Stem, Inc. · NYSE:STEM

Stem — Star Peak Energy Transition — Simmons Energy Conference 2021

32 slides from Stem's conference presentation, Mar 22, 2021

  1. Slide 1: Leader in AI-Driven Storage Solutions

    Leader in AI - Driven Storage Solutions Simmons Energy Conference March 22, 2021

  2. Slide 2: Disclaimer

    © 2021 Stem, Inc. 2 Disclaimer Information Subject to Change This presentation is provided for informational purposes only and has been prepared to assist interested parties in making th eir own evaluation with respect to the proposed business combination of Star Peak Energy Transition Corp. (“STPK”

  3. Slide 3: Disclaimer

    © 2021 Stem, Inc. 3 Disclaimer This presentation also includes references to financial measures that are calculated and presented on the basis of methodolog ies other than in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Any non - GAAP financial m

  4. Slide 4: Introduction

    © 2021 Stem, Inc. 4 Introduction John Carrington CEO and Director Mark Triplett Chief Operating Officer Alan Russo Chief Revenue Officer Prakesh Patel Chief Strategy Officer Larsh Johnson Chief Technology Officer Bill Bush Chief Financial Officer • Seasoned leadership team with 150+ years of experie

  5. Slide 5: Our Vision: Smart Storage is Key to Global Decarbonization

    © 2021 Stem, Inc. Our Vision: Smart Storage is Key to Global Decarbonization A revolutionized grid, with Stem, is the solution 5 Distributed, renewable generation is supplementing and replacing traditional generation Since 2019, 90% of new interconnection requests were renewables and/or storage, but

  6. Slide 6: Investment Highlights

    © 2021 Stem, Inc. 6 Investment Highlights 6 Stem is the first pure play smart energy storage company to go public in the US • ~$1.2 trillion in new revenue opportunities for integrated storage expected to be deployed by 2050 (1) • Battery storage capacity expected to increase by 25x by 2030 (2) • 95

  7. Slide 7: Hardware Deliveries Drive Strong Recurring Software Cash Flows

    © 2021 Stem, Inc. 7 Hardware Deliveries Drive Strong Recurring Software Cash Flows Hardware + Network Integration Software Market Participation Total Deliveries (kWh) (x) Project Hardware ASP ($kWh) = Total Hardware Revenues Total AUM (kWh) (x) Software Subscription ($/kWh/month) = Total Software (R

  8. Slide 8: Global Commitment to Decarbonization

    © 2021 Stem, Inc. 8 Global Commitment to Decarbonization REGULATORS CORPORATES UTILITIES & ASSET OWNERS With the world committed to decarbonization, Stem is well positioned to capture this tailwind. Source: Company filings, EEI, S&P Global Market Intelligence. Japan net zero emissions pledge NY, MA,

  9. Slide 9: Clean Energy Technology Convergence: Disruption and Exponential Growth

    © 2021 Stem, Inc. $ 0 $ 100 $ 200 $ 300 $ 400 2009 2011 2013 2015 2017 2019 Levelized Cost of Energy ($/kW) Nuclear Coal CCGT Wind Solar PV 9 Clean Energy Technology Convergence: Disruption and Exponential Growth Renewables Lowest Cost Generation Battery Hardware Rapid Cost Reductions Source: Bloomb

  10. Slide 10: Stem is a Market Leader with Significant Scale and Visible Growth

    © 2021 Stem, Inc. - 100 200 300 400 500 600 700 Hyundai Electric Tesla, Inc. NEC Corp. Fluence Energy Nidec Corp. Mitsubishi Electric Sungrow Power Supply Co Ltd. Storage Capacity Commissioned (MWh) ` 10 Stem is a Market Leader with Significant Scale and Visible Growth • 950+ systems operating or co

  11. Slide 11: Athena Platform Delivers Value to Multiple Customer Segments

    © 2021 Stem, Inc. 11 Athena Platform Delivers Value to Multiple Customer Segments Stem offers more value streams in more markets with more asset types AI - Driven Athena platform facilitates monetization of 11 out of 13 identified energy storage value streams Source: Rocky Mountain Institute. Servic

