Stem, Inc. (NYSE:STEM) reported its fourth‑quarter and full‑year 2025 financial results, marking the first time the company posted a positive adjusted earnings‑before‑interest‑taxes‑depreciation‑and‑amortization (EBITDA) for the entire year. Total revenue rose 8% to $156.3 million, driven by a 25% increase in software, services and edge‑hardware revenue to $141.4 million, while battery‑hardware resale revenue remained flat at $15 million. The company’s GAAP gross margin expanded to 38% from –8% in 2024, and non‑GAAP gross margin climbed to 46% from 35% year‑over‑year, reflecting a higher mix of high‑margin software and services and lower exposure to lower‑margin battery hardware sales.
In the fourth quarter, revenue fell 15% to $47.2 million, largely due to a decline in battery‑hardware sales, but the quarter still delivered a positive adjusted EBITDA of $4.2 million, up from a $4.2 million loss in Q4 2024. The positive quarterly EBITDA, combined with the $141.4 million in software, services and edge‑hardware revenue, underpins the company’s first‑ever positive annual adjusted EBITDA of $10.8 million, a milestone that signals the successful execution of its software‑centric strategy.
Management highlighted the shift to higher‑margin businesses as the key driver of the turnaround. Chief Financial Officer William Bush noted that “for the full year of 2025, total revenue was $156 million, up 8% year‑over‑year, and revenue from software, services and edge hardware – the core of our software‑centric model – was up 25% year‑over‑year to $141 million.” Chief Executive Officer Arun Narayanan added that the company “has delivered on every commitment we made, successfully launched two innovative products, PowerTrack EMS and PowerTrack Sage, and established the operational foundation to support sustainable growth.”
The company guided for 2026 revenue between $140 million and $190 million, with software, services and edge‑hardware revenue expected to range from $130 million to $150 million. Stem aims to maintain non‑GAAP gross margins between 40% and 50% and anticipates adjusted EBITDA growth to $10 million to $15 million, reflecting confidence in continued operational leverage and margin expansion.
The results and forward guidance have been well received by investors, who view the revenue beat, margin expansion and first‑ever positive annual adjusted EBITDA as evidence of a successful strategic pivot and a more sustainable, high‑margin business model. The company’s ability to convert a previously loss‑making business into a profitable, software‑centric operation is expected to strengthen its competitive position in the clean‑energy software sector and support future growth.
The content on EveryTicker is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.