second quarter 2026
Filed Aug 5, 2026Continued execution on Ormat's growth strategy drove double-digit revenue growth while advancing EGS development
Total revenues increased 10.6%, gross profit increased 20.8%, Energy Storage revenue increased 195.1%, and the Company increased full-year revenue and Adjusted EBITDA guidance. GAAP operating income and net income attributable to stockholders declined, affected primarily by a $6.6 million write-off of storage projects no longer being pursued and lower Product segment revenue and margin.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenuesGAAP | $258.8 million | – | 10.6% |
| Gross profitGAAP | $68.7 million | – | 20.8% |
| Gross marginGAAP | 26.5% | – | – |
| Operating incomeGAAP | $34.2 million | – | (3.2)% |
| Net income attributable to the Company's stockholdersGAAP | $27.1 million | – | (3.4)% |
| Diluted EPSGAAP | $0.43 | – | (6.5)% |
| Adjusted Net income attributable to the Company's stockholdersnon-GAAP | $31.0 million | – | 6.5% |
| Adjusted Diluted EPSnon-GAAP | $0.50 | – | 4.2% |
| Adjusted EBITDAnon-GAAP | $143.9 million | – | 6.9% |
| Total cost of revenuesGAAP | 190,066 (Dollars in thousands) | – | – |
| Research and development expensesGAAP | 1,501 (Dollars in thousands) | – | – |
| Selling and marketing expensesGAAP | 5,968 (Dollars in thousands) | – | – |
| General and administrative expensesGAAP | 21,104 (Dollars in thousands) | – | – |
| Impairment of long-lived assetsGAAP | 316 (Dollars in thousands) | – | – |
| Write-off of unsuccessful exploration and storage activitiesGAAP | 6,611 (Dollars in thousands) | – | – |
| Interest expense, netGAAP | (43,938) (Dollars in thousands) | – | – |
| Income attributable to sale of tax benefitsGAAP | 16,553 (Dollars in thousands) | – | – |
| Income tax benefitGAAP | 9,666 (Dollars in thousands) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| ElectricityContributions from the Blue Mountain acquisition, improved generation at the Puna and Olkaria facilities, higher energy rates at Puna and lower curtailments compared to the prior-year period were partially offset by planned maintenance activities. Gross margin was 23.7%, compared to 24.2%. | $169.3 million | – | 5.8% |
| ProductRevenue declined due to the timing of manufacturing and construction progress. Gross margin declined to 9.7% due to high expenses related to construction costs of a project in Europe and the impact of changes in exchange rate on overall manufacturing costs. | $46.7 million | – | (21.6)% |
| Energy StorageHigh asset availability enabled the Company to capitalize on strong merchant pricing in the PJM market, alongside new portfolio capacity additions over the past 12 months. Gross margin was 56.2%, compared to 11.9%. | $42.8 million | – | 195.1% |
full-year 2026 outlook
- RevenueTotal revenues are expected to be between $1,150 million and $1,200 million.
- NoteElectricity segment revenues of between $710 million and $725 million.
- NoteProduct segment revenues of between $300 million and $320 million.
- NoteEnergy Storage revenues of between $140 million and $155 million.
- NoteAdjusted EBITDA is expected to be between $630 million and $650 million.
- NoteOf which approximately $17.0 million is attributable to minority interest.
Capital returns
- On August 5, 2026, the Board of Directors declared, approved, and authorized payment of a quarterly dividend of $0.12 per share.
- The dividend will be paid on September 2, 2026, to stockholders of record as of the close of business on August 19, 2026.
- The Company expects to pay a dividend of $0.12 per share in the next quarter.
What drove it
- Energy Storage revenue nearly tripled year-over-year, benefiting from favorable merchant pricing and new capacity additions.
- Since the start of the year, the Company expanded its generation portfolio by 155 MW with the addition of the Hoku solar and energy storage facility, the Shirk energy storage facility, the 5 MW Cove Fort upgrade and commencement of commercial operations at the 10 MW Dominica geothermal power plant.
- The Company reported 202 MW of electricity generation projects under construction and development, all backed by long-term PPAs, and 497 MW / 1,888 MWh of energy storage projects under construction and development.
- Product backlog stood at approximately $202.8 million as of August 5, 2026.
- The Company introduced the Ormega100 surface generation unit and advanced the SLB and Sage Geosystems EGS pilot projects toward field execution.
Concerns
- GAAP operating income declined 3.2%, net income attributable to stockholders declined 3.4%, and diluted EPS declined 6.5%.
- The decline in GAAP net income was primarily driven by a $6.6 million write-off of storage projects that the Company decided to no longer pursue.
- Product revenue declined 21.6% and Product gross margin declined to 9.7% from 27.7%.
- Interest expense, net was (43,938) (Dollars in thousands), compared to (36,682) (Dollars in thousands) in the prior-year period.
- The Company does not provide guidance on net income and cannot provide a reconciliation of Adjusted EBITDA guidance to net income without unreasonable efforts.】【。
What to watch
- Product segment manufacturing and construction progress and the Company's expectation for Product gross margin to improve in the second half of the year.
- Execution of planned drilling at the Desert Peak project with SLB in the fourth quarter of 2026.
- Progress in permitting, procurement, drilling services and equipment, and engineering for the Sage Geosystems pilot.
