Samsara Reports Fourth Quarter and Full Fiscal Year 2024 Financial Results

SAN FRANCISCO--(BUSINESS WIRE)--Samsara Inc. (NYSE: IOT), the pioneer of the Connected Operations Cloud, reported financial results for the fourth quarter and fiscal year ended February 3, 2024, and released a shareholder letter accessible from the Samsara investor relations website at investors.samsara.com.

"Fiscal year 2024 was another year of durable and efficient growth. We ended the year with $1.1 billion of ARR, growing 39% year-over-year. While sustaining high growth at scale, we remain committed to operating efficiently and recorded our first year of positive adjusted free cash flow," said Sanjit Biswas, CEO and co-founder of Samsara. "We continue to see a vast opportunity for our customers and are excited to deliver on our mission to increase the safety, efficiency, and sustainability of the operations that power the global economy."

Fourth Quarter Fiscal Year 2024 Financial Highlights (In millions, except percentage, percentage points, and per share data)
	Q4 FY2024				Q4 FY2023				Y/Y Change
Annual Recurring Revenue (ARR)	$	1,102.0			$	795.1				39	%
Total revenue	$	276.3			$	186.6				48	%
Adjusted total revenue (1)	$	256.5			$	186.6				37	%
GAAP gross profit	$	207.3			$	135.0			$	72.3
GAAP gross margin		75	%			72	%		3 pts
Non-GAAP gross profit	$	210.7			$	137.5			$	73.2
Non-GAAP gross margin		76	%			74	%		3 pts
GAAP operating loss	$	(123.0	)		$	(60.0	)		$	(63.0	)
GAAP operating margin		(45	%)			(32	%)		(13 pts)
Non-GAAP operating income (loss)	$	13.5			$	(14.7	)		$	28.2
Non-GAAP operating margin		5	%			(8	%)		13 pts
GAAP net loss per share, basic and diluted	$	(0.21	)		$	(0.10	)		$	(0.11	)
Non-GAAP net income (loss) per share, basic and diluted	$	0.04			$	(0.02	)		$	0.06
Net cash used in operating activities	$	(41.9	)		$	(4.4	)		$	(37.5	)
Net cash used in operating activities margin		(15	%)			(2	%)			(13 pts)
Adjusted free cash flow	$	16.0			$	(6.0	)		$	22.0
Adjusted free cash flow margin		6	%			(3	%)		9 pts

Fiscal Year 2024 Financial Highlights (In millions, except percentage, percentage points, and per share data)
	FY 2024				FY 2023				Y/Y Change
ARR	$	1,102.0			$	795.1				39	%
Total revenue	$	937.4			$	652.5				44	%
Adjusted total revenue (1)	$	917.7			$	652.5				41	%
GAAP gross profit	$	690.4			$	469.9			$	220.5
GAAP gross margin		74	%			72	%		2 pts
Non-GAAP gross profit	$	703.1			$	479.4			$	223.7
Non-GAAP gross margin		75	%			73	%		2 pts
GAAP operating loss	$	(323.3	)		$	(259.5	)		$	(63.8	)
GAAP operating margin		(34	%)			(40	%)		6 pts
Non-GAAP operating income (loss)	$	1.3			$	(77.0	)		$	78.3
Non-GAAP operating margin		0	%			(12	%)		12 pts
GAAP net loss per share, basic and diluted	$	(0.54	)		$	(0.48	)		$	(0.06	)
Non-GAAP net income (loss) per share, basic and diluted	$	0.07			$	(0.13	)		$	0.20
Net cash used in operating activities	$	(11.8	)		$	(103.0	)		$	91.2
Net cash used in operating activities margin		(1	%)			(16	%)			15 pts
Adjusted free cash flow	$	27.1			$	(110.0	)		$	137.1
Adjusted free cash flow margin		3	%			(17	%)		20 pts

We report non-GAAP financial measures in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with generally accepted accounting principles ("GAAP"). See the section titled "Use of Non-GAAP Financial Measures" for an explanation of non-GAAP financial measures and the tables in the section titled "Reconciliation Between GAAP and Non-GAAP Financial Measures" for a reconciliation of GAAP to non-GAAP financial measures.

