Good afternoon, and welcome to Samsara's first quarter fiscal 2023 earnings call. I'm Mike Chang, Samsara's Vice President of Corporate Development and Investor Relations. Joining me today are Samsara's Co-Founder and Chief Executive Officer, Sanjit Biswas, and our Chief Financial Officer, Dominic Phillips. In addition to our prepared remarks on this call, additional information can be found in our shareholder letter, press release, investor presentation, and SEC filings on our investor relations website, investors.samsara.com. The matters we'll discuss today include forward-looking statements. Actual results may differ materially from those contained in the forward-looking statements. Any forward-looking statements that we make on this call are based on assumptions as of today, June 2nd, 2022, and we undertake no obligation to update these statements as a result of new information or future events unless required by law. During today's call, some of our discussions will include our first quarter fiscal 2023 financial results. We'd like to point out that the company reports non-GAAP results in addition to, and not as a substitute for, our financial measures calculated in accordance with GAAP. All financial figures we'll discuss today are non-GAAP, except for revenues and revenue growth. Reconciliations of GAAP to non-GAAP financial measures are provided with our press release and investor presentation. We'll make opening remarks, dive into highlights for Q1, and then open up the call for Q&A. With that, I'll hand the call over to Sanjit. Thanks, Mike, and thank you everyone for joining us today. We had a strong start to the year, surpassing $600 million of ARR in just the seventh year since our founding. This represents 59% year-over-year growth and is a great milestone for the company as we continue to grow at scale. We also surpassed 15,000 core customers and continue to see exceptional growth in our $100,000+ ARR customers. This segment now represents approximately 900 customers spanning various industries. It includes the addition of Coach USA, Oklahoma City, a major United States provider of automotive, travel and financial services, and two Fortune 500 customers, one of the largest home improvement retailers in the United States and one of the world's top 10 global retailers. Samsara is operating at a scale that's hard to replicate. The amount of IoT data we process in our Connected Operations Cloud more than doubled last year to about 4.6 trillion data points. In addition, API calls grew to 33 billion last year, an increase of more than 4x year-over-year. We use this massive amount of data to regularly train our AI models and enhance our benchmarking data. Our year-over-year growth speaks to Samsara's integral role in supporting digital transformation and physical operations. Our customers provide mission-critical services that keep our planet running and represent over 40% of global GDP. Now more than ever, they're investing in digital technology to streamline operations and increase efficiencies, and we are here to help. Our customers come from every segment of the world of physical operations. They help keep the world running, whether it's constructing infrastructure, maintaining utilities, clearing snow off the streets, or managing the global supply chain. Many have been around for over 1/2 a century and weathered challenging cycles in the past. Today, the world is facing particularly challenging macro environment with inflation, rising interest rates, tightening supply chains, tight labor markets, and geopolitical uncertainty. These challenges represent Samsara's biggest opportunities to add value for our customers. We're proud to partner with our customers to use data to mitigate cost challenges, including labor inefficiencies, asset and fuel inefficiencies, insurance costs, compliance, safety, and emissions. Using the Samsara Connected Operations Cloud, our customers are seeing their investment returned several times over. Let me share three examples. First, GP Transco is a trucking logistics company with over 400 drivers, 410 tractors, and 550 trailers. They use Samsara to improve fuel efficiency and reduce vehicle idling by 35%. They've saved an estimated 205,000 gal of fuel. That's over $350,000 in savings. GP Transco use these savings to fund driver pay increases and bonus programs, giving them a competitive edge in this market. Second, Heniff Transportation Systems, a leader in liquid bulk transportation, is using our Video-Based Safety with 1,800 drivers and Site Visibility across their 80 terminal locations nationwide. They're proactively coaching drivers and employees to reduce spend on insurance claims. Heniff estimates a 50% reduction in liabilities because of our technologies. Third, UFP Industries, the leading manufacturer and distributor of wood products, is using the Connected Operations Cloud to streamline worker productivity. They wanted to improve operational visibility, driver safety, and customer service. Our solutions are used in 350 private fleet trucks to complete over 200,000 deliveries a year. By going paperless with Samsara, UFP Industries estimates they saved $600,000 annually. These examples show how Samsara's Connected