Earnings call transcript Q4 2022

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

Operator

Welcome to the Stem, Inc. Fourth Quarter 2022 Earnings Conference Call.

As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions]

to Head call of like host, to now Durbin, Ted Investor would turn over the your I Relations. Please go ahead.

Ted Durbin

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

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

Our comments non-GAAP measures. today also include financial

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

be using slide will a today. We presentation

portion website earnings www.stem.com. of our Our presentation Investor and release at are on Relations the

will be CEO, call call. of the Operating Officer the our and the prepared Michael Strategy CFO, Chief available also Patel, Bush, Bill Officer, Carlson, start remarks. Carrington, will for and Chief with today portion John question-and-answer Prakesh

now, the And call John. I over to turn will

John Carrington

you, thank call and joining for gentlemen, you Ladies the today. on us Thank Ted.

agenda an Starting supply I highlights. the leadership. overview results, operating Slide will that our our an offerings review Followed demonstrate the and results review for quarter technology the and X will by discussion today, and execution commercial our strong of update our fourth on with provide I XXXX then chain. and new

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

same was Today, of record Xx X. than solid including the revenue last year. Turning quarter million, we fourth reported quarter to which results, higher $XXX Slide

which quarter year. record last the higher bookings than Xx reported was also of $XXX million We same

alone achievement the a the short time. of and fourth than remarkable XXXX, of period were revenue in Our over which is a in higher bookings year entire quarter

AD/CVD and import including throughout the UFLPA volatility, delays permitting results and We inflation, solar environment achieved turbulent a declines supply cost these XXXX, chain despite from and interconnection restrictions.

model these Our help and Company business multiple across products geographies the navigate diversified headwinds.

came early our bookings in were As range we interim of revenue previewed within the in we guidance had the in that update January, of XXXX. in well guidance ahead already raised middle our and

you ended earnings higher to XQ than the 'XX In are our XX% in software our fact, solutions a year our bookings that bookings guidance. differentiated momentum our original call, back go full and if testament to marketplace. services is The

the $X We another are call. or our macro our the on also capitalizing that Revenue of also range raised was by grew in to guidance in tremendous Annual X% this CARR We XQ Recurring tailwinds our quarter-over-quarter million earnings industry. $XX during Contracted million

Focusing in on eMobility we right I'll exciting later discuss strategic more page, in with opportunity the momentum of our call. side continued partnership ChargePoint. an this the with of the

rate we as our operating to leverage, revenue a at continue drive slower growth. We than headcount ramp

implementing leveraging cost India infrastructure are to to and grow lower in We technology our in processes control regions. cost headcount and

with We staying QX supply are the through ahead XXXX. chain, capacity also contracted of

several a to fourth this headwinds diversify undertaking relationships impacted comments deepen were results. To address our strategy year. battery in We our related during about Before risk, year on slide, quarter faced I this we China. move quarter the from in the and full make with to We are COVID like we throughout shutdowns the and would by couple negatively a OEMs.

for and to any design, one in leadership introduce technology our provides system can offering disruptions our leveraging are we flexibility supplier. help at to mitigate customers an that addition, In

the negatively were forced as impacted panel restrictions. On that labor from the we previously solar by discussed, resulted shipments weaker of the anti-dumping lack front, and

we discuss have multiple growing and interconnection pathways delays. Software the will permitting services gross revenue was negatively continue impacted to by Bill margin.

with in prudent In XXXX managed throughout positive in geographies, organization large on for to lower our and EBITDA. headcount this are our our our that global management cost I've EBITDA adjusted expand not we on our effectively and key plan guidance the the benefit we coming adjusted charged objective. year, in second we expenses waiver part, hiring and team to strategy reaching of will were Finally, seeing in because half of

Moving to and X, continued commercial execution. Slide our

As chart itself see the the the had was second XX% the versus revenue X% quarter, in up up strong fourth quarter, growth quarter. right, upper in you which services can the versus we in third

and As bookings. you mentioned these full know, I portion and exceeded the higher revenues in quarter, XXXX driving we are is on business, margin of which year focused beyond. our this highest our XXXX bookings strong

customers. year full our of new two-thirds bookings from came over Additionally,

the We continue expect in industry. to the bookings seeing with momentum tailwinds are we

come. XX% you in Inflation the visibility now buildout is increase a see in U.S. Reduction storage We result calling the right in provided can by a for and solar the years WoodMacKenzie think of for primarily to lower As that strong will as long-term growth chart, drive the Act. IRA

New to only this quarter expect ISO project software forward. first software more going England do deals pleased start are only our in We to and

willing for they generate the to continue to customers them. our from revenues We incremental strong additional for are pay value existing recurring as we're creating

sales have over to favor margin our we compensation revenue. plan Finally, revamped

our We solutions highest expect will continued the focus strong chain but margin most portion growth, the where of differentiated value on resonate.

supply on X and the an Slide to Turning chain. update

on excess with in XXXX, fully quarter and along of the have side, adding are to contracted storage market, market. some released the have electric spot through that some coming the is storage supply project delays, supply opportunistically now vehicle appears The the the capacity stationary On first into we we choppiness market.

