Stem stock reports Q2 revenue decline as margins improve

Stem (ISIN US85859N3008) generated USD 33.7 million in second-quarter 2026 revenue, down 12 percent from USD 38.4 million a year earlier, while adjusted EBITDA rose 63 percent to USD 6.2 million. The figures were reported for the quarter ended June 30, 2026, in the company's August 12 results release summarized by StockTitan.

Margins improve despite lower revenue

Stem's GAAP gross margin increased to 41 percent from 33 percent in the year-earlier quarter, while non-GAAP gross margin reached 55 percent versus 49 percent. The company also reported a USD 14.4 million net loss, compared with prior-year net income of USD 202.5 million that included a debt-extinguishment gain.

The revenue mix explains the contrast. PowerTrack software revenue grew 11 percent year over year to USD 11 million, and edge hardware revenue increased 22 percent to USD 15 million, while battery hardware resale revenue fell to USD 0.3 million from USD 5 million, according to Yahoo Finance on August 12, 2026.

Cash flow reaches breakeven

Operating cash flow was positive at USD 0.3 million in Q2 2026, compared with a USD 21.3 million outflow in Q2 2025. Bookings reached USD 36.8 million, up 39 percent from USD 26.5 million in the first quarter, while contracted backlog rose 18 percent sequentially to USD 27.1 million.

Stem reaffirmed full-year 2026 revenue guidance of USD 140 million to USD 190 million, non-GAAP gross margin guidance of 40 percent to 50 percent, and adjusted EBITDA guidance of USD 10 million to USD 15 million. The company also guided to year-end ARR of USD 65 million to USD 70 million, making execution in the second half central to the investment case.

Analysts see room above the share price

According to StockAnalysis, six analysts carry a Hold consensus and an average 12-month price target of USD 7.45. That target lies 75.29 percent above the USD 4.250 closing price on October 5, 2026. The same Q2 operating improvement prompted UBS to upgrade Stem from Neutral to Buy while setting a USD 7.00 target, as Investing.com reported on September 25, 2026.

Stem stock stays below yearly high

Stem stock closed at USD 4.250 on the NYSE on October 5, 2026 at 4:00 p.m. EDT, down 0.23 percent from USD 4.260. The stock's 52-week range was USD 3.700 to USD 32.230, and market capitalization stood at USD 40.9 million on the same date.

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