Shares of Samsara Inc. (NYSE: IOT) tumbled 10.81% 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 the company's guidance, which may have fallen short of investor expectations.

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 outlook for the second quarter and full fiscal year 2026 seems to have disappointed investors. For Q2, the company expects revenue between $371-373 million and adjusted EPS of $0.06-0.07. The full-year guidance projects revenue of $1.547-$1.555 billion and adjusted EPS of $0.39-$0.41. While these figures represent growth, they may not have met the market's high expectations, leading to the significant after-hours sell-off.