Stem Announces Fourth Quarter and Full Year 2023 Results
- Achievement of positive adjusted EBITDA in Q4 and expectation to generate $50 million operating cash flow in 2024.
- Awarded PowerBidder™ Pro contract by Mercuria Energy Trading, signifying strong performance.
- Financial highlights show revenue growth, increased gross margins, and positive adjusted EBITDA.
- Optimistic outlook for 2024 with projected revenue, bookings, CARR, and AUM growth.
- Focus on maintaining technology leadership, driving software services revenue, and achieving profitable growth.
- None.
Insights
The reported financial results of Stem, Inc. indicate a positive shift towards profitability with an achievement of positive adjusted EBITDA in the latter half of 2023. This is a critical indicator for investors as it reflects the company's ability to generate profits from its core operations. The projection of at least $50 million in operating cash flow for 2024 suggests financial stability and operational efficiency, which could positively influence the company's stock valuation.
However, it's important to note that despite an increase in revenue, the company still reported a net loss. This implies that while the company is growing, it is doing so with considerable expenses. The decrease in GAAP gross margin year-over-year needs to be monitored as it could indicate pricing pressures or increased costs that could affect future profitability. Investors should also consider the impact of non-recurring items and how they affect the adjusted EBITDA.
Stem's contracted backlog nearly doubling and the increase in contracted storage assets under management (AUM) and solar monitoring AUM are indicative of strong market demand for clean energy solutions. The 44% increase in full-year bookings demonstrates the company's competitive position and potential for revenue growth. The introduction of Athena® PowerBidder Pro and the contract with Mercuria Energy Trading highlight Stem's innovation and ability to secure significant deals in the energy trading space, potentially opening new revenue streams.
The emphasis on technology leadership and software services revenue growth is a strategic move in the energy sector, which is increasingly relying on software solutions for energy management. The company's focus on profitable growth without equity issuance shows a commitment to shareholder value and capital efficiency.
The financial results reflect Stem's strategic positioning within the clean energy sector, particularly in AI-driven energy storage and services. The positive adjusted EBITDA and projected cash flow indicate a maturation in Stem's business model, aligning with industry trends towards more sustainable and efficient energy solutions. The contract with Mercuria Energy Trading for the PowerBidder™ Pro product showcases Stem's role in the advanced energy trading market, which is critical as the energy sector evolves towards greater reliance on renewable sources and storage solutions.
Stem's ability to increase its contracted AUM in a competitive market is a testament to the scalability of its technology and services. The company's focus on extending its technology leadership and building software services revenue is well-aligned with the growing need for intelligent energy management systems in the transition to a low-carbon economy.
Achieved Key Milestone with Positive Adjusted EBITDA in Q4 and 2H23
Expect to Generate at Least
Awarded PowerBidder™ Pro Contract by Mercuria Energy Trading
Outlook
-
Expect to achieve positive adjusted EBITDA of between
$5 million $20 million -
Project at least
$50 million
Fourth Quarter and Full Year 2023 Financial and Operating Highlights
Financial Highlights – Fourth Quarter 2023
-
Revenue of
$167.4 million $155.5 million 8% ) in Q4 2022 -
GAAP gross margin of
7% , down from8% in Q4 2022 -
Non-GAAP gross margin of
13% , up from11% in Q4 2022 -
Net loss of
$37.7 million $35.3 million -
Adjusted EBITDA of
$4.6 million $(9.5) million -
Ended Q4 2023 with
$113.6 million
Financial Highlights - Full Year 2023
-
Revenue of
$461.5 million $363.0 million 27% ) for full year 2022 -
GAAP gross margin of
1% , versus9% for full year 2022 -
Non-GAAP gross margin of
15% , versus13% for full year 2022 -
Net loss of
$140.4 million $124.1 million -
Adjusted EBITDA of
$(19.5) million $(46.0) million
Operating Highlights – Fourth Quarter 2023 and Full Year 2023
-
Bookings of
$256.1 million $457.5 million 44% ) in Q4 2022 -
Bookings of
$1.53 billion $1.06 billion 44% ) in full year 2022 -
Contracted backlog of
$1.9 billion $969.0 million 99% ) at end of Q4 2022 -
Contracted storage assets under management (AUM) of 5.5 gigawatt hours (GWh) at end of Q4 2023, up from 5.0 GWh (+
10% ) at end of Q3 2023 and 3.1 GWh (+77% ) at end of 2022 -
Solar monitoring AUM of 27.5 gigawatts (GW), up from 26.3 GW (+
5% ) at the end of Q3 2023 and 25.0 GW (+10% ) at the end of 2022 -
Contracted Annual Recurring Revenue (CARR) of
$91.0 million $87.5 million 4% ) at end of Q3 2023 and$65.3 million 39% ) at end of 2022
John Carrington, Chief Executive Officer of Stem, commented, “We are proud to report that Stem reached our commitment to deliver positive adjusted EBITDA in the second half of 2023. We accomplished our goal through increased margins and ongoing operating cost discipline. We believe we are in a strong position to generate positive operating cash flow driven by our software technology leadership.