Financial Outlook

Our guidance includes GAAP and non-GAAP financial measures. For the first quarter and fiscal year 2025, Samsara expects the following:

	Q1 FY2025 Outlook		FY 2025 Outlook
Total revenue	$271 million - $273 million		$1,186 million - $1,196 million
Year/Year revenue growth	33% - 34%		27% - 28%
Year/Year adjusted revenue growth (1)			29% - 30%
Non-GAAP operating margin	(3%)		2%
Non-GAAP net income per share, diluted	$0.00 - $0.01		$0.11 - $0.13

(1)

Q4 FY24 was a 14-week fiscal quarter instead of a typical 13-week fiscal quarter. To enable comparability across periods, adjusted revenue and adjusted revenue growth rate are calculated by multiplying Q4 FY24 revenue by 13/14 to remove the impact of an additional week of revenue recognition in Q4 FY24.

A reconciliation of non-GAAP guidance financial measures to corresponding GAAP guidance financial measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty and potential variability of expenses, such as stock-based compensation expense-related charges, that may be incurred in the future and cannot be reasonably determined or predicted at this time. It is important to note that these factors could be material to our results of operations computed in accordance with GAAP.

About Samsara

Samsara is the pioneer of the Connected Operations Cloud, which is a platform that enables organizations that depend on physical operations to harness Internet of Things (IoT) data to develop actionable insights and improve their operations. With tens of thousands of customers across North America and Europe, Samsara is a proud technology partner to the people who keep our global economy running, including the world's leading organizations across construction, transportation and warehousing, field services, manufacturing, retail, logistics, and the public sector. The company's mission is to increase the safety, efficiency, and sustainability of the operations that power the global economy.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements may relate to, but are not limited to, expectations of future operating results or financial performance, the calculation of certain of our key financial and operating metrics, our market opportunity, industry developments and trends, customer demand for our solution, macroeconomic conditions and any expected benefits of our products, and our competitive position, as well as assumptions relating to the foregoing.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and could cause actual results and events to differ. In some cases, you can identify forward-looking statements by terminology such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "goal," "guidance," "intend," "may," "objective," "ongoing," "plan," "potential," "predict," "project," "seek," "should," "target," "will," "would," or the negative of these terms or other comparable expressions that concern our expectations, strategies, plans, or intentions. You should not put undue reliance on any forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. Forward-looking statements are based on information available at the time those statements are made, including information furnished to us by third parties that we have not independently verified, and/or management's good faith beliefs and assumptions as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.

These risks and uncertainties include our ability to retain customers and expand the Applications used by our customers, our ability to attract new customers, our future financial performance, including trends in revenue and annual recurring revenue, net retention rate, costs of revenue, gross profit or gross margin, operating expenses, customer counts, non-GAAP financial measures (such as adjusted revenue, adjusted revenue growth rate, non-GAAP gross margin, non-GAAP operating margin, free cash flow margin, and adjusted free cash flow margin), our ability to achieve or maintain profitability, the demand for our products or for solutions for connected operations in general, the impact of the Russia-Ukraine conflict, geopolitical tensions involving China, the conflict in Israel and Gaza, the emergence of pandemics and epidemics, and macroeconomic conditions globally on our and our customers', partners' and suppliers' operations and future financial performance, possible harm caused by silicon component shortages and other supply chain constraints, the length of our sales cycles, possible harm caused by a security breach or other incident affecting our or our customers' assets or data, our ability to compete successfully in competitive markets, our ability to respond to rapid technological changes, and our ability to continue to innovate and develop new Applications. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in our filings and reports that we may file from time to time with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.

Except as required by law, we do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise.

Use of Non-GAAP Financial Measures

This document includes certain non-GAAP financial measures. Reconciliations of non-GAAP financial measures to our financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data.

Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as substitutes for financial information presented under GAAP. There are a number of limitations related to the use of non-GAAP financial measures versus comparable financial measures determined under GAAP. For example, other companies in our industry may calculate these non-GAAP financial measures differently or may use other measures to evaluate their performance. In addition, free cash flow and adjusted free cash flow do not reflect our future contractual commitments or the total increase or decrease of our cash balance for a given period. These and other limitations could reduce the usefulness of these non-GAAP financial measures as analytical tools. Investors are encouraged to review the related GAAP financial measures and the reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures and to not rely on any single financial measure to evaluate our business.