Operations Cloud is being used by our customers to improve worker productivity, streamline their operations, and reduce their cost stacks. It's these kinds of cost savings that are helping our customers combat inflation and maintain competitive footholds in their industries. As you may have seen in April, we released our inaugural ESG report. In it, we share how we're building a safer and more sustainable world through our customers' operations and our own. Our customers are vitally important to the global economy. Small shifts in their operations can dramatically reduce their environmental impact and improve the lives of employees. With over 4 trillion data points captured last year alone, Samsara is uniquely positioned to impact our customers' ESG goals, especially around emissions reporting, worker safety, and efficiency. Take Summit Materials, a leading construction materials company. Their goal is to be the most socially responsible provider in the market and achieve net zero emissions by 2050. To achieve the goals outlined in their ESG report, they needed more reliable data and deeper visibility across their operations. Summit is using Samsara's Vehicle Telematics, Video-Based Safety, and Site Visibility. With Samsara, they expect to save approximately $1 million per year in fuel costs. That's a reduction of more than 2,000 tons of CO₂ emissions or over 175,000 gal of fuel. They also saw a 33% decrease in preventable vehicle accidents in one year. We are also helping Sunrun unlock new ways to meet their sustainability goals. As outlined in their latest impact report, we're helping them reduce transportation emissions by transitioning 1/2 of their vehicle fleet to electric or hybrid. We also made great strides on our own ESG goals this quarter. Doing this helps us better understand our customers' ESG journeys and guide them. Samsara is carbon neutral, and we're committed to maintaining carbon neutrality and achieving net zero emissions by 2040. As I mentioned earlier, the world of physical operations represents more than 40% of the global GDP and keeps our world running. We want our Connected Operations Cloud to be the foundation supporting digital transformation in this space for decades to come. As part of this, we are prioritizing profitability because we plan to be a sustainable long-term business. We improved our operating margins by more than 1/2 year-over-year and remain committed to key operational drivers for profitability, disciplined capital allocation, reducing hardware costs, and efficient go-to-market strategy focused on renewals and expansions. We're also focused on building capacity to serve increasing customer demand. Q1 was our best hiring quarter since the pandemic began, driven in part by our well-received work-from-anywhere strategy. 90% of the new hires in Q1 are remote-first employees. By expanding our operations, we're able to leverage the efficiencies of a global talent pool, bolster customer support, and accelerate region-specific go-to-market strategies. We plan to sustain our hiring momentum throughout FY 2023 in order to serve our growing base of customers. Last, I'd like to thank all Samsarians as well as our customers, partners, and investors for their continued support. We're in the early stages of this tremendous opportunity and look forward to what's ahead. We're excited to continue the partnership at our first-ever in-person customer conference, Samsara Beyond, on June 15th and 16th. With that, I'll hand it over to Dominic to go over the financial highlights for the quarter. Thanks, Sanjit. As a reminder, please refer to our shareholder letter, press release, and investor presentation at investors.samsara.com for additional information on our Q1 results and guidance. Q1 was highlighted by strong top-line growth at scale due to the continued large customer momentum, multi-product strength, and significant expansions within our existing customer base. Our ending ARR in Q1 was $607 million, growing 59% year-over-year, and Q1 revenue was $143 million, growing 63% year-over-year. Our investments in serving the largest physical operations customers continue to pay off. We now have 897 customers with ARR of more than $100,000 each, a quarterly increase of 91, and an annual increase of 379 or 73% year-over-year growth. Samsara is purpose-built for large customers with complex operations that want full visibility and control over thousands of disparate assets on one integrated platform. Additionally, large customers are generally more stable in uncertain macroeconomic environments, they have stronger long-term unit economics, and higher retention rates. Our investments in large customer opportunities coincides with the de-emphasis in acquiring customers with less than $5,000 of ARR. As a result, the number of $100,000+ ARR customer additions in Q1 surpassed the number of sub- $5,000 ARR customers acquired for the first time ever, and we expect that trend to continue. Additionally, multi-product transactions continue to contribute significantly to our top-line growth, showing the strength of our Connected Operations Cloud in the market. Seven of our 10 largest deals in Q1 included subscriptions to two or more products. More broadly, more