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Date

Wednesday, May 6, 2026 at 5:00 p.m. ET

Call participants

  • Chief Executive Officer — Arun Narayanan
  • Chief Financial Officer — Brian Musfeldt
  • Vice President, Investor Relations — Erin Reed

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Takeaways

  • Total Revenue -- $29 million, down 11% year over year, due to no battery hardware resales in the quarter.
  • Core Software, Services, and Edge Hardware Revenue -- Grew 4% year over year; this category represented all revenue in the quarter.
  • PowerTrack Software Revenue -- Increased 16% year over year, highlighting momentum in commercial and industrial solar monitoring and early contributions from utility scale opportunities.
  • Edge Hardware Revenue -- Up approximately 1% year over year, indicating stability in this component.
  • Project and Professional Services Revenue -- Declined 5% year over year, reflecting lower activity in this area.
  • Managed Services Revenue -- Down 5% year over year.
  • GAAP Gross Margin -- 38%, up from 32% for the same quarter last year.
  • Non-GAAP Gross Margin -- Achieved a record 52%, compared to 46% in the prior year period, driven by a revenue mix shift and sustained cost structure improvements.
  • Adjusted EBITDA -- $2 million, marking a $7 million year-over-year improvement and a fourth consecutive positive quarter.
  • Cash Operating Expenses -- Reduced 30% year over year and 10% sequentially, demonstrating stated permanent structural efficiency.
  • Operating Cash Flow -- Negative $8 million, attributed to working capital timing and interest payments; management maintains full year guidance of $0 million to $10 million.
  • Bookings -- $27 million, compared to $33 million in the previous quarter; all from core software, services, and edge hardware, with utility scale bookings more than doubling quarter over quarter.
  • Contracted Backlog -- $23 million, up 8% sequentially from the prior quarter.
  • Annual Recurring Revenue (ARR) -- $61.2 million, slightly up from $61.1 million in fiscal Q4 2025 (period ended Dec. 31, 2025); PowerTrack ARR grew 2% sequentially while managed services ARR declined 4% because of a supplier bankruptcy.
  • Solar Assets Under Management (AUM) -- Increased 4% sequentially to 37.5 gigawatts; storage AUM remained flat at 1.7 gigawatt hours.
  • AI Adoption -- Nearly 70% of employees use AI tools weekly, supporting noted productivity improvements and internal efficiency gains.
  • raicoon Acquisition -- Recently acquired this Austrian company to enhance PowerTrack with automated fault detection and event management capabilities.
  • PowerTrack Sage -- Now live for all customers, providing AI-powered plain-language site analytics briefings and early signs of daily multi-customer engagement.
  • PowerTrack EMS Bookings -- First fiscal Q4 2025 EMS bookings on track to convert to revenue in the current quarter; latest utility scale win cited a 50-plus megawatt hour hybrid site in Hungary.
  • Nuvation Energy Collaboration -- New agreement to jointly market a North American–designed “cell-to-cloud” battery-energy-storage and hybrid control stack, aimed at tighter regulatory compliance and expanding the ecosystem.
  • International Revenue -- Accounted for approximately 5% of total revenue, with further growth expected as more European projects reach revenue recognition.
  • Full Year Guidance Reaffirmed -- Total revenue $140 million to $190 million; software, services, and edge hardware $130 million to $150 million; battery hardware resales up to $40 million; non-GAAP gross margin 40%-50%; adjusted EBITDA $10 million to $15 million; operating cash flow $0 million to $10 million; ARR $65 million to $70 million by year-end.

Summary

Stem (STEM 21.27%) reported a full quarter without battery hardware resales, shifting entirely to core software, services, and edge hardware for revenue. Rapid growth in utility scale bookings and a robust contracted backlog signaled forward momentum. The integration of raicoon’s automated fault detection and live rollout of PowerTrack Sage expanded the platform’s appeal and utility for existing and new customers, cited as strategic differentiators in the call. Cash discipline was demonstrated through reduced operating expenses and record non-GAAP gross margin, while the company maintained a negative operating cash flow citing first-quarter seasonality. International expansion, highlighted by revenue contributions and a strengthened product partnership with Nuvation Energy, positioned the company for further growth opportunities.

