investor presentation -...

Investor PresentationAugust 2017

DisclaimerThis presentation contains statements that constitute “forward looking statements” under the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this presentation, including statements regarding our short‐term and long‐term growth strategies, efforts to develop and commercialize our products, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward‐looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward‐looking statements. The words “anticipate,” “believe,” “could,” “estimate,” “expect,” “guidance,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward‐looking statements, although not all forward‐looking statements contain these identifying words.

These forward looking statements are only predictions and we may not actually achieve the plans, intentions or expectations disclosed in our forward‐looking statements, so you should not rely on our forward‐looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward‐looking statements we make. We have based these forward‐looking statements largely on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results.

The information in this presentation is current as of August 4, 2017 and speaks only as of such date. We expressly disclaim any obligation to release any updates or revisions to any information presented herein, including any forward‐looking statements, to reflect any change in our expectations or projections or any changes in events, conditions or circumstances on which any such information or statements are based for any reason, except as required by law, even as new information becomes available. All information and forward‐looking statements in this presentation are qualified in their entirety by this cautionary statement.

In addition to results presented in accordance with U.S. GAAP, this presentation and related tables include Adjusted EBIDTA, a non‐GAAP financial measure. We have provided a reconciliation of this measure to net income (loss) the most directly comparable GAAP measure, which is available in “Reconciliations” starting on slide 17. We use Adjusted EBITDA as a measure of operating performance, because it does not include the impact of items that we do not consider indicative of our core operating performance, for planning purposes, including the preparation of our annual operating budget, to allocate resources, to enhance the financial performance of our business, and as a performance measure under our bonus plan. We also believe that the presentation of Adjusted EBITDA provides useful information to investors with respect to our results of operations and in assessing the performance and value of our business. Although we believe this non‐GAAP financial measure enhances investors’ understanding of our business and performance, this non‐GAAP financial measure should not be considered an alternative to or substitute for the accompanying GAAP financial measures.

The risk factors set forth in our Annual Report on Form 10‐K for the year ended December 31, 2016 and filed with the SEC on March 2, 2017, as amended by the risk factors set forth in our Quarterly Report on Form 10‐Q for the quarterly period ended June 30, 2017 and filed with the SEC on August 3, 2017, pursuant to the Securities Exchange Act of 1934, as amended, are incorporated by reference into this presentation and should be read in their entirety alongside this presentation.

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DisclaimerThis presentation contains market data and industry forecasts that were obtained from industry publications, third party market research and publicly available information. These publications generally state that the information contained therein has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. This presentation also contains estimates and other statistical data made by independent parties and by us relating to market size and growth and other data about our industry. We obtained the industry and market data in this presentation from our own research as well as from industry and general publications, surveys and studies conducted by third parties, some of which may not be publicly available. For example, this presentation includes statistical data extracted from an off‐the‐shelf market research report (World Insulation ‐ #3435) by The Freedonia Group, an independent international market research firm, and a separate custom market research report by Freedonia Custom Research, Inc., a wholly‐owned subsidiary of The Freedonia Group, or Freedonia, which was commissioned by us and was issued in January 2017. Such data may be outdated and involves a number of assumptions and limitations and contains projections and estimates of the future performance of the industries in which we operate that are subject to a high degree of uncertainty. We caution you not to give undue weight to such projections, assumptions and estimates.

The Freedonia Custom Research, Inc. Report, or the Freedonia Report, represents data, research opinion or viewpoints developed independently on our behalf and does not constitute a specific guide to action. In preparing the Freedonia Report, Freedonia used various sources, including publicly available third party financial statements; government statistical reports; press releases; industry magazines; and interviews with manufacturers of related products (including us), manufacturers of competitive products, distributors of related products and government and trade associations. The Freedonia Report speaks as of its final publication date (and not as of the date of this presentation).

