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ASPEN AEROGELS INC (ASPN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 revenue was $73.0M and GAAP EPS was -$0.08; Thermal Barrier revenue fell 12% QoQ while Energy Industrial rose 7% QoQ, and gross margin compressed to 28.5% from 32.4% in Q2 .
  • Versus estimates, Q3 revenue was roughly in line ($73.0M vs $73.4M*) while EPS missed (-$0.06 adjusted actual vs -$0.00* consensus); Q2 had beaten on both revenue and EPS*.
  • Guidance was cut materially: FY25 revenue to $270–$280M (from $297–$317M) and FY25 adjusted EBITDA to $7–$15M (from $35–$45M); Q4 revenue guided to $40–$50M with negative adjusted EBITDA of -$14M to -$6M .
  • Strategic positives: new PyroThin award with a major EU OEM (SOP 2027), expected EI project upcycle in 2026 (subsea and LNG), and near-term BESS adjacency opportunities .

What Went Well and What Went Wrong

  • What Went Well

    • EU OEM PyroThin award strengthens European foothold; management expects European programs and ACC to support growth in 2026–2027 (“We expect to rebuild growth…supported by the ramp-up of our European programs, including our newest award”) ; ACC ramp noted for 2026 .
    • Energy Industrial stabilized and improved QoQ: revenue $24.3M (+7% QoQ) with segment margin ~36%, above company target, indicating healthy unit economics .
    • Working capital execution: Q3 operating cash flow of $15.0M; ended Q3 with $152.4M in cash and equivalents, providing liquidity to absorb near-term EV headwinds .

  • What Went Wrong

    • Thermal Barrier weakness and manufacturing inefficiencies: TB revenue down 12% QoQ to $48.7M; company-level gross margin declined to 28.5% due to lower EV volumes and one-time scrap as they prepare for ACC ramp .
    • Guidance reset: FY25 revenue cut by ~$27–$37M and adjusted EBITDA by ~$28–$30M; Q4 outlook implies negative adjusted EBITDA amid GM demand erosion and regulatory rollback impacts .
    • Adjusted EBITDA fell to $6.3M in Q3 (from $9.7M in Q2) as fixed cost absorption worsened with lower EV volumes; TB segment margin fell from 31% in Q2 to 24% in Q3 .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$78.7 $78.0 $73.0
GAAP EPS ($USD)-$3.67 -$0.11 -$0.08
Adjusted EPS ($USD)-$0.06 -$0.04 -$0.06
Gross Margin %29% 32% 28.5%
Adjusted EBITDA ($USD Millions)$4.9 $9.7 $6.3
Operating Cash Flow ($USD Millions)$5.6 -$3.9 $15.0
Cash and Equivalents ($USD Millions, end-period)$192.4 $168.0 $152.4
Q3 Year-over-Year ComparisonQ3 2024Q3 2025
Revenue ($USD Millions)$117.3 $73.0
GAAP EPS ($USD)-$0.17 -$0.08
Adjusted EBITDA ($USD Millions)$25.4 $6.3
Segment Revenue ($USD Millions)Q1 2025Q2 2025Q3 2025
Thermal Barrier$48.9 $55.2 $48.7
Energy Industrial$29.8 $22.8 $24.3

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025$297–$317 $270–$280 Lowered
Net Income (Loss) ($USD Millions)FY 2025$(317)–$(307) $(342)–$(334) Lowered
Basic EPS (Loss) ($USD)FY 2025-$3.86 to -$3.73 -$4.15 to -$4.05 Lowered
Adjusted EBITDA ($USD Millions)FY 2025$35–$45 $7–$15 Lowered
Capex (ex Plant II) ($USD Millions)FY 2025$25 $25 Maintained
Revenue ($USD Millions)Q4 2025n/a$40–$50 New
Adjusted EBITDA ($USD Millions)Q4 2025n/a-$14 to -$6 New
Segment Mix (EI revenue) ($USD Millions)Q4 2025n/a~ $25 EI, TB variable New

Assumptions disclosed in outlook: D&A $22.5M; SBC $10.5M; Other expense (net) $11.5M; restructuring/demobilization $16.5M; PP&E impairment $287.6M; WASC 82.3M shares .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
EV demand & regulationQ2: regulatory headwinds flagged; EV volumes stable at GM Administration removed CARB waivers/penalties; expect similar EPA actions; GM recalibrating production to demand Near-term EV reset; demand led, not incentive led
GM production outlookQ2: GM market share gains; optimism for Q4 Q3: Q4 volumes likely floor; IHS ~175k Ultium in 2026; discounting forecasts prudently Reset lower base then rebuild
Energy Industrial (Subsea/LNG)Q2: subsea lull despite strong partner backlogs; LNG dip; project uptick expected 2026 Subsea potential $15–$20M in 2026; supply Cryogel to CP2 LNG H1’26 Project pipeline normalizing in 2026
Adjacent markets (BESS)Q2: exploring adjacencies; building materials resumption BESS opportunity emerging as LFP density rises; working with two large players; minimal capex incremental Near-term revenue contribution possible
Cost structure & break-evenQ2: ~$65M fixed cost removed; Q2 adj. EBITDA nearly doubled QoQ Opex run-rate expected $20–$22M; adj. EBITDA break-even at ~$200M revenue; $0.50–$0.60 incremental EBITDA per $1 above break-even Leaner, scalable model
Plant II demobilization & asset saleQ1/Q2: impairment ($286.6M) and plan to monetize assets ~$50M+ Equipment sales to begin in Q4; building sale tail into 2026 Progressing monetization

