Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 25, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity Registrant Name | STEM, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 001-39455 | |
Entity Tax Identification Number | 85-1972187 | |
Entity Address, Address Line One | 100 California St., 14th Fl. | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94111 | |
Country Region | 1 | |
City Area Code | 877 | |
Local Phone Number | 374-7836 | |
Title of 12(b) Security | Common Stock, par value $0.0001 | |
Trading Symbol | STEM | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 155,802,411 | |
Entity Central Index Key | 0001758766 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 75,405 | $ 87,903 |
Short-term investments | 62,769 | 162,074 |
Accounts receivable, net of allowances of $5,349 and $3,879 as of June 30, 2023 and December 31, 2022, respectively | 293,853 | 223,219 |
Inventory, net | 145,523 | 8,374 |
Deferred costs with suppliers | 22,119 | 43,159 |
Other current assets (includes $58 and $74 due from related parties as of June 30, 2023 and December 31, 2022, respectively) | 13,139 | 8,026 |
Total current assets | 612,808 | 532,755 |
Energy storage systems, net | 84,627 | 90,757 |
Contract origination costs, net | 12,412 | 11,697 |
Goodwill | 547,204 | 546,649 |
Intangible assets, net | 159,472 | 162,265 |
Operating lease right-of-use assets | 13,810 | 12,431 |
Other noncurrent assets | 73,157 | 65,339 |
Total assets | 1,503,490 | 1,421,893 |
Current liabilities: | ||
Accounts payable | 102,980 | 83,831 |
Accrued liabilities | 55,530 | 85,258 |
Accrued payroll | 7,965 | 12,466 |
Financing obligation, current portion | 18,158 | 15,720 |
Deferred revenue, current portion | 115,381 | 64,311 |
Other current liabilities (includes $34 and $687 due to related parties as of June 30, 2023 and December 31, 2022, respectively) | 7,479 | 5,412 |
Total current liabilities | 307,493 | 266,998 |
Deferred revenue, noncurrent | 78,736 | 73,763 |
Asset retirement obligation | 4,079 | 4,262 |
Notes payable, noncurrent | 0 | 1,603 |
Convertible notes, noncurrent | 522,506 | 447,909 |
Financing obligation, noncurrent | 58,895 | 63,867 |
Lease liabilities, noncurrent | 11,874 | 10,962 |
Other liabilities | 563 | 362 |
Total liabilities | 984,146 | 869,726 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized as of June 30, 2023 and December 31, 2022; zero shares issued and outstanding as of June 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock, $0.0001 par value; 500,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 155,796,411 and 154,540,197 issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | 16 | 15 |
Additional paid-in capital | 1,176,678 | 1,185,364 |
Accumulated other comprehensive loss | (88) | (1,672) |
Accumulated deficit | (657,737) | (632,081) |
Total Stem’s stockholders’ equity | 518,869 | 551,626 |
Non-controlling interests | 475 | 541 |
Total stockholders’ equity | 519,344 | 552,167 |
Total liabilities and stockholders’ equity | $ 1,503,490 | $ 1,421,893 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Accounts receivable, allowances | $ 5,349 | $ 3,879 |
Other current assets | 13,139 | 8,026 |
Other current liabilities | $ 7,479 | $ 5,412 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 155,796,411 | 154,540,197 |
Common stock, shares outstanding (in shares) | 155,796,411 | 154,540,197 |
Related Party | ||
Other current assets | $ 58 | $ 74 |
Other current liabilities | $ 34 | $ 687 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Revenue | ||||
Revenue | $ 92,946 | $ 66,947 | $ 160,351 | $ 108,035 |
Cost of Revenue | ||||
Cost of Revenue | 81,075 | 59,159 | 147,486 | 96,603 |
Gross profit | 11,871 | 7,788 | 12,865 | 11,432 |
Operating expenses: | ||||
Sales and marketing | 13,680 | 12,955 | 26,086 | 22,097 |
Research and development | 14,156 | 8,963 | 27,600 | 17,906 |
General and administrative | 18,904 | 15,693 | 36,701 | 36,205 |
Total operating expenses | 46,740 | 37,611 | 90,387 | 76,208 |
Loss from operations | (34,869) | (29,823) | (77,522) | (64,776) |
Other income (expense), net: | ||||
Interest expense, net | (3,903) | (2,691) | (5,680) | (5,909) |
Gain on extinguishment of debt, net | 59,121 | 0 | 59,121 | 0 |
Other (expense) income, net | (736) | 484 | (1,175) | 959 |
Total other income (expense), net | 54,482 | (2,207) | 52,266 | (4,950) |
Income (loss) before (provision for) benefit from income taxes | 19,613 | (32,030) | (25,256) | (69,726) |
(Provision for) benefit from income taxes | (491) | 7 | (400) | 15,220 |
Net income (loss) | 19,122 | (32,023) | (25,656) | (54,506) |
Net loss attributed to non-controlling interests | 0 | (4) | 0 | (4) |
Net income (loss) attributable to Stem | $ 19,122 | $ (32,019) | $ (25,656) | $ (54,502) |
Net income (loss) per share attributable to common stockholders, basic (in dollars per share) | $ 0.12 | $ (0.21) | $ (0.17) | $ (0.36) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.26) | $ (0.21) | $ (0.17) | $ (0.36) |
Net income (loss) attributable to Stem common stockholders, basic | $ 19,122 | $ (32,019) | $ (25,656) | $ (54,502) |
Net loss attributable to Stem common stockholders, diluted | $ (40,011) | $ (32,019) | $ (25,656) | $ (54,502) |
Weighted-average shares used in computing net income (loss) per share to common stockholders, basic (in shares) | 155,619,179 | 154,125,061 | 155,294,475 | 152,318,090 |
Weighted-average shares used in computing net loss per share to common stockholders, diluted (in shares) | 155,804,953 | 154,125,061 | 155,294,475 | 152,318,090 |
Services and other revenue | ||||
Revenue | ||||
Revenue | $ 16,360 | $ 12,521 | $ 31,033 | $ 22,486 |
Cost of Revenue | ||||
Cost of Revenue | 11,756 | 10,141 | 23,260 | 18,774 |
Hardware revenue | ||||
Revenue | ||||
Revenue | 76,586 | 54,426 | 129,318 | 85,549 |
Cost of Revenue | ||||
Cost of Revenue | $ 69,319 | $ 49,018 | $ 124,226 | $ 77,829 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 19,122 | $ (32,023) | $ (25,656) | $ (54,506) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on available-for-sale securities | 47 | (399) | 1,590 | (1,010) |
Foreign currency translation adjustment | (133) | (118) | (6) | (146) |
Total other comprehensive income (loss) | 19,036 | (32,540) | (24,072) | (55,662) |
Less: Comprehensive loss attributable to non-controlling interests | 0 | (4) | 0 | (4) |
Total comprehensive income (loss) attributable to Stem | $ 19,036 | $ (32,536) | $ (24,072) | $ (55,658) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-In Capital | Additional Paid-In Capital Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment | Non-controlling Interests |
Beginning balance (in shares) at Dec. 31, 2021 | 144,671,624 | ||||||||
Beginning balance at Dec. 31, 2021 | $ 667,827 | $ 14 | $ 1,176,845 | $ 20 | $ (509,052) | $ 0 | |||
Beginning balance (Accounting Standards Update 2020-06) at Dec. 31, 2021 | $ (129,381) | $ (130,979) | $ 1,598 | ||||||
Beginning balance (Accounting Standards Update 2016-13) at Dec. 31, 2021 | (573) | (573) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Common stock issued upon business combination (in shares) | 8,621,006 | ||||||||
Common stock issued upon business combination | 108,883 | $ 1 | 108,882 | ||||||
Stock option exercises, net of statutory tax withholdings (in shares) | 425,167 | ||||||||
Stock option exercises, net of statutory tax withholdings | (426) | (426) | |||||||
Stock-based compensation | 6,787 | 6,787 | |||||||
Unrealized gain (loss) on available-for-sale securities | (611) | (611) | |||||||
Foreign currency translation adjustment | (28) | (28) | |||||||
Contributions from non-controlling interests | 141 | 141 | |||||||
Net income (loss) | (22,483) | (22,483) | |||||||
Ending balance (in shares) at Mar. 31, 2022 | 153,717,797 | ||||||||
Ending balance at Mar. 31, 2022 | 630,136 | $ 15 | 1,161,109 | (619) | (530,510) | 141 | |||
Beginning balance (in shares) at Dec. 31, 2021 | 144,671,624 | ||||||||
Beginning balance at Dec. 31, 2021 | 667,827 | $ 14 | 1,176,845 | 20 | (509,052) | 0 | |||
Beginning balance (Accounting Standards Update 2020-06) at Dec. 31, 2021 | (129,381) | $ (130,979) | 1,598 | ||||||
Beginning balance (Accounting Standards Update 2016-13) at Dec. 31, 2021 | $ (573) | $ (573) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Unrealized gain (loss) on available-for-sale securities | (1,010) | ||||||||
Foreign currency translation adjustment | (146) | ||||||||
Net income (loss) | (54,506) | ||||||||
Ending balance (in shares) at Jun. 30, 2022 | 154,226,275 | ||||||||
Ending balance at Jun. 30, 2022 | 603,427 | $ 15 | 1,166,865 | (1,136) | (562,529) | 212 | |||
Beginning balance (in shares) at Mar. 31, 2022 | 153,717,797 | ||||||||
Beginning balance at Mar. 31, 2022 | 630,136 | $ 15 | 1,161,109 | (619) | (530,510) | 141 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock option exercises, net of statutory tax withholdings (in shares) | 355,712 | ||||||||
Stock option exercises, net of statutory tax withholdings | (1,415) | (1,415) | |||||||
Issuance of common stock upon release of restricted stock units (in shares) | 131,665 | ||||||||
Shares issued for exercise of warrants (in shares) | 21,101 | ||||||||
Shares issued for exercise of warrants | 150 | 150 | |||||||
Stock-based compensation | 7,021 | 7,021 | |||||||
Unrealized gain (loss) on available-for-sale securities | (399) | (399) | |||||||
Foreign currency translation adjustment | (118) | (118) | |||||||
Contributions from non-controlling interests | 75 | 75 | |||||||
Net income (loss) | (32,023) | (32,019) | (4) | ||||||
Ending balance (in shares) at Jun. 30, 2022 | 154,226,275 | ||||||||
Ending balance at Jun. 30, 2022 | 603,427 | $ 15 | 1,166,865 | (1,136) | (562,529) | 212 | |||
Beginning balance (in shares) at Dec. 31, 2022 | 154,540,197 | ||||||||
Beginning balance at Dec. 31, 2022 | 552,167 | $ 15 | 1,185,364 | (1,672) | (632,081) | 541 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock option exercises, net of statutory tax withholdings (in shares) | 65,045 | ||||||||
Stock option exercises, net of statutory tax withholdings | 149 | 149 | |||||||
Issuance of common stock upon release of restricted stock units (in shares) | 903,061 | ||||||||
Issuance of common stock upon release of restricted stock units | 1 | $ 1 | |||||||
Stock-based compensation | 8,108 | 8,108 | |||||||
Unrealized gain (loss) on available-for-sale securities | 1,543 | 1,543 | |||||||
Foreign currency translation adjustment | 127 | 127 | |||||||
Redemption of non-controlling interests, net | (72) | (72) | |||||||
Net income (loss) | (44,778) | (44,778) | |||||||
Ending balance (in shares) at Mar. 31, 2023 | 155,508,303 | ||||||||
Ending balance at Mar. 31, 2023 | 517,245 | $ 16 | 1,193,621 | (2) | (676,859) | 469 | |||
Beginning balance (in shares) at Dec. 31, 2022 | 154,540,197 | ||||||||
Beginning balance at Dec. 31, 2022 | $ 552,167 | $ 15 | 1,185,364 | (1,672) | (632,081) | 541 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock option exercises, net of statutory tax withholdings (in shares) | 104,573 | ||||||||
Unrealized gain (loss) on available-for-sale securities | $ 1,590 | ||||||||
Foreign currency translation adjustment | (6) | ||||||||
Net income (loss) | (25,656) | ||||||||
Ending balance (in shares) at Jun. 30, 2023 | 155,796,411 | ||||||||
Ending balance at Jun. 30, 2023 | 519,344 | $ 16 | 1,176,678 | (88) | (657,737) | 475 | |||
Beginning balance (in shares) at Mar. 31, 2023 | 155,508,303 | ||||||||
Beginning balance at Mar. 31, 2023 | 517,245 | $ 16 | 1,193,621 | (2) | (676,859) | 469 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Stock option exercises, net of statutory tax withholdings (in shares) | 39,528 | ||||||||
Stock option exercises, net of statutory tax withholdings | 80 | 80 | |||||||
Issuance of common stock upon release of restricted stock units (in shares) | 248,580 | ||||||||
Stock-based compensation | 10,817 | 10,817 | |||||||
Purchase of capped call options | (27,840) | (27,840) | |||||||
Unrealized gain (loss) on available-for-sale securities | 47 | 47 | |||||||
Foreign currency translation adjustment | (133) | (133) | |||||||
Contributions from non-controlling interests | 6 | 6 | |||||||
Net income (loss) | 19,122 | 19,122 | |||||||
Ending balance (in shares) at Jun. 30, 2023 | 155,796,411 | ||||||||
Ending balance at Jun. 30, 2023 | $ 519,344 | $ 16 | $ 1,176,678 | $ (88) | $ (657,737) | $ 475 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
OPERATING ACTIVITIES | ||
Net loss | $ (25,656) | $ (54,506) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 22,376 | 20,887 |
Non-cash interest expense, including interest expenses associated with debt issuance costs | 1,586 | 902 |
Stock-based compensation | 17,122 | 12,732 |
Change in fair value of derivative liability | 2,576 | 0 |
Non-cash lease expense | 1,406 | 1,131 |
Accretion of asset retirement obligations | 120 | 122 |
Impairment loss of energy storage systems | 2,069 | 919 |
Impairment loss of project assets | 122 | 0 |
Net (accretion of discount) amortization of premium on investments | (1,300) | 410 |
Income tax benefit from release of valuation allowance | (335) | (15,100) |
Provision for accounts receivable allowance | 1,734 | 1,010 |
Net loss on investments | 1,561 | 0 |
Gain on extinguishment of debt, net | (59,121) | 0 |
Other | (680) | (34) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (72,187) | (26,123) |
Inventory | (137,149) | (36,634) |
Deferred costs with suppliers | 28,759 | (23,430) |
Other assets | (17,816) | (28,704) |
Contract origination costs, net | (2,256) | (3,625) |
Project assets | (2,834) | 0 |
Accounts payable | 19,049 | 82,405 |
Accrued expenses and other liabilities | (35,087) | 7,006 |
Deferred revenue | 56,043 | 28,471 |
Lease liabilities | (1,341) | (469) |
Net cash used in operating activities | (201,239) | (32,630) |
INVESTING ACTIVITIES | ||
Acquisitions, net of cash acquired | (1,847) | (533,009) |
Purchase of available-for-sale investments | (58,034) | (98,922) |
Proceeds from maturities of available-for-sale investments | 84,750 | 86,623 |
Proceeds from sales of available-for-sale investments | 73,917 | 0 |
Purchase of energy storage systems | (2,640) | (232) |
Capital expenditures on internally-developed software | (7,388) | (8,085) |
Purchase of property and equipment | (289) | (2,405) |
Net cash provided by (used in) investing activities | 88,469 | (556,030) |
FINANCING ACTIVITIES | ||
Proceeds from exercise of stock options and warrants | 229 | 611 |
Payments for taxes related to net share settlement of stock options | 0 | (2,302) |
Proceeds from financing obligations | 0 | 311 |
Repayment of financing obligations | (2,587) | (6,817) |
Proceeds from issuance of convertible notes, net of issuance costs of $7,601 and $0 for the six months ended June 30, 2023 and 2022, respectively | 232,399 | 0 |