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EXPERIENCED LEADERSHIP TEAM

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• President, CEO and member of Board of Aspen Aerogels since 2001

• Prior to 2001, worked in the U.S. and abroad in a range of senior operating roles for Cabot Corporation

• Graduate of Harvard College and earned an MBA from Harvard Business School

Donald R. YoungPresident & CEO

• Has served as CFO since 2006• More than 10 years of service as a SVP of New

England Business Service, in senior financial and operating roles

• Earned a BA in Economics from Middlebury College and an MBA from the Wharton School of the University of Pennsylvania

John F. FairbanksVice President, CFO & Treasurer

27%

3%

56%

2%13% USA

Canada

Asia Pacific

LatinAmerica

Europe

GeographyTargeted Energy End Markets2016 Product Revenue by Region

Designs, develops and manufactures innovative, high-performance aerogel insulation primarily used in large-scale energy infrastructure process facilities Offers a superior combination of performance and long-term value End users save money, reduce energy use, preserve operating assets and protect workers Global network of energy-focused distributors, contractors and engineering firms

Proven market adoption in $3.1 billion global energy infrastructure market Used by 24 of the world’s 25 largest refining companies; 20 of 20 largest petrochemical companies Initial installations in approximately 30% of the world’s 640 refineries Installed base of nearly 260 million sq. ft. and $650 million of product sales since 2008

ASPEN AEROGELS: AN AEROGEL TECHNOLOGY COMPANY

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REFINERIES PETROCHEMICALPLANTS

POWER GENERATION

LNG & GAS PRODUCTION

OFFSHOREOIL SANDS

© 2017 Aspen Aerogels

END MARKETS AND PRODUCTS

Refining

Used by 24 of the world’s 25 largest refining

companies

Petro-chemical

Installed by 20 of the top 20

petrochemical companies

LNG

Preferred by LNG & FLNG

for space saving design

Power

Maximum efficiency for

power generation

Offshore

Thin and durable for pipe-in-pipe applications

Other

Building Materials

District EnergyTransportation

Apparel

Hot Process Applications Cold Process Applications Ambient & LowTemperature Applications

6© 2017 Aspen Aerogels

UNIQUE TECHNOLOGICAL ADVANTAGES

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Amorphous silica solids Characterized by extreme

material properties Lowest density solid ~97% air

Lowest thermal conductivity

Best thermal performance of any widely used insulation product

Reduced corrosion under insulation Compact design and faster installation High durability and fire protection

Industrially robust Unique product form Proprietary manufacturing process Patent-protected – 95 issued

and 89 pending patents owned or co-owned worldwide

Focus on Thermal Our Breakthrough Technology

Advantages vs. Traditional Insulation

Our Aerogel Products


GLOBAL DISTRIBUTION NETWORK AND INSTALLED BASE

Distributor

Contractor

OEM

Installed Base

Installed in more than40 countries worldwide

36 sales & marketing employees and 68 distributors

8© 2017 Aspen Aerogels

INDUSTRY-LEADING END USERS

© 2017 Aspen Aerogels9

STRATEGY

AEROGEL TECHNOLOGY PLATFORM

CORE MARKETS

ADJACENT MARKETS

NEW MARKETS

Invest in and drive innovation

Penetrate and gain global market share

Leverage existing products and channels to add additional markets

Commercialize Aerogel Enhanced Products through strategic partnerships

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SUBSEA REFINERIES PETROCHEMICALPLANTS

LNG & GAS PRODUCTION

DISTRICT ENERGY POWER GENERATION


BUILD MOMENTUM THROUGH 2017

Build Commercial Momentum

• Each quarter stronger than the last

Grow Base Revenue

Foundation

• Revenue minus Subsea and Reliance

Launch Pyrogel

HPS • Diversified growth

© 2017 Aspen Aerogels11

Financial Overview

12

SIX MONTHS 2017 PERFORMANCEIMPACT OF WEAK ENERGY MARKET & IP ENFORCEMENT COSTS

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See slide 17 herein for a reconciliation of net loss, the most directly comparable GAAP measure, to Adjusted EBITDA for the periods presented.

Six Months Ended Change6/30/17 6/30/16 $ %


($ in thousands)

48,071$ 60,539$ (12,468)$ -21%42,156 47,359 (5,203) -11%

5,915 13,180 (7,265) -55%Operating Expenses 20,400 16,286 4,114 25%

(14,485) (3,106) (11,379) -366%(65) (78) 13 17%

Net Loss (14,550) (3,184) (11,366) -357%Adjusted EBITDA Add-backs 7,989 7,707 282 4%

(6,561)$ 4,523$ (11,084)$ -245%

Gross Margin 12% 22%

Adjusted EBITDA Margin -14% 7%

Total Revenue

Adjusted EBITDA

Operating Loss

Cost of Revenue

Gross Profit

Interest Expense, Net

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For the Year Ended December 31,

See slide 18 herein for a reconciliation of net loss, the most directly comparable GAAP measure, to Adjusted EBITDA for the periods presented.


