Core Viewpoint - Ormat Technologies Inc. reported strong first-quarter 2025 results, with adjusted earnings per share exceeding expectations, although total revenues fell slightly short of estimates. The company continues to face challenges in its electricity segment but showed significant growth in its product and energy segments [1][2][4]. Financial Performance - Adjusted earnings per share for Q1 2025 were 68 cents, beating the Zacks Consensus Estimate of 58 cents by 17.2% and increasing 4.6% from 65 cents in the prior year [1]. - Total revenues reached $229.8 million, missing the Zacks Consensus Estimate of $233 million by 1.4%, but reflecting a year-over-year increase of 2.5% [2]. - GAAP earnings were reported at 66 cents, compared to 64 cents in the year-ago quarter [1]. Segmental Performance - Electricity segment revenues were $180.2 million, down 5.8% year over year due to energy curtailments and maintenance issues [3]. - Product segment revenues increased by 27.9% to $31.8 million, attributed to timing of revenue recognition and a higher backlog [4]. - Energy segment revenues surged 119.7% to $17.8 million, driven by strong performance in the PJM merchant market due to cold weather [4]. Operational Update - Total operating expenses were $24.6 million, up 1.6% from the previous year [5]. - Operating income declined 3.2% year over year to $50.9 million [5]. - Total cost of revenues increased by 7.9% year over year to $156.8 million [5]. - Net interest expenses rose 11.3% year over year to $34.5 million [5]. Financial Condition - As of March 31, 2025, cash and cash equivalents stood at $112.7 million, up from $94.4 million as of December 31, 2024 [6]. 2025 Guidance - The company reiterated its revenue guidance for 2025, expecting between $935 million and $975 million, with the Zacks Consensus Estimate at $953.6 million [7]. - Electricity segment revenues are anticipated in the range of $710 million to $725 million, product segment revenues between $172 million and $187 million, and energy storage segment revenues between $53 million and $63 million [8]. - Annual adjusted EBITDA is expected to be in the range of $563 million to $593 million [9].

Cover Page Ormat Technologies, Inc. (ORA) filed its Form 10-Q for the quarter ended March 31, 2025, as a Large Accelerated Filer[2](index=2&type=chunk)[3](index=3&type=chunk) Securities Registered | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | :--- | :--- | :--- | | Common Stock | ORA | NYSE | As of May 1, 2025, **60,662,626** shares of common stock were outstanding[3](index=3&type=chunk) [Table of Contents](index=2&type=section&id=Table%20of%20Contents) The report is structured into Part I (Financial Information) and Part II (Other Information), encompassing financial statements, MD&A, market risk, controls, legal proceedings, and risk factors[5](index=5&type=chunk) [Certain Definitions](index=3&type=section&id=Certain%20Definitions) The terms 'Ormat', 'the Company', 'we', 'us', 'our company', 'Ormat Technologies', or 'our' refer to Ormat Technologies, Inc. and its consolidated subsidiaries[7](index=7&type=chunk) [PART I — FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for Q1 2025, including balance sheets, statements of operations, equity, and cash flow, with detailed notes on accounting policies and financial instruments [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (March 31, 2025 vs. December 31, 2024) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Assets | $5,838,947 | $5,666,224 | $172,723 | 3.05% | | Total Liabilities | $3,243,601 | $3,105,844 | $137,757 | 4.44% | | Total Equity | $2,585,773 | $2,550,932 | $34,841 | 1.37% | | Cash and cash equivalents | $112,704 | $94,395 | $18,309 | 19.40% | | Restricted cash and cash equivalents | $112,001 | $111,377 | $624 | 0.56% | | Property, plant and equipment, net | $3,497,915 | $3,501,886 | $(3,971) | -0.11% | | Construction-in-process | $844,873 | $755,589 | $89,284 | 11.82% | | Total current assets | $600,854 | $547,122 | $53,732 | 9.82% | | Total current liabilities | $619,223 | $598,078 | $21,145 | 3.54% | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Condensed Consolidated Statements of Operations (Three Months Ended March 31, 2025 vs. 2024) | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $229,762 | $224,166 | $5,596 | 2.50% | | Cost of Revenues | $156,835 | $145,356 | $11,479 | 7.89% | | Gross Profit | $72,927 | $78,810 | $(5,883) | -7.46% | | Operating Income | $50,913 | $52,583 | $(1,670) | -3.17% | | Net Income | $41,034 | $40,350 | $684 | 1.70% | | Net Income Attributable to Company's Stockholders | $40,362 | $38,587 | $1,775 | 4.60% | | Basic EPS | $0.67 | $0.64 | $0.03 | 4.69% | | Diluted EPS | $0.66 | $0.64 | $0.02 | 3.13% | Revenue Breakdown by Segment (Three Months Ended March 31, 2025 vs. 2024) | Segment | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Electricity | $180,241 | $191,253 | $(11,012) | -5.76% | | Product | $31,769 | $24,832 | $6,937 | 27.94% | | Energy Storage | $17,752 | $8,081 | $9,671 | 119.68% | [Condensed Consolidated Statements of Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Changes in Equity (Three Months Ended March 31, 2025 vs. 2024) | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Total Stockholders' Equity attributable to Company's Stockholders | $2,461,204 | $2,425,129 | $36,075 | | Total Equity | $2,585,773 | $2,550,932 | $34,841 | | Retained Earnings | $847,607 | $814,518 | $33,089 | | Additional Paid-in Capital | $1,640,910 | $1,635,245 | $5,665 | Stock-based compensation contributed **$4.9 million** to additional paid-in capital in Q1 2025, an increase from **$4.8 million** in Q1 2024[16](index=16&type=chunk) Cash dividends declared were **$0.12 per share**, totaling **$7.273 million** in Q1 2025[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flow](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) Condensed Consolidated Statements of Cash Flow (Three Months Ended March 31, 2025 vs. 2024) | Cash Flow Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $88,010 | $115,209 | $(27,199) | -23.61% | | Net cash used in investing activities | $(207,948) | $(377,834) | $169,886 | -44.96% | | Net cash provided by financing activities | $138,853 | $273,944 | $(135,091) | -49.31% | | Net change in cash and cash equivalents and restricted cash | $18,933 | $11,191 | $7,742 | 69.18% | Capital expenditures increased significantly to **$192.6 million** in Q1 2025 from **$103.4 million** in Q1 2024, primarily for facilities under construction[20](index=20&type=chunk) Cash used in investing activities decreased due to the absence of a large business acquisition (**$274.6 million** in Q1 2024) in Q1 2025[20](index=20&type=chunk) [NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=12&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [NOTE 1 — GENERAL AND BASIS OF PRESENTATION](index=12&type=section&id=NOTE%201%20%E2%80%94%20GENERAL%20AND%20BASIS%20OF%20PRESENTATION) This note outlines the basis of presentation for interim financial statements, details new loan agreements, a battery supplier settlement, war impact, exploration write-offs, and information on cash and credit risk concentration - The Company secured three new 8-year loan agreements in Q1 2025: **Mizrahi 2025 Loan ($50.0 million)**, **Discount 2025 Loan ($50.0 million)**, and **Hapoalim 2025 Loan ($100.0 million)**, all with SOFR-based interest rates and covenants[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk) - A settlement with a battery supplier resulted in a **$35.0 million** recovery of damages, with **$3.1 million** recognized as 'Other operating income' in Q1 2025 upon meeting contingency conditions[30](index=30&type=chunk) - Write-offs for unsuccessful exploration and storage activities totaled **$0.5 million** in Q1 2025, related to abandoned storage projects[32](index=32&type=chunk) Reconciliation of Cash and Cash Equivalents and Restricted Cash (in thousands) | Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $112,704 | $94,395 | | Restricted cash and cash equivalents | $112,001 | $111,377 | | Total | $224,705 | $205,772 | - Revenues from primary customers (SCPPA, Sierra Pacific Power Company/Nevada Power Company, KPLC) accounted for **50.2%** of total