Demand Surge - U.S. electricity demand is experiencing a significant increase, driven by electric vehicle chargers and data centers, particularly those powered by artificial intelligence [4][6] - AI data centers consumed approximately 4.4% of U.S. electricity in 2023, with projections indicating this could triple by 2028 [4] - The Pacific Northwest Utilities Conference Committee anticipates growth equivalent to seven Seattle-sized cities within the next decade due to electric vehicles and electrified industries [6] Supply Gap - The U.S. is retiring reliable power sources, with the Energy Information Administration projecting a 65% increase in capacity retirements in 2025 compared to 2024 [10] - In 2025, 12.3 gigawatts (GW) of capacity will retire, including 8.1 GW of coal and 2.6 GW of natural gas [10] - The Department of Energy warns that only 22 GW of firm generation is expected by 2030, falling short of the 104 GW needed for peak demand [11] Growing Vulnerabilities - The power grid faces increasing risks from extreme weather events, cybersecurity threats, and physical sabotage [9][12] - Events like the 2003 Northeast blackout are now seen as precursors to larger disruptions, highlighting the grid's vulnerabilities [13] - The system's aging infrastructure, with over 160,000 miles of high-voltage lines, is a target for sabotage [14] Policy and Infrastructure Challenges - Policy responses to the grid's challenges are slow, with jurisdictional issues complicating progress [15] - Transmission projects are facing delays of five to seven years due to permitting hurdles and supply chain constraints [16] - Bipartisan efforts to incentivize domestic transformer production remain stalled, despite industry support [17] Investment Opportunities - Companies like NextEra Energy, Dominion, and Avangrid are investing billions in grid modernization, with Avangrid planning $20 billion through 2030 [20] - Independent power producers like NRG Energy are benefiting from rising demand and higher wholesale electricity prices in deregulated markets [21] - Firms specializing in storage and microgrid solutions, such as Fluence and Tesla Energy, are seeing increased demand [22] Future Outlook - The U.S. power grid is under unprecedented pressure, with demand growth, baseload retirements, and extreme weather creating a fragile system [24] - The ability to adapt quickly will determine whether the current situation leads to a crisis or a course correction [24][25] - The power sector will require $1.4 trillion in new capital between 2025 and 2030 to address these challenges [23]

HOUSTON, Sept. 12, 2025 (GLOBE NEWSWIRE) -- FibroBiologics, Inc. (Nasdaq: FBLG) (“FibroBiologics”), a clinical-stage biotechnology company with 270+ patents issued and pending with a focus on the development of therapeutics and potential cures for chronic diseases using fibroblasts and fibroblast-derived materials, today announced the publication of an opinion editorial authored by company leadership that presents the scientific case for fibroblast cells' therapeutic advantages compared to stem cell therapi ...

Toronto, Ontario--(Newsfile Corp. - Le 3 septembre/September 2025) - The common shares of Stem Holdings Inc. will be delisted from the CSE at market close today, September 3, 2025. Stem Holdings Inc. is currently suspended. See Bulletin 2024-0302. _________________________________ Les actions ordinaires de Stem Holdings Inc. seront radiées de la CSE à la fermeture du marché aujourd'hui, le 3 septembre 2025. Stem Holdings Inc. est actuellement suspendue. Voir le Bulletin 2024-0302. Date : Mar ...

Core Insights - Stem (STEM) shares have increased by 11.9% following the release of its second-quarter 2025 results, driven by strong growth in software and managed services, new customer engagements, expanded professional services, and increased recurring revenue momentum [1][9] - The company reported a loss of $3.73 per share, which is an improvement from the $4.40 loss per share in the same quarter last year, although it missed the Zacks Consensus Estimate by 24.33% [1][9] Revenue Performance - Revenues for the second quarter of 2025 reached $38.4 million, marking a 12.9% year-over-year increase and surpassing the consensus estimate by 15.93% [2][9] - Solar Software revenues accounted for 24.8% of total revenues, increasing by 20.4% year over year to $9.5 million [3] - Edge Hardware, which made up 31.5% of revenues, saw an 8.6% year-over-year increase to $12.1 million [3] - Project and Professional Services surged by 76.1% year over year to $2.3 million, while Storage Software & Managed Services rose by 53.2% to $9 million [3] - Battery Hardware resale revenues decreased by 30% year over year to $5.4 million [3] Operational Metrics - Bookings for the second quarter were $34.3 million, slightly down from $34.5 million in the previous quarter, while contracted backlog increased by 6% to $26.8 million [4] - Storage operating assets under management (AUM) grew by 42% year over year to 1.7 gigawatt hours (GWh), and solar operating AUM increased by 22% to 32.7 gigawatts (GW) [4] - Contracted Annual Recurring Revenue remained stable at $69.2 million, while Annual Recurring Revenue (ARR) rose by 3% quarter over quarter to $58.5 million, reflecting a 22% year-over-year growth [5] Cost and Margin Analysis - Non-GAAP gross margin expanded by 900 basis points to 48.9% in the second quarter of 2025 [6][9] - Operating expenses decreased significantly by 95.6% year over year to $26.1 million, with research & development expenses down by 34.6% to $10 million, general & administrative expenses down by 43.8% to $8.9 million, and selling and marketing expenses down by 33.8% to $7.3 million [6] EBITDA and Cash Flow - Adjusted EBITDA for the second quarter reached $3.8 