Earnings call transcript Q4 2022

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Operator

Good morning. Thank you for attending Aspen Aerogels, Inc. 2022 Financial Results Call. [Operator Instructions]

I would now like to turn the conference over to your host, Laura Guerrant, Aspen's Vice President of Investor Relations and Corporate Communications. you. Thank

Ms. proceed, Guerrant. may You

Laura Guerrant

call. you, morning CEO; joining fourth and thank are conference for Ricardo Rodriguez, Officer. Good for Thank quarter Young, the and results and and us XXXX Aspen you year today Financial Elliot. Aerogels President us With Chief financial Don fiscal

as use management's housekeeping most accepted that financial would principles over press available announcing Aspen's like of Don. are a to financial the or address before of non-GAAP is There reconciliation The compared to section items a of applicable to and well business measures developments measures results few call website, Investors I as turning the U.S. accounting www.aerogel.com. on Aspen's generally the GAAP release

summary sheet operating summary XXXX. Included December of statement fourth in the the and ended summary and financial operations, and balance press statistics key for quarter XX, of XXXX a is year a a full release

like a I'd addition, to uploaded we that have conversation our deck In accompany slide our today. that website, highlight to will

can the archive deck for of one be will year. section at our approximately on Investors the today's webcast An of website. our You find website

Please note statements expectations, any business statements forward-looking forward-looking risks projections, uncertainties. will that to today and outlook, is prospects other regarding plans historical discussion estimates, targets, any statement fact. These include beliefs, and statements that including a our not are subject

section report release Form company's Aspen's with discussed differ be and factors website. yesterday, can presentation reports results from with expressed issued forward-looking in are most found those may the be the XX-Q. the The issued more press actual recent materially SEC, particularly Aspen affect press actual Aspen's release of could Investors the Page that of Aspen the in the in found results A in files detail also Aerogels list SEC and of in filings yesterday these X Company's the company's statements. can on annual on

February represent XX, of today company's XXXX. views the today as statements Forward-looking made

Aerogels reflect update circumstances. these forward-looking Aspen to to disclaims statements or events future obligation any

measures, with During including accordance this call, measures for financial measures financial These isolation with non-GAAP to substitute accordance non-GAAP not considered are in non-GAAP included non-GAAP financial most not be EBITDA. are GAAP reconciliations adjusted a as financial directly These in or and these and are of financial release. GAAP. we will refer intended of to in present prepared these The yesterday to prepared financial GAAP. why definitions in the results measures press a discussion measures we measures, comparable

final one And note.

ask session, to that Q&A a two questions time. the at During in you interest time, we limit of questions your the

questions questions. queue If beyond please get you get have additional back the to will we all the initial two, and into

turn I'll Don? call the now to Don. over

Don Young

joining Laura. Good morning, for our QX you us everyone. Thanks, call. Thank earnings XXXX for

for from our performance, and in with I outlook will our financing, our QX will comments detail. start development and OEM our our highlights business work. results outlook Ricardo EV on XXXX discuss

We will Q&A with a conclude session.

of robust $XXX which target of quarter, levels. million, thermal growth XX%. the had $XX up for surpassing nine book, us fourth slightly year from million $XX PyroThin revenue, the revenue barrier with industrial the surpassed million thermal nearly the During nearly order achieve to enabled XXXX mark times a and together record we barrier year energy the for our PyroThin

our same remain through the of first business of half the energy load we steady base and At result their PyroThin thermal strong to in second industrial half. expect revenue As believe the year thermal we XXXX, the year automotive will time, build look as with out the we expect in over operations, PyroThin which provide more compared revenue. year the to materially revenue a scale over barrier we OEMs barrier

revenue this of XXXX. demonstrated of $XX revenue double supports target QX with million in to objective consistent million reaching our nearly to generate year, XXXX, of our capability XXXX supply both Our revenue approximately and to demand from $XXX

we the margin and gross to demonstrates higher-capacity are of costs scale. XX% QX value utilization the The of eliminate making we redundant progress as

Our on to gains productivity are additional focused teams continuing outstanding in in XXXX. job now make QX did and an

longer-term XX%, made we progress gross are remains we've our target pleased While the margin QX. with in

to continue technical both commercial and engagement automotive prospective We with our customers. current deepen and

During QX, parts. prototype number we a of experienced record OEMs ordering

pipeline of propagation. non-PyroThin Several at their of in designs our mitigating barrier we during being part, risk entered thermal OEMs unsuccessful believe, earlier thermal the driven runaway least by development at XXXX, the

our is unique value have OEMs thermal presents we mitigating past, and and the We on the to customers we at in a deep that existing commercial described runaway to positioned of the our subject-matter and solutions with goal our our add the our expertise and technical well time of As dangers customers. achieve new relationships problem. important believe, based that deepening same automotive we technical challenging are multifaceted

major and parts last barrier thermal developments were group call. our German We brand battery letter There luxury platform LOI use for the the intended the and from since track across full are award. design for interesting a stage a a of puts their where earnings several qualification for of of a negotiations a OEM we of The intent the targeted firm related process received advanced believe, models. several captures us on

LOI broad with brand for OEM parallel approximately and earn vehicle an parts group. this this German order received to advanced million We OEM. us We for Group adoption other position believe a with that the within X.X important well within work the German commercial also brands same prototype the

to are we by new quote existing well thermal believe, More $XX have PyroThin positioned invited approximately to broadly, customers business. billion of been and we we succeed. prospective barrier Again,

