Ormat Technologies, Inc.

We recognize in the first quarter approximately 60% of the segment expected annual revenue, gross profit, and EBITDA. The energy storage segment reported gross margin of 59.1% during the first quarter, making a significant improvement versus the prior year. The increase was driven by the effectiveness of our strategic approach to balance between contracted pricing and merchant exposure. For the full year 2026, we expect the storage segment gross margin to be approximately 35% to 40%, reflecting the fact that we currently do not forecast similar merchant prices condition during the remainder of the year. Moving to slide eight, we collected $48.6 million in cash from monetizing PTCs and ITC through tax equity transactions. For the full year 2026, we expect to collect approximately $90 million from ITC tax equity transaction and PTC transfers, including ITC tax equity proceeds from the recently signed Burdock tax equity transaction. As we discussed during our fourth quarter call, in 2026, we expect to record a tax benefit driven by higher ITC level that will result in a negative tax rate of 15% to 20%. Slide nine detail our cash flow over the last three months, illustrating OMAD's ability to generate strong cash flow, which allow us to reinvest in our strategic growth, while servicing debt obligation and returning capital to shareholders. Cash and cash equivalents, and restricted cash and cash equivalents, as of March 31st, 2026, were approximately $763 million, compared to approximately $281 million at the end of 2025. Our total debt as of March 31st, 2026 was approximately $3.4 billion net of deferred financing cost. And our cost of debt decreased significantly following the recent convertible notes offering to 3.9%. Moving to slide 10, our net debt as of March 31st, 2026 was approximately $2.6 billion equivalent to 4.2 times net debt to EBITDA. As Daron noted, during the quarter, we successfully completed a $1 billion upsized convertible note offering. We elected to execute this capital raise in the convertible market because it provides us with the best combination of low and no-cash coupons and reduce equity dilution through the repurchase of our shares at an attractive price of $108 per share. We now expect our total capital expenditure for the remainder of 2026 to be $587 million. Our detailed CapEx plans are presented in slide 32 in the appendix. We plan to invest approximately $436 million in the electricity segment for the construction, exploration and drilling and maintenance in 2026. We also plan to invest $111 million in the construction of our storage assets and approximately $20 million in the pilot with SLB as well as in other EGS activities. On May 6th, 2026, our board of directors declared, approved and authorized payment of a quarterly dividend of 12 cents per share payable on June 3, 2026 to shareholders of record as of May 20, 2026. In addition, the company expects to pay a quarterly dividend of 12 cents per share in each of the next three quarters. I would like now to turn the call back to Doron to discuss some of our recent developments.

