STEM, INC.

Previous wording

Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results or outcomes to differ materially from those expressed or implied by such forward-looking statements, including but not limited to our inability to execute on, and achieve the expected benefits from, our operational and strategic initiatives, including from our cost reduction, workforce reduction and restructuring efforts; our inability to successfully execute on our new software and services-centric strategy; the effects of the OBBB on our business and that of our customers; 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, high interest rates, changes in monetary policy, changes in trade policies, including tariffs or other trade restrictions or the threat of such actions, and instability in financial institutions; the direct and indirect effects of widespread health emergencies on our workforce, operations, financial results and cash flows; geopolitical instability, such as the armed conflicts between Russia and Ukraine and in the Gaza Strip and nearby areas; the results of operations and financial condition of our customers; pricing pressures; severe 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 those concerning data protection, consumer privacy, sustainability, and evolving labor standards; our inability to maintain compliance with New York Stock Exchange listing standards; risks relating to the development and performance of our 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 Part II. Item 1A. “Risk Factors” in this Report, in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and in our other filings with 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, our actual results or outcomes, or the timing of these results or outcomes, may vary materially from those reflected in our forward-looking statements. Forward-looking statements and other statements in this Report regarding our environmental, social, and other sustainability plans and goals are not an indication that these statements are necessarily material to the Comp…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results or outcomes to differ materially from those expressed or implied by such forward-looking statements, including but not limited to our inability to execute on, and achieve the expected benefits from, our operational and strategic initiatives, including from our cost reduction, workforce reduction and restructuring efforts; our inability to successfully execute on our new software and services-centric strategy; the effects of the OBBB on our business and that of our customers; 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, high interest rates, changes in monetary policy, changes in trade policies, including tariffs or other trade restrictions or the threat of such actions, government shutdowns and instability in financial institutions; the direct and indirect effects of widespread health emergencies on our workforce, operations, financial results and cash flows; geopolitical instability, such as the armed conflicts between Russia and Ukraine and in the Gaza Strip and nearby areas; the results of operations and financial condition of our customers; pricing pressures; severe 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 those concerning data protection, consumer privacy, sustainability, and evolving labor standards; risks relating to the development and performance of our 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 Part II. Item 1A. “Risk Factors” in this Report, in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and in our other filings with 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, our actual results or outcomes, or the timing of these results or outcomes, may vary materially from those reflected in our forward-looking statements. Forward-looking statements and other statements in this Report regarding our environmental, social, and other sustainability plans and goals are not an indication that these statements are necessarily material to the Company, investors or other stakeholders or required to be disclosed…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Since our inception in 2009, we have engaged in developing and marketing AI-enabled software and services, raising capital, recruiting personnel, and growing our annual recurring revenue. As the energy landscape has changed in recent years, we have increasingly focused on larger, utility-scale projects, supporting asset owners, developers, utilities, operators, and traders. Over the last 15 years, we have grown into one of the most experienced clean energy software providers in the world, achieving milestones such as deploying software with multiple Fortune 500 companies, operating the largest virtual power plant in California, and becoming the de facto standard for commercial and industrial solar asset management software.

Current wording

Since our inception in 2009, we have engaged in developing and marketing AI-enabled software and services, raising capital, recruiting personnel, and growing our annual recurring revenue. Over the last 15 years, we have an industry leader in clean energy software and solutions.

Previous wording

We have incurred net operating losses and negative cash flows from operations each year since our inception. We have financed our operations primarily through cash flows from customers, proceeds from the Merger, and the issuance of convertible senior notes and convertible preferred stock.

Current wording

Each year since our inception, we have incurred net operating losses and negative cash flows from operations. We have financed our operations primarily through cash flows from customers and the issuance of convertible senior notes.

Previous wording

Our total revenue increased from $59.5 million for the six months ended June 30, 2024 to $70.9 million for the six months ended June 30, 2025. For the six months ended June 30, 2025 and 2024, werecognized net income of $177.5 million and incurred a net loss of $654.6 million, respectively. As of June 30, 2025, we had an accumulated deficit of $1,449.0 million.

Current wording

Our total revenue increased from $88.8 million for the nine months ended September 30, 2024 to $109.1 million for the nine months ended September 30, 2025. For the nine months ended September 30, 2025 and 2024, werecognized net income of $153.7 million and incurred a net loss of $802.9 million, respectively. As of September 30, 2025, we had an accumulated deficit of $1,472.8 million.

