Slide 1: Q2 2024 Financial Results
August 6, 2024 Q2 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 • Second Quarter 2024 Results • Business Update • Guiding Principles • Technology and Operations Update • Financial and Operating Results • Key Takeaways © 2024 Stem, Inc. 3
Slide 4: Second Quarter 2024 Results & Highlights
Second Quarter 2024 Results & Highlights Driving free cash flow generation and reducing working capital intensity Q2 Results* Q2 Highlights Revenue Contracted Annual Recurring Revenue $34M (63%) YoY $90M 1% QoQ / +20% YoY Improving gross margins, cash flow, 40 MWh Hardware + Software Deployment and
Slide 5: Success and Challenges with Public Power and Large FTM
Success and Challenges with Public Power and Large FTM Built 15% market share in fastest growing segment of FTM Rush by broader industry to access USDA’s PACE and New ERA financing vehicles has significantly impacted project timelines ● USDA economics generate compelling returns to project owners ●
Slide 6: Key Factors Impacting Results and Action Plan
Key Factors Impacting Results and Action Plan Issue Action Plan • Expanded pipeline of opportunities to diversify reliance on individual deals > $1B of projects delayed due to • Engaging with supply chain and EPC partners to align resources once USDA financing process, project financing is greenligh
Slide 7: 2024 Guiding Principles: Continued Progress
2024 Guiding Principles: Continued Progress Grow free cash flow by leveraging our software leadership Focus on Cash Flow Build Software Extend Technology Generation Services Revenue Leadership Position Operating cash flow +$154M YoY CARR-to-ARR conversion remains PowerTrack APM launch on track on tr
Slide 8: Stem Software Development Progress in Q2 2024
Stem Software Development Progress in Q2 2024 Continued Enhancements to the Leading Energy Asset Performance Optimization Platform Optimization Asset Management Control Forecast & optimize value streams Streamline performance management Control Energy Systems PowerBidder Pro PowerTrack APM PowerCore
Slide 9: 334 MWh Storage Activated in 2Q24
334 MWh Storage Activated in 2Q24 +334 MWh of energy storage Driving CARR-to-ARR conversion: unlocked $1.7M of ARR in 2Q assets deployed Storage Deployments Across a Diversity of Markets, Customers, and Use Cases +$1.7M ARR 2Q24 Stem Energy Storage MWh from deployments Deployed by State of energy st
Slide 10: Solar Business Remains Strong
Solar Business Remains Strong Steady growth continues -> +$1M of ARR in 2Q 2024 Steady Growth in Solar Software Revenue ARR* Increasing with nearly All Top Customers +19% CAGR A B $31.4 $28.7 C $22.1 $ in millions D E 2022 2023 1H'24 ann'd F G H • Remain market leader in C&I solar asset management I
Slide 11: Financial and Operating Results
Financial and Operating Results © 2024 Stem, Inc.
Slide 12: 2Q24 Financial Metrics
2Q24 Financial Metrics Revenue, GM, Adj. EBITDA, and Operating Cash Flow Revenue, Gross Margin, Adj. $ millions unless otherwise noted Revenue GAAP & Non-GAAP EBITDA, and Operating Cash Flow Gross Margin % 93 40% • Consolidated revenue down 63% YoY, 28% however adjusted EBITDA remained 18% relativel
Slide 13: 2Q24 Operating Metrics
2Q24 Operating Metrics CARR, Backlog, and AUM $ millions unless otherwise noted CARR, Backlog, and AUM Growth Backlog CARR/ARR $1,640 $1,579 • Backlog down QoQ due to low bookings and $89 $90 software activations • ARR +7% QoQ, driven by storage activations and steady solar growth • Storage AUM +53%
Slide 14: Revising 2024 Guidance
Revising 2024 Guidance 2024E: 1Q24A 2Q24A 3Q24E 4Q24E $30M- $110M- Revenue $200M - $270M $25M $34M $50M $160M Prior: $567M-$667M 25–30% Non-GAAP Gross Margin 24% 40% Prior: 15-20% 2024E: 2024E: Bookings Adjusted EBITDA $0.6B - $1.1B ($30)M – ($20)M Prior: $1.5B-$2.0B Prior: $5M-$20M 2024E: 2024E: CA
Slide 15: Drivers of 2024 Revenue & Adj. EBITDA Change
Drivers of 2024 Revenue & Adj. EBITDA Change Delays in customers’ project financing and interconnection (IX) approvals pushed certain projects into 2H 2024 and 2025+ • Projects still contracted and advancing EBITDA $12.5 Continued operating leverage drives confidence in positive operating cash flow
Slide 16: Progress on Controllable vs Uncontrollable Impacts
Progress on Controllable vs Uncontrollable Impacts Underlying business fundamentals are strong Controllable Uncontrollable Software activations ❌ USDA financing – PACE / New ERA Non-GAAP Gross Margin ❌ Permitting / Interconnection delays Operating leverage ❌ Equipment availability Working capital in
Slide 17: Key Takeaways
Key Takeaways Positive cash flow generation on track for 2H 2024 ● Disappointing quarter offset by strong system activations driving software growth o Financing and interconnection delays negatively impacted performance o Backlog deals are delayed not canceled o Record storage software activations o
Slide 18: Q&A
stem © 2024 Stem, Inc.
Slide 19: About Stem
About Stem Stem (NYSE: STEM) is a global leader in AI-driven clean energy solutions and services. Stem (NYSE: STEM) provides clean energy solutions and services designed to maximize the economic, environmental, and resiliency value of energy assets and portfolios. Stem’s leading AI-driven enterprise
Slide 20: Appendix
Appendix © 2024 Stem, Inc.
Slide 21: Financial and Operating Metrics
Financial and Operating Metrics $ millions unless otherwise noted Three Months Ended June 30, 2024 2023 Key Financial Results Revenue $34.0 $93.0 GAAP gross (loss) profit 9.4 11.9 GAAP gross margin % 28% 13% Non-GAAP gross profit* 13.5 16.4 Non-GAAP gross margin %* 40% 18% Net Loss (582.3) 19.1 Adju
Slide 22: Supplemental Revenue Detail
Supplemental Revenue Detail $ millions unless otherwise noted Three Months Ended June 30, 2024 2023 Solar Hardware Revenue $11.2 $9.9 Solar Services and Other Revenue 9.2 8.7 Total Solar Revenue 20.4 18.6 Three Months Ended June 30, $ millions unless otherwise noted 2024 2023 Solar Software Services
Slide 23: Reconciliation of GAAP and Non-GAAP Gross Margin
Reconciliation of GAAP and Non-GAAP Gross Margin Three Months Ended June 30, $ millions unless otherwise noted 2024 2023 Revenue $34.0 $93.0 Cost of revenue (24.6) (81.1) GAAP gross (loss) profit 9.4 11.9 GAAP gross margin (%) 28% 13% Non-GAAP Gross Profit GAAP Revenue $34.0 $93.0 Less: Cost of reve
Slide 24: Reconciliation of Net Loss to Adjusted EBITDA
Reconciliation of Net Loss to Adjusted EBITDA $ thousands unless otherwise noted Three Months Ended June 30, 2024 2023 Net (loss) income $(582,270) $19,122 Adjusted to exclude the following: Depreciation and amortization(1) 13,651 12,609 Interest expense, net 4,631 3,903 Gain on extinguishment of de
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 June 30, 2024 2023 GAAP Operating Expense $589.2 $46.7 Less: Non-cash adjustments Depreciation and Amortization (4.0) (4.5) Stock Compensation (6.8) (9.9) Impairment of Goodwill (5
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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