Smart Energy Storage Company Stem’s Q3 Revenue Up 150% On Higher Hardware Sales

Company reaffirms 2022 guidance on higher demand due to the Inflation Reduction Act


Smart energy storage company Stem reported revenue of $100 million in Q3 FY 2022, a jump of 150% year-over-year (YoY) primarily due to higher hardware sales from Front-of-the-Meter (FTM) and Behind-the-Meter (BTM) partnership agreements.

For the July-September quarter, the adjusted Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) loss widened to $13 million from $7 million YoY. The company said the lower adjusted EBITDA was primarily driven by higher operating expenses due to increased personnel costs and continued investment growth initiatives.

The company, which provides AI-driven energy solutions, reaffirmed its outlook across key metrics – revenue, non-GAAP gross margin, and adjusted EBITDA — for the full-year 2022 but raised the bottom end of the guidance for booking to $850-$950 million from $775-$950 million earlier.

“We have started to see an increase in demand from our customers following the passage of the (Inflation Reduction) Act, as evidenced by the 29% sequential increase in our 12-month pipeline. In particular, many of our Behind-the-Meter (BTM) customers are increasing their investments in renewables as a result of the Act,” John Carrington, Chief Executive Officer, said.

Stem’s 12-month pipeline rose to $7.2 billion by the end of Q3 compared with $5.6 billion at the end of Q2, mainly fuelled by increased FTM and BTM project opportunities, including expansions into new markets and continued growth in Stem’s partner channels.

The company had a contracted backlog of $817 million by Q3, up 115% YoY. Sequentially the contracted backlog rose by 12% in Q3 owing to the quarterly bookings worth $223.

Stem posted a net loss of $34.2 million for the third quarter (Q3) of 2022 against a net income of $115.6 YoY. The company said that the losses were due to the non-cash revaluation of warrants tied to changes in the value of the underlying common stock reported in the previous quarter.

Supply chain issues and labor shortages for AlsoEnergy, a solar asset management platform, clubbed with sharply lower volumes, particularly in utility-scale solar, also reflected in the losses, the company added.

Stem’s total revenue for the 9M of 2022 increased by 179% YoY to $207.5 million. It reported a net loss of $88.7 million for the first nine months (9M) of 2022 compared with $67.2 million YoY.

revenue stemStem’s contracted storage assets under management (AUM) increased 71% YoY and 14% QoQ to 2.4 GWh, mainly driven by new contracts.

The company’s solar monitoring AUM decreased by 257% to 25 GW compared to 32.1 GW, as AlsoEnergy began to migrate or terminate a legacy-acquired software application, primarily used in Europe, that was unprofitable.