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ORMAT TECHNOLOGIES, INC. (ORA)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 delivered record revenue and adjusted EBITDA: total revenue $234.0M (+9.9% y/y), GAAP diluted EPS $0.46 (+24.3% y/y), and adjusted EBITDA $134.6M (+6.7% y/y) .
  • Clear beat versus S&P consensus: revenue $234.0M vs $221.6M*, GAAP EPS $0.46 vs $0.38*, and adjusted EPS $0.48; guidance reiterated for FY2025; segment margins mixed with electricity pressured by curtailments .
  • Operational headwinds: planned well-field maintenance at Puna and third‑party curtailments reduced electricity revenue by ~$13M and EBITDA by ~$12M; management expects curtailments to lessen in H2 2025 .
  • Strategic and funding catalysts: completed Blue Mountain 20MW acquisition; secured ~$300M across tax equity ($139M) and project finance ($161M); announced a 25‑year PPA extension for Heber 1 with SCPPA effective Feb 2026 (post-Q2) .
  • Policy tailwinds and AI demand: extended PTC/ITC runway (“OBBB”) supports geothermal and storage; rising baseload demand from AI data centers cited as structural support for pricing and growth .

What Went Well and What Went Wrong

What Went Well

  • Product segment rebound: revenue +57.6% y/y to $59.6M; gross margin rose to 27.7% from 13.7%, supported by backlog execution and higher-margin contracts .
  • Storage momentum: revenue +62.7% y/y to $14.5M, benefited from 2024 CODs and strong PJM merchant pricing; storage gross margin improved to 11.9% from 5.7% .
  • Funding and pipeline: ~$300M secured across tax equity and project finance to support development; management: “record second quarter Revenue and Adjusted EBITDA results” and confidence in long-term targets .

What Went Wrong

  • Electricity segment pressure: revenue down 3.8% y/y to $159.9M; gross margin compressed to 24.2% (from 33.5%) due to Puna maintenance, Stillwater outage, and U.S. curtailments .
  • Consolidated gross margin declined to 24.3% from 28.8% y/y; gross profit down 7.3% y/y to $56.9M .
  • External constraints: FEOC rules introduce uncertainty for storage sourcing; management is safe harboring projects and expects minimal impact to geothermal; active evaluation underway for storage projects .

Financial Results

MetricQ2 2024Q1 2025Q2 2025Q2 2025 Consensus*
Total Revenues ($USD Millions)$213.0 $229.8 $234.0 $221.6*
Electricity Revenues ($USD Millions)$166.2 $180.2 $159.9 —
Product Revenues ($USD Millions)$37.8 $31.8 $59.6 —
Energy Storage Revenues ($USD Millions)$8.9 $17.8 $14.5 —
Gross Margin (%)28.8% 31.7% 24.3% —
GAAP Diluted EPS ($)$0.37 $0.66 $0.46 $0.38*
Adjusted Diluted EPS ($)$0.40 $0.68 $0.48 —
Operating Income ($USD Millions)$35.1 $50.9 $35.3 —
Adjusted EBITDA ($USD Millions)$126.1 $150.3 $134.6 —

Values with asterisk retrieved from S&P Global.

Segment Breakdown

SegmentQ2 2024 Revenue ($M)Q2 2025 Revenue ($M)Q2 2024 Gross MarginQ2 2025 Gross Margin
Electricity$166.2 $159.9 33.5% 24.2%
Product$37.8 $59.6 13.7% 27.7%
Energy Storage$8.9 $14.5 5.7% 11.9%

KPIs and Balance Sheet Highlights

KPIQ2 2025Notes
Product Backlog ($M)~$263.0 As of Aug 6, 2025
Tax Equity Proceeds ($M)$77.0 received for Heber 1 & 2; $25.6 expected over 8 years Heber geothermal tax partnership
Hybrid Tax Equity ($M)$62.0 with Morgan Stanley Renewables, expected by end-2025 Supports Lower Rio, Arrowleaf
Project Finance – BouillanteUp to $111.0M at ~4.65% Guadeloupe, euro loan
Project Finance – DominicaUp to $49.8M at ~2.4% Caribbean lenders
Dividend$0.12 declared; expects $0.12 next two quarters Paid Sep 3, 2025
Net Debt / EBITDA~4.4x as of 6/30/2025 CFO remarks
Curtailement Impact~$13M revenue, ~$12M EBITDA reduction in Q2 Expected to lessen in H2

Guidance Changes

MetricPeriodPrevious Guidance (Q1 PR)Current Guidance (Q2 PR)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–$593 Maintained
Adj. EBITDA to Minority Interest ($M)FY 2025~$21 ~$21 Maintained
Product Segment Gross Margin (%)FY 202519–21% (CFO) 21–23% (CFO) Raised
Energy Storage Gross Profit (%)FY 2025Up to ~20% (CFO) Up to ~20% (CFO) Maintained
DividendFY 2025$0.12 per quarter next 3 quarters $0.12 per quarter next 2 quarters Horizon trimmed

