Aspen Aerogels, Inc.

Good morning. Thank you for attending the Aspen AeroGels Incorporated Q2 2025 Financial Results Call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to turn the conference over to your host, Neil Berenowsky, Aspen's Senior Director, Head of Investor Relations and Corporate Strategy. Thank you. You may proceed, Mr.

Berenowsky. Thank you, Megan. Good morning and thank you for joining us for the Aspen AeroGels Second Quarter 2025 Financial Results Conference Call. With us today are Don Young, President and CEO, and Ricardo Rodriguez, Chief Financial Officer and Treasurer. The press release announcing Aspen's financial results and business developments and the slide deck that will accompany our conversation today are available on the Investors section of Aspen's website, .aerogel.com. During this call, we will refer to non-GAAP financial measures, including adjusted EBITDA and adjusted net income. The reconciliations between GAAP and non-GAAP measures are included in the back of the slide presentation and earnings release. On today's call, management will make forward-looking statements about our expectations. These statements are subjects to risks and uncertainties that could cause our actual results to differ materially. These risks and uncertainties include the factors identified in our filings with the SEC. Please review the disclaimer statements on page one of the slide deck as the content of our call will be governed by this language. I'd also like to note that from time to time, in connection with the vesting of restricted stock units and or stock options issued under our long-term equity incentive program, we expect that our Section 16 officers will file Forms 4 to report the sale and or withholding of shares in order to cover the payment of taxes and or the exercise price of options. I also want to highlight a few near-term IR engagements. On Monday, August 11th, Ricardo and I will be hosting -on-one virtual meetings at the Oppenheimer 28th Annual Technology Internet and Communications Conference. On Tuesday, August 12th, and Wednesday, August 13th, Don and Ricardo will be hosting -on-one meetings at Canter Corps Junior University's 45th Annual Growth Conference at the Intercontinental Boston Hotel. Both conferences will also feature fireside chats. The live webcast of these presentations can be found on the Investors section of Aspen's website. I'll now turn the call over to Don.

Thanks, Neil. Good morning, everyone. Thank you for joining us for our Q2 2025 earnings call. My comments will cover our CFO transition, the expected impact of simplifying and streamlining our organization, our operating performance, and our view of the current environment and second half outlook. Ricardo will amplify these points with his comments. We look forward to your questions. As we announced in our Q2 earnings press release, Ricardo plans to step down from his position as Chief Financial Officer at the end of the third quarter. Ricardo joined the company in November 2021 as the Chief Strategy Officer and assumed the role of CFO in April 2022. He has been an invaluable partner to me these past years. He has elevated our game in many ways, which has directly resulted in our strong balance sheet and overall financial position. I'm deeply grateful for Ricardo's many contributions to Aspen and have no doubt that he has great things ahead in his career. We are pleased to announce that Grant Thaley will become Aspen's Chief Financial Officer at the end of the third quarter. Grant currently serves as our Chief of Staff to the CEO and our VP of Corporate Strategy and Finance. He has been with Aspen since 2021 and has played a pivotal role in shaping our financial strategy, including our mid-cap financing and our recent cost optimization efforts. Grant will be returning from parental leave later in August and will continue to work closely with Ricardo and the senior executive team to ensure a seamless transition. Our core objective is to build a strong, profitable, capital-efficient business. The focus during the first half of the year was to streamline and simplify the organization to optimize our cost structure, drive profitability, and build resilience. We have made significant progress. As shown in slide two by the red, blue, and green lines, we have shifted our fixed cost structure to drive profitability at lower revenue levels. We have removed approximately $65 million in cost, including lowering OPEC's back to 2022 levels on a run rate basis. We have also structured the company to require minimum capital expenditures. The Aerogel Manufacturing Facility in Rhode Island and our EMF Supplemental Supply are positioned to provide the capacity to meet significant revenue growth in the future and to support a flexible sourcing strategy aimed at mitigating risk associated with the potential for fluctuating tariff scenarios. It is clear that U.S.-based OEMs value domestic supply, and we are well positioned to serve them. In an environment where the growth rate in the EV market is facing regulatory headwinds, especially in the U.S., and the energy sector overall is in flux with a turbulent global economy, we have structured our teams and operating resources to build a resilient, growth-oriented, and profitable business. In Q2, we delivered revenue, gross profit, and adjusted EBITDA at the high end of expectations. The performance was led by our Pyrethin Thermal Barrier Business, which has been holding steady here in Q3. Our energy industrial segment is currently experiencing a slowdown in project activity, which traditionally contributes around 40% of the segment's total revenue. This has been particularly evident in our subsea market. Dating back more than 10 years, subsea revenue cycled between $5 and $15 million per year. In 2023 and 2024, it averaged approximately $30 million per year. While the whole of the energy industrial business is behind expectation, weak subsea is the main reason we are having trouble keeping pace with last year. If there's a bright spot in an otherwise unsettled energy environment, we are seeing key customers such as Technip FMC winning subsea projects in 2025 that we believe will translate into attractive project revenue for us in 2026. Similarly, after strong LNG revenues in 2024, we are seeing a dip in LNG revenues in 2025, but like the subsea segment, we are seeing opportunities for attractive LNG project work in 2026. Overall, we believe our energy industrial segment is well positioned for a policy approach in the United States that promotes an intensified focus on energy and power generation. We anticipate that we will grow revenue and produce high gross profit margins in 2026 and beyond. Looking ahead to the second half of 2025, our revenue outlook is roughly on par with that of the first half. The major distinction is that we anticipate generating approximately two times the adjusted EBITDA. This leverage reflects the progress we made during the first half of the year to streamline our organization and optimize our fixed cost structure. We are operating with discipline to build a business with strength and resilience and enhanced profitability. Ricardo, over to you.