“Underlying demand for our market-leading solutions remains strong, as evidenced by another solid quarter of bookings, which drove our contracted backlog near
“We are introducing our full year 2024 financial and operating outlook. For the year, we forecast adjusted EBITDA of between
“The management team and I are deeply focused on three guiding principles in 2024: extending our technology leadership position, building software services revenue, and profitable growth.”
________________________________
1 See the section below titled “Reconciliations of Non-GAAP Financial Measures” for information regarding why the Company is unable to reconcile adjusted EBITDA guidance to its most comparable financial measure calculated in accordance with GAAP.
Key Financial Results and Operating Metrics (in $ millions unless otherwise noted): |
|||||||||||||||
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
(in millions) |
|
(in millions) |
||||||||||||
Key Financial Results |
|
|
|
|
|
|
|
||||||||
Revenue (1) |
$ |
167.4 |
|
|
$ |
155.5 |
|
|
$ |
461.5 |
|
|
$ |
363.0 |
|
GAAP Gross Profit |
$ |
11.0 |
|
|
$ |
12.6 |
|
|
$ |
3.6 |
|
|
$ |
33.1 |
|
GAAP Gross Margin (%) |
|
7 |
% |
|
|
8 |
% |
|
|
1 |
% |
|
|
9 |
% |
Non-GAAP Gross Profit* |
$ |
22.2 |
|
|
$ |
17.0 |
|
|
$ |
75.1 |
|
|
$ |
47.3 |
|
Non-GAAP Gross Margin (%)* |
|
13 |
% |
|
|
11 |
% |
|
|
15 |
% |
|
|
13 |
% |
Net Loss |
$ |
(37.7 |
) |
|
$ |
(35.3 |
) |
|
$ |
(140.4 |
) |
|
$ |
(124.1 |
) |
Adjusted EBITDA* |
$ |
4.6 |
|
|
$ |
(9.5 |
) |
|
$ |
(19.5 |
) |
|
$ |
(46.0 |
) |
|
|
|
|
|
|
|
|
||||||||
Key Operating Metrics |
|
|
|
|
|
|
|
||||||||
Bookings |
$ |
256.1 |
|
|
$ |
457.5 |
|
|
$ |
1,532.4 |
|
|
$ |
1,056.9 |
|
Contracted Backlog** |
$ |
1,929.3 |
|
|
$ |
969.0 |
|
|
$ |
1,929.3 |
|
|
$ |
969.0 |
|
Contracted Storage AUM (in GWh)(2)** |
|
5.5 |
|
|
|
3.1 |
|
|
|
5.5 |
|
|
|
3.1 |
|
Solar Monitoring AUM (in GW)** |
|
27.5 |
|
|
|
25.0 |
|
|
|
27.5 |
|
|
|
25.0 |
|
CARR** |
$ |
91.0 |
|
|
$ |
65.3 |
|
|
$ |
91.0 |
|
|
$ |
65.3 |
|
(1) Revenue, gross profit, and net loss were negatively impacted by a
(2) Contracted storage AUM as of December 31, 2022 has been adjusted from 2.5 GWh, as previously disclosed, to 3.1 GWh. Revised AUM reflects adjustments to total GWh of energy storage as a result of revisions to the contracted system configuration or changes in hardware specifications due to updates from the original equipment manufacturer.
*Non-GAAP financial measures. Adjusted EBITDA and non-GAAP gross profit and non-GAAP margin have been adjusted to exclude the impact of the reduction in revenue, excess supplier costs and resulting liquidated damages as discussed below. See the section below titled “Use of Non-GAAP Financial Measures” for details and the section below titled “Reconciliations of Non-GAAP Financial Measures” for reconciliations.