Thank you, Asi. On slide 12, you can see that our current total portfolio stands at 1.8 gigawatts of geothermal, solar, and energy storage facilities. Turning to slide 13, our electricity portfolio now stands at approximately 1,340 megawatts globally. We added 30 megawatts in the first quarter of 2026 and currently have approximately 216 megawatts under construction and development through 2028. Earlier this year, we acquired HOKU, a recently built solar plus storage facility on the Big Island of Hawaii for approximately $80 million in cash. The acquired assets include a 30 megawatt solar PV facility, paired with a 30 MW, 120 MWh battery energy storage system with a 25-year PPA. Moving to slide 14, our electricity segment benefited mainly from improved generation at our Olkaria complex and contribution from our Blue Mountain facility, which was acquired during the second quarter of last year. We also experienced lower curtailment during the quarter compared to the year ago period, especially in Nevada. And we expect this trend to continue throughout the remainder of the year. As Asi noted, performance within our electricity segment was partially offset by lower energy rates at Puna and extremely high ambient temperatures in Nevada that impacted our power plants generation. With respect to Puna, we anticipate energy rates in the next few months will improve following the impact of oil prices. Internationally, our Dominica plant is now operational. Full COD is expected in the second quarter of 2026 due to third party transmission line delays. Moving to slide 15, we have negotiated to blend and extend PPA for existing plants. The first agreement is for our CD4 geothermal power plant, which is part of our MAMOS geothermal complex in California. The amended agreement extends the original PPA, which was signed in 2022 and scheduled to expire in 2032 by five additional years through 2037, and increases contract pricing by approximately 27%. The amended PPA terms will go into effect in October of this year. The second blend and extend PPA is for another facility that we cannot disclose at this time due to our agreement with the utility provider. These new PPAs show our consistent strategic execution over the past several years and reinforces our ability to secure high-quality, long-term contracts that drive sustainable growth. Turning now to slide 16, our product segment backlog stands at $239 million. The decline from the fourth quarter of 2025 was primarily driven by the recognition of $105 million in revenue from the top two project in the first quarter of 2026. Since the start of the year, we've also secured two supply contracts for project in Asia totaling to $56 million. Moving to slide 17, our energy storage segment produced another strong quarter of year-over-year growth, with total revenues increasing by 153%. The COD of SHIR and the addition of the Huku facility in Hawaii brings the total energy storage portfolio to approximately 1.4 gigawatt hours, with the majority operating in California. On slide 19, we continue to remain on track to achieve our portfolio capacity targets of between 2.6 to 2.8 gigawatts by the end of 2028. Turning to slide 20 and 21, which display our geothermal and hybrid solar PV projects currently underway. We anticipate adding 216 megawatts to our generating capacity from these projects by the end of 2028. In geothermal, we are planning a 30 megawatt Greenfield project that will come online in 2028. We added the Jersey Valley solar plus storage facility following the PPA signing and the Blue Mountain solar facility for the plant auxiliaries. Moving to slides 22 and 23. We currently have six projects under development in our energy storage segment. expected more than double our portfolio and add approximately 1.5 gigawatt hour. As shown on the slide, the Jersey Valley project has been added and is expected to come online late 2027 or early 2028. The 100 megawatt, 400 megawatt hour Griffith facility is now expected to reach COD in 2028 as permitting is still in progress. This timing update is reflected in our plan. It does not impact our long-term targets. Turning to slide 24 for a discussion of our EGS efforts. We continue to advance our next generation geothermal strategy and are making meaningful progress across both technology and commercial development. We are actively progressing subsurface pilot initiatives With SLB, we have completed initial geoscience groundwork and are advancing well-planning appraisal, positioning the project for key milestones over the coming quarters. At the same time, our collaboration with SAIT is moving through planning and early engineering stages, including permitting, drilling design, and fracture testing activities. These efforts are designed to validate technical assumptions ahead of commercial-scale deployment. We are also strengthening our internal capabilities to support long-term scale. This includes advancing our above-ground system design and optimizing our Ormat energy converter for EGS applications, alongside evaluating manufacturing readiness and cost structures. We are investing in resource development, including geographic heat mapping, land acquisition, and state-level resource assessment to build a robust pipeline of future opportunities. Our resource team has already identified two prospects in our existing prospect portfolio, including Dixie Valley, that can potentially support large-scale EGS development. Finally, we are actively pursuing external funding opportunities to accelerate development and reduce upfront capital requirements. We have multiple applications underway under various US DOE programs, supporting both EGS field testing and next-generation resource development. Overall, these combined efforts position us to effectively bridge the gap from pilot project to commercial deployment, while reinforcing our leadership in next-generation geothermal and integrated energy solutions. Please turn to slide 25 for discussion of our 2026 guidance. We are maintaining our guidance and expect revenue to increase by 14.6% year over year at the midpoint, ranging between $1,110,000,000 and $1,160,000,000. Electricity segment revenues are projected to be between $715 and $730 million Product segment revenues are expected to range between 300 and 320 million dollars, and energy storage revenues are expected to range between 95 and 110 million dollars. Adjusted EBITDA is expected to increase by approximately 8.2% at the midpoint, ranging between 615 and 645 million dollars. I will now conclude our prepared remarks with reference to slide 26. The strong performance we delivered in the first quarter across our business segments highlights the strengths of our diversified business and our ability to capitalize on the rising demand for reliable, low-carbon electricity. With improving contract pricing, new project entering service, and our pipeline continuing to grow, we have a clear line of sight towards achieving our long-term targets for 2028. Our focus remains on creating long-term value for our shareholders through discipline execution, strategic investments, and our proven ability to develop and operate world-class clean energy assets. This concludes our prepared remarks. Now, I would like to open the call for questions. Operator, please.

