Stem Announces Third Quarter 2024 Results
Stem announced its third-quarter 2024 results, highlighting a 78% year-over-year revenue decline to $29.3 million, primarily due to reduced battery hardware sales and a $5.6 million adjustment for contract guarantees. However, GAAP gross profit improved to $6.2 million from a loss of $20.3 million in 3Q23, with non-GAAP gross margin rising to 46% from 12% in 3Q23. The company reported a net loss of $148.3 million, exacerbated by a $104.1 million bad debt expense. Adjusted EBITDA was $(3.5) million, compared to $(0.9) million in 3Q23. Stem ended the quarter with $75.4 million in cash. Despite lower bookings and a reduced backlog, contracted storage AUM grew 20% year-over-year to 6.0 GWh. The company revised its full-year 2024 guidance, lowering revenue expectations to $135-$155 million and bookings to $100-$500 million while projecting higher non-GAAP gross margins of 32%-36%. Stem's new strategy focuses on software and services to drive higher-margin, predictable revenue.
Stem ha annunciato i risultati del terzo trimestre 2024, evidenziando un declino del fatturato dell'78% su base annua a 29,3 milioni di dollari, principalmente a causa della riduzione delle vendite di hardware per batterie e di un aggiustamento di 5,6 milioni di dollari per garanzie contrattuali. Tuttavia, il profitto lordo GAAP è migliorato a 6,2 milioni di dollari, rispetto a una perdita di 20,3 milioni di dollari nel 3Q23, con un margine lordo non GAAP che è aumentato al 46% rispetto al 12% nel 3Q23. L'azienda ha riportato una perdita netta di 148,3 milioni di dollari, aggravata da una spesa per crediti cattivi di 104,1 milioni di dollari. L'EBITDA rettificato è stato di $(3,5) milioni, rispetto a $(0,9) milioni nel 3Q23. Stem ha chiuso il trimestre con 75,4 milioni di dollari in contanti. Nonostante prenotazioni inferiori e un backlog ridotto, l'AUM di stoccaggio contratto è cresciuto del 20% su base annua, raggiungendo 6,0 GWh. L'azienda ha rivisto le previsioni per l'intero anno 2024, abbassando le aspettative di fatturato a 135-155 milioni di dollari e le prenotazioni a 100-500 milioni di dollari, pur proiettando margini lordi non GAAP più alti del 32%-36%. La nuova strategia di Stem si concentra su software e servizi per guidare un fatturato più prevedibile e con margini più elevati.
Stem anunció sus resultados del tercer trimestre de 2024, destacando un declive en los ingresos del 78% interanual a 29.3 millones de dólares, principalmente debido a la reducción de las ventas de hardware de baterías y un ajuste de 5.6 millones de dólares por garantías contractuales. Sin embargo, el beneficio bruto GAAP mejoró a 6.2 millones de dólares desde una pérdida de 20.3 millones de dólares en el 3T23, con el margen bruto no GAAP aumentando al 46% desde el 12% en el 3T23. La compañía reportó una pérdida neta de 148.3 millones de dólares, exacerbada por un gasto de deudas incobrables de 104.1 millones de dólares. El EBITDA ajustado fue de $(3.5) millones, en comparación con $(0.9) millones en el 3T23. Stem terminó el trimestre con 75.4 millones de dólares en efectivo. A pesar de las reservas más bajas y una reducción en el backlog, el AUM de almacenamiento contratado creció un 20% interanual a 6.0 GWh. La empresa revisó sus expectativas para el año completo 2024, reduciendo las expectativas de ingresos a 135-155 millones de dólares y las reservas a 100-500 millones de dólares, mientras proyectaba márgenes brutos no GAAP más altos del 32%-36%. La nueva estrategia de Stem se centra en software y servicios para impulsar un ingreso más predecible y con márgenes más altos.
Stem은 2024년 3분기 실적을 발표하며 전년 대비 78% 매출 감소를 기록했습니다. 매출은 2,930만 달러로, 주로 배터리 하드웨어 판매 감소와 계약 보증을 위한 560만 달러 조정 때문입니다. 하지만 GAAP 기준 총 이익은 개선되었다고 보고되어 620만 달러로 증가했으며, 3Q23에서 2030만 달러의 손실에서 돌아섰습니다. 비GAAP 총 마진은 3Q23의 12%에서 46%로 상승했습니다. 회사는 1억 4,830만 달러의 순손실을 보고했으며, 이는 1억 4,410만 달러의 부실 채권 비용으로 악화되었습니다. 조정 EBITDA는 350만 달러의 손실을 기록했으며, 3Q23에서 90만 달러의 손실과 비교됩니다. Stem은 분기를 7540만 달러의 현금으로 마감했습니다. 예약 주문이 감소하고 백로그가 줄어든 가운데, 계약된 저장소 AUM은 전년 대비 20% 증가하여 6.0 GWh에 도달했습니다. 회사는 2024년 연간 지침을 수정하여 매출 예상치를 1억 3,500만 달러에서 1억 5,500만 달러로, 예약 주문을 1억 달러에서 5억 달러로 낮추었으며, 비GAAP 총 마진이 32%-36%로 높아질 것으로 예상했습니다. Stem의 새로운 전략은 소프트웨어와 서비스를 중심으로 하여 더 높은 마진의 예측 가능한 수익을 창출하는 데 집중하고 있습니다.
