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ORMAT TECHNOLOGIES, INC. (ORA)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered revenue of $229.8M, GAAP diluted EPS of $0.66 and record adjusted EBITDA of $150.3M; Energy Storage revenues rose 119.7% YoY, Product grew 27.9%, while Electricity declined 5.8% due to U.S. curtailments and wildfire impacts .
  • Wall Street consensus was modestly exceeded: revenue beat by ~$2.2M and EPS beat by ~$0.09; management reiterated full-year 2025 guidance, signaling confidence despite tariff/policy uncertainty . Estimates marked with “*” in tables are from S&P Global.
  • Storage margin inflected sharply (30.6% vs 7.5% YoY); Product margin improved to 22.3% on backlog strength (~$314M), offsetting Electricity margin compression from curtailments .
  • Strategic actions: agreement to acquire the 20MW Blue Mountain plant for $88M (upgrade + solar addition planned) and leadership changes to accelerate Electricity ops and EGS initiatives; Blue Mountain closed post-quarter (June 18) .
  • Near-term stock narrative catalysts: demonstrated Storage profitability and reiterated guidance; potential concerns include Q2 Puna maintenance impact (~$4M revenue, ~$3M net profit headwind) and ongoing curtailments; management frames both as transient and manageable .

What Went Well and What Went Wrong

What Went Well

  • Record quarterly adjusted EBITDA ($150.3M, +6.4% YoY) driven by Energy Storage outperformance (new assets, higher PJM merchant pricing, supplier settlement) and improved Product margins .
  • Storage margin step-up to 30.6% (from 7.5% in Q1’24) and Product margin to 22.3% (from 14.8%), with management now anticipating full-year Storage gross profit “as high as 20%” .
  • Strategic portfolio expansion: signed agreement to acquire Blue Mountain ($88M), with plans to add ~3.5MW and potentially 13MW of solar; later closed post-quarter (June 18) .
  • Quote: “We expect continued good performance throughout 2025 as we transition our Storage segment to a more predictable portfolio designed to maximize profitability.” — CEO Doron Blachar .

What Went Wrong

  • Electricity segment revenue declined 5.8% YoY and segment gross margin fell to 33.5% (from 39.0%) due to curtailments and wildfire-related grid constraints in California and Nevada .
  • Consolidated gross margin contracted to 31.7% (from 35.2%) on Electricity margin compression, partially offset by Storage/Product improvements .
  • Q2 outlook headwind: Puna well maintenance expected to reduce Q2 revenue by ~$4M and net profit by ~$3M; continued NV Energy transmission maintenance may sustain U.S. curtailments, albeit management reiterated annual guidance .

Financial Results

Headline Metrics vs Prior Periods and Consensus

MetricQ1 2024Q4 2024Q1 2025Q1 2025 Consensus
Revenue ($USD Millions)$224.2 $230.7 $229.8 $227.5*
GAAP Diluted EPS ($)$0.64 $0.67 $0.66 $0.590*
Adjusted Diluted EPS ($)$0.65 $0.72 $0.68 N/A
Gross Margin (%)35.2% 31.9% 31.7% N/A
Adjusted EBITDA ($USD Millions)$141.2 $145.5 $150.3 N/A

Estimates marked with “” retrieved from S&P Global.
Consensus detail: Primary EPS Consensus Mean 0.590 (10 estimates*), Revenue Consensus Mean $227.5M* (9 estimates*) — actuals: EPS 0.68 (adjusted) and revenue $229.8M [GetEstimates]. Values retrieved from S&P Global.

Segment Revenue and Margin

SegmentQ1 2024 Revenue ($M)Q4 2024 Revenue ($M)Q1 2025 Revenue ($M)Q1 2024 Gross MarginQ4 2024 Gross MarginQ1 2025 Gross Margin
Electricity$191.3 $180.1 $180.2 39.0% 34.9% 33.5%
Product$24.8 $39.6 $31.8 14.8% 24.5% 22.3%
Energy Storage$8.1 $11.0 $17.8 7.5% 9.5% 30.6%
Total$224.2 $230.7 $229.8 35.2% 31.9% 31.7%

KPIs

KPIQ1 2025Prior Reference
Net income attributable to stockholders ($M)$40.4 $38.6 in Q1 2024
Product backlog ($M)~$314 ~$340 as of Feb 25, 2025
Storage gross margin (%)30.6% 7.5% in Q1 2024
Liquidity (total available) ($M)~$690.6 ~$667.1 at FY-end 2024
Net debt ($B) and net debt/EBITDA (x)~$2.3B; ~4.2x ~$2.2B; ~4.0x at FY-end 2024
Dividend per share$0.12 declared; expected each of next three quarters $0.12 declared Feb 26, 2025
2025 tax benefit rate5%–10% expected Commentary reiterated
Q2 2025 Puna impactRev −$4M; Net −$3M N/A

