Aspen Aerogels, Inc. Q1 FY2026 earnings call

On April 8, there was an operational disruption in the East Providence manufacturing facility due to an explosion in a high temperature oven. Staged restart expected in May. Energy industrial segment aims for 20% revenue growth in 2026 with drivers: sub-C pipeline, LNG and natural gas infrastructure opportunities, maintenance and turnaround work. Thermal barrier: US EV market in reset, EU thermal barrier revenue tripled in Q1, expects 10 - 15M revenue in 2026. Battery energy storage systems in development. Strategic review initiated to align growth strategy and capital allocation.

Energy industrial segment had revenue of $21.6 million in Q1 2026, thermal barrier segment had $16.3 million, total revenue $37.9 million. Energy industrial revenues declined 15% QoQ, thermal barrier was flat. Gross margin was 15% for energy industrial and 6% for thermal barrier.

Q2 2026 total revenue expected between $40M and $48M, adjusted EBITDA between negative $10M and negative $4M. Q2 guidance assumes GM production at annualized rate of ~55,000 - 65,000 vehicles. Anticipate 20% growth in energy industrial in 2026 with more project activity in second half.

Operational disruption in East Providence manufacturing facility may cause cost pressure in Q2 and potentially Q3 due to expedited freight, repair costs, and inventory build while restarting the plant.

Q: Just on the European demand for thermal barrier, following the record quarter on that front. Do you think OEMs are looking to accelerate production in part just because of the volatility in energy markets? Could you just talk about what you're hearing from customers in the pipeline? And also, would you expect to be leaning on the EMF to meet that ramp just with everything going on in Rhode Island right now?

A: In terms of the ramp, I think it's a little too early to associate their active first quarter and the levels of activity that we're seeing here in 2026 with higher energy prices and switching from ICE vehicles to EV vehicles. I think more broadly, though, this has been building for some period of time. We've seen significant EV market share gains in Europe, and the OEMs with whom we have won awards are beginning to benefit from that. In terms of supply, we want to We want to be sure that we have as much flexibility as we as we can and make sure we're capable of meeting expectations of our of our customers and everything that we can do to assure that we're going to do. And that that does include having capability in our East Providence facility and in our Chinese supplier.

Q: switching gears here to EI, I mean, you've talked about ultimately scaling that business to, let's say, a $200 million annual business. Do you have line of sight into just some of the sub-C and LNG opportunities that could really make that a real possibility before the end of the decade? And just what are some of the factors that ultimately would get youthere?

A: Yeah, I really think it's the three things that I touched on in my earlier statements, and certainly sub-C is one of them. If you think back, as I cited, our historic range for a long time going back, I want to say to 2008 or so, has been in the range of between $10 and $20 million. In 23 and 24, we had numbers that were closer to $30 million. And in 25, we had a very quiet year, a number less than $5 million. You know, we see a lot of activity going on, and it's not just the two awards that we've won to date, but the roster of opportunities. I can't remember when it's been stronger. And again, our value proposition and our record serving that market is outstanding. So that is definitely one component. And then LNG, as I said, again, in my statements, we're not just looking at the LNG kind of macro cycle. Our teams are engaged with the owners, with the EPC contractors in the field, accelerating projects and expanding some of the opportunities that we have there. So that has a good opportunity. I have said that We have the opportunity to double the size of that business compared to 2025, both in number of projects and in dollars. And we are aiming to do that. And then the third area has been kind of a quiet area for us. It's our day in and day out maintenance work, turnaround work that we do in refineries and petrochemical plants around the world. These refiners have been running their plants pretty hard and they've had relatively narrow maintenance windows. And we know that reliability is critical to them and that cycle will move and create opportunity for us in that nice baseload day in and day out revenue that we're accustomed to in that area. So if you add those three things together, we believe that that $200 million mark is a very realistic opportunity for us.