than 70% of core customers and more than 90% of $100,000+ ARR customers subscribe to multiple applications. We're also seeing multi-product adoption at scale. At the end of Q1, our two connected fleet applications, Video-Based Safety and Vehicle Telematics, each represented more than $250 million of ARR, and our remaining non-vehicle applications combined to contribute more than 10% of total ARR. Finally, while Q1 was another record quarter of new core customer additions, it was also the second consecutive quarter that expansions to existing customers drove more than 50% of Net New ACV. As a result, our dollar-based net retention rate for core customers and large customers continues to be greater than our target of 115% and 125% respectively. In addition to our strong top-line performance, we continue to operate more efficiently as we scale, and we saw strong year-over-year leverage across all functions. Our Q1 non-GAAP gross margin was 73%, a year-over-year improvement of approximately 2 percentage points, primarily from product optimizations, improved commercial strategies, and larger scale. Our operating margin was -18%, an annual improvement of more than 50% or approximately 24 percentage points year- over- year, driven by leverage across all functions. Our adjusted free cash flow margin improved by 10 percentage points year- over- year, driven by the operating leverage I just mentioned, but partially offset by negative working capital. A key component of our solution is providing IoT devices that connect physical assets to the Samsara Cloud. More than 75% of our adjusted free cash flow in Q1 was related to payments for IoT devices. While these purchases result in negative net working capital today while we're growing rapidly, we anticipate net working capital will turn positive in our long-term model, primarily from a more stable global supply chain, improved device optimizations, and a larger renewal base that won't require new devices, all of which will lead to operating margin and free cash flow margin converging over time. It's also worth noting the global supply chain disruption continues to put pressure on critical component costs and availability. We expect inventory costs and lead times to remain high for the foreseeable future, but we also expect they will normalize over time as the supply chain ramps to meet demand. Even in the face of this challenge, we improved our gross margin, we improved our adjusted free cash flow margin, and we shipped enough IoT devices to meet all customer demand for the quarter. The final Q1 point I want to make is regarding hiring and head count. Q1 was our largest hiring quarter since pre-COVID, and almost 50% of our net new employees joined our go-to-market teams. We primarily utilize a direct sales model, which means adding more sales capacity, along with improving productivity, are key drivers of future growth. As a reminder, we reduced head count at the beginning of FY 2021 during the onset of COVID to manage costs in an uncertain macro environment, and we started to rebuild our head count capacity last year. We're now above pre-COVID head count and on track to accelerate our head count growth in FY 2023, while maintaining a commitment to margin improvement each year. Okay, now turning to guidance. For Q2 FY 2023, we expect total revenue to be between $142 million and $144 million, representing year-over-year growth between 41% and 43%, and non-GAAP operating margin to be approximately -22%. Based on our strong Q1 results and updated outlook for the remainder of FY 2023, we're raising our full-year revenue guidance to $590 million-$600 million, or 38%-40% year-over-year growth. We also identified additional savings from operating efficiencies without sacrificing investments to growth, given the strong demand we're seeing from customers. In addition to increasing our top line guidance, we also raised our FY 2023 operating margin guidance to -20%, or an implied non-GAAP operating income improvement of $7 million. Finally, we also included some additional modeling notes for Q2 and full year FY 2023 in our shareholder letter. To wrap up, we are very pleased with our start to the year and our improved outlook for FY 2023. We are benefiting from the secular transformation of physical operations, and we believe that the macro volatility caused by high inflation and a tight labor market is making Samsara even more imperative to our customers. We remain committed to continued operating efficiencies on our path to profitability through scale, product enhancements, global employee expansion, and cost optimization, all without sacrificing the incredible customer demand we're experiencing. With that, I'll hand it over to Mike to moderate Q&A. Thanks, Dominic. We'll now open the line up for questions. When it's your turn, please limit your questions to one main question and one follow-up question. The first question today comes from Kirk Materne at Evercore, followed by Keith Weiss at Morgan Stanley. All right. Thanks very much and congrats on the quarter. You know, I was wondering if you all could just talk a little bit about what you're seeing in your pipeline build, and maybe juxtapose that versus what you saw at the beginning