New Strategy Implementation in Progress
Increased ARR by more than
Revising Full Year 2024 Guidance for Several Key Metrics
Third Quarter 2024 Financial and Operating Highlights
Financial Highlights
-
Revenue of
$29.3 million , down from$133.7 million in 3Q23. Reflects$5.6 million and$37.4 million reductions in revenue, respectively, due to revised negotiated valuations of assets under certain hardware price guarantees entered into in 2022 and 2023. Lower revenue in the quarter also reflects reduced battery hardware sales, partially offset by growth in software and services revenue1 -
GAAP gross profit of
$6.2 million , up from$(20.3) million in 3Q23 -
Non-GAAP gross profit of
$16.2 million , down from$21.4 million in 3Q23, reflecting lower battery hardware revenue - GAAP gross margin of 21%, up from (15)% in 3Q23
- Non-GAAP gross margin of 46%, up from 12% in 3Q23, reflecting a higher percentage of software and services revenue
-
Net loss of
$148.3 million versus net loss of$77.1 million in 3Q23, which includes$104.1 million of bad debt expense associated with impairment of accounts receivable related to customer contracts that provide a parent company guarantee1 -
Adjusted EBITDA of
$(3.5) million versus$(0.9) million in 3Q23 -
Operating cash flow of
$(9.4) million versus$(4.0) million in 3Q23 -
Ended 3Q24 with
$75.4 million in cash and cash equivalents, versus$89.6 million at the end of 2Q24
Operating Highlights
-
Bookings of
$29.1 million , versus$676.4 million in 3Q23, driven primarily by lower battery hardware resale bookings -
Contracted backlog of
$1.5 billion , down 17% from the end of 3Q23, and down 2% from the end of 2Q24 - Contracted storage assets under management (“AUM”) of 6.0 gigawatt hours (“GWh”), up 20% from the end of 3Q23 and up 3% from the end of 2Q24
- Solar monitoring AUM of 28.5 gigawatts (“GW”), up 8% from the end of 3Q23 and up 6% from the end of 2Q24
-
Contracted annual recurring revenue (“CARR”) of
$92.3 million , up 5% from the end of 3Q23, and up 2% from the end of 2Q24
“We reported another strong quarter of growth in Annual Recurring Revenue, driven by continued adoption of our industry-leading software,” said
“Sequential growth in software and services revenue drove strong GAAP gross margins of 21%, and record non-GAAP gross margins of 46% in the third quarter,” said
“We are adjusting our full year 2024 guidance for several key metrics to account for our latest financial results, ongoing implementation of our new strategy and continued expectation of project delays, which continue to negatively impact our results including revenue, bookings and cash flow,” said
____________________
1 See the section below entitled “Some Factors Affecting our Business and Operations.” Adjusted EBITDA and non-GAAP gross profit and margin percentage for the quarter have been adjusted to exclude the impact of the
|
Key Financial Results and Operating Metrics (in $ millions unless otherwise noted): |
|||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Key Financial Results(1) |
|
|
|
|
|
|
|
||||||||
|
Revenue |
$ |
29.3 |
|
|
$ |
133.7 |
|
|
$ |
88.8 |
|
|
$ |
294.1 |
|
|
GAAP Gross Profit (Loss) |
$ |
6.2 |
|
|
$ |
(20.3 |
) |
|
$ |
(8.6 |
) |
|
$ |
(7.4 |
) |
|
GAAP Gross Margin (%) |
|
21 |
% |
|
|
(15 |
)% |
|