in commitments. as back We contracts demand additional lock will customer our supply execute to we add to continue back that

and recent couldn't our prove declines front, are the economics increase project for that market. some cautiously optimistic will of the customers price hold, commodities addressable we which On

down their starting to For example, overall around system storage are flow in price. energy carbonate lithium prices which November, is into peak from the XX%

in prices decreases lower As you we or to through our complete Stem, and know, storage. but price increases see pass encouraged are these for

storage This customers offering inverters to that our hardware ultimately decoupling combinations in call. have ability to earnings the recent various customers some controller progress supply we volatility enable seen of and discussed from to match years. will our system energy continue in that mix our We swap and or an chain last batteries modular we with unit strategy

we are will modular this month. next control very of excited Customers edge maintain expect and ESS pilot the still and hardware install about solution. first partners we offering Importantly, to our

use a Please technology customer technology on turn grid fleet has we to our hours million we in bill front. across in Athena the well markets, XX% and Overall, hardware devices. across Slide and without will XX now discuss runtime We XXXX X, where impacting leadership. experienced expectations. the calls reduction performed cases operations multiple

to to exposed our in data algorithm markets, continues machine as improve more competitive Our is it learning mode. more extends which

support We in our the core markets. several grid continue to customers and

in California. a XXx tied the grid and atmospheric calls during saw gas to In prices December weather patterns river in high January extreme California, we the Southern along increase with

almost Edison STEM network as over megawatts California the called provided on Southern XX for day continuously per we months. those

became equivalent peaking and for operators. Our plants of capacity plant and gas several vital a virtual utilities option power the power delivered grid

market with Athena we a also more ISO We above X% than New XX% will XXX continued megawatt SGIP effect PGM forward in an auction Program. exceptional to exceed important had bid our a will into differentiator Key our take I England, coincident the revenue peaks, forecasted. in hours in the that fleet performance be that market generating the this Incentive capacity baseline over will XX% the accuracy predicting continued in discuss moment, which spring, XXXX. commitments, In we and for

our Energy in equity market between in storage, December of independent to XXXX. fund. the Regis in developer could first first Capital, four Holdings, sites leading Storage and venture substantial Rex ERCOT commitment Partners Rex wholesale which will ERCOT, We and in a Finally, fund Energy our a new dozens a announced begin Excelsior projects. projects with made trading investment has joint

infrastructure a over both to move with market vehicle to X Founded grown path company, new ChargePoint XXX,XXX electric management in as ChargePoint is charging similar and fleet a ChargePoint. ports Let's under which focused of and our vehicles. XXXX, innovation followed partnership personal Slide on leading Stem. has leadership has charging in

ChargePoint fleet and of grid. will onsite Our the and the coordinate Stem solutions. grid, the to provide charging partnership will electrification, software demand will with battery, provide on focus hardware confluence the

electric and billion economics, went We incentives of leverage from credits $X the or for estimate incentives emissions. greenhouse NEVI XXXX. the focused, quarter offset $X tax can project to reduce will in further, funding gas of driving Infrastructure National effect And Electric Collectively, that XX% will of estimate NEVI benefits we up customer available. and vehicle the resiliency, accelerate program enhanced adoption, markets costs customers. another additional provide our the grid into we're help billion fourth the Program in increased IRA could we we Together, Vehicle were

behind the our around total, years. in expect E-mobility comprise or we to half sales of In BTM meter three

ChargePoint charging our partnerships our in announcement deals, We help previously will with ABB. several booked along have the and already exciting with EV jumpstart ENGIE progress market and announced this

Next, started at larger world last spans DC, several gigawatts, the major storage. to reasons. doubled charges almost charges, more is you the It most entry than rising around Xx the nine California. plus in is One, in see XXX the largest in for transmission and of the is over than X average please PJM customer years, grid. than selling turn energy storage into PJM Slide market power industrial PJM competitive the our solutions We've XX market which larger can Xx the California load for in zones. transmission have our for states

to bills electric increasingly customers storage. like and solar for them raising renewable industrial commercial driving and sources is This energy

on are installations. the many the new retrofit ITC, which solar in onto Secondly, programs returns new state particular, And the incentive storage increasing finally, to markets storage. existing is storage IRA, open

Our us in install significant a regard. base gives this AlsoEnergy advantage from

benefit expansion streams. to PJM ability customers complex opportunity value ideal from as an think is will We Athena's co-optimize multiple market

key that PJM we well. we for higher a in up is addition, add XX% predicting have strong our value with accessible to drive Because to coincident best-in-class a Athena. additional the for and charge capabilities. This of peaks record a is we customers, expect differentiated be offering other value that AI fees of will track In will markets as

Bill will call to over I Financial now And you. Thank Chief the Officer. our Bush, turn

Bill Bush

Starting Page XXXX, John. XX, the year on which with you, transaction fourth our quarter February Thank will the recall full the and XX for to on AlsoEnergy comparability Please results. impact we year's that, results last closed XXXX.

XXX% the of hardware was of the of in Most FTM million from John which and increase recorded PowerTrack the about in revenue quarter the million, versus As $XXX partner we storage and platform. reported from fourth growth million $XX we on $XX more the came than of sales mentioned, XXXX. XXXX record all projects

for also million, $XXX was We an high representing total and $XX XXXX. software revenue revenue, the of XXXX of increase quarter. margin XX% over revenue recognized year of services approximately million Full XXX%

a from up our gross X% same quarter, GAAP negative million $XX the or X% was year. For last in margin the positive quarter

the million. full increased GAAP $X year, margin to from million gross For $XX

Turning $XX X% to Slide up million XX. from was from to XX% year, On last last Fourth the revenues. the was from in million quarter up basis, margin gross due a non-GAAP percentage higher fourth gross margin year. non-GAAP quarter quarter, in $X

greater software of from share high benefited a margins margin revenue. services Our and

For XX% driven non-GAAP gross at XXXX, came up the X% year mix we than We margin non-GAAP higher our up came short margin year. guidance, XX%, a in to gross last by of of full hardware expected. from XX%

the software that and also partners continued our than slowly to we due storage revenues delays permitting interconnection increased and experienced. expected, Our more

margins continues side to XXXX is advantage the of with expected to business revenue flat underperformed from the a take generate revenue solar standpoint While business XX% gross XXXX, in of versus relatively the industry. year the at in high snapback and well-positioned our the ending solar

evidence backlog concrete giving on Our year-over-year a increased a results. of in basis, solar solar our rebound XX%

million quarter Adjusted million year. $XX our the EBITDA continue was last $XX the in EBITDA as loss business. same negative in million in same year. fourth versus lastly, a million a we operating improved $XX Net $XX to And drive quarter versus in adjusted quarter was leverage negative last

was year, XXXX. negative full the EBITDA million For negative $XX a a $XX in adjusted million versus

of results $XX negative million. our negative range EBITDA adjusted to $XX were guidance million Our within

pace due our saw EBITDA the margins, So the than when to and gross hiring. in we solar able slowdown spring, of we that's expected meet to the guidance the develop particular, our cost despite were in controls. business In begin managed we to weaker

