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    ORA
    Earnings call· Jun 2026(Q2 FY26)

    ORMAT TECHNOLOGIES Q2 FY26 earnings call ORA

    Aug 6, 2026 Source

    Executive summary

    Ormat Technologies Q2 FY26 — Strong H1 Performance Drives Raised Full-Year Guidance

    Ormat Technologies delivered a strong Q2 FY26, marked by double-digit revenue growth and a significant increase in adjusted EBITDA, prompting a full-year guidance raise. The company's diversified three-segment model, balancing long-term contracted revenues with selective merchant exposure, proved effective, particularly in Energy Storage. Strategic focus remains on expanding the development pipeline, advancing EGS pilots, and leveraging a robust funding platform to meet growing demand for low-carbon electricity.

    Highlights

    5

    • Second quarter revenue increased 10.6% to $258.8 million, driven by strong Energy Storage performance and Electricity segment growth.

    • Adjusted EBITDA increased 6.9% to $143.9 million in Q2 FY26, leading to a raised full-year guidance.

    • Energy Storage segment revenue nearly tripled year-over-year, increasing 195.1% to $42.8 million, supported by new capacity and favorable PJM merchant pricing.

    • First half 2026 adjusted diluted EPS increased 54.3% to $1.79 per share.

    • Added 155 MW to generating portfolio year-to-date, including Hoku solar/storage, Shire storage, and Dominica geothermal plant.

    Concerns

    3

    • Net income attributable to stockholders decreased to $27.1 million ($0.43 per diluted share) in Q2 FY26, down from $28 million ($0.46 per diluted share) in Q2 FY25, due to a $6.6 million write-off of a storage project.

    • Product segment revenue decreased 21.6% to $46.7 million in Q2 FY26, and gross margin was 9.7% due to increased construction costs and FX fluctuations.

    • Electricity segment revenue guidance for the full year was modestly lowered by $5 million due to project COD delays in the Caribbean.

    Guidance & targets

    15
    CategoryTargetConfidence
    Total Revenue
    $1.15B-$1.2B
    high materiality
    High
    Adjusted EBITDA
    $630M-$650M
    high materiality
    High
    Electricity Revenue
    $710M-$725M
    medium materiality
    High
    Product Revenue
    $300M-$320M
    medium materiality
    High
    Energy Storage Revenue
    $140M-$155M
    medium materiality
    High
    Product Segment Gross Margin
    approximately 15%
    medium materiality
    Medium
    Product Segment Gross Margin
    approximately 18%
    medium materiality
    Medium
    Energy Storage Gross Margin
    30% to 40%
    medium materiality
    Medium
    Energy Storage Gross Margin
    approximately 40% to 50%
    medium materiality
    Medium
    ITC Benefits
    approximately $59.9M
    low materiality
    High
    Effective Income Tax Benefit Rate
    approximately 15%
    low materiality
    Medium
    Capital Expenditures
    $449M
    high materiality
    High
    Quarterly Dividend per Share
    $0.12
    low materiality
    High
    Quarterly Dividend per Share
    $0.12
    low materiality
    High
    Portfolio Target
    2.6 to 2.8 GW
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Electricity
    Increase reflects full quarter contribution for Blue Mountain, higher energy rates and improved performance at Puna, stronger generation at Olkaria following well field optimization and lower curtailments at McGinness Hills, Dixie Valley and Tungsten, partially offset by planned maintenance activities.
    Curtailment in U.S. declined by: $4.2MBlue Mountain revenue contribution: $2.6MPuna revenue increase: $3MOlkaria stronger generation contribution: $2.5MOverall power generation growth: 3% year-over-year
    		$169.3M5.8%——
    Product
    Decrease reflects the timing of manufacturing and construction progress. Gross margin was down mainly due to increased construction costs related to a project in Europe, and the impact of foreign exchange fluctuation on manufacturing costs.
    		$46.7M-21.6%—9.7%
    Energy Storage
    High asset availability enabled capture of strong merchant pricing in PJM, while capacity addition completed over the past 12 months contributed incremental revenue. Gross margin reflects strategy of optimizing mix of contracted and merchant revenues.
    Higher revenue from existing PJM assets: $19.5MRevenue from newly commissioned facilities: $7.7M
    		$42.8M195.1%—56.2%

    Operational metrics

    25
    Revenue
    $258.8M10.6% YoY
    Q2 FY26
    Gross Profit
    $68.7M20.8% YoY
    Q2 FY26
    Consolidated Gross Margin
    26.5%expanded 220 bps
    Q2 FY26
    Net Income attributable to stockholders
    $27.1Mdown from $28M in Q2 FY25
    Q2 FY26

    Decrease reflects a $6.6 million write-off of a storage project.