|
(10 |
)% |
|
|
(3 |
)% |
|
Non-GAAP Gross Profit* |
$ |
16.2 |
|
|
$ |
21.4 |
|
|
$ |
43.5 |
|
|
$ |
52.9 |
|
|
Non-GAAP Gross Margin (%)* |
|
46 |
% |
|
|
12 |
% |
|
|
34 |
% |
|
|
15 |
% |
|
Net Loss |
$ |
(148.3 |
) |
|
$ |
(77.1 |
) |
|
$ |
(802.9 |
) |
|
$ |
(102.7 |
) |
|
Adjusted EBITDA* |
$ |
(3.5 |
) |
|
$ |
(0.9 |
) |
|
$ |
(27.0 |
) |
|
$ |
(24.1 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Key Operating Metrics |
|
|
|
|
|
|
|
||||||||
|
Bookings |
$ |
29.1 |
|
|
$ |
676.4 |
|
|
$ |
78.3 |
|
|
$ |
1,276.3 |
|
|
Contracted Backlog** |
$ |
1,547.4 |
|
|
$ |
1,836.6 |
|
|
$ |
1,547.4 |
|
|
$ |
1,836.6 |
|
|
Contracted Storage AUM (in GWh)** |
|
6.0 |
|
|
|
5.0 |
|
|
|
6.0 |
|
|
|
5.0 |
|
|
Solar Monitoring AUM (in GW)** |
|
28.5 |
|
|
|
26.3 |
|
|
|
28.5 |
|
|
|
26.3 |
|
|
CARR** |
$ |
92.3 |
|
|
$ |
87.5 |
|
|
$ |
92.3 |
|
|
$ |
87.5 |
|
|
(1) Revenue, gross profit (loss), and net loss were negatively impacted by a |
|
*Non-GAAP financial measures. Adjusted EBITDA and non-GAAP gross profit and margin have been adjusted to exclude the impact of the reduction in revenue in the quarter, and adjusted EBITDA has been adjusted to exclude the impact of impairment of accounts receivable related to contracts that provide parent company guarantees, as discussed below. See the section below titled “Use of Non-GAAP Financial Measures” for details and the section below titled “Reconciliations of Non-GAAP Financial Measures” for reconciliations. |
|
** At period end. |
Third Quarter 2024 Financial and Operating Results
Financial Results
Revenue decreased 78% year-over-year to
GAAP gross profit (loss) was
Non-GAAP gross profit was
Net loss was
Adjusted EBITDA was
The Company ended the third quarter of 2024 with
Operating Results
Contracted backlog was
Bookings were
Contracted storage AUM increased 3% sequentially to 6.0 GWh for the third quarter of 2024. Solar monitoring AUM increased 6% sequentially to 28.5 GW for the third quarter of 2024.
CARR increased 2% to
The following table provides a summary of backlog at the end of the third quarter of 2024, compared to backlog at the end of the second quarter of 2024 ($ in millions):
| End of 2Q24 |
$ |
1,578.5 |
|
||
|
Add: |
Bookings |
|
29.1 |
|
|
|
Less: |
Hardware revenue |
|
(13.8 |
) |
|
|
Software/services activations |
|
(43.2 |
) |
||
|
Amendments/Cancellations |
|
(3.2 |
) |
||
| End of 3Q24 |
$ |
1,547.4 |
|
||
Strategy Review Outcome
On
Recent Business Updates
On
On
Outlook
The Company is updating its full year 2024 guidance ranges to account for the Company’s recent financial results, ongoing implementation of its new strategy and continued expectation of project delays, which continue to negatively impact results, as follows ($ millions, unless otherwise noted):
|
|
Previous |
Updated |
|
Revenue |
|
|
|
|
|
|
|
Non-GAAP Gross Margin (%) |
25% - 30% |
32% - 36% |
|
|
|
|
|
Adjusted EBITDA |
( |
( |
|
|
|
|
|
Bookings |
|
|
|
|
|
|
|
CARR (year-end) |
|
|
|
|
|
|
|
Operating Cash Flow |
Greater than |
( |
See the section below titled “Reconciliations of Non-GAAP Financial Measures” for information regarding why Stem is unable to reconcile Non-GAAP Gross Margin and Adjusted EBITDA guidance to their most comparable financial measures calculated in accordance with GAAP.
