Quarterly revenue 5% above high end of
guidance
Raise FY 2022 Bookings and CARR guidance
AlsoEnergy integration and synergies on
track
Second Quarter 2022 Financial and Operating
Highlights
Financial Highlights
- Revenue of $67 million, up from $19 million (+246%) in Q2
2021
- GAAP Gross Margin of 12%, up from (1)% in Q2 2021
- Non-GAAP Gross Margin of 17%, up from 8% in Q2 2021
- Net Loss of $32 million versus $100 million in Q2 2021
- Adjusted EBITDA of $(11) million versus $(8) million in Q2
2021
- Ended Q2 2022 with $335 million in cash, cash equivalents, and
short-term investments
Operating Highlights
- 12-month Pipeline of $5.6 billion, up from $5.2 billion (+8%)
at the end of Q1 2022
- Bookings of $226 million, up from $45 million (+402%) in Q2
2021
- Record contracted backlog of $727 million, up from $250 million
(+191%) at the end of Q2 2021
- Record contracted storage assets under management (AUM) of 2.1
gigawatt hours (GWh) up from 1.8 GWh (+17%) at the end of Q1
2022
- Solar monitoring AUM of 32.1 gigawatts (GW), largely unchanged
sequentially
- Contracted Annual Recurring Revenue (CARR) of $58 million, up
from $52 million (+12%) at the end of Q1 2022
Stem, Inc. (“Stem” or the “Company”) (NYSE: STEM), a global
leader in artificial intelligence (AI)-driven energy software and
services, announced today its financial results for the three
months ended June 30, 2022. Reported results in this press release
reflect AlsoEnergy’s operations for the period from February 1,
2022 through June 30, 2022.
John Carrington, Chief Executive Officer of Stem, commented, “We
executed at a high level in the second quarter, with revenue above
the top end of our guidance range for the second straight quarter,
and margins and adjusted EBITDA in-line with our expectations. We
are reiterating our full-year 2022 revenue and adjusted EBITDA
guidance, and raising our full-year 2022 bookings and CARR guidance
by 20% and 7% at the midpoint, respectively, driven by continued
commercial momentum achieved by our team. Importantly, our guidance
does not incorporate any potential upside from the proposed
Inflation Reduction Act of 2022.
Our contracted backlog nearly tripled as compared to the period
ended June 30, 2021, driven by $226 million in bookings, which was
up more than five-fold versus the second quarter of 2021. That
marks the second-highest bookings performance in Company history,
just behind the fourth quarter of 2021, underscoring our
accelerating momentum.
We were also pleased to achieve 12% sequential growth in CARR to
$58 million, reflecting our focus on long-term, high-margin
recurring software and services revenues. Our AI-driven software
delivers improved economic optimization and asset management
solutions to our renewable energy customers. We were proud that
AlsoEnergy was ranked #1 by Guidehouse Insights in its Solar and
Storage Monitoring and Control Vendors report, a testimony to our
technology leadership. We believe Stem’s differentiated software
solutions, coupled with our customer-focused employees and strong
balance sheet, will drive multi-year growth in high-margin
recurring software and services revenues, as evidenced by our 12%
GAAP / 17% non-GAAP gross margin results this quarter.
The integration of AlsoEnergy is proceeding on track as we
combine the commercial and technical strengths into one company
focused on providing differentiated solutions for our customers. We
continue to expect joint bookings this year that will translate
into revenue next year, and we are exploring opportunities to
leverage our India infrastructure to optimize Stem’s cost
structure.
We are encouraged by Congressional support for the Inflation
Reduction Act of 2022. The climate provisions in the Act would
drive continued investment in America’s aging power grid, support
customer adoption of renewable energy, and improve energy security
by incentivizing development of our domestic supply chain.
Importantly, a stand-alone Investment Tax Credit (ITC) for energy
storage, and the extension of the solar ITC, would improve the
economic returns for our customers.
Supply chain constraints, permitting and interconnection delays,
and certain regulatory actions continue to pose challenges, but we
believe we remain well-positioned to manage these risks and
continue with our strong execution through the rest of 2022.”
