Stem : Investor Presentation – November 2023

November 2023

Investor Presentation

Cautionary Statement Regarding Forward-Looking Statements

This presentation, as well as other statements we make, contains "forward-looking statements" within the meaning of the federal securities laws, which include any statements that are not historical facts. Such statements often contain words such as "expect," "may," "can," "believe," "predict," "plan," "potential," "projected," "projections," "forecast," "estimate," "intend," "anticipate," "ambition," "goal," "target," "think," "should," "could," "would," "will," "hope," "see," "likely," and other similar words. Forward-looking statements address matters that are, to varying degrees, uncertain, such as statements about financial and performance targets and other forecasts or expectations regarding, or dependent on, our business outlook; the expected benefits of the combined Stem/AlsoEnergy company; our ability to secure sufficient and timely inventory from suppliers; our ability to meet contracted customer demand; our ability to manage supply chain issues and manufacturing or delivery delays; our joint ventures, partnerships and other alliances; forecasts or expectations regarding energy transition and global climate change; reduction of greenhouse gas ("GHG") emissions; the integration and optimization of energy resources; our business strategies and those of our customers; our ability to retain or upgrade current customers, further penetrate existing markets or expand into new markets; our ability to manage our supply chains and distribution channels and the effects of natural disasters and other events beyond our control; the direct or indirect effects on our business of macroeconomic factors and geopolitical instability, such as the ongoing conflict in Ukraine; the expected benefits of the Inflation Reduction Act of 2022 on our business; and future results of operations, including adjusted EBITDA. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements, including but not limited to our inability to secure sufficient and timely inventory from our suppliers, as well as contracted quantities of equipment; our inability to meet contracted customer demand; supply chain interruptions and manufacturing or delivery delays; disruptions in sales, production, service or other business activities; general macroeconomic and business conditions in key regions of the world, including inflationary pressures, general economic slowdown or a recession, rising interest rates, changes in monetary policy, instability in financial institutions, and the prospect of a shutdown of the U.S. federal government; the direct and indirect effects of widespread health emergencies on our workforce, operations, financial results and cash flows; geopolitical instability, such as the ongoing conflict in Ukraine; the results of operations and financial condition of our customers and suppliers; pricing pressures; weather and seasonal factors; our inability to continue to grow and manage our growth effectively; our inability to attract and retain qualified employees and key personnel; our inability to comply with, and the effect on our business of, evolving legal standards and regulations, including concerning data protection and consumer privacy and evolving labor standards; risks relating to the development and performance of our energy storage systems and software-enabled services; our inability to retain or upgrade current customers, further penetrate existing markets or expand into new markets; the risk that our business, financial condition and results of operations may be adversely affected by other political, economic, business and competitive factors; and other risks and uncertainties discussed in this presentation and in our most recent Forms 10-K,10-Q and 8-K filed with or furnished to the SEC. If one or more of these or other risks or uncertainties materialize (or the consequences of any such development changes), or should our underlying assumptions prove incorrect, actual results or outcomes, or the timing of these results or outcomes, may vary materially from those reflected in our forward-looking statements. Forwardlooking and other statements in this presentation regarding our environmental, social, and other sustainability plans and goals are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current, and forward-looking environmental, social, and sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future. Statements in this presentation are made as of the date of this presentation, and Stem disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events, or otherwise, except as required by law.

Non-GAAP Measures

In addition to financial measures in accordance with U.S. GAAP, this presentation includes references to non-GAAP financial measures, including adjusted EBITDA, non-GAAP gross profit and non-GAAP gross margin. We believe these non-GAAP measures provide useful supplemental information regarding certain financial and business trends relating to our financial condition and results of operations. We also believe that these non-GAAP financial measures provide an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial performance with other similar companies, many of which present similar non-GAAP financial measures to investors. These non-GAAP financial measures are in addition to, and should not be considered superior to, or a substitute for, financial results prepared in accordance with GAAP. Non- GAAP financial measures should not be considered in isolation and are subject to significant inherent limitations. The non-GAAP measures presented herein may not be comparable to similar non-GAAP measures presented by other companies. Reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures are included in the Appendix to this presentation.

Industry and Market Data

In this presentation, Stem relies on and refers to certain information and statistics obtained from third-party sources which it believes to be reliable, including reports by market research firms. Stem has not independently verified the accuracy or completeness of any such third-party information. This presentation may contain trademarks, service marks, trade names and copyrights of other companies, which are the property of their respective owners.

© 2023 Stem, Inc.

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Agenda

• Company Update
• Industry Outlook
• Q3'23 Financial and Operating Results
• Appendix

© 2023 Stem, Inc.

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Today's Presenters

John Carrington	Bill Bush
CEO and Director	Chief Financial Officer

Prakesh Patel	Ted Durbin
Chief Strategy Officer	Vice President,
	Investor Relations

Seasoned leadership team with extensive experience in software, energy and industrial companies

© 2023 Stem, Inc.

