Stem, Inc. reported a decrease in total revenue for the first quarter of 2026, generating $29.0 million compared to $32.5 million in the same period of 2025, marking an 11% decline. The company's services and other revenue increased by 5% to $18.7 million, while hardware revenue fell significantly by 30% to $10.3 million, primarily due to a strategic shift away from battery hardware resales. The gross profit for the quarter was $10.9 million, reflecting a slight increase from $10.5 million year-over-year, with a gross margin of 38%, up from 32% in the previous year.
Operating expenses decreased by 21% to $25.1 million, driven by reductions in research and development costs, which fell by 42% to $6.6 million, and general and administrative expenses, which decreased by 36% to $8.7 million. The company recorded a net loss of $18.9 million for the quarter, an improvement from the $25.0 million loss reported in the prior year. This resulted in a net loss per share of $2.22, compared to $3.05 in the same quarter of 2025.
In terms of operational metrics, Stem's customer base and service offerings continue to evolve. The company reported a contracted backlog of $23.0 million and an annual recurring revenue (ARR) of $61.2 million, indicating a slight decrease from the previous year. The company also noted an increase in solar operating assets under management (AUM) to 37.5 gigawatts, up from 32.4 gigawatts in the prior year, reflecting ongoing growth in its clean energy initiatives.
Strategically, Stem has made significant organizational changes, including the acquisition of raicoon GmbH, a software company focused on automated fault detection for solar assets, for $4.3 million in stock. The company has also initiated an at-the-market equity offering program, allowing it to raise up to $30 million for general corporate purposes. Looking ahead, Stem's management emphasized the importance of executing its new business strategy centered on AI-enabled software and services, while acknowledging the challenges posed by market conditions and the need for additional capital to support growth initiatives.
About STEM, INC.
Stem, Inc. is a global provider of AI-driven software and services for renewable energy asset management, focusing on solar and energy storage projects. Its solutions optimize performance, enhance grid stability, and support energy market participation for asset owners, developers, and utilities. The company leverages proprietary AI platform Athena, offering software, hardware, and advisory services to maximize the value and efficiency of clean energy assets.
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