  • Management emphasized “permanent structural efficiency” as a key contributor to the quarter’s profitability turnaround and margin resilience.
  • Speakers framed working capital outflows as timing-related, not indicative of underlying business health.
  • AI-driven productivity was cited as enabling a leaner organization, with explicit claims that internal adoption provided “tangible productivity benefits to our customers.”
  • Managed services ARR contraction was directly linked to the battery supplier bankruptcy, but customer assets remained on the platform with continued optimization support.
  • Guidance reflects expectations for a material ramp-up in battery hardware sales and cash flow improvement as “bookings and billings increase and working capital requirements lessen throughout the year.”

Industry glossary

  • AUM (Assets Under Management): Total capacity of customer-controlled solar or storage systems monitored and optimized through company software platforms.
  • EMS (Energy Management System): Integrated software and controls solution for real-time operation and optimization of energy assets, especially for utility-scale deployments.
  • PowerTrack Sage: AI-powered assistant within PowerTrack providing plain-language analytics briefings and operational insights for site operators and asset managers.
  • PowerTrack: Core software platform enabling real-time monitoring, control, and optimization of solar and storage assets across commercial, industrial, and utility-scale portfolios.
  • BESS (Battery Energy Storage System): Integrated systems for storing and managing electrical energy using batteries, often paired with renewable generation.
  • SCADA (Supervisory Control and Data Acquisition): Industrial control system for real-time monitoring and automation of facility operations, including energy generation and storage sites.
  • ARR (Annual Recurring Revenue): Expected yearly revenue from contracted, renewable software and services subscriptions.
  • CARR (Contracted Annual Recurring Revenue): Portion of ARR based on signed contracts not yet fully reflected in invoiced or recognized revenues.

Full Conference Call Transcript

Arun Narayanan: Thank you, Erin. Good afternoon, everyone, and thank you all for joining us today. When I spoke with you last during our fourth quarter and full year 2025 earnings call, I framed 2025 as a transformative year and 2026 as the year to demonstrate what that transformation was designed to deliver. One quarter in, I'm encouraged by the progress we are making. Our results are moving in the right direction, and we remain on track against the commitments we've set. Q1 is historically the lightest revenue quarter for us and our industry. And yet this quarter, we delivered our fourth consecutive quarter of positive adjusted EBITDA.

In fact, this was our first ever positive adjusted EBITDA in a first fiscal quarter, supported by strong gross margins and continued growth in core software, services and edge hardware revenue. This reflects a cost structure and a margin profile that are now increasingly durable. We remain on track across all 2026 financial and operating targets, and we are reaffirming full year guidance across all metrics today. Now turning to an update on our three key priorities for 2026. Our first priority is to drive operational leverage and ensure that the structural improvements we made in 2025 are sustainable and continue over time. Gross margins for the first quarter were again very strong.

With no battery hardware resales in the quarter, our revenue mix was entirely software, services and edge hardware, which drove non-GAAP gross margin to 52%. As we opportunistically layer in battery hardware through the balance of the year, we expect margins to naturally compress towards the midpoint of our 40% to 50% non-GAAP gross margin guidance range. Importantly, the underlying software and services margin engine remains strong. On the operating expense side, we continue to maintain what we have characterized as permanent structural efficiency. Cash operating expenses were down significantly year-over-year and down sequentially versus the fourth quarter of 2025.

We remain focused on resourcefulness and driving further efficiency wherever we can, while continuing to invest deliberately in the areas that drive longer-term growth. One area where we are seeing meaningful efficiency gains is in AI adoption. Today, nearly 70% of our employee base is actively using AI tools in their weekly workflows with tangible productivity benefits to our customers. Within our development team specifically, AI is accelerating feature delivery and improving triage and operations. These productivity gains are real, and they are helping us do more with a leaner organization.

As a result of our strong execution as well as these achievements and advancements, we delivered $2 million in adjusted EBITDA, our fourth consecutive positive quarter and our first ever positive first quarter performance. This clearly evidences the operating leverage embedded in this business, and we expect it to expand as we move through the year. Operating cash flow was negative $8 million for the first quarter. This reflects expected Q1 working capital timing and scheduled interest payments. As bookings and billings increase and working capital requirements lessen throughout the year, we expect improvements in operating cash flow and remain confident in our full year guidance range of $0 million to $10 million.

Now moving on to our second priority, strengthening the core PowerTrack platform. PowerTrack is a critical digital infrastructure platform, which enables our customers to go from data to insight to action. PowerTrack generates data at the customer site with our edge hardware and sends that data to the cloud and ultimately to our PowerTrack software platform, enabling our customers to make meaningful decisions about their portfolios and optimize their assets. We added approximately 1.5 gigawatts of solar assets under management in the first quarter, bringing total solar AUM to 37.5 gigawatts, and we drove 2% growth in PowerTrack ARR.