On deep purchase $XXX we for XXXX have the million. order have orders business, of of already industrial a We over our book. side energy

petrochemical, and regions. robust activity levels commercial segments all and of across refining, our across LNG have We subsea major our

our Furthermore, maintenance price impact positively beyond. successfully are industrial We products and work. have implemented for and competing which energy in business, increases across QX all we should both project

baseload believe, of resiliency value safety, and energy valuable we for strategy global revenue growth, we pressures the our leverage is and geopolitical the industrial the balance LNG large by our flexibility markets. with early and of manage This revenue by stage our into strong growth our a a The end for fueled trend. the that strength our probability is during overall set example stream users. Even EV good industrial this economic Aerogel benefit outlook efficiency, technology is drivers of of mega the slowing of to diverse as of sheet promote energy of us by a a platform dynamic

quarter, During partially of fund executed for Phase the Statesboro, X use and Georgia construction We equity offering a offering publicly-marketed million, million intend Koch from facility the our approximately the of Aerogel to manufacturing from general to corporate $XXX purposes. successful Industries. the raising $XXX including a second fourth other we in proceeds

we and our a loan a X. are General periodic definitive time, same the construction be secured At construction Plant on of $XXX commitment with into loan with The proceeds the Motors of met. connection agreement lending equipment million a milestones entered drawn for can as in basis

financial The dimension to longstanding commercial Motors from another relationship. and our technical General adds commitment

coming course, deeply are in battery meet GM'S to generation commitment to success. We building in of with our demand GM's involved GM's part current We are appreciate years. the next platforms X Plant and and,

all calls, not macro from earnings chain challenges I construction be our inflationary by supply the marked last impacting major challenges two immune have projects. that and that X During virtually Plant said would are

to such schedule and the to We try adequate XXXX minimize cost so than doing managing revenue Phase more to X project order and pressures manufacturing million. are achieve in target of that capacity $XXX our proactively has

our OEMs General EV Toyota who are This we in level and LOI believe recent deep German as of other demonstrated development the serve manufacturing by capacity OEM. Motors, will our from business be as critical now pipeline

With financing all the our in QX, years growth the approach successful to will financing next continue of over plan. completed couple take to above we in of the

grant as and loan utilizing As strategic collateral and we equity prospective will government focus continue we capital. debt significant to programs supplement explore sources and our on sector fully of investors more to capital, and private on assets

for wide We of these safety course, business and our areas resiliency attract our most continue validate We will transformation are a range the capital of believe, U.S., especially balance strengthen chains sheet. critical believe, performance avenues supply battery and sources. energy strategy of to from and in and efficient, electrification, of

raising that correct. to execute the is long-term to the capital are strategy necessary for all our of us We above approach confident the

to many macro presented from the to to focused turn I over I to XXXX. year double to Ricardo, to preparing XXXX stayed triple but plan on team call revenue appreciation my to the past like our express XXXX revenue would XXXX Before challenges on Aspen. The of our and from executing employees

We are our with customers, cycle to by and guided create of positive mutual a suppliers benefit communities. our desire

the We very to at here of be group a talented working and Aspen happy I'm and of dedicated people team. part have

Ricardo, over you. to

Ricardo Rodriguez

Don. Thank you,

fourth year-over-year. This into quarter growth the financial year. start contributed revenue record in $XX.X revenues. last on million for increase annual of XXXX Slide X $XXX.X rate million our This revenues XXXX XX% run on delivered and XX% Starting highlights the is our year. in of recap for million. to our a QX, with in I'll over and which translates We of of delivery level revenues of of QX year-over-year $XXX.X the

doubling by the end thankful is revenues long-standing tripling our targets by of in truly our for them This growth I our XXXX end XXXX. well and line the the locations of with XXXX high-quality all rate then, am our came barriers EV Mexico, produce area, Rhode get in and industrial all team thermal as the out possible last deliveries door. energy Island, it and together Boston sales the international to of

there, that proved world-class barrier way. deliver EV in when is we our thermal the demand a can QX, In assets

up line demand, 'XX. of came in Motors to of of to supplemental order order of quarter, and our Speaking barrier in that ramps EV as thanks our for thermal second volumes demand XXXX this is half meant GM stabilize expectations QX spans with QX XXXX. the from a This the their General

This year. a $XX.X in leverage a increase also quarter over our prior the of enabled during of the and order operation us This to times thermal barrier deliver last manual XXX% total EV to in productivity a increase five is QX. Mexico over assembly million

barrier years. were over revenues almost nine-fold million, Our increase prior up XXXX $XX.X in an total EV thermal the

than revenues higher were higher higher allocating XX% of and They to we the year-over-year. QX if Our million, Energy EV $XXX.X X% year Aerogel weren't our increase. capacity would Industrial quarters barriers. brought million XX% That towards for prior production be thermal year-over-year the total an $XX.X

thermal Rhode as our more of start is in barriers, mix our to learnings we it product productivity in X plans. rate get into more excited revenue Georgia. those with Our out Aerogel profitably on go when EV detail towards can QX growing continue this later. plant aligning Island and I'll that our implement more be I tilted couldn't our run Plant prospects growth demonstrated on about

to where for expenses. summary main expenses percentage XX which $XX.X a of within points. up want our sales, Material close be we of percentage made provide I'll of digit Next, quarter million single to was points actually long-term, the

This can quarter-over-quarter XX of run of points rate. what improvement higher be delivered percentage a of is indicative sales, at

