Stem Announces Second Quarter 2023 Results
- Strong Q2 revenue and net income growth
- Record high contracted backlog and CARR growth
- None.
Strong Second Quarter Revenue of
Ameresco (313 MWh) and
Technology Leadership Further Recognized By Third-Party Awards
Reaffirm Full-Year 2023 Financial and Operating Guidance
Second Quarter 2023 Financial and Operating Highlights
Financial Highlights
-
Revenue of
$93.0 million $66.9 million 39% ) in Q2 2022 -
GAAP gross margin of
13% , up from12% in Q2 2022 -
Non-GAAP gross margin of
18% , up from17% in Q2 2022 -
Net income of
$19.1 million $32.0 million -
Adjusted EBITDA of
$(9.5) million $(11.1) million -
Ended Q2 with
$138.2 million
Operating Highlights
-
Bookings of
$236.4 million $225.7 million 5% ) in Q2 2022 -
Record contracted backlog of
$1.36 billion $726.6 million 88% ) at end of Q2 2022 -
Record contracted storage assets under management (“AUM”) of 3.8 gigawatt hours (“GWh”) at end of Q2 2023, up from 3.5 GWh (+
9% ) at end of Q1 2023 -
Solar monitoring AUM of 26.0 gigawatts (“GW”), up from 25.6 GW (+
2% ) at the end of Q1 2023, highlighted by 304 MW Hungary project -
Contracted annual recurring revenue (“CARR”) of
$74.9 million $57.6 million 30% ) at end of Q2 2022, and sequentially up from$71.5 million 5% ) versus Q1 2023
John Carrington, Chief Executive Officer of Stem, commented, “We continued our strong execution in the second quarter, with revenue above the midpoint of our guidance range, and margins in-line with our expectations. CARR grew
“Our technology leadership was independently recognized again this quarter with awards from AI Breakthrough and Environment + Energy Leader, a testament to our culture of innovation, as well as our advanced AI and machine learning capabilities that deliver customer value, in addition to energy and environmental benefits. Our financial results reflected this strong and expanding differentiation, with
“Given our strong performance in the first half of the year and visibility from our backlog, we reaffirm our full-year 2023 guidance across all of our key metrics, and our continued expectation that we will achieve positive adjusted EBITDA in the second half of 2023.”
Key Financial Results and Operating Metrics |
||||||||||||||||
(in $ millions unless otherwise noted): |
||||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
Key Financial Results |
|
|
|
|
|
|
|
|||||||||
Revenue |
$ |
93.0 |
|
|
$ |
66.9 |
|
|
$ |
160.4 |
|
|
$ |
108.0 |
|
|
GAAP Gross Profit |
$ |
11.9 |
|
|
$ |
7.7 |
|
|
$ |
12.9 |
|
|
$ |
11.4 |
|
|
GAAP Gross Margin (%) |
|
13 |
% |
|
|
12 |
% |
|
|
8 |
% |
|
|
11 |
% |
|
Non-GAAP Gross Profit* |
$ |
16.4 |
|
|
$ |
11.3 |
|
|
$ |
31.5 |
|
|
$ |
17.9 |
|
|
Non-GAAP Gross Margin (%)* |
|
18 |
% |
|
|
17 |
% |
|
|
18 |
% |
|
|
17 |
% |
|
Net Income (Loss) |
$ |
19.1 |
|
|
$ |
(32.0 |
) |
|
$ |
(25.7 |
) |
|
$ |
(54.5 |
) |
|
Adjusted EBITDA* |
$ |
(9.5 |
) |
|
$ |
(11.1 |
) |
|
$ |
(23.2 |
) |
|
$ |
(23.9 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Key Operating Metrics |
|
|
|
|
|
|
|
|||||||||
Bookings |
$ |
236.4 |
|
|
$ |
225.7 |
|
|
$ |
599.9 |
|
|
$ |
376.5 |
|
|
Contracted Backlog** |
$ |
1,364.3 |
|
|
$ |
726.6 |
|
|
$ |
1,364.3 |
|
|
$ |
726.6 |
|
|
Contracted Storage AUM (in GWh)(1)** |
|
3.8 |
|
|
|
2.4 |
|
|
|
3.8 |
|
|
|
2.4 |
|
|
Solar Monitoring AUM (in GW)** |
|
26.0 |
|
|
|
32.1 |
|
|
|
26.0 |
|
|
|
32.1 |
|
|
CARR** |
$ |
74.9 |
|
|
|
57.6 |
|
|
|
74.9 |
|
|
|
57.6 |
|
|
(1) Contracted storage AUM as of June 30, 2022 has been adjusted from 2.1 GWh, as previously disclosed, to 2.4 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. 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. |
Second Quarter 2023 Financial and Operating Results
Financial Results
Revenue increased
