10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

—————————————————

FORM 10-Q

—————————————————

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

STEM, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-39455	85-1972187
(State or Other Jurisdiction<br><br>of Incorporation or Organization)	(Commission File Number)	(IRS Employer <br>Identification No.)

4 Embarcadero Ctr., Suite 710, San Francisco, California 94111

(Address of principal executive offices, including zip code)

1-877-374-7836

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001	STEM	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	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.			☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Class	Outstanding as of April 22, 2025
Common Stock, $0.0001 par value per share	166,358,775

STEM, INC.

Quarterly Report on Form 10-Q

For the Period Ended March 31, 2025

	Page
Part I. Financial Information	3
Item 1. Financial Statements (Unaudited)	3
Condensed Consolidated Balance Sheets	3
Condensed Consolidated Statements of Operations	4
Condensed Consolidated Statements of Comprehensive Loss	5
Condensed Consolidated Statements of Stockholders’ (Deficit) Equity	6
Condensed Consolidated Statements of Cash Flows	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3. Quantitative and Qualitative Disclosures About Market Risk	36
Item 4. Controls and Procedures	36
Part II. Other Information	38
Item 1. Legal Proceedings	38
Item 1A. Risk Factors	38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3. Defaults Upon Senior Securities	38
Item 4. Mine Safety Disclosures	38
Item 5. Other Information	38
Item 6. Exhibits	39
Signature	39

ITEM 1. FINANCIAL STATEMENTS

STEM, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share amounts)

	March 31, 2025		December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	58,584	$	56,299
Accounts receivable, net of allowances of $9,744 and $9,499 as of March 31, 2025 and December 31, 2024, respectively	34,733		59,316
Inventory	8,836		10,920
Other current assets	8,427		10,082
Total current assets	110,580		136,617
Energy storage systems, net	55,557		58,820
Contract origination costs, net	9,373		9,681
Intangible assets, net	141,933		143,912
Operating lease right-of-use assets	11,923		12,574
Other noncurrent assets	75,715		75,755
Total assets	$	405,081	$	437,359
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	$	19,644	$	30,147
Accrued liabilities	27,849		25,770
Accrued payroll	8,470		6,678
Financing obligation, current portion	17,416		16,521
Deferred revenue, current portion	40,115		43,255
Other current liabilities	6,683		6,429
Total current liabilities	120,177		128,800
Deferred revenue, noncurrent	85,994		85,900
Asset retirement obligation	4,263		4,203
Convertible notes, noncurrent	526,503		525,922
Financing obligation, noncurrent	37,136		41,627
Lease liabilities, noncurrent	12,527		13,336
Other liabilities	35,405		35,404
Total liabilities	822,005		835,192
Commitments and contingencies (Note 12)
Stockholders’ (deficit) equity:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized as of March 31, 2025 and December 31, 2024; zero shares issued and outstanding as of March 31, 2025 and December 31, 2024	—		—
Common stock, $0.0001 par value; 500,000,000 shares authorized as of March 31, 2025 and December 31, 2024; 166,352,779 and 162,797,684 issued and outstanding as of March 31, 2025 and December 31, 2024, respectively	17		16
Additional paid-in capital	1,233,760		1,228,042
Accumulated other comprehensive income (loss)	266		76
Accumulated deficit	(1,651,508)		(1,626,508)
Total Stem’s stockholders’ (deficit) equity	(417,465)		(398,374)
Non-controlling interests	541		541
Total stockholders’ (deficit) equity	(416,924)		(397,833)
Total liabilities and stockholders’ (deficit) equity	$	405,081	$	437,359

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

STEM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except share and per share amounts)


	2025		2024
Revenue
Services and other revenue	$	17,721	$	14,840
Hardware revenue	14,791		10,629
Total revenue	32,512		25,469
Cost of Revenue
Cost of services and other revenue	11,413		9,984
Cost of hardware revenue	10,561		39,676
Total cost of revenue	21,974		49,660
Gross profit (loss)	10,538		(24,191)
Operating expenses:
Sales and marketing	6,792		11,126
Research and development	11,328		14,136
General and administrative	13,566		18,560
Total operating expenses	31,686		43,822
Loss from operations	(21,148)		(68,013)
Other expense, net:
Interest expense	(4,290)		(4,707)
Other income, net	496		566
Total other expense, net	(3,794)		(4,141)
Loss before provision for income taxes	(24,942)		(72,154)
Provision for income taxes	(58)		(153)
Net loss	$	(25,000)	$	(72,307)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.15)	$	(0.46)
Weighted-average shares used in computing net loss per share to common stockholders, basic and diluted	163,889,801		158,180,137

The accompanying notes are an integral part of these condensed consolidated financial statements.

STEM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(in thousands)


	2025		2024
Net loss	$	(25,000)	$	(72,307)
Other comprehensive loss:
Unrealized gain on available-for-sale securities	—		3
Foreign currency translation adjustment	190		193
Total other comprehensive loss	$	(24,810)	$	(72,111)

The accompanying notes are an integral part of these condensed consolidated financial statements.

STEM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

(UNAUDITED)

(in thousands, except share amounts)

	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Non-controlling Interests		Total Stockholders’ <br>(Deficit) Equity
	Shares	Amount
Balance as of January 1, 2025	162,797,684	$	16	$	1,228,042	$	76	$	(1,626,508)	$	541	$	(397,833)
Issuance of common stock upon release of restricted stock units	3,555,095	1		—		—		—		—		1
Stock-based compensation	—	—		5,718		—		—		—		5,718
Foreign currency translation adjustments	—	—		—		190		—		—		190
Net loss	—	—		—		—		(25,000)		—		(25,000)
Balance as of March 31, 2025	166,352,779	$	17	$	1,233,760	$	266	$	(1,651,508)	$	541	$	(416,924)
	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, 2024	155,932,880	$	16	$	1,198,716	$	(42)	$	(772,494)	$	485	$	426,681
Issuance of common stock upon release of restricted stock units	2,632,464	—		—		—		—		—		—
Issuance of fully vested restricted stock units for employee bonuses (Note 8)	2,961,438	—		8,114		—		—		—		8,114
Stock-based compensation	—	—		9,367		—		—		—		9,367
Unrealized gain on available-for-sale securities	—	—		—		3		—		—		3
Foreign currency translation adjustments	—	—		—		193		—		—		193
Net loss	—	—		—		—		(72,307)		—		(72,307)
Balance as of March 31, 2024	161,526,782	$	16	$	1,216,197	$	154	$	(844,801)	$	485	$	372,051

The accompanying notes are an integral part of these condensed consolidated financial statements.

STEM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

	Three Months Ended March 31,
	2025		2024
OPERATING ACTIVITIES
Net loss	$	(25,000)	$	(72,307)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense	10,996		10,809
Non-cash interest expense, including interest expenses associated with debt issuance costs	289		422
Stock-based compensation	4,317		8,374
Non-cash lease expense	679		777
Accretion of asset retirement obligations	60		59
Impairment loss of project assets	699		345
Net accretion of discount on investments	—		(29)
Provision for (recovery of) credit losses on accounts receivable	78		(1,004)
Other	63		(98)
Changes in operating assets and liabilities:
Accounts receivable	24,351		63,943
Inventory	2,084		2,221
Other assets	2,025		(746)
Contract origination costs, net	(324)		(356)
Project assets	(1,516)		(390)
Accounts payable	(10,538)		(16,280)
Accrued expenses and other liabilities	3,861		1,731
Deferred revenue	(3,046)		2,715
Lease liabilities	(542)		(807)
Net cash provided by (used in) operating activities	8,536		(621)
INVESTING ACTIVITIES
Proceeds from maturities of available-for-sale investments	—		8,250
Purchase of energy storage systems	(7)		(51)
Capital expenditures on internally-developed software	(3,583)		(3,463)
Purchase of property and equipment	—		(61)
Net cash (used in) provided by investing activities	(3,590)		4,675
FINANCING ACTIVITIES
Proceeds from employee equity transactions to be remitted to tax authorities, net	—		5,228
Repayment of financing obligations	(2,819)		(2,086)
Net cash (used in) provided by financing activities	(2,819)		3,142
Effect of exchange rate changes on cash, cash equivalents and restricted cash	158		233
Net increase in cash, cash equivalents and restricted cash	2,285		7,429
Cash, cash equivalents and restricted cash, beginning of year	58,085		106,475
Cash, cash equivalents and restricted cash, end of period	$	60,370	$	113,904
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
---	---	---	---	---
Cash paid for interest	$	1,048	$	1,422
NON-CASH INVESTING AND FINANCING ACTIVITIES
Change in asset retirement costs and asset retirement obligation	$	—	$	38
Purchases of energy storage systems in accounts payable	$	—	$	251
Stock-based compensation capitalized to internal-use software	$	1,434	$	992
RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH WITHIN THE UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS TO THE AMOUNTS SHOWN IN THE STATEMENTS OF CASH FLOWS ABOVE:
Cash and cash equivalents	$	58,584	$	112,804
Restricted cash included in other noncurrent assets	1,786		1,100
Total cash, cash equivalents, and restricted cash	$	60,370	$	113,904

The accompanying notes are an integral part of these condensed consolidated financial statements.

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. 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 software and services that enable its customers to plan, deploy, and operate clean energy assets. We offer a comprehensive suite of solutions that transform how solar and energy storage projects are developed, built, and operated, including (i) an integrated suite of software and edge products, and (ii) full-lifecycle energy services from a team of experts. More than 16,000 global customers rely on Stem to maximize the value of their clean energy projects and portfolios.

Our suite of software applications is enabled by our AI platform, Athena®. Each application serves a different purpose in helping customers to maximize the value of their energy assets. We offer software-enabled forecasting and optimization managed services to our storage customers through the Athena AI platform that are designed to support renewable energy generation. We offer solar asset performance management software through our PowerTrack software that enables standardization of clean energy portfolios on one, hardware agnostic application. Our commercial- and utility-scale edge hardware solutions are original equipment manufacturers (“OEMs”)-agnostic devices used to connect customers’ solar and storage assets to our software applications in a unified view.

To help our customers achieve long-term performance and profitability goals for their energy projects, we also provide advisory services spanning development and engineering, procurement and integration, and performance and operation services. In the early stages of project planning, our experts help lay a solid foundation for our customers’ solar and storage projects by guiding the design and ensuring informed decision-making. During the building stage, we provide guidance for hardware procurement and integration for timely deployment. After assets are operational, we enable optimal economic and technical returns with managed energy services like trading and bidding strategies, wholesale market participation, performance reporting, system warranties, and more.

The Company operated as Rollins Road Acquisition Company (f/k/a Stem, Inc.) 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 March 31, 2025, we had cash and cash equivalents of $58.6 million, an accumulated deficit of $1,651.5 million, net accounts receivable of $34.7 million, and negative working capital, which we define as current assets less current liabilities, of $9.6 million. During the three months ended March 31, 2025, we incurred a net loss of $25.0 million and had positive cash flows from operating activities of $8.5 million. As of March 31, 2025, our principal sources of liquidity were cash and cash equivalents totaling $58.6 million, which were held for working capital purposes and for investment growth opportunities. As of March 31, 2025, we believe that our cash position, as well as expected collections from accounts receivable, is sufficient to meet our capital and liquidity requirements for at least the next 12 months.

Our business prospects are subject to various risks, expenses, and uncertainties, including those discussed in Part I. Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The attainment of profitable operations is dependent upon future events, including successfully transitioning to a new software and services-oriented strategy, the successful delivery of AI-enabled software and edge device capabilities to our customers, regaining and maintaining compliance with the New York Stock Exchange’s continuing listing standards, securing new customers and maintaining current ones, securing and maintaining adequate supplier relationships, building our customer base, successfully executing our business and marketing strategy, 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 us to modify, delay or abandon some of our planned future expansion or development, or to otherwise enact operating cost reductions available to management, which could have a material adverse effect on our business, operating results and financial condition.

Supply Chain Constraints and Risk

We have 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 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, import tariffs and related trade policies, geopolitical pressures, including the armed conflicts between Russia and

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Ukraine and in the Gaza Strip and nearby areas, as well as tensions between China and the United States and uncertainty around current and future trade policies. The Company cannot predict the full effects the macroeconomic, geopolitical and business environment will have on our business, cash flows, liquidity, financial condition and results of operations.

2. 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 consolidated balance sheet at December 31, 2024 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 the Company’s 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, 2024. Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 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 unaudited condensed consolidated balance sheets, and the amount of consolidated net loss that is attributable to the Company and the non-controlling interest in its unaudited condensed consolidated statements of operations. All intercompany balances and transactions have been eliminated in consolidation.

Variable Interest Entities

The Company has in some instances formed 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 entered into strategic joint ventures through indirect wholly-owned development subsidiaries of the Company (“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.

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The following table summarizes the carrying values of the assets and liabilities of the DevCo JVs that are consolidated by the Company as of March 31, 2025 and December 31, 2024 (in thousands):

	March 31, 2025		December 31, 2024
Assets
Cash and cash equivalents	$	290	$	1,556
Other current assets	8		18
Other noncurrent assets	17,233		16,415
Total assets	17,531		17,989
Liabilities
Accounts payable	906		1,284
Other current liabilities	—		114
Total liabilities	$	906	$	1,398

The Company did not make any material capital investment contributions during the three months ended March 31, 2025 and 2024. The net income from the DevCo JVs was immaterial during the three months ended March 31, 2025 and 2024.

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, estimates of transaction price with variable consideration; the amortization of acquired intangibles; deferred commissions and contract fulfillment costs; the valuation of energy storage systems, finite-lived intangible assets, internally developed software, accruals related to sales tax liabilities, and the fair value of assets acquired and liabilities assumed 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. Net assets outside of the U.S. were less than 10% of total net assets as of March 31, 2025 and December 31, 2024.

Accounts Receivable, Net

Accounts Receivable are stated at amounts estimated by management to be equal to their net realizable values. Accounts receivable also includes unbilled accounts receivable, which is composed of milestone development activities of noncancellable purchase orders and monthly energy optimization services provided and recognized but not yet invoiced as of the end of the reporting period. The allowance for credit losses is the Company's best estimate of the amount of expected credit losses. The expectation of collectability is based on the Company's review of credit profiles of customers, contractual terms and conditions, current economic trends, and historical payment experience. If events or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and an allowance is recorded accordingly. The total allowance for credit losses balance was $9.9 million and $9.8 million, of which the current portion is $9.7 million and $9.5 million as of March 31, 2025 and December 31, 2024, respectively.

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The following table presents the changes in the current expected credit losses during the three months ended March 31, 2025 and the year ended December 31, 2024 (in thousands):

	March 31, 2025		December 31, 2024
Balance as of beginning of period	$	9,794	$	5,953
Provision for expected credit losses	1,528		3,978
Write-offs, recoveries and other charges against allowance	(1,438)		(137)
Balance as of end of period	$	9,884	$	9,794

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 did not experience material losses related to receivables from individual customers, or groups of customers during the three months ended March 31, 2025. 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.

The net book value of unbilled receivables, current are $7.7 million and $7.8 million as of March 31, 2025 and December 31, 2024, respectively. Unbilled receivables, current are included in accounts receivable, net. The net book value of unbilled receivables, noncurrent are $6.3 million and $5.9 million as of March 31, 2025 and December 31, 2024, respectively. Unbilled receivables, noncurrent are included in other noncurrent assets.

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:

	Accounts Receivable				Revenue
	March 31,		December 31,		Three Months Ended March 31,
	2025		2024			2025		2024
Customers:
Customer A	33	%	28	%		12	%	24	%
Customer B	*		20	%		*		*
Customer C	*		*			*		22	%
Customer D	*		*			*		22	%

*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.

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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 March 31, 2025 and December 31, 2024 include cash and cash equivalents and convertible notes.

Reclassifications

Certain prior year amounts have been reclassified for consistency with the current year presentation. Such reclassifications have no impact on previously reported net income (loss), stockholders’ (deficit) equity, or cash flows. A reclassification of $0.4 million from deferred costs with suppliers to other current assets has been made to the December 31, 2024 balance sheet to conform to the March 31, 2025 presentation. This change had no impact to total current assets. For the three months ended March 31, 2024, a $0.4 million net cash inflow was reclassified from changes in deferred costs with suppliers to changes in other assets. This change had no impact to net cash used in operating activities.

New Accounting Standards

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, related to income tax disclosures. The amendments in this update are intended to enhance the transparency and decision usefulness of income tax disclosures primarily through changes to the rate reconciliation and income taxes paid information. This update is effective for annual periods beginning after December 15, 2024, though early adoption is permitted. The Company is currently evaluating the ASU to determine its impact on the Company’s disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The amendments in this update enhance disaggregated disclosure of income statement expenses for companies by requiring disaggregation of certain expense captions into specified categories in

disclosures within the footnotes to the financial statements. The effective date of ASU 2024-03 was amended by ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. This update is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, though early adoption of is permitted. The Company is currently evaluating the ASU to determine its impact on the Company’s disclosures.

