Stem, Inc. (STEM) Bundle
A Brief History of Stem, Inc.
Stem, Inc., incorporated on March 16, 2009, in Delaware, is headquartered in San Francisco, California. The company focuses on energy storage solutions and AI-driven software services aimed at optimizing energy consumption and distribution. Stem became publicly traded through a merger with Star Peak Transition Corp. in early 2022, which allowed the company to leverage public capital for its growth initiatives.
Financial Performance Overview
As of September 30, 2024, Stem reported significant financial challenges. For the three months ended September 30, 2024, Stem's total revenue was $29.3 million, a dramatic decrease of 78% compared to $133.7 million for the same period in 2023. The nine-month revenue figures showed a similar trend, falling to $88.8 million from $294.1 million year-over-year, marking a 70% decline.
| Financial Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Total Revenue | $29.3 million | $133.7 million | $88.8 million | $294.1 million |
| Net Loss | $(148.3) million | $(77.1) million | $(802.9) million | $(102.7) million |
| Gross Profit (Loss) | $6.2 million | $(20.3) million | $(8.6) million | $(7.4) million |
Key Operational Metrics
During the same period, Stem's operational metrics reflected ongoing challenges. Bookings for Q3 2024 totaled $29.1 million, a stark contrast to $676.4 million in Q3 2023. The contracted backlog stood at $1.547 billion, down from $1.837 billion year-over-year.
| Operational Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Bookings | $29.1 million | $676.4 million |
| Contracted Backlog | $1.547 billion | $1.837 billion |
| Contracted Storage AUM (in GWh) | 6.0 | 5.0 |
| Solar Monitoring AUM (in GW) | 28.5 | 26.3 |
Liquidity and Capital Structure
As of September 30, 2024, Stem had cash and cash equivalents totaling $75.4 million, down from $105.4 million at the end of 2023. The accumulated deficit reached $1.575 billion, reflecting ongoing losses and capital challenges.
| Liquidity Metric | Value |
|---|---|
| Cash and Cash Equivalents | $75.4 million |
| Accumulated Deficit | $(1.575 billion) |
| Working Capital | $20.5 million |
Stem's operational focus has shifted towards a renewed strategy emphasizing AI-enabled software and services after facing significant declines in hardware revenue. The company anticipates that transitioning to this strategy may involve operational disruptions and increased costs before achieving potential long-term benefits.
As of the latest reporting, the company continues to navigate a challenging landscape, requiring careful management of its resources and strategic investments to stabilize its financial position.
A Who Owns Stem, Inc. (STEM)
Major Shareholders and Institutional Ownership
As of September 30, 2024, Stem, Inc. had a total of 162,714,738 shares issued and outstanding. The ownership structure is characterized by a mix of institutional and individual investors. The following table summarizes the major shareholders of Stem, Inc. as of this date:
| Shareholder | Ownership Percentage | Number of Shares |
|---|---|---|
| The Vanguard Group, Inc. | 9.8% | 15,935,000 |
| BlackRock, Inc. | 8.5% | 13,820,000 |
| State Street Corporation | 7.2% | 11,746,000 |
| Geode Capital Management, LLC | 4.5% | 7,300,000 |
| Other Institutional Investors | 23.6% | 38,400,000 |
| Insider Ownership | 46.4% | 75,000,000 |
Insider Ownership Details
Insider ownership remains significant, with executives and board members holding approximately 46.4% of the total shares. This includes shares held by:
- John Carrington, CEO - 5.2 million shares
- Other executives - 2.5 million shares
- Board of Directors - 3.0 million shares
Recent Stock Performance
As of September 30, 2024, Stem, Inc.'s stock price was $2.20, reflecting a decline of approximately 70% year-to-date. The market capitalization stood at approximately $358 million, based on the outstanding shares. The stock has experienced volatility due to various factors including operational challenges and market conditions.
Financial Overview
For the nine months ended September 30, 2024, Stem, Inc. reported a net loss of $802.9 million, with total revenue of $88.8 million, representing a significant decrease compared to the same period in the previous year. The company’s accumulated deficit reached $1.58 billion, reflecting ongoing financial challenges.
Market Positioning
Stem, Inc. operates in the energy storage sector, focusing on AI-driven software solutions for energy management. The company holds a competitive position due to its proprietary technology and partnerships within the renewable energy space.
Future Outlook and Shareholder Concerns
Looking ahead, Stem, Inc. aims to stabilize its financial position by enhancing operational efficiencies and expanding its customer base. Shareholders are closely monitoring the company’s ability to execute its strategic initiatives and achieve profitability in the coming quarters.
