Aspen Aerogels(US:ASPN)2022-07-31 10:34Financial Data and Key Metrics Changes - Aspen Aerogels reported revenues of $45.6 million for Q2 2022, representing a 19% increase from the previous quarter and a 44% increase year-over-year [23][24] - Year-to-date revenue grew by 40% year-over-year to $84 million [23] - The net loss increased to $24 million or $0.68 per share compared to a net loss of $6.7 million or $0.23 per share in Q2 2021 [29] - Adjusted EBITDA was negative $18.3 million in Q2 compared to negative $3.4 million in Q2 of last year [29] Business Line Data and Key Metrics Changes - Energy industrial revenues increased by 13% over the prior quarter to $34.9 million, driven by strong demand and backlog fulfillment [24] - EV thermal barrier revenues reached $10.8 million, a 42% quarterly increase [24] - PyroThin thermal barrier revenue was nearly $11 million in Q2 compared to $7.6 million in Q1 and less than $7 million for all of 2021 [17] Market Data and Key Metrics Changes - The automotive industry is projected to invest $0.5 trillion in the next five years for the transition to electric vehicles, positioning Aspen Aerogels favorably for battery performance and safety [19] - The EV market is expected to grow significantly, with forecasts indicating a 24.7 million unit market in 2025 [43] Company Strategy and Development Direction - The company aims to achieve $1.6 billion in revenue and $400 million in EBITDA by fully utilizing its second aerogel manufacturing plant [11][21] - Aspen Aerogels is exploring various sources of capital, including government grants and strategic investors, to support its growth plans [14][15] - The company is focused on leveraging its Aerogel technology platform into high-value markets with sustainability themes [20][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in raising necessary funds to become cash flow positive in 2024 despite challenging market conditions [16] - The company anticipates high year-over-year growth rates in 2022, supported by strong demand in the EV market and energy industrial sector [16] - Management highlighted the importance of operational improvements and productivity initiatives to enhance gross margins and profitability [36][41] Other Important Information - Aspen Aerogels is committed to ESG initiatives and plans to release its inaugural ESG highlights report [22] - The company is investing in technology and new business development, with over 60 new inventions captured in 33 patent families filed or in draft [20] Q&A Session Summary Question: How is scarcity value affecting discussions with OEMs? - Management indicated that demonstrating capacity build-out is crucial for meeting 2023 and 2025 targets, and OEMs are keen on being prioritized in the supply chain [51][52] Question: What is the significance of fire containment in product design? - Management noted that regulatory standards are becoming more stringent, and their products aim to isolate bad cells, transforming catastrophic events into serviceable ones [55] Question: How does localization of battery supply chains affect operations? - Management acknowledged the need for regional fabrication facilities to meet OEM demands and is committed to expanding operations accordingly [58] Question: What is the status of staffing and operational efficiency? - Management reported improvements in staffing at the aerogel manufacturing facility and plans to streamline operations between Rhode Island and Mexico [61][62] Question: How does quoting and testing relate to the award process? - Management clarified that quoting is a late-stage process, indicating significant testing and qualification have already been completed [64]