It's the prior quarters accounted margins also was QX prior were worth in our in converted during the but that that barrier that fact scrap manufacturing enhanced due thermal QX made Aerogel to costs slightly EV those of quarters. in into was for highlighting

year, of our $XX.X sales the are percentage up we've and as from million at away points of cost percentage material long-term For points these XX target. made least previously, our XX mentioned

quality sales points and manufacturing Conversion utilities, with direct These to convert points all supplies, costs, $XX.X of include of costs inspection. percentage labor, finished XX logistics, we of percentage million insurance, QX. required up overhead, in production of rent, as products XX costs process factory made describe These materials costs QX. compare all sales which elements and were into in

conversion points our is as to It be continue encouraging these points At towards where down to to driving cost and every areas run targets we leverage of revenues. the see we improvements sales, our team's we're of as and rate in percentage XX percentage to increases of increase ability making our drive to XX cost continue need making incremental our to unit. revenue operating these within expect grow continue

year, points these million of up XX our and made percentage sales. conversion the XX.X costs were For

with combined the assembly profit our investments Aerogel QX margins our to gross of establishment the to XX% from positive in Rhode plant go QX, of increase our our In XX% facilities in enabled in negative Mexico Island, in productivity to QX.

for our $X.X segment energy the gross Barrier. coming million represent to These Both with profit QX lines respectively and margins positive Thermal our million positively contributed gross XX% of and that from of $XX.X in $X.X of million from industrial coming profit EV product quarter. XX%

and a For Barriers reflecting the respectively. or negative margin of profit X% gross $XX.X was a $XX.X our Energy our gross million Thermal EV margins gross with profit of year $X.X XX% in million gross a profit Industrial in XX% million of segment and loss

These versus where Operating over $X.X million. QX by expenses, increase in QX. which are million QX an over $X.X enabling our had $X million QX million increase $XX and of of an quarter-over-quarter increased in growth of

off in development As on systems and things. and prior increases new process that tangible mentioned One, I've precisely quarters, on focused our have delivering our the drive streamline through we're productivity methods of and implementation leveling three OpEx productivity. benefits

OEM technical Putting awards pursuits sales world-class thermal our Two, these negative with milestones million $XX.X and barrier new of $X.X quarter. $XX.X prior QX these awards negative production million the during And QX our during adjusted year managing and the service. levels to EV prior efforts. elements through in our and R&D of together, EBITDA three, clear was million compared in negative efforts

the to loss $XX.X in negative million prior For $XX of XXXX, year. EBITDA was our million compared adjusted a

income we other reminder, we items taxes, compensation operating are expenses amortization, interest, loss believe depreciation, core adjusted a or performance net do that as indicative before of our As and EBITDA stock-based not define

In million $X.X stock-based items and compensation other of interest QX, these income. of included net $XX,XXX

$X.X $XX.X or million net per the $X.XX Our in per in share to same million QX of loss $X.XX loss quarter versus net or XXXX. a of share decreased

was loss $XX.X by net from million million. quarter-over-quarter $XX reduced Our

of For XXXX million share. the loss $XX.X net a or in year, or per compares was our to $X.XX per of loss $X.XX share, $XX.X which net million

XXXX was a our per $XX.X our is of shares at million shares. It of XX.X XXXX, that clarifying diluted of all worth of shares million weighted end share was average shares at number these XX the in fully and the for end earnings of outstanding calculations, XXXX, million outstanding number

that the stock long-term program, report I will officers units of to Section-XX next topic ordinary our that On would incentive in with count, vesting course over two equity note issued share of the Form-X's to like under In to file to were statutory restricted the the obligation, weeks. will our connection and that Aspen to company will withholding also by held sold tax the the of the vesting unissued would shares into want satisfy market these emphasize remain I by of related the RSUs. be not shares the

$X.X year $XX.X at turn cash million. I'll operating of balance These our of and in in increase needs sheet. to put operations that Next, then million cash negative for million adjusted of reflected EBITDA reflects needs used million our Cash our $XX.X million. cash flow in and a of quarterly $XX.X receivable increase accounts the $XX

thermal of during equipment progress expenditures Boston million center the buildings thermal labs of of R&D for the Capital advanced area. $XX.X and included Statesboro, construction our quarter main in operations, in Georgia partial X, development in construction the Plant barrier to assembly barrier the significant for our the automated our upgrades

with million, These range. million Progress brought the these our $XXX on our expectations. to below is in CapEx $XXX $XXX.X XXXX total line in projects million

Plant update the later a X construction more of plant provide end through in manufacturing on second have $XXX.X we the of progress presentation. on a towards capital meaningful expenses I'll this it. As our Aerogel incurred continues, XXXX million in

included by million proceeds Net equity prepayment XXXX. in from million million $X offering, net of $XXX.X QX originally BASF's and February of was which received provided financing repayment during $XXX.X activities of a of balance, our cash

at Industries XXXX at was $XX million of $XXX.X for common of financing stock a year in upsized to our share, issuance a and of pivotal ended the from on cash million proceeds equity XX. activities the and recently, million average note price million $XX.XX common at $XXX.X with featured per convertible growth issued public from $XXX from sale proceeds $XXX.X the $X.XX share proceeds million of of at net quarter shareholders' of per with driven $XXX.X of equity We Koch of offering funding a per and by $XX.X million. million $XX.XX that of a price November market net our share the net stock offering an most