of 2020. Obviously, everybody's pretty nervous about the macro, but I'd imagine for your business it's very different today, just given your size and scale and the maturity of the business. Can you just give us a bit of a sense of what you're seeing on just sort of pipeline build? You know, also, just Dom, can you just talk a little bit about the sequential guide on revenue? You know, why, you know, seeing it sort of flat sequentially makes sense given, that sort of, you know, deviates from the pattern we've seen over the last, year at least. Thanks. Great. Kirk, this is Sanjit. I'll start with your first question around pipeline build. In general, we are on track in terms of pipeline build for the year, and we're seeing healthy incoming inbound business leads and so on from across different industries. We serve a variety of industry segments including, you know, construction, field services, local governments, transportation, and we are continuing to see growth there. I think this is very different than what we saw at the beginning of 2020 when effectively a lot of the world froze or shut down. It was just uncertain what was gonna happen. What turned out to be the case was that the industries we serve are the essential industries. They're the ones that keep the energy utilities running, keep the water running, and so on. They sprang back very quickly. I think that was just not clear at the beginning of 2020, whereas right now what we're seeing is even with inflation, even with macro uncertainty, people still need waste management, they still need energy utilities to run, they still need the local governments, and they need food and beverage to continue to operate. I think while everyone's keeping their ear to the ground to understand what might happen in the future, these industries are really robust and they're truly essential industries. You know, I think we feel good about what we're seeing in the pipeline, and that allowed us to raise our full year revenue guidance for the year. Just on your Q2 sequential revenue guidance question, Kirk. You know, again, this is similar to kind of the comments that I made three months ago during our Q4 earnings call. You know, this is our first year as a public company, and so we wanna make sure that we're putting out numbers that we feel highly confident about hitting. This is, you know, similar to the Q1 guide that we provided three months ago. you know, we're not seeing any major negative impacts to our business. We are aware of the broader macro factors that we've talked about, that you know that may impact the economy. you know, but we're not seeing anything in our pipeline that concerns us. Great. Thank you all. Great. Our next question comes from Keith Weiss at Morgan Stanley, followed by Michael Turrin at Wells Fargo. Keith? Okay, let's go to the next question. We'll come back to you, Keith. Our next question comes from Michael Turrin at Wells Fargo. Hey there. Thanks. I'm here. It's clear just from the initial question we're fielding a lot of questions on the macro. Some of your customers are dealing with things like supply chain complexity and inflation, but you've referenced there are elements of the product set that can help with things like fuel savings and efficiency gains. Anything you can add and just your latest view on those market crosswinds, and if there are observations you can share from recent customer conversations that showcase certain elements of the product portfolio, that's all very helpful. Sure. Michael, this is Sanjit. I've been spending a lot of time over the past month out in the field meeting customers, both here domestically in the U.S. as well as out in Western Europe. I think we are seeing a couple of trends there that are very related to these kind of macro issues. Fuel savings, as I highlighted in the shareholder letter and earlier in the earnings call, is something that's very front of mind. This is an operating expense for our customers across all these industries, and frankly, they'd like to find ways to save money on that, especially the rising cost of fuel. Our products has been essential in terms of helping them quantify where those fuel expenses are going and finding opportunities to reduce those fuel spends by 15%, 20%, 30% in some cases. That's one area. I think the other area that's related is you mentioned the supply chain crunch. That affects the availability of vehicles for many of our customers, as well as other kinds of equipment. That could be construction equipment, trailers, generators, compressors and so on, which means that they need to find ways to sweat their assets and run them for longer lifetimes. Specifically, I'm thinking of a customer conversation we had two weeks ago. They said, "We normally run our vehicles for 600,000 mi. We're now trying to find a way to run them for 900,000 mi. We're using the Samsara products to understand which of those vehicles needs maintenance and might break down and cause unplanned downtime." They're being very data-driven about how do they run those assets for longer. So that's how they're combating the supply crunch. They're still seeing a ton of customer demand from their end customers. They just can't get new assets to