Stem (STEM) Q1 2026 earnings summary

Executive summary

• Achieved fourth consecutive quarter of positive adjusted EBITDA, reaching $2.0M, with the first-ever positive Q1 adjusted EBITDA, reflecting operational discipline and margin durability in a seasonally light quarter.

• Q1 2026 revenue was $29.0M, down 11% year-over-year, primarily due to reduced battery hardware resales and a strategic shift toward software and services.

• Net loss improved to $18.9M from $25.0M in Q1 2025, reflecting lower operating expenses and a focus on higher-margin business lines.

• PowerTrack software revenue grew 16% year-over-year and 4% sequentially, with ARR up 8% year-over-year to $61.2M.

• Announced acquisition of raicoon software assets to enhance PowerTrack's capabilities and signed a co-marketing agreement with Nuvation Energy.

Financial highlights

• GAAP gross margin improved to 38% from 32% year-over-year; non-GAAP gross margin reached a record 52% from 46%.

• Adjusted EBITDA was $2.0M, a $7M improvement year-over-year.

• Cash operating expenses fell to $16.3M from $23.0M year-over-year, representing 56% of revenue.

• Operating cash flow was negative $8.3M, reflecting working capital timing; cash and cash equivalents at quarter-end were $36.6M.

• Net loss per share was $(2.22), improved from $(3.05) year-over-year.

Outlook and guidance

• Reaffirmed full-year 2026 guidance: total revenue $140M–$190M; software/services/edge hardware $130M–$150M; battery hardware resale up to $40M.

• Non-GAAP gross margin expected at 40%–50%, with margin compression anticipated as battery hardware resales increase in H2.

• Adjusted EBITDA guidance: $10M–$15M; operating cash flow: $0–$10M; year-end ARR: $65M–$70M.

• Management believes cash reserves are sufficient for at least the next 12 months but highlights the need for improved cash flow or additional capital to support strategic initiatives.

• Focused on operational leverage, strengthening PowerTrack, and building for accelerated growth in 2027 and beyond.