Ormat Technologies (ORA 0.74%), a leading developer and operator in geothermal, solar, and energy storage power solutions, released its second-quarter results on August 6, 2025. The headline news from the release was a significant beat on both revenue (GAAP) and adjusted diluted earnings per share (non-GAAP), with actual EPS (non-GAAP) of $0.48 mildly outpacing Wall Street estimates and revenue (GAAP) climbing to $234.0 million versus an expected $221.7 million. Despite some operational hiccups in its core Electricity segment, the company reported improved performance in its Product and Energy Storage businesses, with Product segment revenues increasing by 57.6% and Energy Storage segment revenues increasing by 62.7% compared to Q2 2024. Overall, Ormat delivered a solid quarter that backed up its growth plans, even as margin pressures in key segments highlighted a changing earnings profile for the company.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| Adjusted Diluted EPS (Non-GAAP) | $0.48 | $0.41 | $0.40 | 20.0% |
| Revenue (GAAP) | $234.0 million | N/A | $213.0 million | 9.9% |
| Operating Income (GAAP) | $35.3 million | $35.1 million | 0.6% | |
| Adjusted EBITDA | $134.6 million | $126.1 million | 6.7% | |
| Net Income Attributable to Stockholders (GAAP) | $28.0 million | $22.2 million | 26.1% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Ormat’s Business Model and Strategic Focus
Ormat operates across three main divisions: the Electricity segment, which runs geothermal and solar power plants; the Product segment, which manufactures equipment for geothermal and recovered-energy power plants; and the Energy Storage segment, which builds and manages battery storage systems. These segments allow Ormat to draw income from both steady, long-term power generation and growth in newer technologies like advanced batteries.
The company has recently centered its strategy on two priorities: boosting its Energy Storage and Product segments, and expanding geographically in the U.S. and overseas. Its focus on innovation, such as proprietary organic Rankine cycle (ORC) technology for clean-power conversion, and efforts in regulatory and financial management, have become critical success factors. Building a balanced portfolio helps lower the risk from reliance on any one market or customer.
Quarter Highlights: Segment Dynamics and Key Developments
The quarter saw sharply contrasting results between segments. Electricity revenues (GAAP) fell 3.8%, caused mainly by planned maintenance at Hawaii’s Puna plant and curtailments at the McGinness Hills and Tungsten complexes. An outage at the Stillwater site, tied to upgrades, also weighed. Electricity segment gross margin (GAAP) declined by 9.3 percentage points year-over-year to 24.2%. Management disclosed these setbacks affected Electricity segment revenue by about $13 million and EBITDA by $12 million.
In contrast, the Product segment delivered headline growth. Product revenue increased 57.6% and margins more than doubled, reaching 27.7% against 13.7% last year for the Product segment (GAAP). This was "driven largely by the timing of revenue recognition from manufacturing and construction progress." according to management. The order backlog stood at $263.0 million as of August 6, 2025, underlining further momentum.
The Energy Storage segment saw revenue rise 62.7% year over year, with gross margins growing to 11.9% from 5.7% for the Energy Storage segment. Growth in the Energy Storage segment was fueled by new battery storage systems coming online and strong prices in the PJM electricity market, a key U.S. power grid. Management highlighted that new and existing merchant energy-storage facilities performed well, especially those benefiting from favorable market pricing.
Several strategic moves marked the quarter. Ormat completed the acquisition of the 20-megawatt Blue Mountain geothermal power plant in Nevada, adding planned upgrades of 3.5 MW and a new solar component pending approval. International expansion included a $111 million project loan for the Bouillante facility in Guadeloupe, signed in Q3 2025, as well as a $49.8 million loan in Dominica. Domestically, Ormat released 25 MW of geothermal and 22 MW of solar construction at its Heber complex, in addition to pipeline growth in storage. There were no dividend policy shifts; the quarterly dividend was maintained at $0.12 per share, consistent with prior quarters.
Business Evolution: Innovation, Regulation, and Financial Management
Ormat continues to invest in research and development, with expenses of about $1.4 million in Q2 2025. These technical advances are vital for extracting energy from locations that would otherwise not support traditional geothermal operations, and for pushing energy efficiency higher in existing plants. The company also strengthened its management structure to focus on electricity operations and drilling innovation.
The regulatory environment is a crucial part of Ormat’s strategy. Management credited recent U.S. permitting reforms with accelerating new project timelines and pointed to extended federal tax credits supporting the construction of geothermal and energy storage assets. Ormat said most batteries for scheduled projects arrived before new import tariffs took effect, limiting potential cost disruptions for 2025 and 2026. It also continued to benefit from investment tax credits applied to its projects in 2025.
Financial Position and Outlook
The company’s balance sheet reflects ongoing investment, with $88.5 million in cash at June 30, 2025. Restricted cash stood at $117.6 million as of June 30, 2025 Ormat secured a combined $300 million in tax equity and project finance to support new developments, with project finance deals in the U.S. and abroad. Recent additions strengthen the company’s ability to meet long-term plans.
For the rest of fiscal 2025, Ormat’s management did not change its annual projections. Full-year revenue guidance stands at $935 million to $975 million. Guidance for the Electricity segment is $710 million to $725 million; for Products, $172 million to $187 million; and for Energy Storage, $53 million to $63 million. Adjusted EBITDA is projected in the $563 million to $593 million range, with minority interest accounting for about $21 million. No dividend change was declared; the quarterly dividend remains at $0.12 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