The Company is updating its full-year 2024 revenue projected quarterly performance as follows:
|
|
1QA |
2QA |
3QA |
4QE |
|
Revenue |
|
|
|
|
Some Factors Affecting our Business and Operations
As previously disclosed, the Company entered into certain contractual guarantees in 2022 and 2023 pursuant to which, if a customer were unable to install or designate hardware to a specified project within a specified period of time, the Company would be required to assist the customer in re-marketing the hardware for resale by the customer. Such guarantees provide that, in such cases, if the customer resold the hardware for less than the amount initially sold to the customer, the Company would be required to compensate the customer for any shortfall in fair value for the hardware from the initial contract price. The Company accounts for specified contractual guarantees as variable consideration. The Company reviews its estimate of variable consideration, including changes in estimates related to such guarantees, each quarter for facts or circumstances that have changed from the time of the initial estimate. As previously disclosed, the Company recorded a net revenue reduction of
The Company is subject to risk and exposure from the evolving macroeconomic, geopolitical and business environment, including the effects of increased global inflationary pressures and interest rates, potential import tariffs, potential economic slowdowns or recessions, and geopolitical pressures, including the armed conflicts between
Use of Non-GAAP Financial Measures
In addition to financial results determined in accordance with
We use these non-GAAP financial measures for financial and operational decision-making and to evaluate our operating performance and prospects, develop internal budgets and financial goals, and facilitate period-to-period comparisons. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our operating performance, such as stock-based compensation and other non-cash charges, as well as discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance and liquidity as well as comparisons to our competitors’ operating results, to the extent that competitors define these metrics in the same manner that we do. We believe these non-GAAP financial measures are useful to investors both because they (1) allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) are used by investors and analysts to help them analyze the health of our business. Our calculation of these non-GAAP financial measures may differ from similarly-titled non-GAAP measures, if any, reported by other companies. In addition, other companies may not publish these or similar measures. These non-GAAP financial measures should be considered in addition to, not as a substitute for, or superior to, other measures of financial performance prepared in accordance with GAAP. For reconciliation of adjusted EBITDA and non-GAAP gross profit and margin to their most comparable GAAP measures, see the section below entitled “Reconciliations of Non-GAAP Financial Measures.”
Definitions of Non-GAAP Financial Measures
We define adjusted EBITDA as net loss attributable to Stem before depreciation and amortization, including amortization of internally developed software, interest expense, further adjusted to exclude stock-based compensation and other income and expense items, including revenue constraint, reduction in revenue, excess supplier costs, change in fair value of derivative liability, impairment of goodwill, contract termination payment, restructuring costs, impairment of accounts receivable related to customer contracts that provide parent company guarantees, and income tax provision or benefit. The expenses and other items that we exclude in our calculation of adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude when calculating adjusted EBITDA.
We define non-GAAP gross profit as gross profit excluding amortization of capitalized software, impairments related to decommissioning of end-of-life systems, excess supplier costs, reduction in revenue, and including revenue constraint. Non-GAAP gross margin is defined as non-GAAP gross profit as a percentage of revenue.
The Company generally records the full purchase order value as revenue at the time of hardware delivery; however, for certain non-cancelable purchase orders entered into during the first quarter of 2023, the final settlement amount payable to the Company is variable and indexed to the price per ton of lithium carbonate in the first quarter of 2024 such that the Company may increase or decrease the final prices in such purchase orders based on the price per ton of lithium carbonate at final settlement. Lithium carbonate is a key raw material used in the production of hardware systems that the Company ultimately sells to customers. The total dollar amount of such purchase orders for the indexed contracts is approximately
As stated above, in certain customer contracts, the Company previously agreed to provide a guarantee that the value of purchased hardware will not decline for a certain period of time. The Company accounts for such contractual terms and guarantees as variable consideration at each measurement date. The Company reviews its estimate of variable consideration each quarter, including changes in estimates related to such guarantees, for facts or circumstances that have changed from the time of the initial estimate.
Additionally, as a result of impairment of accounts receivables related to contracts that provided for a parent company guarantee, the Company recorded a bad debt expense of
Conference Call Information
Stem will hold a conference call to discuss this earnings press release and business outlook on
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. The company offers a complete set of solutions that transform how solar and energy storage projects are developed, built, and operated, including an integrated suite of software and edge products, and full lifecycle services from a team of leading experts. More than 16,000 global customers rely on Stem to maximize the value of their clean energy projects and portfolios. Learn more at stem.com.
