Ormat Technologies, Inc.

Q1 2026 Earnings Call — May 7, 2026

Analyst Derek Podhacer (Piper Sandler): Hey, good morning, everybody. I guess maybe let's start on EGS. Obviously, a lot of encouraging and very strong commentary around your developments there. Obviously, there's an IPO going on currently with the new entrance and more of the EGS market. So maybe just if you could expand on it further as far as the technology advances you're making on the surface. You talked about a tailored solution for EGS. Maybe if you could help us understand that, the potential size and scale of some of the progress you're working on with SLB and SAGE. You pointed out Dixie Valley as a potential area to scale EGS. Just, you know, it's obviously a very exciting outlook, and this is about to be more under the spotlight as far as EGS and geothermal. So just hoping to get an understanding of how big this could potentially be for you for ORMAP over the, you know, medium to long term here.

Executive Name: Hi, good morning. Thank you for the questions. So I'll touch on the different levels that you asked, and maybe I'll start with our equipment and technology. We are developing a unique solution, a new OEC that will be able to work efficiently with EGS. EGS comes with special parameters on the resource that comes out of the ground, and this will allow us to standardize our OEC and develop a much simpler power plant than the power plants we have today, which will over time reduce significantly the cost to construct a power plant. On the SLB joint venture that we have, as well as the work that Sage are doing, we are doing multiple phases of land analysis and well engineering.

In both cases with SLB, we are working to file the permit to drill the first well later this year and Sage on their part are working similarly to design the well and do all the preparation to file for permitting. Both pilots will be adjacent to our facilities in order to reduce the time to market so once the pilot is successful, the heat can be immediately transferred to our facility to generate electricity and basically allow us to confirm the pilot performance and success. And the third element you mentioned, Dixie, obviously, ORMAT has a unique and very large presence in California, in Nevada, with multiple sites that we have been looking for, for hydrothermal, but also over the last few BLM options, we were able to acquire some land we believe are fit to an EGS project. And one of them that we mentioned is Dixie, not far from our Dixie Valley asset. And we have additional places that we see that are potential for EGS. We are also, this is part of our business development efforts scanning multiple states on locations to develop EGS projects, and we'll obviously update you as we make progress.

Analyst: Detail conversation, very helpful. Maybe just switching to the electricity margins, you know, fully understand you had some elevated ambient temperatures, and if you add that back, it looks like you're FLAT YEAR OVER YEAR FROM A MARGIN PERSPECTIVE BUT JUST THINKING ABOUT HOW SHOULD THESE MARGINS REALLY DEVELOP YOU KNOW THIS YEAR INTO NEXT YEAR MIGHT BE ABLE TO TAKE ADVANTAGE OF SOME OF THE ELEVATED COMMODITY PRICE WITH PUNA HERE IN THE SHORT TERM BUT AS YOU BRING ON NEWER GENERATION OR MAYBE AN INCREASE OF SOLAR GENERATION JUST TRY TO THINK THROUGH THE MARGIN PROGRESSION AS WE WORK THROUGH 26 27 THROUGH 2028 SO MAYBE SOME THOUGHTS AROUND THAT WOULD BE HELPFUL.

Executive Name: Hi Derek, it's Asti. Good morning and thank you for joining us. As you know, over the next few quarters, we have roughly 40 megawatts of new blend and extend that should add anywhere from $7 to $10 million annually to the revenue of the company. So that should be another 1% of margin. And then we have another 40 megawatts roughly that is being also already negotiated and already in new contracts that will be added in another in around 2027. And actually there's another five, six million dollars to the company. So between the two, we should see to the revenue and improvement of one to two percent. In addition to that, we are looking also at the expense side, reviewing our expenses, trying to focus on reduction expenses. We do not anticipate similar weather, also as warm as what we've seen in the Q1. We are very happy that the containment is behind us, it was much more favorable in the And I would like to say also, OMAC has a large portfolio. It was very warm on the west coast. It was very cold in the east coast.

When you bundle those together, we lost roughly $5 billion on the west coast, but we made approximately, not approximately, over $20 billion in the east coast. So this weather overall does improve OMAC situation. But it does impact the margin of electricity. So I do expect in the next two years to see this rise to 2% increase year-over-year, starting probably in the second half of this year when we expect the weather to impact us. I appreciate all the comments. I'll turn it back. Thank you very much.

