ASPEN AEROGELS INC (ASPN)·Q2 2025 Earnings Summary

Executive Summary

• Q2 revenue of $78.0M and 32% gross margin came in at the high end of company expectations; Thermal Barrier grew 13% QoQ to $55.2M while Energy Industrial fell 24% QoQ to $22.8M . The quarter delivered Adjusted EBITDA of $9.7M, nearly 2x QoQ on similar revenue, reflecting fixed-cost reductions and operational leverage .
• Results beat S&P Global consensus: revenue $78.024M vs $72.526M estimate* and normalized/primary EPS of $(0.04) vs $(0.10) estimate*; management also noted EBITDA exceeded their own prior high-end guidance for Q2 by ~38% .
• H2 2025 outlook guides revenue of $140–$160M and Adjusted EBITDA of $20–$30M (FY 2025 revenue $297–$317M; Adjusted EBITDA $35–$45M), indicating ~2x H2 EBITDA vs H1 on comparable revenue; CAPEX ex-Statesboro guided to $10M in H2 ($25M FY) .
• Strategic/catalyst items: cost structure reset (~$65M fixed costs removed across H1), CFO transition to an internal successor in Q3, and planned asset sales in Georgia expected to materially reduce debt and help maintain a positive net cash position—supporting potential multiple expansion if H2 leverage materializes .

What Went Well and What Went Wrong

What Went Well

• Cost reductions drove operating leverage: Adjusted EBITDA rose to $9.7M (+$4.8M QoQ) on near-flat revenue, with gross margin up 3 pts QoQ to 32% . CEO: “The leverage from these initiatives is clearly reflected in our second-half outlook, which projects a significantly higher Adjusted EBITDA on revenue levels consistent with the first half” .
• Thermal Barrier resilience with GM share gains: TB revenue increased 13% QoQ to $55.2M; TB gross margin improved 8 pts QoQ to 31% on higher volume and productivity . CFO: “GM… production volumes… increase meaningfully quarter over quarter” supporting TB QoQ growth .
• Balance sheet/liquidity: Ended Q2 with $167.6M in cash; management expects to maintain net cash through year-end, with asset sales (Statesboro equipment/plant) expected to generate >$50M over coming quarters to reduce debt .

What Went Wrong

• Energy Industrial softness: EI revenue fell 24% QoQ to $22.8M and 38% YoY, driven by distributor/contractor inventory rebalancing, fewer new projects, and especially a subsea lull after two strong years; LNG also dipped vs 2024 .
• EV market/regulatory uncertainty: Management cited U.S. regulatory headwinds and broader energy volatility, though they emphasized organizational resilience and flexible sourcing .
• GAAP profitability impacted by charges: Net loss of $9.1M included $5.9M in restructuring/impairment; adjusted net loss improved to $3.2M; non-cash/state-level actions still flow through GAAP in 2025 (notably Q1 impairment) .

Financial Results

Headline P&L vs Prior Periods and Consensus

Notes: Consensus figures marked with asterisk are from S&P Global. Actual EPS under “Consensus” refers to normalized/primary EPS; company’s adjusted EPS for Q2 2025 was $(0.04) .

Segment Breakdown

KPIs and Balance Sheet

Guidance Changes

Management assumptions for H2 include D&A of $13.2M, SBC of $5.0M, other expense (net) of $5.3M, and ~$82.2M diluted WASO for FY .

Earnings Call Themes & Trends

Management Commentary

• CEO on H1 actions and H2 leverage: “We focused on streamlining and simplifying our organization… The leverage from these initiatives is clearly reflected in our second-half outlook, which projects a significantly higher Adjusted EBITDA on revenue levels consistent with the first half” .
• CEO on market backdrop: “Given the regulatory headwinds facing the EV market—particularly in the U.S.—and the broader volatility in the global energy sector, we’ve built our teams and operating framework to support a resilient, growth-oriented, and profitable business” .
• CFO on EBITDA beat and cost actions: “Adjusted EBITDA nearly doubled quarter over quarter by $4.8M on revenues that were $0.7M lower… we exceeded [Q2] high-end guidance by 38%” .
• CFO on balance sheet and monetization: “We ended the quarter with $168M of cash… equipment [and plant] expected to bring in over $50M… proceeds will… be used to prepay the term loan and reduce… interest” .
• CEO on EI outlook: “We believe our Energy Industrial segment is well positioned… We anticipate… high gross profit margins in 2026 and beyond” .