I team since in year XXXX be every XXXX. our and expressed XX walk and will full that the our now million. to $XXX.X months XXXX revenues million turn call, double would be delivered outlook. the you logical expect to thinking doubling the X Earnings That revenues Slide $XXX.X QX to XXXX it be through of target our would our Having

barrier XX% our for In XXXX. our compared revenues XXXX growth we're of in for and revenue we triple what today earnings we is setting them between $XXX reiterated our PyroThin into XXXX. triple XXXX, year customers' demand then outlook double and With them thermal XXXX to be then plan about our QX million. to call, and know $XXX This XXXX our into million XX% to of the to between equivalent to

will this that is range realize year wide that We progresses. tighten the as a

driven XXXX, production to an steep by to vehicles our by are as ramp significant we powered what revenues increasingly in platform a of expect the being battery be However, in General just extent Motors. Ultium

of North for This transition our ramp year, we continued delay to to may doubling a the of XXXX continue are a year with and and the be this continues Star supplying that second was for half in the OEMs subject revenues target being our last XXXX year,

of surpass quarterly the executing XXXX in critical of year believe that our this throughout run will to of expect Because second we we XXXX. half the towards least half production thermal year. run materialize we XX% of not capacity during EV new expect Optimizing will our XX% in is the revenue year steep least role rate a Therefore, end until our a revenues. significant launches, our split our barrier Aerogel of a total play QX second the of at of QX revenues XXXX. This number nameplate at see the ramp rate to

XX% this With year. in year, of we're the this profit second half mind, in is and of rise we type demonstrated our gross that flexible to can the there. expect also Last of the demand when we challenge

we our sold XXXX reduce our million can improve our that We of approximately the by are for that would executing cost $XX and and several million. believe OpEx by over in profitability initiatives $X goods year,

also expense the in in of second anticipation base early are half of the that this we fixed of the However, conscious are year. carrying in revenues year, we the

at has Historically, the given that high expenses, investing minimizing expect, dividends. variance our the flexibility but pay in exceeded team quarterly these expectations will demand in fixed we

we technological personnel XXXX will and aim capitalize tempered commissioning and thermal optimize resources be in X, we through to EV as OpEx and our systems in are that at it productivity the maintaining Plant on investments lead barriers. our in more growth Our processes and driving and commercial expecting

of negative and million million between $XX $XX weighted shares With of negative expect year. $X.XX these EBITDA of average the XX for outstanding This adjusted of loss between we loss and share. and a of assumes actions, per a EPS outlook million EPS a $X.XX

In of addition, assumes million this XXXX $X.X compensation depreciation $XX of stock-based outlook expense million, million. interest expense of $XX.X and

expect as raising and $XXX our strengthening continue sources. incur also Plant in of expenditures capital year of $XXX the between XXXX, our Don project. principally million sheet will We balance range capital million wide we a remarks, earlier his from X In mentioned to for during by

can November million in term, made on supplement we to to the last of loan that General of we $XXX Plant Motors up near announced from with X. support $XXX also In We've that secured million rely funding the financing. ongoing commitment the equipment-backed year to of progress

that we in regulatory landscape. several fund managing potential as make continue very -- discussions to have also the a most We our of strategy our profitable we growth we supportive and collateral strategic that ensure

Plant XXXX our how productivity Slide million. how efforts has capacity. navigating design X, our over be rising processes a completed and cost $XXX Turning an in Plant X, the its of construction the to aimed to the material with roughly X team environments, flexibility and would provide a evolved, has at update cost December been of on Phase team of of a results XXXX, I'd XX% and of the estimated the X that our of overall design, increasing In like

is of costs. design cost million, or we Phase Now, driven the million and of $XXX material through two million higher Approximately, XX% estimate by the be XXXX, X increase. $XXX a to weeks $XX after towards of the the having $XXX this increase completed of project spent construction end million XX% and having

being the cost cement last difficult team rise of and industrial over months, of the what the of in a scale. the cost is commission a the industrial With of XX% any be a XX% rise valves in optimistic project rise construction, time backdrop through a the able to is cost of about to in the construction building manage proving XX% XX to

increase of the million driven X% remaining $XX The clarity plant. higher of level in of by or design is the

For defining we completion, XX% length plant's the design piping. of the example, at were

plant's design at completion, finer specifications the While the the involving has XX% piping detail. team

our what product to We've of production this process increase all know, cost also In capital of implementing a to we all about improvements and the Aerogel we've in our by higher optimize challenged design light flexibility and capacities it's environment, mix. our XXXX. thought team latest production how

a we can Phase $X.X our billion. total up to capacity for up mix, be annual $X.X our capacity revenue As plant of total X be to year capacity X and revenue of of Island in revenue the Plant for billion, optimize of Rhode annual per million of $XXX can

This estimate XXXX time, ready ago driving from believe awarded At revenues. opportunities. can incremental a additional revenue million X, increased for these PyroThin having to we these be point on $XXX Island Plant make anywhere prior for capacity that revenue of but of the for business seeing our year not our $XXX thermal X focused XXX% to compares revenue a on X million. long-term between where Phase plans, our of flexibility capacity EV for up estimated provided plant XX% volume XXXX our to barrier of the in we target we're assets plans to million million and we the of deliver just X. Phase an $XXX of $XXX spend over that that light and total Plant In our just Rhode to

like factors Later, X. through to of level the our and focus laid various with map customers Today, Slide the year, relay we'd engagement that our with compatible our were Throughout quote most around out attention team's let's on last XXXX. logically deeper we form world. our we PyroThin. chemistries views award to pipeline into on use dive Finally, battery the

