Stem (STEM) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $34 million, down 63% year-over-year, mainly due to project delays, lower hardware demand, and customer financing/interconnection issues.

• Net loss for Q2 2024 was $582.3 million, driven by a $547 million goodwill impairment.

• High-margin software and services revenue remained stable or grew, offsetting hardware declines.

• Operating cash flow improved by $154 million year-over-year to -$12 million.

• CFO transition announced: Bill Bush stepping down, Doran Hole appointed effective September 2, 2024.

Financial highlights

• GAAP gross margin reached 28% and non-GAAP gross margin 40%, both record highs, due to a greater mix of software revenue.

• Adjusted EBITDA was $(11.3) million, relatively flat year-over-year despite lower revenue.

• Bookings for Q2 2024 were $25.4 million, down sharply year-over-year due to project delays.

• Contracted backlog at $1.58 billion, up 14% year-over-year but down 4% sequentially.

• $547 million goodwill impairment charge recorded in Q2 2024.

Outlook and guidance

• 2024 revenue guidance revised to $200–$270 million, down from $567–$667 million, due to project delays.

• Gross margin guidance raised to 25–30% as lower-margin hardware revenue decreases.

• Bookings guidance cut to $600–$1,100 million; year-end CARR guidance now $100–$110 million.

• Adjusted EBITDA guidance lowered to $(30) million–$(20) million; positive operating cash flow still targeted for 2024.

• No new equity raise anticipated; liquidity considered sufficient.