Stem Inc revenue and bookings plummet, but margins up, as it shifts to software and services

LinkedIn
Twitter
Reddit
Facebook
Email

System integrator Stem Inc has seen huge falls in quarterly revenue and bookings as it shifts its business model away from BESS hardware solutions towards higher-margin software and service offerings.

The NYSE-listed firm saw US$29.3 million revenues in the third quarter of 2024, down 78% from the same period last year, while bookings fell a staggering 96% to US$29.1 million.

However, its GAAP gross profit was US$16.2 million, up from a US$20 million loss a year ago, while the non-GAAP margin was 46%, up from 12%.

Its net loss for the period did double to US$148.3 million, versus $77.1 million in 3Q23, but that included US$104.1 million of “bad debt expense associated with impairment of accounts receivable related to customer contracts that provide a parent company guarantee”, the company said.

This article requires Premium SubscriptionBasic (FREE) Subscription

Enjoy 12 months of exclusive analysis

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Annual digital subscription to the PV Tech Power journal
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

The falls in revenue reflect “revised negotiated valuations of assets under certain hardware price guarantees entered into in 2022 and 2023” and “reduced battery hardware sales”.

The results reflect the company’s shift away from providing battery energy storage system (BESS) hardware solutions to focusing on software and services associated with BESS projects, a shift revealed in October after the company was warned by the NYSE about its low share price in September. Interim CEO David Buzby explained the shift in Stem Inc’s Q3 earnings call with analysts.

“This year, the unpredictability of project timelines for utility-scale storage hardware persisted, prompting a strategic shift to reduce our reliance on this revenue stream. These timeline challenges resulted in significantly lower than expected bookings, revenue and accounts receivable collections,” Buzby said.

The downturn for the company’s BESS activity was first noted in Q1, before further weak results in Q2 prompted a strategic review.

Buzby continued: “We expect our refined strategy to accelerate the growth of more predictable revenue from software and services. Through our consultative energy services offering, we aim to generate revenue earlier in the project lifecycle, independent of potential interconnection or permitting delays positioning services as a gateway for software sales. By emphasising our software and services offerings, we believe that we also have a clear path to gross margin expansion and profitability.”

The firm was one of numerous in the energy storage space to go public via special purpose acquisition company (SPAC) listings.

Earnings call transcript from Seeking Alpha.

Read Next

August 8, 2025
Lyten’s deal to acquire and recommence operations of European battery firm Northvolt out of bankruptcy has winners and losers, but some of the challenges that led to its demise have already been solved.
August 8, 2025
Utility Portland General Electric (PGE) announced the completion of three battery energy storage systems (BESS) totalling more than 1.9GWh in Portland, Oregon, US.
August 7, 2025
Energy storage developer and system integrator Energy Vault has received approval to pursue market-based participation in the California Independent System Operator (CAISO) with the Calistoga Resiliency Centre (CRC).
August 7, 2025
Calibrant, a joint venture between Green Investment Group and German engineering company Siemens, has energised and begun generating Value of Distributed Energy Resources (VDER) credits from three front-of-the-meter battery energy storage systems (BESS) in New York, US.
August 7, 2025
Software-focused energy storage system integrator FlexGen’s bid to acquire assets from bankrupt rival Powin has been approved in court.

Most Popular

Email Newsletter