revenues in Q1 2025, with overdue amounts from KPLC (**$44.7 million**) and ENEE (**$17.3 million**) partially collected post-period[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) - Income from transferable Production Tax Credits (PTCs) was **$7.3 million** in Q1 2025, and Investment Tax Credits (ITCs) generated a **$13.9 million** tax benefit, both net of discount[47](index=47&type=chunk) [NOTE 2 — NEW ACCOUNTING PRONOUNCEMENTS](index=15&type=section&id=NOTE%202%20%E2%80%94%20NEW%20ACCOUNTING%20PRONOUNCEMENTS) This note details new accounting pronouncements, including ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation), aiming for enhanced transparency, while ASU 2024-04 (Convertible Debt) is not expected to have a material impact - ASU 2023-09, 'Improvements to Income Tax Disclosures,' effective after December 15, 2024, will require enhanced disclosures on rate reconciliation and income taxes paid, disaggregated by jurisdiction[49](index=49&type=chunk)[51](index=51&type=chunk) - ASU 2024-03, 'Expense Disaggregation Disclosures,' effective after December 15, 2026, will require public entities to disclose detailed expense categories in financial statement notes[52](index=52&type=chunk) - ASU 2024-04, 'Induced Conversions of Convertible Debt Instruments,' effective after December 15, 2025, is not anticipated to materially impact the Company's consolidated financial statements[53](index=53&type=chunk) [NOTE 3 — INVENTORIES](index=16&type=section&id=NOTE%203%20%E2%80%94%20INVENTORIES) This note breaks down the Company's inventory, primarily raw materials, purchased parts, self-manufactured parts, and finished products, showing an increase from December 31, 2024, to March 31, 2025 Inventories (in thousands) | Item | March 31, 2025 | December 31, 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Raw materials and purchased parts for assembly | $17,264 | $20,575 | $(3,311) | -16.1% | | Self-manufactured assembly parts and finished products | $24,843 | $17,517 | $7,326 | 41.8% | | Total inventories | $42,107 | $38,092 | $4,015 | 10.5% | [NOTE 4 — FAIR VALUE OF FINANCIAL INSTRUMENTS](index=17&type=section&id=NOTE%204%20%E2%80%94%20FAIR%20VALUE%20OF%20FINANCIAL%20INSTRUMENTS) This note details fair value measurements of financial instruments by level, presents gains and losses on derivative instruments (currency forwards, cross-currency swaps, interest rate swaps), and provides fair value information for long-term debt - The Company's financial instruments measured at fair value primarily consist of **Level 1 cash equivalents** and **Level 2 derivatives** (interest rate swaps, cross-currency swaps, currency forward contracts)[59](index=59&type=chunk)[61](index=61&type=chunk) Gain (Loss) Recognized on Derivative Instruments (in thousands) | Derivative Type | Location of Recognized Gain (Loss) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | :--- | | Currency forward contracts (not designated as hedging) | Derivative and foreign currency transaction gains (losses) | $(347) | $1,078 | | Cross currency swap (cash flow hedging) | Derivative and foreign currency transaction gains (losses) | $(3,665) | $(3,236) | | Interest rate swap (cash flow hedging) | Interest expense, net | $101 | $457 | | Total | | $(3,564) | $(2,779) | - As of March 31, 2025, **90.0%** of consolidated long-term debt was at fixed interest rates, limiting exposure to interest rate volatility, though new variable-rate loans increased variable-rate exposure[192](index=192&type=chunk) Fair Value of Long-Term Debt (in millions) | Loan Type | Fair Value (March 31, 2025) | Fair Value (December 31, 2024) | Carrying Amount (March 31, 2025) | Carrying Amount (December 31, 2024) | | :--- | :--- | :--- | :--- | :--- | | Limited and non-recourse loans: fixed rate | $621.8 | $636.5 | $639.8 | $657.3 | | Full recourse loans: Fixed-rate | $883.6 | $920.4 | $897.4 | $940.4 | | Full recourse loans: Variable-rate | $252.9 | $48.5 | $248.4 | $48.4 | | Financing liability: fixed-rate | $220.2 | $223.4 | $219.7 | $220.6 | | Convertible senior note | $492.3 | $471.2 | $476.4 | $476.4 | [NOTE 5 — STOCK-BASED COMPENSATION](index=20&type=section&id=NOTE%205%20%E2%80%94%20STOCK-BASED%20COMPENSATION) This note describes the Company's stock-based compensation, including the grant of **210,961 RSUs** and **45,190 PSUs** in March 2025 under the 2018 Incentive Compensation Plan, with 1 to 3-year vesting periods - In March 2025, Ormat granted **210,961 RSUs** and **45,190 PSUs** with 1 to 3-year vesting periods, with fair values of **$68.9 per RSU** and **$70.9 per PSU**[69](index=69&type=chunk)[70](index=70&type=chunk) [NOTE 6 — INTEREST EXPENSE, NET](index=21&type=section&id=NOTE%206%20%E2%80%94%20INTEREST%20EXPENSE%2C%20NET) This note details the components of net interest expense, which increased to **$34.5 million** in Q1 2025 from **$31.0 million** in Q1 2024, primarily due to new loan agreements Components of Interest Expense, Net (in thousands) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Interest related to sale of tax benefits | $3,799 | $4,896 | $(1,097) | -22.4% | | Interest expense | $34,436 | $29,124 | $5,312 | 18.2% | | Less — amount capitalized | $(3,762) | $(3,052) | $(710) | 23.3% | | Total interest expense, net | $34,473 | $30,968 | $3,505 | 11.3% | - The increase in net interest expense was primarily driven by new loan agreements, including Mammoth Senior Secured Notes, DEG 4 Loan, Discount 2024/2024 II loans, Bottleneck Loan, and Mizrahi 2025 Loan[147](index=147&type=chunk) [NOTE 7 — EARNINGS PER SHARE](index=21&type=section&id=NOTE%207%20%E2%80%94%20EARNINGS%20PER%20SHARE) This note provides the computation of basic and diluted earnings per share, showing an increase for Q1 2025 compared to Q1 2024, and clarifies that convertible senior notes had no dilutive effect as conversion conditions were not met Earnings Per Share (EPS) and Weighted Average Shares (in thousands, except EPS) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Basic EPS | $0.67 | $0.64 | $0.03 | 4.69% | | Diluted EPS | $0.66 | $0.64 | $0.02 | 3.13% | | Weighted average basic shares | 60,559 | 60,386 | 173 | 0.29% | | Weighted average diluted shares | 60,840 | 60,536 | 304 | 0.50% | - Convertible senior notes had no dilutive effect on EPS for Q1 2025, as the common stock price (**$90.27**) did not exceed the conversion price and other conditions were not met[75](index=75&type=chunk) [NOTE 8 — BUSINESS SEGMENTS](index=21&type=section&id=NOTE%208%20%E2%80%94%20BUSINESS%20SEGMENTS) This note disaggregates financial information into Electricity, Product, and Energy Storage segments, providing detailed revenue, gross profit, and operating income data, highlighting distinct operations and cost allocation - Ormat operates in three segments: **Electricity** (geothermal, solar PV, REG power plants), **Product** (equipment design, manufacturing, EPC services), and **Energy Storage** (grid-connected BESS)[76](index=76&type=chunk)[77](index=77&type=chunk) Segment Performance (Three Months Ended March 31, 2025 vs. 2024, in thousands) | Segment | Net Revenue (2025) | Net Revenue (2024) | Gross Profit (2025) | Gross Profit (2024) | Operating Income (2025) | Operating Income (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Electricity | $180,241 | $191,253 | $60,408 | $74,523 | $40,843 | $52,681 | | Product | $31,769 | $24,832 | $7,085 | $3,678 | $3,636 | $842 | | Energy Storage | $17,752 | $8,081 | $5,434 | $609 | $6,434 | $(940) | | Consolidated Total | $229,762 | $224,166 | $72,927 | $78,810 | $50,913 | $52,583 | - Foreign operations in the Electricity segment, primarily Kenya, Guatemala, Honduras, and Guadeloupe, contributed disproportionately to gross profit (**34.8%** in Q1 2025) and net income (**53.8%** in Q1 2025) due to lower costs and newer plants[121](index=121&type=chunk) [NOTE 9 — COMMITMENTS AND CONTINGENCIES](index=24&type=section&id=NOTE%209%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) This note discloses legal proceedings and commitments, including a class action settlement and a **$47.5 million** breach of contract claim, along with PPA renegotiations in Kenya, neither expected to be material to financial statements - A class action lawsuit by a former employee in California