ASPEN AEROGELS INC

Previous wording

We have entered into multi-year production contracts with a number of automotive EV original equipment manufacturer (OEM) customers to supply fabricated, multi-part thermal barriers for use in the battery systems of their EV models. These customers include General Motors LLC (GM), Toyota, Scania, Automotive Cells Company, which is a battery cell joint venture between Stellantis N.V., Saft-TotalEnergies and Mercedes-Benz (collectively, ACC), Volvo, and Volvo Truck. We are currently supplying thermal barrier production parts to GM, Toyota, and ACC, and thermal barrier prototype parts to a number of global manufacturers of EVs, grid storage and home battery systems. During 2025, 2024 and 2023, we sold $168.9 million, $306.8 million and $110.1 million, respectively, of our PyroThin thermal barriers, primarily to GM.

Current wording

We have entered into multi-year production contracts with a number of automotive EV original equipment manufacturer (OEM) customers to supply fabricated, multi-part thermal barriers for use in the battery systems of their EV models. These customers include General Motors LLC (GM), Toyota, Scania, Automotive Cells Company, which is a battery cell joint venture between Stellantis N.V., Saft-TotalEnergies and Mercedes-Benz (collectively, ACC), Volvo, and Volvo Trucks. We are currently supplying thermal barrier production parts to GM, Toyota, and ACC, and thermal barrier prototype parts to a number of global manufacturers of EVs and battery energy storage systems. During 2025, 2024 and 2023, we sold $168.9 million, $306.8 million and $110.1 million, respectively, of our PyroThin thermal barriers, primarily to GM.

Previous wording

On April 8, 2026, an explosion occurred at our manufacturing facility in East Providence, Rhode Island. The incident related to a high temperature oven and resulted in damage to a portion of the facility’s production space and the temporary cessation of operations (the April 2026 Incident). On May 14, 2026, we initiated a staged restart of the facility and we are proceeding with a phased ramp-up of production. To date, we believe we have mitigated any significant commercial impact of the disruption by working through existing inventory, leveraging the capacity of our external manufacturing facility, and resuming limited production at our East Providence facility. However, our ability to continue to mitigate the impacts of the disruption assumes that the staged restart of our East Providence manufacturing facility proceeds as we currently expect, and that we are able to continue to meet customer demand for our products through a combination of restored production in East Providence, production at our external manufacturing facility, and other efforts to mitigate the impact of the disruptions. If we are unable to resume normal operations at our manufacturing facility in East Providence in a timely manner or manufacture the full array of our products, it may impact our ability to meet customer demand, which could have a material adverse impact on our business, results of operations and financial condition. Even if we are successful in our mitigation efforts, if we experience increased customer demand, we may be unable to produce sufficient product to meet such increased customer demand, which could have a material adverse impact on our business, results of operations and financial condition.

Current wording

On April 8, 2026, an explosion occurred at our manufacturing facility in East Providence, Rhode Island. The incident related to a high temperature oven and resulted in damage to a portion of the facility’s production space and the temporary cessation of operations (the April 2026 Incident). On May 14, 2026, we initiated a staged restart of the facility and we are proceeding with a phased ramp-up of production. We have progressed toward restoring production capability at the facility and are aiming for completion in the first half of 2027. To date, we believe we have mitigated any significant commercial impact of the disruption by working through existing inventory, leveraging the capacity of our external manufacturing facility, and resuming limited production at our East Providence facility. However, our ability to continue to mitigate the impacts of the disruption assumes that the staged restart of our East Providence manufacturing facility proceeds as we currently expect, and that we are able to continue to meet customer demand for our products through a combination of restored production in East Providence, production at our external manufacturing facility, and other efforts to mitigate the impact of the disruptions. If we are unable to resume normal operations at our manufacturing facility in East Providence in a timely manner or manufacture the full array of our products, it may impact our ability to meet customer demand, which could have a material adverse impact on our business, results of operations and financial condition. Even if we are successful in our mitigation efforts, if we experience increased customer demand, we may be unable to produce sufficient product to meet such increased customer demand, which could have a material adverse impact on our business, results of operations and financial condition.