million, a significant improvement from an adjusted EBITDA loss of $11.3 million in the same quarter of 2024 [7] - As of June 30, 2025, Stem had cash and cash equivalents of $40.8 million, down from $58.6 million as of March 31, 2025 [8] - Operating cash outflow for the second quarter was $21.3 million, compared to $11.9 million in the second quarter of 2024 [8] Future Guidance - For 2025, Stem expects revenues to be between $125 million and $175 million, with software, edge hardware, and services projected to contribute between $120 million and $140 million [10] - Battery hardware resale is anticipated to be approximately $35 million, with a non-GAAP gross margin expected between 30% and 40% [10] - Adjusted EBITDA is projected to range from a loss of $10 million to a gain of $5 million, and year-end ARR is expected to be between $55 million and $65 million [10]

分组1 - Stem, Inc. reported a quarterly loss of $3.73 per share, which was worse than the Zacks Consensus Estimate of a loss of $3, representing an earnings surprise of -24.33% [1] - The company posted revenues of $38.37 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 15.93%, and showing an increase from $34 million in the same quarter last year [2] - Over the last four quarters, Stem has surpassed consensus EPS estimates two times and topped revenue estimates three times [2] 分组2 - The stock has underperformed the market, losing about 3.4% since the beginning of the year, while the S&P 500 gained 7.9% [3] - The current consensus EPS estimate for the coming quarter is -$2.00 on revenues of $36.3 million, and for the current fiscal year, it is -$10.20 on revenues of $145.2 million [7] - The Computers - IT Services industry, to which Stem belongs, is currently in the bottom 40% of the Zacks industry rankings, indicating potential challenges ahead [8]

Part I. Financial Information [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements and accompanying notes for the period ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show a decrease in total assets and liabilities, resulting in a reduced stockholders' deficit as of June 30, 2025 Balance Sheet Summary | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Assets | $379,216 | $437,359 | | Total Liabilities | $592,695 | $835,192 | | Total Stockholders' Deficit | $(213,479) | $(397,833) | - The company's total assets decreased by approximately **$58.1 million** from December 31, 2024, to June 30, 2025, while total liabilities decreased by approximately **$242.5 million**, leading to a significant reduction in the stockholders' deficit[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company shifted from a significant net loss to a substantial net income, driven by revenue growth and a gain on debt extinguishment Statement of Operations Summary | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenue | $38,374 | $33,999 | $70,886 | $59,468 | | Gross Profit (Loss) | $12,800 | $9,375 | $23,338 | $(14,816) | | Loss from Operations | $(13,343) | $(579,848) | $(34,491) | $(647,861) | | Net Income (Loss) | $202,531 | $(582,270) | $177,531 | $(654,577) | | Basic EPS | $24.31 | $(71.81) | $21.48 | $(81.74) | | Diluted EPS | $(1.79) | $(71.81) | $(4.54) | $(81.74) | - The company reported a significant **net income of $202.5 million** for the three months ended June 30, 2025, a substantial improvement from a net loss of $582.3 million in the prior-year period, primarily due to a **$220.0 million gain on extinguishment of debt** and the absence of a $547.2 million goodwill impairment recorded in Q2 2024[12](index=12&type=chunk)[219](index=219&type=chunk)[221](index=221&type=chunk) - Total revenue increased by **13%** for the three months ended June 30, 2025, and by **19%** for the six months ended June 30, 2025, driven by growth in solar software, edge hardware, project and professional services, and storage software & managed services, partially offset by a strategic reduction in battery hardware resale[12](index=12&type=chunk)[214](index=214&type=chunk)[226](index=226&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) The statements reflect a significant improvement in total comprehensive income, primarily mirroring the reported net income Comprehensive Income (Loss) Summary | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Income (Loss) | $202,531 | $(582,270) | $177,531 | $(654,577) | | Foreign currency translation adjustment | $82 | $(60) | $272 | $133 | | Total Other Comprehensive Income (Loss) | $202,613 | $(582,330) | $177,803 | $(654,441) | [Condensed Consolidated Statements of Stockholders' (Deficit) Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20(Deficit)%20Equity) Stockholders' deficit improved significantly due to net income, alongside impacts from stock-based compensation and a reverse stock split - Total stockholders' deficit improved significantly from **$(397.8) million** as of January 1, 2025, to **$(213.5) million** as of June 30, 2025, primarily driven by net income of $202.5 million during the period[17](index=17&type=chunk) - The company issued common stock upon release of restricted stock units and recognized stock-based compensation, contributing to additional paid-in capital[17](index=17&type=chunk) - A **1-for-20 reverse stock split** was effected on June 23, 2025, retroactively adjusting share and per share amounts[17](index=17&type=chunk)[31](index=31&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flows show stable operating cash usage, increased investing outflows, and a positive shift in financing activities Cash Flow Summary | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(12,742) | $(12,507) | | Net cash (used in) provided by investing activities | $(4,674) | $1,465 | | Net cash provided by (used in) financing activities | $1,682 | $(4,185) | | Net decrease in cash, cash equivalents and restricted cash | $(15,509) | $(15,040) | | Cash, cash equivalents and restricted cash, end of period | $42,576 | $91,435 | - Net cash used in operating activities remained relatively stable year-over-year, at **$(12.7) million** for the six months ended June 30, 2025[19](index=19&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk) - Investing activities shifted from a net cash inflow of $1.5 million in 2024 to a net cash outflow of **$4.7 million** in 2025, primarily due to capital expenditures on internally-developed software[19](index=19&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk) - Financing activities generated **$1.7 million** in cash in 2025, a positive change from a $4.2 million outflow in 2024, mainly due to proceeds from the issuance of senior secured notes[19](index=19&type=chunk)[261](index=261&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of accounting policies, revenue recognition, debt, and other key financial statement components [1. BUSINESS](index=8&type=section&id=1.%20BUSINESS) The company is a leader in AI-driven clean energy solutions and has sufficient liquidity for the next 12 months despite historical losses - Stem, Inc. is a global leader in AI-driven software and services for planning, deploying, and operating clean energy assets, offering integrated software (PowerTrack™) and full-lifecycle energy services[22](index=22&type=chunk)[23](index=23&type=chunk) - As of June 30, 2025, the company had **$40.8 million in cash and cash equivalents** and an accumulated deficit of $1,449.0 million, with negative working capital of $12.8 million; management believes current liquidity is sufficient for the next 12 months[25](index=25&type=chunk) - Future profitability depends on executing its software and services-oriented strategy, successful delivery of AI-enabled capabilities, customer acquisition/retention, and maintaining NYSE listing standards[26](index=26&type=chunk) [2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=8&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details key accounting policies, including a recent reverse stock split, consolidation of VIEs, and customer concentration - On June 23, 2025, Stem effected a **1-for-20 reverse stock split**, reducing outstanding common stock shares from 167.2 million to 8.4 million and authorized shares from 500 million to 250 million[31](index=31&type=chunk) - The company consolidates Variable Interest Entities (VIEs), such as DevCo JVs, where it is deemed the primary beneficiary, having power to direct activities and absorb significant losses or receive benefits[34](index=34&type=chunk)[35](index=35&type=chunk) DevCo JVs | DevCo JVs (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Total Assets | $17,862 | $17,989 | | Total Liabilities | $256 | $1,398 | - Stem operates as a single operating segment, focusing on innovative technology services for energy distribution and consumption[41](index=41&type=chunk) Accounts Receivable Allowance | Accounts Receivable Allowance (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------------------- | :------------ | :---------------- | | Balance as of beginning of period | $9,794 | $5,953 | | Provision for expected credit losses | $1,547 | $3,978 | | Write-offs, recoveries and other charges | $(5,088) | $(137) | | Balance as of end of period | $6,253 | $9,794 | Significant Customers | Significant Customers | Accounts Receivable (June 30, 2025) | Revenue (Q2 2025) | | :-------------------- | :---------------------------------- | :---------------- | | Customer A | 25% | * | | Customer D | 10% | 14% | [3. REVENUE](index=13&type=section&id=3.%20REVENUE) Revenue grew due to strong performance in software and services, offsetting a strategic decline in battery hardware resale Revenue by Stream | Revenue Stream (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Solar software | $9,521 | $7,905 | $18,375 | $15,697 | | Edge hardware | $12,086 | $11,134 | $22,349 | $19,182 | | Project and professional services | $2,330 | $1,323 | $4,146 | $2,683 | | Storage software & managed services | $9,003 | $5,875 | $16,054 | $11,563 | | Battery hardware resale | $5,434 | $7,762 | $9,962 | $10,343 | | Total revenue | $38,374 | $33,999 | $70,886 | $59,468 | - Total revenue increased by **13% for Q2 2025** and **19% for YTD 2025**, driven by strong growth in solar software (20% Q2 YoY), project and professional services (76% Q2 YoY), and storage software & managed services (53% Q2 YoY)[68](index=68&type=chunk)[214](index=214&type=chunk)[226](index=226&type=chunk) - Battery hardware resale revenue decreased by **30% in Q2 2025**, reflecting the company's strategic shift away from this business line[68](index=68&type=chunk)[214](index=214&type=chunk) - As of June 30, 2025, remaining performance obligations totaled **$397.4 million**, with approximately 18% expected to be recognized in the next 12 months[69](index=69&type=chunk) - The company recorded a net revenue reduction of **$33.1 million** in hardware revenue during the six months ended June 30, 2024, related to Parent Company Guarantees (PCGs), which are no longer outstanding and are not expected to impact future financial results[73](index=73&type=chunk)[74](index=74&type=chunk) [4. FAIR VALUE MEASUREMENTS](index=14&type=section&id=4.%20FAIR%20VALUE%20MEASUREMENTS) The company details the fair value hierarchy for its financial instruments, including cash equivalents, warrants, and convertible notes Financial Instruments at Fair Value | Financial Instruments at Fair Value (in thousands) | June 30, 2025 | December 31, 2024 | | :----------------------------------------------- | :------------ | :---------------- | | Cash equivalents (Money market fund) | $17,766 | $37,108 | | Warrant liabilities (Level 3) | $1,899 | $0 | | 2028 Convertible Notes (Level 2) | $16,600 | $77,300 | | 2030 Convertible Notes (Level 2) | $29,300 | $65,400 | - Warrant liabilities are classified as **Level 3** due to significant unobservable inputs in their valuation, using the Black-Scholes-Merton model[79](index=79&type=chunk)[82](index=82&type=chunk) [5. INTANGIBLE ASSETS, NET](index=16&type=section&id=5.