- Earnings call transcript Q3 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to the Stem, Inc.

Third Quarter Conference Call. At this time all participants will be in a listen-only mode. Later we will conduct a question-and-answer session. I would now like to turn the call over to your host, Ted Durbin, Head of Investor Relations. Mr. sir. begin may you Durbin,

Ted Durbin

Thank you, Relations our Head Investor Ted quarter This Stem, and is at to earnings Durbin, we XXXX of call. Operator. welcome third you

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

today comments financial Our include also measures. non-GAAP

details financial and in release. reconciliations comparable Additional to the measures our directly most GAAP found can be earnings

We will using slide presentation today. be a

Our earnings the with prepared John portion and Schaefer, call Patel, portion www.stem.com. Carrington, question-and-answer will Relations release John. the of Bob our remarks. Officer, CEO, call Investor today Bush, available be will and for start are the turn and our Chief will AlsoEnergy, at on to of website I Bill Prakesh now, presentation the President also the call. And of over CFO, Strategy

John Carrington

commercial with Ted. by review will for agenda call our XXXX you, and our the slide I Thank third of strong overview and highlights, today, quarter an results followed the three execution. Starting

leadership. will offering finally, update I customer continued our technology everyone believe margins. our new enhance Next, compelling will and a And we choice more enable

Officer, Following my discuss will who our Financial Bill remarks, detail. financial Chief I will in our turn to the call Bush results more over

contracted expectations. for with recurring of while company revenue CARR. digit strong four, this end in high very EBITDA third margins note million, achieved record revenue, reported proud results, pipeline history. quarter am results quarter, or the the on triple our Revenue today record XXX% are and backlog, revenue full-year our of slide I representing tracking contracted we first is Turning growth. above to our guidance $XXX quarter revenue annual and X% year-over-year came range including to in-line We in

year year-over-year, continues up Backlog, by of Record AlsoEnergy plan momentum growth. our Contracted plan. flat to bookings year impacted was we the and nearly margin have continued Regarding full seeing full hardware XXX% XXXX actuals. gross exceeded to CARR strong Front doubled underperformance Meter momentum, quarter-over-quarter and mix, and pipeline specifics: additional greater quarter-over-quarter Some strong see

reaffirming We on key also our full-year are of our guidance all XXXX metrics.

some and to and of quarter guidance, the highlights specific slide: addition technology QX significant our supply Moving to made management. progress on have the chain strong commercial right execution with we leadership, In our side

& optimization pleased technology front, by trading be recognized Frost independent research to firm. and for as On Sullivan, we innovation the were an in number one

million $XXX Year-to-date Regarding for versus year-to-date over million bookings, $XXX top million representing are of range end at quarter. and year full the for a XXX% XXXX. versus at the full we $XXX roughly our increase in bookings XXXX, year just is the

improve line, we about in continues achievements customers, the we Importantly, chain, plan Bottom executing technology in macro our supply our next as we expect the power. for software leadership are to to gross margin reliability environment. are a and I’ll improved backlog flexibility our enhance these drives few increase challenging on and revenues. well offer pricing to a initiatives which the talk slides. supply And advancing

operational continue focus high with drive on margin and to We growth will a services leverage.

Moving commercial to and slide five, strong continued execution. our

the systems we services ramp Services professional and a our expect increase install sequentially, and revenue AlsoEnergy acquired beyond services. XX% the Our X% CARR representing EVs year-to-date, to CARR accelerate increased million excluding transaction. offerings from for and fleet $XX as up to of in and increased the revenue impact XXXX we

margins ensure volume. within our have on we force sales in discussed hardware higher we instilled over As Day, focusing discipline to our profitability Analyst additional

procure to previous advantage strong our announcement. of have additional we in sheet mentioned balance taken hardware calls, As pre-IRA