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3. REVENUE

Disaggregation of Revenue

The following table provides information on the disaggregation of revenue as recorded in the unaudited condensed consolidated statements of operations (in thousands):


	2025		2024
Hardware revenue	$	14,791	$	10,629
Services and other revenue	17,721		14,840
Total revenue	$	32,512	$	25,469

The following table summarizes reportable revenue by geographic regions determined based on the location of the customers (in thousands):


	2025		2024
United States	$	31,733	$	24,294
Rest of the world	779		1,175
Total revenue	$	32,512	$	25,469

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 March 31, 2025 and March 31, 2024, the Company had $409.9 million and $440.6 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):

	March 31, 2025
	Total Remaining<br>Performance<br>Obligations			Percent Expected to be Recognized as Revenue
			Less Than<br>One Year			Two to<br>Five Years			Greater Than<br>Five Years
Services and other revenue	$	394,068		14	%		39	%		47	%
Hardware revenue	15,818			100	%		—	%		—	%
Total revenue	$	409,886
	March 31, 2024
---	---	---	---	---	---	---	---	---	---	---	---
	Total Remaining<br>Performance<br>Obligations			Percent Expected to be Recognized as Revenue
			Less Than<br>One Year			Two to<br>Five Years			Greater Than<br>Five Years
Services and other revenue	$	344,555		15	%		47	%		38	%
Hardware revenue	96,013			96	%		4	%		—	%
Total revenue	$	440,568

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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 three months ended March 31, 2025 and March 31, 2024 (in thousands):

	Three Months Ended March 31,
	2025		2024
Beginning balance	$	129,155	$	142,647
Upfront payments received from customers	11,030		17,373
Upfront or annual incentive payments received	749		497
Revenue recognized related to amounts that were included in beginning balance of deferred revenue	(13,543)		(10,074)
Revenue recognized related to deferred revenue generated during the period	(1,282)		(5,081)
Ending balance	$	126,109	$	145,362

Parent Company Guarantees

Prior to July 2023, the Company agreed in certain customer contracts to provide a parent company guarantee (“PCG”) that the value of purchased hardware will not decline for a certain period of time. Under such PCGs, 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. If a resale were not to occur, the hardware would be appraised utilizing a third party. Such PCGs provided that, in such cases, if the customer resold the hardware for less than the amount initially sold to the customer or the appraisal value is less than the hardware purchase price, 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 accounted for such contractual terms and guarantees as variable consideration at each measurement date. The Company updated its estimate of variable consideration each quarter with respect to the outstanding guarantees, including changes in estimates related to such guarantees, for facts or circumstances that have changed from the time of the initial estimate. As a result, the Company recorded a net revenue reduction of $33.1 million in hardware revenue during the three months ended March 31, 2024. The overall reduction in revenue was related to deliveries that occurred prior to 2024.

There are no remaining PCGs outstanding, and the Company expects no future impact on its financial results as a result of PCGs.

Impairment and Accounts Receivable Write-Off

For those contracts where the customers invoked PCG protection pursuant to the applicable contract, the Company worked actively to remarket the remaining systems subject to PCG with a wide variety of potential customers. Despite such efforts, such negotiations resulted in limited transactions with mutually agreed upon pricing and terms. As stated above, under contracts containing a PCG provision, in the event that the Company and the customer are unable to remarket and sell the relevant assets, the customer was obligated to engage a third party to appraise the fair market value of the remaining hardware. None such customers obtained such third party hardware appraisal. Given the uncertainty of collection from the original customers of due and unpaid amounts in those cases where the Company believes it has enforceable rights of recovery, the Company believed the likelihood for collection of the accounts receivable outstanding relating to hardware subject to these PCG’s was no longer probable. Accordingly, the Company wrote-off the remaining receivables of $104.1 million during the fiscal year ended December 31, 2024. The Company is pursuing all potential remedies with respect to its enforceable rights under applicable contracts.

4. FAIR VALUE MEASUREMENTS

Fair 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. On March 31, 2025 and December 31, 2024, 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.

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table provides the financial instruments measured at fair value (in thousands):

	March 31, 2025
	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market fund	$	37,500	$	—	$	—	$	37,500
Total financial assets	$	37,500	$	—	$	—	$	37,500
	December 31, 2024
---	---	---	---	---	---	---	---	---
	Level 1		Level 2		Level 3		Fair Value
Assets:
Cash equivalents:
Money market fund	$	37,108	$	—	$	—	$	37,108
Total financial assets	$	37,108	$	—	$	—	$	37,108

The Company’s money market funds are classified as Level 1 because they are valued using quoted market prices.

Fair Value of Convertible Promissory Notes

The convertible notes are recorded at face value less unamortized debt issuance costs (see Note 7 — Convertible Notes for additional details) on the unaudited condensed consolidated balance sheets as of March 31, 2025. As of March 31, 2025 and December 31, 2024, the estimated fair value of the 2028 Convertible Notes was $72.0 million and $77.3 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 March 31, 2025 and December 31, 2024, the estimated fair value of the 2030 Convertible Notes was $57.4 million and $65.4 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.

5. INTANGIBLE ASSETS, NET

Intangible assets, net, consists of the following (in thousands):

	March 31,		December 31,
	2025		2024
Developed technology	$	32,618	$	32,618
Trade name	11,300		11,300
Customer relationships	106,800		106,800
Internally developed software	86,331		81,314
Intangible assets	237,049		232,032
Less: Accumulated amortization	(95,091)		(88,094)
Add: Currency translation adjustment	(25)		(26)
Total intangible assets, net	$	141,933	$	143,912

Amortization expense for intangible assets was $7.0 million and $6.6 million for the three months ended March 31, 2025 and 2024, respectively.

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

6. ENERGY STORAGE SYSTEMS, NET

Energy storage systems, net, consists of the following (in thousands):

	March 31,		December 31,
	2025		2024
Energy storage systems placed into service	$	137,616	$	137,616
Less: accumulated depreciation	(84,542)		(81,305)
Energy storage systems not yet placed into service	2,483		2,509
Total energy storage systems, net	$	55,557	$	58,820

Depreciation expense for energy storage systems was approximately $3.2 million and $3.0 million for the three months ended March 31, 2025 and 2024, respectively. Depreciation expense is recognized in cost of services and other revenue.

7. CONVERTIBLE NOTES

2028 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 2028 Convertible 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 2028 Convertible 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 related 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 the effect of 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 March 31, 2025 and December 31, 2024 are summarized in the following table (in thousands):

	March 31, 2025		December 31, 2024
Long Term Debt
Outstanding principal	$	297,024	$	297,024
Unamortized 2021 Initial Purchasers’ debt discount and debt issuance cost	(4,873)		(5,200)
Net carrying amount	$	292,151	$	291,824

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The following table presents total interest expense recognized related to the 2028 Convertible Notes during the three months ended March 31, 2025 and 2024 (in thousands):


	2025		2024
Cash interest expense
Contractual interest expense	$	371	$	371
Non-cash interest expense
Amortization of debt discount and debt issuance cost	327		324
Total interest expense	$	698	$	695

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 2030 Convertible 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 2030 Convertible 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.

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The outstanding 2030 Convertible Notes balances as of March 31, 2025 and December 31, 2024 are summarized in the following table (in thousands):

	March 31, 2025		December 31, 2024
Long Term Debt
Outstanding principal	$	240,000	$	240,000
Unamortized 2023 Initial Purchasers’ debt discount and debt issuance cost	(5,648)		(5,901)
Net carrying amount	$	234,352	$	234,099

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 March 31, 2025 (in thousands):


	2025		2024
Cash interest expense
Contractual interest expense	$	2,550	$	2,550
Non-cash interest expense
Amortization of debt discount and debt issuance cost	253		243
Total interest expense	$	2,803	$	2,793

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 2030 Convertible 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.

8. STOCK-BASED COMPENSATION

Equity Incentive Plans

In May 2024, the Company adopted the 2024 Equity Incentive Plan (the “2024 Plan”). Under the 2024 Plan, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), and other awards that are settled in shares of the Company’s common stock.

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Stock Options

The following table summarizes the stock option activity for the period ended March 31, 2025:

	Number of<br>Options<br>Outstanding	Weighted-<br>Average<br>Exercise Price<br>Per Share		Weighted-<br>Average<br>Remaining<br>Contractual<br>Life (years)	Aggregate<br>Intrinsic<br>Value<br>(in thousands)
Balances as of December 31, 2024	8,552,283	$	5.60	3.1	$	6
Options granted	66,667	0.84
Options forfeited and cancelled	(4,241,780)	4.95
Balances as of March 31, 2025	4,377,170	$	6.14	5.6	$	—
Options vested and exercisable — March 31, 2025	3,500,640	$	5.86	4.9	$	—

As of March 31, 2025, the Company had approximately $2.3 million of remaining unrecognized stock-based compensation expense for stock options, which is expected to be recognized over a weighted average period of 1.0 years.

Restricted Stock Units

The following table summarizes the RSU activity for the period ended March 31, 2025:

	Number of<br><br>RSUs<br><br>Outstanding (1)	Weighted-Average<br>Grant Date Fair Value<br>Per Share
Balances as of December 31, 2024	12,284,292	$	3.05
RSUs granted	2,885,549	0.67
RSUs vested	(3,555,095)	6.54
RSUs forfeited	(206,517)	3.01
Balances as of March 31, 2025	11,408,229	$	1.90

As of March 31, 2025, the Company had approximately $16.4 million of remaining unrecognized stock-based compensation expense for RSUs, which is expected to be recognized over a weighted average period of 1.1 years.

During the three months ended March 31, 2024, the Company issued 3.0 million shares of fully vested RSU awards through the Company’s stock bonus program under the Company’s 2021 Equity Incentive Plan.

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense recorded in each component of operating expenses in the Company’s unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025 and 2024 (in thousands):


	2025		2024
Sales and marketing	$	171	$	1,114
Research and development	1,754		1,531
General and administrative	2,392		5,729
Total stock-based compensation expense	$	4,317	$	8,374

Stock-based compensation expense associated with research and development of $1.4 million and $1.0 million were capitalized as internal-use software during the three months ended March 31, 2025 and 2024, respectively.

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

9. NET LOSS PER SHARE

Net loss per share is computed by dividing net loss by the basic weighted-average number of shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the diluted weighted-average number of shares outstanding during the period and, accordingly, reflects the potential dilutive effect of all issuable shares of common stock, including as a result of stock options, restricted stock units, warrants and convertible notes. The diluted weighted-average number of shares used in our diluted net loss per share calculation is determined using the treasury stock method for stock options, restricted stock units, and warrants, and the if-converted method for convertible notes. For periods in which we recognize losses, the calculation of diluted loss per share is the same as the calculation of basic 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):


	2025		2024
Numerator:
Net loss attributable to common stockholders	$	(25,000)	$	(72,307)
Denominator:
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, basic and diluted	163,889,801		158,180,137
Net loss per share attributable to common stockholders, basic and diluted	$	(0.15)	$	(0.46)

The following table shows total outstanding potentially dilutive shares excluded from the computation of diluted net loss per share attributable to common stockholders as their effect would have been anti-dilutive, as of March 31, 2025 and 2024:

	March 31, 2025	March 31, 2024
Outstanding 2028 Convertible Notes (if converted)	10,157,181	10,157,181
Outstanding 2030 Convertible Notes (if converted)	33,673,584	33,673,584
Outstanding stock options	4,377,170	9,672,634
Outstanding warrants	2,533	2,533
Outstanding RSUs	11,408,229	8,493,136
Total	59,618,697	61,999,068

10. INCOME TAXES

The following table reflects the Company’s provision for income taxes and the effective tax rates for the periods presented below (in thousands, except effective tax rate):


	2025			2024
Loss before provision for income taxes	$	(24,942)		$	(72,154)
Provision for income taxes	$	(58)		$	(153)
Effective tax rate	(0.23)		%	(0.21)		%

For the three months ended March 31, 2025, the Company recognized a provision for income taxes of $0.1 million, representing an effective tax rate of (0.23)%, which was lower than the statutory federal tax rate because the Company maintains a valuation allowance on its U.S. deferred tax assets during the three months ended March 31, 2025. For the three months ended March 31, 2024, the Company recognized a provision for income taxes of $0.2 million, representing an effective tax rate of (0.21)%, which was lower than the statutory federal tax rate because the Company maintains a valuation allowance on its U.S. deferred tax assets.

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

11. SEGMENT INFORMATION

The Company’s CODM manages the business and evaluates operating performance based on consolidated net loss. The Company’s CODM uses consolidated net loss to monitor budget versus actual results. The Company operates as one operating segment and has one reportable segment that constitutes consolidated results.

The following table sets forth the Company’s segment information for revenue and significant expenses for the three months ended March 31, 2025 and 2024 (in thousands):


	2025		2024
Revenue	$	32,512	$	25,469
Less (add):
Cost of revenue	21,974		49,660
Compensation expense excluding stock-based compensation	14,282		21,309
Stock-based compensation	4,317		8,374
Depreciation and amortization	4,240		4,344
Other segment expenses, net (1)	12,641		13,936
Provision for income taxes	58		153
Net loss	$	(25,000)	$	(72,307)

(1) Other segment expenses, net includes interest expense and other income, net.

12. COMMITMENTS AND CONTINGENCIES

Contingencies

The Company is party to various legal proceedings from time to time arising in the ordinary course of its business. 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 definitively 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.

Non-cancelable Purchase Obligations

During the three months ended March 31, 2025, there have been no material changes to our non-cancelable purchase obligations.

Non-Income Related Taxes

During 2023, the Company was selected for sales and use tax examination by the state of California and determined that it was not appropriately charging certain customers sales tax and remitting the applicable amounts to the taxing authority for certain revenue arrangements from 2018 through 2022. The Company determined it was probable that it would be subject to sales tax liabilities plus applicable interest in certain states, principally California, and estimated a probable tax liability of $5.6 million. The California sales and use tax examination is ongoing and the Company is awaiting final ruling on its sales tax administration process and clarity on the required settlement amount. The Company accrued this amount and included it in general and administrative expense in the consolidated statement of operations in 2023.

13. SUBSEQUENT EVENTS

On April 9, 2025, the Company announced a reduction of its global workforce of approximately 27%, as part of the Company’s broader efforts to prioritize investments in software, reduce operating costs, increase efficiency, drive profitable growth and increase stockholder value. The Company estimates that it will incur charges of approximately $6.0 million to $6.5 million, primarily consisting of severance payments, notice period payments in applicable jurisdictions, employee benefits and related costs. The Company expects to incur these expenses primarily in the second quarter of 2025.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (the “Report”), as well as other statements we make, contains “forward-looking statements” within the meaning of the federal securities laws, which include any statements that are not historical facts. Such statements often contain words such as “expect,” “may,” “can,” “believe,” “predict,” “plan,” “potential,” “projected,” “projections,” “forecast,” “estimate,” “intend,” “anticipate,” “ambition,” “goal,” “target,” “think,” “should,” “could,” “would,” “will,” “hope,” “see,” “likely,” and other similar words.

Forward-looking statements address matters that are, to varying degrees, uncertain, such as statements about our financial and operating performance guidance, outlook, targets and other forecasts or expectations regarding, or dependent on, our business outlook and strategy; our expectations around our new software and services-centric strategy; our ability to secure sufficient and timely inventory from suppliers; our ability to meet contracted customer demand; our ability to manage manufacturing or delivery delays; our ability to manage our supply chains and distribution channels; our joint ventures, partnerships and other alliances; forecasts or expectations regarding energy transition and global climate change; reduction of greenhouse gas (“GHG”) emissions; the integration and optimization of energy resources; our business strategies and those of our customers; our ability to retain or upgrade current customers, further penetrate existing markets or expand into new markets; the effects of natural disasters and other events beyond our control; the direct or indirect effects on our business of macroeconomic factors and geopolitical instability, such as the armed conflicts between Russia and Ukraine and in the Gaza Strip and nearby areas; the expected benefits of the Inflation Reduction Act of 2022 on our business; and our future results of operations, including revenue, adjusted EBITDA, and the other metrics presented herein.

Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results or outcomes to differ materially from those expressed or implied by such forward-looking statements, including but not limited to our inability to execute on, and achieve the expected benefits from, our operational and strategic initiatives, including from our cost reduction and restructuring efforts; our inability to successfully execute on our new software and services-centric strategy; uncertainty around the status of the Inflation Reduction Act of 2022 as a result of the change in U.S. Administration; our inability to secure sufficient and timely inventory from our suppliers, as well as contracted quantities of equipment; our inability to meet contracted customer demand; supply chain interruptions, manufacturing or delivery delays and increased supply chain costs, including as a result of trade policies; disruptions in sales, production, service or other business activities; general macroeconomic and business conditions in key regions of the world, including inflationary pressures, general economic slowdown or a recession, high interest rates, changes in monetary policy, changes in trade policies, including tariffs or other trade restrictions or the threat of such actions, and instability in financial institutions; the direct and indirect effects of widespread health emergencies on our workforce, operations, financial results and cash flows; geopolitical instability, such as the armed conflicts between Russia and Ukraine and in the Gaza Strip and nearby areas; the results of operations and financial condition of our customers and suppliers; pricing pressures; severe weather and seasonal factors; our inability to continue to grow and manage our growth effectively; our inability to attract and retain qualified employees and key personnel; our inability to comply with, and the effect on our business of, evolving legal standards and regulations, including those concerning data protection, consumer privacy, sustainability, and evolving labor standards; our inability to regain and maintain compliance with New York Stock Exchange listing standards; risks relating to the development and performance of our energy storage systems and software-enabled services; our inability to retain or upgrade current customers, further penetrate existing markets or expand into new markets; the risk that our business, financial condition and results of operations may be adversely affected by other political, economic, business and competitive factors; and other risks and uncertainties discussed in Part II. Item 1A. “Risk Factors” in this Report, in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and in our other filings with the SEC. If one or more of these or other risks or uncertainties materialize (or the consequences of any such development changes), or should our underlying assumptions prove incorrect, our actual results or outcomes, or the timing of these results or outcomes, may vary materially from those reflected in our forward-looking statements. Forward-looking statements and other statements in this Report regarding our environmental, social, and other sustainability plans and goals are not an indication that these statements are necessarily material to the Company, investors or other stakeholders or required to be disclosed in our filings under U.S. securities laws or any other laws or requirements applicable to the Company. In addition, historical, current, and forward-looking environmental, social, and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. Forward-looking statements in this Report are made as of the date of such Report, and the Company disclaims any intention or obligation to update publicly or revise such forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

You should read the following management’s discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and related notes included in Part I, Item 1 of

this Quarterly Report on Form 10-Q. This discussion and analysis should also be read together with our audited consolidated financial statements and related notes, as well as the section entitled “Management’s Discussion and Analysis of Financial Condition and Results or Operations” contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. You should carefully read the sections entitled “Special Note Regarding Forward-Looking Statements” and “Risk Factors” herein to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements.