Previous wording

On April 9, 2025, we announced a reduction of our global workforce of approximately 27%, as part of our broader efforts to prioritize investments in software, reduce operating costs, increase efficiency, drive profitable growth and increase stockholder value. For the six months ended June 30, 2025, we incurred $5.9 million for restructuring costs related to thereduction of our global workforce. We expect to continue to exercise discipline and moderate expenses associated with sales and marketing, research and development, regulatory and related functions. In addition, we expect to continue to manage and reduce our general and administrative expenses associated with scaling our business operations, including legal, audit, additional insurance expenses, investor relations activities, and other administrative and professional services.

Current wording

On April 9, 2025, we announced an approximately 27% reduction of our global workforce, as part of our broader efforts to prioritize investments in software, reduce operating costs, increase efficiency, drive profitable growth and increase stockholder value. For the nine months ended September 30, 2025, we incurred $6.0 million in restructuring costs related to the reduction of our global workforce. We expect to continue to exercise discipline and moderate expenses associated with sales and marketing, research and development, regulatory and related functions. In addition, we expect to continue to manage and reduce our general and administrative expenses associated with scaling our business operations, including legal, audit, additional insurance expenses, investor relations activities and other administrative and professional services.

Previous wording

The execution of our new business strategy has required, and is expected to continue to require, investment in our software, our employees and infrastructure. As of June 30, 2025, we had cash and cash equivalents of$40.8 million, while our operating expenses for the three months ended June 30, 2025 were$26.1 million. If our cash flow from operations does not improve as expected, or if we are unable to secure additional sources of capital if or when the need arises, we may be constrained in our ability to make the investments required to continue execution of our new strategy.

Current wording

The execution of our new business strategy has required, and is expected to continue to require, investment in our software, our employees and infrastructure. As of September 30, 2025, we had cash and cash equivalents of$43.1 million, while our operating expenses for the three months ended September 30, 2025 were$26.4 million. If our cash flow from operations does not improve as expected, or if we are unable to secure additional sources of capital if or when the need arises, we may be constrained in our ability to make the investments required to continue execution of our new strategy.

Previous wording

In July 2025, the OBBB was enacted, which introduced material changes to clean energy tax credit programs that are significant to our business and may affect our financial condition, results of operations and future prospects. Included in this legislation are provisions that allow for the immediate expensing of domestic Unites States research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S. taxation of profits derived from foreign operations. As a result of the enactment of the legislation, we do not expect any material changes to tax expense or cash tax for Q3 2025 when the law was enacted, mainly as a result of the valuation allowance we have on our deferred tax assets

Current wording

In July 2025, the OBBB was enacted, which introduced material changes to clean energy tax credit programs that are significant to our business and may affect our financial condition, results of operations and future prospects. Included in this legislation are provisions that allow for the immediate expensing of domestic Unites States research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S. taxation of profits derived from foreign operations. The OBBB did not result in any material changes to tax expense or cash tax for Q3 2025, primarily as a result of the valuation allowance we have on our deferred tax assets

Previous wording

The OBBB makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws to be recognized in the period in which the legislation is enacted, which is the date the legislation is signed into law. We are evaluating the impact of the OBBB on our financial statements, but do not expect that it will have a material impact.

Current wording

The OBBB makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws to be recognized in the period in which the legislation is enacted, which is the date the legislation is signed into law. The OBBB did not have a material impact on our financial statements for the third quarter of 2025, but we continue to evaluate the potential future impact of the OBBB on our financial statements.

Previous wording

Prior to July 2023, we agreed in certain customer contracts, to PCG that the value of purchased hardware will not decline for a certain period of time, as more fully described above under Note 3 —Revenue, of the accompanying Notes to the unaudited condensed consolidated financial statements in this Report. We accounted for such contractual terms and guarantees as variable consideration at each measurement date. We updated our estimates of variable consideration each quarter with respect to outstanding guarantees, including changes in estimates related to such guarantees, for facts or circumstances that had changed from the time of the initial estimate. As a result, the Company recorded a net revenue reduction of $33.1 million in hardware revenue during the six months ended June 30, 2024. The overall reduction in revenue was related to deliveries that occurred prior to 2024.

