Stem Announces Second Quarter 2026 Results

Achieved fifth consecutive quarter of positive adjusted EBITDA

PowerTrack^TM software revenue up 11% YoY

PowerTrack^TM Energy Management System (EMS) recognized as leading, global innovative solution with The smarter E AWARD win

Reaffirming full year 2026 financial and operating guidance

HOUSTON--(BUSINESS WIRE)--Stem, Inc. (“Stem,” “we” or the “Company”) (NYSE: STEM), a global leader in AI-enabled clean energy software and services, today announced its results for the quarter ended June 30, 2026.

Financial Highlights

• Revenue of $33.7 million, down 12% from $38.4 million in 2Q25
• Software, services, and edge hardware revenue of $33.4 million, up 1% from $32.9 million in 2Q25
• GAAP gross profit of $13.9 million, up 9% from $12.8 million in 2Q25
• GAAP gross margin of 41%, up from 33% in 2Q25
• Non-GAAP gross profit of $18.4 million, down from $18.7 million in 2Q25
• Non-GAAP gross margin of 55%, up from 49% in 2Q25
• Net loss of $14.4 million versus net income of $202.5 million in 2Q25
• Adjusted EBITDA of $6.2 million up 63% from $3.8 million in 2Q25
• Operating cash flow of $0.3 million versus $(21.3) million in 2Q25
• Ended 2Q26 with $38.4 million in cash and cash equivalents versus $36.6 million in 1Q26

Operating Highlights

• Bookings of $36.8 million, up 39% from $26.5 million in 1Q26
• Contracted backlog of $27.1 million, up 18% from $23.0 million at the end of 1Q26
• Storage operating assets under management (“AUM”) of 1.8 gigawatt hours (“GWh”), up 6% sequentially
• Solar operating AUM of 38.3 gigawatts (“GW”), up 2% sequentially
• Contracted annual recurring revenue (“CARR”) of $69.0 million, up from $67.2 million at the end of 1Q26
• Annual recurring revenue (“ARR”) of $62.4 million, up from $61.2 million at the end of 1Q26

“The second quarter reflected strong momentum across our core PowerTrack platform and continued expansion of our international footprint,” stated Arun Narayanan, Chief Executive Officer of Stem. “We brought PowerTrack EMS to Latin America this quarter with the Granja Solar project in Chile, where our software will serve as the control system for a 135 MW solar facility being retrofitted with a 420 megawatt-hour battery storage system – a strong proof point for the kind of hybrid, utility-scale project that validates the commercial prospects of our EMS offering. Our products were also recognized internationally, with PowerTrack EMS receiving ‘The smarter E AWARD 2026’ in Europe for the Smart Integrated Energy category, an honor given to industry pioneers driving major innovations across energy storage and smart integrated energy, and a prestigious recognition for the clean energy industry. Alongside this sustained commercial progress, we are continuing to execute with discipline, delivering our fifth consecutive quarter of positive adjusted EBITDA and record non-GAAP gross margins. We remain focused on driving operating leverage, strengthening our core platform, and building the foundation for accelerated growth in 2027 and beyond.”

“Our second quarter results reflect our continued dedication to driving operating leverage in the business,” stated Brian Musfeldt, Chief Financial Officer of Stem. “Non-GAAP gross margins, adjusted EBITDA, and operating cash flow improved significantly versus the prior year. Because of our consistent performance and expectations for the rest of the year, we are pleased to reaffirm full year 2026 guidance across all metrics.”

Second Quarter 2026 Financial and Operating Results

Financial Results

Revenue decreased 12% year-over-year to $33.7 million, versus $38.4 million in the second quarter of 2025, driven by significantly reduced battery hardware resales and lower managed services revenue. Revenue from software, services, and edge hardware was $33.4 million for the second quarter of 2026, up 1% from $32.9 million for the second quarter of 2025, driven by 11% year-over-year growth in PowerTrack software revenue, partially offset by lower managed services revenue.

GAAP gross profit was $13.9 million, or 41%, versus $12.8 million, or 33%, in the second quarter of 2025. The year-over-year increase in GAAP gross profit ($) and GAAP gross margin (%) was driven by reduced costs, increased higher-margin software, services, and edge hardware sales, and reduced lower-margin battery hardware resale and managed services revenue.