GAAP gross profit was
Non-GAAP gross profit was
Net income was
Adjusted EBITDA was
The Company ended the second quarter of 2023 with
Operating Results
Contracted backlog was
Second quarter 2023 contracted storage AUM increased
Second quarter 2023 solar monitoring AUM increased
Second quarter 2023 CARR increased to
The following table provides a summary of backlog at the end of the second quarter of 2023, compared to backlog at the end of the first quarter of 2023 ($ in millions):
End of 1Q23 |
$ |
1,242.6 |
|
|
Add: Bookings |
$ |
236.4 |
|
|
Less: Hardware revenue |
$ |
(76.6 |
) |
|
Software/services adjustments |
$ |
(14.5 |
) |
|
Amendments/other |
$ |
(23.6 |
) |
|
End of 2Q23 |
$ |
1,364.3 |
|
Some Factors Affecting our Business and Operations
The Company 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
Recent Business Highlights
The Company is announcing that it has entered into an agreement for a new 313 MWh, multiple site battery storage project with Ameresco. Stem will provide battery storage hardware, system design support, and Athena® software to the project. Athena will enable one of the fastest growing electric cooperatives in the nation to dispatch the battery into system peaks to minimize costs and maximize efficiency. The project is expected to begin service in 2024.
On July 19, 2023, the Company announced that its Athena platform received the Top Product of the Year Award in the Environment + Energy Leader Awards program. The program aims to commend excellence in products and projects that deliver significant energy and environmental benefits.
On July 6, 2023, the Company announced that its award-winning solar monitoring and optimization solutions are now commercially operational as part of Hungary’s largest solar power plant, Mezőcsát. Athena, Stem’s AI clean energy platform, includes AlsoEnergy’s PowerTrack and PowerManager Control Solutions (PMCS), which are designed to help the 304 MW (DC) power plant reduce Hungary’s reliance on natural gas and increase the amount of electricity generated from alternative energy sources. The facility is the largest contiguous solar park in
On June 21, 2023, the Company announced that its Athena platform was selected as winner of the “Best Predictive Analytics Platform” award in the sixth annual AI Breakthrough Awards program, recognizing Athena as a leading innovative software solution driving the clean energy transition. The mission of the AI Breakthrough Awards is to honor excellence and recognize innovation, hard work and success in a range of AI and machine learning related categories.
Outlook
The Company is reaffirming its full-year 2023 guidance ranges as follows ($ millions, unless otherwise noted):
|
|
|
Revenue |
|
|
|
|
|
Non-GAAP Gross Margin (%) |
|
|
|
|
|
Adjusted EBITDA |
|
|
|
|
|
Bookings |
|
|
|
|
|
CARR (year-end) |
|
See the section below titled “Reconciliations of Non-GAAP Financial Measures” for information regarding why we are unable to reconcile Non-GAAP gross margin and adjusted EBITDA guidance to their most comparable financial measures calculated in accordance with GAAP. |
The Company reaffirms full-year 2023 revenue and bookings projected quarterly performance as follows:
Metric |
Q1A |
Q2A |
Q3E |
Q4E |
Revenue |
|
|
|
|
Bookings |
|
|
|
|
Conference Call Information
Stem will hold a conference call to discuss this earnings press release and business outlook on Thursday, August 3, 2023 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 September 3, 2023 and can be accessed by dialing (844) 512-2921 or for international callers by dialing (412) 317-6671. The passcode for the replay is 10022134. A replay of the webcast will be available on the Company’s website at https://investors.stem.com/overview for approximately 12 months after the call.