Current wording

Prior to July 2023, we agreed in certain customer contracts, to PCG that the value of purchased hardware will not decline for a certain period of time, as more fully described above under Note 3 —Revenue, of the accompanying Notes to the unaudited condensed consolidated financial statements in this Report. We accounted for such contractual terms and guarantees as variable consideration at each measurement date. We updated our estimates of variable consideration each quarter with respect to outstanding guarantees, including changes in estimates related to such guarantees, for facts or circumstances that had changed from the time of the initial estimate. As a result, the Company recorded net revenue reductions of $5.6 million and $38.7 million in hardware revenue during thethree and nine months ended September 30, 2024, respectively. The overall reduction in revenue was related to deliveries that occurred prior to 2024.

Previous wording

Because we have not included these parent company guarantees in our contracts since July 2023, and because we do not intend to provide guarantees in customer contracts going forward, we believe that excluding the effect of the $33.1 million net reduction in revenue from adjusted EBITDA and non-GAAP gross profit enhances the comparability to these metrics in prior periods.

Current wording

Because we have not included these parent company guarantees in our contracts since July 2023, and because we do not intend to provide guarantees in customer contracts going forward, we believe that excluding the effect of the$5.6 million and $38.7 million net reduction in revenue during thethree and nine months ended September 30, 2024, respectively, from adjusted EBITDA and non-GAAP gross profit enhances the comparability to these metrics in prior periods.

Previous wording

For those contracts where the customers invoked PCG protection pursuant to the applicable contract, we worked actively to remarket the remaining systems subject to PCG with a wide variety of potential customers, as more fully described above under Note 3 —Revenue, in the accompanying notes to the unaudited condensed consolidated financial statements in this Report. Given the uncertainty of collection from the original customers of due and unpaid amounts in those cases where we believe we have enforceable rights of recovery, we believed the likelihood for collection of the accounts receivable outstanding relating to hardware subject to these PCG’s was no longer probable. Accordingly, we wrote-off the remaining receivables of $104.1 million during the fiscal year ended December 31, 2024. As of June 30, 2025, the Company has entered into an arrangement to recover $3.5 million of the receivables previously written off. We are pursuing all potential remedies with respect to its enforceable rights under applicable contracts.

Current wording

For those contracts where the customers invoked PCG protection pursuant to the applicable contract, we worked actively to remarket the remaining systems subject to PCG with a wide variety of potential customers, as more fully described above under Note 3 —Revenue, in the accompanying notes to the unaudited condensed consolidated financial statements in this Report. Given the uncertainty of collection from the original customers of due and unpaid amounts in those cases where we believe we have enforceable rights of recovery, we believed the likelihood for collection of the accounts receivable outstanding relating to hardware subject to these PCG’s was no longer probable. Accordingly, we wrote-off the remaining receivables of $104.1 million during the fiscal year ended December 31, 2024. As of June 30, 2025, the Company has entered into an arrangement to recover $3.5 million of the receivables previously written off. As of September 30, 2025, the Company has recovered $2.7 million. We are pursuing all potential remedies with respect to its enforceable rights under applicable contracts.

Previous wording

We, through an indirect wholly-owned development subsidiary, entered into strategic joint ventures with qualified third parties to develop select energy storage generation projects (“DevCo Projects”), as more fully described above under Note 2— Summary of Significant Accounting Policies, of the Notes to the unaudited condensed consolidated financial statements in this report. These projects sometimes required significant upfront investment by us and involved a high degree of risk. If a DevCo Project fails to reach completion or is significantly delayed, we could lose all or a portion of our development capital investment. See“We Face Risks Related to our DevCo Business Model” in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for additional information about certain risks related to these DevCo Projects. We are not making further investments in these DevCo Projects, but have exposure on existing investments.

Current wording

We, through an indirect wholly-owned development subsidiary, entered into strategic joint ventures with qualified third parties to develop select energy storage generation projects (“DevCo Projects”), as more fully described above under Note 2— Summary of Significant Accounting Policies, of the Notes to the unaudited condensed consolidated financial statements in this report. These projects sometimes required significant upfront investment by us and involved a high degree of risk. If a DevCo Project fails to reach completion or is significantly delayed, we could lose all or a portion of our development capital investment. See“We Face Risks Related to our DevCo Business Model” in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for additional information about certain risks related to these DevCo Projects. We are not making further investments in these DevCo Projects.