XXX% our our We quarter the to of bookings same for to the a billion from new were the more in year. the million highest was up quarter and quarterly positive history XXXX. same achieve approach and bookings full quarter versus last This bookings year, the in the Fourth the half is EBITDA of conservative we take the will in achieving Xx this up year Company's of than $XXX record. second ensure goal continue year $X.X bookings

operating to Moving Slide from XX. our metrics results on financial our

$XXX over fourth the from year a the of doubled XX% XXXX, quarter quarter approximately than of $XXX nearly of increase the the XXXX largest us fourth sequential as backlog early million backlog XXXX. in on in third gives more to visibility into quarter increased the in year from The backlog Our $X basis bookings billion new quarter revenue we the driver cancellation $XXX disclosed million offset was contract XXXX well $XXX by January. The the recognized good million in and as that backlog of revenue. of million

of flat month We sequentially metric backlog strong during of the also in where we quarter, does outlook business the in no the quarter. pipeline important point volatility not a mostly bookings the key the fourth pipeline the is is to believe the our was Pipeline XXXX, and pipelining, XX have matured the conversion a longer report commercial more due is indicator of the metric. to

of gigawatt by year increase from AUM on driven X.X year of hours commercial business strong the contracted Our in fourth in our over storage fourth quarter of hours XXXX. That's our XXXX momentum. gigawatt XX% the a quarter side the grew X.X to

gigawatts, including performance Our quarter. by side quarter on third that additions down this the churn, our offset spin XX of ended largely we platform the were the business monitoring quarter. solar operating last flat AUM of asset Customer legacy to discussed the at on relatively

million, recurring up recovers. AUM ended expect revenue as We $XX quarter solar Contracted XXXX sequentially. the growth at in the solid X% CARR or in annual industry

pleased are able quarter to contract are grow during CARR cancellation. despite the we We the

to testament the success quarter on our the in software we ended commercial Again, $XXX in million sheet. and differentiation, cash with balance

term to operational for cash We securing and will service fee. come customers. the in Company margin, hardware to a storage funds of These our including hardware fees, software form continue deploy recurring the long fund back investments, to will our

established our remain prudent We management directors. by of overseen cash use and will our in by risk of within limits board

$XXX Turning guidance. recognize to back our the we XXXX To and right, of Starting to weighted in the during revenue you between with see the to delivery of of million expect XX, prior year, can the is we seasonality Slide halfway for in timing expect revenue million years. XXXX. similar revenue, driven in by the $XXX batteries. It

revenue throughout ratable year. the more expect service We growing

higher XXXX. software we from XX% versus of including improvement to and the side This the services We gross expect of non-GAAP margin the XX% solar revenue, XX% reported of in a reflects mix business.

billion expect we mind, EBITDA plan bookings, year year, as growth revenue. XX% on compensation well as sales between With contract our in focus year. On have to our $X.X billion representing margin focus over $X.X to revamped this and plus a we

the will for on can We and focus where economics customers our we of for highest opportunities drive Stem. differentiated margin

expense our is negative leverage. the on range We continued driven improvement in to EBITDA in expect $XX of adjusted by $X operating focus margins XXXX. improving This a and million $XX negative versus negative higher million

expect half We're to function introducing of XXXX. million a including second then expecting rate deals we And we pursuing are EBITDA the XXXX This growth, only $XX CARR some importantly, More million. is $XX guidance. markets. are software run our core of of at in positive lastly, we exit and the bookings between in

relationships. product and domestic manufacturing with against contracted would pursued QX constraints considered guidance. driven provide our we building into our onboarding chain including some this key one of impacted our key have in at suppliers suppliers, and delaying solutions, supply logistics of results delivery some additional I mitigate developing context Storage our both we like To technology backlogs. uncertainties situation, to commercial supply delays

targets. solar of our critical achievement supply the to the in chain recovery margin is gross A

shoots top seeing accelerating this with panel across are tier and pace from green stabilize should developers a the contribution of and deliveries ultra-energy. customers, We

Our QX backlog cautiously the margin multiple so I for discuss have solar are shots XXXX, we gross exiting APM goal, on On we slide. next was up which expansion, XX% optimistic. will on

XXXX margin several gross the margin the within as and of margin improvement gross sales initiatives. gross aligning market a as XXXX. On seen factors meaningful achievement, our result By we've team compensation we and of our accretion in Slide we exited expect for key XX, a backlog on

focused he pace partnership rigor processes and our customers. permitting In on Carlson, the our interconnection in the system is is addition, and Mike commissioning of focus and bringing accelerating with CEO, pushing through

to XXXX, operating expect under We in commissioning. management and terms our assets gross roughly double as will contribute our high this software software upon services contract margin begin

solar business We growth the driven to return expect by in recovery solar to asset the performance in industry. a

first from the deliveries the resolved year. panel the You graph of the see can the be this left, that industry of on in half solar to on most UFLPA impact expect

design, several In built which customers industry. introduction of begin out management activities. long a already as This enhanced XXXX. the service we to project tied rolling We've term, to monetization and we been asset first our modular we in of project position to leadership the our of the includes providing offerings the of offerings targeting strategy, were half modeling, growth ESS have deliver in expect

will to quarters. the of line, our these experts second management quarter forecasting the to Additionally, progress services the to and business you in last for coming energy on the of drive and we expanded energy team we prudently address half offerings out our risks plan roll EBITDA FTM in market. of positive uptake We'll for we wholesale the continue and Bottom in program market as the manage year. update