We are committed to maintaining and extending our market-leading position in commercial and industrial solar asset monitoring while extending into additional customer segments, and we continue to invest in the platform's stability, performance and feature depth to achieve these goals. A key part of that investment strategy is a disciplined build or buy analysis. Our acquisition of raicoon, which we announced on April 28th, is a direct and strategic move towards building out that platform capability and improving the actionability from insights and data. raicoon is an Austrian provider of automated fault detection and event management for solar assets.

This is a targeted high-impact acquisition, a natural capability extension to our platform that we believe has immediate value across our wide customer base. raicoon's technology provides enhancements to PowerTrack through automated fault detection and alert prioritization. As our customer base scales and portfolios grow more complex, the ability to surface and triage performance issues faster is increasingly important for our customers to drive meaningful actions at scale. We expect raicoon's technology will drive customers to do even more work with PowerTrack, further establishing our product as the platform of choice for solar asset managers. What's more, this is a small, focused tuck-in acquisition that we executed opportunistically and will integrate quickly.

We look forward to sharing more on the benefits of this acquisition as product integration progresses. Another way in which we make data more accessible for our customers is with PowerTrack Sage. PowerTrack Sage is now live and available in PowerTrack to our broader customer base. The AI assistant synthesizes live site data, alerts, and performance analytics into plain language briefings, giving operators, performance engineers and asset managers the ability to detect, diagnose and resolve issues faster. The early adoption signals are very exciting. We are seeing consistent daily engagement across multiple customer organizations with integrations into their daily workflows.

In the future, as more heterogeneous data appears in PowerTrack, the capabilities of PowerTrack Sage will become more meaningful to our customers. Turning now to managed services. Our managed services business provides software-enabled full life cycle energy storage services, covering design, procurement, commissioning and the ongoing operation and optimization of energy storage systems typically under five- to 20-year contract terms. Managed services brought in approximately $7 million in revenue during the first quarter. Customer satisfaction remains high, and our optimization service continues to exceed the performance targets we have set with our customers.

Shifting now to our final strategic priority, building the foundation for accelerated growth in 2027 and beyond, which includes expanding into utility scale deployments, advancing our international footprint and unlocking new market opportunities. I'm particularly excited about bookings momentum we are seeing in the utility scale segment. Bookings more than doubled quarter-over-quarter, and our pipeline in this segment is the strongest we have ever seen. We booked new deals in four different geographies and across various asset types, including stand-alone storage, solar and new build hybrid. While PowerTrack EMS is valuable across our portfolio, including C&I, it is also a key offering for us to drive expansion in the utility scale space, both internationally and domestically.

It differentiates us by providing customers with unified controls, cloud monitoring and portfolio level visibility. PowerTrack EMS also helps customers extend the value of existing solar assets by adding storage with minimal disruption. PowerTrack EMS has a longer commercial life cycle than our core C&I business because of the utility scale end market since it requires more time for commissioning. And we expect these bookings to convert to meaningful revenue in late 2026 and into 2027. Our first PowerTrack EMS bookings from Q4 2025 are developing well and are on track to convert to revenue during the second quarter of 2026.

One key PowerTrack EMS booking from Q1, I'd like to highlight is with a long-standing PowerTrack solar monitoring customer operating two utility scale sites exceeding 50 megawatts in Hungary. This customer made the decision to hybridize their portfolio and selected PowerTrack EMS to manage a new 50-plus megawatt hour battery system. This is precisely the expansion dynamic we anticipated when we built PowerTrack EMS, an existing customer deepening their relationship with them as their assets evolve. It validates both the platform's ability to grow with our customers and the increasing prevalence of hybridization in the European utility scale market.

Just last week, we further strengthened PowerTrack EMS with a co-marketing relationship with Nuvation Energy, a North American provider of battery management and energy control solutions. Together, we will market a cell-to-cloud BESS and hybrid control stack that is exclusively North American designed and manufactured. This collaboration will allow us to deliver real value to our customers as regulatory requirements, including FEOC tighten. Further, this agreement proves we are on our way to building a robust ecosystem of commercial and product partnerships to extend our reach. On the international front, we continue to build out our European presence, anchored by our Berlin office.

International revenue represented approximately 5% of total revenue in the first quarter, and we expect that proportion to grow as PowerTrack EMS and other utility scale projects in Europe move through commissioning and into revenue recognition in late 2026 and in 2027. Beyond our core growth drivers, I'd like to briefly update you on the two new offerings we introduced during our Q4 call. Our AI services offering continues to progress with active customer conversations focused on helping organizations identify and implement practical AI use cases that streamline internal processes, improve decision-making and unlock operational efficiency.

