STEM - Earnings call transcript Q3 2021

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Operator

Good afternoon and welcome to the Stem, Inc.

Third Quarter Conference Call. All participants will be in listen-only mode. [Operator instructions] After today's presentation, there will be an opportunity to ask questions. [Operator instructions]

Ted Durbin

operator. you, Thank Durbin, we Ted call. Investor at Relations This you Head to and welcome earnings our Stem, is of Third Quarter

Before from are you SEC that will we could therefore cause risks note refer the to that in begin, we differ filings. these results statements We materially and some uncertainties latest be projected These to forward-looking. of today our our matters those involve making please statements.

measures. Our comments also today financial non-GAAP include

Strategy directly comparable release portion Additional financial reconciliations Bush for start and CFO, Investor Officer over details CEO, the most the with CTO, our of the at earnings and be Larsh also will prepared can John. be call And turn the quarter Relations website the on our today will which available now Patel, GAAP to found John our to I measures question-and-answer Bill under Carrington, www.stem.com. Johnson, call will portion call. third of Chief is remarks. Prakesh

John Carrington

in since contracted at $XXX Ted. million up Thanks, backlog metrics: million of second of under quarter, X. X. the record billion quarter, record, revenues pipeline quarter. results million the operating since the the up end the X. record of X. gigawatt cash of and our and hours $XXX year-over-year, X. $XX XX% all X.X second of management record financial of XX quarter assets across last key from record of $X.X same year, we XX% up Today XX% reported

customers Smart continues Athena Solutions. accelerate Software-driven as momentum proprietary our to Our demand Storage

position. wanna us our customer Number the EBITDA. things and differentiate market. Number On financial Number for our guidance our focus full-year in are We revenue XXXX X, And our that adjusted today's three I X, on focus. X, software. call, reiterating

software. starting First with

the be energy position clear is software expand vision. about provider. intelligence It our Let as to leading me completely our

industry. in Larsh artificial differentiation software will most in organization in drive We the later discuss more the our platform have purposefully intelligence deepest, detail our robust to built call. the

over up both and value operational significant software benefits Second on our of and Bill customers platform continue drove X% financial margin We growing XX will software this margins provide further years, The XX% to and third, And in margin driven And drive strong gross contracted profile will customer-focus. a period financial non-GAAP our services. provide customers. and by our the gross from Athena through our our AI to quarter. expansion. margin GAAP detail Athena to call. later gross

and customer the Larsh let Stem second Before differentiation, on of I to it me focus turn leg Bill our over focus.

Specifically, I and sales markets. will strategic channel Stem start partners, direct go-to our which 's strategy, maximize reach force, across our to with investors multiple market leverages

a products completed capabilities great at education University, success have who our platform. in have Stem with and channel We and know our partners our particular, training

expand relationships. continue depth We to breadth the and of our customer

and in in to use small This a continues highly number Athena cases, base to our customer segments, are the In significant we FTM which geographies, inform any different one expect increase the will year dependent XX% the on our sharply moat. versus this not enhances in our the in of Our Front customer we doubled customer expanded our which We who customers our contributed generate to of Stem to quarter. size segment, revenue project This last number Meter continue also platform competitive software's this some quarter tripled nearly depth results the active revenue. pipeline increased our gain more as has broad customer our diversification concentration. year. And the represent average share, breadth of or of AI as competitors same market last of limited year. do partners than versus

are metrics continue customers Behind repeat customer our year-over-year. Meter or BTM and Additionally, the grow. up to quarter-over-quarter our And

led fact, our announcement domestic and to be in growth, this In from a customers. of public one of which continue came quarter our investor and Copec, America. largest our Partners international source of XX% the nearly to with companies the to Chile South partner of bookings existing expansion

in additional the wins this expect broader market. We from partnership American Chile both and South

achieved our Moving of the second segments billion and some by both days in our customer pipeline, strong across growth our of FTM end at customers $X.X metrics and this driven helping merchant quarter and to is this key solar the wind garner which opportunities. market led America, market of storage for we've XX% billion the XX was second on revenue the from opportunities record economics which the pipeline across $X.X has market, Texas September. seen now source largest the South quarter. We're in the a in build-out down and to grew by of to exceptional success, tremendous beyond at Drilling XX-month as only of bookings increased multiple volatility, BTM We stellar has end geographies. geographies our growth in significant