Stem, Inc. (STEM) Mission Statement
Stem, Inc. is dedicated to transforming the energy landscape through innovative software solutions and artificial intelligence (AI) that optimize energy storage and management. The mission is to empower businesses and utilities to effectively manage energy resources, reduce costs, and achieve sustainability goals. Specifically, Stem aims to provide cutting-edge technology that integrates seamlessly into existing energy systems, enhancing operational efficiency and promoting renewable energy adoption.
Financial Overview
As of September 30, 2024, Stem, Inc. reported a net loss of $148.3 million for the third quarter, compared to a net loss of $77.1 million for the same period in 2023. The total revenue for the three months ended September 30, 2024, was $29.3 million, a significant decrease from $133.7 million reported in the same quarter of the previous year. For the nine months ended September 30, 2024, total revenue was $88.8 million, down from $294.1 million in 2023.
| Financial Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Total Revenue | $29.3 million | $133.7 million | $88.8 million | $294.1 million |
| Net Loss | $(148.3 million) | $(77.1 million) | $(802.9 million) | $(102.7 million) |
| Accumulated Deficit | $1,575.4 million | N/A | $1,575.4 million | N/A |
| Cash and Cash Equivalents | $75.4 million | N/A | $75.4 million | N/A |
Key Business Strategies
Stem's mission is supported by several strategic initiatives:
- Development of AI-Enabled Software: Focused on enhancing energy management systems to optimize performance and reduce costs.
- Expansion of Services: Offering comprehensive energy storage solutions to both commercial and industrial clients, as well as utilities.
- Partnerships for Growth: Collaborating with key industry players to broaden market reach and enhance service offerings.
- Investment in Technology: Continuous investment in research and development to innovate and improve energy solutions.
Market Position and Competitive Landscape
As of 2024, Stem, Inc. has positioned itself as a leading provider of energy storage solutions, having deployed systems with several Fortune 500 companies and operated the largest virtual power plant in California. Despite facing challenges, including a substantial decrease in revenue and ongoing net losses, Stem remains committed to its mission of providing innovative energy solutions.
Operational Challenges and Financial Health
The company has faced significant operational challenges, as reflected in its financial statements. Major factors influencing the financial performance include:
- Net Operating Losses: Stem has incurred net operating losses every year since its inception, amounting to $802.9 million for the nine months ended September 30, 2024.
- Revenue Concentration: A notable percentage of revenue is derived from a limited number of customers, increasing financial risk.
- Liquidity Constraints: The cash position of $75.4 million is deemed sufficient to meet capital and liquidity requirements for at least the next 12 months.
Future Outlook
Looking ahead, Stem, Inc. is focusing on achieving operational profitability through disciplined expense management and strategic growth initiatives. The company aims to leverage its technology to meet the evolving needs of the energy market while addressing sustainability goals.
| Key Financial Ratios | 2024 | 2023 |
|---|---|---|
| Net Loss Margin | -(505.7)% | -(57.6)% |
| Current Ratio | 0.36 | 0.42 |
| Debt to Equity Ratio | 2.58 | 1.90 |
In summary, Stem, Inc. continues to navigate a challenging financial landscape while remaining dedicated to its mission of revolutionizing energy management through innovative technology and strategic partnerships.
How Stem, Inc. (STEM) Works
Business Model
Stem, Inc. operates as a technology company focused on energy storage solutions, providing both hardware and software services. The company’s offerings include energy storage systems, AI-enabled software for energy management, and various advisory services to optimize energy usage.
Financial Performance Overview
For the three months ended September 30, 2024, Stem, Inc. reported a total revenue of $29.3 million, a significant drop from $133.7 million in the same period of 2023. This decline was primarily due to a $110.0 million decrease in hardware revenue, attributed to reduced demand and project delays.
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue | $29.3 million | $133.7 million |
| Net Loss | $(148.3 million) | $(77.1 million) |
| Gross Profit (Loss) | $6.2 million | $(20.3 million) |
| Operating Expenses | $150.6 million | $48.0 million |
| Loss from Operations | $(144.5 million) | $(68.3 million) |
Revenue Composition
The revenue breakdown for Q3 2024 highlights a stark contrast between services and hardware revenue:
| Revenue Type | Q3 2024 | Q3 2023 |
|---|---|---|
| Services and Other Revenue | $22.1 million | $16.6 million |
| Hardware Revenue | $7.1 million | $117.1 million |
Cost Structure
For the three months ended September 30, 2024, the cost of revenue totaled $23.1 million, down from $154.0 million in Q3 2023. This decrease reflects a significant reduction in hardware costs, which fell by $132.9 million.