remarks. let turn John call that, the me to back some closing With for

John Carrington

committed achieving Thanks, the to page positive to EBITDA in wrap On we XXXX. XX, up, are Bill. half second

reduction inflation act growth. seeing very by cost is we of demand full as from energy rising strong progress fuels customers face they and as the the are financial Our impact supported the market

with bookings, X.X from year. XXX% in prior We increase representing closed billion XXXX the

launched our largest best-in-class co-optimization and is sites and We market team the and Athena's gross competitive are energy power unmatched trading enhancing global into enhancing of CAISO driving PJM, offerings new the economics technology market, margins. in with expansion Our capabilities. wholesale

to the with enable adjusted electric into set vehicle we the ChargePoint. fast-growing us up achieve inroads partnership we growth services growth market addition, continue to annual EBITDA. In Company make and drive double-digit software announced significant All in these with the activities to

meeting to our we forward outlined looking outstanding want performance I and global for commitments diverse to today. have team Finally, recognize the the

class world customers. employees, products have and We

open let's line questions, that, please. With the for

Operator

comes Thank First from Please go of Goldman question Instructions] [Operator Brian you. Sachs. Lee ahead.

Brian Lee

the taking questions. Thanks afternoon. Good guys. for Hey,

I curious assumption First one revenue, I position do the backlog have your be kind mean, the I'm of what's the midpoint. in here of you around to conversion? position guidance would just guidance for here, on million the backlog at revenue kind of $XXX given higher thought than would

the more we are Or So thought, to coverage would be then to the as given backlog something gave slowly? headline is I number guidance overall just not margins. respect seemed that's as with sort you over maybe the follow-up of you quickly providing And here? converting had there revenue you bigger a seeing turning are mix than more on and have

Bill Bush

Perfect. Hey, the question. Brian, thanks for

I plug, back terms of and is yes, slower. think, it the converting in So,

I talked about and first. we to multiyear second, larger as taking are to they be -- FTM, tend past, Then tend the in larger think projects. we to they installations. on have this be be Those tend

we -- were like conversion, in saw when And we million say, the $XXX plus much backlog. much we million saw the $XXX of had smaller, a XXXX, quicker much end so at quick products

year. in revenue this have million $XXX We

just this quick need into projects I But pretty to longer. build think pipeline and year going we're So more future because years, to the general. in are conversion going

for from that year-over-year revenue. I growth but And would still significant on a pretty basis so extension, say, standpoint,

John Carrington

so first is, the other the do some this think thanks here in thing the convert to still opportunity add into bookings quarter. and Brian for have I year, I'd question we

mind. in So that keep

Brian Lee

some on that like I had on it impact margins. Okay. the issue Yes, 'XX, know you just sounded to do gross the margins, obviously

year same dissipate. but some You margin like headwinds the are started you guidance effectively starting 'XX adjusted from what seems going have here to into of 'XX, with last gross the had it

understanding margin baked into 'XX I more And ton? know like you've is, margin level of have there Because conservatism headline got wondering the operating leverage doesn't baking of of a you what -- you BTM coming the chain my is better. there in that here mix, leverage is leverage look is some levers expected? that are seeing not back some But gross here? on bit So maybe into little Or are some a supply the are just in to the that because based could kudos you we around guidance, seem on side things. would it

Bill Bush

though so a is, in in has And lot had think the it. somewhat come terms seeing margins, can green year. we of our -- We be terms part we mean, fourth conservative, you think service into the leverage I I quarter are that growth the to see shoots some because I of margin of sequentially. out. I need solar business X% the in think of one

expect backlog, sure have business have because nice really XXXX. negative for we in on margin make a We that'll got in us those doesn't And though, that that that's numbers are XX% year-over-year. XX% like gross We impact a in increase of general, want materialize that -- 'XX, much the if to actually there.

So conservatism. probably is some

take I there's, you to always extent, down. increase So the to can them numbers think hard some

terms be margin. software size, project to think side our that business XXXX consider And of the we But I into as continues going to of part gross we'll in the well the I of that of business doing carefully. solar move on hardware is margins pressure. monitor so as I to before under the part the those overall we what mean, very comes which hardware as -- unfortunately up storage the be going to the thing to is think the sales, roll continue impact is is other definitely

tried of a is what of what went mix the And would act depend appropriately forecast those through to actually to the out ultimate going turns on mix be. things lot two So, think the answer we to kind and I be.

Operator

Credit Suisse. Maheep The Please of go next comes question from Mandloi ahead.

Maheep Mandloi

feels half a previous margins. from now the It questions like profitability question QX of like Thanks just probably the and second shift following for from there's to of Brian after over 'XX. EBITDA on the the

could that and wanted any it. the understand there EBITDA here? Just the causing profitability which We any, in to seasonality on levels is Thanks. anything be other appreciate

John Carrington

Maheep, no, any the half coming positive we're way. second EBITDA not off in

I'm sure indication. that So you got not where

not So case. that's the

Maheep Mandloi

later XX% the more or just and that bookings, probably looking that by backlog follow-up make kind hardware that. where or the implies assuming be of that I'll in guidance XX assuming of Now delays is around here revenue all recognition million kind And at and than Does about the on the that. extended revenues the the in math or could XXX previous impacted sense for also you kind of of talked question?

