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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


Form 10-Q


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to

Commission file number: 001-32347

ORMAT TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)


Delaware			88-0326081
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)
6884 Sierra Center Parkway,, Reno,, Nevada			89511-2210
(Address of principal executive offices)			(Zip Code)

(775) 356-9029

(Registrant’s telephone number, including area code)

6140 Plumas Street, Reno, Nevada 89519-6075

(Former name, former address and former fiscal year, if changed from last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	ORA	NYSE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes þ No

As of August 1, 2025, the number of outstanding shares of common stock, par value $0.001 per share, was 60,723,470.

ORMAT TECHNOLOGIES, INC.

FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2025


PART I — FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS	4
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	26
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	52
ITEM 4.	CONTROLS AND PROCEDURES	52
PART II — OTHER INFORMATION		53
ITEM 1.	LEGAL PROCEEDINGS	53
ITEM 1A.	RISK FACTORS	53
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	53
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	53
ITEM 4.	MINE SAFETY DISCLOSURES	53
ITEM 5.	OTHER INFORMATION	53
ITEM 6.	EXHIBITS	53
SIGNATURES		55

Certain Definitions

Unless the context otherwise requires, all references in this quarterly report to “Ormat”, “the Company”, “we”, “us”, “our company”, “Ormat Technologies” or “our” refer to Ormat Technologies, Inc. and its consolidated subsidiaries.

iii

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30, 2025		December 31, 2024
	(Dollars in thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	88,492	$	94,395


Restricted cash and cash equivalents (primarily related to VIEs)	117,572		111,377
Receivables:
Trade less allowance for credit losses of $275 and $224, respectively (primarily related to VIEs)	154,277		164,050

Other	39,227		50,792

Inventories	44,907		38,092
Costs and estimated earnings in excess of billings on uncompleted contracts	12,926		29,243

Prepaid expenses and other	51,508		59,173
Total current assets	508,909		547,122


Investment in unconsolidated companies	160,178		144,585
Deposits and other (primarily related to VIE’s)	102,483		75,383
Deferred income taxes	176,897		153,936

Property, plant and equipment, net ($3,308,167 and $3,271,248 related to VIEs, respectively)	3,544,564		3,501,886
Construction-in-process ($526,053 and $251,442 related to VIEs, respectively)	1,024,241		755,589
Operating leases right of use ($14,789 and $13,989 related to VIEs, respectively)	35,240		32,114
Finance leases right of use (none related to VIEs)	3,648		2,841

Intangible assets, net	289,061		301,745
Goodwill	170,391		151,023
Total assets	$	6,015,612	$	5,666,224

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	212,617	$	234,334

Short term revolving credit lines with banks (full recourse)	96,500		—
Commercial paper (less deferred financing costs of $20 and $23, respectively)	99,980		99,977
Billings in excess of costs and estimated earnings on uncompleted contracts	37,693		23,091
Current portion of long-term debt:
Limited and non-recourse (primarily related to VIEs)	70,570		70,262


Full recourse	201,251		161,313
Financing liability	5,905		4,093
Operating lease liabilities	4,464		3,633
Finance lease liabilities	1,696		1,375
Total current liabilities	730,676		598,078
Long-term debt, net of current portion:
Limited and non-recourse (primarily related to VIEs and less deferred financing costs of $7,833 and $8,849, respectively)	542,437		578,204
Full recourse (less deferred financing costs of $4,665 and $4,671, respectively)	997,139		822,828
Convertible senior notes (less deferred financing costs of $5,456 and $6,820, respectively)	470,981		469,617
Financing liability	213,810		216,476
Operating lease liabilities	25,285		22,523
Finance lease liabilities	2,042		1,529


Liability associated with sale of tax benefits	136,778		152,292

Deferred income taxes	72,544		68,616
Liability for unrecognized tax benefits	7,583		6,272
Liabilities for severance pay	11,984		10,488
Asset retirement obligation	137,266		129,651
Other long-term liabilities	37,314		29,270
Total liabilities	3,385,839		3,105,844

Commitments and contingencies (Note 9)

Redeemable noncontrolling interest	10,985		9,448

Equity:
The Company's stockholders' equity:
Common stock, par value $0.001 per share; 200,000,000 shares authorized; 60,723,470 and 60,500,580 issued and outstanding as of June 30, 2025 and December 31, 2024, respectively	61		61
Additional paid-in capital	1,644,777		1,635,245
Treasury stock, at cost (258,667 shares held as of June 30, 2025 and December 31, 2024, respectively)	(17,964)		(17,964)
Retained earnings	868,371		814,518
Accumulated other comprehensive income (loss)	(2,297)		(6,731)
Total stockholders' equity attributable to Company's stockholders	2,492,948		2,425,129
Noncontrolling interest	125,840		125,803
Total equity	2,618,788		2,550,932
Total liabilities, redeemable noncontrolling interest and equity	$	6,015,612	$	5,666,224

The accompanying notes are an integral part of the condensed consolidated financial statements.

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(Dollars in thousands, except per share data)				(Dollars in thousands, except per share data)
Revenues:
Electricity	$	159,912	$	166,226	$	340,153	$	357,479
Product	59,612		37,829		91,381		62,661
Energy storage	14,494		8,908		32,246		16,989
Total revenues	234,018		212,963		463,780		437,129
Cost of revenues:
Electricity	121,236		110,515		241,069		227,245
Product	43,118		32,662		67,802		53,816
Energy storage	12,769		8,400		25,087		15,872
Total cost of revenues	177,123		151,577		333,958		296,933
Gross profit	56,895		61,386		129,822		140,196
Operating expenses:
Research and development expenses	1,439		1,730		3,981		3,294
Selling and marketing expenses	4,370		4,167		8,542		9,293
General and administrative expenses	19,786		18,026		37,695		37,563

Other operating income	(4,269)		—		(7,394)		—
Impairment of long-lived assets	—		957		—		957
Write-off of unsuccessful exploration and storage activities	251		1,379		767		1,379
Operating income	35,318		35,127		86,231		87,710
Other income (expense):
Interest income	1,929		2,604		3,242		4,443
Interest expense, net	(36,682)		(33,716)		(71,155)		(64,684)
Derivatives and foreign currency transaction gains (losses)	5,068		(332)		7,128		(1,914)

Income attributable to sale of tax benefits	16,251		15,798		33,822		33,274


Other non-operating income, net	76		74		298		100
Income from operations before income tax and equity in earnings of investees	21,960		19,555		59,566		58,929
Income tax (provision) benefit	5,466		3,178		9,261		3,325
Equity in earnings of investees	773		1,232		406		2,061
Net income	28,199		23,965		69,233		64,315





Net income attributable to noncontrolling interest	(153)		(1,722)		(825)		(3,485)
Net income attributable to the Company's stockholders	$	28,046	$	22,243	$	68,408	$	60,830
Comprehensive income:
Net income	28,199		23,965		69,233		64,315
Other comprehensive income (loss), net of related taxes:
Change in foreign currency translation adjustments	7,547		(266)		10,308		(2,429)
Change in unrealized gains or losses in respect of the Company's share in derivatives instruments of an unconsolidated investment that qualifies as a cash flow hedge	(214)		429		(1,110)		939
Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge	1,324		(1,189)		(2,142)		(628)
Change in unrealized gains or losses in respect of an interest rate swap derivative instrument that qualifies as a cash flow hedge	(233)		41		(745)		1,107

Other changes in comprehensive income	11		(28)		23		25
Total other comprehensive income (loss), net of related taxes:	8,435		(1,013)		6,334		(986)
Comprehensive income	36,634		22,952		75,567		63,329
Comprehensive income attributable to noncontrolling interest	(1,475)		(1,620)		(2,725)		(2,921)
Comprehensive income attributable to the Company's stockholders	$	35,159	$	21,332	$	72,842	$	60,408


Earnings per share attributable to the Company's stockholders:


Basic:	$	0.46	$	0.37	$	1.13	$	1.01


Diluted:	$	0.46	$	0.37	$	1.12	$	1.00
Weighted average number of shares used in computation of earnings per share attributable to the Company's stockholders:
Basic	60,689		60,451		60,624		60,419
Diluted	61,019		60,755		60,973		60,655

The accompanying notes are an integral part of the condensed consolidated financial statements.

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


	The Company's Stockholders' Equity
										Accumulated
				Additional						Other
	Common Stock			Paid-in		Treasury		Retained		Comprehensive				Noncontrolling		Total
	Shares	Amount		Capital		Stock		Earnings		Income (Loss)		Total		Interest		Equity
	(Dollars in thousands, except per share data)
Balance at December 31, 2023	60,359	$	60	$	1,614,769	$	(17,964)	$	719,894	$	(1,332)	$	2,315,427	$	125,560	$	2,440,987


Stock-based compensation	—	—		4,769		—		—		—		4,769		—		4,769
Exercise of stock-based awards by employees and directors (*)	63	—		55		—		—		—		55		—		55


Cash paid to noncontrolling interest	—	—		—		—		—		—		—		(2,587)		(2,587)
Cash dividend declared, $0.12 per share	—	—		—		—		(7,243)		—		(7,243)		—		(7,243)







Net income	—	—		—		—		38,587		—		38,587		1,924		40,511
Other comprehensive income (loss), net of related taxes:
Currency translation adjustments	—	—		—		—		—		(1,701)		(1,701)		(462)		(2,163)

Change in unrealized gains or losses in respect of the Company's share in derivative instruments of an unconsolidated investment that qualifies as a cash flow hedge	—	—		—		—		—		510		510		—		510
Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge	—	—		—		—		—		561		561		—		561
Change in unrealized gains or losses in respect of an interest rate swap derivative instrument that qualifies as a cash flow hedge	—	—		—		—		—		1,066		1,066		—		1,066
Other	—	—		—		—		—		53		53		—		53

Balance at March 31, 2024	60,422	$	60	$	1,619,593	$	(17,964)	$	751,238	$	(843)	$	2,352,084	$	124,435	$	2,476,519


Balance as of the beginning of the period	60,422	$	60	$	1,619,593	$	(17,964)	$	751,238	$	(843)	$	2,352,084	$	124,435	$	2,476,519
Stock-based compensation	—	—		5,077		—		—		—		5,077		—		5,077
Exercise of stock-based awards by employees and directors (*)	31	1		93		—		—		—		94		—		94


Cash paid to noncontrolling interest	—	—		—		—		—		—		—		(90)		(90)
Cash dividend declared, $0.12 per share	—	—		—		—		(7,344)		—		(7,344)		—		(7,344)







Net income	—	—		—		—		22,243		—		22,243		1,777		24,020
Other comprehensive income (loss), net of related taxes:						—
Currency translation adjustment	—	—		—		—		—		(164)		(164)		(102)		(266)

Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge	—	—		—		—		—		429		429		—		429
Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge	—	—		—		—		—		(1,189)		(1,189)		—		(1,189)
Change in unrealized gains or losses in respect of an interest rate swap derivative instrument that qualifies as a cash flow hedge	—	—		—		—		—		41		41		—		41
Other	—	—		—		—		—		(28)		(28)		—		(28)

Balance at June 30, 2024	60,453	$	61	$	1,624,763	$	(17,964)	$	766,137	$	(1,754)	$	2,371,243	$	126,020	$	2,497,263


























Balance at December 31, 2024	60,501	$	61	$	1,635,245	$	(17,964)	$	814,518	$	(6,731)	$	2,425,129	$	125,803	$	2,550,932


Stock-based compensation	—	—		4,911		—		—		—		4,911		—		4,911
Exercise of stock-based awards by employees and directors (*)	162	—		—		—		—		—		—		—		—


Cash paid to noncontrolling interest	—	—		—		—		—		—		—		(2,767)		(2,767)
Cash dividend declared, $0.12 per share	—	—		—		—		(7,273)		—		(7,273)		—		(7,273)







Net income	—	—		—		—		40,362		—		40,362		955		41,317
Other comprehensive income (loss), net of related taxes:
Currency translation adjustments	—	—		—		—		—		2,183		2,183		578		2,761