In parallel, we are exploring how our core strength in energy optimization software and deep energy market expertise can support data center developers and operators as they navigate rising power costs, grid constraints and resilience requirements. Both remain important future growth opportunities, and we will share more substantive updates as customer engagements and market validations advance. To close, I want to reinforce our confidence in the rest of the year ahead. Q1 came in as expected, strong margins, positive adjusted EBITDA and solid progress on all three priorities. As I stated earlier, we are reaffirming our full year 2026 guidance across all metrics, and I'm confident in our team's ability to execute.

With that, I'll turn the call over to Brian.

Brian Musfeldt: Thanks, Arun, and good afternoon, everyone. Let's walk through the results. As Arun noted, Q1 is historically the lightest revenue quarter for the company, driven by the natural sales cycle of construction projects, which typically begin to ramp in the summer and through the end of the year. Total revenue for the first quarter was $29 million, down 11% year-over-year from $32 million in the first quarter of 2025. The year-over-year decline was entirely attributable to the absence of battery hardware resales this quarter and our expectation that battery hardware resale activity will be weighted to the second half of 2026. Core revenue from software, services and edge hardware was up 4% from the first quarter of 2025.

Within that, I want to highlight a few components. PowerTrack software revenue grew 16% year-over-year, reflecting continued strength in our commercial and industrial solar monitoring business and early contributions from utility scale expansion. This is the highest margin recurring revenue in our portfolio, and its growth rate is a meaningful indicator of the health of our core business. Edge hardware revenue grew approximately 1% year-over-year. Project and professional services revenue declined 5% year-over-year and managed service revenue was down 5% year-over-year. First quarter GAAP gross margin was 38% compared to 32% in the first quarter of 2025. Non-GAAP gross margin was a record 52% compared to 46% in the first quarter of 2025.

The significant margin expansion reflects the increasing mix of software, services and edge hardware in our revenue base, combined with the structural cost improvements we made in 2025. As battery hardware resales volumes pick up in the second half of the year, non-GAAP gross margin percentage will trend toward the middle of our 40% to 50% full year guidance range, but the underlying software and service margins remain strong. Cash operating expenses were down 30% year-over-year and down approximately 10% sequentially. The workforce and cost optimization actions we completed in 2025 and continue to implement into 2026 have become permanent structural efficiency and the first quarter confirms that characterization.

Adjusted EBITDA was $2 million, a $7 million improvement compared to a negative $5 million in the first quarter of 2025. This marks our fourth consecutive quarter of positive adjusted EBITDA and our first ever positive adjusted EBITDA in the first quarter, which has historically been our most challenging quarter for profitability given seasonal revenue patterns. This is strong evidence of the operating leverage that is now entrenched in this business. We ended the first quarter with $37 million in cash and cash equivalents. Operating cash flow was negative $8 million in the quarter, driven primarily by the timing of working capital movements and cash interest expense. I want to be clear about the working capital dynamics.

The Q1 outflow reflects timing, not a change in the underlying cash generation of the business. As bookings and billings increase and working capital requirements lessen throughout the year, we expect improvement in our cash position and remain on track to achieve our full year operating cash flow guidance of $0 to $10 million. Turning now to our operating metrics. Bookings were $27 million in the first quarter compared to $33 million in the fourth quarter of 2025. The sequential decline is typical for first quarter seasonality. All bookings this quarter came from core software, services and edge hardware.

As Arun noted, utility scale bookings more than doubled quarter-over-quarter, which is one of the key drivers of our long-term growth objectives. While we did not have any battery hardware bookings this quarter, we continue to expect up to $40 million in opportunistic battery hardware sales this year. The battery supply is accessible and can be delivered to customers within 90 days. Contracted backlog was $23 million at the end of the first quarter, up 8% sequentially from $21 million at the end of the fourth quarter of 2025. CARR was $67 million, flat versus the end of the fourth quarter. ARR was $61.2 million, up slightly from $61.1 million at the end of the fourth quarter.

Within that, PowerTrack ARR grew 2% sequentially and managed services ARR declined 4% sequentially. Managed services ARR declined modestly, reflecting the impact of a battery supplier bankruptcy, which prevented the renewal of certain recurring warranty management and other services contracts tied to that supplier systems. Importantly, we continue to provide optimization and other core managed services to the owners of those assets and associated AUM remains on our platform. Solar operating AUM grew 4% sequentially to 37.5 gigawatts and storage operating AUM was flat sequentially at 1.7 gigawatt hours. Now turning to guidance. As Arun mentioned, we are reaffirming our full year 2026 guidance across all metrics.

