Samsara Inc.IOT
Samsara Inc. Income Taxes Disclosure
Income Taxes
Income (loss) before provision for income taxes was as follows (in thousands):
| Fiscal Year Ended | |||||||||||||||||
| January 31, 2026 | February 1, 2025 | February 3, 2024 | |||||||||||||||
| United States | $ | (40,302) | $ | (168,662) | $ | (298,189) | |||||||||||
| Foreign | 41,208 | 18,248 | 14,806 | ||||||||||||||
| Income (loss) before provision for income taxes | $ | 906 | $ | (150,414) | $ | (283,383) | |||||||||||
The components of the provision for income taxes comprises the following (in thousands):
| Fiscal Year Ended | |||||||||||||||||
| January 31, 2026 | February 1, 2025 | February 3, 2024 | |||||||||||||||
| Current: | |||||||||||||||||
| U.S. Federal | $ | — | $ | — | $ | — | |||||||||||
| State and local | 309 | 201 | 494 | ||||||||||||||
| Foreign | 3,544 | 2,219 | 1,918 | ||||||||||||||
| Total current tax expense | $ | 3,853 | $ | 2,420 | $ | 2,412 | |||||||||||
| Deferred: | |||||||||||||||||
| U.S. federal | $ | — | $ | — | $ | — | |||||||||||
| State and local | — | — | — | ||||||||||||||
| Foreign | 6,170 | 2,073 | 931 | ||||||||||||||
| Total deferred tax expense | 6,170 | 2,073 | 931 | ||||||||||||||
| Total provision for income taxes | $ | 10,023 | $ | 4,493 | $ | 3,343 | |||||||||||
The effective income tax rate is higher than the U.S. statutory tax rate primarily due to a valuation allowance on the cumulative U.S. deferred tax assets, stock-based compensation adjustments, and executive compensation adjustments. A reconciliation of the income tax provision from the U.S. federal statutory tax rate to the effective tax rate for the year ended January 31, 2026, prepared in accordance with ASU 2023-09, was as follows (in thousands):
| Fiscal Year Ended | |||||||||||
| January 31, 2026 | |||||||||||
| U.S. federal statutory tax rate | $ | 190 | 21.0% | ||||||||
| Domestic federal reconciling items: | |||||||||||
| Tax credits: | |||||||||||
| Research and development credits | (10,229) | (1,128.8%) | |||||||||
| Changes in valuation allowances | 36,417 | 4,018.7% | |||||||||
| Nontaxable or nondeductible items: | |||||||||||
| Stock-based compensation | (43,374) | (4,786.3%) | |||||||||
| Executive compensation | 23,796 | 2,626.0% | |||||||||
| Non-deductible gifts | 699 | 77.2% | |||||||||
| Non-deductible meals and entertainment | 434 | 47.9% | |||||||||
| Other adjustments: | |||||||||||
| Other | 785 | 86.6% | |||||||||
| State and local income taxes, net of federal income tax effect | 244 | 26.9% | |||||||||
| Foreign reconciling items: | |||||||||||
| United Kingdom: | |||||||||||
| Stock-based compensation | (2,226) | (245.7%) | |||||||||
| Rate differential | 802 | 88.5% | |||||||||
| Other | (36) | (3.9%) | |||||||||
| Taiwan: | |||||||||||
| Stock-based compensation | 658 | 72.6% | |||||||||
| Other | (59) | (6.5%) | |||||||||
| Mexico: | |||||||||||
| Rate differential | 833 | 91.9% | |||||||||
| Non-deductible expenses | 529 | 58.4% | |||||||||
| Other | 104 | 11.5% | |||||||||
| Other foreign reconciling items | 456 | 50.3% | |||||||||
| Effective tax rate | $ | 10,023 | 1,106.3% | ||||||||
Reconciliations of the income tax provision from the U.S. federal statutory tax rate to the effective tax rate for the years ended January 31, 2025 and February 3, 2024, were as follows (in thousands):
| Fiscal Year Ended | |||||||||||
| February 1, 2025 | February 3, 2024 | ||||||||||
| U.S. federal statutory tax rate | 21.0% | 21.0% | |||||||||
| Changes in income taxes resulting from: | |||||||||||
| State taxes, net of federal benefit | 9.5 | 5.6 | |||||||||
| Foreign income taxed at different rates | 0.7 | 0.1 | |||||||||
| Federal research and development credits | 10.8 | 4.3 | |||||||||
| Stock-based compensation | 37.7 | 14.0 | |||||||||
| Tax on foreign earnings | — | — | |||||||||
| Permanent differences | (0.6) | (0.3) | |||||||||
| Change in valuation allowance | (81.9) | (45.5) | |||||||||
| Other | (0.2) | (0.4) | |||||||||
| Total tax provision | (3.0%) | (1.2%) | |||||||||
Cash paid for income taxes, net of refunds comprises the following for the fiscal year ended January 31, 2026 (in thousands):
| Fiscal Year Ended | |||||
| January 31, 2026 | |||||
| U.S. federal | $ | — | |||
| U.S. state and local | 350 | ||||
| Foreign: | |||||
| Mexico | 1,173 | ||||
| Taiwan | 881 | ||||
| Canada | 745 | ||||
| France | 178 | ||||
| Poland | 185 | ||||
| India | 500 | ||||
| United Kingdom | (727) | ||||
| Netherlands | (179) | ||||
| Germany | 166 | ||||
| Total foreign | 2,922 | ||||
| Total cash paid for income taxes, net of refunds | $ | 3,272 | |||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are presented below (in thousands):
| As of | |||||||||||
| January 31, 2026 | February 1, 2025 | ||||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss carryforwards | $ | 543,811 | $ | 545,306 | |||||||
| Tax credit carryforwards | 59,707 | 42,803 | |||||||||
| Operating lease liability | 18,248 | 19,096 | |||||||||
| Capitalized research and development | 52,012 | 63,946 | |||||||||
| Accruals and reserves | 146,095 | 39,032 | |||||||||
| Property and equipment | 1,383 | 1,363 | |||||||||
| Total deferred tax assets | 821,256 | 711,546 | |||||||||
| Valuation allowance | (638,940) | (560,745) | |||||||||
| Deferred tax assets, net of valuation allowance | 182,316 | 150,801 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Deferred commissions | (53,819) | (43,060) | |||||||||
| Deferred connected device costs | (101,791) | (81,896) | |||||||||