Previous wording

Deployment of intermittent resources has accelerated over the last decade, and today, wind and solar have become a low cost energy source. We expect the cost of generating renewable energy to continue to decline and deployments of energy storage systems to increase. As renewable energy sources of energy production are expected to represent a larger proportion of energy generation, grid instability rises due to their intermittency, which can be addressed by energy storage solutions. The IRA is expected to further increase the deployment of renewable energy assets, provided that the law or its implementation is not modified or restricted in a way that counters these effects. We are continuing to evaluate the IRA and its requirements, including Treasury Department guidance, and its application to our business and our customers.

Current wording

Deployment of intermittent resources has accelerated over the last decade, and today, wind and solar have become a low cost energy source. We expect the cost of generating renewable energy to continue to decline and deployments of energy storage systems to increase. As renewable energy sources of energy production are expected to represent a larger proportion of energy generation, grid instability rises due to their intermittency, which can be addressed by energy storage solutions.

Previous wording

Our key competitors include energy monitoring and optimization software providers, energy storage and edge device OEMs, hardware integration providers, renewable project developers, EPC firms, and consulting firms. In storage, our competitors are typically focused on the development and marketing of single-purpose built solutions with captive hardware offerings, while our AI-powered software is hardware agnostic, and benefits from operational data across a multitude of hardware types, geographies, utilities, and grid operator service areas. In solar, our competitors provide monolithic software and edge devices, whereas PowerTrack™ and our edge devices provide customers with a flexible solution that meets their individual project needs.

Current wording

Our key competitors include energy monitoring and optimization software providers, energy storage and edge device OEMs and hardware integration providers. Our PowerTrack software is hardware agnostic and benefits from operational data across a multitude of hardware types, geographies, utilities and grid operator service areas. Our edge devices provide customers with a flexible solution that meets their individual project needs.

Previous wording

Although we are not regulated as a utility, the market for our products and services is heavily influenced by federal, state, and local government statutes and regulations concerning electricity. These statutes and regulations, like the IRA, affect electricity pricing, net metering, incentives, taxation, competition with utilities, and the interconnection of customer-owned electricity generation. In the United States and internationally, governments regularly modify these statutes and regulations and acting through state utility or public service commissions, regularly change and adopt different rates for commercial customers. These changes can positively or negatively affect our ability to deliver cost savings to customers.

Current wording

Although we are not regulated as a utility, the market for our products and services is heavily influenced by federal, state, and local government statutes and regulations concerning electricity. These statutes and regulations affect electricity pricing, net metering, incentives, taxation, competition with utilities, and the interconnection of customer-owned electricity generation. In the United States and internationally, governments regularly modify these statutes and regulations and acting through state utility or public service commissions, regularly change and adopt different rates for commercial customers. These changes can positively or negatively affect our ability to deliver cost savings to customers.

Previous wording

In the three months ended March 31, 2024, we incurred costs of $1.0 million above initially agreed prices on the acquisition of certain hardware systems from one of our suppliers, which resulted from production delays by such supplier. Because we had not previously incurred costs above initially agreed prices with a hardware supplier, we excluded this item from adjusted EBITDA and non-GAAP gross profit to better facilitate comparisons of our underlying operating performance across periods.

Current wording

In the first quarter of 2024, we incurred costs of $1.0 million above initially agreed prices on the acquisition of certain hardware systems from one of our suppliers, which resulted from production delays by such supplier. Because we had not previously incurred costs above initially agreed prices with a hardware supplier, we excluded this item from adjusted EBITDA and non-GAAP gross profit to better facilitate comparisons of our underlying operating performance across periods.

Previous wording

We calculate adjusted EBITDA as net income (loss) attributable to us before depreciation and amortization, including amortization of internally developed software, interest expense, further adjusted to exclude stock-based compensation and other income and expense items, including net gain on extinguishment of debt, reduction in revenue, excess supplier costs and resulting liquidated damages, and income tax provision or benefit.

Current wording

We calculate adjusted EBITDA as net (loss) income attributable to us before depreciation and amortization, including amortization of internally developed software, interest expense, further adjusted to exclude stock-based compensation and other income and expense items, including net gain on extinguishment of debt, reduction in revenue, excess supplier costs and resulting liquidated damages, and income tax provision or benefit.