Change in unrealized gains or losses in respect of the Company's share in derivative instruments of an unconsolidated investment that qualifies as a cash flow hedge	—	—		—		—		—		(896)		(896)		—		(896)
Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge	—	—		—		—		—		(3,466)		(3,466)		—		(3,466)
Change in unrealized gains or losses in respect of an interest rate swap derivative instrument that qualifies as a cash flow hedge	—	—		—		—		—		(512)		(512)		—		(512)
Other	—	—		—		—		—		12		12		—		12

Balance at March 31, 2025	60,663	$	61	$	1,640,156	$	(17,964)	$	847,607	$	(9,410)	$	2,460,450	$	124,569	$	2,585,019

Cumulative effect of changes in accounting principles	—	—		—				—		—		—		—		—
Balance as of the beginning of the period	60,663	$	61	$	1,640,156	$	(17,964)	$	847,607	$	(9,410)	$	2,460,450	$	124,569	$	2,585,019
Stock-based compensation	—	—		4,621		—		—		—		4,621		—		4,621
Exercise of stock-based awards by employees and directors (*)	60	—		—		—		—		—		—		—		—




Cash dividend declared, $0.12 per share	—	—		—		—		(7,282)		—		(7,282)		—		(7,282)

Increase in noncontrolling interest related to tax monetization transaction	—	—		—		—		—		—		—		276		276





Net income	—	—		—		—		28,046		—		28,046		(327)		27,719
Other comprehensive income (loss), net of related taxes:
Currency translation adjustment	—	—		—		—		—		6,225		6,225		1,322		7,547

Change in unrealized gains or losses in respect of the Company's share in derivative instruments of unconsolidated investment that qualifies as a cash flow hedge	—	—		—		—		—		(214)		(214)		—		(214)
Change in unrealized gains or losses in respect of a cross currency swap derivative instrument that qualifies as a cash flow hedge	—	—		—		—		—		1,324		1,324		—		1,324
Change in unrealized gains or losses in respect of an interest rate swap derivative instrument that qualifies as a cash flow hedge	—	—		—				—		(233)		(233)		—		(233)
Other	—	—		—		—		—		11		11		—		11

Balance at June 30, 2025	60,723	$	61	$	1,644,777	$	(17,964)	$	868,371	$	(2,297)	$	2,492,948	$	125,840	$	2,618,788

(*) Resulted in an amount lower than $1,000.

The accompanying notes are an integral part of the condensed consolidated financial statements.

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)


	Six Months Ended June 30,
	2025		2024
	(Dollars in thousands)
Cash flows from operating activities:
Net income	$	69,233	$	64,315
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	139,808		126,152
Accretion of asset retirement obligation	4,201		3,895
Stock-based compensation	9,533		9,845

Income attributable to sale of tax benefits, net of interest expense	(13,431)		(16,519)
Equity in earnings of investees	(406)		(2,061)
Mark-to-market of derivative instruments	(2,404)		1,279

Disposal of property, plant and equipment	(332)		38

Write-off of unsuccessful exploration and storage activities	767		1,379
Write-off of long-lived assets	—		957


Gain on severance pay fund asset	(49)		(43)




Loss (gain) on foreign currency exchange rates	(8,329)		963
Deferred income tax provision	(15,038)		(18,266)
Liability for unrecognized tax benefits	1,311		(1,153)


Changes in operating assets and liabilities, net of businesses acquired:
Receivables	15,865		53,147
Costs and estimated earnings in excess of billings on uncompleted contracts	16,794		(11,352)
Long-term costs and estimated earnings in excess of billings on uncompleted contracts	(29,396)		(5,370)
Inventories	(6,815)		390
Prepaid expenses and other	531		(14,004)
Change in operating lease right of use asset	2,404		1,912
Deposits and other	6,456		287
Accounts payable and accrued expenses	(18,161)		(42,765)

Billings in excess of costs and estimated earnings on uncompleted contracts	12,591		(2,392)
Liabilities for severance pay	1,496		(1,835)
Change in operating lease liabilities	(1,926)		(2,677)
Other long-term liabilities	204		(218)

Net cash provided by operating activities	184,907		145,904
Cash flows from investing activities:







Capital expenditures	(327,426)		(250,225)

Investment in unconsolidated companies	(16,297)		(1,225)


Cash paid for business acquisition, net of cash acquired	(88,650)		(274,632)

Decrease (increase) in severance pay fund asset, net of payments to retired employees	(53)		1,120

Net cash used in investing activities	(432,426)		(524,962)
Cash flows from financing activities:

Proceeds from long-term loans, net of transaction costs	299,339		392,791
Proceeds from exercise of options by employees	—		149





Proceeds related to tax monetization transaction	5,190		—

Proceeds from revolving credit lines with banks	682,000		40,000
Repayment of revolving credit lines with banks	(585,500)		(60,000)
Cash received from noncontrolling interest	10,276		12,251


Repayments of long-term debt	(136,790)		(108,644)


Cash paid to noncontrolling interest	(3,301)		(4,007)

Payments under finance lease obligations	(765)		(687)
Debt issuance costs	(8,964)		(2,073)
Cash dividends paid	(14,555)		(14,587)
Net cash provided by financing activities	246,930		255,193
Effect of exchange rate changes	881		(163)
Net change in cash and cash equivalents and restricted cash and cash equivalents	292		(124,028)

Cash and cash equivalents and restricted cash and cash equivalents at beginning of period	205,772		287,770
Cash and cash equivalents and restricted cash and cash equivalents at end of period	$	206,064	$	163,742




Supplemental non-cash investing and financing activities:
Change in accounts payable related to purchases of property, plant and equipment	$	(1,190)	$	(22,265)
Right of use assets obtained in exchange for new lease liabilities	$	5,241	$	3,548

The accompanying notes are an integral part of the condensed consolidated financial statements.

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1 — GENERAL AND BASIS OF PRESENTATION

These unaudited condensed consolidated interim financial statements of Ormat Technologies, Inc. and its subsidiaries (collectively, the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Accordingly, they do not contain all information and notes required by U.S. GAAP for annual financial statements. In the opinion of management, these unaudited condensed consolidated interim financial statements reflect all adjustments, which include normal recurring adjustments, necessary for a fair statement of the Company’s condensed consolidated balance sheets as of June 30, 2025, the condensed consolidated statements of operations and comprehensive income, the condensed consolidated statements of cash flows and the condensed consolidated statements of equity for the periods presented.

The financial data and other information disclosed in the notes to the condensed consolidated financial statements related to these periods are unaudited. The results for the periods presented are not necessarily indicative of the results to be expected for the year.

These condensed unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”). The condensed consolidated balance sheet data as of December 31, 2024 was derived from the Company’s audited consolidated financial statements for the year ended December 31, 2024 but does not include all disclosures required by U.S. GAAP.

Dollar amounts, except per share data, in the notes to these financial statements are rounded to the closest $1,000.

Dominica Limited-Recourse Loan

On June 23, 2025, one of the Company’s subsidiaries (“GPCD”), entered into loan agreements (the “Dominica Loan Agreements”) with the Caribbean Development Bank (“CDB”) and Caricom Development Fund (“CDF”), (the “Lenders”) pursuant to which GPCD will borrow up to $49.8 million aggregate principal amount at an interest rate of 2.4% in connection with GPCD’s 10MW Geothermal Project in Dominica (“The Project”) .

The loan (the “Dominica Loan”) will be drawn over several drawdowns expected to occur during the second half of 2025, and the proceeds will be used to refinance and fund the development and construction costs of the Project, which were initially financed using equity.

The Dominica Loan is secured by all of the assets of GPCD. The GPCD Loan Agreements requires GPCD to comply with certain covenants, including, among others, restrictions on the incurrence of indebtedness or liens, amendment or modification of material project documents, or the ability of GPCD to merge or consolidate with another entity. In addition, there are restrictions on the ability of GPCD to make distributions to its shareholders after the commercial operation of The Project, which include a required historical and projected DSCR.

Blue Mountain Purchase Transaction

On June 18, 2025, the Company closed a purchase transaction with Cyrq Energy to acquire 100% ownership of the Blue Mountain geothermal power plant for a total consideration of $88.7 million (including customary post-closing working capital adjustments). The Blue Mountain power plant is a 20MW facility, located in Humboldt County, NV, under a Power Purchase Agreement (“PPA”) with NV Energy that expires at the end of 2029.

As a result of the acquisition, the Company expanded its overall generation capacity and expects to improve the profitability of the power plant through cost reduction, synergies and upgrades. The Company accounted for the transaction in accordance with Accounting Standard Codification ("ASC") 805, Business Combinations, and following the transaction, the Company consolidates the power plant in accordance with ASC 810, Consolidation.

During the six months ended June 30, 2025, the Company incurred $0.7 million of acquisition- related costs. Such costs are included under "General and administrative expenses" in the condensed consolidated statements of operations and comprehensive income for the respective period. Accounting guidance provides that the allocation of the purchase price may be adjusted for up to one year from the date of the acquisition to the extent that additional information is obtained about the facts and circumstances that existed as of the acquisition date.

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The following table summarizes the preliminary purchase price allocation to the fair value of the assets acquired and liabilities assumed (in millions):


Trade receivables and others (1)	$	1.7
Deferred income taxes	5.3
Property, plant and equipment and construction-in-process (2)	86.2
Operating lease right-of-use	1.4
Total assets acquired	$	94.6

Accounts payable, accrued expenses and others	$	0.3
Long-term operating lease liabilities	1.2
Other long-term liability (3)	16.8
Asset retirement obligation	3.7
Total liabilities assumed	$	22.0

Total assets acquired, and liabilities assumed, net	$	72.6
Goodwill (4)	$	16.1

(1) The gross amount of trade receivables was collected subsequent to the acquisition date.

(2) The fair value of Property, plant and equipment was estimated by applying the income approach and utilizing the discounted cash flow method. This methodology assesses the value of tangible assets by computing the anticipated cash flows expected to be generated by the respective assets.

(3) Other long-term liability is related to the long-term electricity PPA described above, and is amortized over the term of the PPA. The fair value of the long-term liability represents a PPA price that is relatively lower than the related prevailing market price, and was estimated by applying the income approach and utilizing the With and Without method.

(4) Goodwill is primarily related to the expected synergies, potential cost savings in operations as a result of the purchase transaction as well as potential future enhancements to the geothermal asset. The goodwill is allocated to the Electricity segment and is deductible for tax purposes.

During the three months ended June 30, 2025, the acquired power plant contributed $0.5 million to the Company’s Electricity revenues, and $0.3 million to the Company's earnings which were included in the Company's condensed consolidated statements of operations and comprehensive income for that period. Pro forma information is not provided as the Company deemed this information to be immaterial.

Hybrid Tax Equity Partnership

On May 20, 2025, the Company entered into a partnership agreement with a private investor under which the private investor acquired indirect membership interests in the Lower Rio and Arrowleaf storage facilities (the “Project Facilities”) for total consideration of $62.0 million, of which an initial contribution of $5.2 million was made on May 20, 2025 (the “Initial Contribution”). The remainder of the total consideration will be paid upon the achievement of substantial completion milestones of each of the Project Facilities. Such milestones are expected to be reached during the second half of 2025. Following the transaction, the Company continues to operate and maintain the Project Facilities.

Under the transaction agreements, prior to reaching the flip date, which was defined as the later of the date on which the private investor reaches its target return, and the end of the Investment Tax Credits (“ITCs”) recapture period (the “Flip Date”), the private investor receives substantially all of the distributable cash flow generated by the Project Facilities, and substantially all of the tax attributes of the Project Facilities. Following the Flip Date, the Company will receive substantially all of the distributable cash and taxable income, on a go-forward basis.

Following the Flip Date, but no later than May 19, 2033, the Company has the option to purchase the private investor’s interests at the greater of (i) the fair market value of the post-flip residual interest, (ii) five percent of the aggregate capital contributions of the private investor, (iii) the fair market value of the Class A units, and (iv) the private investor’s book value investment. If the Company exercises this purchase option, it will become the sole owner of the project again.