Stem a annoncé ses résultats pour le troisième trimestre 2024, mettant en évidence un décroissance des revenus de 78 % d'une année sur l'autre à 29,3 millions de dollars, principalement en raison de la réduction des ventes de matériel de batteries et d'un ajustement de 5,6 millions de dollars pour les garanties contractuelles. Cependant, le bénéfice brut GAAP s'est amélioré à 6,2 millions de dollars après une perte de 20,3 millions de dollars au 3T23, avec une marge brute non GAAP passant de 12 % à 46 % au 3T23. L'entreprise a signalé une perte nette de 148,3 millions de dollars, aggravée par une charge de créances douteuses de 104,1 millions de dollars. L'EBITDA ajusté était de $(3,5) millions, comparé à $(0,9) millions au 3T23. Stem a terminé le trimestre avec 75,4 millions de dollars en liquidités. Malgré des réservations inférieures et un carnet de commandes réduit, l'AUM de stockage contractuel a augmenté de 20 % d'une année sur l'autre, atteignant 6,0 GWh. L'entreprise a révisé ses prévisions pour l'année entière 2024, abaissant les attentes de revenus à 135-155 millions de dollars et les réservations à 100-500 millions de dollars, tout en projetant des marges brutes non GAAP plus élevées de 32 %-36 %. La nouvelle stratégie de Stem se concentre sur les logiciels et les services pour générer des revenus prévisibles à plus forte marge.
Stem hat seine Ergebnisse für das dritte Quartal 2024 bekannt gegeben und einen Rückgang der Einnahmen von 78 % im Vergleich zum Vorjahr auf 29,3 Millionen Dollar hervorgehoben, was hauptsächlich auf verringerte Verkäufe von Batterietechnologie und eine Anpassung von 5,6 Millionen Dollar für Vertragsgarantien zurückzuführen ist. Dennoch verbesserte sich der GAAP-Bruttogewinn auf 6,2 Millionen Dollar, nachdem er im 3Q23 einen Verlust von 20,3 Millionen Dollar verzeichnete, wobei die nicht GAAP Bruttomarge im 3Q23 von 12 % auf 46 % anstieg. Das Unternehmen meldete einen Nettoverlust von 148,3 Millionen Dollar, verstärkt durch einen Aufwand für zweifelhafte Forderungen in Höhe von 104,1 Millionen Dollar. Das bereinigte EBITDA betrug $(3,5) Millionen im Vergleich zu $(0,9) Millionen im 3Q23. Stem schloss das Quartal mit 75,4 Millionen Dollar in bar ab. Trotz niedrigerer Buchungen und eines reduzierten Auftragsbestands wuchs das verwaltete Vermögen (AUM) für vertraglich gebundenen Speicher um 20 % im Vergleich zum Vorjahr auf 6,0 GWh. Das Unternehmen hat seine Prognose für das Gesamtjahr 2024 überarbeitet und die Umsatzprognose auf 135-155 Millionen Dollar sowie die Buchungsprognose auf 100-500 Millionen Dollar gesenkt, wobei eine höhere nicht GAAP Bruttomarge von 32 %-36 % projiziert wird. Die neue Strategie von Stem konzentriert sich auf Software und Dienstleistungen, um ein profitableres und vorhersagbares Einkommen zu generieren.