Overview

Our mission is to help our customers plan, deploy, and operate clean energy assets via AI-enabled software and services.

We offer a comprehensive suite of solutions that transform how solar and energy storage projects are developed, built, and operated, including (i) an integrated suite of software and edge products, and (ii) full-lifecycle energy services from a team of experts.

We operate in two key areas within the renewable energy landscape: solar and storage. In solar, we serve project developers, asset owners and engineering, procurement and construction firms (EPCs) by selling them solar edge devices and monitoring and control software, as well as professional services related to the design and commissioning of the same.

In storage, we serve project developers, asset owners, EPCs, and distributors by selling them software-enabled forecasting and optimization managed services that minimize spending on utility bills, or maximize revenue from energy market participation. In some cases, we also resell battery OEM hardware to our customers for a fee.

Some customers own both solar and storage assets, and use our full software capabilities and services across both asset classes.

Since our inception in 2009, we have engaged in developing and marketing AI-enabled software and services, raising capital, recruiting personnel, and growing our annual recurring revenue. As the energy landscape has changed in recent years, we have increasingly focused on larger, utility-scale projects, supporting asset owners, developers, utilities, operators, and traders. Over the last 15 years, we have grown into one of the most experienced clean energy software providers in the world, achieving milestones such as deploying software with multiple Fortune 500 companies, operating the largest virtual power plant in California, and becoming the de facto standard for commercial and industrial solar asset management software.

We have incurred net operating losses and negative cash flows from operations each year since our inception. We have financed our operations primarily through cash flows from customers, proceeds from the Merger, and the issuance of convertible senior notes and convertible preferred stock.

Our total revenue increased from $25.5 million for the three months ended March 31, 2024 to $32.5 million for the three months ended March 31, 2025. For the three months ended March 31, 2025 and 2024, we incurred net losses of $25.0 million and $72.3 million, respectively. As of March 31, 2025, we had an accumulated deficit of $1,651.5 million.

On April 9, 2025, we announced a reduction of our global workforce of approximately 27%, as part of the Company’s broader efforts to prioritize investments in software, reduce operating costs, increase efficiency, drive profitable growth and increase stockholder value, as more fully described above under Note 13 — Subsequent Events, of the accompanying Notes to the unaudited condensed consolidated financial statements in this Report. We expect to continue to exercise discipline and moderate expenses associated with sales and marketing, research and development, regulatory and related functions. In addition, we expect to continue to manage and reduce our general and administrative expenses associated with scaling our business operations and being a public company, including compliance with the rules and regulations of the SEC, legal, audit, additional insurance expenses, investor relations activities, and other administrative and professional services.

Key Factors, Trends and Uncertainties Affecting our Business

We believe that our performance and future success depend on several factors, some of which present significant opportunities for us, and some of which pose risks and challenges, including but not limited to:

Our New Strategy

In 2024, we announced a new business strategy that reflects a renewed focus on developing and marketing our AI-enabled software and services offerings. This transition entails significant operational changes, including reduction of what has historically been the source of most of our revenue (battery resales), adjustments to the way we develop and market our products and services, and realignment of our business processes. These changes are expected to result in reduced revenue, increased restructuring-related costs and short-term disruptions in our operations, which may negatively affect our ability to effectively scale our software and services offerings and achieve our financial and operational targets. Failure to successfully and timely implement our new strategy may have a material adverse effect on our business, financial condition, and results of

operations. See “We may not be able to successfully implement our recently announced new strategy.” in Part I. Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Cash Reserves

In addition, the execution of our new business strategy is expected to require investment in our human capital and infrastructure. As of March 31, 2025, we had cash and cash equivalents of $58.6 million (as compared to $56.3 million as of December 31, 2024), while our operating expenses for the three months ended March 31, 2025 was $31.7 million. Our cash reserves may constrain our ability to make the investments required to execute our new strategy or may otherwise not be sufficient to fund operations. If our cash flow from operations does not improve as quickly as expected, or if we are unable to secure additional sources of capital if or when the need arises, it may have a material adverse effect on our business, financial condition, and results of operations.

Customer Concentration

We have historically depended on a small number of significant customers for our sales, and a small number of customers have historically accounted for a material portion of our revenue. Although we continue to diversify our customer base, we may continue to derive a significant portion of our revenue from a small number of customers. Loss of a significant customer, the inability to close (or a delay in closing) a significant contract at any time, or a significant reduction in pricing or order volume from a significant customer, have (in the case of contractual delays) resulted in material reductions in revenue and other adverse effects in certain quarters, and may do so in the future.

NYSE Notice

On August 28, 2024, we received formal notice from the New York Stock Exchange (the “NYSE”) that we were not in compliance with Section 802.01C of the NYSE Listed Company Manual because the average closing price of our shares of common stock had fallen below $1.00 per share over a period of 30 consecutive trading days. We subsequently notified the NYSE of our intent to regain compliance with the requirements of Section 802.01C. We are able to regain compliance at any time within the six-month period following receipt of the notice if, on the last trading day of any calendar month during this cure period (or the last trading day of this cure period), we have a closing share price of at least $1.00 and an average closing share price of at least $1.00 over the prior 30 trading-day period. If we do not regain compliance with Section 802.01C within such cure period, the NYSE may commence delisting proceedings. The NYSE rules also provide for an exception to the six-month cure period if the action required to regain compliance with Section 802.01C requires stockholder approval, in which case, the action needs to be approved by stockholders by no later than our next annual meeting of stockholders and promptly implemented. We would be able to regain compliance if our share price promptly exceeds $1.00 per share after receiving stockholder approval, and the price remains above that level for at least the following 30 trading days. On February 13, 2025, we notified the NYSE that we intend to regain compliance with Section 802.01C through a reverse stock split, for which we will seek stockholder approval at our 2025 annual meeting of stockholders to be held on June 4, 2025.

The notice does not affect our ongoing business operations or our SEC reporting requirements.

For more information, see “We may fail to qualify for continued listing on the NYSE, which could make it more difficult for our stockholders to sell their shares.” in Part I. Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Inflation Reduction Act and Infrastructure Investment and Jobs Act

In August 2022, the U.S. government enacted the United States Inflation Reduction Act of 2022 (the “IRA”), which includes several provisions intended to accelerate U.S. manufacturing and adoption of clean energy, battery and energy storage, electrical vehicles, and other solar products and is expected to impact our business and operations. As part of such incentives, the IRA, among other things, extends the investment tax credit and production tax credit at their full rates until at least 2034 and is therefore expected to increase the demand for solar and storage products. The IRA also incentivizes residential solar and storage customers and developers through the inclusion of a tax credit for qualifying energy projects of up to 30%. Section 45X of the IRA offers advanced manufacturing production tax credits (“AMPTC”) that incentivize the production of eligible components within the U.S. These provisions of the law are only several years old, and regulations and guidance concerning their implementation are gradually being published and refined by the U.S. Treasury Department. On October 24, 2024, final regulations concerning the application of IRC §45X were published. The regulations contain detailed rules concerning the eligibility, qualifying and accounting for AMPTCs. Of particular relevance to the Company are the rules concerning the qualification and measurement of AMPTCs to Residential Inverters, Commercial Inverters and DC-Optimized Inverter Systems, that are included in the definition of Microinverters.

In January 2025, the new U.S. administration issued an executive order and a memorandum aimed at pausing the disbursement of grants and other government funds, including funds under the IRA and the Infrastructure Investment and Jobs

Act (“IIJA”), thereby creating uncertainty regarding the ability to secure government awards and grants. This potential loss of financial support could adversely affect our business and the overall financial performance of the Company.

Furthermore, potential federal decisions to modify the IRA, IIJA or their associated regulations or guidance could adversely affect the availability of incentives.

Parent Company Guarantees

Prior to July 2023, we agreed in certain customer contracts, to PCG that the value of purchased hardware will not decline for a certain period of time, as more fully described above under Note 3 — Revenue, of the accompanying Notes to the unaudited condensed consolidated financial statements in this Report. We accounted for such contractual terms and guarantees as variable consideration at each measurement date. We updated our estimates of variable consideration each quarter with respect to outstanding guarantees, including changes in estimates related to such guarantees, for facts or circumstances that had changed from the time of the initial estimate. As a result, the Company recorded a net revenue reduction of $33.1 million in hardware revenue during the three months ended March 31, 2024. The overall reduction in revenue was related to deliveries that occurred prior to 2024.

There are no remaining PCGs outstanding, and the Company expects no future impact on its financial results as a result of PCGs.

Because we have not included these parent company guarantees in our contracts since July 2023, and because we do not intend to provide guarantees in customer contracts going forward, we believe that excluding the effect of the $33.1 million net reduction in revenue from adjusted EBITDA and non-GAAP gross profit enhances the comparability to these metrics in prior periods.

Impairment and Accounts Receivable Write-Off

For those contracts where the customers invoked PCG protection pursuant to the applicable contract, we worked actively to remarket the remaining systems subject to PCG with a wide variety of potential customers, as more fully described above under Note 3 — Revenue, in the accompanying notes to the unaudited condensed consolidated financial statements in this Report. Given the uncertainty of collection from the original customers of due and unpaid amounts in those cases where we believe we have enforceable rights of recovery, we believed the likelihood for collection of the accounts receivable outstanding relating to hardware subject to these PCG’s was no longer probable. Accordingly, we wrote-off the remaining receivables of $104.1 million during the fiscal year ended December 31, 2024. We are pursuing all potential remedies with respect to its enforceable rights under applicable contracts.

Seasonality

Our results of operations have typically fluctuated due to seasonal trends, which we expect to recur in future periods. Historically, we have recognized most of our revenue in the third and fourth fiscal quarters of each year due to various factors, including the requirement by our customers to reach target commercial operation dates for their renewable energy projects as well as tax equity and financing considerations. For instance, our revenue recognized in the third and fourth quarters of the fiscal year ended December 31, 2024 accounted for 59% of the total revenue recognized in the fiscal year ended December 31, 2024. The seasonality of our results of operations may be mitigated as our software and services offerings begin to comprise a greater percentage of our total revenue.

Supply Chain Constraints and Risk

We rely on a very small number of suppliers of energy storage systems and other equipment. If any of our suppliers were unable or unwilling to provide us with contracted quantities in a timely manner at prices, quality levels, and volumes acceptable to us, we would have very limited alternatives for supply, and we may not be able find suitable replacements for our customers, if at all. Such an event could materially adversely affect our business, prospects, financial condition, and results of operations.

DevCo Joint Ventures

We, through an indirect wholly-owned development subsidiary, have entered into strategic joint ventures with qualified third parties to develop select energy storage generation projects (“DevCo Projects”), as more fully described above under Note 1 — Business, of the Notes to the unaudited condensed consolidated financial statements in this report. These projects sometimes require significant upfront investment by us and can involve a high degree of risk. If a DevCo Project fails to reach completion or is significantly delayed, we could lose all or a portion of our development capital investment. See “We Face Risks Related to our DevCo Business Model” in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for additional information about certain risks related to these DevCo Projects.

Decline in Lithium-Ion Battery Costs

Our revenue growth is directly tied to the continued adoption of energy storage systems by our customers. The cost of lithium-ion energy storage hardware has generally declined over the last decade, but increased demand and global supply chain constraints or trade and tariff actions could cause price increases in the future. The market for energy storage is rapidly evolving, and while we believe costs will continue to decline over time, there is no guarantee. If costs do not continue to decline, or do not decline as quickly as we anticipate, this could adversely affect our ability to increase our revenue and grow our business. The United States Inflation Reduction Act of 2022 (the “IRA”) was signed into law in August 2022 and includes incentives and tax credits aimed at reducing the effects of climate change, such as a tax credit for stand-alone battery storage projects. The implementation of the IRA is expected to further reduce the cost of battery storage systems for certain customers; however, there are numerous restrictions and requirements associated with qualifying for the tax credits and other incentives available under the IRA, and we continue to assess Treasury Department and other guidance on how the IRA impacts our business. Additionally, a new Congress and presidential administration introduces uncertainty as to whether these financial and tax incentives will be modified, reduced or restricted in the future.

Increase in Deployment of Renewables

Deployment of intermittent resources has accelerated over the last decade, and today, wind and solar have become a low cost energy source. We expect the cost of generating renewable energy to continue to decline and deployments of energy storage systems to increase. As renewable energy sources of energy production are expected to represent a larger proportion of energy generation, grid instability rises due to their intermittency, which can be addressed by energy storage solutions. The IRA is expected to further increase the deployment of renewable energy assets, provided that the law or its implementation is not modified or restricted in a way that counters these effects. We are continuing to evaluate the IRA and its requirements, including Treasury Department guidance, and its application to our business and our customers.

Competition

Our key competitors include energy monitoring and optimization software providers, energy storage and edge device OEMs, hardware integration providers, renewable project developers, EPC firms, and consulting firms. In storage, our competitors are typically focused on the development and marketing of single-purpose built solutions with captive hardware offerings, while our AI-powered software is hardware agnostic, and benefits from operational data across a multitude of hardware types, geographies, utilities, and grid operator service areas. In solar, our competitors provide monolithic software and edge devices, whereas PowerTrack™ and our edge devices provide customers with a flexible solution that meets their individual project needs.

We believe we are well-positioned to compete successfully in the market for software and software-enabled services. We are among the leaders in global distributed solar and energy storage assets under management, supported by proven technology, focused customer service, strong strategic partnerships and a seasoned leadership team with a track record of success.

Existing competitors may expand their product offerings and sales strategies, and new competitors may enter the market. Furthermore, our competitors include other types of software providers and some hardware manufacturers that offer software solutions. If our market share declines due to increased competition, our revenue and ability to generate profits in the future may be adversely affected.

Government Regulation and Compliance

Although we are not regulated as a utility, the market for our products and services is heavily influenced by federal, state, and local government statutes and regulations concerning electricity. These statutes and regulations, like the IRA, affect electricity pricing, net metering, incentives, taxation, competition with utilities, and the interconnection of customer-owned electricity generation. In the United States and internationally, governments regularly modify these statutes and regulations and acting through state utility or public service commissions, regularly change and adopt different rates for commercial customers. These changes can positively or negatively affect our ability to deliver cost savings to customers.

Non-GAAP Financial Measures

In addition to financial results determined in accordance with U.S. generally accepted accounting principles (“GAAP”), we use adjusted EBITDA and non-GAAP gross profit and margin, which are non-GAAP financial measures, for financial and operational decision making and as a means to evaluate our operating performance and prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our operating performance, such as stock-based compensation and other non-cash charges, as well as discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and

analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance and liquidity as well as comparisons to our competitors’ operating results. We believe these non-GAAP financial measures are useful to investors because they both (1) allow for greater transparency with respect to key metrics used by management in its financial and operational decision making and (2) are used by our institutional investors and the analyst community to help them analyze the health of our business. Adjusted EBITDA and non-GAAP gross profit and margin should be considered in addition to, not as a substitute for, or superior to, other measures of financial performance prepared in accordance with GAAP.

Non-GAAP Gross Profit and Margin

We define non-GAAP gross profit as gross profit excluding amortization of capitalized software, impairments related to decommissioning of end-of-life systems, excess supplier costs and resulting liquidated damages, and reduction in revenue. We define non-GAAP gross margin as non-GAAP gross profit as a percentage of revenue.

In the three months ended March 31, 2024, we incurred costs of $1.0 million above initially agreed prices on the acquisition of certain hardware systems from one of our suppliers, which resulted from production delays by such supplier. Because we had not previously incurred costs above initially agreed prices with a hardware supplier, we excluded this item from adjusted EBITDA and non-GAAP gross profit to better facilitate comparisons of our underlying operating performance across periods.

The following table provides a reconciliation of GAAP gross profit (loss) and margin to non-GAAP gross profit and margin (in millions, except for percentages):


	2025			2024
Revenue	$	32.5		$	25.5
Cost of revenue	(22.0)			(49.7)
GAAP gross profit (loss)	10.5			(24.2)
GAAP gross margin (%)	32		%	(95)		%
Non-GAAP Gross Profit
GAAP Revenue	$	32.5		$	25.5
Add: Revenue reduction, net (1)	—			33.1
Subtotal	32.5			58.6
Less: Cost of revenue	(22.0)			(49.7)
Add: Amortization of capitalized software & developed technology	4.3			3.9
Add: Excess supplier costs (2)	—			1.0
Non-GAAP gross profit	$	14.8		$	13.8
Non-GAAP gross margin (%)	46		%	24		%

(1) Refer to the discussion of reduction in revenue in “— Parent Company Guarantees” above.

(2) Refer to the discussion of excess supplier costs in “— Non-GAAP Gross Profit and Margin” above.

Adjusted EBITDA

As discussed above, we believe that adjusted EBITDA is useful for investors to use in comparing our financial performance with the performance of other companies. Nonetheless, the expenses and other items that we exclude in our calculation of adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude when calculating adjusted EBITDA.

We calculate adjusted EBITDA as net loss attributable to us before depreciation and amortization, including amortization of internally developed software, interest expense, further adjusted to exclude stock-based compensation and other income and expense items, including reduction in revenue, excess supplier costs and resulting liquidated damages, and income tax provision or benefit.

The following table provides a reconciliation of adjusted EBITDA to net loss (in thousands):

	Three Months Ended March 31,
		2025		2024
	(in thousands)
Net loss		$	(25,000)	$	(72,307)
Adjusted to exclude the following:
Depreciation and amortization (1)		11,695		11,154
Interest expense		4,290		4,707
Stock-based compensation		4,317		8,374
Revenue reduction, net (2)		—		33,128
Excess supplier costs and resulting liquidated damages (3)		—		1,012
Provision for income taxes		58		153
Other expenses (4)		13		1,540
Adjusted EBITDA		$	(4,627)	$	(12,239)

(1) Depreciation and amortization includes depreciation and amortization expense, impairment loss of energy storage systems, impairment loss of project assets, and impairment loss of right-of-use assets.