We present these non-GAAP financial measures to assist investors in seeing Samsara's operating results through the eyes of management and because we believe that these measures provide an additional tool for investors to evaluate our business.

Expenses Excluded from Non-GAAP Financial Measures-Stock-based compensation expense is excluded primarily because it is a non-cash expense that management believes is not reflective of our ongoing operational performance. Employer taxes on employee equity transactions, which is a cash expense, is excluded because such taxes are tied to the timing and size of the vesting of the underlying equity awards and the price of our common stock at the time of vesting, which may vary from period to period independent of the operating performance of our business. Lease modification, impairment, and related charges, and legal settlements are excluded because management believes that such charges are not reflective of our ongoing operational performance.

Operating Metrics and Non-GAAP Financial Measures

Annual Recurring Revenue-We define ARR as the annualized value of subscription contracts that have commenced revenue recognition as of the measurement date.

Adjusted Revenue / Adjusted Revenue Growth-Q4 FY24 was a 14-week fiscal quarter instead of a typical 13-week fiscal quarter. To enable comparability across periods, adjusted revenue and adjusted revenue growth rate are calculated by multiplying Q4 FY24 revenue by 13/14 to remove the impact of an additional week of revenue recognition in Q4 FY24.

Non-GAAP Gross Profit and Non-GAAP Gross Margin-We define non-GAAP gross profit as gross profit excluding the effect of stock-based compensation expense-related charges, including employer taxes on employee equity transactions, included in cost of revenue. Non-GAAP gross margin is defined as non-GAAP gross profit as a percentage of total revenue. We use non-GAAP gross profit and non-GAAP gross margin in conjunction with traditional GAAP measures to evaluate our financial performance. We believe that non-GAAP gross profit and non-GAAP gross margin provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations.

Non-GAAP 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, including employer taxes on employee equity transactions, 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 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 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.

Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) per Share-We define non-GAAP net income (loss) as net loss excluding the effect of stock-based compensation expense-related charges, including employer taxes on employee equity transactions, lease modification, impairment, and related charges, and legal settlements. Our non-GAAP net income (loss) per share-basic is calculated by dividing non-GAAP net income (loss) by the weighted-average number of shares of common stock outstanding during the period. Our non-GAAP net income per share-diluted is calculated by giving effect to all potentially dilutive common stock equivalents (stock options, restricted stock units, and shares issued under our 2021 Employee Stock Purchase Plan) to the extent they are dilutive. Non-GAAP net loss per share-diluted is the same as non-GAAP net loss per share-basic as the inclusion of all potential dilutive common stock equivalents would be antidilutive. We use non-GAAP net income (loss) and non-GAAP net income (loss) per share in conjunction with traditional GAAP measures to evaluate our financial performance. We believe that non-GAAP net income (loss) and non-GAAP net income (loss) per share provide our management and investors consistency and comparability with our past financial performance and facilitate period-to-period comparisons of operations.

Free Cash Flow and Free Cash Flow Margin-We define free cash flow as net cash used in 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, are useful in evaluating liquidity and provide information to management and investors about our ability to fund future operating needs and strategic initiatives.

Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin-We define adjusted free cash flow as free cash flow excluding the cash impact of non-recurring capital expenditures associated with the build-out of our corporate office facilities in San Francisco, California, net of tenant allowances, and legal settlements. Adjusted free cash flow margin is calculated as adjusted free cash flow as a percentage of total revenue. We believe that adjusted free cash flow and adjusted free cash flow margin, even if negative, are useful in evaluating liquidity and provide information to management and investors about our ability to fund future operating needs and strategic initiatives by excluding the impact of non-recurring events.

Webcast Information and Shareholder Letter

An investor presentation and accompanying shareholder letter is accessible from the Samsara investor relations website at https://investors.samsara.com/. Samsara will host a live webcast to discuss the results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) today. The live webcast may be accessed at https://investors.samsara.com/. Following the webcast, a replay will be accessible from the same website.