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

As further described below under the caption “Transferable Production and Investment Tax Credits”, the Company accounts for ITCs under ASC 740 through the “Income tax (provision) benefit” line in the condensed consolidated statement of operations and comprehensive income, and therefore, proceeds allocated to ITCs were included in the “Income tax (provision) benefit line. Proceeds allocated to other tax attribute, will be included under “Income attributable to the sale of tax benefits” line in the condensed consolidated statement of operations and comprehensive income. The private investor’s Initial Contribution of $5.2 million was primarily related to ITC benefits, and thus recorded against the related deferred tax asset. Contributions related to other tax attributes will be recorded to the liability associated with sales of tax benefits on the condensed consolidated balance sheets.

Discount 2025 II Loan

On May 14, 2025, the Company entered into a definitive loan agreement (the “Discount 2025 II Loan Agreement”) with Discount Bank. The Discount 2025 II Loan Agreement provides for a loan by Discount Bank to the Company in an aggregate principal amount of $50.0 million (the “Discount 2025 II Loan”). The outstanding principal amount of the Discount 2025 II Loan will be repaid in 32 quarterly payments of $1.6 million each, commencing on August 22, 2025. The duration of the Discount 2025 II Loan is 8 years and it bears interest of 3-month SOFR+2.40%, payable every three months. The Discount 2025 II Loan Agreement includes various affirmative and negative covenants, including a requirement that the Company maintain (i) a net debt to adjusted EBITDA ratio not to exceed 6.0, (ii) a minimum equity capital amount of not less than $750 million, and (iii) an equity capital to total assets ratio of not less than 25%. The Discount 2025 II Loan Agreement includes other customary affirmative and negative covenants, including payment and covenant events of default.

Hapoalim 2025 Loan

On March 31, 2025, the Company entered into a definitive loan agreement (the “Hapoalim Loan Agreement 2025”) with Bank Hapoalim B.M. The Hapoalim Loan Agreement 2025 provides for a loan by Bank Hapoalim B.M. to the Company in an aggregate principal amount of $100.0 million (the “Hapoalim 2025 Loan”). On June 30, 2025, the Company amended and restated the Hapoalim Loan Agreement 2025 in order to increase the original principal amount of the Hapoalim 2025 Loan by an additional aggregated principal amount of $50 million (the “Amended Hapoalim 2025 Loan”). The outstanding principal amount of the Amended Hapoalim 2025 Loan will be repaid in 31 quarterly payments of $4.74 million each, commencing on September 30, 2025. The duration of the Amended Hapoalim 2025 Loan is 8 years and it bears interest of 3-month SOFR+2.45%, payable every three months. The Amended Hapoalim Loan Agreement 2025 includes various affirmative and negative covenants, including a requirement that the Company maintain (i) a net debt to adjusted EBITDA ratio not to exceed 6.0, (ii) a minimum equity capital amount of not less than $750 million, and (iii) an equity capital to total assets ratio of not less than 25%. The Amended Hapoalim Loan Agreement 2025 includes other customary affirmative and negative covenants, including payment and covenant events of default.

Discount 2025 Loan

On March 27, 2025, the Company entered into a definitive loan agreement (the “Discount Loan Agreement 2025”) with Discount Bank. The Discount Loan Agreement 2025 provides for a loan by Discount Bank to the Company in an aggregate principal amount of $50.0 million (the “Discount 2025 Loan”). The outstanding principal amount of the Discount 2025 Loan will be repaid in 32 quarterly payments of $1.6 million each, commencing on May 22, 2025. The duration of the Discount 2025 Loan is 8 years and it bears interest of 3-month SOFR+2.40%, payable every three months. The Discount Loan Agreement 2025 includes various affirmative and negative covenants, including a requirement that the Company maintain (i) a net debt to adjusted EBITDA ratio not to exceed 6.0, (ii) a minimum equity capital amount of not less than $750 million, and (iii) an equity capital to total assets ratio of not less than 25%. The Discount Loan Agreement 2025 includes other customary affirmative and negative covenants, including payment and covenant events of default.

Mizrahi 2025 Loan

On February 2, 2025, the Company entered into a definitive loan agreement (the “Mizrahi Loan Agreement 2025”) with Mizrahi Bank. The Mizrahi Loan Agreement 2025 provides for a loan by Mizrahi Bank to the Company in an aggregate principal amount of $50.0 million (the “Mizrahi 2025 Loan”). The outstanding principal amount of the Mizrahi 2025 Loan will be repaid in 16 semi-annual payments of $3.1 million each, commencing on October 15, 2025. The duration of the Mizrahi 2025 Loan is 8 years and it bears interest of 6-month SOFR+2.35%, payable every six months. The Mizrahi Loan Agreement 2025 includes various affirmative and negative covenants, including a requirement that the Company maintain (i) a net debt to adjusted EBITDA ratio not to exceed 6.0, (ii) a minimum equity capital amount of not less than $750 million, and (iii) an equity capital to total assets ratio of not less than 25%. The Mizrahi Loan Agreement 2025 includes other customary affirmative and negative covenants, including payment and covenant events of default.

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Settlement Agreement

As previously disclosed, on August 1, 2024, the Company entered into a settlement agreement, effective April 2024, (the “Agreement”) with a third-party battery systems supplier (the “Supplier”). Under the Agreement, the Supplier paid to the Company $35.0 million as a recovery of damages, such as significant loss of potential profit due to project delays, as well as additional costs incurred by the Company, related to locating and purchasing substitute battery solutions from alternative vendors, (the “Recovery of Damages”) to settle the dispute. On August 16, 2024, the Company received the Recovery of Damages payment contingent upon certain conditions which the Company expects to be met, on a pro-rata basis, during the period until March 31, 2026. The Company accounted for the Recovery of Damages amount under the guidance of ASC 450, Contingencies, and ASC 705, Cost of Sales and Services, and as a result, deemed $25.0 million as a recovery of damages, which is recognized as income once contingency conditions are met, and $10.0 million as a reduction to the cost of battery systems to be purchased under the Agreement. During the three and six months ended June 30, 2025, the Company recognized income of $3.1 million, and $6.3 million, respectively, under “Other operating income” in the condensed consolidated statements of operations and comprehensive income. These amounts represent the non-refundable portion of the recovery of damages for which contingency conditions have been met.

War in Israel

Starting October 7, 2023, Israel has been engaged in a complex multifront war in the Middle East. As of the date of these condensed consolidated financial statements, none of the Company's facilities or infrastructure have been damaged nor have its supply chains been significantly impacted since the war broke out. Management continuously monitors the effect of the war on the Company's financial position and results of operations. For more information, see Note 1 to the consolidated financial statements in the Company’s 2024 Annual Report.

Write-offs of Unsuccessful Exploration and Storage Activities

The write-off of unsuccessful exploration and storage activities for the three and six months ended June 30, 2025 of $0.3 million, and $0.8 million, respectively, are related to a number of storage projects that the Company decided to no longer pursue. The write-off of unsuccessful exploration and storage activities for the three and six months ended June 30, 2024 of $1.4 million, is related to geothermal exploration projects that the Company decided to no longer pursue.

Reconciliation of Cash and Cash Equivalents and Restricted Cash and Cash Equivalents

The following table provides a reconciliation of cash and cash equivalents and restricted cash and cash equivalents as reported on the balance sheet to the total of the same amounts shown on the statement of cash flows:


	June 30,		December 31,
	2025		2024
	(Dollars in thousands)
Cash and cash equivalents	$	88,492	$	94,395
Restricted cash and cash equivalents	117,572		111,377
Total cash and cash equivalents and restricted cash and cash equivalents	$	206,064	$	205,772

Concentration of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash investments and accounts receivable.

Cash investments:

The Company places its cash investments with high credit quality financial institutions located in the United States (“U.S.”) and in foreign countries. At June 30, 2025 and December 31, 2024, the Company had deposits totaling $10.2 million and $31.2 million, respectively, in ten U.S. financial institutions that were federally insured up to $250,000 per account. At June 30, 2025 and December 31, 2024, the Company’s deposits in foreign countries amounted to approximately $74.4 million and $73.9 million, respectively.

Account receivables:

At June 30, 2025 and December 31, 2024, account receivables related to operations in foreign countries amounted to approximately $107.2 million, and $105.2 million, respectively. At June 30, 2025 and December 31, 2024, accounts receivable from the Company’s primary customers, which each accounted for revenues in excess of 10% of total consolidated revenues for the related period, amounted to approximately 55% and 57% of the Company’s trade receivables, respectively.

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The aggregate amount of notes receivable exceeding 10% of total receivables as of June 30, 2025 and December 31, 2024 is $83.3 million, and $99.7 million, respectively.

The Company's revenues from its primary customers as a percentage of total revenues are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Southern California Public Power Authority (“SCPPA”)	17.0	%	19.7	%	19.5	%	22.3	%
Sierra Pacific Power Company and Nevada Power Company	12.9		14.7		14.5		15.8

Kenya Power and Lighting Co. Ltd. ("KPLC")	12.5		13.1		12.3		12.7

The Company has historically been able to collect on substantially all of its receivable balances. As of June 30, 2025, the amount overdue from KPLC in Kenya was $36.7 million of which $13.9 million was paid in July of 2025. The Company believes it will be able to collect all past due amounts from KPLC. This belief is supported by the fact that in addition to KPLC's obligations under its power purchase agreement, the Company holds a support letter from the Government of Kenya that covers certain cases of KPLC non-payment (such as non-payments that are caused by government actions and/or political events).

In Honduras, as of June 30, 2025, the total amount overdue from Empresa Nacional de Energía Eléctrica ("ENEE") was $17.4 million of which $0.9 million was paid in July of 2025. In addition, due to the financial situation in Honduras, the Company may experience further delays in collection. The Company believes it will be able to collect all past due amounts from ENEE.

Allowance for Credit Losses

The following table describes the changes in the allowance for expected credit losses for the three and six months ended June 30, 2025 and 2024 (all related to trade receivables):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(Dollars in thousands)				(Dollars in thousands)
Beginning balance of the allowance for expected credit losses	$	249	$	163	$	224	$	90
Change in the provision for expected credit losses for the period	26		37		51		110
Ending balance of the allowance for expected credit losses	$	275	$	200	$	275	$	200

Revenues from Contracts with Customers

Contract assets related to the Company’s Product segment reflect revenue recognized and performance obligations satisfied in advance of customer billing. Contract liabilities related to the Company's Product segment reflect payments received in advance of the satisfaction of performance under the contract. The Company receives payments from customers based on the terms established in the contracts. Total contract assets and contract liabilities as of June 30, 2025 and December 31, 2024 are as follows:


	June 30,		December 31,
	2025		2024
	(Dollars in thousands)
Contract assets (*)	$	12,926	$	29,243
Contract liabilities (*)	$	(37,693)	$	(23,091)

(*) Contract assets and contract liabilities are presented as "Costs and estimated earnings in excess of billings on uncompleted contracts" and "Billings in excess of costs and estimated earnings on uncompleted contracts", respectively, on the condensed consolidated balance sheets. The contract liabilities balance at the beginning of the year was fully recognized as product revenues during the six months ended June 30, 2025 as a result of performance obligations having been fully satisfied as of June 30, 2025, except for certain immaterial amounts. Additionally, as of June 30, 2025, long-term costs and estimated earnings in excess of billings on uncompleted contracts related to the Dominica project in the amount of $55.4

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

million is included under “Deposits and other” in the condensed consolidated balance sheets, and not under the contract assets and contract liabilities above, due its long-term nature.

On June 30, 2025, the Company had approximately $261.9 million of remaining performance obligations not yet satisfied or partly satisfied related to our Product segment. The Company expects to recognize approximately 100% of this amount as Product revenues during the next 24 months.

Disaggregated revenues from contracts with customers for the three and six months ended June 30, 2025, and 2024 are disclosed under Note 8 - Business Segments, to the condensed consolidated financial statements.

