Stem, Inc.

Greetings. Welcome to STEM's fourth quarter 2025 results conference call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and the number zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Erin Reid, head of investor relations. Thank you. You may begin.

Thank you, Operator. This is Erin Reed, Head of Investor Relations at STEM. We welcome you to our fourth quarter and full year 2025 earnings call. Before we begin, please note that some of the statements we will be making today are forward-looking. These statements involve risks and uncertainties that could cause our results to differ materially from those projected in these statements. We therefore refer you to our latest 10-K and other SEC filings and supplemental materials, which can be found on our IR website. Our comments today also include non-GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP financial measures can be found in our fourth quarter and full year 2025 earnings release, which is on our website. Arun Narayanan, CEO, and Brian Musfelt, CFO, will start the call today with prepared remarks, and then we will take your questions. With that, I'll turn the call over to Arun.

Thank you, Erin. Good afternoon, everyone, and thank you all for joining us today. I am pleased to be speaking with you one year after assuming the role of CEO, and I could not be more proud of what the STEM team has accomplished over the past 12 months. Best in class execution, unwavering commitment to our customers and each other, and disciplined financial performance. 2025 was a transformative year that methodically, yet decisively, reshaped STEM into a software-centric, operationally disciplined organization. Every commitment we made and the proof of our strategic transformation is in the results. Today, I will take you through a look back on our fourth quarter and full year accomplishments. After that, I will walk you through our 2026 priorities and show you how we are determined to become the operating system for clean energy projects. And finally, I will give you a preview of guidance for the year ahead. Brian will follow with the detailed financial results and our complete 2026 outlook. In 2025, we delivered on guidance across every metric. Full year 2025 revenue grew 8% year over year to $156 million with over 55% of that revenue coming from software and services, evidencing our successful and ongoing transformation. Software, services, and edge hardware revenue grew by 25% year over year to $141 million. Year-end ARR grew 16% year over year to $61 million. In 2025, we substantially expanded gross margins and considerably reduced our operating expenses. We achieved three consecutive quarters of positive adjusted EBITDA, resulting in our first ever full year positive adjusted EBITDA of $7 million. We also achieved positive operating cash flow for full year 2025, another first and major accomplishment in the company's history. Throughout the year, we continue to deepen and expand our PowerTrack platform, delivering meaningful improvements in platform stability, performance, and customer experience. We added 6 gigawatts of solar assets to a total of 36 gigawatts under management and added $7 million in PowerTrack ARR to reach $41 million. In 2025, we accelerated our R&D efforts, leveraged AI tools, and rebuilt our product roadmaps. We successfully launched two new products last year. Both products, Powertrack EMS and Powertrack Sage, have resonated well with our customers, and we are encouraged by the early traction. We launched Powertrack EMS in September 2025 and it is a premier solution for utility-scale projects. This morning, we announced a new engagement with EveryRay, a German clean energy developer and EPC. This 100 megawatt-hour deal further expands STEM's presence in Germany and reinforces Powertrack EMS's role as the control backbone for sophisticated utility-scale storage deployments across Europe and other international markets. Commercial operations for those deployments are expected to commence in the summer of 2026. Our expansion into the utility scale market, both domestically and internationally, gained meaningful traction in the fourth quarter, with utility scale bookings increasing 10% sequentially. Notably, nearly all fourth quarter utility scale bookings were driven by international solar projects, underscoring growing demand in global markets. I talked with you about Powertrack Sage, our AI-powered assistant, in previous calls, and I continue to be excited about it. We deployed Powertrack Sage in the fourth quarter to more than 80 customers for a beta trial, and the feedback has been overwhelmingly positive. Powertrack Sage will be generally available at the end of this month. At launch, we will deploy a Lite version across the entire Powertrack customer base embedding AI-assisted capabilities into the core platform from day one and accelerating adoption at scale. This universal rollout ensures immediate value realization while positioning AI as a foundational component of the Powertrack experience. For customers seeking deeper automation, advanced analytics, and expanded workflow functionality, we will soon offer premium tiers at incremental cost creating a clear pathway for upselling, monetization, and long-term platform expansion. Finally, our managed services business delivered solid fourth quarter performance, highlighted by a new brownfield agreement. Under this deal, we will operate and optimize a four-site energy storage portfolio for a Southern California utility. Our services include real-time asset monitoring, enrollment and dispatch into California demand response programs, performance reporting to optimize site dispatches, and energy cost savings, and more. This is a solid proof point for our differentiated managed services capabilities and validation of our brownfield strategy. Overall, the result of 2025 is this. STEM has established a stable Increasingly