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, 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 and impairments related to decommissioning of end-of-life systems 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
See the section below entitled “Reconciliations of Non-GAAP Financial Measures.”
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; the expected benefits of the combined Stem/AlsoEnergy company; our ability to secure sufficient and timely inventory from suppliers; our ability to meet contracted customer demand; our ability to manage supply chain issues and manufacturing or delivery delays; 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 the effects of natural disasters and other events beyond our control; our preparedness for future widespread health emergencies (and government and business responses thereto); the ongoing conflict in
Source: Stem, Inc.
STEM, INC. |
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(UNAUDITED) |
||||||||
(in thousands, except share and per share amounts) |
||||||||
|
|
|
|
|||||
|
June 30, 2023 |
|
December 31, 2022 |
|||||
ASSETS |
|
|
|
|||||
Current assets: |
|
|
|
|||||
Cash and cash equivalents |
$ |
75,405 |
|
|
$ |
87,903 |
|
|
Short-term investments |
|
62,769 |
|
|
|
162,074 |
|
|
Accounts receivable, net of allowances of |
|
293,853 |
|
|
|
223,219 |
|
|
Inventory, net |
|
145,523 |
|
|
|
8,374 |
|
|
Deferred costs with suppliers |
|
22,119 |
|
|
|
43,159 |
|
|
Other current assets (includes |
|
13,139 |
|
|
|
8,026 |
|
|
Total current assets |
|
612,808 |
|
|
|
532,755 |
|
|
Energy storage systems, net |
|
84,627 |
|
|
|
90,757 |
|
|
Contract origination costs, net |
|
12,412 |
|
|
|
11,697 |
|
|
Goodwill |
|
547,204 |
|
|
|
546,649 |
|
|
Intangible assets, net |
|
159,472 |
|
|
|
162,265 |
|
|
Operating lease right-of-use assets |
|
13,810 |
|
|
|
12,431 |
|
|
Other noncurrent assets |
|
73,157 |
|
|
|
65,339 |
|
|
Total assets |
$ |
1,503,490 |
|
|
$ |
1,421,893 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|||||
Current liabilities: |
|
|
|
|||||
Accounts payable |
$ |
102,980 |
|
|
$ |
83,831 |
|
|
Accrued liabilities |
|
55,530 |
|
|
|
85,258 |
|
|
Accrued payroll |
|
7,965 |
|
|
|
12,466 |
|
|
Financing obligation, current portion |
|
18,158 |
|
|
|
15,720 |
|
|
Deferred revenue, current portion |
|
115,381 |
|
|
|
64,311 |
|
|
Other current liabilities (includes |
|
7,479 |
|
|
|
5,412 |
|
|
Total current liabilities |
|
307,493 |
|
|
|
266,998 |
|
|
Deferred revenue, noncurrent |
|
78,736 |
|
|
|
73,763 |
|
|
Asset retirement obligation |
|
4,079 |
|
|
|
4,262 |
|
|
Notes payable, noncurrent |
|
— |
|
|
|
1,603 |
|
|
Convertible notes, noncurrent |
|
522,506 |
|
|
|
447,909 |