America, North an have In to potential capture XXXX. and we XXXX we assess $XX revenues of billion estimated the between that

discussions of testing of quotes Europe, In to second approximately North American on progressed and $X us engaged estimate have the we active Our their value with quotes our to OEM nameplates. the providing be material the being from various of billion.

include to supplier LOI this a it's platform particular it value of in the to revenues selected procured being to can remarks. technology design. communication intent process, this potential announced name mentioned this that letter in because the this that expand that sourcing been it The protected is are isn't EV for We vehicle award These has awards while important be packaged mentioned from the platform's linked plates and his of more Don platform. the an also as this serves OEM award, it for in

get approximately We and parts on we to vehicle for Asia, and of X.X part prototype with be required as million progress sourced billion part meaningful OEM's a a assess are our the commercial through order XXXX. also platform. of over team supply $X quoted development division opportunities to In the continues scheduled awarded making commercial the to same work vehicle

enable safety programs. in of in LFP chemistries are for several XXXX. alone NMC are of pouch As provide our and LFP LFP these by solutions and to quotes seeing but the Chemistries inquire about types one popular are can in OEMs with cell of can we $XX some and prismatic see, billion opportunities China, West revenue

of been within relationships assembled opportunities battery our built OEMs to have opportunity that Tier with expand also two pipeline. OEM's This have battery multiple presents part and or quote with to teams these supply significant established a a we active as of Our have within multiple packs battery ones entities platform.

that, happy I'm to back Don. With turn call the to

Don Young

Ricardo. you, Thank

covered in beyond. XXXX and to We have the a stage four and XXXX and would I of for setting emphasize significant points. like today ground amount reviewing

finished First, from of a strong $XXX in XXXX we achieve our to revenue had to XXXX to ourselves XXXX with million. doubling record QX positioned and revenue target

of barriers barrier PyroThin for thermal been $XX pipeline customer robust. development customers business business. Between prospects, existing our is thermal invited billion we new Second, to and have PyroThin

We strong a existing new are important to customers add position to customers. serve in and

in potential Plant to actively are way we pressures XXXX that achieve to our of the for we and we on schedule focused and achieve gross leveraging profitability of customer $XXX as target our drive to XX% Third, X scale. a fourth, provides managing maximum of enables significant and are flexibility revenue significant to our margin us meet million efficiencies demand. cost And operating target

the to Elliot, let's turn please. call Q&A,

Operator

First Instructions] Stine from from Craig-Hallum. question today comes [Operator Eric

Your line is open.

Eric Stine

you II. talking where you'd talking at where here Plant I revenue has been away Phase be So maybe months, were a because guess Phase for about but Phase just bit and of X last process still about that to kind thought maybe can start X of $X.X first, and confusing, given you the Phase know I it over billion was from overall couple are the get when we capabilities. of with X That's you X were,

in some also it's expanding thoughts just Island? when maybe Rhode but completed. what And to also on on to more So, able be Phase maybe Georgia, you meaningful, how in pretty II of get steps, is are then this, the you would detail

Don Young

Eric. in Yes, talking we be world, about good that's mean, wouldn't question, no, anymore. I a ideal phases an

I Phase still there highlighting year worth think a out we though X the has is had X just given use is Phase over put ago It just Phase that as well. alongside label is a pave much obviously X higher to we that methods had been that outlined recalculate But X. add now that that amount now Phase infrastructure for we're capacity you the us for if that the the the using to way referencing.

ability extraction of so X roles. be to longest to through the X process would our be X add equipment and which facility, the from plant, now that would like time of happens argue Phases -- I the more And the Phases in what liquid more so, have cycle particularly to Phase incrementally is X the we the

And so, plan for focused in plant. of to before right on additional XXXX to half there these demand now, frankly, phases second the being expansion we're of going more just the the

my flex XXXX capture we to in we're with to us outlined revenues now that does think X I've Plant and we capacity. the But to remarks, beyond flexibility give revenue that as allocate our planning as what do well

your Rhode in to also product in delivered the length our a I applied make that vary really step. was significantly our changed the big between meaningful and think we been QX question team it's on multiple site process, to can within But get one the roll Island, run product the at rate range, the actually to -- what that us And we things has the it's plant in that really frankly, to that other. worth

as And products not, roll make which and to which is of those you result. square more just the them, it's as a same mix we're a the that able plant in able we product all out much see the get leaner on assuming to can prices, how Aerogel, we higher we're more of feet lengths, crank for prioritize

Ricardo Rodriguez

scale one our I sure a Eric, to would was ability were build, just -- as to the as have the XXXX be point just you megatrend just our a and our key to that revenue to of to tripling able design is, point frankly revenue upside target, and take more $XXX capability potential shape. see and as as reiterate the managing are first we continues reiterate we we meet we know, does foremost, and million business

Eric Stine

Got it.