  12. Slide 12: Athena Platform Delivers Resource Adequacy in the California Market

    © 2021 Stem, Inc. 12 Athena Platform Delivers Resource Adequacy in the California Market Its Electric Grid Under Strain, California Turns to Batteries New York Times “On Friday, Aug. 14, the first day California ordered rolling blackouts, Stem, an energy company based in the San Francisco Bay Area,

  13. Slide 13: Stem Delivers a Strong Value Proposition to Customers

    © 2021 Stem, Inc. (1,500) (1,000) (500) 0 500 1,000 1,500 2,000 2,500 09:30 13:00 16:30 20:00 23:30 03:00 06:30 10:00 13:30 17:00 kW Time of Day Battery Facility Grid Sees 13 Stem Delivers a Strong Value Proposition to Customers Increasing Asset Returns Athena AI enables solar generation time - shif

  14. Slide 14: Industry Leading Reach And Unmatched Sales Network

    © 2021 Stem, Inc. 14 Industry Leading Reach And Unmatched Sales Network 500+ sales executives across EPC / developer channels with Stem University Deep relationships across the Fortune 500 Distributor relationships cover entire US market Consistently delivering differentiated returns to renewable as

  15. Slide 15: Strong Balance Sheet Drives Rapid Expansion

    © 2021 Stem, Inc. 15 Strong Balance Sheet Drives Rapid Expansion ~$525MM Athena Expansion & Tech Acquisitions Product development to further extend Athena AI leadership position and accelerate roadmap Supply Chain Savings Capital to further reduce cost structure with OEMs Balance Sheet Strength Supp

  16. Slide 16: Financial Forecast

    © 2021 Stem, Inc. 16 Section 2 Financial Forecast

  17. Slide 17: Stem Key Metrics and Seasonality

    © 2021 Stem, Inc. 17 Stem Key Metrics and Seasonality Key Metrics Reporting 1Q21 2Q21 3Q21 4Q21 5 - 10% 5 - 15% 20 - 30% 50 - 60% Contracted AUM 12 Month Pipeline Contracted Backlog Revenue EBITDA 1.0 GWh $1.6B 167 projects / $184MM 2021E: $147M 2021E: ($25M) Seasonality In Line with 2020 Actuals Ke

  18. Slide 18: Robust revenue growth by customer type and segment

    © 2021 Stem, Inc. $36 $147 $315 $526 $748 $944 $1,167 $0 $300 $600 $900 $1,200 $1,500 2020A 2021E 2022E 2023E 2024E 2025E 2026E FTM BTM 18 Robust revenue growth by customer type and segment By Software Type ($MM) By Customer Type ($MM) By Segment ($MM) Market participation revenue expands to ~28% of

  19. Slide 19: Gross margin expands with increasing scale and software growth

    © 2021 Stem, Inc. 19 Gross margin expands with increasing scale and software growth Gross Margins Driven by Increasing Software Margin (2) Adjusted Gross Profit by Type ($MM) (1) As Stem’s AUM grows, software becomes material portion of gross profit Hardware Gross Margin Source: Stem. (1) Stem total

  20. Slide 20: Stem delivers consistent growth and improving margins

    © 2021 Stem, Inc. ($MM) FY20A FY21E FY22E FY23E FY24E FY25E FY26E Revenue $36 $147 $315 $526 $748 $944 $1,167 YoY Growth 107% 304% 115% 67% 42% 26% 24% Adjusted Gross Profit $4 $24 $82 $169 $264 $360 $483 Gross Margin 11% 16% 26% 32% 35% 38% 41% Adjusted Operating Expenses 33 49 54 55 60 65 66 Adjus

  21. Slide 21: Illustrative project revenue contribution case study

    © 2021 Stem, Inc. Delivery Year 1-20 Total Revenue 21 Illustrative project revenue contribution Case Study • Front of the Meter, New York Market • Hardware + Software • 5 MW / 20 MWh Standalone Storage Solution • ~$10MM customer lifetime value Hardware + Network Market Participation (2) Software Rev

