Q2 2026 Stem Inc Earnings Call Transcript
Key Points
- Fifth consecutive quarter of positive adjusted EBITDA, with Q2 2026 adjusted EBITDA of $6 million, up 63% year-over-year.
- Record non-GAAP gross margin of 55% in Q2 2026, driven by a favorable revenue mix toward higher-margin software, services, and edge hardware.
- Operating cash flow reached breakeven at $0.3 million in Q2 2026, a $9 million sequential improvement and a $22 million improvement year-over-year.
- PowerTrack software revenue grew 11% year-over-year to $11 million, and PowerTrack ARR grew 3% sequentially and 13% year-over-year to $42.8 million.
- Expanded PowerTrack EMS bookings to six countries and three continents, including new market entries in Latin America (Chile) and Hungary, and won The smarter E AWARD 2026 for Smart Integrated Energy.
- Bookings grew 39% sequentially to $37 million in Q2 2026, and contracted backlog increased 18% sequentially to $27 million.
- Reaffirmed full-year 2026 guidance, with expectations to trend toward the high end of adjusted EBITDA and non-GAAP gross margin ranges.
- Cash operating expenses remained flat sequentially and down 11% year-over-year, demonstrating disciplined cost management and operational leverage.
- Total revenue declined 12% year-over-year to $34 million, primarily due to lower battery hardware resale revenue.
- Managed services revenue fell 34% year-over-year to $6 million, against an unusually strong Q2 2025.
- Battery hardware resale revenue was minimal in Q2 2026 ($0.3 million), and the company expects to trend toward the lower end of its up to $40 million guidance for the year.
- The company expects non-GAAP gross margins to decline in the second half of 2026 as battery hardware resale revenue increases, which will also pressure EBITDA margins.
- Operating cash flow was only marginally positive at $0.3 million, and the company remains reliant on its ATM program, raising $6 million in Q2 2026.
- The company's full-year revenue guidance remains wide ($140 million to $190 million), with significant uncertainty around battery hardware resale timing and volume.
- International expansion is still in early stages, with only initial bookings coming live, and the company has not yet provided substantive updates on AIONA or data center offerings.
Greetings, and welcome to the Stem, Inc., second-quarter 2026 results conference call. (Operator Instructions) As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host, Erin Reed, Head of Investor Relations. Thank you. You may begin.
Thank you, operator. Welcome to Stem's second-quarter 2026 earnings call. This is Erin Reed, Head of Investor Relations.
Before we begin, please note that some of the statements we will be making today are forward-looking. These statements involve risks and uncertainties that could cause our results to differ materially from those projected in these statements. For more information, we refer you to our latest 10-Q, 10-K, and other SEC filings and supplemental presentation, which can be found on the company's Investor Relations website.
Our comments today also include non-GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP financial measures can be found in our second-quarter
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