Ormat Technologies is no longer only a contracted geothermal owner. The second-quarter print showed energy storage becoming the swing factor in both growth and reported profitability, while a March convertible offering funded the next wave of plants and batteries. That mix shift is the investment debate. Electricity still supplies the majority of revenue, yet the market is now pricing whether storage profits and new hyperscaler contracts are durable enough to support a growth-utility multiple after the stock has already given back most of its prior-year run.
Storage revenue nearly tripled to about $43 million as new batteries in the PJM interconnection captured elevated merchant prices and recently commissioned sites came online. Gross margin in that segment reached 56 percent. That is far above the electricity franchise and far above the more normal second-half range management now describes. The same quarter saw product revenue and product margin slump on European construction costs and currency. A write-off of abandoned storage sites then cut reported earnings even as adjusted EBITDA rose.
Management raised full-year revenue and adjusted EBITDA ranges on first-half storage strength. The equity still sits near $97, close to the low end of its yearly range, which implies the market is already discounting a fade in merchant prices, heavier interest after the convert, and conversion overhang. The next several quarters resolve whether contracted geothermal plus a more mixed storage book can hold the multiple, or whether the print was a price spike dressed as a new business mix.