**At period end.
Fourth Quarter and Full Year 2023 Financial and Operating Results
Financial Results
Fourth quarter 2023 revenue increased
Fourth quarter 2023 GAAP gross profit was
Fourth quarter 2023 non-GAAP gross profit was
Fourth quarter 2023 net loss was
Fourth quarter 2023 adjusted EBITDA was
The Company ended the fourth quarter of 2023 with
Operating Results
Contracted backlog was
Fourth quarter 2023 contracted storage AUM increased
Fourth quarter 2023 CARR increased to
The following table provides a summary of backlog at the end of the fourth quarter of 2023, compared to backlog at the end of the third quarter of 2023 ($ millions):
| End of 3Q23 | $ |
1,836.6 |
|
|
Add: |
Bookings |
|
256.1 |
|
Less: |
Hardware revenue |
|
(152.5 |
) |
Software/services |
|
(11.7 |
) |
|
Cancellations |
|
(2.4 |
) |
|
Amendments/other |
|
3.2 |
|
|
| End of 4Q23 | $ |
1,929.3 |
|
|
Recent Business Highlights
On November 16, 2023, the Company announced that Frost & Sullivan, a leading global research and growth consulting firm, has awarded Stem its 2023 New Product Innovation Award in the
On December 15, 2023, the Company announced the results of its ERCOT benchmarking analysis from 2022. The analysis demonstrated that Athena’s advanced optimization capability unlocks significant revenue potential. In the backcast simulations, Athena outperformed six competitors in revenue attainment by an average of
On February 28, 2024, the Company announced that its Athena PowerBidder Pro application had been selected by Mercuria Energy Trading, a leading global energy trader, to support bid optimization management for one of its energy storage systems (ESS) in ERCOT. Under this software-only contract, Mercuria will leverage PowerBidder Pro’s combination of configurability, cutting-edge analytics, advanced price forecasting and bid optimization, and seamless automation to develop customized trading strategies for its energy storage assets to participate in ERCOT. Stem’s PowerBidder Pro offers Mercuria access to real-time performance metrics, industry-leading analytics, and customizable configurations necessary to tailor trading strategies to ESS constraints, contractual obligations, risk management objectives, and emergent market conditions. As Mercuria’s ESS portfolio grows to meet its corporate objectives, PowerBidder Pro offers a scalable solution to seamlessly manage trading strategies across its entire portfolio, including across different ISO markets.
Outlook
The Company is introducing full-year 2024 guidance ranges as follows ($ millions, unless otherwise noted):
Revenue |
|
|
|
Non-GAAP Gross Margin (%) |
|
|
|
Adjusted EBITDA |
|
|
|
Bookings |
|
|
|
CARR (year-end) |
|
|
|
Operating Cash Flow |
Greater than |
*See the section below titled “Reconciliations of Non-GAAP Financial Measures” for information regarding why Stem is unable to reconcile Non-GAAP Gross Margin and Adjusted EBITDA guidance to their most comparable financial measures calculated in accordance with GAAP.
The Company’s full year 2024 Revenue projected quarterly performance are as follows:
Metric |
Q1 |
Q2 |
Q3 |
Q4 |
Revenue |
|
|
|
|
Additional Factors Affecting our Business and Operations
Stem continues to diversify its supply chain, integrate additional energy technologies, and deploy a portion of its balance sheet to help position the Company to meet the expected significant growth in customer demand. However, we are subject to risk and exposure from the evolving macroeconomic, geopolitical and business environment, including the effects of increased global inflationary pressures and interest rates, potential import tariffs, potential economic slowdowns or recessions, the prospect of a shutdown of the
Use of Non-GAAP Financial Measures
In addition to financial results determined in accordance with
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 to 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 income (loss) attributable to Stem before depreciation and amortization, including amortization of internally developed software, net interest expense, further adjusted to exclude stock-based compensation and other income and expense items, including gain (loss) on the extinguishment of debt, revenue constraint, reduction in revenue, excess supplier costs and resulting liquidated damages, change in fair value of derivative liability, transaction and acquisition-related charges, litigation settlement, restructuring costs, 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 may exclude when calculating adjusted EBITDA.
We define non-GAAP gross profit as gross profit excluding amortization of capitalized software, impairments related to decommissioning of end-of-life systems, excess supplier costs and resulting liquidated damages, reduction in revenue, and including revenue constraint. Non-GAAP gross margin is defined as non-GAAP gross profit as a percentage of revenue.