Non-GAAP gross profit was $18.4 million, or 55%, versus $18.7 million, or 49%, in the second quarter of 2025. The year-over-year decrease in non-GAAP gross profit ($) was driven by significantly decreased lower-margin battery hardware resales and managed services revenue. The year-over-year increase in non-GAAP gross margin (%) reflects increased higher-margin software, services, and edge hardware sales, along with reduced lower-margin battery hardware resale revenue.

Net loss was $14.4 million versus the second quarter of 2025 net income of $202.5 million. The year-over-year decrease was primarily due to a one-time gain on extinguishment of debt in the second quarter of 2025, which was partially offset by increased GAAP gross profit and lower operating expenses in the second quarter of 2026.

Adjusted EBITDA was $6.2 million, up 63% compared to $3.8 million in the second quarter of 2025. The year-over-year improvement was primarily driven by a higher mix of high-margin software and services revenue combined with lower operating expenses.

The Company ended the second quarter with $38.4 million in cash and cash equivalents, versus $36.6 million reported at the end of the first quarter of 2026.

Operating Results

Bookings were $36.8 million in the second quarter of 2026, up 39% from $26.5 million in the first quarter of 2026.

Contracted backlog was $27.1 million at the end of the second quarter of 2026, up 18% from $23.0 million at the end of the first quarter of 2026.

CARR was $69.0 million at the end of the second quarter of 2026, up 3% from $67.2 million at the end of the first quarter of 2026.

ARR increased 2% to $62.4 million at the end of the second quarter of 2026 from $61.2 million at the end of the first quarter of 2026. PowerTrack ARR increased 3% sequentially to $42.8 million in the second quarter of 2026 from $41.7 million at the end of the first quarter of 2026. Managed services ARR increased slightly to $19.6 million from $19.5 million at the end of the first quarter of 2026.

Solar operating AUM increased 2% sequentially to 38.3 GW for the second quarter of 2026. Storage operating AUM increased 6% sequentially to 1.8 GWh for the quarter.

The following table provides a summary of contracted backlog at the end of the second quarter of 2026, and includes only hardware and non-recurring services contracts, compared to backlog at the end of the first quarter of 2026 ($ in millions):

Business Updates

• On August 12, 2026, the Company announced that Solarmarkt Group, together with engineering, procurement, and construction partner Pannonwatt Energetikai Megoldások Zrt., selected Stem's PowerTrack™ EMS as the integrated energy management, power plant control (PPC), and SCADA platform for the hybridization of two operating utility-scale solar plants in Hungary. The projects are expected to add a 40 MW / 80 MWh battery energy storage system to each of Solarmarkt Group's existing 60 MWp solar facilities. Stem previously supplied the PPC capabilities for the solar assets in 2025 and 2026 using a hybrid-ready PowerTrack architecture. Under the new agreement, the same software and controls foundation are expected to expand across the battery systems at each site, helping to enable solar generation, storage, grid interconnection, and market dispatch to operate through a single integrated solution.

• On July 1, 2026, the Company announced that its PowerTrack EMS won The smarter E AWARD 2026 in the Smart Integrated Energy category. Organized by Solar Promotion International GmbH and Freiburg Management and Marketing International GmbH, The smarter E AWARD is presented across five industry categories, honoring pioneers of the energy industry driving major innovations across energy storage and smart integrated energy. The Smart Integrated Energy category specifically highlights technologies advancing the integration, management, and performance of clean energy systems. The award was announced during The smarter E Europe in Munich, Europe's largest alliance of exhibitions for the energy industry, bringing together Intersolar Europe, ees Europe, Power2Drive Europe, and EM-Power Europe.

• On June 17, 2026, the Company announced the launch of AIONA, Stem’s AI services offering developed in direct response to growing customer and market demand for practical, execution-focused artificial intelligence solutions. AIONA builds on Stem’s deep experience applying AI, data science, optimization, and automation across complex clean energy environments.

• On May 27, 2026, the Company announced that Copec Flux, the renewable energy subsidiary of Copec S.A., is deploying Stem’s PowerTrack EMS at the Granja Solar project in Chile. This development expands Stem’s Latin America footprint and represents a meaningful step into the region’s utility-scale hybrid market. The Granja project is an existing 135 MW PV project that Copec is retrofitting with a 420 MWh BESS to create a hybrid solar-plus-storage facility that allows Copec to supply energy to the national energy grid at more valuable times. As part of that expansion, Stem’s PowerTrack EMS is expected to serve as the site’s master control system, providing the controls architecture needed to manage the integrated asset.