Previous wording

Our revenue for the six months ended June 30, 2026 was $87.7 million, which represented a decrease of $69.0 million, or 44%, from $156.7 million of revenue for the six months ended June 30, 2025. Net loss for the six months ended June 30, 2026 was $47.0 million and net loss per share was $0.57. Net loss for the six months ended June 30, 2025 was $310.3 million and net loss per share was $3.78. Revenue for the six months ended June 30, 2026 includes $8.4 million of revenue from a settlement agreement with a customer for $37.6 million for a claim for certain losses incurred arising from lower forecasted long-term demand by the customer which is being deferred and recognized as revenue over a period of approximately two years from the settlement date.

Current wording

Our revenue for the nine months ended September 30, 2026 was $172.9 million, which represented a decrease of $56.9 million, or 25%, from $229.8 million of revenue for the nine months ended September 30, 2025. Net loss for the nine months ended September 30, 2026 was $57.4 million and net loss per share was $0.69. Net loss for the nine months ended September 30, 2025 was $316.6 million and net loss per share was $3.85. Revenue for the nine months ended September 30, 2026 includes $13.2 million of revenue from a settlement agreement with a customer for $37.6 million for a claim for certain losses incurred arising from lower forecasted long-term demand by the customer which is being deferred and recognized as revenue over a period of approximately two years from the settlement date.

Previous wording

We use Adjusted EBITDA, a non-GAAP financial measure, as a means to assess our operating performance. We define Adjusted EBITDA as net income (loss) before interest expense, taxes, depreciation, amortization, stock-based compensation expense and other items, from time to time, which we do not believe are indicative of our core operating performance. These excluded items include costs related to the East Providence Incidents, including expedited freight, professional fees, and the incremental cost of temporarily sourcing certain Energy Industrial products from our external manufacturing facility until the East Providence facility returns to full production capacity. Adjusted EBITDA is a supplemental measure of our performance that is not presented in accordance with U.S. GAAP. Adjusted EBITDA should not be considered as an alternative to net income (loss) or any other measure of financial performance calculated and presented in accordance with U.S. GAAP. In addition, our definition and presentation of Adjusted EBITDA may not be comparable to similarly titled measures presented by other companies.

Current wording

We use Adjusted EBITDA, a non-GAAP financial measure, as a means to assess our operating performance. We define Adjusted EBITDA as net income (loss) before interest expense, taxes, depreciation, amortization, stock-based compensation expense and other items, from time to time, which we do not believe are indicative of our core operating performance. These excluded items include costs related to the East Providence Incidents, including expedited freight and expedited repair costs, professional fees, and the incremental cost of temporarily sourcing certain Energy Industrial products from our external manufacturing facility until the East Providence facility returns to full production capacity. Adjusted EBITDA is a supplemental measure of our performance that is not presented in accordance with U.S. GAAP. Adjusted EBITDA should not be considered as an alternative to net income (loss) or any other measure of financial performance calculated and presented in accordance with U.S. GAAP. In addition, our definition and presentation of Adjusted EBITDA may not be comparable to similarly titled measures presented by other companies.

Previous wording

Other (income) expense, net in the accompanying condensed consolidated statement of operations includes an $8.9 million insurance recovery receivable recognized in connection with the April 2026 Incident. For purposes of calculating Adjusted EBITDA, this amount has been presented separately to enhance comparability between periods.

Current wording

For the nine months ended September 30, 2026 Other (income) expense, net in the accompanying consolidated statements of operations includes an $8.9 million insurance recovery recognized in connection with the April 2026 Incident. For purposes of calculating Adjusted EBITDA, this amount has been presented separately to enhance comparability between periods.

Previous wording

Represents an $8.9 million insurance recovery receivable recognized in connection with the April 2026 Incident. This amount is included within Other (income) expense, net in the accompanying condensed consolidated statement of operations and fully offsets the loss on property damage recognized during the period.

Current wording

For the nine months ended September 30, 2026, Insurance recoveries represents an $8.9 million insurance recovery recognized in connection with the April 2026 Incident. This amount is included within Other (income) expense, net in the accompanying consolidated statements of operations and fully offsets the loss on property damage recognized during the period.

Previous wording

Represents items management believes are not indicative of ongoing operating performance related to the East Providence Incidents, including expedited freight and professional fees.

Current wording

Represents items management believes are not indicative of ongoing operating performance related to the East Providence Incidents, including expedited freight, expedited repair costs and professional fees.

