Greetings. Welcome to Stem's Fourth Quarter 2025 Results Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Erin Reed, Head of Investor Relations. Thank you. You may begin.

Thank you, operator. This is Erin Reed, Head of Investor Relations at Stem. We welcome you to our fourth quarter and full year 2025 earnings call. Before we begin, please note that some of the statements we will be making today are forward-looking. These statements involve risks and uncertainties that could cause our results to differ materially from those projected in these statements. We, therefore, refer you to our latest 10-K and other SEC filings and supplemental materials, which can be found on our IR website. Our comments today also include non-GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP financial measures can be found in our fourth quarter and full year 2025 earnings release, which is on our website. Arun Narayanan, CEO; and Brian Musfeldt, CFO, will start the call today with prepared remarks, and then we will take your questions. With that, I will turn the call over to Arun.

Thank you, Erin. Good afternoon, everyone, and thank you all for joining us today. I am pleased to be speaking with you 1 year after assuming the role of CEO, and I could not be more proud of what the Stem team has accomplished over the past 12 months, best-in-class execution, unwavering commitment to our customers and each other and disciplined financial performance. 2025 was a transformative year that methodically, yet decisively reshaped Stem into a software-centric operationally disciplined organization. Every commitment we made and the proof of our strategic transformation is in the results. Today, I will take you through a look back on our fourth quarter and full year accomplishments. After that, I will walk you through our 2026 priorities and show you how we are determined to become the operating system for clean energy projects. And finally, I will give you a preview of guidance for the year ahead. Brian will follow with the detailed financial results and our complete 2026 outlook. In 2025, we delivered on guidance across every metric. Full year 2025 revenue grew 8% year-over-year to $156 million with over 55% of that revenue coming from software and services, evidencing our successful and ongoing transformation. Software, services and edge hardware revenue grew by 25% year-over-year to $141 million. Year-end ARR grew 16% year-over-year to $61 million. In 2025, we substantially expanded gross margins and considerably reduced our operating expenses. We achieved 3 consecutive quarters of positive adjusted EBITDA, resulting in our first ever full year positive adjusted EBITDA of $7 million. We also achieved positive operating cash flow for full year 2025, another first and major accomplishment in the company's history. Throughout the year, we continued to deepen and expand our PowerTrack platform, delivering meaningful improvements in platform stability, performance and customer experience. We…

Thanks, Arun, and hello, everyone. Let's walk through the results. For the full year 2025, we were in line or above all of the financial expectations we outlined on our third quarter call. We exceeded our profitability guidance, demonstrating the dedication to operational discipline that runs through this organization. For the full year of 2025, total revenue was $156 million, up 8% year-over-year. Most importantly, revenue from software, services and edge hardware, the core of our software-centric model, was up 25% year-over-year to $141 million. Battery hardware resale was $15 million for the year, consistent with our strategic deemphasis of lower-margin business. This shift in revenue mix is precisely what we committed to delivering, and it is reflected in our improved gross margin performance this year. Turning now to the fourth quarter. PowerTrack software revenue continued its strong performance, growing 14% year-over-year and edge hardware revenue grew an impressive 21% year-over-year. Managed service revenue was up 51% year-over-year, driven in part by onetime performance-based revenue, where we exceeded asset operational targets. Battery resale revenue was down from $27 million to less than $1 million year-over-year as expected. Project and professional services revenue increased significantly year-over-year, driven by approximately $11 million of onetime DevCo revenue recognized in the fourth quarter. Excluding DevCo, fourth quarter project and professional services revenue was up 27% year-over-year. I also want to note that as of the end of the year, we have sold or written off all of the project assets associated with DevCo from our financial statements, and we do not intend to make any further investments in DevCo assets moving forward. Now let's take a look at gross margins. For the full year 2025, we achieved record GAAP gross margins of 38% and record non-GAAP gross margins of 46%, driven by decreased battery…

Thank you, Brian. As I reflect on 2025, I am struck by the scope of what our team accomplished. We delivered a business transformation, executed a financial turnaround, completed 2 new product launches and demonstrated a clear strategic path forward. We said we would do it, and we did it. As I look ahead through the remainder of 2026 and beyond, I am confident. We have 3 clear strategic priorities to guide us in 2026. We have an ambitious but achievable adjusted EBITDA target and multiple growth drivers that derisk execution. And last but certainly not least, we have a team with a proven track record of executing. Our long-term vision is to build a scalable, profitable software and services company that holds a market leadership position in clean energy intelligence. Stem is uniquely positioned to capitalize on the ongoing clean energy transformation with a market-leading platform, a growing product suite and an expanding global footprint. To our customers, we are grateful for your continued partnership and trust. To our investors, we appreciate your support through this transformation and your confidence in our vision. To our team, your execution through a challenging transformational year reflects your talent, your resilience and your dedication. Thank you. With that, I will ask the operator to open the line for questions.