Repayment of convertible notes | (99,754) | 0 |
Purchase of capped call options | (27,840) | 0 |
(Redemption of) investment from non-controlling interests, net | (67) | 216 |
Repayment of notes payable | (2,101) | 0 |
Net cash provided by (used in) financing activities | 100,279 | (7,981) |
Effect of exchange rate changes on cash and cash equivalents | (7) | (136) |
Net decrease in cash and cash equivalents | (12,498) | (596,777) |
Cash and cash equivalents, beginning of year | 87,903 | 747,780 |
Cash and cash equivalents, end of period | 75,405 | 151,003 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | 2,588 | 3,407 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Change in asset retirement costs and asset retirement obligation | 302 | 40 |
Purchases of energy storage systems in accounts payable | 388 | 0 |
Right-of-use asset obtained in exchange for lease liability | 2,782 | 0 |
Stock-based compensation capitalized to internal-use software | $ 1,803 | $ 522 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Convertible Notes | ||
Payment of debt issuance costs | $ 7,601 | $ 0 |
BUSINESS
BUSINESS | 6 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS | BUSINESS Description of the Business Stem, Inc., together with its consolidated subsidiaries (“Stem,” the “Company,” “we,” “us,” or “our”), maintains one of the world’s largest digitally connected, intelligent renewable energy networks, providing customers (i) with an energy storage system, sourced from leading, global battery original equipment manufacturers (“OEMs”), that the Company delivers through its partners, including developers, distributors and engineering, procurement and construction (“EPC”) firms, (ii) edge hardware to aid in the collection of site data and the real-time operation and control of the site plus other optional equipment, (iii) ongoing software platform and professional services to operate standalone energy storage, and integrated solar plus storage systems, through its Athena ® artificial intelligence (“AI”) platform (“Athena”), and (iv) solar asset performance monitoring and control, through Athena’s PowerTrack application. In addition, in all the markets where the Company helps manage its customers’ energy storage assets, the Company has agreements to use the Athena platform to participate in such markets and to share the revenue from such market participation. The Company delivers its battery hardware and software-enabled services to its customers through its Athena platform. The Company’s hardware and recurring software-enabled services mitigate customer energy costs through services such as time-of-use and demand charge management optimization and by aggregating the dispatch of energy through a network of virtual power plants. The resulting network created by the Company’s growing customer base increases grid resilience and reliability through the real-time processing of market-based demand signals, energy prices and other factors in connection with the deployment of renewable energy resources to such customers. Additionally, the Company’s energy storage solutions support renewable energy generation by alleviating grid intermittency issues, thereby reducing customer dependence on traditional, fossil fuel resources. The Company’s Athena PowerTrack application provides a vertically integrated solution that incorporates on-site power monitoring equipment that aggregates and communicates data to enable remote control of solar generation assets. PowerTrack provides direct access to individual site performance to measure and benchmark expected energy production, maximizing asset value for our customers. From time to time, the Company, through an indirect wholly-owned development subsidiary (“DevCo”) will enter into strategic joint ventures (each a “DevCo JV”) with qualified third parties for the development of select renewable energy projects (“DevCo Projects”). In this structure, DevCo forms a new DevCo JV entity as the majority owner, with the developer as the minority owner. The purpose of the DevCo JV is to develop and sell DevCo Projects and secure Company hardware and software services for those projects. In DevCo Projects, the Company makes development capital contributions to fund project development, and recovers those capital contributions plus a fee when the developer takes ownership of the project. Given long times to secure hardware, the Company will in some cases elect to make cash advances to hardware suppliers to accelerate project construction timelines given long lead times to secure hardware. This business model is intended to allow the Company to advance development capital to key partners in strategic markets and secure hardware upfront, in order to generate higher-margin software and services and other revenue via exclusive long-term services contracts under the DevCo Projects. On February 1, 2022, the Company acquired all of the issued and outstanding capital stock of Also Energy Holdings, Inc. (“AlsoEnergy”), which has been consolidated since the date of acquisition. Through AlsoEnergy, the Company provides end-to-end turnkey solutions that monitor and manage renewable energy systems through its PowerTrack software. PowerTrack includes data acquisitions and monitoring, performance modeling, agency reporting, internal reports, work order tickets, and supervisory control and data acquisition (“SCADA”) controls. AlsoEnergy has deployed systems at various international locations, but its largest concentration of customers is in the United States, Germany and Canada. See Note 6 — Business Combinations . The Company operated as Rollins Road Acquisition Company (f/k/a Stem, Inc.) (“Legacy Stem”) prior to the Merger with Star Peak Transition Corp. (“STPK”), an entity that was then listed on the New York Stock Exchange under the trade symbol “STPK,” and STPK Merger Sub Corp., a Delaware corporation and wholly - owned subsidiary of STPK (“Merger Sub”), providing for, among other things, and subject to the conditions therein, the combination of the Company and STPK pursuant to the merger of Merger Sub with and into the Company, with the Company continuing as the surviving entity (the “Merger”). Stem, Inc. was incorporated on March 16, 2009 in the State of Delaware and is headquartered in San Francisco, California. Liquidity As of June 30, 2023, the Company had cash and cash equivalents of $75.4 million, short-term investments of $62.8 million, an accumulated deficit of $657.7 million and net working capital of $305.3 million. During the six months ended June 30, 2023, the Company incurred a net loss of $25.7 million and had negative cash flows from operating activities of $201.2 million. Further, the Company received net proceeds of $232.4 million from the issuance of the Company’s 4.25% Green Convertible Senior Notes due 2030 (the “2030 Convertible Notes”) (as described in Note 10 — Convertible Notes ) of which $99.8 million was paid to reduce the principal balance by $163.0 million of the 2028 Convertible Notes. The Company believes that its cash position is sufficient to meet capital and liquidity requirements for at least the next 12 months after the date that the financial statements are available to be issued. The Company’s business prospects are subject to risks, expenses, and uncertainties frequently encountered by companies in the early stages of commercial operations. The attainment of profitable operations is dependent upon future events, including securing new customers and maintaining current ones, securing and maintaining adequate supplier relationships, building the Company’s customer base, successfully executing its business and marketing strategy, obtaining adequate financing to complete the Company’s development activities, and hiring and retaining appropriate personnel. Failure to generate sufficient revenues, achieve planned gross margins and operating profitability, control operating costs, or secure additional funding may require the Company to modify, delay or abandon some of its planned future expansion or development, to seek additional equity or debt financing, or to otherwise enact operating cost reductions available to management, which could have a material adverse effect on the Company’s business, operating results and financial condition. Supply Chain Constraints and Risk |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim reporting and with the instructions to Form 10-Q and Article 10 of Regulation S-X, assuming the Company will continue as a going concern. Accordingly, the condensed consolidated balance sheet at December 31, 2022 has been derived from the audited financial statements at that date, but certain notes or other information that are normally required by GAAP have been omitted if they substantially duplicate the disclosures contained in the Company’s annual audited consolidated financial statements. In the opinion of Stem management, all normal and recurring adjustments considered necessary for a fair statement of the results for the interim period presented have been included in the accompanying unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2022. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or for any other future interim period or year. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and consolidated variable interest entities (“VIEs”). The Company presents non-controlling interests within the equity section of its condensed consolidated balance sheets, and the amount of consolidated net income (loss) that is attributable to Stem and the non-controlling interest in its condensed consolidated statements of operations. All intercompany balances and transactions have been eliminated in consolidation. Variable Interest Entities The Company forms special purpose entities (“SPEs”), some of which are VIEs, with its investors in the ordinary course of business to facilitate the funding and monetization of its energy storage systems. A legal entity is considered a VIE if it has either a total equity investment that is insufficient to finance its operations without additional subordinated financial support or whose equity holders lack the characteristics of a controlling financial interest. The Company’s variable interests arise from contractual, ownership, or other monetary interests in the entity. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. The Company consolidates a VIE if it is deemed to be the primary beneficiary. The Company determines it is the primary beneficiary if it has the power to direct the activities that most significantly impact the VIEs’ economic performance and has the obligation to absorb losses or has the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company evaluates its relationships with its VIEs on an ongoing basis to determine whether it is the primary beneficiary. Beginning in January 2022, the Company formed DevCo JVs with the purpose of originating potential battery storage facility projects in specific locations and conducting early-stage planning and development activities. The Company determined that the DevCo JVs are VIEs, as they lack sufficient equity to finance their activities without additional financial support. The Company determined that it has both (1) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance, and (2) the obligation to absorb losses or receive benefits from the VIE that could potentially be significant. Accordingly, the Company has determined that it is the primary beneficiary of the DevCo JVs, and as a result, the DevCo JVs’ operating results, assets and liabilities are consolidated by the Company, with third party minority owners’ share presented as noncontrolling interest. The Company applied the hypothetical liquidation at book value method in allocating recorded net income (loss) to each owner based on the change in the reporting period, of the amount of net assets of the entity to which each owner would be entitled to under the governing contracts in a liquidation scenario. The following table summarizes the carrying values of the assets and liabilities of the DevCo JVs that are consolidated by the Company as of June 30, 2023 (in thousands): June 30, 2023 December 31, 2022 Assets Cash and cash equivalents $ 892 $ 6,686 Other current assets 7 38 Other noncurrent assets 5,920 3,208 Total assets 6,819 9,932 Liabilities Accounts payable 530 356 Other current liabilities 163 97 Total liabilities $ 693 $ 453 For the six months ended June 30, 2023 and 2022, the Company contributed approximately $0.1 million and $5.6 million in capital investments for hardware purchases, respectively. The net income from the DevCo JVs was immaterial during the three and six months ended June 30, 2023 and 2022. 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’ equity, or cash flows. For the six months ended June 30, 2022, a $23.4 million net cash outflow was reclassified from changes in other assets to changes in deferred costs with suppliers, a $7.0 million net cash inflow was reclassified from change in accounts payable to accrued expenses and other liabilities, and a $0.2 million net cash outflow was reclassified from other liabilities to accrued expenses and other liabilities in the condensed consolidated statements of cash flows. This change had no impact to net cash used in operating activities. Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable. Actual results could differ from those estimates and such differences could be material to the financial position and results of operations. Significant estimates and assumptions reflected in these unaudited condensed consolidated financial statements include, but are not limited to, depreciable life of energy storage systems; the amortization of acquired intangibles; the amortization of financing obligations; deferred commissions and contract fulfillment costs; the valuation of energy storage systems, internally developed software, and asset retirement obligations; and the fair value of equity instruments, equity-based instruments, derivative liability and net assets acquired in a business combination. Segment Information Operating segments are defined as components of an entity for which discrete financial information is available that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s Chief Executive Officer is the CODM. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. As such, management has determined that the Company operates as one operating segment that is focused exclusively on innovative technology services that transform the way energy is distributed and consumed. The operations acquired as part of the acquisition of AlsoEnergy have been included in the Company’s operating segment. Net assets outside of the U.S. were less than 10% of total net assets as of June 30, 2023 and December 31, 2022. Concentration of Credit Risk and Other Uncertainties Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. The Company’s cash balances are primarily invested in money market funds or on deposit at high credit quality financial institutions in the U.S. The Company’s cash and cash equivalents are held at financial institutions where account balances may at times exceed federally insured limits. Management believes the Company is not exposed to significant credit risk due to the financial strength of the depository institution in which the cash is held. The Company has no financial instruments with off-balance sheet risk of loss. At times, the Company may be subject to a concentration of credit risk in relation to certain customers due to the purchase of large energy storage systems made by such customers. The Company routinely assesses the creditworthiness of its customers. The Company has not experienced material losses related to receivables from individual customers, or groups of customers during the six months ended June 30, 2023 and 2022 . The Company does not require collateral. Due to these factors, no additional credit risk beyond amounts provided for credit losses is believed by management to be probable in the Company ’s accounts receivable. Significant Customers A significant customer represents 10% or more of the Company’s total revenue or accounts receivable, net balance at each reporting date. For each significant customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable are as follows: Accounts Receivable Revenue Revenue June 30, December 31, Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 2023 2022 Customers: Customer A 58 % 54 % 61 % 50 % 35 % 46 % Customer B 12 % 16 % * * * * Customer C 13 % 11 % * * 26 % * Customer D * * * 15 % * * *Total less than 10% for the period. There are inherent risks whenever a large percentage of total revenue is concentrated in a limited number of customers. Should a significant customer terminate or fail to renew its contracts with us, in whole or in part, for any reason, or experience significant financial or operating difficulties, it could have a material adverse effect on our financial condition and results of operations. In general, a customer that makes up a significant portion of revenues in one period, may not make up a significant portion in subsequent periods. Fair Value of Financial Instruments Assets and liabilities recorded at fair value in the unaudited condensed consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). Hierarchical levels which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows: Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Level 3 — Unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. The Company’s assessment of the significance of a specific input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. Financial assets and liabilities held by the Company measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 include cash and cash equivalents, short-term investments, derivative liability, and convertible notes. |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Disaggregation of Revenue The following table provides information on the disaggregation of revenue as recorded in the condensed consolidated statements of operations (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Hardware revenue $ 76,586 $ 54,426 $ 129,318 $ 85,549 Services and other revenue 16,360 12,521 31,033 22,486 Total revenue $ 92,946 $ 66,947 $ 160,351 $ 108,035 The following table summarizes reportable revenue by geographic regions determined based on the location of the customers (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 United States $ 89,636 $ 64,202 $ 150,208 $ 103,660 Rest of the world 3,310 2,745 10,143 4,375 Total revenue $ 92,946 $ 66,947 $ 160,351 $ 108,035 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 June 30, 2023 and June 30, 2022, the Company had $767.0 million and $363.8 million of remaining performance obligations, respectively, and the approximate percentages expected to be recognized as revenue in the future are as follows (in thousands, except percentages): June 30, 2023 Total Remaining Percent Expected to be Recognized as Revenue Less Than Two to Greater Than Services and other revenue $ 407,026 12 % 44 % 44 % Hardware revenue 360,003 100 % — % — % Total revenue $ 767,029 June 30, 2022 Total Remaining Percent Expected to be Recognized as Revenue Less Than Two to Greater Than Services and other revenue $ 258,080 18 % 51 % 31 % Hardware revenue 105,680 100 % — % — % Total revenue $ 363,760 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 six months ended June 30, 2023 and June 30, 2022 (in thousands): Six Months Ended June 30, 2023 2022 Beginning balance $ 138,074 $ 37,443 Deferred revenue acquired upon business combination — 49,626 Upfront payments received from customers 117,356 85,598 Upfront or annual incentive payments received 1,614 3,868 Revenue recognized related to amounts that were included in beginning balance of deferred revenue (18,820) (4,488) Revenue recognized related to amounts that were included in acquired balance of deferred revenue — (7,983) Revenue recognized related to deferred revenue generated during the period (44,107) (48,523) Ending balance $ 194,117 $ 115,541 |
SHORT-TERM INVESTMENTS
SHORT-TERM INVESTMENTS | 6 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
SHORT-TERM INVESTMENTS | SHORT-TERM INVESTMENTS The following tables summarize the estimated fair value of the Company’s short-term investments and the gross unrealized holding gains and losses as of June 30, 2023 and December 31, 2022 (in thousands): As of June 30, 2023 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Corporate debt securities $ 5,036 $ — $ (18) $ 5,018 Commercial paper 8,945 — — 8,945 U.S. government bonds 21,357 — (47) 21,310 Certificate of deposits 4,697 — — 4,697 Treasury bills 14,644 — (19) 14,625 Agency bonds 8,182 1 (9) 8,174 Total short-term investments $ 62,861 $ 1 $ (93) $ 62,769 As of December 31, 2022 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Corporate debt securities $ 17,056 $ — $ (164) $ 16,892 Commercial paper 18,922 — — 18,922 U.S. government bonds 106,774 — (1,515) 105,259 Certificate of deposits 9,986 — — 9,986 Treasury bills 9,518 3 (5) 9,516 Agency bonds 1,500 — (1) 1,499 Total short-term investments $ 163,756 $ 3 $ (1,685) $ 162,074 The following table presents the contractual maturities of the Company’s short-term investments as of June 30, 2023 (in thousands): As of June 30, 2023 Amortized cost Estimated Fair Value Due within one year $ 62,861 $ 62,769 Total $ 62,861 $ 62,769 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTSFair value accounting is applied for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. At June 30, 2023 and December 31, 2022, the carrying amount of accounts receivable, other current assets, accounts payable, and accrued and other current liabilities approximated their estimated fair value due to their relatively short maturities. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table provides the financial instruments measured at fair value (in thousands): June 30, 2023 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents: Money market fund $ 48,392 $ — $ — $ 48,392 Commercial paper — 6,492 — 6,492 Debt securities: Corporate debt securities — 5,018 — 5,018 Commercial paper — 8,945 — 8,945 U.S. government bonds — 21,310 — 21,310 Certificate of deposits — 4,697 — 4,697 Treasury bills — 14,625 — 14,625 Agency bonds — 8,174 — 8,174 Total financial assets $ 48,392 $ 69,261 $ — $ 117,653 Liabilities: Derivative liability $ — $ — $ 2,576 $ 2,576 December 31, 2022 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents: Money market fund $ 10,618 $ — $ — $ 10,618 Commercial paper — 2,988 — 2,988 Debt securities: Corporate debt securities — 16,892 — 16,892 Commercial paper — 18,922 — 18,922 U.S. government bonds — 105,259 — 105,259 Certificate of deposits — 9,986 — 9,986 Treasury bills — 9,516 — 9,516 Other — 1,499 — 1,499 Total financial assets $ 10,618 $ 165,062 $ — $ 175,680 The Company’s money market funds are classified as Level 1 because they are valued using quoted market prices. The Company’s short-term investments consist of available-for-sale securities and are classified as Level 2 because their value is based on valuations using significant inputs derived from or corroborated by observable market data. The Company’s other current liabilities includes a derivative liability that is attributable to a derivative feature within a revenue contract, whereby final settlement is indexed to the price per ton of lithium carbonate. The balance will be valued using a third party forecast for lithium carbonate. As the revenue contracts are not traded on an exchange they are classified within Level 3 of the fair value hierarchy. The convertible notes are recorded at face value less unamortized debt issuance costs (see Note 10 — Convertible Notes for additional details) on the condensed consolidated balance sheets as of June 30, 2023. As of June 30, 2023 and December 31, 2022, the estimated fair value of the convertible notes was $412.0 million and $293.1 million, respectively, |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | BUSINESS COMBINATIONS AlsoEnergy Acquisition On February 1, 2022, Stem, Inc. acquired 100% of the outstanding shares of AlsoEnergy. AlsoEnergy provides end-to-end turnkey solutions that monitor and manage renewable energy systems. The total consideration to acquire AlsoEnergy was $652.0 million, comprised of $543.1 million in cash, net of a working capital adjustment for an escrow recovery, and $108.9 million in the form of 8,621,006 shares of the Company’s common stock. The Company incurred $6.1 million of transaction costs related to the acquisition of AlsoEnergy, which were recorded in general and administrative expense in the six months ended June 30, 2022. Unaudited Pro Forma Financial Information The following unaudited pro forma financial information summarizes the combined results of operations for the Company and AlsoEnergy, as if the acquisition had occurred on January 1, 2022. The pro forma financial information is as follows (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Total revenue $ 92,946 $ 66,947 $ 160,351 $ 111,871 Net income (loss) $ 19,122 $ (32,023) $ (25,656) $ (62,411) The pro forma financial information for the periods presented above has been calculated after adjusting the results of AlsoEnergy to reflect the business combination accounting effects resulting from this acquisition, including the elimination of transaction costs incurred by the Company, amortization expense from acquired intangible assets, and settlement of stock option awards. The historical consolidated financial statements have been adjusted in the pro forma combined financial statements to give effect to pro forma events that are directly attributable to the business combination. The pro forma financial information is for informational purposes only, and is not indicative of either future results of operations, or results that may have been achieved had the acquisition been consummated as of the beginning of 2022. |
GOODWILL AND INTANGIBLE ASSETS,
GOODWILL AND INTANGIBLE ASSETS, NET | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET Goodwill Goodwill consists of the following (in thousands): June 30, December 31, 2023 2022 Goodwill $ 547,158 $ 547,556 Recovery of escrow from AlsoEnergy acquisition — (915) Effect of foreign currency translation 46 8 Total goodwill $ 547,204 $ 546,649 Intangible Assets, Net Intangible assets, net, consists of the following (in thousands): June 30, December 31, 2023 2022 Developed technology $ 32,000 $ 30,600 Trade name 11,300 11,300 Customer relationships 106,800 106,800 Backlog 3,900 3,900 Internally developed software 58,664 49,472 Intangible assets 212,664 202,072 Less: Accumulated amortization (53,206) (39,809) Add: Currency translation adjustment 14 2 Total intangible assets, net $ 159,472 $ 162,265 Amortization expense for intangible assets was $6.8 million and $6.2 million for the three months ended June 30, 2023 and 2022, respectively, and $13.3 million and $10.4 million for the six months ended June 30, 2023 and 2022, respectively . |
ENERGY STORAGE SYSTEMS, NET
ENERGY STORAGE SYSTEMS, NET | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
ENERGY STORAGE SYSTEMS, NET | ENERGY STORAGE SYSTEMS, NET Energy Storage Systems, Net Energy storage systems, net, consists of the following (in thousands): June 30, December 31, 2023 2022 Energy storage systems placed into service $ 141,450 $ 143,154 Less: accumulated depreciation (62,338) (58,782) Energy storage systems not yet placed into service 5,515 6,385 Total energy storage systems, net $ 84,627 $ 90,757 Depreciation expense for energy storage systems was approximately $3.6 million and $3.7 million for the three months ended June 30, 2023 and 2022, respectively, and approximately $7.2 million and $7.4 million for the six months ended June 30, 2023 and 2022, respectively. Depreciation expense is recognized in cost of services and other revenue. |
NOTES PAYABLE