- GAAP gross profit of $6.2 million, up from $(20.3) million in 3Q23
- Non-GAAP gross margin increased to 46% from 12% in 3Q23
- Contracted storage AUM increased 20% year-over-year to 6.0 GWh
- Revenue decreased 78% year-over-year to $29.3 million
- Net loss of $148.3 million, up from $77.1 million in 3Q23
- Bookings fell to $29.1 million from $676.4 million in 3Q23
- Contracted backlog down 17% year-over-year to $1.55 billion
- Adjusted EBITDA of $(3.5) million, compared to $(0.9) million in 3Q23
- Cash and cash equivalents decreased to $75.4 million from $89.6 million in 2Q24
- Full-year revenue guidance revised down to $135-$155 million from $200-$270 million
- Bad debt expense of $104.1 million impacting net income
Insights
The Q3 results reveal significant challenges with revenue dropping 78% YoY to
The revised 2024 guidance shows substantial downward adjustments, with revenue forecast cut to
The strategic shift to a software and services-centric model marks a important transition, but the
The company's move away from hardware-centric business could improve predictability but may face challenges in scaling software revenue quickly enough to offset hardware declines. The operating cash flow guidance revision to
New Strategy Implementation in Progress
Increased ARR by more than
Revising Full Year 2024 Guidance for Several Key Metrics
Third Quarter 2024 Financial and Operating Highlights
Financial Highlights
-
Revenue of
$29.3 million $133.7 million $5.6 million $37.4 million -
GAAP gross profit of
$6.2 million $(20.3) million -
Non-GAAP gross profit of
$16.2 million $21.4 million -
GAAP gross margin of
21% , up from (15)% in 3Q23 -
Non-GAAP gross margin of
46% , up from12% in 3Q23, reflecting a higher percentage of software and services revenue -
Net loss of
$148.3 million $77.1 million $104.1 million -
Adjusted EBITDA of
$(3.5) million $(0.9) million -
Operating cash flow of
$(9.4) million $(4.0) million -
Ended 3Q24 with
$75.4 million $89.6 million
Operating Highlights
-
Bookings of
$29.1 million $676.4 million -
Contracted backlog of
$1.5 billion 17% from the end of 3Q23, and down2% from the end of 2Q24 -
Contracted storage assets under management (“AUM”) of 6.0 gigawatt hours (“GWh”), up
20% from the end of 3Q23 and up3% from the end of 2Q24 -
Solar monitoring AUM of 28.5 gigawatts (“GW”), up
8% from the end of 3Q23 and up6% from the end of 2Q24 -
Contracted annual recurring revenue (“CARR”) of
$92.3 million 5% from the end of 3Q23, and up2% from the end of 2Q24
“We reported another strong quarter of growth in Annual Recurring Revenue, driven by continued adoption of our industry-leading software,” said David Buzby, Interim Chief Executive Officer of Stem. “Revenue was down significantly due to lower hardware revenue in the quarter. We have begun to implement our new strategy that we announced in early October, which we expect to drive more predictable, scalable growth in software and services revenue and improved profitability in the long-term.”
“Sequential growth in software and services revenue drove strong GAAP gross margins of
“We are adjusting our full year 2024 guidance for several key metrics to account for our latest financial results, ongoing implementation of our new strategy and continued expectation of project delays, which continue to negatively impact our results including revenue, bookings and cash flow,” said Mr. Hole. “We are also taking actions to right-size our operating costs to conserve cash and align with our new strategy. We are confident that the changes we are making will position the Company to drive faster, more predictable growth in high-margin revenue streams, and improved profitability in the long-term.”
____________________
1 See the section below entitled “Some Factors Affecting our Business and Operations.” Adjusted EBITDA and non-GAAP gross profit and margin percentage for the quarter have been adjusted to exclude the impact of the
Key Financial Results and Operating Metrics (in $ millions unless otherwise noted): |
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2024 |
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2023 |
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|
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2024 |
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|
|
2023 |
|
Key Financial Results(1) |
|
|
|
|
|
|
|
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Revenue |
$ |
29.3 |
|
|
$ |
133.7 |
|
|
$ |
88.8 |
|
|
$ |
294.1 |
|
GAAP Gross Profit (Loss) |
$ |
6.2 |
|
|
$ |
(20.3 |
) |
|
$ |
(8.6 |
) |
|
$ |
(7.4 |
) |
GAAP Gross Margin (%) |
|
21 |
% |
|
|
(15 |
)% |
|
|
(10 |
)% |
|
|
(3 |
)% |
Non-GAAP Gross Profit* |
$ |
16.2 |
|
|
$ |
21.4 |
|
|
$ |
43.5 |
|
|
$ |
52.9 |
|
Non-GAAP Gross Margin (%)* |
|
46 |
% |
|
|
12 |
% |
|
|
34 |
% |
|
|
15 |
% |
Net Loss |
$ |
(148.3 |
) |
|
$ |
(77.1 |
) |
|
$ |
(802.9 |
) |
|
$ |
(102.7 |
) |
Adjusted EBITDA* |
$ |
(3.5 |
) |
|
$ |
(0.9 |
) |
|
$ |
(27.0 |
) |
|
$ |
(24.1 |
) |
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|
|
|
|
|
|
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Key Operating Metrics |
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|
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Bookings |
$ |
29.1 |
|
|
$ |
676.4 |
|
|
$ |
78.3 |
|
|
$ |
1,276.3 |
|
Contracted Backlog** |
$ |
1,547.4 |
|
|
$ |
1,836.6 |
|
|
$ |
1,547.4 |
|
|
$ |
1,836.6 |
|
Contracted Storage AUM (in GWh)** |
|
6.0 |
|
|
|
5.0 |
|
|
|
6.0 |
|
|
|
5.0 |
|
Solar Monitoring AUM (in GW)** |
|
28.5 |
|
|
|
26.3 |
|
|
|
28.5 |
|
|
|
26.3 |
|
CARR** |
$ |
92.3 |
|
|
$ |
87.5 |
|
|
$ |
92.3 |
|
|
$ |
87.5 |
|
(1) Revenue, gross profit (loss), and net loss were negatively impacted by a |
