Ormat Technologies, Inc. (ORA) reported fourth‑quarter and full‑year 2025 financial results that showed a 12.5% increase in revenue to $989.6 million and a 5.7% rise in Adjusted EBITDA to $582.0 million. The revenue growth was driven by a 19.6% jump in Q4 revenue to $276.0 million and a 109.3% increase in full‑year Energy Storage revenue to $79.0 million, reflecting higher merchant pricing in the PJM market and the commercial operation of new facilities in 2024 and 2025.
The Product segment also expanded, with Q4 revenue up 59.1% to $63.1 million and full‑year revenue up 55.2% to $216.7 million. A backlog of approximately $352 million, including $100 million tied to the Topp 2 project, underscored the segment’s strong order flow. Energy Storage revenue more than doubled year‑over‑year, while Product revenue grew at a faster pace, indicating a favorable mix shift toward higher‑margin projects.
Despite top‑line growth, GAAP net income fell to $1.12 billion from $1.32 billion in 2024, and GAAP diluted EPS dropped to $0.50 from $0.67. The decline was largely driven by a $12 million impairment charge and a higher effective tax rate. Full‑year gross margin contracted to 27.6% from 31.0%, and Q4 gross margin fell to 28.6% from 31.9%, reflecting transmission‑related curtailments and operational challenges in the electricity segment.
Strategic developments included the June 18, 2025 acquisition of the Blue Mountain geothermal plant for $88 million, the repowering of the Beowawe project, and new long‑term PPAs: a 15‑year, up to 150 MW agreement with NV Energy to supply Google’s Nevada data‑center operations, and a 20‑year, ~13 MW contract with Switch from the Salt Wells plant. Ormat also reaffirmed its partnership with SLB and entered a strategic agreement with Sage Geosystems to advance Enhanced Geothermal System (EGS) technology.
Management guided for 2026 revenue of $1,110 million to $1,160 million and Adjusted EBITDA of $615 million to $645 million, up from 2025 levels. CEO Doron Blachar emphasized that demand for reliable, low‑carbon electricity—driven by AI and data‑center expansion—remains exceptionally strong, and that the company’s portfolio PPAs provide long‑term revenue visibility. The guidance signals confidence in continued growth, while the margin compression and GAAP net income decline highlight the need for ongoing cost discipline and operational efficiency.
Investors focused on the margin compression and GAAP net‑income decline, which tempered enthusiasm for the revenue and adjusted‑EBITDA beats. The market reaction reflected concerns about the company’s ability to maintain profitability amid one‑time charges and higher tax rates, even as the company’s strategic positioning in energy storage and geothermal PPAs remains robust.
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