The Company generally records the full purchase order value as revenue at the time of hardware delivery; however, for certain non-cancelable purchase orders entered into during the first quarter of 2023, the final settlement amount payable to the Company is variable and indexed to the price per ton of lithium carbonate in the first quarter of 2024 such that the Company may increase or decrease the final prices in such purchase orders based on the price per ton of lithium carbonate at final settlement. Lithium carbonate is a key raw material used in the production of hardware systems that the Company ultimately sells to customers. The total dollar amount of such purchase orders for the indexed contracts is approximately
In the fourth quarter of 2023, we incurred costs of
In certain customer contracts, the Company previously agreed to provide a guarantee that the value of purchased hardware will not decline for a certain period of time. Under this guarantee, if these customers were unable to install or designate the hardware to a specified project within such period of time, the Company would be required to assist the customer in re-marketing the hardware for resale by the customer. The guarantee provided that, in such cases, if the customer resold the hardware for less than the amount initially sold to the customer, the Company would be required to compensate the customer for any shortfall in fair value for the hardware from the initial contract price. The Company accounts for such contractual terms and guarantees as variable consideration at each measurement date. The Company updates its estimate of variable consideration each quarter, including changes in estimates related to such guarantees, for facts or circumstances that have changed from the time of the initial estimate and, as a result, the Company recorded a net revenue reduction of
We do not intend to provide new parent company guarantees in customer contracts going forward. In addition, the Company does not expect that future revenue reductions, if any, as a result of outstanding guarantees will be material.
See 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, February 28, 2024 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/events-and-presentations. The call can also be accessed live over the telephone by dialing (855) 327-6837, or for international callers, (631) 891-4304 and referencing Stem. An audio replay will be available shortly after the call until March 28, 2024, and can be accessed by dialing (844) 512-2921 or for international callers by dialing (412) 317-6671. The passcode for the replay is 10022734. A replay of the webcast will be available on the Company’s website at https://investors.stem.com/overview for 12 months after the call.
About Stem
Stem provides clean energy solutions and services designed to maximize the economic, environmental, and resiliency value of energy assets and portfolios. Stem’s leading AI-driven enterprise software platform, Athena®, enables organizations to deploy and unlock value from clean energy assets at scale. Powerful applications, including AlsoEnergy’s PowerTrack, simplify and optimize asset management and connect an ecosystem of owners, developers, assets, and markets. Stem also offers integrated partner solutions to help improve returns across energy projects, including storage, solar, and EV fleet charging. For more information, visit www.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 performance targets and other forecasts or expectations regarding, or dependent on, our business outlook; our ability to secure sufficient and timely inventory from suppliers; our ability to meet contracted customer demand; our ability to manage our supply chains and distribution channels; our joint ventures, partnerships and other alliances; forecasts or expectations regarding energy transition and global climate change; reduction of greenhouse gas (“GHG”) emissions; 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; our ability to manage our supply chains and distribution channels; the effects of natural disasters and other events beyond our control; the direct or indirect effects on our business of macroeconomic factors and geopolitical instability, such as the ongoing conflict in
