| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
Class | Outstanding as of October 25, 2023 | ||||
Common Stock, $0.0001 par value per share |
Page | |||||
September 30, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Short-term investments | |||||||||||
Accounts receivable, net of allowances of $ | |||||||||||
Inventory, net | |||||||||||
Deferred costs with suppliers | |||||||||||
Other current assets (includes $ | |||||||||||
Total current assets | |||||||||||
Energy storage systems, net | |||||||||||
Contract origination costs, net | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Other noncurrent assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Accrued payroll | |||||||||||
Financing obligation, current portion | |||||||||||
Deferred revenue, current portion | |||||||||||
Other current liabilities (includes $ | |||||||||||
Total current liabilities | |||||||||||
Deferred revenue, noncurrent | |||||||||||
Asset retirement obligation | |||||||||||
Notes payable, noncurrent | |||||||||||
Convertible notes, noncurrent | |||||||||||
Financing obligation, noncurrent | |||||||||||
Lease liabilities, noncurrent | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 15) | |||||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive income (loss) | ( | ||||||||||
Accumulated deficit | ( | ( | |||||||||
Total Stem’s stockholders’ equity | |||||||||||
Non-controlling interests | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Services and other revenue | $ | $ | $ | $ | |||||||||||||||||||
Hardware revenue | |||||||||||||||||||||||
Total revenue | |||||||||||||||||||||||
Cost of Revenue | |||||||||||||||||||||||
Cost of services and other revenue | |||||||||||||||||||||||
Cost of hardware revenue | |||||||||||||||||||||||
Total cost of revenue | |||||||||||||||||||||||
Gross (loss) profit | ( | ( | |||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Sales and marketing | |||||||||||||||||||||||
Research and development | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Loss from operations | ( | ( | ( | ( | |||||||||||||||||||
Other (expense) income, net: | |||||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
Gain on extinguishment of debt, net | |||||||||||||||||||||||
Change in fair value of derivative liability | ( | ( | |||||||||||||||||||||
Other income, net | |||||||||||||||||||||||
Total other (expense) income, net | ( | ( | ( | ||||||||||||||||||||
Loss before benefit from (provision for) income taxes | ( | ( | ( | ( | |||||||||||||||||||
Benefit from (provision for) income taxes | ( | ( | |||||||||||||||||||||
Net loss | ( | ( | ( | ( | |||||||||||||||||||
Net income attributed to non-controlling interests | |||||||||||||||||||||||
Net loss attributable to Stem | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net loss per share attributable to common stockholders, basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted-average shares used in computing net loss per share to common stockholders, basic and diluted | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||
Unrealized gain (loss) on available-for-sale securities | ( | ( | |||||||||||||||||||||
Foreign currency translation adjustment | ( | ( | |||||||||||||||||||||
Total other comprehensive loss | ( | ( | ( | ( | |||||||||||||||||||
Less: Comprehensive income attributable to non-controlling interests | |||||||||||||||||||||||
Total comprehensive loss attributable to Stem | $ | ( | $ | ( | $ | ( | $ | ( |
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Non-controlling Interests | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2023 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||
Stock option exercises, net of statutory tax withholdings | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Issuance of common stock upon release of restricted stock units | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Unrealized gain on available-for-sale securities | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Redemption of non-controlling interests, net | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Balance as of March 31, 2023 | ( | ( | |||||||||||||||||||||||||||||||||||||||
Stock option exercises, net of statutory tax withholdings | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Issuance of common stock upon release of restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Purchase of capped call options (Note 10) | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Unrealized loss on available-for-sale securities | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Contributions from non-controlling interests | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2023 | ( | ( | |||||||||||||||||||||||||||||||||||||||
Stock option exercises, net of statutory tax withholdings | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Issuance of common stock upon release of restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Unrealized gain on available-for-sale securities | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Contributions from non-controlling interests | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||
Balance as of September 30, 2023 | $ | $ | $ | $ | ( | $ | $ |
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Non-controlling Interests | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance as of January 1, 2022 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
Cumulative-effect adjustment upon adoption of ASU 2020-06 (Note 10) | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||
Cumulative-effect adjustment upon adoption of ASU 2016-13 | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Common stock issued upon business combination (Note 6) | — | — | — | ||||||||||||||||||||||||||||||||||||||
Stock option exercises, net of statutory tax withholdings | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Unrealized loss on available-for-sale securities | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Contributions from non-controlling interests | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Balance as of March 31, 2022 | ( | ( | |||||||||||||||||||||||||||||||||||||||
Stock option exercises, net of statutory tax withholdings | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||
Issuance of common stock upon release of restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Shares issued for exercise of warrants | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Unrealized loss on available-for-sale securities | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Contributions from non-controlling interests | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||
Balance as of June 30, 2022 | ( | ( | |||||||||||||||||||||||||||||||||||||||
Stock option exercises, net of statutory tax withholdings | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Issuance of common stock upon release of restricted stock units | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Unrealized loss on available-for-sale securities | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Contributions from non-controlling interests | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net (loss) income | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||
Balance as of September 30, 2022 | $ | $ | $ | ( | $ | ( | $ | $ |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
OPERATING ACTIVITIES | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation and amortization expense | |||||||||||
Non-cash interest expense, including interest expenses associated with debt issuance costs | |||||||||||
Stock-based compensation | |||||||||||
Change in fair value of derivative liability | |||||||||||
Non-cash lease expense | |||||||||||
Accretion of asset retirement obligations | |||||||||||
Impairment loss of energy storage systems | |||||||||||
Impairment loss of project assets | |||||||||||
Net (accretion of discount) amortization of premium on investments | ( | ||||||||||
Income tax benefit from release of valuation allowance | ( | ( | |||||||||
Provision for accounts receivable allowance | |||||||||||
Net loss on investments | |||||||||||
Gain on sale of project assets | ( | ||||||||||
Gain on extinguishment of debt, net | ( | ||||||||||
Other | ( | ( | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Inventory | ( | ( | |||||||||
Deferred costs with suppliers | ( | ||||||||||
Other assets | ( | ( | |||||||||
Contract origination costs, net | ( | ( | |||||||||
Project assets | ( | ||||||||||
Accounts payable | |||||||||||
Accrued expenses and other liabilities | ( | ||||||||||
Deferred revenue | |||||||||||
Lease liabilities | ( | ( | |||||||||
Net cash used in operating activities | ( | ( | |||||||||
INVESTING ACTIVITIES | |||||||||||
Acquisitions, net of cash acquired | ( | ( | |||||||||
Purchase of available-for-sale investments | ( | ( | |||||||||
Proceeds from maturities of available-for-sale investments | |||||||||||
Proceeds from sales of available-for-sale investments | |||||||||||
Purchase of energy storage systems | ( | ( | |||||||||
Capital expenditures on internally-developed software | ( | ( | |||||||||
Net proceeds from sale of project assets | |||||||||||
Capital expenditures on project assets | ( | ||||||||||
Purchase of property and equipment | ( | ( | |||||||||
Net cash provided by (used in) investing activities | ( | ||||||||||
FINANCING ACTIVITIES | |||||||||||
Proceeds from exercise of stock options and warrants | |||||||||||
Payments for taxes related to net share settlement of stock options | ( | ||||||||||
Proceeds from financing obligations | |||||||||||
Repayment of financing obligations | ( | ( | |||||||||
Proceeds from issuance of convertible notes, net of issuance costs of $ | |||||||||||
Repayment of convertible notes | ( | ||||||||||
Purchase of capped call options | ( | ||||||||||
(Redemption of) investment from non-controlling interests, net | ( | ||||||||||
Repayment of notes payable | ( |
Net cash provided by (used in) financing activities | ( | ||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ||||||||||
Cash, cash equivalents and restricted cash, beginning of year | |||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | $ |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||||||
Cash paid for interest | $ | $ | |||||||||
NON-CASH INVESTING AND FINANCING ACTIVITIES | |||||||||||
Change in asset retirement costs and asset retirement obligation | $ | $ | |||||||||
Purchases of energy storage systems in accounts payable | $ | $ | |||||||||
Right-of-use asset obtained in exchange for lease liability | $ | $ | |||||||||
Stock-based compensation capitalized to internal-use software | $ | $ | |||||||||
RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH WITHIN THE CONDENSED CONSOLIDATED BALANCE SHEETS TO THE AMOUNTS SHOWN IN THE STATEMENTS OF CASH FLOWS ABOVE: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash included in other noncurrent assets | |||||||||||
Total cash, cash equivalents, and restricted cash | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Other current assets | |||||||||||
Other noncurrent assets | |||||||||||
Total assets | |||||||||||
Liabilities | |||||||||||
Accounts payable | |||||||||||
Other current liabilities | |||||||||||
Total liabilities | $ | $ |
Accounts Receivable | Revenue | Revenue | |||||||||||||||||||||||||||||||||
September 30, | December 31, | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||
Customers: | |||||||||||||||||||||||||||||||||||
Customer A | % | % | * | % | % | % | |||||||||||||||||||||||||||||
Customer B | % | % | * | * | * | * | |||||||||||||||||||||||||||||
Customer C | % | % | * | * | * | * | |||||||||||||||||||||||||||||
Customer D | * | * | * | % | * | * | |||||||||||||||||||||||||||||
Customer E | * | * | % | * | % | * | |||||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Hardware revenue | $ | $ | $ | $ | |||||||||||||||||||
Services and other revenue | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
United States | $ | $ | $ | $ | |||||||||||||||||||
Rest of the world | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
September 30, 2023 | |||||||||||||||||||||||
Total Remaining Performance Obligations | Percent Expected to be Recognized as Revenue | ||||||||||||||||||||||
Less Than One Year | Two to Five Years | Greater Than Five Years | |||||||||||||||||||||
Services and other revenue | $ | % | % | % | |||||||||||||||||||
Hardware revenue | % | % | % | ||||||||||||||||||||
Total revenue | $ |
September 30, 2022 | |||||||||||||||||||||||
Total Remaining Performance Obligations | Percent Expected to be Recognized as Revenue | ||||||||||||||||||||||
Less Than One Year | Two to Five Years | Greater Than Five Years | |||||||||||||||||||||
Services and other revenue | $ | % | % | % | |||||||||||||||||||
Hardware revenue | % | % | % | ||||||||||||||||||||
Total revenue | $ |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Beginning balance | $ | $ | |||||||||
Deferred revenue acquired upon business combination | |||||||||||
Upfront payments received from customers | |||||||||||
Upfront or annual incentive payments received | |||||||||||
Revenue recognized related to amounts that were included in beginning balance of deferred revenue | ( | ( | |||||||||
Revenue recognized related to amounts that were included in acquired balance of deferred revenue | ( | ||||||||||
