Slide 1: Q3 2024 Financial Results
October 30, 2024 Q3 2024 Financial Results
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 • Strategy Review • Third Quarter 2024 Results • FY2024 Guidance • Key Takeaways © 2024 Stem, Inc. 3
Slide 4: The last few months were transformational for Stem
The last few months were transformational for Stem David Buzby Strategy review initiated appointed Interim Albert Hofeldt Doran Hole appointed CFO CEO appointed CTO 8/6 9/16 10/23 8/27 10/1 Nov-Dec Inaugural ESG Strategy review Cost Report published completed rationalization © 2024 Stem, Inc. 4
Slide 5: A refined strategy to drive sustainable profitability and scalable expansion
A refined strategy to drive sustainable profitability and scalable expansion Refining our go-to- Expanding and Enhancing Updating approach to market strategy emphasizing commitment to battery hardware centered around consultative energy software innovation focused on software and services services a
Slide 6: Energy Services: adding value at each step
Energy Services: adding value at each step A trusted strategic partner throughout the entire energy project lifecycle New beginning of Previous beginning of engagement engagement Development & Engineering Procurement & Integration Performance & Operations 30%-50% Gross Margin Edge Hardware Software
Slide 7: Offering differentiated services to customers
Offering differentiated services to customers Uniquely positioned to provide value-added services to customers throughout the lifecycle of a project and across their portfolios Market Technical Software Experience Expertise Capabilities • Clean energy subject • Vetted and worked • In-house developme
Slide 8: We are not entering energy services for the first time
We are not entering energy services for the first time Example engagements highlight diversity of energy service customers and offerings Distributed Utility-scale Long-Term Family-owned Customer Generation Storage Developer Asset Owner Storage Developer Storage Developer (10 GW total AUM) Potential
Slide 9: Our Software Offerings Enhance Customer Value
Our Software Offerings Enhance Customer Value Driving better technical & commercial performance across clean energy assets PowerBidder Pro PowerTrack APM PowerCore EMS Purpose Wholesale Power Market Asset Performance Management Energy Management System Forecasting & Bid Optimization AI-driven price
Slide 10: A new approach to energy storage hardware
A new approach to energy storage Procurement Advisory Services hardware Use our depth of OEM knowledge to advise Emphasizing procurement advisory customers on hardware selection services in go-to-market strategy Strict Terms Selectively pursue opportunities for hardware resale when they satisfy stri
Slide 11: Financial and Operating Results
Financial and Operating Results © 2024 Stem, Inc.
Slide 12: Third Quarter 2024 Results & Updates
Third Quarter 2024 Results & Updates The last few months were transformational for Stem Q3 Results* Q3 Updates Revenue Contracted Annual Recurring Revenue $29M (78%) YoY $92M 2% QoQ / +5% YoY Strategy review complete, focused Successful first PowerBidder Pro on software and services deployment with
Slide 13: 3Q24 Financial Metrics
3Q24 Financial Metrics Revenue, GM, Adj. EBITDA, and Operating Cash Flow Revenue, Gross Margin, Adj. $ millions unless otherwise noted EBITDA, and Operating Cash Flow GAAP & Non-GAAP Revenue* Gross Margin %* 134 • Consolidated revenue down 78% YoY due 46% to lower storage hardware resale revenue 21%
Slide 14: 3Q24 Operating Metrics
3Q24 Operating Metrics CARR, Backlog, and AUM $ millions unless otherwise noted CARR, Backlog, and AUM Growth Backlog CARR/ARR $1,579 • Backlog down slightly QoQ due to low bookings $1,547 $90 $92 • Operating ARR +7% QoQ, driven by storage activations and steady solar growth • Storage AUM increased
Slide 15: Revising 2024 Guidance
Revising 2024 Guidance 2024E: 1Q24A 2Q24A 3Q24A 4Q24E $45M- Revenue(1) $135M - $155M $25M $34M $29 $65M Prior: $200M-$270M 32–36% Non-GAAP Gross Margin Prior: $110M- 24% 40% 46% Prior: 25-30% $160M 2024E: 2024E: Bookings Adjusted EBITDA $100M - $500M ($45)M – ($30)M Prior: $0.6B-$1.1B Prior: ($30)M-
Slide 16: Future financial profile of Stem
Future financial profile of Stem Lower revenue base Operating expense Utilizing the right More predictable reductions to metrics for revenue support refined software and Much more attractive strategy services-centric margin profile business Cost savings Lower bookings expected to Evaluating changes
Slide 17: Key Takeaways
Key Takeaways Refined strategy expected to drive more predictable, recurring revenue ● The Strategy Review process is complete ● We will continue to identify ways to optimize and maximize the value of the business ● Commercial focus on Software and Services expected to drive more predictable, recurr
Slide 18: Q&A
stem © 2024 Stem, Inc.
Slide 19: About Stem
About Stem Stem (NYSE: STEM) is a global leader in AI-enabled software and services that enable its customers to plan, deploy, and operate clean energy assets. Stem (NYSE: STEM) is a global leader in AI-enabled software and services that enable its customers to plan, deploy, and operate clean energy
Slide 20: Appendix
Appendix © 2024 Stem, Inc.
Slide 21: Financial and Operating Metrics
Financial and Operating Metrics $ millions unless otherwise noted Three Months Ended September 30, 2024 2023 Key Financial Results(1) Revenue $29.3 $133.7 GAAP gross (loss) profit 6.2 (20.3) GAAP gross margin % 21% (15%) Non-GAAP gross profit* 16.2 21.4 Non-GAAP gross margin %* 46% 12% Net Loss (148
Slide 22: Supplemental Revenue Detail
Supplemental Revenue Detail $ millions unless otherwise noted Three Months Ended September 30, 2024 2023 Solar Hardware Revenue $13.2 $11.0 Solar Services and Other Revenue 10.0 8.5 Total Solar Revenue $23.2 $19.5 Three Months Ended September 30, $ millions unless otherwise noted 2024 2023 Solar Sof
Slide 23: Reconciliation of GAAP and Non-GAAP Gross Margin
Reconciliation of GAAP and Non-GAAP Gross Margin Three Months Ended September 30, $ millions unless otherwise noted 2024 2023 Revenue $29.3 $133.7 Cost of revenue (23.1) (154.0) GAAP gross (loss) profit 6.2 (20.3) GAAP gross margin (%) 21% (15%) Non-GAAP Gross Profit GAAP Revenue $29.3 $133.7 Add: R
Slide 24: Reconciliation of Net Loss to Adjusted EBITDA
Reconciliation of Net Loss to Adjusted EBITDA $ thousands unless otherwise noted Three Months Ended September 30, 2024 2023 Net loss $(148,300) $(77,072) Adjusted to exclude the following: Depreciation and amortization(1) 11,516 11,531 Adjusted EBITDA, as used in the Company's full year 2024 guidanc
Slide 25: Reconciliation of GAAP Operating Expense to Cash Operating Expense
Reconciliation of GAAP Operating Expense to Cash Operating Expense $ millions unless otherwise noted Three Months Ended September 30, 2024 2023 GAAP Operating Expense(1) $150.6 $48.0 Less: Non-cash adjustments Depreciation and Amortization (3.5) (4.2) Stock Compensation (6.5) (11.2) Other adjustment
Slide 26: Definitions
Definitions Item Definition Total value of executed customer agreements, as of the end of the relevant period (e.g. quarterly bookings or annual bookings) • Customer contracts are typically executed 6-24 months ahead of installation • The Booking amount typically includes: Bookings 1. Hardware reven
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