Guidance Changes

MetricPeriodPrevious Guidance (Feb 26, 2025)Current Guidance (May 7–8, 2025)Change
Total Revenues ($M)FY 2025$935–$975 $935–$975 Maintained
Electricity Revenues ($M)FY 2025$710–$725 $710–$725 Maintained
Product Revenues ($M)FY 2025$172–$187 $172–$187 Maintained
Energy Storage Revenues ($M)FY 2025$53–$63 $53–$63 Maintained
Adjusted EBITDA ($M)FY 2025$563–$593 $563–$593 Maintained
Adj. EBITDA attributable to minority interest ($M)FY 2025~$23 ~$21 Lowered
Dividend per shareFY 2025$0.12 per quarter expected $0.12 declared; expected next three quarters Maintained/Confirmed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Tariffs & policy/IRASafe harbor strategy for geothermal/storage; IRA change mitigation Minimal near-term impact; batteries procured; diversify supply chain; evaluate U.S. manufacturing De-risking; proactive mitigation
PPA pricing & hyperscalersNegotiating >$100/MWh PPAs; 250MW discussions; recontracting in ’26–’27 PPAs “above 100”; recontracting upside post-2029; mix of direct and utility-mediated contracts Strengthening demand/pricing
Energy Storage margins/modelPath to 20–30% over time; tolling agreements to stabilize Q1 margin 30.6%; full-year gross profit could be as high as 20%; balanced merchant/contract approach Improving faster than expected
Regulatory permittingBLM auction wins; categorical exclusion expected to speed permitting Executive order could cut permitting timelines to 14–28 days on federal land Accelerating
EGS technologySLB MOU for next-gen geothermal; co-develop EGS Pursuing EGS to enhance existing plants and expand footprint; acknowledging technical challenges Advancing exploration/partnerships
Operational curtailmentsDixie outage, U.S./Kenya curtailments affected margins Continued U.S. curtailments; Puna maintenance expected to impact Q2 Transient headwind; managed within guidance

Management Commentary

  • “Our Storage segment benefited from new capacity added over the last 12 months and from higher merchant prices in the PJM market. We expect continued good performance throughout 2025…” — CEO Doron Blachar .
  • “Electricity segment revenues decreased by 5.8%… driven by… energy curtailments… maintenance… and wildfires in California.” — Earnings materials .
  • “We anticipate finalizing [Blue Mountain] acquisition towards the end of the second quarter… plan to upgrade the plant… and install 13MW of solar (subject to approvals).” — CEO Doron Blachar .
  • “We anticipate receiving approximately $160 million in cash proceeds related to PTC and ITC benefit in 2025… tax rate… 5%–10%.” — CFO Assaf Ginzburg .
  • “We are optimistic about the growth potential of our geothermal business… supported by potential easing of project permitting timelines… strong demand for baseload renewable sources and high PPA pricing.” — CEO Doron Blachar .

Q&A Highlights

  • Storage development and tariffs: Batteries procured for ’25–’26; exploring non-China supply and potential U.S. manufacturing; continuing development pipeline including large Israel tolling agreements .
  • Geothermal tariffs: Universal 10% tariff has limited impact; Israel-manufactured equipment is ~25–30% of plant CapEx; higher PPAs offset cost increases .
  • EGS timing/opportunity: EGS could enhance existing plants and expand new sites; acknowledging technical challenges; progress with partners .
  • Blue Mountain economics: Lower double-digit EBITDA multiple on acquisition, expected to compress 30–40% post-upgrades; short PPA term implies recontracting upside post-2029 .
  • Segment margin outlook: Storage margin tracking toward high end (~20% full-year gross profit), Product margin 19–21%; Electricity margin a few points lower vs last year due to curtailments .
  • Guidance sensitivity: Higher-end outcomes tied to lower curtailment (U.S./Kenya) and supportive weather; most CODs are late ’25→’26 .

Estimates Context

  • Q1 2025 vs consensus: Revenue $229.8M vs $227.5M*; EPS $0.68 (adjusted) vs $0.590*; 9–10 estimates supported the consensus [GetEstimates]. Values retrieved from S&P Global.
  • Implications: Modest top-line beat and clear EPS outperformance, with the EPS delta driven by storage margin inflection, PJM pricing and tax benefits related to storage facilities expected to COD in 2025 .
  • Revisions: With reiterated FY guidance and visible storage profitability, Street may need to raise Storage margin assumptions and adjust EPS trajectories, while modeling temporary Electricity headwinds in Q2 from Puna .

Key Takeaways for Investors

  • Storage margin inflection is real and earlier-than-expected; the segment now contributes meaningful EBITDA with risk-managed merchant exposure and growing contracted revenues .
  • Electricity headwinds (curtailments, Puna maintenance) are transitory and embedded in guidance; FY ranges maintained reflect confidence post-Blue Mountain and backlog strength .
  • Pricing power is strengthening: multiple PPAs under negotiation above $100/MWh, including hyperscalers; recontracting and greenfield pipeline support medium-term earnings growth beyond 2028 .
  • Policy/tariffs: Proactive safe-harboring and diversified supply strategy mitigate IRA/tariff risks; permitting acceleration on federal land is a structural positive for geothermal timelines .
  • Capital and tax strategy: ~$160M of 2025 tax monetization (PTC/ITC) and ~$690M liquidity underpin CapEx and growth; net debt/EBITDA ~4.2x with mostly fixed-rate debt .
  • Near-term trading setup: Watch Q2 for Puna maintenance impact and any curtailment updates; continued PJM strength and storage contract execution are potential upside catalysts .
  • Medium-term thesis: Geothermal PPA repricing and storage portfolio maturation, plus EGS optionality, support multi-year EBITDA growth and expanding returns, with selective M&A enhancing scale (e.g., Blue Mountain) .