Good morning. Thank you for attending the Aspen Aerogels First Quarter 2025 Financial Results Call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to turn the conference over to your host, Neal Baranosky, Aspen's Senior Director, Head of Investor Relations and Corporate Strategy. Thank you. You may proceed, Mr. Baranosky.

Thank you, Bruno. Good morning, and thank you for joining us for the Aspen Aerogels First Quarter 2025 Financial Results Conference Call. With us today are Don Young, President and CEO; and Ricardo Rodriguez, 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 Investors section of Aspen's website, www.aerogel.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 filings with the SEC. Please review the disclaimer statements on Page 1 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 Section 16 officers will file Forms 4 to report the sale and/or withholding of shares in order to cover the payment of taxes and/or the exercise price of options. I also wanted to highlight a near-term IR engagement on Wednesday, May 21. Management will be hosting one-on-one investor meetings at the B. Riley Securities 25th Annual Investor Conference. I'll now turn the call over to Don. Don?

Thanks, Neal. Good morning, everyone. Thank you for joining us for our Q1 2025 earnings call. My comments will focus on our performance, the status and expected impact of several key elements of our strategy and our view of the current environment. Ricardo will dig deeper into our Q1 financial performance, our strategy and will provide comments on our Q2 outlook. We look forward to your questions. Our goal is to build a strong and profitable company. The focus during Q1 was to strengthen our resilience by broadening our commercial activities in both EV thermal barrier and Energy Industrial businesses by building a robust and flexible supply chain and by optimizing our cost structure. This important work continues in Q2 and will continue throughout the year. Starting with our Thermal Barrier business, we secured, during Q1, a major PyroThin award with GM for a next-generation prismatic EV platform. This PyroThin award, following recent awards from Mercedes-Benz and Volvo Truck, demonstrates our value in additional EV battery form factors and chemistries and, we believe, is a clear endorsement of our innovation and trusted performance. This momentum validates our role in the electrification ecosystem and sets the stage for continued platform expansion across new and existing OEMs. We are also encouraged by the record level quoting activity in our PyroThin thermal barrier business, which we believe signals that the leading OEMs continue to invest in the battery electric platforms of the future, positions Aspen as a key technology partner and reinforces our strategic leadership in EV battery performance and safety. While the first quarter performance for the Energy Industrial business was on par with the first 3 quarters of 2024, it could not keep the torrid pace of Q4 2024 when we had record revenue of over $53 million. It has not…

Thank you, Don, and good morning, everyone. I'm happy to report another quarter on behalf of our team, starting on Slide 3. We delivered $78.7 million of revenue in Q1, which translates into a 17% year-over-year decline. This reflects an annual revenue run rate of almost $350 million and fell in line with our expectations for the quarter. Our Energy Industrial segment revenue saw a modest increase of 2% year-over-year by coming in at $29.8 million, reflecting the dynamics that Don mentioned in his remarks regarding inventory rebalancing at distributors and contractors, following 18 months of supply constraints and several project completions during the second half of 2024. EV thermal barrier revenue of $48.9 million represents a 25% decrease year-over-year as demand aligned with a lower vehicle production schedule at our key customers. We were encouraged to see General Motors continue gaining U.S. market share and manage finished vehicle inventory levels of EVs in a way that gives us confidence of a potentially more direct relationship between show floor sales and production demand for our parts. In Q1, company-level gross profit margins were up 29%, and our gross profit of $22.8 million represented a 35% decline over the same quarter last year. Our Energy Industrial business led with gross margins of 39%, and our EV thermal barrier business had gross margins of 23%, which was below our target of 35%, driven by reduced fixed cost leverage on lower production volumes and pricing initiatives. Early in the year and as part of longer-term additional award negotiations, we may occasionally and strategically leverage near-term prices to exchange commitments with customers as we expand our business. We expect the impact of those price actions to lessen over time as the benefits of ongoing productivity initiatives that we are aggressively pursuing materialize. While we…

