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AA

ASPEN AEROGELS INC (ASPN)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $78.7M, down 17% YoY; gross margin compressed to 29% on EV Thermal Barrier volume/mix and price actions; GAAP net loss was $301.2M due to a $286.6M impairment from demobilizing the Statesboro plant and $9.8M restructuring costs .
  • Versus Street: revenue missed consensus ($78.7M vs $82.7M*) while normalized/primary EPS beat slightly (-$0.06 vs -$0.07*); Q4 2024 was a clean beat on both revenue ($123.1M vs $120.8M*) and EPS ($0.14 vs $0.089*) .
  • Management issued Q2 2025 guidance: revenue $70–$80M, net loss $11M–$4M, EPS loss $0.13–$0.05, adjusted EBITDA breakeven to $7M; CapEx (ex-Statesboro demobilization) < $10M .
  • Strategic catalysts: new PyroThin award with a leading American OEM (GM) for a next-gen prismatic LFP platform (SOP 2028); ongoing cost structure optimization to lower EBITDA/EBIT breakeven levels; EI segment positioned to rebuild over the year as channel destocking normalizes .

What Went Well and What Went Wrong

What Went Well

  • New EV Thermal Barrier platform win: “secured… a major PyroThin award with GM for a next-generation prismatic EV platform,” expanding into new form factors/chemistries and validating tech leadership; record-level quoting activity in PyroThin .
  • EI resilience and margins: EI revenue +3% YoY to $29.8M; EI gross margin 39% despite early-year typical step-down and channel inventory rebalancing .
  • Balance sheet/cash flow: operating cash flow $5.6M; quarter-end cash and equivalents $192.0M; debt paydown >$20M reduces interest expense .

What Went Wrong

  • EV Thermal Barrier revenue fell 25% YoY to $48.9M; segment gross margin at 23% below the 35% target due to lower production volumes, price actions, and smaller battery pack mix (content per vehicle drifting lower with prismatic cell adoption) .
  • Company gross margin dropped 800 bps YoY to 29%; adjusted EBITDA fell to $4.9M vs $12.9M in Q1 2024 as volume/mix headwinds outweighed cost actions .
  • Large GAAP loss from Statesboro demobilization: $286.6M impairment and $9.8M restructuring/demobilization drove GAAP EPS to -$3.67 despite adjusted EPS of -$0.06 .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$117.3 $123.1 $78.7
Gross Margin %42% 38% 29%
GAAP Diluted EPS ($)-$0.17 $0.14 -$3.67
Adjusted EPS ($)N/AN/A-$0.06
Adjusted EBITDA ($USD Millions)$25.4 $22.7 $4.9

Segment revenue breakdown:

Segment Revenue ($USD Millions)Q3 2024Q4 2024Q1 2025
Thermal Barrier$90.6 $70.0 $48.9
Energy Industrial$26.8 $53.1 $29.8

Key KPIs:

KPIQ3 2024Q4 2024Q1 2025
Thermal Barrier Gross Margin %N/AN/A23%
Energy Industrial Gross Margin %N/AN/A39%
Operating Cash Flow ($USD Millions)$20.8 $35.7 $5.6
Cash & Equivalents ($USD Millions)$113.5 $220.9 $192.0

Consensus vs actual (S&P Global):

MetricQ4 2024 Consensus*Q4 2024 ActualQ1 2025 Consensus*Q1 2025 Actual
Revenue ($USD Millions)$120.8*$123.1 $82.7*$78.7
Primary EPS ($)$0.089*$0.14 -$0.07*-$0.06

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q2 2025N/A$70–$80 Initiated
Net Loss ($USD Millions)Q2 2025N/A$(11)–$(4) Initiated
EPS (Loss) ($)Q2 2025N/A$(0.13)–$(0.05) Initiated
Adjusted EBITDA ($USD Millions)Q2 2025N/A$0–$7 Initiated
CapEx ex-Statesboro ($USD Millions)Q2 2025N/A< $10 Initiated
CapEx ex-Statesboro ($USD Millions)Q1 2025< $7 Actual $13 total CapEx (incl. Statesboro) Higher actual due to demobilization spend