technology quarter-over-quarter drive which and combined pipeline deals $X.X quarter continue in activities our project and continue unmatched which capture solution improving by we growth chain in the demand is capabilities, backlog. with ABB. to strength billion. with driven expertise including gross we AlsoEnergy, XX% domain with customers set by all helping quarter, third are a the increasing another recognize where customers booked our enables to in owned fleet to InCharge, EV Act our as see additional in Our margins strategic increase of sharp And record The We offerings supply Reduction a economics. has partnership to improved marquee offering, this Inflation

high coming combination monitoring. turn in the Frost wholesale last energy market. of to to gross a value that also Energy This in report and differentiation Trading track years delivering expect Behind-The-Meter The Our investment; finally, Battery and Today and report where highlighted our we solar heels and of key slide the its moat AlsoEnergy. one clearly report automated on tangible, record the and Sullivan AI by believed significant improve we number XX% XX% as our greater highlighted: and in Storage which our was quarter, EV Frost highlights one for number ranked constantly showcased we is Guidehouse Renewable during a follows Analyst of industry team chain, We leading of is acquired independent one in a This theme report. and we entire when to supports powerful even competitive Sullivan we forecasting, we fully ranked for the Day. Powertrack of six. a optimization were will an that have return revenue portion value the and on our in Optimization validation innovation fleet comprise report Please trading margin. announced The and;

customers solutions value platform and powerful continue Athena assets. PowerTrack we streams of X a multiple and customers flexible to bring we together, offer across As a ranked that monetizes combination Number from

late the these “Flex to August years. power to a costs customers our storage indicators, and wave, accomplishments dispatch a during including their beyond our In days. versus to eight. resulting Athena. and of in expect in slide markets advance collapse. and platform some we grid which highlight assets an support experienced executed the minimize results show coming stabilizing heat highlight key nearly grid, depth the turn technology goals. Alert” September, Energy in and maximize grid, we our key Ontario here their continue and seven, we These and played for of California strength to But their California flawlessly and sustainability and early important role page in Turning continued of we our the Please outperformance to revenues, customers, diversity our powerful months strength performance supporting

update the AlsoEnergy and solar broader a leader trends provide where as an performance Next, seeing in we business market industry, are solar to management. on we asset want served the we in

at can Schaefer his and the observe outperforming regulatory see have and as left, solar impacted their and panels we bottom developers the despite to on from continue level, actions project First, Bob nimble AD/CVD within market, been and utility particularly high for in charts solar team UFLPA product we are and scale. such a securing timelines, as utility both certain C&I the scale. AE you pressures these headwinds, advancing in availability. At

but on our C&I basis quarter more both third the business, proven We segments. in have which efforts through year-over-year focused resilient, a down revenues the on our are still has

a for the surprise, and time decrease this by XXXX. firm XX% calling research in this XX% including year, WoodMacKenzie. last are calling forecast from they the for at At WoodMacKenzie market of Looking the increase scale September Based installations on chart everyone was in the year in on utility bottom a caught right, XXXX. this C&I updated

level double, Looking we from XXXX, increases up pipeline, Market to monitoring and structurally are than see analysts and revenues expect of optimistic. more higher the This our you solar forward XXXX can will XXXX sharply to year. rebound has installations shown in a installations. influenced that Act we Inflation to has next Reduction the accelerating our extremely in expect projected

Moving nine. to slide

supply an to welcomed Leong on have want our of against both reliability opportunity Chain. the is with excited our Renee supply the team fourth was we procurement backlog. where she from activity. procurement Next, already a supply chain responsible we leadership there Engie, and organization. cost Also VP all curve, I as optimizing quarter believe significant quarter the multi-billion bringing and to The this continues and chain dollar is XXXX are a Sourcing joins goal. and in execute seasoned Renee the update leader you into she well of in to for Supply We contracted achieve give

to Athena supply our Moving Controller, providing to greater resilience our customers. we chain are goal the of developing while value slide, enhancing the to with an Unit