Leases in which the Company is a Lessor

The table below presents lease income recognized as a lessor:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(Dollars in thousands)				(Dollars in thousands)
Lease income relating to lease payments from operating leases	$	131,089	$	129,420	$	274,711	$	276,521

Derivative Instruments

The Company maintains a risk management strategy that may incorporate the use of swap contracts, put options, forward exchange contracts, interest rate swaps, and cross-currency swaps to minimize significant fluctuation in cash flows and/or earnings that are caused by oil and natural gas prices, exchange rate or interest rate volatility.

Transferable Production and Investment Tax Credits

The Inflation Reduction Act (“IRA”) that was signed into law in August 2022, introduces a transferability provision for certain tax credits related to the clean production of energy. The One Big Beautiful Bill continues to allow the transfer of the clean energy tax credits. Under this provision, a reporting entity can monetize such credits through sale to a third party. The option for transferability of credits applies to taxable years beginning after December 31, 2022. Several of the Company’s projects, which are not currently part of a tax monetization transaction, generate eligible tax credits, such as investment tax credits (“ITCs”) and production tax credits (“PTCs”), that are eligible to be transferred to a third-party under the provisions of the IRA. The Company accounts for ITCs under ASC 740 through the “Income tax (provision) benefit” line in the condensed consolidated statement of operations and comprehensive income. PTCs are accounted similarly to refundable or direct-pay credits outside of the “Income tax (provision) benefit” line with income recognized in the “Income attributable to sale of tax benefits” line in the condensed consolidated statement of operations and comprehensive income. Income recognized related to the expected sale of such transferable PTCs during the three and six months ended June 30, 2025, was $6.0 million and $13.3 million, respectively, net of discount, and $3.6 million, and $8.0 million, respectively, net of discount, for the three and six months ended June 30, 2024. Tax benefits recognized under Income tax (provision) benefit related to transferable ITCs during the three and six months ended June 30, 2025, was $10.3 million and $24.2 million, respectively, net of discount, and $6.2 million, and $17.7 million, respectively, net of discount, for the three and six months ended June 30, 2024.

NOTE 2 — NEW ACCOUNTING PRONOUNCEMENTS

New Accounting Pronouncements Effective in the six months ended June 30, 2025

None.

New accounting pronouncements effective in future periods

Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity

In May 2025, the FASB issued ASU 2025-03 “Business Combinations (Topic 805) and Consolidation (Topic 810)” to modify the Topic 805 framework for identifying the accounting acquirer in certain business combinations when the legal acquiree is a variable interest entity (“VIE”). Under current accounting guidance, when a VIE is acquired, the primary beneficiary (i.e., the entity that consolidates the VIE) is the accounting acquirer. The amendments in this ASU revise current guidance to: (1) limit situations in which entities must identify the primary beneficiary as the accounting acquirer in certain business combinations, and (2) require that when a business combination involving a VIE is primarily effected through exchanging equity interests, entities must consider the general factors in Topic 805 to determine which entity is the accounting acquirer. This ASU is effective for annual and interim reporting periods beginning after December 15, 2026. This ASU should be applied prospectively to any acquisition transaction that occurs after the initial application date. Early

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the potential impact of this guidance on its consolidated financial statements; however, it anticipates that the adoption of ASU 2025-03 will not have a material impact on its consolidated financial statements.

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740)–Improvements to Income Tax Disclosures” to enhance the transparency and decision usefulness of income tax disclosures, primarily related to the rate reconciliation and income taxes paid information. The amendments in this ASU require that public entities, on an annual basis, disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. This ASU also requires that all entities disclose, on an annual basis, (1) the amount of income taxes paid disaggregated by federal, state, and foreign taxes, (2) the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than five percent of total income taxes paid, (3) income or loss from continuing operations before income tax expense or benefit disaggregated between domestic and foreign, and (4) income tax expense or benefit from continuing operations disaggregated by federal, state, and foreign. The amendments in this ASU are effective for annual periods beginning after December 15, 2024, and should be applied on a prospective basis with the option to apply retrospectively. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is still evaluating the impact of this update and plans to implement these amendments in its 2025 consolidated annual financial statements.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03 “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40)” to improve the disclosure about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The amendments in this ASU require disclosure of the following items in the notes to the financial statements at each interim and annual reporting date:

1The amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contain any of the expense categories listed in (a) through (e).

2A qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively.

3The total amount of selling expenses recognized in continuing operations, and the entity’s definition of selling expenses.

The amendments of this ASU also require that an entity include certain amounts that are already required to be disclosed under current generally accepted accounting principles in the same disclosure as the other disaggregation requirements. The amendments in this ASU are effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and should be applied either (1) prospectively to financial statements issued for reporting periods after the effective date of the ASU or (2) retrospectively to any or all prior periods presented in the financial statements. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of these amendments on its consolidated financial statements.

Induced Conversions of Convertible Debt Instruments

In November 2024, the FASB issued ASU 2024-04 “Debt – Debt with Conversion and Other Options (Subtopic 470-20)” to improve the relevance and consistency in application of induced conversion guidance. The amendments in this ASU clarify the assessment of whether a transaction should be accounted for as an induced conversion or extinguishment of convertible debt when changes are made to conversion features as part of an offer to settle the instrument. This ASU is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. This ASU can be adopted either on a prospective or retrospective basis. Early adoption is permitted. The Company is currently evaluating the potential impact of this guidance on its consolidated financial statements; however, it anticipates that the adoption of ASU 2024-04 will not have a material impact on its consolidated financial statements.

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

NOTE 3 — INVENTORIES

Inventories consist of the following:


	June 30,		December 31,
	2025		2024
	(Dollars in thousands)
Raw materials and purchased parts for assembly	$	20,860	$	20,575
Self-manufactured assembly parts and finished products	24,047		17,517
Total inventories	$	44,907	$	38,092

NOTE 4— FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value measurement guidance clarifies that fair value is an exit price, representing the amount that would be received upon selling an asset or paid upon transferring a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under the fair value measurement guidance are described below:

Level 1 — unadjusted observable inputs that reflect quoted prices for identical assets or liabilities in active markets;

Level 2 — inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly;

Level 3 — unobservable inputs.

The following table sets forth certain fair value information at June 30, 2025 and December 31, 2024 for financial assets and liabilities measured at fair value by level within the fair value hierarchy, as well as cost or amortized cost. As required by the fair value measurement guidance, assets and liabilities are classified in their entirety based on the lowest level of inputs that is significant to the fair value measurement.


			June 30, 2025
			Fair Value
	Carrying Value at June 30, 2025		Total		Level 1		Level 2		Level 3
	(Dollars in thousands)
Assets:
Current assets:
Cash equivalents (primarily restricted cash accounts)	$	42,797	$	42,797	$	42,797	$	—	$	—


Derivatives: interest rate swap (3)	40		40		—		40		—



Derivatives: currency forward contracts (2)	2,954		2,954		—		2,954		—
Long-term assets:
Cross currency swap (1)	3,341		3,341		—		3,341		—

Liabilities:
Current liabilities:




Derivatives: cross-currency swap (1)	(655)		(655)		—		(655)		—

Long term liabilities:
Derivatives: interest rate swap (3)	(672)		(672)		—		(672)		—

	$	47,805	$	47,805	$	42,797	$	5,008	$	—

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)


			December 31, 2024
			Fair Value
	Carrying Value at December 31, 2024		Total		Level 1		Level 2		Level 3
	(Dollars in thousands)
Assets:
Current assets:
Cash equivalents (primarily restricted cash accounts)	$	52,031	$	52,031	$	52,031	$	—	$	—


Derivatives: interest rate swap (3)	180		180		—		180		—



Derivatives: currency forward contracts (2)	550		550		—		550		—


Liabilities:
Current liabilities:




Derivatives: cross-currency swap (1)	(3,500)		(3,500)		—		(3,500)		—
Long-term liabilities:
Derivatives: cross-currency swap (1)	(6,653)		(6,653)		—		(6,653)		—



	$	42,607	$	42,607	$	52,031	$	(9,424)	$	—

1.These amounts relate to cross-currency swap contracts valued primarily based on the present value of the cross-currency swap future settlement prices for U.S. Dollar (“USD”) and New Israeli Shekel (“NIS”) zero yield curves and the applicable exchange rate as of June 30, 2025 and December 31, 2024, as applicable. These amounts are included within “Deposits and other”, “Accounts payable and accrued expenses” or “Other long-term liabilities”, as applicable, in the condensed consolidated balance sheets on June 30, 2025 and December 31, 2024. Cash collateral deposits in the amount of $1.6 million and $9.7 million as of June 30, 2025, and December 31, 2024, respectively, are presented under “Receivables, other” in the condensed consolidated balance sheets.

2.These amounts relate to currency forward contracts valued primarily based on observable inputs, including forward and spot prices for currencies, net of contracted rates and then multiplied by notional amounts, and are included within “Receivables, other” or “Accounts payable and accrued expenses”, as applicable, in the condensed consolidated balance sheets on June 30, 2025 and December 31, 2024, with the corresponding gain or loss being recognized within “Derivatives and foreign currency transaction gains (losses)” in the condensed consolidated statements of operations and comprehensive income.

3.This amount relates to interest rate swap contracts valued primarily based on the present value of the interest rate swap settlement prices and the future 3-month SOFR prices based on USD zero yield curve as of June 30, 2025 and December 31, 2024. This amount is included within “Receivables, other” or “Other long-term liabilities”, as applicable, in the condensed consolidated balance sheets on June 30, 2025.

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

The following table presents the amounts of gain (loss) recognized in the condensed consolidated statements of operations and comprehensive income on derivative instruments:


		Amount of recognized gain (loss)				Amount of recognized gain (loss)
Derivative instruments	Location of recognized gain (loss)	Three Months Ended June 30,				Six Months Ended June 30,
		2025		2024		2025		2024
		(Dollars in thousands)				(Dollars in thousands)







Derivatives not designated as hedging instruments
Currency forward contracts (1)	Derivative and foreign currency transaction gains (losses)	$	4,040	$	(185)	$	3,693	$	(513)
Derivatives designated as cash flow hedging instruments
Cross currency swap (2)	Derivative and foreign currency transaction gains (losses)	$	18,648	$	(2,127)	$	14,983	$	(5,363)
Interest rate swap (2)	Interest expense, net	$	101	$	433	202		890
Total		$	18,749	$	(1,694)	$	15,185	$	(4,473)

1.The foregoing currency forward transactions were not designated as hedge transactions and were marked to market with the corresponding gains or losses recognized within “Derivatives and foreign currency transaction gains (losses)” in the condensed consolidated statements of operations and comprehensive income.

2. The foregoing cross-currency and interest rate swap transactions were designated as a cash flow hedging instruments. The changes in the cross currency swap fair value are initially recorded in “Other comprehensive income (loss)” and a corresponding amount is reclassified out of “Accumulated other comprehensive income (loss)” to “Derivatives and foreign currency transaction gains (losses)” to offset the remeasurement of the underlying hedged transaction which also impacts the same line item in the condensed consolidated statements of operations and comprehensive income. The changes in the interest rate swap fair value are initially recorded in “Other comprehensive income (loss)” and a corresponding amount is reclassified out of “Accumulated other comprehensive income (loss)” to “Interest expenses, net” to offset the remeasurement of the underlying hedged transaction which also impacts the same line item in the condensed consolidated statements of operations and comprehensive income.

There were no transfers of assets or liabilities between Level 1, Level 2 and Level 3 during the three and six months ended June 30, 2025 and 2024.

The following table presents the effect of derivative instruments designated as cash flow hedges on the condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2025, and 2024:

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(Dollars in thousands)				(Dollars in thousands)
Cash flow hedges:
Balance in Accumulated other comprehensive income (loss) beginning of period	$	(3,294)	$	1,309	$	684	$	(318)
Gain or (loss) recognized in Other comprehensive income (loss):
Cross currency swap	19,971		(3,315)		12,840		(5,990)
Interest rate swap	(132)		474		(543)		1,997
Amounts reclassified from Other comprehensive income (loss) into earnings:
Cross currency swap	(18,648)		2,127		(14,983)		5,363
Interest rate swap	(101)		(433)		(202)		(890)
Balance in Accumulated other comprehensive income (loss) end of period	$	(2,204)	$	162	$	(2,204)	$	162

The estimated net amount of existing gain (loss) that is reported in “Accumulated other comprehensive income (loss)” as of June 30, 2025 that is expected to be reclassified into earnings within the next 12 months is immaterial. The maximum length of time over which the Company is hedging its exposure to the variability in future cash flow is from the transaction commencement date through June 2031.