($ in thousands) 2012 2013 2014 2015 2016

63,453$ 86,094$ 102,399$ 122,518$ 117,738$ 71,421 75,363 85,319 97,870 94,427

(7,968) 10,731 17,080 24,648 23,311 Operating Expenses 25,005 30,703 33,123 30,883 34,531

(32,973) (19,972) (16,043) (6,235) (11,220) Other Expense, Net (23,169) (27,639) (50,281) (182) (803)

Net Loss (56,142) (47,611) (66,324) (6,417) (12,023) Adjusted EBITDA Add-backs 36,996 45,796 69,364 15,482 15,969

(19,146)$ (1,815)$ 3,040$ 9,065$ 3,946$

Revenue Growth 38% 36% 19% 20% -4%

Gross Margin -13% 12% 17% 20% 20%

Adjusted EBITDA Margin -30% -2% 3% 7% 3%

Adjusted EBITDA

Operating Loss

Cost of Revenue

Gross Profit

Total Revenue

ANNUAL REVENUE & ADJUSTED EBITDA2016 OFF TREND DUE TO WEAK ENERGY MARKET & IP ENFORCEMENT COSTS

FINANCIAL GUIDANCE

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2017 Outlook(1)2016


(in thousands, except EPS) Actual Low High

117,738$ 104,000$ 112,000$

Net Loss (12,023)$ (20,800)$ (18,200)$

3,946$ (5,000)$ (2,000)$

EPS (0.52)$ (0.89)$ (0.78)$

Shares Outstanding 23,140 23,400 23,400

Depreciation & Amortization 9,853$ 10,600$ 10,800$

Stock-Based Compensation 5,313$ 5,000$ 5,200$

Total Other Expense, Net 803$ 200$ 200$

Gross Margin 20% Mid Teens

(1) This 2017 f inancial outlook specif ically includes litigation costs and expenses of our patent enforcement actions at the

U.S. International Trade Commission and in Germany. The amount of these litigation costs are projected to be betw een

$3.9 million and $4.2 million during 2017. Estimating litigation costs accurately is dif f icult and w e may incur other charges,

realize gains or losses, incur f inancing and interest expense, or experience other events in 2017 that could cause actual

results to vary materially from this guidance.

(2) See slide 19 herein for a reconciliation of net loss, the most directly comparable GAAP measure, to Adjusted EBITDA for

the periods presented.

Adjusted EBITDA(2)

Total Revenue

Appendices

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RECONCILIATION

17

Six Months Ended

6/30/17 6/30/16

Note: The table above presents a reconciliation of net loss, the most directly comparable GAAP measure, to Adjusted EBITDA for the periods presented.


($ in thousands)

Net loss (14,550)$ (3,184)$

Depreciation and amortization 5,306 4,826 Stock-based compensation 2,618 2,803 Interest expense, net 65 78

Adjusted EBITDA (6,561)$ 4,523$

RECONCILIATION

18


Year Ended December 31


($ in thousands)

2012 2013 2014 2015 2016

Net loss (56,142)$ (47,611)$ (66,324)$ (6,417)$ (12,023)$

Interest expense, net 21,790 30,599 50,281 182 147 Depreciation and amortization 9,684 10,061 10,183 9,887 9,853 Loss on disposal of assets 2,489 230 119 - - Stock-based compensation 1,654 4,426 8,781 5,413 5,313 Gain on extinguishment of convertible notes - (8,898) - - - Loss on exchange of convertible notes - 5,697 - - - Debt extinguishment costs 1,379 - - - - Financing costs - - - - 656 Write-off of costs associated with postponed public offering - 241 - - - Write-off of construction in progress - 3,440 - - -

Adjusted EBITDA (19,146)$ (1,815)$ 3,040$ 9,065$ 3,946$

RECONCILIATION

19


2017 Outlook2016


($ in thousands) Actual Low High

Net loss (12,023)$ (20,800)$ (18,200)$

Depreciation & amortization 9,853 10,600 10,800 Stock-based compensation 5,313 5,000 5,200 Other expense, net 147 200 200 Financing costs 656 - -

Adjusted EBITDA 3,946$ (5,000)$ (2,000)$

Investor PresentationAugust 2017

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