Analyst Justin Kerr (Roth Capital Partners): Hey, good morning. Thanks for taking the time here. Wanted to just follow up on the EGS here. Wondering if you could share just how large the pilot projects are expected to be in terms of megawatts. And then if you could just update us on the anticipated timing for initial production from those EGS wells I think previously you've talked about 2027. And then just what would you need to see from the pilots in terms of the data or just what would you need to see before expanding to larger scale development of EGS projects and then any sense for the timing of, you know, a first commercial plant?

Executive Name: Thank you for the question. I would say that both pilots are looking to generate somewhere between two to four megawatts each. And that should occur based on the drilling schedules and permitting in 2027. I don't know to say exactly who's going to be the first one, but both of them are connected to OMAC. Once the pilot will operate, we will need a period of a couple of months, maybe more, to see the performance of these pilots. I think it is going to be a bit different between a SAGE pilot and ours, an SLB pilot. It's a different technology, the two of them. And so I think the... the duration of the pilot should be a bit different. But as the pilot starts, and we are in the geothermal area for many, many years, we're doing flow tests for hydrothermal. So we are testing the subsurface. And in reality, every day that we do a test, we get information. And there will be a point in time that we will feel comfortable enough to release our first EGS project based on the pilot success.

Analyst: Okay, appreciate it. And then maybe just one on PPA pricing here. So you signed, I think, 270 megawatts so far in 2026. As you look through the balance of the year, you know, could you speak to the opportunity you have to sign additional PPAs for either new projects or recontracting existing assets? And then just any way to quantify the amount of megawatts in terms of capacity that could be eligible for the blend and extend strategy from here over the next, you know, several years here?

Executive Name: So a new PPAs is a thing that we are discussing and it is basically based on the way we are able to do our exploration and the Jersey Valley solar and storage project that we just signed. It's basically us maximizing our interconnection that we already have in our assets. We have a couple of more assets with a free interconnection that we are looking to see if we can duplicate the Jersey Valley solar and storage idea. Building a solar and storage facility not far from a geothermal facility and utilizing the same interconnection. It is something that we are checking today and I hope we'll have some more updates as the year progresses on these two options. Regarding blend and extend, between 2031 and 2034, we have about 190 megawatts that come off contract. Their average PPA rate is in the mid 80s today. And all of them are basically items that we are looking for a blended extent. I don't know to say that we will have it in the next quarter or two since there is some duration, but all of them, we are speaking with the relevant off-takers to see whether a blend and extend concept works for them and for us and at what price.

Analyst Noah Kay (Oppenheimer): Hi there, this is Andre Adams. I'm for Noah. Just to go back to the OEC for EGS applications, could you give us a bit more detail on the kind of capacity ranges you're able to produce, efficiency gains from the larger size, and how you see the TAM for the product evolving? And when we might see initial orders for that product.

Executive Name: We are now in the final stages of design. I expect that in the next few weeks, we will come out to the market with information about the size of the turbine, which will be much bigger than what we have done so far. But the specific number, we will come up with in a few weeks. In a few weeks we will also try in that announcement explain how we see it being a much standardized power plant and by that allow us to have a lower cost regarding getting POs. We are in various negotiations with multiple EGF developers on potential projects. And the minute that we sign with one of them, we'll obviously announce and update the market. And then just as the follow up, given the outperformance of storage and products in the first quarter, could you just give us a little bit of color on the cadence of those businesses for the balance of the year and why the company would be reiterating rather than raising guidance.

Executive Name: You saw the margin achieving was around 59%. Without that being said, the whole year we do expect anywhere from 35% to 40%. We usually do not increase, decrease, change the guidance during the May call. We usually do it during the August and the November call. When we decided to stick with it, we need to see where the mental market will be for the remaining of the year, and then we would make that decision.

Analyst Chris Vendrinos (RBC Capital Markets): Thanks for taking the question. You know, I guess maybe just to go back to EGS again, and you talked about the opportunity at Dixie. I guess what I'm wondering is, is there additional opportunities, call it at your existing asset base to, you know, using EGS well to bring those back up to flush production if you've got, you know, extra transmission capacity or maybe capacity on the turbine. I'm just kind of wondering how amicable that existing acreage position is, you know, with heat in place or something like that.