alleging Labor Code violations has reached a settlement in principle for an immaterial amount, pending court approval[88](index=88&type=chunk) - Engie Resources, LLC filed a **$47.5 million** breach of contract claim against a subsidiary related to the February 2021 Texas power crisis; the Company intends to vigorously defend and has not accrued for potential losses[89](index=89&type=chunk)[91](index=91&type=chunk) - Discussions are ongoing in Kenya regarding the review and potential renegotiation of Power Purchase Agreements (PPAs) between KPLC and independent power producers, including Ormat's Olkaria complex PPA[93](index=93&type=chunk) [NOTE 10 — INCOME TAXES](index=25&type=section&id=NOTE%2010%20%E2%80%94%20INCOME%20TAXES) This note reports an income tax benefit of **$3.8 million** for Q1 2025, with an effective tax rate benefit of **(10.1)%**, primarily due to investment tax credits and jurisdictional mix of earnings, with an immaterial Pillar 2 impact Income Tax Provision (Benefit) and Effective Tax Rate | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Income tax (provision) benefit | $3,795 | $147 | | Effective tax rate benefit | (10.1)% | (0.4)% | - The effective tax rate benefit is primarily driven by the generation of investment tax credits (**$13.9 million** in Q1 2025) and the jurisdictional mix of earnings[151](index=151&type=chunk) - The Company became subject to OECD Pillar 2 global minimum corporate tax rules effective January 1, 2025, but the impact was immaterial in Q1 2025[95](index=95&type=chunk) [NOTE 11 — SUBSEQUENT EVENTS](index=25&type=section&id=NOTE%2011%20%E2%80%94%20SUBSEQUENT%20EVENTS) This note discloses significant subsequent events, including a **$0.12 per share** quarterly dividend and the **$88.0 million** acquisition of the Blue Mountain geothermal plant, with planned capacity upgrades and solar integration, expected to close in Q2 2025 - On May 7, 2025, the Board declared a quarterly dividend of **$0.12 per share** (**$7.3 million** total), payable on June 4, 2025[96](index=96&type=chunk) - On May 5, 2025, Ormat agreed to acquire the **20MW Blue Mountain** geothermal power plant for **$88.0 million**, with plans to upgrade capacity by **3.5MW** and add a **13MW solar facility**, expected to close in Q2 2025[97](index=97&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=26&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on Q1 2025 financial condition and results, discussing business segments, recent developments, trends, uncertainties, and analyzing revenues, costs, operating expenses, liquidity, capital resources, and market risk exposure [Cautionary Note Regarding Forward-Looking Statements](index=26&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) - The report contains forward-looking statements regarding future operations, financial performance, and business strategy, identified by words like 'expects,' 'plans,' 'anticipates,' and 'believes'[99](index=99&type=chunk) - Readers are cautioned that actual future results may vary materially from expectations due to numerous risks and uncertainties beyond the Company's control, and the Company does not commit to updating these statements[99](index=99&type=chunk)[100](index=100&type=chunk) [Risks Related to the Company's Business and Operation](index=26&type=section&id=Risks%20Related%20to%20the%20Company%27s%20Business%20and%20Operation) - Financial performance is highly dependent on the successful operation of geothermal, REG, solar PV, and energy storage facilities, which are subject to various operational risks[101](index=101&type=chunk) - Geothermal exploration and development face geological risks and uncertainties, potentially leading to insufficient growth prospects or increased costs[101](index=101&type=chunk) - Changes in U.S. and foreign government policy, including tariffs and trade agreements, could materially adversely affect global economic conditions and the Company's business[101](index=101&type=chunk) - Investments in BESS technology involve new technologies with limited reliability history, exposing the Company to risks like increased storage costs, trade restrictions, fire risks, and merchant price volatility[101](index=101&type=chunk) - Concentration of customers, specific projects, and regions, along with international operations and conditions in Israel, expose the Company to heightened financial and political risks[101](index=101&type=chunk) [Risks Related to Governmental Regulations, Laws and Taxation](index=27&type=section&id=Risks%20Related%20to%20Governmental%20Regulations%2C%20Laws%20and%20Taxation) - Responses to Israel's ongoing military conflicts may adversely affect operations and limit product production and sales[103](index=103&type=chunk) - Leases may terminate if geothermal resources are not extracted in 'commercial quantities' or if lease terms are not met, requiring new, potentially less favorable, agreements[103](index=103&type=chunk) - The reduction, elimination, or inability to monetize government incentives (e.g., ITCs, PTCs) could adversely affect business, financial condition, and cash flows[103](index=103&type=chunk) - Compliance with environmental laws and obtaining permits may result in liabilities, costs, and construction delays[103](index=103&type=chunk) [Risks Related to Economic and Financial Conditions](index=28&type=section&id=Risks%20Related%20to%20Economic%20and%20Financial%20Conditions) - The Company may struggle to obtain necessary financing on favorable terms, and substantial existing indebtedness could decrease business flexibility and increase borrowing costs[108](index=108&type=chunk) - Foreign power plants and manufacturing operations expose the Company to risks related to currency rate fluctuations, potentially reducing profits[108](index=108&type=chunk) - Defaults on limited or non-recourse project finance debt by subsidiaries could require the Company to make payments or lose power plants through foreclosure[108](index=108&type=chunk) - Future equity issuances, including through compensation plans or convertible note conversions, could result in dilution and adversely affect common stock price[108](index=108&type=chunk) [Risks Related to Force Majeure](index=28&type=section&id=Risks%20Related%20to%20Force%20Majeure) - A prolonged force majeure event or forced outage affecting a power plant or transmission system could reduce net income[108](index=108&type=chunk) - Threats of terrorism may impact operations in unpredictable ways, adversely affecting business, financial condition, and cash flow[108](index=108&type=chunk) [General Overview](index=29&type=section&id=General%20Overview) - Ormat is a leading vertically integrated company primarily engaged in geothermal energy, expanding into recovered energy generation, energy storage, and solar PV[109](index=109&type=chunk) - The Company's objective is to become a leading global provider of renewable energy, with a current generating portfolio of approximately **1.4 GW** across geothermal, energy storage, REG, and Solar PV[109](index=109&type=chunk)[110](index=110&type=chunk) - Business activities are conducted through three segments: **Electricity** (develops, builds, owns, operates power plants), **Product** (designs, manufactures, sells equipment, provides EPC services), and **Energy Storage** (owns, operates grid-connected BESS)[113](index=113&type=chunk) [Recent Developments](index=29&type=section&id=Recent%20Developments) - In May 2025, Ormat agreed to acquire the **20MW Blue Mountain** geothermal power plant for **$88 million**, with plans for a **3.5MW** capacity upgrade and a **13MW** solar facility addition[113](index=113&type=chunk) - In February 2025, Ormat won a tender for two 15-year tolling agreements for energy storage facilities in Israel, totaling approximately **300MW/1200MWh**, as a 50/50 joint venture[113](index=113&type=chunk) - The **Ijen geothermal power plant (35 MW, Ormat's share 17MW)** achieved successful commercial operation in February 2025[113](index=113&type=chunk) - A 10-year PPA was signed with Calpine Energy Solutions in January 2025 to purchase up to **15MW** from the Mammoth 2 geothermal plant, replacing an existing PPA with increased capacity and price[113](index=113&type=chunk) [Trends and Uncertainties](index=29&type=section&id=Trends%20and%20Uncertainties) - Increased U.S. import tariffs, especially on products from China, pose significant uncertainty, potentially slowing Energy Storage segment growth (reliant on imported batteries) and increasing capital expenditures for Electricity segment projects[114](index=114&type=chunk)[215](index=215&type=chunk) - The Company is working to accelerate imports during tariff pauses but cannot assure avoidance of increased operating costs, cost of revenues, or capital expenditures due to tariffs[114](index=114&type=chunk)[215](index=215&type=chunk) - Uncertainty around the continuation of Investment Tax Credits (ITC) combined with tariff increases could affect long-term growth, particularly in the Energy Storage segment in the U.S.