We in And across expect things country. multiple Texas to demonstrated in our generating revenues the New it a to is England merchant into markets come. transfer success of ISO foreshadow

our results. customer contracted to moving Now,

should first than the in third nearly of a this quarter expect the the some last value and Company is core make in time to in We related for you lifetime history, our bookings support. year, This our we and was to For Stem differentiated. believe million Like add triple ways. single in and double quarter. $XXX strength a comments $XXX like for and software, more XX performance We of quarter our last a Texas our The to we exceeded would core million customer second to centered bookings optimistic value of by fourth the group. in quarters the bookings prospects Again, I'm back-half-weighted across quarter asset come. of revenue. several portion the represented in A to extends similar are large our operations commit we of I our bookings, several centricity bookings, continue the of but highly beyond. around commercial and in strong our will encouraged AI lifetime seasonality market this to operations maximize year years. value of is for customers excess year. driven also year, this and

team, and Our engineering, of interconnection at supports dozens time. for logistics, projects a deployments

uses the terabyte ISOS team implements fleet network to or monitor our This includes asset not safety. performance some of also communications from install overseas grid data XX,XXX of which reporting programs an case Our underperforms. and competitors, asset Unlike utilities we monthly a multiple manufacturer team, and our in provides automatically team do performance and and troubleshooting calls batteries. year-to-date. And rare performance,

manufacturer as and agnostic installation with hand-in-hand these on we're the to projects ensure on-budget. contractor. installed dozens EPCs worked and of We or time hardware So utilities to are

geography, timing, installation economics. Our goal align with is better project customer providing use and flexibility maximum our to case, and

Our enduring developer more that relationships. a enabling collaborative will know partners not also with we and projects. future compete for them

margins management. comes line, nearly who higher on-going half me loyalty. software-driven call to for the continue satisfy purpose-built we support cost Johnson, experience many often follow-up have and competitors and designed discuss life power under believe market assets With customer automate differentiated to more their organization an this software management. a the or Technology our provide customers our our offering. extraordinary asset business service customers. from who of are which Today, our over processes with and of provide and These operating Officer, that, We we installation as ongoing turn scale differentiated to low Again, Chief assets. to over our we strong customer our of is X-time more up we teams with Bottom seasoned gross deep repeat services satisfaction limited let Larsh will drives our keep

Larsh Johnson

Thanks, John.

in Athena to of meet pushed power. wind changing and our Whereas clean requiring assets power assets. -centralized storage direction grid flowed challenges. predictable X-way generating by flexible, equipped intermittency to to think software distributed these resources sources serve management. a needed intelligent, premier reliability and assets provide the decisions exceed enhanced and -carbonizing XX/X clean traditionally, as both de are distributed operate intelligence predict to grid. ensure markets The from is from power distributed I capabilities. asset there IPPs battery for multitude intelligence number solutions stations to smart demand far growing to energy and sheer intelligence, platform utilities and requires locations coordinate conventional and new business software platform and purpose-built Distributed centers. Today, assets is corporations install individuals, and models types these energy balancing to and is automation central the a uniquely Athena the a generate These artificial solar solve and optimize demand in of power will distributed generation resilience. factor human need and This the The new is to to and solution also industry. a de

solution extraordinary and for internationally. wide broad. energy our over dozen million intelligence customer on U.S. runtime across of variety generation into which We markets in provide in a have the We XXX insight hours jurisdictions from XX operate is cities, OEMs storage over Our sourced utility we and types. over energy a XX a in of value software, provides multitude

identified or competitors XX their who by supports stream. streams Most in also those on economic streams a Mountain often Whereas co-optimize overtime to versus execute Storage importantly, in customers. value with our we three deep. continuously more is we is value maximize time. four and over value the add solution our Our real-time for start This key Rocky differentiator often XX Athena value one only Institute.

and We introducing our an are continuously expanding new offerings and improving features.

to fleet for insights least Last applications XX owner's real-time to markets. a and updates customers for SaaS how strategy partners ownership several applications ensure the asset and other energy lowest demands This platform assets Bidder, generates copyrights, continuously We're bids continuous we wholesale manages incorporates new as the continue for revenues. and that market introduced month protected cost features energy new we Athena total software properties visibility monetizes wholesale at Athena supports our trademarks. weekly expand which on fulfilling to an and energy patents, markets. assets in Supervisor, maximize advanced Athena wholesale into provides these presence Athena reliably significant Our performance across cadence. meter market deliver asset and with which of by operating intellectual

our of year. Let's sites couple went a for co-optimization capability FTM live Massachusetts in focus this that these on

energy this energy this determine coming hours real-time non-stop millions frequency continuously automated the and than solar real-time conditions generates automatically For regulation that the goals. and I'm is market Athena Bidder prices, site services inform scenarios battery and information, and storage first for to better report plus participation, best tracks the XX% ahead New day bids executing optimizes England. the initial hour forecast time, -stated each Athena options solar With market charge, bids our in regulation always ISO, capacity over incentive frequency with activity. and first forecast. the and of interval generation, of and assets to along hybrid Athena real-time Athena trading each then to per days. system pleased operation cleared for better continuously performing market

no Lastly, was these working we returns to for we deployed New small maximize properly these systems the the This systems feat our ISO operating England and aggressively were ensure new customers. to with with hybrid market. involve