*Non-GAAP financial measures. Adjusted EBITDA and non-GAAP gross profit and margin have been adjusted to exclude the impact of the reduction in revenue in the quarter, and adjusted EBITDA has been adjusted to exclude the impact of impairment of accounts receivable related to contracts that provide parent company guarantees, 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. |
Third Quarter 2024 Financial and Operating Results
Financial Results
Revenue decreased
GAAP gross profit (loss) was
Non-GAAP gross profit was
Net loss was
Adjusted EBITDA was
The Company ended the third quarter of 2024 with
Operating Results
Contracted backlog was
Bookings were
Contracted storage AUM increased
CARR increased
The following table provides a summary of backlog at the end of the third quarter of 2024, compared to backlog at the end of the second quarter of 2024 ($ in millions):
| End of 2Q24 | $ |
1,578.5 |
|
||
Add: |
Bookings |
|
29.1 |
|
|
Less: |
Hardware revenue |
|
(13.8 |
) |
|
Software/services activations |
|
(43.2 |
) |
||
Amendments/Cancellations |
|
(3.2 |
) |
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| End of 3Q24 | $ |
1,547.4 |
|
||
Strategy Review Outcome
On October 1, 2024, the Company announced the outcome of its previously announced review of its corporate strategy. The Company expects its new strategic priorities will drive more predictable recurring revenue at significantly higher gross margins than the Company has previously realized and will enable more scalable growth. The new strategy is driven by four key strategic priorities: (1) shift to software and services-centric business to drive predictable, recurring, high-margin revenue, (2) expand and emphasize energy services as a competitive differentiator and enable more predictable revenue, (3) deliver enhanced AI-enabled software and edge device capabilities, and (4) provide hardware procurement advisory services, rather than procure hardware as the primary go-to-market approach. The Company will continue to provide hardware procurement, but only under certain strict profitability and working capital guidelines.
Recent Business Updates
On September 16, 2024, the Company announced that John Carrington stepped down as Chief Executive Officer and as a member of the Board of Directors of the Company (the “Board”), effective immediately. The Board has engaged an executive search firm to conduct a search, which includes internal and external candidates, for a permanent CEO. David Buzby, Executive Chair of the Board, was appointed interim CEO. Mr. Buzby will continue to serve as Executive Chair of the Board.
On October 23, 2024, the Company announced the appointment of Albert Hofeldt, PhD as Stem’s Chief Technology Officer (CTO), effective immediately. Dr. Hofeldt will lead Stem’s efforts to deliver enhanced AI-enabled software and edge device capabilities as part of the company’s recently announced software and services-centric strategy.
Outlook
The Company is updating its full year 2024 guidance ranges to account for the Company’s recent financial results, ongoing implementation of its new strategy and continued expectation of project delays, which continue to negatively impact results, as follows ($ millions, unless otherwise noted):
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Previous |
Updated |
Revenue |
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Non-GAAP Gross Margin (%) |
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Adjusted EBITDA |
( |
( |
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Bookings |
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CARR (year-end) |
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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 is updating its full-year 2024 revenue projected quarterly performance as follows:
|
1QA |
2QA |
3QA |
4QE |
Revenue |
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Some Factors Affecting our Business and Operations
As previously disclosed, the Company entered into certain contractual guarantees in 2022 and 2023 pursuant to which, if a customer were unable to install or designate hardware to a specified project within a specified period of time, the Company would be required to assist the customer in re-marketing the hardware for resale by the customer. Such guarantees provide 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 specified contractual guarantees as variable consideration. The Company reviews its estimate of variable consideration, including changes in estimates related to such guarantees, each quarter for facts or circumstances that have changed from the time of the initial estimate. As previously disclosed, the Company recorded a net revenue reduction of
The Company is 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, and geopolitical pressures, including the armed conflicts between
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 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 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 revenue constraint, reduction in revenue, excess supplier costs, change in fair value of derivative liability, impairment of goodwill, contract termination payment, restructuring costs, impairment of accounts receivable related to customer contracts that provide parent company guarantees, 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, 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
As stated above, 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. The Company accounts for such contractual terms and guarantees as variable consideration at each measurement date. The Company reviews 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.
