Aspen Aerogels, Inc.

Good morning. Thank you for attending the Aspen Aerogels Inc. First Quarter 2026 Financial Results Call. All lines will be muted during the presentation portion of the call and an opportunity for questions and answers at the end. I would now like to turn the conference over to your host, Neil Baranoski, Aspen Senior Director, Head of Investor Relations and Corporate Strategy. Thank you. You may proceed, Mr. Baranoski.

Thank you, JL. Good morning, and thank you for joining us for the Aspen Aerogels First Quarter 2026 Financial Results Conference Call. With us today are Don Young, President and CEO, and Grant Thaley, 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 investor section of Aspen's website, www.airgel.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 subject to risks and uncertainties that could cause our actual results to differ materially. These risks and uncertainties include the factors identified in our files 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 for to report the sale and or withholding of shares in order to cover the payment of taxes and or the excess price of options. I'll now turn the call over to Don. Don?

Thanks, Neil. Good morning, everyone. Thank you for joining us for our Q1 2026 earnings call. My comments will cover an April event in our manufacturing facility in East Providence, our growth outlook for the energy industrial segment, the evolving demand environment for electric vehicles, and our progress in developing a battery energy storage systems segment. I will also provide an update on our strategic review process. Grant will amplify Uh, these points with his comments on April eight, we experienced an operational disruption in our manufacturing facility in East province. The incident involved an explosion in a high temperature oven and resulted in plant damage confined to that specific area of the facility and the temporary cessation of operations. We are immensely grateful that no employees were seriously injured in the incident and want to recognize the Aspen team for their tireless work towards a safe and disciplined restart of the facility. We currently expect a staged restart of operations to begin in May, subject to continued progress in our mechanical, operational, and safety reviews, as well as ongoing coordination with local and state agencies. To date, we have mitigated any significant commercial impact of the disruption by working through inventory and by leveraging the capacity of our external manufacturing facility. It will take time to restore full capability to the EP plant, a task that will receive our full attention once we complete the restart phase. We are also working closely With our external manufacturing facility to enhance its capabilities to support our energy, industrial and thermal barrier segments, and to enhance short and long term supply flexibility. All of which is intended to strengthen our operational resilience and commitment to customers. Turning to our energy industrial segment, even with. a messy start to the year due to the E.P. disruption and delivery delays in the Middle East. We still have our sights set on 20 percent revenue growth for the year. We believe we will gain considerable considerable momentum in the second half of the year leading to further growth in twenty twenty seven and twenty twenty eight with energy security and supply diversification paramount and structurally higher energy prices projected our customer base is gearing with urgency for a multi-year investment cycle in global energy infrastructure from which we expect to benefit. These dynamics are translating into three clear growth drivers for our business. First, sub C, we continue to build a strong pipeline of opportunities that extend through the decade. We were recently awarded a second subsidy project deliverable in Q3 and with the win announced earlier this year, positions us in 2026 to be within our historical annual revenue range of 10 to 20 million dollars. Second, LNG and natural gas infrastructure. LNG has become one of the clearest and most dynamic growth lanes for us. We are seeing positive developments in the United States and in the Middle East with large scale energy infrastructure activity, moving from market interest into executable commercial opportunities. Our confidence is not based only on the macro cycle, but also based on our concrete engagement with project level execution. We are actively working with customers, EPC contractors, and construction teams, and believe we have the potential to increase our scope on several projects, which would increase our 2026 opportunity and extend visibility into 2027. We believe this supports our expectation that LNG related activity can approximately double in 2026 versus 2025, and provide continued momentum into 2027. Third, maintenance and turnaround work remains an important deferred demand opportunity. Refiners have continued to prioritize uptime and operate at high utilization, which has compressed some maintenance windows. Over time, reliability requirements should bring that work back into scope. and we remain well positioned to support customers as turnaround activity normalizes. Taken together, we believe these drivers support our expectation of approximately 20% growth in energy industrial in 2026. We anticipate building momentum through the second half of the year and remain focused on scaling this segment into a $200 million high margin business without the need for incremental capital investment. Turning to our pyro-thin thermal barrier business, the EV market in the United States remains in reset mode. Market share for EVs in the U.S. appears to be settling at approximately 5 to 6 percent, roughly half the level of when incentives and regulation favored EV adoption. GM's monthly market share for EVs this year has averaged 14.1%, which would suggest a sales rate over 100,000 EVs in 2026. GM produced EVs in Q1 and in April at levels below current sales volume, resulting in lower finished vehicle inventory levels. We anticipate GM will begin aligning production rates more closely with sales with its stated objective of operating in a demand-driven manner and adapting to current market conditions. GM has maintained its full line of EV nameplates and has stated that it remains dedicated to its long-term EV success, including in its Cadillac division, where EV sales represented 28% of total sales in 2025 and over 30% in Q1 2026. We see a different dynamic in Europe where battery electric vehicles now account for more than 20% of new vehicle registrations and where stronger structural drivers are supporting the early stages of production ramp up among the OEMs with whom we have design awards. Our EU thermal barrier revenue in Q1 increased more than threefold versus the prior quarter, prior year quarter. and we believe this momentum could translate into 2026 revenue in the range of 10 to $15 million. Across these European awards, we are supporting programs that incorporate battery cells from a diversified global supply base, including European, Korean, Japanese, and leading Chinese manufacturers. We are encouraged by our momentum in Europe and again believe the region will be an important contributor to our revenue in 2027 and beyond. Looking beyond our current segments, we are also advancing new growth opportunities. In battery energy storage systems, we are actively engaged in multiple qualifications and commercial discussions with developers serving grid infrastructure, data centers, and other high reliability applications. As system architectures evolve toward higher energy density, the thermal challenges increasingly resemble those we have already solved in EV platforms. With proven performance and domestic manufacturing capability, we believe we are well positioned to enter this market and generate initial revenue in 2026. Following a period of market change and internal restructuring, We initiated a strategic review in Q4 last year. Our goal was to execute a disciplined evaluation of our strategic options to ensure our growth strategy and capital allocation priorities were aligned with maximizing long-term shareholder value. The process allowed us to open the aperture to compare our existing opportunities to a wider array of strategic alignments and capital structures. While optimizing strategy is an ongoing endeavor for all good companies, we are confident that our current approach, scaling energy industrial, driving new growth and diversification for power-thin thermal barriers, expanding into adjacent markets, and continuing targeted R&D to create breakthrough opportunities, represents the best path to deploy our financial strength and deliver long-term value for our shareholders. Grant, over to you.