Stem Inc Projects 40%-50% Margins, Sees PowerTrack EMS Ramp in 2027
Stem Inc reported full-year 2025 revenue of $156 million, up 8% year-over-year, with software and services contributing 55%, and CARR down $3 million sequentially due to managed services cancellations. It forecasts 40%-50% gross margins in 2026, expects hardware resale to pressure margins, and anticipates PowerTrack EMS revenue ramp in 2027.
1. Full-Year Revenue and Contract Trends
Stem Inc closed fiscal 2025 with $156 million in revenue, up 8% year-over-year, driven by software and services which made up 55% of total sales. Contract annual recurring revenue fell by $3 million sequentially due to reduced managed services bookings and the cancellation of a customer agreement.
2. Product Launches and Revenue Timeline
The company introduced PowerTrack EMS and PowerTrack Sage in late 2025, receiving strong customer feedback. Due to extended sales cycles for utility-scale EMS deployments, meaningful revenue contributions from PowerTrack EMS are expected in 2027.
3. Margin Guidance and Hardware Resale Impact
Management outlined gross margin guidance of 40% to 50% for 2026, anticipating improvements from a higher software and services mix. However, increased hardware resale could exert downward pressure on overall margins given its lower profitability.