Additionally, as a result of impairment of accounts receivables related to contracts that provided for a parent company guarantee, the Company recorded a bad debt expense of
Conference Call Information
Stem will hold a conference call to discuss this earnings press release and business outlook on Wednesday, October 30, 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 (844) 825-9789, or for international callers, (412) 317-5180 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 10192999. The replay will be available until Saturday, November 30, 2024. An archive of the webcast will be available shortly after the call on Stem’s website at https://investors.stem.com/overview for 12 months following the call.
About Stem
Stem (NYSE: STEM) is a global leader in AI-enabled software and services that enable its customers to plan, deploy, and operate clean energy assets. The company offers a complete set of solutions that transform how solar and energy storage projects are developed, built, and operated, including an integrated suite of software and edge products, and full lifecycle services from a team of leading experts. More than 16,000 global customers rely on Stem to maximize the value of their clean energy projects and portfolios. 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 performance targets and other forecasts or expectations regarding, or dependent on, our business outlook and strategy; our expectations regarding future estimates of variable consideration in connection with guarantees of certain customer contracts, and the resulting effects on revenue and net income; 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 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; 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 armed conflicts between
Source: Stem, Inc.
STEM, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and per share amounts) |
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|
September 30, 2024 |
|
December 31, 2023 |
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ASSETS |
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
75,364 |
|
|
$ |
105,375 |
|
Short-term investments |
|
— |
|
|
|
8,219 |
|
Accounts receivable, net of allowances of |
|
92,659 |
|
|
|
302,848 |
|
Inventory |
|
33,950 |
|
|
|
26,665 |
|
Deferred costs with suppliers |
|
15,237 |
|
|
|
20,555 |
|
Other current assets |
|
10,320 |
|
|
|
9,303 |
|
Total current assets |
|
227,530 |
|
|
|
472,965 |
|
Energy storage systems, net |
|
63,663 |
|
|
|
74,418 |
|
Contract origination costs, net |
|
9,746 |
|
|
|
11,119 |
|
Goodwill |
|
— |
|
|
|
547,205 |
|
Intangible assets, net |
|
148,183 |
|
|
|
157,146 |
|
Operating lease right-of-use assets |
|
12,065 |
|
|
|
12,255 |
|
Other noncurrent assets |
|
76,648 |
|
|
|
81,869 |
|
Total assets |
$ |
537,835 |
|
|
$ |
1,356,977 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
$ |
47,363 |
|
|
$ |
78,277 |
|
Accrued liabilities |
|
57,648 |
|
|
|
76,873 |
|
Accrued payroll |
|
10,265 |
|
|
|
14,372 |
|
Financing obligation, current portion |
|
15,037 |
|
|
|
14,835 |
|
Deferred revenue, current portion |
|
70,766 |
|
|
|
53,997 |
|
Other current liabilities |
|
5,905 |
|
|
|
12,726 |
|
Total current liabilities |
|
206,984 |
|
|
|
251,080 |
|
Deferred revenue, noncurrent |
|
86,799 |
|
|
|
88,650 |
|
Asset retirement obligation |
|
4,150 |
|
|
|
4,052 |
|
Convertible notes, noncurrent |
|
525,345 |
|
|
|
523,633 |
|
Financing obligation, noncurrent |
|
44,662 |
|
|
|
52,010 |
|
Lease liabilities, noncurrent |
|
12,807 |
|
|
|
10,455 |
|
Other liabilities |
|
643 |
|
|
|
416 |
|
Total liabilities |
|
881,390 |
|
|
|
930,296 |
|
|
|
|
|
||||
Stockholders’ equity (deficit): |
|
|
|
||||
Preferred stock, |
|
— |
|
|
|
— |
|
Common stock, |
|
16 |
|
|
|
16 |
|
Additional paid-in capital |
|
1,230,957 |
|
|
|
1,198,716 |
|
Accumulated other comprehensive income (loss) |
|
302 |
|
|
|
(42 |
) |
Accumulated deficit |
|
(1,575,371 |
) |
|
|
(772,494 |
) |
Total Stem’s stockholders’ equity (deficit) |
|
(344,096 |
) |
|
|
426,196 |
|
Non-controlling interests |
|
541 |
|
|
|
485 |
|
Total stockholders’ equity (deficit) |
|
(343,555 |
) |
|
|
426,681 |
|
Total liabilities and stockholders’ equity (deficit) |
$ |
537,835 |
|
|
$ |
1,356,977 |
|
