Aspen Aerogels (NYSE:ASPN) reported third-quarter revenue and adjusted earnings above its guidance, helped by energy industrial project deliveries, higher sales to General Motors and growing demand from European electric vehicle customers.
Revenue rose 17% from a year earlier to $85.2 million, exceeding the company’s forecast of $65 million to $80 million. Adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, were $19.8 million, above its $7 million to $15 million outlook. The company posted a GAAP net loss of $10.4 million, narrower than its $23.3 million loss in the second quarter.
President and CEO Don Young said the results reflected progress toward diversifying revenue and building profitability. Aspen also recorded its first revenue from battery energy storage customers and received its first data center infrastructure order.
Industrial Projects and EV Customers Drive Growth
Energy industrial revenue rose 64% from a year earlier to $39.9 million, including deliveries for two subsea projects. Young said liquefied natural gas deliveries were also strong and continued at a robust pace into the fourth quarter.
Aspen continues to target approximately 20% growth in energy industrial revenue for 2026. Young said the company has a subsea project in hand for 2027 and expects subsea revenue next year to fall within its typical annual range of $10 million to $20 million. He also cited accelerating LNG activity but said the company was not yet ready to provide a detailed 2027 outlook.
Thermal barrier revenue rose 54% sequentially to $45.3 million. That figure included $4.9 million of previously deferred revenue recognized in connection with a GM settlement received in the first quarter. CFO and Treasurer Grant Thoele said revenue from GM increased to $37.3 million from $23.7 million in the second quarter as production rates aligned more closely with sales.
European thermal barrier revenue reached a quarterly record of $8 million, up from $5.8 million in the second quarter. Aspen supplied seven European automakers across eight programs during the quarter and expects approximately $30 million in revenue from those programs for the full year.
Thoele said the company continues to target $50 million to $60 million in European thermal barrier revenue in 2027, when most of the programs are expected to begin serial production. Young said Aspen has no current plan to build a fabrication facility in Europe, though it is discussing warehouse capacity closer to customers.
Margins Improve as Restart Continues
Third-quarter gross margin rose to 24% from 7% in the prior quarter as higher volumes absorbed more fixed manufacturing costs. The result included $14.7 million in incremental costs associated with the April incident at Aspen’s East Providence facility. Excluding those costs, non-GAAP adjusted gross margin was 41%.
Thoele said the company is fully manufacturing aerogel blankets at East Providence while restoring the oven where the incident occurred. Aspen expects restoration to be completed in the first half of 2027, though incident-related charges may continue through the first two to three quarters of next year as the company builds inventory.
Aspen ended the quarter with $146.5 million in cash, cash equivalents and restricted cash, and a net cash position above $60 million. It received $15 million in property damage insurance proceeds during the quarter. Thoele said the cash balance did not include potential insurance reimbursement for approximately $20 million in incident-related charges incurred year to date.
Fourth-Quarter Outlook and New Markets
Aspen forecast fourth-quarter revenue of $60 million to $75 million and adjusted EBITDA of $5 million to $13 million. The outlook includes approximately $35 million in energy industrial revenue and $5 million to $10 million in incident-related costs added back to adjusted EBITDA.
For the full year, the company’s implied outlook calls for revenue of $233 million to $248 million and adjusted EBITDA of $5.5 million to $13.5 million. Thoele said Aspen remains confident it will at least maintain its net cash position through year-end.
In battery energy storage, Aspen’s initial third-quarter revenue came from parts supplied for advanced design and evaluation work. Young said the next steps include product qualification and customers winning projects using Aspen’s materials; he expects the business to contribute revenue in 2027.
Young said the first data center order, scheduled for delivery and installation in the fourth quarter, focuses on energy efficiency and thermal management. Aspen plans to use the installation as a case study to pursue additional orders.
About Aspen Aerogels (NYSE:ASPN)
Aspen Aerogels, Inc is an advanced materials company that develops, manufactures and sells aerogel-based products. Aerogels are highly porous materials used for thermal management, insulation and protection. The company serves customers in the energy, industrial, transportation and building materials markets.
Its product portfolio includes thermal barriers designed to help protect electric vehicle batteries from thermal runaway, as well as insulation products for industrial, energy infrastructure and building applications.
