Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 5, 2026 · Beat 6 of last 6 quarters
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Ormat's strong storage performance and raised guidance underscore the growing value of firm, dispatchable clean energy to support AI-driven data center demand. The company's expanding geothermal and storage pipeline, along with active EGS discussions with hyperscalers, positions it as a key supplier of 24/7 carbon-free power for the AI infrastructure buildout. The blend-and-extend PPA strategy and new contracts with Google and Switch highlight the increasing premium for reliable baseload renewable energy.
Ormat delivered double-digit revenue growth in Q2 2026, with energy storage revenue nearly tripling year-over-year on strong PJM merchant pricing and new capacity additions. Electricity segment growth was driven by Blue Mountain, improved performance at Olkaria and Puna, and lower U.S. curtailment, partially offset by planned maintenance. Product segment revenue declined 21.6% due to project timing, with gross margin pressured by European construction costs and FX. The company added 155 MW to its generating portfolio year-to-date, including the Juco Solar and Storage acquisition, Shirk storage, and Dominica geothermal COD. Management raised full-year guidance and highlighted continued progress on EGS pilots, new product launches (Ormega100), and a growing storage pipeline.
Management raised full-year 2026 revenue guidance to $1.15B–$1.2B (midpoint +18.7% YoY) and adjusted EBITDA to $630M–$650M (midpoint +10% YoY). The raise reflects strong H1 storage performance and continued electricity momentum, partially offset by ~$5M lower electricity revenue from two Caribbean project delays (one already COD). Energy storage gross margin is expected to normalize to 30%–40% in H2 (full year 40%–50%), while product segment gross margin is guided to ~15% in H2 and ~18% for the full year. Management reiterated its 2028 portfolio target of 2.6–2.8 GW (15%–18% CAGR) and highlighted continued PPA repricing opportunities, with ~190 MW under contract at ~$86/MWh versus market pricing over $100/MWh. EGS pilots remain on track for drilling in Q4 2026. Management also announced an Investor Day on September 8, 2026, to provide deeper long-term strategy details.
“The second quarter reinforced the strength of our diversified business model and disciplined execution. Double-digit revenue growth, gross profit expansion of more than 20%, a full-year guidance raise, and continued prospects on projects that will drive our long-term growth.”
on Quarterly performance and guidance raise
“We see a PPA pricing continue to increase. We are negotiating some additional contracts for project. It's in the early stages of negotiations. It's always a question whether to sign today a future contract or not. When we see a high PPA like the one that we signed with Google and with Switch, that takes away the risk of exploration.”
on PPA pricing and contracting strategy
“We are speaking with different hyperscalers, data centers, and utilities about EGS projects. All of them are aware of the fact that the pilots are being developed. Whatever PPA we will sign, we will take into account the fact that the technology is not fully yet developed, and will allow us to manage the risk as we've been doing for many years.”
on EGS commercial discussions
Electricity segment gross margin declined slightly YoY despite improved performance—what offset the benefits, and what explains the lowered full-year outlook?
Assi Ginzburg explained that the lower full-year electricity outlook is due to ~$5M impact from two Caribbean projects with 1-2 month COD delays (one already COD). The Q2 gross margin decline was attributed to planned maintenance, with margin expected to improve toward year-end.
Should we assume new pipeline projects like Lone Mountain are covered under the Google portfolio PPA? How are you tracking toward the 150 MW target?
Doron Blachar confirmed Lone Mountain is part of the Google portfolio PPA and expects more greenfield projects to be added. He expressed confidence in meeting the minimum and maximum targets, noting the portfolio PPA has a range to allow flexibility as pricing increases.
Any color on potential Q3 generation impacts from the heat dome in the West? And any thoughts on the FCC ruling banning new inverter imports?
Doron Blachar said July was relatively flat versus guidance, with August starting hot but impact uncertain. On inverters, he noted they can buy from China and eliminate remote connectivity, and have sourced from Spain; they expect to manage the restriction.