Previous wording

Our financial performance, including such measures as net income (loss), earnings per share and Adjusted EBITDA, are affected by a number of factors, including volume and mix of aerogel products sold, average selling prices, our material costs and manufacturing expenses, and the amount and timing of capital and operating expenses. Accordingly, we expect that our net loss, earnings per share and Adjusted EBITDA will vary from period to period.

Current wording

Our financial performance, including such measures as net income (loss), earnings per share and Adjusted EBITDA, is affected by a number of factors, including volume and mix of aerogel products sold, average selling prices, our material costs and manufacturing expenses, and the amount and timing of capital and operating expenses. Accordingly, we expect that our net loss, earnings per share and Adjusted EBITDA will vary from period to period.

Previous wording

During 2025, we experienced a significant decline in volume for our thermal barrier products, primarily driven by lower North American EV production levels. As a result, total thermal barrier revenue decreased by 47% compared to the prior year. Our expectation for 2026 thermal barrier revenue is based, in part, on our OEM customers’ production forecasts. The automotive industry in which our OEM customers operate is cyclical and is sensitive to changes in consumer demand, regulatory environments, and broader economic conditions. EV adoption rates in certain markets have been lower than previously anticipated, influenced in part by changes in regulatory frameworks and incentive programs as well as evolving consumer demand. OEMs have adjusted production plans and investment timelines accordingly. These actions have resulted in revised capacity plans and re-timed EV-related investments, particularly in North America. In addition, changes in trade policy and other macroeconomic factors have impacted both our customers and our operating environment, and we expect these conditions to continue to influence demand. OEM customers continue to pursue cost reduction and product redesign initiatives, which may result in engineering changes to the components we supply. Our supply agreements generally include pricing step-down provisions over the production life of a program, consistent with industry practice. We expect thermal barrier revenues for full year 2026 to decline compared to 2025, primarily due to lower anticipated production volumes.

Current wording

During 2025, we experienced a significant decline in volume for our thermal barrier products, primarily driven by lower North American EV production levels. As a result, during the three and nine months ended September 30, 2026 total thermal barrier revenue decreased by 7% and 40%, respectively. Our expectation for 2026 thermal barrier revenue is based, in part, on our OEM customers’ production forecasts. The automotive industry in which our OEM customers operate is cyclical and is sensitive to changes in consumer demand, regulatory environments, and broader economic conditions. EV adoption rates in certain markets have been lower than previously anticipated, influenced in part by changes in regulatory frameworks and incentive programs as well as evolving consumer demand. OEMs have adjusted production plans and investment timelines accordingly. These actions have resulted in revised capacity plans and re-timed EV-related investments, particularly in North America. In addition, changes in trade policy and other macroeconomic factors have impacted both our customers and our operating environment, and we expect these conditions to continue to influence demand. OEM customers continue to pursue cost reduction and product redesign initiatives, which may result in engineering changes to the components we supply. Our supply agreements generally include pricing step-down provisions over the production life of a program, consistent with industry practice. We expect thermal barrier revenues for full year 2026 to decline compared to 2025, primarily due to lower anticipated production volumes.

Previous wording

In addition, we have experienced operational disruptions at our manufacturing facility in East Providence, Rhode Island in 2026, which have adversely impacted our manufacturing capacity and are expected to increase near-term costs. In January 2026, there was a fire at our manufacturing facility in East Providence, Rhode Island (the January 2026 Incident). The January 2026 Incident damaged one of our emissions control units and rendered it inoperable. Subsequently, on April 8, 2026, an explosion occurred at our manufacturing facility in East Providence, Rhode Island (the April 2026 Incident, and together with the January 2026 Incident, the “East Providence Incidents”). The incident related to a high temperature oven and resulted in damage to a portion of the facility’s production space and the temporary cessation of operations. On May 14, 2026, we initiated a staged restart of the facility and we are proceeding with a phased ramp-up of production. To date, we believe we have mitigated any significant commercial impact of the disruption by working through existing inventory, leveraging the capacity of our external manufacturing facility, and resuming limited production at our East Providence facility. However, our ability to continue to mitigate the impacts of the disruption assumes that the staged restart of our East Providence manufacturing facility proceeds as we currently expect, and that we are able to continue to meet customer demand for our products through a combination of restored production in East Providence, production at our external manufacturing facility and other efforts to mitigate the impact of the disruptions. If we are unable to resume normal operations at our manufacturing facility in East Providence in a timely manner or manufacture the full array of our products, it may impact our ability to meet customer demand, which could have a material adverse impact on our business, results of operations and financial condition. Even if we are successful in our mitigation efforts, if we experience increased customer demand, we may be unable to produce sufficient product to meet such increased customer demand, which could have a material adverse impact on our business, results of operations and financial condition.

