Samsara Inc (NYSE:IOT) delivered upbeat fiscal first-quarter results on Thursday, surpassing Wall Street estimates on both the top and bottom line. Adjusted earnings per share came in at $0.11, well above the consensus forecast of $0.05, while revenue rose 31% year-over-year to $366.9 million, exceeding the $351.56 million estimate.

Despite the robust headline figures, shares sank 12.5% in after-hours trading as investors reacted to a tempered growth outlook and signs of moderation in the pace of expansion. The San Francisco-based company guided for full-year revenue between $1.55 billion and $1.56 billion, only modestly above consensus estimates of $1.53 billion.

“Our AI-powered platform delivers a clear and fast ROI for our customers and improves the safety, efficiency, and sustainability of their operations,” said Sanjit Biswas, CEO and co-founder of Samsara. “We delivered a strong first quarter of the new fiscal year with Q1 revenue of $366.9 million, growing 32% year-over-year in constant currency.”

While the company showed notable gains in profitability—non-GAAP operating income reached $51.1 million, up from $6.2 million a year ago—the market remained focused on declining momentum, especially as growth decelerates toward the mid-20% range. Forward guidance for second-quarter revenue of $371 million to $373 million indicates only 24% year-over-year growth, a drop from the 31% delivered in Q1.

Key customer metrics also showed continued progress, with Annual Recurring Revenue (ARR) climbing 31% to $1.54 billion and large customer accounts, those generating over $100,000 in ARR, increasing 35% year-over-year to 2,638. However, these growth rates mark a return to more normalized post-pandemic expansion following years of rapid scaling.

Samsara’s improved cash performance was also highlighted in the report, with adjusted free cash flow jumping to $45.7 million and operating cash flow margin expanding six percentage points to 14%. Non-GAAP net income for the quarter reflects a significant improvement from a year earlier, driven by efficiency gains across the organization.

With the stock outperforming in recent months, much of the upside had likely been priced in, leaving execution risk and the pace of future growth as paramount concerns for investors. Even as Samsara continues to pair innovation with consistent customer traction, Wall Street appears to be resetting expectations in line with a maturing growth profile.