NOTES PAYABLE | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTES PAYABLE 2021 Credit Agreement In January 2021, a wholly-owned Canadian subsidiary of the Company entered into a credit agreement to provide a total of $2.7 million towards the financing of certain energy storage systems. The credit agreement was structured on a non-recourse basis and the systems were operated by the Company. The credit agreement had a stated interest of 5.45% and a maturity date of June 2031. The Company received an advance under the credit agreement of $1.8 million in January 2021. The repayment of advances received under the credit agreement was determined by the lender based on the proceeds generated by the Company through the operation of the underlying energy storage systems. On April 6, 2023, the Company repaid the remaining outstanding balance under the 2021 Credit Agreement with a portion of the net proceeds from the issuance of the 2030 Convertible Notes (as described in Note 10 — Convertible Notes 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 notes will mature on December 1, 2028, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. Upon conversion, the Company may choose to pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock. The Notes are redeemable for cash at the Company’s option at any time given certain conditions (as discussed below), at an initial conversion rate of 34.1965 shares of common stock per $1,000 principal amount of 2028 Convertible Notes, which is equivalent to an initial conversion price of approximately $29.24 (the “2028 Conversion Price”) per share of the Company’s common stock. The conversion rate is subject to customary adjustments for certain events as described in the Indenture. The Company may redeem for cash all or any portion of the 2028 Convertible Notes, at the Company’s option, on or after December 5, 2025 if the last reported sale price of the Company’s common stock has been at least 130% of the 2028 Conversion Price then in effect for at least 20 trading days at a redemption price equal to 100% of the principal amount of the 2028 Convertible Notes to be redeemed, plus accrued and unpaid interest. The Company’s net proceeds from this offering were approximately $445.7 million , after deducting the 2021 Initial Purchasers’ discounts and debt issuance costs. To minimize the impact 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 three months ended June 30, 2023, t he 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 June 30, 2023 and December 31, 2022 are summarized in the following table (in thousands): June 30, 2023 December 31, 2022 Long Term Debt Outstanding principal $ 297,024 $ 460,000 Unamortized initial purchaser’s debt discount and debt issuance cost (7,148) (12,091) Net carrying amount $ 289,876 $ 447,909 The following table presents total interest expense recognized related to the 2028 Convertible Notes during the three and six months ended June 30, 2023 and 2022 (in thousands) : Three Months Ended Six Months Ended 2023 2022 2023 2022 Cash interest expense Contractual interest expense $ 376 $ 575 $ 951 $ 1,150 Non-cash interest expense Amortization of debt discount and debt issuance cost 342 496 841 991 Total interest expense $ 718 $ 1,071 $ 1,792 $ 2,141 2028 Capped Call Options On November 17, 2021, in connection with the pricing of the 2028 Convertible Notes, and on November 19, 2021, in connection with the exercise in full by the 2021 Initial Purchasers of their option to purchase additional Notes, the Company entered into the 2028 Capped Calls with certain counterparties. The Company used $66.7 million of the net proceeds to pay the cost of the 2028 Capped Calls. The 2028 Capped Calls have an initial strike price of $29.2428 per share, which corresponds to the initial conversion price of the 2028 Convertible Notes and is subject to anti-dilution adjustments. The 2028 Capped Calls have a cap price of $49.6575 per share, subject to certain adjustments. The 2028 Capped Calls are considered separate transactions entered into by and between the Company and the 2028 Capped Calls counterparties, and are not part of the terms of the 2028 Convertible Notes. The Company recorded a reduction to additional paid-in capital of $66.7 million during the year ended December 31, 2021 related to the premium payments for the 2028 Capped Calls. These instruments meet the conditions outlined in FASB ASU 2022-01 Topic 815, Derivatives and Hedging (“ASC 815”) to be classified in stockholders’ equity and are not subsequently remeasured as long as the conditions for equity classification continue to be met. 2030 Convertible Notes and 2030 Capped Call Options 2030 Convertible Notes On April 3, 2023, the Company issued $240.0 million aggregate principal amount of its 2030 Convertible Notes in a private placement offering to qualified institutional buyers (the “2023 Initial Purchasers”) pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2030 Convertible Notes are senior, unsecured obligations of the Company and bear interest at a rate of 4.25% per year, payable in cash semi-annually in arrears in April and October of each year, beginning on October 1, 2023. The notes will mature on April 1, 2030, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. Upon conversion, the Company may choose to pay or deliver cash, shares of common stock or a combination of cash and shares of common stock. The Notes are redeemable for cash at the Company’s option at any time given certain conditions (as discussed below), at an initial conversion rate of 140.3066 shares of common stock per $1,000 principal amount of the 2030 Convertible Notes, which is equivalent to an initial conversion price of approximately $7.1272 (the “2030 Conversion Price”) per share of the Company’s common stock. The conversion rate is subject to customary adjustments for certain events as described in the related Indenture. The 2030 Convertible Notes will be redeemable, in whole or in part, at the Company’s option, on or after April 5, 2027 if the last reported sale price of the Company’s common stock has been at least 130% of the 2030 Conversion Price then in effect for at least 20 trading days at a redemption price equal to 100% of the principal amount of the 2030 Convertible Notes to be redeemed, plus accrued and unpaid interest. The Company’s net proceeds from this offering were approximately $232.4 million, net of $7.6 million in debt issuance costs primarily consisting of underwriters, advisory, legal, and accounting fees. The Company used approximately $99.8 million of the net proceeds to purchase and surrender for cancellation approximately $163.0 million aggregate principal amount of the Company’s 2028 Convertible Notes. See 2028 Convertible Notes above for further details on the impacts of the debt extinguishment. The outstanding 2030 Convertible Notes balances as of June 30, 2023 are summarized in the following table (in thousands): June 30, 2023 Long Term Debt Outstanding principal $ 240,000 Unamortized initial purchaser’s debt discount and debt issuance cost (7,370) Net carrying amount $ 232,630 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 June 30, 2023 (in thousands) : Three Months Ended Cash interest expense Contractual interest expense $ 2,493 Non-cash interest expense Amortization of debt discount and debt issuance cost 231 Total interest expense $ 2,724 2030 Capped Call Options On March 29, 2023 and March 31, 2023, in connection with the pricing of the 2030 Convertible Notes, and on April 3, 2023, in connection with the exercise in full by the 2023 Initial Purchasers of their option to purchase additional Notes, the Company entered into Capped Calls (the “2030 Capped Calls”) with certain counterparties. The Company used $27.8 million of the net proceeds from the 2030 Convertible Notes to pay the cost of the 2030 Capped Calls. The 2030 Capped Calls have an initial strike price of $7.1272 per share, which corresponds to the initial conversion price of the 2030 Convertible Notes and is subject to anti-dilution adjustments. The 2030 Capped Calls have a cap price of $11.1800 per share, subject to certain adjustments. The 2030 Capped Calls are considered separate transactions entered into by and between the Company and the 2030 Capped Calls counterparties, and are not part of the terms of the 2030 Convertible Notes. The Company recorded a reduction to additional paid-in capital of $27.8 million during the three months ended June 30, 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. |
CONVERTIBLE NOTES
CONVERTIBLE NOTES | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES | NOTES PAYABLE 2021 Credit Agreement In January 2021, a wholly-owned Canadian subsidiary of the Company entered into a credit agreement to provide a total of $2.7 million towards the financing of certain energy storage systems. The credit agreement was structured on a non-recourse basis and the systems were operated by the Company. The credit agreement had a stated interest of 5.45% and a maturity date of June 2031. The Company received an advance under the credit agreement of $1.8 million in January 2021. The repayment of advances received under the credit agreement was determined by the lender based on the proceeds generated by the Company through the operation of the underlying energy storage systems. On April 6, 2023, the Company repaid the remaining outstanding balance under the 2021 Credit Agreement with a portion of the net proceeds from the issuance of the 2030 Convertible Notes (as described in Note 10 — Convertible Notes 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 notes will mature on December 1, 2028, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. Upon conversion, the Company may choose to pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock. The Notes are redeemable for cash at the Company’s option at any time given certain conditions (as discussed below), at an initial conversion rate of 34.1965 shares of common stock per $1,000 principal amount of 2028 Convertible Notes, which is equivalent to an initial conversion price of approximately $29.24 (the “2028 Conversion Price”) per share of the Company’s common stock. The conversion rate is subject to customary adjustments for certain events as described in the Indenture. The Company may redeem for cash all or any portion of the 2028 Convertible Notes, at the Company’s option, on or after December 5, 2025 if the last reported sale price of the Company’s common stock has been at least 130% of the 2028 Conversion Price then in effect for at least 20 trading days at a redemption price equal to 100% of the principal amount of the 2028 Convertible Notes to be redeemed, plus accrued and unpaid interest. The Company’s net proceeds from this offering were approximately $445.7 million , after deducting the 2021 Initial Purchasers’ discounts and debt issuance costs. To minimize the impact 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 three months ended June 30, 2023, t he 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 June 30, 2023 and December 31, 2022 are summarized in the following table (in thousands): June 30, 2023 December 31, 2022 Long Term Debt Outstanding principal $ 297,024 $ 460,000 Unamortized initial purchaser’s debt discount and debt issuance cost (7,148) (12,091) Net carrying amount $ 289,876 $ 447,909 The following table presents total interest expense recognized related to the 2028 Convertible Notes during the three and six months ended June 30, 2023 and 2022 (in thousands) : Three Months Ended Six Months Ended 2023 2022 2023 2022 Cash interest expense Contractual interest expense $ 376 $ 575 $ 951 $ 1,150 Non-cash interest expense Amortization of debt discount and debt issuance cost 342 496 841 991 Total interest expense $ 718 $ 1,071 $ 1,792 $ 2,141 2028 Capped Call Options On November 17, 2021, in connection with the pricing of the 2028 Convertible Notes, and on November 19, 2021, in connection with the exercise in full by the 2021 Initial Purchasers of their option to purchase additional Notes, the Company entered into the 2028 Capped Calls with certain counterparties. The Company used $66.7 million of the net proceeds to pay the cost of the 2028 Capped Calls. The 2028 Capped Calls have an initial strike price of $29.2428 per share, which corresponds to the initial conversion price of the 2028 Convertible Notes and is subject to anti-dilution adjustments. The 2028 Capped Calls have a cap price of $49.6575 per share, subject to certain adjustments. The 2028 Capped Calls are considered separate transactions entered into by and between the Company and the 2028 Capped Calls counterparties, and are not part of the terms of the 2028 Convertible Notes. The Company recorded a reduction to additional paid-in capital of $66.7 million during the year ended December 31, 2021 related to the premium payments for the 2028 Capped Calls. These instruments meet the conditions outlined in FASB ASU 2022-01 Topic 815, Derivatives and Hedging (“ASC 815”) to be classified in stockholders’ equity and are not subsequently remeasured as long as the conditions for equity classification continue to be met. 2030 Convertible Notes and 2030 Capped Call Options 2030 Convertible Notes On April 3, 2023, the Company issued $240.0 million aggregate principal amount of its 2030 Convertible Notes in a private placement offering to qualified institutional buyers (the “2023 Initial Purchasers”) pursuant to Rule 144A under the Securities Act of 1933, as amended. The 2030 Convertible Notes are senior, unsecured obligations of the Company and bear interest at a rate of 4.25% per year, payable in cash semi-annually in arrears in April and October of each year, beginning on October 1, 2023. The notes will mature on April 1, 2030, unless earlier repurchased, redeemed or converted in accordance with their terms prior to such date. Upon conversion, the Company may choose to pay or deliver cash, shares of common stock or a combination of cash and shares of common stock. The Notes are redeemable for cash at the Company’s option at any time given certain conditions (as discussed below), at an initial conversion rate of 140.3066 shares of common stock per $1,000 principal amount of the 2030 Convertible Notes, which is equivalent to an initial conversion price of approximately $7.1272 (the “2030 Conversion Price”) per share of the Company’s common stock. The conversion rate is subject to customary adjustments for certain events as described in the related Indenture. The 2030 Convertible Notes will be redeemable, in whole or in part, at the Company’s option, on or after April 5, 2027 if the last reported sale price of the Company’s common stock has been at least 130% of the 2030 Conversion Price then in effect for at least 20 trading days at a redemption price equal to 100% of the principal amount of the 2030 Convertible Notes to be redeemed, plus accrued and unpaid interest. The Company’s net proceeds from this offering were approximately $232.4 million, net of $7.6 million in debt issuance costs primarily consisting of underwriters, advisory, legal, and accounting fees. The Company used approximately $99.8 million of the net proceeds to purchase and surrender for cancellation approximately $163.0 million aggregate principal amount of the Company’s 2028 Convertible Notes. See 2028 Convertible Notes above for further details on the impacts of the debt extinguishment. The outstanding 2030 Convertible Notes balances as of June 30, 2023 are summarized in the following table (in thousands): June 30, 2023 Long Term Debt Outstanding principal $ 240,000 Unamortized initial purchaser’s debt discount and debt issuance cost (7,370) Net carrying amount $ 232,630 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 June 30, 2023 (in thousands) : Three Months Ended Cash interest expense Contractual interest expense $ 2,493 Non-cash interest expense Amortization of debt discount and debt issuance cost 231 Total interest expense $ 2,724 2030 Capped Call Options On March 29, 2023 and March 31, 2023, in connection with the pricing of the 2030 Convertible Notes, and on April 3, 2023, in connection with the exercise in full by the 2023 Initial Purchasers of their option to purchase additional Notes, the Company entered into Capped Calls (the “2030 Capped Calls”) with certain counterparties. The Company used $27.8 million of the net proceeds from the 2030 Convertible Notes to pay the cost of the 2030 Capped Calls. The 2030 Capped Calls have an initial strike price of $7.1272 per share, which corresponds to the initial conversion price of the 2030 Convertible Notes and is subject to anti-dilution adjustments. The 2030 Capped Calls have a cap price of $11.1800 per share, subject to certain adjustments. The 2030 Capped Calls are considered separate transactions entered into by and between the Company and the 2030 Capped Calls counterparties, and are not part of the terms of the 2030 Convertible Notes. The Company recorded a reduction to additional paid-in capital of $27.8 million during the three months ended June 30, 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. |