(2) Refer to the discussion of reduction in revenue in “— Parent Company Guarantees” above.

(3) Refer to the discussion of excess supplier costs in “— Non-GAAP Gross Profit and Margin” above.

(4) Adjusted EBITDA for the three months ended March 31, 2024 reflects other expenses of $1.5 million, comprised of $1.1 million for expenses related to restructuring costs to pursue greater efficiency and to realign our business and strategic priorities, and $0.4 million of other non-recurring expenses.

Financial Results and Key Metrics

The following table presents our financial results and our key metrics (in millions, except for percentages and unless otherwise noted):


	2025			2024
Key Financial Metrics
Revenue	$	32.5		$	25.5
GAAP gross profit (loss)	$	10.5		$	(24.2)
GAAP gross margin (%)	32		%	(95)		%
Non-GAAP gross profit	$	14.8		$	13.8
Non-GAAP gross margin (%)	46		%	24		%
Net loss	$	(25.0)		$	(72.3)
Adjusted EBITDA	$	(4.6)		$	(12.2)
Key Operating Metrics
Bookings (1)	$	34.5		$	23.8
Contracted backlog* (2)	$	25.3		$	1,639.6
Storage operating AUM (in GWh)* (3)	1.6			0.8
Solar operating AUM (in GW)* (4)	32.4			26.9
CARR* (5)	$	69.0		$	89.3
ARR* (6)	$	56.9		$	45.1
* at period end
(1) Redefined versus prior periods. Beginning with this Report, the Company is redefining “Bookings” as the total value of executed purchase orders. Previously this metric included all relevant executed contracts, regardless of whether or not a related purchase order had been executed. The definition of Bookings is discussed in more detail below under the heading “Bookings.”
(2) Redefined versus prior periods. Beginning with this Report, the Company is redefining “Contracted Backlog” as the total value of hardware and non-recurring services bookings with executed purchase orders in dollars, as of a specific date. Previously, this metric included the total contract value of hardware, software and services contracts recognized ratably over the contract period, regardless of whether or not a related purchase order had been executed.
(3) New metric, introduced in this Report. Represents total GWh of energy storage systems in operation. Contracted storage AUM from prior periods has been replaced with this metric.
(4) Total GW of solar systems in operation.
(5) Contracted Annual Recurring Revenue (“CARR”): Redefined versus prior periods. Beginning with this Report, the Company is redefining CARR as the annualized value from Stem customer subscription contracts with executed purchase orders signed in the period for systems that are not yet operating and all operating Stem customer subscription contracts, including solar software, storage software & recurring managed services, and some recurring professional services contracts. Previously, this metric included the annualized value from all executed Stem customer subscription contracts, regardless of whether or not a related purchase order had been executed.
(6) Annual Recurring Revenue (“ARR”): New metric, introduced in this Report. Annualized value from operating customer subscription contracts, including solar software, storage software & recurring managed services, and some recurring professional services contracts.

Bookings

Due to the long-term nature of our contracts, bookings are a key metric that allows us to understand and evaluate the growth of our Company and our estimated future revenue related to customer contracts for our energy optimization services, sales of energy storage systems, asset monitoring software, edge devices, and project and professional service engagements. Bookings represent the total value of executed customer purchase orders. Customer purchase orders are typically executed three to six months ahead of hardware installation. The booking amount includes (1) hardware revenue, which is typically recognized at delivery of the energy storage system and/or edge device to the customer, and (2) services revenue, which represents the total nominal software and services contract value which will be recognized ratably over the contract period.

For host customer sales, bookings represent the expected consideration from energy optimization services contracts, including estimated incentive payments that are earned by the host customer from utility companies in relation to the services provided by us and assigned by the host customer to us. For host customer sales, there are no differences between bookings and remaining performance obligations at any point in time.

For partnership sales, once a purchase order has been executed, the booking is considered to be a contract in accordance with ASC 606, and therefore, gives rise to a remaining performance obligation as we have an obligation to transfer hardware and energy optimization services in our partnership agreements. We also have the contractual right to receive consideration for our performance obligations.

The accounting policy and timing of revenue recognition for host customer contracts and partnership arrangements that qualify as contracts with customers under FASB ASU 2014-09 Topic 606, Revenue from Contracts with Customers (“ASC 606”), are described within Note 2 — Summary of Significant Accounting Policies, in the accompanying notes to the consolidated financial statements included in Part II, Item 8, “Financial Statements and Supplementary Data” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Components of Our Results of Operations

Revenue

We generate services and other revenue and hardware revenue. Services and other revenue is generated through (i) energy optimization software (ii) asset management software, and (iii) the sale of project assets and advisory services. Software fees charged to customers generally consist of recurring fixed monthly payments throughout the term of the contract and in some arrangements, an installation and/or upfront fee component. We may also receive incentives from utility companies in relation to the sale of our services.

We generate hardware revenue through (i) sales of OEM energy storage systems and (ii) edge hardware devices. Performance obligations are satisfied when the energy storage system and edge hardware device along with all ancillary hardware components are delivered. The milestone payments received before the delivery of hardware are treated as deferred revenue. In certain customer contracts, we agreed to provide a guarantee that the value of purchased hardware will not decline for a certain period of time, as more fully described above under Note 3 — Revenue, of the Notes to the unaudited condensed consolidated financial statements in this Report.

Cost of Revenue

Cost of services and other revenue includes depreciation of the cost of energy storage systems we own under long-term customer contracts, which includes capitalized fulfillment costs, such as installation services, permitting and other related costs. Cost of services and other revenue also includes the costs for the development and constructions of project assets. Cost of revenue may also include any impairment of inventory and energy storage systems, along with system maintenance costs associated with the ongoing services provided to customers. Costs of revenue are recognized as energy optimization and other supporting services are provided to our customers throughout the term of the contract.

Cost of hardware revenue generally includes the cost of the hardware purchased from a manufacturer, shipping, delivery, and other costs required to fulfill our obligation to deliver the energy storage system to the customer location. Cost of hardware revenue may also include any impairment of energy storage systems held in our inventory for sale to our customer. Cost of hardware revenue related to the sale of energy storage systems is recognized when the delivery of the product is completed.

Gross Profit (Loss)

Our gross profit (loss) fluctuates significantly from quarter to quarter. Gross profit (loss), calculated as revenue less costs of revenue, has been, and will continue to be, affected by various factors, including fluctuations in the amount and mix of revenue and the amount and timing of investments to expand our customer base. Over the long term, we hope to increase both our gross profit in absolute dollars and gross margin as a percentage of revenue through enhanced operational efficiency and economies of scale.

Operating Expenses

Sales and Marketing

Sales and marketing expense consists of payroll and other related personnel costs, including salaries, stock-based compensation, commissions, bonuses, employee benefits, and travel for our sales and marketing personnel. In addition, sales and marketing expense includes trade show costs, amortization of intangibles and other expenses. We expect our sales and marketing expense to increase in future periods to support the overall growth in our business.

Research and Development

Research and development expense consists primarily of payroll and other related personnel costs for engineers and third parties engaged in the design and development of products, third-party software and technologies, including salaries, bonuses and stock-based compensation expense, project material costs, services and depreciation. Our research and development expenses support our investments in optimization, accuracy and reliability of our platform and other technology improvements to support and drive efficiency in our operations. These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments.

General and Administrative

General and administrative expense consists of payroll and other related personnel costs, including salaries, stock-based compensation, employee benefits and expenses for executive management, legal, finance and other costs. In addition, general and administrative expense includes fees for professional services and occupancy costs. We expect to continue to manage and reduce our general and administrative expense associated with scaling our business operations and being a public company, including compliance with the rules and regulations of the SEC, legal, audit, additional insurance expenses, investor relations activities, and other administrative and professional services.

Other Expense, Net

Interest Expense

Interest expense consists primarily of interest on our outstanding borrowings under our convertible senior notes, and financing obligations and accretion on our asset retirement obligations.

Other Income, Net

Other income, net consists primarily of income from equity investments and foreign exchange gains or losses.

Results of Operations for the Three Months Ended March 31, 2025 and 2024

	Three Months Ended<br>March 31,				Change	% Change
	2025		2024
	(in thousands, except percentages)
Revenue
Services and other revenue	$	17,721	$	14,840		19%
Hardware revenue	14,791		10,629		4,162	39%
Total revenue	32,512		25,469		7,043	28%
Cost of revenue
Cost of services and other revenue	11,413		9,984		1,429	14%
Cost of hardware revenue	10,561		39,676		(29,115)	(73)%
Total cost of revenue	21,974		49,660		(27,686)	(56)%
Gross profit (loss)	10,538		(24,191)		34,729	(144)%
Operating expenses:
Sales and marketing	6,792		11,126		(4,334)	(39)%
Research and development	11,328		14,136		(2,808)	(20)%
General and administrative	13,566		18,560		(4,994)	(27)%
Total operating expenses	31,686		43,822		(12,136)	(28)%
Loss from operations	(21,148)		(68,013)		46,865	(69)%
Other expense, net:
Interest expense	(4,290)		(4,707)		417	(9)%
Other income, net	496		566		(70)	(12)%
Total other expense, net	(3,794)		(4,141)		347	(8)%
Loss before provision for income taxes	(24,942)		(72,154)		47,212	(65)%
Provision for income taxes	(58)		(153)		95	(62)%
Net loss	$	(25,000)	$	(72,307)		(65)%

All values are in US Dollars.

*Percentage is not meaningful

Revenue

Revenue increased by $7.0 million, or 28%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The increase was primarily driven by a $4.2 million increase in hardware revenue primarily due to an increase in solar and storage hardware revenue from new and existing customers. Services and other revenue also increased by $2.9 million primarily due to an increase in solar subscription services revenue from existing and new customers.

Cost of Revenue

Cost of revenue decreased by $27.7 million, or 56%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The decrease was primarily driven by a decrease in cost of hardware revenue of $29.1 million due to a change in the mix of hardware and service offerings. This decrease was partially offset by an increase in cost of services and other revenue of $1.4 million primarily due to providing services at higher costs.

Operating Expenses

Sales and Marketing

Sales and marketing expense decreased by $4.3 million, or 39%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The decrease was driven by a decrease of $1.0 million in professional services, resulting from reductions in advisory services and office-related expenses as a result of marketing related subscription cancellations, and a decrease of $3.3 million in personnel related expenses due to a decrease in headcount.

Research and Development

Research and development expense decreased by $2.8 million, or 20%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The decrease was primarily due to a decrease of $2.9 million in personnel related expenses as a result of lower headcount, partially offset by an increase of $0.1 million in professional services and other expenses.

General and Administrative

General and administrative expense decreased by $5.0 million, or 27%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The decrease was primarily driven by a decrease of $4.8 million in personnel related expenses driven by lower stock-based compensation expense, a decrease of $0.4 million in professional services and other expenses, and an increase of $0.2 million in office-related expenses.

Other (Expense) Income, Net

Interest Expense, Net

Interest expense, net decreased by $0.4 million, or 9%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The decrease was primarily driven by a decrease of $0.5 million in interest on financing obligations, partially offset by the accretion of the discount on short-term investments of $0.1 million.

Other Income, Net

Other income, net decreased by $0.1 million, or 12%, for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024 primarily due to a $0.3 million decrease in interest income from short-term investments, partially offset by a $0.2 million increase due to the prior period reversal of a previously recognized accretion expense on assets.

Provision for Income Taxes

During the three months ended March 31, 2025, we recorded a provision for income taxes of $0.1 million primarily as a result of foreign income tax expense. During the three months ended March 31, 2024, we recorded a $0.2 million provision for income taxes primarily as a result of state income tax expense.

Liquidity and Capital Resources

Sources of Liquidity

Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, debt service, acquisitions, contractual obligations and other commitments. We assess liquidity in terms of our cash flows from operations and their sufficiency to fund our operating and investing activities. To meet our payment service obligations, we must have sufficient liquid assets and be able to move funds on a timely basis. Significant factors in the management of liquidity are funds generated from operations, levels of accounts receivable and accounts payable and capital expenditures.

As of March 31, 2025, our principal sources of liquidity were cash and cash equivalents of $58.6 million, which were held for working capital purposes and for investment growth opportunities. As of March 31, 2025, we had net accounts receivable of $34.7 million and our working capital (deficit), which we define as current assets less current liabilities, was a deficit of $9.6 million. We believe that our cash position is sufficient to meet our capital and liquidity requirements for at least the next 12 months.

The attainment of profitable operations is dependent upon future events, including successfully implementing our new business strategy, hiring and retaining our key executives and personnel with the requisite experience to develop our software and AI-based solutions, obtaining adequate financing to complete our development activities, developing an adequate network of suppliers, and building our customer base. Failure to successfully implement our new business strategy, generate sufficient revenues from our software and services offerings, achieve planned gross margins and operating profitability, control operating costs, or secure additional funding may require us to modify, delay, or abandon some of our planned future expansion or development, or to otherwise enact operating cost reductions available to management, which could have a material adverse effect on our business, operating results, and financial condition. The execution of our new strategy will entail significant operational changes, including reduction of what has historically been the source of most of our revenue (battery resales), adjustments to the way we develop and market our products and services, and realignment of our business processes. These changes are expected to result in reduced revenue, increased costs and short-term disruptions in our operations, which is expected to negatively impact our financial condition in the near term. Further, our cash reserves may constrain our ability to make the investments required to execute our new strategy or may otherwise not be sufficient to fund operations. If our cash

flow from operations does not improve as quickly as expected, or if we are unable to secure additional sources of capital if or when the need arises, it may have a material adverse effect on our business, financial condition, and results of operations.

In the future, we may be required to obtain additional equity or debt financing in order to support our continued capital expenditures and operations, which may not be available on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies, this could reduce our ability to compete successfully and harm our business, growth and results of operations.

Our long-term liquidity requirements are linked primarily to the expansion of our software and services offerings and the implementation of our new business strategy, as well as the continued extension of Athena PowerTrack and other software applications. While we have plans to potentially expand our geographical footprint beyond our current partnerships and enter into joint ventures, those are not required initiatives to achieve our plans.

Financing Obligations

We have entered into arrangements wherein we finance the cost of energy storage systems via special purpose entities (“SPEs”) we establish with outside investors. These SPEs are not consolidated into our financial statements, but are accounted for as equity method investments. The investors provide us upfront payments through the SPEs. Under these arrangements, the payment by the SPEs to us is accounted for as a borrowing by recording the proceeds received as a financing obligation. The financing obligation is repaid with the future customer payments and incentives received. A portion of the amounts paid to the SPE is allocated to interest expense using the effective interest rate method. Furthermore, we continue to account for the revenues from customer arrangements and incentives and all associated costs despite such systems being legally sold to the SPEs due to our significant continuing involvement in the operations of the energy storage systems. The total financing obligation as of March 31, 2025 was $54.6 million, of which $17.4 million was classified as a current liability.

2028 Green Convertible Senior Notes

On November 22, 2021, we sold to Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC and Barclays Capital Inc, as initial purchasers (the “2021 Initial Purchasers”), and the 2021 Initial Purchasers purchased from us, $460.0 million aggregate principal amount of our 0.50% Green Convertible Notes due 2028 (the “2028 Convertible Notes, pursuant to a purchase agreement dated as of November 17, 2021, by and between us and the 2021 Initial Purchasers. Our net proceeds from this offering were approximately $445.7 million, after deducting the 2021 Initial Purchasers’ discounts and commissions and the estimated offering expenses payable by us. The 2028 Convertible Notes will accrue interest payable semi-annually in arrears and will mature on December 1, 2028, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. Upon conversion, we 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 2028 Convertible Notes are redeemable for cash at our option at any time given certain conditions. Refer to Note 7 — Convertible Notes, of the Notes to the unaudited condensed consolidated financial statements in this Report for additional details regarding this transaction.

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 2028 Convertible Notes, we entered into capped call transactions with certain of the 2021 Initial Purchasers of the 2028 Convertible Notes to minimize the potential dilution to our common stockholders upon conversion of the 2028 Convertible Notes. We used approximately $66.7 million of the net proceeds from the 2028 Convertible Notes to pay the cost of the capped call transactions described above. We intend to allocate an amount equivalent to the net proceeds from this offering to finance or refinance, in whole or in part, our existing or new eligible green expenditures, including investments related to creating a more resilient clean energy system, optimized software capabilities for energy systems, and reducing waste through operations.

On April 3, 2023, we used approximately $99.8 million of the net proceeds from the issuance of the 4.25% Green Convertible Senior Notes due 2030 (“2030 Convertible Notes”) to purchase and surrender for cancellation approximately $163.0 million in aggregate principal amount of our 2028 Convertible Notes. See Note 7 — Convertible Notes, of the Notes to the unaudited condensed consolidated financial statements in this Report for additional details regarding this transaction.

2030 Convertible Notes

On April 3, 2023, we issued $240.0 million aggregate principal amount of our 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 in October 1, 2023. The 2030 Convertible Notes will mature on April 1, 2030, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. Upon conversion, we may choose to pay or deliver cash, shares of common stock or a combination of cash and shares of common stock. The 2030 Convertible Notes are redeemable for cash at our option

at any time given certain conditions. See Note 7 — Convertible Notes, of the Notes to the unaudited condensed consolidated financial statements in this Report, for additional details regarding this transaction.

Our net proceeds from this offering were approximately $232.4 million, after deducting for $7.6 million of debt issuance costs primarily consisting of underwriters, advisory, legal, and accounting fees. We used approximately $99.8 million of the net proceeds to purchase and surrender for cancellation approximately $163.0 million aggregate principal amount of our 2028 Convertible Notes.

