Enlight Renewable Energy (ENLT) Q3 2026 earnings review
Enlight accelerates US solar construction, but power trading lowers margins
Enlight Renewable Energy, a global developer of wind, solar and battery farms, expanded its active construction while low-margin power reselling padded its revenue beat. Third-quarter revenue and tax-credit income rose 40% to $231 million, and Chief Executive Adi Leviatan raised the full-year outlook by $15 million. However, by our math the updated plan still has revenue growth slowing to 18% in the fourth quarter.
| Total revenues and income | $231.4M +40% from a year ago (+24% excluding FX and power trading growth) |
|---|---|
| Profit before interest, taxes, depreciation and one-offs (Adjusted EBITDA) | $153.9M +38% from a year ago |
| Capacity under construction | 5.6 FGW +26% from last quarter |
| Full-year 2026 revenue outlook | Raised $15M middle of the range: $820M (+41% growth) |
⚖️ Verdict: 🟢 Bullish
The story got better because the company put all five phases of its flagship 2.4-gigawatt CO-Bar complex in Arizona under construction ahead of schedule and secured key permits in the eastern US. One caution: the third-quarter beat against what the prior outlook implied came partly from currency gains and low-margin Israeli electricity trading, while US tariff and equipment pressures forced a $20 million fee to cancel old power contracts.
The question now is whether Enlight can turn its 8.7 gigawatts of building and near-building projects into its $2.2–2.3 billion 2028 revenue target without further schedule slips or share dilution. Optimists point to falling battery costs and locked-in US tax credits; skeptics note $2.1 billion of nine-month construction spending and mature projects slipping into 2029. Year-end construction starts and the Country Acres opening in the fourth quarter will test the schedule.
🐂 Bull Case
CO-Bar Enters Full Construction and PJM Advances
Enlight measures its solar, wind and battery portfolio in factored gigawatts (FGW), a unit that combines generation and storage capacity by construction cost. Chief executive Adi Leviatan said "all five phases of the approximately 2.4 FGW CO-Bar complex are now under construction" in Arizona, one quarter ahead of the fourth-quarter target. That milestone pushed total capacity under construction up 26% from last quarter to 5.6 FGW.
- Mature portfolio (operating, under construction and pre-construction): 12.7 FGW, up 3% from last quarter
- US share of third-quarter revenue and tax benefits: 34.7%, up from 25.4% a year ago by our math
- US capacity qualified for federal tax credits under safe-harbor rules: 17.9 FGW, plus 5.7 FGW of storage eligible through 2033
- Blackwater project in Virginia (1.2 FGW): secured its county permit and a 500 MW grid connection in the PJM eastern power market
Moving projects into construction turns development plans into future cash flow, supporting the target of $2.2 billion to $2.3 billion in annual revenue by late 2028. The mature portfolio now carries $2.37 billion of expected annual revenue, though the release notes "The gap between revenues & income in the mature portfolio and 2028 ARR stems from mature projects completing construction in 2029". Management also plans 2 gigawatts of data-center power projects.
What to watch: commercial operation of the 403 MW Country Acres project in California and an additional 1.3 FGW of construction starts by year-end 2026. Hitting both targets keeps operating and under-construction capacity on track for the 2028 revenue goal.
Cheaper Batteries Lift European Storage Returns
Enlight is building standalone battery storage in Europe to balance power grids as solar and wind supply grows. Leviatan said "In Europe, we are benefiting from higher electricity prices and continue to expand our energy storage activity with additional projects that generate double-digit project-level returns". During the quarter, the company bought two battery projects in Finland totaling 858 megawatt-hours (245 factored megawatts) expected to start operating in early 2028.
The company expects these Finnish batteries to earn 19% to 21% project returns before debt, up from the 16.5% to 17% returns estimated for European storage last quarter. Lower battery equipment costs drove the higher return estimate. Over the past year, the developer added 6.6 gigawatt-hours of European storage across Germany, Poland, Romania and Finland, which it expects to add $300 million in yearly revenue once built.
