Financial Data and Key Metrics Changes - The company reported Q2 revenue of $78 million, reflecting a 34% year-over-year decline and a nearly flat trend quarter-over-quarter [14] - Adjusted EBITDA for Q2 was $9.7 million, nearly doubling quarter-over-quarter despite a $700,000 decrease in revenues [17] - The net loss for Q2 was $5.2 million, with an adjusted operating expense run rate of $24.6 million [17] Business Line Data and Key Metrics Changes - The Energy Industrial segment's revenue decreased significantly to $22.8 million, a 38% year-over-year decline, attributed to inventory rebalancing and a lack of new projects [15] - The EV thermal barrier business generated $55.2 million in revenue, a 32% decrease year-over-year, aligning with lower vehicle production schedules [15] - Gross profit margins for the Energy Industrial business were maintained at 36%, while the EV thermal barrier business had margins of 31%, which is below the target of 35% [16] Market Data and Key Metrics Changes - The subsea market has shown a significant slowdown, with historical revenue cycling between $5 million and $15 million per year, but averaging approximately $30 million per year in 2023 and 2024 [10] - The company anticipates revenue growth and high gross profit margins in 2026 and beyond, despite current challenges in the energy sector [12] Company Strategy and Development Direction - The core objective is to build a strong, profitable, and capital-efficient business, focusing on streamlining operations and optimizing cost structures [8] - The company is well-positioned to serve US-based OEMs, especially in the EV market, despite regulatory headwinds [9] - Future growth is expected to be driven by project work in the Energy Industrial segment and stable demand for EV thermal barrier products [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to adapt and innovate in a turbulent global economy, emphasizing a resilient and growth-oriented business model [26] - The outlook for the second half of the year includes expected revenue of $140 million to $160 million, translating to a total annual revenue of $297 million to $317 million [21] - The company expects to generate approximately double the adjusted EBITDA in the second half compared to the first half [21] Other Important Information - The CFO transition is underway, with Grant Thaley set to take over at the end of Q3 [6] - The company has removed approximately $65 million in costs, bringing operating expenses back to 2022 levels [8] - Cash and equivalents at the end of the quarter stood at $168 million, positioning the company well for future operations without needing additional capital [20] Q&A Session Summary Question: Update on Energy Industrial segment and distributor destocking - Management acknowledged ongoing destocking and lower project revenue, but expressed confidence in future growth as distributor inventories are worked through [32][33] Question: Outlook for Pyrothin and impact of tax credit expiration - Management remains optimistic about Q4 sales, citing GM's market share gains and stable demand despite the tax credit expiration [37] Question: Design activity with new OEMs and future revenue - Management noted ongoing quoting activity and expected incremental revenues from key OEMs like Stellantis and Daimler in the coming years [42][44] Question: Revenue buildup potential for Thermal and quoting activity - Management confirmed a path to achieving previously discussed revenue targets, with a focus on prismatic cells and ongoing quoting activity [86][88] Question: Impact of Mercedes' EV plans on revenue - Management indicated potential for incremental volume from the ACC partnership with Mercedes, particularly in the European market [94] Question: Lead times for orders in subsea and LNG - Management clarified that subsea projects typically have a lead time of one to two quarters, while LNG projects may require two to four quarters [107]

Financial Performance & Outlook - Q2 2025 revenues reached $78 million, with Thermal Barrier revenues accounting for $55.2 million, a 13% QoQ increase[9] - Energy Industrial maintained gross margins of 35%+ on revenues of $22.8 million in Q2 2025[9] - Adjusted EBITDA for Q2 2025 was $9.7 million, reflecting ~2X QoQ growth on similar revenues[9] - The company anticipates a ~2X improvement in Adjusted EBITDA on similar revenue in H2 2025[8] - H2 2025 revenue is projected to be in the range of $140 million to $160 million, with Adjusted EBITDA between $20 million and $30 million[7,8,12] - Full year 2025 Adjusted EBITDA is projected to be $35 million to $45 million[12] Cost Management & Capital Expenditure - Fixed cost reductions are expected to drive improved financial performance in H2 2025[6] - CAPEX spend in Q2 2025 was reduced by 50% YoY due to demobilizing Plant II and EV Thermal Barrier Equipment[9] - CAPEX for H2 2025 is projected at $10 million, leading to a full year CAPEX of $25 million[12] Electric Vehicle (EV) Market - General Motors (GM) is gaining EV market share in the US[21] - GM's North American EV production forecast for 2025 is approximately 241,000 units[24] - The Equinox model is expected to represent ~24% of GM's total EV volume in 2026[26]