WARRANTS
WARRANTS | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
WARRANTS | WARRANTSLegacy Stem WarrantsPrior to the Merger, the Company had issued warrants to purchase shares of Legacy Stem’s preferred stock in conjunction with various debt financings. The Company has also issued warrants to purchase shares of Legacy Stem’s common stock. Upon effectiveness of the Merger, the Company had 50,207,439 warrants outstanding, of which substantially all were converted into 2,759,970 shares of common stock of Stem. Upon conversion of the warrants, the existing warrant liabilities were remeasured to fair value resulting in a gain on remeasurement of $100.9 million and a total warrant liability of $60.6 million, which was then reclassified to additional paid-in-capital. At June 30, 2023, there were 2,533 Legacy Stem Warrants outstanding. These instruments are exercisable into the Company’s common stock and are equity classified. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Equity Incentive Plans Under both the Stem, Inc. 2009 Equity Incentive Plan (the “2009 Plan”) and the Stem, Inc. 2021 Equity Incentive Plan (the “2021 Plan,” and together with the 2009 Plan, the “Plans”), the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance stock units (“PSUs”), and other awards that are settled in shares of the Company’s common stock. The Company does not intend to grant new awards under the 2009 Plan. All shares that remain available for future grants are under the 2021 Plan. Stock Options The following table summarizes the stock option activity for the period ended June 30, 2023: Number of Weighted- Weighted- Aggregate Balances as of December 31, 2022 8,243,637 $ 6.88 6.6 $ 35,566 Options granted 1,291,349 10.25 Options exercised (104,573) 2.19 Options forfeited and expired (307,769) 14.30 Balances as of June 30, 2023 9,122,644 $ 7.16 6.5 $ 16,789 Options vested and exercisable — June 30, 2023 6,030,152 $ 4.58 5.4 $ 16,640 As of June 30, 2023, the Company had approximately $20.1 million of remaining unrecognized stock-based compensation expense for stock options, which is expected to be recognized over a weighted average period of 1.6 years. Restricted Stock Units The following table summarizes the RSU activity for the period ended June 30, 2023: Number of RSUs Outstanding (1) Weighted-Average Balances as of December 31, 2022 6,719,490 $ 15.34 RSUs granted 7,257,977 5.57 RSUs vested (1,151,641) 10.72 RSUs forfeited (774,634) 12.10 Balances as of June 30, 2023 12,051,192 $ 10.10 (1) Includes certain restricted stock units with service and market-based vesting criteria. As of June 30, 2023, the Company had approximately $93.4 million of remaining unrecognized stock-based compensation expense for RSUs, which is expected to be recognized over a weighted average period of 2.2 years. Stock-Based Compensation The following table summarizes stock-based compensation expense recorded in each component of operating expenses in the Company’s condensed consolidated statements of operations and comprehensive income (loss) (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Sales and marketing $ 1,550 $ 1,106 $ 2,495 $ 1,930 Research and development 2,548 562 4,266 1,869 General and administrative 5,822 4,799 10,361 8,933 Total stock-based compensation expense $ 9,920 $ 6,467 $ 17,122 $ 12,732 Research and development expenses of $0.9 million and $0.6 million corresponding to internal-use software, were capitalized during the three months ended June 30, 2023 and 2022, respectively. Research and development expenses of $1.8 million and $1.1 million, corresponding to internal-use software, were capitalized during the six months ended June 30, 2023 and 2022, respectively. |
NET INCOME (LOSS) PER SHARE
NET INCOME (LOSS) PER SHARE | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER SHARE | NET INCOME (LOSS) PER SHARE Net income (loss) per share is computed by dividing net income (loss) by the basic weighted-average number of shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income 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 income (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): Three Months Ended Six Months Ended 2023 2022 2023 2022 Numerator - Basic: Net income (loss) per share attributable to common stockholders, basic $ 19,122 $ (32,019) $ (25,656) $ (54,502) Numerator - Diluted: Net income (loss) per share attributable to common stockholders, basic 19,122 (32,019) (25,656) (54,502) Less: Gain on extinguishment of debt, net of tax (59,133) — — — Net loss attributable to Stem common stockholders, diluted (40,011) (32,019) (25,656) (54,502) Denominator: Weighted-average number of shares outstanding used to compute net income (loss) per share attributable to common stockholders, basic 155,619,179 154,125,061 155,294,475 152,318,090 Dilutive potential common shares 185,774 — — — Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, diluted 155,804,953 154,125,061 155,294,475 152,318,090 Net income (loss) per share attributable to common stockholders, basic $ 0.12 $ (0.21) $ (0.17) $ (0.36) Net loss per share attributable to common stockholders, diluted $ (0.26) $ (0.21) $ (0.17) $ (0.36) The following table shows total outstanding potentially dilutive shares excluded from the computation of diluted loss per share as their effect would have been anti-dilutive, as of June 30, 2023 and 2022: June 30, 2023 June 30, 2022 Outstanding 2028 Convertible Notes 10,157,181 15,730,390 Outstanding 2030 Convertible Notes 33,673,584 — Outstanding stock options 9,122,644 8,396,685 Outstanding warrants 2,533 2,533 Outstanding RSUs 12,051,192 6,021,852 Total 65,007,134 30,151,460 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The following table reflects the Company’s (provision for) benefit from income taxes and the effective tax rates for the periods presented below (in thousands, except effective tax rate): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Income (loss) before (provision for) benefit from income taxes $ 19,613 $ (32,030) $ (25,256) $ (69,726) (Provision for) benefit from income taxes $ (491) $ 7 $ (400) $ 15,220 Effective tax rate 2.5 % — % (1.6) % 21.8 % For the three months ended June 30, 2023 , the Company recognized a provision for income taxes of $0.5 million, representing an effective tax rate of 2.5%, which was lower than the statutory federal tax rate because the Company maintains a valuation allowance on its U.S. deferred tax assets. For the six months ended June 30, 2023 , the Company recognized a provision for income taxes of $0.4 million, representing an effective tax rate of 1.6%, which was lower than the statutory federal tax rate due to a $0.3 million tax benefit from an acquisition for a partial valuation allowance release on U.S. deferred tax assets due to the deferred tax liability established in purchase accounting on acquired intangibles during the six months ended June 30, 2023 . For the six months ended June 30, 2022, the Company recognized a benefit from income taxes of $15.2 million , representing an effective tax rate of 21.8%, which was higher than the statutory federal tax rate due to a $15.1 million tax benefit from the acquisition of AlsoEnergy for a partial valuation allowance release on U.S. Deferred tax assets due to the deferred tax liability established in purchase accounting on the acquired intangibles. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Contingencies The Company is party to various legal proceedings from time to time. A liability is accrued when a loss is both probable and can be reasonably estimated. Management believes that the probability of a material loss with respect to any currently pending legal proceeding is remote. However, litigation is inherently uncertain and it is not possible to predict the ultimate disposition of any of these proceedings. As of the date of this filing, the Company does not believe that there are any pending legal proceedings or other loss contingencies that will, either individually or in the aggregate, have a material adverse effect on the Company taken as a whole. Commitments On March 1, 2023, the Company recognized a $2.8 million operating lease liability and a corresponding operating lease right-of-use (“ROU”) asset, which are included in the condensed consolidated balance sheets as of June 30, 2023. The operating lease liability and operating lease ROU asset correspond to 41,811 square feet of leased office in Gurugram, India. As of the commencement date of the lease, the remaining lease term was 58 months. The lease agreement contemplates options to extend the non-cancelable lease term, which have been determined not reasonably certain to be exercised. Base rent is approximately $58,500 per month with escalating payments. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 19,122 | $ (32,019) | $ (25,656) | $ (54,502) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended | 6 Months Ended |
Jun. 30, 2023 shares | Jun. 30, 2023 shares | |
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | (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 second quarter of 2023 and intended to satisfy the affirmative defense conditions of Rule 10b5-1(c), referred to as 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 second quarter of 2023. 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 David S. Buzby Director Adopted June 9, 2023 September 7, 2023 through June 1, 2024, or such earlier date when all transactions under the trading plan are completed. Sale of up to 153,000 shares of common stock. | |
Rule 10b5-1 Arrangement Adopted | true | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
David S. Buzby [Member] | ||
Trading Arrangements, by Individual | ||
Name | David S. Buzby | |
Title | Director | |
Adoption Date | June 9, 2023 | |
Arrangement Duration | 268 days | |
Aggregate Available | 153,000 | 153,000 |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim reporting and with the instructions to Form 10-Q and Article 10 of Regulation S-X, assuming the Company will continue as a going concern. Accordingly, the condensed consolidated balance sheet at December 31, 2022 has been derived from the audited financial statements at that date, but certain notes or other information that are normally required by GAAP have been omitted if they substantially duplicate the disclosures contained in the Company’s annual audited consolidated financial statements. In the opinion of Stem management, all normal and recurring adjustments considered necessary for a fair statement of the results for the interim period presented have been included in the accompanying unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2022. Operating results for the three and six months ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or for any other future interim period or year. |
Principles of Consolidation | Principles of ConsolidationThe unaudited condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and consolidated variable interest entities (“VIEs”). The Company presents non-controlling interests within the equity section of its condensed consolidated balance sheets, and the amount of consolidated net income (loss) that is attributable to Stem and the non-controlling interest in its condensed consolidated statements of operations. All intercompany balances and transactions have been eliminated in consolidation. |
Variable Interest Entities | Variable Interest Entities The Company forms special purpose entities (“SPEs”), some of which are VIEs, with its investors in the ordinary course of business to facilitate the funding and monetization of its energy storage systems. A legal entity is considered a VIE if it has either a total equity investment that is insufficient to finance its operations without additional subordinated financial support or whose equity holders lack the characteristics of a controlling financial interest. The Company’s variable interests arise from contractual, ownership, or other monetary interests in the entity. The typical condition for a controlling financial interest ownership is holding a majority of the voting interests of an entity; however, a controlling financial interest may also exist in entities, such as VIEs, through arrangements that do not involve controlling voting interests. The Company consolidates a VIE if it is deemed to be the primary beneficiary. The Company determines it is the primary beneficiary if it has the power to direct the activities that most significantly impact the VIEs’ economic performance and has the obligation to absorb losses or has the right to receive benefits of the VIE that could potentially be significant to the VIE. The Company evaluates its relationships with its VIEs on an ongoing basis to determine whether it is the primary beneficiary. |
Reclassifications | ReclassificationsCertain 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’ equity, or cash flows. |
Use of Estimates | Use of Estimates The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable. Actual results could differ from those estimates and such differences could be material to the financial position and results of operations. Significant estimates and assumptions reflected in these unaudited condensed consolidated financial statements include, but are not limited to, depreciable life of energy storage systems; the amortization of acquired intangibles; the amortization of financing obligations; deferred commissions and contract fulfillment costs; the valuation of energy storage systems, internally developed software, and asset retirement obligations; and the fair value of equity instruments, equity-based instruments, derivative liability and net assets acquired in a business combination. |
Segment Information | 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 |
Concentration of Credit Risk and Other Uncertainties | Concentration of Credit Risk and Other Uncertainties Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and accounts receivable. The Company’s cash balances are primarily invested in money market funds or on deposit at high credit quality financial institutions in the U.S. The Company’s cash and cash equivalents are held at financial institutions where account balances may at times exceed federally insured limits. Management believes the Company is not exposed to significant credit risk due to the financial strength of the depository institution in which the cash is held. The Company has no financial instruments with off-balance sheet risk of loss. At times, the Company may be subject to a concentration of credit risk in relation to certain customers due to the purchase of large energy storage systems made by such customers. The Company routinely assesses the creditworthiness of its customers. The Company has not experienced material losses related to receivables from individual customers, or groups of customers during the six months ended June 30, 2023 and 2022 . The Company does not require collateral. Due to these factors, no additional credit risk beyond amounts provided for credit losses is believed by management to be probable in the Company ’s accounts receivable. |
