Aspen Aerogels' CEO Don Young and CTO George Gould to Provide a Technology Primer and Roadmap of the Company’s Proprietary Aerogel Platform



KEY POINTS
  • The Aerogel technology platform is proprietary and can be modified to expand to new high-growth markets. It can make aerogels out of different types of materials, adding fibers and other types of reinforcements, thick foam, etc. and can make flexible materials, strong materials, and powders or films.
  • The company focuses on two types of materials in the aerogel platform. One is amorphous silica. Almost all current commercial products are formulated from it. Silica materials are sustainable and non-toxic. The other material is carbon, which is a new frontier for the company, and it can now make electrically conductive materials.
  • Aspen can customize the technology to address new opportunities in sustainability, purification, and energy storage, and has already introduced a line of aerogel thermal barriers for use in battery packs in the electric vehicle (EV) market.
  • The company has over 250 patents to protect its technology, with additional patents pending approval in the US and foreign jurisdictions.
  • Aspen recently launched PyroThin™ to impede thermal runaway in electric vehicles to capture the EV market. It has also developed carbon aerogel battery materials to boost the performance of lithium-ion batteries. The company’s strategy is to be OEM-agnostic. It believes its carbon aerogel business could exceed the silica aerogel business in both size and value.
  • The company has initially secured a multi-year contract worth a potential $1.3 billion of revenue over this decade with a US auto company to supply thermal runaway material. Aspen won a contract from an Asian company to supply materials for EVs. And expects additional OEM wins.
  • Aspen sees the hydrogen economy as a future growth engine with potential applications for its aerogel technology, specifically liquid hydrogen. The company plans to leverage its expertise in thermal management and passive fire protection for liquid hydrogen applications.
  • Management believes it can double revenue every 24 months, reaching an annual $450 million by 2025, representing a 40%+ CAGR between 2021 and 2025. By the end of 2023, it targets $225 million in annual revenue. And a 30% gross margin.
  • Our previous publications on Aspen Aerogels can be viewed here.
OUR INSIGHTS

The Opportunities

Aspen Aerogels has created a modified version of its aerogel insulation materials branded PyroThin™, a highly effective thermal barrier used to mitigate thermal runaway in lithium-ion batteries in electric vehicles. At its core, this product expansion creates a significant pivot for the company by enabling it to participate in the rapidly growing EV market. The overall Aerogel technology platform should continue to evolve and the company will look for additional high-growth markets and applications, creating a potential pathway for long-term growth. In this Management Series we will address the opportunities the company sees and also provide a review of the core technology.

The Obstacles

Although the potential revenue from the initial customer for PyroThin™ thermal barriers is significant, Aspen will likely need to expand its customer base in this market to reduce its reliance on the success of a single OEM in the EV market. In addition, given the market size and opportunity, competitive technologies might evolve and increase competitive pressure. Note that if Aspen successfully executes its strategic plan, it will need to expand annual capacity beyond the $200 million available in its East Providence, Rhode Island manufacturing facility.

EXECUTIVE DISCUSSION

About the Executives: Don Young, CEO of Aspen Aerogels (NYSE: ASPN), and George Gould, Chief Technology Officer. They have been with Aspen for the past 20 years.

Shawn Severson: What have been the parts of the company’s history that brought Aspen to the position that it is in today? How has the company evolved?

Don Young: We are celebrating our 20th anniversary as a company this quarter. We are rooted in our Aerogel Technology PlatformÔ, with its well-protected intellectual property (IP). Our strategy is to leverage our platform in large, interesting, and important markets. We started in the energy infrastructure space and brought efficiency, resource resiliency, and safety to that market. We worked on everything from subsea pipelines to refineries to petrochemical plants and, over the past 5-7 years, have had a very heavy presence in the LNG business.

We developed products with partners such as...

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