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 2030 Convertible Notes, we entered into capped calls (the “2030 Capped Calls”) with certain counterparties. We used $27.8 million of the net proceeds from the 2030 Convertible Notes to pay the cost of the 2030 Capped Calls.

Cash Flows

The following table summarizes our cash flows for the periods indicated (in thousands):

	Three Months Ended March 31,
	2025		2024
Net cash provided by (used in) operating activities	$	8,536	$	(621)
Net cash (used in) provided by investing activities	(3,590)		4,675
Net cash (used in) provided by financing activities	(2,819)		3,142
Effect of exchange rate changes on cash, cash equivalents and restricted cash	158		233
Net increase in cash, cash equivalents and restricted cash	$	2,285	$	7,429

Operating Activities

During the three months ended March 31, 2025, net cash provided by operating activities was $8.5 million, primarily due to our net loss of $25.0 million, adjusted for non-cash items of $17.2 million and net cash inflow of $16.4 million from changes in operating assets and liabilities. Non-cash items primarily consisted of depreciation and amortization of $11.0 million, non-cash interest expense of $0.3 million related to debt issuance costs, stock-based compensation expense of $4.3 million, non-cash lease expense of $0.7 million, and provision for accounts receivable allowance of $0.1 million. The net cash inflow from changes in operating assets and liabilities was primarily driven by a decrease in accounts receivable of $24.4 million, a decrease in inventory of $2.1 million, a decrease in other assets of $2.0 million, an increase in accrued expenses and other liabilities of $3.9 million, partially offset by an increase in contract origination costs of $0.3 million, an increase in project assets of $1.5 million, a decrease in accounts payable of $10.5 million, a decrease in deferred revenue of $3.0 million, and a decrease in lease liabilities of $0.5 million.

During the three months ended March 31, 2024, net cash used in operating activities was $0.6 million, primarily due to our net loss of $72.3 million, adjusted for non-cash charges of $19.7 million and net cash inflow of $52.0 million from changes in operating assets and liabilities. Non-cash items primarily consisted of depreciation and amortization of $10.8 million, non-cash interest expense of $0.4 million, stock-based compensation expense of $8.4 million, non-cash lease expense of $0.8 million, and other non-cash items of $0.3 million, partially offset by provision for accounts receivable allowance of $1.0 million. The net cash inflow from changes in operating assets and liabilities was primarily driven by a decrease in accounts receivable of $63.9 million partially from a $33.1 million variable consideration adjustment, a decrease in inventory of $2.2 million, an increase in accrued expenses and other liabilities of $1.7 million, and an increase in deferred revenue of $2.7 million, partially offset by an increase in other assets of $0.7 million, an increase in contract origination costs of $0.4 million, an increase in project assets of $0.4 million, a decrease in accounts payable of $16.3 million, and a decrease in lease liabilities of $0.8 million.

Investing Activities

During the three months ended March 31, 2025, net cash used in investing activities was $3.6 million, and consisted of $3.6 million in capital expenditures related to internally-developed software.

During the three months ended March 31, 2024, net cash provided by investing activities was $4.7 million, and primarily consisted of $8.3 million in proceeds from maturities of available-for-sale investments, partially offset by $0.1 million in purchases of energy systems, $3.5 million in capital expenditures related to internally-developed software, and $0.1 million in purchases of property and equipment.

Financing Activities

During the three months ended March 31, 2025, net cash used in financing activities was $2.8 million, and primarily consisted of the repayment of financing obligations of $2.8 million.

During the three months ended March 31, 2024, net cash provided by financing activities was $3.1 million, and primarily consisted of proceeds from equity transactions to be remitted to tax authorities of $5.2 million, partially offset by the repayment of financing obligations of $2.1 million.

Contractual Obligations and Commitments

As of March 31, 2025, except as discussed in Note 12 — Commitments and Contingencies, there have been no material changes to our contractual obligations.

Off-Balance Sheet Arrangements

We are not a party to any off-balance sheet arrangements, including guarantee contracts, retained or contingent interests, or unconsolidated VIEs that either have, or would reasonably be expected to have, a current or future material adverse effect on our unaudited condensed consolidated financial statements.

Critical Accounting Policies and Estimates

A summary of our critical accounting policies and estimates is presented in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and there have been no material changes to our critical accounting estimates during the three months ended March 31, 2025.

Recent Accounting Pronouncements

As of March 31, 2025, there have been no material changes to the recent accounting pronouncements described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company, as defined by Rule 12b-2 under the Securities and Exchange Act of 1934, as amended, and in Item 10(f)(1) of Regulation S-K, and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (“Disclosure Controls”) within the meaning of Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Our Disclosure Controls are designed to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act, such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Our Disclosure Controls are also designed to provide reasonable assurance that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

Based on management’s evaluation (under the supervision and with the participation of our CEO and our CFO) of the effectiveness of the design and operation of our Disclosure Controls as of March 31, 2025, our CEO and CFO have concluded that our Disclosure Controls were effective at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting during the first quarter of 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Internal Controls

Our management, including our CEO and CFO, does not expect that our disclosure controls or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Furthermore, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in business conditions or deterioration in the degree of compliance with policies or procedures.

ITEM 1. LEGAL PROCEEDINGS

The information with respect to this Item 1 is set forth under Note 12 — Commitments and Contingencies, of the Notes to the unaudited condensed consolidated financial statements in this Report.

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors disclosed in Part 1, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

(c) Trading Plans. The following table describes contracts, instructions or written plans for the sale or purchase of our securities adopted or terminated by our Section 16 officers and directors during the three months ended March 31, 2025, and intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) (“Rule 10b5-1 Trading Plans”). No Section 16 officer or director adopted or terminated any non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K promulgated under the Exchange Act) during the three months ended March 31, 2025.

Name and Title	Date of Adoption or Termination of Rule 10b5-1 Trading Plan	Duration of Rule 10b5-1 Trading Plan	Aggregate Number of Securities to be Purchased or Sold
Matthew Tappin, President, Software	Adopted 03/18/2025	3/18/2025 through 3/31/2026	Sell up to 20,017 shares of common stock, subject to certain conditions

ITEM 6. EXHIBITS

	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).
10.1*†	Amendment to Executive Chair and Interim CEO Employment Agreement dated September 16, 2024 by and between the Company and David Buzby.
10.2*†	Separation and Release of Claims Agreement dated January 30, 2025 by and between the Company and William Bush.
10.3*†	Separation and Release of Claims Agreement dated March 24, 2025 by and between the Company and John Carrington.
31.1*	Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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)

*Filed herewith

**Furnished herewith

† Management or compensatory plan or arrangement

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized on April 29, 2025.

STEM, INC.
By:	/s/ Spencer Doran Hole
	Spencer Doran Hole
	Chief Financial Officer
	(Principal Financial Officer)

Document

EXHIBIT 10.1

AMENDMENT

EXECUTIVE EMPLOYMENT AGREEMENT

This Amendment to Executive Employment Agreement (this “Amendment”) by and between David Buzby (“Executive”) and Stem, Inc., a Delaware corporation (the “Company”) is effective as of January 1, 2025 (the “Amendment Date”).

WHEREAS, Executive and the Company are parties to the Executive Employment Agreement dated as of September 16, 2024 (the “Original Agreement”); and

WHEREAS, Executive and the Company desire to amend the Original Agreement as described in this Amendment.

NOW, THEREFORE, in consideration of the mutual covenants in this Amendment, the parties hereto agree that the Original Agreement is amended as set forth below. Unless otherwise defined in the Amendment, all capitalized terms used herein are defined in the Original Agreement.

1.The Term is extended until the earlier of (a) January 25, 2025 and (b) the termination of Executive’s employment under the terms of the Original Agreement (such extended term, the “Amended Term”).

2.Section 2.2 is amended and restated in its entirety to read as follows:

“2.2. Annual Bonus. For the duration of the Amended Term, Executive shall be eligible to receive a performance bonus (the “Annual Bonus”) targeted at one hundred twenty five percent (125%) of Base Salary, prorated for the portion of the year Executive serves as Executive Chairman and interim CEO, on such terms and conditions determined by the Board or a committee of the Board. The actual amount of any Annual Bonus (if any) will be determined in the discretion of the Board or a committee of the Board and will be (a) subject to achievement of any applicable bonus objectives and/or conditions determined by the Board or a committee of the Board and (b) subject to Executive’s continued employment with the Company through the date the Annual Bonus is earned; provided, however, that in no event shall the Annual Bonus be less than 75% of the target Annual Bonus, prorated for the portion of the year Executive serves as Executive Chairman and interim CEO. The Annual Bonus will be paid at the same time as bonuses for other Company executives are paid related annual bonuses generally.”

3.From the Amendment Date through the end of the Amended Term, Executive will not be entitled to receive the benefits set forth in Sections 2.4(a) or 2.4(b)(ii)-(iv) of the Original Agreement.

4.Executive shall receive an additional equity incentive grant in the form of stock options to acquire 66,667 shares of Company common stock at an exercise price equal to fair market value on the date of grant, subject to Executive’s employment through the end of the Amended Term (the “Additional Grant”). The Additional Grant shall vest in full at the end of the Amended Term, subject to Executive’s continued employment with the Company as Executive Chairman/interim CEO through that date; provided, that the Additional Grant shall vest in full upon the occurrence of a Change in Control (as defined in the 2024 Plan). The Additional Grant will be subject to the terms and conditions of the 2024 Plan and the Award Agreement, in accordance with Section 2.6 of the Original Agreement.

5.From the Amendment Date through the end of the Amended Term, Executive shall work from his personal residence in Vermont for up to two weeks. Executive agrees to travel to, and work from, the Company’s offices in any of San Francisco, California, Broomfield, Colorado, or Houston, Texas, for the remainder of Amended Term. In accordance with Section 2.4 of the Original Agreement, Executive shall be entitled to reimbursement for reasonable and documented travel expenses between Executive’s personal residence and the Company’s offices during this period.

6.Except as modified by this Amendment, the Original Agreement shall remain in full force and effect.

[Signature page follows]

In Witness Whereof, the parties have executed this Amendment as of the date first written above.

STEM, INC.

By:___________________________________ Name: Saul R. Laureles Title: Chief Legal Officer and Corporate Secretary

Accepted and Agreed:

_________________________ David Buzby

Signature Page to Amendment to Executive Employment Agreement

Document

EXHIBIT 10.2

Execution Copy

SEPARATION AND RELEASE OF CLAIMS AGREEMENT

This Separation and Release of Claims Agreement (as may be amended, the “Agreement”) constitutes a binding agreement between William Bush (“Executive”), an individual residing at P.O. Box 4687, Ketchum, Idaho, 83340, and the Company (as defined below), effective as of the Effective Date (as defined in Section 19 below). Executive and the Company are collectively referred to as the “Parties” or individually referred to as a “Party.”

Executive has been advised to consult with an attorney concerning its terms. By signing below, Executive is agreeing to the terms described below in return for the payments and benefits provided herein.

For purposes of this Agreement, (a) “Company” means Stem, Inc. a Delaware corporation, for and on behalf of its Affiliates, including without limitation, Stem US Operations Inc., a Delaware corporation; (b) “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with the Person in question. As used herein, the term “control” means (a) direct or indirect beneficial ownership of 50% or more of the voting securities or voting interest of a Person or, in the case of a limited partnership, of 50% or more of the general partnership interest, either directly or through an entity which the Person controls or (b) the possession of the power to direct the management of a Person, whether through contract or otherwise; and (c) “Person” means any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or governmental authority.

RECITALS

WHEREAS, Executive was, until September 2, 2024, the Chief Financial Officer of Stem, Inc., and was, until November 8, 2024, assisting the Company’s successor Chief Financial Officer and Executive Vice President in the transition; and

WHEREAS, Executive and Star Peak Energy Transition Corp. (predecessor entity to the Company) previously entered into that certain Executive Employment Agreement dated as of April 28, 2021 (the “Employment Agreement”); and

WHEREAS, Section 4.1 of the Employment Agreement provides that, in the event of a “Covered Termination” (as defined in Sections 1.6 and 1.9 therein), Executive will be entitled to receive the severance benefits described in Section 4.1(a) thereof, provided that Executive (A) delivers an effective general release of all claims against the Company and its Affiliates in a form provided by the Company, and that becomes effective and irrevocable within sixty (60) days following the Covered Termination and (B) continues to comply with Articles V through VII of the Employment Agreement; and

WHEREAS, the Parties agree that the termination of Executive’s employment with the Company is a “Covered Termination” as defined in the Employment Agreement; and

WHEREAS, Executive’s employment with the Company and its Affiliates terminated on November 8, 2024.

NOW, THEREFORE, in exchange for the mutual covenants and conditions contained herein, and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree as follows:

1.Last Day of Employment; Payments and Benefits. Executive’s employment with the Company and its Affiliates terminated on November 8, 2024, effective as of 12:01 a.m. Pacific Time (the “Separation Date”). As of the Separation Date, Executive has effectively resigned from any and all other corporate offices, directorships, powers of attorney, committee memberships, and any and all other corporate roles with the Company and its Affiliates. All of Executive’s health insurance benefits ceased effective as of 12:01 a.m. Pacific Time on November 8, 2024, subject to Executive’s right to continue his health insurance under COBRA as set forth below. Executive’s participation in all benefits and incidents of employment, including, but not limited to, the accrual of bonuses, vacation and paid time off, ceased as of the Separation Date.

Provided that Executive (1) signs and delivers this Agreement at or within twenty-one (21) days after receiving it and does not revoke it under Section 19 below and (2) complies with the post-employments covenants set forth in Section 8 below and continues to comply with Articles V through VII of the Employment Agreement, the Company will provide Executive the severance payments and benefits pursuant to Section 4.1(a) of the Employment Agreement, as further described below.

a.The Company shall pay to Executive any accrued but unpaid base salary and other accrued and unpaid compensation, including any accrued but unpaid vacation. In addition, the Company shall pay to Executive a sum of $318,750, being equal to nine (9) months of Executive’s annual base salary in effect on the Separation Date, less applicable withholdings, such net amount to be payable in a lump sum payment on the next payroll run that occurs after the Effective Date, and, in any event, no later than the sixtieth (60th) day following the Separation Date; provided, however, if such sixty (60) day period falls in two different calendar years, payment will be made in the later calendar year.

b.(i) Company shall pay Executive a pro-rata portion of Executive’s annual incentive bonus, based on a target opportunity of 75% of Executive’s base salary in effect at the Separation Date (the “Annual Bonus”) for the 2024 fiscal year, based on actual achievement of the applicable bonus objectives and conditions determined by the Board of Directors of Stem, Inc. (the “Board”) or a committee of the Board for such year (determined by multiplying the amount of the Annual Bonus that would be payable for the full fiscal year by a fraction, the numerator of which shall be equal to the number of days during the fiscal year of termination that Executive is employed by, and performing services for, the Company and the denominator of which is 365 days).

c.Subject to Executive’s timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company shall directly pay for the premium for Executive and Executive’s covered dependents to maintain continued health coverage pursuant to the provisions of COBRA through the earlier of (A) the nine month anniversary of the Separation Date and (B) the date Executive and Executive’s covered dependents, if any, become eligible for healthcare coverage under another employer’s plan(s). Notwithstanding the foregoing, if the Company is otherwise unable to continue to cover

Executive under its group health plans without penalty under applicable law (including without limitation, Section 2716 of the Public Health Service Act), then, in either case, an amount equal to each remaining Company subsidy shall thereafter be paid to Executive in substantially equal monthly installments.

Executive acknowledges and represents that, other than the consideration set forth in Section 1 above, the Company has paid or provided all salary, wages, bonuses, accrued vacation/paid time off, premiums, leaves, housing allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, stock, stock options, vesting, and any and all other benefits and compensation due to Executive.

2.Treatment of RSUs and Options. As of the Separation Date, (i) all outstanding and unvested restricted stock units and stock options previously issued to Executive by the Company are cancelled and forfeited automatically and (ii) all stock options that are vested as of the Separation Date shall (to the extent that Executive was entitled to exercise such award as of the date of Separation Date) be exercisable within the period of time ending on the earlier of (A) the date three (3) months following the termination of the Separation Date and (B) the expiration of the term of such stock options as set forth in the applicable award document pursuant to which such award was granted.

3.No Consideration Absent Execution, Delivery and Non-Revocation of this Agreement and Reaffirmation of Waiver and Release. Executive acknowledges that Executive was presented with a substantially final draft of the Agreement on September 5, 2024. Executive also acknowledges and agrees that the receipt of any monies or benefits as set forth in Section 1 hereof are subject to the Company’s receipt of an executed Agreement no later than January 27, 2025. After January 27, 2025, this Agreement shall be null and void if the executed Agreement is not received by the Company or if it is revoked under Section 19 hereof.