|
|
Financing obligation, noncurrent |
|
58,895 |
|
|
|
63,867 |
|
|
Lease liabilities, noncurrent |
|
11,874 |
|
|
|
10,962 |
|
|
Other liabilities |
|
563 |
|
|
|
362 |
|
|
Total liabilities |
|
984,146 |
|
|
|
869,726 |
|
|
Commitments and contingencies |
|
|
|
|||||
Stockholders’ equity: |
|
|
|
|||||
Preferred stock, |
|
— |
|
|
|
— |
|
|
Common stock, |
|
16 |
|
|
|
15 |
|
|
Additional paid-in capital |
|
1,176,678 |
|
|
|
1,185,364 |
|
|
Accumulated other comprehensive loss |
|
(88 |
) |
|
|
(1,672 |
) |
|
Accumulated deficit |
|
(657,737 |
) |
|
|
(632,081 |
) |
|
Total Stem’s stockholders’ equity |
|
518,869 |
|
|
|
551,626 |
|
|
Non-controlling interests |
|
475 |
|
|
|
541 |
|
|
Total stockholders’ equity |
|
519,344 |
|
|
|
552,167 |
|
|
Total liabilities and stockholders’ equity |
$ |
1,503,490 |
|
|
$ |
1,421,893 |
|
|
STEM, INC. |
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(UNAUDITED) |
||||||||||||||||
(in thousands, except share and per share amounts) |
||||||||||||||||
|
|
|
|
|||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
Revenue |
|
|
|
|
|
|
|
|||||||||
Services and other revenue |
$ |
16,360 |
|
|
$ |
12,521 |
|
|
$ |
31,033 |
|
|
$ |
22,486 |
|
|
Hardware revenue |
|
76,586 |
|
|
|
54,426 |
|
|
|
129,318 |
|
|
|
85,549 |
|
|
Total revenue |
|
92,946 |
|
|
|
66,947 |
|
|
|
160,351 |
|
|
|
108,035 |
|
|
Cost of revenue |
|
|
|
|
|
|
|
|||||||||
Cost of services and other revenue |
|
11,756 |
|
|
|
10,141 |
|
|
|
23,260 |
|
|
|
18,774 |
|
|
Cost of hardware revenue |
|
69,319 |
|
|
|
49,018 |
|
|
|
124,226 |
|
|
|
77,829 |
|
|
Total cost of revenue |
|
81,075 |
|
|
|
59,159 |
|
|
|
147,486 |
|
|
|
96,603 |
|
|
Gross profit |
|
11,871 |
|
|
|
7,788 |
|
|
|
12,865 |
|
|
|
11,432 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|||||||||
Sales and marketing |
|
13,680 |
|
|
|
12,955 |
|
|
|
26,086 |
|
|
|
22,097 |
|
|
Research and development |
|
14,156 |
|
|
|
8,963 |
|
|
|
27,600 |
|
|
|
17,906 |
|
|
General and administrative |
|
18,904 |
|
|
|
15,693 |
|
|
|
36,701 |
|
|
|
36,205 |
|
|
Total operating expenses |
|
46,740 |
|
|
|
37,611 |
|
|
|
90,387 |
|
|
|
76,208 |
|
|
Loss from operations |
|
(34,869 |
) |
|
|
(29,823 |
) |
|
|
(77,522 |
) |
|
|
(64,776 |
) |
|
Other income (expense), net: |
|
|
|
|
|
|
|
|||||||||
Interest expense, net |
|
(3,903 |
) |
|
|
(2,691 |
) |
|
|
(5,680 |
) |
|
|
(5,909 |
) |
|
Gain on extinguishment of debt, net |
|
59,121 |
|
|
|
— |
|
|
|
59,121 |
|
|
|
— |
|
|
Other (expense) income, net |
|
(736 |
) |
|
|
484 |
|
|
|
(1,175 |
) |
|
|
959 |
|
|
Total other income (expense), net |
|
54,482 |
|
|
|
(2,207 |
) |
|
|
52,266 |
|
|
|
(4,950 |
) |
|
Income (loss) before (provision for) benefit from income taxes |