Management also outlined targets to lower adjusted EBITDA breakeven revenue to ~$245M and EBIT breakeven to ~$270M through fixed cost reductions .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
EV Thermal Barrier awards/platformsStrong TB ramp; target ≥35% gross margins; DOE loan consideration for Statesboro; Volvo Truck award New GM prismatic LFP award; record quoting; TB gross margin 23% on volume/mix/price Expanding awards; near-term margin pressure
Content per vehicle (CPV) mix shiftNot explicitly quantifiedCPV drifting toward $800/vehicle; prismatic could be $200–$250; focus on margins and shared equipment payback Mix shifting lower CPV; margin model adapts
Energy Industrial demand/destockingSupply constrained in Q3; record $53.1M in Q4; external manufacturing expanded Destocking normalizing; EI revenue expected to build through year; aim ~FY2024 EI revenue Normalizing; rebuild expected
Supply chain/tariffs mitigationExternal manufacturing turnaround; financing to fund strategy USMCA compliance for TB; Annex 2 coverage; tariff exposure < $4.5M, potentially < $1M; regional sourcing Well-mitigated; limited impact
Statesboro plant decision/capexDOE conditional commitment; later stopped construction Demobilizing; $286.6M impairment; equipment sale/auction plans; target cash recovery Exit progressing; monetization planned
Cost structure/breakeven2024 margin profile achieved; 2025 cautious Lowering EBITDA/EBIT breakeven via fixed cost cuts; green/blue line path Accelerating cost actions
Regional strategy (Europe/Korea)N/ASupply Europe from Mexico due to labor/capex efficiency; active with LG/Samsung; targeting 2027+ ramps Building pipeline; capex-light approach

Management Commentary

  • “We secured… a major PyroThin award with GM for a next-generation prismatic EV platform… an endorsement of our innovation and trusted performance… record level quoting activity” — Don Young, CEO .
  • “EV thermal barrier… gross margins… 23%, below our target… driven by reduced fixed cost leverage on lower production volumes and pricing initiatives… margins may hover mid- to high-20% this year” — Ricardo Rodriguez, CFO .
  • “We believe… EI revenue will build throughout the year and reach a full year revenue level approximating last year's revenue of $145.9 million” — Don Young .
  • “Tariff environment does not meaningfully affect our company… USMCA compliant TB parts… Annex 2 coverage… total 2025 raw material tariff exposure < $4.5M, potentially < $1M” — Ricardo Rodriguez .
  • “Goal… reduce fixed cash costs to 2022 levels… lower revenue required for positive adjusted EBITDA… target adjusted EBITDA breakeven at ~$245M revenue; EBIT breakeven ~ $270M” — Management .

Q&A Highlights

  • Statesboro monetization: Equipment sales underway; auction planned; plant listing imminent; goal to recoup cash “as soon as possible” despite tough environment .
  • EI destocking: Observed distributor/contractor inventory declines; expect revenue build in 2H after equilibrium; year similar to FY2024 EI levels .
  • EV CPV mix: CPV drifting to ~$800/vehicle; prismatic form factor could be $200–$250; focus on sustaining ~35% margins at scale and capex payback via shared equipment .
  • Europe supply choice: Prefer supplying from Mexico with European warehousing given labor costs and equipment sharing; customers accept Mexico-made parts .
  • Korea OEM pipeline: Active dialogues; close to LG/Samsung; 2027–2028 SOPs expected for incremental awards .

Estimates Context

  • Q1 2025: revenue missed ($78.7M vs $82.7M*), normalized/primary EPS beat (-$0.06 vs -$0.07*).
  • Q4 2024: revenue beat ($123.1M vs $120.8M*), EPS beat ($0.14 vs $0.089*).
    Values retrieved from S&P Global.*

Where estimates may need to adjust:

  • EV Thermal Barrier margins likely modeled lower near term (mid- to high-20%) vs prior 35%+ assumptions until volume recovers; Street should reflect lower fixed-cost absorption and CPV mix .
  • EI rebuild trajectory through 2025 as destocking normalizes could support margin stability; models should capture sequential recovery 2H .
  • CapEx cadence front-loaded; demobilization costs may continue near term; reflect cash recovery plan from asset sales .

Key Takeaways for Investors

  • Near-term EV Thermal Barrier headwinds (volume/mix/pricing) pressure margins; management guides TB margins to mid/high-20% for 2025, improving with productivity at higher run rates .
  • EI destocking is normalizing; management expects EI revenue to build through the year toward FY2024 levels, supporting base-load profitability .
  • Cost structure actions materially lower breakeven revenue thresholds (EBITDA ~ $245M; EBIT ~ $270M), increasing resilience and upside torque when demand improves .
  • Strategic platform expansion continues: GM prismatic LFP award and ongoing quotes broaden EV OEM exposure ahead of 2026–2028 SOPs, with shared equipment enabling better capex payback .
  • Tariff exposure appears contained via USMCA compliance and Annex 2 coverage; supply-chain flexibility across regions limits direct duty impacts .
  • Liquidity remains solid ($192M cash); Q1 generated operating cash flow and reduced debt, supporting continued execution and capital structure optimization .
  • Near-term trading: watch for sequential revenue trends vs Q2 guide ($70–$80M) and EV margin commentary; medium term thesis hinges on OEM wins converting to 2026–2028 ramps and fixed-cost reductions driving operating leverage .

Please note: Values marked with an asterisk (*) are retrieved from S&P Global.