[114](index=114&type=chunk) [Revenues](index=30&type=section&id=Revenues) Total Revenues by Segment (in thousands) | Segment | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (in thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Electricity | $180,241 | $191,253 | $(11,012) | -5.8% | | Product | $31,769 | $24,832 | $6,937 | 27.9% | | Energy Storage | $17,752 | $8,081 | $9,671 | 119.7% | | Total | $229,762 | $224,166 | $5,596 | 2.5% | - Electricity segment revenues decreased by **$11.0 million**, mainly due to curtailments at Dixie Valley and McGinness Hills, and maintenance at Neal Hot Springs and Stillwater power plants[131](index=131&type=chunk) - Energy Storage segment revenues increased by **$9.7 million**, primarily from new facilities (Bottleneck, Montague, East Flemington) and higher energy rates at PJM Interconnect facilities[134](index=134&type=chunk) - Product segment revenues increased by **$6.9 million (27.9%)**, driven by project progress and revenue recognition timing, with projects primarily in Dominica and New Zealand[133](index=133&type=chunk) - Foreign operations contributed **32.4%** of total revenues in Q1 2025, with higher Electricity gross margins than U.S. operations due to lower costs and newer plants in regions like Kenya, Guatemala, Honduras, and Guadeloupe[120](index=120&type=chunk)[121](index=121&type=chunk) [Seasonality](index=32&type=section&id=Seasonality) - Geothermal power plants produce more energy in winter due to lower ambient temperatures, leading to higher revenues and gross profit in Q1 and Q4[123](index=123&type=chunk) - Some PPAs (e.g., Mammoth Complex, North Brawley, Raft River, Neal Hot Springs, Dixie Valley) have higher electricity prices in summer months (June-September) to partially offset reduced generation from higher ambient temperatures[123](index=123&type=chunk) - The Bottleneck tolling agreement in the Energy Storage segment generates approximately **45%** of its revenues in the third quarter[123](index=123&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Key Financial Highlights (Three Months Ended March 31, 2025 vs. 2024, in thousands, except EPS) | Metric | 2025 | 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $229,762 | $224,166 | $5,596 | 2.5% | | Total Cost of Revenues | $156,835 | $145,356 | $11,479 | 7.9% | | Total Gross Profit | $72,927 | $78,810 | $(5,883) | -7.5% | | Operating Income | $50,913 | $52,583 | $(1,670) | -3.2% | | Net Income Attributable to Company's Stockholders | $40,362 | $38,587 | $1,775 | 4.6% | | Basic EPS | $0.67 | $0.64 | $0.03 | 4.7% | | Diluted EPS | $0.66 | $0.64 | $0.02 | 3.1% | - Electricity segment gross profit decreased by **$14.1 million**, while Product and Energy Storage segments saw increases of **$3.4 million** and **$4.8 million**, respectively[127](index=127&type=chunk) - Research and development expenses increased by **$0.9 million (57.7%)**, while selling and marketing expenses decreased by **$0.9 million (18.6%)**, and general and administrative expenses decreased by **$1.6 million (8.3%)**[127](index=127&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk) - Other operating income of **$3.1 million** was recognized in Q1 2025 from a battery supplier settlement, with no comparable amount in Q1 2024[144](index=144&type=chunk) - Interest expense, net, increased by **$3.5 million** to **$34.5 million**, primarily due to new loan agreements[147](index=147&type=chunk) - Derivatives and foreign currency transactions shifted from a **$1.6 million loss** in Q1 2024 to a **$2.1 million gain** in Q1 2025[148](index=148&type=chunk) - Income attributable to sale of tax benefits remained stable at **$17.6 million** in Q1 2025[149](index=149&type=chunk) - Equity in earnings of investees shifted from a **$0.8 million gain** in Q1 2024 to a **$0.4 million loss** in Q1 2025, partly due to Sarulla Consortium's remediation efforts[152](index=152&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) - As of March 31, 2025, the Company had **$112.7 million** in cash and cash equivalents (**$41.1 million** held by foreign subsidiaries) and **$364.8 million** in unused corporate borrowing capacity[155](index=155&type=chunk) - Estimated capital needs for the remainder of 2025 include **$419.0 million** for capital expenditures on new projects, enhancements, and exploration, and **$189.9 million** for long-term debt repayment[156](index=156&type=chunk)[188](index=188&type=chunk) - The Company expects to finance these needs through existing liquidity, positive operating cash flows, and future project financings, including construction loans and tax equity transactions[157](index=157&type=chunk) - New loan agreements totaling **$200.0 million** were entered into with Mizrahi, Discount, and Hapoalim banks in Q1 2025[159](index=159&type=chunk) - The Company is in compliance with financial covenants (e.g., net debt to adjusted EBITDA ratio of **4.18** vs. max **6.0**, equity to total assets ratio of **44.3%** vs. min **25%**), except for a **$0.9 million** equity distribution restriction from the DAC 1 Senior Secured Notes subsidiary[162](index=162&type=chunk)[164](index=164&type=chunk) [Non-GAAP Measures: EBITDA and Adjusted EBITDA](index=42&type=section&id=Non-GAAP%20Measures%3A%20EBITDA%20and%20Adjusted%20EBITDA) - EBITDA is defined as net income before interest, taxes, depreciation, amortization, and accretion[177](index=177&type=chunk) - Adjusted EBITDA further adjusts EBITDA for mark-to-market gains/losses, stock-based compensation, M&A costs, extinguishment gains/losses, settlement costs, impairment charges, and write-offs of unsuccessful exploration/storage activities[177](index=177&type=chunk) EBITDA and Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Net income | $41,034 | $40,350 | $684 | 1.7% | | EBITDA | $142,977 | $134,360 | $8,617 | 6.4% | | Adjusted EBITDA | $150,269 | $141,241 | $9,028 | 6.4% | [Capital Expenditures](index=43&type=section&id=Capital%20Expenditures) - Capital expenditures are focused on developing new power plants, enhancing existing ones, and investing in strategic plan activities[180](index=180&type=chunk) - Major projects under construction include **Zunil Upgrade (Guatemala, 5MW)**, **Bouillante Repowering (Guadeloupe, 10MW)**, **Topp 2 (New Zealand, 50MW)**, **Dominica geothermal (10MW)**, and U.S. plant upgrades (**Cove Fort 7MW, Stillwater 5MW, Salt Wells 5MW**)[180](index=180&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk) Energy Storage Projects Under Construction | Project Name | Size | Location | Customer | Expected COD | | :--- | :--- | :--- | :--- | :--- | | Lower Rio | 60MW/120MWh | TX | ERCOT | Q3 2025 | | Arrowleaf | 35MW/140MWh | CA | SDCP | Q4 2025 | | Bird Dog | 60MW/120MWh | CA | SDCP | Q2 2026 | | Shirk | 80MW/320MWh | CA | CAISO | Q1 2026 | | Israel High Voltage (*) | 150MW/600MWh | Israel | Israeli Electricity Authority | 2028 | - Total estimated capital expenditures for the last three quarters of 2025 are approximately **$419 million**, allocated to new projects, exploration, maintenance, and energy storage development[187](index=187&type=chunk)[188](index=188&type=chunk) [Exposure to Market Risks](index=44&type=section&id=Exposure%20to%20Market%20Risks) - Electricity price volatility risk is limited by fixed or escalating rate PPAs for most power plants, but energy storage projects and the Puna complex (until new PPA) are exposed to merchant market price