Executive Name: Okay, thank you and welcome to join us. Dixie Meadows is one site that we located. We have another site that we believe has potential for EGS projects. Existing interconnection facilities today that we have and free interconnection are not big enough for EGS. EGS projects will be much, much bigger than what we see today. So we are looking to see places that we do have enough new interconnection available to build EGS projects. We have some interconnection requests that we've already filed, some that we are working on to file. But for EGS projects, we would need much larger interconnection agreements than what we have available today.

Analyst: Maybe as a follow-up here, I think you mentioned additional conversations with potential PPA customers. I think you mentioned data centers. Are you seeing an increase in interest from, call it, the non-conventional utility customer outside of switching Google? Have they kind of come in to the conversation here more recently?

Executive Name: Definitely. We have discussions with other hyperscalers on top of the names that you mentioned that are looking for renewable energy. And as EGS will progress, I believe we'll get much, much more attention and ability to assign more PPAs and larger ones.

Analyst: Again, if you would like to ask a question, press star then the number one on your telephone keypad.

Analyst Ben Calo (Baird): Hey, thanks and congrats on the results. Just maybe going on EGS, I think that's the theme. Uh, the JB structure with SLB, uh, could you talk to us about, you know, if we advance a couple of years to where you have a commercial, uh, project, um, how do you expect, uh, or think ownership of, uh, of the power plant would work?

Executive Name: Thanks, Ben. The pilot with SLB is designed to develop the EGS solution for the subsurface. The above surface is obviously utilizing the OMAD technology. Once the pilot is successful, we can develop new EGS projects either as part a format utilizing our knowledge and expertise that we've gained from the joint venture or alternatively utilize the knowledge within the joint venture that will supply services to the new power plant that we will build. SLB, as you know, is a service provider. ORMAT is a developer, owner, and operator of power plants. And we will both have utilized our expertise. So once the JV is successful, we will be buying subsurface services from the JV that SLB will be able to provide and we will continue build the power plants and operate them and own them.

Analyst: Great. My second question is just on, you're in a unique position with both geothermal and developing energy storage as well. And I just wonder if that comes up or how much it comes up with hyperscalers and if there's an opportunity for adding storage with hyperscalers independently or with geothermal.

Executive Name: Thank you, guys. With hyperscalers, we haven't had discussions about bundling energy storage with geothermal since geothermal is a 24-7 facility. But we have had discussions and there are RFPs coming out from hyperscalers that are looking for energy storage facilities. We are participating in these tenders and discussing with different hyperscalers about building for them energy storage facilities, standalone energy storage facilities. And once there will be some kind of an agreement on any of these prospects, we will update the market.

Executive Name: There are no further questions

at this time.

I will now turn the conference back over to Doron for closing remarks.

Executive Name: Thank you. Thank you all for joining us today. It was a very, very good quarter for OMAT and we are looking to continue this great year. Thank you. This concludes today's conference call. Thank you all for joining. You may now disconnect.

Q4 2025 Earnings Call — February 26, 2026

Analyst: Justin Clare (Roth Capital): Hi, thanks for taking our questions. And I wanted to start off here just talking about the PPAs. You've obviously signed a lot recently here. You highlighted the 40 megawatts of PPAs signed under a blend and extend strategy. And just wanted to see, you know, how should we think about the additional opportunity in terms of the amount of capacity that could be proactively renewed and with PPAs extended ahead of expiration. And then also just wondering if you could provide an update on the amount of capacity that might be coming up for renewal still here in 2026, 2027, 2028. Thanks.

Executive: Asi (Title): Hi, Justin. Good morning. As you said, you know, we initiated this blend and extend the 40 megawatts that are in the approval phase. And hopefully in the next few weeks, we will be able to announce once they are fully signed and approved. And we have a few more assets, not too many assets that we can blend and extend. And we have started to work on the next phase that will take a few months to get them updated to the current pricing.

Got it. So then maybe shifting over just on the curtailments, I think there was an 18.6 million impact in 2025. Wondering if you could quantify what the impact was in Q4. I think things improved in the quarter. Maybe if you could just speak to that improvement. And then your expectations for 2026, what level of curtailments might be assumed in the electricity segment guidance?

