2Q21 Results: +28.5% Revenue Growth and +289 BPS Gross Margin Improvement Fuels Earnings Beat; Management Raises FY21 Guidance



KEY POINTS
  • On July 29, 2021, Aspen Aerogels announced its 2Q21 earnings results. The company delivered a strong quarter, beating consensus estimates and raising guidance for the second time this year. Management also reiterated its long-term goal to double revenue twice through 2025 and to continue that pace of growth through the decade.
  • Revenue grew +28.5% y/y and +12.7% q/q driven by the beginning phase of the post-COVID recovery in its maintenance related business in the global petrochemical and refinery markets, solid growth in its European green building business, and continued shipments to the Arctic LNG project.
  • Gross margin improved +289 bps y/y and +38 bps q/q from manufacturing plant leverage associated with higher volumes (shipments increased +35% y/y to 90.9 million square feet and ASP fell 5% to $3.19 per square foot).
  • Compared to the prior year quarter, net loss widened by $1.0 million and adjusted EBITDA fell by $1.4 million as the company increased opex investments in personnel, infrastructure, and related activities to support its PyroThin™ thermal barrier and battery materials businesses.
  • The company ended the quarter with $102.3 million of cash on hand and total debt (including leases) of $16.8 million. Cash increased by +$85.0 million, compared to 1Q21, fueled by the company’s $75.0 million private placement with Koch Strategic Platforms (KSP).
  • In 2Q21, Aspen won additional scope for PyroThin™ in the battery platform of its major US automotive customer. Management believes this has increased the cumulative revenue potential through 2030 from this customer by +30% to $1.3 billion. The company also enhanced its Aspen Battery Materials (ABM) strategy to develop and commercialize its carbon aerogel battery materials.
  • Management raised its FY21 guidance and now expects total revenue of $110-118 million, net loss of $28.9-31.7 million, adjusted EBITDA loss of $14.7-$17.5 million, and EPS loss of $0.94-1.04 per share. Management also projects a gross margin in the mid-teens and an ASP of ~$3.35 per square foot.
  • The company also estimates FY21 capex of $18-23 million and believes its current cash balance and available credit under its SVB facility will be sufficient to fund its near-term operating requirements and its strategic capex plan.

EARNINGS SNAPSHOT

On July 29, 2021, Aspen Aerogels announced its 2Q21 earnings results. The company delivered a strong quarter, beating consensus estimates and raising guidance for the second time this year. Management also reiterated its long-term goal to double revenue twice through 2025 and to continue that pace of growth through the decade.

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