changes[190](index=190&type=chunk)[191](index=191&type=chunk) - As of March 31, 2025, **90.0%** of consolidated long-term debt was at fixed interest rates, but new variable-rate loans and **$100.0 million** in commercial paper increase exposure to interest rate volatility[192](index=192&type=chunk) - Foreign currency exchange risk primarily involves fluctuations of the U.S. dollar against the New Israeli Shekel (NIS), Euro, and Kenyan Shilling (KES), impacting foreign subsidiary revenues and expenses, mitigated by cross-currency swap and forward contracts[194](index=194&type=chunk)[195](index=195&type=chunk) Sensitivity Analysis of Fair Values (March 31, 2025, in thousands) | Risk | Change in the Fair Value of: | Assuming a 10% Increase in Rates | Assuming a 10% Decrease in Rates | | :--- | :--- | :--- | :--- | | Foreign currency | Foreign currency forward contracts | $(738) | $876 | | Interest rate | Mizrahi 2025 Loan | $(1,093) | $1,130 | | Interest rate | Discount 2025 Loan | $(1,123) | $1,161 | | Interest rate | Hapoalim 2025 Loan | $(2,149) | $2,221 | | Interest rate | Financing Liability | $(9,060) | $9,639 | [Effect of Inflation](index=46&type=section&id=Effect%20of%20Inflation) - Increased inflation rates from early 2022 to early 2024 led to higher overall operating and other costs, particularly in the U.S.[200](index=200&type=chunk) - Inflation impacts Electricity segment operating costs, partially mitigated by PPA price adjustments, and Product segment profit margins, which can be offset by project pricing[201](index=201&type=chunk) - Rising interest rates, despite mostly fixed-rate debt, could increase interest expense upon refinancing or new borrowings[201](index=201&type=chunk) [Contractual Obligations and Commercial Commitments](index=46&type=section&id=Contractual%20Obligations%20and%20Commercial%20Commitments) - No material changes to contractual obligations have occurred since the 2024 Annual Report, outside the ordinary course of business[202](index=202&type=chunk) [Concentration of Credit Risk](index=46&type=section&id=Concentration%20of%20Credit%20Risk) - Credit risk is concentrated with major customers: Sierra Pacific Power Company/Nevada Power Company (**16.1%** of revenues), SCPPA (**22.0%**), and KPLC (**12.1%**)[203](index=203&type=chunk)[204](index=204&type=chunk) - As of March 31, 2025, KPLC had **$44.7 million** overdue (**$15.2 million** paid in April/May 2025), and ENEE had **$17.3 million** overdue (**$1.3 million** paid in April/May 2025)[204](index=204&type=chunk)[205](index=205&type=chunk) - The Company expects to collect all past due amounts from KPLC, supported by a government of Kenya support letter[204](index=204&type=chunk) [Government Grants and Tax Benefits](index=46&type=section&id=Government%20Grants%20and%20Tax%20Benefits) - Detailed information on government grants and tax benefits is available in the 2024 Annual Report[206](index=206&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=47&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section incorporates by reference the detailed discussion on market risk exposures, including electricity price volatility, interest rate risk, and foreign currency exchange risk, from Item 2's 'Exposure to Market Risks' and 'Concentration of Credit Risk' sections - Information on quantitative and qualitative disclosures about market risk is incorporated by reference from the 'Exposure to Market Risks' and 'Concentration of Credit Risk' sections in Item 2[207](index=207&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=47&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025, ensuring timely and accurate reporting, with no material changes in internal control over financial reporting during Q1 2025 - The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025, ensuring timely and accurate reporting of material information[209](index=209&type=chunk) - No material changes in internal control over financial reporting occurred during the first quarter of 2025[210](index=210&type=chunk) [PART II — OTHER INFORMATION](index=48&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [ITEM 1. LEGAL PROCEEDINGS](index=48&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section refers to Note 9, 'Commitments and Contingencies,' for legal proceedings, including a class action settlement and a **$47.5 million** breach of contract claim, neither expected to be material to financial statements - Information on legal proceedings is incorporated by reference from Note 9, 'Commitments and Contingencies,' in the financial statements[212](index=212&type=chunk) [ITEM 1A. RISK FACTORS](index=48&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section incorporates by reference risk factors from the 2024 Annual Report, noting no material changes, but highlights ongoing uncertainty and potential negative impacts of increased U.S. import tariffs on Energy Storage and Electricity segments - No material changes to risk factors previously disclosed in the 2024 Annual Report on Form 10-K occurred during the period[213](index=213&type=chunk) - Increased U.S. import tariffs, particularly on products from China, create significant uncertainty and could negatively impact the Energy Storage segment (reliant on imported batteries) and Electricity segment (raw materials/equipment costs), potentially requiring investment reductions or debt restructuring[214](index=214&type=chunk)[215](index=215&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=48&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section states that there were no unregistered sales of equity securities or use of proceeds to report during the period - No unregistered sales of equity securities or use of proceeds to report[216](index=216&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=49&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This section indicates that there were no defaults upon senior securities to report - No defaults upon senior securities to report[217](index=217&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=49&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section states that there are no mine safety disclosures required for the period - No mine safety disclosures to report[218](index=218&type=chunk) [ITEM 5. OTHER INFORMATION](index=49&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section confirms that no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025[219](index=219&type=chunk) [ITEM 6. EXHIBITS](index=49&type=section&id=ITEM%206.%20EXHIBITS) This section lists the exhibits filed with the quarterly report, including certifications, XBRL taxonomy documents, and a separation agreement - The exhibit index includes certifications (31.1, 31.2, 32.1, 32.2), XBRL taxonomy extension documents (101.SC, 101.CA, 101.DE, 101.LA, 101.PR), and a separation agreement (10.1+)[221](index=221&type=chunk)[222](index=222&type=chunk) [SIGNATURES](index=50&type=section&id=SIGNATURES) The report was signed by Assaf Ginzburg, Chief Financial Officer and Authorized Signatory, on May 8, 2025[225](index=225&type=chunk) [CERTIFICATIONS](index=51&type=section&id=CERTIFICATIONS) Certifications from the CEO (Doron Blachar) and CFO (Assaf Ginzburg) affirm the accuracy of the report's financial statements and the effectiveness of disclosure controls and internal control over financial reporting[226](index=226&type=chunk)[229](index=229&type=chunk)[232](index=232&type=chunk)[235](index=235&type=chunk)