Current wording

In addition, we have experienced operational disruptions at our manufacturing facility in East Providence, Rhode Island in 2026, which have adversely impacted our manufacturing capacity and are expected to increase near-term costs. In January 2026, there was a fire at our manufacturing facility in East Providence, Rhode Island (the January 2026 Incident). The January 2026 Incident damaged one of our emissions control units and rendered it inoperable. Subsequently, on April 8, 2026, an explosion occurred at our manufacturing facility in East Providence, Rhode Island (the April 2026 Incident, and together with the January 2026 Incident, the “East Providence Incidents”). The incident related to a high temperature oven and resulted in damage to a portion of the facility’s production space and the temporary cessation of operations. On May 14, 2026, we initiated a staged restart of the facility and we are proceeding with a phased ramp-up of production. We have progressed toward restoring production capability at the facility and are aiming for completion in the first half of 2027. To date, we believe we have mitigated any significant commercial impact of the disruption by working through existing inventory, leveraging the capacity of our external manufacturing facility, and resuming limited production at our East Providence facility. However, our ability to continue to mitigate the impacts of the disruption assumes that the staged restart of our East Providence manufacturing facility proceeds as we currently expect, and that we are able to continue to meet customer demand for our products through a combination of restored production in East Providence, production at our external manufacturing facility and other efforts to mitigate the impact of the disruptions. If we are unable to resume normal operations at our manufacturing facility in East Providence in a timely manner or manufacture the full array of our products, it may impact our ability to meet customer demand, which could have a material adverse impact on our business, results of operations and financial condition. Even if we are successful in our mitigation efforts, if we experience increased customer demand, we may be unable to produce sufficient product to meet such increased customer demand, which could have a material adverse impact on our business, results of operations and financial condition.

Previous wording

Restructuring and demobilization costs consists of severance and other personnel costs, and costs associated with the demobilization of our previously planned Statesboro Plant.

Current wording

Restructuring and demobilization costs consist of severance and other personnel costs, and costs associated with the demobilization of our previously planned Statesboro Plant.

Previous wording

During the fiscal year ended December 31, 2025, impairment of property, plant and equipment consists of impairment incurred on our previously planned Statesboro Plant and impairment of other property, plant and equipment in connection with a restructuring action.

Current wording

During the fiscal year ended December 31, 2025, impairment of property, plant and equipment consisted of impairment incurred on our previously planned Statesboro Plant and impairment of other property, plant and equipment in connection with a restructuring action.

Previous wording

Reflects the write-off of the net book value of property, plant and equipment damaged in the April 2026 Incident during the three months ended June 30, 2026.

Current wording

Reflects the write-off of the net book value of property, plant and equipment damaged in the April 2026 Incident during the three and nine months ended September 30, 2026.

Previous wording

Interest expense, net consists of interest expense and amortization related to our other financing arrangements including our Amended MidCap Loan Facility (as defined below), a failed sale and leaseback arrangement accounted as a financing transaction, and interest earned on the cash balances invested in deposit accounts, money market accounts, and high-quality debt securities issued by the U.S. government.

Current wording

Interest expense, net consists of interest expense and amortization related to our other financing arrangements including our Amended MidCap Loan Facility (as defined below), a failed sale and leaseback arrangement accounted for as a financing transaction, and interest earned on the cash balances invested in deposit accounts, money market accounts, and high-quality debt securities issued by the U.S. government.

Previous wording

Energy industrial revenue decreased by $2.4 million, or 11%, to $20.4 million for the three months ended June 30, 2026 from $22.8 million in the comparable period in 2025. This decrease was driven by a decrease in revenue from the global petrochemical and refinery markets of Asia, Europe, and Latin America, offset in part by an increase in revenue from the global petrochemical and refinery market of North America.