Revenue recognized related to deferred revenue generated during the period | ( | ( | |||||||||
Ending balance | $ | $ |
As of September 30, 2023 | |||||||||||||||||||||||
Amortized Cost | Unrealized Gain | Unrealized Loss | Estimated Fair Value | ||||||||||||||||||||
Corporate debt securities | $ | $ | $ | ( | $ | ||||||||||||||||||
U.S. government bonds | ( | ||||||||||||||||||||||
Certificate of deposits | |||||||||||||||||||||||
Treasury bills | |||||||||||||||||||||||
Agency bonds | ( | ||||||||||||||||||||||
Total short-term investments | $ | $ | $ | ( | $ | ||||||||||||||||||
As of December 31, 2022 | |||||||||||||||||||||||
Amortized Cost | Unrealized Gain | Unrealized Loss | Estimated Fair Value | ||||||||||||||||||||
Corporate debt securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
U.S. government bonds | ( | ||||||||||||||||||||||
Certificate of deposits | |||||||||||||||||||||||
Treasury bills | ( | ||||||||||||||||||||||
Agency bonds | ( | ||||||||||||||||||||||
Total short-term investments | $ | $ | $ | ( | $ | ||||||||||||||||||
As of September 30, 2023 | |||||||||||
Amortized cost | Estimated Fair Value | ||||||||||
Due within one year | $ | $ | |||||||||
Total | $ | $ | |||||||||
September 30, 2023 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||
Money market fund | $ | $ | $ | $ | |||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
Debt securities: | |||||||||||||||||||||||
Corporate debt securities | |||||||||||||||||||||||
U.S. government bonds | |||||||||||||||||||||||
Certificate of deposits | |||||||||||||||||||||||
Treasury bills | |||||||||||||||||||||||
Agency bonds | |||||||||||||||||||||||
Total financial assets | $ | $ | $ | $ | |||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Derivative liability | $ | $ | $ | $ |
December 31, 2022 | |||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Fair Value | ||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||
Money market fund | $ | $ | $ | $ | |||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
Debt securities: | |||||||||||||||||||||||
Corporate debt securities | |||||||||||||||||||||||
Commercial paper | |||||||||||||||||||||||
U.S. government bonds | |||||||||||||||||||||||
Certificate of deposits | |||||||||||||||||||||||
Treasury bills | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total financial assets | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Total revenue | $ | $ | $ | $ | |||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( |
September 30, | December 31, | ||||||||||
2023 | 2022 | ||||||||||
Goodwill | $ | $ | |||||||||
Recovery of escrow from AlsoEnergy acquisition | ( | ||||||||||
Effect of foreign currency translation | |||||||||||
Total goodwill | $ | $ |
September 30, | December 31, | ||||||||||
2023 | 2022 | ||||||||||
Developed technology | $ | $ | |||||||||
Trade name | |||||||||||
Customer relationships | |||||||||||
Backlog | |||||||||||
Internally developed software | |||||||||||
Intangible assets | |||||||||||
Less: Accumulated amortization | ( | ( | |||||||||
Add: Currency translation adjustment | |||||||||||
Total intangible assets, net | $ | $ |
September 30, | December 31, | ||||||||||
2023 | 2022 | ||||||||||
Energy storage systems placed into service | $ | $ | |||||||||
Less: accumulated depreciation | ( | ( | |||||||||
Energy storage systems not yet placed into service | |||||||||||
Total energy storage systems, net | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Long Term Debt | |||||||||||
Outstanding principal | $ | $ | |||||||||
Unamortized initial purchaser’s debt discount and debt issuance cost | ( | ( | |||||||||
Net carrying amount | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Cash interest expense | |||||||||||||||||||||||
Contractual interest expense | $ | $ | $ | $ | |||||||||||||||||||
Non-cash interest expense | |||||||||||||||||||||||
Amortization of debt discount and debt issuance cost | |||||||||||||||||||||||
Total interest expense | $ | $ | $ | $ |
September 30, 2023 | |||||
Long Term Debt | |||||
Outstanding principal | $ | ||||
Unamortized initial purchaser’s debt discount and debt issuance cost | ( | ||||
Net carrying amount | $ |
Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2023 | ||||||||||
Cash interest expense | |||||||||||
Contractual interest expense | $ | $ | |||||||||
Non-cash interest expense | |||||||||||
Amortization of debt discount and debt issuance cost | |||||||||||
Total interest expense | $ | $ |
Number of Options Outstanding | Weighted- Average Exercise Price Per Share | Weighted- Average Remaining Contractual Life (years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
Balances as of December 31, 2022 | $ | $ | |||||||||||||||||||||
Options granted | |||||||||||||||||||||||
Options exercised | ( | ||||||||||||||||||||||
Options forfeited and expired | ( | ||||||||||||||||||||||
Balances as of September 30, 2023 | $ | $ | |||||||||||||||||||||
Options vested and exercisable — September 30, 2023 | $ | $ |
Number of RSUs Outstanding (1) | Weighted-Average Grant Date Fair Value Per Share | ||||||||||
Balances as of December 31, 2022 | $ | ||||||||||
RSUs granted | |||||||||||
RSUs vested | ( | ||||||||||
RSUs forfeited | ( | ||||||||||
Balances as of September 30, 2023 | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Sales and marketing | $ | $ | $ | $ | |||||||||||||||||||
Research and development | |||||||||||||||||||||||
General and administrative | |||||||||||||||||||||||
Total stock-based compensation expense | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net loss per share attributable to common stockholders, basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted | |||||||||||||||||||||||
Net loss per share attributable to common stockholders, basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
September 30, 2023 | September 30, 2022 | ||||||||||
Outstanding 2028 Convertible Notes | |||||||||||
Outstanding 2030 Convertible Notes | |||||||||||
Outstanding stock options | |||||||||||
Outstanding warrants | |||||||||||
Outstanding RSUs | |||||||||||
Total |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Loss before benefit from (provision for) income taxes | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Benefit from (provision for) income taxes | $ | $ | ( | $ | ( | $ | |||||||||||||||||
Effective tax rate | % | ( | % | ( | % | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenue | $ | 133.7 | $ | 99.5 | $ | 294.1 | $ | 207.5 | |||||||||||||||
Cost of revenue | (154.0) | (90.4) | (301.5) | (187.0) | |||||||||||||||||||
GAAP gross (loss) profit | (20.3) | 9.1 | (7.4) | 20.5 | |||||||||||||||||||
GAAP gross margin (%) | (15) | % | 9 | % | (3) | % | 10 | % | |||||||||||||||
Non-GAAP Gross Profit | |||||||||||||||||||||||
GAAP Revenue | $ | 133.7 | $ | 99.5 | $ | 294.1 | $ | 207.5 | |||||||||||||||
Add: Revenue constraint (1) | — | — | 10.2 | — | |||||||||||||||||||
Add: Revenue reduction (2) | 37.4 | — | 37.4 | — | |||||||||||||||||||
Subtotal | 171.1 | 99.5 | 341.7 | 207.5 | |||||||||||||||||||
Less: Cost of revenue | (154.0) | (90.4) | (301.5) | (187.0) | |||||||||||||||||||
Add: Amortization of capitalized software & developed technology | 3.5 | 2.9 | 9.8 | 7.6 | |||||||||||||||||||
Add: Impairments | 0.8 | 0.4 | 2.9 | 2.2 | |||||||||||||||||||
Non-GAAP gross profit | $ | 21.4 | $ | 12.4 | $ | 52.9 | $ | 30.3 | |||||||||||||||
Non-GAAP gross margin (%) | 12 | % | 13 | % | 15 | % | 15 | % | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||
Net loss attributable to Stem | $ | (77,072) | $ | (34,279) | $ | (102,728) | $ | (88,781) | |||||||||||||||
Adjusted to exclude the following: | |||||||||||||||||||||||
Depreciation and amortization (1) | 11,531 | 11,547 | 36,098 | 33,353 | |||||||||||||||||||
Interest expense, net | 4,405 | 2,520 | 10,085 | 8,429 | |||||||||||||||||||
Gain on extinguishment of debt, net | — | — | (59,121) | — | |||||||||||||||||||
Stock-based compensation | 11,198 | 7,678 | 28,320 | 20,410 | |||||||||||||||||||
Revenue constraint (2) | — | — | 10,200 | — | |||||||||||||||||||
Revenue reduction (3) | 37,377 | — | 37,377 | — | |||||||||||||||||||
Change in fair value of derivative liability | 5,155 | — | 7,731 | — | |||||||||||||||||||
Transaction costs in connection with business combination | — | — | — | 6,068 | |||||||||||||||||||
Litigation settlement | — | — | — | (727) | |||||||||||||||||||
(Benefit from) provision for income taxes | (46) | 19 | 354 | (15,201) | |||||||||||||||||||
Other expenses (4) | 6,591 | — | 7,612 | — | |||||||||||||||||||
Adjusted EBITDA | $ | (861) | $ | (12,515) | $ | (24,072) | $ | (36,449) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Key Financial Metrics | |||||||||||||||||||||||
Revenue | $ | 133.7 | $ | 99.5 | $ | 294.1 | $ | 207.5 | |||||||||||||||
GAAP gross (loss) profit | $ | (20.3) | $ | 9.1 | $ | (7.4) | $ | 20.5 | |||||||||||||||
GAAP gross margin (%) | (15) | % | 9 | % | (3) | % | 10 | % | |||||||||||||||
Non-GAAP gross profit | $ | 21.4 | $ | 12.4 | $ | 52.9 | $ | 30.3 | |||||||||||||||
Non-GAAP gross margin (%) | 12 | % | 13 | % | 15 | % | 15 | % | |||||||||||||||
Net loss attributable to Stem | $ | (77.1) | $ | (34.3) | $ | (102.7) | $ | (88.8) | |||||||||||||||
Adjusted EBITDA | $ | (0.9) | $ | (12.5) | $ | (24.1) | $ | (36.4) | |||||||||||||||
Key Operating Metrics | |||||||||||||||||||||||
Bookings (1) | $ | 676.4 | $ | 222.9 | $ | 1,276.3 | $ | 599.4 | |||||||||||||||
Contracted backlog* (2) | $ | 1,836.6 | $ | 817.2 | $ | 1,836.6 | $ | 817.2 | |||||||||||||||
Contracted storage AUM (in GWh)* (3) | 5.0 | 2.7 | 5.0 | 2.7 | |||||||||||||||||||
Solar monitoring AUM (in GW)* (4) | 26.3 | 25.0 | 26.3 | 25.0 | |||||||||||||||||||
CARR* (5) | $ | 87.5 | 61.4 | $ | 87.5 | 61.4 | |||||||||||||||||
* at period end | |||||||||||||||||||||||
(1) As described below. | |||||||||||||||||||||||
(2) Total value of bookings in dollars, as reflected on a specific date. Backlog increases as new contracts are executed (bookings) and decreases as integrated storage systems are delivered and recognized as revenue. | |||||||||||||||||||||||
(3) Total GWh of systems in operation or under contract. Contracted storage AUM as of September 30, 2022 has been adjusted from 2.4 GWh, as previously disclosed, to 2.7 GWh. Revised AUM reflects adjustments to total GWh of energy storage systems to previously executed customer contracts as a result of revisions to the system configuration or changes in hardware specifications due to updates from the original equipment manufacturer. | |||||||||||||||||||||||
(4) Total GW of systems in operation or under contract. | |||||||||||||||||||||||
(5) Contracted Annual Recurring Revenue (“CARR”): Annual run rate for all executed software services contracts including contracts signed in the period for systems that are not yet commissioned or operating. |
Three Months Ended September 30, | $ Change | % Change | |||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Services and other revenue | $ | 16,597 | $ | 13,692 | $ | 2,905 | 21% | ||||||||||||||||
Hardware revenue | 117,143 | 85,809 | 31,334 | 37% | |||||||||||||||||||
Total revenue | 133,740 | 99,501 | 34,239 | 34% | |||||||||||||||||||
Cost of revenue | |||||||||||||||||||||||
Cost of services and other revenue | 13,684 | 11,445 | 2,239 | 20% | |||||||||||||||||||
Cost of hardware revenue | 140,347 | 78,929 | 61,418 | 78% | |||||||||||||||||||
Total cost of revenue | 154,031 | 90,374 | 63,657 | 70% | |||||||||||||||||||
Gross (loss) profit | (20,291) | 9,127 | (29,418) | (322)% | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Sales and marketing | 11,605 | 13,187 | (1,582) | (12)% | |||||||||||||||||||
Research and development | 14,420 | 10,526 | 3,894 | 37% | |||||||||||||||||||
General and administrative | 21,955 | 18,013 | 3,942 | 22% | |||||||||||||||||||
Total operating expenses | 47,980 | 41,726 | 6,254 | 15% | |||||||||||||||||||
Loss from operations | (68,271) | (32,599) | (35,672) | 109% | |||||||||||||||||||
Other expense, net: | |||||||||||||||||||||||
Interest expense, net | (4,405) | (2,520) | (1,885) | 75% | |||||||||||||||||||
Change in fair value of derivative liability | (5,155) | — | (5,155) | * | |||||||||||||||||||
Other income, net | 713 | 863 | (150) | (17)% | |||||||||||||||||||
Total other expense, net | (8,847) | (1,657) | (7,190) | 434% | |||||||||||||||||||
Loss before benefit from (provision for) income taxes | (77,118) | (34,256) | (42,862) | 125% | |||||||||||||||||||
Benefit from (provision for) income taxes | 46 | (19) | 65 | * | |||||||||||||||||||
Net loss | (77,072) | (34,275) | (42,797) | 125% | |||||||||||||||||||
Net income attributed to non-controlling interests | — | 4 | (4) | (100)% | |||||||||||||||||||
Net loss attributable to Stem | $ | (77,072) | $ | (34,279) | $ | (42,793) | 125% |
Nine Months Ended September 30, | $ Change | % Change | |||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Services and other revenue | $ | 47,630 | $ | 36,178 | $ | 11,452 | 32% | ||||||||||||||||
Hardware revenue | 246,461 | 171,358 | 75,103 | 44% | |||||||||||||||||||
Total revenue | 294,091 | 207,536 | 86,555 | 42% | |||||||||||||||||||
Cost of revenue | |||||||||||||||||||||||
Cost of services and other revenue | 36,944 | 30,219 | 6,725 | 22% | |||||||||||||||||||
Cost of hardware revenue | 264,573 | 156,758 | 107,815 | 69% | |||||||||||||||||||
Total cost of revenue | 301,517 | 186,977 | 114,540 | 61% | |||||||||||||||||||