Key Financial Results and Operating Metrics (in $
millions unless otherwise noted):
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
(in millions)
(in millions)
Key Financial Results
Revenue
$
66.9
$
19.3
$
108.0
$
34.8
GAAP Gross Margin
$
7.7
$
(0.1
)
$
11.4
$
(0.2
)
GAAP Gross Margin (%)
12
%
(1
) %
11
%
(1
) %
Non-GAAP Gross Margin*
$
11.3
$
1.5
$
17.9
$
3.5
Non-GAAP Gross Margin (%)*
17
%
8
%
17
%
10
%
Net loss
$
(32.0
)
$
(100.2
)
$
(54.5
)
$
(182.8
)
Adjusted EBITDA*
$
(11.1
)
$
(8.3
)
$
(23.9
)
$
(11.4
)
Key Operating Metrics
12-Month Pipeline (in billions)**
$
5.6
$
1.7
$
5.6
$
1.7
Bookings
$
225.7
$
45.1
$
376.5
$
95.9
Contracted Backlog**
$
726.6
$
249.7
$
726.6
$
249.7
Contracted Storage AUM (in GWh)**
2.1
1.2
2.1
1.2
Solar Monitoring AUM (in GW)**
32.1
**
32.1
**
CARR**
$
57.6
**
57.6
**
* Non-GAAP financial measures. 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.
Second Quarter 2022 Financial and Operating Results
Financial Results
Second quarter 2022 revenue increased 246% to $67 million,
versus $19 million in the second quarter of 2021. Higher hardware
revenue from Front-of-the-Meter (FTM) and Behind-the-Meter (BTM)
partnership agreements drove a majority of the quarterly increase,
in addition to $14 million of revenue contribution from the
inclusion of AlsoEnergy.
Second quarter 2022 GAAP Gross Margin was $8 million, or 12%,
versus $(127) thousand, or (1)% in the second quarter of 2021. The
year-over-year increase in GAAP Gross Margin resulted primarily
from higher hardware sales and additional higher-margin software
and services revenues, including AlsoEnergy.
Beginning in the first quarter 2022, management no longer
reclassifies certain costs of goods sold to operating expenses,
including data communication and cloud service expenditures, in its
calculation of Non-GAAP Gross Margin. Second quarter 2021 Non-GAAP
Gross Margin has been recalculated consistent with this treatment
to allow for comparability between reporting periods. The non-GAAP
reconciliation table below includes important updates to these
calculations for comparability. The Company believes that this
change reflects a more accurate representation of our business for
stakeholders to assess its performance.
Second quarter 2022 Non-GAAP Gross Margin was $11 million, or
17% versus $1 million, or 8% in the second quarter of 2021. The
year-over-year increase in Non-GAAP Gross Margin resulted from
higher revenues. In percentage terms, the year-over-year increase
in Non-GAAP Gross Margin resulted from a higher mix of software and
services, inclusive of AlsoEnergy, and higher hardware margins.
Second quarter 2022 Net Loss attributable to Stem was $32
million versus second quarter 2021 Net Loss of $100 million. The
improvement was primarily driven by non-cash revaluation of
warrants tied to changes in the value of the underlying common
stock reported in the second quarter 2021. In June and September
2021 Stem redeemed all outstanding private and public warrants,
respectively, resulting in a more streamlined capital structure and
less quarter-to-quarter variability in the Company’s Net Income
(Loss).
Second quarter 2022 Adjusted EBITDA was $(11) million compared
to $(8) million in the second quarter of 2021. Lower Adjusted
EBITDA results were primarily driven by higher operating expenses
resulting from increased personnel costs, continued investment in
our growth initiatives, and costs associated with public reporting
requirements.
The Company ended the second quarter of 2022 with $335 million
in cash, cash equivalents, and short-term investments, consisting
of $151 million in cash and cash equivalents and $184 million in
short-term investments, as compared to $352 million in cash, cash
equivalents, and short-term investments at the end of the first
quarter 2022.
Operating Results
The Company’s 12-month Pipeline was $5.6 billion at the end of
the second quarter of 2022 compared to $5.2 billion at the end of
the first quarter of 2022, representing 8% sequential growth. The
increase in the 12-month pipeline was driven by increased FTM
project opportunities, including significant expansions into new
markets and continued growth in Stem’s partner channels.