Source: Stem, Inc.
STEM, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) |
|||||||
|
December 31,
|
|
December 31,
|
||||
ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
105,375 |
|
|
$ |
87,903 |
|
Short-term investments |
|
8,219 |
|
|
|
162,074 |
|
Accounts receivable, net of allowances of |
|
302,848 |
|
|
|
223,219 |
|
Inventory, net |
|
26,665 |
|
|
|
8,374 |
|
Deferred costs with suppliers |
|
20,555 |
|
|
|
43,159 |
|
Other current assets (includes |
|
9,303 |
|
|
|
8,026 |
|
Total current assets |
|
472,965 |
|
|
|
532,755 |
|
Energy storage systems, net |
|
74,418 |
|
|
|
90,757 |
|
Contract origination costs, net |
|
11,119 |
|
|
|
11,697 |
|
Goodwill |
|
547,205 |
|
|
|
546,649 |
|
Intangible assets, net |
|
157,146 |
|
|
|
162,265 |
|
Operating lease right-of-use assets |
|
12,255 |
|
|
|
12,431 |
|
Other noncurrent assets |
|
81,869 |
|
|
|
65,339 |
|
Total assets |
$ |
1,356,977 |
|
|
$ |
1,421,893 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
78,277 |
|
|
$ |
83,831 |
|
Accrued liabilities |
|
76,873 |
|
|
|
85,258 |
|
Accrued payroll |
|
14,372 |
|
|
|
12,466 |
|
Financing obligation, current portion |
|
14,835 |
|
|
|
15,720 |
|
Deferred revenue, current portion |
|
53,997 |
|
|
|
64,311 |
|
Other current liabilities (includes |
|
12,726 |
|
|
|
5,412 |
|
Total current liabilities |
|
251,080 |
|
|
|
266,998 |
|
Deferred revenue, noncurrent |
|
88,650 |
|
|
|
73,763 |
|
Asset retirement obligation |
|
4,052 |
|
|
|
4,262 |
|
Notes payable, noncurrent |
|
— |
|
|
|
1,603 |
|
Convertible notes, noncurrent |
|
523,633 |
|
|
|
447,909 |
|
Financing obligation, noncurrent |
|
52,010 |
|
|
|
63,867 |
|
Lease liabilities, noncurrent |
|
10,455 |
|
|
|
10,962 |
|
Other liabilities |
|
416 |
|
|
|
362 |
|
Total liabilities |
|
930,296 |
|
|
|
869,726 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ equity: |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
16 |
|
|
|
15 |
|
Additional paid-in capital |
|
1,198,716 |
|
|
|
1,185,364 |
|
Accumulated other comprehensive loss |
|
(42 |
) |
|
|
(1,672 |
) |
Accumulated deficit |
|
(772,494 |
) |
|
|
(632,081 |
) |
Total Stem's stockholders’ equity |
|
426,196 |
|
|
|
551,626 |
|
Non-controlling interests |
|
485 |
|
|
|
541 |
|
Total stockholders’ equity |
|
426,681 |
|
|
|
552,167 |
|
Total liabilities and stockholders’ equity |
$ |
1,356,977 |
|
|
$ |
1,421,893 |
|
STEM, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) |
|||||||||||
|
Years Ended December 31, |
||||||||||
|
2023 |
|
2022 |
|
2021 |
||||||
Revenue |
|
|
|
|
|
||||||
Services and other revenue |
$ |
62,548 |
|
|
$ |
52,143 |
|
|
$ |
20,463 |
|
Hardware revenue |
|
398,967 |
|
|
|
310,837 |
|
|
|
106,908 |
|
Total revenue |
|
461,515 |
|
|
|
362,980 |
|
|
|
127,371 |
|
Cost of revenue |
|
|
|
|
|
||||||
Cost of services and other revenue |
|
50,298 |
|
|
|
43,153 |
|
|
|
28,177 |
|
Cost of hardware revenue |
|
407,552 |
|
|
|
286,735 |
|
|
|
97,947 |
|
Total cost of revenue |
|
457,850 |
|
|
|
329,888 |
|
|
|
126,124 |
|
Gross profit |
|
3,665 |
|
|
|
33,092 |
|
|
|
1,247 |
|
Operating expenses |
|
|
|
|
|
||||||
Sales and marketing |
|
51,556 |
|
|
|
48,882 |
|
|
|
19,950 |
|
Research and development |
|
56,508 |
|
|
|
38,303 |
|
|
|
22,723 |
|
General and administrative |
|
74,915 |
|
|
|
77,028 |
|
|
|
41,648 |
|
Total operating expenses |
|
182,979 |
|
|
|
164,213 |
|
|
|
84,321 |
|
Loss from operations |
|
(179,314 |
) |
|
|
(131,121 |
) |
|
|
(83,074 |
) |
Other income (expense), net |
|
|
|
|
|
||||||
Interest expense, net |
|
(14,977 |
) |
|
|
(10,468 |
) |
|
|
(17,395 |
) |
Gain (loss) on extinguishment of debt, net |
|
59,121 |
|
|
|
— |
|
|
|
(5,064 |
) |
Change in fair value of derivative liability |
|
(7,731 |
) |
|
|
— |
|
|
|
— |
|
Change in fair value of warrants and embedded derivatives |
|
— |
|
|
|
— |
|
|
|
3,424 |
|
Other income, net |
|
2,921 |
|
|
|
2,374 |
|
|
|
898 |
|
Total other income (expense), net |
|
39,334 |
|
|
|
(8,094 |
) |
|
|