Gross (loss) profit | (7,426) | 20,559 | (27,985) | (136)% | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Sales and marketing | 37,691 | 35,284 | 2,407 | 7% | |||||||||||||||||||
Research and development | 42,020 | 28,432 | 13,588 | 48% | |||||||||||||||||||
General and administrative | 58,656 | 54,218 | 4,438 | 8% | |||||||||||||||||||
Total operating expenses | 138,367 | 117,934 | 20,433 | 17% | |||||||||||||||||||
Loss from operations | (145,793) | (97,375) | (48,418) | 50% | |||||||||||||||||||
Other income (expense), net: | |||||||||||||||||||||||
Interest expense, net | (10,085) | (8,429) | (1,656) | 20% | |||||||||||||||||||
Gain on extinguishment of debt, net | 59,121 | — | 59,121 | * | |||||||||||||||||||
Change in fair value of derivative liability | (7,731) | — | (7,731) | * | |||||||||||||||||||
Other income, net | 2,114 | 1,822 | 292 | 16% | |||||||||||||||||||
Total other income (expense), net | 43,419 | (6,607) | 50,026 | * | |||||||||||||||||||
Loss before (provision for) benefit from income taxes | (102,374) | (103,982) | 1,608 | (2)% | |||||||||||||||||||
(Provision for) benefit from income taxes | (354) | 15,201 | (15,555) | (102)% | |||||||||||||||||||
Net loss | $ | (102,728) | $ | (88,781) | $ | (13,947) | 16% | ||||||||||||||||
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Net cash used in operating activities | $ | (205,248) | $ | (68,634) | |||||||
Net cash provided by (used in) investing activities | 120,256 | (571,925) | |||||||||
Net cash provided by (used in) financing activities | 95,139 | (6,819) | |||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 114 | (304) | |||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 10,261 | $ | (647,682) |
EXHIBIT INDEX | ||||||||||||||
Exhibit No. | Description | |||||||||||||
3.1 | Second Amended and Restated Certificate of Incorporation, dated April 28, 2021 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on May 4, 2021). | |||||||||||||
3.2 | Amended and Restated Bylaws, dated October 27, 2022 (incorporated by reference to Exhibit 3 to the Current Report on Form 8-K filed on October 31, 2022). | |||||||||||||
31.1* | ||||||||||||||
31.2* | ||||||||||||||
32.1** | ||||||||||||||
32.2** | ||||||||||||||
101.INS | Inline XBRL Instance Document | |||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
STEM, INC. | |||||||||||
By: | /s/ William Bush | ||||||||||
William Bush | |||||||||||
Chief Financial Officer | |||||||||||
(Principal Financial Officer) |
STEM, INC. | |||||||||||
Date: November 2, 2023 | By: | /s/ John Carrington | |||||||||
Name: | John Carrington | ||||||||||
Title: | Chief Executive Officer |
STEM, INC. | |||||||||||
Date: November 2, 2023 | By: | /s/ William Bush | |||||||||
Name: | William Bush | ||||||||||
Title: | Chief Financial Officer | ||||||||||
STEM, INC. | |||||||||||
Date: November 2, 2023 | By: | /s/ John Carrington | |||||||||
Name: | John Carrington | ||||||||||
Title: | Chief Executive Officer |
STEM, INC. | |||||||||||
Date: November 2, 2023 | By: | /s/ William Bush | |||||||||
Name: | William Bush | ||||||||||
Title: | Chief Financial Officer | ||||||||||
(Principal Financial Officer) | |||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Accounts receivable, allowances | $ 5,328 | $ 3,879 |
Other current assets | 10,520 | 8,026 |
Other current liabilities | $ 12,689 | $ 5,412 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 155,883,088 | 154,540,197 |
Common stock, shares outstanding (in shares) | 155,883,088 | 154,540,197 |
Related Party | ||
Other current assets | $ 53 | $ 74 |
Other current liabilities | $ 40 | $ 687 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (77,072) | $ (34,275) | $ (102,728) | $ (88,781) |
Other comprehensive loss: | ||||
Unrealized gain (loss) on available-for-sale securities | 60 | (845) | 1,650 | (1,855) |
Foreign currency translation adjustment | 51 | (141) | 45 | (287) |
Total other comprehensive loss | (76,961) | (35,261) | (101,033) | (90,923) |
Less: Comprehensive income attributable to non-controlling interests | 0 | 4 | 0 | 0 |
Total comprehensive loss attributable to Stem | $ (76,961) | $ (35,265) | $ (101,033) | $ (90,923) |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Convertible Notes | ||
Payment of debt issuance costs | $ 7,601 | $ 0 |
BUSINESS |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS | BUSINESS Description of the Business Stem, Inc., together with its consolidated subsidiaries (“Stem,” the “Company,” “we,” “us,” or “our”), is a global leader in artificial intelligence (“AI”) -driven clean energy solutions and services. The Company maintains one of the world’s largest digitally connected, intelligent renewable energy networks, providing customers (i) with an energy storage system, sourced from leading, global battery original equipment manufacturers (“OEMs”), that the Company delivers through its partners, including developers, distributors and engineering, procurement and construction (“EPC”) firms, (ii) edge hardware to aid in the collection of site data and the real-time operation and control of the site plus other optional equipment, (iii) ongoing software platform and professional services to operate standalone energy storage, integrated solar plus storage systems, and solar asset performance monitoring and control through its Athena® clean energy optimization platform (“Athena”), and (iv) solar asset performance monitoring and control, through Athena’s PowerTrack application. In addition, in all the markets where the Company helps manage its customers’ clean energy assets, the Company has agreements to use the Athena platform to participate in such markets and to share the revenue from such market participation. The Company delivers its battery hardware and software-enabled services to its customers through its Athena platform. The Company’s hardware and recurring software-enabled services mitigate customer energy costs through services such as time-of-use and demand charge management optimization and by aggregating the dispatch of energy through a network of virtual power plants. The resulting network created by the Company’s growing customer base increases grid resilience and reliability through the real-time processing of market-based demand signals, energy prices and other factors in connection with the deployment of renewable energy resources to such customers. Additionally, the Company’s clean energy solutions support renewable energy generation by alleviating grid intermittency issues, thereby reducing customer dependence on traditional, fossil fuel resources. The Company’s Athena PowerTrack application provides a vertically integrated solution that incorporates on-site power monitoring equipment that aggregates and communicates data to enable remote control of solar generation assets. PowerTrack provides direct access to individual site performance to measure and benchmark expected energy production, maximizing asset value for our customers. From time to time, the Company, through an indirect wholly-owned development subsidiary (“DevCo”) will enter into strategic joint ventures (each a “DevCo JV”) with qualified third parties for the development of select renewable energy projects (“DevCo Projects”). In this structure, DevCo forms a new DevCo JV entity as the majority owner, with the developer as the minority owner. The purpose of the DevCo JV is to develop and sell DevCo Projects and secure Company hardware and software services for those projects. In DevCo Projects, the Company makes development capital contributions to fund project development, and recovers those capital contributions plus a fee when the developer takes ownership of the project. Given long times to secure hardware, the Company will in some cases elect to make cash advances to hardware suppliers to accelerate project construction timelines given long lead times to secure hardware. This business model is intended to allow the Company to advance development capital to key partners in strategic markets and secure hardware upfront, in order to generate higher-margin software and services and other revenue via exclusive long-term services contracts under the DevCo Projects. On February 1, 2022, the Company acquired all of the issued and outstanding capital stock of Also Energy Holdings, Inc. (“AlsoEnergy”), which has been consolidated since the date of acquisition. Through AlsoEnergy, the Company provides end-to-end turnkey solutions that monitor and manage renewable energy systems through its PowerTrack software. PowerTrack includes data acquisitions and monitoring, performance modeling, agency reporting, internal reports, work order tickets, and supervisory control and data acquisition (“SCADA”) controls. AlsoEnergy has deployed systems at various international locations, but its largest concentration of customers is in the United States, Germany and Canada. See Note 6 — Business Combinations. The Company operated as Rollins Road Acquisition Company (f/k/a Stem, Inc.) (“Legacy Stem”) prior to the Merger with Star Peak Transition Corp. (“STPK”), an entity that was then listed on the New York Stock Exchange under the trade symbol “STPK,” and STPK Merger Sub Corp., a Delaware corporation and wholly-owned subsidiary of STPK (“Merger Sub”), providing for, among other things, and subject to the conditions therein, the combination of the Company and STPK pursuant to the merger of Merger Sub with and into the Company, with the Company continuing as the surviving entity (the “Merger”). Stem, Inc. was incorporated on March 16, 2009 in the State of Delaware and is headquartered in San Francisco, California. Liquidity As of September 30, 2023, the Company had cash and cash equivalents of $97.1 million, short-term investments of $28.3 million, an accumulated deficit of $734.8 million and net working capital of $241.3 million. During the nine months ended September 30, 2023, the Company incurred a net loss of $102.7 million and had negative cash flows from operating activities of $205.2 million. Further, the Company received net proceeds of $232.4 million from the issuance of the Company’s 4.25% Green Convertible Senior Notes due 2030 (the “2030 Convertible Notes”) (as described in Note 10 — Convertible Notes) of which $99.8 million was paid to reduce the principal balance by $163.0 million of the Company’s 0.5% Green Convertible Senior Notes due 2028 (the “2028 Convertible Notes”). The Company believes that its cash position is sufficient to meet capital and liquidity requirements for at least the next 12 months after the date that the financial statements are available to be issued. The Company’s business prospects are subject to risks, expenses, and uncertainties frequently encountered by companies in the early stages of commercial operations. The attainment of profitable operations is dependent upon future events, including securing new customers and maintaining current ones, securing and maintaining adequate supplier relationships, building the Company’s customer base, successfully executing its business and marketing strategy, obtaining adequate financing to complete the Company’s development activities, and hiring and retaining appropriate personnel. Failure to generate sufficient revenues, achieve planned gross margins and operating profitability, control operating costs, or secure additional funding may require the Company to modify, delay or abandon some of its planned future expansion or development, to seek additional equity or debt financing, or to otherwise enact operating cost reductions available to management, which could have a material adverse effect on the Company’s business, operating results and financial condition. Supply Chain Constraints and Risk The Company has in the past faced shortages and shipping delays affecting the supply of inverters, enclosures, battery modules and associated component parts for inverters and battery energy storage systems available for purchase. These shortages and delays were due in part to the evolving macroeconomic, geopolitical and business environment, including the effects of global inflationary pressures and interest rates, general economic slowdown or a recession, changes in monetary policy, instability in financial institutions, the prospect of a shutdown of the U.S. federal government, potential import tariffs, geopolitical pressures, including the Russia-Ukraine armed conflict, rising tensions between China and the United States and unknown effects of current and future trade regulations. The Company cannot predict the full effects the macroeconomic, geopolitical and business environment will continue to have on our business, cash flows, liquidity, financial condition and results of operations. In addition, the COVID-19 pandemic caused, and any new outbreaks or resurgence of COVID-19 and its variants, or outbreaks of other infectious diseases, could again cause, a significant reduction in global economic activity, significantly weakening demand for our products and services.