Contracted Backlog was $727 million at the end of the second
quarter of 2022 compared to $565 million as of the end of the first
quarter of 2022, representing a 29% sequential increase. The
increase in Contracted Backlog in the second quarter of 2022
resulted from quarterly bookings of $226 million and partially
offset by revenue recognition, contract cancellations, and
amendments. Bookings of $226 million in the second quarter of 2022
grew 402% year-over-year versus $45 million in second quarter
2021.
Contracted storage AUM increased 75% year-over-year and 17%
sequentially to 2.1 GWh, driven by new contracts. Solar monitoring
AUM ended the second quarter of 2022 at 32.1 GW, largely unchanged
sequentially.
CARR increased to $58 million as of the end of the second
quarter of 2022, up from $52 million as of the end of the first
quarter 2022, a 12% sequential increase. We believe CARR provides
visibility into the long-term growth in our high margin software
revenue.
The following table provides a summary of backlog at the end of
the second quarter of 2022, compared to the first quarter of 2022
backlog ($ millions):
Period ended 1Q22
$
565
Add:
Bookings
226
Less:
Hardware revenue
(54
)
Software/services
(10
)
Amendments/other
0
Period ended 2Q22
$
727
The Company continues to diversify its supply chain, adopt
alternative technologies, and deploy its balance sheet to meet the
expected significant growth in customer demand. COVID-19 and its
recent subvariants, potential import tariffs, and general economic,
geopolitical and business conditions, including the ongoing
conflict between Russia and Ukraine, continue to impact and cause
uncertainty in the supply chain and project timelines, and the
Company has been affected by volatility in the costs of equipment
and labor. The Company is actively working to mitigate these
impacts on its financial and operational results, although there is
no guarantee to the extent of which we will be successful in our
migration efforts.
Outlook
The Company is updating its full-year 2022 financial and
operational guidance as follows ($ millions, unless otherwise
noted):
Previous
Updated
Revenue
$350 - $425
unchanged
Non-GAAP Gross Margin (%)
15% - 20%
unchanged
Adjusted EBITDA
$(60) - $(20)
unchanged
Bookings
$650 - $750
$775 - $950
CARR (year-end)
$60 - $80
$65 - $85
*See the section below titled
“Reconciliations of Non-GAAP Financial Measures” for information
regarding why we are unable to reconcile Non-GAAP Gross Margin and
Adjusted EBITDA to their most comparable financial measures
calculated in accordance with GAAP.
The Company reaffirms full-year 2022 Revenue indicating
projected quarterly performance against the annual targets and is
revising quarterly Bookings guidance as follows:
Metric
Q1A
Q2A
Q3E
Q4E
Revenue
$41M
$67M
$70-95M
$175-225M
Bookings
$151M
$226M
$150-225M
$250-350M
Stem’s 2022 guidance includes the operations of AlsoEnergy after
February 1, 2022.
Second Quarter 2022 Conference Call
Stem will hold a conference call to discuss this earnings press
release and its latest business outlook on Thursday, August 4, 2022
beginning at 5:00 p.m. Eastern Time. The conference call and
accompanying slides may be accessed via a live webcast on a
listen-only basis on the Events & Presentations page of the
Investor Relations section of the Company’s website at
https://investors.stem.com/events-and-presentations. The call can
also be accessed live over the telephone by dialing (844) 200-6205,
or for international callers, (833) 950-0062 and using access code
015694. A replay of the conference call will be available shortly
after the call and can be accessed by dialing (866) 813-9403 or for
international callers by dialing +44 204 525 0658. The passcode for
the replay is 676295. An archive of the webcast will be available
on the Company’s website at https://investors.stem.com/overview for
12 months after the call.
Use of Non-GAAP Financial Measures
In addition to financial results determined in accordance with
U.S. generally accepted accounting principles (“GAAP”), this
earnings press release contains the following non-GAAP financial
measures: Adjusted EBITDA and non-GAAP gross margin. 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 margin to their most comparable
GAAP measures, see the section below entitled, “Reconciliations of
Non-GAAP Financial Measures.”
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 to facilitate period-to-period comparisons. Our
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 our institutional investors and
the analyst community to help them analyze the health of our
business.
