Stem Inc, a provider of energy storage systems, bundles third-party hardware with its proprietary Athena software to offer turnkey solutions to commercial and industrial customers, independent power producers, and renewable developers. The company's solutions aim to maximize renewable energy generation and contribute to a cleaner, more resilient grid.
Performance and Challenges
Stem Inc (STEM, Financial) reported a significant decline in revenue for Q2 2024, with figures dropping to $34.0 million, a 63% decrease from $93.0 million in Q2 2023. This shortfall was primarily attributed to unforeseen project timeline extensions caused by delays in USDA-related project financing and interconnection timelines. The company's strategic expansion into large-scale storage markets has led to increased variability and complexity, negatively impacting bookings and operating cash flow.
CEO John Carrington commented,
Our financial performance during the second quarter was a disappointment. Revenue during the period was substantially lower than expected, primarily due to unforeseen extensions of project timelines caused by certain customers’ USDA-related project financing delays and protracted interconnection timelines in the quarter."
Financial Achievements
Despite the revenue decline, Stem Inc (STEM, Financial) achieved notable improvements in gross margins. GAAP gross margin increased to 28% from 13% in Q2 2023, while non-GAAP gross margin rose to 40% from 18% in the same period. These improvements were driven by a higher mix of services revenue and a proactive focus on driving profitable projects.
Key Financial Metrics
Stem Inc (STEM, Financial) reported a net loss of $582.3 million for Q2 2024, compared to a net income of $19.1 million in Q2 2023. This loss was primarily due to a one-time non-cash impairment of goodwill amounting to $547 million. Adjusted EBITDA stood at $(11.3) million, compared to $(9.5) million in Q2 2023. The company ended the quarter with $89.6 million in cash and cash equivalents, down from $112.8 million at the end of Q1 2024.
| Key Financial Results | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $34.0 million | $93.0 million |
| GAAP Gross Profit | $9.4 million | $11.9 million |
| GAAP Gross Margin | 28% | 13% |
| Non-GAAP Gross Profit | $13.5 million | $16.4 million |
| Non-GAAP Gross Margin | 40% | 18% |
| Net (Loss) Income | $(582.3) million | $19.1 million |
| Adjusted EBITDA | $(11.3) million | $(9.5) million |
Operating Highlights
Bookings for Q2 2024 were $25.4 million, a significant drop from $236.4 million in Q2 2023. The contracted backlog increased to $1.6 billion, up 14% from $1.4 billion at the end of Q2 2023. Contracted storage assets under management remained unchanged at 5.8 GWh, while solar monitoring assets under management also remained steady at 26.9 GW.
Management Changes and Future Outlook
Stem Inc (STEM, Financial) announced that Bill Bush will step down as CFO effective September 2, 2024, with Doran Hole named as his successor. The company also revised its full-year 2024 guidance, lowering revenue expectations to $200-$270 million from the previous $567-$667 million. Despite these challenges, the company expects to generate positive operating cash flow for the year.
For more detailed insights and analysis, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Stem Inc for further details.
