8-K: Stem Inc. Q2 2026 Earnings: Positive EBITDA Continues

Stem, Inc. announced its second quarter 2026 financial results, reporting its fifth consecutive quarter of positive adjusted EBITDA and reaffirming full-year guidance.

Summary

• Stem, Inc. reported second quarter 2026 revenue of $33.7 million, a 12% decrease year-over-year from $38.4 million in 2Q25.
• Software, services, and edge hardware revenue increased 1% year-over-year to $33.4 million.
• GAAP gross profit increased 9% to $13.9 million, with GAAP gross margin improving to 41% from 33% in 2Q25.
• Non-GAAP gross margin rose to 55% from 49% in 2Q25.
• Net loss was $14.4 million, compared to a net income of $202.5 million in 2Q25, primarily due to a one-time gain on debt extinguishment in the prior year.
• Adjusted EBITDA increased 63% year-over-year to $6.2 million.
• Operating cash flow was $0.3 million, a significant improvement from $(21.3) million in 2Q25.
• The company reaffirmed its full-year 2026 financial and operating guidance.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive report, highlighting consecutive quarters of positive adjusted EBITDA and improved margins, alongside strategic wins and reaffirmed guidance, despite a year-over-year revenue dip.

Positives

• Achieved fifth consecutive quarter of positive adjusted EBITDA ($6.2 million, up 63% YoY).
• Non-GAAP gross margin improved to 55% from 49% in 2Q25.
• GAAP gross profit increased 9% to $13.9 million, with GAAP gross margin improving to 41% from 33% in 2Q25.
• Operating cash flow turned positive at $0.3 million, a substantial improvement from $(21.3) million in 2Q25.
• PowerTrack software revenue grew 11% year-over-year.
• Bookings increased 39% sequentially to $36.8 million.
• Contracted backlog increased 18% sequentially to $27.1 million.
• Reaffirmed full-year 2026 financial and operating guidance.

Negatives

• Total revenue decreased 12% year-over-year to $33.7 million.
• Net loss of $14.4 million, compared to a net income of $202.5 million in 2Q25, largely due to a one-time gain in the prior year.
• Non-GAAP gross profit decreased slightly to $18.4 million from $18.7 million in 2Q25, despite margin expansion.

Risks

• Subject to evolving macroeconomic, regulatory, geopolitical, and business environments, including uncertainty regarding the effects of the One Big Beautiful Bill (OBBB).
• Potential impacts from increased import tariffs and retaliatory trade policies.
• Global inflationary pressures and interest rates.
• Potential economic slowdowns or recessions.
• Government shutdowns.
• Geopolitical pressures, including armed conflicts and tensions between major global powers.
• Uncertainty around current and future trade policies and other regulations.

Future Outlook

The company is reaffirming its full-year 2026 guidance, projecting revenue between $140 $190 million, software, services, & edge hardware revenue of $130 $150 million, battery hardware resale up to $40 million, non-GAAP gross margin of 40% 50%, adjusted EBITDA of $10 $15 million, operating cash flow of $0 $10 million, and year-end ARR of $65 $70 million.

Management Comments

• "The second quarter reflected strong momentum across our core PowerTrack platform and continued expansion of our international footprint."
• "We brought PowerTrack EMS to Latin America this quarter with the Granja Solar project in Chile, where our software will serve as the control system for a 135 MW solar facility being retrofitted with a 420 megawatt-hour battery storage system a strong proof point for the kind of hybrid, utility-scale project that validates the commercial prospects of our EMS offering."
• "Our products were also recognized internationally, with PowerTrack EMS receiving The smarter E AWARD 2026 in Europe for the Smart Integrated Energy category, an honor given to industry pioneers driving major innovations across energy storage and smart integrated energy, and a prestigious recognition for the clean energy industry."
• "Alongside this sustained commercial progress, we are continuing to execute with discipline, delivering our fifth consecutive quarter of positive adjusted EBITDA and record non-GAAP gross margins."
• "We remain focused on driving operating leverage, strengthening our core platform, and building the foundation for accelerated growth in 2027 and beyond."
• "Our second quarter results reflect our continued dedication to driving operating leverage in the business."
• "Non-GAAP gross margins, adjusted EBITDA, and operating cash flow improved significantly versus the prior year."
• "Because of our consistent performance and expectations for the rest of the year, we are pleased to reaffirm full year 2026 guidance across all metrics."

Industry Context

StockSavvy.ai notes that Stem's results align with broader trends in the clean energy sector, particularly the increasing demand for integrated energy management software and services to optimize renewable assets. The award for PowerTrack EMS and expansion into new international markets like Latin America highlight the company's competitive positioning in a growing market.

Comparison to Industry Standards

• The company's achievement of its fifth consecutive quarter of positive adjusted EBITDA is a strong indicator of operational efficiency, a metric increasingly scrutinized in the energy transition sector.
• The year-over-year revenue decline, while noted, is partially offset by growth in higher-margin software and services, reflecting a strategic shift seen across many technology-focused energy companies aiming for sustainable profitability over pure top-line growth.
• The improvement in GAAP and Non-GAAP gross margins, particularly the latter reaching 55%, suggests effective cost management and a favorable product mix, which is a benchmark for profitability in the software and services segment of the energy industry.

Stakeholder Impact

• Shareholders: Positive impact from continued positive adjusted EBITDA and reaffirmed guidance, suggesting financial stability and operational progress. However, the year-over-year revenue decline may be a concern.
• Employees: Continued focus on operational leverage and platform strengthening may lead to stable employment, but restructuring costs in prior periods could indicate ongoing adjustments.
• Customers: Continued innovation and recognition of PowerTrack EMS (e.g., The smarter E AWARD) and expansion into new markets suggest ongoing value and service delivery.
• Suppliers: The company's focus on managing its supply chain and inventory is critical for ensuring timely delivery of products and services.

Next Steps

• Continue to drive operating leverage.
• Strengthen the core PowerTrack platform.
• Build the foundation for accelerated growth in 2027 and beyond.
• Execute on international expansion, as demonstrated by the Granja Solar project in Chile and the Solarmarkt Group projects in Hungary.
• Leverage the AIONA AI services offering to meet market demand.

Key Dates

Recommendation

The company demonstrates consistent operational improvements with positive adjusted EBITDA and margin expansion, alongside strategic wins and reaffirmed guidance. However, the year-over-year revenue decline and continued net loss, even if explained by one-time items, warrant a cautious 'hold' stance until sustained revenue growth is achieved.

Keywords

AI-enabled clean energy software, energy storage, PowerTrack EMS, adjusted EBITDA, gross margin, revenue, bookings, contracted backlog