Stem, Inc.

What they do

Stem provides an integrated software suite, PowerTrack, for solar, storage, and hybrid assets, including monitoring, analytics, energy management, SCADA, power plant controller, logger, and optimizer. The company also offers edge hardware, project services, managed services, and professional services to project developers, asset owners, EPCs, and distributors. Operations span projects in 55 countries.

Revenue drivers

• PowerTrack Software — Software subscriptions for solar monitoring and analytics; grew 16% YoY in Q1 2026 and is the core growth product.
• Services (Managed and Professional) — Full lifecycle storage services and project lifecycle expertise; part of the software, services, and edge hardware category.
• Edge Hardware — OEM-agnostic devices connecting assets to software; combined with software and services revenue was $29M in Q1 2026, up 4% YoY.

Recent performance

In Q1 2026, total revenue was $29.0M, down 11% YoY from $32.5M, due to reduced battery hardware sales. Software, services, and edge hardware revenue rose 4% to $29.0M. GAAP gross margin improved to 38% from 32%, and non-GAAP gross margin hit a record 52%. Net loss narrowed to $18.9M from $25.0M, and adjusted EBITDA was positive at $2.0M versus a $4.6M loss a year earlier. The company ended Q1 2026 with $36.6M cash, down from $48.9M at end of 2025.

Strategy

Management is executing a strategy announced in 2024 to shift away from battery resales—historically the largest revenue source—toward AI-enabled software, edge, and services. In April 2025, they cut approximately 27% of the global workforce to prioritize software investments and reduce costs. They are focusing on operational leverage, strengthening the core business, and building a foundation for growth. The company expects to maintain expense discipline, particularly in sales, marketing, R&D, and G&A.

Risks

• Transition execution risk — The shift from battery resales to software may not achieve anticipated benefits, leading to reduced revenue and short-term operational disruptions.
• Scale and demand challenges — Limited operating history at current scale and nascent industry could make it difficult to scale software and services offerings.
• Negative equity — As of June 30, 2026, shareholder equity was negative $269.6M against total liabilities of $549.8M, indicating financial strain.
• Competitive and market risks — Intense competition and uncertainty around market acceptance for distributed generation offerings could impede growth.

Outlook

Management reaffirmed full-year 2026 guidance across all metrics after Q1 results. They expect continued operating leverage and sustained margin improvements from the software-focused strategy. The company plans to drive profitable growth while managing costs and investing in software.