Significant Customers | Significant CustomersA significant customer represents 10% or more of the Company’s total revenue or accounts receivable, net balance at each reporting date. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Assets and liabilities recorded at fair value in the unaudited condensed consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). Hierarchical levels which are directly related to the amount of subjectivity associated with the inputs to the valuation of these assets or liabilities are as follows: Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. Level 3 — Unobservable inputs for the asset or liability only used when there is little, if any, market activity for the asset or liability at the measurement date. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. The Company’s assessment of the significance of a specific input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. Financial assets and liabilities held by the Company measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 include cash and cash equivalents, short-term investments, derivative liability, and convertible notes. |
Earnings Per Share | Net income (loss) per share is computed by dividing net income (loss) by the basic weighted-average number of shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income 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 income (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. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Variable Interest Entities | The following table summarizes the carrying values of the assets and liabilities of the DevCo JVs that are consolidated by the Company as of June 30, 2023 (in thousands): June 30, 2023 December 31, 2022 Assets Cash and cash equivalents $ 892 $ 6,686 Other current assets 7 38 Other noncurrent assets 5,920 3,208 Total assets 6,819 9,932 Liabilities Accounts payable 530 356 Other current liabilities 163 97 Total liabilities $ 693 $ 453 |
Schedule of Significant Customers | For each significant customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable are as follows: Accounts Receivable Revenue Revenue June 30, December 31, Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 2023 2022 Customers: Customer A 58 % 54 % 61 % 50 % 35 % 46 % Customer B 12 % 16 % * * * * Customer C 13 % 11 % * * 26 % * Customer D * * * 15 % * * *Total less than 10% for the period. |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table provides information on the disaggregation of revenue as recorded in the condensed consolidated statements of operations (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Hardware revenue $ 76,586 $ 54,426 $ 129,318 $ 85,549 Services and other revenue 16,360 12,521 31,033 22,486 Total revenue $ 92,946 $ 66,947 $ 160,351 $ 108,035 The following table summarizes reportable revenue by geographic regions determined based on the location of the customers (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 United States $ 89,636 $ 64,202 $ 150,208 $ 103,660 Rest of the world 3,310 2,745 10,143 4,375 Total revenue $ 92,946 $ 66,947 $ 160,351 $ 108,035 |
Schedule of Remaining Performance Obligations | As of June 30, 2023 and June 30, 2022, the Company had $767.0 million and $363.8 million of remaining performance obligations, respectively, and the approximate percentages expected to be recognized as revenue in the future are as follows (in thousands, except percentages): June 30, 2023 Total Remaining Percent Expected to be Recognized as Revenue Less Than Two to Greater Than Services and other revenue $ 407,026 12 % 44 % 44 % Hardware revenue 360,003 100 % — % — % Total revenue $ 767,029 June 30, 2022 Total Remaining Percent Expected to be Recognized as Revenue Less Than Two to Greater Than Services and other revenue $ 258,080 18 % 51 % 31 % Hardware revenue 105,680 100 % — % — % Total revenue $ 363,760 |
Schedule of Contract Balances | The following table presents the changes in the deferred revenue balance during the six months ended June 30, 2023 and June 30, 2022 (in thousands): Six Months Ended June 30, 2023 2022 Beginning balance $ 138,074 $ 37,443 Deferred revenue acquired upon business combination — 49,626 Upfront payments received from customers 117,356 85,598 Upfront or annual incentive payments received 1,614 3,868 Revenue recognized related to amounts that were included in beginning balance of deferred revenue (18,820) (4,488) Revenue recognized related to amounts that were included in acquired balance of deferred revenue — (7,983) Revenue recognized related to deferred revenue generated during the period (44,107) (48,523) Ending balance $ 194,117 $ 115,541 |
SHORT-TERM INVESTMENTS (Tables)
SHORT-TERM INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Short-Term Investments | The following tables summarize the estimated fair value of the Company’s short-term investments and the gross unrealized holding gains and losses as of June 30, 2023 and December 31, 2022 (in thousands): As of June 30, 2023 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Corporate debt securities $ 5,036 $ — $ (18) $ 5,018 Commercial paper 8,945 — — 8,945 U.S. government bonds 21,357 — (47) 21,310 Certificate of deposits 4,697 — — 4,697 Treasury bills 14,644 — (19) 14,625 Agency bonds 8,182 1 (9) 8,174 Total short-term investments $ 62,861 $ 1 $ (93) $ 62,769 As of December 31, 2022 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Corporate debt securities $ 17,056 $ — $ (164) $ 16,892 Commercial paper 18,922 — — 18,922 U.S. government bonds 106,774 — (1,515) 105,259 Certificate of deposits 9,986 — — 9,986 Treasury bills 9,518 3 (5) 9,516 Agency bonds 1,500 — (1) 1,499 Total short-term investments $ 163,756 $ 3 $ (1,685) $ 162,074 |
Schedule of Contractual Maturities of Short-Term Investments | The following table presents the contractual maturities of the Company’s short-term investments as of June 30, 2023 (in thousands): As of June 30, 2023 Amortized cost Estimated Fair Value Due within one year $ 62,861 $ 62,769 Total $ 62,861 $ 62,769 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Instruments Measured at Fair Value | The following table provides the financial instruments measured at fair value (in thousands): June 30, 2023 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents: Money market fund $ 48,392 $ — $ — $ 48,392 Commercial paper — 6,492 — 6,492 Debt securities: Corporate debt securities — 5,018 — 5,018 Commercial paper — 8,945 — 8,945 U.S. government bonds — 21,310 — 21,310 Certificate of deposits — 4,697 — 4,697 Treasury bills — 14,625 — 14,625 Agency bonds — 8,174 — 8,174 Total financial assets $ 48,392 $ 69,261 $ — $ 117,653 Liabilities: Derivative liability $ — $ — $ 2,576 $ 2,576 December 31, 2022 Level 1 Level 2 Level 3 Fair Value Assets: Cash equivalents: Money market fund $ 10,618 $ — $ — $ 10,618 Commercial paper — 2,988 — 2,988 Debt securities: Corporate debt securities — 16,892 — 16,892 Commercial paper — 18,922 — 18,922 U.S. government bonds — 105,259 — 105,259 Certificate of deposits — 9,986 — 9,986 Treasury bills — 9,516 — 9,516 Other — 1,499 — 1,499 Total financial assets $ 10,618 $ 165,062 $ — $ 175,680 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Unaudited Pro Forma Information | The pro forma financial information is as follows (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Total revenue $ 92,946 $ 66,947 $ 160,351 $ 111,871 Net income (loss) $ 19,122 $ (32,023) $ (25,656) $ (62,411) |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill consists of the following (in thousands): June 30, December 31, 2023 2022 Goodwill $ 547,158 $ 547,556 Recovery of escrow from AlsoEnergy acquisition — (915) Effect of foreign currency translation 46 8 Total goodwill $ 547,204 $ 546,649 |
Schedule of Intangible Assets | Intangible assets, net, consists of the following (in thousands): June 30, December 31, 2023 2022 Developed technology $ 32,000 $ 30,600 Trade name 11,300 11,300 Customer relationships 106,800 106,800 Backlog 3,900 3,900 Internally developed software 58,664 49,472 Intangible assets 212,664 202,072 Less: Accumulated amortization (53,206) (39,809) Add: Currency translation adjustment 14 2 Total intangible assets, net $ 159,472 $ 162,265 |
ENERGY STORAGE SYSTEMS, NET (Ta
ENERGY STORAGE SYSTEMS, NET (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Energy Storage Systems, Net | Energy storage systems, net, consists of the following (in thousands): June 30, December 31, 2023 2022 Energy storage systems placed into service $ 141,450 $ 143,154 Less: accumulated depreciation (62,338) (58,782) Energy storage systems not yet placed into service 5,515 6,385 Total energy storage systems, net $ 84,627 $ 90,757 |
CONVERTIBLE NOTES (Tables)
CONVERTIBLE NOTES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule Of Convertible Debt | The outstanding 2028 Convertible Notes balances as of June 30, 2023 and December 31, 2022 are summarized in the following table (in thousands): June 30, 2023 December 31, 2022 Long Term Debt Outstanding principal $ 297,024 $ 460,000 Unamortized initial purchaser’s debt discount and debt issuance cost (7,148) (12,091) Net carrying amount $ 289,876 $ 447,909 The following table presents total interest expense recognized related to the 2028 Convertible Notes during the three and six months ended June 30, 2023 and 2022 (in thousands) : Three Months Ended Six Months Ended 2023 2022 2023 2022 Cash interest expense Contractual interest expense $ 376 $ 575 $ 951 $ 1,150 Non-cash interest expense Amortization of debt discount and debt issuance cost 342 496 841 991 Total interest expense $ 718 $ 1,071 $ 1,792 $ 2,141 The outstanding 2030 Convertible Notes balances as of June 30, 2023 are summarized in the following table (in thousands): June 30, 2023 Long Term Debt Outstanding principal $ 240,000 Unamortized initial purchaser’s debt discount and debt issuance cost (7,370) Net carrying amount $ 232,630 The following table presents total interest expense recognized related to the 2030 Convertible Notes during the three months ended June 30, 2023 (in thousands) : Three Months Ended Cash interest expense Contractual interest expense $ 2,493 Non-cash interest expense Amortization of debt discount and debt issuance cost 231 Total interest expense $ 2,724 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Activity Under the Plan | The following table summarizes the stock option activity for the period ended June 30, 2023: Number of Weighted- Weighted- Aggregate Balances as of December 31, 2022 8,243,637 $ 6.88 6.6 $ 35,566 Options granted 1,291,349 10.25 Options exercised (104,573) 2.19 Options forfeited and expired (307,769) 14.30 Balances as of June 30, 2023 9,122,644 $ 7.16 6.5 $ 16,789 Options vested and exercisable — June 30, 2023 6,030,152 $ 4.58 5.4 $ 16,640 |
Schedule of Restricted Stock Activity | The following table summarizes the RSU activity for the period ended June 30, 2023: Number of RSUs Outstanding (1) Weighted-Average Balances as of December 31, 2022 6,719,490 $ 15.34 RSUs granted 7,257,977 5.57 RSUs vested (1,151,641) 10.72 RSUs forfeited (774,634) 12.10 Balances as of June 30, 2023 12,051,192 $ 10.10 (1) Includes certain restricted stock units with service and market-based vesting criteria. |
Schedule of Stock-based Compensation Expense | The following table summarizes stock-based compensation expense recorded in each component of operating expenses in the Company’s condensed consolidated statements of operations and comprehensive income (loss) (in thousands): Three Months Ended Six Months Ended 2023 2022 2023 2022 Sales and marketing $ 1,550 $ 1,106 $ 2,495 $ 1,930 Research and development 2,548 562 4,266 1,869 General and administrative 5,822 4,799 10,361 8,933 Total stock-based compensation expense $ 9,920 $ 6,467 $ 17,122 $ 12,732 |
NET INCOME (LOSS) PER SHARE (Ta
NET INCOME (LOSS) PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share attributable to common stockholders (in thousands, except share and per share amounts): Three Months Ended Six Months Ended 2023 2022 2023 2022 Numerator - Basic: Net income (loss) per share attributable to common stockholders, basic $ 19,122 $ (32,019) $ (25,656) $ (54,502) Numerator - Diluted: Net income (loss) per share attributable to common stockholders, basic 19,122 (32,019) (25,656) (54,502) Less: Gain on extinguishment of debt, net of tax (59,133) — — — Net loss attributable to Stem common stockholders, diluted (40,011) (32,019) (25,656) (54,502) Denominator: Weighted-average number of shares outstanding used to compute net income (loss) per share attributable to common stockholders, basic 155,619,179 154,125,061 155,294,475 152,318,090 Dilutive potential common shares 185,774 — — — Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, diluted 155,804,953 154,125,061 155,294,475 152,318,090 Net income (loss) per share attributable to common stockholders, basic $ 0.12 $ (0.21) $ (0.17) $ (0.36) Net loss per share attributable to common stockholders, diluted $ (0.26) $ (0.21) $ (0.17) $ (0.36) |
Schedule of Potentially Dilutive Shares | The following table shows total outstanding potentially dilutive shares excluded from the computation of diluted loss per share as their effect would have been anti-dilutive, as of June 30, 2023 and 2022: June 30, 2023 June 30, 2022 Outstanding 2028 Convertible Notes 10,157,181 15,730,390 Outstanding 2030 Convertible Notes 33,673,584 — Outstanding stock options 9,122,644 8,396,685 Outstanding warrants 2,533 2,533 Outstanding RSUs 12,051,192 6,021,852 Total 65,007,134 30,151,460 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of (Provision for) Benefit from Income Taxes and Effective Tax Rates | The following table reflects the Company’s (provision for) benefit from income taxes and the effective tax rates for the periods presented below (in thousands, except effective tax rate): Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Income (loss) before (provision for) benefit from income taxes $ 19,613 $ (32,030) $ (25,256) $ (69,726) (Provision for) benefit from income taxes $ (491) $ 7 $ (400) $ 15,220 Effective tax rate 2.5 % — % (1.6) % 21.8 % |
BUSINESS (Details)
BUSINESS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||||