The fair value of the Company’s long-term debt approximates its carrying amount, except for the following:


	Fair Value Hierarchy Level	Fair Value				Carrying Amount (*)
		June 30, 2025		December 31, 2024		June 30, 2025		December 31, 2024
		(Dollars in millions)				(Dollars in millions)
Limited and non-recourse loans: fixed rate	3	$	604.0	$	636.5	$	622.6	$	657.3
Full recourse loans:
Fixed-rate	3	849.8		920.4		862.3		940.4
Variable-rate	3	348.3		48.5		340.6		48.4
Financing liability: fixed-rate	3	222.9		223.4		219.7		220.6
Convertible senior note	2	525.2		471.2		476.4		476.4

(*) The carrying amount value of the loans excludes the related deferred financing costs.

The fair value of the long-term debt is determined by a valuation model, which is based on a conventional discounted cash flow methodology, and utilizes assumptions of current borrowing rates, except for the fair value of the Convertible Senior Notes for which the fair value was estimated based on a quoted bid price of the Notes in an over-the-counter market on the last trading day of the reporting period. A hypothetical change in the quoted bid price will result in a corresponding change in the estimated fair value of these notes. The carrying value of the deposits of $10.1 million, the short term revolving credit lines with banks of $96.5 million, and the commercial paper of $100.0 million, approximate their fair value. In the past five years, interest rate for both short-term and long-term debt have increased, although they have decreased slightly recently. Additional changes to the related interest rate may have a direct impact on the fair value of the Company's long-term debt.

NOTE 5 — STOCK-BASED COMPENSATION

In March 2025, the Company granted certain members of its management and employees an aggregate of 210,961 restricted stock units ("RSUs") and 45,190 performance stock units ("PSUs") under the Company’s 2018 Incentive Compensation Plan. The RSUs and PSUs have vesting periods of between 1 to 3 years from the grant date.

The fair value of each RSU and PSU on the grant date was $68.9 and $70.9, respectively. The Company calculated the fair value of each RSU and PSU on the grant date using the complex lattice, tree-based option-pricing model, and the Monte Carlo simulation, based on the following assumptions:


Risk-free interest rates	3.95%	—	4.08%
Expected life (in years)	1	—	3
Dividend yield	0.69%
Expected volatility (weighted average)	27.0%	—	31.0%

There were no other significant grants that were made by the Company during the six months ended June 30, 2025.

NOTE 6 — INTEREST EXPENSE, NET

The components of interest expense are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(Dollars in thousands)				(Dollars in thousands)

Interest related to sale of tax benefits	$	3,698	$	4,343	$	7,498	$	9,239

Interest expense	37,281		33,621		71,717		62,745
Less — amount capitalized	(4,297)		(4,248)		(8,060)		(7,300)
Total interest expense, net	$	36,682	$	33,716	$	71,155	$	64,684

NOTE 7 — EARNINGS PER SHARE

Basic earnings per share attributable to the Company’s stockholders is computed by dividing net income or loss attributable to the Company’s stockholders by the weighted average number of shares of common stock outstanding for the period. The Company does not have any equity instruments that are dilutive, except for employee stock-based awards and convertible senior notes ("Notes").

The table below shows the reconciliation of the number of shares used in the computation of basic and diluted earnings per share (in thousands):


	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Weighted average number of shares used in computation of basic earnings per share	60,689	60,451	60,624	60,419
Additional shares from the assumed exercise of employee stock awards	330	304	349	236
Weighted average number of shares used in computation of diluted earnings per share	61,019	60,755	60,973	60,655

The number of stock-based awards that could potentially dilute future earnings per share and that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive was 4.3 thousand, and 181.4 thousand for the three months ended June 30, 2025 and 2024, respectively, and 19.7 thousand, and 71.7 thousand, for the six months ended June 30, 2025 and 2024, respectively.

As per ASU 2020-06, the if-converted method is required for calculating any potential dilutive effect from convertible instruments. For the three and six months ended June 30, 2025, the average price of the Company's common stock did not exceed the per share conversion price of the Notes of $90.27, and other requirements for the Notes to be convertible were not met and as such, there was no dilutive effect from the Notes in respect with the aforementioned periods.

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

NOTE 8 — BUSINESS SEGMENTS

The Company has three reporting segments: the Electricity segment, the Product segment and the Energy Storage segment. These segments are managed and reported separately as each offers different products and serves different markets.

•Under the Electricity segment, the Company builds, owns and operates geothermal, solar PV and recovered energy-based power plants ("REG") in the United States and geothermal power plants in foreign countries, and sells the electricity generated by those power plants.

•Under the Product segment, the Company designs, manufactures and sells equipment for geothermal and recovered energy-based electricity generation and provide services relating to the engineering, procurement and construction ("EPC") of geothermal and recovered energy-based power plants.

•Under the Energy Storage segment, the Company owns and operates grid connected In-Front-of-the-Meter battery energy storage systems ("BESS"), which provide capacity, energy and/or ancillary services directly to the electric grid.

The accounting policies of the segments are the same as those described under Note 1 to the condensed consolidated financial statements. Transfer prices between the segments were determined on current market values or cost plus markup of the seller’s segment. The Company’s Chief Operating Decision Maker (“CODM”) is comprised of its CEO and CFO. To evaluate segment performance and allocate the Company’s resources, the CODM uses segment measures of gross profit and operating income. The CODM reviews budget-to-actual variances of both profit measures on a monthly basis when making decisions about allocation of the Company’s resources to the segments.

Summarized financial information concerning the Company’s reportable segments is shown in the following tables, including the Company's disaggregated revenues from contracts with customers as required by ASC 606, Revenue from Contracts with Customers (“ASC 606”). Total consolidated revenues, gross profit (loss) and operating income (loss) of the Company’s business segments exclude intersegment revenues, gross profit (loss) and operating income (loss) as these activities are eliminated in consolidation and are not included in CODM’s evaluation of performance of each segment.


	Electricity		Product		Energy Storage		Consolidated
	(Dollars in thousands)
Three Months Ended June 30, 2025:
Revenues from external customers:
United States (1)	$	111,417	$	3,523	$	14,494	$	129,434
Foreign (2)	48,495		56,089		—		104,584
Net revenue from external customers	159,912		59,612		14,494		234,018
Less:
Depreciation and amortization expenses (3)	58,106		2,632		7,071		67,809
Other cost of revenues expenses (4)	63,130		40,486		5,698		109,314
Segment gross profit (loss)	38,676		16,494		1,725		56,895
Less:
Segment operating expenses (income) (5)	16,705		6,294		(1,422)		21,577
Segment operating income	$	21,971	$	10,200	$	3,147	$	35,318
Total depreciation and amortization expense (6)	$	59,945	$	2,955	$	7,130	$	70,030
Segment assets at period end (7) (*)	5,225,398		238,082		552,132		6,015,612
Expenditures for long-lived assets	34,405		1,809		98,610		134,824
* Including unconsolidated investments	160,178		—		—		160,178

Three Months Ended June 30, 2024:
Revenues from external customers:
United States (1)	$	119,695	$	1,615	$	8,908	$	130,218
Foreign (2)	46,531		36,214		—		82,745
Net revenue from external customers	166,226		37,829		8,908		212,963

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)


Less:
Depreciation and amortization expenses (3)	52,827		2,467		4,784		60,078
Other cost of revenues expenses (4)	57,688		30,195		3,616		91,499
Segment gross profit (loss)	55,711		5,167		508		61,386
Less:
Segment operating expenses (5)	20,297		4,141		1,821		26,259
Segment operating income (loss)	$	35,414	$	1,026	$	(1,313)	$	35,127
Total depreciation and amortization expense (6)	$	56,256	$	2,780	$	4,764	$	63,800
Segment assets at period end (7) (*)	4,955,806		192,092		358,904		5,506,802
Expenditures for long-lived assets	106,867		1,690		38,282		146,839
* Including unconsolidated investments	129,664		—		—		129,664

Six Months Ended June 30, 2025:
Revenues from external customers:
United States (1)	$	245,631	$	6,762	$	32,246	$	284,639
Foreign (2)	94,522		84,619		—		179,141
Net revenue from external customers	340,153		91,381		32,246		463,780
Less:
Depreciation and amortization expense (3)	114,976		5,203		13,922		134,102
Other cost of revenues expenses (4)	126,093		62,599		11,165		199,856
Segment gross profit (loss)	99,084		23,579		7,159		129,822
Less:
Segment operating expenses (income) (5)	36,270		9,743		(2,422)		43,591
Segment operating income	62,814		13,836		9,581		86,231
Total depreciation and amortization expenses (6)	119,921		5,849		14,037		139,808
Segment assets at period end (7) (*)	5,225,398		238,082		552,132		6,015,612
Expenditures for long-lived assets	205,755		3,009		118,662		327,426
* Including unconsolidated investments	160,178		—		—		160,178

Six Months Ended June 30, 2024:
Revenues from external customers:
United States (1)	$	263,511	$	2,491	$	16,989	$	282,991
Foreign (2)	93,968		60,170		—		154,138
Net revenue from external customers	357,479		62,661		16,989		437,129
Less
Depreciation and amortization expense (3)	105,016		5,030		9,235		119,281
Other cost of revenues expenses (4)	122,229		48,786		6,637		177,652
Segment gross profit (loss)	130,234		8,845		1,117		140,196
Less:
Segment operating expenses (income) (5)	42,139		6,977		3,370		52,486
Segment operating income (loss)	88,095		1,868		(2,253)		87,710
Total depreciation and amortization expenses (6)	111,305		5,653		9,194		126,152
Segment assets at period end (7) (*)	4,955,806		192,092		358,904		5,506,802

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)


Expenditures for long-lived assets	199,030	3,012	48,183	250,225
* Including unconsolidated investments	129,664	—	—	129,664

(1)Electricity segment revenues in the United States are all accounted for under lease accounting except for $31.4 million and $71.5 million, in the three and six months ended June 30, 2025, respectively, and $37.5 million and $82.3 million, in the three and six months ended June 30, 2024, respectively, that are accounted for under ASC 606. Product and Energy Storage segment revenues in the United States are accounted for under ASC 606, except for Energy Storage revenues of $2.5 million and $6.1 million, for the three and six months ended June 30, 2025, respectively, and $0.7 million and $1.4 million, for the three and six months ended June 30, 2024, respectively, that are accounted for under lease accounting.

(2)Electricity segment revenues in foreign countries are all accounted for under lease accounting. Product segment revenues in foreign countries are all accounted for under ASC 606.

(3)Depreciation and amortization expense amounts align with the segment-level information that is regularly provided to the CODM, and do not include intersegment transactions. Depreciation and amortization expenses included in the segment measure of gross profit are related to the specific tangible and intangible assets associated with each of the reportable segments.

(4)Other cost of revenues expenses for each reportable segment include:

Electricity: primarily cost of manpower, utilities, repair and maintenance, royalties, and property taxes.

Products: primarily cost of raw materials and finished goods used in manufacturing, manpower, transportation, and third-party subcontractors.

Energy Storage: primarily cost of manpower, utilities, and insurance.

(5)Segment operating expenses include research and development expenses, selling and marketing expenses, and general and administrative expenses such as manpower, depreciation and amortization, legal and professional services. Such expenses do not include intersegment transactions. Segment operating expenses related to the Energy Storage segment are directly related to this segment. Segment operating expenses related to the Electricity and Product segments are allocated between these two segments based on their weighted contribution to revenues, except for certain specific expenses or gains that are specifically allocated to one of these segments, as applicable, such as impairment of long-lived assets, write-off of unsuccessful exploration activities, and other operating income.