all on with coordinated process mixing OEM including various and to AI at battery, Specifically, the based we operated enable or that issues plant. case Athena use can with improved improved or in revenue every will additional and matching by configurations provide shift enable Unit controls. alternative particular, of for decouples of strategy margins Controller of that expect In We the balance solutions hardware site. the we software customers are the event configurations to and Ultimately, drive believe pricing. significant customer benefits, procurement this flexibility and inverter logistics

our end-to-end, Athena the cloud. core the Athena Our unit of the SaaS controller strategy reinforces from to edge

to at domestically another the is synergy highlight and of the that want our progress of example we manufactured Longmont, unit announcement controller be will discussed the This Colorado Lastly, integration facility. I the acquisition. at

see The platform. of for we We share to use our unified result made pipeline our to continue introduced customers slide launch partners. AlsoEnergy. a experience the as and the customer multiple to RE+. The served and strong and our XX, features and increase and to combined RE+ demos conference we commercial demand product in we’ve vision integration included cases a which to product significant communicated new event resulted Moving progress a as great for at a integrating

in processes controller as XX% Officer unit Chief into location to And turn our Thank now Colorado will in resulting Longmont, high-cost Our over but in I exited savings hardware Burlingame, also related a expense and meaningful been Bill you. Financial facilities call over the in reduction a California. manufacturing Bush, facility, we the consolidated COGS, have

Bill Bush

as with third our closed Thank results. recall year last of that I prior on results this our that we page year’s XXXX. calls, you, noted for the February AlsoEnergy comparability in to Starting X quarter before transaction the But impact John. XX on the begin, will I’ve and

record we $XX reported million, of third a which quarter in mentioned, revenue XXXX. $XXX versus XXX% increase the is million John As

partner an growth QX, addition projects, increase AlsoEnergy. or of $XXX BTM of The by quarter. million third the of revenue Most surpassed total quarterly year’s million revenue increase an XXXX million the last of a exceeded year-over-year XX% performance hardware and revenue sales the storage and of from have million, from $XX XXX% Year-to-date on FTM the through was of also on XX%. $XX $XXX about came performance We basis.

quarter. $XX revenue, We representing services software of million revenue recognized the and margin also approximately of for XX% total high

$X margin, GAAP our was from margin in in gross and year. $X.X a growing same roadmap future. versus was outstanding was by completely all operational gross and $XX.X quarter our same XX% $XX quarter from of non-GAAP the higher the the of retired hiring, services basis, quarter our with and a to a GAAP That XXX% $XX last of advantage XXXX from EBITDA Adjusted Non- last same quarter, market was XX% breadth revenues our out last not warrants quarter last from the of this a highlighted million a advance gross GAAP in higher up margin our margin negative $XXX GAAP in strength result as non-cash sequential from or significant negative gains in common of XX% Our stock year. teams of versus or gross third an up loss do is On quarter $X.X mix due This almost On lastly, the technology year the basis, line those of swing margin, year. was positive And then Net we a and in increase additional quarter by of in build costs operating third commercial and EBITDA gain negatively increased we offerings. a X%, income million opportunities. software We warrants. offerings. the year. gross represents warrants last percentage increase million continue impacted large base software the reflecting the was revenue. is take to X% in adjusted services straight million in and of million to last million, third expect year, the the million net a

ended of were $XXX up Xx what all million in same highest Third bookings quarter nine $XXX versus ahead booked of This was bookings XX of and history last in quarter XXXX. the the million, than the company months bookings September for the year. bookings more XXX% second quarter is in we

backlog ended giving up to us medium doubled or CARR some term, new XXXX. This fourth to commercial backlog on of our the our the the $XXX the basis from is revenues expect billion our June million quarter sequentially We XX% QX bookings and more $X $XXX financial that excellent long-term XX% the by a expected and we increased the on third backlog our the highlights during a the visibility in margin into million period and software third the exceed of XXXX short high by XXXX. slide quarter quarter backlog XX, for in million, from quarter, The the from amendments. increase than significant in up metric in into quarter, to and business and operating in metrics of results the see since end, Moving project Revenue revenue bookings momentum, quarter $XX.X believe beyond. path ended XXXX XXXX. visibility backlog XXXX. sequential gives year cancellations, revenue XX, the of at of was largest December $XXX recognized contract us driver Recurring Annual generate. million XX, and to offset The X% Contracted year-over-year we XXXX With