|
19,613 |
|
|
|
(32,030 |
) |
|
|
(25,256 |
) |
|
|
(69,726 |
) |
|
(Provision for) benefit from income taxes |
|
(491 |
) |
|
|
7 |
|
|
|
(400 |
) |
|
|
15,220 |
|
|
Net income (loss) |
|
19,122 |
|
|
|
(32,023 |
) |
|
|
(25,656 |
) |
|
|
(54,506 |
) |
|
Net loss attributed to non-controlling interests |
|
— |
|
|
|
(4 |
) |
|
|
— |
|
|
|
(4 |
) |
|
Net income (loss) attributable to Stem |
$ |
19,122 |
|
|
$ |
(32,019 |
) |
|
$ |
(25,656 |
) |
|
$ |
(54,502 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) per share attributable to common stockholders, basic |
$ |
0.12 |
|
|
$ |
(0.21 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.36 |
) |
|
Net loss per share attributable to common stockholders, diluted |
$ |
(0.26 |
) |
|
$ |
(0.21 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.36 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Numerator used to compute net income (loss) per share: |
|
|
|
|
|
|
|
|||||||||
Net income (loss) attributable to Stem common stockholders, basic |
$ |
19,122 |
|
|
$ |
(32,019 |
) |
|
$ |
(25,656 |
) |
|
$ |
(54,502 |
) |
|
Net loss attributable to Stem common stockholders, diluted |
$ |
(40,011 |
) |
|
$ |
(32,019 |
) |
|
$ |
(25,656 |
) |
|
$ |
(54,502 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
Weighted-average shares used in computing net income (loss) per share to common stockholders, basic |
|
155,619,179 |
|
|
|
154,125,061 |
|
|
|
155,294,475 |
|
|
|
152,318,090 |
|
|
Weighted-average shares used in computing net loss per share to common stockholders, diluted |
|
155,804,953 |
|
|
|
154,125,061 |
|
|
|
155,294,475 |
|
|
|
152,318,090 |
|
|
STEM, INC. |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(UNAUDITED) |
||||||||
(in thousands) |
||||||||
|
|
|||||||
|
Six Months Ended
|
|||||||
|
2023 |
|
2022 |
|||||
OPERATING ACTIVITIES |
|
|
|
|||||
Net loss |
$ |
(25,656 |
) |
|
$ |
(54,506 |
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|||||
Depreciation and amortization expense |
|
22,376 |
|
|
|
20,887 |
|
|
Non-cash interest expense, including interest expenses associated with debt issuance costs |
|
1,586 |
|
|
|
902 |
|
|
Stock-based compensation |
|
17,122 |
|
|
|
12,732 |
|
|
Change in fair value of derivative liability |
|
2,576 |
|
|
|
— |
|
|
Non-cash lease expense |
|
1,406 |
|
|
|
1,131 |
|
|
Accretion of asset retirement obligations |
|
120 |
|
|
|
122 |
|
|
Impairment loss of energy storage systems |
|
2,069 |
|
|
|
919 |
|
|
Impairment loss of project assets |
|
122 |
|
|
|
— |
|
|
Net (accretion of discount) amortization of premium on investments |
|
(1,300 |
) |
|
|
410 |
|
|
Income tax benefit from release of valuation allowance |
|
(335 |
) |
|
|
(15,100 |