Financial Data and Key Metrics Changes - The company achieved a 2.5% increase in revenue for Q1 2025, totaling $229.8 million compared to the same period last year [5][11] - Net income attributable to stockholders rose by 4.6% to $40.4 million, or $0.66 per diluted share [5][12] - Adjusted EBITDA grew by 6.4% to a record $150.3 million, driven by strong performance in the Energy Storage segment [5][12] Business Line Data and Key Metrics Changes - Electricity segment revenues decreased by 5.8% to $180.2 million due to curtailments in California and Nevada [11][13] - Product segment revenues increased by 27.9% to $31.8 million, supported by a strong backlog [11][13] - Energy Storage segment revenues surged nearly 120% in Q1, primarily due to new facilities and strong merchant prices [11][14] Market Data and Key Metrics Changes - The gross margin for the electricity segment fell to 33.5% from 39% year-over-year, impacted by lower revenues from curtailments [11][15] - The Energy Storage segment reported a gross margin of 30.6%, a significant improvement from 7.5% in Q1 2024 [11][16] - The product segment's gross margin improved to 22.3% from 14.8% last year, reflecting better profitability [11][15] Company Strategy and Development Direction - The company plans to acquire the 20 megawatt Blue Mountain geothermal power plant for $88 million, with upgrades expected to add 3.5 megawatts by 2027 [7][8] - A restructuring of the electricity segment management is underway to enhance operational efficiency and focus on drilling and exploration activities [24][76] - The company aims to reach a generating capacity target of 2.6 to 2.8 gigawatts by the end of 2028, supported by geothermal development and energy storage expansion [28][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the geothermal business growth potential, citing easing project permitting timelines and strong demand for renewable energy [7][30] - The company is actively monitoring tariff impacts and is engaging with suppliers to mitigate potential disruptions [9][10] - Despite uncertainties in the regulatory environment, management believes the energy storage market will continue to grow [40][73] Other Important Information - The company declared a quarterly dividend of $0.12 per share, expected to be paid in the upcoming quarters [21] - Total expected capital expenditure for 2025 has increased to $597 million, primarily due to geothermal and storage projects [20] Q&A Session Summary Question: Impact of storage project development pipeline on tariffs - Management indicated that they are exploring multiple alternatives for battery acquisition and are prepared for potential tariff impacts [36][39] Question: Effect of tariffs on geothermal costs - Management confirmed that the impact of tariffs on geothermal CapEx is not material, as most costs are incurred in the U.S. [42] Question: EGS technology implementation timing and opportunities - Management noted that EGS technology could enhance existing plants and expand development opportunities, but technological challenges remain [44] Question: Regulatory changes to expedite geothermal development - Management highlighted a new executive order aimed at speeding up permitting processes for geothermal projects on federal land [48][49] Question: Updated view on gross margins for storage and electricity segments - Management expects storage margins to be at the higher end of 20% and product segment margins to improve to 21% [50] Question: Parameters on expected EBITDA contribution from Blue Mountain acquisition - Management stated that the asset's EBITDA multiple is expected to improve significantly post-upgrade and new PPA negotiations [53][55] Question: Update on PPA pricing and negotiations - Management reported that PPA pricing remains high, with ongoing negotiations expected to yield favorable outcomes [57] Question: Exploration activities and partnerships - Management confirmed increased exploration activities and partnerships with Schlumberger to enhance project development efficiency [64][66]

Financial Data and Key Metrics Changes - The company achieved a 2.5% increase in revenue for Q1 2025, totaling $229.8 million compared to the same period last year [4][10] - Net income attributable to stockholders rose by 4.6% to $40.4 million, or $0.66 per diluted share [4][11] - Adjusted EBITDA grew by 6.4% to a record $150.3 million, driven by strong performance in the Energy Storage segment [4][11] Business Line Data and Key Metrics Changes - Electricity segment revenues decreased by 5.8% to $180.2 million due to curtailments in California and Nevada [12] - Product segment revenues increased by 27.9% to $31.8 million, supported by a strong backlog [12] - Energy Storage segment revenues surged nearly 120%, primarily due to new facilities and strong merchant prices [12][26] Market Data and Key Metrics Changes - The gross margin for the electricity segment fell to 33.5% from 39% year-over-year, while the product segment's gross margin improved to 22.3% from 14.8% [13] - The Energy Storage segment reported a gross margin of 30.6%, a significant increase from 7.5% in Q1 2024 [14] Company Strategy and Development Direction - The company plans to acquire the 20 megawatt Blue Mountain geothermal power plant for $88 million, with upgrades expected to add 3.5 megawatts by 2027 [6][7] - The company is focusing on securing safe harbor for projects and ensuring eligibility for tax credits to navigate tariff impacts [9][30] - The company aims to reach a portfolio capacity target of 2.6 to 2.8 gigawatts by the end of 2028, supported by geothermal development and energy storage expansion [28][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the geothermal business growth potential, citing easing project permitting timelines and strong demand for renewable energy [5][30] - The company is actively monitoring tariff impacts and is engaging with suppliers to mitigate risks [9][39] - Management believes that the demand for reliable renewable energy remains strong, positioning the company well for future growth [9][31] Other Important Information - The company declared a quarterly dividend of $0.12 per share, expected to be paid in the upcoming quarters [20] - Total expected capital expenditure for 2025 increased to $597 million, primarily due to geothermal and storage projects [19] Q&A Session Summary Question: Impact of storage project development pipeline on tariffs - Management indicated that they are exploring multiple alternatives for battery acquisition and are continuing business development efforts despite tariff uncertainties [35][39] Question: Tariff impact on geothermal costs - Management stated that the overall impact of tariffs on geothermal CapEx is not material, as a significant portion of costs is incurred in the U.S. [42][44] Question: EGS technology implementation timing - Management noted that EGS technology could enhance existing plants and is being developed with partners, though technological challenges remain [45][46] Question: Regulatory changes to expedite geothermal development - Management highlighted a new executive order aimed at speeding up the permitting process for geothermal projects on federal land [49][50] Question: Updated view on gross margins for segments - Management expects storage margins to be at the higher end of 20% and product segment margins to improve, while electricity segment margins may be lower due to curtailments [52] Question: Blue Mountain acquisition and expected EBITDA contribution - Management indicated that the Blue Mountain asset is expected to enhance growth and will provide more detailed information post-acquisition [55] Question: PPA pricing and contracting opportunities - Management confirmed that PPA pricing remains high, with ongoing negotiations for multiple PPAs [58][59] Question: Exploration and partnership with Schlumberger - Management discussed the cooperation with Schlumberger for new projects, emphasizing their superior technology in building power plants [66][67]

Financial Performance - Revenues increased by 2.5% to $229.8 million compared to Q1 2024[17, 27] - Adjusted EBITDA increased by 6.4% to $150.3 million compared to Q1 2024[16, 24, 34] - Net income attributable to the Company's stockholders increased by 4.6%[16] - EPS/Adj EPS increased by 3.1% / 4.6%[24] - The company successfully raised $200 million of new debt in Q1 2025[44, 45] Segment Performance - Electricity revenues decreased by 5.8% to $180.2 million compared to Q1 2024[30] - Products revenues increased by 27.9% to $31.8 million compared to Q1 2024[30] - Storage revenues increased by 119.7% to $17.8 million compared to Q1 2024[15, 30, 66] - Energy Storage gross margin increased by +2,310 bps vs Q1 2024[71] Growth and Development - The company expects approximately $160 million in annual cash proceeds from tax benefits[42] - The company signed an agreement to acquire the 20MW Blue Mountain geothermal power plant from Cyrq Energy for $88 million[15, 60] - The company is negotiating PPAs for 250MW with hyperscalers at rates above $100/MWh[57, 94] - The company is targeting 2.6GW to 2.8GW of generating capacity by 2028[93]