Thank you, Ricardo. Before we move to Q&A, I would like to reiterate that we believe that electrification through this decade will be a major driver for both our Thermal Barrier and Energy Industrial businesses. The goal for the Energy Industrial team is to create shareholder value by expanding the baseload of revenue and profit for the company. PyroThin thermal barrier design awards for Mercedes-Benz, Volvo Truck and the recent additional award from GM are clear demonstrations that leading automotive OEMs continue to invest in next-generation battery electric platforms, and they are choosing Aspen as a key technology partner. These contracts add to our portfolio of long-term growth programs and position us for continued platform expansion with both existing and new OEMs. With a strong foundation in place, we are confident in our ability to adapt, innovate and deliver both critical solutions to our customers and durable value to our shareholders. Bruno, let's turn to Q&A, please.

[Operator Instructions] We do have our first question. It comes from Eric Stine from Craig-Hallum. Eric, you're line is now open. Can you hear us? Okay. I'll ask Eric to go back into the queue. We're not receiving any audio from your line. Okay. Our next question comes from Colin Rusch from Oppenheimer.

[Technical Difficulty] evaluating what to do with the Georgia facility. Is there some residual value that you guys might think about monetizing, thinking to just hang on to it and keep it for a little while? I just want to get a sense of what you're planning to do with that facility here.

Sure, Colin. We caught the tail end of the question. I think we missed the beginning, but if I -- let me just play it back to you, and let me know if it's -- if the question matches what our thinking is on what you were asking. So you're mentioning what our plan is in the near term for the plant in Georgia, right, whether we want to hold it or just get valuation up. No, I mean, we've been pretty clear on this since going back 3, 4 months ago on this that we want to just capture the value from it as soon as possible. I mentioned in my remarks that we're already looking to place some of the equipment with a few strategic buyers, and then we'll hold an auction for the remainder. And then you should see the plant get listed for sale here pretty soon. And we do have quite a bit of interest since it's a pretty unique asset in a very good location. And our goal is just to recoup cash from those assets here in the near term. It's obviously tough to sell stuff in the environment that we're in, but that's why we're sprinting to get as much of it sold as soon as possible.

Okay. Great. And then with the oil and gas business, the inventory clearing, I guess, what signals are you seeing from your customers at this point that have changed in the last, call it, 4 to 6 weeks that give you comfort that the inventory clearing is fully wrapped up? A – Don Young: Well, Colin, we have a reasonably clear view of our -- the supply that distributors and contractors hold, not perfect, but a reasonable view of that. And we have seen those levels decrease here in that time frame that you're talking about really over the course of the past couple of months at least. When I just compare 2020 -- where we are here in 2025 relative to 2024, we are basically on par with the first 3 quarters of last year. And yes, we had the gangbuster Q4. We had some extra project work in that particular quarter that came to an end during the quarter. We see project opportunities as we go through the year. And our expectation is that we will -- now that we've reached that equilibrium, I think, in the destocking process and the inventory of our distributors and contractors, that will build revenue over the course of the second half of this year and end up a year similar to our revenue levels from 2024.

Our next question comes from David Anderson from Barclays.

So I have a specific question on thermal barriers and kind of a broader strategic question. So in your commentary, you said lower content mix per vehicle. I'm just curious, is that a trend you're expecting going forward? Is that sort of a 1 quarter thing? And then sort of related to that, you talked about the next-gen LFP contract you have with GM. I would assume that's less revenue per vehicle as well just because of the nature of it. Can you just walk through that for a few minutes with me?

