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]

Group 1: Stem, Inc. (STEM) - STEM shares increased by 8.8% to $6.71 in the last trading session, following a 33.7% loss over the past four weeks [1] - The company is benefiting from a focus on high-margin software and services, particularly PowerTrack and managed services, along with cost reductions and improved operational efficiency [1] - The consensus EPS estimate for the upcoming 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: Earnings Estimates and Stock Performance - The consensus EPS estimate for STEM has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [3] - STEM currently holds a Zacks Rank of 2 (Buy), suggesting positive market sentiment [3] - The company is part of the Zacks Computers - IT Services industry, which includes Cognizant (CTSH), also holding a Zacks Rank of 2 (Buy) [3][4] Group 3: Cognizant (CTSH) - Cognizant's consensus EPS estimate for the upcoming report has increased by 0.7% to $1.26, representing a year-over-year change of +7.7% [4] - Cognizant's stock closed the last trading session at $77.59, with a return of -4.3% over the past month [3][4]

Financial Data and Key Metrics Changes - Total revenue increased by 27% year over year, driven by strong growth across the business [19] - Software revenue rose by 17% compared to Q1 2024, reflecting continued strong performance from PowerTrack and increased storage software activations [19] - GAAP gross margin reached a record 32%, while non-GAAP gross margin was close to an all-time high at 46% [20] - Positive operating cash flow of $9 million was generated for the first time in the company's history [20] - Cash balance grew to $59 million at quarter end, with a focus on cash conservation and margin improvement [21] Business Line Data and Key Metrics Changes - Solar annual recurring revenue (ARR) increased by 10% sequentially and 24% year over year [10] - Storage ARR grew by 4% sequentially and 31% year over year [11] - Professional services are gaining momentum, establishing the company as a trusted advisor in the clean energy sector [12] Market Data and Key Metrics Changes - The company is experiencing strong momentum in utility-scale bookings, with nearly triple the bookings in Q1 compared to the same period last year [10] - The overall bookings pace and pipeline development remain robust across core offerings, with no discernible slowdown in deployments by customers [15][23] Company Strategy and Development Direction - The company has restructured into four distinct business units: software, professional services, managed services, and OEM hardware, each with full P&L responsibility [5][6] - A targeted 27% reduction in workforce is expected to yield $30 million in annual cash cost savings, with $24 million of that benefit realized in 2025 [6][24] - The strategic focus is on growing software revenue, particularly through PowerTrack, while reducing the cost structure and driving profitability [8][12] Management's Comments on Operating Environment and Future Outlook - The clean energy sector faces uncertainty due to evolving economic and regulatory policies, but the company maintains upward momentum [15] - Management expects improving profitability as the year progresses, driven by operational cost discipline and revenue growth [13][24] - The company is committed to enhancing software features and functionality to maximize customer value [29] Other Important Information - The company plans to enhance financial transparency through segment reporting, providing deeper insights into performance drivers across business lines [25] - A reverse stock split is proposed to regain compliance with New York Stock Exchange listing standards [26] Q&A Session Summary Question: How is the bookings environment evolving given the tariffs? - Management noted that OEM hardware sales are not a significant component of the business going forward, and they are actively engaging with customers despite tariff volatility [33][34] Question: What are the drivers for expected improving profitability? - Management indicated that revenue cyclicality and operational expense management are key factors, with a focus on higher-margin offerings [42][43] Question: Can you elaborate on the brownfield opportunities mentioned? - Management highlighted that there are broad-based opportunities in geographies where they already operate, with a focus on increasing profitability through managed services [50] Question: What is the rationale for deemphasizing PowerBidder Pro? - The decision was based on growth potential and the ability to execute effectively, leading to a focus on PowerTrack and associated offerings [55][57]