What to watch: long-term power sale contracts versus open-market pricing for the 2.0 FGW of European pre-construction projects as they enter construction over the next 12 months. Relying on open-market electricity prices would leave those 19% to 21% return targets exposed if rival batteries flood the grid.
Third-Quarter Results Beat the Cautious Second-Half Plan
Enlight provides a full-year outlook for total revenue and income (electricity sales plus US tax credits) and Adjusted EBITDA, which is profit before interest, taxes, depreciation and one-offs. Three months ago, the full-year outlook pointed to $381 million to $411 million of revenue for the second half of 2026 by our math, or about $198 million per quarter. Third-quarter revenue reached $231.4 million, and Adjusted EBITDA hit $153.9 million.
Beating that implied pace shows management set its prior outlook cautiously, so the company raised its full-year revenue plan by $15 million at the middle of the range. However, beating a conservative forecast does not eliminate the slowdown ahead as the company laps last year's project openings. By our math, the new outlook still points to fourth-quarter revenue growth slowing to 17.7% from 40.2% this quarter.
What to watch: fourth-quarter revenue against the $179.3 million implied by the middle of the new full-year outlook. Another beat of similar size would confirm that management regularly builds a cushion into its annual targets.
🐻 Bear Case
Power Trading and Currency Pad the Revenue Raise
Enlight raised its 2026 revenue outlook by $15 million at the middle of the range, citing "operating results for the first nine months, electricity trading activity in Israel and higher electricity prices in Europe". In Israel, the company buys electricity from the grid and other producers to resell alongside its own solar and wind power. That trading revenue more than doubled from a year ago to $56 million in the quarter.
- Israeli electricity trading: $56 million in Q3 (60% from third-party power), adding $17 million to revenue growth before currency effects
- Foreign exchange benefit: added $9 million to Q3 revenue as the Israeli shekel rose 10% against the dollar
- Cost of sales (operating and power purchase costs): rose 2.9 percentage points of revenue to 26.8% by our math
- Underlying revenue growth excluding FX and the trading increase: 24.4% from a year ago by our math, versus 40.2% reported
The company says trading is "characterised by low margins, it also carries low risk, relies on an existing platform and does not require fixed costs". Because 60% of traded power comes from outside Enlight's own plants, it inflates top-line growth while dragging down margins: gross margin fell 2.9 percentage points and operating margin fell 3.0 points.
What to watch: the share of electricity trading in Middle East and North Africa revenue in the fourth-quarter report. A rising share would mean top-line beats rely on low-margin power reselling rather than new wind and solar plants.
Tariffs and Costs Force US Contract Buyouts
Power developers lock in long-term electricity sale contracts, known as power purchase agreements (PPAs), before building a plant. In the third quarter, management paid a $20 million fee to cancel legacy contracts on its Rustic Hills and Gemstone solar projects in the US (439 factored megawatts combined). That penalty, partly offset by $12 million in supplier refunds, held reported net income growth to 3.9% ($33.5 million).
The company said the cancellations reflected a "significant shift in U.S. market conditions over the past year, particularly higher prevailing PPA prices, alongside increases in equipment costs and tariffs". Separately, Appendix 5d disclosed that the Snowflake A battery project in Arizona will no longer qualify for a 10% US domestic-content tax credit bonus after switching to cheaper alternative equipment, showing that trade rules are forcing project redesigns.
What to watch: new power sale contracts and updated project return estimates for Rustic Hills and Gemstone in 2027 filings. Signing replacement contracts at higher electricity prices must cover both the $20 million buyout fee and higher tariff-driven equipment bills.
Construction Spending Burns Cash and Lifts Interest Bills
Enlight highlights in its presentation that it is generating operating cash flow at an annual pace of about $400 million, with $104.3 million in the third quarter and $289.1 million over nine months. However, under an accounting policy change made late last year, the company records interest paid on its debt inside financing cash flows rather than operating cash flows.