Forward-Looking Statements
This earnings press release, 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 such as “expect,” “may,” “can,” “believe,” “predict,” “plan,” “potential,” “projected,” “projections,” “forecast,” “estimate,” “intend,” “anticipate,” “ambition,” “goal,” “target,” “think,” “should,” “could,” “would,” “will,” “hope,” “see,” “likely,” and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain, such as statements about our financial and performance targets and other forecasts or expectations regarding, or dependent on, our business outlook and strategy; our expectations regarding future estimates of variable consideration in connection with guarantees of certain customer contracts, and the resulting effects on revenue and net income; our ability to secure sufficient and timely inventory from suppliers; our ability to meet contracted customer demand; our ability to manage manufacturing or delivery delays; our ability to manage our supply chains and distribution channels; our joint ventures, partnerships and other alliances; forecasts or expectations regarding energy transition and global climate change; reduction of greenhouse gas (“GHG”) emissions; the integration and optimization of energy resources; our business strategies and those of our customers; our ability to retain or upgrade current customers, further penetrate existing markets or expand into new markets; the effects of natural disasters and other events beyond our control; the direct or indirect effects on our business of macroeconomic factors and geopolitical instability, such as the armed conflicts between
Source:
|
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in thousands, except share and per share amounts) |
|||||||
|
|
|
|
|
||||
|
ASSETS |
|
|
|
||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
75,364 |
|
|
$ |
105,375 |
|
|
Short-term investments |
|
— |
|
|
|
8,219 |
|
|
Accounts receivable, net of allowances of |
|
92,659 |
|
|
|
302,848 |
|
|
Inventory |
|
33,950 |
|
|
|
26,665 |
|
|
Deferred costs with suppliers |
|
15,237 |
|
|
|
20,555 |
|
|
Other current assets |
|
10,320 |
|
|
|
9,303 |
|
|
Total current assets |
|
227,530 |
|
|
|
472,965 |
|
|
Energy storage systems, net |
|
63,663 |
|
|
|
74,418 |
|
|
Contract origination costs, net |
|
9,746 |
|
|
|
11,119 |
|
|
|
|
— |
|
|
|
547,205 |
|
|
Intangible assets, net |
|
148,183 |
|
|
|
157,146 |
|
|
Operating lease right-of-use assets |
|
12,065 |
|
|
|
12,255 |
|
|
Other noncurrent assets |
|
76,648 |
|
|
|
81,869 |
|
|
Total assets |
$ |
537,835 |
|
|
$ |
1,356,977 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) |
|
|
|
||||
|
Current liabilities: |
|
|
|
||||
|
Accounts payable |
$ |
47,363 |
|
|
$ |
78,277 |
|
|
Accrued liabilities |
|
57,648 |
|
|
|
76,873 |
|
|
Accrued payroll |
|
10,265 |
|
|
|
14,372 |
|
|
Financing obligation, current portion |
|
15,037 |
|
|
|
14,835 |
|
|
Deferred revenue, current portion |
|
70,766 |
|
|
|
53,997 |
|
|
Other current liabilities |
|
5,905 |
|
|
|
12,726 |
|
|
Total current liabilities |
|
206,984 |
|
|
|
251,080 |
|
|
Deferred revenue, noncurrent |
|
86,799 |
|
|
|
88,650 |
|
|
Asset retirement obligation |
|
4,150 |
|
|
|
4,052 |
|
|
Convertible notes, noncurrent |
|
525,345 |
|
|
|
523,633 |
|
|
Financing obligation, noncurrent |
|
44,662 |
|
|
|
52,010 |
|
|
Lease liabilities, noncurrent |
|
12,807 |
|
|
|
10,455 |
|
|
Other liabilities |
|
643 |
|
|
|
416 |
|
|
Total liabilities |
|
881,390 |
|
|
|
930,296 |
|
|
|
|
|
|
||||
|
Stockholders’ equity (deficit): |
|
|
|