[Second Quarter 2025 Financial Results and Business Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Results%20and%20Business%20Highlights) This section presents Aspen Aerogels' second quarter 2025 financial results and strategic business developments [Q2 2025 Financial Performance](index=1&type=section&id=Q2%202025%20Financial%20Performance) Aspen Aerogels reported a significant revenue decline and net loss in Q2 2025, yet achieved sequential improvements in gross margin and Adjusted EBITDA Q2 2025 vs. Q2 2024 Key Financial Metrics | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $78.0 | $117.8 | -33.8% | | Net Income (Loss) | ($9.1) | $16.8 | N/A | | Net (Loss) Income per Share | ($0.11) | $0.22 | N/A | | Adjusted EBITDA | $9.7 | $28.9 | -66.4% | Q2 2025 Quarter-over-Quarter (QoQ) Performance | Metric | Q2 2025 Value (in millions) | QoQ Change | | :--- | :--- | :--- | | Total Revenue | $78.0 | -1% | | - Thermal Barrier Revenue | $55.2 | +13% | | - Energy Industrial Revenue | $22.8 | -24% | | Gross Margin | 32% | +3 percentage points | | Adjusted EBITDA | $9.7 | +98% | - The company ended the second quarter with **$167.6 million** in cash and cash equivalents[7](index=7&type=chunk) [Business Developments and Strategy](index=1&type=section&id=Business%20Developments%20and%20Strategy) Management focused on organizational streamlining and cost structure improvements in H1 2025, alongside a planned CFO transition to ensure strategic continuity - Management's primary focus in H1 2025 was on streamlining the organization to improve the cost structure and profitability, creating a resilient business framework designed to operate with minimal capital expenditure requirements[5](index=5&type=chunk) - CFO Ricardo Rodriguez will step down at the end of Q3 2025, to be succeeded by Grant Thoele, the current Chief of Staff to the CEO and VP of Corporate Strategy and Finance, ensuring a smooth internal transition[6](index=6&type=chunk)[8](index=8&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) This section provides Aspen Aerogels' financial projections for the second half and full year 2025, including revenue and Adjusted EBITDA targets [Second Half of 2025 Financial Outlook](index=2&type=section&id=Second%20Half%20of%202025%20Financial%20Outlook) Aspen projects H2 2025 revenue between **$140 million** and **$160 million**, with full-year revenue of **$297 million** to **$317 million**, anticipating a maintained net cash position H2 2025 and Full Year 2025 Outlook | Metric (in millions) | H2 2025 Outlook | FY 2025 Outlook | | :--- | :--- | :--- | | Revenue | $140 - $160 | $297 - $317 | | Net Income (Loss) | ($7) - $3 | ($317) – ($307) | | Adjusted EBITDA | $20 - $30 | $35 – $45 | | CAPEX* | $10 | $25 | - The company expects to maintain its net cash position through the end of the year, driven by a leaner fixed cost structure and reductions in net working capital[10](index=10&type=chunk) - Planned asset sales in Georgia are expected to materially reduce the company's debt over the coming quarters[10](index=10&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section provides a detailed overview of Aspen Aerogels' condensed consolidated financial statements, including balance sheets, statements of operations, and cash flow analysis [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased to **$525.1 million**, primarily due to reduced property, plant, and equipment, while total liabilities also declined Balance Sheet Summary (in thousands of US dollars) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $167,622 | $220,882 | | Total current assets | $310,467 | $409,448 | | Property, plant and equipment, net | $156,271 | $459,276 | | Total assets | $525,132 | $895,144 | | Total current liabilities | $78,046 | $110,112 | | Total liabilities | $216,364 | $280,439 | | Total stockholders' equity | $308,768 | $614,705 | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) The company reported **$78.0 million** in Q2 2025 revenue and a **$9.1 million** net loss, with a significant **$310.3 million** net loss for the first