Stem (STEM) Q3 2025 Earnings Call Transcript

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Date

Wednesday, October 29, 2025 at 5 p.m. ET

Call participants

Chief Executive Officer — Arun Narayanan

Chief Financial Officer — Brian Musfeldt

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Takeaways

Revenue -- $38 million revenue for Q3 2025, representing 31% year-over-year growth.

Annual recurring revenue (ARR) -- $60 million ARR for Q3 2025, up 17% year over year, and ARR increased 3% sequentially.

Adjusted EBITDA -- $2 million in adjusted EBITDA for Q3 2025, marking the second consecutive quarter of positive adjusted EBITDA.

Operating cash flow -- $11 million in operating cash flow for Q3 2025, a $21 million improvement compared to the same quarter last year.

GAAP gross margin -- GAAP gross margin of 35%.

Non-GAAP gross margin -- Non-GAAP gross margin of 47%.

Edge hardware revenue -- 18% year-over-year growth in edge hardware.

PowerTrack software revenue -- $60 million ARR for Q3 2025, with 11% annual growth.

Cash operating expenses -- Flat sequentially, primarily due to a workforce reduction in the second quarter.

Q3 bookings -- Down slightly sequentially due to lower battery hardware bookings.

Contracted backlog -- $22 million contracted backlog for Q3 2025, a decrease from $26.8 million the previous quarter due to lower bookings and increased hardware revenue recognition.

Battery hardware resale revenue -- $4 million in battery hardware resale revenue, as the company continues to deemphasize this business line.

Guidance: 2025 total revenue -- Tightened to $135 million–$160 million, from prior $125 million–$175 million.

Guidance: Software, edge hardware, and services revenue -- Increased low end to $125 million–$140 million for these categories, while battery hardware resales capped at up to $20 million for full-year 2025 (offset by lower expectations in that category).

Guidance: Gross margin -- Updated to 40%–50% non-GAAP gross margin guidance, with Q4 2025 expected to see some compression from increased edge hardware deliveries.

Guidance: Adjusted EBITDA -- Updated to a range between negative $5 million and positive $5 million.

Guidance: Operating cash flow -- Updated range of negative $5 million to positive $5 million for adjusted EBITDA, with Q3 performance at the upper end.

Guidance: Year-end ARR -- $55 million–$65 million, reaffirmed.

PowerTrack EMS launch -- Introduced for hybrid and standalone storage projects, expanding market reach to utility-scale and international C&I markets.

International expansion -- Booked post-launch contracts for PowerTrack EMS with blue-chip customers in three countries, and regional capabilities expanded in Berlin and Japan.

PowerTrack Sage (AI assistant) -- On track for limited beta release in December, with full launch targeted for 2026.

One-time items -- The 2024 comparison period benefited from approximately $5 million in one-time DevCo revenues, and a one-time overperformance in managed services in 2024 not repeated in 2025.

Product portfolio integration -- Unification under the Stem brand and the PowerTrack suite, combining Oso Energy’s solar with legacy storage and AI.

Summary

This quarter, Stem (NYSE:STEM) reported 31% year-over-year revenue growth for Q3 2025 and achieved its second consecutive quarter of both positive adjusted EBITDA and positive operating cash flow. Management emphasized strategic progress through the successful launch of PowerTrack EMS, which is already generating contracted business internationally and is described as a key driver of future growth. The company continues to shift away from low-margin hardware resales, resulting in lowered backlog and hardware bookings, but expanding its software-centric model and operating at improved gross margin levels. Elevated cost discipline was evident, with sequentially flat operating expenses and further reductions in cash OpEx contributing to profitability. The international go-to-market strategy, centered on PowerTrack EMS and growth in the C&I solar monitoring segment, positions Stem for diversified, sustainable expansion.

CFO Brian Musfeldt said, "Cash operating expenses were down an impressive 47% year over year."

CEO Arun Narayanan described the product unification as "far beyond surface-level changes," underscoring the operational integration following the Oso Energy acquisition.

Management confirmed heightened confidence in guidance, stating they have "de-risked the low end of nearly all guidance ranges."

While hardware revenue and bookings declined, management reported that recurring base revenue for managed services grew 14% year over year, and 4% sequentially.

Industry glossary

PowerTrack EMS: An energy management system developed by Stem to control and optimize the operation of hybrid and standalone storage projects, supporting C&I and utility-scale assets.

PowerTrack Sage: AI-powered analytics and support assistant integrated into Stem’s PowerTrack platform, providing natural language insights for solar and storage operational data.