STEM, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except share and per share amounts) |
|||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenue |
|
|
|
|
|
|
|
||||||||
Services and other revenue |
$ |
22,143 |
|
|
$ |
16,597 |
|
|
$ |
52,086 |
|
|
$ |
47,630 |
|
Hardware revenue |
|
7,148 |
|
|
|
117,143 |
|
|
|
36,673 |
|
|
|
246,461 |
|
Total revenue |
|
29,291 |
|
|
|
133,740 |
|
|
|
88,759 |
|
|
|
294,091 |
|
Cost of revenue |
|
|
|
|
|
|
|
||||||||
Cost of services and other revenue |
|
15,687 |
|
|
|
13,684 |
|
|
|
36,626 |
|
|
|
36,944 |
|
Cost of hardware revenue |
|
7,408 |
|
|
|
140,347 |
|
|
|
60,753 |
|
|
|
264,573 |
|
Total cost of revenue |
|
23,095 |
|
|
|
154,031 |
|
|
|
97,379 |
|
|
|
301,517 |
|
Gross profit (loss) |
|
6,196 |
|
|
|
(20,291 |
) |
|
|
(8,620 |
) |
|
|
(7,426 |
) |
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Sales and marketing |
|
8,216 |
|
|
|
11,605 |
|
|
|
30,286 |
|
|
|
37,691 |
|
Research and development |
|
11,086 |
|
|
|
14,420 |
|
|
|
40,503 |
|
|
|
42,020 |
|
General and administrative |
|
27,212 |
|
|
|
21,955 |
|
|
|
61,618 |
|
|
|
58,656 |
|
Impairment of parent company guarantees |
|
104,134 |
|
|
|
— |
|
|
|
104,134 |
|
|
|
— |
|
Impairment of goodwill |
|
— |
|
|
|
— |
|
|
|
547,152 |
|
|
|
— |
|
Total operating expenses |
|
150,648 |
|
|
|
47,980 |
|
|
|
783,693 |
|
|
|
138,367 |
|
Loss from operations |
|
(144,452 |
) |
|
|
(68,271 |
) |
|
|
(792,313 |
) |
|
|
(145,793 |
) |
Other (expense) income, net: |
|
|
|
|
|
|
|
||||||||
Interest expense |
|
(4,512 |
) |
|
|
(4,405 |
) |
|
|
(13,850 |
) |
|
|
(10,085 |
) |
Gain on extinguishment of debt, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
59,121 |
|
Change in fair value of derivative liability |
|
— |
|
|
|
(5,155 |
) |
|
|
1,477 |
|
|
|
(7,731 |
) |
Other income, net |
|
793 |
|
|
|
713 |
|
|
|
2,153 |
|
|
|
2,114 |
|
Total other (expense) income, net |
|
(3,719 |
) |
|
|
(8,847 |
) |
|
|
(10,220 |
) |
|
|
43,419 |
|
Loss before (provision for) benefit from income taxes |
|
(148,171 |
) |
|
|
(77,118 |
) |
|
|
(802,533 |
) |
|
|
(102,374 |
) |
(Provision for) benefit from income taxes |
|
(129 |
) |
|
|
46 |
|
|
|
(344 |
) |
|
|
(354 |
) |
Net loss |
$ |
(148,300 |
) |
|
$ |
(77,072 |
) |
|
$ |
(802,877 |
) |
|
$ |
(102,728 |
) |
|
|
|
|
|
|
|
|
||||||||
Net loss per share attributable to common stockholders, basic and diluted |
$ |
(0.91 |
) |
|
$ |
(0.49 |
) |
|
$ |
(4.99 |
) |
|
$ |
(0.66 |
) |
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares used in computing net loss per share to common stockholders, basic and diluted |
|
162,633,996 |
|
|
|
155,829,348 |
|
|
|
160,997,019 |
|
|
|
155,474,725 |
|
STEM, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) |
|||||||
|
Nine Months Ended September 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
OPERATING ACTIVITIES |
|
|
|
||||
Net loss |
$ |
(802,877 |
) |
|
$ |
(102,728 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
||||
Depreciation and amortization expense |
|
33,227 |
|
|
|
33,593 |
|
Non-cash interest expense, including interest expenses associated with debt issuance costs |
|
1,565 |
|
|
|
1,969 |
|
Stock-based compensation |
|
21,716 |
|
|
|
28,320 |
|
Change in fair value of derivative liability |
|
(1,477 |
) |
|
|
7,731 |
|
Non-cash lease expense |
|
2,251 |
|
|
|
2,162 |
|
Accretion of asset retirement obligations |
|
177 |
|
|
|
178 |
|
Impairment loss of energy storage systems |
|
357 |
|
|
|
2,347 |
|
Impairment loss of project assets |
|
641 |
|
|
|
158 |
|
Impairment loss of right-of-use assets |
|
2,096 |
|
|
|
— |
|
| Impairment of parent company guarantees | 104,134 |
— |
|||||
Impairment of goodwill |
|
547,152 |
|
|
|
— |
|
Net accretion of discount on investments |
|
(29 |
) |
|
|
(1,672 |
) |
Income tax benefit from release of valuation allowance |
|
— |
|
|
|
(335 |
) |
(Recovery of) provision for credit losses on accounts receivable |
|
(3,229 |
) |
|
|
1,754 |
|
Net loss on investments |
|
— |
|
|
|
1,561 |
|
Gain on extinguishment of debt, net |
|
— |
|
|
|
(59,121 |
) |
Other |
|
(157 |
) |
|
|
(831 |
) |
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
106,920 |
|
|
|
(67,029 |
) |
Inventory |
|
(7,285 |
) |
|
|
(57,282 |
) |
Deferred costs with suppliers |
|
5,318 |
|
|
|
30,579 |
|
