Aspen Aerogels (NYSE:ASPN) said it expects a sharp sequential increase in revenue and adjusted EBITDA in the third quarter, supported by energy-industrial project deliveries, rising General Motors EV production and expanding European demand for its PyroThin thermal barriers.
The company forecast third-quarter revenue of $65 million to $80 million and adjusted EBITDA of $7 million to $15 million. The outlook follows second-quarter revenue of $49.8 million, up 32% from the prior quarter, and adjusted EBITDA of negative $6.6 million, compared with negative $12.7 million in the first quarter.
Second-Quarter Results Included East Providence Incident Costs
Second-quarter revenue included $20.4 million from the Energy Industrial business and $29.5 million from Thermal Barrier. Thermal Barrier revenue included $4.9 million of previously deferred revenue recognized in connection with the GM settlement received during the first quarter.
Energy Industrial revenue declined 6% sequentially, which Chief Financial Officer and Treasurer Grant Thoele attributed to logistics and inventory challenges related to the conflict in Iran, as well as customer demand that shifted from the second quarter into the third quarter. The company expects Energy Industrial revenue to reach about $40 million in the third quarter, roughly double the second-quarter level, driven by LNG and subsea projects.
Gross profit was $3.3 million, or a 7% gross margin, reflecting lower production volumes and $5.3 million of incremental costs associated with the April incident at Aspen’s East Providence manufacturing facility. Excluding those incident-related costs, adjusted gross profit was $8.6 million, or a 17% margin.
Reported operating expenses were $32 million, including an $8.9 million property-damage loss tied to the incident. That charge was offset by an $8.9 million insurance receivable recorded in other income, as the company said it determined insurance proceeds were probable and expected in the third quarter. GAAP net loss was $23.3 million, compared with a $23.7 million loss in the first quarter.
Plant Restart Underway; Full Capacity Expected in 2027
Aspen began a staged restart of the East Providence aerogel plant on May 14, slightly more than a month after an explosion in a high-temperature oven damaged a specific area of the facility. Young said no employees were seriously injured.
The company expects to restore full production capacity during the first half of 2027. Aspen said it has avoided significant customer supply disruptions by using existing inventory, output from an external manufacturing facility and production from the staged East Providence restart.
Thoele said the company expects to continue recording incident-related expenses until the plant returns to full capacity. These costs include expedited freight, professional fees for restoring capacity and, beginning in the third quarter, incremental costs of sourcing certain Energy Industrial products from its external manufacturing partner. Aspen expects third-quarter incident-related charges of about $5 million to $10 million, which are included in its adjusted EBITDA outlook.
The company ended the quarter with $153.4 million in cash equivalents and restricted cash, compared with $175.6 million at the end of the first quarter. Its term loan balance was $79.5 million, while its revolver balance was $10.9 million. Management said it expects to at least maintain, and likely increase, its approximately $63 million net cash position by year-end.
European Thermal Barrier Outlook Raised
Aspen raised its 2026 European OEM Thermal Barrier revenue outlook to $20 million to $30 million from its previous expectation of $10 million to $15 million. European revenue totaled approximately $11 million in the first half, including $5.8 million in the second quarter, up from $5.1 million in the first quarter.
The company also announced that Jaguar Land Rover selected PyroThin thermal barriers for certain vehicle architectures supporting multiple models across its brands. The award makes Jaguar Land Rover Aspen’s seventh European OEM customer and brings its awarded European portfolio to nine vehicle platforms.
Management said most European programs have not yet entered serial production, though most are expected to start production in 2027. Aspen’s awarded Thermal Barrier pipeline represents $135 million of revenue based on customer-provided full-production volume assumptions and normal platform ramp profiles. The company said it is targeting $40 million to $60 million of European Thermal Barrier revenue in 2027 under more moderated assumptions.
In North America, Young said U.S. EV demand has stabilized at roughly 6% of new-vehicle sales. GM Ultium accounted for approximately 13% of U.S. EV sales during the first half, implying annual sales above 120,000 vehicles, according to the company. Aspen said GM produced vehicles below its sales rate during the first half, reducing finished-vehicle inventories, and now appears positioned to raise output in line with sales while rebuilding inventory modestly.
Energy Industrial and Battery Storage Growth Plans
Aspen continues to target approximately 20% Energy Industrial revenue growth in 2026 and said it sees an opportunity to sustain a similar pace in 2027. Young cited activity in LNG, subsea projects, maintenance and turnaround work, along with customer backlogs extending into 2027 and beyond.
The company expects LNG-related activity to more than double in 2026 from 2025 levels, with opportunities in the United States, Middle East and Africa. Young said Aspen is seeking to build Energy Industrial into a $200 million high-margin business without significant incremental capital investment.
Aspen is also pursuing battery energy storage systems as an adjacent market. The company said it is engaged in technical qualification programs and commercial discussions with utility-scale and critical-power developers. Management expects initial BESS revenue in the near term but said it is not incorporating meaningful BESS revenue into its 2026 expectations.
About Aspen Aerogels (NYSE:ASPN)
Aspen Aerogels, Inc, headquartered in Northborough, Massachusetts, develops and manufactures high-performance aerogel insulation materials and custom engineered solutions. Founded in 2001 as a spin-out from Department of Energy research, the company pursued an initial public offering on the NYSE in 2014 under the ticker ASPN. Aspen Aerogels combines proprietary aerogel formulations with advanced manufacturing processes to deliver products known for their low thermal conductivity, lightweight construction and robust mechanical properties.
The company’s product portfolio spans blanket insulation, boards, and custom shapes built around several proprietary brands, including Pyrogel, Cryogel and Spaceloft.
