Ormat Technologies, Inc.

What they do

Ormat develops, builds, owns, and operates geothermal, solar PV, and recovered energy power plants, and sells the electricity. It also designs and sells equipment for geothermal and recovered energy plants, and operates grid-connected battery energy storage systems (BESS) in California, Texas, and the PJM market.

Revenue drivers

• Electricity segment — Largest segment, generating 70.1% of 2025 revenue from selling power from geothermal, solar PV, and recovered energy plants, both in the U.S. and internationally.
• Product segment — Designs and sells equipment for geothermal and recovered energy plants; in 2025 signed contracts for $103.5 million of anticipated revenues, and added ~$100 million from the TOPP2 project in New Zealand in January 2026.
• Energy Storage segment — Owns and operates front-of-the-meter BESS facilities, generating revenue from ancillary services, tolling agreements, and RA contracts; Q2 2026 revenue grew 195% year-over-year to $42.8 million.

Recent performance

In Q2 2026, total revenue was $258.8 million, up 10.6% from Q2 2025, with gross profit up 20.8% to $68.7 million. H1 2026 revenue was $662.7 million, up 42.9%, driven by a 145% surge in Product revenue and 172% in Energy Storage. Net income attributable to stockholders was $27.1 million in Q2 2026 (diluted EPS $0.43), down slightly from $28.0 million a year ago. Full-year 2025 revenue was $989.5 million and net income was $127.0 million.

Strategy

Ormat's stated strategy is to expand its geothermal business, including piloting new Enhanced Geothermal Systems (EGS) technologies. The company is diversifying into complementary energy solutions like utility-scale storage and solar PV, including hybrid projects. It is pursuing growth through both organic development and M&A, such as the acquisitions of a 20MW geothermal plant and a 30MW solar-plus-storage system in Hawaii. Management also expects to leverage operational expertise to drive long-term growth.

Risks

• Operational risks — Geothermal and storage facilities are subject to equipment breakdowns, maintenance costs, labor disputes, and catastrophic events like earthquakes or volcanic activity (e.g., 2018 Kilauea eruption impacting Puna).
• Customer concentration — The company may depend on a few off-takers; for example, the OREG power plants rely on compressor run times from customer facilities, which led to lower generation and potential loss of a customer agreement.
• Interest rate exposure — With $2.66B in long-term debt (as of Dec 2025), rising interest rates could increase borrowing costs; interest expense grew from $71.2M to $88.9M in H1 2026 vs H1 2025.
• Project development and realization risk — Delays or failures in new project development, including EGS pilots and international projects like TOPP2, could impact revenue recognition and growth expectations.

Outlook

Management raised full-year 2026 revenue and adjusted EBITDA guidance based on strong first-half performance and positive momentum. The company highlighted continued execution on its EGS strategy with two pilot programs and the introduction of the ORMEGA100 surface generation unit. It expects Energy Storage revenue to benefit from favorable merchant pricing and new capacity additions.