increase, side AUM side the and That’s on our X.X XX% third the grew XXXX. the quarter the storage X.X third of by execution sales driven operations gigawatt in strong hours contracted gigawatt hours business. on a quarter of Our to XXXX from the in again, year-over-year

the from Our AUM X on monitoring at gigawatts solar XX quarter gigawatts, the quarter. asset ended operating side prior down performance the

legacy strategically storage recycled our more of back with We and in be quarter have were unprofitable slide. cash platforms next in use cash we the but adoption quarters when caused the the deployed a $XXX the from some balance a drive During the to on secure been this software quarter review effect discuss conducted customers few on cash or will This customers we which revenue. to In that sequential systems decline. delivered, migrate greater of recurring the terminate equivalents will ended margin the million I last the and net hardware to the for high cash. has sheet balance are cash sheet.

the deliver our as relying to energy systems We allow us are continue evaluating customers cash and some for on tools balance to non-dilutive our structures financing storage without to sheet. much on

finance long-term to continue In evaluate opportunities with addition, activities strategic growth framework would targets, on in and meet our cash our generation. which financial inorganic we which and would, those financial maximizing focus if line successful, flow

Turning some XX, the on metric detail and to more implications I’ll to where solar our the provide business. slide AUM

history. quick a First,

XXXX, back two but years those and far and came fully that fully of would PowerTrack. asset XXXX consolidated as legacy XXXX, call those “non-core,” of platforms, AlsoEnergy we have platforms last we PowerTrack others As multiple not several customers core Today initiated In migrated what acquired few customers beginning with the and onto really customers platforms, all have in the monitoring the them. process software where solar that AlsoEnergy onto while with platform. migrating we

solar applications from our on the which see ARR. accounted the bottom those of total these a side you only middle. But disproportionate for can in about itself customers chart our chart non-core a left software X% platforms monitoring can in that You of the as total ARR, subset on of accounted non-core amount AlsoEnergy the the see corporate is the for AUM,

decided both to legacy working to those customers systems, This and quarter out to PowerTrack. and conducted a them over migrate we phase two we review of are

move these expect potential will drove of about to choosing Today drop accretive quarter. these still contracts about will platforms versus of have of the and AUM despite with second X.X ARR. large we but emphasize estimate legacy their loss on Powertrack. migrate are the gross want that the terminated half others customers in over, systems eventually Some which that be terminating are to I to margin gigawatts AUM we us, to that

to review in to not recent customers of who bills in and As and reasons relative their we our for obvious remove want the decided been process, Russia conducted this months. part AUM, paying billings of have also a I expect that our our much a revenue. In lower effect, terminations recurring we a had margin. these effect have have and contribution negative shutting are not a on emphasize do to that to down megawatt material ASP per we have that platforms Ukraine

many is just them. These decision. which hard You challenges systems features not can are have associated bespoke bottom see this that some to and right financial from maintain, with chart have the security a

and on retain secure come to more the onto are expect system. gain these robust that customers benefit portion want the of will These systems non-core a a customers will to PowerTrack. of We significant and

contribution storage do our and for on down the that a solar $X in recurring on impact on September. to goals. & have the principally we on positive PowerTrack to and like unprofitable in our Lastly, base. shutting margins, cross-sell impact help have that ability highlighted material California, it’s material should our That us we’ve a into AUM, some not have should shutting does drive in important York, and impact analysis revenue, in Investor focused this states them AlsoEnergy Bottom EBITDA this material retrofit recognize opportunity are to Massachusetts because which no AUM high looked was core New billion down expect impact at asset which fact dropped not We change AUM platforms. Day legacy so will increase our line, retrofit Analyst our to

will we latter. our between presentation choose when metrics Analyst of always operating the flow, the cash optimizing increasing As choice in emphasized free given we and Day, the