Financial Performance - Revenue reached $33 million, a 27% year-over-year increase[6] - GAAP gross margin was 32%, a 127 percentage point increase year-over-year[6] - Non-GAAP gross margin was 46%, a 22 percentage point increase year-over-year[6] - Adjusted EBITDA improved by $8 million year-over-year to $(5) million[6] - Operating cash flow improved by $9 million year-over-year to $9 million[6] Recurring Revenue and Bookings - Annual Recurring Revenue (ARR) increased by 8% quarter-over-quarter and 26% year-over-year to $57 million[6] - Contracted Annual Recurring Revenue (CARR) reached $69 million in 1Q25[18] - Bookings were $34.5 million in 1Q25[18] Business Strategy and Cost Savings - Implemented targeted workforce reductions in April, driving $30 million in annualized cost savings[6] - The company is creating four distinct business units to optimize operations and drive growth: Software Products, Professional Services, Managed Services, and OEM Hardware[8, 9] 2025 Guidance - The company reaffirmed its 2025 guidance, projecting total revenue between $125 million and $175 million[7, 22] - The company projects year-end ARR between $55 million and $65 million[22]

Financial Data and Key Metrics Changes - Total revenue increased by 27% year over year, driven by strong growth across the business [18] - Software revenue rose by 17% compared to Q1 2024, reflecting continued strong performance from PowerTrack and increased storage software activations [18] - GAAP gross margin reached a record 32%, while non-GAAP gross margin was close to an all-time high at 46% [19] - Positive operating cash flow of $9 million was generated for the first time in the company's history [19] - Cash balance grew to $59 million at quarter end, with over $2 million in net cash generated during the quarter [20] Business Line Data and Key Metrics Changes - Solar annual recurring revenue (ARR) increased by 10% sequentially and 24% year over year [10] - Storage ARR grew by 4% sequentially and 31% year over year [11] - Professional services are gaining momentum, establishing the company as a trusted advisor in the clean energy sector [12] Market Data and Key Metrics Changes - The company is experiencing strong bookings in the solar segment, with no significant slowdown noted despite macroeconomic uncertainties [36] - The pace of deployment for solar projects remains robust, with customers continuing to develop new projects [38] Company Strategy and Development Direction - The company has restructured into four distinct business units: software, professional services, managed services, and OEM hardware, each with full P&L responsibility [6][7] - A targeted 27% reduction in workforce is expected to yield $30 million in annual cash cost savings, with $24 million of that benefit realized in 2025 [7][23] - The focus is on growing software revenue, particularly through PowerTrack, and enhancing product capabilities with AI integration [15][19] Management's Comments on Operating Environment and Future Outlook - The clean energy sector faces uncertainty due to evolving economic and regulatory policies, but the company maintains upward momentum [15] - The company reaffirms its full-year 2025 financial guidance across all metrics, with no discernible slowdown in customer deployments [22] - Management emphasizes a commitment to enhancing software features and functionality to maximize customer value [28] Other Important Information - The company plans to enhance financial transparency through segment reporting following the new business unit structure [24] - A reverse stock split is proposed to regain compliance with New York Stock Exchange listing standards [26] Q&A Session Summary Question: How is the bookings environment evolving given the tariffs? - Management noted that OEM hardware sales are not a significant component of the business going forward, and they are actively engaging with customers regarding tariffs [32][33] Question: Are customers still contracting for storage projects? - Management indicated that while there is volatility, they have not seen a significant impact on bookings, particularly in the solar segment [36][38] Question: What are the drivers for expected improving profitability? - Management highlighted that improvements will come from operational expense reductions and revenue growth, with a focus on higher-margin offerings [40][43] Question: Can you elaborate on the brownfield opportunities mentioned? - Management stated that there are broad-based opportunities in core geographies where they operate, with a focus on increasing assets under management [48][49] Question: What is the rationale for deemphasizing PowerBidder Pro? - Management explained that the decision was based on growth potential and execution capabilities, focusing resources on more promising products like PowerTrack [55][56]