six months due to impairment charges Q2 Statement of Operations Summary (in thousands of US dollars) | Account | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | $78,024 | $117,770 | | Gross profit | $25,316 | $51,578 | | Income (loss) from operations | ($5,155) | $19,986 | | Net income (loss) | ($9,056) | $16,818 | Six-Month Statement of Operations Summary (in thousands of US dollars) | Account | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | $156,747 | $212,271 | | Gross profit | $48,128 | $86,721 | | Income (loss) from operations | ($304,496) | $22,422 | | Net income (loss) | ($310,305) | $14,983 | [Analysis of Cash Flow](index=6&type=section&id=Analysis%20of%20Cash%20Flow) For the first six months of 2025, the company generated **$1.7 million** in cash from operating activities, resulting in a net decrease in cash of **$53.2 million** Six-Month Cash Flow Summary (in thousands of US dollars) | Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash from Operating activities | $1,702 | ($10,906) | | Net cash used in Investing activities | ($25,883) | ($50,690) | | Net cash from (used in) Financing activities | ($29,063) | $13,400 | | **Net decrease in cash** | **($53,244)** | **($48,196)** | [Reconciliation of Non-GAAP Financial Measures](index=6&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section provides reconciliations of GAAP net income (loss) to non-GAAP Adjusted EBITDA and Adjusted Net Loss, including forward-looking guidance adjustments [Reconciliation of Net Income (Loss) to Adjusted EBITDA and Adjusted Net Loss](index=6&type=section&id=Reconciliation%20of%20Net%20Income%20(Loss)%20to%20Adjusted%20EBITDA%20and%20Adjusted%20Net%20Loss) The company reconciles GAAP net income (loss) to non-GAAP Adjusted EBITDA and Adjusted Net Loss by excluding specific non-core and non-cash charges Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands of US dollars) | | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(9,056) | $16,818 | $(310,305) | $14,983 | | Adjustments | $18,801 | $12,125 | $325,077 | $26,888 | | **Adjusted EBITDA** | **$9,745** | **$28,943** | **$14,672** | **$41,871** | Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) (in thousands of US dollars) | | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income (loss) | $(9,056) | $16,818 | | Restructuring and demobilization costs | $4,938 | - | | Impairment of property, plant and equipment | $955 | - | | **Adjusted Net Income (Loss)** | **$(3,163)** | **$16,818** | [Reconciliation for Financial Outlook](index=8&type=section&id=Reconciliation%20for%20Financial%20Outlook) The company provides forward-looking reconciliations of projected GAAP net income (loss) to Adjusted EBITDA for both the second half and full year 2025 H2 2025 Outlook Reconciliation: Net Income (Loss) to Adjusted EBITDA (in thousands of US dollars) | | Low | High | | :--- | :--- | :--- | | Net income (loss) | $(6,500) | $3,500 | | Adjustments (Depreciation, Stock Comp, etc.) | $26,500 | $26,500 | | **Adjusted EBITDA** | **$20,000** | **$30,000** | FY 2025 Outlook Reconciliation: Net Loss to Adjusted EBITDA (in thousands of US dollars) | | Low | High | | :--- | :--- | :--- | | Net loss | $(316,805) | $(306,805) | | Adjustments (Depreciation, Impairment, etc.) | $351,477 | $351,477 | | **Adjusted EBITDA** | **$34,672** | **$44,672** |

Core Viewpoint - Aspen Aerogels, Inc. is actively engaging with investors through participation in two upcoming conferences, highlighting its focus on sustainability and electrification solutions [1][6]. Group 1: Upcoming Investor Events - Aspen Aerogels will participate in the Oppenheimer 28th Annual Technology, Internet & Communications Conference on August 11, 2025, hosting one-on-one meetings with investors [2][3]. - The Canaccord Genuity 45th Annual Growth Conference will take place on August 12-13, 2025, where Aspen's management will also hold one-on-one meetings with investors [4][5]. Group 2: Presentation Details - At the Oppenheimer conference, a virtual presentation featuring CFO Ricardo C. Rodriguez and Senior Director Neal Baranosky is scheduled from 11:35 a.m. to 12:15 p.m. ET, with a live webcast available for one year [3]. - A Fireside Chat with President & CEO Donald R. Young and CFO Ricardo C. Rodriguez is set for August 12, 2025, from 1:30 p.m. to 2:00 p.m. ET, also with a live webcast available for one year [5]. Group 3: Company Overview - Aspen Aerogels is recognized as a technology leader in sustainability and electrification solutions, with products like PyroThin®, Cryogel®, and Pyrogel® addressing challenges in the electric vehicle and energy infrastructure markets [6].

