Stem, Inc. (NYSE: STEM), a global leader in energy technology, announced its financial results for the third quarter ended September 30, 2025, highlighting strong progress in revenue growth, profitability, and operational stability following its strategic transformation. The company reported revenue of $38.2 million for the quarter, a 31% increase compared to $29.3 million in the same period of 2024. This growth was driven by improved hardware margins and the absence of a $5.6 million revenue reduction from prior-year contract adjustments related to parent company guarantees. GAAP gross profit reached $13.5 million, or 35% of revenue, up from $6.2 million, or 21%, in the prior-year quarter. Non-GAAP gross profit was $17.9 million, or 47%, reflecting continued operational efficiency and margin improvement. Stem achieved its second consecutive quarter of positive adjusted EBITDA, reporting $2.0 million compared to a loss of $3.5 million in the third quarter of 2024. The improvement was primarily due to lower operating expenses from ongoing cost reduction initiatives and better financial discipline. Net loss narrowed significantly to $23.8 million from $148.3 million in the prior-year period, largely due to the absence of a $104.1 million one-time bad debt impairment recorded in 2024. The company ended the quarter with $43.1 million in cash and cash equivalents. Bookings totaled $30.3 million, down from $34.3 million in the second quarter, reflecting a strategic shift away from low-margin battery hardware sales. However, software and services bookings remained stable. Contracted backlog decreased to $22.2 million from $26.8 million, due to higher revenue recognition and lower new bookings. Annual Recurring Revenue (ARR) rose to $60.2 million, up 3% sequentially from $58.5 million, and remained strong at $70.1 million for Contracted Annual Recurring Revenue (CARR). Storage Operating AUM grew to 1.8 GWh, and Solar Operating AUM reached 33.9 GW, reflecting continued deployment of clean energy assets. Stem revised its full-year 2025 guidance, raising expectations across most metrics. Revenue guidance was updated to $135–$160 million, with software, edge hardware, and services revenue now projected at $125–$140 million. Non-GAAP gross margin is now expected to be 40%–50%, up from 30%–40%. Adjusted EBITDA is now forecasted at $(5)–$5 million, and operating cash flow at $(5)–$5 million. ARR guidance remains unchanged at $55–$65 million. The company also announced several strategic updates. On October 14, 2025, Stem expanded its Berlin operations into a centralized European hub, positioning the city as its EMEA competence center for utility-scale solar, storage, and hybrid projects. On September 12, 2025, Stem published a shareholder letter reflecting on its strategic realignment since late 2024, including a rebranding of its flagship platform, Athena®, to PowerTrack Optimizer. The company also launched PowerTrack Energy Management System (EMS), a new intelligent control system for standalone and solar-plus-storage projects, designed to maximize grid services and revenue potential. Stem emphasized that it has ended all parent company guarantees (PCGs) for hardware sales, with no outstanding guarantees remaining and no future financial impact expected. The company continues to monitor macroeconomic, regulatory, and geopolitical risks, including the impact of the One Big Beautiful Bill (OBBB), trade policies, inflation, and global instability. Stem will host a conference call on October 29, 2025, at 5:00 p.m. ET to discuss results and outlook. Investors can access the webcast and presentation via the company’s investor relations website.