Ormat Technologies has reported an impressive financial performance for 2025, demonstrating substantial growth across key business segments and setting ambitious targets for the upcoming year. The company's focus on renewable energy, particularly geothermal and energy storage solutions, has yielded significant returns, reinforcing its position in the sustainable energy market. With strategic partnerships and continuous innovation, Ormat is poised for further expansion and profitability.
Ormat Technologies achieved remarkable financial success in 2025, marked by a significant increase in revenue and adjusted EBITDA. The company's strategic initiatives, particularly in the product and energy storage sectors, played a crucial role in driving this growth. New power purchase agreements (PPAs), including substantial deals with prominent data centers, underscore Ormat's expanding market presence and commitment to renewable energy solutions. Despite some challenges, such as reduced gross margins due to curtailments and a shift in revenue mix, the overall financial health of the company remains robust, with strong cash reserves and manageable debt levels. The declaration of a consistent quarterly dividend further highlights Ormat's stable financial position and dedication to shareholder value.
2025 Financial Triumphs and Strategic Advances
Ormat Technologies demonstrated a strong financial performance in 2025, reporting a 12.5% increase in revenue to $989.6 million and a 5.7% rise in adjusted EBITDA to $582.0 million. This growth was primarily fueled by the outstanding performance of its product and energy storage segments. Product revenue surged by approximately 55% to $216.7 million, while energy storage revenue more than doubled, increasing by 109% to $79.0 million, achieving an impressive Q4 gross margin of 51.5%. The company also secured around 200 MW of new Power Purchase Agreements (PPAs), notably a 15-year, up-to-150 MW portfolio PPA with Google and a 20-year, ~13 MW PPA with Switch, expanding its reach into data center operations. These strategic agreements, coupled with active investment in enhanced geothermal systems (EGS), highlight Ormat's commitment to diversified growth and sustainable energy solutions.
Despite the overall positive results, Ormat faced some challenges in 2025, including a decline in gross margins to 27.6% for the full year and 28.6% in the fourth quarter. This reduction was primarily attributed to curtailments at several U.S. facilities within the electricity segment and a revenue mix shift towards the product segment. Nevertheless, the fourth quarter saw a 7.2% rise in gross profit to $78.8 million. Net income for the full year was stable at $123.9 million, or $2.02 per diluted share, while adjusted net income reached $137.3 million, or $2.24 per diluted share. The company successfully monetized over $180 million in tax credits through tax equity transactions and transfers. Ending 2025 with approximately $281 million in cash and a net debt-to-EBITDA ratio of around 4.4x, Ormat's financial foundation remains solid, supported by its consistent dividend payments and strategic growth initiatives.
Outlook for 2026: Continued Growth and Expansion
Ormat Technologies has outlined an optimistic outlook for 2026, projecting revenue between $1.11 billion and $1.16 billion, and adjusted EBITDA in the range of $615 million to $645 million. The company expects continued robust performance from its electricity, product, and energy storage segments, with anticipated revenues of $715-$730 million, $300-$320 million, and $95-$110 million, respectively. Ormat plans to monetize approximately $90 million in tax credits through ITC tax equity transactions and transfers in 2026. Management foresees a strong start to the year, with an estimated $100 million in product segment revenue during the first quarter, benefiting from the sale of the Top Two project. Additionally, the company anticipates an increase in electricity segment gross margin by 1% to 2% in 2026, driven by reduced curtailments compared to the previous year.
Ormat's growth strategy extends beyond financial projections, encompassing significant expansion in its operational footprint. The company's global electricity portfolio currently stands at approximately 1,340 MW, with an additional 72 MW integrated in the fourth quarter of 2025. Furthermore, Ormat has about 149 MW under construction and development slated through 2027. Recent strategic moves include the acquisition of Hoku, a solar-plus-storage facility in Hawaii, for $80.5 million, adding 30 MW of solar PV and a 30 MW/120 MWh battery system under a 25-year PPA. In Indonesia, Ormat secured the Talaga Ranu geothermal working area, potentially adding up to 40 MW to its exploration pipeline, with total Indonesian projects under development reaching 182 MW. The company is also actively engaged in Enhanced Geothermal Systems (EGS) work, partnering with entities like SLB and Sage Geosystems to accelerate development, with potential EPC-related revenue impacts expected in late 2027 or 2028. These initiatives underscore Ormat's commitment to advancing renewable energy technologies and expanding its global presence.