differentiating we expertise on work Our the with continue is and maximizing deep intelligence. grid energy operators benefits to will of domain

performance solutions and customers markets to and the to are partners these our our starting extraordinary U.S. in with Our deploy are delighted abroad. new

energy of our Athena our U.S., needs out other provide areas. focusing constantly additions use ERCOT, such on in multiple but large and Athena success markets the new in We Foundation for the of customers, needs to and to intelligent in the meet Bitter PJM initially are functionality we We as E-Mobility. continue to is grid strive build robust for California. storage, targeting

the electric with California. For and optimize Southern recently minimize to charges. demand vehicle generate uses electricity storage pilot their a predicts in site's example, when announced will battery we charging spike demand and energy Athena truck, a heavy-duty savings charging project electricity Penske to

pilot to solution energy decrease has XX%. by Some starting demand our Penske's peak

was energy is with from not we're displaced actively able Penske the Penske, to multiple of agencies. optimize multiple delighted the worth tariffs Athena. to parties. expand incentive we Penske and provide competitor noting partnerships secure required. discussions and funds exploring that EV also that software state performance a also with We're our relationship It's in We their and helped with

intelligence impacts and trends peak the including backup e-mobility, of power we're electrified customer power gas solutions addition world's want electrification, extend as Over to loads, plant transition. we requirements and that backup energy to delivering generators. the to newly In managing time, for providing premier operator, resiliency minimize for our position de leadership power traditional -centralized greenhouse the supporting

capabilities software platform. further the our expanding Athena management includes customers a road-map under across broader driving our our assets, ahead, Looking spectrum on of assets

Front data from more the engineers greater lead people complexity Ultimately, seeing AI of of the Athena and sciences thrives and intermittent an about the our we're Stem, toughest serve software that from into as example, As are activities we and this strategic scope challenges our of and some and to needs grid. Power in transformation. on passionate market fortunate in and success to loves drive the making tackling energy. increasing are organic software intend developers complexity easy resources source to both and amazing this Meter to is we segment. volatility distributed comes our have team helping grid complex the in demands

With tools edge. to these that, tackle me And we we to to to turn John. in will our back and it our let keep invest continue challenges. talent competitive people over ensure terrific attracting are We

John Carrington

to pass The on it Thanks, to for before Larsh. efforts. results. items storage views ESG I other Bill I our and X financial ITC, supply want our chain touch over the on

On Credit the written months. will legislative remain be the front, Incentive that optimistic U.S. in we a law coming into Tax standalone cautiously storage

the recent seen, our pay reconciliation co-ops out accelerate storage includes which XX% came for XX including growth ITC for the most a markets, in deployment you've calls years, that direct meetings. could house As a bill that and key option of

Bloomsburg ITC it Wood ITC ITC build-out X XX% by believe estimated the Energy a Stem's would our standalone More x existing of addressable to markets. would that reminder, Mackenzie up a our of As storage and estimated their Finance baseline deepening We've we standalone by markets, of also market opening previous the has baselines. the done but total own recently, increase against Storage forecast. versus on passage have analysis business, increase will effect new New

with And targeted continue product ITC,and offerings partners, our Remember, to outreach believe engage already depend represent our passage that to team. marketing not benefit we'll webinars, would storage of Stem co-marketing forecast. the from our have could incentive. content and begun on new customers via We we our to upside the University, does plan from on it

a customers our of are ITC. mode the wait-and-see Some in for

it beginning a to does today, next third the competitive team chain on quarter on pass, to management meet report We we adequate then risk a our been And of demand results. would our supply at pleased impact material critical chain, supply meet expect as supply year. year. this if we of to that through not customer of XXXX focused secured the has entire So I'm identified securing And as management supply our at the adequate prices to have needs.

our As a demand. purchases our match supply contracted reminder,

You next agreements our these year. meeting could supply see grown new have for insured we how and backlog customer commitments much

supply add technologies. hardware vendor Our on strategy diversification continues and to our chain across to X-core to vendors supplement plan a We focus fourth manufacturers.

Our suppliers. are upstream their diversifying vendors also

to a of line to good deeper have to at continue We level supply them chain constraints. with supply our understand sight further needs engage meeting and any

been impact any the margins. are in order and in protect to some inflation through our our cost the bulk but been we seeing small pass of able increases has have agreements, supply We to

to second front, some half On supply change risks have we projects see to for we half situation next to year, the not partners. year chain project continue in a for the first in seen closely with customer we'll timing the potential may solar next of developers the the but relative our timing disruptions, material of monitor

some staffing to and We This COVID have directly issues. permitting. also to related seen delays is interconnection correlated

directly with to timing our engage delays. help and permitting any agencies We utilities mitigate will partners

led our report the update on -carbonizing our Director de processes our of our to in on I systematically partners, continued These We're as you committee. our systems engagement and focus ESG. suppliers. addition, impact and the are nominating, who chairs Tyson, driving and to Laura measure as developing In well grid, on want employees, from sustainability governance, by efforts

on great coming the update We this we're making progress you on in the front will quarters.