(18,137 |
) |
Loss before (provision for) benefit from income taxes |
|
(139,980 |
) |
|
|
(139,215 |
) |
|
|
(101,211 |
) |
(Provision for) benefit from income taxes |
|
(433 |
) |
|
|
15,161 |
|
|
|
— |
|
Net loss |
$ |
(140,413 |
) |
|
$ |
(124,054 |
) |
|
$ |
(101,211 |
) |
|
|
|
|
|
|
||||||
Net loss per share attributable to Stem common shareholders, basic and diluted |
$ |
(0.90 |
) |
|
$ |
(0.81 |
) |
|
$ |
(0.96 |
) |
|
|
|
|
|
|
||||||
Weighted-average shares used in computing net loss per share to Stem common shareholders, basic and diluted |
|
155,583,957 |
|
|
|
153,413,743 |
|
|
|
105,561,139 |
|
STEM, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) |
|||||||||||
|
Years Ended December 31, |
||||||||||
|
2023 |
|
2022 |
|
2021 |
||||||
OPERATING ACTIVITIES |
|
|
|
|
|
||||||
Net loss |
$ |
(140,413 |
) |
|
$ |
(124,054 |
) |
|
$ |
(101,211 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
||||||
Depreciation and amortization expense |
|
46,275 |
|
|
|
45,434 |
|
|
|
24,473 |
|
Non-cash interest expense, including interest expenses associated with debt issuance costs |
|
2,602 |
|
|
|
1,901 |
|
|
|
9,648 |
|
Stock-based compensation |
|
45,109 |
|
|
|
28,661 |
|
|
|
13,546 |
|
Change in fair value of derivative liability |
|
7,731 |
|
|
|
— |
|
|
|
— |
|
Change in fair value of warrant liability and embedded derivative |
|
— |
|
|
|
— |
|
|
|
(3,424 |
) |
Non-cash lease expense |
|
2,928 |
|
|
|
2,328 |
|
|
|
896 |
|
Accretion of asset retirement obligations |
|
234 |
|
|
|
243 |
|
|
|
229 |
|
Impairment loss of energy storage systems |
|
4,683 |
|
|
|
2,571 |
|
|
|
4,320 |
|
Loss on disposal of property, plant and equipment |
|
— |
|
|
|
276 |
|
|
|
— |
|
Impairment loss of project assets |
|
176 |
|
|
|
502 |
|
|
|
— |
|
Issuance of warrants for services |
|
— |
|
|
|
— |
|
|
|
9,183 |
|
Net (accretion of discount) amortization of premium on investments |
|
(1,755 |
) |
|
|
(123 |
) |
|
|
664 |
|
Income tax benefit from release of valuation allowance |
|
(335 |
) |
|
|
(15,100 |
) |
|
|
— |
|
Provision for accounts receivable allowance |
|
1,447 |
|
|
|
3,590 |
|
|
|
— |
|
Net loss on investments |
|
1,561 |
|
|
|
— |
|
|
|
— |
|
Gain on extinguishment of debt, net |
|
(59,121 |
) |
|
|
— |
|
|
|
— |
|
Other |
|
(949 |
) |
|
|
3 |
|
|
|
(50 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
||||||
Accounts receivable |
|
(80,887 |
) |
|
|
(155,817 |
) |
|
|
(48,125 |
) |
Inventory |
|
(18,291 |
) |
|
|
18,606 |
|
|
|
(1,877 |
) |
Deferred costs with suppliers |
|
30,322 |
|
|
|
(37,134 |
) |
|
|
(7,540 |
) |
Other assets |
|
(18,036 |
) |
|
|
(29,420 |
) |
|
|
(17,243 |
) |
Contract origination costs, net |
|
(5,924 |
) |
|
|
(9,612 |
) |
|
|
(2,622 |
) |
Project assets |
|
(5,392 |
) |
|
|
(3,711 |
) |
|
|
— |
|
Accounts payable |
|
(5,241 |
) |
|
|
53,260 |
|
|
|
16,329 |
|
Accrued expense and other liabilities |
|
(15,762 |
) |
|
|
62,210 |
|
|
|
17,007 |
|
Deferred revenue |
|
4,573 |
|
|
|
51,005 |
|
|
|
(14,967 |
) |
Operating lease liabilities, net |
|
(2,912 |
) |
|
|
(1,649 |
) |
|
|
(502 |
) |
Net cash used in operating activities |
|
(207,377 |
) |
|
|
(106,030 |
) |
|
|
(101,266 |
) |
INVESTING ACTIVITIES |
|
|
|
|
|
||||||
Acquisitions, net of cash acquired |
|
(1,847 |
) |
|
|
(533,009 |
) |
|
|
— |
|
Purchase of available-for-sale investments |
|
(60,002 |
) |
|
|
(220,640 |
) |
|
|
(189,858 |
) |
Proceeds from maturities of available-for-sale investments |
|
141,810 |
|
|
|
219,264 |
|
|
|
— |
|
Proceeds from sales of available-for-sale investments |
|
73,917 |
|
|
|
10,930 |
|
|
|
16,011 |
|
Purchase of energy storage systems |
|
(2,634 |
) |
|
|
(2,606 |
) |
|
|
(3,604 |
) |
Capital expenditures on internally-developed software |
|
(14,097 |
) |
|
|
(16,767 |
) |
|
|
(5,970 |
) |
Distribution from (purchase of) equity method investment |
|
85 |
|
|
|
(50 |
) |
|
|
(1,212 |
) |
Purchase of property and equipment |
|
(1,505 |
) |
|
|
(1,495 |
) |
|
|
(600 |
) |
Net cash provided by (used in) investing activities |
|
135,727 |
|
|
|
(544,373 |
) |
|
|
(185,233 |
) |
FINANCING ACTIVITIES |
|
|
|
|
|
||||||