(6)Total depreciation and amortization expenses for each segment are related to the specific tangible and intangible assets associated with the respective reportable segment.

(7)Electricity segment assets include goodwill in the amount of $165.8 million, and $146.4 million as of June 30, 2025 and 2024, respectively. Energy Storage segment assets include goodwill in the amount of $4.6 million, and $4.6 million as of June 30, 2025 and 2024, respectively. No goodwill is included in the Product segment assets as of June 30, 2025 and 2024.

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Reconciling information between reportable segments and the Company’s consolidated totals is shown in the following table:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(Dollars in thousands)				(Dollars in thousands)
Reconciliation of profit or loss (segment gross profit):
Total segment gross profit (loss)	$	56,895	$	61,386	$	129,822	$	140,196
Less operating expenses:
Research and development expenses	1,439		1,730		3,981		3,294
Selling and marketing expenses	4,370		4,167		8,542		9,293
General and administrative expenses	19,786		18,026		37,695		37,563
Other operating income	(4,269)		—		(7,394)		—
Impairment of long-lived assets	—		957		—		957
Write-off of unsuccessful exploration and storage activities	251		1,379		767		1,379
Operating income	$	35,318	$	35,127	$	86,231	$	87,710
Interest income	1,929		2,604		3,242		4,443
Interest expense, net	(36,682)		(33,716)		(71,155)		(64,684)
Derivatives and foreign currency transaction gains (losses)	5,068		(332)		7,128		(1,914)
Income attributable to sale of tax benefits	16,251		15,798		33,822		33,274


Other non-operating income, net	76		74		298		100
Total consolidated income before income taxes and equity in income of investees	$	21,960	$	19,555	$	59,566	$	58,929

Reconciliation of profit or loss (segment operating income):
Total segment operating income	$	35,318	$	35,127	$	86,231	$	87,710
Interest income	1,929		2,604		3,242		4,443
Interest expenses, net	(36,682)		(33,716)		(71,155)		(64,684)
Derivatives and foreign currency transaction gains (losses)	5,068		(332)		7,128		(1,914)
Income attributable to sale of tax benefits	16,251		15,798		33,822		33,274
Other non-operating income, net	76		74		298		100
Total consolidated income before income taxes and equity in income of investees	$	21,960	$	19,555	$	59,566	$	58,929

NOTE 9 — COMMITMENTS AND CONTINGENCIES

On July 29, 2024, a former employee filed a class action against the Company in Imperial County, California alleging violations of the California Labor Code, to act in a representative capacity for other Ormat employees in California alleging violations of California wage and hour regulations. The complaint was amended on September 12, 2024 to add companion Private Attorneys General Act claims. The complaint seeks recovery of various damages as well as equitable relief. The parties attended a mediation in April 2025 and have reached a settlement in principle for an immaterial amount, which is subject to approval by the Court.

On February 7, 2025, Engie Resources, LLC and certain of its affiliates filed an action against the Company’s wholly owned subsidiary in the United States District Court for the Northern District of Texas. The matter was dismissed for lack of jurisdiction and refiled in state court. The complaint alleges that the Company breached its contractual obligations, including certain indemnity obligations, under certain service agreements with or involving the plaintiffs, by failing to properly schedule responsive reserve service on behalf of the plaintiffs during the power crisis in Texas in February 2021. The complaint seeks recovery from the Company of $47.5 million in damages, as well as equitable relief. No amounts have been

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

accrued for potential losses under this matter, as the Company considers it has strong legal defenses and intends to vigorously defend itself against the claims and take all necessary legal actions to have them dismissed. Due to the early stage of the matter, the Company cannot reasonably predict the outcome of the proceedings, which is inherently uncertain, however, the Company believes that the probability of the claimant receiving a material award is low.

Additionally, from time to time, the Company is named as a party to other various lawsuits, claims and other legal and regulatory proceedings that arise in the ordinary course of the Company's business. These actions typically seek, among other things, compensation for alleged personal injury, breach of contract, property damage, punitive damages, civil penalties or other losses, or injunctive or declaratory relief. With respect to such lawsuits, claims and proceedings, the Company accrues reserves when a loss is probable, and the amount of such loss can be reasonably estimated. It is the opinion of the Company’s management that the outcome of these proceedings, individually and collectively, will not be material to the Company’s consolidated financial statements as a whole.

Other Matters

In Kenya, since 2021, various task forces have been appointed by the President and/or the Senate to review and analyze Power Purchase Agreements (“PPA”s) entered into between KPLC and various independent power producers (including our long-term PPA for the Olkaria complex), with the recommendation that KPLC review its contracts and attempt renegotiation with these independent power producers to reduce PPA tariffs within existing contractual arrangements. The Company has been approached by certain of these task forces and has participated in requested discussions with them, which remain ongoing.

NOTE 10 — INCOME TAXES

The Company’s effective tax rate benefit for the three months ended June 30, 2025 and 2024 was (24.9)% and (16.3)%, respectively, and (15.5)% and (5.6)%, for the six months ended June 30, 2025 and 2024, respectively. The effective rate differs from the federal statutory rate of 21% primarily due to the generation of investment tax credits, and the jurisdictional mix of earnings at differing tax rates.

The Organization for Economic Co-operation and Development (“OECD”) issued a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar 2). Certain aspects of Pillar 2 became effective January 1, 2024, and other aspects became effective January 1, 2025. Effective January 1, 2025, the Company met the revenue threshold requirements and is now subject to Pillar 2. The impact of Pillar 2 is not a material component of income tax expense in the six months ended June 30, 2025.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBB”) was enacted into law in the United States. The OBBB includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act of 2017 and numerous changes to the energy tax credits initially introduced and expanded under the IRA. The legislation allows for geothermal and battery storage to qualify for 100% PTC or ITC related to projects that start construction by the end of December 2033, 75% PTC or ITC by the end of December 2034 and 50% PTC or ITC by the end of December 2035. In order to qualify for 100% energy credit, solar projects must start construction by July 4, 2026 and be placed-in-service within four years, or start construction after July 3, 2026 and be placed-in-service by December 31, 2027. The law seeks to limit content from foreign entities of concern (“FEOC”) used in energy related projects that start construction after December 31, 2025. The FEOC restrictions apply at both the product and taxpayer levels, which primarily affects products and ownership related to China. The Company is currently evaluating the impact of the OBBB on our consolidated financial statements.

NOTE 11 — SUBSEQUENT EVENTS

Cash Dividend

On August 6, 2025, the Board of Directors of the Company declared, approved and authorized payment of a quarterly dividend of $7.3 million ($0.12 per share) to all holders of the Company’s issued and outstanding shares of common stock on August 20, 2025, payable on September 3, 2025.

Heber 1 and 2 Tax Monetization Transaction

On July 10, 2025, one of the Company’s wholly-owned subsidiaries that indirectly owns the Heber 1 and Heber 2 geothermal power plants entered into a partnership agreement with a private investor. Under the transaction documents, the private investor acquired membership interests in the two Heber Geothermal power plants for an initial purchase price of approximately $77.1 million and for which it will pay additional installments that are expected to amount to approximately $25.7 million. The Company continues to operate and maintain the power plants and will receive substantially all the distributable cash flow generated by the power plant, as described below.

ORMAT TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(Unaudited)

Under the transaction documents, prior to December 31, 2032 (“Target Flip Date”), the Company’s wholly-owned subsidiary, Ormat Nevada Inc. ("Ormat Nevada"), receives substantially all of the distributable cash flow generated by the project, while the private investor receives substantially all of the tax attributes of the project. Following the later of the Target Flip Date and the date on which the private investor reaches its target return, Ormat Nevada will receive 95% of the distributable cash and taxable income, on a go-forward basis. In the event that the private investor will not reach its target return by the Target Flip Date, then for the period between the Target Flip Date and the date on which the private investor reaches its target return, the private investor will receive 75% of the distributable cash generated by the power plant and 99% of the tax attributes as long as the project is generating PTCs.

On the Target Flip Date, Ormat Nevada has the option to purchase the private investor’s interests at the then-current fair market value, plus an amount that causes the private investor to reach its target return, if needed. If Ormat Nevada exercises this purchase option, it will become the sole owner of the project again.

Geothermie Bouillante Loan

On July 31st, 2025, Geothermie Bouillante S.A., a subsidiary of the Company that owns and operates the geothermal power plant in Guadeloupe in which the Company indirectly holds a 63.75% ownership interest (“GB”), entered into loan agreements (the “GB Loan Agreements”) with a consortium of French banks, pursuant to which GB will borrow up to approximately €99.8 million aggregate principal amount, in connection with GB’s geothermal project in Guadeloupe.

The loan (the “GB Loan”) is comprised of two tranches. One tranche covers the refinancing of sponsors’ investment in the existing power plants, bears interest of 4.1%, and matures in 5 years. The second tranche covers the construction of GB’s 10MW expansion project which is expected to be commissioned in 2026, bears interest of 4.8%, and matures in 21 years. The GB Loan will be drawn over several drawdowns expected to occur during the second half of 2025, and the first half of 2026.

The GB Loan is secured by all of the assets of GB and by sponsors’ ownership interests in GB. The GB Loan Agreements require GB to comply with certain covenants, including, among others, restrictions on the incurrence of indebtedness or liens, amendment or modification of material project documents, or the ability of GB to merge or consolidate with another entity. In addition, there are restrictions on the ability of GB to make distributions to its shareholders, which include a required historical and projected DSCR. The drawdowns are subject to typical conditions for draws, including, among others, verification of project costs, compliance with certain gearing ratios.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Note Regarding Forward-Looking Statements

This quarterly report on Form 10-Q includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, included in this quarterly report that address activities, events or developments that we expect or anticipate will or may occur in the future, including such matters as our projections of annual revenues, expenses and debt service coverage with respect to our debt securities, future capital expenditures, business strategy, competitive strengths, goals, development or operation of generation assets, market and industry developments and the growth of our business and operations, are forward-looking statements. When used in this quarterly report on Form 10-Q, the words “may”, “will”, “could”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “projects”, “potential”, “contemplate”, or “target” or the negative of these terms or other comparable terminology are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. The forward-looking statements in this quarterly report are primarily located in the material set forth under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Risk Factors”, and “Notes to Condensed Consolidated Financial Statements”, but are found in other locations as well. These forward-looking statements generally relate to our plans, objectives and expectations for future operations and are based upon management’s current estimates and projections of future results or trends. Although we believe that our plans and objectives reflected in or suggested by these forward-looking statements are reasonable, we may not achieve these plans or objectives. You should read this quarterly report on Form 10-Q completely and with the understanding that actual future results and developments may be materially different from what we expect attributable to a number of risks and uncertainties, many of which are beyond our control.

These forward-looking statements are made only as of the date hereof, and, except as legally required, we undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

During the period covered by this quarterly report on Form 10-Q, there have been no material changes in our risk factors previously disclosed in our 2024 Annual Report. A summary of the risks that may cause actual results to differ from our expectations include, but are not limited to the following:

Risks Related to the Company’s Business and Operation

•Our financial performance depends on the successful operation of our geothermal, REG, solar PV power plants under the Electricity segment as well as our energy storage facilities, which are subject to various operational risks.

•Our exploration, development, and operation of geothermal energy resources are subject to geological risks and uncertainties, which may result in insufficient prospects to support our growth, decreased performance or increased costs for our power plants.

•We may decide not to implement, or may not be successful in implementing, one or more elements of our multi-year strategic plan, and the plan may not achieve its goal of enhancing shareholder value.

•Changes in U.S. and foreign government policy, including the imposition of or increases in tariffs and changes to existing trade agreements, could have a material adverse effect on global economic conditions and our business, results of operations, prospects and financial condition.

•Our investments in BESS technology involves new technologies and expected advanced technologies with relatively limited history with respect to reliability and performance and may not perform as expected. In addition, our investments and profitability may be negatively affected by a number of factors, including increases in storage costs, expanded trade restrictions, risk of fire and volatility in merchant prices.

•Concentration of customers, specific projects and regions may expose us to heightened financial exposure.

•Our international operations expose us to risks related to the application of foreign laws and regulations.

