Slide 1: Leader in AI-Driven Energy Solutions
January 2023 Leader in AI-Driven Energy Solutions © 2023 Stem, Inc. 1
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This presentation, as well as other statements we make, contains “forward-looking statements” within the meaning of the federal securities laws, which include any statements that are not historical facts. Such statements often contain words s
Slide 3: Agenda
Agenda • Overview • Third Quarter 2022 Results and Highlights • Full Year 2022 Guidance Commentary • Technology Innovation • Operational Excellence © 2023 Stem, Inc. 3
Slide 4: Today’s Presenters
Today’s Presenters Seasoned leadership team with extensive experience in software, energy and industrial companies John Carrington Bill Bush CEO and Director Chief Financial Officer Prakesh Patel Ted Durbin Chief Strategy Officer Vice President, Investor Relations © 2023 Stem, Inc. 4
Slide 5: The Journey to Today
The Journey to Today Industry Leadership, Innovation, and Execution First to market C&I storage to the Fortune 500 First California ISO wholesale market participation Largest Virtual Power Plant with utility (420 MWh in southern CA) Largest fleet of Front-of-the-Meter storage in ISO-New England #1 s
Slide 6: Third Quarter 2022 Results & Highlights
Third Quarter 2022 Results & Highlights Continued Q3 Momentum Q3 Highlights Record Revenue GAAP/Non-GAAP $100M Gross Margin +150% YoY 9% / 13% +49% QoQ flat YoY Record revenue, both year-to-date Athena ranked #1 for innovation Record Contracted Strong Bookings and year-over-year in optimization and
Slide 7: Solid Q3 Commercial Execution
Solid Q3 Commercial Execution Bookings momentum and software services pricing power drive growth and margins • Contracted Annual Recurring Revenue (CARR) up +5% QoQ at $61M underscores leading software differentiation • Services revenue increased 9% QoQ; expect acceleration in 2023+ • Continuing mar
Slide 8: Full Year 2022 Guidance
Full Year 2022 Guidance 2022E: Q1’22A Q2’22A Q3’22A Q4’22E Revenue $350 – $425M $41M $67M $100M $145– 15–20% Non-GAAP 16% 17% 13% 220M Gross Margin 2022E: Q1’22A Q2’22A Q3’22A Q4’22E Bookings $151M $226M $250– $850 – $950M $223M 350M 2022E: Year-End 2022E: Adjusted EBITDA ($60) – ($20)M CARR $65 – $
Slide 9: Commentary on 2022 Guidance
Commentary on 2022 Guidance Expect 2022 bookings >$1 billion, continued cost management Guidance Commentary ▪ Revenue: Forecast Q4’22 revenue towards lower end of previously provided Revenue Revenue Q4’22 guidance range, primarily due to port delays for battery deliveries and Non- $145 – $220M ▪ Imp
Slide 10: Strong Recurring Software Cash Flows Enabled by Hardware Deliveries
Strong Recurring Software Cash Flows Enabled by Hardware Deliveries Software Hardware + Network Integration Market Participation Total AUM (kWh) Total Deliveries (kWh or kW) Total AUM (kWh) (x) Software Subscription ($/kWh/month) (x) Project Hardware ASP ($/kWh or $/kW) (x) Stem’s Market Participati
Slide 11: Market Leading Value Proposition
Market Leading Value Proposition Behind-the-Meter “BTM” Commercial & Industrial Services Representative Customers Reduce Consumer Energy Bills 10–30% Electric Vehicle Offerings Asset Performance Management Corporate ESG Objectives Front-of-the-Meter “FTM” Utilities, IPPs, Developers Representative P
Slide 12: Athena Ranked #1
Athena Ranked #1 Stem ranked #1 for innovation by Frost & Sullivan in its Frost Radar™: Digital Platforms for Renewable Energy and Battery Storage Optimization and Trading report Report highlights: • Top software solution with a track record of delivering tangible, high-value ROI • Fully automated m
Slide 13: AlsoEnergy PowerTrack Ranked #1 Solar and Storage Monitoring and Control Vendor
AlsoEnergy PowerTrack Ranked #1 Solar and Storage Monitoring and Control Vendor “AlsoEnergy takes a holistic view of its M&C [measurement and control] capabilities, targeting an integrated offering across varied application segments, giving the company an edge in the market.” - Guidehouse Insights L
Slide 14: Best Positioned to Benefit from Inflation Reduction Act (IRA)
