|
Operations-technology company Samsara expects to report its first-ever full-year profit for the year, which ends in January 2027. The WSJ Leadership Institute’s Mark Maurer talked with Chief Financial Officer Dominic Phillips about how the San Francisco-based company, whose technology connects physical operations such as freight and construction, has been working to get there, along with its hiring plans and AI investments. Edited excerpts below.
Samsara was founded in 2015 and went public in 2021. Why are you reaching this milestone now?
It's something that we've been working toward since going public. Every year, we've demonstrated more and more leverage. And we got to GAAP profitability for both Q3 and for Q4 [of the year ended January 2026]. The next natural progression from there is to do it for the full year. We've seen leverage, I would say, across all expense areas of our business.
The difference for most companies—at least in technology—between GAAP and non-GAAP tends to be stock-based compensation. We've been getting a lot of leverage out of our stock-based compensation. It's growing slower than our revenue. All of this has happened naturally over the last few years.
We operate with a subscription business model. For our business and all subscription models, you spend more money up front to land new dollars of revenue. But as these dollars of revenue renew over time, these models get, naturally, very profitable and efficient. We're benefiting from that.
The company had more than 4,100 full-time employees as of Jan. 31, up from more than 3,500 a year earlier. Are you slowing hiring in certain areas because of AI?
AI is being used across the company. A lot of experimentation, but it's definitely driving productivity. We will be adding headcount. Most of that will be in go-to-market, sales, customer-facing roles. This is a direct sales model and these are larger enterprise sales cycles and negotiations. We hire a lot of direct sellers to go out and drive our growth. But outside of the go-to market functions across the rest of the company, headcount is not growing at the rate that it did, obviously, before we started to adopt a lot of AI.
What’s your role in evaluating AI investments? Are you the one who says no to the tech executives?
My job is not necessarily to say no, but it's to point out where we need to make trade-offs. If we want to spend dollars here because we're seeing good ROI, it may mean that we can't spend dollars somewhere else. Coming up with creative solutions and ways that we can allocate dollars to the highest-ROI areas, which may result in us needing to reallocate dollars from investments that we've made that aren't generating really good ROI, meaning we're not getting extra revenue growth or we're not getting any productivity gains.
We can take those dollars and reallocate them to some of these other higher-ROI investments. That's more of the role that I'm playing: Discussing the trade-offs, the data and the ROI and helping us make the best decision to drive those improvements.
—Mark Maurer
|
