Stem, Inc. (NYSE:STEM) Q2 2024 Earnings Conference Call August 6, 2024 5:00 PM ET

Company Participants

Ted Durbin - Head of Investor Relations
John Carrington - CEO
Bill Bush - CFO

Conference Call Participants

Justin Clare - Roth Capital Partners
Thomas Boyes - TD Cowen

Operator

Good day and welcome to Stem, Inc. Second Quarter 2024 Results Conference Call. All participants are in a listen-only mode. [Operator Instructions]. Please note, this event is being recorded.

I would now like to turn the conference over to Ted Durbin, Head of Investor Relations. Please go ahead.

Ted Durbin

Thank you, operator. This is Ted Durbin, Head of Investor Relations at Stem. Welcome to our second quarter 2024 earnings call. Before we begin, please note that some of the statements we will be making today are forward-looking. These matters involve risks and uncertainties that could cause our results to differ materially from those projected in these statements. We, therefore, refer you to our latest 10-Q and other SEC filings.

Our comments today also include non-GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP financial measures can be found in our earnings release. We will be using a slide presentation today. Our earnings release and presentation are on the Investor Relations section of our website at www.stem.com.

John Carrington, our CEO; and Bill Bush, CFO, will start the call today with prepared remarks.

Now I'll turn the call over to John.

John Carrington

Thanks, Ted. Good afternoon, and thank you all for joining us today. Beginning with slide three in our agenda, we will cover our second quarter results, business updates, and recent commercial performance. Then Bill will discuss our financial results in greater detail.

Now let's turn to slide four on our second quarter 2024 results and highlights. Our financial results in the second quarter were disappointing. We recorded $34 million in revenue, substantially lower than expected, primarily due to unforeseen extensions of project timelines. This was caused by certain customers' project financing delays and extended interconnection approvals. We are seeing project delays impacting the broader industry. The shortfall was largely in storage hardware revenue, although our high margin software and services revenue was mostly in line with our expectations. Bookings in the second quarter were $25 million.

Our recent strategic expansion into the large-scale storage market has resulted in significantly larger average deal sizes with increased variability and increased project complexity. This has protracted our sales cycle and negatively impacted our bookings in the first half of 2024. These projects were also impacted by the delays stemming from customer project financings, particularly tied to USDA funding, as we will discuss in further detail today.