to beyond. steady and Officer. to let growing XXXX execution, exciting another for momentum giving call strong want Chief team that, tremendous new into With quarter Bill us our I turn with the our product Bush, Finally, me our backlog, over going Financial thank offerings and

Bill Bush

a range Starting year of guidance with high same X over at in with the service revenue projects quarter June of which end and last from $XX of the times growth on in record our the the financial and was results, FTM third customer host we sales additional some we million January versus BTM the the recognized from revenue and quarter, our X provided quarter, over hardware times vast partner the majority arrangements. came

negative is Peak public versus issued large same the $X.X $X.X those first-quarter the million hardware year. also a gross quarter year. the warrants. due this Sequentially, impact the Net the the was as XXXX. or of improvement quarter a or XXXX. a margin This quarter from contracts hardware the $X.X basis, increased $XXX last mix software and XX% of and million margin in reflecting second as from negative X% IPO a result part momentum. improved this margin $XXX revenue, revaluation million sequential non-GAAP from which completely last gross platform. margin, negative versus margin loss we results quarter quarter positive the is star the deliveries. up the from of loss in GAAP to of our when from higher second million continue quarter XX% X% of sequential And a in year, warrants Gross of drive bottom million in X% same GAAP On XX% the represents third of That's for of year. long-dated Our adoption million gross a was in non-cash services Net the the or of benefited our GAAP the Non-GAAP same gross software higher quarter the a was August of year gain last the Athena line Income in same was $XX almost in to in margin

in due announcement the redemption of August and derivative in capitalization table eliminate income the looking planned expense swings of the public large our we simplify our securities. completed the As with call we the in now and mentioned are warrants, to to

$X.X partially EBITDA the As lastly, more do Adjusted of these September, of expect no negative headcount we continue because that year. improved higher future. continued advantage million charges opportunities. teams the a same to of a so gross versus margins, and take was there negative additional market last not a by a we negative quarter. offset are million, reflecting the $X.X $X.X adjusted EBITDA in strength sequential end XX% quarter from warrants types basis out top-to-bottom as build improved EBITDA of of the in outstanding, And on our million Adjusted through

to Turning metrics. our operating

September. XX-month second up billion That's of Our $X.X quarter grew the from to pipeline of of XX% end XXXX. as the

both markets FTM in Our pipeline grew multiple BTM. in and and

$XXX XX% That Our in the end backlog increased at XXXX. momentum from and million backlog XXXX. XX% of growth $XXX continued year-end up sequentially to the for provides million September

backlog was quarter. recognized driven As offset record John growth partially by mentioned, our $XXX the during of revenue quarterly million, by bookings a

commercial growth in markets expect coming which markets bookings into the new we have quarters. Our entrants significant existing and several reflects strength in the impacts will

offering. of quarter trend. the versus represents the predictable hours. many to it pro exceeded trends nominal revenue and the rata Our XX%. software mind more And XX% metric value did as year, best deals every around year-over-year previously $XX contracts reflecting software. revenue million of we a modeling XXXX then contracts result time One year. quarter third years. FTM With - XX%. quarterly relative the and left Sheet been broad-scale on value can range the eclipsed of GAAP That's performance, think our management, mix this last quarter a future more the gross margin $XX to I expected go. the strength $XXX bookings and is to the backlog. gigawatt generate in in to and of strength deferred hardware-software with to which in commercial plus XX than hardware to contracted XX% market our million, track to from the on about a software this only That services. one the quarters, potential. indicates recent recall of we almost of last for of of software XX% We our million contracted think tripled long-term in under of stream total so that good note this And AUM relative to on year, XX% major a bookings And rules displays -- the create and Balance grew near-term That business, in to hardware our backlog, closer we from first doubled the revenue mark $XXX XX metric the million our revenue second keep XX% recognize, assets more you long-term for in our the versus participation XX trend the these under our We will to X.X

we Turning EBITDA. mentioned, of affirming revenue the and of as of guidance adjusted John for $XXX negative our to full-year guidance, million million $XX are

We expect cycles. seasonality And to stronger to full-year provide seasonally guidance XXXX intend results quarter. in of when report bookings continue XX% to in the installation sales February. customer of this we driven quarter, revenue by in the see our do year, similar of our the normal We to to to the last we XX recognize fourth expect mid-to-late in the fourth-quarter our quarter