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim reporting and with the instructions to Form 10-Q and Article 10 of Regulation S-X, assuming the Company will continue as a going concern. Accordingly, the condensed consolidated balance sheet at December 31, 2022 has been derived from the audited financial statements at that date, but certain notes or other information that are normally required by GAAP have been omitted if they substantially duplicate the disclosures contained in the Company’s annual audited consolidated financial statements. In the opinion of Stem management, all normal and recurring adjustments considered necessary for a fair statement of the results for the interim period presented have been included in the accompanying unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2022. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or for any other future interim period or year. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and consolidated variable interest entities (“VIEs”). The Company presents non-controlling interests within the equity section of its condensed consolidated balance sheets, and the amount of consolidated net loss that is attributable to Stem and the non-controlling interest in its condensed consolidated statements of operations. All intercompany balances and transactions have been eliminated in consolidation. Variable Interest Entities The Company forms special purpose entities (“SPEs”), some of which are VIEs, with its investors in the ordinary course of business to facilitate the funding and monetization of its energy storage systems. A legal entity is considered a VIE if it has either a total equity investment that is insufficient to finance its operations without additional subordinated financial support or whose equity holders lack the characteristics of a controlling financial interest. The Company’s variable interests arise from contractual, ownership, or other monetary interests in the entity. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. The Company consolidates a VIE if it is deemed to be the primary beneficiary. The Company determines it is the primary beneficiary if it has the power to direct the activities that most significantly impact the VIEs’ economic performance and has the obligation to absorb losses or has the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company evaluates its relationships with its VIEs on an ongoing basis to determine whether it is the primary beneficiary. Beginning in January 2022, the Company formed DevCo JVs with the purpose of originating potential battery storage facility projects in specific locations and conducting early-stage planning and development activities. The Company determined that the DevCo JVs are VIEs, as they lack sufficient equity to finance their activities without additional financial support. The Company determined that it has both (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (2) the obligation to absorb losses or receive benefits from the VIE that could potentially be significant. Accordingly, the Company has determined that it is the primary beneficiary of the DevCo JVs, and as a result, the DevCo JVs’ operating results, assets and liabilities are consolidated by the Company, with third party minority owners’ share presented as noncontrolling interest. The Company applied the hypothetical liquidation at book value method in allocating recorded net income (loss) to each owner based on the change in the reporting period, of the amount of net assets of the entity to which each owner would be entitled to under the governing contracts in a liquidation scenario. The following table summarizes the carrying values of the assets and liabilities of the DevCo JVs that are consolidated by the Company as of September 30, 2023 and December 31, 2022 (in thousands):
For the nine months ended September 30, 2023 and 2022, the Company contributed approximately $0.1 million and $6.6 million in capital investments for hardware purchases, respectively. The net income from the DevCo JVs was $1.2 million and $1.4 million during the three and nine months ended September 30, 2023, respectively, and immaterial during the three and nine months ended September 30, 2022. Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable. Actual results could differ from those estimates and such differences could be material to the financial position and results of operations. Significant estimates and assumptions reflected in these unaudited condensed consolidated financial statements include, but are not limited to, depreciable life of energy storage systems; estimates of transaction price with variable consideration; the amortization of acquired intangibles; the amortization of financing obligations; deferred commissions and contract fulfillment costs; the valuation of energy storage systems, internally developed software, and asset retirement obligations; and the fair value of equity instruments, equity-based instruments, derivative liability, accruals related to sales tax liabilities and net assets acquired in a business combination. Segment Information Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the CODM. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, management has determined that the Company operates as one operating segment that is focused exclusively on innovative technology services that transform the way energy is distributed and consumed. The operations acquired as part of the acquisition of AlsoEnergy have been included in the Company’s operating segment. Net assets outside of the U.S. were less than 10% of total net assets as of September 30, 2023 and December 31, 2022. Concentration of Credit Risk and Other Uncertainties Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. The Company’s cash balances are primarily invested in money market funds or on deposit at high credit quality financial institutions in the U.S. The Company’s cash and cash equivalents are held at financial institutions where account balances may at times exceed federally insured limits. Management believes the Company is not exposed to significant credit risk due to the financial strength of the depository institution in which the cash is held. The Company has no financial instruments with off-balance sheet risk of loss. At times, the Company may be subject to a concentration of credit risk in relation to certain customers due to the purchase of large energy storage systems made by such customers. The Company routinely assesses the creditworthiness of its customers. The Company has not experienced material losses related to receivables from individual customers, or groups of customers during the nine months ended September 30, 2023 and 2022. The Company does not require collateral. Due to these factors, no additional credit risk beyond amounts provided for credit losses is believed by management to be probable in the Company’s accounts receivable. Significant Customers A significant customer represents 10% or more of the Company’s total revenue or accounts receivable, net balance at each reporting date. For each significant customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable are as follows:
*Total less than 10% for the period. There are inherent risks whenever a large percentage of total revenue is concentrated in a limited number of customers. Should a significant customer terminate or fail to renew its contracts with us, in whole or in part, for any reason, or experience significant financial or operating difficulties, it could have a material adverse effect on our financial condition and results of operations. In general, a customer that makes up a significant portion of revenues in one period, may not make up a significant portion in subsequent periods. Fair Value of Financial Instruments Assets and liabilities recorded at fair value in the unaudited condensed consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). Hierarchical levels which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows: Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Level 3 — Unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. The Company’s assessment of the significance of a specific input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. Financial assets and liabilities held by the Company measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 include cash and cash equivalents, short-term investments, derivative liability, and convertible notes.
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REVENUE |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE | REVENUE Disaggregation of Revenue The following table provides information on the disaggregation of revenue as recorded in the condensed consolidated statements of operations (in thousands):
The following table summarizes reportable revenue by geographic regions determined based on the location of the customers (in thousands):
Remaining Performance Obligations Remaining performance obligations represent contracted revenue that has not been recognized, which include contract liabilities (deferred revenue) and amounts that will be billed and recognized as revenue in future periods. As of September 30, 2023 and September 30, 2022, the Company had $545.3 million and $365.8 million of remaining performance obligations, respectively, and the approximate percentages expected to be recognized as revenue in the future are as follows (in thousands, except percentages):
Contract Balances Deferred revenue primarily includes cash received in advance of revenue recognition related to energy optimization services and incentives. The following table presents the changes in the deferred revenue balance during the nine months ended September 30, 2023 and September 30, 2022 (in thousands):
Parent Company Guarantees In certain customer contracts, the Company previously agreed to provide a guarantee that the value of purchased hardware will not decline for a certain period of time. Under this guarantee, if these customers were unable to install or designate the hardware to a specified project within such period of time, the Company would be required to assist the customer in re-marketing the hardware for resale by the customer. The guarantee provided that, in such cases, if the customer resold the hardware for less than the amount initially sold to the customer, the Company would be required to compensate the customer for any shortfall in fair value for the hardware from the initial contract price. The Company accounts for such contractual terms and guarantees as variable consideration at each measurement date. The Company updates its estimate of variable consideration, including changes in estimates related to such guarantees, each quarter for facts or circumstances that have changed from the time of the initial estimate. As a result, the Company recorded a revenue reduction during the third quarter of fiscal year 2023 of $32.7 million in hardware revenue relating to hardware deliveries prior to third quarter 2023. During the three months ended September 30, 2023, variable consideration relating to current quarter hardware deliveries was constrained by $4.7 million.
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SHORT-TERM INVESTMENTS |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHORT-TERM INVESTMENTS | SHORT-TERM INVESTMENTS The following tables summarize the estimated fair value of the Company’s short-term investments and the gross unrealized holding gains and losses as of September 30, 2023 and December 31, 2022 (in thousands):
The following table presents the contractual maturities of the Company’s short-term investments as of September 30, 2023 (in thousands):
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTSFair value accounting is applied for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. At September 30, 2023 and December 31, 2022, the carrying amount of accounts receivable, other current assets, accounts payable, and accrued and other current liabilities approximated their estimated fair value due to their relatively short maturities. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table provides the financial instruments measured at fair value (in thousands):
The Company’s money market funds are classified as Level 1 because they are valued using quoted market prices. The Company’s short-term investments consist of available-for-sale securities and are classified as Level 2 because their value is based on valuations using significant inputs derived from or corroborated by observable market data. The Company’s other current liabilities includes a derivative liability that is attributable to a derivative feature within a revenue contract, whereby final settlement is indexed to the price per ton of lithium carbonate. The balance will be valued using a third party forecast for lithium carbonate. As the derivative instrument is not traded on an exchange they are classified within Level 3 of the fair value hierarchy. Fair Value of Convertible Promissory NotesThe convertible notes are recorded at face value less unamortized debt issuance costs (see Note 10 — Convertible Notes for additional details) on the condensed consolidated balance sheets as of September 30, 2023. As of September 30, 2023 and December 31, 2022, the estimated fair value of the 2028 Convertible Notes was $177.9 million and $293.1 million, respectively, based on Level 2 quoted bid prices of the convertible notes in an over-the-counter market on the last trading date of the reporting period. As of September 30, 2023, the estimated fair value of the 2030 Convertible Notes was $192.1 million, based on Level 2 quoted bid prices of the convertible notes in an over-the-counter market on the last trading date of the reporting period.