Core Viewpoint - Aspen Aerogels, Inc. is set to discuss its financial results for the second quarter of 2025 during a conference call on August 7, 2025, at 8:30 a.m. ET, with results expected to be released before the market opens on the same day [1]. Company Overview - Aspen Aerogels is a technology leader focused on sustainability and electrification solutions, leveraging its aerogel technology to support global trends in resource efficiency, e-mobility, and clean energy [4]. - The company's PyroThin® products address thermal runaway challenges in the electric vehicle market, while its Cryogel® and Pyrogel® products are utilized by major energy infrastructure companies [4]. - Aspen aims to partner with industry leaders to expand its Aerogel Technology Platform® into high-value markets [4].

Company Overview - Aspen Aerogels, Inc. is a technology leader in sustainability and electrification solutions, focusing on resource efficiency, e-mobility, and clean energy [3] - The company's aerogel technology supports customers in addressing global megatrends, particularly in the electric vehicle (EV) market [3] - Aspen's PyroThin® products are designed to tackle thermal runaway challenges in EVs, while its carbon aerogel initiative aims to enhance lithium-ion battery performance, reducing charging time and costs for EV manufacturers [3] Upcoming Events - Aspen Aerogels is scheduled to participate in the 25th Annual B. Riley Securities Investor Conference on May 21-22, 2025, at the Ritz-Carlton in Marina Del Rey, CA [1] - The company's President & CEO, Donald R. Young, and CFO & Treasurer, Ricardo C. Rodriguez, will host one-on-one and small group meetings with investors during the conference [2] Strategic Partnerships - Aspen aims to partner with world-class industry leaders to leverage its Aerogel Technology Platform® into additional high-value markets [3] - The company's Cryogel® and Pyrogel® products are recognized and valued by major energy infrastructure companies globally [3]

Core Insights - Aspen Aerogels reported revenue of $78.72 million for Q1 2025, a year-over-year decline of 16.7% and below the Zacks Consensus Estimate of $82.94 million, resulting in a surprise of -5.08% [1] - The company posted an EPS of -$0.06, compared to $0.01 a year ago, with an EPS surprise of +14.29% against a consensus estimate of -$0.07 [1] Revenue Breakdown - Energy Industrial segment revenue was $29.80 million, below the two-analyst average estimate of $36.16 million, reflecting a year-over-year increase of 2.4% [4] - Thermal Barrier segment revenue was $48.90 million, exceeding the average estimate of $45.23 million, but showing a significant year-over-year decline of 25.2% [4] Profitability Metrics - Gross profit for the Thermal Barrier segment was $11.12 million, lower than the average estimate of $14.98 million [4] - Gross profit for the Energy Industrial segment was $11.69 million, compared to the average estimate of $13.19 million [4] Stock Performance - Aspen Aerogels' shares have returned -15.5% over the past month, contrasting with the Zacks S&P 500 composite's increase of +13.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Q1 2025, detailing a significant net loss and substantial decrease in total assets, primarily due to an impairment charge [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) Total assets significantly decreased to **$554,976 thousand** due to impairment, leading to a **$301,249 thousand** net loss, despite positive operating cash flow Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$554,976** | **$895,144** | | Cash and cash equivalents | $192,039 | $220,882 | | Property, plant and equipment, net | $179,282 | $459,276 | | **Total Liabilities** | **$240,142** | **$280,439** | | Long term debt | $95,416 | $94,961 | | **Total Stockholders' Equity** | **$314,834** | **$614,705** | Consolidated Statement of Operations Highlights (Three Months Ended March 31, in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $78,723 | $94,501 | | Gross Profit | $22,812 | $35,143 | | Impairment of property, plant and equipment | $286,612 | $2,702 | | Income (loss) from operations | $(299,341) | $2,436 | | **Net Loss** | **$(301,249)** | **$(1,835)** | | **Net Loss Per Share (Basic & Diluted)** | **$(3.67)** | **$(0.02)** | Consolidated Statement of Cash Flows Highlights (Three Months Ended March 31, in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $5,632 | $(17,749) | | Net cash used in investing activities | $(12,998) | $(25,863) | | Net cash provided by (used in) financing activities | $(21,477) | $5,259 | | **Net decrease in cash** | **$(28,843)** | **$(38,353)** | [Notes to Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, liquidity with **$192,039 thousand** cash, a **$286,612 