Best Positioned to Benefit from Inflation Reduction Act (IRA) Expect additional upside to financial plan as provisions are implemented IRA Section Impact to Stem Standalone storage • Improves customer economics with 30- ITC – greenfield 60% reduction in project costs Standalone storage • ~$6B potent
Slide 15: AlsoEnergy Outperforming the Broader Solar Industry
AlsoEnergy Outperforming the Broader Solar Industry Negative impact on near-term demand, but significant growth expected in 2023 and beyond Supply chain issues, labor shortages and related regulatory Pipeline growth is accelerating heading into 2023, actions have dampened 2022 growth with continued
Slide 16: Improving Access to Large Scale Solar + Storage
Improving Access to Large Scale Solar + Storage Athena Unit Controller enables more customer choice while driving better margin Initiative Customer benefits Stem benefits • Develop universal “unit controller” edge • Enables supplier optionality to • Increases penetration into large solar / device fo
Slide 17: Simplifying Deployment and Operations to Monetize Professional Services
Simplifying Deployment and Network Operations Operations to Monetize • Real-time asset operations • 24/7 monitoring & site management Professional Services • Asset management services • OEM warranty management • Compliance reporting Design & Engineering • Building Athena-ready sites • Storage sizing
Slide 18: Key Takeaways
Key Takeaways • Positioned for EBITDA positive in 2H’23 • Technology leadership validated by Guidehouse & Frost & Sullivan #1 rankings • Unit controller software strategy expected to dampen supply chain volatility • Integration of AlsoEnergy on track: introduced unified customer experience, consolid
Slide 19: Appendix
Appendix © 2023 Stem, Inc. 19
Slide 20: Resurgent Behind-the-Meter Storage Market Outlook
Resurgent Behind-the-Meter Storage Market Outlook Leading market share and technology differentiation Key Metrics BTM US Energy Storage Market Outlook • Customers include community, commercial and industrial 2,500 51% 2,268 • Typically 10-year software contract CAGR • Average system of 2MWh and $1M
Slide 21: Accelerating eMobility Market Outlook
Accelerating eMobility Market Outlook Energy storage paired with fleet electric vehicles and vehicle-to-grid opportunities Compelling Value Proposition Strong Growth in EV Charging Demand • Enhanced resiliency for EV fleets and charging infrastructure with Stem core value streams applied to EV loads
Slide 22: Strong Front-of-the-Meter Storage Market Outlook
Strong Front-of-the-Meter Storage Market Outlook Proven track record in driving higher revenue and project returns Key Metrics FTM US Energy Storage Market Outlook • Customers include Utilities, IPPs, and Renewable Asset Owners 50,000 58% • ~25% of total FTM bookings are software-only by 2025 CAGR 4
Slide 23: Solar Asset Performance Management Market Outlook
Solar Asset Performance Management Market Outlook #1 in the industry and positioned to move upstream into large portfolios integrated with storage Key Metrics US Solar PV Market Outlook • AlsoEnergy PowerTrack reduces operating costs and enhances 50,000 BTM Utility 38% CAGR 41,219 project revenues f
Slide 24: Reconciliation of Non-GAAP Gross Margin
Reconciliation of Non-GAAP Gross Margin Three Months Ended Nine Months Ended September 30, September 30, $ millions unless otherwise noted 2022 2021 2022 2021 Revenue $99.5 $39.8 $207.5 $74.6 Cost of Revenue (90.4) (36.7) (187.0) (71.7) GAAP Gross Margin 9.1 3.1 20.5 2.9 GAAP Gross Margin (%) 9% 8%
Slide 25: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA Three Months Ended Nine Months Ended September 30, September 30, $ thousands 2022 2021 2022 2021 Net (loss) income attributable to Stem $(34,279) $(115,612) $(88,781) $(67,157) Adjusted to exclude the following: Depreciation and amortization 11,547 6,003 33,353 17,5
Slide 26: Definitions
Definitions Item Definition Pipeline represents the total value (excluding market participation revenue) of uncontracted, potential energy storage hardware and software contracts that are currently being pursued by Stem direct salesforce and 12-Month Pipeline channel partners with developers and ind
Slide 27: © 2023 Stem, Inc.
stem ) 2023 Stem, Inc 27