) |
|
Provision for accounts receivable allowance |
|
1,734 |
|
|
|
1,010 |
|
|
Net loss on investments |
|
1,561 |
|
|
|
— |
|
|
Gain on extinguishment of debt, net |
|
(59,121 |
) |
|
|
— |
|
|
Other |
|
(680 |
) |
|
|
(34 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
|||||
Accounts receivable |
|
(72,187 |
) |
|
|
(26,123 |
) |
|
Inventory |
|
(137,149 |
) |
|
|
(36,634 |
) |
|
Deferred costs with suppliers |
|
28,759 |
|
|
|
(23,430 |
) |
|
Other assets |
|
(17,816 |
) |
|
|
(28,704 |
) |
|
Contract origination costs, net |
|
(2,256 |
) |
|
|
(3,625 |
) |
|
Project assets |
|
(2,834 |
) |
|
|
— |
|
|
Accounts payable |
|
19,049 |
|
|
|
82,405 |
|
|
Accrued expenses and other liabilities |
|
(35,087 |
) |
|
|
7,006 |
|
|
Deferred revenue |
|
56,043 |
|
|
|
28,471 |
|
|
Lease liabilities |
|
(1,341 |
) |
|
|
(469 |
) |
|
Net cash used in operating activities |
|
(201,239 |
) |
|
|
(32,630 |
) |
|
INVESTING ACTIVITIES |
|
|
|
|||||
Acquisitions, net of cash acquired |
|
(1,847 |
) |
|
|
(533,009 |
) |
|
Purchase of available-for-sale investments |
|
(58,034 |
) |
|
|
(98,922 |
) |
|
Proceeds from maturities of available-for-sale investments |
|
84,750 |
|
|
|
86,623 |
|
|
Proceeds from sales of available-for-sale investments |
|
73,917 |
|
|
|
— |
|
|
Purchase of energy storage systems |
|
(2,640 |
) |
|
|
(232 |
) |
|
Capital expenditures on internally-developed software |
|
(7,388 |
) |
|
|
(8,085 |
) |
|
Purchase of property and equipment |
|
(289 |
) |
|
|
(2,405 |
) |
|
Net cash provided by (used in) investing activities |
|
88,469 |
|
|
|
(556,030 |
) |
|
FINANCING ACTIVITIES |
|
|
|
|||||
Proceeds from exercise of stock options and warrants |
|
229 |
|
|
|
611 |
|
|
Payments for taxes related to net share settlement of stock options |
|
— |
|
|
|
(2,302 |
) |
|
Proceeds from financing obligations |
|
— |
|
|
|
311 |
|
|
Repayment of financing obligations |
|
(2,587 |
) |
|
|
(6,817 |
) |
|
Proceeds from issuance of convertible notes, net of issuance costs of |
|
232,399 |
|
|
|
— |
|
|
Repayment of convertible notes |
|
(99,754 |
) |
|
|
— |
|
|
Purchase of capped call options |
|
(27,840 |
) |
|
|
— |
|
|
(Redemption of) investment from non-controlling interests, net |
|
(67 |
) |
|
|
216 |
|
|
Repayment of notes payable |
|
(2,101 |
) |
|
|
— |
|
|
Net cash provided by (used in) financing activities |
|
100,279 |
|
|
|
(7,981 |
) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
(7 |
) |
|
|
(136 |
) |
|
Net decrease in cash and cash equivalents |
|
(12,498 |
) |
|
|
(596,777 |
) |
|
Cash and cash equivalents, beginning of year |
|
87,903 |
|
|
|
747,780 |
|
|
Cash and cash equivalents, end of period |
$ |
75,405 |
|
|
$ |
151,003 |
|
|
STEM, INC.