• On May 13, 2026, the Company announced that it entered into a services agreement with Bluesphere Ventures to support its portfolio of standalone battery energy storage projects participating in New York's Value of Distributed Energy Resources (VDER) program. Under the agreement, Stem is expected to provide revenue modeling, market analysis, and intelligence across Bluesphere Ventures' pipeline of battery storage projects located within Consolidated Edison (ConEd) territory in New York City.

• On April 30, 2026, the Company announced a co-marketing agreement with Nuvation Energy, a North American provider of battery management and energy control solutions, to jointly promote a fully North American-made BESS control stack. The agreement brings together Stem’s PowerTrack EMS and Unit Controller with Nuvation’s Battery Management System, to create an integrated control layer designed to meet growing demand for secure, compliant, and domestically sourced energy infrastructure.

• On April 28, 2026, the Company announced it acquired the assets of raicoon GmbH, a Vienna-based provider of automated fault detection and event management for solar asset performance. The acquisition enhances Stem’s PowerTrack platform by improving how operational data is analyzed and translated into action, helping customers identify, prioritize, and resolve performance issues more quickly across their renewable energy portfolios.

Outlook

The Company is reaffirming its full-year 2026 guidance as follows ($ millions, unless otherwise noted):

Some Factors Affecting our Business and Operations

The Company is subject to risk and exposure from the evolving macroeconomic, regulatory, geopolitical and business environment, including uncertainty regarding the effects of the One Big Beautiful Bill (OBBB) on our business and that of our suppliers and customers, the effects of increased import tariffs and retaliatory trade policies, global inflationary pressures and interest rates, potential economic slowdowns or recessions, government shutdowns, and geopolitical pressures, including the armed conflicts between Russia and Ukraine and in the Middle East, as well as tensions between China and the United States, and uncertainty around other current and future trade policies and other regulations. We regularly monitor and attempt to mitigate the direct and indirect effects of these circumstances on our business and financial results, although there is no guarantee of the extent to which we will be successful in these efforts.

Use of Non-GAAP Financial Measures

In addition to financial results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), this earnings press release contains the following non-GAAP financial measures: adjusted EBITDA, non-GAAP gross profit and non-GAAP gross margin.

We use these non-GAAP financial measures for financial and operational decision-making and to evaluate our operating performance and prospects, develop internal budgets and financial goals, and facilitate period-to-period comparisons. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our operating performance, such as stock-based compensation and other non-cash charges, as well as discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance and liquidity as well as comparisons to our competitors’ operating results, to the extent that competitors define these metrics in the same manner that we do. We believe these non-GAAP financial measures are useful to investors both because they (1) allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) are used by investors and analysts to help them analyze the health of our business. Our calculation of these non-GAAP financial measures may differ from similarly titled non-GAAP measures, if any, reported by other companies. In addition, other companies may not publish these or similar measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for, or superior to, other measures of financial performance prepared in accordance with GAAP. For reconciliation of adjusted EBITDA and non-GAAP gross profit and margin to their most comparable GAAP measures, see the section below entitled “Reconciliations of Non-GAAP Financial Measures.”

Definitions of Non-GAAP Financial Measures

We define adjusted EBITDA as net (loss) income attributable to Stem before depreciation and amortization, including amortization of internally developed software, interest expense, further adjusted to exclude stock-based compensation and other income and expense items, including change in fair value of warrant liability, impairment of assets held for sale, and income tax provision or benefit. The expenses and other items that we exclude in our calculation of adjusted EBITDA may differ from the expenses and other items, if any, that other companies exclude when calculating adjusted EBITDA.

We define non-GAAP gross profit as gross profit excluding amortization of capitalized software, and impairments related to decommissioning of end-of-life systems. We define non-GAAP gross margin as non-GAAP gross profit as a percentage of revenue.

See also the section below entitled “Reconciliations of Non-GAAP Financial Measures.”

Conference Call Information

Stem will hold a conference call to discuss this earnings press release and business outlook on Wednesday, August 12, 2026, beginning at 5:00 p.m. Eastern Time. The conference call and accompanying slides may be accessed via a live webcast on a listen-only basis on the Events & Presentations page of the Investor Relations section of the Company’s website at https://investors.stem.com/news-events/ir-calendar. The call can also be accessed live over the telephone by dialing (877) 407-3982, or for international callers, (201) 493-6780 and referencing Stem. An audio replay will be available shortly after the call and can be accessed by dialing (844) 512-2921 or for international callers by dialing (412) 317-6671. The passcode for the replay is 13757930. The replay will be available until September 12, 2026. An archive of the webcast will be available shortly after the call on Stem’s website at https://investors.stem.com for 6 months following the call.