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BUSINESS COMBINATIONS |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS AlsoEnergy Acquisition On February 1, 2022, Stem, Inc. acquired 100% of the outstanding shares of AlsoEnergy. AlsoEnergy provides end-to-end turnkey solutions that monitor and manage renewable energy systems. The total consideration to acquire AlsoEnergy was $652.0 million, comprised of $543.1 million in cash, net of a working capital adjustment for an escrow recovery, and $108.9 million in the form of 8,621,006 shares of the Company’s common stock. The Company incurred $6.1 million of transaction costs related to the acquisition of AlsoEnergy, which were recorded in general and administrative expense in the nine months ended September 30, 2022. Unaudited Pro Forma Financial Information The following unaudited pro forma financial information summarizes the combined results of operations for the Company and AlsoEnergy, as if the acquisition had occurred on January 1, 2022. The pro forma financial information is as follows (in thousands):
The pro forma financial information for the periods presented above has been calculated after adjusting the results of AlsoEnergy to reflect the business combination accounting effects resulting from this acquisition, including the elimination of transaction costs incurred by the Company, amortization expense from acquired intangible assets, and settlement of stock option awards. The historical consolidated financial statements have been adjusted in the pro forma combined financial statements to give effect to pro forma events that are directly attributable to the business combination. The pro forma financial information is for informational purposes only, and is not indicative of either future results of operations, or results that may have been achieved had the acquisition been consummated as of the beginning of 2022.
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GOODWILL AND INTANGIBLE ASSETS, NET |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET Goodwill Goodwill consists of the following (in thousands):
Intangible Assets, Net Intangible assets, net, consists of the following (in thousands):
Amortization expense for intangible assets was $5.2 million and $6.5 million for the three months ended September 30, 2023 and 2022, respectively, and $18.5 million and $16.9 million for the nine months ended September 30, 2023 and 2022, respectively.
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ENERGY STORAGE SYSTEMS, NET |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ENERGY STORAGE SYSTEMS, NET | ENERGY STORAGE SYSTEMS, NET Energy Storage Systems, Net Energy storage systems, net, consists of the following (in thousands):
Depreciation expense for energy storage systems was approximately $3.6 million and $3.8 million for the three months ended September 30, 2023 and 2022, respectively, and approximately $10.8 million and $11.2 million for the nine months ended September 30, 2023 and 2022, respectively. Depreciation expense is recognized in cost of services and other revenue. Impairment expense for energy storage systems was approximately $0.3 million and $0.4 million for the three months ended September 30, 2023 and 2022, respectively, and approximately $2.3 million and $1.3 million for the nine months ended September 30, 2023 and 2022, respectively. Impairment expense is recognized in cost of services and other revenue.
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTES PAYABLE | NOTES PAYABLE 2021 Credit Agreement In January 2021, a wholly-owned Canadian subsidiary of the Company entered into a credit agreement to provide a total of $2.7 million towards the financing of certain energy storage systems. The credit agreement was structured on a non-recourse basis and the systems were operated by the Company. The credit agreement had a stated interest of 5.45% and a maturity date of June 2031. The Company received an advance under the credit agreement of $1.8 million in January 2021. The repayment of advances received under the credit agreement was determined by the lender based on the proceeds generated by the Company through the operation of the underlying energy storage systems. On April 6, 2023, the Company repaid the remaining outstanding balance under the 2021 Credit Agreement with a portion of the net proceeds from the issuance of the 2030 Convertible Notes (as described in Note 10 — Convertible Notes). Upon prepayment of this facility, the Company incurred a $0.3 million loss on extinguishment of debt, which is recorded in the Company’s statement of operations. The facility was terminated after the repayment in April 2023.CONVERTIBLE NOTES2028 Convertible Notes and 2028 Capped Call Options 2028 Convertible Notes On November 22, 2021, the Company issued $460.0 million aggregate principal amount of its 2028 Convertible Notes in a private placement offering to qualified institutional buyers (the “2021 Initial Purchasers”) pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2028 Convertible Notes are senior, unsecured obligations of the Company and bear interest at a rate of 0.5% per year, payable in cash semi-annually in arrears in June and December of each year, beginning in June 2022. The notes will mature on December 1, 2028, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. Upon conversion, the Company may choose to pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock. The Notes are redeemable for cash at the Company’s option at any time given certain conditions (as discussed below), at an initial conversion rate of 34.1965 shares of common stock per $1,000 principal amount of 2028 Convertible Notes, which is equivalent to an initial conversion price of approximately $29.24 (the “2028 Conversion Price”) per share of the Company’s common stock. The conversion rate is subject to customary adjustments for certain events as described in the Indenture. The Company may redeem for cash all or any portion of the 2028 Convertible Notes, at the Company’s option, on or after December 5, 2025 if the last reported sale price of the Company’s common stock has been at least 130% of the 2028 Conversion Price then in effect for at least 20 trading days at a redemption price equal to 100% of the principal amount of the 2028 Convertible Notes to be redeemed, plus accrued and unpaid interest. The Company’s net proceeds from this offering were approximately $445.7 million, after deducting the 2021 Initial Purchasers’ discounts and debt issuance costs. To minimize potential dilution to the Company’s common stockholders upon conversion of the 2028 Convertible Notes, the Company entered into separate capped call transactions (the “2028 Capped Calls”) as described below. In connection with the issuance of the 2030 Convertible Notes during the second quarter of 2023, the Company used approximately $99.8 million of the net proceeds to purchase and surrender for cancellation approximately $163.0 million aggregate principal amount of the Company’s 2028 Convertible Notes, which resulted in a $59.4 million gain on debt extinguishment. See 2030 Convertible Notes below for further details of the 2030 Convertible Notes. Upon adoption of ASU 2020-06, the Company allocated all of the debt discount to long-term debt. The debt discount is amortized to interest expense using the effective interest method, computed to be 0.9%, over the life of the 2028 Convertible Notes or approximately its seven-year term. The outstanding 2028 Convertible Notes balances as of September 30, 2023 and December 31, 2022 are summarized in the following table (in thousands):
The following table presents total interest expense recognized related to the 2028 Convertible Notes during the three and nine months ended September 30, 2023 and 2022 (in thousands):
2028 Capped Call Options On November 17, 2021, in connection with the pricing of the 2028 Convertible Notes, and on November 19, 2021, in connection with the exercise in full by the 2021 Initial Purchasers of their option to purchase additional Notes, the Company entered into the 2028 Capped Calls with certain counterparties. The Company used $66.7 million of the net proceeds to pay the cost of the 2028 Capped Calls. The 2028 Capped Calls have an initial strike price of $29.2428 per share, which corresponds to the initial conversion price of the 2028 Convertible Notes and is subject to anti-dilution adjustments. The 2028 Capped Calls have a cap price of $49.6575 per share, subject to certain adjustments. The 2028 Capped Calls are considered separate transactions entered into by and between the Company and the 2028 Capped Calls counterparties, and are not part of the terms of the 2028 Convertible Notes. The Company recorded a reduction to additional paid-in capital of $66.7 million during the year ended December 31, 2021 related to the premium payments for the 2028 Capped Calls. These instruments meet the conditions outlined in FASB ASU 2022-01 Topic 815, Derivatives and Hedging (“ASC 815”) to be classified in stockholders’ equity and are not subsequently remeasured as long as the conditions for equity classification continue to be met. 2030 Convertible Notes and 2030 Capped Call Options 2030 Convertible Notes On April 3, 2023, the Company issued $240.0 million aggregate principal amount of its 2030 Convertible Notes in a private placement offering to qualified institutional buyers (the “2023 Initial Purchasers”) pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2030 Convertible Notes are senior, unsecured obligations of the Company and bear interest at a rate of 4.25% per year, payable in cash semi-annually in arrears in April and October of each year, beginning on October 1, 2023. The notes will mature on April 1, 2030, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. Upon conversion, the Company may choose to pay or deliver cash, shares of common stock or a combination of cash and shares of common stock. The Notes are redeemable for cash at the Company’s option at any time given certain conditions (as discussed below), at an initial conversion rate of 140.3066 shares of common stock per $1,000 principal amount of the 2030 Convertible Notes, which is equivalent to an initial conversion price of approximately $7.1272 (the “2030 Conversion Price”) per share of the Company’s common stock. The conversion rate is subject to customary adjustments for certain events as described in the related Indenture. The 2030 Convertible Notes will be redeemable, in whole or in part, at the Company’s option, on or after April 5, 2027 if the last reported sale price of the Company’s common stock has been at least 130% of the 2030 Conversion Price then in effect for at least 20 trading days at a redemption price equal to 100% of the principal amount of the 2030 Convertible Notes to be redeemed, plus accrued and unpaid interest. The Company’s net proceeds from this offering were approximately $232.4 million, net of $7.6 million in debt issuance costs primarily consisting of underwriters, advisory, legal, and accounting fees. The Company used approximately $99.8 million of the net proceeds to purchase and surrender for cancellation approximately $163.0 million aggregate principal amount of the Company’s 2028 Convertible Notes. See 2028 Convertible Notes above for further details on the impacts of the debt extinguishment. The outstanding 2030 Convertible Notes balances as of September 30, 2023 are summarized in the following table (in thousands):
The debt discount and debt issuance costs are amortized to interest expense using the effective interest method, computed to be 4.70%, over the life of the 2030 Convertible Notes or its approximately seven-year term. The following table presents total interest expense recognized related to the 2030 Convertible Notes during the three months ended September 30, 2023 (in thousands):
2030 Capped Call Options On March 29, 2023 and March 31, 2023, in connection with the pricing of the 2030 Convertible Notes, and on April 3, 2023, in connection with the exercise in full by the 2023 Initial Purchasers of their option to purchase additional Notes, the Company entered into Capped Calls (the “2030 Capped Calls”) with certain counterparties. The Company used $27.8 million of the net proceeds from the 2030 Convertible Notes to pay the cost of the 2030 Capped Calls. The 2030 Capped Calls have an initial strike price of $7.1272 per share, which corresponds to the initial conversion price of the 2030 Convertible Notes and is subject to anti-dilution adjustments. The 2030 Capped Calls have a cap price of $11.1800 per share, subject to certain adjustments. The 2030 Capped Calls are considered separate transactions entered into by and between the Company and the 2030 Capped Calls counterparties, and are not part of the terms of the 2030 Convertible Notes. The Company recorded a reduction to additional paid-in capital of $27.8 million during the second quarter of 2023 related to the premium payments for the 2030 Capped Calls. These instruments meet the conditions outlined in ASC 815 to be classified in stockholders’ equity and are not subsequently remeasured as long as the conditions for equity classification continue to be met.
