Ormat Technologies(ORA) - 2025 Q2 - Quarterly Results

Ormat Technologies Q2 2025 Earnings Release Financial and Operational Highlights Ormat reported record Q2 revenue and Adjusted EBITDA, driven by strong Product and Energy Storage growth, despite a temporary decline in the Electricity segment Key Financial Results Total revenues increased 9.9% to $234.0 million, driven by strong Product and Energy Storage segment growth, with net income up 26.1% and Adjusted EBITDA rising 6.7% | | Q2 2025 (millions) | Q2 2024 (millions) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenues | 234.0 | 213.0 | 9.9% | | Electricity | 159.9 | 166.2 | (3.8)% | | Product | 59.6 | 37.8 | 57.6% | | Energy Storage | 14.5 | 8.9 | 62.7% | | Gross Profit | 56.9 | 61.4 | (7.3)% | | Net income attributable to stockholders | 28.0 | 22.2 | 26.1% | | Diluted EPS | 0.46 | 0.37 | 24.3% | | Adjusted EBITDA | 134.6 | 126.1 | 6.7% | CEO Commentary CEO attributes record Q2 to Product and Energy Storage recovery, acknowledges Electricity segment impacts, and expresses confidence in future growth driven by demand and favorable regulations - The Electricity segment's revenue and EBITDA were negatively impacted by approximately $13 million and $12 million, respectively, due to planned well field work at the Puna Power plant and third-party curtailments in the U.S. These curtailments are expected to decrease in the second half of 2025[4] - The company foresees strong growth in its geothermal and storage businesses, driven by favorable regulatory developments, increased demand for baseload renewable energy (partially from AI data centers), and higher PPA pricing[5] Segment Performance Analysis Electricity segment revenue declined 3.8% due to maintenance, while Product segment revenue surged 57.6% with improved margins, and Energy Storage grew 62.7% from new assets - Electricity segment revenues decreased by 3.8% due to well-field work at Puna, energy curtailments at McGinness Hills and Tungsten, and a planned outage at the Stillwater plant[6] - Product segment revenues increased by 57.6%, with gross margin expanding from 13.7% to 27.7% YoY. The segment backlog stands at approximately $263.0 million[6] - Energy Storage segment revenues grew 62.7%, driven by contributions from new assets and strong merchant pricing in the PJM market[6] Business Developments and Strategic Initiatives Ormat completed the Blue Mountain acquisition, secured $300 million in funding, released 50 MW of new projects, and benefits from extended tax credit eligibility - Completed the acquisition of the 20MW Blue Mountain geothermal power plant in June, which offers potential for value creation through PPA renewal and asset upgrades[10] - Secured $300 million in funding from tax equity partnerships and project finance loans to support future development, with most cash proceeds expected in the second half of the year[4][10] - Released 50 MW of new projects for construction: 28 MW of geothermal capacity (including a 3.5 MW addition at Blue Mountain) and 22 MW of Solar PV capacity at the Heber Complex[4][10] - The signed OBBB has created a longer runway for Production Tax Credits (PTC) and Investment Tax Credits (ITC) for geothermal and energy storage projects, extending eligibility for 100% of tax credits for projects starting construction by December 31, 2033[10] Full-Year 2025 Guidance Ormat reiterated full-year 2025 guidance, projecting total revenues between $935 million and $975 million and Adjusted EBITDA between $563 million and $593 million | Metric | 2025 Guidance (in 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 unable to provide a reconciliation for its Adjusted EBITDA guidance to net income without unreasonable efforts due to high variability in estimating items like impairments, acquisition costs, and income tax expense[9] Shareholder Returns The Board declared a quarterly dividend of $0.12 per share, payable September 3, 2025, with intentions to maintain this level for the next two quarters - A quarterly dividend of $0.12 per share was declared, to be paid on September 3, 2025, to stockholders of record as of August 20, 2025[11] - The company expects to continue paying a quarterly dividend of $0.12 per share for the next two quarters[11] Financial Statements Condensed Consolidated Statement of Operations Q2 2025 total revenues reached $234.0 million, with operating income stable at $35.3 million and net income attributable to stockholders increasing 26.1% to $28.0 million | (In thousands) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total revenues | $234,018 | $212,963 | | Gross profit | $56,895 | $61,386 | | Operating income | $35,318 | $35,127 | | Net income attributable to the Company's stockholders | $28,046 | $22,243 | | Diluted EPS | $0.46 | $0.37 | Condensed Consolidated Balance Sheet As of June 30, 2025, total assets increased to $6.02 billion, driven by construction-in-process, with total liabilities rising to $3.39 billion and stockholders' equity reaching $2.49 billion | (In thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $508,909 | $547,122 | | Property, plant and equipment, net | $3,544,564 | $3,501,886 | | Construction-in-process | $1,024,241 | $755,589 | | Total assets | $6,015,612 | $5,666,224 | | Total current liabilities | $730,676 | $598,078 | | Total long-term debt (net) | $2,010,557 | $1,870,649 | | Total liabilities | $3,385,839 | $3,105,844 | | Total stockholders' equity | $2,492,948 | $2,425,129 | Non-GAAP Financial Measures Reconciliation Reconciliation of EBITDA and Adjusted EBITDA Q2 2025 GAAP Net Income of $28.2 million was reconciled to an EBITDA of $132.0 million and an Adjusted EBITDA of $134.6 million, reflecting non-GAAP adjustments | (In thousands) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income | $28,199 | $23,965 | | EBITDA | $132,018 | $118,000 | | Adjusted EBITDA | $134,581 | $126,100 | Reconciliation of Adjusted Net Income and Adjusted EPS Q2 2025 GAAP Net Income of $28.0 million was adjusted to an Adjusted Net Income of $29.1 million, resulting in an Adjusted Diluted EPS of $0.48 | (in millions, except for EPS) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | GAAP Net income attributable to the Company's stockholders | $28.0 | $22.2 | | Adjusted Net income attributable to the Company's stockholders | $29.1 | $24.3 | | GAAP diluted EPS | $0.46 | $0.37 | | Adjusted Diluted EPS | $0.48 | $0.40 |