4.General Release of Claims. Executive, individually, and on behalf of Executive’s heirs, executors, administrators, successors, and assigns (collectively referred to throughout the remainder of this Agreement as “Executive”) knowingly and voluntarily releases and forever discharges Company, its Affiliates, predecessors, insurers, divisions, successors and assigns and the current and former employees, attorneys, officers, directors and agents thereof both individually and in their business capacities, and their employee benefit plans and programs and their administrators and fiduciaries (collectively referred to throughout the remainder of this Agreement as “Company Releasees”), of and from any and all disputes, differences, claims, complaints, grievances, charges, obligations, actions, petitions, and demands or causes of action (collectively, “Claims”) may lawfully be released by private agreement, known and unknown, that Executive has or may have against Company Releasees as of the date of Executive’s execution of this Agreement, including, but not limited to:

•any and all Claims arising out of or relating in any way to Executive’s employment relationship with the Company and its Affiliates and the termination of that relationship;

•any and all Claims relating to, or arising from, Executive’s right to purchase, or Executive’s actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal law;

•any and all Claims for wrongful discharge of employment, termination in violation of public policy, discrimination, harassment, retaliation, breach of contract (both express and implied), breach of covenant of good faith and fair dealing (both express and implied), promissory estoppel, negligent or intentional infliction of emotional distress, fraud, negligent or intentional misrepresentation, negligent or intentional interference with contract or prospective economic advantage, unfair business practices, defamation, libel, slander, negligence, personal injury, assault, battery, invasion of privacy, false imprisonment, conversion, and disability benefits;

•any and all Claims for violation of any federal, state, or municipal statute, regulation, or foreign constitution, including, but not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990, the Equal Pay Act, the Fair Labor Standards Act, the Fair Credit Reporting Act, the Age Discrimination in Employment Act of 1967, the Older Workers Benefit Protection Act, the Executive Retirement Income Security Act of 1974, the Worker Adjustment and Retraining Notification Act, the Family and Medical Leave Act, the Sarbanes-Oxley Act of 2002, the Immigration Control and Reform Act, the Affordable Care Act, the California Family Rights Act, the California Labor Code, the California Workers’ Compensation Act, and the California Fair Employment and Housing Act;

•any and all Claims for violation of the federal or any state constitution;

•any and all Claims arising out of any other laws and regulations relating to employment or employment discrimination;

•any Claim for any loss, cost, damage, or expense arising out of any dispute over the non-withholding or other tax treatment of any of the proceeds received by Executive as a result of this Agreement; or

•any allegation for costs, fees, or other expenses including attorneys’ fees incurred in these matters.

Executive agrees that the agreement set forth in this Section 4 shall be and remain in effect in all respects as a complete general release as to the matters released. The agreement set forth in this Section 4 shall not extend to any Claim or cause of action to enforce any obligations incurred under this Agreement. This Agreement is not intended to release any Claims that the Executive is not free to release on his own accord. Executive waives participation, to the extent permitted by law, in any class or collective action, as either a class or collective action representative or participant as to those claims not released, by signing this Agreement prior to the conditional certification of a class or collective action. This Agreement does not waive participation in a class or collective action certified prior to the date of Executive’s signature if Executive meets the requirements for the defined class or collective class.

Executive represents that he has made no assignment or transfer of any right, claim, complaint, charge, duty, obligation, demand, cause of action, or other matter waived or released by this Section 4.

Executive agrees that this Agreement does not apply to any rights or claims that may arise under the ADEA after the Effective Date. Executive acknowledges that the consideration given hereunder for this Agreement is in addition to anything of value to which Executive was already entitled to receive prior to entering into this Agreement. Executive further acknowledges that Executive has been advised and is advised by this writing that: (a) Executive should consult with an attorney prior to executing this Agreement; (b) Executive was given a copy of this Agreement on September 5, 2024, and has been given at least twenty-one (21) calendar days within which to consider whether to sign it; (c) if Executive accepts this Agreement, he has seven (7) calendar days following his execution hereof to revoke it;; and (d) nothing in this Agreement prevents or precludes Executive from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law. In the event Executive signs this Agreement and returns it to the Company in fewer than the 21-calendar day period identified above, Executive hereby acknowledges that he has freely and voluntarily chosen to waive the time period allotted for considering this Agreement. Executive acknowledges and understands that revocation must be accomplished by a written notification to the Chief People Officer, of Stem, Inc. at Kim.Homenock@stem.com and received on or before the 7th calendar day following execution of this Agreement. In the event Executive timely revokes acceptance of this Agreement, the Company shall have no obligation to pay, or otherwise deliver to Executive, any part of the consideration hereunder. The Parties agree that changes, whether material or immaterial, do not restart the running of the 21-calendar day period.

6.California Civil Code Section 1542. Executive acknowledges that he has been advised to consult with legal counsel and is familiar with the provisions of California Civil Code Section 1542, a statute that otherwise prohibits the release of unknown claims, which provides as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, AND THAT, IF KNOWN BY HIM OR HER WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

7.Affirmations. Executive affirms that Executive has not filed, caused to be filed, and is not currently a party to, any claim, complaint, or action against any Company Releasees in any forum or form. If the aforementioned is not accurate, Executive acknowledges and agrees that such claims, complaints or actions, to the extent permitted by law, may be waived by this Agreement, and Company advises Executive to consult with an attorney prior to executing this Agreement. Executive furthermore affirms that Executive has no known workplace injuries or occupational diseases.

Executive affirms that all of the Company’s decisions regarding Executive’s pay and benefits through the Separation Date were not discriminatory based on age, disability, race, color, sex, sexual orientation, gender, gender identity, gender expression, pregnancy, marital status, veteran status, religion, national origin, ancestry, mental or physical disability, medical condition, denial of family and medical care leave, or any other classification protected by law.

Executive affirms that, with respect to any portion of Executive’s compensation or benefits that are based on hours worked, Executive affirms that Executive has accurately reported and been paid for all hours worked and has received all compensation, wages, bonuses, commissions and benefits which are due and payable as of the date of Executive’s execution of this Agreement.

Executive further affirms that Executive has not been retaliated against for reporting any allegations of wrongdoing by Company or its officers, including any allegations of corporate fraud. Executive understands that Company has relied upon Executive’s representations herein. As set forth in Section 10 below, nothing in this Agreement shall in any way limit or prohibit Executive from engaging for a lawful purpose in filing a charge or complaint, or otherwise communicating, cooperating, or participating with, any state, federal, or other governmental agency, including the Securities and Exchange Commission (the “SEC”), the Equal Employment Opportunity Commission (the “EEOC”), or the National Labor Relations Board (the “NLRB”) regarding any possible violations of law.

8.Consideration and Post-Employment Covenants. For the consideration provided to Executive in this Agreement and subject to Section 10 below, Executive (1) agrees to continue to comply with Article V (Proprietary Information and Confidentiality Obligations) and Article VI (Section 6.3 only) of the Employment Agreement. Article V (Proprietary Information and Confidentiality Obligations) and Article VI (Section 6.3 only) are incorporated herein by reference as if set out in full, and also (2) agrees to be bound by the following covenants:

a.Return of Property. Executive certifies to the Company that he has delivered to the Company all (and has not kept in Executive’s possession or control, and has not recreated or delivered to anyone else, any) Confidential Information (as defined in Section 5.2(d) of the Employment Agreement) of the Company and its Affiliates, as well as all other computers, devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, customer or client lists or information, or any other documents or property (including all reproductions of the aforementioned items) belonging to the Company or any of its Affiliates or ventures, regardless of whether such items were prepared by Executive. Executive’s signature below constitutes Executive’s certification under penalty of perjury that Executive has returned all documents and other items provided to Executive by the Company or any of its Affiliates, developed or obtained by Executive in connection with his employment with the Company, or otherwise belonging to the Company. Executive understands that the Company, in its sole discretion, may choose to delay any benefits or payments due to Executive under this Agreement unless and until Executive complies with this paragraph, but such delay shall not relieve Executive of Executive’s other obligations under this Agreement or Executive’s release of claims. The obligations in this Section 8(a) are in addition to Executive’s obligations set forth in Section 5 of that certain At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement previously executed by and between Executive and Stem, Inc. and executed by Executive on October 14, 2016 (the “PIAA”). Executive agrees that Executive will continue to comply with the PIAA.

restriction will be limited to persons: (1) with whom Executive had contact or business dealings while employed by Company; (2) who worked in Executive’s business unit; or (3) about whom Executive had access to confidential information. If Executive resides in California at the time this Agreement is entered into, then the forgoing restriction shall not be applicable to Executive if it would restrain Executive from “engaging in a lawful profession, trade, or business of any kind” as such is interpreted under Cal. Bus. & Prof. Code §16600. However, conduct involving misappropriation of Company trade secrets will remain prohibited and nothing in this Agreement shall be construed to limit or eliminate any rights or remedies the Company would have against Executive under trade secret law, unfair competition law, or other laws applicable in California absent this Agreement, if Executive uses trade secrets or other protected confidential information to help a competitor solicit an employee of the Company.

d.Competition. In order to protect the Company’s goodwill and other legitimate business interests, provide greater flexibility to Executive in obtaining other employment, and to provide the Parties with greater certainty as to their obligations hereunder, the Parties agree that Executive shall not be prohibited from accepting employment or otherwise rendering or engaging in any Services (as defined below), anywhere in the world with any company or other enterprise except an Unauthorized Competitor (as defined below). During the Relevant Period, Executive shall not directly or indirectly, whether as an officer, director, stockholder, partner, proprietor, associate, representative, consultant, or in any capacity whatsoever engage in, become financially interested in, be employed by or have any business connection (any of the foregoing, the “Services”) with any of the following entities (each, an “Unauthorized Competitor”): (1) Fluence; (2) FlexGen; (3) Fractal Analytics; (4) Ascend; (5) GE Vernova; (6) Powin; or (7) Tesla, or any of their respective Affiliates as of the date of this Agreement, as well as any of their successors or assigns, with such restriction being limited to the United States of America. With respect to any Unauthorized Competitor described in clauses (5)-(7) above, Services to be provided by Executive to any such Unauthorized Competitor will be in violation of this paragraph (d) if (i) the Services that Executive is to provide to any such Unauthorized Competitor are the same as, or substantially similar to, any of the services that Executive provided to the Company or its Affiliates; or (ii) the trade secrets, confidential information, or proprietary information (including, without limitation, confidential or proprietary methods) of the Company and its Affiliates to which the Executive had access could reasonably be expected to benefit the Unauthorized Competitor if the Unauthorized Competitor were to obtain access to such secrets or information. For purposes of this paragraph (d), services provided by others shall be deemed to have been provided by Executive if Executive had material supervisory responsibilities with respect to the provision of such services. Anything above to the contrary notwithstanding, Executive may own, as a passive investor, securities of any competitor corporation, so long as Executive’s direct holdings in any one such corporation

do not, in the aggregate, constitute more than 1% of the voting stock of such corporation If any such actual or potential conflict arises during the Relevant Period, Executive shall immediately notify the Company in writing at Kim.Homenock@stem.com and Saul.Laureles@stem.com. If the Company determines, in its sole discretion, that Executive has breached this Section 8.d., then Section 2.b. shall become be null and void and all such options shall be cancelled and forfeited automatically, and Company shall notify Executive in writing.

e.Executive agrees that these restrictions are reasonable in light of the consideration given. Executive was given an opportunity to review these restrictions, advised to consult with an attorney, and agreed to these restrictions as an agreement ancillary to Executive’s agreement to protect the Company’s Confidential Information, which was made in exchange for the Company’s provision of confidential information, as well as its agreement to the additional benefits provided in Section 2. The Company is relying on Executive’s commitment to comply with the restrictions set forth in this Section 8 in agreeing to pay the consideration set forth in Section 2 and this commitment is ancillary to Executive’s agreement to protect the Company’s confidential information. Executive acknowledges that in the event of a breach by Executive of any of these restrictive covenants, the covenants may be enforced by temporary restraining order, preliminary or temporary injunction and permanent injunction, in addition to any other remedies that may be available by law. In that connection, Executive acknowledges that in the event of a breach, the Company will suffer irreparable injury for which there is no adequate legal remedy, in part because damages caused by the breach may be difficult to prove with any reasonable degree of certainty.

f.Reasonable Cooperation. Beginning on the Separation Date and for twelve (12) months thereafter, Executive agrees that Executive will reasonably cooperate with and assist the Company, its subsidiaries and Affiliates, and any of their respective officers, directors, shareholders or employees: (A) concerning requests for information about the business of the Company or its subsidiaries or Affiliates or Executive’s involvement and participation therein (including but not limited to requests and subpoenas to provide information or testimony); and (B) in connection with any investigation or review by the Company or any federal, state or local regulatory, quasi-regulatory or self-governing authority as any such investigation or review relates to events or occurrences that transpired while Executive were employed by the Company. Executive’s cooperation shall include, but not be limited to (taking into account Executive’s personal and professional obligations, including those to any new employer or entity to which Executive provide services), being available to meet and speak with officers or employees of the Company and/or the Company’s counsel at reasonable times and locations, executing accurate and truthful documents, and taking such other actions as may reasonably be requested by the Company and/or the Company’s counsel to effect the foregoing. Executive shall be entitled to reimbursement from the Company, upon receipt by the Company of suitable documentation, for reasonable and necessary travel and other expenses which Executive may incur on such matters at the specific request of the Company and as approved by the Company in advance and in accordance with its policies and procedures established from time to time.

g.LinkedIn and Social Media Profiles. Executive agrees that, within five (5) days following the date of execution of this Agreement, Executive will update his

LinkedIn and other social media profiles as necessary to reflect that he no longer works for Stem, Inc. or its Affiliates.

9.Confidentiality of Agreement. Except as (a) otherwise required by law or regulation or permitted by Section 10 below, Executive agrees to maintain in complete confidence the existence of this Agreement, the contents and terms of this Agreement, and the consideration for this Agreement (hereinafter collectively referred to as “Separation Information”). Except as required by law, Executive may disclose Separation Information only to his immediate family members, the Court in any proceedings to enforce the terms of this Agreement, Executive’s attorney(s), and Executive’s accountant and any professional tax advisor to the extent that they need to know the Separation Information in order to provide advice on tax treatment or to prepare tax returns and must prevent disclosure of any Separation Information to all other third parties. Executive agrees that he will not publicize, directly or indirectly, any Separation Information.

10.Protected Activity Not Prohibited. Executive understands that nothing in this Agreement or Exhibit A shall in any way limit or prohibit Executive from engaging for a lawful purpose in any Protected Activity. For purposes of this Agreement, “Protected Activity” means disclosing, discussing, or making truthful statements about sexual harassment or sexual assault disputes, or any other unlawful or unsafe Company conduct or practices; filing a charge or complaint, or otherwise communicating, cooperating, or participating with, any state, federal, or other governmental agency, including the SEC, the EEOC or the NLRB regarding any possible violations of law. However, to the maximum extent permitted by law, Executive agrees that Executive is waiving rights to individual relief (including backpay, frontpay, reinstatement or other legal or equitable relief) in any charge, complaint, or lawsuit or other proceeding brought by Executive or on Executive’s behalf by any third party, except for any right Executive may have to receive a payment or award from a government agency (and not the Company) for information provided to the government agency or otherwise where prohibited. Notwithstanding any restrictions set forth in this Agreement, Executive understands that he is not required to obtain authorization from the Company prior to disclosing information to, or communicating with, such agencies, nor is Executive obligated to advise the Company as to any such disclosures or communications. Notwithstanding, in making any such disclosures or communications, Executive agrees to take all reasonable precautions to prevent any unauthorized use or disclosure of any information that may constitute Confidential Information of the Company and its Affiliates to any parties other than the relevant government agencies. Executive further understands that “Protected Activity” does not include the disclosure of any Company attorney-client privileged communications, and that any such disclosure without the Company’s written consent shall constitute a material breach of this Agreement. Executive understands that pursuant to 18 USC § 1833(b), an individual may not be held criminally or civilly liable under any federal or state trade secret law for disclosure of a trade secret: (a) made in confidence to a government official, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law; and/or (b) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Additionally, an individual suing an employer for retaliation based on the reporting of a suspected violation of law may disclose a trade secret to his or her attorney and use the trade secret information in the court proceeding, so long as any document containing the trade secret is filed under seal and the individual does not disclose the trade secret except pursuant to court order.

11.No Cooperation. Executive agrees that he will not knowingly encourage, counsel, or assist any attorneys or their clients in the presentation or prosecution of any Claims by any third party against any of the Company Releasees, unless under a subpoena or other court order to do so or as related directly to the ADEA waiver in this Agreement. Executive agrees both to immediately notify the Company upon receipt of any such subpoena or court order, and to furnish, within three (3) business days of its receipt, a copy of such subpoena or other court order. If approached by anyone for counsel or assistance in the presentation or prosecution of any Claims against any of the Company Releasees, Executive shall state no more than that he cannot provide counsel or assistance. Nothing in this Agreement, including this Section 11 and Section 9 above, shall be construed as requiring Executive to cooperate with the Company with respect to any charge or litigation in which Executive is a plaintiff or complaining party, or any confidential investigation by a competent government agency in which Executive is a witness for or providing support to a charging or complaining party or are asked by a Government Agency to maintain confidentiality.

12.Governing Law and Venue; Reformation; Severability. This Agreement shall be construed, interpreted, and enforced in accordance with the laws of the State of Texas, without regard to its choice of law principles. This choice of law does not apply in California or where otherwise unenforceable, in which case the law of the jurisdiction in which Executive last worked for the Company will apply. Venue for any dispute(s) arising from or related to this Agreement shall lie solely, and is convenient, in San Francisco County, California. Executive consents to the choice of law and venue provisions of this Agreement and agrees that Executive will not contest these provisions in any future proceeding(s).

In the event Executive breaches any provision of this Agreement, Executive and Company affirm that the Company may institute an action to specifically enforce any term or terms of this Agreement. The Company’s right to injunctive relief is in addition to any rights otherwise available to Company, and the parties agree such injunctive relief may be obtained without the necessity of posting any bond.

Should any provision of this Agreement be declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, excluding the general release language, such provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect.

13.Breach. In addition to the rights provided in the “Attorneys’ Fees” section below, Executive acknowledges and agrees that any material breach of this Agreement, unless such breach constitutes a legal action by Executive challenging or seeking a determination in good faith of the validity of the waiver herein under the ADEA, or the confidentiality provisions hereof shall entitle the Company immediately to recover and cease providing the consideration provided to Executive under this Agreement and to obtain damages, except as provided by law.

14.Attorneys’ Fees. Except with regard to a legal action challenging or seeking a determination in good faith of the validity of the waiver herein under the ADEA, in the event that either Party brings an action to enforce or effect its rights under this Agreement, the prevailing Party shall be entitled to recover its costs and expenses, including the costs of mediation, arbitration, litigation, court fees, and reasonable attorneys’ fees incurred in connection with such an action.