About Stem

Stem (NYSE: STEM) is a global leader reimagining technology to support the energy transition. We turn complexity into clarity and potential into performance.

Stem helps asset owners, operators, and energy stakeholders unlock the full value of their portfolios by enabling the intelligent development, deployment, and operation of clean energy assets. Stem’s integrated software suite, PowerTrack™, is the industry-standard and best-in-class platform for asset monitoring and optimization and is backed by expert professional and managed services, all delivered under one roof. Designed to address complex energy challenges seamlessly, our technology transforms raw data into clear, actionable insights, providing the visibility and intelligence needed to drive performance. With projects across 55 countries, customers have trusted Stem for nearly 20 years to maximize the value of their clean energy investments.

Driven by human and artificial intelligence, Stem is unlocking energy intelligence. Learn more at stem.com.

Forward-Looking Statements

This earnings press release, as well as other statements we make, contains “forward-looking statements” within the meaning of the federal securities laws, which include any statements that are not historical facts. Such statements often contain words such as “expect,” “may,” “can,” “believe,” “predict,” “plan,” “potential,” “projected,” “projections,” “forecast,” “estimate,” “intend,” “anticipate,” “ambition,” “goal,” “target,” “think,” “should,” “could,” “would,” “will,” “hope,” “see,” “likely,” and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain, such as statements about our financial and operating performance, guidance, targets and other forecasts or expectations regarding, or dependent on, our business outlook and strategy and expectations around our software-centric business; our ability to secure sufficient and timely inventory from suppliers; our ability to meet contracted customer demand; our ability to manage manufacturing or delivery delays; our ability to manage our supply chain and distribution channels; our acquisitions, joint ventures, partnerships and other alliances; forecasts or expectations regarding the energy transition and global climate change; the integration and optimization of energy resources; our business strategies and those of our customers; our ability to retain or upgrade current customers, further penetrate existing markets or expand into new markets; the effects of natural disasters and other events beyond our control; the impacts of the One Big Beautiful Bill Act (“OBBB”) on our business and that of our customers; the direct or indirect effects on our business of macroeconomic factors and geopolitical instability, such as the armed conflicts between Russia and Ukraine and in the Middle East; and our outlook and future results of operations, including revenue, adjusted EBITDA and other metrics. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results or outcomes to differ materially from those expressed or implied by such forward-looking statements, including but not limited to our inability to execute on, and achieve the expected benefits from, our operational and strategic initiatives; including from our cost reduction and restructuring efforts; our inability to successfully execute on our new software-centric strategy; the effects of the OBBB on our business and that of our customers; our inability to secure sufficient and timely inventory from our suppliers, as well as contracted quantities of equipment; our inability to meet contracted customer demand; supply chain interruptions and manufacturing or delivery delays; disruptions in sales, production, service or other business activities; general macroeconomic and business conditions in key regions of the world, including inflationary pressures, general economic slowdown or a recession, high interest rates, changes in monetary policy, changes in trade policies, including tariffs or other trade restrictions or the threat of such actions, government shutdowns, and instability in financial institutions; the direct and indirect effects of widespread health emergencies on our workforce, operations, financial results and cash flows; geopolitical instability, such as the armed conflicts between Russia and Ukraine and in the Middle East; the results of operations and financial condition of our customers and suppliers; pricing pressures; severe weather and seasonal factors; our inability to continue to grow and manage our growth effectively; our inability to attract and retain qualified employees and key personnel; our inability to comply with, and the effect on our business of, evolving legal standards and regulations, including those concerning data protection, consumer privacy, sustainability, and evolving labor standards; risks relating to the development and performance of our software-enabled services; our inability to retain or upgrade current customers, further penetrate existing markets or expand into new markets; the risk that our business, financial condition and results of operations may be adversely affected by other political, economic, business and competitive factors; and other risks and uncertainties discussed in this release and in our most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the SEC.

Stem Investor Contacts
Erin Reed, Stem
Marc Silverberg, ICR
IR@stem.com

Stem Media Contacts
Tatjana Legans, Stem
press@stem.com