Stem Achieves First Annual Positive Adjusted EBITDA, Guides for 85% Growth in 2026 Amidst Software-Centric Shift

summarizeSummary

Stem, Inc. announced its Q4 and full-year 2025 results, achieving its first-ever full year of positive Adjusted EBITDA and operating cash flow, driven by a successful shift to a software-centric strategy. The company provided strong 2026 guidance, projecting significant Adjusted EBITDA and ARR growth.

check_boxKey Events

• First Annual Positive Adjusted EBITDA

  Stem achieved its first full year of positive Adjusted EBITDA ($6.7 million) and operating cash flow ($6.9 million) in 2025, a significant operational milestone compared to losses in 2024.

• Strategic Shift to Software-Centric Model

  The company successfully transitioned to a software-centric strategy, leading to an 8% increase in full-year 2025 revenue to $156.3 million, with software, services, and edge hardware revenue up 25%.

• Improved Q4 Profitability

  Fourth-quarter 2025 saw a reduced net loss of $16.0 million (vs. $51.1 million in 4Q24) and increased Adjusted EBITDA of $5.5 million (vs. $4.2 million in 4Q24), despite a 15% revenue decline due to reduced battery hardware sales.

• Strong 2026 Guidance

  Stem introduced full-year 2026 guidance targeting $10-$15 million in Adjusted EBITDA (approx. 85% growth) and $65-$70 million in year-end Annual Recurring Revenue (ARR), representing 10% growth.

auto_awesomeAnalysis

This 8-K reports Stem's Q4 and full-year 2025 financial results, highlighting a pivotal year for the company. The achievement of the first-ever full year positive Adjusted EBITDA and operating cash flow demonstrates successful execution of its software-centric strategy and improved operational discipline. While Q4 revenue declined due to the de-emphasis of lower-margin battery hardware sales, higher-margin software and services revenue grew significantly, leading to improved gross margins and reduced net loss. The 2026 guidance, projecting approximately 85% growth in Adjusted EBITDA and 10% growth in ARR, signals continued operational leverage and a positive outlook for the company's transformed business model. Investors should monitor the company's progress in expanding its software and services segments and achieving its profitability targets.