Edge hardware: Distributed, site-level physical equipment for metering, control, and optimization in energy management applications.

Managed services (PowerTrack Optimizer): Full life cycle, software-enabled services for energy storage systems including design, commissioning, operation, and optimization, with performance-based upside.

DevCo revenue: One-time development-related consulting or construction revenue, as referenced for the 2024 period.

Full Conference Call Transcript

Arun Narayanan: Thanks, Erin. Hello, everyone, and thank you for joining us today. Q3 2025 marks twelve months since we announced our strategic realignment. And I'm proud to report that our transformation continues to deliver tangible positive results. Today, we reported third quarter revenue of $38 million, up 31% year over year, with ARR growing 17% year over year to $60 million. We achieved our second consecutive quarter of positive adjusted EBITDA and generated positive operating cash flow. Our software-centric strategy is delivering results. The success of our strategic transformation is evident in our consistent earnings performance, with steady growth in software and services revenue and continued improvement across key profitability metrics.

As we maintain disciplined cost management, we believe we have achieved operational stability, and our high-performing team is laser-focused on execution and results. Today, we are also refining guidance to reflect our revised forecast. We will go into more detail later in the call. The key takeaways are we have reduced the historical volatility in our business, we have de-risked the low end of nearly all guidance ranges, and we feel confident about the stability of our business. This quarter also marked a pivotal moment in our evolution as we unified our corporate identity under the Stem brand and streamlined our entire product portfolio within the comprehensive PowerTrack suite. This transformation goes far beyond surface-level changes.

It reflects the deep integration of Oso Energy's solar expertise with Stem's storage and AI capabilities. For our customers, this means that we approach them with a single voice with superior technical solutions across their entire energy portfolio, covering solar, storage, and hybrid assets alike. Combined with Stem's industry-leading subject matter expertise, this creates an unparalleled customer value proposition. We welcome you to visit our redesigned website at stem.com to see this unified vision in action. Each quarter, we have touched upon our strategic priorities for 2025: driving software and services revenue growth, revamping software development, and reducing our cost structure and driving profitability. We've advanced all three strategic priorities in Q3 with concrete results. Let me detail our progress.

First, let's focus on software and services growth and revamping our software. On September 2, we launched PowerTrack EMS for hybrid and standalone storage projects. This energy management system integrates Oso Energy's solar C&I offerings with Stem's storage offerings and positions us to meet the needs of key markets, including solar, storage, and hybrid assets in both the C&I and utility-scale segments. It is an intelligent control system that manages battery charging and discharging operations while coordinating grid services and enabling revenue streams for energy storage projects.

PowerTrack EMS fills the critical gap between basic battery management and advanced optimization software, such as our offerings, regardless of the commercial management of the battery, including in territories where merchant optimization is not permitted. We remain excited about PowerTrack EMS because it expands our total addressable market by widening our potential customer base and the markets we can serve. Here in the US, it unlocked for us the utility-scale market, which is heavily hybridized with the C&I market. Outside of the US, PowerTrack EMS unlocks the international market for C&I and utility-scale projects, which are also largely hybridized. International expansion is a key component of our corporate strategy that also helps us manage near-term macro headwinds in the US.

Importantly, in all markets, PowerTrack EMS is an optimization-agnostic, controls-oriented product, meaning that it can be sold in markets where utilities provide dispatch signals without the need for a third-party optimizer or in international markets where Stem does not provide managed optimization services with PowerTrack Optimizer. It is truly a complementary offering to the existing portfolio and allows us to offer an end-to-end solution for our customers. We launched PowerTrack EMS at the RE+ conference to strong customer reception. This product garnered particularly high interest from operators of hybrid energy sites. Just eight weeks after launch, we've already booked significant capacity deployments with blue-chip customers in three different countries, validating both our product capabilities and marketing positioning.

These deals cover primarily hybrid utility-scale projects with existing solar assets that expect to convert to hybrid in the near term and are using PowerTrack EMS as a way to future-proof this conversion while limiting downtime. We expect these bookings to convert to revenue in the coming quarters, with about a six to nine-month typical lead time. Our core C&I solar monitoring platform is deeply established in the industry, but we remain dedicated to continuous innovation and addressing key customer feedback as quickly as we can. In the last ninety days alone, we rolled out over 100 software improvements and bug fixes directly enhancing the PowerTrack experience for our customers.