SAMSARA INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
	As of
	February 3, 2024				January 28, 2023
Assets
Current assets:
Cash and cash equivalents	$	135,536			$	200,670
Short-term investments		412,126				489,192
Accounts receivable, net		161,829				122,867
Inventories		22,238				40,571
Connected device costs, current		104,008				82,046
Prepaid expenses and other current assets		51,221				22,189
Total current assets		886,958				957,535
Restricted cash		19,202				23,096
Long-term investments		276,166				113,101
Property and equipment, net		54,969				59,278
Operating lease right-of-use assets		81,974				112,624
Connected device costs, non-current		230,782				194,852
Deferred commissions		177,562				140,166
Other assets, non-current		7,232				16,356
Total assets	$	1,734,845			$	1,617,008
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	46,281			$	30,144
Accrued expenses and other current liabilities		61,437				53,824
Accrued compensation and benefits		37,068				36,030
Deferred revenue, current		426,369				300,113
Operating lease liabilities, current		20,661				22,047
Total current liabilities		591,816				442,158
Deferred revenue, non-current		139,117				126,452
Operating lease liabilities, non-current		78,830				100,873
Other liabilities, non-current		9,935				9,506
Total liabilities		819,698				678,989
Commitments and contingencies
Stockholders' equity:
Preferred stock		-				-
Class A common stock		9				7
Class B common stock		23				23
Class C common stock		-				-
Additional paid-in capital		2,368,597				2,107,013
Accumulated other comprehensive income (loss)		1,616				(652	)
Accumulated deficit		(1,455,098	)			(1,168,372	)
Total stockholders' equity		915,147				938,019
Total liabilities and stockholders' equity	$	1,734,845			$	1,617,008

SAMSARA INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share data)
(Unaudited)
	Three Months Ended								Fiscal Year Ended
	February 3, 2024				January 28, 2023				February 3, 2024				January 28, 2023
Revenue	$	276,274			$	186,577			$	937,385			$	652,545
Cost of revenue		69,024				51,528				247,032				182,656
Gross profit		207,250				135,049				690,353				469,889
Operating expenses
Research and development		73,426				54,603				258,581				187,405
Sales and marketing		133,006				96,751				486,649				370,098
General and administrative		55,155				43,687				195,043				170,785
Lease modification, impairment, and related charges		-				-				4,762				1,056
Legal settlement		68,665				-				68,665				-
Total operating expenses		330,252				195,041				1,013,700				729,344
Loss from operations		(123,002	)			(59,992	)			(323,347	)			(259,455	)
Interest income and other income (expense), net		11,471				8,526				39,964				15,620
Loss before provision for income taxes		(111,531	)			(51,466	)			(283,383	)			(243,835	)
Provision for income taxes		1,840				2,132				3,343				3,587
Net loss	$	(113,371	)		$	(53,598	)		$	(286,726	)		$	(247,422	)
Other comprehensive income (loss):
Foreign currency translation adjustments		562				93				838				509
Unrealized gains (losses) on investments, net of tax		2,493				239				1,430				(1,065	)
Other comprehensive income (loss)		3,055				332				2,268				(556	)
Comprehensive loss	$	(110,316	)		$	(53,266	)		$	(284,458	)		$	(247,978	)
Basic and diluted net loss per share:
Net loss per share attributable to common stockholders, basic and diluted	$	(0.21	)		$	(0.10	)		$	(0.54	)		$	(0.48	)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted		543,250,066				521,515,286				534,878,501				514,279,230

