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Jun 30, 2025
Stem Q2 2025 Earnings Report
Stem announced its second quarter 2025 results, reporting increased revenue, positive adjusted EBITDA, and strengthened its balance sheet through debt refinancing.
Key Takeaways
Stem delivered a strong second quarter in 2025, with revenue increasing by 13% year-over-year to $38.4 million and achieving positive adjusted EBITDA of $3.8 million. The company also significantly strengthened its balance sheet by reducing outstanding debt by $195 million and extended debt maturities to 2030. ARR increased by 3% sequentially to $58.5 million, demonstrating continued execution of its software-focused strategy.
Revenue increased by 13% year-over-year to $38.4 million, driven by higher contributions from software and services.
Achieved positive adjusted EBITDA of $3.8 million, a significant improvement from a loss of $(11.3) million in the prior year, primarily due to higher gross profit and lower operating expenses.
Net income reached $202.5 million, largely due to a one-time gain on extinguishment of debt and lower operating costs.
Successfully refinanced debt, reducing outstanding debt by $195 million and extending maturities to 2030, providing a solid financial runway.
Forward Guidance
Stem reaffirmed its full year 2025 guidance across all key metrics, indicating confidence in continued revenue growth, strong gross margins, and positive adjusted EBITDA, despite potential tariff and policy headwinds.
Positive Outlook
- Reaffirmed full year 2025 revenue guidance of $125 million to $175 million.
- Reaffirmed non-GAAP gross margin guidance of 30% to 40%.
- Reaffirmed adjusted EBITDA guidance of $(10) million to $5 million, with a positive range.
- Reaffirmed operating cash flow guidance of $0 to $15 million, indicating potential for positive cash generation.
- Reaffirmed year-end ARR guidance of $55 million to $65 million, reflecting continued software-centric growth.
Challenges Ahead
- Potential negative impacts from tariff and policy headwinds.
- Uncertainty around macroeconomic, regulatory, geopolitical, and business environments.
- Risk of disruptions in sales, production, or service activities.
Historical Earnings Impact
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