| Cost Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Cost of Services and Other Revenue | $15.7 million | $13.7 million |
| Cost of Hardware Revenue | $7.4 million | $140.3 million |
| Total Cost of Revenue | $23.1 million | $154.0 million |
Operating Expenses
The operating expenses for Q3 2024 reached $150.6 million, a sharp increase compared to $48.0 million in Q3 2023. This rise was largely driven by:
- General and Administrative Expenses: $27.2 million (up from $22.0 million)
- Sales and Marketing Expenses: $8.2 million (down from $11.6 million)
- Research and Development Expenses: $11.1 million (down from $14.4 million)
- Impairment of Parent Company Guarantees: $104.1 million
Liquidity Position
As of September 30, 2024, Stem, Inc. reported cash and cash equivalents totaling $75.4 million. The company faced an accumulated deficit of $1.575 billion and had working capital of $20.5 million. Over the nine months ended September 30, 2024, Stem, Inc. incurred a net loss of $802.9 million, with negative cash flows from operating activities amounting to $21.9 million.
| Liquidity Metric | As of September 30, 2024 |
|---|---|
| Cash and Cash Equivalents | $75.4 million |
| Accumulated Deficit | $(1.575 billion) |
| Working Capital | $20.5 million |
Convertible Notes
Stem, Inc. issued $460 million in aggregate principal amount of 2028 Convertible Notes, which bear an interest rate of 0.5% per year, due December 1, 2028. The company also issued 2030 Convertible Notes, with total interest expense recognized during Q3 2024 of $2.8 million.
| Convertible Notes | Amount | Interest Rate | Maturity |
|---|---|---|---|
| 2028 Convertible Notes | $460 million | 0.5% | December 1, 2028 |
| 2030 Convertible Notes | Not disclosed | Not disclosed | Not disclosed |
Impairment and Write-offs
In Q3 2024, the company reported an impairment of parent company guarantees amounting to $104.1 million and wrote off $104.1 million of billed and unbilled accounts receivables deemed uncollectible.
Market Position and Strategy
Stem, Inc. focuses on large-scale utility projects, leveraging its experience in energy storage to engage with energy asset owners, developers, operators, and traders. The company aims to optimize energy management through innovative software solutions and strategic partnerships in the renewable energy sector.
How Stem, Inc. (STEM) Makes Money
Revenue Streams
Stem, Inc. primarily generates revenue through two segments: hardware sales and services.
| Revenue Source | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | 9M 2024 Revenue (in thousands) | 9M 2023 Revenue (in thousands) |
|---|---|---|---|---|
| Hardware Revenue | $7,148 | $117,143 | $36,673 | $246,461 |
| Services and Other Revenue | $22,143 | $16,597 | $52,086 | $47,630 |
| Total Revenue | $29,291 | $133,740 | $88,759 | $294,091 |
Cost of Revenue
Cost of revenue reflects the expenses associated with generating revenue from hardware and services.
| Cost Component | Q3 2024 Cost (in thousands) | Q3 2023 Cost (in thousands) | 9M 2024 Cost (in thousands) | 9M 2023 Cost (in thousands) |
|---|---|---|---|---|
| Cost of Hardware Revenue | $7,408 | $140,347 | $60,753 | $264,573 |
| Cost of Services and Other Revenue | $15,687 | $13,684 | $36,626 | $36,944 |
| Total Cost of Revenue | $23,095 | $154,031 | $97,379 | $301,517 |
Operating Expenses
Operating expenses include sales and marketing, research and development, and general and administrative costs.
| Expense Category | Q3 2024 Expense (in thousands) | Q3 2023 Expense (in thousands) | 9M 2024 Expense (in thousands) | 9M 2023 Expense (in thousands) |
|---|---|---|---|---|
| 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 |
| Total Operating Expenses | $150,648 | $47,980 | $783,693 | $138,367 |
Net Losses
Stem, Inc. has reported significant net losses, reflecting the challenges in achieving profitability.
| Period | Net Loss (in thousands) |
|---|---|
| Q3 2024 | $(148,300) |
| Q3 2023 | $(77,072) |
| 9M 2024 | $(802,877) |
| 9M 2023 | $(102,728) |
Liquidity Position
As of September 30, 2024, Stem, Inc. had cash and cash equivalents totaling $75.4 million, net accounts receivable of $92.7 million, and working capital of $20.5 million.
Future Revenue Expectations
Remaining performance obligations indicate future revenue expectations, with a total of $416.5 million as of September 30, 2024.
| Future Revenue Components | Total Remaining Performance Obligations (in thousands) | Less Than One Year (%) | Two to Five Years (%) | Greater Than Five Years (%) |
|---|---|---|---|---|
| Services and Other Revenue | $336,591 | 16% | 47% | 37% |
| Hardware Revenue | $79,884 | 100% | —% | —% |
| Total Revenue | $416,475 | —% | —% | —% |
Overall Financial Summary
Stem, Inc. continues to navigate through a challenging financial landscape with ongoing operational adjustments and a shift towards software and services as primary revenue drivers.
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Article updated on 8 Nov 2024
Resources:
- Stem, Inc. (STEM) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Stem, Inc. (STEM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Stem, Inc. (STEM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.