Company: IOT
Filing Date: 2025-03-25
Form Type: 10-K
Source: 0001642896-25-000022
Chunk: 87

Company: Samsara Inc.
Filing Date: 2025-03-25
Form: 10-K
Item: Item 1A
Chunk 87
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 them for free. Any decrease in our pricing, without a corresponding decrease in costs or increase in sales volume, would adversely affect our overall profitability and results of operations.

We may also have difficulty determining the appropriate price structure for new or existing Applications. Regardless of the pricing model used, larger customers may demand higher price discounts than have been given in the past, or are given to other customers. As a result, we may be required to reduce our prices, offer shorter contract durations, or offer alternative pricing models. If we do not maintain our prices at levels that will allow us to achieve our profitability targets, our business, financial condition, and results of operations will be harmed.

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We recognize certain revenue streams over the term of our subscription contracts. Consequently, downturns in new sales may not be immediately reflected in our results of operations and may be difficult to discern.

We recognize subscription revenue from customers ratably over the terms of their contracts. As a result, a significant portion of the revenue we report in each quarter is derived from the recognition of deferred revenue relating to subscription agreements entered into during previous quarters. Consequently, a decline in new or renewed subscriptions in any single quarter may only have a small impact on our revenue results for that quarter. However, such a decline will negatively affect our revenue in future quarters. Accordingly, the effect of significant downturns in sales and market acceptance of our Connected Operations Platform, and potential changes in our pricing policies or rate of customer expansion or retention, may not be fully reflected in our results of operations until future periods. Our subscription revenue also makes it more difficult for us to rapidly increase our revenue through additional sales in any period, as subscription revenue from new customers must be recognized over the applicable subscription term. We may also be unable to reduce our cost structure in line with a significant deterioration in sales or renewals. In addition, a majority of our costs are expensed as incurred, while a significant portion of our revenue is recognized over the life of the contract with our customer. As a result, increased growth in the number of our customers could continue to result in our recognition of more costs than revenue in the earlier periods of the terms of certain of our customer contracts.

Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could expose us to greater than anticipated tax liabilities.

The tax laws applicable to our business, including the laws of the United States and other jurisdictions, are subject to interpretation and certain jurisdictions may aggressively interpret their laws in an effort to raise