||||
|
Preferred stock, |
|
— |
|
|
|
— |
|
|
Common stock, |
|
16 |
|
|
|
16 |
|
|
Additional paid-in capital |
|
1,230,957 |
|
|
|
1,198,716 |
|
|
Accumulated other comprehensive income (loss) |
|
302 |
|
|
|
(42 |
) |
|
Accumulated deficit |
|
(1,575,371 |
) |
|
|
(772,494 |
) |
|
Total Stem’s stockholders’ equity (deficit) |
|
(344,096 |
) |
|
|
426,196 |
|
|
Non-controlling interests |
|
541 |
|
|
|
485 |
|
|
Total stockholders’ equity (deficit) |
|
(343,555 |
) |
|
|
426,681 |
|
|
Total liabilities and stockholders’ equity (deficit) |
$ |
537,835 |
|
|
$ |
1,356,977 |
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except share and per share amounts) |
|||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended S eptember 30, |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Revenue |
|
|
|
|
|
|
|
||||||||
|
Services and other revenue |
$ |
22,143 |
|
|
$ |
16,597 |
|
|
$ |
52,086 |
|
|
$ |
47,630 |
|
|
Hardware revenue |
|
7,148 |
|
|
|
117,143 |
|
|
|
36,673 |
|
|
|
246,461 |
|
|
Total revenue |
|
29,291 |
|
|
|
133,740 |
|
|
|
88,759 |
|
|
|
294,091 |
|
|
Cost of revenue |
|
|
|
|
|
|
|
||||||||
|
Cost of services and other revenue |
|
15,687 |
|
|
|
13,684 |
|
|
|
36,626 |
|
|
|
36,944 |
|
|
Cost of hardware revenue |
|
7,408 |
|
|
|
140,347 |
|
|
|
60,753 |
|
|
|
264,573 |
|
|
Total cost of revenue |
|
23,095 |
|
|
|
154,031 |
|
|
|
97,379 |
|
|
|
301,517 |
|
|
Gross profit (loss) |
|
6,196 |
|
|
|
(20,291 |
) |
|
|
(8,620 |
) |
|
|
(7,426 |
) |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
|
Sales and marketing |
|
8,216 |
|
|
|
11,605 |
|
|
|
30,286 |
|
|
|
37,691 |
|
|
Research and development |
|
11,086 |
|
|
|
14,420 |
|
|
|
40,503 |
|
|
|
42,020 |
|
|
General and administrative |
|
27,212 |
|
|
|
21,955 |
|
|
|
61,618 |
|
|
|
58,656 |
|
|
Impairment of parent company guarantees |
|
104,134 |
|
|
|
— |
|
|
|
104,134 |
|
|
|
— |
|
|
Impairment of goodwill |
|
— |
|
|
|
— |
|
|
|
547,152 |
|
|
|
— |
|
|
Total operating expenses |
|
150,648 |
|
|
|
47,980 |
|
|
|
783,693 |
|
|
|
138,367 |
|
|
Loss from operations |
|
(144,452 |
) |
|
|
(68,271 |
) |
|
|
(792,313 |
) |
|
|
(145,793 |
) |
|
Other (expense) income, net: |
|
|
|
|
|
|
|
||||||||
|
Interest expense |
|
(4,512 |
) |
|
|
(4,405 |
) |
|
|
(13,850 |
) |
|
|
(10,085 |
) |
|
Gain on extinguishment of debt, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
59,121 |
|
|
Change in fair value of derivative liability |
|
— |
|
|
|
(5,155 |
) |
|
|
1,477 |
|
|
|
(7,731 |
) |
|
Other income, net |
|
793 |
|
|
|
713 |
|
|
|
2,153 |
|
|
|
2,114 |
|
|
Total other (expense) income, net |
|
(3,719 |
) |
|
|
(8,847 |
) |
|
|
(10,220 |
) |
|
|
43,419 |
|
|
Loss before (provision for) benefit from income taxes |
|
(148,171 |
) |
|
|
(77,118 |
) |
|
|
(802,533 |
) |
|
|
(102,374 |
) |
|
(Provision for) benefit from income taxes |
|
(129 |
) |
|
|
46 |
|
|
|
(344 |
) |
|
|
(354 |
) |
|
Net loss |
$ |
(148,300 |
) |
|
$ |
(77,072 |
) |
|
$ |
(802,877 |
) |
|
$ |
(102,728 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Net loss per share attributable to common stockholders, basic and diluted |
$ |
(0.91 |
) |
|
$ |
(0.49 |
) |
|
$ |
(4.99 |
) |
|
$ |
(0.66 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Weighted-average shares used in computing net loss per share to common stockholders, basic and diluted |
|
162,633,996 |
|
|
|
155,829,348 |
|
|
|
160,997,019 |
|
|
|
155,474,725 |
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) |
|||||||
|
|
Nine Months Ended S eptember 30, |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