Recently, we have added best monitoring features and enhanced PV performance analytics, ensuring that PowerTrack is the platform of choice for our customers as they add storage to their solar portfolios and scale to more complex operations. As we announced last quarter, we are also incorporating advances in AI into our offerings with PowerTrack Sage. PowerTrack Sage is an AI-powered assistant that sits on top of PowerTrack and transforms complex solar and storage data analysis into natural language conversations. It's like an expert analyst available twenty-four seven to simplify certain important product workflows and serve as a first line of support for customer questions.

There's high customer interest and excitement about this product, particularly around solar analytics and diagnosing root causes for unusual data. PowerTrack Sage development remains on track for limited beta release with select customers in December and is expected to be broadly available in 2026. PowerTrack software continues to demonstrate strong performance across key metrics. Revenue increased 10% year over year, ARR expanded 19% year over year, and we commissioned 1.2 gigawatts of solar assets this quarter. Our platform now manages nearly 34 gigawatts of solar assets, reinforcing our market-leading position in C&I solar monitoring. Now let's move on to managed services.

Our managed services are software-enabled, full life cycle energy storage services covering the design, procurement, commissioning, operation, and optimization of energy storage and hybrid solar plus storage systems. We help asset owners maximize the reliability, performance, and returns of their storage assets. Managed services are supported by our PowerTrack optimizer software, previously known as Athena. Energy optimization, especially when value stacking, is a specialized area that requires both our optimization software and humans in the loop to execute well. Humans in the loop ensure that the optimization is keeping up with the constant market and program rule changes, market dynamics, and new value streams.

Our competitive advantage in managed services lies in our ability to serve as a full-service provider, leveraging our substantial market share across diverse segments. We remain one of the few companies with this expertise. Our managed services contracts include both recurring revenue and performance-based upside when we exceed operational targets. Q3 2024 included significant overperformance that we did not repeat this quarter, which impacts the year-over-year comparison. The underlying health of this business is strong, as our recurring base revenue grew 14% year over year and 4% sequentially. Finally, our consultative professional services offering continues to resonate with customers across a wide range of development, deployment, and operational needs.

We are continuing to drive repeat business, a clear mark that our offerings are adding value. And we are increasingly focused on cross-selling professional services with other business units' offerings. Now to another strategic priority, reducing our cost structure and driving profitability. We remain diligently focused on cost management. We have achieved our second consecutive quarter of positive adjusted EBITDA while maintaining robust GAAP and non-GAAP gross margins. Operating expenses remained flat compared to the second quarter, and they are continuing to drive further efficiencies through AI implementation. Additionally, we've generated positive operating cash flow and kept cash flat sequentially.

Our financial performance validates the business model transformation, expanding gross margins, two consecutive quarters of positive adjusted EBITDA, and positive operating cash flow. These results demonstrate both profitability and sustainability. We are dedicated to financial transparency, and we remain committed to helping our investors and stakeholders better understand our business. To that extent, our Form 10-Q to be filed today once again disaggregates revenue across distinct categories. What's new this quarter is that we are also providing detailed gross margin disclosure for each revenue category in our supplemental slides. Now on to guidance. With nine months of reported results and early visibility into Q4, today we are refining our full-year 2025 guidance ranges, including a tightening of ranges previously disclosed.

First, we'd like to highlight that our ability to tighten ranges is a significant advancement versus where we were previously, where volatility and back-end seasonality negatively impacted our ability to guide with precision. Our software-centric model has reduced this volatility and enhanced our forecasting accuracy. With that said, we are tracking towards the midpoint or better on all metrics except operating cash flow, with the timing of working capital movements could result in performance towards the lower end of our range. I'd like to highlight that we have brought up the low end of the ranges for software, edge hardware, and services revenue and adjusted EBITDA and raised the guidance for non-GAAP gross profit.

Brian will provide the specific updated ranges, but I want to emphasize that the underlying business fundamentals remain strong, and we are well-positioned entering into 2026. Now turning to the macro environment. Headwinds from policy uncertainty remain, and we are actively working with our customers to navigate this environment. We remain on track to meet our guidance expectations through the end of the year. In addition, our diversified software-centric model combined with our recently enhanced international strategy should position us well against the potential impact of domestic headwinds. We remain confident in our end markets, and we believe that we are well-positioned to benefit from the projected international load growth. Our international expansion efforts are focused on a multi-phased approach.