Current wording

Energy industrial revenue increased by $15.6 million, or 64%, to $39.9 million for the three months ended September 30, 2026 from $24.3 million in the comparable period in 2025. This increase was driven by an increase in revenue from the global petrochemical and refinery markets of Asia, North America, and Latin America, along with project-based demand in the European subsea market, offset in part by a decrease in revenue from the global petrochemical and refinery market of Europe.

Previous wording

Energy industrial revenue for the six months ended June 30, 2026 included $10.2 million and $8.2 million from two North American distributors, in comparison to $12.3 million and $5.3 million for the comparable period of 2025.

Current wording

Energy industrial revenue for the three months ended September 30, 2026 included $9.2 million and $5.9 million from two distributors, in comparison to $4.6 million from one distributor for the comparable period of 2025.

Previous wording

The average selling price per square foot of our energy industrial products decreased by 6% for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The decrease in average selling price reflected a change in the mix of products sold. This decrease in average selling price had the effect of decreasing product revenue by $1.3 million for the three months ended June 30, 2026 from the comparable period in 2025.

Current wording

The average selling price per square foot of our energy industrial products increased by 27% for the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The increase in average selling price reflected a change in the mix of products sold. This increase in average selling price had the effect of increasing product revenue by $8.4 million for the three months ended September 30, 2026 from the comparable period in 2025.

Previous wording

In volume terms, energy industrial product shipments decreased by 5% as measured by square feet of our energy industrial products shipped for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. The decrease in volume had the effect of decreasing product revenue by $1.1 million for the three months ended June 30, 2026 from the comparable period in 2025.

Current wording

In volume terms, energy industrial product shipments increased by 29% as measured by square feet of our energy industrial products shipped for the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The increase in volume had the effect of increasing product revenue by $7.2 million for the three months ended September 30, 2026 from the comparable period in 2025.

Previous wording

Thermal barrier revenue decreased by $25.8 million, or 47%, to $29.4 million for the three months ended June 30, 2026 from $55.2 million in the comparable period in 2025. During the three months ended June 30, 2026 and 2025, thermal barrier revenue included $23.7 million and $53.8 million, respectively, from a major U.S. automotive OEM. The decrease in thermal barrier revenue was driven by a reduction in the volume of parts ordered by our OEM customer and a lower contractual component price during the period compared to the same period in the prior year. Thermal barrier revenue for the three months ended June 30, 2026 includes $4.9 million of revenue from a settlement agreement with a customer for $37.6 million for a claim for certain losses incurred arising from lower forecasted long-term demand by the customer which is being deferred and recognized as revenue over a period of approximately two years from the settlement date.

Current wording

Thermal barrier revenue decreased by $3.4 million, or 7%, to $45.3 million for the three months ended September 30, 2026 from $48.7 million in the comparable period in 2025. During the three months ended September 30, 2026 and 2025, thermal barrier revenue included $37.3 million and $46.6 million, respectively, from a major U.S. automotive OEM. The decrease in thermal barrier revenue was driven by a reduction in the volume of parts ordered by our OEM customer and a lower contractual component price during the period compared to the same period in the prior year. Thermal barrier revenue for the three months ended September 30, 2026 includes $4.9 million of revenue from a settlement agreement with a customer for $37.6 million for a claim for certain losses incurred arising from lower forecasted long-term demand by the customer which is being deferred and recognized as revenue over a period of approximately two years from the settlement date.

Previous wording

Energy industrial cost of revenue increased $2.2 million, or 7%, to $34.8 million for the six months ended June 30, 2026 from $32.6 million in the comparable period in 2025. The $2.2 million increase resulted from an increase of $8.5 million in manufacturing costs, unabsorbed overheads and other operating costs, and an increase of $5.9 million in other related shut-down costs, partially offset by a decrease of $12.2 million in material costs due to lower volume.

Current wording

Energy industrial cost of revenue increased $8.9 million, or 58%, to $24.3 million for the three months ended September 30, 2026 from $15.4 million in the comparable period in 2025. The $8.9 million increase resulted from an increase of $6.0 million in costs due to the East Providence Incidents, an increase of $1.9 million in material costs, and an increase of $1.0 million in manufacturing costs, unabsorbed overheads, and other operating costs.