OPERATING ACTIVITIES |
|
|
|
||||
|
Net loss |
$ |
(802,877 |
) |
|
$ |
(102,728 |
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
||||
|
Depreciation and amortization expense |
|
33,227 |
|
|
|
33,593 |
|
|
Non-cash interest expense, including interest expenses associated with debt issuance costs |
|
1,565 |
|
|
|
1,969 |
|
|
Stock-based compensation |
|
21,716 |
|
|
|
28,320 |
|
|
Change in fair value of derivative liability |
|
(1,477 |
) |
|
|
7,731 |
|
|
Non-cash lease expense |
|
2,251 |
|
|
|
2,162 |
|
|
Accretion of asset retirement obligations |
|
177 |
|
|
|
178 |
|
|
Impairment loss of energy storage systems |
|
357 |
|
|
|
2,347 |
|
|
Impairment loss of project assets |
|
641 |
|
|
|
158 |
|
|
Impairment loss of right-of-use assets |
|
2,096 |
|
|
|
— |
|
| Impairment of parent company guarantees |
104,134 |
— |
|||||
|
Impairment of goodwill |
|
547,152 |
|
|
|
— |
|
|
Net accretion of discount on investments |
|
(29 |
) |
|
|
(1,672 |
) |
|
Income tax benefit from release of valuation allowance |
|
— |
|
|
|
(335 |
) |
|
(Recovery of) provision for credit losses on accounts receivable |
|
(3,229 |
) |
|
|
1,754 |
|
|
Net loss on investments |
|
— |
|
|
|
1,561 |
|
|
Gain on extinguishment of debt, net |
|
— |
|
|
|
(59,121 |
) |
|
Other |
|
(157 |
) |
|
|
(831 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
||||
|
Accounts receivable |
|
106,920 |
|
|
|
(67,029 |
) |
|
Inventory |
|
(7,285 |
) |
|
|
(57,282 |
) |
|
Deferred costs with suppliers |
|
5,318 |
|
|
|
30,579 |
|
|
Other assets |
|
7,129 |
|
|
|
(17,947 |
) |
|
Contract origination costs, net |
|
(927 |
) |
|
|
(4,184 |
) |
|
Project assets |
|
(7,382 |
) |
|
|
(2,827 |
) |
|
Accounts payable |
|
(30,675 |
) |
|
|
1,771 |
|
|
Accrued expenses and other liabilities |
|
(19,935 |
) |
|
|
(28,910 |
) |
|
Deferred revenue |
|
21,531 |
|
|
|
27,630 |
|
|
Lease liabilities |
|
(2,181 |
) |
|
|
(2,135 |
) |
|
Net cash used in operating activities |
|
(21,940 |
) |
|
|
(205,248 |
) |
|
INVESTING ACTIVITIES |
|
|
|
||||
|
Acquisitions, net of cash acquired |
|
— |
|
|
|
(1,847 |
) |
|
Purchase of available-for-sale investments |
|
— |
|
|
|
(58,034 |
) |
|
Proceeds from maturities of available-for-sale investments |
|
8,250 |
|
|
|
119,650 |
|
|
Proceeds from sales of available-for-sale investments |
|
— |
|
|
|
73,917 |
|
|
Purchase of energy storage systems |
|
— |
|
|
|
(2,912 |
) |
|
Capital expenditures on internally-developed software |
|
(8,868 |
) |
|
|
(10,123 |
) |
|
Purchase of property and equipment |
|
(228 |
) |
|
|
(395 |
) |
|
Net cash (used in) provided by investing activities |
|
(846 |
) |
|
|
120,256 |
|
|
FINANCING ACTIVITIES |
|
|
|
||||
|
Proceeds from exercise of stock options and warrants |
|
— |
|
|
|
257 |
|
|
Repayment of financing obligations |
|
(6,998 |
) |
|
|
(7,766 |
) |
|
Proceeds from issuance of convertible notes, net of issuance costs of |
|
— |
|
|
|
232,399 |
|
|
Repayment of convertible notes |
|
— |
|
|
|
(99,754 |
) |
|
Purchase of capped call options |
|
— |
|
|
|
(27,840 |
) |
|
Investment from (redemption of) non-controlling interests, net |
|
56 |
|
|
|
(56 |
) |
|
Repayment of notes payable |
|
— |
|
|
|
(2,101 |
) |
|
Net cash (used in) provided by financing activities |
|
(6,942 |
) |
|
|
95,139 |
|
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
403 |
|
|
|
114 |
|
|
Net (decrease) increase in cash, cash equivalents and restricted cash |
|
(29,325 |
) |
|
|
10,261 |
|
|
Cash, cash equivalents and restricted cash, beginning of year |
