Stem Reviews Strategic Options After NYSE Notice on Listing Requirements
Key Facts
Stem's board began a formal review of strategic options on October 26, 2026, saying the goal is to maximize shareholder value. The review includes continuing the company's standalone plan, selling some assets or the entire company, a merger, refinancing, recapitalizing the company, and other transactions that could enhance shareholder value. Stem appointed Guggenheim Securities as financial adviser and retained Gibson Dunn and Davis Polk as legal advisers. The company said these alternatives are under consideration, without announcing a selection or confirming an agreement. The board has set no timeline for completing the review and has given no assurance that it will result in a transaction or other strategic outcome.
The review follows Stem's disclosure that it received a notice from the New York Stock Exchange on October 19 that it did not meet a listing standard related to market capitalization and stockholders' equity. The standard requires average market capitalization of at least $50 million over 30 consecutive trading days, and stockholders' equity of at least $50 million at the same time. The company said its common stock will remain listed and traded on the exchange during the cure period, subject to the exchange's acceptance of a compliance plan and its meeting other listing requirements. The notice puts the listing requirements in the context of the board's review, but does not change the list of options the company said it would consider. That list includes Stem continuing as a standalone company under its plan, as well as selling assets or the company, refinancing and recapitalizing.
Stem's second-quarter 2026 results show a mixed operating picture. Revenue was $33.7 million, down 12% from $38.4 million in the same quarter of 2025, which Stem attributed to lower battery hardware resale and managed services revenue. By contrast, software, services and edge hardware revenue rose 1% to $33.4 million from $32.9 million a year earlier. The company said 11% year-over-year growth in PowerTrack software revenue drove the improvement in that category. Overall revenue declined while the category posted modest growth, with PowerTrack software growing faster over the same period.
Stem posted a net loss of $14.4 million in the second quarter of 2026, compared with net income of $202.5 million in the second quarter of 2025. The company attributed a significant part of the comparison to a one-time gain from debt extinguishment in the year-earlier period, explaining the difference between last year's result and the latest quarterly loss. Cash and cash equivalents totaled $38.4 million at the end of June 2026, compared with $36.6 million at the end of March. These figures provide financial context for the review, while the company has kept a broad range of alternatives on the table. Stem did not link its announcement to any particular financial result and did not say the review would necessarily lead to a sale, merger or refinancing.
PowerTrack's importance to Stem's business is underscored by the scale of energy managed by the software, according to the company's chief executive. More than 38 gigawatts of solar power and 1.8 gigawatt-hours of storage capacity rely on it. Those figures accompany 11% growth in software revenue in the second quarter, the company said, while overall revenue fell 12% year over year. They provide context for the software and services business, which grew during the period as battery hardware resale and managed services declined. The board has not said whether it will continue with the standalone plan or choose one of the sale or financing paths included in the review.
Stem is scheduled to report third-quarter 2026 results after the market closes on November 5, followed by a conference call at 5:00 p.m. Eastern Time. The board has set no date for completing the strategic review and has not guaranteed that it will result in a deal or other strategic outcome. According to the company, the shares will remain listed and traded on the New York Stock Exchange during the cure period, subject to acceptance of its compliance plan and satisfaction of the remaining listing requirements. The next earnings date therefore comes amid an open review and a listing notice still subject to the cure process described by the company.