•Political, economic and other conditions in the emerging economies where we operate, including Israel, may subject us to greater risk than in the developed U.S. economy.

•Conditions in and around Israel, where the majority of our senior management and our main production and manufacturing facilities are located, may adversely affect our operations and may limit our ability to produce and sell our products, and support our Electricity segment.

•Responses in various countries where we have business operations to Israel’s ongoing military conflicts on some of its borders or future similar conflicts may adversely affect our operations and may limit our ability to produce and sell our products.

•Some of our leases will terminate if we do not extract geothermal resources in “commercial quantities” or if we fail to comply with the terms or stipulations of such leases or any of the provisions of the Geothermal Steam Act or if the lessor under any such lease defaults on any debt secured by the relevant property, thus requiring us to enter into new leases or secure rights to alternate geothermal resources, none of which may be available on terms as favorable to us as any such terminated lease, if at all.

•Our business development activities may not be successful and our projects under construction or facilities undergoing enhancement and repowering may encounter delays.

•Our future growth depends, in part, on the successful enhancement of a number of our existing facilities.

•We rely on power transmission facilities that we do not own or control.

•Our use of joint ventures may limit our flexibility with jointly owned investments.

•Our operations could be adversely impacted by climate change and other extreme weather events..

•We could be impacted by regulatory and other responses to climate change.

•We may not be able to successfully complete acquisitions, and we may not be able to successfully integrate, or realize anticipated synergies from, companies that we have acquired and may acquire in the future.

•We encounter intense competition from electric utilities, other power producers, power marketers, developers and third-party investors.

•Changes in costs and technology may significantly impact our business by making our power plants and products less competitive, resulting in our inability to sign new or recontracted PPAs for our Electricity segment and new supply and EPC contracts for our Products segment.

•Our intellectual property rights may not be adequate to protect our business.

•We may experience a cyber-incident, cyber security breach, severe natural event or physical attack on our operational networks and information technology systems.

Risks Related to Governmental Regulations, Laws and Taxation

•Our financial performance could be adversely affected by changes in the legal and regulatory environment affecting our operations.

•Pursuant to the terms of some of our PPAs with investor-owned electric utilities and publicly-owned electric utilities in states that have renewable portfolio standards, the failure to supply the contracted capacity and energy thereunder may result in the imposition of penalties.

•If any of our domestic power plants lose their current Qualifying Facility status under the U.S. Public Utility Regulatory Policies Act of 1978 (“PURPA”), or if amendments to PURPA are enacted that substantially reduce the benefits currently afforded to Qualifying Facilities, our domestic operations could be adversely affected.

•The reduction, elimination or inability to monetize government incentives could adversely affect our business, financial condition, future results and cash flows.

•We are a holding company and our cash depends substantially on the performance of our subsidiaries and the power plants they operate, most of which are subject to restrictions and taxation on dividends and distributions.

•The costs of compliance with federal, state, local and foreign environmental laws and our ability to obtain and maintain environmental permits and governmental approvals required for development, construction and/or operation may result in liabilities, costs and delays in construction (as well as any fines or penalties that may be imposed upon us in the event of any non-compliance or delays with such laws or regulations).

•We could be exposed to significant liability for violations of hazardous substances laws because of the use or presence of such substances at our power plants.

•U.S. federal, state and foreign country income tax reform could adversely affect us.

Risks Related to Economic and Financial Conditions

•We may be unable to obtain the financing we need on favorable terms to pursue our growth strategy and any future financing we receive may be less favorable to us than our current financing arrangements.

•We have incurred substantial indebtedness that may decrease our business flexibility, access to capital, and/or increase our borrowing costs, and we may still incur substantially more debt, which may adversely affect our operations and financial results.

•Our debt obligations may adversely affect our ability to raise additional capital and will be a burden on our future cash resources, particularly if we elect to settle these obligations in cash upon conversion or upon maturity or required repurchase.

•The capped call transactions, into which we entered in connection with the issuance of the June 2022 convertible notes, (the "Notes"), may affect the value of the Notes and our common stock and we are subject to counterparty risk with respect to the capped call transactions.

•Our foreign power plants and foreign manufacturing operations expose us to risks related to fluctuations in currency rates, which may reduce our profits from such power plants and operations.

•Our power plants have generally been financed through a combination of our corporate funds and limited or non-recourse project finance debt and lease financing. If our project subsidiaries default on their obligations under such limited or non-recourse debt or lease financing, we may be required to make certain payments to the relevant debt holders, and if the collateral supporting such leveraged financing structures is foreclosed upon, we may lose certain of our power plants.

•We may experience fluctuations in the costs of construction, raw materials, commodities and drilling.

•Our commodity derivative activity may limit potential gains, increase potential losses, result in earnings volatility and involve other risks.

•We are exposed to swap counterparty credit risk.

Risks Related to Force Majeure

•The existence of a prolonged force majeure event or a forced outage affecting a power plant, or the transmission systems could reduce our net income.

•Threats of terrorism may impact our operations in unpredictable ways and could adversely affect our business, financial condition, future results and cash flow.

Risks Related to Ownership of our Common Stock

•Future equity issuances, including through our current or any future equity compensation plans, could result in dilution, which could cause the price of our shares of common stock to decline.

•The price of our common stock has in the past and may in the future fluctuate substantially, and your investment may decline in value.

•We may issue additional shares of our common stock in connection with conversions of the Notes, and thereby dilute our existing stockholders and potentially adversely affect the market price of our common stock.

•The fundamental change provisions of the Notes may delay or prevent an otherwise beneficial takeover attempt of us.

Investors are cautioned that these forward-looking statements are inherently uncertain. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results or outcomes may vary materially from those described herein. Other than as required by law, we undertake no obligation to update forward-looking statements even though our situation may change in the future. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes included elsewhere in this quarterly report and the “Risk Factors” section of our 2024 Annual Report on Form 10-K for the year ended December 31, 2024 and any updates contained herein as well as those set forth in our reports and other filings made with the SEC.

General

Overview

We are a leading vertically integrated company that is primarily engaged in the geothermal energy power business. We leverage our core capabilities and global presence to expand our activity in recovered energy generation and into different energy storage services and solar PV (including hybrid geothermal and solar PV as well as Solar plus Energy Storage). Our objective is to become a leading global provider of renewable energy and help to mitigate climate change by providing a replacement to carbon-intensive energy sources. We have adopted a strategic plan to focus on several key initiatives to expand our business.

We currently conduct our business activities in three business segments:

•Electricity Segment. In the Electricity segment, we develop, build, own and operate geothermal, solar PV and recovered energy-based power plants in the United States and geothermal power plants in other countries around the world and sell the electricity they generate. In the three and six months ended June 30, 2025, we derived 69.7% and 72.2%, respectively, of our Electricity segment revenues from our operations in the United States, and 30.3% and 27.8%, respectively, from the rest of the world.

•Product Segment. In the Product segment, we design, manufacture and sell equipment for geothermal and recovered energy-based electricity generation and provide services relating to the engineering, procurement and construction of geothermal and recovered energy-based power plants. In the three and six months ended June 30, 2025, we derived 5.9% and 7.4%, respectively, of our Product segment revenues from our operations in the United States and 94.1% and 92.6%, respectively, from the rest of the world.

•Energy Storage Segment. In the Energy Storage segment, we own and operate grid connected In Front of the Meter BESS, which provide capacity, energy and/or ancillary services directly to the electric grid. In the three and six months ended June 30, 2025, we derived all of our Energy Storage segment revenues from our operations in the United States.

Our current generating portfolio of approximately 1.6 GW includes geothermal power plants in the United States, Kenya, Guatemala, Honduras, Guadeloupe and Indonesia, as well as energy storage facilities, recovered energy generation and Solar PV power plants in the United States.

Recent Developments

The most significant developments in our Company and business since January 1, 2025 are described below.

•In July 2025, we entered into loan agreements with a consortium of French banks pursuant to which we will borrow up to approximately €99.8 million aggregate principal amount in connection with our new Bouillante geothermal power plant in Guadeloupe.

•In July 2025, we entered into a tax partnership agreement with a private investor, under which the private investor paid approximately $77.1 million for the tax benefits related to Heber 1&2 Geothermal power plants that are part of our Heber Complex. The private investor will pay over eight years additional installments that are expected to amount to approximately $25.7 million.

•In June, 2025, we entered into loan agreements with the Caribbean Development Bank and Caricom Development Fund pursuant to which we will borrow up to $49.8 million aggregate principal amount in connection with the 10MW Geothermal Project in Dominica.

•In June 2025, we closed the acquisition of the Blue Mountain geothermal power plant from Cyrq Energy. The 20MW facility, located in Humboldt County, NV, was purchased for $88.7 million for 100% of the equity interest in the power plant. The power plant, built using Ormat technology, features an existing 51MW interconnection capacity and a PPA with NV Energy (“NVE”) that expires at the end of 2029. Ormat plans to upgrade the power plant and increase its capacity by 3.5MW. Additionally, subject to permit and PPA approval, Ormat intends to add a 13MW solar facility to support the plant's auxiliaries.

•In May 2025, we announced the signing of a $62.0 million Hybrid Tax Equity partnership with Morgan Stanley Renewables, Inc. The partnership’s transaction covers the Lower Rio 60MW/120MWh storage facility and the Arrowleaf 35MW/140MWh storage and 42MW solar projects, which are expected to achieve Commercial Operation Date (“COD”) by the end of 2025.

•In February 2025, we won a tender issued by the Israeli Electricity Authority and have been awarded two separate 15-year tolling agreements for two Energy Storage facilities. The facilities under the tolling agreements are expected to have a combined capacity of approximately 300MW/1200MWh. The ownership of the projects will be shared, 50/50 between Ormat and Allied Infrastructure LTD, a leading infrastructure company in Israel.

•In February 2025, we announced the successful COD for the Ijen geothermal power plant that is owned jointly with PT Medco Power Indonesia (“Medco Power”). The Ijen Geothermal Power Plant, equipped with OEC, began operations with its first phase, delivering 35 MW of electricity power to the Java grid, Ormat’s share of the facility is 17MW.

•In January 2025, we announced the signing of a 10-year PPA with Calpine Energy Solutions, one of North America’s largest energy suppliers. Under this agreement, Calpine Energy Solutions agreed to purchase up to 15MW of clean, renewable energy from the Mammoth 2 geothermal power plant located near Mammoth Lakes, California, to support demand within its retail portfolio. Energy deliveries under the PPA are scheduled to begin in the first quarter of 2027 and will replace the existing PPA with Southern California Edison. The new PPA includes an increase in production capacity and a higher price point.

Trends and Uncertainties

Different trends, factors and uncertainties may impact our operations and financial condition, including many that we do not or cannot foresee. However, we believe that our results of operations and financial condition for the foreseeable future will be primarily affected by trends, factors and uncertainties discussed in our 2024 Annual Report under “Part II - Item 7 – Management Discussion and Analysis of Financial Condition and Results of Operation”, in addition to the information set forth in this quarterly report. These trends, factors and uncertainties are, from time to time, also subject to market cycles.

•During 2025, the United States introduced actions to increase import tariffs at various rates, including on certain products imported from almost all countries and individualized higher tariffs on certain other countries, such as China. Other countries have announced retaliatory actions or plans for retaliatory actions in response. Some of these tariff announcements were followed by limited exemptions and temporary pauses. As of the date of this quarterly report, discussions remain ongoing regarding U.S. trade restrictions and tariffs on imports and retaliatory tariffs from numerous countries, and there continues to be significant uncertainty about the future relationship between the United States and other countries regarding such trade policies, treaties, and tariffs. Accordingly, we can make no assurance about the eventual impact on our operating results and business. Our Energy Storage segment growth relies on imported batteries from China, and the growth of projects in the United States in the Electricity segment requires raw materials and equipment from various countries.