Bill Bush

So thanks for the question Maheep.

would think of guidance first that But data we're the you the LRP. just to 'XX I yet. course, in refer we quite not given gave I

So we rates see do of be course XX%. XX% on expect from at midpoint and grow hardware and the revenue that services those would to 'XX was

you last in I this So places that then growth that think And do quarter I saw of expect sequential from one we the a in think see fourth services. growth. that XX% standpoint, to is

I ultimately, very to momentum third going that quarter quarters growth. mean, and this X% in seeing XX% through EBITDA a services, of lot is row, quarter, positive service from in So, the a in be we're of paved standpoint. the Two path to

come about be margin That's really gross going where that. So we're excited from. dollars the to

is, also margin but be mind shake to that'll the be. think something gross of not what the keep in revenue to go print on, just as so the out we to, And what dollars big I

Maheep Mandloi

and software backlog 'XX? bookings XX:XX, is split that XX? And Sorry, changing versus hardware is of and for the

Bill Bush

No, is change. we that mean, what XXXX we'll software in the be though will don't backlog. to to I only have expect clear change deals more in

the more deals. true are see particularly largest that that's you'll So on deals

tried in to to -- number bookings total So, only one fact year. was that the for this expected we software that of the in the we things adjust have deals

XX% that economic -- it represents, value you system. the So total only of course, of of the and call

to at be the the the on a to going is grow So of that, result or bookings going megawatt a hours a to very slower continue quick KWH is nominal as basis growth but rate.

Operator

comes of of ahead. next Julien Please America. question from The Dumoulin-Smith go Bank

Julien Dumoulin-Smith

with It's you nice chat to here. guys

posts bit the to talk respect services, tracking of and services little serve business can we're know we're of I see alluding mix. points to the a that the and and services growth scaling specifically get dev been guys gross you maybe at you're to to margin -- the other road materialize to want So issues But there've some data serve, going you're or some how I signs the pro side. on with here as discreet some these just the the that about back here specifically here. the know as of

John Carrington

the Julien question. for thanks Hey,

revenue, to just post sign of general. the high-level to the service you those I is terms should mean, and the the going growth, total think is be that I sequential that's folks obvious So, the most and are of going XX% be able are what's in we do for I that's in other that be there, on so at looking top kind -- think what kind

pro think, a so, course serve lot us, of here the And business. made progress. today I that's with of is the where Mike Carlson, we've who's of side leading

from the little solar expect year-over-year givenX% standpoint accomplishment, quarter on expecting, lot that with in a see We experience has the able this we're that solar that that And period a the of of in of been a particularly And progress was picked growth off of much initiative to fourth last XXX% growth a It of do decline a the of for the going side we think, i.e. so, a we we're to quite extent see did did solar, of which the quarter. storage doing nice the the This analysts that bit part business. to part better. time. I third bit August, the the in are to X%, grow that business business. some

be on. go you going that think the So, as we should I those points looking to obvious are for be

to want anything add Prakesh? You

Prakesh Patel

Yes. Hey well. I Two accretion as John would Prakesh. margin long-term is Julien, Bill points gross and the strategy, When the plan references this make. was discussing

we That And advises ESS a our with wholesale installing our of on services forecasting we'll expect first launch project and to more we project month energy modular that design type Next asset and team that services customers management. that for separately, controller unit modeling, expanded it. comes to be attached business lot markets. then

And line so and around customer wins as see those growth should these press Bill or both and engagements. of releases just item to either mentioned, services start you

Julien Dumoulin-Smith

issues appreciate Got they the comments I some of kind with a, b, thinking there. How to and disproportionate that about about given seen of How interconnect issues are in respect how leading as if the just it. and some timeline fit the and I of PJM. PLM, obviously, risk backlog with does you the your quickly, if backlog you margin will? then the to issues. delay can interconnection we've the there confidence And PJM, you it have is translating, mix into that which adjust, pertains

Prakesh Patel

Prakesh the for in deal. front approach Yes. Right not meter again. now, is behind say templatized of Right very engineered the PJM is focus now, this primary interconnection there's a the market We're highly large meter, I'd where the chasing approvals.

deploying developers that strategy. targeting we're And one time leveraging and corporate for we're some Fortune EPC with solar projects. worked have their firms that's accounts in So, XXX quite

context days. But seen just question the of market early segment pace. still different backlog, -- So on it's and around then a we your a the it's have faster and

So we the just launched year. during it

in risk weight So component we it. the to yet just don't have significant a backlog,

Operator

Cowen. ahead. The comes go from next of ahead. Thomas go Please Please question Boyes

Thomas Boyes

XXXX what just if IRA. batteries, Have domestic at or wondering Maybe late as your the do your as reasonable sourcing XXXX then maybe strategy to sourcing in post taking XXXX? be frankly, has assume on back security available one, online? held maybe social it's And you Thanks a first follow-up XQ beyond anything think U.S. changed it comes for there, for quite production all you my I'm questions.

John Carrington

Yes.

Thomas. couple thanks, So a things. I'd say of

We and progress for have on contracted supply XXXX making XXXX.

As we And previous have well. think continue I make talked to we spot us in opportunistic market calls, that served purchases.

do We will continue to that.

is are calls. significant Tesla's. I are a content we of a our still I know, one we of customer change U.S. think one suppliers piece, of in believe And look, on first their customers, the there the

say, specifically us really since I'd a them. or capacity And been And by to as I They just visibility continue don't have And little long-term we that on we -- are kind we focus coming so, our for till new today XXXX online, XX maybe see we months that. bookings. on think to XXXX. with that really work engaging just will not as longer of related of have yet IRA, far a we partner some closely because

we coming will guess, would I summer, as on that start get the in. in more So clarity who's we probably

You want add Bill? anything, to

Bill Bush

Yes.

point just So finer John's put I to would a on comments.

in contracted the quarter supply fully are of we So terms XXXX. first of booked through

me contracted beyond contracted haven't I capital on calls to I that product mean, going we've that we out. a -- the better XXXX. probably that We shouldn't having talked and to the contracting. further into prior the being anything it's we're And actually You standpoint, that working read between would we're for about getting us on distinction make some from think ground. where do

plant supply perspective. on battery made there side the least it's from is is we're panels, around a announcements of no monitoring nobody and So course, I ground Lot the right? think et talking But at them, that. that domestic aware But inverters, yet I a of we're that. days conversations we're of things. broken that batteries, of for around for mean cetera, sure, early have folks with

that groups here Our And U.S. chain of produce team is supply extent closely. able product to one the those in is monitoring to the very that