Previous wording

Total gross profit decreased by $40.6 million, or 84%, to $7.5 million in gross profit for the six months ended June 30, 2026 from $48.1 million in the comparable period in 2025. The decrease in gross profit was the result of the $69.0 million decrease in total revenue and the inclusion of certain related costs associated with the East Providence Incidents in cost of revenue.

Current wording

Total gross profit decreased by $0.2 million, or 1%, to $20.6 million in gross profit for the three months ended September 30, 2026 from $20.8 million in the comparable period in 2025. The decrease in gross profit was the result of the increase in cost of revenue, partially offset by an increase of $12.2 million in total revenue.

Previous wording

Sales and marketing expenses increased by less than $0.1 million, or 0%, to $7.0 million for the three months ended June 30, 2026 from $6.9 million in the comparable period in 2025. The less than $0.1 million increase primarily reflects increases in compensation and related costs.

Current wording

Research and development expenses decreased by less than $0.1 million, or 1%, to $2.5 million for the three months ended September 30, 2026 from $2.5 million in the comparable period in 2025.

Previous wording

Sales and marketing expenses as a percentage of total revenue increased to 14% of total revenue for the three months ended June 30, 2026 from 9% in the comparable period in 2025.

Current wording

Sales and marketing expenses as a percentage of total revenue decreased to 8% of total revenue for the three months ended September 30, 2026 from 9% in the comparable period in 2025.

Previous wording

In February 2025, we announced and began implementing a restructuring plan to realign our operational focus to improve costs and align capital expenditure to anticipated long-term demand. The plan included reducing our headcount and ceasing construction of our previously planned Statesboro Plant. Restructuring and demobilization costs include severance and other personnel costs of $3.1 million and facility closures and other costs associated with demobilization of $1.8 million for the three months ended June 30, 2025.

Current wording

In February 2025, we announced and began implementing a restructuring plan to realign our operational focus to improve costs and align capital expenditure to anticipated long-term demand. The plan included reducing our headcount and ceasing construction of our previously planned Statesboro Plant. Restructuring and demobilization costs include severance and other personnel costs of $1.3 million and facility closures and other costs associated with demobilization of $0.3 million for the three months ended September 30, 2025.

Previous wording

During the six months ended June 30, 2026, we incurred a $8.9 million loss on property damage associated with the April 2026 Incident.

Current wording

During the three months ended September 30, 2026, we did not incur any additional loss on property damage associated with the April 2026 Incident.

Previous wording

The $0.3 million decrease in interest expense, net for the three months ended June 30, 2026 is primarily due to the result of a decrease in interest income of $0.4 million.

Current wording

The $0.3 million increase in interest expense, net for the three months ended September 30, 2026 is primarily the result of a decrease in interest income of $0.3 million.

Previous wording

The $0.6 million of income tax expense for the three months ended June 30, 2026 is primarily related to an expense of $0.6 million related to our Mexican maquiladora operations. The $0.8 million of income tax expense for the three months ended June 30, 2025 is related to our Mexican maquiladora operations, in addition to a provision for state income taxes of $0.4 million.

Current wording

The $0.6 million of income tax expense for the three months ended September 30, 2026 is primarily related to an expense of $0.6 million related to our Mexican maquiladora operations. The $0.6 million of income tax expense for the three months ended September 30, 2025 is related to our Mexican maquiladora operations, in addition to a provision for state income taxes of less than ($0.1) million.

Previous wording

Energy industrial revenue decreased by $10.6 million, or 20%, to $42.0 million for the six months ended June 30, 2026 from $52.6 million in the comparable period in 2025. This decrease was driven by a decrease in revenue from the global petrochemical and refinery markets of Asia, Latin America, North America, Europe, and project-based demand in the subsea market.

Current wording

Energy industrial revenue increased by $5.0 million, or 6%, to $81.9 million for the nine months ended September 30, 2026 from $76.9 million in the comparable period in 2025. This increase was driven by an increase in revenue from project-based demand in the European subsea market, offset in part by a decrease in revenue from the global petrochemical and refinery market of Asia, North America, Latin America, and Europe.

Previous wording

Energy industrial revenue for the three months ended June 30, 2026 included $5.5 million and $4.6 million from two North American distributors, in comparison to $2.6 million and $1.7 million for the comparable period of 2025.