Proceeds from exercise of stock options |
|
276 |
|
|
|
1,276 |
|
|
|
148,532 |
|
Payments for taxes related to net share settlement of stock options |
|
— |
|
|
|
(2,302 |
) |
|
|
(12,622 |
) |
Net contributions from Merger and PIPE financing, net of transaction costs of |
|
— |
|
|
|
— |
|
|
|
550,322 |
|
Proceeds from financing obligations |
|
— |
|
|
|
1,519 |
|
|
|
7,839 |
|
Repayment of financing obligations |
|
(12,686 |
) |
|
|
(10,306 |
) |
|
|
(9,587 |
) |
Proceeds from issuance of convertible notes, net of issuance costs of |
|
232,399 |
|
|
|
— |
|
|
|
446,827 |
|
Repayment of convertible notes |
|
(99,754 |
) |
|
|
— |
|
|
|
— |
|
Purchase of capped call options |
|
(27,840 |
) |
|
|
— |
|
|
|
(66,700 |
) |
Proceeds from issuance of notes payable, net of issuance costs of |
|
— |
|
|
|
— |
|
|
|
3,930 |
|
(Redemption of) investment from non-controlling interests |
|
(56 |
) |
|
|
541 |
|
|
|
— |
|
Repayment of notes payable |
|
(2,101 |
) |
|
|
— |
|
|
|
(41,446 |
) |
Net cash provided by (used in) financing activities |
|
90,238 |
|
|
|
(9,272 |
) |
|
|
1,027,095 |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
(16 |
) |
|
|
(202 |
) |
|
|
242 |
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
18,572 |
|
|
|
(659,877 |
) |
|
|
740,838 |
|
Cash, cash equivalents and restricted cash, beginning of year |
|
87,903 |
|
|
|
747,780 |
|
|
|
6,942 |
|
Cash, cash equivalents and restricted cash, end of period |
$ |
106,475 |
|
|
$ |
87,903 |
|
|
$ |
747,780 |
|
STEM, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
The following table provides a reconciliation of adjusted EBITDA to net loss:
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
|
(in thousands) |
|
(in thousands) |
||||||||||||
Net loss |
$ |
(37,685 |
) |
|
$ |
(35,273 |
) |
|
$ |
(140,413 |
) |
|
$ |
(124,054 |
) |
Adjusted to exclude the following: |
|
|
|
|
|
|
|
||||||||
Depreciation and amortization (1) |
|
15,036 |
|
|
|
15,430 |
|
|
|
51,134 |
|
|
|
48,783 |
|
Interest expense, net |
|
4,892 |
|
|
|
2,039 |
|
|
|
14,977 |
|
|
|
10,468 |
|
Gain on extinguishment of debt, net |
|
— |
|
|
|
— |
|
|
|
(59,121 |
) |
|
|
— |
|
Stock-based compensation |
|
16,789 |
|
|
|
8,251 |
|
|
|
45,109 |
|
|
|
28,661 |
|
Revenue constraint (2) |
|
— |
|
|
|
— |
|
|
|
10,200 |
|
|
|
— |
|
Revenue reduction, net (3) |
|
(2,326 |
) |
|
|
— |
|
|
|
35,051 |
|
|
|
— |
|
Excess supplier costs and resulting liquidated damages (4) |
|
7,554 |
|
|
|
— |
|
|
|
7,554 |
|
|
|
— |
|
Change in fair value of derivative liability |
|
— |
|
|
|
— |
|
|
|
7,731 |
|
|
|
— |
|
Transaction costs in connection with business combination |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,068 |
|
Litigation settlement |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(727 |
) |
Provision for (benefit from) income taxes |
|
79 |
|
|
|
40 |
|
|
|
433 |
|
|
|
(15,161 |
) |
Other expenses (5) |
|
277 |
|
|
|
— |
|
|
|
7,889 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
4,616 |
|
|
$ |
(9,513 |
) |
|
$ |
(19,456 |
) |
|
$ |
(45,962 |
) |
Adjusted EBITDA, as used in the Company's full year 2024 guidance, is a non-GAAP financial measure that excludes or has otherwise been adjusted for items impacting comparability. The Company is unable to reconcile projected adjusted EBITDA to net income (loss), its most directly comparable forward-looking GAAP financial measure, without unreasonable effort, because the Company is unable to predict with a reasonable degree of certainty its change in stock-based compensation expense, depreciation and amortization expense, revenue constraint and other items that may affect net loss. The unavailable information could have a significant effect on the Company’s full year 2024 GAAP financial results.
(1) Depreciation and amortization include depreciation and amortization expense, impairment loss of energy storage systems, and impairment loss of project assets.
(2) Refer to the discussion of revenue constraint in the definition of non-GAAP gross profit provided above.
(3) Refer to the discussion of reduction in revenue in the definition of non-GAAP gross profit provided above.