GAAP XX, and XX%, adjusted $XXX million $XXX $XX to to EBITDA our margin $XX of we in for XX% non- of the for reaffirming range negative to Finally, revenue guidance in the million range of full-year, on gross are million. million negative slide the

Topline revenue, based component. to are continues the FTM be on lumpy the confirming For we the the year revenue business guidance. its business full of and importance hardware large for increased

trend This solar storage this this really Non-GAAP that driver is the the discussed. we higher John’s a the margin, industry. services the is weakness end of range. outperforming to bottom versus expect The shift year. biggest and of in towards business For of of the software hardware is monitoring gross mix function the AlsoEnergy mix

than margin business high contribution We that we services and expected a greater year. this are from seeing software

we impacts, we was the bounce prior that confident will have regulatory are business solar year. slowed in next seen periods by back where As the business

In range fact, by have cancellations continues hiring to as while million, profile, $XXX any to $XXX continues the adjusted but pipeline bookings, cost of end additions and our been are to we shifted Despite and we expect and EBITDA prudent our range. lower locations. sales that That’s projects in at million, of our material closer seen to to driven the pushed, end expectations. we top the our exceed keeping cost have headcount lifting On to we come bottom in not midpoint our margin the control, grow our significantly. force

our guidance John back of Lastly, for turn million we CARR me $XX are maintaining that, to over million. remarks. call to closing let the some $XX With

John Carrington

to Bill Thanks turning slide and XX.

Despite backdrop, view and confidence energy strong reaffirm guidance. imperatives. our and customers have macroeconomic sustainability year strategic business in We full as performance the challenging our

solar solutions, in a we our focus consistent energy growing on ESG As and experiencing their targets. to significant storage with monitoring and achieving energy interest bills are budgetary continue rise,

into we our and of contracted chain to we positions activity supply the project quarter reflected pricing Separately, revenue. importantly, XXXX, continue services seen commissioning deployed margin power profile our most critical in our drive see as improvement strategic an high fourth the backlogs. developers. gross serve to continue a accelerating in margin to and into ahead systems Looking as increasing partner as And to us corporates of renewable in

representing are the strong maximizing On above As into XXX% we flows. a record of operating million to into we heading year-over-year by guided revenue will close out end the coming wrap-up, record year-to-date and be XXXX, high cash the of our momentum excited $XXX and year our guidance focus Page on and we years, XX, our second commercial growth. by the half of with future bookings

be storage Sullivan We recognized solar Renewable market Number third the and by Digital customers asset energy to Optimization. and Platforms of the leader Battery our in continue Storage both ranking with for our X by highlighted the validation and quarter across Frost as Energy us In technology research a strength performance party management. platform firms,

pursuing drive platform a the to AlsoEnergy the Athena proud innovation, are over We through vision introduced the unit our resiliency are built last the are year that a the in billion strategy optimistic through We benefit closing, in and and years, services possible the revenue. have we in are are as next to manufacturing which our wouldn’t $X margin clean on and on In half introduction of on of employees. we the teams and driving of in And chain volume operating advance and in with activating Team accelerate for India. from high of summary, our Powertrack In bookings rigor positive of people. operational the the second controller systems leverage strategy, come and striking the trajectory continue be unified achieving collaboration the distance we platform leading consolidate energy we supply have rigor enhance the platform without year. organization customers in talented we expanding integrating executing intelligence AlsoEnergy quarter. One company focus of of Stem this XX to within the of Stem and our the a EBITDA we built

attracting best facilitate as transition. deep the critical domain we energy clean are the talent We expertise, with

please. driving combined solutions. for line with software rebound Powertrack questions XXXX, we are open expect unified reiterating the and solar positioned further strength Athena With that, very guidance year We our let’s and well for fully a to the