profitable software centric business model 2025. Ability 2026 is about operational leverage and building for scale. So let's dive in. As we enter the new year with strong fourth quarter momentum, we are focused on three new priorities. Priority number one, driving operational leverage. Priority number two, continuing to strengthen our core business. And priority number three, building the foundation for accelerated growth in 2027 and beyond. Now let's dive deeper into each of these in turn. First, driving operational leverage. We have built a sustainable business model, and in 2026, we intend to demonstrate the leverage it creates. Our software centric model delivers predictable, high margin revenue and cost discipline is now embedded in the culture of this company. In 2026, we will continue integrating AI across the organization to drive productivity improvements and we will maintain our relentless focus on cost reductions, cash conservation and working capital management. Second, strengthening our core business. We remain focused on driving core platform excellence for Powertrack in 2026. The platform maintains its market-leading position in commercial and industrial solar monitoring in the US. This year, we will deliver further platform stability, scalability, and simplified intelligent UI updates that drive customer value and retention. The domestic CNI solar market, where we already hold significant share, offers moderate growth in 2026. But this is a stable high retention base that continues to generate recurring revenue. Additionally, we are targeting a brownfield strategy to further increase our market share, as well as a range of other adjacent offerings. Our other core business, managed services for energy storage, continues to be a differentiated offering that sets STEM apart from competitors. Our brownfield strategy remains a key focus, as does actively pursuing greenfield opportunities. We are scaling in existing domestic markets, leading with our proof of performance and winning with our differentiated offerings. And finally, to priority number three, building for growth in 2027 and beyond. Outside of our core CNI solar and storage businesses, we are focused on expanding our utility scale footprint domestically and internationally. We are targeting key markets across Europe, leveraging local support infrastructure that we have built and continue to invest in. Both the domestic and international utility scale storage and solar markets are growing, and we are well positioned to capture rising demand and take share. Powertrack EMS helps us differentiate in the utility-scale space by providing a solution for hybrid solar plus storage sites and also standalone best sites, which are increasingly common in the utility-scale market. We expect meaningful revenue conversion of Powertrack EMS bookings to begin at the end of 2026 and the beginning of 2027. While we are bringing Powertrack EMS to market this year, we are also exploring other ways in which our team's expertise and our technology can deliver value. First, as part of our suite of professional services offerings, we are developing AI services that leverage our domain expertise and operational knowledge to help customers identify, prioritize, and deploy the current iteration of generative AI solutions in a way that generates real economic outcomes. These offerings are distinct from Powertrack Sage, and they are focused on helping customers unlock value across their broader operations. And our second area of opportunity is with data centers. More and more, we are seeing data centers adopting renewables as a power source. We believe STEM has the foundational technology and deep expertise in both solar and storage to be a meaningful player in this market. I am encouraged by these options. We see a natural extension of our existing capabilities driving our entrance into the space, and I look forward to updating you all on our progress in the coming quarters. 2026 is an optimization year focused on margin expansion and operating leverage while we continue to invest selectively in the capabilities that will drive scale in 2027 and beyond. I want to be deliberate about that framing because it shapes how you should think about our trajectory. Powertrack EMS was launched in late 2025. It accelerates through the end of 2026 and meaningfully scales in 2027 and beyond. Our utility scale team is building meaningfully in 2026, and this foundation will drive us towards taking share in 2027 and beyond. We believe that the market positions we are strengthening on technology are AI integration, improving stability and scalability. On markets, International expansion and utility scale expansion here and abroad. On products and offerings, a comprehensive suite from solar monitoring to storage optimization. On operations, building operating leverage and driving operational excellence. Expanding the value chain of our offerings today sets up the foundation for future growth. This is important to note because it ties into our core software centric vision for STEM. We are determined to become the operating system for new energy projects across solar storage and hybrid assets and in different market segments and geographies. Before turning it over to Brian, let me introduce the key themes of our 2026 guidance. We are entering the year with a strong foundation from our 2025 execution and believe we are well positioned to execute on our commitments. We expect our software centric strategy to drive moderate top line revenue growth, strong growth margins, and significant adjusted EBITDA expansion supported by continued software momentum, expanding product suite, and the operational leverage we have built into the business. Brian will provide a more detailed look at our 2026 guidance and also dive deeper into our fourth quarter and full year 2025 financial results. With that, let me pass over the call to him.