At this time, I would like to remind everyone, in order to ask a question, press par, then the number one on your telephone keypad. We will pause for just a moment to compile the Q&A roster. And your first question comes from the line of Derek Podhacer with Piper Sandler.

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

Hi, good morning. Thank you for the questions. So I'll touch on the different levels that you asked, and maybe I'll start with our equipment and technology. developing a unique solution, a new OEC that will be able to work efficiently with EGS. EGS comes with special parameters on the resource that comes out of the ground, and this will allow us to standardize our OEC. and develop a much simpler power plant than the power plants we have today, which will over time reduce significantly the cost to construct a power plant. On the SLB joint venture that we have, as well as the work that Sage are doing, we are doing multiple phases of land analysis and well engineering. In both cases with SLB, we are working to file the permit to drill the first well later this year and Sage on their part are working similarly to design the well and do all the preparation to file for permitting. Both pilots will be adjacent to our facilities in order to reduce the time to market so once the pilot is successful, the heat can be immediately transferred to our facility to generate electricity and basically allow us to confirm the pilot performance and success. And the third element you mentioned, Dixie, obviously, ORMAT has a unique and very large presence in California, in Nevada, with multiple sites that we have been looking for, for hydrothermal, but also over the last few BLM options, we were able to acquire some land we believe are fit to an EGS project. And one of them that we mentioned is Dixie, not far from our Dixie Valley asset. And we have additional places that we see that are potential for EGS. We are also, this is part of our business development efforts scanning multiple states on locations to develop EGS projects, and we'll obviously update you as we make progress.

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

Hi Derek, it's Asti. Good morning and thank you for joining us. As you know, over the next few quarters, we have roughly 40 megawatts of new blend and extend that should add anywhere from $7 to $10 million annually to the revenue of the company. So that should be another 1% of margin. And then we have another 40 megawatts roughly that is being also already negotiated and already in new contracts that will be added in another in around 2027. And actually there's another five, six million dollars to the company. So between the two, we should see to the revenue and improvement of one to two percent. In addition to that, we are looking also at the expense side, reviewing our expenses, trying to focus on reduction expenses. We do not anticipate similar weather, also as warm as what we've seen in the Q1. We are very happy that the containment is behind us, it was much more favorable in the And I would like to say also, OMAC has a large portfolio. It was very warm on the west coast. It was very cold in the east coast. When you bundle those together, we lost roughly $5 billion on the west coast, but we made approximately, not approximately, over $20 billion in the east coast. So this weather overall does improve OMAC situation. But it does impact the margin of electricity. So I do expect in the next two years to see this rise to 2% increase year-over-year, starting probably in the second half of this year when we expect the weather to impact us.

I appreciate all the comments. I'll turn it back. Thank you very much.

Your next question comes from the line of Justin Kerr with Roth Capital Partners. You may go ahead, please.

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

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

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

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

Your next question comes from the line of Noah Kay with Oppenheimer. Please go ahead.

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

We are now in the final stages of design. I expect that in the next few weeks, we will come out to the market with information about the size of the turbine, which will be much bigger than what we have done so far. But the specific number, we will come up with in a few weeks. in a few weeks we will also try in that announcement explain how we see it being a much standardized power plant and by that allow us to have a lower cost regarding getting po's we are in various negotiations with multiple egf developers on potential projects. And the minute that we sign with one of them, we'll obviously announce and update the market.

And then just as the follow up, given the outperformance of storage and products in the first quarter, could you just give us a little bit of color on the cadence of those businesses for the balance of the year and why the company would be reiterating rather than raising guidance.

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

Got it. Thank you.

Thank you.

Your next question comes from the line of Chris Vendrinos with RBC Capital Markets.

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

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

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

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

Again, if you would like to ask a question, press star then the number one on your telephone keypad. And your next question comes from the line of Ben Calo with Baird.

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

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

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

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

There are no further questions at this time. I will now turn the conference back over to Doron for closing remarks.

Thank you. Thank you all for joining us today. It was a very, very good quarter for OMAT and we are looking to continue this great year. Thank you.

This concludes today's conference call. Thank you all for joining. You may now disconnect.