Ormat Technologies Q4 Earnings Call Highlights

• Revenue +12.5%: Ormat reported 2025 revenue of $989.6M and adjusted EBITDA of $582.0M (up 5.7%), but gross margins declined due to curtailments at U.S. facilities and a revenue mix shift toward the product segment.

• Product and energy storage led growth—product revenue rose ~55% to $216.7M and storage grew ~109% to $79.0M with Q4 storage gross margin at 51.5%—and the company secured roughly 200 MW of new PPAs, including a 15‑year, up-to-150 MW portfolio PPA supporting Google and a 20-year ~13 MW PPA with Switch.

• For 2026 Ormat guided to $1.11–$1.16B revenue and $615–$645M adjusted EBITDA, expects to monetize about $90M of tax credits this year after monetizing >$180M in 2025, ended 2025 with ~$281M cash and ~4.4x net debt/EBITDA, and declared a $0.12 quarterly dividend.

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Ormat Technologies (NYSE:ORA) reported a “strong year” in 2025, highlighted by double-digit revenue growth and higher adjusted EBITDA, while management pointed to accelerating momentum in energy storage, new power purchase agreements (PPAs) tied to data centers and hyperscalers, and continued investment in enhanced geothermal systems (EGS) initiatives.

Chief Executive Officer Doron Blachar said Ormat’s 2025 results reflected “meaningful progress toward our long-term targets,” supported by improved performance in the product and energy storage segment and “solid execution” in the electricity segment.

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Chief Financial Officer Assaf Ginzburg said total 2025 revenue increased 12.5% year-over-year to $989.6 million. Fourth-quarter revenue rose 19.6% to $276.0 million, which management attributed largely to continued strength in the product and energy storage segments.

Gross profit for 2025 was $272.7 million, in line with the prior year, while fourth-quarter gross profit rose 7.2% to $78.8 million. Gross margin declined year-over-year to 27.6% for the full year and 28.6% in the fourth quarter, compared with 31.0% and 31.9% in the prior-year periods. Ginzburg attributed the margin comparison to curtailments in the electricity segment at several U.S. facilities during the year, along with a revenue mix shift toward the product segment.

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Net income attributable to stockholders was $31.4 million, or $0.50 per diluted share, in the fourth quarter, compared with $40.8 million, or $0.67 per diluted share, in the prior-year quarter. For the full year, net income was $123.9 million, or $2.02 per diluted share, compared with $123.7 million, or $2.04 per diluted share, in 2024.

Ginzburg said the fourth-quarter year-over-year decline was primarily driven by impairment charges tied to Ormat’s Brawley geothermal assets and one ORIC facility, which the company now expects to discontinue operating during 2026. Adjusted net income was $41.8 million ($0.67 per diluted share) in the fourth quarter and $137.3 million ($2.24 per diluted share) for the year.

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Adjusted EBITDA increased 5.7% for 2025 to $582.0 million. Fourth-quarter adjusted EBITDA rose 9.1% to $158.7 million, driven mainly by higher contribution from energy storage on improved PJM pricing and new capacity additions, as well as improved product segment performance.

In the electricity segment, fourth-quarter revenue rose 3.6% to $186.6 million, which management said was driven by the acquisition of Blue Mountain and improved performance at Dixie Valley, offsetting a $4.3 million revenue reduction at the Puna complex tied mainly to lower energy rates. For the full year, electricity revenue declined 1.2% to $693.9 million, reflecting curtailments earlier in the year, reduced generation at Puna, and repowering activities at Stillwater, partially offset by contributions from Blue Mountain, the Beowawe Repowering Project, and improved Dixie Valley performance.

The product segment posted outsized growth. Fourth-quarter product revenue rose 59.1% to $63.1 million, and full-year product revenue increased 55.2% to $216.7 million, driven by backlog strength and the timing of progress in manufacturing and construction.

The energy storage segment reported fourth-quarter revenue growth of 140.5% and full-year growth of 109.3% to $79.0 million. Management cited elevated energy rates in PJM and contributions from newer operational projects, including Bottleneck, Montague, and Lower Rio.

Margins diverged by segment. Electricity gross margin declined to 30.2% in the fourth quarter and 28.5% for the year, driven by curtailments and lower energy rates at Puna. Product gross margin for the year improved 280 basis points to 21.2% on improved project profitability and favorable mix. Energy storage gross margin improved to 51.5% in the fourth quarter and 36.4% for the year, which management attributed to its strategy of balancing contracted pricing with merchant exposure.