SAMSARA INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
	Three Months Ended								Fiscal Year Ended
	February 3, 2024				January 28, 2023				February 3, 2024				January 28, 2023
Operating activities
Net loss	$	(113,371	)		$	(53,598	)		$	(286,726	)		$	(247,422	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		4,687				3,418				15,526				11,768
Stock-based compensation expense		64,687				43,983				237,082				177,473
Net accretion of discounts on investments		(4,161	)			(3,326	)			(16,888	)			(4,368	)
Lease modification, impairment, and related charges		-				-				4,762				1,056
Non-cash legal settlement		8,666				-				8,666				-
Other non-cash adjustments		2,525				2,110				4,571				6,488
Changes in operating assets and liabilities:
Accounts receivable, net		(50,244	)			(34,167	)			(46,420	)			(47,464	)
Inventories		4,865				3,930				18,332				(7,504	)
Prepaid expenses and other current assets		(11,628	)			(5,993	)			(29,076	)			(11,293	)
Connected device costs		(20,896	)			(24,093	)			(57,893	)			(83,086	)
Deferred commissions		(16,099	)			(11,954	)			(37,396	)			(22,409	)
Other assets, non-current		242				(342	)			509				(1,862	)
Accounts payable and other liabilities		26,802				22,883				26,596				13,485
Deferred revenue		61,765				52,322				138,920				112,879
Operating lease right-of-use assets and liabilities, net		282				454				7,620				(762	)
Net cash used in operating activities		(41,878	)			(4,373	)			(11,815	)			(103,021	)
Investing activities
Purchase of property and equipment		(2,095	)			(6,003	)			(10,953	)			(33,240	)
Purchases of investments		(199,145	)			(329,885	)			(740,546	)			(685,615	)
Proceeds from sales of investments		1,994				-				8,168				-
Proceeds from maturities and redemptions of investments		156,601				86,625				664,694				86,625
Other investing activities		-				(50	)			(50	)			382
Net cash used in investing activities		(42,645	)			(249,313	)			(78,687	)			(631,848	)
Financing activities
Proceeds from issuance of common stock in connection with equity compensation plans		9,767				7,179				23,202				18,047
Payment of offering costs		-				-				-				(2,532	)
Payment of principal on finance leases		(789	)			(447	)			(2,205	)			(1,303	)
Net cash provided by financing activities		8,978				6,732				20,997				14,212
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash		501				584				477				113
Net decrease in cash, cash equivalents, and restricted cash		(75,044	)			(246,370	)			(69,028	)			(720,544	)
Cash, cash equivalents, and restricted cash, beginning of period		229,782				470,136				223,766				944,310
Cash, cash equivalents, and restricted cash, end of period	$	154,738			$	223,766			$	154,738			$	223,766

SAMSARA INC. RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL MEASURES (In thousands, except percentages and per share data) (Unaudited)
	Three Months Ended								Fiscal Year Ended
	February 3, 2024				January 28, 2023				February 3, 2024				January 28, 2023
Total revenue and revenue growth rate reconciliation
GAAP revenue	$	276,274			$	186,577			$	937,385			$	652,545
Less:
Additional week in Q4 FY24		19,734				-				19,734				-
Adjusted revenue (1)	$	256,540			$	186,577			$	917,651			$	652,545
GAAP revenue growth rate		48	%			48	%			44	%			52	%
Adjusted revenue growth rate (1)		37	%			48	%			41	%			52	%
Gross profit and gross margin reconciliation
GAAP gross profit	$	207,250			$	135,049			$	690,353			$	469,889
Add:
Stock-based compensation expense-related charges (2)		3,418				2,423				12,725				9,466
Non-GAAP gross profit	$	210,668			$	137,472			$	703,078			$	479,355
GAAP gross margin		75	%			72	%			74	%			72	%
Non-GAAP gross margin		76	%			74	%			75	%			73	%
Operating income (loss) and operating margin reconciliation
GAAP loss from operations	$	(123,002	)		$	(59,992	)		$	(323,347	)		$	(259,455	)
Add:
Stock-based compensation expense-related charges (2)		67,835				45,331				251,190				181,424
Lease modification, impairment, and related charges		-				-				4,762				1,056
Legal settlement (4)		68,665				-				68,665				-
Non-GAAP income (loss) from operations	$	13,498			$	(14,661	)		$	1,270			$	(76,975	)
GAAP operating margin		(45	)%			(32	)%			(34	)%			(40	)%
Non-GAAP operating margin		5	%			(8	)%			0	%			(12	)%

SAMSARA INC. RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL MEASURES (In thousands, except percentages and per share data) (Unaudited)
	Three Months Ended								Fiscal Year Ended
	February 3, 2024				January 28, 2023				February 3, 2024				January 28, 2023
GAAP net loss	$	(113,371	)		$	(53,598	)		$	(286,726	)		$	(247,422	)
Add:
Stock-based compensation expense-related charges		67,835				45,331				251,190				181,424
Lease modification, impairment, and related charges		-				-				4,762				1,056
Legal settlement (4)		68,665				-				68,665				-
Non-GAAP net income (loss) (5)	$	23,129			$	(8,267	)		$	37,891			$	(64,942	)