XX, proceeds in redemption we exercised our million million of move as are to capital warrants each. announced The the quarter, all September structure penny sheet. warrants there On April million for trading public X outstanding. the we Holders to XX.X simplify This merger. from Company. at remaining generate warrants XXth, of more redeemed take which August balance of for were $XX.XX, XXX,XXX gross steps a no purchase as price the of $XXX continued XX.X our warrants forward we And

said in has future make Company the as fund to battery regards to investments capacity plans have to we to with made past, growth. capital, to Additionally, significant secure working continue the and

of said As on a cash we result, and of million as debt. and sheet in no the end balance held $XXX the September, investments liquid

We in use drive to to key with future our as our well lock-in balance markets supply the to of use adoption sheet continue strong quarters, cash for as Athena partners.

our maintaining different structure to to financial support will while We to flexibility opportunities our strengthen evaluate capital growth. continue

Finally, on and third financial I differentiation, want to gross expand the our our our model, model is strong which leg business generates growing of margin.

to a XX% expect We what field basis we like for the to non-GAAP around activities consider close margin XXXX generated construction services. gross full-year on engage that generate and do year-to-date, not have we We or lower-margin figure.

revenue In fact, software a our expect blend over as our gross services margin portion our will up become margins larger of time high stack.

intentionally Rather, the free financial With faster model our as and expenses. operating right let's flow scale significant operating place we we than growing owner. much our questions. to assets open scale a pace to at should strategies are our the and and we line, sell finance natural those a allow on not us which intend We more own expenditures revenues do model on channel Balance through margins, capex AUM OpEx low. our confident go-to-market in Our growth, moderate have the And our in expect business. asset to ourselves that, to we Bottom will generate market. capital keeps low to basis. for ultimate differentiate long-term the Combining and Sheets asset-light, lineup we partner this cash growing

Operator

Instructions]. first momentarily we We Instructions] comes roster. from to question-and-answer pause this will question session. will of go [Operator assemble [Operator time, the Suisse. ahead. At Mandloi Maheep And Credit Please now our begin our

Maheep Mandloi

-- Good seen were your the you about maybe John, from here contract you've on [Indiscernible] dealers over than your thing customer how in your could we're visibility different of for talk [Indiscernible]. evening. here congratulations We markets questions culture. lot industry the end here, the or one Thanks from hearing my solar in other taking just and the on push-outs. somewhat or seeing a and

customer half different could about the we're here. year that, of seeing backlog than of these how just for your are an for Thanks. So of impact talk could what was if next you And like projects. changes somewhat extension which some your is second you just

John Carrington

Sure, understand things. past lead comments. couple to say the about of our partner important exactly us I'd really Maheep. strategy times with aligned And that and that run is of discussions supplier those we've are the in the each process a project A in specific for each Thanks talked help projects. joining hardware channel geography. we've with weekly looking where rigorous we very at

rigorous, weekly the So I'd of and Front regular a team longer-term it's out, basis. projects, so on on a with to that little tend members, Meter, also operations those E-Staff all the say a be literally this. over those we're the call further we're monitoring

very our third supply We've where many working most I been of the the have important the we with into suppliers. I for quarter stand we the starting suppliers quarter think about XXXX, part is feel And really good with chain. secured we're on fourth years. as and well

And said diversity part feel adding terrific as to look supplier customers. and very big a of a relationship mentioned fourth probably important is them. with ensuring minutes we that for we a have ago, of success the be that we're I delivery as our going so at We in and our like

Maheep Mandloi

to the And just over chain you XX Got XXXX it, those could nature the to expect already talk got visibility? about finalize more do supply you then contracts needs over months [Indiscernible] QX it. and that have your of when battery here for deliveries

John Carrington

lock down maybe this at quarter. good Yes, before probably beginning, down We'll latest. of visibility quarter, We it we fourth expect upwards mid-January certainly not, the lock the pretty the if get to XX months.

quarter will and our way we're feel come very We us. and perspective, quarter of pretty say has oversupply hours the some -- XXXX what this beyond. expansion So transparency into we supply year, with a well in as mean that even those feel for supply fourth I'd about around say the us in in from over Maheep, we -- to positioned a work in feel XXXX we -- four they it's it ensure And coming like both hours XXXX. customers, That's more our done a there's we of bookings good effect to the gives interesting fourth have gigawatt suppliers mentioned, like there's and XXXX. going XX make I DNEF XXX gigawatt XXXX,

Ted Durbin

Maheep, have scope is, think the into What he's what John of saying QX. note some secured also part referencing full really supply of as is I already it's 's we to important for what to of be full what we not end period. zero a think we forecast it's expect the that, just that It's would not the will is time number, that top sell.

Maheep Mandloi

me one then the from X it. back in And just last Got queue sense. I'll hop and this Makes here.

you talk Behind Meter, of bookings, the of in hardware and versus the just of Front the Thanks. share split is If much -- Meter could the how about software? the

John Carrington

a into from front third on The the Texas bookings pipeline, as XX% were quarter We a geographies. And Meter. getting our Front was of about go XX% new standpoint, progress of Front particularly Front the and making forward, large Meter. we're part we to of looks of Yes, our pipeline of that be great expansion, Meter. around in like feel the booking

The that part of software. on was the second on had question you

Maheep Mandloi

Yes, [Indiscernible] versus [Indiscernible] yes.