Current wording

Energy industrial revenue for the nine months ended September 30, 2026 included $14.1 million and $11.6 million from two North American distributors, in comparison to $16.9 million and $9.7 million for the comparable period of 2025.

Previous wording

The average selling price per square foot of our energy industrial products decreased by 5% for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The decrease in average selling price reflected a change in the mix of products sold. This decrease in average selling price had the effect of decreasing product revenue by $2.3 million for the six months ended June 30, 2026 from the comparable period in 2025.

Current wording

The average selling price per square foot of our energy industrial products increased by 9% for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The increase in average selling price reflected a change in the mix of products sold. This increase in average selling price had the effect of increasing product revenue by $6.4 million for the nine months ended September 30, 2026 from the comparable period in 2025.

Previous wording

In volume terms, energy industrial product shipments decreased by 16% as measured by square feet of our energy industrial products shipped for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The decrease in volume had the effect of decreasing product revenue by $8.3 million for the six months ended June 30, 2026 from the comparable period in 2025.

Current wording

In volume terms, energy industrial product shipments decreased by 2% as measured by square feet of our energy industrial products shipped for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025. The decrease in volume had the effect of decreasing product revenue by $1.5 million for the nine months ended September 30, 2026 from the comparable period in 2025.

Previous wording

Thermal barrier revenue decreased by $58.4 million, or 56%, to $45.7 million for the six months ended June 30, 2026 from $104.1 million in the comparable period in 2025. During the six months ended June 30, 2026 and 2025, thermal barrier revenue included $34.9 million and $101.2 million from a major U.S. automotive OEM, respectively. The decrease in thermal barrier revenue was driven by a reduction in the volume of parts ordered by our OEM customer and a lower contractual component price during the period compared to the same period in the prior year. Thermal barrier revenue for the six months ended June 30, 2026 includes $8.4 million of revenue from a settlement agreement with a customer for $37.6 million for a claim for certain losses incurred arising from lower forecasted long-term demand by the customer which is being deferred and recognized as revenue over a period of approximately two years.

Current wording

Thermal barrier revenue decreased by $61.8 million, or 40%, to $91.0 million for the nine months ended September 30, 2026 from $152.8 million in the comparable period in 2025. During the nine months ended September 30, 2026 and 2025, thermal barrier revenue included $72.2 million and $147.9 million from a major U.S. automotive OEM, respectively. The decrease in thermal barrier revenue was driven by a reduction in the volume of parts ordered by our OEM customer and a lower contractual component price during the period compared to the same period in the prior year. Thermal barrier revenue for the nine months ended September 30, 2026 includes $13.2 million of revenue from a settlement agreement with a customer for $37.6 million for a claim for certain losses incurred arising from lower forecasted long-term demand by the customer which is being deferred and recognized as revenue over a period of approximately two years.

Previous wording

Total cost of revenue decreased $6.1 million, or 12%, to $46.6 million for the three months ended June 30, 2026 from $52.7 million in the comparable period in 2025. The decrease in total cost of revenue was the result of a decrease in thermal barrier cost of revenue offset by an increase in energy industrial cost of revenue.

Current wording

Total cost of revenue decreased $16.0 million, or 10%, to $144.8 million for the nine months ended September 30, 2026 from $160.8 million in the comparable period in 2025. The decrease in total cost of revenue was the result of a decrease in thermal barrier cost of revenue, offset by an increase in energy industrial cost of revenue.

Previous wording

Energy industrial cost of revenue increased $2.0 million, or 14%, to $16.5 million for the three months ended June 30, 2026 from $14.5 million in the comparable period in 2025. The $2.0 million increase resulted from an increase of $8.1 million in manufacturing costs, unabsorbed overheads, and other operating costs, partially offset by a decrease of $6.1 million in material costs.

Current wording

Energy industrial cost of revenue increased $11.1 million, or 23%, to $59.1 million for the nine months ended September 30, 2026 from $48.0 million in the comparable period in 2025. The $11.1 million increase resulted from an increase of $9.2 million in manufacturing costs, unabsorbed overheads and other operating costs, an increase of $6.2 million related to the East Providence Incidents, and an increase of $6.1 million in idle plant capacity costs, partially offset by a decrease of $10.4 million in material costs due to a mix of aerogel products sold.