Earnings Call Themes & Trends

TopicQ4 2024 (Prior-2)Q1 2025 (Prior-1)Q2 2025 (Current)Trend
AI/Data Center DemandNegotiating ~250MW with hyperscalers; PPAs >$100/MWh Continued strong demand narrative Expect to finalize contracts with hyperscalers; improved economics Strengthening demand and pricing
Permitting AccelerationHighlighted easing expected Executive order to shorten BLM permitting timelines “Accelerated permit approvals”; multiple permits in ~2 months (Nevada) Material acceleration supporting pipeline
Tariffs / FEOCStorage may face interim headwinds; mitigation underway Batteries for ’25/’26 largely procured; evaluating U.S. supply FEOC expected minimal impact on geothermal; safe harboring storage Manageable; storage supply pivot
Product BacklogRecord ~$340M ~$314M ~$263M Normalizing as revenue recognized; pipeline intact
Storage Merchant Pricing (PJM)2024 uplift; 120MW/360MWh COD Strong winter pricing; margins up Strong summer pricing; margin guidance up to 20% Persistent tailwind
EGS / Next-Gen Geothermal—Building partnerships; exploring EGS tech New SVP appointment; EGS focus; Sage pressure geothermal agreement (post-Q2) Execution ramping

Management Commentary

  • “This performance was driven by the continued recovery of our Product segment revenue and margin as well as improved performance in our Energy Storage segment… Planned well field work at our Puna Power plant, along with planned third-party curtailments in the U.S., negatively impacted our Electricity segment’s revenue and EBITDA by approximately $13 million and $12 million” — CEO Doron Blachar .
  • “We secured $300 million of funding for future project development, with $139 million related to tax equity proceeds… and $161 million related to project finance at attractive rates” — CEO Doron Blachar .
  • “Gross margin for the electricity segment was 24.2%… Excluding these temporary disclosed events, the margin would have been approximately 30%. … We now anticipate that gross margin for the year in our product segment will increase to a range of 21 to 23%” — CFO Assi Ginzburg .
  • “OBBB… extended the PTC and ITC runway for both our geothermal and energy storage segments” — CEO Doron Blachar .

Q&A Highlights

  • Permitting: Nevada environmental permits shortened from ~1 year to ~2 months in some cases; company filing aggressively to expedite projects .
  • FEOC and storage sourcing: safe-harbor strategy across projects through 2028/2029; minimal FEOC impact for geothermal; ongoing evaluation for storage supply chain .
  • Data center PPAs: ~250MW in negotiations; not contingent on EGS; aim to announce signed PPAs in coming months .
  • Blue Mountain contribution: ~$4M EBITDA expected in H2 2025; capacity expansion from 20MW to 23.5MW by ~2027; PPA repricing opportunity post‑2029 .
  • Curtailments: NV Energy transmission maintenance largely completed; curtailments expected to be “much less” in H2 .
  • Battery settlement: recurring ~$3.1M quarterly income through end-2025/into Q1 2026 due to non-supply settlement .

Estimates Context

  • Revenue beat: $234.0M actual vs $221.6M consensus*; GAAP diluted EPS beat: $0.46 vs $0.38*; adjusted EPS $0.48 was above GAAP and aligned with company focus; consensus revenue estimates based on 9 forecasts; EPS based on 10 .
  • Forward view: consensus EPS for Q3 2025 at ~$0.38* and revenue ~$234.3M*; guidance reiteration and curtailment easing could support modest upward revisions; note comparability differences between consensus EBITDA and company’s adjusted EBITDA focus*.
    Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Clear top-line and EPS beats with maintained FY guidance underscore resilient multi-segment model; product and storage offset electricity curtailments .
  • Near-term relief: management expects curtailments to lessen in H2, supporting electricity margin recovery towards ~30% ex-temp impacts .
  • Structural growth drivers: extended PTC/ITC runway (“OBBB”), accelerated permitting, and AI data center demand underpin higher PPA pricing and long-term targets .
  • Capital and pipeline catalysts: ~$300M funding secured; Blue Mountain acquisition with capacity upgrade and 2029 repricing; Heber 1 25‑year PPA extension effective 2026 .
  • Margin trajectory: product margin guidance raised (21–23%); storage gross profit up to ~20% supported by PJM merchant strength .
  • Watchlist: FEOC rulemaking and storage supply chain transitions; continued safe-harboring mitigates risks; geothermal minimally impacted .
  • Upcoming potential stock catalysts: signing of hyperscaler PPAs; H2 confirmation of reduced curtailments; progress on EGS initiatives and Sage collaboration (announced post-Q2) .