deploy out in the field, so they're trying to be smarter about their operations. So those are hopefully just two helpful examples of how people use our technology. Maybe the third one, if I can cram one more in there, would be just around insurance costs. Distracted driving continues to be an issue. Accident rates are still very high. In these macro environments, our customers are being very conscious around costs. They're looking to reduce accidents, lower their insurance premiums, exonerate their drivers. I think our driver safety products continue to also do very well for that reason. That's very helpful. That's great detail. Dominic, if I can stick in a follow-up. You added more than 90 customers to that $100,000 customer metric during the Q1. Can you just speak to the drivers there? Is that unusual for a Q1? Is there anything in the demand environment that's driving that or is this more just natural expansion within customers that helps explain that? Maybe you can just put some context around that metric as well. Yeah. I mean, Q1 is our seasonally lowest Net New ACV quarter. We did 66 and $100,000+ adds in Q1 of last year, so the $91 million was a great start to the year, and it was kind of in line with what we saw in Q2, Q3 and Q4 of last year. This has been a concerted effort and an investment focus for us for a long time. Really building out an enterprise sales segment, you know, a field team to go after these customer opportunities. We're also seeing it within the expansion numbers. Again, this was the second quarter in a row where more than 50% of our new bookings came from our existing customers, and those tend to be the larger customers as well. You know, overall, our customer demand remains really strong. You know, our productivity improved year-over-year from our fully ramped sales reps. We came in slightly ahead of our forecast. You know, it was a really solid Q1. Great. Thank you. Thanks, Michael. Let's come back to Keith and see if we can get back online here. Excellent. Can you hear me now again? Yeah, we can hear you, Keith. Awesome. Sorry about that. Very nice quarter. Thank you for taking the question. I think two for Dominic. You talked about a kind of a more of a focus on profitability and that ramp's profitability. We saw that in the quarter with the outperformance on margins. Should we be thinking about a kind of faster ramp to profitability? Can you give us maybe sort of a longer term view on what that means in terms of when we should expect you guys to get to either break even on an operating income line or a free cash flow line? That's part one. Part two, the other part of the equation that's really top of mind for a lot of investors right now is stock-based compensation, particularly with companies that have hired a lot over the past year, at a point where their stock prices were materially higher. How are you guys thinking about stock-based compensation? Is there a prospect of a larger grant coming up to make employees whole or something that investors should be aware of on the horizon? Sure. Thanks, Keith. You know, on your first question, you know, the path to breakeven, whether it's on free cash flow, it's probably gonna come for us first on operating margin because of the working capital dynamics of our business. It's definitely a big priority internally. We have a number of initiatives that we're focused on, that we're gonna accelerate the timeline that we've determined over the last kind of three months. I still think we're probably a few years away. I'll provide a more kind of firmer timeline as we get closer to that milestone. I think regardless of that timing, we are committed to showing more leverage across both operating margin and free cash flow margin each year on that path to breakeven. On the second question, in terms of, you know, SBC as a percentage of sales, for Q1, for us it was just over 30%. I expect that will decrease over time, and I do think that it will be lower for the full year than it was in Q1. The first half of this year is being impacted by two things. We have some accelerated SBC expense that's tied to the pre-IPO shares that vested at the time of the IPO that's impacting the beginning of this year. We do our large annual equity refresh in the middle of Q1, and so we will see a little bit more of that expense in the kind of the first half of the year. I do expect that the second half of the year will be lower. I think another way that we look at this is on an SBC as a percentage of OpEx and COGS, and for us it was 20% in Q1. When we look at that benchmarked to other recent software IPOs, it's actually quite favorable, and it's actually in line with some of the at scale SaaS companies. It's something that we're tracking, monitoring, and on both of those metrics we expect to see improvements over the time. Got it. The grants in Q1, those are kind of in line with kind of historical grants. There's nothing kind of out of the ordinary because of the pullback in the stock price? We typically have two comp cycles a year. We do one at the beginning of the year and we do one at mid-year. We're looking at comp again in a few months. Other than those normal new hire grants and the equity, the annual equity refresh