Stem (STEM) Q4 2025 earnings summary

Executive summary

• Achieved a transformative year in 2025, shifting to a software-centric, operationally disciplined model with best-in-class execution and financial turnaround.

• Delivered first-ever full year of positive adjusted EBITDA and net income, with three consecutive quarters of positive adjusted EBITDA.

• Generated positive operating cash flow and strengthened cash position, ending 2025 with $48.9 million in cash.

• Launched PowerTrack EMS and PowerTrack Sage, expanding product suite and international presence, including a 100MWh deal in Germany.

• Net income reached $137.8 million, reversing a net loss of $854.0 million in 2024, driven by a $220 million gain on extinguishment of debt and absence of large impairments.

Financial highlights

• Full year 2025 revenue grew 8% year-over-year to $156.3 million; software, services, and edge hardware revenue up 25% to $141.4 million.

• Year-end ARR increased 16% year-over-year to $61.1 million.

• Achieved record GAAP gross margins of 38% and non-GAAP gross margins of 46% for 2025; Q4 GAAP gross margin at 49%.

• Full year adjusted EBITDA was $6.7 million, with three consecutive quarters of positive adjusted EBITDA.

• Positive operating cash flow of $6.9 million for 2025; ended year with $48.9 million in cash.

Outlook and guidance

• 2026 revenue expected in the range of $140–190 million, with $130–150 million from high-margin software, services, and edge hardware.

• Non-GAAP gross margins guided at 40–50%; adjusted EBITDA expected at $10–15 million, representing ~85% growth at midpoint.

• ARR projected at $65–70 million, about 10% growth at midpoint.

• Focused on operational leverage, core business strength, and building for accelerated growth in 2027 and beyond.