(4) Refer to the discussion of excess supplier costs and resulting liquidation damages in the table provided below.
(5) Adjusted EBITDA for the year ended December 31, 2023 reflects other expenses of
The following table provides a reconciliation of non-GAAP gross profit and margin to GAAP gross profit and margin ($ in millions, except for percentages):
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Revenue |
$ |
167.4 |
|
|
$ |
155.5 |
|
|
$ |
461.5 |
|
|
$ |
363.0 |
|
Cost of revenue |
|
(156.4 |
) |
|
|
(142.9 |
) |
|
|
(457.9 |
) |
|
|
(329.9 |
) |
GAAP gross profit ($) |
$ |
11.0 |
|
|
$ |
12.6 |
|
|
$ |
3.6 |
|
|
$ |
33.1 |
|
GAAP gross margin (%) |
|
7 |
% |
|
|
8 |
% |
|
|
1 |
% |
|
|
9 |
% |
|
|
|
|
|
|
|
|
||||||||
Non-GAAP gross profit |
|
|
|
|
|
|
|
||||||||
GAAP Revenue |
$ |
167.4 |
|
|
$ |
155.5 |
|
|
$ |
461.5 |
|
|
$ |
363.0 |
|
Add: Revenue constraint (1) |
|
— |
|
|
|
— |
|
|
|
10.2 |
|
|
|
— |
|
Add: Revenue reduction, net (2) |
|
(2.3 |
) |
|
|
— |
|
|
|
35.1 |
|
|
|
— |
|
Add: Liquidated damages (3) |
|
4.8 |
|
|
|
— |
|
|
|
4.8 |
|
|
|
— |
|
Subtotal |
|
169.9 |
|
|
|
155.5 |
|
|
|
511.6 |
|
|
|
363.0 |
|
Less: Cost of revenue |
|
(156.4 |
) |
|
|
(142.9 |
) |
|
|
(457.9 |
) |
|
|
(329.9 |
) |
Add: Amortization of capitalized software & developed technology |
|
3.7 |
|
|
|
3.1 |
|
|
|
13.5 |
|
|
|
10.7 |
|
Add: Impairments |
|
2.3 |
|
|
|
1.3 |
|
|
|
5.2 |
|
|
|
3.5 |
|
Add: Excess supplier costs (3) |
|
2.7 |
|
|
|
— |
|
|
|
2.7 |
|
|
|
— |
|
Non-GAAP gross profit ($) |
$ |
22.2 |
|
|
$ |
17.0 |
|
|
$ |
75.1 |
|
|
$ |
47.3 |
|
Non-GAAP gross margin (%) |
|
13 |
% |
|
|
11 |
% |
|
|
15 |
% |
|
|
13 |
% |
Non-GAAP gross margin as used in the Company's full year 2024 guidance, is a non-GAAP financial measure that excludes or has otherwise been adjusted for items impacting comparability. The Company is unable to reconcile projected non-GAAP gross margin to GAAP gross margin, its most directly comparable forward-looking GAAP financial measure, without unreasonable efforts, because the Company is currently unable to predict with a reasonable degree of certainty its change in amortization of capitalized software, impairments, and other items that may affect GAAP gross margin. The unavailable information could have a significant effect on the Company’s full year 2024 GAAP financial results.
(1) Refer to the discussion of revenue constraint in the definition of non-GAAP gross profit provided above.
(2) Refer to the discussion of reduction in revenue in the definition of non-GAAP gross profit provided above.
(3) Refer to the discussion of excess supplier costs and resulting liquidated damages in the definition of non-GAAP gross profit provided above.
Key Definitions: |
|
Item |
Definition |
Bookings |
Total value of executed customer agreements, as of the end of the relevant period (e.g. quarterly bookings or annual bookings)
|
Contracted Backlog |
Total value of bookings in dollars, as of a specific date
|
Contracted Assets Under Management (“AUM”) |
Total GWh of storage systems in operation or under contract |
Solar Monitoring AUM |
Total GW of solar systems in operation or under contract |
Contracted Annual Recurring Revenue (CARR) |
Annual run rate for all executed software services contracts, including contracts signed in the applicable period for systems that are not yet commissioned or operating |
Project Services |
Professional services and revenue tied to Development Company investments |
Operating Cash Flow |
Net cash provided by (used in) operating activities. Does not represent the change in balance sheet cash which will be further impacted by investing and financing activities. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240227398694/en/
Stem Investor Contacts
Ted Durbin, Stem
Marc Silverberg, ICR
IR@stem.com
Stem Media Contacts
Suraya Akbarzad, Stem
press@stem.com
Source: Stem, Inc.
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