that we did at the beginning of the year, we haven't done anything off cycle. You know, with that, I will say that we're always evaluating, you know, comp for inequities, but we haven't done anything more broadly beyond that. Perfect. Thanks so much, guys. Great. Our next question comes from Matt at William Blair, followed by Kash at Goldman Sachs. Hey, guys. Thanks for taking my question. Wanted to ask on the John Deere partnership that you mentioned in the shareholder letter, any additional details on that and any sort of plans to build out a broader suite focused on digitizing the farming space? Thanks. I'm happy to take that. Matt, I'm glad you were able to see that in the shareholder letter. We're really excited to bring John Deere onto the platform, and this is again connecting all of their different kinds of equipment that used to be on JDLink into the Samsara Operations Cloud. We've been building this out as a strategy, not just for farm equipment or construction equipment, but all kinds of equipment. We've partnered with Ford, Navistar International, Volvo, and others in OEM integrations to bring that data into the cloud. I would say this is again just trying to give our customers full visibility over connected operations. While Deere has farming equipment, we also are partnering with others that make construction equipment and others that make generators and compressors and so on. I would expect to see that rollout continue over the next couple of years. Okay, great. One follow-up for Dominic, if I may. Just on the margin guidance for the year, I think you guys had previously communicated that, you know, we should expect revenue upside to be reinvested in the business and for the margin guidance to sort of remain consistent throughout the year. You brought it up a bit. You said it was due to some operational efficiencies. Should we, you know, view this as maybe a one-time thing in that your plan is to continue to hold it steady going forward? Or should we expect revenue upside to produce some improvement to the margin guidance going forward? Yeah. Matt, thanks for, you know, for pointing that out. I think our posture on that has definitely changed over the last three months where we were potentially gonna have implied operating profit be lower and keeping margins flat as we improved our revenue guidance throughout the year. You saw in this quarter, not only did we improve our revenue guidance, but we also took up our operating margins for the year, which resulted in that $7 million of implied operating profit. I think that's something we're gonna be focused on going forward is really looking at the implied operating profit and do not expect that to get worse. Ideally, we can continue to make improvements as we scale the business. Great. Thank you. Great. Our next question comes from Kash at Goldman Sachs, followed by Derrick at Cowen. Hey. Thank you very much. Congrats on the quarter. I was curious to get your thoughts on customer acquisition economics. I'm sure that you look at the metrics in a far more detailed manner than we are able to, just looking at reported financials. Any trends that you see as the macro environment arguably gets a little bit more challenging, how are you monitoring how you spend and how that dollar of spend is translating into revenue at an attractive economics? Also, if I could, you've had the entire month of May after closing the quarter. Have things changed or, with respect to linearity of business, pretty much playing out the way you expected? Any thoughts there would be highly appreciated. Thank you so much. Yeah. Hey, Kash, let me start there and then Sanjit can pile on. You know, we'll talk a little bit more about some of the kind of unit economic data at our Investor Day coming up in a couple of weeks, you know. We are looking at, you know, CAC payback period, LTV to CAC, net retention rates across different products, different geographies, different sales segments, and they continue to be strong. You know, our LTV to CAC continues to be more than 8x, and so, you know, we have really strong long-term profitability in the investments that we're making, and we're not seeing, you know, payback periods increase over time. In fact, I kind of made the point in one of the other questions that the We saw the productivity per ramped rep improve year-over-year, which gives us confidence that we should continue to invest in the business. You know, as we talked about, we plan to accelerate headcount growth this year. I'd say that, you know, what we're seeing out of May so far, getting through month one, you know, we feel really good about, and you know, that is factored into the guidance that we just provided, you know, where we were able to pull up guidance, you know, for the year. Yeah. I don't think. Okay. I have anything significant to add to that other than it is, sort of playing out as expected in the month of May, and that's again why we felt confident with the guidance level. May it continue. Thank you so much. Mm-hmm. Thanks, Kash. Our next question comes from Derrick at Cowen, followed by Ethan at Wolfe Research. Hey guys, congrats on a strong quarter. First question, you know, we've heard a lot about your commitment to