Definitions of Non-GAAP Financial Measures
We define Adjusted EBITDA as net loss before depreciation and
amortization, including amortization of internally developed
software, net interest expense, further adjusted to exclude
stock-based compensation and other income and expense items,
including transaction and acquisition-related charges, the change
in fair value of warrants and embedded derivatives, vesting of
warrants, loss on extinguishment of debt, litigation settlement,
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 margin as gross margin excluding
amortization of capitalized software and impairments related to
decommissioning of end-of-life systems.
See the sections below entitled “Reconciliations of Non-GAAP
Financial Measures.”
About Stem
Stem (NYSE: STEM) provides solutions that address the challenges
of today’s dynamic energy market. By combining advanced energy
storage solutions with Athena®, a world-class AI-powered analytics
platform, Stem enables customers and partners to optimize energy
use by automatically switching between battery power, onsite
generation, and grid power. Stem’s solutions help enterprise
customers benefit from a clean, adaptive energy infrastructure and
achieve a wide variety of goals, including expense reduction,
resilience, sustainability, environmental and corporate
responsibility, and innovation. Stem also offers full support for
solar partners interested in adding storage to standalone,
community or commercial solar projects – both behind and in front
of the meter. Stem is also a leader in solar asset management,
bringing project developers, asset owners, and commercial customers
an integrated solution for solar and energy storage management and
optimization. For more information, visit www.stem.com.
Forward-Looking Statements
This earnings press release, as well as other statements we
make, contain “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; the expected
synergies of the combined Stem/AlsoEnergy company; our ability to
successfully integrate the combined companies; our joint ventures,
partnerships and other alliances; reduction of greenhouse gas
(“GHG”) emissions; the integration and optimization of energy
resources; our business strategies and those of our customers; the
global commitment to decarbonization; our ability to retain or
upgrade current customers, further penetrate existing markets or
expand into new markets; our ability to manage our supply chains
and distribution channels and the effects of natural disasters and
other events beyond our control, such as the COVID-19 pandemic and
variants thereof, and government and business responses thereto;
the impact of the ongoing conflict in Ukraine; our ability to meet
contracted customer demand; and future results of operations,
including revenue and Adjusted EBITDA. Such forward-looking
statements are subject to risks, uncertainties, and other factors
that could cause actual results to differ materially from those
expressed or implied by such forward-looking statements, including
but not limited to our ability to achieve our financial and
performance targets and other forecasts and expectations; our
ability to help reduce GHG emissions; our ability to integrate and
optimize energy resources; our ability to recognize the anticipated
benefits of our recent acquisition of AlsoEnergy; challenges,
disruptions and costs of integrating the combined company and
achieving anticipated synergies, or such synergies taking longer to
realize than expected; risks that the integration disrupts current
plans and operations that may harm our business; uncertainty as to
the effects of the transaction on our financial performance; our
ability to grow and manage growth profitably; our ability to retain
or upgrade current customers, further penetrate existing markets or
expand into new markets; our ability to attract and retain
qualified employees and key personnel; our ability to comply with,
and the effect on their businesses of, evolving legal standards and
regulations, particularly concerning data protection and consumer
privacy and evolving labor standards; risks relating to the
development and performance of our energy storage systems and
software-enabled services; the risk that the global commitment to
decarbonization may not materialize as we predict, or even if it
does, that we might not be able to benefit therefrom; our inability
to secure sufficient inventory from our suppliers to meet customer
demand, and provide us with contracted quantities of equipment;
general economic, geopolitical and business conditions in key
regions of the world, including inflationary pressures, general
economic slowdown or a recession, increasing interest rates, and
changes in monetary policy; the ongoing conflict in Ukraine; supply
chain interruptions and manufacturing or delivery delays;
disruptions in sales, production, service or other business
activities; the risk that our business, financial condition and
results of operations may be adversely affected by other political,
economic, business and competitive factors; and other risks and
uncertainties discussed in this release and in our most recent
Forms 10-K, 10-Q and 8-K filed with or furnished to the SEC. If one
or more of these or other risks or uncertainties materialize (or
the consequences of any such development changes), or should our
underlying assumptions prove incorrect, actual outcomes may vary
materially from those reflected in our forward-looking statements.
