Energy storage solutions firm Stem's Q3 revenue beats estimates on software-focused strategy

Stem

29/10/2025 20:45

Overview

Stem Q3 2025 revenue grows 31% yr/yr, beating analyst expectations

Company achieves positive adjusted EBITDA for second consecutive qtr, reflecting operational efficiency

ARR increases 17% yr/yr, evidencing continued software-focused strategy execution

Outlook

Stem revises 2025 revenue guidance to $135 mln-$160 mln

Non-GAAP gross margin guidance raised to 40%-50% for 2025

Stem maintains year-end ARR guidance at $55 mln-$65 mln

Result Drivers

SOFTWARE STRATEGY - Stem's software-focused strategy led to a 17% yr/yr increase in ARR, highlighting successful execution

HARDWARE MARGINS - Improved hardware margins contributed to higher gross profit and margin

COST REDUCTION - Lower operating expenses from cost reduction initiatives improved adjusted EBITDA

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q3 Revenue
Beat
$38.20 mln
$36.80 mln (3 Analysts)
Q3 Net Income
-$23.80 mln
Q3 Adjusted EBITDA
$2 mln
Q3 Gross Margin
35%
Q3 Adjusted Gross Margin
47%
Q3 Order Backlog
$22.20 mln


Analyst Coverage

The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 7 "hold" and no "sell" or "strong sell"

The average consensus recommendation for the renewable energy equipment & services peer group is "buy."

Wall Street's median 12-month price target for Stem Inc is $14.50, about 61.8% below its October 28 closing price of $23.46

Press Release: ID:nBw8xZ2Pfa

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)