First, we developed an internationally ready product suite with PowerTrack EMS. Second, we are leveraging our regional expertise through our existing teams in Berlin and Japan. We see significant opportunities to expand within the European markets. And in Berlin, we recently moved our operations to more centralized and collaborative facilities. We are expanding our technical depth and customer support in Berlin to combine our global expertise with local execution that can service high-priority European markets. Our growth strategy for Q4 and beyond centers on two drivers: PowerTrack EMS expanding our addressable market into utility-scale and international hybrid projects and continued focus acceleration in our core C&I solar business.

Our recurring revenue base, substantial backlog, and international diversification provide a strong foundation for sustained growth. With that, let me turn the call over to Brian for detailed financial results and the updates to guidance.

Brian Musfeldt: Thanks, Arun, and hello everyone. In 2025, we saw solid financial performance across the business. Total revenue grew an impressive 31% year over year to $38 million. PowerTrack software revenue continued its strong performance in the third quarter, growing 11% year over year, and edge hardware grew a notable 18% year over year. As a note, this quarter, with the introduction of PowerTrack EMS for hybrid and storage sites, we have redefined solar software revenue to PowerTrack software revenue, as our PowerTrack software revenue will now include all customer-facing SaaS revenue generated from solar, storage, and hybrid assets. Project and professional service revenue decreased year over year as 2024 benefited from approximately $5 million of one-time DevCo revenues.

As Arun discussed, managed service revenue was also down year over year due to one-time overperformance in 2024. Although we are deemphasizing the business as part of our software-centric strategy, battery hardware resale brought in $4 million in revenue this quarter. You can find this revenue detail in the disaggregation of revenue footnote in our Form 10-Q and supplemental materials, which provide enhanced clarity into our business. We again achieved strong gross margin this quarter, with GAAP gross margins of 35% and non-GAAP gross margins of 47%. This expansion reflects the increasing mix of higher-margin software and services in our revenue base and improving hardware margins for both edge hardware and battery resales.

Our disaggregation of revenue provided in our supplemental materials now includes gross margin ranges for each revenue category to provide more clarity to investors and analysts. GAAP and cash operating expenses were both flat sequentially from 2025. Cash operating expenses were down an impressive 47% year over year. These reductions were primarily the result of the difficult but necessary workforce reduction that took place in the second quarter, and we remain focused on driving operating leverage and further cost savings across the business. That said, we feel positive about our ability to grow revenue without significant OpEx increases, as demonstrated by our development of PowerTrack EMS and PowerTrack Sage products with current staffing levels.

The improved margins and significantly reduced OpEx drove positive adjusted EBITDA of $2 million for the quarter, demonstrating that we are finding sustained operational profitability in our lower OpEx structure and our business transformation. Operating cash flow turned decisively positive at $11 million this quarter, a $21 million swing versus the same quarter last year, and our cash position remains stable at $43 million. My key strategic priorities as CFO remain to help drive profitable growth and manage our capital structure as we look to continue growing in key revenue categories over the coming years. And now turning to our operating metrics.

Bookings were $30 million, down slightly versus last quarter, largely due to the timing of bookings from our historically lumpy low-margin battery hardware resales. Software and service bookings were sequentially flat, and contracted backlog was $22 million, down from $26.8 million last quarter due to lower bookings and increased hardware revenue recognition in the quarter. Contracted ARR remained stable at $70 million, and importantly, ARR increased 3% sequentially and 17% year over year, demonstrating the strength and scalability of our recurring revenue model. Finally, storage and solar AUM increased 64% respectively since last quarter. Now turning to our updated guidance for full-year 2025.

First, for revenue, we are tightening our revenue range to $135 million to $160 million from the prior $125 million to $175 million range. This reflects strong software and service performance with an updated range of $125 million to $140 million and is offset by lower battery hardware resale expectations of up to $20 million as we continue to deemphasize that business. For gross margins, we are raising the range to 40% to 50%. We are already tracking toward the high end of this range but expect some margin compression in the fourth quarter with increased edge hardware deliveries.

For adjusted EBITDA, we are raising the low end of the range, now forecast between negative $5 million and positive $5 million for fiscal year 2025. We have factored in some conservatism in this metric, and I would highlight that we are currently tracking above the midpoint of our updated range. For operating cash flow, we are adjusting our range for this metric between negative $5 million and positive $5 million. This quarter's $11 million in positive cash flow demonstrates the underlying cash generation capability of the business. Any fourth-quarter working capital fluctuations will reflect normal timing differences in customer payment cycles, not fundamental business performance.

Finally, our forecast for year-end ARR remains consistent at $55 million to $65 million and continues to reflect an attractive base of recurring revenue. While we will not provide formal guidance for 2026 until early next year during our fourth quarter and full-year 2025 call, I can share that we enter 2026 with strong visibility from our recurring revenue base and contracted backlog, positioning us well for continued growth. And now I will pass the call back over to Arun for closing remarks.

