Ormat Technologies (NYSE:ORA) reported a 10.2% increase in third-quarter revenue and raised the midpoint of its full-year outlook, as strong energy storage results offset lower generation at its Puna geothermal plant.
Revenue rose to $275 million, while adjusted EBITDA increased 11.1% to a third-quarter record of $153.8 million. Net income attributable to shareholders climbed to $31.9 million, or $0.51 per diluted share, from $24.1 million, or $0.39 per share, a year earlier.
Chief Executive Officer Doron Blachar said energy storage was the main driver of growth, supported by new capacity, high asset availability and favorable merchant power prices in the PJM market. Gross profit increased 20.8% to $77.4 million, and consolidated gross margin expanded to 28.1% from 25.6%.
Storage Growth Offsets Puna Outage
Energy storage revenue more than doubled to $49.9 million, up 145.2% from a year earlier, with a segment gross margin of 62.1%. The increase included $19.6 million in additional revenue from existing PJM assets and approximately $9.3 million from newly commissioned facilities, Blachar said.
Electricity revenue fell 2.1% to $163.7 million. Chief Financial Officer Assi Ginzburg said a hurricane-related forced outage at Puna reduced revenue by $5.1 million during the quarter. The impact was partly offset by $2.2 million from the new Dominica geothermal plant and $1.9 million from higher generation at Olkaria.
Ormat plans to clean out wells at Puna in the fourth quarter, temporarily reducing revenue but supporting higher generation in 2027, Ginzburg said. He expects electricity segment gross margin to rise slightly above its year-earlier level in the fourth quarter and to see a “jump” in 2027, helped by contract extensions, Puna and higher-priced power purchase agreements for new facilities.
Product segment revenue slipped 1.2% to $61.5 million. Its gross margin was 16.5%, compared with 21.7% a year earlier. Ormat continues to expect a full-year product segment margin of approximately 18% and a storage margin of 50% to 55%.
Guidance Raised as Merchant Prices Moderate
Ormat now expects 2026 revenue of $1.17 billion to $1.2 billion and adjusted EBITDA of $640 million to $650 million. The company said the midpoints represent growth of approximately 19.7% and 10.8%, respectively, from 2025.
The revenue forecast includes $700 million to $710 million from electricity, $310 million to $320 million from products and $160 million to $170 million from energy storage. The electricity outlook reflects the Puna impact in the third and fourth quarters.
Asked about merchant pricing, Blachar said October was a more stable month without the very high prices seen earlier in the year. He said 2026 PJM merchant prices were more than double 2025 levels and that Ormat expects prices in 2027 to be somewhat lower than in 2026, though they remain difficult to forecast.
Future U.S. storage projects are expected to operate under full tolling agreements, providing longer-term revenue and reducing reliance on PJM, Blachar said. Ormat’s operating storage portfolio totaled 495 megawatts, with another 497 megawatts under construction and development.
EGS Land Position Expands
Ormat said its enhanced geothermal systems, or EGS, land position grew to approximately 170,000 acres from 70,000 acres over two months. Management estimates the acreage could support 5 to 6 gigawatts of future EGS development, up from its earlier estimate of 3 to 4 gigawatts.
Blachar said the estimate draws on geological analysis and information from nearby hydrothermal systems, but drilling is needed to confirm the potential. Ormat is advancing pilots with SLB and Sage Geosystems and is negotiating a power purchase agreement for Dixie Valley, its first planned commercial EGS project.
The company expects the first phase of Dixie Valley to come online between late 2029 and early 2030. Blachar said pilot success is the critical milestone for that phase, which already has land, water rights and interconnection.
Ormat is targeting 1 gigawatt of operating EGS projects between 2033 and 2035, subject to pilot results, project economics and investment decisions. Blachar said the company believes a $100-per-megawatt-hour power purchase price is not currently high enough to make an EGS project economical and that initial projects will need higher prices.
Long-Term Targets and Financial Position
Ormat maintained its goal of reaching 2.6 to 2.8 gigawatts of operating capacity by 2028. By the end of 2030, it aims to have 2 to 2.1 gigawatts of electricity capacity and 1.5 to 1.6 gigawatts of storage, excluding EGS. It also targets annual revenue and adjusted EBITDA run rates above $1.5 billion and $1 billion, respectively, by that date.
As of Sept. 30, the company had approximately $977 million in liquidity and $2.8 billion in net debt, equivalent to 4.3 times adjusted EBITDA. Its board declared a quarterly dividend of $0.12 per share, payable Dec. 2 to shareholders of record on Nov. 18.
About Ormat Technologies (NYSE:ORA)
Ormat Technologies, Inc (NYSE: ORA) develops, owns, and operates renewable and alternative energy projects. The company’s principal activities include geothermal power generation, energy storage, and recovered energy generation, which converts waste heat from industrial processes into electricity.
Ormat provides equipment and services for geothermal projects, including turbines, generators, power plants, and related engineering and development capabilities. Its geothermal technology is designed to generate electricity from naturally occurring underground heat, including resources that may be unsuitable for conventional steam-based systems.
Founded in 1965, Ormat serves customers and operates projects in multiple international markets, including the United States, Latin America, Africa, and Asia.
