Gross margin improved to 32% in Q2 2025, rising three percentage points quarter-over-quarter amidst significant restructuring efforts. Adjusted loss per share of $(0.04) in Q2 2025 beat estimates by $0.07, though sharply down from $0.22 in the prior-year period (Q2 2024, basic, GAAP).
Aspen Aerogels (ASPN -6.49%), a company specializing in advanced aerogel insulation and thermal management solutions for electric vehicle batteries and industrial energy markets, reported its Q2 2025 earnings on August 7, 2025. The report revealed a mixed quarter: GAAP revenue exceeded analyst expectations at $78.0 million versus the expected $72.53 million. However, this figure was well below the $117.8 million reported in Q2 2024. Adjusted loss per share was $(0.04) (non-GAAP), also beating the $(0.11) Wall Street estimate. Gross margin showed sequential improvement, rising to 32% from 29% last quarter, reflecting cost discipline and restructuring progress. However, both revenue and earnings declined steeply compared to Q2 2024.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(0.11) | $(0.11) | $0.22 | -150.0% |
| Revenue | $78.0 million | $72.53 million | $117.8 million | (33.7%) |
| Adjusted Net Loss per Share | $(0.04) | $0.22 | (118.2%) | |
| Adjusted EBITDA | $9.7 million | $28.9 million | (66.4%) | |
| Gross Margin | 32.0% | 43.8% | (11.8 pp) |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
About Aspen Aerogels: Business Model and Strategic Focus
Aspen Aerogels develops and manufactures advanced aerogel materials that deliver thermal insulation and fire protection in demanding applications. Its two main markets are the automotive sector, where it supplies PyroThin thermal barriers for electric vehicle (EV) batteries, and the energy industrial segment, which uses Aspen's insulation products in oil refining, petrochemical, and liquefied natural gas facilities.
The company's current strategy targets growth in the electric vehicle market by supplying OEMs—original equipment manufacturers—such as General Motors, Toyota, and Audi. Its PyroThin barriers enhance battery fire safety and performance, a critical need as global EV adoption accelerates. In parallel, Aspen maintains a strong position in energy industrial insulation, counting major companies like ExxonMobil and Shell as customers. Proprietary aerogel technology and a broad patent portfolio underpin the company's value proposition, while strategic partnerships and flexible manufacturing support its broader aspirations.
Quarter Review: Financial Performance and Business Drivers
Aspen delivered mixed results in Q2 2025. While GAAP revenue came in above analyst forecasts, it declined from $117.8 million in Q2 2024 to $78.0 million. The company's thermal barrier product line, primarily PyroThin EV battery barriers, generated $55.2 million in sales.—a 13% sequential increase from the prior quarter in thermal barrier revenue. This trend reflects a broader industry shift towards battery pack designs that require less content, estimated at $800 per vehicle now, with projections as low as $200–$250 per vehicle for new prismatic cell platforms. Aspen noted its flexibility to adapt manufacturing for multiple customers, potentially mitigating future margin pressure.
The energy industrial segment, which supplies aerogel insulation to oil refineries and petrochemical plants, saw a sequential revenue drop of 24%, from $29.8 million in Q1 2025 to $22.8 million. The company attributed this primarily to customers reducing excess inventory held after previous supply constraints. According to management, distributor stock levels are now at equilibrium, with expectations for project-driven revenue to rebuild in the second half of 2025. Historical margin performance in this segment outpaces that of EV products.
Gross margin improved to 32% in Q2 2025, reversing some of the prior period's contraction. However, operating profit ratios remain well below year-ago levels given the decline in overall sales. On the bottom line, Aspen reported a net loss of $(9.1) million (GAAP), Net loss included $5.9 million in restructuring and impairment charges. Excluding these, adjusted net loss was $(3.2) million.
The company continued its focus on controlling costs and capital expenditures. Adjusted EBITDA was $9.7 million, a 98% quarter-over-quarter improvement, while cash and equivalents stood at $167.6 million as of June 30, 2025, down from $220.9 million at December 31, 2024. Management expects asset sales and a leaner operation to help maintain a net cash position through year-end 2025, but Aspen emphasized established relationships with global automotive and energy industry leaders.
Product Developments and Operational Updates
PyroThin, Aspen's main thermal barrier product for EV batteries, is designed to impede thermal runaway—a process that can lead to battery fires. During Q2 2025, Aspen continued supplying this technology to customers such as General Motors and Toyota. The earnings release noted continued awards from major original equipment manufacturers and the company secured a new contract with a leading U.S. auto maker for a next-generation prismatic lithium iron phosphate (LFP) platform, with production expected to begin in 2028.
In energy industrial markets, Aspen's high-performance aerogel insulation products are used for heat management and safety in refineries, petrochemical facilities, and liquefied natural gas operations. The period saw revenue from this segment fall sharply on a sequential basis, with management pointing to customer inventory normalization as the driver. As these supply chain trends stabilize, Aspen expects this part of the business to return to its prior year revenue pace.
The company remains committed to proprietary technology and intellectual property. At the end of 2024, its portfolio included 83 issued U.S. patents, 271 issued foreign patents, 63 pending U.S. patent applications, and 372 pending foreign patent applications spanning product design, chemistry, and production methods. Aspen continues to emphasize close collaboration with strategic partners in the automotive and energy sectors to support new product adoption and grow its addressable market.
Operationally, Aspen is undertaking significant restructuring to streamline its cost base, as reflected in restructuring and impairment charges recorded this quarter. Progress demobilizing its Georgia facility is ongoing, with asset sales planned to strengthen the balance sheet and reduce debt. The company is curbing further capital expenditures, aiming for only $10 million in the second half of 2025, excluding plant shutdown costs. A planned chief financial officer transition is set for the third quarter, as internal candidate Grant Thoele succeeds Ricardo Rodriguez.
Looking Ahead: Guidance and Investor Considerations
Management provided an outlook for the remainder of FY2025. For the second half of 2025, it projects revenue between $140 million and $160 million, with expected net income (GAAP) in the range of a $(7) million loss to a $3 million profit. Adjusted EBITDA (non-GAAP) is forecast at $20 million to $30 million, reflecting anticipated further benefits from cost reduction and restructuring. For FY2025, guidance is revenue of $297 million to $317 million and adjusted EBITDA (non-GAAP) of $35 million to $45 million.
Aspen cautioned that additional one-time charges, asset sales impacts, or unforeseen supply chain disruptions could introduce variability in results over the coming months. Revenue growth in electric vehicle and energy industrial markets, realization of cost-saving measures, and further asset monetization are areas for investors to monitor.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