Arun Narayanan: Thank you, Brian. Our team delivered strong execution across the business this quarter. One year into our strategic transformation, the results are evident: revenue growth, margin expansion, sustained profitability, and positive cash generation. We established clear objectives for this transformation, and we are achieving them. The clean energy transformation continues accelerating globally, and our industry-leading software platforms, solutions, and dedicated team position us to capitalize on this transformation. I want to thank our investors and customers for their continued confidence and trust in us, and I want to take this opportunity to also express my gratitude for the hard work and contributions of Stem employees in achieving these results. With that, operator, let's open the line for questions, please.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. You may press star and 2; it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, we will wait for a moment while we poll for questions. The first question comes from Justin Lars Clare with ROTH MKM. Please go ahead.

Justin Lars Clare: Hi. Thanks for the time. So I wanted to start with the guidance. And so with the update here, it looks like you are guiding to the mid or better across all the metrics. But just looking back to what you said last quarter, it sounded like you were tracking toward the high end of the guidance. Based on your comments from last quarter, just wondering, has your outlook moderated somewhat given the new ranges? Or maybe you could speak to the potential to kind of deliver at the high end?

Arun Narayanan: Justin, this is Arun. Thanks for the question. Let's address your point. The way we show the updated guidance on slide six in the exhibit, you can see that we are actually still tracking towards the midpoint or high end of all the ranges. Only the deemphasized and non-predictable sort of OEM hardware resale business ranged at zero to 35 is now ranged between up to $20 million. I think that difference is sort of, you could say, the main difference. The rest of it is just a tightening of the ranges. And I would say that's the main interplay between the two quarters.

Justin Lars Clare: Okay. Got it. That's helpful. And then just on the gross margins, it looks like in Q4, you could see a slight compression. I'm wondering, is this only really due to a mix shift with a little bit higher sales of the battery hardware? Or, you know, should we anticipate any other notable change to the gross margins by business line? And then I guess just looking beyond Q4, how should we be thinking about the gross margins by business line? Definitely appreciate the added disclosure here that you provided this quarter.

Brian Musfeldt: Yes. Thanks, Justin. This is Brian. Yeah. I think you look at the new disclosure there, hopefully, you see on detailed on page 12, we talked about a little bit about compression in Q4, it's just gonna be mix. Q4 is our largest delivery quarter for our edge hardware to the slightly lower margin. So that's really what will compress it in the fourth quarter kind of just in that period. As far as the out periods, we do not give guidance until Q1, but I think you can kind of see the three and nine months trends.

And so we do, you know, to keep working on margins, improving them over the next coming years, especially as, you know, again, we're deemphasizing that OEM hardware, but the other categories are pretty stable. Will continue to improve.

Justin Lars Clare: Got it. Okay. And then maybe just one more. Bookings in Q3 were modestly lower than Q2, but again, that sounds like it's more a de-emphasis of the battery hardware sales. But wondering, you know, with the release of PowerTrack EMS, can you talk a little bit more about the demand that you're seeing, the potential to see an increase in bookings potentially in Q4? Here and just what you're seeing at this point?

Arun Narayanan: I could take a stab at that. This is Arun again. We are very excited about PowerTrack EMS, as we have said in the prepared remarks quite a few times. It opens up new markets for us. And the market, the sub-segments we are targeting are the small utility-scale sites, so sort of 20 to 100 megawatts in size. As we look at the initial energy around it, we are quite enthusiastic about it. And we are quite glad that our product fit is good. As PowerTrack EMS becomes a more meaningful portion of the revenue, we will provide more breakup and details around that. I think that's sort of what I'm thinking at this point.

Justin Lars Clare: Okay. Appreciate it. Thank you.

Operator: Our next question comes from John Wyndham with UBS. Please go ahead.

John Wyndham: Hey, perfect. Thanks for taking the questions. Congratulations on the back-to-back quarters. I just have two questions. I will ask one at a time. Any we'd love any commentary or sense of color which you gave me your customers. There's also a lot of moving parts going on right now, particularly around batteries. With Fiac, but also with solar and some of IRS guidance. Just love your thoughts on what you're seeing in sort of the top of the funnel, how demand looks in general for the industry and then for you, Brian. Thanks.