Previous wording

Thermal barrier cost of revenue decreased $30.6 million, or 40%, to $45.4 million for the six months ended June 30, 2026 from $76.0 million in the comparable period in 2025. The $30.6 million decrease was the result of a decrease of $25.8 million due to manufacturing costs and a decrease of $20.8 million in material costs, offset by an increase of $10.7 million in costs due to the plant shut-down, and $5.3 million related to the East Providence Incidents. Material costs decreased primarily due to lower volume and operational efficiencies generating lower scrap. Manufacturing costs decreased due to lower volumes in comparison to the same period 2025, benefits from the headcount reduction, and other cost cutting efforts.

Current wording

Thermal barrier cost of revenue decreased $27.1 million, or 24%, to $85.7 million for the nine months ended September 30, 2026 from $112.8 million in the comparable period in 2025. The $27.1 million decrease was the result of a decrease of $24.1 million in material costs and a decrease of $20.4 million due to manufacturing costs, partially offset by an increase of $13.8 million related to the East Providence Incidents, and an increase of $3.6 million in costs due to the idle plant capacity. Material costs decreased primarily due to lower volume and operational efficiencies generating lower scrap and tariff refunds received. Manufacturing costs decreased due to lower volumes in comparison to the same period 2025, benefits from the headcount reduction, and other cost cutting efforts.

Previous wording

Total gross profit decreased by $22.0 million, or 87%, to $3.3 million in gross profit for the three months ended June 30, 2026 from $25.3 million in the comparable period in 2025. The decrease in gross profit was the result of the $28.2 million decrease in total revenue and the inclusion of certain related costs associated with the East Providence Incidents in cost of revenue.

Current wording

Total gross profit decreased by $40.8 million, or 59%, to $28.1 million in gross profit for the nine months ended September 30, 2026 from $68.9 million in the comparable period in 2025. The decrease in gross profit was the result of the $56.9 million decrease in total revenue and the inclusion of certain related costs associated with the East Providence Incidents in cost of revenue.

Previous wording

Research and development expenses decreased by $2.2 million, or 27%, to $5.9 million for the six months ended June 30, 2026 from $8.1 million in the comparable period in 2025. The $2.2 million decrease reflects decreases in compensation and related costs of $1.2 million, driven by a headcount reduction, a decrease in utility expenses of $0.5 million, a decrease in operating material and supplies of $0.3 million and a decrease in facility maintenance costs of $0.2 million.

Current wording

Research and development expenses decreased by $2.2 million, or 21%, to $8.4 million for the nine months ended September 30, 2026 from $10.6 million in the comparable period in 2025. The $2.2 million decrease reflects a decrease in compensation and related costs of $0.8 million, driven by a headcount reduction, a decrease in utility expenses of $0.6 million, a decrease in depreciation of $0.5 million, and a decrease in operating material supplies of $0.3 million.

Previous wording

Sales and marketing expenses decreased by $1.7 million, or 11%, to $13.6 million for the six months ended June 30, 2026 from $15.3 million in the comparable period in 2025. The $1.7 million decrease reflects decreases in compensation and related costs of $1.3 million, decreases in marketing expenses of $0.3 million, and decreases in facility related expenses of $0.2 million, offset by an increase in other expenses of $0.1 million.

Current wording

Sales and marketing expenses decreased by $1.5 million, or 7%, to $20.4 million for the nine months ended September 30, 2026 from $21.9 million in the comparable period in 2025. The $1.5 million decrease primarily reflects decreases in compensation and related costs of $1.0 million, a decrease in marketing expenses of $0.4 million, and a decrease in other expenses of $0.1 million.

Previous wording

Sales and marketing expenses as a percentage of total revenue increased to 16% of total revenue for the six months ended June 30, 2026 from 10% in the comparable period in 2025.

Current wording

Sales and marketing expenses as a percentage of total revenue increased to 12% of total revenue for the nine months ended September 30, 2026 from 10% in the comparable period in 2025.

Previous wording

General and administrative expenses as a percentage of total revenue increased to 26% for the three months ended June 30, 2026 from 18% in the comparable period in 2025.

Current wording

General and administrative expenses as a percentage of total revenue increased to 24% for the nine months ended September 30, 2026 from 18% in the comparable period in 2025.