Management Commentary

  • Don Young (CEO): “The U.S. EV environment has created a challenging backdrop…We expect to rebuild growth in our Thermal Barrier business after the market stabilizes, supported by the ramp-up of our European programs, including our newest award.”
  • Don Young (CEO): “We anticipate a strong 2026 for our Energy Industrial business as project activity normalizes. We also see near-term revenue opportunities from our diversification into adjacent markets.”
  • Grant Thoele (CFO): “For the fourth quarter, we currently expect total revenue between $40–$50 million…With $40–$50 million of revenues for Q4, we’d expect between -$14 million and to -$6 million of adjusted EBITDA.”
  • Grant Thoele (CFO): “We believe we can achieve adjusted EBITDA break-even approximately at $200 million of annual revenue…we expect to drop approximately $0.50–$0.60 to the bottom line on every dollar of additional revenue.”

Q&A Highlights

  • EBITDA break-even and margin path: Management reiterated break-even at ~$200M revenue and highlighted mix sensitivity (more Thermal Barrier accelerates break-even) and yield improvements taking hold into mid-2026 .
  • Energy Industrial growth magnitude: Subsea projects could contribute ~$15–$20M in 2026 with additional LNG project contributions; maintenance turnarounds expected to normalize and support growth .
  • European EV ramp and content: 2026 European OEM revenue expected at ~$10–$15M, with 2027 awarded European customers potentially >$150M at full volumes; European prismatic CPV typically $250–$350 per vehicle .
  • Channel inventory clearing: Distribution channel has “improved markedly” since earlier in the year, aiding Thermal Barrier demand normalization .
  • Stationary storage (BESS): Higher-density LFP designs create thermal propagation challenges; PyroThin being adopted, with similar tooling and minimal incremental capital required .

Estimates Context

MetricQ1 2025 Consensus*Q1 ActualQ2 2025 Consensus*Q2 ActualQ3 2025 Consensus*Q3 Actual
Revenue ($USD Millions)$82.7*$78.7 $72.5*$78.0 $73.4*$73.0
Primary EPS ($USD)-$0.07*-$0.06 -$0.10*-$0.04 -$0.00*-$0.06
  • Q1: Miss on revenue, slight beat on EPS*. Q2: Beat on both revenue and EPS*. Q3: Slight revenue miss and EPS miss*. Values retrieved from S&P Global.

Earnings Call Themes & Trends Table

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
EV regulation shiftRegulatory headwinds noted (Q2) CARB/EPA rollback accelerating; OEMs aligning production to demand Deterioration in near-term EV supply-side incentives
GM outlookGains in EV share; stable volumes (Q2) Q4 seen as floor; IHS ~175k Ultium in 2026 Reset lower then gradual rebuild
EI pipelineSubsea/LNG lull; recovery signal (Q2) Subsea $15–$20M ‘26; CP2 LNG supply H1’26 Strengthening for ‘26

Key Takeaways for Investors

  • Near-term EV reset is pressuring Thermal Barrier volumes and margins; Q4 guide implies negative EBITDA with uncertainty around GM production—position sizing should reflect near-term demand risk .
  • The FY25 guidance cut (revenue and EBITDA) resets expectations; watch for deliverability of Q4 range and signs of EV demand stabilization into early 2026 .
  • Liquidity remains strong ($152.4M cash), providing flexibility through the reset; asset monetization from Plant II equipment/building could bolster balance sheet in Q4 and 2026 .
  • Energy Industrial offers a 2026 growth bridge (subsea projects and LNG CP2), potentially offsetting EV volatility; monitor project awards and EI segment margins (36% target) .
  • European EV programs (ACC, new EU OEM award) and BESS adjacencies diversify revenue and may underpin 2026–2027 recovery—track SOP milestones and early orders .
  • Cost discipline and scalability: Opex run-rate targeted at $20–$22M and break-even at ~$200M revenue; incremental EBITDA $0.50–$0.60 per $1 above break-even highlights operating leverage in upside scenarios .
  • Trading implications: Expect sensitivity to regulatory headlines (EPA/CARB), GM production updates, and EI project announcements; guidance revisions and European award disclosures are likely catalysts.