Stem Inc (5QQ) Q2 2026 Earnings Report

The call highlights a clear operational inflection: record non-GAAP margins (55%), five consecutive quarters of positive adjusted EBITDA with strong YoY improvement (+63%), operating cash flow turned positive, bookings and ARR growth, successful international utility-scale wins, product awards, and a new AI services launch. These positives are tempered by a 12% YoY decline in total revenue driven largely by a sharp reduction in battery hardware resale in Q2, a 34% YoY decline in managed services (driven by timing of deployments), and continued dependence on second-half battery resale timing which creates a wide full-year revenue range and potential margin mix pressure. On balance, the operational improvements, margin expansion, cash-flow inflection, product validation, and bookings momentum notably outweigh the revenue timing and mix headwinds.

Stem reaffirmed full‑year 2026 guidance: total revenue $140–$190M, with software, services and edge hardware $130–$150M and battery hardware resales up to $40M (weighted to H2 and expected to trend toward the lower end); non‑GAAP gross margin 40%–50% (company expects to track toward the higher end given lower battery resale mix), adjusted EBITDA $10–$15M (tracking toward the high end), operating cash flow $0–$10M, and year‑end ARR $65–$70M; management noted product margin assumptions driving this outlook—PowerTrack ~75%, edge hardware ~45–47%, and battery resale ~10–11%.