Ormat Technologies (NYSE:ORA) reported record first-quarter 2026 revenue and maintained its full-year outlook, as strength in its energy storage and product segments offset more modest growth in its electricity business.
Chief Executive Officer Doron Blachar said the company began 2026 with “record first quarter revenue,” citing a 75.8% year-over-year increase and expansion in operating income and adjusted EBITDA. He said the results reflected “strong execution across our business,” with particularly strong contributions from energy storage and product operations.
Chief Financial Officer Assi Ginzburg said first-quarter revenue rose to $403.9 million, compared with the prior-year period, driven largely by continued strength in energy storage and product sales. Gross profit increased 65.1% to $120.4 million from $72.9 million a year earlier.
Net income attributable to company stockholders was $44.1 million, or $0.71 per diluted share, compared with $40.4 million, or $0.66 per diluted share, in the prior-year quarter. Ginzburg said the increase was driven by improved business performance, partially offset by about $38 million of one-time pre-tax expenses, including costs related to the repurchase of 2027 convertible notes, write-offs and a settlement expense, partially offset by a gain tied to the purchase of the Ho'oku storage and solar facility in Hawaii.
Adjusted net income attributable to stockholders increased 93.5% to $80.3 million, or $1.30 per diluted share, compared with $41.5 million, or $0.68 per diluted share, a year earlier. Adjusted EBITDA rose 29.7% to $194.9 million.
Storage and Product Segments Drive Growth
Energy storage revenue increased 153.1% year over year in the first quarter. Blachar said the segment is “emerging as a key growth engine,” supported by capacity expansion and the company’s ability to capture favorable merchant pricing. Ginzburg said strong asset availability allowed Ormat to capitalize on merchant prices in the PJM market, while new capacity additions over the past 12 months also contributed.
The energy storage segment posted a gross margin of 59.1% in the quarter, an improvement from the prior year. Ginzburg said the company expects full-year storage gross margin of approximately 35% to 40%, noting that Ormat is not forecasting similar merchant price conditions for the rest of the year.
Product segment revenue rose 458.4% to $177.4 million, driven by $105 million in revenue recognition from the Top Two projects. Ginzburg said Ormat recognized about 60% of the product segment’s expected annual revenue, gross profit and EBITDA in the first quarter because of the impact of that project sale. Product segment gross margin was 21.4% in the quarter, while the company expects full-year product gross margin of 18% to 20%.
Blachar said the product segment’s performance highlighted the strength of Ormat’s integrated business model and its ability to create value across the full life cycle of its assets. He also said product backlog stood at $239 million, down from the fourth quarter of 2025 mainly because of the Top Two revenue recognition. Since the start of the year, Ormat secured two supply contracts for projects in Asia totaling $56 million.
Electricity Segment Sees Modest Revenue Growth
Electricity segment revenue increased about 1% to $181.6 million. Ginzburg said the increase was mainly due to the recent Blue Mountain acquisition and improved performance at the Olkaria facility, which more than offset lower rates at Puna and the effect of extremely high ambient temperatures in Nevada. He said the Nevada temperatures reduced revenue by approximately $4.8 million.
The electricity segment’s gross margin decreased to 30.8% in the first quarter. Blachar said Ormat expects energy rates at Puna to improve in the next few months following the impact of oil prices. He also said the company experienced lower curtailment during the quarter compared with the prior-year period, especially in Nevada, and expects that trend to continue for the remainder of the year.
Internationally, Blachar said Ormat’s Dominica plant is now operational, with full commercial operation expected in the second quarter of 2026 due to third-party transmission line delays.
During the call, management said Ormat signed power purchase agreements for approximately 200 megawatts at favorable pricing, including agreements with Google and Switch and two “blend-and-extend” contracts. Blachar said one amended agreement covers the CD4 geothermal power plant at the Mammoth geothermal complex in California, extending the PPA by five years through 2037 and increasing contract pricing by about 27%. Terms are expected to take effect in October.
In response to an analyst question, Ginzburg said about 40 megawatts of new blend-and-extend agreements should add $7 million to $10 million annually to revenue, with another roughly 40 megawatts in new contracts ending around 2027 expected to add another $5 million to $6 million. He said he expects the electricity segment margin to improve by 1% to 2% year over year over the next two years, beginning likely in the second half of 2026, assuming weather does not have a similar impact.