While there has so far been only limited impact on short-term growth in both of these segments, a significant increase in tariffs may lead to a slowdown in the growth of our Energy Storage segment in the United States if we are unable to pass the price increases from tariffs through to our customers. This could affect our long-term growth targets, specifically in our Energy Storage segment in the United States, and, to a lesser extent, across our business. Additionally, increases in the cost of raw materials and equipment resulting from tariffs could increase our capital expenditures for projects built in the United States under our Electricity segment. We have worked to accelerate imports into the United States and have expedited Chinese imports prior to the potential reinstatement of higher tariffs. However, we can make no assurance that we will succeed in avoiding any of these negative consequences. In addition, current uncertainties about tariffs and their effects on trading relationships may contribute to inflation in the markets in which we operate. For more information, see Part II, Item 1A “Risk Factors”

•On July 4, 2025, the OBBB was signed into law by the President of the United States. For more information, see Note 10 of notes to the unaudited condensed consolidated financial statements contained in this quarterly report. The Company is currently evaluating the impact of the OBBB on its consolidated financial statements.

Revenues

For the six months ended June 30, 2025, 94.0% of our Electricity segment revenues were derived from PPAs with fixed energy rates, which are not affected by fluctuations in energy commodity prices. We have a variable price PPA in Hawaii, which provides for payments based on the local utilities’ avoided cost, which is the incremental cost that the power purchaser avoids by not having to generate such electrical energy itself or purchase it from others. In Hawaii, the prices paid for electricity pursuant to the 25MW PPA for the Puna Complex in Hawaii change primarily as a result of variations in the price of oil, as well as other commodities. In 2024, the HPUC approved a new PPA related to Puna with fixed prices, increased capacity and an extension of the term until 2052.

To comply with obligations under their respective PPAs, certain of our project subsidiaries are structured as special purpose, bankruptcy remote entities and their assets and liabilities are ring-fenced. Such assets are not generally available to pay our debt, other than debt at the respective project subsidiary level. However, these project subsidiaries are allowed to pay dividends and make distributions of cash flows generated by their assets to us, subject in some cases to restrictions in debt instruments, as described below.

Electricity segment revenues are also subject to seasonal variations and are affected by higher-than-average ambient temperatures, as described below under “Seasonality”. These variations became severe in recent years due to extreme weather events and in some cases cannot be forecasted.

Revenues attributable to our Product segment are based on the sale of equipment, engineering, procurement and construction contracts and the provision of various services to our customers, or as related to the Dominica project, under a BOT agreement with the Commonwealth of Dominica. Product segment revenues vary from period to period because of the timing of our receipt of purchase orders and the progress of our equipment manufacturing and execution of the relevant project.

Revenues attributable to our Energy Storage segment are generated by several grid-connected BESS facilities that we own and operate that sell energy, capacity and/or ancillary services in merchant markets like PJM Interconnect, ISO New England, ERCOT and CAISO or under tolling agreements that have fixed revenues. The revenues fluctuate over time since a large portion of such revenues are generated in the merchant markets, where price volatility is inherent. We are seeking to reduce volatility by increasing the amount of long-term tolling agreements in our portfolio.

The following table sets forth a breakdown of our revenues for the periods indicated:


	Revenue				Increase (Decrease)				% of Revenues for Period Indicated
	Three Months Ended June 30,				Three Months Ended June 30,				Three Months Ended June 30,
	2025		2024		2025				2025		2024
	(Dollars in thousands)
Revenues:
Electricity	$	159,912	$	166,226	$	(6,314)	(3.8)	%	68.3	%	78.1	%
Product	59,612		37,829		21,783		57.6		25.5		17.8
Energy storage	14,494		8,908		5,586		62.7		6.2		4.2
Total	$	234,018	$	212,963	$	21,055	9.9	%	100.0	%	100.0	%

	Revenue				Increase (Decrease)				% of Revenues for Period Indicated
	Six Months Ended June 30,				Six Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025				2025		2024
	(Dollars in thousands)
Revenues:
Electricity	$	340,153	$	357,479	$	(17,326)	(4.8)	%	73.3	%	81.8	%
Product	91,381		62,661		28,720		45.8		19.7		14.3
Other	32,246		16,989		15,257		89.8		7.0		3.9
Total	$	463,780	$	437,129	$	26,651	6.1	%	100.0	%	100.0	%

The following table sets forth the geographic breakdown of the revenues attributable to our Electricity, Product and Energy Storage segments for the periods indicated:


	Revenue				Increase (decrease)				% of Revenues for Period Indicated
	Three Months Ended June 30,				Three Months Ended March 31,				Three Months Ended June 30,
	2025		2024		2025				2025		2024
Electricity Segment:	(Dollars in thousands)
United States	$	111,417	$	119,695	$	(8,277)	(6.9)	%	69.7	%	72.0	%
Foreign	48,495		46,531		1,964		4.2		30.3		28.0
Total	$	159,912	$	166,226	$	(6,313)	(3.8)	%	100.0	%	100.0	%

Product Segment:
United States	$	3,523	$	1,615	$	1,908	118.1	%	5.9	%	4.3	%
Foreign	56,089		36,214		19,875		54.9		94.1		95.7
Total	$	59,612	$	37,829	$	21,783	57.6	%	100.0	%	100.0	%

Energy Storage Segment:
United States	$	14,494	$	8,908	$	5,587	62.7	%	100.0	%	100.0	%
Total	$	14,494	$	8,908	$	5,587	62.7	%	100.0	%	100.0	%

	Revenue				Increase (decrease)				% of Revenues for Period Indicated
	Six Months Ended June 30,				Six Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025				2025		2024
	(Dollars in thousands)
Electricity Segment:
United States	$	245,631	$	263,511	$	(17,880)	(6.8)	%	72.2	%	73.7	%
Foreign	94,522		93,968		554		0.6		27.8		26.3
Total	$	340,153	$	357,479	$	(17,326)	(4.8)	%	100.0	%	100.0	%

Product Segment:
United States	$	6,762	$	2,491	$	4,271	171.5	%	7.4	%	4.0	%
Foreign	84,619		60,170		24,449		40.6		92.6		96.0
Total	$	91,381	$	62,661	$	28,720	45.8	%	100.0	%	100.0	%

Energy Storage Segment:
United States	$	32,246	$	16,989	$	15,257	89.8	%	100.0	%	100.0	%
Total	$	32,246	$	16,989	$	15,257	89.8	%	100.0	%	100.0	%

In the six months ended June 30, 2025 and 2024, 38.6% and 35.3% of our total revenues, respectively, were derived from foreign locations, and 44.7% and 38.9%, for the three months ended June 30, 2025 and 2024, respectively. Our foreign operations had higher Electricity gross margins than our U.S. operations in each of those periods. A substantial portion of Electricity segment foreign revenues came from Kenya and to a lesser extent, from Honduras, Guadeloupe and Guatemala. Our operations in Kenya contributed disproportionately to gross profit and net income. The contribution to combined pre-tax income of our domestic and foreign operations within our Electricity segment and Product segment differ in a number of ways, as summarized below.

Electricity Segment. Our Electricity segment domestic revenues were approximately 72.2% and 73.7% of our total Electricity segment revenues for the six months ended June 30, 2025 and 2024, respectively, and 69.7% and 72.0%, for the three months ended June 30, 2025 and 2024, respectively. Our Electricity segment foreign revenues were approximately 27.8% and 26.3% of our total Electricity segment revenues for the six months ended June 30, 2025 and 2024, respectively and 30.3% and 28.0%, for the three months ended June 30, 2025 and 2024, respectively. However, domestic operations have higher costs of revenues and expenses than our foreign operations. Our foreign power plants are located in lower-cost regions, like Kenya, Guatemala, and Honduras, which favorably impact payroll, maintenance expenses and other items. Our power plants in those foreign locations are also newer than most of our domestic power plants and therefore tend to have lower maintenance costs and higher availability factors than our domestic power plants. Consequently, in the six months ended June 30, 2025 and 2024, our foreign operations of the segment accounted for 40.1% and 36.9%, respectively, of our total gross profits, 70.5% and 74.3%, respectively, of our net income (assuming the majority of corporate operating expenses and financing are recorded under our domestic jurisdiction), and 28.6% and 31.0%, respectively, of our EBITDA.

Product Segment. Our Product segment foreign revenues were approximately 92.6% and 96.0% of our total Product segment revenues for the six months ended June 30, 2025 and 2024, respectively, and 94.1% and 95.7%, for the three months ended June 30, 2025 and 2024, respectively.

Energy Storage Segment. Our Energy Storage segment domestic revenues were 100% of our total Energy Storage segment revenues for each of the three and six months ended June 30, 2025 and 2024.

Seasonality

Electricity generation from some of our geothermal power plants is subject to seasonal variations. In the winter, our power plants produce more energy primarily attributable to the lower ambient temperature, which has a favorable impact on the energy component of our Electricity segment revenues as the prices under many of our contracts are fixed throughout the year with no time-of-use impact. The prices paid for electricity under the PPAs for the Mammoth Complex and the North Brawley power plant in California, the Raft River power plant in Idaho, the Neal Hot Springs power plant in Oregon and the Dixie Valley power plant in Nevada are higher in the months of June through September. The higher payments payable under these PPAs in the summer months partially offset the negative impact on our revenues from lower generation in the summer attributable to a higher ambient temperature. As a result, we expect the revenues and gross profit in the winter months to be higher than the revenues and gross profit in the summer months and in general we expect the first and fourth quarters to generate higher revenues than the second and third quarters. In the Energy Storage segment pursuant to the Bottleneck tolling agreement, approximately 45% of the revenues are generated in the third quarter, and the rest is nearly even between the first, second and fourth quarters.

Breakdown of Cost of Revenues

The principal cost of revenues attributable to our three segments are discussed in our 2024 Annual Report under “Part II - Item 7 – “Management Discussion and Analysis of Financial Condition and Results of Operations.”

Critical Accounting Estimates and Assumptions

A comprehensive discussion of our critical accounting estimates and assumptions is included in our 2024 Annual Report under “Part II, Item 7 — “Management Discussion and Analysis of Financial Condition and Results of Operations.”

New Accounting Pronouncements

See Note 2 to our condensed consolidated financial statements set forth in Item 1 of this quarterly report for information regarding new accounting pronouncements.

Results of Operations

Our historical operating results in U.S. dollars and as a percentage of total revenues are presented below for each of the periods indicated.


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(Dollars in thousands, except per share data)				(Dollars in thousands, except per share data)
Statements of Operations Historical Data:
Revenues:
Electricity	$	159,912	$	166,226	$	340,153	$	357,479
Product	59,612		37,829		91,381		62,661
Energy storage	14,494		8,908		32,246		16,989
Total Revenues	234,018		212,963		463,780		437,129
Cost of revenues:
Electricity	121,236		110,515		241,069		227,245
Product	43,118		32,662		67,802		53,816
Energy storage	12,769		8,400		25,087		15,872
Total cost of revenues	177,123		151,577		333,958		296,933
Gross profit
Electricity	38,676		55,711		99,084		130,234
Product	16,494		5,167		23,579		8,845
Energy storage	1,725		508		7,159		1,117
Total gross profit	56,895		61,386		129,822		140,196
Operating expenses:
Research and development expenses	1,439		1,730		3,981		3,294
Selling and marketing expenses	4,370		4,167		8,542		9,293
General and administrative expenses	19,786		18,026		37,695		37,563
Other operating income	(4,269)		—		(7,394)		—
Impairment of long-lived assets	—		957		—		957
Write-off of unsuccessful exploration and storage activities	251		1,379		767		1,379
Operating income	35,318		35,127		86,231		87,710
Other income (expense):
Interest income	1,929		2,604		3,242		4,443
Interest expense, net	(36,682)		(33,716)		(71,155)		(64,684)
Derivatives and foreign currency transaction gains (losses)	5,068		(332)		7,128		(1,914)
Income attributable to sale of tax benefits	16,251		15,798		33,822		33,274

Other non-operating income, net	76		74		298		100
Income from operations before income tax and equity in earnings (losses) of investees	21,960		19,555		59,566		58,929
Income tax (provision) benefit	5,466		3,178		9,261		3,325
Equity in earnings of investees	773		1,232		406		2,061

ORMAT TECHNOLOGIES, INC. 10-Q