Good morning, Justin. This is Asi. I'll start by saying that the curtailment in Q4 did lessen. We saw around three and a half billion dollars of curtailment in Q4. I will say that for the full year 2026, we are not expecting more than four to five million, maybe slightly higher than that. But at least what we know today from nve which is the one that caused most of the development during 2025 we're not expecting too much into it also in 2025 if you remember in January there was some fires in California luckily to us this year we didn't so we don't expect in Q1 any significant development so things definitely are coming our way as we look into a 2026.

Got it. Okay. And then maybe just one more. Considering those factors, could you share what you anticipate for the gross margin for the electricity segment in 26 and how that compares to 25 in the factors you mentioned?

Yeah, we do expect anywhere from 1% to 2% increase in gross margin. You know, it's around 14, 15 million in total, which is in line with the difference in the curtailment. One thing that we do see this year slightly less than last year is the prices in Pune are lower. But with the tension in the Middle East, you know, this can change very quickly. So right now the prices in Pune are slightly lower. But again, we took it already into consideration in the guidance.

Thank you.

Analyst: Noah K. (Oppenheimer): Thanks. Lots going on, lots to talk about. And I want to start with the comments you made in reference to the Google PPA. You know, you talked about this portfolio structure being, you know, a model for future activity. And I was just wondering if you could expand on that a little bit in terms of, you know, how the structure kind of came to be, why it was the right fit for both you and Google as a counterparty, and some of the optionality that it gives you in terms of development.

Executive: Asi (Title): Thank you, Noah. So Google basically, as we all know, is looking continuously for clean renewable energy, and that aligns perfectly with geothermal. It is a baseload. Over the last few years, we've invested quite a lot and we're continuously investing in exploration and developing green fields. And we actually released, as you've seen on the presentation, our first green field, a 30 megawatt project, the first time after close to seven years. And we have a few in the pipeline that are in the final stages of exploration and I expect to release a few more this year and the next year. And the structure of the PPA basically which is up to allows us on one hand to know that we have a PPA, a very strong and profitable PPA if we are successful in the exploration and it basically gives us the confidence to continue with this investment and exploration effort that we are doing that will grow significantly the company in the coming years. I'm almost sure to say that if we do maximize this PPA, we will be able to add another one. At this stage, it relates to until the end of 2030. And with the exploration efforts we have, this gives us the confidence to continue with this strategy.

Okay, thanks. And then I think on the blend and extend comments that you made in response to Justin's question. So as we understood it, at this point, most of what was expiring through, I think, 2028 has already been recontracted. This blend and extend seems like a pull forward of contracts that were going to expire beyond that. So maybe you could just give us a little bit more insight on the contracts that are being affected here and the amount of kind of post-2028 capacity that you're looking at recontracting right now.

Yes, the contracts that are being blended and extended are contracts that end, as you said, in the next three to five years. We have one more contract in this timeframe that we are looking to blend and extend. The next wave of contracts, actually, that are looking for re-contracting are mainly in 2032. In 2033, that is... Jersey Valley, Don Campbell, McGuinness One, Tungsten. So we will be looking at this for Blend and Extend. I don't know if the sales will do it in the next few months because it is longer term. But today when NV Energy and others that have contracts with us that are set to expire in the range of five years plus minus, they want to secure the re-contracting with them. The fact that we did sign with Switch and we did sign with Google PPAs for a similar timeframe actually drives their willingness or their desire to sign, blend and extend and basically secure the baseload geothermal energy for a longer period of time.

Makes sense. One quick one to sneak in before I turn it over. Asi, I think you mentioned that the CapEx guide is $675 million, but once the top two conversion to products revs complete, it'll actually be $575. Can you just walk us through the mechanics of that and explain the timing on that a little bit, please?

Executive: Asi (Title): Sure. So in Q1, we closed the sale of the top two transaction to our customer after he basically exercised his option to buy the asset. As a result, you will see through the P&L around $100 million revenue with approximately 20% margin that will boost Q1 results. And what you will see in the financials, in addition, in the cash flow section, you will see a line item that will be a sale of an asset that will offset the capex. So when we look at the cash flow for 2026, we will expect to see a capex of 675. In addition to that, we did make an acquisition in Q1 that was another 80.5. So you will see also the M&A of the 80.5 in Q1. And then you will see a sale of assets of approximately 100 million. So that's what we expect to see on the cash flow. This is just for modeling, for you guys to understand the debt and the net debt of the company throughout the year. I want to mention one more thing. You asked us how did Google came about. I do have a recording call with you that you told me, Asi, if you have to sign with somebody, you have to sign it with Google. So that day I went to Doron and that's how it all started. So I think you can give yourself some kudos and we appreciate the support here.