customer success and listening to customer needs from your installed base. How is this helping drive more wallet share? I guess outside of telematics and safety, what do you see as the next strongest emerging product to cross-sell? Sure, Derrick, I'll take that. This is Sanjit. One of the areas that we have seen. I'll kind of answer both questions at once. One of the areas we've seen healthy growth has been around connected equipment, so these are non-fleet assets that our customers have as part of their physical operations. I've mentioned construction equipment in one of the previous questions. There's just all different kinds of equipment out there. Bringing those assets onto the Samsara Connected Operations Cloud has unlocked even more value for the customer. It's oftentimes an add-on or follow-on project, and you see that in our expansions that have been occurring over time. That's how when we run that customer feedback loop, when we build these deep relationships, we're able to expand within these opportunities. There was a slide in the presentation earlier around multi-product adoption. Our largest customers, 90% of them are using multiple products from us. That is, I think, how we're driving a lot of expanded share of wallet, which is finding more areas of value to unlock for the customer. I'll just add on there. I mean, the customer success team for us is instrumental and you know their singular focus is on our net retention rate. I'll give you an update on where that is at Investor Day in a couple of weeks. As we said, we continue to be above our target, and we are seeing that trend up over the last several quarters. A lot of that is to what Sanjit just mentioned, customers, especially larger customers, coming back and expanding more seats and more products. That's great to hear. Dom, one for you. I mean, nice job on the strength of gross margins, but it does sound like you're still seeing some higher component costs. How are you managing those costs, and how should we be thinking about the gross margin trends for the rest of the year? Yeah. I think, with the increasing costs, you know, we've been able to find additional savings to more than offset those costs. Whether it's cloud or cellular fees, you can see that in our gross margin improved from 71% in Q1 of last year to 73% in Q1 of this year. Even with the increased cost that we've seen, we've been able to find other more than enough savings to offset that. You feel good about kind of maintaining this kind of seven handle plus? Yes. I think we'll stay above 70%. Again, I think, you know, our outlook for the rest of the year is kind of in line with where we were three months ago, that we expect to be in the low 70%s. Got it. All right, thanks. Thanks, Derrick. Our last question for today comes from Ethan at Wolfe. Hey guys, this is Ethan Bruck on for Alex Zukin. Thank you for taking my question. I have two questions. The first one is, you guys had the same amount of large customers added in the quarter, which was great to see. I guess my question specifically is around new customers. I guess what gives you confidence as the macro environment gets tougher that net new customers to the platform, especially larger enterprise customers, will still continue to adopt Samsara solutions? Yeah, maybe I'll take that. I think that's what gives us. We're really excited about is that not only was it a really strong expansion quarter, it was also our largest core customer addition quarter that we've ever seen. It's a really nice balanced mix now between new customers and expansions. It's roughly 50/50 in terms of Net New ACV Bookings Mix. Gotcha. Thank you. The second one is, so the beat in the quarter was stronger than last quarter, and you also had equally strong rates. So I guess how should we consider how much of mix of confidence versus conservatism is factored into the full year outlook, just considering how the macro is today and how you guys are viewing the environment and just the outlook in general for your customers throughout the rest of the year and into 2023? Thank you. Yeah. Yeah. I think getting through Q1 and having the success that you saw in terms of the beat gives us a lot of confidence. As I kind of mentioned, that customer demand remains really strong. Our productivity grew year-over-year. We were ahead of our forecast for Q1, and our outlook, you know, remains really strong, which gave us the confidence to raise the top line guidance for the rest of the year. Okay, great. Thank you, guys. Perfect. This concludes the question- and- answer portion. Thank you all for attending our Q1 fiscal year 2023 earnings call. Before I let you go, I have a few short announcements. First, we'll be attending the William Blair Growth Stock Conference in person on June 7th, and we look forward to seeing you there. Second, we will host our inaugural Investor Day on June 15th in San Francisco, where we will be providing additional insights into Samsara's trajectory and the overall state of physical operations. Our investor relations website will have a web link to a live broadcast. That's it for today's meeting. If you have any follow-up questions, you can email us at ir@samsara.com. Thanks again. Bye, everyone.