Company Expands Portfolio and Development Pipeline
Blachar said Ormat’s total portfolio now stands at 1.8 gigawatts of geothermal, solar and energy storage facilities. Its electricity portfolio is approximately 1,340 megawatts globally, with 216 megawatts under construction and development through 2028.
The company added 30 megawatts in the first quarter. Blachar highlighted Ormat’s acquisition of Ho'oku, a recently built solar-plus-storage facility on the Big Island of Hawaii, for approximately $80 million in cash. The acquired assets include a 30-megawatt solar photovoltaic facility paired with a 30-megawatt/120-megawatt-hour battery energy storage system under a 25-year PPA.
Ormat also placed the Shirk energy storage facility into commercial operation and added the Jersey Valley solar-plus-storage project to its pipeline after signing a PPA. Jersey Valley is expected to include 67 megawatts of solar paired with 67 megawatts/268 megawatt-hours of storage and is expected online in late 2027 or early 2028.
Blachar said Ormat remains on track to achieve its portfolio capacity target of 2.6 gigawatts to 2.8 gigawatts by the end of 2028. The company expects to add 216 megawatts of generating capacity from geothermal and hybrid solar photovoltaic projects by then. In energy storage, Ormat has six projects under development that are expected to add approximately 1.5 gigawatt-hours and more than double the storage portfolio.
EGS Strategy Advances as Hyperscaler Interest Grows
Management spent a significant portion of the call discussing enhanced geothermal systems, or EGS. Blachar said Ormat is progressing with two subsurface pilots, including one with SLB and another through its collaboration and investment in Sage Geosystems. He said both pilots are expected to generate approximately 2 megawatts to 4 megawatts each, with production targeted in 2027 based on drilling schedules and permitting.
Blachar said the SLB effort is advancing well planning and permitting, with the company working to file a permit to drill the first well later this year. Sage is also designing wells and preparing for permitting. Both pilots are expected to be adjacent to Ormat facilities, which Blachar said could reduce time to market by allowing heat from a successful pilot to be transferred to existing facilities to generate electricity.
Ormat is also developing a next-generation Ormat Energy Converter tailored for EGS applications. Blachar said the company is in the final stages of design and expects to provide more information within weeks about a turbine that will be “much bigger” than prior models. He said standardizing the system could help reduce power plant construction costs over time.
Blachar said Ormat has identified two prospects within its existing portfolio, including Dixie Valley, that could potentially support large-scale EGS development. He also said Ormat is in discussions with hyperscalers beyond Google and Switch, adding that he expects EGS progress to attract more attention and support larger PPAs.
Guidance Maintained After Strong First Quarter
Ormat maintained its 2026 guidance. The company expects revenue of $1.11 billion to $1.16 billion, representing 14.6% year-over-year growth at the midpoint. Electricity revenue is expected to range from $715 million to $730 million, product revenue from $300 million to $320 million, and energy storage revenue from $95 million to $110 million.
Adjusted EBITDA is expected to range from $615 million to $645 million, up approximately 8.2% at the midpoint.
Ginzburg said the company collected $48.6 million in cash from monetizing production tax credits and investment tax credits through tax equity transactions during the quarter. For the full year, Ormat expects to collect approximately $90 million from investment tax credit tax equity transactions and production tax credit transfers.
Ormat ended the quarter with cash, cash equivalents and restricted cash and cash equivalents of approximately $763 million, compared with about $281 million at the end of 2025. Total debt was approximately $3.4 billion net of deferred financing costs, and net debt was approximately $2.6 billion, equal to 4.2 times net debt to EBITDA.
The company also completed a $1 billion upsized convertible notes offering. Ginzburg said Ormat chose the convertible market because it provided a combination of low and no cash coupon financing and reduced equity dilution through share repurchases at $108 per share.
Ormat now expects total capital expenditures for the remainder of 2026 to be $587 million, including $436 million in the electricity segment, $111 million for storage assets and about $20 million for the SLB pilot and other EGS activities.
The board approved a quarterly dividend of $0.12 per share, payable June 3, 2026, to shareholders of record as of May 20, 2026. The company said it expects to pay the same quarterly dividend in each of the next three quarters.
About Ormat Technologies (NYSE:ORA)
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.
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