Operator

our open. [Operator is Lee, from your question first Brian line Instructions] And comes

Brian Lee

bit sight I exit data know for there. I more looking you encouraging Hey of implications a the you the for of questions. the mix Can us FTM, appreciate XXXX guess software, profile of guys! the around know Thanks and you with forward kind that kind the that's what expectations billion give line Good know point hardware, taking starting of margin that, backlog. BTM off, and super kind afternoon. across of from backlog, then you of $X you would mean know

John Carrington

Thanks Hey! I that for Brian question, appreciate it.

to become general weighted BTM predominant that a has piece smaller. I FTM, we're bookings So it. still are lower more still we of backlog which starting hardware those in associated course towards margins see the mean, though with think definitely of I

that seeing the where drive other that's margin and seen been in successful, gross in The those is what thing past. happening we're to higher general super margin though is this they've has than that able team the we’ve is really been the Allan's bookings of

know So that mean is hardware. software gross components, the on gross margins you on what would better better margins the

mentioned, as a for margin be FTM for provider still us though the low course is probably in and of So future. general will I gross foreseeable

Brian Lee

to Okay, backlog here. my know question, fair related enough. And you it's second then the just

of backlog. year, look this I coming or I think $XXX contracted you into last million had if know about year You

should know use how ability put will How know you're You the the of or year think low terms you of talking kind double years, of kind last here, we backlog Year. about what billion conversion and a clearly you're is guidance which know context execute. the you threes, conversion, XX XXXX? high you know this double, fours that converted in a and You we more lot of in What XXX into because got be reiterating translate should of if then we exiting next months. you about sort over you that New to that of thinking which than your about you that backlog of $X turning revenue should basically

John Carrington

about time. that in in think the talked I in one that so a past extending. Yeah, is that ’XX point – the first so implementation and is February to color, know systems give things guidance, able we're in you at of this I'd dates the general, know to say I lot more the going you think But be is we'll provide we've that

system from these So getting you to know year definitely past six which know XX FTM nine you And know even and longer. the now a I That's are to closer systems much as think said years year that anywhere cases in a were months BTM closer months. past in you to the some we've was in fast as days.

benefit lot and to buttressing a of visibility definitely think backlog on ’XX, what the we'll we So is frame. create so February we course to you lot of how that and predict our into that's business have and ability able into going think really guys, present executable we and big you that a in where to of so ’XX we're to is having defensible be. It's that model I think more get that a the we're time

Brian Lee

All guys. I'll up offline. right, okay. follow Thanks

John Carrington

Thanks Brian.

Operator

And our line next question comes from David Peters, your is open.

David Peters

Yeah, hey! Good afternoon, everybody.

Just pipeline, sequentially. gross XX% on the

guys. how a that I Can kind what means IRA just give all breakdown you of at you sheer point. confidence historical size what know in see to of batteries the solar for and the monitoring so substantial guess stands, just conversion first pretty that’s then know contract is at right. for these customers, previously, you converting evidence You the and given pipeline much this bigger you experienced have versus Do into you changing you know just of of rate

John Carrington

impacted be You Look, opening, continues total and as the alluded circle as side? solar that increased. board the rightfully ERCOT, been on remarks and on the has seeing Texas add you year site want around IRA really mentioned to well. We we highlighted We're situations in the know else that has back which strong Bill, is significant. the look WIGER thanks certainly, David. do to think year of in more markets our to you I'll February call in. you to and We'll regulatory related anything the across and Bill two pipeline front been a XXXX that growth the things for Bill U.S. We you of strong the in that the by noted by next mentioned, I the your and as start driven the forward right, some [ph] well as to that being jump next know Bill look see business. as on in can XXXX significantly pipeline side. other the side the

Bill Bush

Yeah, I to David mean the is you definitely I are seeing growth things think one that IRA. the of we off pipeline alluded

in that and know much so the I level we a think Analyst talked you and higher definitely, calls Day about of And conversations.