Yes, definitely. I mean this is exactly why content per vehicle is the wrong metric to apply to us as a supplier to the OEMs, right? We've seen this metric used by the Tier 1s broadly, and they get penalized when the content per vehicle goes down. In our case, it's a very different dynamic because as you know, the form factor of the cells inside of these battery packs are ultimately what drives the content per vehicle. And so this will definitely go down over the next several years and quarters as we launch more prismatic cell battery pack products versus the pouch-cell vehicles that we've been generally supplying up to this point. And the content per vehicle has drifted from over $1,000 a vehicle. Right now, we believe we're sitting at about $800 per vehicle. And if you recall on the prismatic cells, it could be as low as $200 to $250 per vehicle. So what we're more focused on is really just making sure that we consistently deliver 35% gross margins at a reasonable run rate and that we pay back all of the capital that we're deploying. And there's actually something pretty attractive in that within the prismatic parts that have the lower content per vehicle in the sense that we can share the equipment across various different OEMs which will enable us to pay back the CapEx much better than how we've been paying back the CapEx on the current pouch programs. So yes, I do think, just in general, CPV is not really indicative of what to expect from us when it comes to our ability to generate margins and pay back the capital that we're deploying. A – Don Young: David, I would just add one point to what Ricardo said. I would think of some of these new form factors and chemistries as being additive and not really replacements necessarily for our current business. This is an expanding market. And we anticipate -- we've anticipated this as we bid on these projects. So we're not particularly surprised by this phenomenon. But again, I'd like for you to think about it as a growing market with -- as opposed to kind of a zero-sum game across different product forms.

Right. Understood. An expanding market in a number of different ways, and you have other opportunities there. I totally understand that. My bigger strategic question is sort of around the U.S. market versus the European market for your business. Obviously, GM has lowered their expectation for the year. There are a lot of headwinds. I'm sure there's a lot of uncertainty in GM on the EV program. Just curious, just looking across the sea here into Europe and those areas there, I saw on your chart there, Mercedes, Volvo, a number of those other players over there. What's the opportunity for a European expansion? And are you thinking about maybe shifting that to Europe because that would seem to be at least a more opportunistic market at least over the next 3.5 years, I would think?

Yes. So, so far, those customers have not been averse to purchasing product made in Mexico. And we would prefer to supply that from Mexico with some warehousing in Europe, just to fully leverage what we've spent and invested in Mexico. And so we -- I think expanding into Europe is -- can be pretty risky if you don't have enough of a baseline set of demand to start that with. We see labor costs in Europe are nowhere near comparable with Mexico's, and so we think that -- especially as we try to use the same equipment for all of these programs, we think that supplying that out of Mexico makes the most sense. A – Don Young: And David, I would just add to that, that this is a set of customers who are dedicated to electrification. And over that time period that you mentioned will help us diversify and be a little less concentrated on our work here in the United States. And so these are good companies. We've worked extremely closely with them technically and commercially. And we're very optimistic that we'll have a great business in Europe.

Our next question comes from Eric Stine from Craig-Hallum back on the queue.

[indiscernible]

I don't think we're receiving any audio from Eric at the moment. [Operator Instructions] Our next person in line is going to be Leanne Hayden from Canaccord.

Just to start, can you please talk about any conversations or traction you may have seen with any South Korean EV OEMs?

Yes. I mean they've been in the pipeline for a while, and they're obviously interested in the product for cell-to-cell work. They did have a meaningful number of launches here recently. So in order to get on those vehicles, one would have had to have a product in 2019 or 2020. But our team is actively engaged for the next generation and some of the potential refreshes of those launches, either directly with them or with the cell manufacturers. A – Don Young: Yes, I would just emphasize that we are very close to both LG and to Samsung on the cell manufacturing side of it. And the Korean OEMs are good at what they do, and we're determined to partner with them and have them be a customer.

Okay. That's very helpful. And just additionally, how quickly can we expect any additional OEM wins to gather momentum and impact your P&L?

Yes. I mean that's what we were alluding to there on Slide 7. When we think about 2027 and in my prepared remarks, I mentioned that if we look at some of the additional OEMs that we are not currently in production with, those can add up to over $200 million of revenues in 2027. And we think that that's pretty meaningful growth, especially as the OEMs that we're currently supplying could keep growing by then as well. And then a lot of the quotes that we are working on now and some of the additional awards that we have now have pretty early 2028 start production dates as well. So it is fair to keep expecting the demand curve to get built up here from 2027 onwards from other OEMs.

We currently have no further questions. So I would like to hand the call back to Don Young for closing remarks. Over to you.

Thank you, Bruno. We appreciate your interest in Aspen Aerogels and look forward to reporting to you our second quarter results in early August. Be well. Have a good day. Thank you.

Ladies and gentlemen, this concludes today's call. Thank you for joining. Have a good day.