Shares of Samsara Inc. (NYSE: IOT) tumbled 12.17% in after-hours trading on Thursday, despite the company reporting better-than-expected first-quarter results for fiscal year 2026. The sharp decline appears to be driven by concerns over the company's decelerating growth outlook, which overshadowed the strong quarterly performance.

For the first quarter, Samsara reported adjusted earnings per share of $0.11, significantly beating the analyst estimate of $0.06. Revenue came in at $366.9 million, also surpassing the expected $351.4 million. The company's Q1 adjusted gross margin was strong at 79%, with an adjusted operating margin of 14%.

However, Samsara's guidance for the second quarter and full fiscal year 2026 sparked investor concerns about slowing growth. For Q2, the company expects revenue between $371-373 million, representing a year-over-year growth of 24%, a significant deceleration from the 31% growth seen in Q1. While the company raised its full-year revenue guidance to $1.547-$1.555 billion, up from the previous consensus of $1.53 billion, the implied growth rate still suggests a continued slowdown in the latter half of the year. This moderation in growth appears to be the primary factor behind the stock's after-hours plunge, as investors reassess the company's long-term growth trajectory in an uncertain macroeconomic environment.