Total revenue of $140 million to $190 million with software, services and edge hardware expected in the range of $130 million to $150 million and battery hardware resales of up to $40 million, which, as I mentioned, we expect to be weighted to the second half of the year. Non-GAAP gross margin of 40% to 50%, with the range driven by the timing and volume of battery hardware resales. Adjusted EBITDA of $10 million to $15 million, operating cash flow of $0 to $10 million and year-end ARR of $65 million to $70 million. And I will now pass the call back over to Arun for closing remarks.

Arun Narayanan: Thank you, Brian. I'd like to leave you all with three key takeaways from this quarter. First, the transformation we undertook in 2025 is delivering results. We achieved positive adjusted EBITDA in our historically weakest quarter with record high software margins and a cost structure that is both lean and durable. This is not a onetime achievement. It's the foundation we are building on. Second, our core business is strong and growing. PowerTrack software revenue grew 16% year-over-year. Our new products, PowerTrack EMS and PowerTrack Sage are gaining real traction with customers. And the raicoon acquisition demonstrates our disciplined approach to extending our platform capabilities where it matters most.

Third, we are making tangible progress on the growth initiatives that will drive through 2027 and beyond. Utility scale bookings more than doubled quarter-over-quarter. Our international footprint is expanding and our partnership with Nuvation positions us to capitalize on the growing demand for secure domestically sourced energy infrastructure. We said 2026 would be the year to demonstrate what our transformation was designed to deliver. One quarter in, we are doing exactly that. We have the right strategy, the right team and the right momentum. We are executing with discipline, investing with purpose, and we remain confident in achieving all our full year commitments.

I want to thank our customers for their continued partnership, our team for their exceptional execution and all of you for your support and engagement. With that, I will ask the operator to open the line for questions.

Operator: [Operator Instructions] The first question comes from Justin Clare with ROTH Capital.

Justin Clare: So I wanted to just start out on bookings. So you've mentioned utility scale bookings had doubled quarter-over-quarter. And so just wondering if you could speak to what drove the strength there? Is that new customer wins? Is it expansion with existing customers? Are you seeing larger project sizes? And then also, just where are you seeing the most traction with utility scale customers in your portfolio? So which products or services are you seeing the most uptake for?

Arun Narayanan: Justin, good to hear from you. This is Arun. It's largely driven, I would say, by PowerTrack EMS. PowerTrack EMS is the key differentiator that allows us to provide our customers in the utility scale space with solutions. They bring unified controls, cloud monitoring as well as portfolio level visibility to our customers. And I think this is what's extending the ability to engage with us beyond solar projects into these utility scale projects. Now also one more thing. We have PowerTrack SCADA, which is another product that we offer for monitoring and control in utility-scale solar projects as well. We have a team based in Berlin.

The team is working very hard, and they have done a great job in doubling bookings. There are two maybe examples I can cite. In the last quarter, we spoke about Everyray, which was a German customer. That was a 100-plus megawatt hour project. And then in the prepared remarks, we referred to a Hungarian project that went through hybridization that was 50-plus megawatt hour deal as well. And overall, I think we remain confident that this conversion continues. The first CMS bookings from the Q4 2025 cycle, we expect to start seeing that as revenue starting in Q2 of 2026. So we remain very optimistic on this, Justin.

Justin Clare: Okay. Got it. Got it. I appreciate that. And then just wanted to ask on PowerTrack. So we did see a pretty good growth, I think, 16% year-over-year revenue growth for that. Though we did see the ARR was flat sequentially. And so I'm just wondering how we should think about the cadence of ARR growth as we move through the balance of the year here, given your target of $65 million to $70 million at the end of the year? And then just what are the drivers that could potentially enable you to get to the higher end of that target?

Arun Narayanan: Yes, Justin, I can answer that as well. PowerTrack ARR was up 12% year-over-year, 2% sequentially. And this moderate sequential growth in PowerTrack ARR is just due to seasonality. We expect ARR to ramp up throughout the remainder of the year. And the majority of our ARR growth, as usual, will come from PowerTrack C&I customers. There will be some PowerTrack EMS and utility scale deployments in the ARR, but it won't be a significant portion of ARR this year. And we're very focused and we continue to drive ARR across our business over the long term. And as I said earlier, we're pleased to reaffirm our guidance of $65 million to $70 million for ARR.