Other assets |
|
7,129 |
|
|
|
(17,947 |
) |
Contract origination costs, net |
|
(927 |
) |
|
|
(4,184 |
) |
Project assets |
|
(7,382 |
) |
|
|
(2,827 |
) |
Accounts payable |
|
(30,675 |
) |
|
|
1,771 |
|
Accrued expenses and other liabilities |
|
(19,935 |
) |
|
|
(28,910 |
) |
Deferred revenue |
|
21,531 |
|
|
|
27,630 |
|
Lease liabilities |
|
(2,181 |
) |
|
|
(2,135 |
) |
Net cash used in operating activities |
|
(21,940 |
) |
|
|
(205,248 |
) |
INVESTING ACTIVITIES |
|
|
|
||||
Acquisitions, net of cash acquired |
|
— |
|
|
|
(1,847 |
) |
Purchase of available-for-sale investments |
|
— |
|
|
|
(58,034 |
) |
Proceeds from maturities of available-for-sale investments |
|
8,250 |
|
|
|
119,650 |
|
Proceeds from sales of available-for-sale investments |
|
— |
|
|
|
73,917 |
|
Purchase of energy storage systems |
|
— |
|
|
|
(2,912 |
) |
Capital expenditures on internally-developed software |
|
(8,868 |
) |
|
|
(10,123 |
) |
Purchase of property and equipment |
|
(228 |
) |
|
|
(395 |
) |
Net cash (used in) provided by investing activities |
|
(846 |
) |
|
|
120,256 |
|
FINANCING ACTIVITIES |
|
|
|
||||
Proceeds from exercise of stock options and warrants |
|
— |
|
|
|
257 |
|
Repayment of financing obligations |
|
(6,998 |
) |
|
|
(7,766 |
) |
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 |
) |
Investment from (redemption of) non-controlling interests, net |
|
56 |
|
|
|
(56 |
) |
Repayment of notes payable |
|
— |
|
|
|
(2,101 |
) |
Net cash (used in) provided by financing activities |
|
(6,942 |
) |
|
|
95,139 |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
403 |
|
|
|
114 |
|
Net (decrease) increase in cash, cash equivalents and restricted cash |
|
(29,325 |
) |
|
|
10,261 |
|
Cash, cash equivalents and restricted cash, beginning of year |
|
106,475 |
|
|
|
87,903 |
|
Cash, cash equivalents and restricted cash, end of period |
$ |
77,150 |
|
|
$ |
98,164 |
|
|
|
|
|
||||
RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH WITHIN THE UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS TO THE AMOUNTS SHOWN IN THE STATEMENTS OF CASH FLOWS ABOVE: |
|
|
|
||||
Cash and cash equivalents |
$ |
75,364 |
|
|
$ |
97,064 |
|
Restricted cash included in other noncurrent assets |
|
1,786 |
|
|
|
1,100 |
|
Total cash, cash equivalents, and restricted cash |
$ |
77,150 |
|
|
$ |
98,164 |
|
STEM, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) |
|||||||||||||||
The following table provides a reconciliation of adjusted EBITDA to net loss: |
|||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
(in thousands) |
|
(in thousands) |
||||||||||||
Net loss |
$ |
(148,300 |
) |
|
$ |
(77,072 |
) |
|
$ |
(802,877 |
) |
|
$ |
(102,728 |
) |
Adjusted to exclude the following: |
|
|
|
|
|
|
|
||||||||
Depreciation and amortization (1) |
|
11,516 |
|
|
|
11,531 |
|
|
|
36,321 |
|
|
|
36,098 |
|
Interest expense |
|
4,512 |
|
|
|
4,405 |
|
|
|
13,850 |
|
|
|
10,085 |
|
Gain on extinguishment of debt, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(59,121 |
) |
Stock-based compensation |
|
6,532 |
|
|
|
11,198 |
|
|
|
21,716 |
|
|
|
28,320 |
|
Revenue constraint (2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,200 |
|
Revenue reduction, net (3) |
|
5,525 |
|
|
|
37,377 |
|
|
|
38,653 |
|
|
|
37,377 |
|
Excess supplier costs (4) |
|
— |
|
|
|
— |
|
|
|
1,012 |
|
|
|
— |
|
Change in fair value of derivative liability |
|
— |
|
|
|
5,155 |
|
|
|
(1,477 |
) |
|
|
7,731 |
|
Impairment of goodwill |
|
— |
|
|
|
— |
|
|
|
547,152 |
|
|
|
— |
|
Contract termination payment (5) |
|
10,000 |
|
|
|
— |
|
|
|
10,000 |
|
|
|
— |
|
Impairment and accounts receivable write-off (6) |
|
104,134 |
|
|
|
— |
|
|
|
104,134 |
|
|
|
— |
|
Provision for (benefit from) income taxes |
|
129 |
|
|
|
(46 |
) |
|
|
344 |
|
|
|
354 |
|
Other expenses (6) |
|
2,460 |
|
|
|
6,591 |
|
|
|
4,125 |
|
|
|
7,612 |
|
Adjusted EBITDA |
$ |
(3,492 |
) |
|
$ |
(861 |
) |
|
$ |
(27,047 |
) |
|
$ |
(24,072 |
) |
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 includes depreciation and amortization expense, impairment loss of energy storage systems, impairment loss of project assets, and impairment loss of right-of-use 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 in the definition of non-GAAP gross profit provided above.