I mean, works really from attribute the content standpoint, the it it's and a interesting IRA. domestic within how

for U.S. the and primary closely 'XX, we and are Tesla. it's of we to well. course from is buying stuff So something Japan be very Korea going going as China And But be us then for are monitoring. supplier to

than real of the us have us. other didn't that makes folks to IRA talk were been interesting start that the strategy, before, that fact some of obviously and we speaking kind no the with spots they to necessarily the plans in So because not changes to would have

Thomas Boyes

just And the appreciate as follow-up. color there. Great. Maybe my

there all maybe and billion pruning efforts? to a C&I cross parsing And number the plus you approach XX,XXX of your is then talk about just $X check-in of sites? those the Just to wanted AlsoEnergy. or after through that give kind change an about on the update good still is Could opportunities kind think and selling us with

Prakesh Patel

is X estimate. Yes, This a good that is Prakesh. billion

point and from granular our detail third made started have some sell. about We've came a year XXX bookings cross I have would a BTM in We conversations. customer of upwards analyzed in out sites segment progress. the of the statistic last One that

So momentum already. there we're early seeing

Operator

comes question next The go ahead. Wolf from David Research. Please Peters of

David Peters

to So versus and linger extent just hardware software, split of a what as it issues UFLPA just provide relates to the of legacy expectations. maybe assumes guidance beyond battery margin revenue kind AlsoEnergy profile, can the rough you for maybe

John Carrington

so from a us XXXX you from did or can did the of XX for that. see about pieces, AlsoEnergy revenue. on they as the more million various basis, standpoint consolidated So for They than in

we just January. in course, didn't XXXX, Of consolidate

to see growth strong expect We there.

of they're but a You I percent see hundred the we I part do growth of any the growth. say expect hundred presenting a don't, from we're percent I would see Mac to think and data that going look Wood revenue don't Company, in significant at business. growth to the

available of if should at in solar, I growth look XX% business. see XX% around anywhere that we mean, publicly to data most you from the

that lot that so impact. that how a probably I amongst that'll those that UFLPA, back? obviously how if be various done, does going the there's quickly congressmen some Biden of roll is a been chatter to come going have seen rules you've had negative anti-dumping obviously and the And does they're work mean, of back to happens, it quickly that

to I XX% carefully, I be that a up before, on our we're as backlog very going stuff So were year year mean over is the like, mentioned basis. monitoring

storage months the the I'll months. backlog pretty the it make and fairly or backlog is on a so, look quickly so -- part business -- revenue distinction large of and three six backlog to the and turns and between of And solar four the part business, of into as on solar this like many at is we less

able And churn quickly. so to pretty it's

able seeing that the and partners way feel have going side from like we're in we're forward the to the a are we're on we've the year nice we of really our business. if those to what way So that move that projects solar hearing we're optimistic pretty

back talked when really is early a harken about we we've the as some period seeing the back. really And were early then next in last kind that snap head, it's I to of it of as to think even well, back solar positioned -- I result kind strong when slowdowns of mean, of snap XXXX, as the of XXXX summer a a the anti-dumping. took We kind really really and period. time tough as period

why what's into, to is I actually little bit happen. the some growth and have good conservative part we're gross just and is want that feelings margin turn revenue revenue why of have think about to which we'll opposed the So that see, in a margins as gross terms in having of to going we

Prakesh Patel

we the same Yes. their to gate. that year points to of market versus the as we well, strong I'd David, that year. also And solar as quick expect a year. highlight add out couple one, more to we've I'd asset RFQ seen number business it coming And the management exceeded growth date performance so are feels last talked in XXXX, this earnings X call last the up

David Peters

Thanks. color. I That's appreciate helpful. all that

trying just and the of with provide bottleneck of stand assume, is I you where you ’XX? up to to metric ease can interconnection things follow CARR timing what if to sense if Just parse then that be kind were be kind where see possible just a just XXXX, if could some guess, wondering requests, of out today for broadly, my it'd for

John Carrington

maybe to Prakesh, in? you to Mike jump want start,

Prakesh Patel

Yes. around conversion we're core of seeing I'd delivered far hardware. say, interconnect status so

prompted to we're We the we to this have kind Carlson, Bill Mike our I'll was mention, year. approach it undertaken, operating of taking that COO a to and very looking AUM but our some that Mike? rigorous about driving and faster initiatives, hand to are double talk to of what

Michael Carlson

developer this two-pronged rigor Dave, we've same a partners. by Mike are approach interconnects it, guess it's kind we're to obviously of I field more, doing, management as lot What around owners then project management the one project focus internally our our and big us is then these getting and the turning a a into assets into but you'd for very that secured of to it thing Yes. Carlson. getting related these and of call put assets field piece

So, forward them and they of if are want backlog the sure what that's progress is as up. they leveraging make that that through every can what's we aware that or move to interconnect get with of And moving that knowledge as getting interconnect expertise rapidly and holding bottleneck opportunity how it lose we've the as online. over, assets through the commissioned into move time them any these and possible. don't control we We fundamentally field but don't direct got to have any and other of to we

we improve performance the expect, really that definitely focus we'll the solve of problem, So go it but won't on as the we we forward.