Justin Clare: Got it. Okay. Great. And then just one more. I wanted to ask on the margins here. So we just see that PowerTrack non-GAAP gross margins that continue to move higher in Q1. I think you're at 75% versus 69% a year ago, 71% in Q4. So just wondering if you could just speak to the improvements that we've seen there? What's been the biggest driver? And then how we should think about the margin profile as you continue to scale that business? Is there further potential for margins to move higher?

Brian Musfeldt: Yes. Thanks, Justin. This is Brian. I'll take that one. Yes, I mean, we are always reviewing the supply chain and the macro environment for our PowerTrack product. So you're seeing good growth in a couple of ways. One, our AUM is increasing. And so that is a kind of traditional SaaS product that gains leverage as we get more volume, which is always great, and that's going to improve margin. But also, you do see us -- as we watch the environment in the supply chain this last year, we have been able to increase pricing modestly where we've needed to kind of between tariffs and other things that have kind of driven that environment.

So as the volume increases, you'll continue to see margins push up on that space. And then you always -- we're always watching for places where we can increase pricing or need to increase pricing on our customers, and that's what's going to drive that kind of to keep improving.

Operator: This concludes the equity research questions. I'd like to turn the floor over to Aaron for retail investor questions at this time.

Erin Reed: Thank you, operator. We have a few questions here. Firstly, relating to cash flow. With 2026 operating cash flow guided from $0 to $10 million, what are the key levers that give you confidence that Stem can reach positive operating cash flow for the full year 2026?

Brian Musfeldt: Yes. This is Brian again. I'll grab that one. As Arun stated in the call, Q1's negative operating cash flow was really driven by a combination of expected higher working capital requirements in Q1 and it being our traditionally lowest kind of billings and revenue quarter. When you look forward, we expect that bookings and billings will increase with our seasonality and you look at this business and how it operates. And we also expect reduced working capital requirements through the rest of the year. And the combination of that will allow us to build cash going into the second half of the year.

I think it's important to note, cash operating expenses have really been optimized to the business and the size today. I think you can see that in the evidence when you see that cash operating expenses were down 30% year-over-year and another 10% sequentially. So with that, we were able to achieve positive EBITDA in our lowest revenue quarter for the first time, which is great. And I think you're just fundamentally seeing that we need significantly less cash to run this business with the new operating discipline that we have in place. So I think that's what really gives us the confidence to reiterate our guidance on all our metrics this year.

Erin Reed: Thanks, Brian. The next question is on the recent acquisition of raicoon. Why did you acquire raicoon and why now?

Arun Narayanan: I'll take this. This is Arun. Well, I'm very excited that raicoon is joining Stem, and I want to take this opportunity to welcome all of the raicoon employees to Stem. raicoon's technology provides significant enhancements to PowerTrack through automated false detection and prioritization. What this means is as our customer base scales and portfolios are more complex, the ability to surface and triage performance issues faster is increasingly becoming very important to customer retention and satisfaction. This acquisition directly supports our 2026 priority of strengthening our core PowerTrack business, and we saw an opportunity to bring in a proven already deployed technology rather than build it from scratch.

And this brings additional value to our existing customer base as well as it's a differentiator as we try to acquire new customers. So we're very pleased that raicoon is joining us.

Erin Reed: Thanks. This will be the last question, and it is related to AI. Where is Stem's AI capability creating measurable value for customers today? And how does that translate into retention, expansion or new customer wins?

Arun Narayanan: I'll take this. Look, I'm always excited about AI. And I would say that our ability to bring AI to life and to bring value to our customers maybe can be thought of in two different ways. The first way is how we embed AI into our products. AI is baked into PowerTrack as PowerTrack Sage, and this AI assistant provides customers with more fluency to interpret their site data. It expands PowerTrack users beyond the technical users that we have, and it does so by providing plain language briefings to non-technical users.

Secondly, we also impact customer value by using AI internally, especially if you think about our development team, their usage of the AI tools, it allows them to accelerate feature delivery. It improves triage in our operations. It allows us to roll out updates more quickly. And ultimately, what this means is we reduce friction for our customers.

Erin Reed: Thanks, Arun. This concludes the retail investor question. Turning back to you now for closing remarks.

Arun Narayanan: I want to thank everyone for joining our first quarter earnings call, and we look forward to speaking with you next during our second quarter 2026 earnings call this summer. Thanks, everyone.

Operator: Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.