ASPN Q1 2024 Results

ASPN reported blow-out earnings on 5/1

-Revenue of $94.5M (+107.3% Y/Y) beats by $19.13M.
-13.6% EBITDA margins vs 2.6% EBITDA expected by analysts
-Also raised their EBITDA guidance from $30M to $55M which implies 14.4% EBITDA margins using their revenue guidance.
-Raised FY Guidance from $350M to $380M
-Operating income of $2.4 million, a $1.1 million improvement or 76% QoQ and $21.3 million improvement YoY

“We continue to execute the transition of our Energy Industrial products to our external manufacturing facility and dedicate our manufacturing plant in East Providence to the production of aerogel for EV thermal barriers. We believe the Q1 results further demonstrate that we have the capability with existing assets and supply arrangements to deliver $650 million of annual revenue with at least 35% gross margins and 25% Adjusted EBITDA margins,” commented Don Young, Aspen’s President and CEO. “We remain deeply engaged with a growing list of automotive OEMs and battery cell manufacturers and have strong conviction that we are providing a unique solution to a very challenging problem. We remain focused on scaling the five OEM awards that we have in hand alongside maximizing our Energy Industrial business.”

-Their new thermal barrier product is growing at 459% YoY and now makes up 69% of total revenue

-Looks like ASPN could have continued success with thermal barrier to support the hybrid/EV transition

Ricardo C. Rodriguez, Chief Financial Officer and Treasurer noted, "We added $10 million of revenue quarter over quarter, a 12% increase. More importantly, we increased Adjusted EBITDA by 42% quarter over quarter, to $12.9 million, and operating income increased by 76%, further validating the scalability of our operations. We are increasingly optimistic about our outlook for the year as our main automotive OEM customers capture their fair share of the EV market, and our Energy Industrial customers benefit from incremental supply through our external manufacturing facility." Mr. Rodriguez added, “These elements, combined with our team’s continued execution, enable us to raise our 2024 baseline Adjusted EBITDA outlook by 83%, to $55 million on $380 million of revenue, and to anticipate positive net income for the year.”

-Stock was up 57% yesterday and 5% today.

Full Press Release:

Aspen Aerogels, Inc. Reports First Quarter 2024 Financial Results and Recent Business Highlights | Seeking Alpha

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Thank you @FoolishJeff for raising this company on the board! I’ve been following them for a few quarters and trying to understand their business more.

The revenue growth of their PyroThin product are incredible. I’m trying to understand what the competitive advantage is and why the market has adopted the product so quickly.

My understanding is this is a product which coats a EV battery to protect against “thermal runaway” or the battery catching on fire. Sounds like Toyota and GM are adopting this product rapidly. I’m curious though why not Telsa, or if they have their own gel or don’t have any pyrogel.

The company also has Pyrogel which is more for refineries, chemical plants, and power generation stations which protects against fire hazards. It handles temperatures from -40F to 1200F.

Then there is Cryogel which is for protecting against cooling and handles temperatures from -460F to 257F, and is used in LNG (Liquified Natural Gas) and other petrochemicals.

It sounds like PyroThin is by far the fastest growing over Pyrogel and Cryogel.

I’ve only been able to find two competitors who are public but basically have incremental or negative growth and P/E ratios in the 10-15 range,

Cabot Corporation (CBT) - 5B market cap, P/E 13, flat growth
Saint-Gobain (SGO.PA) - Paris based, 40B market cap, P/E 15, -10% growth

Then some other competitors,

IBIH (China)
Guangdong Alison Hi-Tech (China)
Nanotech (China)
Armacell
Johns Manville
JIOS Aerogel - Singaporean series B startup, very small

I am trying to figure out why PyroThin is growing but these industry standard gels are not. From what I gather PyroThin design allows “breathing” of daily expansion and contraction of lithium-ion batteries. It protects at the cell level, is ultra-thin, lightweight thermal insulation.


It sounds like the company is ramping production at their Rhode Island facility to convert to PyroThin primarily.

I was also wondering if you know about their Department of Energy deal and what this entails? They say they are “deeply engaged” with the DOE on becoming a candidate partner in some program. I cannot tell the value or scope of this deal.


Ultimately while I like the growth in financials here, I’m still struggling to understand the competitive advantage and bit concerned all the growth relies on a single product of PyroThin. While it seems to be taking the market by storm, I’d like more assurances on the durability of this competitive advantage for the product. I’m fascinated though how they’ve been able to convince Toyota and GM to adopt it so fast.

Is their product just that vastly superior to the competition that word of mouth has spread like wildfire, and every EV maker is looking to coat their batteries in PyroThin?

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