Ormat Technologies(ORA) - 2025 Q1 - Quarterly Results

Q1 2025 Financial Results Overview Financial Performance Summary 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] - The Energy Storage segment was a key growth driver, with revenues increasing by 120%, leading to a significant margin increase for the segment[4] Management Commentary 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] - The Electricity segment experienced a slight year-over-year decline due to previously disclosed energy curtailments in California and Nevada[5] - 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] Business and Strategic Developments 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][13] - 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] - Commenced commercial operations of the 35MW Ijen geothermal power plant in Indonesia in February 2025, in which Ormat holds a 49% equity interest[13] - 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] Segment Performance Analysis 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][6][13] - 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][6][13] - 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][6] 2025 Full-Year Guidance 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] Shareholder Returns 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] - The company expects to continue paying a quarterly dividend of $0.12 per share in each of the next three quarters[10] Financial Statements and Reconciliations Condensed Consolidated Statement of Operations 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 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 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 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 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 |