Core Insights - Ormat Technologies reported revenue of $229.76 million for Q1 2025, a year-over-year increase of 2.5% and an EPS of $0.68, up from $0.65 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $233.11 million by -1.44%, while the EPS exceeded the consensus estimate of $0.58 by +17.24% [1] Revenue Breakdown - Product revenue was $31.77 million, below the five-analyst average estimate of $38.92 million, representing a year-over-year increase of +28.1% [4] - Energy storage revenue reached $17.75 million, significantly surpassing the average estimate of $11.78 million, with a year-over-year change of +119.2% [4] - Electricity revenue was $180.24 million, slightly below the average estimate of $183.92 million, reflecting a year-over-year decrease of -5.8% [4] Profitability Metrics - Gross profit from product sales was $7.09 million, compared to the average estimate of $7.28 million [4] - Gross profit from energy storage was $5.43 million, exceeding the average estimate of $2.21 million [4] - Gross profit from electricity was $60.41 million, below the average estimate of $71.39 million [4] Stock Performance - Ormat Technologies' shares returned +8.5% over the past month, compared to the Zacks S&P 500 composite's +10.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Ormat Technologies (ORA) reported quarterly earnings of $0.68 per share, exceeding the Zacks Consensus Estimate of $0.58 per share, and showing an increase from $0.65 per share a year ago, resulting in an earnings surprise of 17.24% [1] - The company posted revenues of $229.76 million for the quarter ended March 2025, which was 1.44% below the Zacks Consensus Estimate, but an increase from $224.17 million year-over-year [2] - Ormat Technologies has outperformed the S&P 500, gaining approximately 6.4% since the beginning of the year, while the S&P 500 has declined by 4.7% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.41, with expected revenues of $225.88 million, and for the current fiscal year, the EPS estimate is $2 on revenues of $955.06 million [7] - The estimate revisions trend for Ormat Technologies is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Alternative Energy - Other industry, to which Ormat Technologies belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, suggesting potential challenges ahead [8]

[Q1 2025 Financial Results Overview](index=1&type=section&id=Q1%202025%20Financial%20Results%20Overview) [Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) Ormat reported a 2.5% increase in total revenue to $229.8 million and a 4.6% rise in net income attributable to stockholders to $40.4 million in Q1 2025, with Adjusted EBITDA reaching a record $150.3 million, up 6.4% year-over-year, driven by strong performance in the Energy Storage and Product segments offsetting a decline in Electricity Q1 2025 Key Financial Results | | Q1 2025 ($M) | Q1 2024 ($M) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenues** | 229.8 | 224.2 | 2.5% | | **Gross Profit** | 72.9 | 78.8 | (7.5%) | | **Operating Income** | 50.9 | 52.6 | (3.2%) | | **Net Income Attributable to Stockholders** | 40.4 | 38.6 | 4.6% | | **Diluted EPS** | 0.66 | 0.64 | 3.1% | | **Adjusted EBITDA** | 150.3 | 141.2 | 6.4% | | **Adjusted Diluted EPS** | 0.68 | 0.65 | 4.6% | - Achieved record Adjusted EBITDA of **$150.3 million**, marking a **6.4% increase** compared to the same period last year[4](index=4&type=chunk) - The Energy Storage segment was a key growth driver, with revenues increasing by **120%**, leading to a significant margin increase for the segment[4](index=4&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) The CEO highlighted a strong start to 2025, driven by the Product and Storage segments, with the latter benefiting from new capacity and higher merchant prices in the PJM market, while the Electricity segment saw a slight decline due to curtailments, the company is confident in future growth from projects coming online by the end of 2025, and management also noted that the impact of recent reciprocal tariffs is expected to be limited in the short term as batteries for current projects have already been procured - The Storage segment's growth was attributed to new capacity added over the last 12 months and higher merchant prices in the PJM market[5](index=5&type=chunk) - The Electricity segment experienced a slight year-over-year decline due to previously disclosed energy curtailments in California and Nevada[5](index=5&type=chunk) - The company anticipates a limited short-term impact from recent reciprocal tariffs, as batteries for all projects under construction have already been procured and its Electricity segment has limited exposure to China[5](index=5&type=chunk) [Business and Strategic Developments](index=2&type=section&id=Business%20and%20Strategic%20Developments) Ormat announced the strategic acquisition of the 20MW Blue Mountain geothermal plant for $88 million, with plans for capacity upgrades and a solar addition, and also expanded its energy storage portfolio by winning a tender for approximately 300MW/1200MWh in Israel, while operationally, the 35MW Ijen geothermal plant in Indonesia commenced commercial operations - Signed an agreement to acquire the **20MW Blue Mountain geothermal power plant** from Cyrq Energy for **$88 million**, with plans to upgrade its capacity by **3.5 MW** and add a **13 MW solar facility**[5](index=5&type=chunk)[13](index=13&type=chunk) - In February 2025, won a tender in Israel for two 15-year tolling agreements for energy storage facilities with a combined capacity of approximately **300MW/1200MWh**[13](index=13&type=chunk) - Commenced commercial operations of the **35MW Ijen geothermal power plant** in Indonesia in February 2025, in which Ormat holds a **49% equity interest**[13](index=13&type=chunk) - Signed a new 10-year Power Purchase Agreement (PPA) with Calpine Energy Solutions for up to **15MW of geothermal capacity**, which will replace a lower-priced PPA in Q1 2027[13](index=13&type=chunk) [Segment Performance Analysis](index=1&type=section&id=Segment%20Performance%20Analysis) The Energy Storage segment was the standout performer with revenues soaring 119.7% due to strong merchant pricing and new assets, the Product segment also saw robust growth, with revenue up 27.9% and an improved gross margin, supported by a strong backlog, conversely, the Electricity segment's revenue declined by 5.8% because of grid curtailments in the U.S - **Energy Storage:** Revenue increased by **119.7% YoY**, driven by new assets, higher merchant pricing in East Coast markets, and a legal settlement with a battery supplier, with gross margin improving significantly from **7.5% to 30.6%**[3](index=3&type=chunk)[6](index=6&type=chunk)[13](index=13&type=chunk) - **Product:** Revenue grew **27.9% YoY** due to the timing of revenue recognition and a higher backlog, with gross margin increasing from **14.8% in Q1 2024 to 22.3% in Q1 2025**, and the segment backlog stands at approximately **$314 million** as of May 7, 2025[3](index=3&type=chunk)[6](index=6&type=chunk)[13](index=13&type=chunk) - **Electricity:** Revenue decreased by **5.8% YoY**, primarily due to energy curtailments at the McGinness complex, transmission line maintenance, and wildfire-related grid issues in California[3](index=3&type=chunk)[6](index=6&type=chunk) [2025 Full-Year Guidance](index=3&type=section&id=2025%20Full-Year%20Guidance) Ormat reiterated its full-year 2025 guidance, projecting total revenues between $935 million and $975 million and Adjusted EBITDA between $563 million and $593 million, reflecting the company's confidence in its strong execution and business prospects across all segments 2025 Full-Year Guidance | Metric | Guidance Range ($ millions) | | :--- | :--- | | **Total Revenues** | $935 - $975 | | Electricity Segment Revenues | $710 - $725 | | Product Segment Revenues | $172 - $187 | | Energy Storage Revenues | $53 - $63 | | **Adjusted EBITDA** | $563 - $593 | - The company is not providing guidance on net income or a reconciliation of its Adjusted EBITDA guidance to net income due to the high variability and complexity of estimating certain