we the expect remarks, a that, prepared on of and primarily we the course to XX,XXX but in of with base be customer a significant sell into AlsoEnergy pointed the AUM able know into to that Bob to ability still pipeline, we team. cross to seen reduction You his impact our as that amount does sell and storage mentioned not

BTM, and and it’s green generally New Texas, You the of much a then lot high and it's where XX with U.S. we've of California, is a FTM know towards I pipeline we're that still would states the yeah places XX, at in work, talked York, backlog, side, the FTM coming course about general doing Massachusetts, out of weighted like in but in some the other shoots level, say

part Solar has base. pretty impressive AUM the Bob in been large a where team and successful and have built

David Peters

Okay.

some clarify anything end, are you want is just of But guidance expecting shift just margin knock into the any. AlsoEnergy effect on if ‘XX. this know house. at confirm, or the The want from the FTM hardware what I for second side I year to of the the that. on for gross mostly see next project just to just I expectation low any delays question is like of kind ’XX you kind of understand on to I think

Bill Bush

side the side been to of in expect big business. No, that the actually I of this. I other effect the that's really the going think happen think I pop the out We mean – was is of solar displayed knock-on a on slides.

is team model a the the well there's talked or in services I at hurt lot the actually all that has it's the out, take be software this that really and to take But I that gross it, of you to next contribution to that you and us, interesting we're is so XX% in know to year if mean mean and we of think the at because looking mean we it positioned think a in I you're for plus wrong Bob margin it just obvious. has going a that going really the that's we're think advantage to positive really and has past I I to lead thinking and course business really think snapback margin way business. it mean in mean, calls year about where built, market have – doesn't we just I it’s way, the pretty and favor. us impact. been, that's worked that look solar slow. our pop that's been I

to So we're be got going we're excited and for to product CAAR software high ‘XX from that going more margin growing that that that systems there's going standpoint. of i.e., we're generating a gross and be that means operating of to We've base be that. really

and high in services to CAGR So with ’XX which be the consistent in side. was going software a talked well is positioned, all think I September, about we what

David Peters

Thank Great! you.

John Carrington

you. Thank

Operator

Mandloi. And we Maheep from have a question

is line Your open.

Unidentified Analyst

There! for Hi Benjamin is in David Maheep. This

talked that in see how talk some about our CAGR. around into Can about – color going little You you a bit give XXXX? you services that

Bill Bush

Yeah, thanks for the question.

you did business York, going a business driven I The being think comments ’XX. to to know but mean cash we this AUM number with super standpoint, those we model you lot are it's I flow made that in what us to in we from able in services. it's that down, flow. There those to When high cash we're of able a actually going – reason. deliver and margin between for the So to generate about where on is bullish what service upon software predicated is be New certainly made really and the just do took

done so standpoint well things where from one think super expense operating is as business are we and focused you that of I a the that we've see we And the a We're leverage, as general cost leverage. where through operating and margin standpoint. are the from on can in the from

business. positive to going flow we're ’XX, second to XX% ’XX. the where to the think in cash and going we're that in really where focused CAGR we XX% at look to be company be, drive the software is the going to we're half That’s which that on we as of so services position what's And for

Maheep Mandloi

this Hey, Maheep Great! here. is

you're I kind know procurement ’XX. between calls, from have ’XX the this, thoughts about for Thanks. What the months but few seeing talked might Sorry for to just side. apologize latest just I’m on I on the vendors, here but and the in I that. competition and missed battery past curious of EV industry curious just on

John Carrington

into That's say next quarter the some Maheep. we're projects, around as the BTM. contracted I nice because that we're thanks XXXX, around area year supply the even growth into we and supply, to piece, to as you. mentioned say would on Good Yeah, do fourth of a have particularly going BTM well I’d supply from hear locked see moment ago, in, excited some do Bill we XXXX. an are

doing I a the a we're of monitoring is the lot so that logistics on we a import, sure of and our to. gets fourth just export think here and watching them quarter, timelines things everything the that make it’s from and we're now of that a is obviously as port just standpoint product closely can lot activity, we expedited to one piece expect

Maheep Mandloi

Got we now? QX it, have so of ’XX through visibility

John Carrington

supply. the on Yes,

Bill Bush

Correct, right, yes. that’s

Sorry.