Q&A Highlights

• Energy Industrial destocking and subsea/LNG timing: Management acknowledged pipeline misreads and subsea lull but pointed to robust subsea backlogs and typical order-to-ship within 1–2 quarters; LNG projects have longer lead times; expect 2026 growth and solid margins .
• EV demand and U.S. tax credit expiration: Despite the $7,500 credit expiring Sep 30, management expects Q4 stability as GM’s EV market share gains persist; potential inventory rebuild may support demand into Q4 and early 2026 .
• Non-GM OEM ramps: Expect ACC-related revenue in Q4’25 and ramp in 2026; Daimler meaningful from 2027; Stellantis ramp in Europe intact .
• Cost structure flexibility: Fixed costs cut by ~$65M through H1; ongoing continuous-improvement projects (e.g., roll length/productivity) to improve gross margins even if volumes fluctuate .
• Plant II spend largely complete: < $10M left; anticipate >$50M monetization proceeds over coming quarters .

Estimates Context

• Q2 2025: Revenue beat by ~$5.5M ($78.024M vs $72.526M*), and normalized/primary EPS beat ($(0.04) vs $(0.10)) . Adjusted EBITDA of $9.745M exceeded internal guidance and was well above SPGI EBITDA consensus of ~$2.47M .
• FY 2025 outlook vs consensus: Company revenue outlook $297–$317M is above SPGI consensus of ~$274.2M*, implying upward estimate revisions if management’s H2 trajectory holds. Company Adjusted EBITDA guide $35–$45M is materially above SPGI FY EBITDA consensus of ~$10.8M*, also implying upward revisions if execution continues .

Note: Asterisked figures are from S&P Global and presented as provided by SPGI without company adjustments.*

Key Takeaways for Investors

• Aspen delivered a clean top-line and normalized EPS beat, with a notable EBITDA outperformance on flat revenue—evidence that fixed-cost actions are taking hold ahead of H2 .
• The H2 outlook embeds ~2x H2 vs H1 Adjusted EBITDA on comparable revenue, a potentially powerful catalyst if delivered; execution on cost and mix is critical .
• Thermal Barrier should remain supported by GM’s share gains and European OEM ramps (ACC/Stellantis), while EI faces near-term softness but has 2026 project catalysts (subsea/LNG) .
• Balance sheet de-risking: >$50M expected from Statesboro asset monetization and an intent to maintain a positive net cash position reduce financing risk and interest burden .
• Watch items: U.S. EV policy shifts and tax-credit expiration, EI subsea timing, and segment margins (TB target ~35% vs Q2 at 31%) .
• Estimate path: With company FY revenue/EBITDA outlook above SPGI consensus, Street revisions likely skew upward if Q3 trends match commentary; stock could react positively to confirmation of H2 EBITDA inflection and asset-sale execution .

Appendix: Additional Data Tables

Cash Flow (selected)

Non-GAAP Reconciliations (Q2 2025)

• Adjusted EBITDA reconciliation: Net loss $(9.056)M + D&A $5.796M + SBC $3.211M + other $3.080M + tax $0.821M + restructuring $4.938M + impairment $0.955M = $9.745M Adjusted EBITDA .
• Adjusted Net Loss and Adjusted EPS: Adjusted net loss $(3.163)M; Adjusted EPS $(0.04) .

Disclosures: Non-GAAP definitions and reconciliations are provided by the company; see press release for full details .

Footnote on Estimates: All asterisked consensus values are retrieved from S&P Global (Capital IQ) and may reflect normalized definitions that differ from company-reported non-GAAP metrics. Values retrieved from S&P Global.*