Ormat Technologies (ORA) Financials

Ormat Technologies’ latest statements show a business that continues to expand, but with more pressure from financing costs, capital spending and working-capital needs. The comparisons below use the reported and restated figures provided, so investors should be aware that some historical periods were revised.

• Revenue growth remains intact. Q2 2026 revenue increased to $258.8 million from $234.0 million in Q2 2025, a gain of approximately 10.6%. Compared with Q2 2023, revenue is up roughly 32.8%, indicating sustained expansion over the longer term.
• Gross margin improved year over year. Gross profit rose 20.7% year over year to $68.7 million, while gross margin expanded to approximately 26.5% from 24.3% in Q2 2025. This suggests that revenue growth was accompanied by improved profitability before operating expenses.
• Operating cash flow remains positive. Ormat generated $50.6 million of operating cash flow in Q2 2026. Although this was below the $97.0 million generated in Q2 2025, the company has produced positive operating cash flow in each comparable quarter provided.
• The asset base continues to grow. Total assets reached $6.79 billion at June 30, 2026, up from $6.02 billion a year earlier and $5.01 billion in Q2 2023. The increase reflects continued investment in the company’s operating platform and long-term assets.
• Liquidity is substantially higher than a year ago. Cash and equivalents plus restricted cash totaled approximately $658.1 million at the end of Q2 2026, compared with $206.1 million in Q2 2025. Much of the improvement followed significant debt financing in Q1 2026, but the larger liquidity position provides additional funding flexibility.
• Dividend payments have been consistent. The company paid $0.12 per share in quarterly dividends in the reported periods, and Q2 2026 cash dividend payments were $7.4 million. This consistency may appeal to income-oriented investors, although dividend coverage should be viewed alongside capital spending and debt obligations.
• Quarterly earnings are volatile. Q2 2026 net income attributable to common shareholders was $27.1 million, or $0.43 diluted EPS, compared with $44.1 million, or $0.71 diluted EPS, in Q1 2026. The sequential decline was driven by lower revenue, lower operating income and unfavorable non-operating items.
• Depreciation is a major component of cash generation. Depreciation expense was $79.6 million in Q2 2026, compared with $70.0 million in Q2 2025 and $54.3 million in Q2 2023. Rising depreciation is consistent with a growing asset base, but it also highlights the capital-intensive nature of the business.
• Free cash flow was negative in Q2 2026. Capital expenditures totaled $138.0 million, substantially above the $50.6 million of operating cash flow. On this basis, quarterly free cash flow was approximately negative $87.5 million. The company has repeatedly reported heavy capital expenditures, including $134.8 million in Q2 2025 and $159.8 million in Q2 2023.
• Interest expense is weighing heavily on earnings. Q2 2026 interest expense increased to $43.9 million from $36.7 million in Q2 2025, while interest and investment income was only $23.6 million. The resulting net interest burden reduced pretax income and is likely to remain a key risk while debt levels are elevated.
• Debt has increased sharply over the past year. Short- and long-term debt totaled approximately $1.27 billion at June 30, 2026, versus roughly $667 million at June 30, 2025. The increase largely reflects Q1 2026 financing activity, when Ormat issued approximately $1.39 billion of debt while repaying $884.1 million. This expanded liquidity but also increased future interest and refinancing obligations.
• Working capital was a cash drag in the latest quarter. Changes in operating assets and liabilities consumed $54.7 million of cash in Q2 2026, compared with a $26.2 million source of cash in Q2 2025. This reversal helps explain why operating cash flow declined despite higher revenue and gross profit.
• Profitability has not kept pace with revenue growth. Q2 2026 net income attributable to common shareholders of $27.1 million was below the $28.0 million recorded in Q2 2025 and only modestly above the $24.2 million reported in Q2 2023. Diluted EPS was also affected by a gradual increase in diluted shares, from 60.6 million in Q2 2023 to 62.5 million in Q2 2026.
• Balance-sheet leverage and asset quality warrant monitoring. Total liabilities increased to $4.04 billion from $3.39 billion in Q2 2025, while total equity rose only modestly to $2.73 billion. The balance sheet also includes substantial goodwill, intangible assets and other noncurrent operating assets. In addition, impairment charges were $6.9 million in Q2 2026 and $10.2 million in Q1 2026, signaling a need to monitor whether certain assets continue to generate expected returns.

Overall, Ormat’s long-term growth profile is supported by rising revenue, a larger asset base and consistently positive operating cash flow. However, the most recent quarter was less favorable: revenue and earnings declined sequentially, operating cash flow weakened, capital spending exceeded internal cash generation, and higher debt increased interest expense. For investors, the key question is whether future operating growth can generate enough cash to support Ormat’s investment program while reducing the burden created by its expanded debt balance.