Well, thank you very much. And with that, I'll turn it over.

Analyst: Hannah Velasquez (Jefferies): Hey everyone, this is Hannah Velasquez on for Julian. Thank you for the update and good morning. So I'll go ahead and just get started. I wanted to circle back on this curtailment question. So if I'm just, you know, using 2024 revenue for the electricity segment as a baseline, you know, around 700 million. That's also what you did in 2025 for the segment you brought on, you know. Yeah, I mean you brought on over 100 megawatts in the electricity segment across that time period. And if I do the math there, that would suggest about 30 million of incremental revenue from those new assets that came online. And so that gets you to where your guidance currently is. So does that imply that curtailment is not being recovered from 2025? Or I know you talked about 4 to 5 million recuperating it, but I'm just having a hard time bridging to the new assets or new capacity that you brought online for that segment. And then also the curtailment that you expect to recover in the year.

Executive: Asi (Title): Hannah, good morning. Thank you for the question. First, some of the 100 mega that you mentioned is solar. So the capacity factor is closer to 22%. So I suggest that you look into it when you model the number. Second, as I mentioned, we do expect four to five million curtailment in the year in 20, maybe even six in 2026 versus the 18.6. So there is around 10, 12 million dollars reduction in curtailment. But I think the main difference is that some of the additions are solar.

Right. About 42 megawatts. Yeah, I did do the math and I'm getting about, you know, 25 to 30 million contribution from the new geothermal and then, you know, less than 10 million from the new solar. So it still suggests to me that there might be, that you're not recovering.

As I mentioned earlier, the prices in Pune are slightly lower. And then we also been trying to be quite careful with our guidance for 2026, making sure we can, uh, if possible, toward the years, try to raise the guidance and not be in a position that, like we've been in 2025, that we were behind on electricity sales. So it's, again, also us being proactive here.

Okay, I got it. That's super clear. So you do expect some of the, I guess, segment headwinds that you saw in 2025 to extend over, potentially, but you're being cautious in your guidance outlook.

Okay. As a follow-up question, just on the EGS front, from what I understand, there are multiple technologies or variations within EGS? It sounds like you're currently vetting through Sage Geosystems and also partnership with SLB. But would you consider any incremental partnerships with other next gen technologies? Just because again, it seems like there's such a wide variance in how different companies are approaching EGS. I'm just trying to get a sense of like the probability of success here.

Executive: Asi (Title): Yes, thank you. That's exactly the way that we are operating. The reason that we have started the joint venture with SLB and also signed a commercial agreement with Sage and invested in Sage is exactly, as you say, multiple approaches to EGS. There are technological barriers in EGS, mainly the water loss and the economics of it. And we are looking at spreading the risk. We are discussing with other developers in the EGS arena, different corporations agreement. We believe that EGS if successful will turn the industry into something that is much much bigger because you will be able to generate geothermal energy baseload energy in many many places. So we are focused a lot on it we are looking at the different players all of them are speaking with us. We are the largest operator of geothermal globally we are the largest a binary seller of supply of products in EPC. And I assume that over the next time you'll see us making additional moves in the EGS in order to make sure that if EGS is successful, OMAT will be able to capture this opportunity.

Okay, that's super clear. Thank you.

Analyst: Mark Strauss (JP Morgan): Yes, thank you very much for taking our questions. Maybe a follow-up to Hannah's question there on EGS. Instead of kind of looking beyond the existing partnerships, within the partnerships that you have with SLB and SAGE, do you think that we could see additional pilot activity announced in 2026, potentially different site selection with different conditions, whatever it might be? And then on that same slide, on slide 25, you mentioned the equipment sales to third-party developers. Can you talk about what you've embedded in your guide for 2026 from that and how we should think about the timing of when that could potentially become more material?