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONVERTIBLE NOTES | NOTES PAYABLE 2021 Credit Agreement In January 2021, a wholly-owned Canadian subsidiary of the Company entered into a credit agreement to provide a total of $2.7 million towards the financing of certain energy storage systems. The credit agreement was structured on a non-recourse basis and the systems were operated by the Company. The credit agreement had a stated interest of 5.45% and a maturity date of June 2031. The Company received an advance under the credit agreement of $1.8 million in January 2021. The repayment of advances received under the credit agreement was determined by the lender based on the proceeds generated by the Company through the operation of the underlying energy storage systems. On April 6, 2023, the Company repaid the remaining outstanding balance under the 2021 Credit Agreement with a portion of the net proceeds from the issuance of the 2030 Convertible Notes (as described in Note 10 — Convertible Notes). Upon prepayment of this facility, the Company incurred a $0.3 million loss on extinguishment of debt, which is recorded in the Company’s statement of operations. The facility was terminated after the repayment in April 2023.CONVERTIBLE NOTES2028 Convertible Notes and 2028 Capped Call Options 2028 Convertible Notes On November 22, 2021, the Company issued $460.0 million aggregate principal amount of its 2028 Convertible Notes in a private placement offering to qualified institutional buyers (the “2021 Initial Purchasers”) pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2028 Convertible Notes are senior, unsecured obligations of the Company and bear interest at a rate of 0.5% per year, payable in cash semi-annually in arrears in June and December of each year, beginning in June 2022. The notes will mature on December 1, 2028, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. Upon conversion, the Company may choose to pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock. The Notes are redeemable for cash at the Company’s option at any time given certain conditions (as discussed below), at an initial conversion rate of 34.1965 shares of common stock per $1,000 principal amount of 2028 Convertible Notes, which is equivalent to an initial conversion price of approximately $29.24 (the “2028 Conversion Price”) per share of the Company’s common stock. The conversion rate is subject to customary adjustments for certain events as described in the Indenture. The Company may redeem for cash all or any portion of the 2028 Convertible Notes, at the Company’s option, on or after December 5, 2025 if the last reported sale price of the Company’s common stock has been at least 130% of the 2028 Conversion Price then in effect for at least 20 trading days at a redemption price equal to 100% of the principal amount of the 2028 Convertible Notes to be redeemed, plus accrued and unpaid interest. The Company’s net proceeds from this offering were approximately $445.7 million, after deducting the 2021 Initial Purchasers’ discounts and debt issuance costs. To minimize potential dilution to the Company’s common stockholders upon conversion of the 2028 Convertible Notes, the Company entered into separate capped call transactions (the “2028 Capped Calls”) as described below. In connection with the issuance of the 2030 Convertible Notes during the second quarter of 2023, the Company used approximately $99.8 million of the net proceeds to purchase and surrender for cancellation approximately $163.0 million aggregate principal amount of the Company’s 2028 Convertible Notes, which resulted in a $59.4 million gain on debt extinguishment. See 2030 Convertible Notes below for further details of the 2030 Convertible Notes. Upon adoption of ASU 2020-06, the Company allocated all of the debt discount to long-term debt. The debt discount is amortized to interest expense using the effective interest method, computed to be 0.9%, over the life of the 2028 Convertible Notes or approximately its seven-year term. The outstanding 2028 Convertible Notes balances as of September 30, 2023 and December 31, 2022 are summarized in the following table (in thousands):
The following table presents total interest expense recognized related to the 2028 Convertible Notes during the three and nine months ended September 30, 2023 and 2022 (in thousands):
2028 Capped Call Options On November 17, 2021, in connection with the pricing of the 2028 Convertible Notes, and on November 19, 2021, in connection with the exercise in full by the 2021 Initial Purchasers of their option to purchase additional Notes, the Company entered into the 2028 Capped Calls with certain counterparties. The Company used $66.7 million of the net proceeds to pay the cost of the 2028 Capped Calls. The 2028 Capped Calls have an initial strike price of $29.2428 per share, which corresponds to the initial conversion price of the 2028 Convertible Notes and is subject to anti-dilution adjustments. The 2028 Capped Calls have a cap price of $49.6575 per share, subject to certain adjustments. The 2028 Capped Calls are considered separate transactions entered into by and between the Company and the 2028 Capped Calls counterparties, and are not part of the terms of the 2028 Convertible Notes. The Company recorded a reduction to additional paid-in capital of $66.7 million during the year ended December 31, 2021 related to the premium payments for the 2028 Capped Calls. These instruments meet the conditions outlined in FASB ASU 2022-01 Topic 815, Derivatives and Hedging (“ASC 815”) to be classified in stockholders’ equity and are not subsequently remeasured as long as the conditions for equity classification continue to be met. 2030 Convertible Notes and 2030 Capped Call Options 2030 Convertible Notes On April 3, 2023, the Company issued $240.0 million aggregate principal amount of its 2030 Convertible Notes in a private placement offering to qualified institutional buyers (the “2023 Initial Purchasers”) pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2030 Convertible Notes are senior, unsecured obligations of the Company and bear interest at a rate of 4.25% per year, payable in cash semi-annually in arrears in April and October of each year, beginning on October 1, 2023. The notes will mature on April 1, 2030, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. Upon conversion, the Company may choose to pay or deliver cash, shares of common stock or a combination of cash and shares of common stock. The Notes are redeemable for cash at the Company’s option at any time given certain conditions (as discussed below), at an initial conversion rate of 140.3066 shares of common stock per $1,000 principal amount of the 2030 Convertible Notes, which is equivalent to an initial conversion price of approximately $7.1272 (the “2030 Conversion Price”) per share of the Company’s common stock. The conversion rate is subject to customary adjustments for certain events as described in the related Indenture. The 2030 Convertible Notes will be redeemable, in whole or in part, at the Company’s option, on or after April 5, 2027 if the last reported sale price of the Company’s common stock has been at least 130% of the 2030 Conversion Price then in effect for at least 20 trading days at a redemption price equal to 100% of the principal amount of the 2030 Convertible Notes to be redeemed, plus accrued and unpaid interest. The Company’s net proceeds from this offering were approximately $232.4 million, net of $7.6 million in debt issuance costs primarily consisting of underwriters, advisory, legal, and accounting fees. The Company used approximately $99.8 million of the net proceeds to purchase and surrender for cancellation approximately $163.0 million aggregate principal amount of the Company’s 2028 Convertible Notes. See 2028 Convertible Notes above for further details on the impacts of the debt extinguishment. The outstanding 2030 Convertible Notes balances as of September 30, 2023 are summarized in the following table (in thousands):
The debt discount and debt issuance costs are amortized to interest expense using the effective interest method, computed to be 4.70%, over the life of the 2030 Convertible Notes or its approximately seven-year term. The following table presents total interest expense recognized related to the 2030 Convertible Notes during the three months ended September 30, 2023 (in thousands):
2030 Capped Call Options On March 29, 2023 and March 31, 2023, in connection with the pricing of the 2030 Convertible Notes, and on April 3, 2023, in connection with the exercise in full by the 2023 Initial Purchasers of their option to purchase additional Notes, the Company entered into Capped Calls (the “2030 Capped Calls”) with certain counterparties. The Company used $27.8 million of the net proceeds from the 2030 Convertible Notes to pay the cost of the 2030 Capped Calls. The 2030 Capped Calls have an initial strike price of $7.1272 per share, which corresponds to the initial conversion price of the 2030 Convertible Notes and is subject to anti-dilution adjustments. The 2030 Capped Calls have a cap price of $11.1800 per share, subject to certain adjustments. The 2030 Capped Calls are considered separate transactions entered into by and between the Company and the 2030 Capped Calls counterparties, and are not part of the terms of the 2030 Convertible Notes. The Company recorded a reduction to additional paid-in capital of $27.8 million during the second quarter of 2023 related to the premium payments for the 2030 Capped Calls. These instruments meet the conditions outlined in ASC 815 to be classified in stockholders’ equity and are not subsequently remeasured as long as the conditions for equity classification continue to be met.
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WARRANTS |
9 Months Ended |
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Sep. 30, 2023 | |
Equity [Abstract] | |
WARRANTS | WARRANTSLegacy Stem WarrantsPrior to the Merger, the Company had issued warrants to purchase shares of Legacy Stem’s preferred stock in conjunction with various debt financings. The Company has also issued warrants to purchase shares of Legacy Stem’s common stock. Upon effectiveness of the Merger, the Company had 50,207,439 warrants outstanding, of which substantially all were converted into 2,759,970 shares of common stock of Stem. Upon conversion of the warrants, the existing warrant liabilities were remeasured to fair value resulting in a gain on remeasurement of $100.9 million and a total warrant liability of $60.6 million, which was then reclassified to additional paid-in-capital. At September 30, 2023, there were 2,533 Legacy Stem Warrants outstanding. These instruments are exercisable into the Company’s common stock and are equity classified. |
STOCK-BASED COMPENSATION |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Equity Incentive Plans Under both the Stem, Inc. 2009 Equity Incentive Plan (the “2009 Plan”) and the Stem, Inc. 2021 Equity Incentive Plan (the “2021 Plan,” and together with the 2009 Plan, the “Plans”), the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance stock units (“PSUs”), and other awards that are settled in shares of the Company’s common stock. The Company does not intend to grant new awards under the 2009 Plan. All shares that remain available for future grants are under the 2021 Plan. Stock Options The following table summarizes the stock option activity for the period ended September 30, 2023:
As of September 30, 2023, the Company had approximately $17.3 million of remaining unrecognized stock-based compensation expense for stock options, which is expected to be recognized over a weighted average period of 1.5 years. Restricted Stock Units The following table summarizes the RSU activity for the period ended September 30, 2023:
(1) Includes certain restricted stock units with service and market-based vesting criteria. As of September 30, 2023, the Company had approximately $79.5 million of remaining unrecognized stock-based compensation expense for RSUs, which is expected to be recognized over a weighted average period of 1.9 years. Stock-Based Compensation The following table summarizes stock-based compensation expense recorded in each component of operating expenses in the Company’s condensed consolidated statements of operations and comprehensive loss (in thousands):
Research and development expenses of $1.2 million and $0.6 million corresponding to internal-use software, were capitalized during the three months ended September 30, 2023 and 2022, respectively. Research and development expenses of $3.1 million and $1.7 million, corresponding to internal-use software, were capitalized during the nine months ended September 30, 2023 and 2022, respectively. Awards under our stock bonus program issued through the 2021 Plan are accounted for as liability-classified awards, because the obligations are based predominantly on fixed monetary amount determined at a future date to be settled with a variable number of shares of our common stock. We recognized stock-based compensation expense related to such bonuses in the amount of $1.5 million during the three and nine months ended September 30, 2023
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NET LOSS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET LOSS PER SHARE | NET LOSS PER SHARE The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share amounts):
The following table shows total outstanding potentially dilutive shares excluded from the computation of diluted loss per share as their effect would have been anti-dilutive, as of September 30, 2023 and 2022:
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The following table reflects the Company’s (provision for) benefit from income taxes and the effective tax rates for the periods presented below (in thousands, except effective tax rate):
For the three months ended September 30, 2023, the Company recognized a benefit from income taxes of $46 thousand, representing an effective tax rate of 0.1%, which was lower than the statutory federal tax rate because the Company maintains a valuation allowance on its U.S. deferred tax assets. For the nine months ended September 30, 2023, the Company recognized a provision for income taxes of $0.4 million, representing an effective tax rate of (0.3)%, which was lower than the statutory federal tax rate due to a $0.3 million tax benefit from an acquisition for a partial valuation allowance release on U.S. deferred tax assets due to the deferred tax liability established in purchase accounting on acquired intangibles during the nine months ended September 30, 2023. For the nine months ended September 30, 2022, the Company recognized a benefit from income taxes of $15.2 million, representing an effective tax rate of 14.6%, which was lower than the statutory federal tax rate due to a $15.1 million tax benefit from the acquisition of AlsoEnergy for a partial valuation allowance release on U.S. Deferred tax assets due to the deferred tax liability established in purchase accounting on the acquired intangibles.
