Stem Records $156M Revenue, $7M EBITDA and 46% Margin
Stem reported full-year 2025 revenue of $156 million and ARR rose 16% to $61 million, with software, services and Edge hardware revenue up 25% to $141 million. The company achieved first full-year positive adjusted EBITDA of $7 million, operating cash flow of $7 million and non-GAAP gross margin of 46%.
1. Full-Year and Q4 Financial Results
The company reported full-year 2025 revenue of $156 million, an 8% year-over-year increase, and Q4 revenue performance contributed to GAAP gross margin of 49% and non-GAAP gross margin of 45%. For the full year, GAAP gross margin reached 38% and non-GAAP gross margin expanded to 46%.
2. Profitability and Cash Flow Achievements
Stem delivered its first full-year positive adjusted EBITDA of $7 million and generated $7 million in operating cash flow. The cash balance rose to $49 million by year-end, supported by a 41% reduction in full-year cash operating expenses and a 50% year-over-year decrease in Q4 operating expenses.
3. Revenue Mix and ARR Growth
Software, services and Edge hardware revenue climbed 25% to $141 million, while battery hardware resale contributed $15 million reflecting strategic de-emphasis of lower-margin sales. Year-end annual recurring revenue reached $61 million, up 16%, driven by PowerTrack platform enhancements and the addition of 6 GW of solar assets under management.
4. 2026 Guidance and Strategic Priorities
Management set full-year 2026 revenue guidance of $140 million to $190 million with non-GAAP gross margins targeted at 40% to 50%, adjusted EBITDA of $10 million to $15 million and operating cash flow of $0 to $10 million. Priorities include driving operational leverage, strengthening core software and managed services offerings, and building a foundation for utility-scale market expansion.