Executive: Asi (Title): Thank you, Mark. I'll start maybe with the second part of the question. EGS has technological challenges that need to be solved. I think most of the players that we know are dealing with these challenges. I would expect that during 2026 we will be able to negotiate with some of them, maybe EPC contracts, but revenue from that first, they will need to demonstrate the technological issue, they will need to do it well, and then the EPC revenue will come. So we have multiple discussions with different of them, as I said before, both on EPC agreements, but this will be EPC that will impact product segment, probably second half of 27, 28, definitely if it is successful.

Regarding additional, we are speaking with other companies that are looking at technological ideas that have already invested and raised cash in order to develop them. We are also building internal capabilities to see how we adjust our technology to fit these large-scale power plants. We are speaking with different hyperscalers and data centers on PPAs once the technology is successful. So there's a lot a lot of work that is being done within ORMAT in the different areas. I'm sure that during the coming quarters and discussions will keep on updating you on the various issues. And as I said before, if this is successful, then it will take ORMAT in the industry into a different level.

Yeah, I understand. Okay, that's helpful. And then can I just switch over to the storage side of the business? Just given the initial fiat guidelines that came out recently, just curious for your take on that and how you're approaching potential safe harbor before the July deadline that would give you further visibility out to 2030.

Executive: Omer Tover (Title): Thank you. Omer Tover, the last year safe harbored over one giga of project, and we plan to install and use it over the next few years. I will start by saying that Griffith, which is a 100 megawatt, 400 megawatt hour, which is our largest project, was also safe harbor. We have basically for all of our interconnections for 2028, 2029, safe harbor, basically the majority of the projects. We were able to reiterate our 2028 targets for the storage, taking into consideration the field. All in all, we are in a very good situation to continue and grow. We also see more and more capacity of batteries coming from outside China, which is very favorable. We see also an increase in US production. So I believe that the Fioc eventually will not impact us. I think that our position in the queue, especially in California, is very good, which should enable us to release over the next year potentially additional two projects, almost similar size to Griffith. So again, all in all, the ability to buy batteries, the extension of the credits, and the fact that we save Harvard a sufficient project for the next three years really put us in a good place. In addition to the fact, when you look at our pipeline, you see the majority of it is in California, which battery is really, really needed. And those lines that we have in the queue really put us in a position to sign the good tolling agreements or good RA contracts.

Analyst: Ben Callow (Baird): Hey, guys. Thank you for taking my question. Just thinking about, you know, as you think about longer-term targets, you know, past the 28, and there's, you know, been a lot of changes, you know, from the federal level in the United States, you know, when do you think that you're in a position to, you know, update us on longer-term targets? And then, you know, have you adjusted the operations, you know, to, you know, the benefit of, off of any of that and specifically just, you know, faster permitting or anything like that. And then my second question is, and thank you for that. You kind of answered this, but just on the EGS front, outside of technology, how do you think about just building the infrastructure around your own development? You know, if we look at the 2030, 2031, whether that's, you know, employees and or it's financing, or other things there, because scale will get bigger if and when you're successful.

Executive: Asi (Title): Thank you, Ben. So we are, I'll start with the second part, but we're definitely looking at how to prepare ourselves for this transformation event if EGS is successful. We are doing the exploration. We have increased our BD efforts. Obviously, the land position that you need for an EGS project is significantly bigger than what you need for geothermal. So we are looking at much larger land positions in additional states, not just Nevada and California. So the look for EGS is much broader than just Nevada and California. We are looking on our binary technology, how you manufacture so many turbines to a power plant, heat exchangers, how to multiple or match efforts. All of these are things that we are working on in parallel to make sure that once the technology is successful, we are able to utilize it and move forward with it.

Regarding the question on the growth target, so one, we've increased significantly over the last three years, the exploration efforts. We see the greenfield, the first one, coming to fruition now. We will see additional coming. The change in the permitting helped us a lot and moved us faster than what happened in the past. The fact that there are multiple land auctions by BLM in different states in the West, again, pushes us faster. We are planning an analyst day in the September timeframe. And at that time, we will give longer term targets for megawatts.

And thank you.

Executive: Management: And with no further questions in queue, I'd like to turn the conference back over to Duran for closing remarks. Thank you all for joining us today. 2025 was a very good year for OMAD. Looking to 2026, we continue to see growth in all our segments and expect significant progress in EGS during 2026. Thank you. This concludes today's conference call. You may now disconnect.