thousand** impairment charge from the Statesboro Plant, segment revenue changes, and **$9,790 thousand** in restructuring costs - The company operates in two reportable segments: Energy Industrial and Thermal Barrier, focusing on high-performance aerogel materials for energy, sustainable insulation, and electric vehicle (EV) markets[20](index=20&type=chunk) - As of March 31, 2025, the company had **$192,039 thousand** in unrestricted cash and cash equivalents after incurring a net loss of **$301,249 thousand** for the quarter[22](index=22&type=chunk) Revenue by Segment (Three Months Ended March 31, in thousands) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Energy industrial | $29,822 | $29,082 | | Thermal barrier | $48,901 | $65,419 | | **Total revenue** | **$78,723** | **$94,501** | - The company ceased construction of its planned second manufacturing plant in Statesboro, Georgia, resulting in an impairment charge of **$286,612 thousand** during the three months ended March 31, 2025[57](index=57&type=chunk) - In Q1 2025, the company incurred **$9,790 thousand** in restructuring and demobilization costs, including severance, demobilization costs, and a write-off of deferred financing costs related to the canceled Statesboro Plant[107](index=107&type=chunk)[109](index=109&type=chunk) - On May 6, 2025, subsequent to the quarter end, the company amended its MidCap Loan Facility, adding Aspen Georgia as a borrower and modifying interest rates and financial covenants[74](index=74&type=chunk)[110](index=110&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a **17%** revenue decrease to **$78,723 thousand**, a **$301,249 thousand** net loss due to impairment, and a decline in Adjusted EBITDA, with future segment projections [Results of Operations](index=43&type=section&id=Results%20of%20Operations) Q1 2025 revenue fell **17%** to **$78,723 thousand** due to a **25%** decline in Thermal Barrier sales, while a **$286,612 thousand** impairment charge led to a significant operating loss Revenue Comparison (Three Months Ended March 31, in thousands) | Segment | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Energy industrial | $29,822 | $29,082 | $740 | 3% | | Thermal barrier | $48,901 | $65,419 | $(16,518) | (25)% | | **Total revenue** | **$78,723** | **$94,501** | **$(15,778)** | **(17)%** | - The decrease in Thermal Barrier revenue was driven by reduced volume from a major U.S. automotive OEM and lower contractual component pricing[160](index=160&type=chunk) Gross Profit Comparison (Three Months Ended March 31, in thousands) | Segment | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Energy industrial | $11,690 | $11,562 | $128 | 1% | | Thermal barrier | $11,122 | $23,581 | $(12,459) | (53)% | | **Total gross profit** | **$22,812** | **$35,143** | **$(12,331)** | **(35)%** | - General and administrative expenses decreased by **$4,200 thousand** (**24%**) primarily due to lower compensation and related costs[169](index=169&type=chunk) - The company incurred **$9,790 thousand** in restructuring and demobilization costs and a **$286,612 thousand** impairment charge in Q1 2025, which were not present in the prior-year period[171](index=171&type=chunk)[172](index=172&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company held **$192,039 thousand** in cash, with operating cash flow at **$5,632 thousand**, and ceased Statesboro Plant construction to optimize capital expenditures and liquidity - The company's principal sources of liquidity are its cash and cash equivalents of **$192,039 thousand** (as of March 31, 2025), availability under its Revolving Facility, and cash from operations[184](index=184&type=chunk) Cash Flow Summary (Three Months Ended March 31, in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Operating Activities | $5,632 | $(17,749) | | Investing Activities | $(12,998) | $(25,863) | | Financing Activities | $(21,477) | $5,259 | - Capital expenditures decreased to **$12,998 thousand** in Q1 2025 from **$25,863 thousand** in Q1 2024, reflecting the halt in construction of the Statesboro Plant[187](index=187&type=chunk) - Financing activities in Q1 2025 primarily consisted of debt repayments, including **$13,200 thousand** on the revolver and **$6,500 thousand** on the term loan[188](index=188&type=chunk) [Key Metrics and Non-GAAP Financial Measures](index=36&type=section&id=Key%20Metrics%20and%20Non-GAAP%20Financial%20Measures) Adjusted EBITDA for Q1 2025 was **$4,927 thousand**, a significant decrease from **$12,928 thousand** in Q1 2024, primarily due to a **$286,612 thousand** impairment charge Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net loss | $(301,249) | $(1,835) | | Depreciation and amortization | $5,793 | $5,786 | | Stock-based compensation | $2,073 | $4,706 | | Other expense | $832 | $3,515 | | Income tax expense | $1,076 | $756 | | Restructuring and demobilization costs | $9,790 | — | | Impairment of property, plant and equipment | $286,612 | — | | **Adjusted EBITDA** | **$4,927** | **$12,928** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces interest rate risk from **$112,000 thousand** variable-rate debt, foreign currency risk from the Mexican Peso, and notes no material impact from inflation - The company is exposed to interest rate risk through its variable-rate Term Loan Facility (**$112,000 thousand** principal) and Revolving Facility (**$29,800 thousand** principal), both tied to Term SOFR[200](index=200&type=chunk) - Foreign currency exchange risk is primarily related to the Mexican Peso vs. the U.S. dollar, which resulted in a transaction loss of **$400 thousand** for Q1 2025[203](index=203&type=chunk) - Management does not believe that inflation has had a material effect on results of operations for the periods presented[202](index=202&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - Based on an evaluation as of March 31, 2025, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[206](index=206&type=chunk) - There were no changes in the company's internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[207](index=207&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ongoing patent infringement proceedings in Korea and a lawsuit seeking over **$16,000 thousand** in damages, both stayed pending appeals or arbitration - Patent infringement proceedings in Korea against several entities remain stayed pending the outcome of appeals at the Korean IP High Court[211](index=211&type=chunk) - A lawsuit filed by a former distributor, Aerogels Poland Nanotechnology LLC (APN), seeking over **$16,000 thousand** in damages has been stayed by the court pending arbitration[212](index=212&type=chunk) [Item 1A. Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) Key risk factors include potential changes in U.S. trade policies and tariffs, such as a **145%** tariff on Chinese imports, which could increase costs and impact gross margins - The company's business could be materially and adversely affected by changes in U.S. trade policies and tariffs, such as a potential **145%** tariff on product imports from China[214](index=214&type=chunk) - Increased tariffs could raise the cost of materials sourced from outside the U.S., and the company may be unable to pass these cost increases on to its customers, potentially harming gross margins[215](index=215&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=56&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales or repurchases of equity securities during the quarter ended March 31, 2025 - The company had no unregistered sales of equity securities and made no repurchases of its equity securities during the quarter ended March 31, 2025[217](index=217&type=chunk) [Item 3. Defaults Upon Senior Securities](index=56&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[218](index=218&type=chunk) [Item 4. Mine Safety Disclosures](index=56&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[219](index=219&type=chunk) [Item 5. Other Information](index=56&type=section&id=Item%205.%20Other%20Information) This section details the amendment of the MidCap Loan Facility, adjusting interest rates and financial covenants, and reports the departure of the Chief Legal Officer - On May 6, 2025, the company amended its MidCap Loan Facility, which increased interest rate margins and adjusted financial covenants, including changing the minimum liquidity requirement and the minimum EBITDA levels tested quarterly[220](index=220&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk) - The Chief Legal Officer, General Counsel and Corporate Secretary, Virginia H. Johnson, will depart the company effective May 23, 2025, to pursue other opportunities[225](index=225&type=chunk) [Item 6. Exhibits](index=59&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the credit agreement amendment and CEO/CFO certifications - Key exhibits filed with the report include the Amendment No. 1 to the Credit Agreement and certifications from the principal executive officer and principal financial officer[228](index=228&type=chunk)

Aspen Aerogels (ASPN) Q1 2025 Earnings Call May 08, 2025 08:30 AM ET Company Participants Neal Baranosky - Senior Director, Head of Investor Relations & Corporate StrategyDonald Young - President & CEORicardo Rodriguez - CFO & TreasurerColin Rusch - Managing Director - Head of Sustainable Growth & Resource Optimization ResearchLeanne Hayden - Senior Associate - Equity Research Conference Call Participants David Anderson - Analyst Operator Good morning. Thank you for attending the Aspen Aerogel First Quarter ...