Forward-looking and other statements in this release regarding our
environmental, social, and other sustainability plans and goals are
not an indication that these statements are necessarily material to
investors or required to be disclosed in our filings with the SEC.
In addition, historical, current, and forward-looking
environmental, social, and sustainability-related statements may be
based on standards for measuring progress that are still
developing, internal controls and processes that continue to
evolve, and assumptions that are subject to change in the future.
Statements in this earnings press release are made as of the date
of this release, and Stem disclaims any intention or obligation to
update publicly or revise such statements, whether as a result of
new information, future events, or otherwise.
Source: Stem, Inc.
STEM, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(UNAUDITED)
(in thousands, except share and
per share amounts)
June 30, 2022
December 31, 2021
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
151,003
$
747,780
Short-term investments
183,890
173,008
Accounts receivable, net of allowances of
$1,639 and $91 as of June 30, 2022 and December 31, 2021,
respectively
95,855
61,701
Inventory, net
63,055
22,720
Other current assets (includes $58 and
$213 due from related parties as of June 30, 2022 and December 31,
2021, respectively)
47,927
18,641
Total current assets
541,730
1,023,850
Energy storage systems, net
98,427
106,114
Contract origination costs, net
9,321
8,630
Goodwill
546,732
1,741
Intangible assets, net
164,796
13,966
Operating lease right-of-use assets
13,200
12,998
Other noncurrent assets
52,496
24,531
Total assets
$
1,426,702
$
1,191,830
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
113,180
$
28,273
Accrued liabilities
33,057
25,993
Accrued payroll
10,132
7,453
Financing obligation, current portion
14,784
15,277
Deferred revenue, current portion
49,692
9,158
Other current liabilities (includes $354
and $306 due to related parties as of June 30, 2022 and December
31, 2021, respectively)
4,415
1,813
Total current liabilities
225,260
87,967
Deferred revenue, noncurrent
65,849
28,285
Asset retirement obligation
4,217
4,135
Notes payable, noncurrent
1,673
1,687
Convertible notes, noncurrent
446,914
316,542
Financing obligation, noncurrent
67,102
73,204
Lease liabilities, noncurrent
11,921
12,183
Other liabilities
339
—
Total liabilities
823,275
524,003
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value;
1,000,000 shares authorized as of June 30, 2022 and December 31,
2021; 0 shares issued and outstanding as of June 30, 2022 and
December 31, 2021
—
—
Common stock, $0.0001 par value;
500,000,000 shares authorized as of June 30, 2022 and December 31,
2021; 154,226,275 and 144,671,624 issued and outstanding as of June
30, 2022 and December 31, 2021, respectively
15
14
Additional paid-in capital
1,166,865
1,176,845
Accumulated other comprehensive (loss)
income
(1,136
)
20
Accumulated deficit
(562,529
)
(509,052
)
Total Stem's stockholders' equity
603,215
667,827
Non-controlling interests
212
—
Total stockholders’ equity
603,427
667,827
Total liabilities and stockholders’
equity
$
1,426,702
$
1,191,830
STEM, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except share and
per share amounts)
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Revenue
Services revenue
$
12,521
$
5,153
$
22,486
$
10,035
Hardware revenue
54,426
14,184
85,549
24,723
Total revenue
66,947
19,337
108,035
34,758
Cost of revenue
Cost of service revenue
10,141
5,809
18,774
12,715
Cost of hardware revenue
49,018
13,655
77,829
22,286
Total cost of revenue
59,159
19,464
96,603
35,001
Gross margin
7,788
(127
)
11,432
(243
)
Operating expenses:
Sales and marketing
12,955
3,913
22,097
6,580
Research and development
