Aspen Aerogels Q2 2026 Earnings: Thermal Barrier Improves Sequentially

Aspen Aerogels (NYSE: ASPN) reported Q2 2026 revenue of $49.8 million, down 36% from $78.0 million a year earlier, while diluted net loss per share widened to $0.28 from $0.11. Thermal Barrier revenue improved 81% sequentially, but remained well below the prior-year level, and adjusted EBITDA turned negative amid lower revenue and disruption-related costs.

Core earnings data

The year-over-year revenue decline primarily reflected Thermal Barrier weakness tied to changes in North American electric-vehicle regulatory frameworks and incentive programs. Energy Industrial revenue also declined, although by a smaller percentage.

Lower revenue coincided with a sharp contraction in gross profit and a wider operating loss. Even after excluding specified incident, restructuring and impairment items, adjusted net loss increased substantially from the prior-year quarter.

Business and segment performance

Thermal Barrier remained the main source of the year-over-year decline, but its sequential improvement suggests that North American program volumes were stabilizing while European original-equipment-manufacturer revenue continued to ramp. Aspen maintained customer supply during the East Providence disruption by using existing inventory, external manufacturing and limited production from the affected facility.

On a sequential basis, total company revenue increased 32%, while Thermal Barrier revenue rose 81%. That recovery did not erase the year-over-year contraction, but it formed the basis for management’s higher Q3 revenue outlook.

Aspen also secured a PyroThin award covering two next-generation Jaguar Land Rover vehicle architectures and multiple JLR brands. Production is expected to begin in 2027; the company did not disclose the award’s expected revenue contribution.

Profitability, cash flow and the balance sheet

The April 2026 East Providence incident complicated the quarter’s reported results. Aspen recorded an $8.9 million property-damage loss and a corresponding estimated insurance-recovery receivable in other income. The company expects to collect that receivable in Q3, and the two items had no net impact on adjusted EBITDA.

Aspen separately incurred $5.3 million of incident-related costs, including expedited freight and professional fees. Those costs were included in GAAP results but excluded from adjusted EBITDA and adjusted net loss. Aspen plans to submit business-interruption insurance claims for them. Adjusted net loss nevertheless widened to $17.9 million from $3.2 million, showing that the deterioration was not limited to the excluded incident costs.

Q2 operating cash flow was an outflow of $16.2 million, reversing Q1’s $34.1 million inflow. For the first six months of 2026, operating cash flow remained positive at $17.9 million, compared with $1.7 million in the prior-year period. Cash, cash equivalents and restricted cash ended the quarter at $153.4 million, down from $175.6 million at the end of Q1.

Inventory decreased to $27.9 million from $38.2 million at the end of 2025. Total deferred revenue, including current and long-term balances, increased to approximately $35.3 million from $1.3 million over the same period.

Q3 2026 outlook

Management expects a meaningful sequential improvement in Q3. The revenue range has a midpoint of $72.5 million, approximately 45% above Q2 revenue, while adjusted EBITDA is expected to return to positive territory.

The adjusted EBITDA outlook excludes an estimated $5 million to $10 million of East Providence-related costs, including expedited freight, professional fees and the incremental expense of temporarily sourcing certain Energy Industrial products externally. Neither the GAAP net-loss forecast nor the adjusted EBITDA forecast assumes business-interruption insurance recoveries.

Management’s perspective

CEO Don Young attributed the improving outlook to accelerating Energy Industrial project activity, stabilizing North American Thermal Barrier demand and continued European Thermal Barrier growth. Management is also proceeding with a staged restart of the East Providence facility and expects the European Thermal Barrier business to generate $20 million to $30 million of revenue in 2026.

CFO Grant Thoele emphasized cost control and rebuilding earnings capacity. The planned move from negative Q2 adjusted EBITDA to a positive Q3 range is central to that objective, although the outlook excludes substantial incident-related costs.

Risks investors should monitor

• East Providence recovery: The plant remains in a staged restart. Delays in returning to full production could extend external sourcing, freight and professional costs beyond current assumptions.
• Insurance timing and recoverability: Aspen expects to collect the $8.9 million property-damage receivable in Q3 and plans to submit additional business-interruption claims, but its Q3 outlook does not assume recoveries for the latter costs.
• North American EV policy exposure: Regulatory and incentive changes contributed to the approximately 47% year-over-year decline in Thermal Barrier revenue. Continued stabilization is important to achieving the Q3 outlook.
• Gap between adjusted and GAAP results: Q3 adjusted EBITDA excludes $5 million to $10 million of incident costs, while Aspen still expects a GAAP net loss. Both measures are necessary to assess the pace of the recovery.
• Statesboro asset sale: A non-binding letter of intent for the Statesboro manufacturing assets expired without a definitive agreement. Aspen continues to market the assets, which had a carrying value of $32.2 million at quarter-end.

Summary

Aspen Aerogels entered Q3 with improving sequential demand, particularly in Thermal Barrier, but Q2 revenue, margins and adjusted profitability remained substantially weaker than a year earlier. The next major tests are whether the East Providence restart proceeds as planned, North American Thermal Barrier demand continues to stabilize and the company delivers the positive adjusted EBITDA anticipated in its Q3 outlook.