Operator

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

Joseph Osha

point for to that, in revenue you a at Kind online contracted projects talked all they're and AUM generate came nice revenue are you. the we've there and and the some things that of on kind show question, following generating on service be up those the started aren't would lot previous that that steward interconnected up not gotten about sort of sense of a side as step your that have out there

in hours, are I of maybe how is gigawatt projects to much So And might quantify follows, this question you some interconnected, that follow me AUM have, a and up. operation XXXX? my how you to how storage then in into make aren't give many as manage that sense have it in could contracted as

Bill Bush

Yes.

do account So, that Joe, to one numbers, think difficult to Appreciate I but you exact this so give can we double is operating expect don't question. you year. that. specifics take thanks me that, the it's point, for AUM point At the of this definitely break we into out for

side on to which projects turn a able. as there able is bit so, and think We I think we're you said, is that of I be that on. to believe storage And going backlog that great a business, the the of a of we're indicator

-- operational, we being that's know, about margin system that's I it up think we we gets at of and as the is when to to think kicks booking when to actually Mike business. that, all in, that's gross I talked already, delivered and the part How a look do really, a a that? software the equipment this highest conversion because the I lot as future, are that, from going think and where that's how to the speed the from deal we're going And

And that process quickly sure focus, happening as a so as is for us, making huge it's possible.

Joseph Osha

is? you have operating And number Okay. what actual AUM the shared

Bill Bush

We not. have

Joseph Osha

number Okay. at executing are But look just you're on are you to and rating way lot reasonable, your right projects, I'll doubling asked if follow other you have ask people of more? the service additional the revenue up is question is your projects what guess I of on if it now. and annualized additional AUM you why is that revenue bringing think not it's going it, up a and Why this rate not then, lot I service a the CARR run is doubling?

Bill Bush

XX% rate. growing at is It

that's I growth, you So think pretty when then at... look significant

Joseph Osha

at say, XX XX Not to belabor CARR XXXX your but whatever to and it, a metric XX you end it is, you put of are CARR currently. of

you're to I'm saying that's to operating that guess given more base? about understand up reasonable going the CARR run Why why rate. annualized I trying the which adding number, So is not bogey for services software a what

Bill Bush

So, CARR of assets result a wouldn't operating as first. increase

So that's CARR distinction. an important a I amount. contracted is think

annual basis operating is is the say an The to on as So to assets. tied the number to that we CARR that software recognize increase on based of revenue contract. the business a going attached amount software particular on in is

the when like, generate put so actual being rates look And margin. are so in say, then far, operating and that's in fourth growth I'd revenue assets actual that quarter, you quarter, had third to that's where where you X% seeing able gross at the the the we've XX%

will what happened. has not of what indicator an is CARR So happen,

are are we operating I And conversion have that going so had. means assets that And say, what have of to going CARR when faster to ARR. hey, a into double, we

I would distinction that make. the So that's

Joseph Osha

what I dollars offline, next end $XX,XXX to software run but going that by services rate Okay. the think the it here I'll question take is year? and is be of

Bill Bush

XX% I a have answer I would way we currently what the I reported. growth on say, would is that rate think

to are services across that So like year we three the time compound that's number about. have It's rate the at the grow going XX%. period talked at a

number services for the expect if was XX% look So at what we in that to XXXX. you grow XXXX, number at

Operator

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

Biju Perincheril

for taking question. my Thanks Hi.

CARR to seems look look ratio? -- I how the CARR. is there also I down your I guidance, step under So been a the But when guess CARR it asset through at to sort of of at it's question when stable software going my is guess, there I sort like and project related in management, into pretty AUM was translating related that is compare year. that anything attached Or of to much sites? is on last

John Carrington

the not front much and meter a the dynamic deals. and we're everything Really, It's selling his of winning has is that's discussion, hundred we -- all the has hardware mentioned in software larger sell attachment. happening, Bill this

those And expanding are XX beyond term. in years of some

year average the you expand, length see of the And software bringing when CARR so per the down conversion. that's terms

Biju Perincheril

think your last up of BTM call mentioned starting are come sort you mix you pipeline. And think, on a I bit, the to the in the, see I then,

still are us you that bookings sort XX:XX an moved? recent Where can So give for stand or you sort set at now? you, update where of you ratio in that the bookings are of has the

Bill Bush

and we Yes, questions. have really for Viju, thanks the

FDM larger the ability the of deals. or our things of win certainly is -- one we've one seen that So larger FDM that to

terms it projects. in bookings. So what towards it backlog And that weights tends of course then the FTM of is to heavily the do

increasing it's are smaller absolutely smaller both just part. It's those and are the our But, the, projects. just we a business. side absolute of of values percentage the So BTM

nature, grow fast FTM projects. size very the nearly as their they're to By as going in not

I where on are better. to has -- BTM. got it The but And hardware the the deals It's -- started integration of a it a longer, years term. do benefits invest refocus are better to it. the FTM FTM, so software it's continue Not STEM and the and going well, attributes are of competitor think a think necessarily of And the think I ago, both one as has margins to of which call that and it same I'll bit things on one time in has the can been to margin market AlsoEnergy I very we better of terms and area.

And in businesses it's context of our all also, the EV classifications, the within BTM.

consistently the about value that, be ability so to because we'll talked And and actual drive rates delivering we're higher, that we've more customers dollars. able pretty attach software

So we're the meter about side. really behind excited or the BTM

projects, what to always think but of it's bit on growth area going of a it's always size we're the a FTM. to just get us, nice going to by the be because doing I swamped going for absolute it's

John Carrington

incoming, seeing at this IRA the sites we're you we've past, in XXXs country. to to us is in that. XXX because Fortune trying the the that And had discussed It's look think particular, certainly the process more we're operationalize than enable corporates, post in past across asking to I to coming we've

Operator

Please The next ahead. Partners. Justin question go comes from Roth Clare Capital of

Justin Clare

So revenue from the and looking just meaningful first sales into majority margin Xx how then gross that how growth? a here, that wanted And software of one software? for to for you the XX% the much software kind XX% vast monitoring of was drive your Or could was QX ask, split battery revenue us is contribution and of solar if give your between to margin sense a you software services services expecting your XXXX, there sales? your are

Bill Bush

question. the for thanks So,

of gross all recent revenue would terms that I the think, rate. margin software additions in the of the first are is point in mention at I high

on that's And from of couple a now we buy straight model going finance sell. We a So structured that's years way to ago. a model a mostly, shifted that because the our there. XXX% what's did

the margin software. over been has the everything line has high into years been So, the last added three, that's four services