8,963
4,827
17,906
9,234
General and administrative
15,693
15,014
36,205
17,706
Total operating expenses
37,611
23,754
76,208
33,520
Loss from operations
(29,823
)
(23,881
)
(64,776
)
(33,763
)
Other expense, net:
—
—
Interest expense
(2,691
)
(3,929
)
(5,909
)
(10,162
)
Loss on extinguishment of debt
—
(5,064
)
—
(5,064
)
Change in fair value of warrants and
embedded derivative
—
(67,179
)
—
(133,577
)
Other income (expenses), net
484
(163
)
959
(203
)
Total other expense, net
(2,207
)
(76,335
)
(4,950
)
(149,006
)
Loss before income taxes
(32,030
)
(100,216
)
(69,726
)
(182,769
)
Income tax benefit
7
—
15,220
—
Net loss
(32,023
)
(100,216
)
(54,506
)
(182,769
)
Net loss attributed to non-controlling
interests
(4
)
—
(4
)
—
Net loss attributable to Stem
$
(32,019
)
$
(100,216
)
$
(54,502
)
$
(182,769
)
Net loss per share attributable to Stem
common stockholders, basic and diluted
$
(0.21
)
$
(1.00
)
$
(0.36
)
$
(2.59
)
Weighted-average shares used in computing
net loss per share to Stem common stockholders, basic and
diluted
154,125,061
100,611,965
152,318,090
70,684,750
STEM, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
Six Months Ended June
30,
2022
2021
OPERATING ACTIVITIES
Net loss
$
(54,506
)
$
(182,769
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization expense
20,887
10,315
Non-cash interest expense, including
interest expenses associated with debt issuance costs
902
7,119
Stock-based compensation
12,732
1,784
Change in fair value of warrant liability
and embedded derivative
—
133,577
Noncash lease expense
1,131
334
Impairment of energy storage systems
919
1,275
Issuance of warrants for services
—
9,183
Net (accretion of discount) amortization
of premium on investments
410
—
Income tax benefit from release of
valuation allowance
(15,100
)
—
Provision for accounts receivable
allowance
1,010
—
Other
88
112
Changes in operating assets and
liabilities:
Accounts receivable
(26,123
)
(4,219
)
Inventory
(36,634
)
(6,323
)
Other assets
(52,134
)
(16,924
)
Contract origination costs
(3,625
)
(1,650
)
Accounts payable, accrued expenses and
other current liabilities
89,598
3,292
Deferred revenue
28,471
3,294
Lease liabilities
(469
)
(289
)
Other liabilities
(187
)
56
Net cash used in operating activities
(32,630
)
(41,833
)
INVESTING ACTIVITIES
Acquisition of AlsoEnergy, net of cash
acquired
(533,009
)
—
Purchase of available-for-sale
investments
(98,922
)
—
Sales and maturities of available-for-sale
investments
86,623
—
Purchase of energy storage systems
(232
)
(5,603
)
Capital expenditures on
internally-developed software
(8,085
)
(2,693
)
Purchase of property and equipment
(2,405
)
(300
)
Net cash used in investing activities
(556,030
)
(8,596
)
FINANCING ACTIVITIES
Proceeds from exercise of stock options
and warrants
611
2,933
Payments for taxes related to net share
settlement of stock options
(2,302
)
—
Net contributions from Merger and PIPE
financing, net of transaction costs of $58,061
—
550,322
Proceeds from financing obligations
311
4,929
Repayment of financing obligations
(6,817
)
(4,609
)
Proceeds from issuance of convertible
notes, net of issuance costs of $0 and $8 for the three months
ended March 31, 2022 and 2021, respectively
—
1,118
Proceeds from issuance of notes payable,
net of issuance costs of $0 and $101 for the three months ended
March 31, 2022 and 2021, respectively
—
3,940
Investment from non-controlling
interests
216
—
Repayment of notes payable
—
(41,446
)
Net cash (used in) provided by financing
activities
(7,981
)
517,187
Effect of exchange rate changes on cash
and cash equivalents
(136
)
438
Net (decrease) increase in cash and cash
equivalents
(596,777
)
467,196
Cash and cash equivalents, beginning of
year
747,780
6,942
Cash and cash equivalents, end of
period
$
151,003
$
474,138
STEM, INC.