(5) Contract termination payment to a vendor for the delivery of hardware.
(6) See Note 3 — “Impairment and Accounts Receivable Write-Off” in the notes to the unaudited condensed consolidated financial statements in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.
(7) Adjusted EBITDA for the three and nine months ended September 30, 2024 reflects other expenses of
The following table provides a reconciliation of non-GAAP gross profit and margin to GAAP gross profit (loss) and margin ($ in millions): |
|||||||||||||||
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenue |
$ |
29.3 |
|
|
$ |
133.7 |
|
|
$ |
88.8 |
|
|
$ |
294.1 |
|
Cost of revenue |
|
(23.1 |
) |
|
|
(154.0 |
) |
|
|
(97.4 |
) |
|
|
(301.5 |
) |
GAAP gross profit (loss) |
|
6.2 |
|
|
|
(20.3 |
) |
|
|
(8.6 |
) |
|
|
(7.4 |
) |
GAAP gross margin (%) |
|
21 |
% |
|
|
(15 |
)% |
|
|
(10 |
)% |
|
|
(3 |
)% |
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Gross Profit |
|
|
|
|
|
|
|
||||||||
GAAP Revenue |
$ |
29.3 |
|
|
$ |
133.7 |
|
|
$ |
88.8 |
|
|
$ |
294.1 |
|
Add: Revenue constraint (1) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10.2 |
|
Add: Revenue reduction, net (2) |
|
5.6 |
|
|
|
37.4 |
|
|
|
38.7 |
|
|
|
37.4 |
|
Subtotal |
|
34.9 |
|
|
|
171.1 |
|
|
|
127.5 |
|
|
|
341.7 |
|
Less: Cost of revenue |
|
(23.1 |
) |
|
|
(154.0 |
) |
|
|
(97.4 |
) |
|
|
(301.5 |
) |
Add: Amortization of capitalized software & developed technology |
|
4.1 |
|
|
|
3.5 |
|
|
|
12.0 |
|
|
|
9.8 |
|
Add: Impairments |
|
0.3 |
|
|
|
0.8 |
|
|
|
0.4 |
|
|
|
2.9 |
|
Add: Excess supplier costs (3) |
|
|
|
|
|
1.0 |
|
|
|
— |
|
||||
Non-GAAP gross profit |
$ |
16.2 |
|
|
$ |
21.4 |
|
|
$ |
43.5 |
|
|
$ |
52.9 |
|
Non-GAAP gross margin (%) |
|
46 |
% |
|
|
12 |
% |
|
|
34 |
% |
|
|
15 |
% |
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 profit provided above.
(2) Refer to the discussion of reduction in revenue in the definition of non-GAAP profit provided above.
(3) Refer to the discussion of excess supplier costs in the definition of non-GAAP profit provided above.
Key Definitions: |
|||||
Item |
Definition |
||||
|
Total value of executed customer agreements, as of the end of the relevant period (e.g. quarterly bookings or annual bookings) | ||||
● |
Customer contracts are typically executed 6-24 months ahead of installation |
||||
● |
Bookings amount typically includes: |
||||
Bookings |
1. | Hardware revenue, which is typically recognized at delivery of system to customer, | |||
| 2. | Services revenue, which represents total nominal software and services contract value recognized ratably over the contract period, | ||||
● |
Market participation revenue is excluded from booking value |
||||
|
Total value of bookings in dollars, as of a specific date | ||||
Contracted Backlog |
● |
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 | ||||
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/20241028760199/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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