Financial Data and Key Metrics Changes - Total revenue increased by 27% year over year, driven by strong growth across the business [18] - Software revenue rose by 17% compared to Q1 2024, reflecting continued strong performance from PowerTrack and increased storage software activations [18] - GAAP gross margin reached a record 32%, while non-GAAP gross margin was close to an all-time high at 46% [19] - Positive operating cash flow of $9 million was generated for the first time in the company's history [19] - Cash balance grew to $59 million at quarter end, with over $2 million in net cash generated during the quarter [20] Business Line Data and Key Metrics Changes - Solar annual recurring revenue (ARR) increased by 10% sequentially and 24% year over year [10] - Storage ARR grew by 4% sequentially and 31% year over year [11] - Professional services are gaining momentum, establishing the company as trusted advisors in the clean energy sector [12] Market Data and Key Metrics Changes - The company is experiencing strong bookings in the solar segment, with no significant slowdown noted despite macroeconomic uncertainties [36] - The pace of deployment for solar projects remains robust, with customers continuing to develop new projects [38] Company Strategy and Development Direction - The company has restructured into four distinct business units: software, professional services, managed services, and OEM hardware, each with full P&L responsibility [6] - A targeted 27% reduction in workforce is expected to yield $30 million in annual cash cost savings, with $24 million of that benefit realized in 2025 [7] - The focus is on growing software revenue, particularly through PowerTrack, and optimizing capital deployment towards high-growth opportunities [9] Management's Comments on Operating Environment and Future Outlook - The clean energy sector faces uncertainty due to evolving economic and regulatory policies, but the company maintains upward momentum [15] - The company expects improving profitability as it moves through the year, driven by operational cost discipline and revenue growth [13][22] - The organizational changes are seen as a significant milestone in the company's evolution, supporting a strategy shift aimed at enhancing shareholder value [24] Other Important Information - The company plans to enhance financial transparency through segment reporting, providing deeper insights into performance drivers across business lines [24] - A reverse stock split is proposed to regain compliance with New York Stock Exchange listing standards [26] Q&A Session Summary Question: How is the bookings environment evolving given the tariffs? - The OEM hardware sales are not a significant component of the business going forward, and there is active dialogue with customers regarding the impact of tariffs [32][33] Question: Are customers still contracting for storage projects? - There has not been a significant slowdown in solar bookings, and the pace of deployment remains strong [36][38] Question: What are the drivers for expected improving profitability? - Improvement is anticipated from operational expense reductions and revenue growth, with a focus on managing operating expenses effectively [40][42] Question: Can you elaborate on the brownfield opportunities mentioned? - The company is pursuing opportunities in core geographies where managed services are already established, with a broad-based approach rather than targeting specific areas [48] Question: What is the rationale for deemphasizing PowerBidder Pro? - The decision was based on growth potential and the ability to execute effectively, focusing on PowerTrack and associated offerings instead [55]

Core Viewpoint - Stem (STEM) is expected to report its first-quarter 2025 earnings on April 29, with revenues estimated at $25.80 million, reflecting a 1.30% increase year-over-year, and a projected loss of 20 cents per share, which is an improvement from a loss of 46 cents in the same quarter last year [1][3]. Group 1: Earnings Expectations - The Zacks Consensus Estimate for first-quarter 2025 revenues is $25.80 million, indicating a 1.30% increase from the previous year [1]. - The consensus for the bottom line is a loss of 20 cents per share, which has widened by 6 cents over the past month but shows improvement from a loss of 46 cents in the prior year [1][2]. Group 2: Performance Drivers - The anticipated performance for the first quarter is expected to benefit from the high-margin software platform, PowerTrack, which has delivered gross margins of 70-80% in previous quarters [3]. - The company's strategic shift towards software and services aims to reduce reliance on lower-margin hardware sales, likely supporting improved profitability [3]. - International expansion, particularly a deal with Neovolt in Hungary to manage a 484 MW solar portfolio, is expected to contribute to revenue growth [4]. Group 3: Operational Improvements - The company expects an improvement in operating cash flow due to working capital releases related to OEM hardware, aided by efficient inventory management and a reduction in lower-margin hardware deployments [5]. - Stem plans to cut operational expenses by over 20% in 2025, focusing on profitability and operational efficiency through targeted initiatives [6]. Group 4: Challenges - A significant decline in hardware sales during the fourth quarter of 2024 negatively impacted overall performance, and this trend is expected to continue into the first quarter of 2025, putting pressure on total revenues [7]. Group 5: Earnings Prediction Model - According to the Zacks model, Stem currently has an Earnings ESP of 0.00% and a Zacks Rank of 2 (Buy), indicating that the odds of an earnings beat are not favorable [8].