What are the assumptions for H2 merchant pricing in the storage segment, given strong H1 performance, and how has pricing trended in Q3?

Doron Blachar stated that H1 pricing was very strong, but merchant prices have normalized somewhat in late July and August. The H2 outlook assumes more normalized pricing, though still higher than previous years, with weather conditions being a key factor. “I would say on the Energy Storage part, pricing in the first half was very, very strong. The merchant prices over the last few weeks, we see them becoming a bit more normal as we went towards the end of July and into August.”

Are new projects like Lone Mountain covered under the Google umbrella PPA, and how is Ormat tracking towards meeting the 150 MW portfolio target?

Doron confirmed Lone Mountain is part of the Google PPA and expects more greenfield projects to be added. He expressed confidence in meeting the portfolio target, noting the PPA range allows flexibility with increasing pricing. “So yes, Lone Mountain is going to be part of this portfolio PPA with Google. I expect that in the coming quarters, we'll release some more greenfield that will be part of the portfolio PPA with Google.”

What are the key technical challenges Ormat is solving with EGS pilots, and how is integration into existing operations managed?

Doron explained that the pilots are designed to have no impact on existing facilities, being drilled outside the reservoir and connected with minimal disruption. The main EGS challenges are maintaining water, connecting fractures, and reducing the cooling effect, which Ormat addresses through its JV with SLB. “I'd say the main challenges with EGS technology at the end of the day is how you maintain the water on one hand, build the facility that the fractures are connecting, and how you reduce the cooling effect that you continuously inject through the fracture, the cold water.”

ORA

Ormat Technologies (ORA) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Utilities· Aug 6, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Total Revenue	$1.15B-$1.2B high materiality	FY26	High
Adjusted EBITDA	$630M-$650M high materiality	FY26	High
Electricity Revenue	$710M-$725M medium materiality	FY26	High
Product Revenue	$300M-$320M medium materiality	FY26	High
Energy Storage Revenue	$140M-$155M medium materiality	FY26	High
Product Segment Gross Margin	approximately 15% medium materiality	H2 FY26	Medium
Product Segment Gross Margin	approximately 18% medium materiality	FY26	Medium
Energy Storage Gross Margin	30% to 40% medium materiality	H2 FY26	Medium
Energy Storage Gross Margin	approximately 40% to 50% medium materiality	FY26	Medium
ITC Benefits	approximately $59.9M low materiality	FY26	High
Effective Income Tax Benefit Rate	approximately 15% low materiality	H2 FY26	Medium
Capital Expenditures	$449M high materiality	Remainder of 2026 · FY26	High
Quarterly Dividend per Share	$0.12 low materiality	Q3 · FY26	High
Quarterly Dividend per Share	$0.12 low materiality	Q4 · FY26	High
Portfolio Target	2.6 to 2.8 GW high materiality	FY28	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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	$169.3M	5.8%	—	—
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	$42.8M	195.1%	—	56.2%

ORA operating KPIs by quarter

ORA operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2025 Q4 FY25	Mar 2026 Q1 FY26	This call Jun 2026 Q2 FY26	Change vs prior quarter
Generation capacity Additions	72 MW We added 72 megawatts in the fourth quarter of 2025. Source: earnings call transcript	30 MW We added 30 megawatts in the first quarter of 2026 and currently have approximately 216 megawatts under construction and development through 2028. Source: earnings call transcript	—	-58.3%
Backlog Product	$352M Our product segment backlog stands at $352 million, representing a 19% increase on a sequential basis. Source: earnings call transcript	$239M Our product segment backlog stands at $239 million. Source: earnings call transcript	—	-32.1%
Generation capacity Electricity	—	~1,340 MW Our Electricity portfolio now stands at approximately 1,340 megawatts globally. Source: earnings call transcript	~1,355 MW On Slide 15, our electricity portfolio stands at approximately 1,355 megawatts globally with new 15 megawatts added during the quarter. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Product Segment Backlog $203M August 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 Development 202 MW Q2 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 Development 497 MW Q2 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

Hoku Solar and storage acquisition

SLB Joint venture for EGS development

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

Clean Power Alliance 20-year tolling agreement for Denali facility 20 years

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

Google Umbrella 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.

Switch PPA for geothermal projects

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

Capital programs

Wapsalit Geothermal Project Exploration Financing closed up 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 Expenditures underway

Period spend: $281M

Benefit:construction, exploration, drilling, and maintenance

Allocation for the remainder of 2026.

Storage Asset Construction Capital Expenditures underway

Period spend: $129M

Benefit:storage asset construction

Allocation for the remainder of 2026.

SLB Pilot and Other EGS Activities Capital Expenditures underway

Period spend: $20M

Benefit:SLB pilot and other EGS activities

Allocation for the remainder of 2026.

Risks & headwinds

Storage project write-off Q2 FY26

$6.6M

Mitigation:Decision not to pursue the project.

Product segment gross margin pressure Q2 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 delays Q3 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 risk Long-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

SLB Desert Peak EGS pilot drilling

Q4 2026

Current Drilling permit applications submitted, procurement of long lead items progressed, final stages of vendor selection.

Target Drilling 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.

Find out whether ORA delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.