forward-looking amounts[9](index=9&type=chunk) [Shareholder Returns](index=3&type=section&id=Shareholder%20Returns) The Board of Directors declared a quarterly dividend of $0.12 per share, payable on June 4, 2025, and the company signaled its intention to maintain this dividend level for the subsequent three quarters - A quarterly dividend of **$0.12 per share** was declared, payable on June 4, 2025, to stockholders of record as of the close of business on May 21, 2025[10](index=10&type=chunk) - The company expects to continue paying a quarterly dividend of **$0.12 per share** in each of the next three quarters[10](index=10&type=chunk) [Financial Statements and Reconciliations](index=6&type=section&id=Financial%20Statements%20and%20Reconciliations) [Condensed Consolidated Statement of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations) For Q1 2025, Ormat reported total revenues of $229.8 million, an increase from $224.2 million in Q1 2024, and despite a lower gross profit of $72.9 million, net income attributable to stockholders grew to $40.4 million, or $0.66 per diluted share, up from $38.6 million, or $0.64 per diluted share, in the prior-year period, aided by an income tax benefit and income from the sale of tax benefits Condensed Consolidated Statement of Operations (in thousands) | | Three Months Ended March 31, | | :--- | :--- | | | **2025** | **2024** | | **Total revenues** | **$229,762** | **$224,166** | | Gross profit | $72,927 | $78,810 | | Operating income | $50,913 | $52,583 | | Income from operations before income tax | $37,606 | $39,374 | | **Net income attributable to the Company's stockholders** | **$40,362** | **$38,587** | | **Diluted EPS** | **$0.66** | **$0.64** | [Condensed Consolidated Balance Sheet](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) As of March 31, 2025, Ormat's total assets increased to $5.84 billion from $5.67 billion at year-end 2024, primarily driven by growth in construction-in-process, while total liabilities also rose to $3.24 billion from $3.11 billion, and total stockholders' equity grew to $2.59 billion from $2.55 billion over the same period Key Balance Sheet Items (in thousands) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $600,854 | $547,122 | | Property, plant and equipment, net | $3,497,915 | $3,501,886 | | Construction-in-process | $844,873 | $755,589 | | **Total assets** | **$5,838,947** | **$5,666,224** | | **Total current liabilities** | $619,223 | $598,078 | | Total long-term debt (net) | $1,988,150 | $1,870,649 | | **Total liabilities** | **$3,243,601** | **$3,105,844** | | **Total equity** | **$2,585,773** | **$2,550,932** | [Reconciliation of Non-GAAP Measures](index=9&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The company provides reconciliations for non-GAAP measures to their closest GAAP equivalents, with Q1 2025 Adjusted EBITDA reconciled from a net income of $41.0 million to $150.3 million, and Adjusted Net Income attributable to stockholders at $41.5 million, or $0.68 per diluted share, after accounting for items like unsuccessful exploration write-offs and a settlement agreement [Reconciliation of EBITDA and Adjusted EBITDA](index=9&type=section&id=Reconciliation%20of%20EBITDA%20and%20Adjusted%20EBITDA) Net income of $41.0 million for Q1 2025 was reconciled to an Adjusted EBITDA of $150.3 million, with key positive adjustments including adding back interest expense ($33.2M), depreciation and amortization ($69.2M), and stock-based compensation ($4.9M) Reconciliation of Net Income to Adjusted EBITDA (in thousands) | | Three Months Ended March 31, 2025 | | :--- | :--- | | **Net income** | **$41,034** | | Interest expense, net | $33,160 | | Income tax provision (benefit) | ($3,795) | | Depreciation, amortization and accretion | $69,157 | | **EBITDA** | **$142,977** | | Stock-based compensation | $4,911 | | Settlement agreement | $900 | | Write-off of unsuccessful exploration and storage activities | $516 | | Other adjustments | $965 | | **Adjusted EBITDA** | **$150,269** | [Reconciliation of Adjusted Net Income and Adjusted EPS](index=10&type=section&id=Reconciliation%20of%20Adjusted%20Net%20Income%20and%20Adjusted%20EPS) For Q1 2025, GAAP Net Income of $40.4 million ($0.66 per diluted share) was adjusted for several items, including a $0.41 million write-off and a $0.71 million settlement agreement, resulting in an Adjusted Net Income of $41.5 million ($0.68 per diluted share) Reconciliation of Adjusted Net Income and EPS (in millions, except per share data) | | Three Months Ended March 31, 2025 | | :--- | :--- | | **GAAP Net income attributable to the Company's stockholders** | **$40.4** | | Write-off of unsuccessful exploration and storage activities | $0.41 | | Settlement agreement | $0.71 | | Allowance for bad debts | $0.02 | | **Adjusted Net income attributable to the Company's stockholders** | **$41.5** | | **GAAP diluted EPS** | **$0.66** | | **Adjusted Diluted EPS** | **$0.68** |

Core Insights - Ormat Technologies reported a strong start to 2025 with a 2.5% increase in total revenues, driven by significant growth in the Product and Energy Storage segments [4][8] - The company achieved a record adjusted EBITDA of $150.3 million, reflecting a 6.4% year-over-year increase, supported by improved performance in its Storage segment [4][8] - The Electricity segment experienced a slight decline in revenues due to curtailments in California and Nevada, but overall geothermal operations remained solid [4][5] Financial Highlights - Total revenues for Q1 2025 were $229.8 million, up from $224.2 million in Q1 2024, marking a 2.5% increase [3][20] - Net income attributable to the Company's stockholders rose to $40.4 million, a 4.6% increase compared to $38.6 million in the previous year [3][30] - Diluted EPS increased by 3.1% to $0.66 from $0.64 year-over-year [3][30] - Adjusted net income attributable to stockholders was $41.5 million, up 4.8% from $39.6 million in Q1 2024 [3][30] - The Energy Storage segment saw a remarkable revenue increase of 119.7%, driven by higher merchant prices in the PJM market [3][8] Business Developments - Ormat signed an agreement to acquire the 20 MW Blue Mountain geothermal power plant from Cyrq Energy for $88 million, expected to close by the end of Q2 2025 [4][5] - The company plans to upgrade the Blue Mountain facility, increasing its capacity by 3.5 MW, and intends to add a 13 MW solar facility to support the plant [5][16] - The company reiterated its full-year guidance for 2025, reflecting strong execution and confidence in its business outlook [4][9] Segment Performance - The Electricity segment's revenues decreased by 5.8% to $180.2 million, primarily due to curtailments and maintenance issues [3][8] - The Product segment revenues increased by 27.9% to $31.8 million, attributed to higher backlog and improved contract margins [3][8] - The gross margin for the Electricity segment fell to 33.5% from 39.0% year-over-year, while the Product segment's gross margin improved to 22.3% from 14.8% [3][8] Guidance and Future Outlook - The company expects continued strong performance throughout 2025, particularly in the Storage segment, as it transitions to a more predictable portfolio [4][5] - Ormat anticipates that easing project permitting timelines and increased focus on geothermal exploration will further support growth [5][8] - The company provided guidance for total revenues between $935 million and $975 million for 2025, with adjusted EBITDA expected to be between $563 million and $593 million [16][9]

Group 1 - The company has a total of 2,660,056,599 shares as of the end of April 2025 [2] - The number of treasury shares without voting rights decreased from 3,835,000 on January 31, 2025, to 1,541,848 by April 30, 2025 [2] - The theoretical number of voting rights increased from 3,172,669,760 on January 31, 2025, to 3,177,421,164 by April 30, 2025 [2] Group 2 - The number of exercisable voting rights was 3,169,834,760 on January 31, 2025, and increased to 3,175,879,316 by April 30, 2025 [2] - The company follows the regulations set forth in the French Commercial Code regarding voting rights and shareholding [1] - A double voting right is granted to fully paid-up shares held in registered form for at least two years [1]