Stem, Inc. Announces First Quarter 2021 Financial Results
May 17 2021 - 06:30AM
Business Wire
Revenue exceeds the high end of guidance
Reaffirms 2021 financial guidance
Stem, Inc. (“Stem” or the “Company”) (NYSE:STEM), a global leader in artificial intelligence (AI)-driven clean energy storage services, announced today the financial results for the first quarter ended March 31, 2021. All financial and operating results included in this release are for the Stem business prior to the closing of the business combination with Star Peak Energy Transition Corp. (“Star Peak”). Based on the timing of the transaction close, the Company will not host an earnings call related to the first quarter results but will hold quarterly earnings calls starting with its second quarter 2021 results.
First Quarter 2021 Financial and Operating Highlights
Revenues of $15.4 million vs. $4.1 million in the same quarter last year
Gross Margin (GAAP) of (1)% vs. (34)% in the same quarter last year
Non-GAAP Gross Margin of 19% vs. 1% in the same quarter last year
Net Loss of $(82.6) million vs. $(17.5) million in the same quarter last year, which included a $66 million non-cash charge from the revaluation of warrants
Adjusted EBITDA of $(4.1) million vs. $(9.7) million in the same quarter last year
Contracted AUM of 1.10 gigawatt hours (GWh)
12-month Pipeline of $1.43 billion
Contracted Backlog increased to $221 million driven by strong year-over-year bookings growth of 150%
John Carrington, Chief Executive Officer of Stem, commented, “We are excited to announce strong first quarter results following the recent completion of our business combination with Star Peak. Revenue exceeded the high end of our guidance range, coupled with strong gross margin and Adjusted EBITDA performance. Our contracted backlog grew more than 20% sequentially, reflecting strong commercial momentum particularly in the Front of the Meter (“FTM”) segment and a quickly growing end market. Looking forward, our sales, product development and operations teams continue to drive toward achieving our 2021 guidance and building momentum into 2022 and beyond. As the first publicly traded pure-play smart storage company, our experience, industry-leading software, robust service offerings, and strong balance sheet will continue to differentiate Stem in this rapidly expanding market.”
First Quarter 2021 Financial and Operating Results
Financial Results
For the first quarter ended March 31, 2021, revenues increased 275% to $15.4 million versus $4.1 million in the same quarter last year. Higher hardware revenue from FTM partnership agreements, and more services revenue from host customer arrangements, drove the year-over year increase.
Gross Margin (GAAP) was $(0.1) million or (1)% versus $(1.4) million or (34)% in the same quarter last year. Non-GAAP Gross Margin was $2.9 million or 19% versus $0.0 million or 1% in the same quarter last year. The year-over-year increase in Non-GAAP Gross Margin resulted from an increased mix of software service revenues and higher-margin hardware deliveries.
Net Loss increased to $(82.6) million versus $(17.5) million in the same period last year. The larger loss was primarily due to a $66 million non-cash charge from the revaluation of warrants tied to an increase in the value of the underlying stock, partially offset by higher margins and lower operating expenses.
Adjusted EBITDA was $(4.1) million compared to $(9.7) million in the same quarter last year. The improved Adjusted EBITDA results were driven by higher gross margins and lower operating expenses, reflecting the success in Stem’s channel strategy driving lower customer acquisition costs.
Operating Results
Contracted Assets Under Management (“AUM”) more than doubled year-over-year to 1.10 GWh, driven by increased commercial activity and the addition of the 345 megawatt hour (MWh) Electrodes Holdings, LLC portfolio. Contracted AUM increased by 10% sequentially as new systems came in service.
The Company’s 12-month forward Pipeline was $1.43 billion as of March 31, 2021 representing significant year-over-year growth. The Gross Pipeline was $1.27 billion as of March 31, 2020. The Company updated its definition of Pipeline from “Gross” to “12-month forward” during 2020.
Contracted Backlog increased 20% sequentially, from $184 million as of December 31, 2020 to $221 million as of March 31, 2021. The increase in contracted backlog resulted from strong bookings of $51 million tied to increased commercial activity, particularly in the FTM market, which more than offset recognized revenue. The growth in bookings represents a 150% year over year increase from the $20M recorded in the quarter ended March 31, 2020.
Business Highlights
On April 28, 2021, Stem completed its business combination with Star Peak, and on April 29, 2021 began trading under the ticker symbol “STEM” on the New York Stock Exchange (NYSE). All prior Stem shareholders rolled 100% of their equity holdings into the new public company.
On April 14, 2021, Stem announced it had completed six months of successful operation of the 345 MWh energy storage portfolio owned by Electrodes. Customers in the 86-site portfolio realized more than 30% greater monthly energy savings compared to the previous software provider. Stem seamlessly onboarded the portfolio to its AthenaTM smart energy storage software within two months of being awarded the exclusive contract.
On March 2, 2021, Stem announced the installation of its largest Massachusetts “solar plus storage” site. Located in Haverhill, MA, the 9 MWh battery will generate revenues from multiple value streams by enabling Stem’s partner Kearsarge Energy’s storage system to participate in the Solar Massachusetts Renewable Target (SMART) program, New England wholesale energy markets, and Massachusetts’s Clean Peak Energy Standard program.
Outlook
The Company reaffirms its previously issued guidance, which includes revenue of $147 million and Adjusted EBITDA of $(25) million for the full year 2021. Consistent with prior guidance, Stem reaffirms the remaining expected 2021 quarterly revenue as follows: 2Q 5-15%, 3Q 20-30%, 4Q 50-60%.
The Company has contracted for sufficient supply chain commitments to meet its 2021 revenue goal and will continue to diversify its supply chain, adopt alternative technologies, and utilize its balance sheet to meet the significant growth in customer demand.
