Energy storage company Stem’s revenue rose 31% year-over-year (YoY) to $38.2 million in the third quarter (Q3) of 2025, from $29.3 million. However, the revenue missed analysts’ expectations by $260,000.

The company’s loss per share was $2.84, falling short of analysts’ expectations by $0.47.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased to $2 million from a loss of $3.5 million in the corresponding quarter last year. The improvement was driven by significantly lower operating expenses resulting from ongoing cost-reduction and profitability-improvement initiatives.

The company reported a net loss of $23.8 million compared to $148.3 million in Q3 2024. The YoY improvement was largely due to the absence of a $104.1 million one-time impairment of bad debt expense associated with receivables related to customer contracts that provided a parent company guarantee, reflected during Q3 2024, and lower operating costs.

Stem reported bookings of $30.3 million in the quarter, down from $34.3 million in the second quarter. Bookings were sequentially down due to a strategic de-emphasis of low-margin battery hardware. Software, services, and edge hardware bookings were sequentially flat.

Contracted backlog was $22.2 million at the end of the quarter compared to $26.8 million in Q2  2025. Contracted backlog was sequentially down due to the previously mentioned lower quarterly bookings, and increased hardware and services revenue recognition in the quarter.

During the earnings call, Stem’s Chief Executive Officer, Arun Narayanan, emphasized that the software-centric model has reduced historical volatility, de-risked the low end of nearly all guidance ranges, and increased confidence in business stability.

He highlighted the unification of the company’s identity under the Stem brand and the streamlining of its portfolio into the PowerTrack suite.

He pointed to the September launch of PowerTrack EMS for hybrid and standalone storage, noting strong customer reception and early bookings from blue-chip customers in three countries, with conversions expected in six to nine months.

He said PowerTrack Sage, an AI assistant layered on PowerTrack, remains on track for a limited beta with select customers in December 2025, ahead of broader availability in 2026.

Narayanan also noted that there is significant opportunities to expand within the European markets. The company recently moved its operations in Belin to more centralized and collaborative facilities.

He noted that Stem is expanding its technical depth and customer support in Berlin to combine the company’s global expertise with local execution that can service high-priority European markets.

Outlook

Narayanan said Stem is tracking toward the midpoint or better on most full-year metrics, with any potential Q4 shortfall in operating cash flow tied to working capital timing.

On demand, he said customer engagement around PowerTrack remains steady despite macro headwinds. He flagged emerging opportunities tied to data-center demand as workloads tilt toward renewable-backed power.

The company has updated its full-year 2025 guidance. Revenue is now expected to range from $135 million to $160 million, down from the previous estimate of $125 million to $175 million.

The adjusted EBITDA range has also improved to a loss of $5 million to $5 million, compared to the earlier range of a loss of $10 million to $5 million.

Narayanan pointed out that Stem’s growth strategy for Q4 and beyond centers on two drives. PowerTrack EMS will expand addressable market into utility scale and international hybrid projects and continued focus and acceleration in our core C&I solar business. While its recurring revenue base, substantial backlog and international diversification provide a strong foundation for sustained growth.