|
106,475 |
|
|
|
87,903 |
|
|
Cash, cash equivalents and restricted cash, end of period |
$ |
77,150 |
|
|
$ |
98,164 |
|
|
|
|
|
|
||||
|
RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH WITHIN THE UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS TO THE AMOUNTS SHOWN IN THE STATEMENTS OF CASH FLOWS ABOVE: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
75,364 |
|
|
$ |
97,064 |
|
|
Restricted cash included in other noncurrent assets |
|
1,786 |
|
|
|
1,100 |
|
|
Total cash, cash equivalents, and restricted cash |
$ |
77,150 |
|
|
$ |
98,164 |
|
|
RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) |
|||||||||||||||
|
The following table provides a reconciliation of adjusted EBITDA to net loss: |
|||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
(in thousands) |
|
(in thousands) |
||||||||||||
|
Net loss |
$ |
(148,300 |
) |
|
$ |
(77,072 |
) |
|
$ |
(802,877 |
) |
|
$ |
(102,728 |
) |
|
Adjusted to exclude the following: |
|
|
|
|
|
|
|
||||||||
|
Depreciation and amortization (1) |
|
11,516 |
|
|
|
11,531 |
|
|
|
36,321 |
|
|
|
36,098 |
|
|
Interest expense |
|
4,512 |
|
|
|
4,405 |
|
|
|
13,850 |
|
|
|
10,085 |
|
|
Gain on extinguishment of debt, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(59,121 |
) |
|
Stock-based compensation |
|
6,532 |
|
|
|
11,198 |
|
|
|
21,716 |
|
|
|
28,320 |
|
|
Revenue constraint (2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10,200 |
|
|
Revenue reduction, net (3) |
|
5,525 |
|
|
|
37,377 |
|
|
|
38,653 |
|
|
|
37,377 |
|
|
Excess supplier costs (4) |
|
— |
|
|
|
— |
|
|
|
1,012 |
|
|
|
— |
|
|
Change in fair value of derivative liability |
|
— |
|
|
|
5,155 |
|
|
|
(1,477 |
) |
|
|
7,731 |
|
|
Impairment of goodwill |
|
— |
|
|
|
— |
|
|
|
547,152 |
|
|
|
— |
|
|
Contract termination payment (5) |
|
10,000 |
|
|
|
— |
|
|
|
10,000 |
|
|
|
— |
|
|
Impairment and accounts receivable write-off (6) |
|
104,134 |
|
|
|
— |
|
|
|
104,134 |
|
|
|
— |
|
|
Provision for (benefit from) income taxes |
|
129 |
|
|
|
(46 |
) |
|
|
344 |
|
|
|
354 |
|
|
Other expenses (6) |
|
2,460 |
|
|
|
6,591 |
|
|
|
4,125 |
|
|
|
7,612 |
|
|
Adjusted EBITDA |
$ |
(3,492 |
) |
|
$ |
(861 |
) |
|
$ |
(27,047 |
) |
|
$ |
(24,072 |
) |
Adjusted EBITDA, as used in the Company's full year 2024 guidance, is a non-GAAP financial measure that excludes or has otherwise been adjusted for items impacting comparability. The Company is unable to reconcile projected adjusted EBITDA to net income (loss), its most directly comparable forward-looking GAAP financial measure, without unreasonable effort, because the Company is unable to predict with a reasonable degree of certainty its change in stock-based compensation expense, depreciation and amortization expense, revenue constraint and other items that may affect net loss. The unavailable information could have a significant effect on the Company’s full year 2024 GAAP financial results.
(1) Depreciation and amortization includes depreciation and amortization expense, impairment loss of energy storage systems, impairment loss of project assets, and impairment loss of right-of-use assets.
(2) Refer to the discussion of revenue constraint in the definition of non-GAAP gross profit provided above.
(3) Refer to the discussion of reduction in revenue in the definition of non-GAAP gross profit provided above.
(4) Refer to the discussion of excess supplier costs in the definition of non-GAAP gross profit provided above.
(5) Contract termination payment to a vendor for the delivery of hardware.