| Operating lease right-of-use assets | (14,789) | (15,313) | |||||||||
| Accruals | (23,980) | (15,704) | |||||||||
| Total deferred tax liabilities | (194,379) | (155,973) | |||||||||
| Net deferred tax liabilities | $ | (12,063) | $ | (5,172) | |||||||
As required by the 2017 Tax Cuts and Jobs Act, effective January 1, 2022, the Company’s research and development expenditures were capitalized and amortized, which resulted in higher deferred tax assets. The One Big Beautiful Bill Act (the “OBBBA”), effective July 4, 2025, eliminated the requirement to capitalize research and development performed in the U.S. while foreign expenditures will continue to be capitalized and amortized over 15 years. The OBBBA had an immaterial impact on the consolidated financial statements and the current year effective tax rate. The Company will continue to monitor any future changes in its business or interpretations of the new tax law that could affect its tax position in subsequent periods.
The provisions of Accounting Standards Codification (“ASC”) Topic 740, Accounting for Income Taxes (ASC 740), require an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. As of January 31, 2026 and February 1, 2025, based on all available objective evidence, including the existence of cumulative losses, the Company determined that it was not more likely than not that the net deferred tax assets were fully realizable for U.S. federal and state tax purposes. Accordingly, the Company established a full valuation allowance against its deferred tax assets for U.S. federal and state tax purposes. The Company intends to maintain a full valuation allowance on net deferred tax assets until sufficient positive evidence exists to support reversal of the valuation allowance for U.S. federal and state tax purposes. For foreign jurisdictions, the Company does not have a valuation allowance against its deferred tax assets, after considering both the positive and negative evidence.
During the fiscal years ended January 31, 2026, February 1, 2025, and February 3, 2024, the Company’s valuation allowance increased by $78.2 million, $105.5 million, and $128.7 million, respectively.
As of January 31, 2026, the Company had U.S. federal, state, and foreign net operating loss (“NOL”) carryforwards of approximately $2,232.7 million, $2,135.3 million, and $5.6 million, respectively.
Of the U.S. federal NOL carryforwards, $52.2 million, if not utilized, will begin to expire in 2036 and $2,180.5 million will carryforward indefinitely. The state NOL carryforwards have begun expiring in 2024.
As of January 31, 2026, the Company’s U.S. federal and California research and development credit carryforwards were $56.7 million and $29.7 million, respectively. These are available to offset future income taxes. The U.S. federal credit carryforwards, if not utilized, will begin to expire in 2036, while the California credit carryforwards have no expiration date.
Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change NOL carryforwards and other pre-change attributes, such as research tax credits, to offset its post-change income may be limited. In general, an “ownership change” will occur if there is a cumulative change in the Company’s ownership by “5-percent shareholders” that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws. Ownership changes in the future could result in limitations on the Company’s NOL and tax credit carryforwards.
Uncertain Tax Positions
The Company reviews its tax positions to determine whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities before any tax benefit can be recorded in the consolidated financial statements. ASC 740 also provides guidance on the recognition, measurement, classification, and interest and penalties related to uncertain tax positions. A reconciliation of the beginning and ending balance of total gross unrecognized tax benefits, excluding accrued net interest and penalties, is as follows (in thousands):
| Fiscal Year Ended | |||||||||||||||||
| January 31, 2026 | February 1, 2025 | February 3, 2024 | |||||||||||||||
| Unrecognized tax benefits, beginning balance | $ | 21,290 | $ | 16,602 | $ | 9,810 | |||||||||||
| Gross increases for tax positions taken in prior years | 1,341 | 527 | 1,934 | ||||||||||||||
| Gross decreases for tax positions taken in prior years | (4,829) | (2,682) | (685) | ||||||||||||||
| Gross increases for tax positions taken in current year | 5,715 | 6,843 | 5,543 | ||||||||||||||
| Unrecognized tax benefits, ending balance | $ | 23,517 | $ | 21,290 | $ | 16,602 | |||||||||||
The unrecognized tax benefits as of January 31, 2026 and February 1, 2025, if recognized, would not affect the effective income tax rate due to the valuation allowance that currently offsets the deferred tax assets.
The Company recognizes interest and penalties related to income tax positions as a component of income tax expense. The Company had no interest and penalties accrued related to uncertain tax positions as of January 31, 2026 and February 1, 2025.
The Company files income tax returns in the United States and in foreign jurisdictions. In the U.S., tax years remain open back to fiscal year 2023 for federal income tax purposes and fiscal year 2021 for some states. In other major jurisdictions where we conduct business, the tax years generally remain open back to formation.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 16, 2026 | Showing above |
| 2025 | Mar 25, 2025 | |
| 2024 | Mar 26, 2024 | |
| 2023 | Mar 21, 2023 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.