Ormat Technologies, Inc. Q3 FY2025 earnings call

• Ormat delivered strong results with 17.9% revenue increase, 13.3% operating income increase, and 9.3% net income growth. - Secured 25-year PPA extension for Heber 1 facility and 2 Geothermal exploration licenses in Indonesia. - Commissioned Lower Rio Energy Storage facility and expanded Product segment backlog to $295 million. - Partnered with SLB and Sage to advance Enhanced Geothermal System strategy. - Blue Mountain power plant acquisition contributing to results, and TOPP 2 project in New Zealand moving to Product segment revenue. - Anticipate adding 98 MW of generating capacity from Geothermal & Hybrid Solar PV projects by end of 2026, and 325 MW/1,180 MWh from Energy Storage projects.

Electricity segment revenue for the third quarter increased by 1.5% to $167.1 million, with a gross margin of 25.4% (down from 30.2% last year). Product segment revenues increased by 66.6% to $62.2 million, with a gross margin of 21.7% (up 250 basis points from last year). Energy Storage segment revenues increased by 108% to $20.4 million, with a gross margin of 39.4% (up from 20.2% last year).

• Expect revenue to increase by 10.2% y-o-y at midpoint, ranging $960M-$980M. Electricity segment revenues projected $700M-$705M, Product segment $190M-$200M, Energy Storage $70M-$75M. - Adjusted EBITDA expected to increase by ~6.2% at midpoint, ranging $575M-$593M. - Total cash from tax credit this year expected ~$167M, exceeding initial expectation. - Plan $140M capital expenditure for remaining 2025, with $100M in Electricity segment and $34M in Storage Assets.

• FEOC and regulatory uncertainties affecting Energy Storage segment. - Uncertainties in EGS pilot outcomes and potential impacts on commercialization. - Exogenous factors like wildfires, grid failures, and curtailments impacting Electricity segment margins.

Q: Update on PPA discussions with hyperscalers A: In very final negotiations, hope to finalize and announce in next couple of months Q: TOPP 2 conversion to Product revenue A: It's an EPC project ~$100M, transaction expected to close in Q1 '26 Q: EGS pilot scope and commercial viability A: With SLB, pilot at Desert Peak site in Nevada; with Sage, pilot at existing power plant; looking for permitting and business dev issues, drilling pilot wells in 2H '26 or end '26 Q: Electricity segment margin trend in Q4 A: Q4 expected to be much improved vs Q3, but slightly below 2024 due to some curtailment and Stillwater not at full capacity Q: Financing needs for next year A: Expected EBITDA and tax credits to cover majority of CapEx needs, with potential to borrow if needed; no immediate need for equity