Stem Announces First Quarter 2026 Results

PowerTrack™ software revenue up 16% YoY

Software, services, and edge hardware revenue up 4% YoY to $29M

Achieved fourth consecutive quarter of positive adjusted EBITDA

Reaffirming full year 2026 financial and operating guidance across all metrics

Stem, Inc. (“Stem,” “we” or the “Company”) (NYSE: STEM), a global leader reimagining technology to support the energy transition, announced today its results for the quarter ended March 31, 2026.

Financial Highlights

• Revenue of $29.0 million, down 11% from $32.5 million in 1Q25
• Software, services, and edge hardware revenue of $29.0 million, up 4% from $28.0 million in 1Q25
• GAAP gross profit of $10.9 million, up from $10.5 million in 1Q25
• Non-GAAP gross profit of $15.2 million, up from $14.8 million in 1Q25
• GAAP gross margin of 38%, up from 32% in 1Q25
• Non-GAAP gross margin of 52%, up from 46% in 1Q25
• Net loss of $18.9 million versus net loss of $25.0 million in 1Q25
• Adjusted EBITDA of $2.0 million versus $(4.6) million in 1Q25
• Operating cash flow of $(8.3) million versus $8.5 million in 1Q25
• Ended 1Q26 with $36.6 million in cash and cash equivalents versus $48.9 million in 4Q25

Operating Highlights

• Bookings of $26.5 million versus $32.7 million in 4Q25
• Contracted backlog of $23.0 million versus $21.3 million at the end of 4Q25
• Storage operating assets under management (“AUM”) of 1.7 gigawatt hours (“GWh”), sequentially flat
• Solar operating AUM of 37.5 gigawatts (“GW”) up 4% sequentially
• Contracted annual recurring revenue (“CARR”) of $67.2 million, flat from the end of 4Q25
• Annual recurring revenue (“ARR”) of $61.2 million, a slight increase sequentially

“Our first quarter 2026 performance demonstrated that the operational discipline and margin profile we established in 2025 are proving durable,” stated Arun Narayanan, Chief Executive Officer of Stem. “Delivering positive adjusted EBITDA in our seasonally lightest-revenue quarter, combined with strong gross margins and continued PowerTrack momentum, underscores the strength of our execution and gives us confidence in our outlook. We continue to make meaningful progress against all three of our 2026 strategic priorities: driving operational leverage, strengthening our core business, and building the foundation for growth. Based on that progress, we are reaffirming our full year 2026 guidance across all metrics.”

“Our first quarter results demonstrate continued operating leverage in the business and the sustainable benefits of our software-focused strategy,” stated Brian Musfeldt, Chief Financial Officer of Stem. “We delivered record non-GAAP gross margins of 52% and our fourth consecutive quarter of positive adjusted EBITDA, driven by continued software revenue growth and the lasting benefits of the efficiency improvements we implemented in 2025. We remain well-positioned to execute against our full-year 2026 plan and are confident in delivering on our full year 2026 financial and operating commitments.”

First Quarter 2026 Financial and Operating Results

Financial Results

Revenue decreased 11% year-over-year to $29.0 million, versus $32.5 million in the first quarter of 2025 due to significantly reduced battery hardware sales. Revenue from software, services, and edge hardware was $29.0 million for first quarter 2026, up 4% from $28.0 million for the first quarter 2025, driven by 16% year-over-year growth in PowerTrack software revenue.

GAAP gross profit was $10.9 million, or 38%, versus $10.5 million, or 32%, in the first quarter of 2025. The year-over-year increase in GAAP gross profit ($) and GAAP gross margin (%) was due to reduced costs and increased higher-margin software, services, and edge hardware sales and significantly decreased lower-margin battery hardware sales.

Non-GAAP gross profit was $15.2 million, or 52%, versus $14.8 million, or 46%, in the first quarter of 2025. The year-over-year increase in non-GAAP gross profit ($) and non-GAAP gross margin (%) was again due to increased higher-margin software, services, and edge hardware sales and significantly decreased lower-margin battery hardware sales.

Net loss was $18.9 million versus the first quarter 2025 net loss of $25.0 million. The year-over-year improvement was primarily driven by significantly lower operating expenses.

Adjusted EBITDA was $2.0 million, up significantly compared to $(4.6) million in the first quarter of 2025. The material improvement and achievement of positive quarterly adjusted EBITDA was primarily driven by significantly lower operating expenses.

The Company ended the first quarter with $36.6 million in cash and cash equivalents, versus $48.9 million reported at the end of the fourth quarter of 2025.

Operating Results

Bookings were $26.5 million in the first quarter of 2026, compared to $32.7 million in the fourth quarter of 2025 due to typical first quarter seasonality.

Contracted backlog was $23.0 million at the end of the first quarter of 2026 compared to $21.3 million at the end of the fourth quarter of 2025.

CARR was $67.2 million at the end of the first quarter of 2026, flat versus the end of the fourth quarter of 2025.

ARR increased slightly to $61.2 million at the end of the first quarter of 2026 from $61.1 million at the end of the fourth quarter of 2025. PowerTrack ARR increased 2% sequentially to $41.7 million in the first quarter from $40.7 million at the end of the fourth quarter of 2025. Managed services ARR decreased 4% sequentially to $19.5 million from $20.4 million at the end of the fourth quarter of 2025.

Solar operating AUM increased 4% sequentially to 37.5 GW for the first quarter of 2026. Storage operating AUM was sequentially flat at 1.7 GWh for the quarter.

The following table provides a summary of contracted backlog at the end of the first quarter, and includes only hardware and non-recurring services contracts, compared to backlog at the end of the fourth quarter of 2025 ($ in millions):

Business Updates

• On March 4, 2026, the Company announced that its PowerTrack Energy Management System (“EMS”) had been selected to support Everyray GmbH’s 90 MWh utility-scale battery energy storage system (“BESS”) in Kölsa, Germany, and a 10 MWh BESS in Elsterwerda, Germany. Together, the projects further expand Stem’s presence in the German market and reinforce PowerTrack’s role as the control system for sophisticated, utility-scale storage deployments across Europe. Commercial operations are expected to commence in summer 2026.

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

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

Outlook

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

Some Factors Affecting our Business and Operations

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

Use of Non-GAAP Financial Measures

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

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

Definitions of Non-GAAP Financial Measures

We define adjusted EBITDA as net income (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 change in fair value of warrant liability, and income tax provision or benefit. The expenses and other items that we exclude in our calculation of adjusted EBITDA may differ from the expenses and other items, if any, that other companies exclude when calculating adjusted EBITDA.

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

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

Conference Call Information

Stem will hold a conference call to discuss this earnings press release and business outlook on Wednesday, May 6, 2026, beginning at 5:00 p.m. Eastern Time. The conference call and accompanying slides may be accessed via a live webcast on a listen-only basis on the Events & Presentations page of the Investor Relations section of the Company’s website at https://investors.stem.com/events-and-presentations. The call can also be accessed live over the telephone by dialing (877) 407-3982, or for international callers, (201) 493-6780 and referencing Stem. An audio replay will be available shortly after the call and can be accessed by dialing (844) 512-2921 or for international callers by dialing (412) 317-6671. The passcode for the replay is 13757929. The replay will be available until Saturday, June 6, 2026. 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 reimagining technology to support the energy transition. We turn complexity into clarity and potential into performance.

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

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

Forward-Looking Statements

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

Source: Stem, Inc.

Key Definitions:

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“Our first quarter 2026 performance demonstrated that the operational discipline and margin profile we established in 2025 are proving durable,” stated Arun Narayanan, Chief Executive Officer of Stem.