CapEx with I $X.X capacity, revenue way number Phase so, maybe another $XXX the in you think think to And was X, were billion this, about but and targeting million.

you're amount think yes, increase increasing but really million to million, it's is $XX fair -- of about that million you're of for $XXX to it? an a way like $XXX a capacity. mean I effectively, So

Don Young

is. It

mean yes, we product $X.X capital It billion is But as in the more efficient trade-offs math, more the is math number. there with think now capacity. revenue the mix that lot are a implied right. is I I the plan how

Eric Stine

-- beyond be the Got moved you've And all today? just phase. is you'll to fair you're But the it. these longer you able They've OEM quote you're that in it and for your more kind charge things, quote that opportunities that to details testing do the that when the not notice Is still in to German have the OEM the on thanks there. I people that maybe and all detailed although of of announce phase. expectation then is, and say no pipeline, award the adding

Don Young

I several sort list are with would now those quote frankly were production or that them. parts actually assume One quoting on map There to be the we've added or had we're that material prototype where quote that pipeline. who and we're need here, are and two right. the quoted argue a playing prototypes would testing that sold charts Yes, when this this OEMs to testing, is the that those that program for parts we too. before of we testing

So clarifying on one only that's our thing worth is X, quotes. here included Slide production vehicle that, we

pipeline. code So, is vehicle production our this

Eric Stine

Got it.

Ricardo Rodriguez

-- other several say through originally. of And much I domain because I -- our be that our is would it's we've would period in our these I Eric, one than the with make characterized shorter that I our knowledge point is think is better the process testing I part make, one maybe gone observation expertise, OEMs. would to think as greater, seems product

the part and more so think OEMs process the on move through I urgency more quickly to well. there And -- as is

little than reasons, for to be testing tending that so, of is period And ago. shorter combination year a or a so think it a was I that

Operator

Our Oppenheimer. next Colin comes from Rusch question from

Your line is open.

Colin Rusch

about and trending? how as dynamics vehicle, leverage process, quoting this Could a guys. a as through as you of pricing well pricing content do talk the you're much from growing so per the that Thanks have is how going you guys little much bit perspective,

Ricardo Rodriguez

mean, fact testing further leverage think when these But and discussions, pipeline more. or at I that accelerate on advance are customers. only given we the any paying to we Don We, to here, able simple investing deliver data that back I are testing the we're one faster we pretty, that -- much the not the but capital and some has not message looks to I own definitely to to us leverage goes we as of our weakness. seen easy have when have through mentioned, say focused a laser wouldn't it

the into been pricing of really pricing go can I commoditized, selling and And the something right. we that, with think justify dynamics not that's

time is more the that, we spend are we price and And therefore on back paying so, well realize same supply special to here. and that of need that price. having a We're are aware at very the we but and we the a lot to saw focused capital of it

Don Young

target as as focused, business of And our call the margin gross we are stated on here, a very near here in it, course, of XX% we scale future.

So, that underlies our pricing strategy that concept.

will also process. be to us given to and We customers latitude firm value quoting our in that also significant has bring the believe these

Ricardo Rodriguez

short companies profitable. actually a It's that that a here being having gross team because XX% of year ways, and in across for really plus list good margins shouldn't sell our funny, on into to that shown we are some have we our doing markets be apologize we've

we most solving unique cut I all the of have strongly capital something back. when our share with capturing in when importantly and believe problem, think, are this and you a fair value you paying

Colin Rusch

a investments And you grow as just guys of talking XX the fair about? need over you XX scale to that you really the growth here to That's super trajectory and the cadence this months obviously, OpEx then you to a team little then are next helpful. make that the the amount. talk you business, support months and need Could to bit about

Don Young

Yes.

the my past tone here So, three on our probably quarters in heard remarks has over you've changed. this where

efficient to beginning it lot gone the year. big function at and we step second the that really seeing year that one was Then, started has our think So say, work I how then of last work. One done, where leverage last I of get of more we throughout actually would significant could XXXX half ultimately OpEx. during in really change we been in and two of functions increases the another all a literally through, one

are actually the more our investing my research as that IT side we've very but the slowed that expeditions, in focused are started remarks, to not on manufacturing And just only reducing are switching just processes delivering investing and and from really the people more milestones time-bound I've we've and it, clear that on in R&D our mentioned in driven adding spigot and processes, towards costs. OpEx hiring has our implementing improving systems,

encouraging archive from General when team we baseline of really commercial how test And then leverage work commercial the to were to to data has see it's been been to that on used our Motors these we accelerate initially working side, the actually an with build own able discussions.

chains And then, from on their of the added support implement and a we're and these people who bringing hired functions, and tools of the knowledge ways we've different working to of I outside we've now working capability are and lot their results. their are that tool yielding they new think

So, out support of we'll more and and sign this is need this growth the taper taking start the OpEx out tools it's we new but our had this hope take think, start year, OpEx that OpEx we up as flexible transition as processes, implement being this things or these actually being implemented I to same actually the at this particularly. we've side of ramp of function on time, that

Ricardo Rodriguez

just Yes, OpEx have anticipation. in I emphasize would invested in our that we

to amount to And we point, by as relative of so, disproportionate scale, at this going a wide any you're increases margin. grow, growth see a we as OpEx

Don Young

and than now, us be be all of pretty summarize to North not percentage rate. more points to so the maybe run $Xbillion mind, would my OpEx need OpEx it, in our Star high, right sales like Colin, for to revenues mean, XX we're I of a should

the on million to something We're get XX% back that also $XXX $X with And in on OpEx the billion. XXXX. revenues just we're so, the letting -- we're not down aligns bringing to just focused

Colin Rusch

That's target. helpful that long-term appreciate model. Thanks for the incredibly understanding guys. Really

Operator

question comes Riley. from from Chris next Our Souther B.

Your line is open.