	Three Months Ended								Fiscal Year Ended
	February 3, 2024				January 28, 2023				February 3, 2024				January 28, 2023
Net income (loss) per share, basic and diluted, reconciliation
GAAP net loss per share attributable to common stockholders, basic and diluted	$	(0.21	)		$	(0.10	)		$	(0.54	)		$	(0.48	)
Total impact on net loss per share, basic and diluted, from non-GAAP adjustments		0.25				0.08				0.61				0.35
Non-GAAP net income (loss) per share attributable to common stockholders, basic and diluted (6)	$	0.04			$	(0.02	)		$	0.07			$	(0.13	)
Weighted-average shares used in computing GAAP net loss per share attributable to common stockholders, basic and diluted		543,250,066				521,515,286				534,878,501				514,279,230
Weighted-average shares used in computing non-GAAP net income (loss) per share attributable to common stockholders, basic		543,250,066				521,515,286				534,878,501				514,279,230
Weighted-average shares used in computing non-GAAP net income (loss) per share attributable to common stockholders, diluted (6)		571,102,601				521,515,286				562,651,874				514,279,230

SAMSARA INC. RECONCILIATION BETWEEN GAAP AND NON-GAAP FINANCIAL MEASURES (In thousands, except percentages and per share data) (Unaudited)
	Three Months Ended								Fiscal Year Ended
	February 3, 2024				January 28, 2023				February 3, 2024				January 28, 2023
Free cash flow, adjusted free cash flow, free cash flow margin, and adjusted free cash flow margin reconciliation
Net cash used in operating activities	$	(41,878	)		$	(4,373	)		$	(11,815	)		$	(103,021	)
Purchase of property and equipment		(2,095	)			(6,003	)			(10,953	)			(33,240	)
Free cash flow		(43,973	)			(10,376	)			(22,768	)			(136,261	)
Purchase of property and equipment for build-out of corporate office facilities, net of tenant allowances (7)		-				4,353				(10,179	)			26,227
Legal settlement (8)		60,000				-				60,000				-
Adjusted free cash flow	$	16,027			$	(6,023	)		$	27,053			$	(110,034	)
Net cash used in operating activities margin		(15	)%			(2	)%			(1	)%			(16	)%
Free cash flow margin		(16	)%			(6	)%			(2	)%			(21	)%
Adjusted free cash flow margin		6	%			(3	)%			3	%			(17	)%

(1)		Q4 FY24 was a 14-week fiscal quarter instead of a typical 13-week fiscal quarter. To enable comparability across periods, adjusted revenue and adjusted revenue growth rate are calculated by multiplying Q4 FY24 revenue by 13/14 to remove the impact of an additional week of revenue recognition in Q4 FY24.
(2)		Stock-based compensation expense-related charges were included in the following line items of our condensed consolidated statements of operations and comprehensive loss as follows:

	Three Months Ended								Fiscal Year Ended
	February 3, 2024				January 28, 2023				February 3, 2024				January 28, 2023
Cost of revenue	$	3,418			$	2,423			$	12,725			$	9,466
Research and development		26,504				17,897				95,220				64,184
Sales and marketing		19,893				12,313				75,203				54,072
General and administrative		18,020				12,698				68,042				53,702
Total stock-based compensation expense-related charges (3)	$	67,835			$	45,331			$	251,190			$	181,424

(3)		Stock-based compensation expense-related charges included approximately $3.1 million and $14.1 million of employer taxes on employee equity transactions for the three months and fiscal year ended February 3, 2024, respectively, and approximately $1.3 million and $4.0 million of employer taxes on employee equity transactions for the three months and fiscal year ended January 28, 2023, respectively.
(4)		In January 2024, we settled non-recurring lease-related litigation and recognized a one-time operating expense charge of $68.7 million for the three months and fiscal year ended February 3, 2024. The settlement amount consisted of a $60.0 million cash payment and $8.7 million associated with a previously drawn letter of credit.
(5)		There were no material income tax effects on our non-GAAP adjustments for all periods presented.
(6)		For each period in which we had non-GAAP net income, diluted non-GAAP net income per share is calculated using weighted-average number of shares of common stock outstanding during the period, adjusted for dilutive potential shares that were assumed outstanding during the period.
(7)		In April 2023, we settled a lease dispute which was primarily related to lease incentives associated with leasehold improvements in the form of a tenant allowance and received $11.3 million.
(8)		In January 2024, we settled non-recurring lease-related litigation and made a one-time cash payment of $60.0 million.

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