Bill Bush

us revenue software generates a comments, my the a Bush. -- long-term heavier us is in of There gives the more revenue the starting great which we're weight Bill equation. as on the Maheep, side, for shift is I fact that starting and side We're predictability a on problem mentioned to towards deferred see this that more in

emphasis software heavier component on the value. as a total to So we're see of starting bookings a

Maheep Mandloi

Thanks, queue. Jump in back the Bill. John, Got it.

John Carrington

Thank you.

Operator

Biju Susquehanna. from Please comes question Perincheril next go of The ahead.

Biju Perincheril

markets, new here. I pick-up on congratulations the this interest projects of the nice of is -- you maybe Good quarter. up seeing that how seeing about Can just following new and some on Thanks. And, and afternoon bookings were from about the talk the on of that any you and and nice as acceleration think maybe a you're should some

Biju Perincheril

gave projects expected Or these that some were are that be you the booked year? January? to incremental into to in next guidance of

John Carrington

Minister the storage (VPP) -- they're partnership Chile. may with their announced announced first to Incidentally, Copec double You U.S. you deploy major announcing expansion power last X COP continue northeast and want of that going and in virtual the the have include commitment to XX of XXXX. say see I'd the In the which at gigawatts it that broadly seen accelerated our to Chile we contract in by quarter, Prakesh? our Texas, geography take Arizona, we markets, across plant with to also an California, of Sure. by demand Energy

see We strong investors market South continue we're U.K., to specific for America focus. being with and as our globe, to looking across in Europe, a partner including the then us a separately,

Australia, quarters. to as well we talk As and coming about that have Asia in and we'll in more

Unidentified Participant

Great. Thank you.

Operator

of Goldman Lee Our comes question go Please from Sachs. next ahead. Brian

Brian Lee

QX? Thanks us made, [Indiscernible] On guys. sequentially and Give that versus QX a Being Hey, to piece quarter both the seasonality. that the will bookings for that [Indiscernible] fair comments you

Prakesh Patel

up all apologize. of I that, I Brian, couldn't pick

I think it railed through. choppy you was a little as

John Carrington

it Maybe Brian Go --. again, Q of Seasonality try because ahead. --

Prakesh Patel

Is speaker. that on I'm Sorry, better? a Okay. sorry. bit Thanks, little

the for Sorry technical difficulties.

bookings don't I but -- average expecting year? the think a a It QX seasonality, tend you should mentioned bookings follow I in our the revenue expect just Just so more bookings, would expect strong that do they to would don't to or question be going that, be it's I projection, going quarter. give you're less, QX typically say remaining but Well, necessarily as we is quarter. strong on think Bookings the number. up largest in we're it's versus fourth I typical to

Brian Lee

-- year Fair a timing, little mix it related Having should then that, Just more the the margins software appreciate around then software, next going of you backdrop, made medium quarter, quarter, enough. next versus bit we're light to some having software near-term expectations. seem I bookings anticipating versus tad versus year? we be being longer-term. margins on trajectory hardware end? that Hardware to this on expect we implications into softer? the then a as comments the given obviously in And has should fine. And a move the the of but there hardware what's into we revenue being and as higher rev-rec Anything Okay.

Prakesh Patel

timeframe. as the we're going of we the mentioned, providing the to I Yeah, world be side guidance in XXXX on mid-February think

the think software time. as share it split year and details between will how and lot more or we at the to the a I that back-end relates hardware revenue have XXXX might there to

the terms equal margin. we the we're stronger mean The your significantly in in think recording, be we've gross to consistently software increase margins to in I of increase. said, I more hardware should I margins, software see margins. All as the the are question, an think things than in

we non-GAAP As the Company gross rolls that deck showed pretty now, pipe like consistently, should as basis, out. we we reflected top said in software We gross almost margin. of ago year And say, each other, a we the -- I always of contracts a contracts, through think margin increasing. we've add on on I software stacking think be a a the stack more, as higher more as that

John Carrington

Brian. It GAAP first GM positive may I is add If our ever.

gross about the mix next the to fact, gross out that. year will we're margin drive higher -- XX% in longer-term, do higher excited that we're software for towards margins mentioned and rolling we our think it's tracking that said, And the February. also plan. Bill in We're So as plan

Brian Lee

Okay. I'll offline. I Fair guys. rest it. the enough, appreciate take

John Carrington

you. Thank

Operator

from comes question next Williams please of Sean Our ahead. Trading, go Milligan

Sean Milligan

for guys, my thanks taking Hey questions.

little the bookkeeping revenue is or on there a XXX% question, but that service component that? to another line, revenue software-related First, is