Apr. 03, 2023 | Nov. 22, 2021 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Apr. 06, 2023 | Dec. 31, 2022 | |
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||||||||||
Cash and cash equivalents | $ 75,405 | $ 75,405 | $ 87,903 | |||||||
Short-term investments | 62,800 | 62,800 | ||||||||
Accumulated deficit | (657,737) | (657,737) | $ (632,081) | |||||||
Working capital | 305,300 | 305,300 | ||||||||
Net income (loss) | 19,122 | $ (44,778) | $ (32,023) | $ (22,483) | (25,656) | $ (54,506) | ||||
Net cash used in operating activities | (201,239) | (32,630) | ||||||||
Proceeds from convertible notes | $ 232,399 | $ 0 | ||||||||
2030 Convertible Notes | Convertible Notes | ||||||||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||||||||||
Proceeds from convertible notes | $ 232,400 | |||||||||
Fixed interest rate, annual | 4.25% | 4.25% | ||||||||
2028 Convertible Notes | Convertible Notes | ||||||||||
Subsidiary of Limited Liability Company or Limited Partnership [Line Items] | ||||||||||
Proceeds from convertible notes | $ 445,700 | 99,800 | ||||||||
Fixed interest rate, annual | 0.50% | |||||||||
Cancellation of aggregate principal | $ 163,000 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Variable Interest Entities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and cash equivalents | $ 75,405 | $ 87,903 |
Other current assets | 13,139 | 8,026 |
Other noncurrent assets | 73,157 | 65,339 |
Total assets | 1,503,490 | 1,421,893 |
Liabilities | ||
Other current liabilities | 7,479 | 5,412 |
Total liabilities | 984,146 | 869,726 |
Variable Interest Entity, Primary Beneficiary | ||
Assets | ||
Cash and cash equivalents | 892 | 6,686 |
Other current assets | 7 | 38 |
Other noncurrent assets | 5,920 | 3,208 |
Total assets | 6,819 | 9,932 |
Liabilities | ||
Accounts payable | 530 | 356 |
Other current liabilities | 163 | 97 |
Total liabilities | $ 693 | $ 453 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) | |
Concentration Risk [Line Items] | ||
Deferred costs with suppliers | $ (28,759) | $ 23,430 |
Net cash inflow, other liabilities | $ (35,087) | 7,006 |
Number of operating segments | segment | 1 | |
Revision of Prior Period, Reclassification, Adjustment | ||
Concentration Risk [Line Items] | ||
Deferred costs with suppliers | (23,400) | |
Net cash inflow, other liabilities | 7,000 | |
Net cash outflow, other liabilities | (200) | |
Variable Interest Entity, Primary Beneficiary | ||
Concentration Risk [Line Items] | ||
Contribution paid | $ 100 | $ 5,600 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of Significant Customers (Details) - Customer Concentration Risk | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Customer A | Accounts Receivable | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 58% | 54% | |||
Customer A | Revenue | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 61% | 50% | 35% | 46% | |
Customer B | Accounts Receivable | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 12% | 16% | |||
Customer C | Accounts Receivable | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 13% | 11% | |||
Customer C | Revenue | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 26% | ||||
Customer D | Revenue | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage | 15% |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 92,946 | $ 66,947 | $ 160,351 | $ 108,035 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 89,636 | 64,202 | 150,208 | 103,660 |
Rest of the world | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 3,310 | 2,745 | 10,143 | 4,375 |
Hardware revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 76,586 | 54,426 | 129,318 | 85,549 |
Services and other revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 16,360 | $ 12,521 | $ 31,033 | $ 22,486 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Total Remaining Performance Obligations | $ 767,029 | $ 363,760 |
REVENUE - Remaining Performance
REVENUE - Remaining Performance Obligations (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Jun. 30, 2022 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Total Remaining Performance Obligations | $ 767,029 | $ 363,760 |
Services and other revenue | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Total Remaining Performance Obligations | 407,026 | 258,080 |
Hardware revenue | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Total Remaining Performance Obligations | $ 360,003 | $ 105,680 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | Services and other revenue | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Percent Expected to be Recognized as Revenue | 18% | |
Period expected to be recognized as revenue | 6 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | Hardware revenue | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Percent Expected to be Recognized as Revenue | 100% | |
Period expected to be recognized as revenue | 6 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Services and other revenue | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Percent Expected to be Recognized as Revenue | 51% | |
Period expected to be recognized as revenue | 4 years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Hardware revenue | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Percent Expected to be Recognized as Revenue | 0% | |
Period expected to be recognized as revenue | 4 years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | Services and other revenue | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Percent Expected to be Recognized as Revenue | 12% | |
Period expected to be recognized as revenue | 6 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | Hardware revenue | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Percent Expected to be Recognized as Revenue | 100% | |
Period expected to be recognized as revenue | 6 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Services and other revenue | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Percent Expected to be Recognized as Revenue | 44% | |
Period expected to be recognized as revenue | 4 years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Hardware revenue | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Percent Expected to be Recognized as Revenue | 0% | |
Period expected to be recognized as revenue | 4 years | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Services and other revenue | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Percent Expected to be Recognized as Revenue | 31% | |
Period expected to be recognized as revenue | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Hardware revenue | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Percent Expected to be Recognized as Revenue | 0% | |
Period expected to be recognized as revenue | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | Services and other revenue | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Percent Expected to be Recognized as Revenue | 44% | |
Period expected to be recognized as revenue | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | Hardware revenue | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Percent Expected to be Recognized as Revenue | 0% | |
Period expected to be recognized as revenue |
REVENUE - Contract Balances (De
REVENUE - Contract Balances (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Contract With Customer, Liability [Roll Forward] | ||
Beginning balance | $ 138,074 | $ 37,443 |
Deferred revenue acquired upon business combination | 0 | 49,626 |
Upfront payments received from customers | 117,356 | 85,598 |
Upfront or annual incentive payments received | 1,614 | 3,868 |
Revenue recognized related to amounts that were included in beginning balance of deferred revenue | (18,820) | (4,488) |
Revenue recognized related to amounts that were included in acquired balance of deferred revenue | 0 | (7,983) |
Revenue recognized related to deferred revenue generated during the period | (44,107) | (48,523) |
Ending balance | $ 194,117 | $ 115,541 |
SHORT-TERM INVESTMENTS - Schedu
SHORT-TERM INVESTMENTS - Schedule of Short-Term Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Short-term investments: | ||
Amortized Cost | $ 62,861 | $ 163,756 |
Unrealized Gain | 1 | 3 |
Unrealized Loss | (93) | (1,685) |
Debt securities: | 62,769 | 162,074 |
Corporate debt securities | ||
Short-term investments: | ||
Amortized Cost | 5,036 | 17,056 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | (18) | (164) |
Debt securities: | 5,018 | 16,892 |
Commercial paper | ||
Short-term investments: | ||
Amortized Cost | 8,945 | 18,922 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | 0 | 0 |
Debt securities: | 8,945 | 18,922 |
U.S. government bonds | ||
Short-term investments: | ||
Amortized Cost | 21,357 | 106,774 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | (47) | (1,515) |
Debt securities: | 21,310 | 105,259 |
Certificate of deposits | ||
Short-term investments: | ||
Amortized Cost | 4,697 | 9,986 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | 0 | 0 |
Debt securities: | 4,697 | 9,986 |
Treasury bills | ||
Short-term investments: | ||
Amortized Cost | 14,644 | 9,518 |
Unrealized Gain | 0 | 3 |
Unrealized Loss | (19) | (5) |
Debt securities: | 14,625 | 9,516 |
Agency bonds | ||
Short-term investments: | ||
Amortized Cost | 8,182 | 1,500 |
Unrealized Gain | 1 | 0 |
Unrealized Loss | (9) | (1) |
Debt securities: | $ 8,174 | $ 1,499 |
SHORT-TERM INVESTMENTS - Sche_2
SHORT-TERM INVESTMENTS - Schedule of Contractual Maturities of Short-Term Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Amortized cost | ||
Due within one year | $ 62,861 | |
Amortized Cost | 62,861 | $ 163,756 |
Estimated Fair Value | ||
Due within one year | 62,769 | |
Debt securities: | $ 62,769 | $ 162,074 |
SHORT-TERM INVESTMENTS - Additi
SHORT-TERM INVESTMENTS - Additional Information (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2023 USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |
Allowance for credit losses recorded | $ 0 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Debt securities: | ||
Debt securities: | $ 62,769 | $ 162,074 |
Corporate debt securities | ||
Debt securities: | ||
Debt securities: | 5,018 | 16,892 |
Commercial paper | ||
Debt securities: | ||
Debt securities: | 8,945 | 18,922 |
U.S. government bonds | ||
Debt securities: | ||
Debt securities: | 21,310 | 105,259 |
Certificate of deposits | ||
Debt securities: | ||
Debt securities: | 4,697 | 9,986 |
Treasury bills | ||
Debt securities: | ||
Debt securities: | 14,625 | 9,516 |
Agency bonds | ||
Debt securities: | ||
Debt securities: | 8,174 | 1,499 |
Fair Value, Recurring | ||
Debt securities: | ||
Total financial assets | 117,653 | 175,680 |
Liabilities: | ||
Derivative liability | 2,576 | |
Fair Value, Recurring | Corporate debt securities | ||
Debt securities: | ||
Debt securities: | 5,018 | 16,892 |
Fair Value, Recurring | Commercial paper | ||
Debt securities: | ||
Debt securities: | 8,945 | 18,922 |
Fair Value, Recurring | U.S. government bonds | ||
Debt securities: | ||
Debt securities: | 21,310 | 105,259 |
Fair Value, Recurring | Certificate of deposits | ||
Debt securities: | ||
Debt securities: | 4,697 | 9,986 |
Fair Value, Recurring | Treasury bills | ||
Debt securities: | ||
Debt securities: | 14,625 | 9,516 |
Fair Value, Recurring | Agency bonds | ||
Debt securities: | ||
Debt securities: | 8,174 | |
Fair Value, Recurring | Other | ||
Debt securities: | ||
Debt securities: | 1,499 | |
Fair Value, Recurring | Money market fund | ||
Cash equivalents: | ||
Cash equivalents | 48,392 | 10,618 |
Fair Value, Recurring | Commercial paper | ||
Cash equivalents: | ||
Cash equivalents | 6,492 | 2,988 |
Level 1 | Fair Value, Recurring | ||
Debt securities: | ||
Total financial assets | 48,392 | 10,618 |
Liabilities: | ||
Derivative liability | 0 | |
Level 1 | Fair Value, Recurring | Corporate debt securities | ||
Debt securities: | ||
Debt securities: | 0 | 0 |
Level 1 | Fair Value, Recurring | Commercial paper | ||
Debt securities: | ||
Debt securities: | 0 | 0 |
Level 1 | Fair Value, Recurring | U.S. government bonds | ||
Debt securities: | ||
Debt securities: | 0 | 0 |
Level 1 | Fair Value, Recurring | Certificate of deposits | ||
Debt securities: | ||
Debt securities: | 0 | 0 |
Level 1 | Fair Value, Recurring | Treasury bills | ||
Debt securities: | ||
Debt securities: | 0 | 0 |
Level 1 | Fair Value, Recurring | Agency bonds | ||
Debt securities: | ||
Debt securities: | 0 | |
Level 1 | Fair Value, Recurring | Other | ||
Debt securities: | ||
Debt securities: | 0 | |
Level 1 | Fair Value, Recurring | Money market fund | ||
Cash equivalents: | ||
Cash equivalents | 48,392 | 10,618 |
Level 1 | Fair Value, Recurring | Commercial paper | ||
Cash equivalents: | ||
Cash equivalents | 0 | 0 |
Level 2 | Fair Value, Recurring | ||
Debt securities: | ||
Total financial assets | 69,261 | 165,062 |
Liabilities: | ||
Derivative liability | 0 | |
Level 2 | Fair Value, Recurring | Corporate debt securities | ||
Debt securities: | ||
Debt securities: | 5,018 | 16,892 |
Level 2 | Fair Value, Recurring | Commercial paper | ||
Debt securities: | ||
Debt securities: | 8,945 | 18,922 |
Level 2 | Fair Value, Recurring | U.S. government bonds | ||
Debt securities: | ||
Debt securities: | 21,310 | 105,259 |
Level 2 | Fair Value, Recurring | Certificate of deposits | ||
Debt securities: | ||
Debt securities: | 4,697 | 9,986 |
Level 2 | Fair Value, Recurring | Treasury bills | ||
Debt securities: | ||
Debt securities: | 14,625 | 9,516 |
Level 2 | Fair Value, Recurring | Agency bonds | ||
Debt securities: | ||
Debt securities: | 8,174 | |
Level 2 | Fair Value, Recurring | Other | ||
Debt securities: | ||
Debt securities: | 1,499 | |
Level 2 | Fair Value, Recurring | Money market fund | ||
Cash equivalents: | ||
Cash equivalents | 0 | 0 |
Level 2 | Fair Value, Recurring | Commercial paper | ||
Cash equivalents: | ||
Cash equivalents | 6,492 | 2,988 |
Level 3 | Fair Value, Recurring | ||
Debt securities: | ||
Total financial assets | 0 | 0 |
Liabilities: | ||
Derivative liability | 2,576 | |
Level 3 | Fair Value, Recurring | Corporate debt securities | ||
Debt securities: | ||
Debt securities: | 0 | 0 |
Level 3 | Fair Value, Recurring | Commercial paper | ||
Debt securities: | ||
Debt securities: | 0 | 0 |
Level 3 | Fair Value, Recurring | U.S. government bonds | ||
Debt securities: | ||
Debt securities: | 0 | 0 |
Level 3 | Fair Value, Recurring | Certificate of deposits | ||
Debt securities: | ||
Debt securities: | 0 | 0 |
Level 3 | Fair Value, Recurring | Treasury bills | ||
Debt securities: | ||
Debt securities: | 0 | 0 |
Level 3 | Fair Value, Recurring | Agency bonds | ||
Debt securities: | ||
Debt securities: | 0 | |
Level 3 | Fair Value, Recurring | Other | ||
Debt securities: | ||
Debt securities: | 0 | |
Level 3 | Fair Value, Recurring | Money market fund | ||
Cash equivalents: | ||
Cash equivalents | 0 | 0 |