    Adjusted Net Income attributable to stockholders
    $31M6.5% YoY
    Q2 FY26
    Adjusted EBITDA
    $143.9M6.9% YoY
    Q2 FY26
    Revenue
    $662.7M42.9% YoY
    H1 FY26
    Adjusted EBITDA
    $338.8M18.9% YoY
    H1 FY26
    Adjusted Diluted EPS
    $1.7954.3% YoY
    H1 FY26
    Proceeds from tax credit monetization
    $52M
    H1 FY26

    Full year expectation is $90M, including $70M related to ITCs and $20M related to PTC transfers.

    ITC Benefit
    $9.5M
    Q2 FY26
    Cash and cash equivalents and restricted cash
    $658Mup from $281M at year-end 2025
    as of June 30, 2026

    Increase reflects proceeds from convertible notes offering, financing activities, cash from operations, tax credit monetization, and Top 2 sales, partially offset by capex, debt repayments, acquisitions, and investments.

    Total Debt
    $3.4B
    as of June 30, 2026
    Weighted Average Interest Rate on Debt
    3.9%
    as of June 30, 2026
    Total Liquidity
    $1.1B
    as of June 30, 2026
    Net Debt
    $2.7B
    as of June 30, 2026
    Net Debt to Adjusted EBITDA
    4.3x
    as of June 30, 2026
    Net Debt as % of Total Capitalization
    50%
    as of June 30, 2026
    Quarterly Dividend per Share
    $0.12
    Q3 FY26

    Declared on August 5, 2026.

    Total Operating Portfolio
    1.85 GW
    as of Q2 FY26
    Electricity Portfolio
    1,355 MW
    as of Q2 FY26
    Energy Storage Operating Portfolio
    495 MW
    as of Q2 FY26
    Energy Storage Pipeline
    2.5 GW
    current
    Federal Lease Awarded
    10,642 acres
    during the year
    Storage Project Write-off
    $6.6M
    Q2 FY26

    For a project decided not to pursue.

    Industry KPIs

    6
    MetricValueDetails
    Contracted ppa price$86/MWhUSD/MWh
    Generation output fleet availability3%%
    Development pipeline by maturity stage202 MWMW
    Data center co location deal structures—
    Contracted ppas vs uncontracted capacity190 MWMW
    Uprates development pipeline m a capacity155 MWMW

    Orderbook & backlog

    3
    Product Segment Backlog$203MAugust 5, 2026

    decrease from year-end 2025

    Reflects recognition of $105M revenue from Top 2 projects during Q1. Geographically diversified with majority in Asia and Oceania.

    Electricity Projects Under Construction and Development202 MWQ2 FY26

    Through end of 2028. Includes 87 MW geothermal and 115 MW solar capacity. All projects supported by long-term PPAs.

    Energy Storage Projects Under Construction and Development497 MWQ2 FY26

    7 projects with total capacity of 497 MW or 1,888 MWh. Includes Denali facility (100 MW, 400 MWh) in California, expected to commence operation by end of 2028 under a 20-year tolling agreement.

    Deals & partnerships

    5
    HokuSolar and storage acquisition
    SLBJoint venture for EGS development

    Leverages SLB's expertise in drilling and fracking to address EGS technical challenges.

    Clean Power Alliance20-year tolling agreement for Denali facility20 years

    Denali is expected to commence operation by the end of 2028.

    GoogleUmbrella PPA for geothermal projects

    Lone Mountain project will be part of this portfolio PPA. Allows flexibility in managing portfolio with a range of minimum/maximum MW.

    SwitchPPA for geothermal projects

    Mentioned as a high-value PPA that takes away the risk of exploration.

    Capital programs

    4
    Wapsalit Geothermal Project Exploration Financingclosedup to $40M
    Funding: World Bank's geothermal resource risk mitigation program

    Unique exploration financing facility providing a risk-sharing mechanism to reduce financial exposure associated with early-stage exploration.

    Electricity Segment Capital Expendituresunderway
    Period spend: $281M

    Benefit: construction, exploration, drilling, and maintenance

    Allocation for the remainder of 2026.

    Storage Asset Construction Capital Expendituresunderway
    Period spend: $129M

    Benefit: storage asset construction

    Allocation for the remainder of 2026.

    SLB Pilot and Other EGS Activities Capital Expendituresunderway
    Period spend: $20M

    Benefit: SLB pilot and other EGS activities

    Allocation for the remainder of 2026.