- Cash interest paid in Q3: $41.4 million, up from $15.1 million a year ago
- Operating cash flow after subtracting interest paid: $62.9 million in Q3 and $185.8 million for nine months by our math
- Project construction spending (capex): $756.7 million in Q3 (327% of revenue) and $2.09 billion for nine months
- Consolidated long-term debt: $5.6 billion, with net debt at 5.3 times EBITDA
Subtracting project construction spending left free cash flow at minus $652.4 million in the quarter by our math. To fund the 8.7 FGW of projects in construction and pre-construction—which require $9.2 billion of total capital—Enlight raised $419 million from share sales and $346 million from bonds earlier this year.
What to watch: parent-company unrestricted cash ($420 million at quarter-end) and new share or bond sales in early 2027. With 40% of required project equity ($600 million) still to be invested, faster cash burn could require more share dilution.
👓 Other Themes
Battery Prices Fall Globally While US Tariffs Bite
Enlight's presentation shows global utility-scale battery storage costs falling from $197 per kilowatt-hour in 2024 to $113 in 2026, helping lift expected returns on its new Finnish battery projects to 19%–21%. In the US, import tariffs and domestic-content rules offset part of that equipment deflation, prompting the company to cancel legacy solar contracts and swap battery suppliers at Snowflake A for "significant savings capital expenditure of the new alternative equipment resulting in a negligible impact on the project’s economics".
💲 Other KPIs
Diluted weighted average shares rose 11.6% from a year ago to 150.0 million, though down slightly from 150.5 million last quarter. The increase stems from issuing about 6 million shares to Israeli institutional investors in the first quarter for $420 million to fund project construction, which diluted per-share profit growth relative to net income.
Deferred income related to tax equity—upfront cash received from US tax-credit partners that is recognised as income over time—rose 51.0% from year-end 2025 to $559.9 million. The developer collected $118.8 million from tax-equity partners in the third quarter and $239.9 million over nine months as new US solar and battery plants progressed.
Trade receivables—bills owed by electricity buyers—rose 25.3% from year-end 2025 to $119.2 million. That increase trailed the 49.0% growth in nine-month revenue and income, showing that customers in the US, Europe and Israel are paying their power bills on time despite the rapid expansion in Israeli electricity trading.
🔮 Guidance
Raised. Management lifted the middle of its full-year revenue and tax-benefit plan by $15 million, pointing to 40.8% growth for the year by our math. That leaves $179.3 million for the fourth quarter, meaning growth slows to 17.7% from 40.2% in the third quarter as the company laps late-2025 US project openings. This is the second raise this year: +$0M in Q1, +$35M in Q2, +$15M in Q3.
Raised. The Israeli group increased the middle of its cash profit outlook by $7.5 million, calling for 33.0% growth this year by our math. That implies $114.3 million in the fourth quarter, or 16.0% growth from a year ago against 37.5% in the third quarter, with no asset-sale gains assumed in the final quarter. Second raise this year: +$0M in Q1, +$20M in Q2, +$7.5M in Q3.
Unchanged. The solar and storage operator kept its forecast for US tax-credit income at $160 million to $180 million, included inside total revenues and income. With $131.5 million booked in the first nine months, the middle of the range leaves $38.5 million for the fourth quarter by our math, down from $44.7 million in the third quarter and up 36.8% from a year ago.
❓ Key Questions
What are the new contract prices on cancelled US projects?
Enlight paid $20 million to exit legacy power contracts on its 439 FMW Rustic Hills and Gemstone projects in the US. Management has not disclosed the new contract prices or updated project returns to show how quickly the higher electricity rates repay that penalty.
How much European battery revenue relies on merchant power prices?
The company expects 19% to 21% pre-debt returns on its new Finnish battery projects and $300 million in annual revenue from its European storage expansion. It has not disclosed what share of those batteries will sell power on open-market prices versus fixed contracts.
Which mature projects slipped into 2029 completion?
Footnote 7 states that the gap between the $2.37 billion mature portfolio run rate and the $2.2–2.3 billion 2028 target comes from mature projects finishing construction in 2029. Management did not name which specific projects or how many megawatts shifted out of 2028.
When will the 2 GW data-center pipeline require capital?
The presentation highlights a 2-gigawatt pipeline of power projects for artificial-intelligence data centers across three regions. Management has not shared when the first project will reach a final investment decision, how much it will cost, or whether Enlight will sell more shares to fund it.