[Operator Instructions] Our first question comes from Justin Clare with ROTH.

I wanted to start off on the PowerTrack EMS launch. So you mentioned that you could see an acceleration for PowerTrack EMS in 2026, but more meaningful scale in 2027. So just wondering how we should think about the timing of bookings for the product. Could we see an increase as early as Q1 or Q2? Or is that more of a second half dynamic? And then just wondering if you could talk through the typical sales cycle and lead times for the EMS deployments.

Justin, thank you for your question This is Arun. Good to hear from you again. PowerTrack EMS was launched in September 2025. And the reason we are so excited about it is it is the first time we are able to address a solar and storage solution and address a customer's need completely. If you think about even the press release that we put out today, we are able to work with newer customers in international markets as well as customers domestically as well. And the main sort of aspect of these solutions are geared towards utility-scale projects. Inherently, they are a longer life cycle, and this means that we need to give time to build the business, build the pipeline, engage with the customer and make sure that the solution is a good fit and then work with the customer through the commissioning of the project all the way to revenue recognition. So it does take some time, and we are working on that today.

Okay. And then I guess curious, would you anticipate the revenue [Audio Gap] recurring revenue stream, but maybe you could help us understand that.

Yes. So it depends on the components, right? So think about a project that we deploy, it would have hardware, software as well as service components and the mix of these 3 components would be the totality of the contracts that we are executing. Depending on the component we're talking about, the revenue recognition would follow specific time line. So maybe hardware is recognized immediately upon delivery, but the service component would need to run through the commissioning life cycle. So that -- if you look at the Everyray press release that we announced today, we are encouraged by the feedback that we're getting from our customers. That's a 100-megawatt hour project that we have deployed. And just connecting back to the remarks that we made earlier, we are looking at 2026 as a way to build the foundation and then see 2027 as the point at which we're able to scale the revenue.

I see. Got it. Got it. Okay. And then just on the 2026 guidance, it does look like the battery resale revenue up to $40 million. That's a fairly meaningful increase potentially from the 2025 storage resale revenue of $15 million. So just wondering if you could speak to what's driving the increase there, considering you are shifting emphasis toward software and services, are you still seeing demand from customers where they prefer you to do the procurement?

I would characterize Stem as a trusted adviser. We have really good relationships with our customer and the ability for our technical expertise in the organization to assist customers through that journey is very valuable to our customers. So we have deemphasized the OEM hardware resale component of the business. But when we see opportunities to help customers meaningfully and it doesn't use up our balance sheet, we do pursue it. And this is how we see the year develop, and that's how we are guiding to it.

Got it. Okay. And then just one more on margins. Wondering if you could give us a sense for how you see the gross margins evolving for software, services and edge hardware in '26 relative to '25. It looks like you could potentially have a higher mix of battery hardware resale, which is lower margin. But overall for the year, it looks like margins could be flat year-over-year. So it implies there could be an expansion in the software margins. So just checking, is that the right interpretation and how we should think about it?

Justin, this is Brian. Yes, I mean, we've guided you to 40% to 50% for the year. And that is obviously at a mix of kind of revenue, software services and hardware. We do break out for you now in our slide deck the kind of detail by each revenue kind of line. You can look at that in the appendix for that. But yes, I think you see that this year, software was over 70% or just north of 70%. So I think you can look at that from a mix perspective and based on our guidance and what we're looking at for improved software revenue will drive that mix up a bit.

[Operator Instructions] There are no further questions at this time. This concludes our question-and-answer session. I'd like to turn the call back over to Arun for closing comments.

I want to thank everyone for joining our fourth quarter and full year earnings call, and we look forward to speaking with you next during our first quarter 2026 earnings call this spring. Thanks, everyone.

Ladies and gentlemen, thank you for your participation. This concludes today's conference. Please disconnect your lines, and have a wonderful day.