Chris Souther

XXXX represents anywhere timing you XX% I And Thanks quoting? I'm German here. the any the the call, curious that OEMs if beyond of is what us that in then, you future when target Can from growing XXX% that for for plus. people the see that to XXXX do sense on including of said think visibility, XXXX program beyond questions years give taking platform? the XXXX. that just saying or of you we Is the awarded this XXXX, my to of any kind of adds business the that's of you're kind target think

Don Young

take the Yes, so, remark I'm into that the the of platform on that target up the by around to go awards. made the existing XXXX percentage happy first revenue then and one is

So, for yes, SOP. LOI is

I XXXX. think is the SOP that first in on platform

So, we of expect bit revenue a in do that from little XXXX.

all the time, right. we end the these the mean, it's market, up same as with the one have awards, you of those where you I value then, volumes of market been things right. than the we estimate if of two a of together conservative And OEMs, fairly And larger times that's put vehicle at all yes,

year actively ramp-up pushing working. is they can given same but the these team what and Everybody has can as are team If it. XXXX, their beyond, in plus to why understand the capacity that the or that how and this to be all is just we aspirations pipeline then flex just be value not quote one doing time, and of way our to of whether XXXX the why that's want we the in people cautious, And that we expressing looking, just awards that, the here forecast. we showing the the thought just XXXX of wrong scope want this electrification don't that see at we're just is profound high transition production becomes when to mainstream be

Chris Souther

Okay. No, makes certainly that sense.

So, the just had move it's volumes visibility, about more confidence would incremental just you talked previously folks? around from XX%, two XX% think those I the

Don Young

of the Yes, I say, it's volume. would more same to applied level confidence

Chris Souther

producing you're got to second year sounds like of then just of from gross looks -- in margins shipping maybe going to It be time end of kind the Okay, fluctuate be year. it the the the it. half. And pretty lot of ahead the of going to to PyroThin a like the beginning largely are

you product land give at for you in year, kind and a XXXX, the quarter does of to what should fourth shape like could first that stabilize? are we have trajectory the continue pretty saw looking rate for So, then what similar probably here the exit ramps of or and how sense incurred in full later, where the you half where margins the gross probably a PyroThin phenomenon you maybe scrap similar us costs but think ship

Ricardo Rodriguez

during so second hard into for of on the the that PyroThin, the all because really hinges year. go of the to us, Yes, it's it profitability really volumes one half

believe continues. can expectations shown we XXXX gross revenue think of a have gross our in our the if of we in that really make our then there, in and that the where into negative the that we'll the we've second there, the align progress can the kind this PyroThin gross to you if XXXX easily if dig demand out we and there PyroThin the However, year rate of do growth moves for year and then I QX point demand middle out mid-teens positive today XXXX particularly XX% mean, range, we margin ourselves is And in think, the we're from dig margins. I can when at in line is draw to that half. profit

Operator

comes next Potter Sandler. Our question from Piper from Alex

Your line is open.

Alex Potter

in know to I of that necessarily place. I think loan the question, weren't on first you're So could on first that of whether wondering any X at milestones money going you Plant the draw the to was some from if you you was draw on General contingent and comment going construction money Motors. that

on on updated thoughts So your just that curious topic.

Don Young

Yes.

the basically we already a and $XX draw $XXX between the this window offering public we the have The million of which that of spend that the been from now that complete September we Koch. the and site Georgia, completed got to it. work actually end year million requirement to we has draw in So, first from is

will by we of ready end million We've are contact close when that that early here and end receive they the And early April. Motors form our March, been General of April. on first draw have with basically point to $XX spent is this most at in the this here would we draw loan. at from the March, likely And

Alex Potter

were good. maybe OEM, is saying when these regard with this to into And can is being coming to LOI just the it instance into with profitable, less comments back earlier for this. value, is have things about you like pricing, you pricing Aspen to are apologize then talking to or in set this stone, I'm curious German very adding just conversations I like you more go appreciate you like just price. Okay, the going the don't

much or sort how to talk with let's with Now, broadly? come the have finalize do others the at in of Just at else Thanks. is in everything you placeholder you a and visibility that there relationship back this agreement? about more on will discussion stage and that of the pricing pricing end particular

Don Young

on than been this and have at point, pricing say, I on go negotiations. at of worth then is, and any you yes, through of point, the there this them part capacity right. point, Yes, team that. of has just indicative I think think, start the agreed really the allocating sort We the these but the that by And would driven at sense, more been evolve for design an turns usually several possible some quotes, it's the of iteration lot more. of knows it a art what may itself making really It's

Ricardo Rodriguez

both Alex at Yes, this LOI, that. terms on negotiated are mystery and commercial left There I technically is point. the pretty the not think, fully much

Operator

Canaccord George from comes Genuity. question next Our Gianarikas,

Your open. line is

George Gianarikas

potential on I'd like battery their of -- their spilled a decision on General and manufacturing lot move to there's some to obviously ink to manufacturing of been focused Motors capacity cylindrical.

