Stem, Inc. Reports Net Income Turnaround to $202.5 Million in Q2 2025

Stem, Inc. reported a significant turnaround in its financial performance for the second quarter of 2025, achieving a net income of $202.5 million compared to a net loss of $582.3 million in the same period last year. This improvement was largely driven by a $220 million gain on the extinguishment of debt, which offset operational losses. Total revenue for the quarter reached $38.4 million, a 13% increase from $34 million in Q2 2024, with notable contributions from solar software and storage services. The company’s gross profit also improved, rising to $12.8 million from $9.4 million year-over-year.

In the first half of 2025, Stem's total revenue increased by 19% to $70.9 million, up from $59.5 million in the prior year. The growth was attributed to higher sales in solar software, edge hardware, and storage services, which collectively offset a decline in battery hardware resale revenue. The company reported a gross profit of $23.3 million for the six-month period, a stark contrast to the gross loss of $14.8 million recorded in the same timeframe last year. This shift reflects a strategic pivot towards software and services, which are expected to yield higher margins.

Operationally, Stem has undergone significant restructuring, reducing its workforce by approximately 27% to streamline operations and focus on its software-centric strategy. This restructuring resulted in $5.9 million in related costs during the first half of 2025. The company also reported a decrease in total operating expenses, which fell to $57.8 million from $633 million in the previous year, primarily due to the absence of goodwill impairment charges that had heavily impacted prior results.

As of June 30, 2025, Stem's cash and cash equivalents stood at $40.8 million, down from $56.3 million at the end of 2024. The company reported a working capital deficit of $12.8 million, indicating ongoing liquidity challenges. However, management believes that current cash reserves, along with expected collections from accounts receivable, will be sufficient to meet capital and liquidity requirements for at least the next 12 months. The company is also focusing on expanding its customer base and enhancing its software offerings to drive future growth.

Looking ahead, Stem anticipates continued revenue growth as it implements its new business strategy, which emphasizes AI-driven software and services for clean energy management. The company is also navigating regulatory changes, including the recent enactment of the One Big Beautiful Bill, which may impact its operations and financial outlook. Despite the challenges, Stem remains committed to optimizing its operations and enhancing shareholder value through strategic investments in technology and infrastructure.