RECONCILIATIONS OF NON-GAAP
FINANCIAL MEASURES
(UNAUDITED)
The following table provides a reconciliation of Adjusted EBITDA to
net loss:
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
(in thousands)
(in thousands)
Net loss attributable to Stem
$
(32,019
)
$
(100,216
)
$
(54,502
)
$
(182,769
)
Adjusted to exclude the following:
Depreciation and amortization (1)
12,910
5,543
21,806
11,555
Interest expense
2,691
3,929
5,909
10,162
Loss on extinguishment of debt
—
5,064
—
5,064
Stock-based compensation
6,467
1,024
12,732
1,784
Vesting of warrants
—
9,184
—
9,184
Change in fair value of warrants and
embedded derivative
—
67,179
—
133,577
Transaction costs in connection with
business combination
—
—
6,068
—
Litigation settlement
(1,127
)
—
(727
)
—
Income tax benefit
(7
)
—
(15,220
)
—
Adjusted EBITDA
$
(11,085
)
$
(8,293
)
$
(23,934
)
$
(11,443
)
Adjusted EBITDA, as used in connection
with the Company's 2022 guidance, is a non-GAAP financial measure
that excludes or has otherwise been adjusted for items impacting
comparability. The Company is unable to provide a reconciliation of
forecasted Adjusted EBITDA to net loss, 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
stock-based compensation expense and other items that may affect
net loss. The unavailable information could have a significant
effect on the Company’s full year 2022 GAAP financial results.
(1) Adjusted EBITDA for the three and six
months ended June 30, 2021 reflects adjustments to depreciation and
amortization of approximately $0.3 million and $1.2 million,
respectively, for expenses related to impairments, decommissioning
and forfeited incentives that were not previously reflected.
The following table provides a
reconciliation of non-GAAP gross margin to GAAP gross margin ($ in
millions, except for percentages):
Three Months Ended June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Revenue
$
66.9
$
19.3
$
108.0
$
34.8
Cost of revenue
(59.2
)
(19.4
)
(96.6
)
(35.0
)
GAAP Gross Margin
7.7
(0.1
)
11.4
(0.2
)
GAAP Gross Margin (%)
12
%
(1
) %
11
%
(1
) %
Adjustments to Gross Margin:
Amortization of Capitalized Software &
Developed Technology
2.6
1.3
4.7
2.5
Impairments
1.0
0.3
1.8
1.2
Non-GAAP Gross Margin
$
11.3
$
1.5
$
17.9
$
3.5
Non-GAAP Gross Margin (%)
17
%
8
%
17
%
10
%
Historically, management included a
separate “Other Adjustments” caption in the table above as part of
the adjustments to gross margin. Other Adjustments consisted of
certain operating expenses including communication and cloud
service expenditures reclassified to cost of revenue. Other
Adjustments are no longer in the calculation of Non-GAAP Gross
Margin and Non-GAAP Gross Margin %. The Company believes that this
change reflects a more accurate representation of our business for
stakeholders to assess its performance.
Non-GAAP Gross Margin as used in
connection with the Company's 2022 guidance is a non-GAAP financial
measure that excludes or has otherwise been adjusted for items
impacting comparability. The Company is unable to provide a
reconciliation of forecasted 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 2022 GAAP financial results.
Key Definitions:
Item
Definition
12-Month Pipeline
Total value (excluding market
participation revenue) of uncontracted, potential hardware and
software revenue from opportunities that are currently being
pursued by our direct salesforce and channel partners with
developers and independent power producers seeking energy
optimization services and transfer of energy storage systems, and
which have a reasonable likelihood of contract execution within 12
months of the end of the relevant period. Pipeline is based on
project timelines published by such developers and independent
power producers. We cannot guarantee that our pipeline will result
in meaningful revenue or profitability.
Bookings
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 6-18 months ahead of
installation
- The Booking amount typically includes:
- Hardware revenue, which is typically recognized at delivery of
system to customer,
- Software revenue, which represents total nominal software
contract value recognized ratably over the contract period,
- Market participation revenue is excluded from booking
value
Contracted Backlog
Total value of bookings in dollars, as of
a specific date
- Backlog increases as new contracts are executed (bookings)
- Backlog decreases as integrated storage systems are delivered
and recognized as revenue
Contracted AUM
Total GWh or GW of 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 period for
systems that are not yet commissioned or operating
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220802006224/en/
Stem Media Contacts Suraya Akbarzad,
Stem Cory Ziskind, ICR press@stem.com
Stem Investor Contacts Ted Durbin, Stem Marc Silverberg,
ICR IR@stem.com (847) 905-4400
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