means Just any it to fourth the for as your cetera, thoughts on your plant, what that, guidance et volumes. there

that to in production being venture halted going press I'd halt that and quoting I appears to second, production It battery their that And been they've just North -- the you're the of Ford like be around has that guess, fires. related to discussion about F-XXX might OEM Ford. American overnight, and there guess ask I'm and

touch could it. you Thank I'd questions, you. appreciate both if So, on just

Don Young

well. only Well, General -- as of done kind just the we're it GM speculation ink that would has with categorize activities GM closely I as as but activities current on on not of and question, engaged development most with the their Motors,

comment much So, that. I to don't on want too

ultimate sense lineup they think factors makes their various I exploring OEM be of as vehicles. for form to through any chemistries, think various it

of of about don't things, Motors, speculation I in doing anything really can would but all so, Korean one have sorts companies trade things, those to any put category knowledge just was think, those we it And these imagine of of the in publications. I particular General and talked so that specifically

to we've Georgia, have, Ford, read that stop respect you understand, With yes, the around come stop shipments you same things issue. to production, highlighted, articulated the think, battery I that originally and

think, I -- at refined across stored fire but that more to and battery at vehicle in a battery least into may category to this it. platform the another vehicle a the of a read vehicle I a least now propagated or fact next speculation, around fall as into of

so, I comes are events. in the and these and are that focused term. sensitive any performance they're from my certainly for view of platforms that is engaged highly And on long And they think, getting safety they Ford kinds brand of damage battery these creating to right

So, view. than don't that's specific you We the do. more know our sort situation a of lot about

George Gianarikas

much. your just these a not hit to so in -- -- because revenue decides potential XXXX. this other need fourth you to Is production that switch question of a Can back their should out don't or for this real have just there a in Thank tripling that some can go or we have this conviction years? to they cylindrical plant about that's therefore target of GM they I third these plant XX your General the something and reinforced by second about, Motors think maybe quoting -- they those ultimately, you If has this material. LOIs, kind Aspen is worry even wins might

Don Young

building Yes, this factories -- and not thank factories and it away far than having you, when comes is having I battery do knows factors and XXXX battery products XXXX very form chemistries. Ricardo better George. to and

a experiment potential fleet. think I will again, chemistries certain form that sense really factors differ with issue this all make their and I OEMs XXXX of for speculative to say, And and it as don't parts over issue. And so, I view may should

to XXXX factory away And not and is but General sort I'm short just I'm battery this logic battery very time to Motors. again assigning again, of assigning this development building. a in

an us that's risk So again, we today. for think don't enormous

Ricardo Rodriguez

of kind it's interesting. mean. I

XXX one and CapEx probably writing direction on OEMs there significant behind take, the there speculating that decided direction that is take. out decisions pretty OEM is every people for will about I that some any about these particular engineer this are what and stuff working to think there also

to this it's us they track really even a is engineers quoting And speak direction. switch built, if train basically cases, parallel a is we were not more say, track one the that some train is when tell really moving, quick I and that's built stuff, And these would than of, of in being a from next. X-year switching decision to track of on the

Operator

Osborne from Jeff comes Cowen. Our from next question

Your line open. is

Jeff Osborne

Thank articulate prepared you to why to other is attempts -- differentiation references just other you. approaches order as wondering, driver win. in mentioned failed engagement. I remarks, mitigate for investors around and and get common Hi, you question on? your that from fail technology that those what why Is something more can propagation the was Europe potentially of in for some to you sort your Don, a I

Don Young

touches various say, self-stabilization would involved. areas, it mechanical a and problem And those think think, Jeff, involved. task it's I what There uniquely. And on to that there of is upon I our are thermal an very easy think, constraints safety are issues material Well, effectively factors. those complex not issues I very or management, critical and each I triangulate is fire

the with one during and customers us do activity in has and believe again, critical in today, really apart that combination here it I think, that perhaps. our we're But other, position of existing are there And or the this customers is attributes of setting EV this that, do materials that thing we material stage both that is here. with prospective

Jeff Osborne

I can sense products Mexico automation? That's showed will those up reference and take most fully they in in think, when potential we transition this, place? are Mexico, place? or might give made, been validated the running helpful. maybe in is Ricardo. us on that but that where I And you the plans ramp you the made or Have but and automation manually then of up with QX the perspective have margin a are of you but missed for obviously on

Ricardo Rodriguez

place Yes, flex be of -- the that fully then equipment in the for quarter in the that basically off half up of We're year. manual be higher, the is place second production the half fully in takes transition second will our automated transition to second so still would this demand to our and keeping able the but if equipment. be

Operator

Dayal Our from Instructions] comes Wainwright. H.C. next [Operator Amit question from

Your is line open.

Amit Dayal

guidance for you me? Just guys, can hear on hi, next XXXX --

Don Young

Yes. Perfect. Yes.

Amit Dayal

thank Okay, you.

to in how Just for GM guide there see wanted from XXXX? is much the concentration

Don Young

We've right. bit. IHS I mean, a slide, their got there quite on from volumes the

as are a they were They are big driver. now. right QX well our they portion I driver up demand. big mean, a thermal in a and they barrier big So driver make of disproportionate

Amit Dayal

And you delivered understood. energy this you hand. million then expected I XXXX? respect industrial the with to have in highlighted in I all Okay. think, worth $XXX just guys to of orders that orders, be Is

Don Young

the side barrier would who of single be making to we that and feed receive mindful Yes. when that we time sure same plant, Those well. -- we're have strong orders thermal are those we to will of a again, business keeping -- as materials this people at trying the EV like

are of the of couple even orders first requested of been XXXX -- have the quarters some So, and those flexibility do purchase that material, have but for deliver way the year. we in we three all in

Operator

concludes Q&A. hand This our Mr. back to now I'll

Young for closing remarks.

Don Young

Elliot, your to our you. good to Thank first have interest you We appreciate forward your you, today. day. results April. reporting and in XXXX Aerogels a well quarter help for we Aspen Be look in Thank and

Operator

thank has to We'd now call like your you Today's for concluded. participation.

may disconnect now lines. your You

Aspen Aerogels (ASPN) 16 Feb 232022 Q4 Earnings call transcript