  22. Slide 22: Sources and Uses

    © 2021 Stem, Inc. Sources and Uses Sources $MM % Uses $MM % Committed Equity PIPE 225 17.9% Stock to Stem Shareholders 650 51.7% Star Peak Trust 383 30.4% Estimated Fees and Expenses 51 4.1% Stem Shareholder Equity Rollover 650 51.7% Estimated Repayment of Debt 45 3.6% Cash to Stem Balance Sheet 512

  23. Slide 23: Public comparable universe

    © 2021 Stem, Inc. 23 Public comparable universe Solar Technology Solutions Distributed Solar Sustainable Infrastructure Diversified Energy Tech Stem Peers Relevance to Stem • Upfront equipment margins augmented by recurring cash flows • Diversified long - term contracted cash flows • Increasing BTM

  24. Slide 24: Investment thesis

    © 2021 Stem, Inc. 24 Strong Balance Sheet Drives Rapid Expansion Stem is the first pure play smart energy storage company to go public in the US Investment thesis Large Addressable Market and Strong Macro Tailwinds Market Leader with Industry Leading Technology Balance Sheet Well Positioned to Capit

  25. Slide 25: Q&A

    © 2021 Stem, Inc. 25 Q&A

  26. Slide 26: Appendix A Supplemental Information

    Appendix A Supplemental Information

  27. Slide 27: Definitions of key metrics

    © 2021 Stem, Inc. 27 Item Definition 12 - Month Pipeline Total value of uncontracted, potential hardware and software revenue from opportunities currently in process by Stem direct s ale sforce and channel partners (see page 15), which have a reasonable likelihood of contract execution within 12 mon

  28. Slide 28: Market Leader and Continued Growth With Asset Owners and Utilities

    © 2021 Stem, Inc. 28 Market Leader and Continued Growth With Asset Owners and Utilities 2,381 9,679 14,107 17,107 17,219 21,006 26,533 0 5,000 10,000 15,000 20,000 25,000 30,000 2020 2021 2022 2023 2024 2025 2026 All Others California Arizona Hawaii New York Massachusetts PJM (excl. NJ) Texas x Util

  29. Slide 29: Dominant Market Share with Commercial & Industrial Customers

    © 2021 Stem, Inc. 29 Dominant Market Share with Commercial & Industrial Customers 292 593 1,336 1,252 1,761 2,238 3,043 0 500 1,000 1,500 2,000 2,500 3,000 3,500 2020 2021 2022 2023 2024 2025 2026 California New York All Others Massachusetts PJM (excl. NJ) Arizona Hawaii Texas BTM US Energy Storage

  30. Slide 30: Growing Global Total Addressable Market

    © 2021 Stem, Inc. 30 Growing Global Total Addressable Market Worldwide Energy Storage Outlook (Ex - US) (MWh) 7,881 10,611 13,040 16,979 18,195 21,233 26,630 0 5,000 10,000 15,000 20,000 25,000 30,000 2020 2021 2022 2023 2024 2025 2026 Australia Canada China France Germany India Italy Japan South Ko

  31. Slide 31: Global Energy Storage Market to Grow ~25x By 2030

    © 2021 Stem, Inc. 31 Global Energy Storage Market to Grow ~25x By 2030 Global Energy Storage Outlook (GWh) x All major global markets forecasted at double digit storage growth rates over the decade x US and China lead energy storage growth with respective CAGRs of ~45% and ~41% respectively through

  32. Slide 32: GAAP to Non-GAAP Reconciliations

    © 2021 Stem, Inc. 32 GAAP to Non - GAAP Reconciliations 2020 Financials Source: Stem. Reconciliation of GAAP Gross Profit to Adjusted Gross Profit 2020A GAAP Gross Profit ($4) Amortization Related to Internally Developed Software (IDS) $4 Impairments and Inventory Adjustments $3 Other Adjustments $1

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