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Our Guiding Principles

Drive to positive adjusted EBITDA

Build a leading	Grow revenues at
international business	or above market

Integrate teams to advance

Delight our customers

a common mission

Make Stem a great place to work

© 2023 Stem, Inc.

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Third Quarter 2023 Results & Highlights

Positioned to meet full year performance targets with strong bookings momentum into 2024

Strong Q3 Momentum*

Revenue	Bookings
$134M	$676M
+34% YoY	+203% YoY
Contracted	Contracted Annual
Backlog	Recurring Revenue
$1.84B	$88M
+125% YoY	+43% YoY
Adjusted	GAAP/Non-GAAP
EBITDA	Gross Margin
$(0.9)M	(15%) / 12%

Q3 Highlights

Record Q3 Bookings, +186% QoQ	SB Energy agreement for software and
Strong CARR growth, +17% QoQ	services across a 10GWh development
pipeline

On track to achieve positive adjusted	Launched PowerBidder Pro for asset
EBITDA in 2H 2023*	owners and traders

Expect positive FY 2024 adjusted EBITDA

*Revenue and GAAP Gross Margin were negatively impacted by the $37.4 million reduction in revenue for guarantees issued related to hardware delivered in
2022 and 2023. Adjusted EBITDA and non-GAAP Gross Margin have been adjusted to exclude the impact of the reduction in revenue.	© 2023 Stem, Inc.	6
See appendix for definitions.

Third Quarter Highlights (continued)

Bookings reach all-time high

Record bookings growth

• Strength in FTM storage, driven by muni / co-op segment
• Solar backlog +41% YoY
• Consistent strong contracted margins demonstrate differentiation

Strong AUM, CARR growth in both Storage and Solar

• Storage AUM +1.2 GWh or +32% QoQ
• Solar AUM +5% YoY
• CARR +$13M or +17% QoQ; raising CARR guidance

Demand remains resilient

• Project returns are higher despite rising interest rates
• Declining equipment prices and clarity on tax incentives further improve project economics

$ in millions
		Record Bookings
	and Steady CARR Growth
						$88
				$72	$75	$676
		$61	$65
	$58
$52
			$363	$364
	$226	$223			$236
$151
Q1'22	Q2'22	Q3'22	Q4'22	Q1'23	Q2'23	Q3'23
		Bookings	CARR
					© 2023 Stem, Inc.	7

Operational Excellence

Successful growth in revenue and profitability across the business

4-5x estimated revenue growth over past two years driven by strong execution and significant industry tailwinds

~3x growth in bookings since 2021,

evidencing continued momentum in

2023+

Gross margin expansion driven by successful growth in mix of higher-margin Services business

Improved operating leverage: declining cash OPEX as % of revenue

$ in millions unless otherwise noted.

Revenue$513 - $613

110% CAGR

$127

2021 2022 2023E

Gross Margin %

		GAAP		15% - 20%
		Non-GAAP	13%
9%	9%
1%		NA
2021	2022	2023E

Bookings

$1,400 - $1,600

90% CAGR	$1,057

$417

2021 2022 2023E

Cash OPEX as % of

Revenue

44%

29%

<25%

2021 2022 2023E

See Appendix A for reconciliation of non-GAAP financial measures to most directly comparable GAAP measures.

© 2023 Stem, Inc.

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Creating Value with Software, Hardware & Services

Growing recurring software cash flows driven by edge solution deliveries

Software

Recurring SaaS revenue

Secured by 5-20 year contracts

Ratable revenue recognition

Up/cross-sell opportunities

Revenue calculation:

Operating AUM x

Software Subscription ASP

~80% GAAP Gross Margin

Hardware

Turnkey BESS

Modular ESS

Sourced from Tier 1	Proprietary smart
OEMs	controller
Leverage subject matter	Enables hardware
expertise	flexibility; capital-light
Revenue calculation:	Revenue calculation:
Total Deliveries x	Total units x
Project Hardware ASP	Device ASP
~5%-15% GAAP Gross	~10%-40% GAAP Gross
Margin	Margin

Services

Project configuration & deployment

Ongoing reporting and other

software-related services

Post-COD Asset Management

Revenue calculation:

Up-front fee +

ongoing subscription

~30%-50% GAAP Gross Margin

Note: ASP = Average Selling Price; BESS = Battery Energy Storage System; COD = Commercial Operations Date; ESS = Energy Storage System; OEM = Original Equipment Manufacturer.

© 2023 Stem, Inc.

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Stem + SB Energy Global

Software & services opportunity across 10GWh+ project pipeline

SB Energy (SBE)

• SoftBank Group's utility scale solar, energy storage and technology platform

Technology and Commercial Alliance

• Offer Stem modular ESS software and services across multi-year 10GWh SBE project portfolio in North America
• Integrate Athena AI into SBE Digital Platform to extend capabilities for 24/7 Renewables offering

Programmatic engagement to drive Services Revenue

• Template to offer Stem's software and services across the project lifecycle
• Targeting additional leading asset owners, developers and energy trading platforms with partnership model

SBE Pipeline

5GW solar | 10GWh+ storage

© 2023 Stem, Inc.

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