Ormat Technologies, Inc. (ORA) Balance Sheet

The sequential increase in net PPE, from $4.3B in 2024Q4 to $4.8B in 2026Q2, reflects a deliberate expansion of the regulated asset base. However, equity grew only from $2.4B to $2.6B over the same period, implying that a significant portion of the asset growth is debt-funded. This suggests that while the rate base is expanding, the equity component is not keeping pace, which may pressure future returns if regulatory approvals do not fully compensate for the increased leverage.

The gap between PPE growth and equity growth suggests that ORA is relying more on debt to fund its capital expenditure program. This trend is consistent with the rising total debt, which climbed from $2.4B in 2024Q1 to $3.4B in 2026Q2. While this is typical for utilities in a growth phase, the pace of debt accumulation relative to equity may indicate that the company is approaching the upper bounds of its authorized leverage, potentially limiting future borrowing capacity.

The D/E ratio has increased steadily over the past ten quarters, from 0.95 in 2024Q2 to 1.24 in 2026Q2. This trend suggests that ORA is funding its growth with incremental debt, which may be approaching the limits allowed by its regulatory framework. If the ratio exceeds authorized levels, the company may face challenges in recovering the cost of capital in rate cases, potentially pressuring earned returns.

The modest growth in equity relative to assets suggests that ORA is not generating enough internal capital to support its expansion. This is consistent with the low ROE figures, which have ranged from 0.9% to 1.6% over the period, well below typical utility authorized returns. The reliance on external financing may dilute existing shareholders if the company issues new equity, and the low ROE may indicate that the regulatory recovery of capital costs is lagging.

The significant increase in cash, from $94.4M to $513.7M, suggests that ORA has raised substantial capital, likely through debt or equity offerings, to fund its CAPEX program. However, the current ratio has remained below 1.1 in most quarters, indicating that current liabilities are nearly equal to current assets. This suggests that the company is relying on short-term borrowings or lines of credit to manage working capital, which may expose it to refinancing risk if credit conditions tighten.