Blachar said Ormat secured approximately 200 MW of new PPAs “over the last few months” with hyperscalers, data centers, developers, and utility and municipal customers at “elevated PPA prices,” with “potential for additional growth.”

• Google/NV Energy: Ormat entered into a 15-year portfolio PPA for up to 150 MW supporting Google’s Nevada data center operations via NV Energy’s Clean Transition Tariff.

• Switch: Ormat signed a 20-year PPA with Switch for approximately 13 MW from the Salt Wells geothermal plant, which management described as Ormat’s first direct PPA with a data center operator. Ormat also has an option to expand output by adding an approximately 7 MW solar PV facility to serve auxiliary power.

Management also discussed two “blend-and-extend” contracts totaling approximately 40 MW that were pending final approval. Blachar said these are expected to raise revenues by about $20–$30 per MWh beginning in 2027. In the Q&A, Blachar indicated there were “a few more assets” that may be candidates for additional blend-and-extend activity, while noting the next wave of recontracting activity is largely in 2032 and 2033 (including Jersey Valley, Don Campbell, McGinness Hills, and Tungsten).

Ginzburg said the company monetized more than $180 million in production and investment tax credits (PTCs and ITCs) through tax equity transactions and transfers during 2025, above its $160 million expectation. For 2026, Ormat expects to collect approximately $90 million through ITC tax equity transactions and transfers.

Cash and cash equivalents plus restricted cash totaled about $281 million at year-end 2025, up from approximately $206 million at the end of 2024. Total debt was about $2.8 billion (net of deferred financing costs) with a cost of debt of 4.8%. Net debt was about $2.5 billion, or 4.4x net debt to EBITDA.

Ormat’s board declared a quarterly dividend of $0.12 per share payable March 24, 2026, to shareholders of record March 10, 2026. Ginzburg added the company expects to pay quarterly dividends of $0.12 per share in each of the next three quarters.

For 2026, management guided to:

• Revenue: $1.11 billion to $1.16 billion

• Electricity segment revenue: $715 million to $730 million

• Product segment revenue: $300 million to $320 million

• Energy storage revenue: $95 million to $110 million

• Adjusted EBITDA: $615 million to $645 million

Ginzburg also said the company expects a “strong start” to 2026, with first-quarter results benefiting from about $100 million of product segment revenue at an estimated gross margin of around 20% tied to the sale of the Top Two project after a customer exercised its purchase option.

On curtailments, Ginzburg said curtailment eased in the fourth quarter, and the company does not expect more than roughly $4 million to $5 million of curtailment in 2026 based on what it knows today from NV Energy, which management said caused most of the 2025 curtailment. He also said Ormat expects electricity segment gross margin to increase by about 1% to 2% in 2026.

Blachar said Ormat’s electricity portfolio stands at approximately 1,340 MW globally, with 72 MW added in the fourth quarter. The company has about 149 MW under construction and development through 2027.

Subsequent to year-end, Ormat closed an agreement to acquire Hoku, a solar-plus-storage facility on Hawaii’s Big Island, from Energix Renewable Energies for $80.5 million in cash. The asset includes 30 MW of solar PV paired with a 30 MW/120 MWh battery system under a 25-year PPA.

In Indonesia, Ormat was awarded the Talaga Ranu geothermal working area via competitive tender, which management said could add up to 40 MW to its exploration pipeline. Ormat said projects under development in Indonesia total 182 MW, including previously announced tender wins.

Ormat also emphasized ongoing EGS work. Blachar described the company’s partnership with SLB to help accelerate EGS development and said Ormat signed a strategic commercial agreement with Sage Geosystems, later serving as co-lead investor in Sage’s Series B financing. In the Q&A, Blachar said Ormat is also discussing agreements with other EGS developers and expects potential EPC-related revenue impacts from EGS to be more likely in the second half of 2027 or 2028, depending on technological progress.

Looking ahead, Blachar said Ormat is planning an analyst day in September, where the company expects to provide longer-term megawatt targets beyond 2028.

Ormat Technologies, Inc is a leading renewable energy company specializing in geothermal and recovered energy power plants. Through its vertically integrated business model, Ormat designs, develops, engineers, constructs, owns and operates clean energy projects worldwide. The company’s core technology centers on the Organic Rankine Cycle (ORC), which converts heat from geothermal sources or industrial waste streams into sustainable electricity without combustion.

Ormat’s offering includes turnkey power plant solutions, proprietary ORC equipment and ongoing operations and maintenance services.

The article “Ormat Technologies Q4 Earnings Call Highlights” was originally published by MarketBeat.