--we not from not we're that out this will We other don't have those question that breakout? done future, Likely So individual yet. at but then in we the your point what's components. -- the breaking

what of the makes interesting software see course, tables what across the is, think see particularly business in of is business. which that hardware AlsoEnergy, PowerPoint what it and they component from you that and margin we that plus from And can back the you that driving XX% of what's posted, can deck, are in kind which of the

Justin Clare

one just then And Thanks. in great. bookings I QX, more AUM X% you strong very is up had but the in think it about Okay, storage quarter. contracted was sequentially

didn't the upward contracted So be Did storage if why software you. a could more monitoring you thank solar significantly. wondering bookings? Any higher AUM just customer additional you helpful, us understand mix there was or of cancellations of may meaningful help be battery see move any better will color contracts,

Bill Bush

million so cancellation. we had in rounded did had -- Sure. And Unfortunately, again, $XXX $XXX a so a we in million and booking the called million we quarter. $XXX

definitely tamped down in that that So metric. growth particular the

Operator

The go of Please ahead. Sinha comes Financial. from question Northland next Abhi

Abhi Sinha

Just PGM that. get trying interesting It's the understand to into you market. that

the give new What So percentage market I'm that. break what maybe, to just trying in revenue for comes to takes area. on can idea you XXXX a of you understand. some it from new and

you how in XXXX, So 'XX, you maybe something unfold that color, can some to like provide market like that. expect 'XX,

Bill Bush

want you in. jump if to start, I'll Yes, Prakesh, I can,

things a the of country. us a one footprint did the all, interesting with aligned partners that channel of years And first that we gives So is through very across distribution. few ago

So, markets, and partners have distributors those as we look areas we at already. new in

is concern that. CAC kind you eliminated through that of would that So have

very platform new quickly. Athena software highly other pieces, through The our is translatable into markets

So proven in that the we with believe force believe if our in I for like track is at market. that streams, markets, applicable of offering think and commercial to very We execute out look we've the And we in in market. record in PJM. Athena just co we have coincident value right as markets good, the peak certainly, many optimize complex to technology Ontario. highly you a ability our go have variety been And has some

market strong, we size Company. in from very of past been execute very at leading and you standpoint, larger some some transmission past just that the then years, look it's can And effectively. few believe cost the really of for than execution opportunity market our a you a the in early so market at the compelling over here has look when share much higher we California of our experiences, California So and that being market

Prakesh Patel

I this corporate we add, would can and create our that is optimistic is we for that, market just about customers tremendous. value that Prakash geographies this are in

meter, around behind of interest We not to you there, bookings our the exactly are the some be expectations the in certainly but interconnection well. PJM. timeline pipeline XXXX installed in the wanted significant what It's just in seeing but as early given gets see in we tempering that case conservative and

Abhi Sinha

it. Got Sure.

one as So more just a follow-up.

a little As hardware continue hardware mean, bit part business it. to more we see get of struggling part I of more

look make towards of move do the so more more here as business guess? the when I consider software and mean, to we at software and software the trajectory So you be more like? what we do the transitions business as part, how only, looks toward the only the trajectory I

John Carrington

the not asking distribution understand understood I if going and right, But software be -- your that what's fair? didn't I'm I on contracts? totally Is you hardware of are question. to long-term

Abhi Sinha

are as more getting not more like if thinking And that, case? heading towards the only it forward like the we towards is software and was I No, business business? few years, heads more on fast more that's

Bill Bush

working and it's definitely ship -- up around Mike discussed and are project on is that size are move are that likely I we all we that will is, graph we I think big that in and size Yes. here working of the We have controller, the services to think to part the hardware, of this less projects on is bigger software the as we unified a mean leading as terms supply business. be of going less going which quarter. on, the the is how and like unit that system

make companies batteries, be going on, sense two obviously time do themselves the smaller said to it's absolute the XXXX growth the earlier XXXX, on for projects. rate periods. case. for billion But basis, about that larger bookings I in longer-term, I on a why in ones, think won't I to talked the slower The when comparing think when we that's growth those probably $X.X So an procurement

the we've more and more. mean, balance part see It over you a onto think it's about. working are us. not standpoint going easier or if much the to that I always of It's And we're economic of talked exciting which battery capital would capital light, time, taking our be all value from I for more market sheet. an a

the definitely see it's expect something as So should growing business that you to matures.

Abhi Sinha

our assume aggressive? 'XX that 'XX or would or can we that Maybe be that's software-only business too

Bill Bush

they and not I that like, are think to I don't oh, going to be any selling hardware. think going be we selling want commentary are anybody to hear still hardware.

we going think are not selling the very projects. to I be hardware on largest

go recorded So hardware going make a two to think between distinction that sales. don't is is going those we to anytime in year, is zero things $XXX over million last there number soon. I

the $XXX of terms forecast million in hardware of you And have XXXX, a at given for that sales. we number are with looking north

to not with hardware It's these definitely for other which it's working capabilities. I and buying going zero. developer a not more going to going business, with to has that the be integrated, with go to that fully go, But we a be. it's just We're we So for that of would think that them. many going what I procurement mature we're a is be to think call would larger will today, partners projects

John Carrington

would on standardizing I developers that Athena the is amount add our growing. of

think even if for a I to having we So that, need they do continue them see software.

I team. So pipeline Bill's more are comment, the our and the echo only we Athena deals with building commercial platform's ideal, many seeing in software

as bullish well. I'm that so, front on And

Operator

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

John Carrington

XXXX thank on fourth joining Sure. full during call. earnings speaking to to year guidance call. you our everyone and us forward with want I our XQ We look for quarter

you thank for And all again, joining.

Operator

call. today's concludes This conference

have and a for Thank lines. day. You participating, disconnect may your you pleasant

Stem (STEM) 16 Feb 232022 Q4 Earnings call transcript