Previous wording

The following table provides a reconciliation of adjusted EBITDA to net income (loss) (in thousands):

Current wording

The following table provides a reconciliation of adjusted EBITDA to net (loss) income (in thousands):

Previous wording

(1) Depreciation and amortization includes depreciation and amortization expense, impairment loss of energy storage systems, impairment loss of project assets, and impairment loss of right-of-use assets.

Current wording

(1) Depreciation and amortization includes depreciation and amortization expense, impairment loss of energy storage systems, and impairment loss of project assets.

Previous wording

(5) Adjusted EBITDA for the three and six months ended June 30, 2025 included other expenses of $6.0 million and $6.0 million, respectively. For the three months ended June 30, 2025, other expenses included $5.9 million for expenses related to restructuring costs to pursue greater efficiency and to realign our business. For the six months ended June 30, 2025, other expenses included of $0.1 million of other non-recurring expenses, and $5.9 million for expenses related to restructuring costs to pursue greater efficiency and to realign our business and strategic priorities. Restructuring expenses included employee severance and other exit costs.

Current wording

(6) Adjusted EBITDA for the three and nine months ended September 30, 2025 included other expenses of $1.3 million and $7.3 million, respectively. For the three months ended September 30, 2025, other expenses includes $0.9 million for one-time costs associated with a loss on disposal andabandonment of property, plant and equipment, $0.1 million for expenses related to restructuring costs to pursue greater efficiency and to realign our business and strategic priorities and $0.3 million of other non-recurring expenses. For the nine months ended September 30, 2025, other expenses included $0.4 million of other non-recurring expenses, $0.9 million for one-time costs associated with a loss on disposal andabandonment of property, plant and equipment, and $6.0 million for expenses related to restructuring costs to pursue greater efficiency and to realign our business and strategic priorities. Restructuring expenses included employee severance and other exit costs.

Previous wording

Adjusted EBITDA for the six months ended June 30, 2024 included other expenses of $1.7 million, comprised of $1.1 million for expenses related to restructuring costs to pursue greater efficiency and to realign our business and strategic priorities, and $0.6 million of other non-recurring expenses.

Current wording

Adjusted EBITDA for the three and nine months ended September 30, 2024 included other expenses of $2.5 million and $4.1 million, respectively. For the three months ended September 30, 2024, other expenses includes $1.2 million for advisory services relating to strategy and $1.3 million in connection with separation agreements for certain of the Company’s former executive officers. For the nine months ended September 30, 2024, other expenses includes $1.2 million for advisory services relating to strategy, $1.3 million in connection with separation agreements for certain of the Company’s former executive officers, $1.1 million for expenses related to restructuring costs to pursue greater efficiency and to realign our business and strategic priorities and $0.5 million of other non-recurring expenses.

Previous wording

Cost of revenue increased by $1.0 million, or 4%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase was primarily driven by an increase in cost of services and other revenue of $3.3 million, primarily due to higher cloud infrastructure costs to support our growing solar software platform and increased personnel costs associated with expanded project deliveries. The decrease was partially offset by a decrease in cost of hardware revenue of $2.4 million primarily reflecting the reduction in battery resale activities.

Current wording

Cost of revenue increased by $1.6 million, or 7%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The increase was primarily driven by an increase in cost of hardware revenue of $5.3 million due to the increase in edge hardware sales. The increase was partially offset bya decrease in cost of services and other revenue of $3.7 million, primarilydue to the absence of DevCo Project cost of revenue for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024.

Previous wording

Sales and marketing expense decreased by $3.7 million, or 34%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The decrease was primarily due to a decrease of $3.2 million in personnel related expenses mainly due to a decrease in headcount, and a decrease of $0.5 million in professional services, resulting from reductions in advisory services and office-related expenses as a result of marketing related cancellations.

Current wording

Sales and marketing expense decreased by $1.2 million, or 15%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The decrease was primarily due to a decrease of $1.0 million in personnel related expenses mainly due to a decrease in headcount, and a decrease of $0.2 million in professional services, primarily resulting from reductions in advisory services as a result of marketing related cancellations.

Previous wording

Research and development expense decreased by $5.3 million, or 35%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The decrease was primarily due to a decrease of $2.4 million in professional services and office-related expenses, and a decrease of $2.8 million in personnel related expenses as a result of lower headcount.

Current wording

Research and development expense decreased by $4.2 million, or 38%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The decrease was primarily due to a decrease of $3.3 million in personnel related expenses as a result of lower headcount and a decrease of $0.9 million in professional services and office-related expenses.

Previous wording

General and administrative expense decreased by $6.9 million, or 44%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The decrease was primarily driven by a decrease of $6.1 million in office-related and other expenses, and a decrease of $2.3 million in personnel costs driven by a decrease in headcount, partially offset by an increase of $1.5 million in professional services, resulting from increases in advisory services.

Current wording

General and administrative expense decreased by $14.7 million, or 54%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The decrease was primarily driven by a prior year one-time contract cancellation payment of $10.0 million, a decrease of $4.3 million in personnel costs driven by a decrease in headcount and a decrease of $1.8 million in professional services, partially offset by an increase of $1.5 million in office-related and other expenses.

Previous wording

Interest expense decreased by $0.6 million, or 12%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The decrease was driven by a decrease of $0.6 million in interest on financing obligations.

Current wording

Interest expense increased by $2.8 million, or 61%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The increase was driven by an increase of $3.3 million in interest on notes due to the debt exchange executed in the second quarter of 2025, partially offset by a decrease of $0.5 million in interest on financing obligations.

Previous wording

Other income, net decreased by $0.4 million, or 53% for the three months ended June 30, 2025, as compared to three months ended June 30, 2024 primarily due to a decrease of $0.4 million in interest income from investments.

Current wording

Other income, net decreased by $0.4 million, or 52% for the three months ended September 30, 2025, as compared to three months ended September 30, 2024, primarily due to a decrease of $0.4 million in interest income from investments.

Previous wording

During thethree months ended June 30, 2025, we recorded a provision for income taxes of $0.5 million as a result of foreign and state income tax expense primarily from the gain on extinguishment of 2028 Convertible Notes and 2030 Convertible Notes during the second quarter of 2025. During the three months ended June 30, 2024, we recorded aprovision for income taxes of$0.1 million primarily as a result of foreign and state income tax expense.

Current wording

During thethree months ended September 30, 2025, we recorded a benefit from income taxes of $0.1 million as a result of foreign and state income tax expense. During the three months ended September 30, 2024, we recorded aprovision for income taxes of$0.1 million primarily as a result of foreign and state income tax expense.

Previous wording

Results of Operations for the Six Months Ended June 30, 2025 and 2024

Current wording

Results of Operations for the Nine Months Ended September 30, 2025 and 2024

Previous wording

Cost of revenue decreased by$26.7 million, or 36%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The decrease was primarily driven by a decrease in cost of hardware revenue of $31.5 million primarily reflecting the reduction in battery resale activities. This decrease was partially offset by anincrease in cost of services and other revenue of $4.7 million primarily due to higher cloud infrastructure costs to support our growing solar software platform and increased personnel costs associated with expanded project deliveries.

Current wording

Cost of revenue decreased by$25.2 million, or 26%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The decrease was primarily driven by a decrease in cost of hardware revenue of $26.2 million primarily reflecting the reduction in battery resale activities. This decrease was partially offset by anincrease in cost of services and other revenue of $1.0 million primarily due to higher cloud infrastructure costs to support our growing PowerTrack software platform and increased personnel costs associated with expanded project deliveries.

Previous wording

Sales and marketing expense decreased by$8.0 million, or 36%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The decrease was driven by a decrease of$6.6 million in personnel related expenses due to a decrease in headcount, and a decrease of$1.4 million in professional services, resulting from reductions in advisory services and office-related expenses as a result of marketing related subscription cancellations.

Current wording

Sales and marketing expense decreased by$9.3 million, or 31%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The decrease was driven by a decrease of$7.5 million in personnel related expenses due to a decrease in headcount, and a decrease of$1.7 million in professional services, resulting from reductions in advisory services, marketing related subscription cancellations and office-related expenses.

Previous wording

Research and development expense decreased by$8.1 million, or 28%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The decrease was primarily due to a decrease of$5.7 million in personnel related expenses as a result of lower headcount, partially offset by a decrease of$2.4 million in professional services and other expenses.

Current wording

Research and development expense decreased by$12.3 million, or 30%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The decrease was primarily due to a decrease of$8.9 million in personnel related expenses as a result of lower headcount, and a decrease of$3.3 million in professional services and other expenses.

Previous wording

General and administrative expense decreased by$11.9 million, or 35%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The decrease was primarily driven by a decrease of $7.2 million in personnel related expenses driven by a decrease in headcount and a decrease of $5.9 million in office-related and other expenses, partially offset by an increase of $1.0 million in professional services, resulting from increases in advisory services.

Current wording

General and administrative expense decreased by$26.6 million, or 43%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The decrease was primarily driven by a decrease of $11.5 million in personnel related expenses driven by a decrease in headcount, a prior year one-time contract cancellation payment of $10.0 million and a decrease of $4.2 million in office-related and other expenses, partially offset by a decrease of $0.9 million in professional services, resulting from increases in advisory services.

Previous wording

During the three months ended June 30, 2024, we recorded an impairment of goodwill of $547.2 million as the carrying amount of the reporting unit exceeded its fair value.

Current wording

During the nine months ended September 30, 2024, we recorded an impairment of goodwill of $547.2 million as the carrying amount of the reporting unit exceeded its fair value.

Previous wording

Interest expense, net decreased by$1.0 million, or 10%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The decrease was primarily driven by a decrease of$1.1 million in interest on financing obligations, partially offset by prior period accretion of the discount on short-term investments of$0.1 million.

Current wording

Interest expense, net increased by$1.8 million, or 13%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The increase was primarily driven by an increase of$3.3 million in interest on notes and prior period accretion of the discount on short-term investments of$0.1 million, partially offset by a decrease of$1.6 million in interest on financing obligations.

Previous wording

During the six months ended June 30, 2024, we recorded a $220.0 million gain on extinguishment of debt driven by the $155.4 million issuance of our 2030 Senior Secured Notes, 2030 Private Placement Warrants, and cash proceeds, which extinguished approximately $228.8 million aggregate principal amount of our 2028 Convertible Notes and approximately $121.3 million aggregate principal amount of our 2030 Convertible Notes.

Current wording

During the nine months ended September 30, 2025, we recorded a $220.0 million gain on extinguishment of debt driven by the $155.4 million issuance of our 2030 Senior Secured Notes, 2030 Private Placement Warrants, and cash proceeds, which extinguished approximately $228.8 million aggregate principal amount of our 2028 Convertible Notes and approximately $121.3 million aggregate principal amount of our 2030 Convertible Notes.

Previous wording

During thesix months ended June 30, 2024, we realized gains of $1.5 million relating to the settlement of our derivative liability related to customers contracts.

Current wording

During thenine months ended September 30, 2024, we realized gains of $1.5 million relating to the settlement of our derivative liability related to customers contracts.

Previous wording

Other income, net decreased by$0.5 million, or 36%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024 primarily due to a $0.8 million decrease in interest income from short-term investments, partially offset by a $0.3 million increase due to the prior period reversal of a previously recognized accretion expense on assets.

Current wording

Other income, net decreased by$0.9 million, or 42%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024 primarily due to a $1.1 million decrease in interest income from short-term investments.

Previous wording

During thesix months ended June 30, 2025, we recorded a provision for income taxes of $0.5 million primarily as a result of foreign and state income tax expense. During the six months ended June 30, 2024, we recorded a$0.2 million provision for income taxes primarily as a result of foreign and state income tax expense.

Current wording

During thenine months ended September 30, 2025, we recorded a provision for income taxes of $0.4 million primarily as a result of foreign and state income tax expense. During the nine months ended September 30, 2024, we recorded a$0.3 million provision for income taxes primarily as a result of state income tax expense.

Previous wording

As of June 30, 2025, our principal sources of liquidity were cash and cash equivalents of $40.8 million, which were held for working capital purposes and for investment growth opportunities. As of June 30, 2025, we had net accounts receivable of $42.8 million and our working capital (deficit), which we define as current assets less current liabilities, was a deficit of $12.8 million. We believe that our cash position is sufficient to meet our capital and liquidity requirements for at least the next 12 months.

Current wording

As of September 30, 2025, our principal sources of liquidity were cash and cash equivalents of $43.1 million, which were held for working capital purposes and for investment growth opportunities. As of September 30, 2025, we had net accounts receivable of $35.8 million and our working capital (deficit), which we define as current assets less current liabilities, was a deficit of $19.8 million. We believe that our cash position is sufficient to meet our capital and liquidity requirements for at least the next 12 months.