John Carrington

software That XXX% revenue. is

Sean Milligan

then great. just Okay, And picture. bigger

market think just down starting players about involved also. set of are opportunity storage trying market probably are on services now it talk get curious the Some you talked to residential be -stack, to But in de that road. thoughts I the you grid energy and just when there at as about your that came an develops the maybe

John Carrington

-- cognizant We're are of residential in growth obviously we Sean. the Yes, the market.

markets, nice I The is us, software go poses thing we're various think opportunity into pretty about for Athena feel to platform an [Indiscernible] on in that like and we it's think markets. focused if highly the more that translatable would I variety that to Lash list we're to of or? opposed anything you of researchgate. and not top add doing a point. variety this a it of been - so it's it, to as just at Horban the want energy contributions/Andrzej - assets. net/scientific we certainly direction. putting -XXXXXXXXssets,

Larsh Johnson

that's No, right. I think

doing The have list to of that. help we would different cash not into yet. of on of think now focused We've right things I we're itself that John plants. assets pay to opportunity Athena and the the out. kinds the the to power lot the scalability from and that's heard capability at lend platform as virtual pointed But just top a of drive

Sean Milligan

Thank Great. you-all. Okay.

John Carrington

And I things operators, to think or the I'd of doing. takes add we're -- a utilities the houses services, one in that if do and are the other thing, Sean. other your When CNI grid of certainly you that lot looking look it at capacity for that's focus grid

the and So feel from as the behind of acquisition for customer the we provides utilities. a costs compelling, CNI point well lot stand functionality it grid operators like as market's a

Larsh Johnson

high opposed several installing of get our one we typical in think for batteries. has to is can that to homes volume get homes. of commercial utilities the space customer of the the homes. XXX CNI to hundreds But sites worthy One if having customers those of about leverage still That it's as are

And ignoring commercial it are sense, those hanging so we're little any customers but not fruit. by

Sean Milligan

Athena think terms deploy for about you heavier in being year I more, I ITC battery trying think, When I adoption storage, quickly the Okay. like of because and the guess guess. one could about maybe that in that correct? could seasonally second in And talked dramatically, modeled you standalone what's the revenue just theory segment. then the to would more just of there the change half that into

John Carrington

XX% to in know. in XX would we the -- included point. for our as reconciliation, it's plan that this I this not say I'd have you house included years,

the And and passed view a what's Mackenzie. we frankly upside ITC. and beyond. It's TAM XX And with going a bullish XX% to some the lot numbers about perspective and with XXXX it's of hear, probably see. in is B likely We're occurring, more We upside from we we our of get ENF, it's but in like Wood as far what significant it a manner. quite be as when

-- storage, including it'll really critical speak Washington, piece it's industry. right missing and as energy it's clean we're we I energy very We way. they're in accelerate And so just And look, bullish about that. any good And as again, accelerating supportive for Build lobbyist ITC Act to the we been direction think recognized have around it, to the included occurring. in the the want our long-range excited for just We by a feel planning underscript obviously Better not about energy I to the think transition. Back it in this, storage certainly

Sean Milligan

-- through, do maybe lbearings seasona be or your too deployments If the that it early just same Okay. And I have of guess would think does more that was it's would you my question to into like go they different? business just tell. current were that's kind that to

Prakesh Patel

and really is tell, the way the something to see it point. the probably likely but we than think but going at track at opposed early to they other to to little think tax day, I We calendar are generally the as they would to or these have advantaged still, say that, expect enough else. this one information I are don't a are end of more tax investments,

Sean Milligan

Thank Great. you guys.

John Carrington

you. Thank

Operator

[Operator Instructions]. And the next of ahead. question will Go come from Brett Morningstar. Castelli

Brett Castelli

my taking questions. for Thanks Yes.

-- of balance $XXX the cash. million sheet on of in one first terms Just and

priorities of terms in curious there. Just

beyond stirring supply, maybe mentioned You that? but curious

Prakesh Patel

that see just principally on technology a and think business that supply procurement spend said, see probably of our in to days of we the news We acquisitive, funding longer-term, a as we also all we've basically and goes. spent two we -- is particular that got center, the need. lot are interested most think sure as the the that we've team around I the the are front these But be time side. of time for sure cash Well, that But that particularly given topics. you lot equipment has primary making those over the where of well uses as we'll

Brett Castelli

any hardware then all software Okay. of pipeline and that you at are pretty seeing across billion, opportunities that much than this the terms in point? $X.X is And software-only pipeline, XX-month that or