    Risks & headwinds

    5
    Storage project write-offQ2 FY26

    $6.6M

    Mitigation: Decision not to pursue the project.

    Product segment gross margin pressureQ2 FY26

    Gross margin 9.7% in Q2 FY26

    Mitigation: Expectation for H2 FY26 gross margin to be approximately 15% and full year 18%.

    Electricity segment project delaysQ3 FY26

    $5M reduction in full-year Electricity segment revenue guidance

    Mitigation: Dominica geothermal plant is now in full operations since July 31; other delayed project expected to come online soon.

    EGS technology development riskLong-term

    Technology not fully yet developed

    Mitigation: Joint venture with SLB for drilling and fracking expertise; risk-managed approach to EGS PPAs.

    Inverter import restrictions (FCC ruling)Ongoing

    Banning new models for inverter imports

    Mitigation: Ability to buy foreign inverters by eliminating remote connectivity; procuring from multiple sources (e.g., Spain).

    What to watch in Q3 FY26

    5

    SLB Desert Peak EGS pilot drilling

    Q4 2026
    CurrentDrilling permit applications submitted, procurement of long lead items progressed, final stages of vendor selection.
    TargetDrilling commenced

    Why it matters

    Verifies progress on a key EGS pilot, which is a long-term growth opportunity for the company.

    At our SLB Desert Peak pilot, we completed the analysis of geophysical seismic data and incorporated the results into an updated subsurface model. We also submitted drilling permit applications, progressed procurement of long lead items, and entered the final stages of vendor selection, keeping us on track to begin drilling in the fourth quarter of 2026.

    Q&A highlights

    9

    Why did Q2 electricity gross margin decline slightly despite positive drivers, and what explains the modest lowering of the full-year Electricity segment outlook?

    Assi Ginzburg explained that the full-year guidance update includes a $5 million reduction in the Electricity segment, mainly due to 1-2 month COD delays for two Caribbean projects, though Dominica is now fully operational. He noted Q2 had some planned maintenance, with margins expected to improve later in the year.

    “Those projects, we do have around 1 or 2 months delay on those projects on the COD. But I'm glad to report that one of them already COD. Dominica is already in full operations, full operations since July 31.”

    asked by Justin Clare · answered by Assaf Ginzburg

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Priorities & Portfolio Expansion

    Ormat is focused on expanding its generating portfolio, adding 155 MW year-to-date through acquisitions and new commercial operations, including the Hoku solar and storage acquisition, the Shire storage facility, and the 10 MW Dominica geothermal power plant. The company's strategic priority includes proactively renegotiating contracts to extend terms and capture improved geothermal pricing, expecting to increase annual revenues by approximately $14 million from re-contracted PPAs through 2030.

    02

    EGS Development Advancement

    The company is advancing its Enhanced Geothermal Systems (EGS) strategy across surface technology (Omega 100 unit), subsurface pilot projects (SLB Desert Peak and Sage pilots), and expanding its development footprint in the Western U.S. Drilling permit applications are submitted for the SLB pilot, and the project location selected for the Sage pilot, with drilling for SLB expected to commence in Q4 2026. Ormat was awarded federal leases covering 10,642 acres in New Mexico for EGS development and is negotiating additional acreage in Oregon and Idaho.

    03

    Energy Storage Growth

    The Energy Storage segment demonstrated significant growth, with revenue nearly tripling year-over-year due to new capacity additions and strong merchant pricing in PJM. The operating portfolio now stands at 495 MW / 1,358 MWh, with 7 projects under construction/development totaling 497 MW / 1,888 MWh. This includes the new 100 MW, 400 MWh Denali facility in California, which is expected to commence operation by the end of 2028 under a 20-year tolling agreement.

    04

    Financial Strength & Liquidity

    Ormat maintains strong liquidity of approximately $1.1 billion as of June 30, 2026, supported by proceeds from its convertible notes offering, cash generated from operations, and tax credit monetization. The company secured a unique exploration financing facility of up to $40 million for the Wapsalit geothermal project in Indonesia under the World Bank's geothermal resource risk mitigation program, providing a risk-sharing mechanism for early-stage exploration.

    05

    PPA Environment and Re-contracting

    The PPA environment remains constructive with pricing continuing to increase. Ormat is actively negotiating new contracts and blend-and-extend agreements, aiming to reprice approximately 190 MW of capacity currently priced at a weighted average of $86/MWh (below today's market of over $100/MWh) between 2031 and 2034. This strategy is expected to create significant embedded value with minimal incremental capital investment.

    AI-generated summary of the company’s earnings call. Not investment advice.