%20INTANGIBLE%20ASSETS,%20NET) The composition and amortization of intangible assets, including developed technology and customer relationships, are presented Intangible Assets Summary | Intangible Assets (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------- | :------------ | :---------------- | | Developed technology | $32,618 | $32,618 | | Trade name | $11,300 | $11,300 | | Customer relationships | $106,800 | $106,800 | | Internally developed software | $86,724 | $81,314 | | Total intangible assets, net | $135,158 | $143,912 | - Amortization expense for intangible assets was **$14.2 million** for the six months ended June 30, 2025, up from $13.3 million in the prior-year period[87](index=87&type=chunk) [6. ENERGY STORAGE SYSTEMS, NET](index=16&type=section&id=6.%20ENERGY%20STORAGE%20SYSTEMS,%20NET) This note outlines the carrying value, depreciation, and impairment of the company's energy storage systems Energy Storage Systems Summary | Energy Storage Systems (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Energy storage systems placed into service | $134,993 | $137,616 | | Less: accumulated depreciation | $(85,759) | $(81,305) | | Energy storage systems not yet placed into service | $1,728 | $2,509 | | Total energy storage systems, net | $50,962 | $58,820 | - Depreciation expense for energy storage systems was **$6.3 million** for the six months ended June 30, 2025, slightly down from $6.5 million in the prior-year period[88](index=88&type=chunk) - Impairment expense for energy storage systems increased significantly to **$1.4 million** for the six months ended June 30, 2025, compared to $0.1 million in the prior-year period[89](index=89&type=chunk) [7. DEBT](index=16&type=section&id=7.%20DEBT) The company executed a major debt exchange, issuing new senior secured notes and recognizing a significant gain on extinguishment - On June 30, 2025, Stem issued **$155.4 million in 2030 Senior Secured Notes** through a privately negotiated exchange, extinguishing approximately $228.8 million of 2028 Convertible Notes and $121.3 million of 2030 Convertible Notes[95](index=95&type=chunk)[108](index=108&type=chunk)[116](index=116&type=chunk) - This exchange resulted in a **$220.0 million gain on debt extinguishment**, recorded in other income (expenses), net[117](index=117&type=chunk) Debt Summary | Debt (in thousands) | June 30, 2025 | December 31, 2024 | | :------------------ | :------------ | :---------------- | | 2028 Convertible Notes (Net Carrying Amount) | $67,162 | $291,824 | | 2030 Convertible Notes (Net Carrying Amount) | $116,023 | $234,099 | | 2030 Senior Secured Notes (Net Carrying Amount) | $126,709 | — | - The 2030 Senior Secured Notes bear interest at **12.0% (PIK) or 11.0% (cash)** and are secured by a first priority lien on substantially all company assets[118](index=118&type=chunk)[120](index=120&type=chunk) [8. WARRANTS](index=20&type=section&id=8.%20WARRANTS) New private placement warrants were issued in connection with the debt exchange and are classified as a liability - In connection with the debt exchange, Stem issued **439,919 2030 Private Placement Warrants**, each allowing the holder to purchase one common stock share at an exercise price of $30.00[122](index=122&type=chunk) - These warrants are classified as liability and initially recorded at fair value of **$1.9 million**, subject to remeasurement each reporting period[117](index=117&type=chunk)[125](index=125&type=chunk) [9. STOCK-BASED COMPENSATION](index=21&type=section&id=9.%20STOCK-BASED%20COMPENSATION) Stock-based compensation expense decreased significantly due to lower headcount and reduced personnel-related costs Stock-Based Compensation Expense | Stock-Based Compensation Expense (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Sales and marketing | $228 | $1,244 | $399 | $2,358 | | Research and development | $105 | $2,585 | $1,859 | $4,116 | | General and administrative | $1,062 | $2,981 | $3,454 | $8,710 | | Total stock-based compensation expense | $1,395 | $6,810 | $5,712 | $15,184 | - Total stock-based compensation expense decreased significantly by **79% for Q2 2025** and **62% for YTD 2025**, reflecting lower headcount and reduced personnel-related expenses[132](index=132&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk) - As of June 30, 2025, unrecognized stock-based compensation expense for stock options was **$1.4 million** (over 1.1 years) and for RSUs was **$9.1 million** (over 1.2 years)[127](index=127&type=chunk)[131](index=131&type=chunk) [10. NET INCOME (LOSS) PER SHARE](index=23&type=section&id=10.%20NET%20INCOME%20(LOSS)%20PER%20SHARE) The calculation of basic and diluted EPS is detailed, showing a diluted loss despite basic income due to specific adjustments EPS Summary | EPS (per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic EPS | $24.31 | $(71.81) | $21.48 | $(81.74) | | Diluted EPS | $(1.79) | $(71.81) | $(4.54) | $(81.74) | - The calculation of diluted EPS for periods with net income includes adjustments for the gain on extinguishment of debt, resulting in a **diluted net loss per share** despite basic net income[136](index=136&type=chunk) Potentially Dilutive Shares Excluded | Potentially Dilutive Shares Excluded (in thousands) | June 30, 2025 | June 30, 2024 | | :------------------------------------------------ | :------------ | :------------ | | Outstanding 2028 Convertible Notes | 116,620 | 507,859 | | Outstanding 2030 Convertible Notes | 832,620 | 1,683,679 | | Outstanding stock options | 241,773 | 475,922 | | Outstanding RSUs | 655,845 | 623,877 | | Outstanding private placement warrants | 439,919 | — | | Total | 2,286,904 | 3,291,464 | [11. INCOME TAXES](index=24&type=section&id=11.