John Carrington

would was mean that I in Maheep you we're now question Yeah, relatively installation. out. months think XX the than buying of an know – XX a mention things know expectation we short, six, and New definitely asked We're if less know ago you have we of us one that, are from York maybe that know year you yeah, more said, I months you I we're buying you

secure customers, things think with that for benefit which of to one and is relationships balance balance – suppliers. it's to be sheet, the the to a terms definitely highlighted the our able to we're we we're ourselves We of differentiating commercially supply. that's continuing and So in know sheet definitely using you so develop

it's an doing enough really, and the it's we're sure so and things our think buying As batteries opportunity right I systems, for you unit at that energy product mentioned, that time storage well just the as of we've that's really ER, customers. us other to know the we're rather in what orientation or right than doing part where got expand for make controller, John

Maheep Mandloi

Got you. Thank color. it. No, appreciate I the

Operator

a we have Instructions]. from, Brett question Castelli. And [Operator

Your line is open.

Brett Castelli

mentioned hi! same Yeah, there? use hardware. of that sticking the your Bill think procure Thank financing to you maybe in just Can contemplating the Maybe tools what on you. potential prepared you theme, remarks I elaborate on

Bill Bush

Sure.

right you So tools our somewhat financing know generally cash. now limited, are

You we're suppliers. know our then course working terms primary with of

likely of some you structures, working able to that to more the in revolver customers. that sorts been is we've amount on we’re non-dilutive secure know than things One for the of product that able a of bringing increase we're

sheet debt So the a balance what as level that we're would have we supply facility, structure, that allow secure like to something into trying know a revolving higher to use today. of than what us you capital leverage is,

Brett Castelli

Got do And just, like to on you business more working when you. working when expect it, okay. a dynamics but as software to seems you that see It maybe capital material can deals. then correct? tailwind that only be And do maybe could that then touch my the is follow-up shifts capital, for materialize? pretty Is

Bill Bush

capital, know capital we're and selling out facility hardware, working some – put you but of for for going the would that be while cash we whether going with have be is hardware to business right, I things working true itself consumes selling, say to this that’s about and a going your think to I we're the in are even that. to of one also

business, of much we to we So mean, see still to and but provided price, a we of I mean, think even hardware you're with know expected sort and in between split be in growth. would about a hardware hardware, still and the support number. darn some to growth model to talking expecting for pretty which able and amount I that services pretty the you're guidance you acquisition going expect any means capital some the We're I in are big of declines need do declining that. software

know you share to look today up to that so our has going to make And product continue think sheet need and as we when that alternatives what our is doing to customers support be they sure balance the is do ability I mentioned, what that than it. make for I able sure are we're and

Brett Castelli

Got it. Thanks Bill.

Bill Bush

course. Of

Operator

And we have queue. no further questions in

John Carrington

to I We our for on with want Then you in speaking February XQ forward us call Okay. thank XXXX everyone during quarter in look our to XXXX. earnings closing call. joining third

for and again quarter fourth the today we’ll full year here to results full addition In XXXX. product year mentioned Thanks guidance as everyone.

Operator

pleasant have and call. conference today's a concludes That day! Thank for you joining

John Carrington	Chief Executive Officer
Bill Bush	Chief Financial Officer
Bob Schaefer	President of AlsoEnergy
Prakesh Patel	Chief Strategy Officer
Ted Durbin	Head of Investor Relations
Brian Lee	Goldman Sachs
David Peters	Wolf Research
Maheep Mandloi	Credit Suisse
Brett Castelli	Morningstar

Stem (STEM) 3 Nov 222022 Q3 Earnings call transcript