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Shares of Aspen Aerogels (NYSE: ASPN) jumped 15.6% on Tuesday after the sustainability and electrification solutions specialist announced far stronger-than-expected quarterly results.

The key to Aspen Aerogels' outperformance

Aspen Aerogels' fourth-quarter revenue jumped 41% year over year to $84.2 million, and its net loss narrowed to $519,000, or $0.01 per share, from a loss of $0.20 per share a year earlier. Analysts, on average, were modeling a much wider net loss of $0.12 per share on revenue of $83.8 million.

Within its top line, Aspen Aerogels saw Thermal Barriers segment revenue grow 110% year over year, to $52.9 million, more than offsetting a supply-constrained 9% year-over-year decline in Energy Industrial segment sales, to $31.3 million.

Aspen CEO Don Young said that further diversifying the company's EV Thermal Barrier customer base will be key to driving growth beyond 2024. Young credited his team for delivering on its primary execution milestones for 2023 "while building a company that can rapidly scale to profitability."

What's next for Aspen Aerogels shareholders?

For the full year 2024, Aspen Aerogels sees revenue of "at least" $350 million, assuming $150 million in Energy Industrial revenue and $200 million from the Thermal Barrier segment. That should translate to a net loss of under $23 million, or $0.30 per share. By comparison, most analysts on Wall Street are looking for Aspen Aerogels to deliver a net loss of $0.24 per share on revenue of around $371 million.

Time will tell, of course, whether Aspen Aerogels can live up to those expectations in the coming year. But given its drastic earnings outperformance to end 2023, the stock is understandably rallying in response today.

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Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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