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COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Contingencies The Company is party to various legal proceedings from time to time. A liability is accrued when a loss is both probable and can be reasonably estimated. Management believes that the probability of a material loss with respect to any currently pending legal proceeding is remote. However, litigation is inherently uncertain and it is not possible to predict the ultimate disposition of any of these proceedings. As of the date of this filing, the Company does not believe that there are any pending legal proceedings or other loss contingencies that will, either individually or in the aggregate, have a material adverse effect on the Company taken as a whole. Commitments On March 1, 2023, the Company recognized a $2.8 million operating lease liability and a corresponding operating lease right-of-use (“ROU”) asset, which are included in the condensed consolidated balance sheets as of September 30, 2023. The operating lease liability and operating lease ROU asset correspond to 41,811 square feet of leased office in Gurugram, India. As of the commencement date of the lease, the remaining lease term was 58 months. The lease agreement contemplates options to extend the non-cancelable lease term, which have been determined not reasonably certain to be exercised. Base rent is approximately $58,500 per month with escalating payments. Non-Income Related Taxes The Company is in the process of finalizing its sales tax liability analysis for states in which it has economic nexus. During the third quarter of 2023, the Company determined it was probable the Company would be subject to sales tax liabilities plus applicable interest and has estimated the probable exposure to be $5.6 million and accordingly, the Company accrued this amount with a corresponding charge to earnings as of September 30, 2023.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Pay vs Performance Disclosure | ||||
Net loss attributable to Stem | $ (77,072) | $ (34,279) | $ (102,728) | $ (88,781) |
Insider Trading Arrangements |
3 Months Ended |
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Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim reporting and with the instructions to Form 10-Q and Article 10 of Regulation S-X, assuming the Company will continue as a going concern. Accordingly, the condensed consolidated balance sheet at December 31, 2022 has been derived from the audited financial statements at that date, but certain notes or other information that are normally required by GAAP have been omitted if they substantially duplicate the disclosures contained in the Company’s annual audited consolidated financial statements. In the opinion of Stem management, all normal and recurring adjustments considered necessary for a fair statement of the results for the interim period presented have been included in the accompanying unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2022. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or for any other future interim period or year.
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Principles of Consolidation | Principles of ConsolidationThe unaudited condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and consolidated variable interest entities (“VIEs”). The Company presents non-controlling interests within the equity section of its condensed consolidated balance sheets, and the amount of consolidated net loss that is attributable to Stem and the non-controlling interest in its condensed consolidated statements of operations. All intercompany balances and transactions have been eliminated in consolidation. |
Variable Interest Entities | Variable Interest Entities The Company forms special purpose entities (“SPEs”), some of which are VIEs, with its investors in the ordinary course of business to facilitate the funding and monetization of its energy storage systems. A legal entity is considered a VIE if it has either a total equity investment that is insufficient to finance its operations without additional subordinated financial support or whose equity holders lack the characteristics of a controlling financial interest. The Company’s variable interests arise from contractual, ownership, or other monetary interests in the entity. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. The Company consolidates a VIE if it is deemed to be the primary beneficiary. The Company determines it is the primary beneficiary if it has the power to direct the activities that most significantly impact the VIEs’ economic performance and has the obligation to absorb losses or has the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company evaluates its relationships with its VIEs on an ongoing basis to determine whether it is the primary beneficiary. Beginning in January 2022, the Company formed DevCo JVs with the purpose of originating potential battery storage facility projects in specific locations and conducting early-stage planning and development activities. The Company determined that the DevCo JVs are VIEs, as they lack sufficient equity to finance their activities without additional financial support. The Company determined that it has both (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (2) the obligation to absorb losses or receive benefits from the VIE that could potentially be significant. Accordingly, the Company has determined that it is the primary beneficiary of the DevCo JVs, and as a result, the DevCo JVs’ operating results, assets and liabilities are consolidated by the Company, with third party minority owners’ share presented as noncontrolling interest. The Company applied the hypothetical liquidation at book value method in allocating recorded net income (loss) to each owner based on the change in the reporting period, of the amount of net assets of the entity to which each owner would be entitled to under the governing contracts in a liquidation scenario.
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Use of Estimates | Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable. Actual results could differ from those estimates and such differences could be material to the financial position and results of operations. Significant estimates and assumptions reflected in these unaudited condensed consolidated financial statements include, but are not limited to, depreciable life of energy storage systems; estimates of transaction price with variable consideration; the amortization of acquired intangibles; the amortization of financing obligations; deferred commissions and contract fulfillment costs; the valuation of energy storage systems, internally developed software, and asset retirement obligations; and the fair value of equity instruments, equity-based instruments, derivative liability, accruals related to sales tax liabilities and net assets acquired in a business combination.
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Segment Information | Segment InformationOperating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the CODM. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, management has determined that the Company operates as one operating segment that is focused exclusively on innovative technology services that transform the way energy is distributed and consumed. The operations acquired as part of the acquisition of AlsoEnergy have been included in the Company’s operating segment. |
Concentration of Credit Risk and Other Uncertainties | Concentration of Credit Risk and Other Uncertainties Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. The Company’s cash balances are primarily invested in money market funds or on deposit at high credit quality financial institutions in the U.S. The Company’s cash and cash equivalents are held at financial institutions where account balances may at times exceed federally insured limits. Management believes the Company is not exposed to significant credit risk due to the financial strength of the depository institution in which the cash is held. The Company has no financial instruments with off-balance sheet risk of loss. At times, the Company may be subject to a concentration of credit risk in relation to certain customers due to the purchase of large energy storage systems made by such customers. The Company routinely assesses the creditworthiness of its customers. The Company has not experienced material losses related to receivables from individual customers, or groups of customers during the nine months ended September 30, 2023 and 2022. The Company does not require collateral. Due to these factors, no additional credit risk beyond amounts provided for credit losses is believed by management to be probable in the Company’s accounts receivable.
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Significant Customers | Significant CustomersA significant customer represents 10% or more of the Company’s total revenue or accounts receivable, net balance at each reporting date. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Assets and liabilities recorded at fair value in the unaudited condensed consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). Hierarchical levels which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows: Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Level 3 — Unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. The Company’s assessment of the significance of a specific input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. Financial assets and liabilities held by the Company measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 include cash and cash equivalents, short-term investments, derivative liability, and convertible notes.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Variable Interest Entities | The following table summarizes the carrying values of the assets and liabilities of the DevCo JVs that are consolidated by the Company as of September 30, 2023 and December 31, 2022 (in thousands):
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Schedule of Significant Customers | For each significant customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable are as follows:
*Total less than 10% for the period.
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REVENUE (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenue | The following table provides information on the disaggregation of revenue as recorded in the condensed consolidated statements of operations (in thousands):
The following table summarizes reportable revenue by geographic regions determined based on the location of the customers (in thousands):
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Schedule of Remaining Performance Obligations | As of September 30, 2023 and September 30, 2022, the Company had $545.3 million and $365.8 million of remaining performance obligations, respectively, and the approximate percentages expected to be recognized as revenue in the future are as follows (in thousands, except percentages):
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Schedule of Contract Balances | The following table presents the changes in the deferred revenue balance during the nine months ended September 30, 2023 and September 30, 2022 (in thousands):
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SHORT-TERM INVESTMENTS (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Short-Term Investments | The following tables summarize the estimated fair value of the Company’s short-term investments and the gross unrealized holding gains and losses as of September 30, 2023 and December 31, 2022 (in thousands):
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Schedule of Contractual Maturities of Short-Term Investments | The following table presents the contractual maturities of the Company’s short-term investments as of September 30, 2023 (in thousands):
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FAIR VALUE MEASUREMENTS (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Instruments Measured at Fair Value | The following table provides the financial instruments measured at fair value (in thousands):
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BUSINESS COMBINATIONS (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unaudited Pro Forma Information | The pro forma financial information is as follows (in thousands):
|
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | Goodwill consists of the following (in thousands):
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Schedule of Intangible Assets | Intangible assets, net, consists of the following (in thousands):
|
ENERGY STORAGE SYSTEMS, NET (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Energy Storage Systems, Net | Energy storage systems, net, consists of the following (in thousands):
|
CONVERTIBLE NOTES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Convertible Debt | The outstanding 2028 Convertible Notes balances as of September 30, 2023 and December 31, 2022 are summarized in the following table (in thousands):
The following table presents total interest expense recognized related to the 2028 Convertible Notes during the three and nine months ended September 30, 2023 and 2022 (in thousands):
The outstanding 2030 Convertible Notes balances as of September 30, 2023 are summarized in the following table (in thousands):
The following table presents total interest expense recognized related to the 2030 Convertible Notes during the three months ended September 30, 2023 (in thousands):
|
STOCK-BASED COMPENSATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Activity Under the Plan | The following table summarizes the stock option activity for the period ended September 30, 2023:
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Schedule of Restricted Stock Activity | The following table summarizes the RSU activity for the period ended September 30, 2023:
(1) Includes certain restricted stock units with service and market-based vesting criteria.