%20INCOME%20TAXES) The effective tax rate remains low due to a valuation allowance, and the company is assessing the impact of new tax legislation Income Tax Summary | Income Tax (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Provision for income taxes | $(475) | $(62) | $(533) | $(215) | | Effective tax rate | 0.23% | (0.01)% | 0.30% | (0.03)% | - The effective tax rate for Q2 2025 was **0.23%**, lower than the statutory federal rate due to the exclusion of cancellation of debt income (CODI) and a valuation allowance on U.S. deferred tax assets[139](index=139&type=chunk) - The 'One Big Beautiful Bill Act' (OBBB) was signed into law on July 4, 2025, introducing changes to clean energy tax credits and other tax provisions; the company is evaluating its impact, but does not expect material changes to Q3 2025 tax expense due to the valuation allowance[140](index=140&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) [12. SEGMENT INFORMATION](index=24&type=section&id=12.%20SEGMENT%20INFORMATION) The company operates and reports as a single operating segment - The company operates as a single operating segment, with the Chief Executive Officer reviewing financial information on a consolidated basis for decision-making and performance evaluation[41](index=41&type=chunk)[141](index=141&type=chunk) [13. COMMITMENTS AND CONTINGENCIES](index=25&type=section&id=13.%20COMMITMENTS%20AND%20CONTINGENCIES) Management considers the risk of material loss from legal proceedings remote and has accrued for a specific sales tax liability - Management believes the probability of a material loss from currently pending legal proceedings is **remote**[144](index=144&type=chunk) - The company accrued a **$5.6 million** probable sales tax liability in 2023, primarily for California, related to uncharged sales tax from 2018-2022, with the examination ongoing[146](index=146&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, its strategic shift to AI-enabled services, key business trends, and overall liquidity [Overview](index=27&type=section&id=Overview) The company is focusing on AI-enabled clean energy solutions and has undertaken a workforce reduction to drive profitable growth - Stem's mission is to help customers plan, deploy, and operate clean energy assets using AI-enabled software and services, focusing on solar and storage markets[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) - The company has historically incurred net operating losses and negative cash flows but reported **net income of $177.5 million** for the six months ended June 30, 2025, a significant improvement from a $654.6 million net loss in the prior year[156](index=156&type=chunk)[157](index=157&type=chunk) - A workforce reduction of approximately **27%** was announced on April 9, 2025, as part of a strategy to prioritize software investments, reduce operating costs, and drive profitable growth[158](index=158&type=chunk) [Key Factors, Trends and Uncertainties Affecting our Business](index=27&type=section&id=Key%20Factors,%20Trends%20and%20Uncertainties%20Affecting%20our%20Business) The company's new strategy, cash position, NYSE compliance, new legislation, and supplier concentration are key business factors - The company's new strategy focuses on AI-enabled software and services, involving operational changes, reduced battery resale revenue, and increased restructuring costs, which may impact financial targets[159](index=159&type=chunk) - Cash reserves of **$40.8 million** as of June 30, 2025, are critical for executing the new strategy; insufficient cash flow or inability to secure additional capital could adversely affect the business[160](index=160&type=chunk) - A **1-for-20 reverse stock split** was implemented on June 23, 2025, to regain compliance with NYSE listing standards, which was successful[163](index=163&type=chunk)[164](index=164&type=chunk)[166](index=166&type=chunk) - The 'One Big Beautiful Bill Act' (OBBB) enacted in July 2025 introduces changes to clean energy tax credits (e.g., Section 25D expiration, Section 48E timing, FEOC provisions), which the company is evaluating for potential impacts[167](index=167&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk)[171](index=171&type=chunk) - The company faces risks from customer concentration, reliance on a small number of suppliers for energy storage systems, and exposure from existing DevCo Joint Ventures[161](index=161&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) [Non-GAAP Financial Measures](index=30&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like adjusted EBITDA and non-GAAP gross profit to supplement its GAAP financial results - Stem uses non-GAAP financial measures, including adjusted EBITDA and non-GAAP gross profit and margin, to evaluate operating performance and liquidity, excluding non-cash and infrequent discrete cash charges[183](index=183&type=chunk)[184](index=184&type=chunk) Non-GAAP Gross Profit Reconciliation | Non-GAAP Gross Profit (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | GAAP gross profit (loss) | $12.8 | $9.4 | $23.3 | $(14.8) | | Non-GAAP gross profit | $18.7 | $13.5 | $33.5 | $27.3 | | Non-GAAP gross margin (%) | 49% | 40% | 47% | 30% | Adjusted EBITDA Reconciliation | Adjusted EBITDA (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income (loss) | $202,531 | $(582,270) | $177,531 | $(654,577) | | Adjusted EBITDA | $3,817 | $(11,316) | $(810) | $(23,555) | - **Adjusted