Arun Narayanan: John, thanks for the question. This is Arun. I can take a stab at it. We are maintaining the momentum in our engagement with our customers. And we do see that the engagement levels that we have in terms of being able to drive our conversations around PowerTrack are maintained. So the comments I'm making on Fiac and other points are valid. But we see reasonably unchanged sort of conversation momentum in customer engagements.

John Wyndham: Perfect. And I guess the second question you're gonna love this. Your is the turnaround. You're delivering on gross margin expansion. Very nicely. EBIT is positive. How do you think about your goals for them? Because, you know, the market's always on to the next thing. When do we get to operating income positive? When do we get the net income positive? Know, once how do you think about that path?

Or, alternatively, if you don't want to answer that question, which I would understand, is how do you think about laying that out to investors on here's the path we're on our timeline to sort of get a longer term because I really have had a lot of success here. In the first year with the strategy shift, but I think the questions from investors are increasingly how does this progress down the income statement to positive numbers all the way down? Appreciate any thoughts you have on and thanks for taking the questions.

Arun Narayanan: Thanks. Yes. It's a really good question. Let me take two or three parts to it. First of all, I think this quarter is the one-year anniversary of the shift to the software-centric focus for the company. And you can sort of see that strategy is paying off in terms of stabilizing the revenue margins and being able to have a predictable business. The second piece is, I've been in this role now nine months. Roughly. And there's been a focus on managing costs and driving towards profitability. Now, I think we'll give more guidance on this in the next call.

But maybe one thing I can direct you to is a note that we put out towards investors and stakeholders in one of the press releases in September. We saw explains our thinking in terms of our overall product strategy, terms of our overall service strategy, how we look at how we look at international markets, and what our general approach is towards having a very continuous full market coverage solution all the way from C&I to the smaller scale utility projects and then going up from that space to what PowerTrack optimizer provides in terms of the high end of that market. I think it's an elegant story.

And, yeah, I would sort of encourage you and the other listeners to go back to our website and read that note that we've put out towards investors that comes with an attachment and a very nice presentation.

John Wyndham: Appreciate it.

Operator: Thank you. Our next question comes from Thomas Roche with Barclays. Please go ahead.

Thomas Roche: Hi, this is Tom on for Christine. Congrats on the great quarter.

Arun Narayanan: Thank you, Tom. Thank you.

Thomas Roche: So I guess I just first wanted to ask, do you foresee the business benefiting from the hyperscaler data center build-out in any way? I know you've typically been more focused on C&I and smaller utility customers. But has there been any internal strategy discussions around trying to go after hyperscaler customers? With either, you know, your solar or storage offering?

Arun Narayanan: Yeah, Tom. Good, really good question. This is Arun. Yeah. One of the things I love about Stem is the team is very energetic. Always focused on new business models, new business opportunities. We continue to target all of these opportunities with a lot of vigor. What we're seeing in the data center markets, which typically prefer natural gas solutions, is that there are early indications that it's gonna come around towards more renewable energy plays. So it's an exciting development as that shift seems to be happening, and we continue to watch that market space and see how we can play into that effectively.

Thomas Roche: Got it. Understood. Thank you. And then just one more quick one for me. So you guys have you've cut a fair amount of OpEx here in the last few quarters. Would you say that it's safe to assume that we're at a decent quarterly run rate here on a go-forward basis?

Brian Musfeldt: Yeah. Hi, Tom. This is Brian. Can take that one. Yeah. I mean, as you've seen, right, we've cut cash OpEx. We've cut about 47% year over year. We reported just over $20 million of cash OpEx this quarter. I think we're done with the fundamentally large execution of that you've seen in the second quarter. You know, we took a really large chunk out of the team with a very difficult but motivated strategy. But we are now, you know, we continue to look at other opportunities for savings. An example, this quarter, we exited our India facility, which was just oversized for what we needed. So the team is working on it.

We'll always kind of manage cash just in the fundamental blood of this company now to make sure that we're operating that way. So we'll expect we're not really giving guidance yet, but I would say this quarter's trend is a good op, you know, a good indication, and we'll keep working it down.

Thomas Roche: Great. Thank you very much. Appreciate it.

Operator: Ladies and gentlemen, this concludes the question and answer session. I would now like to hand the conference over to Arun Narayanan, the CEO, for the closing comments.

Arun Narayanan: I want to thank everyone for joining the third quarter earnings call, and we look forward to speaking with you during our fourth quarter and full-year 2025 earnings call next year. Thanks, everyone.

Operator: Ladies and gentlemen, the conference of Stem, Inc. is now concluded. Thank you for your participation. You may now disconnect your lines.

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