REVENUE

9 Months Ended

Sep. 30, 2025

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The Company’s disaggregation of revenue has been adjusted to better align the classification of revenues with the Company’s business strategy announced in 2024. Prior period comparable results have been disaggregated to reflect the change in presentation. This change did not have an impact on consolidated total revenue.

Product line revenue, as presented below, depicts the nature, amount and timing of revenue for the Company’s various offerings.

PowerTrack Software – Recurring Software as a Service (“SaaS”) revenue from our PowerTrack platform supporting customer-owned clean energy assets.

Edge Hardware – Sales of edge device hardware to aid in the collection of site data and the real-time operation and control of sites.

Project and Professional Services & Other – Full lifecycle energy services including development and engineering, procurement and integration, performance and operations support, and revenue tied to DevCo JVs.

Managed Services – Includes (1) recurring revenue related to the operation and optimization of energy storage and hybrid portfolios managed by Stem, (2) full lifecycle, storage services covering the design, procurement and commissioning of energy storage and hybrid systems and (3) Host Customer recurring and merchant revenues.

Battery Hardware Resale – Sales of energy storage systems through partnership arrangements.

The following table provides information on the disaggregation of revenue as recorded in the unaudited condensed consolidated statements of operations (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
PowerTrack software	$	9,380	$	8,488	$	27,755	$	24,185
Edge hardware	15,558		13,202		37,907		32,384
Project and professional services & other	2,475		6,857		6,621		9,540
Subtotal	27,413		28,547		72,283		66,109
Managed services	6,554		6,798		22,606		18,361
Battery hardware resale	4,270		(6,054)		14,234		4,289
Total revenue	$	38,237	$	29,291	$	109,123	$	88,759

The following table summarizes reportable revenue by geographic regions determined based on the location of the customers (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
United States	$	36,066	$	27,425	$	102,563	$	84,361
Rest of the world	2,171		1,866		6,560		4,398
Total revenue	$	38,237	$	29,291	$	109,123	$	88,759

Remaining Performance Obligations

The Company’s remaining performance obligations represent the unrecognized revenue value of its contractual commitments, which include deferred revenue and amounts that will be billed and recognized as revenue in future periods. As of September 30, 2025, the Company had $389.4 million of remaining performance obligations, of which, we expect to recognize in revenue approximately 18% in the next 12 months, with the remainder recognized in revenue in periods thereafter.

Contract Balances

Deferred revenue primarily includes cash received in advance of revenue recognition related to PowerTrack software and optimization services and incentives. The following table presents the changes in the deferred revenue balance during the nine months ended September 30, 2025 and September 30, 2024 (in thousands):


	Nine Months Ended September 30,
	2025		2024
Beginning balance	$	129,155	$	142,647

Upfront payments received from customers	39,618		62,875
Upfront or annual incentive payments received	1,497		1,580
Revenue recognized related to amounts that were included in beginning balance of deferred revenue	(37,902)		(32,287)

Revenue recognized related to deferred revenue generated during the period	(2,567)		(10,636)
Write-off of deferred revenue (1)	(880)		(6,614)
Ending balance	$	128,921	$	157,565

(1) Deferred revenue written off against the associated receivables in connection to terminated projects, contract restructurings, and the parent company

guarantee arrangements discussed below.

Parent Company Guarantees

Prior to July 2023, the Company agreed in certain customer contracts to provide a parent company guarantee (“PCG”) that the value of purchased hardware will not decline for a certain period of time. Under such PCGs, if these customers were unable to install or designate the hardware to a specified project within such period of time, the Company would be required to assist the customer in re-marketing the hardware for resale by the customer. If a resale were not to occur, the hardware would be appraised utilizing a third party. Such PCGs provided that, in such cases, if the customer resold the hardware for less than the amount initially sold to the customer or the appraisal value is less than the hardware purchase price, the Company would be required to compensate the customer for any shortfall in fair value for the hardware from the initial contract price. The Company accounted for such contractual terms and guarantees as variable consideration at each measurement date. The Company updated its estimate of variable consideration each quarter with respect to the outstanding guarantees, including changes in estimates related to such guarantees, for facts or circumstances that have changed from the time of the initial estimate. As a result, the Company recorded net revenue reductions of $5.6 million and $38.7 million in hardware revenue during the three and nine months ended September 30, 2024, respectively. The overall reduction in revenue was related to deliveries that occurred prior to 2024.

There are no remaining PCGs outstanding, and the Company expects no future impact on its financial results as a result of PCGs.

Impairment and Accounts Receivable Write-Off

For those contracts where the customers invoked PCG protection pursuant to the applicable contract, the Company worked actively to remarket the remaining systems subject to PCG with a wide variety of potential customers. Despite such efforts, such negotiations resulted in limited transactions with mutually agreed upon pricing and terms. As stated above, under contracts containing a PCG provision, in the event that the Company and the customer are unable to remarket and sell the relevant assets, the customer was obligated to engage a third party to appraise the fair market value of the remaining hardware. None of our customers obtained such third party hardware appraisal. Given the uncertainty of collection from the original customers of due and unpaid amounts in those cases where the Company believes it has enforceable rights of recovery, the Company believed the likelihood for collection of the accounts receivable outstanding relating to hardware subject to these PCG’s was no longer probable. Accordingly, the Company wrote-off the remaining receivables of $104.1 million during the three months ended September 30, 2024, offset by $1.6 million for amounts previously provided for on these receivables and recorded within general and administrative expense in the unaudited condensed consolidated statements of operations. As of June 30, 2025, the Company entered into an arrangement to recover $3.5 million of the receivables previously written off. As of September 30, 2025, the Company has recovered $2.7 million. The Company continues to pursue remedies with respect to its enforceable rights under applicable contracts.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-7

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-9

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-10

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-15

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-12

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479806/606-10-50-13

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org/606/tableOfContent

+ Details

STEM, INC. 10-Q