Financial Data and Key Metrics Changes - The company reported Q1 2025 revenue of $78.7 million, a 17% year-over-year decline, aligning with expectations for the quarter [14] - Adjusted EBITDA for Q1 was $4.9 million, with a negative adjusted operating income of $2.9 million [18] - The net income for Q1 was negative $301.2 million, or $3.67 per diluted share, which would have been negative $4.8 million or $0.06 per diluted share excluding impairment and restructuring costs [18] Business Line Data and Key Metrics Changes - The Energy Industrial segment's revenue increased by 2% year-over-year to $29.8 million, reflecting inventory rebalancing [14] - EV thermal barrier revenue was $48.9 million, representing a 25% decrease year-over-year due to lower vehicle production schedules [15] - Gross profit margins for the company were up 29%, with gross profit of $22.8 million, a 35% decline year-over-year [17] Market Data and Key Metrics Changes - The company noted that major oil and gas companies maintained their 2025 capital expenditure guidance, indicating stability in the energy markets [9] - The company is experiencing destocking in its distribution channel, which is expected to stabilize and lead to revenue growth in the second half of the year [9][44] Company Strategy and Development Direction - The company aims to build resilience by broadening commercial activities in EV thermal barrier and energy industrial businesses, optimizing cost structures, and enhancing supply chain flexibility [6][10] - The focus is on reducing fixed cash costs to 2022 levels and lowering the revenue required for positive adjusted EBITDA performance to approximately $245 million [12] - The company is strategically positioned to leverage its technology in both energy industrial and EV thermal barrier segments, anticipating significant growth opportunities by 2027 [32][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt and innovate, emphasizing the importance of electrification as a major driver for growth [35] - The company expects Q2 revenue to range from $70 million to $80 million, translating to a net income loss of $4 million to $11 million [29] - Management highlighted ongoing efforts to mitigate risks associated with international trade and tariffs, which are not expected to significantly impact operations [28] Other Important Information - The company has successfully diversified its raw material supply chain and created a second source for aerogel, enhancing resilience against fluctuating tariff regimes [10] - The company ended the quarter with $192 million in cash and equivalents, indicating a strong balance sheet [20] Q&A Session Summary Question: Plans for the Georgia facility - The company aims to capture value from the Georgia facility as soon as possible, with plans to sell equipment and list the plant for sale [41][42] Question: Signals from customers regarding inventory clearing - The company has observed a decrease in inventory levels held by distributors and contractors, indicating a potential for revenue growth in the second half of the year [44] Question: Trends in thermal barriers and content per vehicle - The company expects a decrease in content per vehicle due to the shift towards prismatic cell battery packs, but remains focused on maintaining gross margins [50][51] Question: Opportunities for European expansion - The company prefers to supply products from Mexico to European customers, leveraging existing investments and minimizing risks associated with European labor costs [56][57] Question: Engagement with South Korean EV OEMs - The company is actively engaged with South Korean OEMs and is determined to partner with them for future product launches [65][66] Question: Timeline for additional OEM wins - The company anticipates that new OEM partnerships could contribute over $200 million in revenue by 2027, with ongoing demand expected to build from 2027 onwards [67]