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
The following table provides a reconciliation of Adjusted EBITDA to net income (loss):
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
|
(in thousands) |
|
(in thousands) |
|||||||||||||
Net income (loss) attributable to Stem |
$ |
19,122 |
|
|
$ |
(32,019 |
) |
|
$ |
(25,656 |
) |
|
$ |
(54,502 |
) |
|
Adjusted to exclude the following: |
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization (1) |
|
12,609 |
|
|
|
12,910 |
|
|
|
24,567 |
|
|
|
21,806 |
|
|
Interest expense, net |
|
3,903 |
|
|
|
2,691 |
|
|
|
5,680 |
|
|
|
5,909 |
|
|
Gain on extinguishment of debt, net |
|
(59,121 |
) |
|
|
— |
|
|
|
(59,121 |
) |
|
|
— |
|
|
Stock-based compensation |
|
9,920 |
|
|
|
6,467 |
|
|
|
17,122 |
|
|
|
12,732 |
|
|
Revenue constraint (2) |
|
— |
|
|
|
— |
|
|
|
10,200 |
|
|
|
— |
|
|
Change in fair value of derivative liability |
|
2,576 |
|
|
|
— |
|
|
|
2,576 |
|
|
|
— |
|
|
Transaction costs in connection with business combination |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,068 |
|
|
Litigation settlement |
|
— |
|
|
|
(1,127 |
) |
|
|
— |
|
|
|
(727 |
) |
|
Provision for (benefit from) income taxes |
|
491 |
|
|
|
(7 |
) |
|
|
400 |
|
|
|
(15,220 |
) |
|
Other expenses (3) |
|
1,021 |
|
|
|
— |
|
|
|
1,021 |
|
|
|
— |
|
|
Adjusted EBITDA |
$ |
(9,479 |
) |
|
$ |
(11,085 |
) |
|
$ |
(23,211 |
) |
|
$ |
(23,934 |
) |
|
Adjusted EBITDA, as used in the Company's full-year 2023 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 2023 GAAP financial results. |
|
(1) Depreciation and amortization includes 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 profit provided above. |
|
(3) Adjusted EBITDA for both the three and six months ended June 30, 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):
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
Revenue |
$ |
93.0 |
|
|
$ |
66.9 |
|
|
$ |
160.4 |
|
|
$ |
108.0 |
|
|
Cost of revenue |
|
(81.1 |
) |
|
|
(59.2 |
) |
|
|
(147.5 |
) |
|
|
(96.6 |
) |
|
GAAP gross profit |
|
11.9 |
|
|
|
7.7 |
|
|
|
12.9 |
|
|
|
11.4 |
|
|
GAAP gross margin (%) |
|
13 |
% |
|
|
12 |
% |
|
|
8 |
% |
|
|
11 |
% |
|
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP Gross Profit |
|
|
|
|
|
|
|
|||||||||
GAAP Revenue |
$ |
93.0 |
|
|
$ |
66.9 |
|
|
$ |
160.4 |
|
|
$ |
108.0 |
|
|
Add: Revenue constraint (1) |
|
— |
|
|
|
— |
|
|
|
10.2 |
|
|
|
— |
|
|
Subtotal |
|
93.0 |
|
|
|
66.9 |
|
|
|
170.6 |
|
|
|
108.0 |
|
|
Less: Cost of revenue |
|
(81.1 |
) |
|
|
(59.2 |
) |
|
|
(147.5 |
) |
|
|
(96.6 |
) |
|
Add: Amortization of capitalized software & developed technology |
|
3.3 |
|
|
|
2.6 |
|
|
|
6.3 |
|
|
|
4.7 |
|
|
Add: Impairments |
|
1.2 |
|
|
|
1.0 |
|
|
|
2.1 |
|
|
|
1.8 |
|
|
Non-GAAP gross profit |
$ |
16.4 |
|
|
$ |
11.3 |
|
|
$ |
31.5 |
|
|
$ |
17.9 |
|
|
Non-GAAP gross margin (%) |
|
18 |
% |
|
|
17 |
% |
|
|
18 |
% |
|
|
17 |
% |
|
Non-GAAP gross margin as used in the Company's full-year 2023 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 2023 GAAP financial results. |
|
(1) Refer to the discussion of revenue constraint in the definition of non-GAAP profit provided above. |
Key Definitions:
Item |
Definition |
Bookings |
Total value of executed customer agreements, as of the end of the relevant period • Customer contracts are typically executed 6-18 months ahead of installation
• Bookings amount typically includes:
• Market participation revenue is excluded from booking value |
Contracted Backlog |
Total value of bookings in dollars, as of a specific date • Backlog increases as new contracts are executed (bookings) • Backlog decreases as integrated storage systems are delivered and recognized as revenue |
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 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230801465393/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.