(6)
See Note 3 — “Impairment and Accounts Receivable Write-Off” in the
notes to the unaudited condensed consolidated financial statements in the Company’s Quarterly Report on Form 10-Q for the quarter ended
(7) Adjusted EBITDA for the three and nine months ended
|
The following table provides a reconciliation of non-GAAP gross profit and margin to GAAP gross profit (loss) and margin ($ in millions): |
|||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Revenue |
$ |
29.3 |
|
|
$ |
133.7 |
|
|
$ |
88.8 |
|
|
$ |
294.1 |
|
|
Cost of revenue |
|
(23.1 |
) |
|
|
(154.0 |
) |
|
|
(97.4 |
) |
|
|
(301.5 |
) |
|
GAAP gross profit (loss) |
|
6.2 |
|
|
|
(20.3 |
) |
|
|
(8.6 |
) |
|
|
(7.4 |
) |
|
GAAP gross margin (%) |
|
21 |
% |
|
|
(15 |
)% |
|
|
(10 |
)% |
|
|
(3 |
)% |
|
|
|
|
|
|
|
|
|
||||||||
|
Non-GAAP Gross Profit |
|
|
|
|
|
|
|
||||||||
|
GAAP Revenue |
$ |
29.3 |
|
|
$ |
133.7 |
|
|
$ |
88.8 |
|
|
$ |
294.1 |
|
|
Add: Revenue constraint (1) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10.2 |
|
|
Add: Revenue reduction, net (2) |
|
5.6 |
|
|
|
37.4 |
|
|
|
38.7 |
|
|
|
37.4 |
|
|
Subtotal |
|
34.9 |
|
|
|
171.1 |
|
|
|
127.5 |
|
|
|
341.7 |
|
|
Less: Cost of revenue |
|
(23.1 |
) |
|
|
(154.0 |
) |
|
|
(97.4 |
) |
|
|
(301.5 |
) |
|
Add: Amortization of capitalized software & developed technology |
|
4.1 |
|
|
|
3.5 |
|
|
|
12.0 |
|
|
|
9.8 |
|
|
Add: Impairments |
|
0.3 |
|
|
|
0.8 |
|
|
|
0.4 |
|
|
|
2.9 |
|
|
Add: Excess supplier costs (3) |
|
|
|
|
|
1.0 |
|
|
|
— |
|
||||
|
Non-GAAP gross profit |
$ |
16.2 |
|
|
$ |
21.4 |
|
|
$ |
43.5 |
|
|
$ |
52.9 |
|
|
Non-GAAP gross margin (%) |
|
46 |
% |
|
|
12 |
% |
|
|
34 |
% |
|
|
15 |
% |
Non-GAAP gross margin as used in the Company's full year 2024 guidance, is a non-GAAP financial measure that excludes or has otherwise been adjusted for items impacting comparability. The Company is unable to reconcile projected non-GAAP gross margin to GAAP gross margin, its most directly comparable forward-looking GAAP financial measure, without unreasonable efforts, because the Company is currently unable to predict with a reasonable degree of certainty its change in amortization of capitalized software, impairments, and other items that may affect GAAP gross margin. The unavailable information could have a significant effect on the Company’s full year 2024 GAAP financial results.
(1) Refer to the discussion of revenue constraint in the definition of non-GAAP profit provided above.
(2) Refer to the discussion of reduction in revenue in the definition of non-GAAP profit provided above.
(3) Refer to the discussion of excess supplier costs in the definition of non-GAAP profit provided above.
|
Key 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 |
||||
|
● |
Bookings amount typically includes: |
||||
|
Bookings |
1. | Hardware revenue, which is typically recognized at delivery of system to customer, | |||
| 2. | Services revenue, which represents total nominal software and services contract value recognized ratably over the contract period, | ||||
|
● |
Market participation revenue is excluded from booking value |
||||
|
|
Total value of bookings in dollars, as of a specific date | ||||
|
Contracted Backlog |
● |
Backlog increases as new contracts are executed (bookings) |
|||
|
● |
Backlog decreases as integrated storage systems are delivered and recognized as revenue |
||||
|
Contracted Assets Under Management (“AUM”) |
Total GWh of storage systems in operation or under contract | ||||
|
Solar Monitoring AUM |
Total GW of solar systems in operation or under contract | ||||
|
Contracted Annual Recurring Revenue (CARR) |
Annual run rate for all executed software services contracts, including contracts signed in the applicable period for systems that are not yet commissioned or operating | ||||
|
Project Services |
Professional services and revenue tied to |
||||
|
Operating Cash Flow |
Net cash provided by (used in) operating activities. Does not represent the change in balance sheet cash which will be further impacted by investing and financing activities | ||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20241028760199/en/
Stem Investor Contacts
IR@stem.com
Stem Media Contacts
Suraya Akbarzad, Stem
press@stem.com
Source:
