스템(STEM) 2026년 2분기 실적 발표 콘퍼런스 콜: 사상 최대 마진 및 가이던스 재확인

핵심 요약

• 2026년 2분기 매출은 배터리 하드웨어 재판매 매출이 500만 달러에서 30만 달러로 감소한 것이 주원인이 되어 전년 동기 대비 12% 감소한 3,400만 달러를 기록했습니다.
• 매출 비중이 마진이 높은 소프트웨어, 서비스 및 에지 하드웨어로 이동함에 따라 Non-GAAP 매출총이익률은 전년 동기의 49%에서 사상 최고치인 55%를 기록했습니다.
• 조정 EBITDA는 600만 달러를 기록하며 5분기 연속 흑자를 달성했습니다. 영업활동 현금흐름은 2025년 2분기 마이너스 2,100만 달러에서 플러스 30만 달러로 개선되었습니다.
• 파워트랙(PowerTrack) 소프트웨어 매출은 전년 동기 대비 11% 증가한 1,100만 달러를 기록했으며, 파워트랙 ARR은 13% 증가한 4,280만 달러로 집계되었습니다.
• 수주액은 전분기 대비 39% 증가한 3,700만 달러를 기록했습니다. 계약 잔고는 18% 증가한 2,700만 달러로 늘어났으며, 파워트랙 EMS 수주는 현재 3개 대륙, 6개국에 걸쳐 있습니다.
• 스템(Stem)은 2026년 연간 가이던스 전체를 재확인했으며, 조정 EBITDA와 Non-GAAP 매출총이익률이 각각의 제시된 범위 상단을 향해 추이하고 있다고 밝혔습니다.

주요 재무 데이터

스템은 해당 분기 동안 주식 모집 프로그램(at-the-market equity program)을 통해 주당 평균 약 9.75달러로 약 600만 달러의 자금을 조달했습니다.

사업 및 운영 실적

파워트랙은 핵심 소프트웨어 성장 동력으로 유지되었습니다. 파워트랙의 ARR은 전분기 대비 3%, 전년 동기 대비 13% 증가한 4,280만 달러를 기록했습니다. 총 ARR은 전분기 대비 2% 증가한 6,240만 달러를 기록한 반면, CARR은 3% 증가한 6,900만 달러를 기록했습니다.

운용 중인 태양광 자산 규모는 전분기 대비 2% 증가한 38.3GW를 기록했습니다. 운용 중인 에너지 저장 자산 규모는 파워트랙 EMS 프로젝트 상업 운전에 따라 6% 증가한 1.8GWh를 기록했습니다.

수주액은 2026년 1분기 대비 39%, 2025년 2분기 대비 약 7% 증가한 3,700만 달러를 기록했습니다. 계약 잔고는 전분기 2,300만 달러에서 2,700만 달러로 증가했습니다.

스템은 칠레의 그란하 솔라(Granja Solar) 프로젝트를 통해 라틴아메리카 지역으로 파워트랙 EMS를 확장했습니다. 이 플랫폼은 기존 135MW 태양광 시설에 추가된 420MWh 배터리 저장 시스템을 제어하게 됩니다. 헝가리에서는 기존 60MW 태양광 부지 2곳에 추가되는 80MWh 배터리 시스템 2개에 파워트랙 EMS가 선정되었습니다.

회사는 파워트랙 EMS가 현재 3개 대륙, 6개국에 걸쳐 수주를 확보했다고 밝혔습니다. 독일의 에브리레이(Everyray) 프로젝트가 상업 운전 중입니다. 스템은 또한 라이쿤(raicoon)의 자동 결함 감지 및 이벤트 관리 기술을 파워트랙에 지속적으로 통합하고 있으며, 3분기 실적 발표 때 더 실질적인 업데이트를 제공할 수 있을 것으로 예상하고 있습니다.

스템의 AI 서비스 상품인 에이오나(AIONA)가 6월에 출시되었습니다. 경영진은 초기에는 기존 고객에 집중하여 고객 논의 및 워크숍을 진행 중이라고 밝혔습니다. 데이터 센터 개발자 및 운영자를 위한 잠재적 상품 개발도 진행 중입니다.

경영진 가이던스

스템은 2026년 연간 가이던스 전체를 재확인했습니다.

경영진은 하반기 배터리 하드웨어 재판매 매출 증가로 인해 보고되는 매출총이익률 및 EBITDA 마진율이 감소할 것으로 예상하고 있습니다. 파워트랙의 예상 마진율이 약 75%, 에지 하드웨어가 45%~47%인 데 비해 배터리 하드웨어의 예상 마진율은 약 10%~11%입니다.

리스크 및 관전 포인트

• 연간 매출은 배터리 하드웨어 재판매의 시점 및 물량과 소프트웨어, 서비스, 에지 하드웨어의 배치 속도에 민감하게 작용합니다.
• 하반기에 마진이 낮은 배터리 하드웨어 비중이 높아지면 매출총이익 금액 자체는 늘어나더라도 매출총이익률 및 조정 EBITDA 마진율은 감소할 수 있습니다.
• 애널리스트들은 수입 인버터 및 태양광 모듈 관세에 영향을 미치는 미국 정책 변화에 대해 질문을 제기했습니다. 경영진은 스템의 상업·산업용 또는 유틸리티급 프로젝트에 영향을 미치지 않았다고 밝혔습니다.
• 해외 및 유틸리티급 확장 정책은 여전히 경영진의 2027년 성장 계획에서 핵심적인 위치를 차지하고 있으므로, 프로젝트 실행과 고객 도입이 중요한 운영 요인이 됩니다.

애널리스트 Q&A 하이라이트

경영진은 에지 하드웨어의 전년 동기 대비 22% 성장이 프로젝트 구성에서 더 높은 비율의 에지 하드웨어를 필요로 하는 유틸리티급 프로젝트로의 확장에 기인한다고 설명했습니다.

수익성과 관련해 브라이언 머스펠트(Brian Musfeldt) CFO는 하반기 EBITDA의 암묵적인 둔화세가 운영상의 약점보다는 매출 구성을 반영하는 것이라고 설명했습니다. 배터리 하드웨어 재판매 활동 증가가 마진율을 낮출 것으로 예상됩니다.

하이브리드 프로젝트의 경우, 경영진은 기존 파워트랙 PPC 고객이 에너지 저장장치를 설치할 때 별도의 파워트랙 EMS 소프트웨어 계약을 추가할 수 있다고 설명했습니다. 따라서 이러한 배치는 서비스 및 에지 하드웨어 매출뿐만 아니라 추가적인 ARR 창출원이 될 수 있습니다.

지리적 확장과 관련하여 아룬 나라야난(Arun Narayanan) CEO는 칠레와 콜롬비아를 스템의 라틴아메리카 관심 시장으로 꼽았습니다. 회사는 또한 베를린 사무소를 활용해 유럽 시장 확장을 지원할 계획입니다.

실적발표 콘퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Greetings and welcome to the Stem, Inc. Second Quarter 2026 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Erin Reed, Head of Investor Relations.

Erin Reed

Thank you, operator. Welcome to Stem's Second Quarter 2026 Earnings Call. This is Erin Reed, Head of Investor Relations. 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. For more information, we refer you to our latest 10-Q, 10-K, and other SEC filings and supplemental presentation, which can be found on the company's Investor Relations 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 second quarter 2026 earnings release and supplemental materials, which are available on our Investor Relations website.

Arun Narayanan, CEO, and Brian Musfeldt, CFO, will start the call today with prepared remarks, and then we will conduct a question-and-answer session.

And now, I'll turn the call over to Arun.

Arun Narayanan

Thank you, Erin. Good afternoon, everyone, and thank you all for joining us today. On our Q1 call, I told you that we would demonstrate what our software-centric transformation was designed to deliver. Halfway through 2026, I am pleased to see evidence of this transformation in the results. The second quarter marked our fifth consecutive quarter of positive adjusted EBITDA. Our non-GAAP gross margin remains at record levels, and we saw meaningful commercial momentum across the PowerTrack platform. We made a new market entry in Latin America, received industry recognition for PowerTrack EMS, and continued the expansion of our product capabilities. Given this progress, we are reaffirming our full year 2026 guidance today, which Brian will walk through in detail later in the call.

Let me turn now 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 continue. We achieved record non-GAAP gross margins in the second quarter. As in Q1, this was driven by a revenue mix weighted meaningfully towards software, services, and edge hardware, with battery hardware resales remaining relatively low in the quarter as expected. Because we have had minimal revenue from battery hardware resales in the first half of the year, we are trending above the high end of our guidance range for non-GAAP gross margin. We expect to track within the high end of our guidance range of 40% to 50%. We see more battery hardware resale revenue during the second half of the year.

On the operating expense side, we continue to manage costs with discipline and drive efficiency through the use of AI. Cash operating expenses remain sequentially flat and were down versus the second quarter of 2025. We are proving that these OpEx levels are sustainable. The improved gross margins and low operating expenses drove adjusted EBITDA of $6 million in the second quarter, up 63% from the second quarter of 2025, and more than double that of the first quarter of 2026. For the first half of 2026, adjusted EBITDA was $8 million compared to negative $1 million for the first half of 2025. This is clear evidence of the inflection point we've been building towards. Operating cash flow reached breakeven this quarter at $0.3 million, a $9 million sequential improvement and a $22 million improvement versus the second quarter of 2025. Because we expect billings and revenue to continue to build throughout the second half of the year, we expect this metric to continue improving.

The second priority is strengthening the core PowerTrack platform. In the quarter, we added approximately 0.8 gigawatt of solar assets under management, which in turn drove 3% sequential growth in PowerTrack ARR. During the second quarter, we also shipped a handful of product improvements, including an updated UX with dark mode, in-app feedback tools, and keyboard shortcuts. These are changes that our operators and asset managers value in their daily workflows and that set the stage for further product enhancements. Customer adoption of PowerTrack Sage, our AI assistant within PowerTrack, remains strong, reflected in consistent day-to-day usage across a range of organizations.

As we discussed last quarter, a key part of our platform investment strategy is a disciplined build-or-buy approach. On the buy side, we continue to advance the integration of raicoon, the automated fault detection and event management technology we acquired in April. That integration into PowerTrack is progressing well, and our development and sales teams are now working through how best to package and release this new capability to customers. We expect to share a more substantive update during our third quarter call.

The third and final strategic priority is building the foundation for accelerated growth in 2027 and beyond. That means expanding into utility-scale deployments, advancing our international footprint, and unlocking new market opportunities. Starting with utility-scale expansion, bookings grew nearly 15% (sic) [ 40% ] sequentially in the quarter. We brought PowerTrack EMS to Latin America through the Granja Solar Project in Chile, where it will serve as the primary control system for a 420 megawatt hour battery storage system being added to an existing 135-megawatt solar facility. This is exactly the kind of hybrid utility-scale project that validates the commercial prospects of our EMS offering. We see real potential to extend this delivery model across additional projects in Latin America.

We added another new booking in Hungary like Solarmarkt Group, along with EPC partner, Pannonwatt, selected PowerTrack EMS as the integrated energy management, power plant control, and SCADA platform for two 80 megawatt hour battery systems being added to two existing 60 megawatt solar sites. There is a PowerTrack PPC already in place for these existing solar assets. So this is another proof point for our growth ambitions around hybridization, where we deepen our controls and software offerings over time as plants evolve. Commercial operation of the fully hybridized assets is expected in fall 2026. Altogether, PowerTrack EMS now has bookings across six countries and three continents. The first initial bookings have begun to come live and our Everyray project in Germany announced in March is now live.

Alongside the commercial progress, we also earned external recognition for the PowerTrack EMS product. I am proud to share that PowerTrack EMS won The smarter E AWARD 2026 in the Smart Integrated Energy category, recognized by Solar Promotion International and Freiburg Management and Marketing International at The smarter E Europe Conference. The Smart Integrated Energy category specifically highlights technologies innovating and advancing the integration, management, and performance of clean energy systems. This is a meaningful external validation of the innovative platform that we have built.

A co-marketing agreement and partnership with Nuvation Energy also continues to build optionality around projects that require domestic control. We are working closely with Nuvation's technical and sales team, and in late July, we co-presented at the IEEE Power & Energy Society General Meeting in Montreal. Finally, on new market opportunities. We officially launched AIONA, our AI services offering, in June. We are currently in conversations with potential customers and running workshops to help them identify where AI can have the greatest impact on their day-to-day operations, focusing first on our existing customer base. We will share a substantive update on AIONA's customer traction as these engagements progress.

We are also continuing to explore how our strength in energy optimization software and deep energy market expertise can support data center developers and operators. Development on this offering is ongoing. Two quarters into 2026, we are executing with discipline and delivering the results we committed to at the start of the year, and I'm confident in our team's ability to keep building on this momentum.

With that, I will turn the call over to Brian.

Brian Musfeldt

Thanks, Arun, and good afternoon, everyone. Let's walk through the results. Total revenue for the second quarter was $34 million, down 12% year-over-year from $38 million. Nearly all of that decline came from lower battery hardware resale revenue, which was $300,000 in the second quarter versus $5 million in the second quarter of 2025. Excluding battery hardware resales, revenue from software, services, and edge hardware was $33 million, up 1% versus the second quarter of 2025. Within that, the revenue mix shifted meaningfully. PowerTrack software revenue grew 11% year-over-year to $11 million, reflecting continued strength in our core commercial and industrial solar monitoring business.

Edge hardware grew 22% year-over-year to $15 million, and project and professional services revenue was $2 million, down 6% year-over-year. Managed services revenue was $6 million, down 34% year-over-year, against an unusually strong second quarter in 2025, where we brought roughly 100 megawatt hours online in a single quarter.

GAAP gross margin was 41% in the second quarter, compared to 33% in the second quarter of 2025. Non-GAAP gross margin reached a record 55%, up from 49% in the second quarter of 2025, driven by the continued shift of our product mix toward higher-margin software, services, and edge hardware, and less from lower margin battery hardware resale. Given the revenue mix in the first half, non-GAAP gross margin has been tracking above our 40% to 50% guidance range. Because we expect more battery hardware resale revenue during the second half of the year, we expect the full year margins to move back toward the upper end of that range. GAAP operating expenses were down both year-over-year and sequentially. Cash operating expenses were sequentially flat and down 11% year-over-year as we continue to manage costs with discipline, even as we invest deliberately in target growth areas.

The second quarter of 2026 marked our fifth consecutive quarter of positive adjusted EBITDA at $6 million, representing an 18% adjusted EBITDA margin. Adjusted EBITDA was up 63% from $4 million in the second quarter of 2025. Operating cash flow was positive $300,000 in the second quarter compared to negative $21 million in the second quarter of 2025 and negative $8 million in the first quarter of 2026, representing a sequential improvement of nearly $9 million from the first quarter of 2026. The improvement reflects the benefit of increased high margin billings and revenue flowing through the business. We expect continued improvement through the balance of the year.

We ended the second quarter with $38.4 million in cash and cash equivalents, up from $36.6 million at the end of the first quarter. We remain very focused on our capital structure. During the quarter, we opportunistically used our at-the-market, or ATM, equity sales program, raising approximately $6 million at an average stock price of roughly $9.75 for general corporate purposes.

Now turning to our operating metrics. Bookings were $37 million in the second quarter, up 39% from $27 million in the first quarter of 2026, and up approximately 7% from $34 million in the second quarter of 2025. Contracted backlog was $27 million at the end of the second quarter, up 18% from $23 million at the end of the first quarter. CARR was $69 million, up 3% from $67 million at the end of the first quarter. ARR increased 2% to $62.4 million from $61.2 million at the end of the first quarter. Within that, PowerTrack ARR grew 3% sequentially and 13% year-over-year to $42.8 million, and managed services ARR was roughly flat sequentially at $19.6 million. Solar operating AUM grew 2% sequentially to 38.3 gigawatts, and storage operating AUM grew 6% sequentially to 1.8 gigawatt hours, driven by PowerTrack EMS projects coming online.

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. We provided guidance on battery hardware resales of up to $40 million, which we still anticipate to be weighted to the second half of the year, and we expect to trend toward the lower end of that range. We expect non-GAAP gross margin of 40% to 50%, with the range driven by timing and volume of battery hardware resales. Given that we expect to trend toward the lower end of the battery hardware resale revenue range, we expect to trend toward the higher end of our non-GAAP gross margin range. Adjusted EBITDA remains at $10 million to $15 million, and we are tracking toward the high end of the range. We expect operating cash flow of $0 to $10 million and year-end ARR of $65 million to $70 million.

And now I will 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, our operating leverage story continues to build. Five straight quarters of positive adjusted EBITDA, a second consecutive quarter of record non-GAAP margins, and operating cash flow at breakeven, all without pulling back on investment. This is the kind of durable structural improvement we told you we were building. Second, our core platform continues to strengthen. PowerTrack software revenue grew 11% year-over-year, and we took disciplined steps to extend our platform capabilities and make PowerTrack a more complete solution for our customers. Third, we are making tangible progress on the growth initiatives that will carry us into 2027 and beyond.

PowerTrack EMS is now booked across three continents. We entered a new region in Latin America with Copec's Granja Solar Project in Chile, alongside a new hybridization booking with Solarmarkt Group in Hungary. And we earned industry recognition with The smarter E AWARD. Halfway through 2026, I'm very pleased with the progress we are making against our commitments we set out at the beginning of the year. 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] Our first question comes from the line of Jon Windham with UBS.

질의응답

Jonathan Windham

Congratulations on the quarter. Maybe just a couple from me. First, the edge hardware seemed to have a really good quarter, both in terms of revenue, which was up like 22% year-over-year, as well as the gross margin. Just any comments on what's driving that?

Arun Narayanan

Jonathan, this is Arun. Good to hear from you. Yes, look, we had a good quarter, and as we grow into the utility scale space, this kind of shift in the mix is natural. These projects come as a configuration with a greater percentage of edge hardware deployment just because of the nature and the size of these projects. So I think that's consistent with how the revenue mix is shifting and our growth patterns.

Jonathan Windham

Right. That's perfect because it will lead to my next question, which is kind of a bigger picture question. There's obviously been some policy changes announced, whether it be the FCC's ruling on imported inverters or the Section 232 Solar Module Tariff. Just any thoughts you have about potential impact and how you would mitigate any impact on solar projects in the U.S. due to policy changes?

Arun Narayanan

Yes, thanks for that too. Listen, I think we are seeing -- first of all, our projects are spread across, as we said, in multiple countries, different continents. So some of these policy changes are U.S. only. And the particular policy that you're raising, we've not seen any impact from that on our projects, be it within the C&I space or even in the utility-scale space. We continue to navigate this space by staying on top of it and working with our customers and partners to deliver effective solutions for our customers.

Operator

Our next question comes from the line of Justin Clare with ROTH Capital Partners.

Justin Clare

I first wanted to just ask on the guidance. So when we look at the EBITDA generated in the first half, so just over $8 million, and then the annual guidance range of $10 million to $15 million. So it implies a modest step down in EBITDA in the second half versus the first half. So just wondering if you could speak to what might drive a decline, or is that the right way to interpret it? And then, is there potential for you to maybe exceed the high end of the guidance here given what you've delivered so far this year?

Brian Musfeldt

Justin, this is Brian. Thanks for the question. Yes, I think if you look at the numbers, we did state that we think we're trending toward the higher end of that guidance. You're correct that we had a really strong first quarter, or second quarter really, which brings our year-to-date a little over $8 million, so a bit over halfway there. Remember, we had a very low percentage of our revenue coming from battery hardware resale this quarter, or this first half, so that will increase as a percentage of the revenue, which will bring our margins down a little bit more in line. It'll also put a little pressure on the EBITDA margins. So I think the answer there is, we don't see any real weakness in that space. It's just a matter of timing and our battery hardware resale.

Justin Clare

Got you. Okay. And then kind of similar question, just speaking about the gross margin. So it implies a decline in the back half relative to the first half. I'm assuming that, that's primarily mix related, just higher mix of battery resale in the second half, but wondering on the software and services side, any notable changes you anticipate in margins as we move through Q3, Q4?

Brian Musfeldt

Yes, thanks, Justin. No, I think you're right. The reason we're saying it's going to pull back a little bit is if you look at our Slide 12 and our appendix of the supplement, you'll see battery hardware is expected to be around 10% to 11% margins. So when we bring that in, it just naturally lowers our margin percentage, and those deals are generally a little bit bigger in size with that lower margin. So it'll help gross margin dollars, but it'll bring down the margin percentage a little bit. As far as our other products, no, I think if you look at that slide, I think we expect to see that continued margin. PowerTrack running around 75%, edge hardware at 45% to 47%. So nothing indicating that we should see a slip in any of those margins.

Justin Clare

Got you. Okay. Great. That's helpful. And then just curious on the hybrid projects, the announcement today on the project in Hungary. I was wondering if you could just compare the economics of a traditional PowerTrack solar monitoring contract with a contract that includes a hybridization. Does this materially increase the ARR or the profitability per megawatt for you guys?

Arun Narayanan

I don't think we are disclosing it at the contract level.

Erin Reed

Yes, this is Erin. I can take that question. So when we have a hybrid deployment, for example, with the Hungary deal, you saw that, that was previously a PowerTrack PPC customer of ours, so there is a software contract already in place, and as they hybridize, we're adding another software contract in place with PowerTrack EMS. So yes, there are two sources of ARR there, but there are also the services and the edge hardware deployments on those sites.

Operator

And we have reached the end of this portion of the question-and-answer session. I would now like to turn the floor back to Erin Reed for the retail questions.

Erin Reed

Thank you, operator. We have a few questions here. First question is on guidance. Full year 2026 revenue guidance is still at a fairly wide range with two quarters left to go. What are the key swing factors that would move you toward the higher or the lower end of that range?

Arun Narayanan

Okay, this is Arun. I'm going to take the answer. Battery hardware resale revenue is the potential source of this swing. We are expecting to come in at the lower end of our $40 million range. Software, services and edge hardware revenue has a smaller range of $130 million to $150 million. The pace of deployments would determine how we swing within that range. And as we said before, we are on track and we remain within the range, and we are very pleased to reaffirm guidance across all metrics today.

Erin Reed

Thanks, Arun. The next question I have for you is on international expansion. Today on the call we talked a lot about our new deal in Latin America with PowerTrack EMS and the one in Hungary. Is there a region you're most excited about beyond those or one where you see a next real opportunity opening up?

Arun Narayanan

Again, this is Arun. For me, if you just take a step back and you look at what we are saying in this quarter, The smarter E AWARD win and the feedback from customers in these recent transactions show that we have really built an innovative product that is really a key solution for our customers in this marketplace. What's happening is that PowerTrack EMS is becoming the solution for solar asset owners who are trying to add storage and hybridizing their plants. As well as PowerTrack EMS is a really good compatible product for those international deployments.

So this is how we are ending up in this situation. We are seeing PowerTrack EMS entering into Latin America in this quarter. This sets us up for expansion in Latin America with key markets like Chile and Colombia on our radar. And as we have also shown in the past few quarters, we can see that using our office in Berlin, we are able to make expansion within the European market. So maybe the broader answer is, this is really a fit-for-market product solution that we've built, and we want to be where our customers are.

Erin Reed

Great. Now looking into 2027, as we look past 2026, what's one of the things that you're most focused on getting right in 2027 to keep this momentum going?

Arun Narayanan

We've reiterated many times on the earnings call that growth in 2027 is where we are focused on. And we're going to achieve this by continuing to focus on the utility scale market. This is both within the United States as well as internationally. The products that are in the solution are PowerTrack EMS, PowerTrack SCADA, as well as the PowerTrack PPC product. The examples we have listed today and in other recent press releases show how our customers are configuring their solutions with these different products. And expanding into these markets successfully gives us the best opportunity for revenue growth.

Erin Reed

Great. Thank you. My last question here is for Brian. A key metric investors are focused on is operating cash flow. What gives you the confidence in reaching positive operating cash flow for the full year of 2026?

Brian Musfeldt

Yes, thanks. If you remember, our first quarter is traditionally our lowest billing and revenue quarter. So we had $8 million of negative OCF in the first quarter, which was really driven by those low billings and a combination of some expected working capital outflows. You can see in the second quarter, there was already significant improvement in that space. We came in the quarter about $0.3 million positive OCF, which was sequentially about a 9% (sic) [ $9 million ] improvement. So we do expect that trend to continue through the second half of the year as our billings and our revenue continue to grow with our seasonality. So that's what gives us the confidence to reaffirm the guidance we've given for the year.

Erin Reed

Great. Thanks, Brian. This concludes the retail investor questions. I'll now turn the call back to Arun for closing remarks.

Arun Narayanan

I want to thank everyone for joining our second quarter earnings call, and we look forward to speaking with you next during our third quarter 2026 earnings call this fall. Thanks, everyone.

Operator

This concludes today's conference. You may now disconnect your lines at this time. Thank you for your participation.