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Schedule of Stock-based Compensation Expense | The following table summarizes stock-based compensation expense recorded in each component of operating expenses in the Company’s condensed consolidated statements of operations and comprehensive loss (in thousands):
|
NET LOSS PER SHARE (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share amounts):
|
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Schedule of Potentially Dilutive Shares | The following table shows total outstanding potentially dilutive shares excluded from the computation of diluted loss per share as their effect would have been anti-dilutive, as of September 30, 2023 and 2022:
|
INCOME TAXES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of (Provision for) Benefit from Income Taxes and Effective Tax Rates | The following table reflects the Company’s (provision for) benefit from income taxes and the effective tax rates for the periods presented below (in thousands, except effective tax rate):
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Variable Interest Entities (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
---|---|---|---|
Assets | |||
Cash and cash equivalents | $ 97,064 | $ 87,903 | $ 100,098 |
Other current assets | 10,520 | 8,026 | |
Other noncurrent assets | 77,132 | 65,339 | |
Total assets | 1,398,792 | 1,421,893 | |
Liabilities | |||
Other current liabilities | 12,689 | 5,412 | |
Total liabilities | 945,449 | 869,726 | |
Variable Interest Entity, Primary Beneficiary | |||
Assets | |||
Cash and cash equivalents | 2,482 | 6,686 | |
Other current assets | 5 | 38 | |
Other noncurrent assets | 5,877 | 3,208 | |
Total assets | 8,364 | 9,932 | |
Liabilities | |||
Accounts payable | 826 | 356 | |
Other current liabilities | 137 | 97 | |
Total liabilities | $ 963 | $ 453 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023
USD ($)
|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2023
USD ($)
segment
|
Sep. 30, 2022
USD ($)
|
|
Concentration Risk [Line Items] | ||||
Net loss attributable to Stem | $ (77,072) | $ (34,279) | $ (102,728) | $ (88,781) |
Number of operating segments | segment | 1 | |||
Variable Interest Entity, Primary Beneficiary | ||||
Concentration Risk [Line Items] | ||||
Contribution paid | $ 100 | 6,600 | ||
Net loss attributable to Stem | $ 1,200 | $ 0 | $ 1,400 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Significant Customers (Details) - Customer Concentration Risk |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Customer A | Accounts Receivable | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 54.00% | 54.00% | |||
Customer A | Revenue | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 58.00% | 18.00% | 52.00% | ||
Customer B | Accounts Receivable | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 10.00% | 16.00% | |||
Customer C | Accounts Receivable | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 14.00% | 11.00% | |||
Customer D | Revenue | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 12.00% | ||||
Customer E | Revenue | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 89.00% | 41.00% |
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 133,740 | $ 99,501 | $ 294,091 | $ 207,536 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 129,800 | 97,815 | 280,010 | 201,475 |
Rest of the world | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,940 | 1,686 | 14,081 | 6,061 |
Hardware revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 117,143 | 85,809 | 246,461 | 171,358 |
Services and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 16,597 | $ 13,692 | $ 47,630 | $ 36,178 |
REVENUE - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Capitalized Contract Cost [Line Items] | ||
Total Remaining Performance Obligations | $ 545,333 | $ 365,798 |
Revenue reduction | (32,700) | |
Hardware revenue | ||
Capitalized Contract Cost [Line Items] | ||
Total Remaining Performance Obligations | 213,813 | $ 101,603 |
Revenue reduction | $ (4,700) |
REVENUE - Contract Balances (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Contract With Customer, Liability [Roll Forward] | ||
Beginning balance | $ 138,074 | $ 37,443 |
Deferred revenue acquired upon business combination | 0 | 49,626 |
Upfront payments received from customers | 217,360 | 113,101 |
Upfront or annual incentive payments received | 2,805 | 4,592 |
Revenue recognized related to amounts that were included in beginning balance of deferred revenue | (26,538) | (16,122) |
Revenue recognized related to amounts that were included in acquired balance of deferred revenue | 0 | (3,338) |
Revenue recognized related to deferred revenue generated during the period | (165,997) | (66,612) |
Ending balance | $ 165,704 | $ 118,690 |
SHORT-TERM INVESTMENTS - Schedule of Contractual Maturities of Short-Term Investments (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Amortized cost | ||
Due within one year | $ 28,333 | |
Amortized Cost | 28,333 | $ 163,756 |
Estimated Fair Value | ||
Due within one year | 28,301 | |
Estimated Fair Value | $ 28,301 | $ 162,074 |
SHORT-TERM INVESTMENTS - Additional Information (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
| |
Investments, Debt and Equity Securities [Abstract] | |
Allowance for credit losses recorded | $ 0 |
FAIR VALUE MEASUREMENTS - Narrative (Details) - Convertible Notes - Level 2 - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
2028 Convertible Notes | ||
Debt Instrument [Line Items] | ||
Convertible debt | $ 177.9 | $ 293.1 |
2030 Convertible Notes | ||
Debt Instrument [Line Items] | ||
Convertible debt | $ 192.1 |
BUSINESS COMBINATIONS - Narrative (Details) - AlsoEnergy, Inc - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Feb. 01, 2022 |
Sep. 30, 2022 |
|
Business Acquisition [Line Items] | ||
Percent of outstanding shares acquired | 100.00% | |
Aggregate purchase price | $ 652.0 | |
Cash paid, net of working capital adjustment | 543.1 | |
Transaction costs | $ 6.1 | |
Common Stock | ||
Business Acquisition [Line Items] | ||
Business combination, consideration transferred, equity interests issued and issuable | $ 108.9 | |
Business acquisition, equity interest Issued or issuable (in shares) | 8,621,006 |
BUSINESS COMBINATIONS - Unaudited Pro Forma Information (Details) - AlsoEnergy, Inc - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Business Acquisition [Line Items] | ||||
Total revenue | $ 133,740 | $ 99,501 | $ 294,091 | $ 211,372 |
Net loss | $ (77,072) | $ (34,275) | $ (102,728) | $ (96,686) |
GOODWILL AND INTANGIBLE ASSETS, NET - Goodwill Consists (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 547,158 | $ 547,556 |
Recovery of escrow from AlsoEnergy acquisition | 0 | (915) |
Effect of foreign currency translation | 6 | 8 |
Total goodwill | $ 547,164 | $ 546,649 |
ENERGY STORAGE SYSTEMS, NET - Schedule of Energy Storage Systems, Net (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (65,606) | $ (58,782) |
Total energy storage systems, net | 80,709 | 90,757 |
Energy storage systems placed into service | ||
Property, Plant and Equipment [Line Items] | ||
Total energy storage systems, gross | 141,759 | 143,154 |
Energy storage systems not yet placed into service | ||
Property, Plant and Equipment [Line Items] | ||
Total energy storage systems, gross | $ 4,556 | $ 6,385 |
ENERGY STORAGE SYSTEMS, NET - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 3,600 | $ 3,800 | $ 10,800 | $ 11,200 |
Impairment loss of energy storage systems | $ 300 | $ 400 | $ 2,347 | $ 1,293 |
NOTES PAYABLE - Narrative (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|---|
Apr. 06, 2023 |
Jan. 31, 2021 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Apr. 03, 2023 |
|
Debt Instrument [Line Items] | |||||||
Loss on extinguishment of debt | $ 0 | $ 0 | $ (59,121) | $ 0 | |||
Line of Credit | 2021 Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Total capacity | $ 2,700 | ||||||
Fixed interest rate, annual | 5.45% | ||||||
Proceeds from credit agreement | $ 1,800 | ||||||
Convertible Notes | 2030 Convertible Notes | |||||||
Debt Instrument [Line Items] | |||||||
Fixed interest rate, annual | 4.25% | 4.25% | |||||
Loss on extinguishment of debt | $ 300 |
CONVERTIBLE NOTES - Outstanding Convertible Notes (Details) - Convertible Notes - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
2028 Convertible Notes | ||
Debt Instrument [Line Items] | ||
Outstanding principal | $ 297,024 | $ 460,000 |
Unamortized initial purchaser’s debt discount and debt issuance cost | (6,825) | (12,091) |
Long-Term Debt, Total | 290,199 | $ 447,909 |
2030 Convertible Notes | ||
Debt Instrument [Line Items] | ||
Outstanding principal | 240,000 | |
Unamortized initial purchaser’s debt discount and debt issuance cost | (7,131) | |
Long-Term Debt, Total | $ 232,869 |
CONVERTIBLE NOTES - Interest Expense Recognized Related to Convertible Note (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Debt Instrument [Line Items] | ||||
Amortization of debt discount and debt issuance cost | $ 1,969 | $ 1,479 | ||
2028 Convertible Notes | Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 371 | $ 575 | 1,322 | 1,725 |
Amortization of debt discount and debt issuance cost | 323 | 497 | 1,163 | 1,488 |
Total interest expense | 694 | $ 1,072 | 2,485 | $ 3,213 |
2030 Convertible Notes | Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | 2,550 | 5,043 | ||
Amortization of debt discount and debt issuance cost | 239 | 470 | ||
Total interest expense | $ 2,789 | $ 5,513 |
WARRANTS (Details) - Legacy Stem Warrants - USD ($) $ in Millions |
Apr. 28, 2021 |
Sep. 30, 2023 |
---|---|---|
Class of Warrant or Right [Line Items] | ||
Warrants outstanding (in shares) | 50,207,439 | 2,533 |
Conversion of securities into common stock (in shares) | 2,759,970 | |
Gain from fair value adjustment | $ 100.9 | |
Conversion of securities into common stock | $ 60.6 |
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Remaining unrecognized stock-based compensation expense | $ 17.3 | $ 17.3 | ||
Internally developed software | Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Amount capitalized | 1.2 | $ 0.6 | 3.1 | $ 1.7 |
RSU | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Remaining unrecognized stock-based compensation expense | $ 79.5 | $ 79.5 | ||
Weighted average period for recognition of stock-based compensation expense | 1 year 10 months 24 days | |||
Outstanding stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average period for recognition of stock-based compensation expense | 1 year 6 months |
STOCK-BASED COMPENSATION - RSU Activity (Details) - RSU |
9 Months Ended |
---|---|
Sep. 30, 2023
$ / shares
shares
| |
Number of RSUs Outstanding | |
RSUs outstanding, beginning (in shares) | shares | 6,719,490 |
RSUs granted (in shares) | shares | 7,542,131 |
RSUs vested (in shares) | shares | (1,226,174) |
RSUs forfeited (in shares) | shares | (1,791,088) |
RSUs outstanding, ending (in shares) | shares | 11,244,359 |
Weighted-Average Grant Date Fair Value Per Share | |
RSUs outstanding, weighted average grant date fair value, beginning (in dollars per share) | $ / shares | $ 15.34 |
RSUs granted, weighted average grant date fair value (in dollars per share) | $ / shares | 5.62 |
RSUs vested, weighted average grant date fair value (in dollars per share) | $ / shares | 10.78 |
RSUs forfeited, weighted average grant date fair value (in dollars per share) | $ / shares | 8.65 |
RSUs outstanding, weighted average grant date fair value, ending (in dollars per share) | $ / shares | $ 10.56 |
STOCK-BASED COMPENSATION - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 11,198 | $ 7,678 | $ 28,320 | $ 20,410 |
Liability-Classified Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1,500 | 1,500 | ||
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1,614 | 1,172 | 4,109 | 3,102 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 2,467 | 1,589 | 6,733 | 3,458 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 7,117 | $ 4,917 | $ 17,478 | $ 13,850 |
INCOME TAXES - Provision (Benefit) for Income Taxes and the Effective Tax Rates (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Loss before benefit from (provision for) income taxes | $ (77,118) | $ (34,256) | $ (102,374) | $ (103,982) |
Benefit from (provision for) income taxes | $ 46 | $ (19) | $ (354) | $ 15,201 |
Effective tax rate | 0.10% | (0.10%) | (0.30%) | 14.60% |
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Tax provision (benefit) | $ (46) | $ 19 | $ 354 | $ (15,201) |
Effective tax rate | 0.10% | (0.10%) | (0.30%) | 14.60% |
(Benefit) for income taxes, federal | $ 300 | $ 15,100 |
COMMITMENTS AND CONTINGNECIES (Details) |
Mar. 01, 2023
USD ($)
ft²
|
Sep. 30, 2023
USD ($)
|
---|---|---|
Loss Contingencies [Line Items] | ||
Operating lease liability | $ 2,800,000 | |
Lease term | 58 months | |
Base rent per month | $ 58,500 | |
Loss contingency accrual amount | $ 5,600,000 | |
Gurugram, India | ||
Loss Contingencies [Line Items] | ||
Area of lease | ft² | 41,811 |
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