15.No Admission of Liability. Executive understands and acknowledges that this Agreement constitutes a compromise and settlement of any and all actual or potential disputed Claims by Executive. No action taken by the Company or any of its Affiliates hereto, either previously or in connection with this Agreement, shall be deemed or construed to be (a) an admission of the truth or falsity of any actual or potential Claims or (b) an acknowledgment or admission by the Company or any of the other Company Releasees of any fault or liability whatsoever to Executive or to any third party, or (c) an admission by the Company or any other of the Company Releasees that they engaged in any wrongful or unlawful act or that the Company or any other Releasee violated any federal or state law or regulation.

16.Amendment. This Agreement may not be modified, altered or changed except in writing and signed by both Parties wherein specific reference is made to this Agreement.

17.Entire Agreement. This Agreement, (including all Exhibits and Schedules), and Articles V through VII of the Employment Agreement, set forth the entire agreement between the Parties with respect to the subject matter hereof, and fully supersedes any prior agreements or understandings between the Parties, except any agreement between Executive and Company (including Company’s Affiliates) containing restrictions relating to patents, confidential information, intellectual property, solicitation, or competition. Executive acknowledges that he has not relied on any representations, promises or agreements of any kind made to him/her in connection with the decision to accept this Agreement except for those set forth in this Agreement. If there is any conflict between Articles V through VII of the Employment Agreement and this Agreement, Articles V through VII of the Employment Agreement shall control.

18.Notices. Any notice, request, instruction, correspondence or other document to be given hereunder by either Party to the other shall be sufficient if in writing and delivered in person or by courier service (with proof of receipt of delivery); mailed by certified mail, first-class postage prepaid and return receipt requested; or by confirmed electronic mail, as follows:

If to the Company: c/o Stem, Inc.

4 Embarcadero Center, Suite 710

San Francisco, CA 94111

Attention: Chief People Officer kim.homenock@stem.com

If to Executive: William Bush

P.O. Box 4687 Ketchum, Idaho 83340

details specified in this paragraph; provided, however, that such notification shall only be effective on the date specified in such notice or five (5) business days after the notice is given, whichever is later. Rejection or other refusal to accept or the inability to deliver because of changed address of which no prior written notice was given shall be deemed to be receipt of the notice as of the date of such rejection, refusal or inability to deliver.

19.Right to Revoke; Effective Date. Within seven (7) days following the date of execution of this Agreement (the “Revocation Period”), Executive may revoke acceptance of this Agreement by delivering written notification to Kim Homenock, at Kim.Homenock@stem.com. If Executive revokes his acceptance within this seven-day revocation period, no payments or benefits described in this Agreement will be provided to Executive. This Agreement shall not become effective until the eight calendar days after of Executive signs, without revoking, this Agreement (the “Effective Date”). No payments or other benefits due to Executive under this Agreement shall be made or begin before the Effective Date.

20.Binding Effect and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective permitted successors and assigns; but neither this Agreement nor any of the rights, benefits or obligations hereunder shall be assigned, by operation of law or otherwise, by any Party without the prior written consent of the other Party; provided, however, that Company may assign its rights and obligations hereunder to any Affiliate, and Executive specifically consents to such future assignment. Nothing in this Agreement, express or implied, is intended to confer upon any person or entity other than the Parties and their respective permitted successors and assigns, any rights, benefits or obligations hereunder.

21.Costs. The Parties shall each bear their own costs, attorneys’ fees, and other fees incurred in connection with the preparation of this Agreement.

22.ARBITRATION. THE PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE TERMS OF THIS AGREEMENT, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN RELEASED, SHALL BE SUBJECT TO ARBITRATION IN SAN FRANCISCO COUNTY, BEFORE JUDICIAL ARBITRATION & MEDIATION SERVICES (“JAMS”), PURSUANT TO ITS EMPLOYMENT ARBITRATION RULES & PROCEDURES (“JAMS RULES”). THE ARBITRATOR MAY GRANT INJUNCTIONS AND OTHER RELIEF IN SUCH DISPUTES. THE ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY ARBITRATION IN ACCORDANCE WITH CALIFORNIA LAW, INCLUDING THE CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE ARBITRATOR SHALL APPLY SUBSTANTIVE AND PROCEDURAL CALIFORNIA LAW TO ANY DISPUTE OR CLAIM, WITHOUT REFERENCE TO ANY CONFLICT-OF-LAW PROVISIONS OF ANY JURISDICTION. TO THE EXTENT THAT THE JAMS RULES CONFLICT WITH CALIFORNIA LAW, CALIFORNIA LAW SHALL TAKE PRECEDENCE. THE DECISION OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE, AND BINDING ON THE PARTIES TO THE ARBITRATION. THE PARTIES AGREE THAT THE PREVAILING PARTY IN ANY ARBITRATION SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION TO ENFORCE THE ARBITRATION AWARD. THE PARTIES TO THE ARBITRATION SHALL EACH PAY AN EQUAL SHARE OF THE COSTS AND EXPENSES OF SUCH ARBITRATION, AND EACH PARTY SHALL SEPARATELY PAY FOR ITS RESPECTIVE COUNSEL FEES AND EXPENSES; PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL AWARD ATTORNEYS’ FEES AND COSTS TO THE PREVAILING PARTY, EXCEPT AS PROHIBITED BY LAW. THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY. NOTWITHSTANDING THE FOREGOING, THIS SECTION WILL NOT PREVENT EITHER

23.Tax Consequences. The Company makes no representations or warranties with respect to the tax consequences of the payments and any other consideration provided to Executive or made on his/her behalf under this Agreement. Executive agrees and understands that he is responsible for payment, if any, of local, state, and/or federal taxes on the payments and any other consideration provided hereunder by the Company and any penalties or assessments thereon. Executive further agrees to indemnify and hold the Company harmless from any Claims, deficiencies, penalties, interest, assessments, executions, judgments, or recoveries by any government agency against the Company or any of its Affiliates for any amounts claimed due on account of (a) Executive’s failure to pay or delayed payment of federal or state taxes, or (b) damages sustained by the Company or any of its Affiliates by reason of any such claims, including attorneys’ fees and costs.

24.Section 409A. It is intended that this Agreement comply with, or be exempt from, Code Section 409A and the final regulations and official guidance thereunder (“Section 409A”) and any ambiguities herein will be interpreted to so comply and/or be exempt from Section 409A. Each payment and benefit to be paid or provided under this Agreement is intended to constitute a series of separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations. The Company and Executive will work together in good faith to consider either (a) amendments to this Agreement; or (b) revisions to this Agreement with respect to the payment of any awards, which are necessary or appropriate to avoid imposition of any additional tax or income recognition prior to the actual payment to Executive under Section 409A. In no event will the Company reimburse Executive for any taxes that may be imposed on Executive as a result of Section 409A.

25.Counterparts. This Agreement and other documents to be delivered pursuant to this Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy and all of which, when taken together, will be deemed to constitute one and the same agreement or document, and will be effective when counterparts have been signed by each of the Parties and delivered to the other Party. Each Party agrees that the electronic signatures, whether digital or encrypted, of the Parties included in this Agreement are intended to authenticate this writing and to have the same force and effect as manual signatures. Delivery of a copy of this Agreement or any other document contemplated hereby, bearing an original manual or electronic signature by facsimile transmission (including a facsimile delivered via the Internet), by electronic mail in “portable document format” (“.pdf”) or similar format intended to preserve the original graphic and pictorial appearance of a document,

or through the use of electronic signature software will have the same effect as physical delivery of the paper document bearing an original signature.

EXECUTIVE HAS BEEN ADVISED THAT HE HAS TWENTY-ONE (21) CALENDAR DAYS TO CONSIDER THIS AGREEMENT, AND HAS BEEN ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT.

EXECUTIVE AGREES THAT ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT DO NOT RESTART OR AFFECT IN ANY MANNER THE 21-DAY CONSIDERATION PERIOD.

EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS CAREFULLY READ AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THIS AGREEMENT.

HAVING ELECTED TO EXECUTE THIS AGREEMENT, TO FULFILL THE PROMISES SET FORTH HEREIN, AND TO RECEIVE THEREBY THE SUMS AND BENEFITS SET FORTH IN SECTIONS 1 AND 2 ABOVE, EXECUTIVE FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS EXECUTIVE HAS OR MIGHT HAVE AGAINST COMPANY AND ITS AFFILIATES.

EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS BEEN INFORMED OF HIS/HER RIGHT TO REVOKE THIS AGREEMENT FOR A PERIOD OF SEVEN DAYS FOLLOWING EXECUTION HEREOF AS DESCRIBED IN SECTION 5 HEREOF.

[signature page follows]

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the dates set forth below their respective signatures, but effective as of the Effective Date set forth herein.

STEM, INC.

By: Name: Kim Homenock Title: Chief People Officer Date:

EXECUTIVE

Name: William Bush Date:

Document

EXHIBIT 10.3

Execution Copy

SEPARATION AND RELEASE OF CLAIMS AGREEMENT

This Separation and Release of Claims Agreement (as may be amended, the “Agreement”) constitutes a binding agreement between John E. Carrington (“Executive”), an individual, and the Company (as defined in the next paragraph), effective as of the Effective Date (as defined below). Executive and the Company are collectively referred to as the “Parties” or individually referred to as a “Party.”

Executive is advised to consult with an attorney concerning its terms. By signing below, Executive is agreeing to the terms described below in return for the payments and benefits provided herein.

For purposes of this Agreement, (a) “Company” means Stem, Inc., a Delaware corporation, for and on behalf of its Affiliates, including without limitation, Stem US Operations Inc., a Delaware corporation; (b) “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with the Person in question. As used herein, the term “control” means (a) direct or indirect beneficial ownership of 50% or more of the voting securities or voting interest of a Person or, in the case of a limited partnership, of 50% or more of the general partnership interest, either directly or through an entity which the Person controls or (b) the possession of the power to direct the management of a Person, whether through contract or otherwise; and (c) “Person” means any individual, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, or other entity or governmental authority.

RECITALS

WHEREAS, Executive was the Chief Executive Officer of Stem, Inc. until September 11, 2024; and

WHEREAS, Executive and the Company previously entered into that certain Executive Employment Agreement, dated April 28, 2021 (the “Employment Agreement”); and

WHEREAS, Section 4.1(a) of the Employment Agreement provides that, in the event of a “Covered Termination” (as defined in Sections 1.6 therein) not in connection with a Change in Control (as defined therein), Executive will be entitled to receive the severance benefits described in Section 4.1(a) thereof, provided that Executive (A) delivers an effective general release of all claims against the Company and its Affiliates in a form provided by the Company, and that becomes effective and irrevocable within sixty (60) days following the Covered Termination and (B) continues to comply with Articles V through VII of the Employment Agreement; and

WHEREAS, the Parties agree that the termination of Executive’s employment with the Company is a “Covered Termination” as defined in the Employment Agreement; and

WHEREAS, Executive’s employment with the Company and its Affiliates terminated on December 31, 2024.

1.Last Day of Employment; Payments and Benefits. Executive’s last day of employment with the Company and its Affiliates was December 31, 2024 (the “Separation Date”). On September 11, 2024, Executive resigned from all corporate offices, directorships, powers of attorney, committee memberships, and any and all other corporate roles with the Company. All of Executive’s health insurance benefits ceased effective as of 12:01 a.m. Pacific Time on December 31, 2024, subject to Executive’s right to continue his health insurance under COBRA as set forth below. Executive’s participation in all benefits and incidents of employment, including, but not limited to, the accrual of bonuses, vacation and paid time off, ceased as of the Separation Date.

Provided that Executive (1) signs and delivers this Agreement at or within twenty-one (21) days after receiving it and does not revoke it under Section 5 below and (2) continues to comply with Articles V through VII of the Employment Agreement, the Company will provide Executive the severance payments and benefits pursuant to Section 4.1(a) of the Employment Agreement, as further described in this Section 1.

a.The Company shall pay to Executive any accrued but unpaid base salary and other accrued and unpaid compensation, including any accrued but unpaid vacation. In addition, the Company shall pay to Executive a sum of $600,000, being equal to twelve (12) months of Executive’s annual base salary in effect on the Separation Date, less applicable withholdings, such net amount to be payable in a lump sum payment as soon as administratively practicable following the Effective Date (as defined in Section 19 below).

b.The Company shall pay Executive a pro-rata portion of Executive’s annual incentive bonus, based on a target opportunity of 125% of Executive’s base salary in effect on the Separation Date (the “Annual Bonus”) for the 2024 fiscal year, based on actual achievement of the applicable bonus objectives and conditions determined by the Board of Directors of Stem, Inc. (the “Board”) or a committee of the Board for such year (determined by multiplying the amount of the Annual Bonus that would be payable for the full fiscal year by a fraction, the numerator of which shall be equal to the number of days during the fiscal year of termination that Executive is employed by, and performing services for, the Company and the denominator of which is 365 days), at the same time bonuses for such year are paid to other senior executives of the Company, but in no event later than March 15, 2025.

c.Subject to Executive’s timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), the Company shall directly pay, or reimburse Executive for the premium for Executive and Executive’s covered dependents to maintain continued health coverage pursuant to the provisions of COBRA through the earlier of (A) the twelve month anniversary of the Separation Date and (B) the date Executive and Executive’s covered dependents, if any, become eligible for healthcare coverage under another employer’s plan(s). Notwithstanding the foregoing, if the Company is otherwise unable to continue to cover Executive under its group health plans without penalty under applicable law (including without limitation, Section 2716 of the Public Health Service Act),

then, in either case, an amount equal to each remaining Company subsidy shall thereafter be paid to Executive in substantially equal monthly installments.

2.Treatment of RSUs and Options.

a.Reference is made to Executive’s one-time grant of restricted stock units (“RSUs”) on July 2, 2021 covering 1,000,000 shares of the Company’s common stock, par value $0.0001 per share (the “Closing Grant”), With respect to the Closing Grant, (i) Executive hereby acknowledges that 428,572 of such RSUs are vested as of the Separation Date, and (ii) in accordance with Section 4.1(a)(iv) of the Employment Agreement, Executive shall receive accelerated vesting of an additional 171,428 RSUs.

b.Other than as set forth in Section 2(a) above, all outstanding RSUs previously issued to Executive by the Company and that were unvested as of the Separation Date have been cancelled and forfeited automatically.

c.All outstanding stock options that remain unvested as of the Separation Date will be cancelled and forfeited automatically. All options that are vested as of the Separation Date will be exercisable for three months from the Separation Date pursuant to the terms, as applicable, of the Stem, Inc. 2021 Equity Incentive Plan, the Stem, Inc., the Stem, Inc. 2024 Equity Incentive Plan, and applicable award agreements.

3.No Consideration Absent Execution and Delivery of this Agreement. Executive acknowledges that Executive was presented with a substantially final draft of the Agreement on September 19, 2024. Executive also acknowledges and agrees that the receipt of any monies or benefits as set forth herein (including in Section 1 hereof) are subject to the Company’s receipt of an executed Agreement no later than the date that is 22 calendar days after the date set forth in the foregoing sentence. After such date, this Agreement, shall be null and void if the executed Agreement is not received by the Company or if it is revoked under Section 5 hereof.

that Executive has or may have against Company Releasees as of the date of Executive’s execution of this Agreement, including, but not limited to:

•any and all Claims arising out of or relating in any way to Executive’s employment relationship with the Company and its Affiliates and the termination of that relationship;

•any and all Claims for violation of the federal or any state constitution;

•any and all Claims arising out of any other laws and regulations relating to employment or employment discrimination;

•any allegation for costs, fees, or other expenses including attorneys’ fees incurred in these matters.

Executive agrees that the Agreement set forth in this Section 4 shall be and remain in effect in all respects as a complete general release as to the matters released. This Agreement shall not extend to any Claim or cause of action (i) to enforce any obligations incurred under this Agreement, (b) any claims for coverage under the Indemnification Agreement entered into by and between the Company and Executive, or any Director and Officer insurance or other similar insurance policy that applies to Executive in his capacity as a former officer and director of the Company and (c) any claims for vested benefits under any Company

employee benefit plan. This Agreement is not intended to release any Claims, that the Executive is not free to release on his or her own accord. Executive waives participation, to the extent permitted by law, in any class or collective action, as either a class or collective action representative or participant as to those claims not released, by signing this Agreement prior to the conditional certification of a class or collective action. This Agreement does not waive participation in a class or collective action certified prior to the date of the Executive’s signature if the Executive meets the requirements for the defined class or collective class.

5.Acknowledgment of Waiver of Claims under ADEA. Executive expressly acknowledges and agrees that by entering into this Agreement, he is waiving and releasing any and all rights or Claims that Executive may have under the Age Discrimination in Employment Act of 1967 (the “ADEA”), and that this Agreement is knowing and voluntary. Executive agrees that this Agreement does not apply to any rights or claims that may arise under the ADEA after the Effective Date. Executive acknowledges that the consideration given hereunder for this Agreement is in addition to anything of value to which Executive was already entitled to receive prior to entering into this Agreement. Executive further acknowledges that Executive has been advised and is advised by this writing that: (a) Executive should consult with an attorney prior to executing this Agreement; (b) Executive was given a copy of this Agreement on September 19, 2024, and has been given at least twenty-one (21) calendar days within which to consider whether to sign it; (c) if Executive accepts this Agreement, he has seven (7) calendar days following his execution hereof to revoke it; (d) this Agreement will not be effective until after the revocation period has expired without Executive having revoked this Agreement; and (e) nothing in this Agreement prevents or precludes Executive from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties, or costs for doing so, unless specifically authorized by federal law. In the event Executive signs this Agreement and returns it to the Company in fewer than the 21-calendar day period identified above, Executive hereby acknowledges that he has freely and voluntarily chosen to waive the time period allotted for considering this Agreement. Executive acknowledges and understands that revocation must be accomplished by a written notification to the Chief People Officer, of Stem, Inc. at Kim.Homenock@stem.com and received on or before the 7th calendar day following execution of this Agreement. In the event Executive timely revokes acceptance of this Agreement, the Company shall have no obligation to pay, or otherwise deliver to Executive, any part of the consideration hereunder. The Parties agree that changes, whether material or immaterial, do not restart the running of the 21-calendar day period.