EBITDA** significantly improved to **$3.8 million** for Q2 2025 from $(11.3) million in Q2 2024, and to **$(0.8) million** for YTD 2025 from $(23.6) million in YTD 2024, reflecting the gain on debt extinguishment and reduced operating expenses[191](index=191&type=chunk) [Financial Results and Key Metrics](index=33&type=section&id=Financial%20Results%20and%20Key%20Metrics) Key metrics show growth in recurring revenue and assets under management, alongside newly defined booking and backlog metrics Key Operating Metrics | Key Operating Metrics | June 30, 2025 | June 30, 2024 | | :-------------------- | :------------ | :------------ | | Bookings (Q2) | $34.3M | — | | Bookings (YTD) | $68.8M | — | | Contracted backlog | $26.8M | — | | Storage operating AUM (GWh) | 1.7 | 1.2 | | Solar operating AUM (GW) | 32.7 | 26.9 | | CARR | $69.2M | — | | ARR | $58.5M | $48.1M | - Bookings and Contracted Backlog metrics were redefined in Q1 2025 to reflect executed purchase orders, thus prior period comparisons are not available[194](index=194&type=chunk)[195](index=195&type=chunk) - **Annual Recurring Revenue (ARR)** increased by **21.6%** to **$58.5 million** as of June 30, 2025, from $48.1 million as of June 30, 2024, indicating growth in recurring subscription contracts[193](index=193&type=chunk)[198](index=198&type=chunk) - Storage operating Assets Under Management (AUM) grew to **1.7 GWh** from 1.2 GWh, and Solar operating AUM increased to **32.7 GW** from 26.9 GW year-over-year[193](index=193&type=chunk)[196](index=196&type=chunk) [Components of Our Results of Operations](index=34&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section breaks down the key components of revenue, cost of revenue, operating expenses, and other income/expense - Revenue is generated from services (energy optimization software, asset management software, advisory services, project asset sales) and hardware (OEM energy storage systems, edge hardware devices)[200](index=200&type=chunk)[201](index=201&type=chunk) - Cost of revenue includes costs for servicing subscription customers (personnel, cloud, software amortization, depreciation of owned systems) and hardware costs (production, shipping, delivery, inventory impairment)[202](index=202&type=chunk)[203](index=203&type=chunk) - Operating expenses comprise sales and marketing, research and development, general and administrative, and impairment of goodwill, with expectations for sales and marketing to increase and G&A to decrease as the company scales[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk) - Other income (expense), net, includes interest expense, gain on extinguishment of debt, change in fair value of derivative liability, and other income/losses from equity investments and foreign exchange[209](index=209&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk) [Results of Operations for the Three Months Ended June 30, 2025 and 2024](index=36&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) The second quarter saw revenue growth, a significant reduction in operating expenses, and a shift to net income from a net loss Q2 2025 vs Q2 2024 Operations | Metric (in thousands) | Q2 2025 | Q2 2024 | $ Change | % Change | | :-------------------- | :------ | :------ | :------- | :------- | | Total Revenue | $38,374 | $33,999 | $4,375 | 13% | | Gross profit (loss) | $12,800 | $9,375 | $3,425 | 37% | | Total operating expenses | $26,143 | $589,223 | $(563,080) | (96)% | | Loss from operations | $(13,343) | $(579,848) | $566,505 | (98)% | | Total other income (expense), net | $216,349 | $(2,360) | $218,709 | (9,267)% | | Net income (loss) | $202,531 | $(582,270) | $784,801 | (135)% | - Revenue growth was primarily driven by solar software (+20%), edge hardware (+9%), project and professional services (+76%), and storage software & managed services (+53%), partially offset by a **30% decrease** in battery hardware resale[214](index=214&type=chunk) - Operating expenses decreased by **96%** due to the absence of a **$547.2 million goodwill impairment** in Q2 2025 and reductions in sales and marketing (-34%), R&D (-35%), and G&A (-44%) expenses, mainly from lower headcount and professional services[213](index=213&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk)[219](index=219&type=chunk) - A **$220.0 million gain on extinguishment of debt** significantly contributed to the positive net income in Q2 2025[221](index=221&type=chunk) [Results of Operations for the Six Months Ended June 30, 2025 and 2024](index=38&type=section&id=Results%20of%20Operations%20for%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) Year-to-date results show strong revenue growth, improved gross profit, and a substantial decrease in operating loss YTD 2025 vs YTD 2024 Operations | Metric (in thousands) | YTD 2025 | YTD 2024 | $ Change | % Change | | :-------------------- | :------- | :------- | :------- | :------- | | Total Revenue | $70,886 | $59,468 | $11,418 | 19% | | Gross profit (loss) | $23,338 | $(14,816) | $38,154 | (258)% | | Total operating expenses | $57,829 | $633,045 | $(575,216) | (91)% | | Loss from operations | $(34,491) | $(647,861) | $613,370 | (95)% | | Total other income (expense), net | $212,555 | $(6,501) | $219,056 | (3,370)% | | Net income (loss) | $177,531 | $(654,577) | $832,108 | (127)% | - Year-to-date revenue increased by **19%**, driven by growth across all software and services segments, with solar software up 17%, edge hardware up 17%, project and professional services up 55%, and storage software & managed services up 39%[226](index=226&type=chunk) - Cost of revenue decreased by **36%** year-over-year, primarily due to a **$31.5 million reduction** in battery resale activities, partially offset by increased cloud infrastructure and personnel costs for