The Energy Storage Report 2024

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Stem ended Q1 with US$565m order backlog


‘Smart’ energy storage provider Stem finished the first quarter of 2022 with an order backlog worth in excess of a half-billion dollars and reaffirmed previously issued revenue guidance for the year.

The US company, which specialises in artificial intelligence-driven battery energy storage, listed on the New York Stock Exchange (NYSE) in April 2021, triggering its reporting of quarterly financial results in line with requirements.

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Having said in February when reporting its full-year 2021 results that revenues for 2022 would be in the region of US$350 million to US$425 million, the company said last week that it was on track to achieve that range.

CEO John Carrington said Stem had had a “strong first quarter,” with quarterly revenues of US$41.1 million representing a 166% increase from Q1 2021’s figure of US$15.4 million. It was also 29% above previously offered quarterly revenue guidance.

A GAAP gross margin of 9% was recorded (US$3.6 million), again a significant step up from same quarter last year, when a GAAP gross margin of -1% (US$-0.1 million) was recorded.

However, ahead of its stock exchange listing Stem had highlighted that the path to profitability would take some time to traverse and for the quarter adjusted EBITDA was US$-12.8 million. This was due to higher personnel costs, investment in growth initiatives and the increased costs of reporting finances as a public company.

The company said that its growth potential and the growth of the energy storage and renewable energy markets it operates in is starting to be realised: its 12-month pipeline of forward opportunities stands at a claimed US$5.2 billion, up 30% from the previous quarter’s US$4 billion.

Contracted backlog at the end of Q4 2021 was US$449 million but rose 26% in the past three months to US$565 million.

Industry buffeted by macroeconomic headwinds

Stem acknowledged that while there has been growth in customer demand, well-documented supply chain issues continue to buffet the industry, from ongoing COVID-19 pandemic impacts to the Russia-Ukraine war and the wider battery supply chain bottlenecks and materials price rises caused by the growth in demand for batteries from the electric vehicle (EV) industry.

The company is using strategies including diversification of supply chains and technologies to mitigate the effects, which include increases in the cost of equipment it installs for customers both in front-of-the-meter and behind-the-meter in standalone battery storage and colocated solar-plus-storage.

It said that there is “no guarantee” its efforts to limit the impact on its finances or operations, although the company did say it expects the impacts of the US’ ongoing solar PV import tariffs dispute which have threatened that industry to be relatively benign on its own business.

The company recently also completed the acquisition of US solar asset management software company AlsoEnergy in February. Stem Inc said that although the deal incurred costs in the region of US$533 million in the quarter, the acquisition gave it the capability of offering customers including project developers and commercial and industrial (C&I) entities an integrated solar and energy storage asset management and optimisation solution.  

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