to obtain location and other operational data and transmit that data to our platform. Service outages occurring in the satellite and/or cellular networknetworks upon which our Connected Operations Platform relies or a lack of coverage in certain locations have affected and may in the future adversely affect the functionality of our solution. Moreover, technologies, such as GPS, that rely on satellites depend on the use of radio frequency bands, and any modification of the permitted uses of these bands may adversely affect the functionality of these technologies and, in turn, our solution.

Additionally, increases in the fees charged by cellular carriers or satellite networks for data transmission, changes to the conditions by which our cellular carriers or satellite networks provide service on their or their partners’ networks, or changes in the cellular or satellite networks themselves, such as a cellular carrier discontinuing support of the network currently used by our or our customers’ IoT devices, could increase our costs and impact our profitability. Mobile carriers regularlydeprecate discontinueoutdated radio frequency technologies asto theyrepurpose becomespectrum obsolete.for newer, more efficient wireless standards. If we are unable to design our solution into new technologies, our business, financial condition, and results of operations could be harmed.

In order to support customers’ adoption of our Connected Operations Platform, we develop IoT devices that are compatible with a wide variety of hardware, software, and infrastructure. Not only must we ensure our IoT devices are compatible with third-party software applications and technologies developed by our partners and vendors, but we must also ensure that our IoT devices can interface with third-party hardware, software, or infrastructure that our customers may choose to adopt. ToThird theparties extentmay thatchoose anot thirdto partysupport our solution, for example, if they were to develop software applications or IoT devices that compete with ours, that third party may choose not to support our solution.ours. In particular, our ability to interface with vehicles and equipment from a variety of manufacturers or accurately anticipate evolving wireless technology standards and ensure that our IoT devices comply with these standards in relevant respects is critical to the functionality of our IoT devices. Any failure of our IoT devices to be compatible or comply with the hardware, software, or infrastructure—including wireless communications standards—utilized by our customers could prevent or delay their implementation of our Connected Operations Platform and require costly and time-consuming engineering changes. Additionally, if an insufficient number of wireless operators or subscribers adopt the standards to which we design our IoT devices, our ability to introduce and sell subscriptions to our Connected Operations Platform, or to renew existing subscriptions, would be harmed.

We believe that our ability to increase our sales depends in part on maintaining and strengthening relationships with parties such as channel partners, OEM partners, integration partners, installation partners, financing partners, and other strategic technology companies or technology partners. Once a relationship is established, we likely will dedicate significant time and resources to it in an effort to advance our business interests. There is no assurance that any strategic relationship will achieve our business purposes or that the resources we use to develop the relationship will be cost-effective, and we may decide to exit or terminate the relationship. Parties with whom we establish strategic relationships may offer competing products and/or services or also work with companies that compete with us. We have limited, if any, control as to whether these parties devote adequate resources to our strategic relationships or adequately or appropriately deliver on their responsibilities or commitments, including to us or our customers.customers, and from time to time are contractually required to take liability for the actions of our partners. Failure of such third parties to deliver on their responsibilities or commitments to us or our customers could result in losses or damages to our business.business, as well as reputational harm. Further, companies with whom we maintain strategic relationships may de-emphasize their dealings with us orus, become competitors in the future.future, or be unwilling to agree to our preferred partnership terms and conditions. We also have limited, if any, control as to other business activities of these parties, and we could experience reputational harm because of our association with such parties if they fail to execute on business initiatives, are accused of breaking the law, or suffer reputational harm for other reasons. All of these factors could materially and adversely impact our business and results of operations.

Our success in the future depends in part on the continued contribution of our executive, technical, engineering, sales, marketing, operations, and administrative personnel, particularly Sanjit Biswas, our Chief Executive Officer and co-founder, and John Bicket, our Chief Technology Officer and co-founder, as well as our ability to attract and retain additional qualified management and employees. Recruiting and retaining skilled personnel in the industries in which we operate, including engineers and other technical staff and skilled sales and marketing personnel, is highly competitive. In addition, the success of any future acquisitions depends in part on our retention and integration of key personnel from the acquired company or business. In response to competition, labor shortages, elevated inflation rates, and other market conditions, we may need to adjust employee cash compensation, which would affect our operating costs and our margins. In addition, we have adjusted and may in the future need to adjust employee equity compensation as a result of these factors, including by issuing retention grants and other additional equity awards, which would affect our outstanding share count, cause dilution to existing shareholders, and affect our results of operations.

Although we may enter into employment agreements with members of our senior management and other key personnel, these arrangements are at-will and do not prevent any of our management or key personnel from leaving the company.Company. If we are not able to attract or retain qualified personnel in the future, or if we experience delays in hiring required personnel, particularly qualified technical and sales personnel, we may not be able to maintain and expand our business. In addition, the success of any future acquisitions depends in part on our retention and integration of key personnel from the acquired company or business.

Further, we rely in part on direct sales employees to sell subscriptions to our solution in the United States and internationally. We are focused on increasing the size and effectiveness of our sales force, marketing activities, sales management team, and corporate infrastructure, as well as exploring further relationships with third-party resellers and channel partners. We intend to continue increasing the size of our current direct sales organization and to more efficiently leverage our expanded sales force to increase sales coverage for our solution. We cannot assure you that we will be able to attract and retain the additional personnel necessary to grow and expand our business and operations. Further, we expect that the onboarding of new sales and marketing personnel, including new sales and marketing team leaders,personnel will take considerable time to enable new employees to ramp up to full productivity. If we are unable to expand our sales force at sufficiently high levels and onboard new sales personnel successfully, our ability to attract new customers may be harmed, and our business, financial condition, and results of operations would be adversely affected. In addition, any failure to adequately train our employees on how to communicate the uses and benefits of our solution to potential and existing customers may prevent us from increasing our market share and revenue. If we fail to identify, attract, retain, and motivate these highly skilled personnel, we will be unable to achieve our growth expectations, and our business, financial condition, and results of operations may be harmed.

We believe that our success to date has been driven in large part by our company’s values of focusing on customer success, building for the long term, adopting a growth mindset, being inclusive, and winning as a team. As we mature,mature and scale, we may find it difficult to maintain these important aspects of our culture. It is possible that continued widespread remote or flexible work arrangements may have a negative impact on our operations, the execution of our business plans, the productivity of key personnel and other employees necessary to conduct our business, or otherwise cause operational failures. Any failure to preserve our culture could negatively affect our ability to retain and recruit personnel, which is critical to our growth, and to effectively focus on and pursue our corporate objectives. As a result, if we fail to maintain our company culture, our business and competitive position may be harmed.

We believe that maintaining, enhancing, and protecting our reputation as a differentiated and category-defining company is critical to our relationships with our existing customers and to our ability to attract new customers. We also believe the importance of brand recognition will increase as competition in our market increases, and that brand and reputation are particularly important in the physical operations industry given the potential impact of any failure of our solution on the physical operations of our customers. The successful promotion and protection of our brand depends on a number of factors, including our and our channel partners’ marketing efforts, our ability to continue to develop high-quality solutions, our ability to successfully differentiate our Applications from those of competitors, and our ability to obtain and maintain intellectual property and other protections related to our brand. In addition, users of our solution, independent industry analystsanalysts, and other media commentators provide reviews of our solution and our competitors’ products, which could influence the perception of the relative value of our Connected Operations Platform in the marketplace. If these reviews are negative, or less positive as compared to those of our competitors’ products, our reputation and brand may be harmed.

We typically provide service-level commitments under our subscription agreements.agreements and may provide product performance obligations, warranties or commitments to larger customers. If we fail to meet these contractual commitments, we could be obligated to provide credits for future service or other remedies, or face subscription termination with prorated refunds of prepaid amounts,amounts or breach of contract claims, which wouldcould lower our revenuerevenue, require personnel time or company resources to remedy the issue, and harm our reputation, business, financial condition, and results of operations.

Our subscription agreements typically contain service-level commitments, and our agreements with larger customers may carry higher service-level commitments and/or product performance obligations, warranties, or commitments than those provided to customers generally. If we are unable to meet thethese stated service-level commitments,requirements, including failure to meet the uptime, response time, and/or resolution time requirements under our customer subscription agreements, we may be contractually obligated to provide these customers with service credits or other remedies, which could significantly affect our revenue in the periods in which the failure occurs and the credits are applied. We could also face subscription terminationsterminations, breach of contract claims, and a reduction in renewals, which could significantly affect both our current and future revenue.revenue and/or require personnel time and company resources to remedy the issue. We offer multiple tiers of subscriptions to our solution and, as such, our service-level commitments will increase if more customers choose higher tier subscriptions. Although our historical service credits have not been significant, any future service-level failures and/or failure to meet our product performance obligations, warranties, or commitments could also damage our reputation, which could also adversely affect our business, financial condition, and results of operations.

Our Connected Operations Platform isand IoT devices are inherently complex and, despite extensive testing and quality control, hashave in the past contained and may in the future contain defects or errors, especially when features and Applications are in testing phases, first introduced, or not performing as contemplated. These defects, security vulnerabilities, errors, performance or related failures could cause damage to our reputation, loss of customers or revenue, loss of applicable regulatory certifications, order cancellations, service terminations, or lack of market acceptance of our solution. Our customers within the physical operations industry are particularly sensitive to the reliability of our solution because a failure or defect in our solution could have a significant impact on their business or employees, including leading to noncompliance with applicable regulations, serious bodily injury, or death. For example, customers of our Applications for connected sites may have heightened expectations in connection with the security provided by such Applications, given our access to video feeds of their work environments. Moreover, because customers use some of our Applications for critical compliance functions, defects or errors in such Applications may expose customers to liability or regulatory enforcement. As the use of our solution, including features and Applications that were recently developed, continues to expand to even more sensitive, secure, or mission-critical uses by our customers, we will be subject to increased scrutiny, potential reputational risk, or potential liability should our solution fail to perform as intended in such deployments. We have in the past needed, and may in the future need, to issue corrective releases or hardware to fix these defects, security vulnerabilities, errors or performance failures, which could require us to allocate significant research and development and customer support resources to address these problems. When required to correct device bugs or to implement proactive firmware updatesissues to our IoT devices, we have often implemented over-the-air firmware updates to devices that are deployed in the field.field, created workaround solutions, or deployed new or updated hardware. If such updatessolutions do not perform as anticipated, they may prolong interruptions and performance problems and otherwise impact our reputation and relationship with our customers. Additionally, an improperly configured or deployed update, or our failure to adequately develop and deploy updated technology, may cause performance or security issues or disable certain devices in the field, as has occurred in the past. Such an error could require us to fix or replace such devices and may harm our relationship with the impacted customer or customers. Fixing or replacing such devices is costly and would have an adverse impact on our results of operations.

Our solution is often operated in large scale, distributed IT environments, including across a wide array of IoT devices and connected assets. Implementing our solution in such environments can be a complex and lengthy process, particularly for certain of our customers who are less experienced with respect to the implementation of hardware and/or cloud-based platforms such as ours. On occasion, some of our customers and partners have encountered challenges in implementing our solution, leading them to require training and experience in the proper use of and the benefits that can be derived from our solution to maximize its potential. If our solution is not implemented, used, or updated appropriately, then inadequate performance, exposure of customer data and/or security vulnerabilities can result. Because our customers rely on our software and hardware to manage a wide range of operations, the incorrect implementation or use of, or failure to update, our software and hardware or our failure to train customers on how to use our solution productively may result in customer dissatisfaction, negative publicity and litigation, which may adversely affect our reputation and brand. Failure to effectively provide training and implementation services to our customers could result in lost opportunities for follow-on sales to these customers, decreased subscriptions by new customers, and returns or customer concessions, which would adversely affect our business and growth prospects.

We are subject to the risk of product liability and warranty claims if our Connected Operations Platform and our IoT devices actually or allegedly fail to perform as expected or result, or are alleged to result, in bodily injury and/or property damage. Certain technologies incorporated in our IoT devices, such as batteries (including lithium batteries,batteries), behavior detection, in-cab audio alerts, and immobilizing technologies, may increase the risk profile of such devices. While we maintain what we believe to be reasonable insurance coverage to appropriately respond to such liability exposures, large product liability claims, if made, could exceed our insurance coverage limits and insurance may not continue to be available on commercially acceptable terms, if at all. There can be no assurance that we will not incur significant costs to defend these claims or that we will not experience any product liability losses in the future. In addition, we generally provide our customers a hardware warranty for the entire term of their subscription to our Connected Operations Platform. If any of our IoT devices are, or are alleged to be, defective, we may be required to participate in recalls and exchanges of such devices or customer claims against us. The future cost associated with providing product warranties and/or bearing the cost of repair or replacement of our solution, or a refund of customer expenses, could exceed our historical experience and have a material adverse effect on our business, financial condition, and results of operations.

Our current operations are international in scope, and we plan further geographic expansion, creating a variety of operational and regulatory challenges.

A component of our growth strategy involves the further expansion of our operations and customer base internationally. We are continuing to adapt to and develop strategies to address international markets, but there is no guarantee that such efforts will have the desired effect. For example, we anticipate that we will need to establish relationships with new partners in order to expand into certain countries, and if we fail to identify, establish, and maintain such relationships, we may be unable to execute on our expansion plans. We intend to increase the scope of our international activities as we continue to pursue opportunities in existing and new international markets, which will require significant dedication of management attention and financial and other resources.

•challenges in recruiting, training, and retaining qualified employees, particularly in markets wherein which we have notlittle historicallyor operatedno experience operating;

•slower than anticipated availability and adoption of our solution, or of cloud technologies in general,solution by existing or potential customers in our target geographies;

•changeschallenges in operating in a specific country’s or region’s political or legal and regulatory environment, including theresponding impactto ofchanges that result from elections and other governmental changes, political instability, and political disputes;

Please read the following discussion and analysis of our financial condition and results of operations together with our audited consolidated financial statements and related notes included under Part II, Item 8 of this Annual Report on Form 10-K. Some of the information contained in the following discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that could impact our business. In particular, we encourage you to review the risks and uncertainties described in “Part I, Item 1A. Risk Factors” or included elsewhere in this report.Annual Report on Form 10-K. These risks and uncertainties could cause actual results to differ materially from those projected in forward-looking statements contained in this reportAnnual Report on Form 10-K or implied by past results and trends. Forward-looking statements are statements that attempt to forecast or anticipate future developments in our business, financial condition, or results of operations. See the section titled “Special Note Regarding Forward-Looking Statements” in this report.Annual Report on Form 10-K. These statements, like all statements in this report,Annual Report on Form 10-K, speak only as of their date (unless another date is indicated), and we undertake no obligation to update or revise these statements in light of future developments. Our fiscal year ends on the Saturday closest to February 1, resulting in a 52-week or 53-week fiscal year. Our fiscal years 20252026 and 20232025 each consisted of 52 weeks, with the fourth quarter consisting of 13 weeks, and our fiscal year 2024 consisted of 53 weeks, with the fourth quarter consisting of 14 weeks.

To realize this vision, we pioneered the Connected Operations Platform, which is an open platform that connects the people, devices,assets, and systems of some of the world’s most complex operations, allowing them to develop actionable insights and improve their operations.

Our Connected Operations Platform consolidates data from our IoT devices and a growing ecosystem of connected assets and third-party systems, and makes it easy for organizations to access, analyze, and act on data insights using our cloud dashboard, custom alerts and reports, mobile apps, and workflows. OurPowered by our massive and growing data asset and expansive AI technology, our differentiated, purpose-built suite of Applications and Agents enables organizations to embrace and deploy a digital, cloud-connected strategy across their operations. With Samsara, customers have the ability to drive safer operations, increase business efficiency, and achieve their sustainability goals, all to improve the lives of their employees and the customers they serve.

We were founded in 2015 and have achieved significant growth since our inception. For the fiscal years ended FebruaryJanuary 1,31, 20252026 and February 3,1, 2024,2025, our revenue was $1,249.2$1,618.6 million and $937.4$1,249.2 million, respectively, representing year-over-year growth of 33%.respectively. Our net loss was $154.9$9.1 million and $286.7$154.9 million for the fiscal years ended FebruaryJanuary 1,31, 20252026 and February 3,1, 2024,2025, respectively. Our business model focuses on maximizing the lifetime value of our customer relationships, and we continue to make significant investments to growexpand our customercustomers’ base.use of our Connected Operations Platform.

In each of the past two fiscal years, we generated approximately 98% of our revenue from subscriptions to our Connected Operations Platform, which today includes Applications for AI Video-Based Safety, Vehicle Telematics, WorkforceAsset Apps,Tracking, EquipmentRouting, Monitoring,Commercial Navigation, Maintenance, Connected Training, Connected Forms, and Site Visibility. A subscription to our Connected Operations Platform includes IoT data collection, which usually comes from a Samsara IoT device, such as an internet gateway, camera or sensor, or at times from a third-party solution; cellular connectivity for our IoT devices; access to our cloud Applications, application programming interfaces, and the Samsara App Marketplace; customer support; and warranty coverage. We generally price our subscriptions on a per asset, per application basis. For example, one vehicle using two Applications (AI Video-Based Safety and Vehicle Telematics) would count as two subscriptions.

As our business has scaled, we have increasingly focused our sales efforts on larger customers. As of FebruaryJanuary 1,31, 2025,2026, we had more than 20,00012,000 customers,customers who each representingrepresented $10,000$25,000 or more in ARR, or Core Customers, and approximately 93%85% of our ARR came from Core Customers. Our customer counts fluctuate from period to period, including due to customer mergers, acquisitions, consolidations, spin-offs, and other market activity. We have a very diverse customer base and no significant customer concentration, with no single customer accounting for more than 1%2% of our ARR as of FebruaryJanuary 1,31, 2025.2026.

We have extended our Applications over time to address the needs of our customers. We started with Applications for connected fleets, where we observed a large and underpenetrated market opportunity, and then expanded into connected equipment and connected sites, where we observed similar opportunities to improve operations around physical assets. As of FebruaryJanuary 1,31, 2025,2026, over 80%90% of our Core Customers and 90%over 95% of our customers representing over $100,000 in ARR are using multiple Applications. We believe this demonstrates the flexibility of our solution and our ability to develop and grow new Applications.

While our Connected Operations Platform is accessible to customers of all sizes and we have achieved rapid adoption over time, we are particularly focused on larger customers representing over $100,000 in ARR. As of FebruaryJanuary 1,31, 2025,2026, approximately 55%61% of our ARR came from customers representing over $100,000 in ARR. These customers generally contribute higher revenue, land with multiple products, have higher retention rates, and demonstrate stronger unit economics. The number of our customers representing over $100,000 in ARR has increased over time from 1,848 as of February 3, 2024 to 2,506 customers2,484 as of February 1, 2025.2025 to 3,194 customers as of January 31, 2026. Customers representing over $100,000 in ARR generally adopt more Applications than our overall customer base. For example, as of FebruaryJanuary 1,31, 2025,2026, more than 90%95% of these large customers use two or more Applications and moreapproximately than 60%70% use three or more Applications.

The following table showspresents a summary of our key business metrics as of the periods presented (dollars in thousands):

Our performance is driven by continuous innovation on our Connected Operations Platform and our ability to scale our headcountoperations to grow our business. We continuously invest in adding new data types to our Connected Operations Platform and innovate with this growing data asset to introduce new Applications over time. Our performance is also impacted by our ability to scale our headcountoperations across our business to support our growth. We have increased our headcount from 2,895 employees as of the last business day of the fiscal year ended February 3, 2024 to more than 3,500 full-time employees as of the last business day of the fiscal year ended February 1, 2025.2025 to more than 4,100 full-time employees as of the last business day of the fiscal year ended January 31, 2026. We remain committed to investing in our sales and marketing capacitycapacity, investing in world-class talent and productivity tools within our research and development organization, and to driving revenue growth globally.

Unfavorable conditions in the economy, both in the United States and abroad, may negatively affect the growth of our business and our results of operations. For example, our business and results of operationsoperations, as well as those of our customers, could be affected by global macroeconomic trends and events such as inflationary pressure, fluctuations in foreign currency exchange rates, interest rate increases and declines in consumer confidence, widespread disruptions of supply chains and freight and shipping channels, increased prices for many goods and services (including fluctuating hardware component costs, memory, storage and computing costs, and fuel costs), labor shortages, delayed or reduced spending on IT products,technology, and significant volatility and disruption of financial markets, as well as other conditions arising from international conflicts, such as the ongoing conflict between Russiaconflicts and Ukraine, geopolitical tensions involving China, and the conflict in the Middle East,tension, the outcome of political elections, and new monetary, fiscal, and trade policies (including tariff policies and import and export restrictions), in the United States and the emergence of public health crises.abroad. We are continuously monitoring these global events and other macroeconomic developments and how they may impact us directly or indirectly as a result of the effects on our customers and suppliers.

We provide access to our Connected Operations Platform through subscription arrangements, whereby the customer is charged a per-subscription fee for access for a specified term. Subscription agreements contain multiple service elements for one or more of our cloud-based Applications via mobile app(s) or a website that enable data collection and provide access to the cellular network, IoTgenerally one or more wireless gateways, cameras, sensors and other devices (which we also refer to as connected devices or IoT devices), andthat support servicesare delivered over the term of the arrangement.arrangement, and warranty coverage. Our subscription contracts typically have an initial term of three to five years and are generally non-cancelable and non-refundable, subject to limited exceptions under our standard terms of service and other exceptions for public sector customers, who are often subject to annual budget appropriations cycles. Our Connected Operations Platform and IoT devices are highly interdependent and interrelated, and represent a combined performance obligation within the context of the contract.

In each of our past two fiscal years, we generated approximately 98% of our revenue from subscriptions to our Connected Operations Platform. The remaining portion of our revenue not generated from subscriptions to our Connected Operations Platform is derived from the sale of replacement IoT devices, including gateways, sensors and cameras, related shipping and handling fees, and professional services.

Cost of revenue consists primarily of the amortization of IoTconnected device costs associated with subscription agreements, third-party cloud and cellular infrastructure costs, customer support costs, warranty costs, and employee-related costs directly associated with our customer support and operations,supply chain teams, including salaries, employee benefitsbenefits, and stock-based compensation, amortization of internal-use software developmentcosts, and certain cloud computing implementationfulfillment costs, expenseswarranty relatedcosts, toprovision shipping and handling, packaging, fulfillment, warehousing, write-downs offor excess and obsolete inventory, and costs associated with software subscriptions,subscriptions and office facilities, IT-related expenses, and depreciation and amortization of property and equipment.facilities.

As our customers expand and increase the use of our Connected Operations Platform driven by additional IoT devices and Applications, our cost of revenue may vary from quarter to quarter as a percentage of our revenue due to the timing and extent of these expenses. We intend to continue to invest additional resources in our Connected Operations Platform and customer support and operations personnel as we grow our business. The level and timing of investment in these areas will affect our cost of revenue in the future.

Research and development expenses consist primarily of employee-related costs, including salaries, employee benefitsbenefits, and stock-based compensation, depreciationassociated with improvements to our platform and othercurrent expenses related to prototyping IoT devices, product initiatives, software subscriptions, hostingofferings and cellular-relatedthe costsdevelopment usedof innew research and development,products, and costs associated with officesoftware facilities, IT-related expenses,subscriptions and depreciationoffice and amortization of property and equipment.facilities. We continue to focus our research and development efforts on adding new features and products and enhancing the utility of our Connected Operations Platform. We capitalize the portion of our internal-use software development costs that meets the criteria for capitalization.

Sales and marketing expenses consist primarily of employee-related costs directly associated with our sales and marketing activities,costs, including salaries, employee benefits, stock-based compensation, and sales commissions.commissions incurred to acquire and retain new customers and increase product adoption with our existing customers. Sales and marketing expenses also include expendituresmarketing related to advertising, media, marketing,activities, promotional costs, free trial expenses, brand awareness activities, business development, corporate partnerships, travel, conferences and events, professional services, and costs associated with software subscriptions,subscriptions and office facilities, IT-related expenses, and depreciation and amortization of property and equipment.facilities.

We plan to continue to invest in sales and marketing to growexpand our customercustomers’ baseuse of our Connected Operations Platform and increase our brand awareness. As a result, we expect our sales and marketing expenses to generally increase in absolute dollars for the foreseeable future. Our sales and marketing expenses have fluctuated in the past and may in the future fluctuate as a percentage of our revenue from period to period due to the timing and extent of these expenses, including seasonally higher spend on conferences andpromotional events in the first half of our fiscal year.

General and administrative expenses consist primarily of employee-related costs for executive, finance, legal, human resources, facilities, and certain IT personnel, including salaries, employee benefitsbenefits, and stock-based compensation,compensation. General and administrative expenses also include costs related to professional servicesservices, fees for externalincluding legal, accounting, recruiting and other consulting services, badas debt,well as costs associated with software subscriptions,subscriptions and office facilities, IT-related expenses, and depreciation and amortization of property and equipment.facilities.

Interest income and other income, net, consists primarily of income earned on our money market funds included in cash and cashmarketable equivalents,debt restricted cash, and our short-term and long-term investments,securities, including amortization of premiums and accretion of discountsdiscounts, relatedand tonet unrealized gains (losses) on our marketablestrategic debtinvestments. securities,It netalso includes the effect of associatedchanges fees. We also havein foreign currency remeasurementexchange gains and losses and foreign currency transaction gains and losses.rates. As we have expanded our global operations, our exposure to fluctuations in foreign currencies has increased, and we expect this to continue.

Comparison of the Fiscal Years Ended January 31, 2026 and February 1, 2025 and February 3, 2024

Revenue increased by $311.8$369.4 million, or 33%,30%, for the fiscal year ended FebruaryJanuary 1,31, 20252026 compared to the fiscal year ended February 3,1, 2024,2025, primarily due to an increase in customernew countcustomers and increased purchases byof existingsubscriptions customers ofto our subscriptionConnected offerings,Operations Platform, including subscriptions to additional Applications, partially offsetApplications by anexisting extra week in our fiscal year 2024.customers.

Cost of revenue increased by $51.3$78.2 million, or 21%,26%, for the fiscal year ended FebruaryJanuary 1,31, 20252026 compared to the fiscal year ended February 3,1, 2024,2025, primarily due to $22.0$38.1 million of increased amortizationcloud ofand IoT devicecellular costs, $19.1$21.8 million of increased infrastructureconnected costsdevice associatedcosts, with our product offerings,and $7.9 million of increased employee-related costs, which included a $6.5$6.0 million increase in salariessalaries, and benefitsbenefits, and related employer taxes and a $1.4$1.9 million increase in stock-based compensation expense, $3.1 million of increased excess and obsolete inventory charges, and $2.2 million of increased amortization of internally-developed software, partially offset by $4.6 million of decreased warranty costs.expense. The increases in amortizationcloud ofand IoT devicecellular costs and infrastructureconnected device costs were primarily due to increased sales volume year-over-year. The increase in costemployee-related of revenuecosts was partiallyprimarily offsetdue byto anincreased extra week in our fiscal year 2024.headcount.

Our gross margin increased to 77% for the fiscal year ended January 31, 2026 compared to 76% for the fiscal year ended February 1, 2025 compared to 74% for the fiscal year ended February 3, 2024,2025, mainly due to operational efficiencies in IoTconnected device costs,costs and direct labor costs, and warranty charges.costs.

Research and development expense increased by $41.1$44.9 million, or 16%,15%, for the fiscal year ended FebruaryJanuary 1,31, 20252026 compared to the fiscal year ended February 3,1, 2024,2025, primarily due to a $31.0$26.5 million increase in employee-related costs, which included a $20.5 million increase in salaries and benefits and related employer taxes and a $10.5$19.0 million increase in stock-based compensation expense, primarily due to increased headcount to support our researchexpense and developmenta organization.$7.6 million increase in salaries, benefits, and related employer taxes. The increase in research and development expense was also due to a $5.2$8.3 million increase in software subscriptions, IT, hostingcloud and cellular-relatedcellular costs,costs and a $2.8$7.2 million increase in expensescosts relatingassociated towith contractorsoftware and other professional services, and a $1.5 million increase in prototyping expenses. The increase in research and development expense was partially offset by an extra week in our fiscal year 2024.subscriptions.

Sales and marketing expense increased by $115.0$82.1 million, or 24%,14%, for the fiscal year ended FebruaryJanuary 1,31, 20252026 compared to the fiscal year ended February 3,1, 2024,2025, primarily due to a $88.2$64.1 million increase in employee-related costs, which included a $69.4$40.4 million increase in salariessalaries, and benefitsbenefits, and related employer taxes, a $13.7$18.6 million increase in sales commissions, and a $5.1 million increase in stock-based compensation expense, and a $5.1 million increase in sales commissions, primarily due to increased headcount to support our sales organization.headcount. The increase in sales and marketing expense was also due to a $10.0$12.3 million increase in travel-relatedexpenditures costsincurred to generate demand through various marketing channels and expensespromotional relatingevents, toincluding our customerannual visits, conferences, and other events, a $7.1 million increase in IT-related costs and software subscriptions, a $3.1 million increase in expenses relating to campaign marketing and brand awareness, a $2.8 million increase in expenses relating to professional services, and a $1.7 million increase in free trial expense. The increase in sales and marketing expense was partially offset by an extra week in our fiscal year 2024.conference.

General and administrative expense increased by $39.6$31.7 million, or 20%,14%, for the fiscal year ended FebruaryJanuary 1,31, 20252026 compared to the fiscal year ended February 3,1, 2024,2025, primarily due to a $28.0$16.5 million increase in employee-related costs, which included a $16.5$11.2 million increase in stock-based compensation expense and a $11.6$5.3 million increase in salariessalaries, and benefitsbenefits, and related employer taxes, primarily due to increased headcount to support the growth of our finance, accounting, human resources, and legal functions.headcount. The increase in general and administrative expense was also due to a $14.7$9.8 million increase in expenseswrite-offs relatingagainst tothe professionalallowance servicesfor credit losses and a $2.2$7.5 million increase in software subscriptions, partially offset by a $4.1 million decrease in bad debt expense. The increase in generalconsulting and administrativeprofessional expenseservices was partially offset by an extra week in our fiscal year 2024.fees.

Interest income and other income, net, decreasedincreased by $0.4$13.9 million, or 1%,35%, for the fiscal year ended FebruaryJanuary 1,31, 20252026 compared to the fiscal year ended February 3,1, 2024.2025. $2.8This increase was impacted by $5.7 million ofin thisunrealized decreasegains wasfrom duestrategic toinvestments, an$5.0 million increase in foreign currency lossesgains, and $1.9 million of this decrease was due to lower interest income earned on our cash balances as a result of a smaller average balance in our money market funds. These decreases were partially offset by a $4.1$3.4 million increase due toin interest income earned on a larger investment basebalance of our managed portfolio of marketable debt securities and themoney netmarket accretion of discounts on these securities.funds.

The provision for income taxes increased by $1.2$5.5 million, or 34%,123%, for the fiscal year ended FebruaryJanuary 1,31, 20252026 compared to the fiscal year ended February 3,1, 2024,2025, primarily due to higherthe taxesgrowth related toof our operations in foreign jurisdictions.

Expenses (Income) Excluded from Non-GAAP Performance Financial Measures

Stock-based compensation expense-related charges include the amortization of deferred stock-based compensation expense for capitalizedinternal-use software and cloud computing arrangements and employer taxes on employee equity transactions. Stock-based compensation expense is excluded because it is a non-cash expense and is dependent on our stock price, which is beyond our control. Further, because of varying available valuation methodologies and award types,Accordingly, we find it useful to exclude stock-based compensation expense in order to better understand our ongoing operational performance. Employer taxes on employee equity transactions, which are a cash expense,expenses, are excluded because such taxes are directly tied to the timing and size of employee equity transactions and the future fair market value of our common stock, which may vary from period to period independent of the operating performance of our business.

(1)Stock-based compensation expense-related charges included approximately $1.0 million, $0.8$1.0 million, and $0.3$0.8 million of employer taxes on employee equity transactions for the fiscal years ended January 31, 2026, February 1, 2025, and February 3, 2024, and January 28, 2023, respectively.

Non-GAAP Operating Income (Loss) from Operations and Non-GAAP Operating Margin

We define non-GAAP income (loss) from operations, or non-GAAP operating income (loss), as income (loss) from operations excluding the effect of stock-based compensation expense-related charges, lease modification, impairment, and related charges, and legal settlements. Non-GAAP operating margin is defined as non-GAAP operating income (loss) as a percentage of total revenue. We use non-GAAP operating income (loss) from operations and non-GAAP operating margin in conjunction with traditional GAAP measures to evaluate our financial performance. We believe that non-GAAP operating income (loss) from operations and non-GAAP operating margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations. The following table presents a reconciliation of our non-GAAP operating income (loss) from operations to our GAAP loss from operations for the periods presented (in thousands, except percentages):

(1)Stock-based compensation expense-related charges included approximately $18.6$16.3 million, $14.1$18.6 million, and $4.0$14.1 million of employer taxes on employee equity transactions for the fiscal years ended January 31, 2026, February 1, 2025, and February 3, 2024, and January 28, 2023, respectively.

Non-GAAP Net Income (Loss)

We define non-GAAP net income (loss) as net income (loss) excluding the effect of stock-based compensation expense-related charges, lease modification, impairment, and related charges, and legal settlements. We use non-GAAP net income (loss) in conjunction with traditional GAAP measures to evaluate our financial performance. We believe that non-GAAP net income (loss) provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations. The following table presents a reconciliation of our non-GAAP net income (loss) to our GAAP net loss for the periods presented (in thousands, except percentages):

Since our founding, we have financed our operations primarily through the sale of equity securities and payments received from our customers. In December 2021, we completed our IPO, which resulted in aggregate net proceeds of $846.7 million, including proceeds from the underwriters’ exercise of their option to purchase additional shares of our Class A common stock in January 2022 and net of underwriting discounts and commissions. We have generated significant operating losses from our operations, as reflected in our accumulated deficit of $1,610.0$1,619.1 million as of FebruaryJanuary 1,31, 2025.2026. We intend to continue investing in our business, and as a result, we may require additional capital resources to execute on our strategic initiatives to grow our business, particularly if we generate negative cash flows in future quarters. We believe that our existing cash, cash equivalents, and short-term and long-term investments will be sufficient to support working capital, including our non-cancelable arrangements, and capital expenditure requirements for at least the next 12 months.

As of FebruaryJanuary 1,31, 2025,2026, our principal sources of liquidity were cash, cash equivalents, and short-term and long-term investments of $977.5$1,236.9 million. Cash and cash equivalents consisted of cash on deposit with banks as well as highly liquid investments with an original maturity of 90 days or less, when purchased. Our investments primarily consisted of U.S. government and agency securities, corporate notes and bonds, and commercial paper. Our primary uses of cash include personnel-relatedemployee-related costs,expenditures, third-party cloud and cellular infrastructure costs, sales and marketing expenses, overhead costs,expenses, and funding other working capital requirements, such as inventory and related connected device costs to meet our performance obligations related to our Connected Operations Platform.

Our future capital requirements will depend on many factors, including, but not limited to, our growth, our ability to attract and retain customers, the continued market acceptance of our solution, the timing and extent of spending necessary to support our efforts to develop our Connected Operations Platform and meet our performance obligations related to our Connected Operations Platform,customers, the expansion of sales and marketing activities, and the impact of macroeconomic conditions on our and our customers’ and partners’ businesses. Further, we may in the future enter into arrangements to acquire or invest in businesses, products, services, and technologies. We may be required to seek additional equity or debt financing. In the event that additional financing is required, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital when desired, our business, financial condition, and results of operations could be adversely affected.

The following table showspresents a summary of our cash flows for the periods presented (in thousands):

Our largest source of operating cash is payments received from our customers. Our primary uses of cash from operating activities are for employee-related expenses,expenditures, sales and marketing expenses, inventory and related connected device costs, third-party cloud and cellular infrastructure costs, and overhead expenses. Although we generated positive operating cash flows from operationsbeginning in fiscal year 2025, we generated negative cash flows from operations in the preceding two fiscal years. We have supplemented working capital through net proceeds from the sale of equity securities.

Cash provided by operating activities was $131.7$236.2 million for the fiscal year ended FebruaryJanuary 1,31, 2025.2026. This consisted of a net loss of $154.9$9.1 million, adjusted for non-cash charges of $288.5$331.9 million, and changes in our operating assets and liabilities of $2.0$86.6 million. The non-cash charges were primarily comprisedcomposed of stock-based compensation expense of $277.9$315.0 million, depreciation and amortization of $20.6$24.0 million, and leaseother modification, impairment, and relatednon-cash charges of $3.5 million, partially offset by net accretion of discounts on marketable debt securities of $15.3$10.6 million. Changes in our operating assets and liabilities during the fiscal year ended FebruaryJanuary 1,31, 20252026 reflect increased accounts receivable from customers, higher deferred commissions and connected device costs and deferred commissions due to the growth of our business, and higher levels of inventories to meet anticipated demand requirements, partially offset by increases in deferred revenue due to the growth of our business and lower vendor payments during the fiscal year ended FebruaryJanuary 1,31, 2025.2026.

Cash usedprovided inby operating activities was $11.8$131.7 million for the fiscal year ended February 3,1, 2024.2025. This consisted of a net loss of $286.7$154.9 million, which included a charge of $60.0 million for a cash payment made to settle non-recurring lease-related litigation, and adjusted for non-cash charges of $253.7$288.5 million, and changes in our operating assets and liabilities of $21.2$2.0 million. The non-cash charges were primarily comprisedcomposed of stock-based compensation expense of $237.1$277.9 million, depreciation and amortization of $15.5 million, non-cash legal settlement of $8.7$20.6 million, and lease modification, impairment, and related charges of $4.8$3.5 million, partially offset by net accretion of discounts on marketable debt securities of $16.9$15.3 million. Changes in our operating assets and liabilities during the fiscal year ended February 3,1, 20242025 reflect increased accounts receivable from customers, higher deferred commissions and connected device costs due to the growth of our business, and higher levels of inventories to meet anticipated demand requirements, partially offset by increases in deferred revenue due to the growth of our business, increases in accounts payable and other liabilities due to timing of invoices received from vendors, lower inventories due to operating efficiencies in our order fulfillment processes,business and lower operatingvendor lease ROU assets, partially offset by higher connected device costs, lower cash collections from customers, higher deferred commissions, and higher prepaid expenses and other current assetspayments during the fiscal year ended February 3,1, 2024.2025.

Cash used in investing activities was $78.7$189.5 million for the fiscal year ended FebruaryJanuary 3,31, 2024,2026, which primarily consisted of $740.5$873.5 million of purchases of investments and $11.0$28.8 million of capital expenditures for internal-use software development costs and our office facilities, partially offset by $664.7$714.1 million of proceeds from maturities and redemptions of investments and $8.2 million of proceeds from sales of investments.

Cash provided by financing activities was $27.1$29.9 million for the fiscal year ended FebruaryJanuary 1,31, 2025,2026, which primarily consisted of $28.8$30.9 million of proceeds from employee stock purchases under the 2021 Employee Stock Purchase Plan (the “2021 ESPP”) and exercises of stock options, partially offset by $1.7$0.9 million in payments of principal on finance leases.

Cash provided by financing activities was $21.0$27.1 million for the fiscal year ended February 3,1, 2024,2025, which primarily consisted of $23.2$28.8 million of proceeds from employee stock purchases under the 2021 ESPPEmployee Stock Purchase Plan and exercises of stock options, partially offset by $2.2$1.7 million in payments of principal on finance leases.

Our estimated future obligations consist of leases and non-cancelable purchase commitments as of FebruaryJanuary 1,31, 2025.2026. For additional discussion on our leases and other commitments, refer to Notes 8, “Leases,” and 9, “Commitments and Contingencies,” to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Our business, operations, and financial condition are subject to various risks and uncertainties that could materially adversely affect our business, results of operations, financial condition, growth prospects, and the trading price of our Class A common stock. The following factors, among others not currently known by us or that we currently do not believe are material, could cause our actual results to differ materially from historical results and those expressed in forward-looking statements made by us or on our behalf in filings with the SEC, press releases, communications with investors, and oral and other statements. You should carefully consider the following updated risks and uncertainties, together with all the other information contained in this Quarterly Report on Form 10-Q, as well as the risk factors discussed in “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026, and “Part II, Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the fiscal quarter ended May 2, 2026, which remain applicable to our business.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with (1) our audited consolidated financial statements and related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the fiscal year ended January 31, 2026 included in our Annual Report on Form 10-K filed with the SEC on March 16, 2026, and (2) our unaudited condensed consolidated financial statements and related notes and other financial information included under Part I, Item 1 of this Quarterly Report on Form 10-Q. Some of the information contained in the following discussion and analysis, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. You should review the sections titled “Item 1A. Risk Factors” and “Special Note Regarding Forward-Looking Statements” contained in this Quarterly Report on Form 10-Q and the section titled “Risk Factors” included under Part I, Item 1A. of our Annual Report on Form 10-K filed with the SEC on March 16, 20262026, as supplemented by our subsequent quarterly reports on Form 10-Q, for a discussion of forward-looking statements and important factors that could impact our business and cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis or implied by past results and trends. TheseUnless otherwise indicated, these statements, like all statements in this Quarterly Report on Form 10-Q, speak only as of their date (unless another date is indicated),date, and we undertake no obligation to update or revise these statements in light of future developments. Our fiscal year ends on the Saturday closest to February 1, resulting in a 52-week or 53-week fiscal year. Our fiscal years 2027 and 2026 each consist of 52 weeks.

We were founded in 2015 and have achieved significant growth since our inception. For the three months ended MayAugust 2,1, 2026 and MayAugust 3,2, 2025, our revenue was $478.8$508.4 million and $366.9$391.5 million, respectively. Our net income was $44.5$16.2 million for the three months ended MayAugust 2,1, 2026 and our net loss was $22.1$16.8 million for the three months ended MayAugust 3,2, 2025. For the six months ended August 1, 2026 and August 2, 2025, our revenue was $987.3 million and $758.4 million, respectively. Our net income was $60.8 million for the six months ended August 1, 2026 and our net loss was $38.9 million for the six months ended August 2, 2025. Our business model focuses on maximizing the lifetime value of our customer relationships, and we continue to make significant investments to expand our customers’ use of our Connected Operations Platform.

We believe that we have a substantial opportunity to continue to grow our customer base. We intend to drive new customer acquisition by continuing to invest significantly in sales and marketing to engage our prospective customers, increase brand awareness, and drive adoption of our Connected Operations Platform. Our ability to attract new customers depends on a number of factors, including the effectiveness of our sales and marketing efforts, macroeconomic factors and their impact on our customers’ businesses, and the success of our efforts to expand internationally.our international presence.

We believe that there is a significant opportunity to expand sales to existing customers following their initial adoption of our Connected Operations Platform. We expand within our customer base by selling more Applications and Agents and expanding existing Applications and Agents across geographies and divisions. Our ability to expand within our customer base will depend on a number of factors, including our customers’ satisfaction, pricing, competition, macroeconomic factors, and changes in our customers’ spending levels.

Unfavorable conditions in the economy, both in the United States and abroad, may negatively affect the growth of our business and our results of operations. For example, our business and results of operations, as well as those of our customers, could be affected by global macroeconomic trends and events such as inflationary pressure, fluctuations in foreign currency exchange rates, interest rate increases and declines in consumer confidence, widespread disruptions of supply chains and freight and shipping channels, increased prices for many goods and services (including fluctuatingelevated hardware component costs, memory, storage and computing costs, and fuel costs), labor shortages, delayed or reduced spending on technology, and significant volatility and disruption of financial markets, as well as other conditions arising from international conflicts and geopolitical tension, the outcome of political elections, and new monetary, fiscal, and trade policies (including tariff policies and import and export restrictions) in the United States and abroad. We are continuously monitoring these global events and other macroeconomic developments and how they may impact us directly or indirectly as a result of the effects on our customers and suppliers.

Refer to the section titled “Risk Factors” in Part II, Item 1A and elsewhere in this Quarterly Report on Form 10-Q and the section titled “Risk Factors” in Part I, Item 1A and elsewhere in our Annual Report on Form 10-K filed on March 16, 2026, as supplemented by our subsequent quarterly reports on Form 10-Q, for further discussion of the impacts of macroeconomic trends on our business.

As our customers expand and increase the use of our Connected Operations Platform driven by additional IoT devices and Applications, our cost of revenue may vary from quarter to quarter as a percentage of our revenue due to the timing and extent of these expenses. Our cost of revenue may also increase as a result of higher market prices for hardware components. We intend to continue to invest additional resources in our Connected Operations Platform, including in our IoT device hardware, cloud infrastructure, and cellular connectivity, as well as in customer support and operations as we grow our business. The level and timing of investment in these areas will affect our cost of revenue in the future.

Research and development expenses consist primarily of employee-related costs, including salaries, benefits, and stock-based compensation, associated with improvements to our platform and current offerings and the development of new products, and costs associated with software subscriptionssubscriptions, and office facilities. We continue to focus our research and development efforts on adding new features and products and enhancing the utility of our Connected Operations Platform.

General and administrative expenses consist primarily of employee-related costs for executive, finance, legal, and human resources, facilities, and certain IT personnel, including salaries, benefits, and stock-based compensation. General and administrative expenses also include costs related to professional services, including legal, accounting, recruiting and other consulting services, as well as costs associated with software subscriptions and office facilities.

Provision for income taxes consists primarily of income taxes in certain foreign jurisdictions in which we conduct business. We maintain a full valuation allowance against our U.S. deferred tax assets because we have concluded that it is not more likely than not that the deferred tax assets will not be realized.

Comparison of the Three and Six Months Ended MayAugust 2,1, 2026 and MayAugust 3,2, 2025

Revenue increased by $112.0$117.0 million and $228.9 million, or 31%,30%, for the three and six months ended MayAugust 2,1, 20262026, respectively, compared to the three and six months ended MayAugust 3,2, 2025, primarily due to an increasegrowth in new customers and increased purchases by existing customers.

Cost of revenue increased by $34.5$25.4 million, or 42%,28%, for the three months ended MayAugust 2,1, 2026 compared to the three months ended MayAugust 3,2, 2025, primarily due to $16.1$11.7 million of increased cloud and cellular costs, $10.8$6.4 million of increased connected device costs, and $3.0$3.3 million of increased employee-related costs. The increases in cloud and cellular costs and connected device costs were primarily due to increased sales volume and additional product features and functionality year-over-year. The increase in employee-related costs was primarily due to increased headcount.

Our gross margin decreased to 75%76% for the threesix months ended MayAugust 2,1, 2026 compared to 77% for the threesix months ended MayAugust 3,2, 2025, mainlyprimarily due to increased cloud and cellular costs.

Research and development expense increased by $14.3$16.9 million, or 17%,20%, for the three months ended MayAugust 2,1, 2026 compared to the three months ended MayAugust 3,2, 2025, primarily due to a $5.9$6.8 million increase in costs associated with software subscriptions, a $4.6$6.4 million increase in cloudstock-based compensation expense, and cellulara $6.2 million increase in platform costs driven by investments in AI tooling and related development infrastructure, and a $3.9 million increase in employee-related costs.infrastructure.

Sales and marketing expense increased by $38.2$43.7 million, or 23%,25%, for the three months ended MayAugust 2,1, 2026 compared to the three months ended MayAugust 3,2, 2025, primarily due to a $23.5$25.7 million increase in employee-related costs,costs which included a $18.1$6.1 million increase in salaries,sales benefits,commissions and relateda employer$4.5 taxesmillion increase in stock-based compensation expense primarily due to increased headcount and a $5.8 million increase in sales commissions.headcount. The increase in sales and marketing expense was also due to aan $9.7$11.5 million increase in expenditures incurred to generate demand through various marketing channels and promotional events.events, including our annual customer and investor conference.

General and administrative expense decreased by $15.6 million, or 23%, for the three months ended MayAugust 2,1, 2026 compared to the three months ended MayAugust 3,2, 2025,2025 primarilyremained duerelatively to a $14.4 million decrease in non-recurring consulting and professional services fees and a $2.5 million decrease in stock-based compensation expense.flat.

Interest income and other income, net, increased by $29.0$1.2 million, or 228%,11%, for the three months ended MayAugust 2,1, 2026 compared to the three months ended MayAugust 3,2, 2025. This increase was primarily adue resultto ofunrealized agains $30.3from millionstrategic arbitration award issued in Samsara’s favor in the Motive breach of contract, fraud, unfair competition, and false advertising matter,investments, partially offset by a $2.1 million increase in foreign currency losses.

The provision for income taxes increased by $2.8 million, or 178%, for the three months ended MayAugust 2,1, 2026 compared to the three months ended MayAugust 3,2, 2025,2025 primarilyremained duerelatively to growth in our operations in foreign jurisdictions.flat.

LeaseIn periods when they occur, significant lease modification, impairment,impairment and related charges, and legal settlements and awards are excluded because management believes that such charges are not reflective of our ongoing operational performance.

(1)Stock-based compensation expense-related charges included approximately $0.3$0.2 million and $0.4$0.3 million of employer taxes on employee equity transactions for the three months ended MayAugust 2,1, 2026 and MayAugust 3,2, 2025, respectively.

We define non-GAAP operating income as income (loss) from operations excluding the effect of stock-based compensation expense-related charges, lease modification, impairment,impairment and related charges, and legal settlements.settlements and awards, in periods when they occur. Non-GAAP operating margin is defined as non-GAAP operating income as a percentage of total revenue. We use non-GAAP operating income and non-GAAP operating margin in conjunction with traditional GAAP measures to evaluate our financial performance. We believe that non-GAAP operating income and non-GAAP operating margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations. The following table presents a reconciliation of our non-GAAP operating income to our GAAP income (loss) from operations for the periods presented (in thousands, except percentages):

(1)Stock-based compensation expense-related charges included amortization of capitalized stock-based compensation expense of approximately $5.0$1.5 million and $6.5$0.8 million for the three months ended August 1, 2026 and August 2, 2025, respectively, which was initially capitalized as internal-use software or cloud computing arrangements. Stock-based compensation expense-related charges also included approximately $3.3 million and $4.4 million of employer taxes on employee equity transactions for the three months ended MayAugust 2,1, 2026 and MayAugust 3,2, 2025, respectively.

We define non-GAAP net income as net income (loss) excluding the effect of stock-based compensation expense-related charges, lease modification, impairment,impairment and related charges, and legal settlements and awards.awards, in periods when they occur. We use non-GAAP net income in conjunction with traditional GAAP measures to evaluate our financial performance. We believe that non-GAAP net income provides our management and investors consistency and comparability with our past financial performance and facilitates period-to-period comparisons of operations. The following table presents a reconciliation of our non-GAAP net income to our GAAP net income (loss) for the periods presented (in thousands, except percentages):

We define free cash flow as net cash provided by operating activities reduced by cash used for purchases of property and equipment. Free cash flow margin is calculated as free cash flow as a percentage of total revenue. We believe that free cash flow and free cash flow margin, even if negative,margin are useful in evaluating liquidity and provide information to management and investors about our ability to fund future operating needs and strategic initiatives. The following table presents a reconciliation of free cash flow to net cash provided by operating activities for the periods presented (in thousands, except percentages):

Since our founding, we have financed our operations primarily through the sale of equity securities and payments received from our customers. In December 2021, we completed our initial public offering (“IPO”), which resulted in aggregate net proceeds of $846.7 million, including proceeds from the underwriters’ exercise of their option to purchase additional shares of our Class A common stock in January 2022 and net of underwriting discounts and commissions. We have generated significant operating losses from our operations, as reflected in our accumulated deficit of $1,574.6$1,558.4 million as of MayAugust 2,1, 2026. We intend to continue investing in our business, and as a result, we may require additional capital resources to execute on our strategic initiatives to grow our business, particularly if we generate negative cash flows in future quarters. We believe that our existing cash, cash equivalents, and short-term and long-term investments will be sufficient to support working capital, including our non-cancelable arrangements, and capital expenditure requirements for at least the next 12 months.

As of MayAugust 2,1, 2026, our principal sources of liquidity were cash, cash equivalents, and short-term and long-term investments of $1,281.4$1,325.7 million. Cash and cash equivalents consisted of cash as well as highly liquid investments with an original maturity of 90 days or less, when purchased. Our investments primarily consisted of U.S. government, and agency securities,agency, and municipal securities, corporate notes and bonds, and commercial paper. Our primary uses of cash include employee-related expenditures, third-party cloud and cellular costs, sales and marketing expenses, overhead expenses, and funding other working capital requirements, such as inventory and related connected device costs to meet our performance obligations related to our Connected Operations Platform.

Cash provided by operating activities was $81.4$154.9 million for the threesix months ended MayAugust 2,1, 2026. This consisted of a net income of $44.5$60.8 million, adjusted for non-cash charges of $83.1$188.3 million, partially offset by net$94.1 usesmillion of cash fromused by changes in our operating assets and liabilities of $46.2 million.liabilities. The non-cash charges were primarily composed of stock-based compensation expense of $77.5$173.9 million and depreciation and amortization of $7.9$16.3 million. Changes in our operating assets and liabilities during the threesix months ended MayAugust 2,1, 2026 reflect higher connected device costs (offset by a one-time $12.4 million cash refund related to tariffs), deferred commissions, and accounts receivable from customers due to the growth of our business; the recognition of an arbitration award receivable, higher vendor payments, higher connected device costs and deferred commissions due to the growth of our business,receivable; and increases in inventory levels to meet anticipated demanddemand. requirements,These increases were partially offset by higher cash collections from customers and increases in deferred revenue due to the growth of our business duringand thelower threevendor months ended May 2, 2026.payments.

Cash provided by operating activities was $52.6$102.8 million for the threesix months ended MayAugust 3,2, 2025. This consisted of a net loss of $22.1$38.9 million, adjusted for non-cash charges of $79.3$162.7 million, andpartially offset by $21.0 million of cash used by changes in our operating assets and liabilities of $4.6 million.liabilities. The non-cash charges were primarily composed of stock-based compensation expense of $77.1$158.2 million and depreciation and amortization of $5.1$10.5 million, partially offset by net accretion of discounts on marketable debt securities of $2.6$5.0 million. Changes in our operating assets and liabilities during the threesix months ended MayAugust 3,2, 2025 reflect higheran vendorincrease payments and higherin deferred commissions andcommissions, connected device costscosts, and accounts receivable from customers due to the growth of our business,business; increases in vendor payments; and inventory levels to meet anticipated demand. These increases were partially offset by increases in deferred revenue also due to the growth of our business and higher cash collections from customers during the three months ended May 3, 2025.business.

Cash used in investing activities was $149.2$129.5 million for the threesix months ended MayAugust 2,1, 2026, which primarily consisted of $357.5$578.5 million of purchases of investments and $6.2$12.2 million of capitalized internal-use software costs, partially offset by $216.6$465.9 million of proceeds from maturities and redemptions of investments.

Cash used in investing activities was $18.3$86.4 million for the threesix months ended MayAugust 3,2, 2025, which primarily consisted of $173.1$421.9 million of purchases of investments and $5.1$10.3 million of capitalized internal-use software costs, partially offset by $162.0$348.6 million of proceeds from maturities and redemptions of investments.

Cash used in financing activities was $34.4$53.4 million for the threesix months ended MayAugust 2,1, 2026, which primarily consisted of $34.3$70.4 million of tax payments to net share settle equity awards.awards, partially offset by $17.1 million of proceeds from employee stock purchases under the 2021 Employee Stock Purchase Plan (the “2021 ESPP”) and exercises of stock options.

Cash usedprovided inby financing activities was $0.4$18.0 million for the threesix months ended MayAugust 3,2, 2025, which primarily consisted of $0.4$18.7 million inof paymentsproceeds from employee stock purchases under the 2021 ESPP and exercises of principalstock on finance leases.options.

Our estimated future obligations consist of leases and non-cancelable purchase commitments as of MayAugust 2,1, 2026. For additional discussion on our leases and other commitments, refer to Notes 8, “Leases,” and 9, “Commitments and Contingencies,” to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

There were no material changes to our critical accounting estimates during the threesix months ended MayAugust 2,1, 2026.