services[227](index=227&type=chunk)[228](index=228&type=chunk) - Operating expenses decreased by **91%** year-over-year, largely due to the absence of the **$547.2 million goodwill impairment** recorded in 2024, alongside significant reductions in sales and marketing (-36%), R&D (-28%), and G&A (-35%) expenses[225](index=225&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk)[232](index=232&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) The company believes its current cash is sufficient for the next year despite a working capital deficit and cash usage in operations - As of June 30, 2025, Stem had **$40.8 million in cash and cash equivalents** and a working capital deficit of $12.8 million, but believes its cash position is sufficient for the next 12 months[239](index=239&type=chunk) - The company's new business strategy, which includes reducing battery resales and investing in software, has led to reduced revenue and increased costs, potentially constraining its ability to make necessary investments if cash flow does not improve[240](index=240&type=chunk) - Net cash used in operating activities was **$(12.7) million** for the six months ended June 30, 2025, while net cash provided by financing activities was **$1.7 million**, primarily from senior secured notes issuance[256](index=256&type=chunk)[257](index=257&type=chunk)[261](index=261&type=chunk) - The company is not a party to any material off-balance sheet arrangements[263](index=263&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Stem is not required to provide disclosures about market risk - Stem, Inc. is a smaller reporting company and is not required to provide disclosures about market risk[267](index=267&type=chunk) [Item 4. Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective and no material changes to internal controls occurred - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** at a reasonable assurance level as of June 30, 2025[270](index=270&type=chunk) - **No material changes** in internal control over financial reporting occurred during the second quarter of 2025[271](index=271&type=chunk) - Management acknowledges the inherent limitations of internal control systems, which can provide only reasonable, not absolute, assurance against errors and fraud[272](index=272&type=chunk) Part II. Other Information [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company refers to Note 13, stating that the risk of material loss from legal proceedings is considered remote - Legal proceedings information is detailed in Note 13, where management assesses the probability of a material loss as **remote**[144](index=144&type=chunk)[274](index=274&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors are reported, except for the removal of the NYSE listing compliance risk - No material changes to risk factors from the 2024 Annual Report on Form 10-K, except for the removal of the risk factor concerning NYSE listing compliance[275](index=275&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales or repurchases of equity securities occurred during the quarter, aside from previously disclosed events - No unregistered sales of equity securities occurred during Q2 2025, other than those disclosed in the June 30, 2025 Form 8-K[276](index=276&type=chunk) - There were no purchases of equity securities by the issuer or affiliated purchasers[277](index=277&type=chunk) [Item 3. Defaults Upon Senior Securities](index=47&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon its senior securities - No defaults upon senior securities were reported[278](index=278&type=chunk) [Item 4. Mine Safety Disclosures](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This disclosure requirement is not applicable to the company - Mine Safety Disclosures are not applicable to the company[279](index=279&type=chunk) [Item 5. Other Information](index=47&type=section&id=Item%205.%20Other%20Information) No officers or directors adopted or terminated Rule 10b5-1 trading plans during the quarter - No Section 16 officer or director adopted or terminated any Rule 10b5-1 trading plan or non-Rule 10b5-1 trading arrangement during Q2 2025[280](index=280&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including key agreements, plans, and certifications - The exhibit index includes organizational documents, debt agreements (Indenture, Senior Secured Notes), warrant agreements, the 2024 Equity Incentive Plan, and CEO/CFO certifications[282](index=282&type=chunk)

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $38.4 million, representing a 13% year-over-year increase [5][24] - Total Annual Recurring Revenue (ARR) grew 3% sequentially and 22% year-over-year to $59 million [5][29] - Positive adjusted EBITDA of $4 million for the quarter, a $15 million year-over-year improvement [9][26] - GAAP gross margins were 33%, while non-GAAP gross margins reached a record 49% [25] - Cash operating expenses decreased by nearly 40% year-over-year [9][25] Business Line Data and Key Metrics Changes - Solar software revenue grew 20% year-over-year, while storage software and managed service revenue increased by 53% year-over-year [24] - Professional services expanded with new consulting engagements, including the Green River Energy Center project [7] - PowerTrack software engagements were established with Norbert Solar Farms and Avangrid [6] Market Data and Key Metrics Changes - The largest share of revenue comes from the U.S. Commercial and Industrial (C&I) solar market, which is expected to grow in 2026 [19][20] - The company anticipates a shift towards utility-scale solar, supported by the new PowerTrack EMS offering [40] Company Strategy and Development Direction - The company is focusing on a software-centric strategy, with a new business unit structure to enhance operational efficiency [11][12] - A strategic reduction in force was implemented, resulting in a 35% reduction in personnel costs [9][25] - The introduction of AI-enabled products like PowerTrack EMS and PowerTrack Sage is part of the company's strategy to enhance software offerings [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macro challenges, citing a diversified software-centric model [17][20] - The company is tracking towards the high end of guidance for most metrics, despite uncertainties in the policy environment [20][30] - Future technology roadmaps and a cleaner balance sheet are expected to support sustainable profitable growth [31] Other Important Information - A significant debt exchange transaction was completed, reducing overall debt burden by approximately $200 million [10][28] - The company is now in compliance with New York Stock Exchange listing standards following a reverse stock split [30] Q&A Session Summary Question: How should we think about hardware sales moving forward? - The company aims to achieve up to $35 million in hardware sales but is pivoting towards a more software-centric focus [37] Question: What is the progress on growing into utility-scale solar? - The company is excited about the PowerTrack EMS offering, which integrates solar and storage management, allowing entry into the utility-scale market [40] Question: What are the expectations for operating expenses at the end of the year? - Operating expenses are expected to continue declining, with a focus on non-personnel related savings [42][44] Question: Can you elaborate on the recent debt deal? - The debt exchange significantly improved the balance sheet by reducing outstanding debt and extending maturity dates [48][50] Question: How does the cash position reconcile with the operating cash flow guidance? - The decrease in cash was primarily due to working capital fluctuations and one-time payments related to the reduction in force [51][53]

Financial Performance - Revenue increased to $38 million, a 13% year-over-year increase[6] - Adjusted EBITDA was $4 million, a $15 million year-over-year improvement[6] - GAAP gross margin was 33%, a 5 percentage point increase year-over-year, while non-GAAP gross margin was 49%, a 9 percentage point increase year-over-year[6] - Annual Recurring Revenue (ARR) reached $59 million, a 3% quarter-over-quarter increase and a 22% year-over-year increase[6] Operating Metrics - Contracted Annual Recurring Revenue (CARR) was $692 million in 2Q25[12] - Storage Operating Assets Under Management (AUM) increased to 17 GWh[13] - Solar Operating AUM reached 327 GW[13] Strategic Debt Exchange - Stem completed a strategic debt exchange, reducing outstanding debt by nearly $200 million[21] - The debt exchange decreased the 2028 principal amount by nearly $230 million[21] - The company exchanged $350 million in aggregate principal amount of 2028 and 2030 Convertible Senior Notes for $155 million in new First Lien Notes due 2030 and $10 million in cash[18] Guidance - Stem reaffirmed its 2025 guidance, with expectations of tracking towards the high end on nearly all metrics[7, 30]

Core Insights - Stem (STEM) is scheduled to report its second-quarter 2025 earnings on August 7, with revenue estimates at $33.1 million, indicating a 2.65% decrease from the previous year [1] - The consensus estimate for loss is $3 per share, unchanged over the past 90 days, but represents a 31.82% improvement from the same quarter last year [1] - Stem has beaten earnings estimates in three of the last four quarters, with an average surprise of 12.34% [1] Performance Drivers - The performance in Q2 2025 is expected to be driven by the growth of the solar asset performance management software platform, Powertrack, which saw a 10% sequential and 24% year-over-year increase in solar ARR [3] - A 27% workforce reduction announced on April 9 is anticipated to generate $30 million in annual cash savings, with $24 million expected in 2025, aligning with the company's software-first strategy [4] - Profitability is projected to improve throughout the year due to better management of operating expenses and a shift in product mix towards high-margin software and edge devices [5] Seasonal Trends - Seasonal trends may have slightly impacted bookings in Q2, with lower total bookings in Q1 due to seasonality, typically seeing higher volumes in the second half of the year [6] - Despite an increase in key metrics like Contracted Backlog and CARR in Q1, the seasonal pattern may have constrained overall revenue growth in early Q2 [6] Earnings Outlook - According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 increases the likelihood of an earnings beat, but Stem currently has an Earnings ESP of 0.00% and a Zacks Rank 3 [7]

Group 1: Stem, Inc. (STEM) - STEM shares increased by 45.6% in the last trading session, closing at $13.5, with significantly higher trading volume compared to normal sessions [1] - The stock has gained 6.4% over the past four weeks, driven by a focus on high-margin software and services, particularly PowerTrack and managed services, alongside cost reductions and improved operational efficiency [1] - The consensus EPS estimate for the upcoming quarterly report is a loss of $3.00 per share, reflecting a year-over-year change of +31.8%, with expected revenues of $33.1 million, down 2.7% from the previous year [2] Group 2: Industry Context - STEM belongs to the Zacks Computers - IT Services industry, which includes other companies like Taboola.com Ltd. (TBLA) [3] - TBLA's consensus EPS estimate for its upcoming report is unchanged at $0.09, representing a +1000% change from the previous year [4] - Both STEM and TBLA currently hold a Zacks Rank of 3 (Hold), indicating a neutral outlook for these stocks [3][4]