Prakesh Patel

we've No, of well, be more vary tends partners, to the I that customer sophistication. we and really Tend side on the definitely solar FTM as projects. terms in fairly think to significantly larger in said our base development our partners. are past, see of opportunities And as the software-only

who driven some be to procurement projects tend have more actually larger as And sophisticated it to much batteries. cases the themselves relates by the,-- so departments in counterparties,

more its done, the fact, in see And as deal And software-only. deal. so ever in cases the biggest Company's electrodes of likely a the those

of hours ultimately and megawatt we've history We XXX measure is the contract. as ago, said AUM have business always year capacity well, a of with those best a as battery software-only almost term. long is Now deals, certainly associated this

just we the And will that to driving take goals. them accomplish we're hardware drive software active both so to don't have to ways in. our need only and AUM. the continue deals, in we're business markets really We advance We'll

Brett Castelli

of Got Can one only Storage ITC. percentage is you or [Indiscernible] it. storage terms today plus solar last standalone us in maybe is -- it or remind what mostly business you your the And on storage already

Prakesh Patel

days. and Really, And contracts it's only been the solar more I'll and really say started a a historical signed about, of started we storage years that seeing which is more transition player. plus storage, the we X.X these ago predominant we as amount

because the we only the well -- storage market, this particularly you some the turning last bit of also a that's not that's Texas lot quarter. Although of a markets, deals little as where saw see area is

flow to and provide hard it's And exactly but I question complexity, both a active we're a just or solar standpoint, the to to system t's said, say thrives sides. it. what from the really which that generally really be, of like those types on services are there's going gonna So We It's of our really which of always ebb not installations. attached, an in increase there's different. Athena we've complexity. is substantially whether sorts not the we

Brett Castelli

for Thanks Thanks. that. Great.

Operator

ahead. Osha Our next go question of comes from Guggenheim. Please Joseph

Hilary

guys This you so I for super exciting, questions e-mobility for And two Hello. congratulations. on which Hilary pilot, sounds is had actually Joe. on

say, wondering the little early of had of to results a -- competitor you or not you this real offering, hoping be how perhaps, midterm. was terms I Thank you're to finding feedback might for any dynamic speak early And no much. conversations then out the additional if customers there's growth competitive to of you think actually where near some but a could in these too that different. First if with competitive you ability contract. driver kind could off, I from and big it's beat you mentioned sure just that so share similar if secondly, is if And the there

Larsh Johnson

Larsh. this Hi, is

a Let for There battery chargers integrator about and DC a me little battery a that And are were was the this equipment how bit there. system number opportunity got to project things we And for software OEM when from available the that do put became it that of to location. were particular actual provided in this the put that it Penske then the some fast of talk time project that supplier and came project. the some have wasn't of going place together, operating the of the there to part the clear requirements able needed. be

nature chargers, is can to So here for EV a that the grid really face how might charges another operation designed drive is in the which that's such drops deal demand system the that customers protect exceeded can the going as EV battery The called fast our mobility This software-only as and capacity these though really the from opportunity. charging this got and to grid. show to well putting interconnection sure the be large the when even space. not would we the large required tremendous make in TI facility, you're from be of

and [Indiscernible] work this charges, charges bit other some protecting electrical that market? as really from the upgrades, programs and to actual power want install with you it quickly like to for been particular Prakesh, cost time-of-use some to is the costs people utility them batteries of is with. as fast the that XX%, the the we're what little customer site makes different including we've about chargers helping operating exposure that tune dropping So by easier well as of do characteristics which more to there that talk well the mitigate to now at our and to showing of demand were peak incentive able load both help the Maybe as a capacity related particular

Prakesh Patel

Sure.

Larsh Johnson

Dynamics?

Prakesh Patel

Yeah.

think well they're charging and grid the build-out seems how And other market, the houses. upgrades, we're happening the that. electric grid and with operators in these things the the that in using space other solutions effect impact on which really things similar many that seeing of there. electric of growth internet, One Teslas covered with that working we're it engaged entering pull during we're to a research facing. the previously dialogue on you forward fleet in seeing more everyone command is their the and of the vehicle Similar of vehicles for forecasting your missing what that is utilities that neighborhoods are piece to infrastructure or a distribution EV quantify demand are is utilities aligns as network block are increased dynamic we But might It's the planned for utilities penetration and many electrical we're being have to other is you pulled slowdown are COVID and with experience your services. forward. upgrades or in and capex we're like these unanticipated seeing And ameliorate on by

seen important research in trend picked think an of here. the up we that some We demand accelerate that industry haven't could potential reports, that's but

Hilary

you. Good, thank

Operator

I remarks. the would turn back question-and-answer conference our like to concludes for This John closing over any session, Carrington to

John Carrington

us for on joining our you call. bet. third earnings Thank quarter You

to the we're this we you forward X earnings speaking momentum all and with year. quarter look in Thank We next certainly into fourth again. are carrying our quarter strong execution year and with during of pleased first our in And quarters February. the you call the

Operator

for disconnect. concluded. may you has now conference today's The attending presentation now and you Thank

Stem (STEM) 10 Nov 212021 Q3 Earnings call transcript