Stem, Inc. Reports 28% Revenue Growth to $32.5 Million in Q1 2025

Stem, Inc. reported a significant improvement in its financial performance for the first quarter of 2025, with total revenue reaching $32.5 million, a 28% increase from $25.5 million in the same period last year. This growth was driven by a 39% rise in hardware revenue, which totaled $14.8 million, and a 19% increase in services and other revenue, amounting to $17.7 million. Despite this revenue growth, the company recorded a net loss of $25.0 million, a notable reduction from the $72.3 million loss reported in the first quarter of 2024.

The company's cost of revenue also saw a substantial decrease, dropping by 56% to $22.0 million, primarily due to a significant reduction in hardware costs. The cost of hardware revenue fell by 73%, reflecting a shift in the mix of offerings. Operating expenses decreased by 28% to $31.7 million, driven by reductions in sales and marketing, research and development, and general and administrative expenses. This operational efficiency contributed to a gross profit of $10.5 million, compared to a gross loss of $24.2 million in the prior year.

In terms of strategic developments, Stem, Inc. has announced a workforce reduction of approximately 27% as part of its efforts to streamline operations and focus on software and services. This decision is expected to incur charges of approximately $6.0 million to $6.5 million, primarily related to severance and employee benefits. The company aims to enhance its investments in AI-driven software solutions while reducing operating costs to drive profitable growth.

Operationally, Stem, Inc. reported a customer base of over 16,000 globally, with a significant increase in contracted backlog, which stood at $25.3 million as of March 31, 2025. The company also noted an increase in its storage operating assets under management (AUM), which reached 1.6 GWh, up from 0.8 GWh a year earlier. The company’s cash and cash equivalents totaled $58.6 million, providing a solid liquidity position to support its ongoing operations and strategic initiatives.

Looking ahead, Stem, Inc. remains focused on executing its new business strategy centered on software and services, which may involve short-term disruptions and increased costs. The company believes its current cash position, along with expected collections from accounts receivable, will be sufficient to meet its capital and liquidity requirements for at least the next 12 months. However, the company acknowledges that achieving profitable operations will depend on successfully implementing this strategy and managing various operational risks, including supply chain constraints and customer concentration.