8.Consideration and Post-Employment Covenants. For the consideration provided to Executive in this Agreement and subject to Section 10 below, Executive (1) agrees to continue to comply with Article V (Proprietary Information and Confidentiality Obligations) and Article VI (Section 6.3 only) of the Employment Agreement. Article V (Proprietary Information and Confidentiality Obligations) and Article VI (Section 6.3 only) are incorporated herein by reference as if set out in full, and (2) also agrees to be bound by the following covenants:

a.Return of Property. On the Separation Date, if not sooner, Executive shall deliver to the Company all (and will not keep in Executive’s possession or control, and will not recreate or deliver to anyone else, any) Confidential Information, as well as all other devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, customer or client lists or information, or any other documents or property (including all reproductions of the aforementioned items) belonging to the Company or any of its Affiliates or ventures, regardless of whether such items were prepared by Executive. Executive’s signature below constitutes Executive’s certification under penalty of perjury that Executive has returned all documents and other items provided to Executive by the Company or any of its Affiliates, developed or obtained by Executive in connection with his employment with the Company, or otherwise belonging to the Company. Executive understands that the Company, in its sole discretion, may choose to delay any

payments due to Executive under this Agreement unless and until Executive complies with this paragraph, but such delay shall not relieve Executive of Executive’s other obligations under this Agreement or Executive’s release of claims. The obligations in this Section 8(a) are in addition to Executive’s obligations set forth in Section 5 of that certain At-Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement previously executed by and between Executive and Stem, Inc. (the “PIAA”). Executive agrees that Executive will continue to comply with the PIAA.

b.Nonsolicitation. For the period of 12 months following the Separation Date (the “Restricted Period”), Executive will not directly or indirectly, for the benefit of another business, recruit, hire, solicit, or assist others in recruiting, hiring, or soliciting any person, who is, at the time of the recruiting, hiring, or solicitation, an employee of the Company to leave the employment of the Company, or work for a competing business. This restriction will be limited to persons: (1) with whom Executive had contact or business dealings while employed by Company; (2) who worked in Executive’s business unit; or (3) about whom Executive had access to confidential information. If Executive resides in California at the time this Agreement is entered into, then the forgoing restriction shall not be applicable to Executive if it would restrain Executive from “engaging in a lawful profession, trade, or business of any kind” as such is interpreted under Cal. Bus. & Prof. Code §16600. However, conduct involving misappropriation of Company trade secrets will remain prohibited and nothing in this Agreement shall be construed to limit or eliminate any rights or remedies the Company would have against Executive under trade secret law, unfair competition law, or other laws applicable in California absent this Agreement, if Executive uses trade secrets or other protected confidential information to help a competitor solicit an employee of the Company.

c.Nondisparagement. Executive covenants that he shall not, directly or indirectly, whether in writing, orally or electronically, make any false negative, derogatory or other comment with knowledge of their falsity or with reckless disregard for their truth or falsity that could reasonably be expected to be detrimental to the Company or any of its Affiliates, their business or operations, or to any of its or their current or former employees, officers or directors. Notwithstanding the foregoing and as set forth in Section 10 below, nothing in this Agreement prevents Executive from discussing or disclosing information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that Executive has reason to believe is unlawful. The Company shall not, directly or indirectly, whether in writing, orally or electronically, make any false negative, derogatory or other comment with knowledge of their falsity or with reckless disregard for their truth or falsity that could reasonably be expected to be detrimental to Executive. Executive understands that the Company’s obligations under this paragraph (c) extend only to the Company’s current executive officers and members of its Board of Directors and only for so long as each officer or member is an employee or Director of the Company.

d.Executive agrees that these restrictions are reasonable in light of the consideration given. Executive was given an opportunity to review these restrictions, advised to consult with an attorney, and agreed to these restrictions as an agreement ancillary to Executive’s agreement to protect the Company Confidential Information, which was made in exchange for the Company’s provision of confidential information, as well as its agreement to the additional benefits provided in Section 1. The Company is relying on Executive’s commitment to comply with the restrictions set forth in this Section 8 in agreeing to pay the consideration set forth in Section 1 and this commitment is ancillary to Executive’s agreement to protect the Company’s confidential information. Executive acknowledges that in the event of a

breach by Executive of these restrictive covenants, the covenants may be enforced by temporary restraining order, preliminary or temporary injunction and permanent injunction, in addition to any other remedies that may be available by law. In that connection, Executive acknowledges that in the event of a breach, the Company will suffer irreparable injury for which there is no adequate legal remedy, in part because damages caused by the breach may be difficult to prove with any reasonable degree of certainty.

e.Reasonable Cooperation. Beginning on the Separation Date and for twelve (12) months thereafter, Executive agrees that Executive will reasonably cooperate with and assist the Company, its subsidiaries and Affiliates, and any of their respective officers, directors, shareholders or employees: (A) concerning requests for information about the business of the Company or its subsidiaries or Affiliates or Executive’s involvement and participation therein (including but not limited to requests and subpoenas to provide information or testimony); (B) in connection with any investigation or review by the Company or any federal, state or local regulatory, quasi-regulatory or self-governing authority as any such investigation or review relates to events or occurrences that transpired while Executive were employed by the Company; and (C) with respect to transition and succession matters. Executive’s cooperation shall include, but not be limited to (taking into account Executive’s personal and professional obligations, including those to any new employer or entity to which Executive provide services), being available to meet and speak with officers or employees of the Company and/or the Company’s counsel at reasonable times and locations, executing accurate and truthful documents, and taking such other actions as may reasonably be requested by the Company and/or the Company’s counsel to effect the foregoing. Executive shall be entitled to reimbursement from the Company, upon receipt by the Company of suitable documentation, for reasonable and necessary travel and other expenses which Executive may incur on such matters at the specific request of the Company and as approved by the Company in advance and in accordance with its policies and procedures established from time to time.

f.LinkedIn and Social Media Profiles. Executive agrees that within five (5) days of the Separation Date, Executive will update his LinkedIn and other social media profiles as necessary to reflect that he no longer works for Stem.

10.Protected Activity Not Prohibited. Executive understands that nothing in this Agreement shall in any way limit or prohibit Executive from engaging for a lawful purpose in any Protected Activity. For purposes of this Agreement, “Protected Activity” means disclosing, discussing, or making truthful statements about sexual harassment or sexual assault disputes, or any other unlawful or unsafe Company conduct or practices; filing a charge or complaint, or otherwise communicating, cooperating, or participating with, any state, federal, or other governmental agency, including the Securities and Exchange Commission, the Equal

Employment Opportunity Commission, and the National Labor Relations Board regarding any possible violations of law. However, to the maximum extent permitted by law, Executive agrees that Executive is waiving rights to individual relief (including backpay, frontpay, reinstatement or other legal or equitable relief) in any charge, complaint, or lawsuit or other proceeding brought by Executive or on Executive’s behalf by any third party, except for any right Executive may have to receive a payment or award from a government agency (and not the Company) for information provided to the government agency or otherwise where prohibited. Notwithstanding any restrictions set forth in this Agreement, Executive understands that he is not required to obtain authorization from the Company prior to disclosing information to, or communicating with, such agencies, nor is Executive obligated to advise the Company as to any such disclosures or communications. Notwithstanding, in making any such disclosures or communications, Executive agrees to take all reasonable precautions to prevent any unauthorized use or disclosure of any information that may constitute Company Confidential Information to any parties other than the relevant government agencies. Executive further understands that “Protected Activity” does not include the disclosure of any Company attorney-client privileged communications, and that any such disclosure without the Company’s written consent shall constitute a material breach of this Agreement. Executive understands that pursuant to 18 USC § 1833(b), an individual may not be held criminally or civilly liable under any federal or state trade secret law for disclosure of a trade secret: (a) made in confidence to a government official, either directly or indirectly, or to an attorney, solely for the purpose of reporting or investigating a suspected violation of law; and/or (b) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Additionally, an individual suing an employer for retaliation based on the reporting of a suspected violation of law may disclose a trade secret to his or her attorney and use the trade secret information in the court proceeding, so long as any document containing the trade secret is filed under seal and the individual does not disclose the trade secret except pursuant to court order.

11.No Cooperation. Executive agrees that he will not knowingly encourage, counsel, or assist any attorneys or their clients in the presentation or prosecution of any Claims by any third party against any of the Company Releasees, unless under a subpoena or other court order to do so or as related directly to the ADEA waiver in this Agreement. Executive agrees both to immediately notify the Company upon receipt of any such subpoena or court order, and to furnish, within three (3) business days of its receipt, a copy of such subpoena or other court order. If approached by anyone for counsel or assistance in the presentation or prosecution of any Claims against any of the Company Releasees, Executive shall state no more than that he cannot provide counsel or assistance. Nothing in this Agreement, including this section and Section 8 above, shall be construed as requiring Executive to cooperate with the Company with respect to any charge or litigation in which Executive is a plaintiff or complaining party, or any confidential investigation by a competent government agency in which Executive is a witness for or providing support to a charging or complaining party or are asked by a Government Agency to maintain confidentiality.

related to this Agreement shall lie solely, and is convenient, in San Francisco County, California. Executive consents to the choice of law and venue provisions of this Agreement and agrees that Executive will not contest these provisions in any future proceeding(s).

In the event Executive breaches any provision of this Agreement, Executive and Company affirm that Company may institute an action to specifically enforce any term or terms of this Agreement. Company’s right to injunctive relief is in addition to any rights otherwise available to Company, and the parties agree such injunctive relief may be obtained without the necessity of posting any bond.

15.No Admission of Liability. Executive understands and acknowledges that this Agreement constitutes a compromise and settlement of any and all actual or potential disputed Claims by Executive. No action taken by the Company hereto, either previously or in connection with this Agreement, shall be deemed or construed to be (a) an admission of the truth or falsity of any actual or potential Claims or (b) an acknowledgment or admission by the Company or any of the other Company Releasees of any fault or liability whatsoever to Executive or to any third party, or (c) an admission by the Company or any other of the Company Releasees that they engaged in any wrongful or unlawful act or that the Company or any other Releasee violated any federal or state law or regulation.

16.Amendment. This Agreement may not be modified, altered or changed except in writing and signed by both Parties wherein specific reference is made to this Agreement.

17.Entire Agreement. This Agreement, Articles V through VII of the Employment Agreement, and the PIAA set forth the entire agreement between the Parties with respect to the subject matter hereof, and fully supersedes any prior agreements or understandings between the Parties, except any agreement between Executive and Company (including Company’s Affiliates) containing restrictions relating to patents, confidential information, intellectual property, solicitation, or competition. Executive acknowledges that he has not relied on any representations, promises or agreements of any kind made to him/her in connection with the decision to accept this Agreement except for those set forth in this Agreement. If there is any

conflict between this Agreement and the PIAA, this Agreement shall control. If there is any conflict between Articles V through VII of the Employment Agreement and this Agreement, Articles V through VII of the Employment Agreement shall control.

If to the Company: c/o Stem Inc.

4 Embarcadero Center, Suite 710

San Francisco, CA 94111

Attention: Chief People Officer

If to Executive: John Carrington

Address: (see signature page)

Notice given by personal delivery, courier service or mail shall be effective upon actual receipt. Notice given by email shall be effective when sent by confirmed electronic mail if sent during normal business hours of the recipient (9:00 a.m. to 5:00 p.m., recipient’s local time), if not, then on the next business day. Either Party may change any address to which notice is to be given to it by giving written notice as provided above of such change of address, and such notice shall be deemed to have been delivered as of the date so telecommunicated, personally delivered or mailed. Either Party may notify the other Party of any changes to the address or any of the other details specified in this paragraph; provided, however, that such notification shall only be effective on the date specified in such notice or five (5) business days after the notice is given, whichever is later. Rejection or other refusal to accept or the inability to deliver because of changed address of which no prior written notice was given shall be deemed to be receipt of the notice as of the date of such rejection, refusal or inability to deliver.

19.Right to Revoke; Effective Date. Within seven (7) days following execution of this Agreement, Executive may revoke acceptance of this Agreement by delivering written notification to Kim Homenock, at Kim.Homenock@stem.com. If Executive revokes his acceptance within this seven-day revocation period, no payments or benefits described in this Agreement will be provided to Executive. This Agreement shall not become effective until the eighth (8th) day after Executive signs, without revoking, this Agreement (the “Effective Date”). No payments or other benefits due to Executive under this Agreement shall be made or begin before the Effective Date.

20.Binding Effect and Assignment. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns; but neither this Agreement nor any of the rights, benefits or obligations hereunder shall be assigned, by operation of law or otherwise, by any party hereto without the prior written consent of the other party; provided, however, that Company may assign its rights and obligations hereunder to any Affiliate, and Executive specifically consents to such future assignment. Nothing in this Agreement, express or implied, is intended to confer upon any

person or entity other than the parties hereto and their respective permitted successors and assigns, any rights, benefits or obligations hereunder.

21.Costs. The Parties shall each bear their own costs, attorneys’ fees, and other fees incurred in connection with the preparation of this Agreement.

or state taxes, or (b) damages sustained by the Company or any of its Affiliates by reason of any such claims, including attorneys’ fees and costs.

EXECUTIVE HAS BEEN ADVISED THAT HE HAS TWENTY-ONE (21) CALENDAR DAYS TO CONSIDER THIS AGREEMENT, AND HAS BEEN ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTION OF THIS AGREEMENT.

EXECUTIVE AGREES THAT ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT DO NOT RESTART OR AFFECT IN ANY MANNER THE 21-DAY CONSIDERATION PERIOD.

EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS CAREFULLY READ AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THIS AGREEMENT.

HAVING ELECTED TO EXECUTE THIS AGREEMENT, TO FULFILL THE PROMISES SET FORTH HEREIN, AND TO RECEIVE THEREBY THE SUMS AND BENEFITS SET FORTH IN SECTION 1 ABOVE, EXECUTIVE FREELY AND KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS EXECUTIVE HAS OR MIGHT HAVE AGAINST COMPANY AND ITS AFFILIATES.

EXECUTIVE ACKNOWLEDGES THAT EMPLOYEE HAS BEEN INFORMED OF HIS/HER RIGHT TO REVOKE THIS AGREEMENT FOR A PERIOD OF SEVEN DAYS FOLLOWING EXECUTION HEREOF AS DESCRIBED IN SECTION 5 HEREOF.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the dates set forth below their respective signatures, but effective as of the Effective Date set forth herein.

STEM, INC.

By: Name: Kim Homenock Title: Chief People Officer Date:

EXECUTIVE

Name: John E. Carrington Date:

Address:

800 Hermosa Way Menlo Park, CA 94025

Document

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Arun Narayanan, certify that:

I have reviewed this Quarterly Report on Form 10-Q for the three months ended March 31, 2025 of Stem, Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

	STEM, INC.
Date: April 29, 2025	By:	/s/ Arun Narayanan
		Name:	Arun Narayanan
		Title:	Chief Executive Officer

Document

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Spencer Doran Hole, certify that:

I have reviewed this Quarterly Report on Form 10-Q for the three months ended March 31, 2025 of Stem, Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:

The registrant’s other certifying officer and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

	STEM, INC.
Date: April 29, 2025	By:	/s/ Spencer Doran Hole
		Name:	Spencer Doran Hole
		Title:	Chief Financial Officer

Document

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Stem, Inc. (the “Company”) for the three months ended March 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Arun Narayanan, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the registrant.

	STEM, INC.
Date: April 29, 2025	By:	/s/ Arun Narayanan
		Name:	Arun Narayanan
		Title:	Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Exchange Act.

Document

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Stem, Inc. (the “Company”) for the three months ended March 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Spencer Doran Hole, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the registrant.

	STEM, INC.
Date: April 29, 2025	By:	/s/ Spencer Doran Hole
		Name:	Spencer Doran Hole
		Title:	Chief Financial Officer
			(Principal Financial Officer)

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Exchange Act.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended March 31, 2025

For the transition period from ________ to ________

STEM, INC.

4 Embarcadero Ctr., Suite 710, San Francisco, California 94111

1-877-374-7836

Not Applicable

Securities registered pursuant to Section 12(b) of the Act:

STEM, INC.

Quarterly Report on Form 10-Q

For the Period Ended March 31, 2025

TABLE OF CONTENTS

ITEM 1. FINANCIAL STATEMENTS

STEM, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

STEM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

The accompanying notes are an integral part of these condensed consolidated financial statements.

STEM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

The accompanying notes are an integral part of these condensed consolidated financial statements.

STEM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

The accompanying notes are an integral part of these condensed consolidated financial statements.

STEM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

The accompanying notes are an integral part of these condensed consolidated financial statements.

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BUSINESS

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Variable Interest Entities

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

3. REVENUE

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

4. FAIR VALUE MEASUREMENTS

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

5. INTANGIBLE ASSETS, NET

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6. ENERGY STORAGE SYSTEMS, NET

7. CONVERTIBLE NOTES

2028 Convertible Notes

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2028 Capped Call Options

2030 Convertible Notes

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2030 Capped Call Options

8. STOCK-BASED COMPENSATION

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

9. NET LOSS PER SHARE

10. INCOME TAXES

STEM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11. SEGMENT INFORMATION

12. COMMITMENTS AND CONTINGENCIES

13. SUBSEQUENT EVENTS

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following management’s discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and related notes included in Part I, Item 1 of

For the transition period from to