- Development of the 100 MW / 400 MWh Denali energy storage facility, expected by the end of 2028, under a 20-year tolling agreement with Clean Power Alliance.
- Delivery against the increased full-year revenue and Adjusted EBITDA guidance ranges.
Balance sheet and cash flow
- Cash and cash equivalents were 513,747 (Dollars in thousands) as of June 30, 2026, compared to 147,448 (Dollars in thousands) as of December 31, 2025.
- Restricted cash and cash equivalents were 144,399 (Dollars in thousands) as of June 30, 2026, compared to 133,418 (Dollars in thousands) as of December 31, 2025.
- Commercial paper was 99,986 (Dollars in thousands) as of June 30, 2026, compared to 99,983 (Dollars in thousands) as of December 31, 2025.
- Convertible senior notes were 360,585 (Dollars in thousands) in current liabilities and 806,455 (Dollars in thousands) in long-term debt as of June 30, 2026.
- Long-term limited and non-recourse debt, net of current portion, was 684,416 (Dollars in thousands) as of June 30, 2026, compared to 645,803 (Dollars in thousands) as of December 31, 2025.
- Long-term full recourse debt, net of current portion, was 895,899 (Dollars in thousands) as of June 30, 2026, compared to 1,009,090 (Dollars in thousands) as of December 31, 2025.
- Total assets were 6,788,245 (Dollars in thousands) and total liabilities were 4,044,260 (Dollars in thousands) as of June 30, 2026.
Analysis
Ormat reported second-quarter total revenues of $258.8 million, up 10.6% from $234.0 million, while gross profit increased 20.8% to $68.7 million. Consolidated gross margin increased to 26.5% from 24.3%. Adjusted EBITDA increased 6.9% to $143.9 million, and adjusted diluted EPS increased to $0.50 from $0.48. The Company increased its full-year 2026 revenue and Adjusted EBITDA guidance.
Energy Storage was the principal source of quarterly growth. Segment revenue increased 195.1% to $42.8 million and segment gross margin reached 56.2%, compared with 11.9% in the prior-year period. Management attributed the performance to high asset availability, strong merchant pricing in the PJM market and new capacity additions. Electricity revenue increased 5.8% to $169.3 million, supported by Blue Mountain, improved Puna and Olkaria performance, higher Puna energy rates and lower U.S. curtailments, partly offset by planned maintenance.
Product performance was the offset. Product revenue declined 21.6% to $46.7 million due to manufacturing and construction timing, and Product gross margin declined to 9.7% from 27.7%. The Company cited construction costs for a European project and exchange-rate effects on manufacturing costs, while stating that it expects Product gross margin to improve in the second half. At the consolidated level, operating income declined 3.2% to $34.2 million and GAAP net income attributable to stockholders declined 3.4% to $27.1 million. Management identified a $6.6 million write-off of storage projects no longer being pursued as the primary driver of the net-income decline.
Capital allocation included a declared quarterly dividend of $0.12 per share, payable September 2, 2026, to holders of record on August 19, 2026. Cash and cash equivalents were 513,747 (Dollars in thousands) at June 30, 2026, versus 147,448 (Dollars in thousands) at December 31, 2025. The Company also reported ongoing project expansion, including 202 MW of electricity generation projects and 497 MW / 1,888 MWh of energy storage projects under construction and development, as well as approximately $202.8 million of Product backlog. EGS development advanced through the SLB and Sage Geosystems pilots, with Desert Peak drilling planned in the fourth quarter of 2026.
The updated full-year outlook calls for total revenues of between $1,150 million and $1,200 million and Adjusted EBITDA of between $630 million and $650 million. Segment guidance calls for Electricity revenue of between $710 million and $725 million, Product revenue of between $300 million and $320 million, and Energy Storage revenue of between $140 million and $155 million. Management's outlook is supported by first-half performance, merchant and contracted Energy Storage exposure, portfolio additions and the development pipeline, while Product margin recovery and execution on storage and EGS projects remain central items to monitor.
Management, verbatim
Our second quarter results reflect the continued successful execution of our diversified growth strategy. We delivered double-digit revenue growth while expanding gross profit by more than 20%, reflecting the strength and balance of our three operating segments. Based on our strong first-half performance and positive momentum across our business, we are raising our full-year 2026 revenue and Adjusted EBITDA guidance.
Doron Blachar, Chief Executive Officer of Ormat
Our Electricity segment built on its growth momentum during the quarter, driven by contributions from our Blue Mountain geothermal power plant acquired in June 2025, improved performance at our Olkaria and Puna power plants, and lower curtailments in the USA compared to the prior-year period. Our Energy Storage segment delivered another outstanding quarter, with revenues increasing nearly threefold year-over-year.
Doron Blachar, Chief Executive Officer of Ormat
We continued to make significant progress on our EGS strategy during the quarter.
Doron Blachar, Chief Executive Officer of Ormat
Not in the filing
stated, not guessed- Prior-quarter figures and quarter-over-quarter changes for reported metrics were not provided.
- Operating cash flow was not provided.
- Free cash flow was not provided.
- Share repurchases were not provided.
- Prior full-year guidance ranges were not provided, so comparison with prior guidance cannot be made.
- Full-year gross margin, operating expenses and tax-rate guidance were not provided.
- GAAP net income and GAAP EPS guidance were not provided.
- A total debt figure on its own labeled line was not provided.
- A stated total debt-to-capital, leverage ratio or net debt figure was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.