Level 3 | Fair Value, Recurring | Commercial paper | ||
Cash equivalents: | ||
Cash equivalents | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
Convertible Notes | Level 2 | ||
Debt Instrument [Line Items] | ||
Convertible debt | $ 412 | $ 293.1 |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - AlsoEnergy, Inc - USD ($) $ in Millions | 6 Months Ended | |
Feb. 01, 2022 | Jun. 30, 2022 | |
Business Acquisition [Line Items] | ||
Percent of outstanding shares acquired | 100% | |
Aggregate purchase price | $ 652 | |
Cash paid, net of working capital adjustment | 543.1 | |
Transaction costs | $ 6.1 | |
Common Stock | ||
Business Acquisition [Line Items] | ||
Business combination, consideration transferred, equity interests issued and issuable | $ 108.9 | |
Business acquisition, equity interest Issued or issuable (in shares) | 8,621,006 |
BUSINESS COMBINATIONS - Unaudit
BUSINESS COMBINATIONS - Unaudited Pro Forma Information (Details) - AlsoEnergy, Inc - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Business Acquisition [Line Items] | ||||
Total revenue | $ 92,946 | $ 66,947 | $ 160,351 | $ 111,871 |
Net income (loss) | $ 19,122 | $ (32,023) | $ (25,656) | $ (62,411) |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS, NET - Goodwill Consists (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 547,158 | $ 547,556 |
Recovery of escrow from AlsoEnergy acquisition | 0 | (915) |
Effect of foreign currency translation | 46 | 8 |
Total goodwill | $ 547,204 | $ 546,649 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS, NET - Intangible Assets, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 212,664 | $ 212,664 | $ 202,072 | ||
Less: Accumulated amortization | (53,206) | (53,206) | (39,809) | ||
Add: Currency translation adjustment | 14 | 14 | 2 | ||
Total intangible assets, net | 159,472 | 159,472 | 162,265 | ||
Amortization of intangible assets | 6,800 | $ 6,200 | 13,300 | $ 10,400 | |
Developed technology | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | 32,000 | 32,000 | 30,600 | ||
Trade name | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | 11,300 | 11,300 | 11,300 | ||
Customer relationships | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | 106,800 | 106,800 | 106,800 | ||
Backlog | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | 3,900 | 3,900 | 3,900 | ||
Internally developed software | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 58,664 | $ 58,664 | $ 49,472 |
ENERGY STORAGE SYSTEMS, NET - S
ENERGY STORAGE SYSTEMS, NET - Schedule of Energy Storage Systems, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (62,338) | $ (58,782) |
Total energy storage systems, net | 84,627 | 90,757 |
Energy storage systems placed into service | ||
Property, Plant and Equipment [Line Items] | ||
Total energy storage systems, gross | 141,450 | 143,154 |
Energy storage systems not yet placed into service | ||
Property, Plant and Equipment [Line Items] | ||
Total energy storage systems, gross | $ 5,515 | $ 6,385 |
ENERGY STORAGE SYSTEMS, NET - N
ENERGY STORAGE SYSTEMS, NET - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 3.6 | $ 3.7 | $ 7.2 | $ 7.4 |
NOTES PAYABLE - Narrative (Deta
NOTES PAYABLE - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Apr. 06, 2023 | Jan. 31, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Apr. 03, 2023 | |
Debt Instrument [Line Items] | |||||||
Loss on extinguishment of debt | $ (59,121) | $ 0 | $ (59,121) | $ 0 | |||
Line of Credit | 2021 Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Total capacity | $ 2,700 | ||||||
Fixed interest rate, annual | 5.45% | ||||||
Proceeds from credit agreement | $ 1,800 | ||||||
Convertible Notes | 2030 Convertible Notes | |||||||
Debt Instrument [Line Items] | |||||||
Fixed interest rate, annual | 4.25% | 4.25% | |||||
Loss on extinguishment of debt | $ 300 |
CONVERTIBLE NOTES - Narrative (
CONVERTIBLE NOTES - Narrative (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||
Apr. 06, 2023 USD ($) | Apr. 03, 2023 USD ($) day $ / shares | Nov. 22, 2021 USD ($) day $ / shares | Nov. 19, 2021 USD ($) $ / shares | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Mar. 29, 2023 $ / shares | |
Debt Instrument [Line Items] | ||||||||||
Proceeds from convertible notes | $ 232,399 | $ 0 | ||||||||
Gain on extinguishment of debt, net | $ 59,121 | $ 0 | $ 59,121 | $ 0 | ||||||
Capped Call Options | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Initial strike price (in dollars per share) | $ / shares | $ 29.2428 | $ 7.1272 | ||||||||
Cap price (in dollars per share) | $ / shares | $ 49.6575 | $ 11.1800 | ||||||||
Cost of capped calls | $ 66,700 | 27,800 | $ 66,700 | |||||||
2028 Convertible Notes | Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Face amount | $ 460,000 | |||||||||
Fixed interest rate, annual | 0.50% | |||||||||
Conversion ratio | 0.0341965 | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 29.24 | |||||||||
Redemption price, percentage | 100% | |||||||||
Proceeds from convertible notes | $ 445,700 | 99,800 | ||||||||
Cancellation of aggregate principal | 163,000 | |||||||||
Gain on extinguishment of debt, net | $ 59,400 | |||||||||
Effective interest percentage | 0.90% | |||||||||
Term | 7 years | |||||||||
2028 Convertible Notes | Convertible Notes | Debt Instrument, Redemption, Period One | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Conversion price, percentage | 130% | |||||||||
2028 Convertible Notes | Convertible Notes | Debt Instrument, Redemption, Period Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Threshold trading days | day | 20 | |||||||||
2030 Convertible Notes | Convertible Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Face amount | $ 240,000 | |||||||||
Fixed interest rate, annual | 4.25% | 4.25% | ||||||||
Conversion ratio | 0.1403066 | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 7.1272 | |||||||||
Redemption price, percentage | 100% | |||||||||
Proceeds from convertible notes | $ 232,400 | |||||||||
Gain on extinguishment of debt, net | $ (300) | |||||||||
Effective interest percentage | 4.70% | |||||||||
Term | 7 years | |||||||||
Debt issuance costs | $ 7,600 | |||||||||
2030 Convertible Notes | Convertible Notes | Capped Call Options | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Proceeds from convertible notes | $ 27,800 | |||||||||
2030 Convertible Notes | Convertible Notes | Debt Instrument, Redemption, Period One | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Conversion price, percentage | 130% | |||||||||
2030 Convertible Notes | Convertible Notes | Debt Instrument, Redemption, Period Two | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Threshold trading days | day | 20 |
CONVERTIBLE NOTES - Outstanding
CONVERTIBLE NOTES - Outstanding Convertible Notes (Details) - Convertible Notes - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
2028 Convertible Notes | ||
Debt Instrument [Line Items] | ||
Outstanding principal | $ 297,024 | $ 460,000 |
Unamortized initial purchaser’s debt discount and debt issuance cost | (7,148) | (12,091) |
Long-Term Debt, Total | 289,876 | $ 447,909 |
2030 Convertible Notes | ||
Debt Instrument [Line Items] | ||
Outstanding principal | 240,000 | |
Unamortized initial purchaser’s debt discount and debt issuance cost | (7,370) | |
Long-Term Debt, Total | $ 232,630 |
CONVERTIBLE NOTES - Interest Ex
CONVERTIBLE NOTES - Interest Expense Recognized Related to Convertible Note (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Debt Instrument [Line Items] | ||||
Amortization of debt discount and debt issuance cost | $ 1,586 | $ 902 | ||
2028 Convertible Notes | Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | $ 376 | $ 575 | 951 | 1,150 |
Amortization of debt discount and debt issuance cost | 342 | 496 | 841 | 991 |
Total interest expense | 718 | $ 1,071 | $ 1,792 | $ 2,141 |
2030 Convertible Notes | Convertible Notes | ||||
Debt Instrument [Line Items] | ||||
Contractual interest expense | 2,493 | |||
Amortization of debt discount and debt issuance cost | 231 | |||
Total interest expense | $ 2,724 |
WARRANTS (Details)
WARRANTS (Details) - Legacy Stem Warrants - USD ($) $ in Millions | Apr. 28, 2021 | Jun. 30, 2023 |
Class of Warrant or Right [Line Items] | ||
Warrants outstanding (in shares) | 50,207,439 | 2,533 |
Conversion of securities into common stock (in shares) | 2,759,970 | |
Gain from fair value adjustment | $ 100.9 | |
Conversion of securities into common stock | $ 60.6 |
STOCK-BASED COMPENSATION - Opti
STOCK-BASED COMPENSATION - Option Activity (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | |
Number of Options Outstanding | ||
Options outstanding, beginning of period (in shares) | 8,243,637 | |
Options granted (in shares) | 1,291,349 | |
Options exercised (in shares) | (104,573) | |
Options forfeited (in shares) | (307,769) | |
Options outstanding, end of period (in shares) | 9,122,644 | 8,243,637 |
Options vested and exercisable (in shares) | 6,030,152 | |
Weighted- Average Exercise Price Per Share | ||
Options outstanding, weighted average exercise price (in dollars per share) | $ / shares | $ 7.16 | $ 6.88 |
Options granted, weighted average exercise price (in dollars per share) | $ / shares | 10.25 | |
Options exercised, weighted average exercise price (in dollars per share) | $ / shares | 2.19 | |
Options forfeited, weighted average exercise price (in dollars per share) | $ / shares | 14.30 | |
Options vested and exercisable, weighted-average exercise price (in dollars per share) | $ / shares | $ 4.58 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted average remaining contractual life, options outstanding | 6 years 6 months | 6 years 7 months 6 days |
Weighted average remaining contractual life, options vested and exercisable | 5 years 4 months 24 days | |
Aggregate intrinsic value, options outstanding | $ | $ 16,789 | $ 35,566 |
Aggregate intrinsic value, options vested and exercisable | $ | $ 16,640 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Remaining unrecognized stock-based compensation expense | $ 20.1 | $ 20.1 | ||
Internally developed software | Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Amount capitalized | 0.9 | $ 0.6 | 1.8 | $ 1.1 |
RSU | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Remaining unrecognized stock-based compensation expense | $ 93.4 | $ 93.4 | ||
Weighted average period for recognition of stock-based compensation expense | 2 years 2 months 12 days | |||
Outstanding stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average period for recognition of stock-based compensation expense | 1 year 7 months 6 days |
STOCK-BASED COMPENSATION - RSU
STOCK-BASED COMPENSATION - RSU Activity (Details) - RSU | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Number of RSUs Outstanding | |
RSUs outstanding, beginning (in shares) | shares | 6,719,490 |
RSUs granted (in shares) | shares | 7,257,977 |
RSUs vested (in shares) | shares | (1,151,641) |
RSUs forfeited (in shares) | shares | (774,634) |
RSUs outstanding, ending (in shares) | shares | 12,051,192 |
Weighted-Average Grant Date Fair Value Per Share | |
RSUs outstanding, weighted average grant date fair value, beginning (in dollars per share) | $ / shares | $ 15.34 |
RSUs granted, weighted average grant date fair value (in dollars per share) | $ / shares | 5.57 |
RSUs vested, weighted average grant date fair value (in dollars per share) | $ / shares | 10.72 |
RSUs forfeited, weighted average grant date fair value (in dollars per share) | $ / shares | 12.10 |
RSUs outstanding, weighted average grant date fair value, ending (in dollars per share) | $ / shares | $ 10.10 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 9,920 | $ 6,467 | $ 17,122 | $ 12,732 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1,550 | 1,106 | 2,495 | 1,930 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 2,548 | 562 | 4,266 | 1,869 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 5,822 | $ 4,799 | $ 10,361 | $ 8,933 |
NET INCOME (LOSS) PER SHARE - B
NET INCOME (LOSS) PER SHARE - Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator - Basic and Diluted: | ||||
Net income (loss) per share attributable to common stockholders, basic | $ 19,122 | $ (32,019) | $ (25,656) | $ (54,502) |
Less: Gain on extinguishment of debt, net of tax | (59,133) | 0 | 0 | 0 |
Net loss attributable to Stem common stockholders, diluted | $ (40,011) | $ (32,019) | $ (25,656) | $ (54,502) |
Denominator: | ||||
Weighted-average number of shares outstanding used to compute net income (loss) per share attributable to common stockholders, basic (in shares) | 155,619,179 | 154,125,061 | 155,294,475 | 152,318,090 |
Dilutive potential common shares (in shares) | 185,774 | 0 | 0 | 0 |
Weighted-average number of shares outstanding used to compute net loss per share attributable to common stockholders, diluted (in shares) | 155,804,953 | 154,125,061 | 155,294,475 | 152,318,090 |
Net income (loss) per share attributable to common stockholders, basic (in dollars per share) | $ 0.12 | $ (0.21) | $ (0.17) | $ (0.36) |
Net loss per share attributable to common stockholders, diluted (in dollars per share) | $ (0.26) | $ (0.21) | $ (0.17) | $ (0.36) |
NET INCOME (LOSS) PER SHARE - A
NET INCOME (LOSS) PER SHARE - Antidilutive Securities (Details) - shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares (in shares) | 65,007,134 | 30,151,460 |
Outstanding 2028 Convertible Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares (in shares) | 10,157,181 | 15,730,390 |
Outstanding 2030 Convertible Notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares (in shares) | 33,673,584 | 0 |
Outstanding stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares (in shares) | 9,122,644 | 8,396,685 |
Outstanding warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares (in shares) | 2,533 | 2,533 |
Outstanding RSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive shares (in shares) | 12,051,192 | 6,021,852 |
INCOME TAXES - Provision (Benef
INCOME TAXES - Provision (Benefit) for Income Taxes and the Effective Tax Rates (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income (loss) before (provision for) benefit from income taxes | $ 19,613 | $ (32,030) | $ (25,256) | $ (69,726) |
(Provision for) benefit from income taxes | $ (491) | $ 7 | $ (400) | $ 15,220 |
Effective tax rate | 2.50% | 0% | (1.60%) | 21.80% |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Tax provision (benefit) | $ 491 | $ (7) | $ 400 | $ (15,220) |
Effective tax rate | 2.50% | 0% | (1.60%) | 21.80% |
Provision (benefit) for income taxes, federal | $ 300 | $ 15,100 |
COMMITMENTS AND CONTINGNECIES (
COMMITMENTS AND CONTINGNECIES (Details) | Mar. 01, 2023 USD ($) ft² |
Loss Contingencies [Line Items] | |
Operating lease liability | $ 2,800,000 |
Lease term | 58 months |
Base rent per month | $ 58,500 |
Gurugram, India | |
Loss Contingencies [Line Items] | |
Area of lease | ft² | 41,811 |