Amaero Targets 162% Revenue Growth as US Defence Contracts and Production Expansion Gather Momentum

Amaero Inc. (ASX: 3DA) is targeting revenue growth of up to 162% in 2026 as demand builds for its specialised metal powders and advanced manufacturing capabilities. Following its October Nasdaq listing and US$17 million capital raising, the company is entering its next growth phase with expanding production capacity and increasing exposure to US defence and aerospace supply chains.

Its latest September quarter results highlight significant commercial progress, including a 180% year-on-year increase in contract backlog. However, the next stage will require Amaero to translate growing demand into more efficient manufacturing operations while securing additional funding to support its expansion.

Key Numbers

• US$4.1 million: September 2026 quarter revenue, up 35% year-on-year.
• US$11.5 million: Revenue for the first nine months of 2026, up 170% year-on-year.
• US$13.4 million: Contract backlog at 30 September 2026, up 180% year-on-year.
• US$16 million to US$16.5 million: Full-year 2026 revenue guidance, representing growth of 154% to 162%.
• US$19.3 million: Cash and cash equivalents at 31 October 2026, following the Nasdaq IPO.
• 920 tonnes: Target annual powder production capacity following commissioning of the fourth atomiser.

Revenue Growth Reflects Expanding Commercial Demand

Amaero's September quarter results demonstrate the momentum building across its advanced manufacturing operations.

Revenue reached US$4.1 million, up 35% from the corresponding period last year, while revenue for the first nine months increased 170% to US$11.5 million.

Management has introduced fourth-quarter revenue guidance of US$4.5 million to US$5 million. Combined with the revenue already generated, this implies full-year 2026 revenue of US$16 million to US$16.5 million, representing growth of 154% to 162% compared with 2025.

The company produces specialised titanium and refractory alloy powders used in additive manufacturing, alongside advanced metal components manufactured through its Powder Metallurgy Hot Isostatic Pressing (PM-HIP) technology.

These capabilities target applications across defence, aerospace, space, energy and other industrial markets, where specialised materials and complex component manufacturing can play an important role in demanding operating environments.

An important development during the quarter was the continued contribution from both business segments.

Metal powder revenue increased 19% year-on-year to US$3.2 million, while PM-HIP component revenue more than doubled to US$0.9 million. The latter included the first revenue recognised under Amaero's low-rate initial production contract with Bechtel Plant Machinery.

This represents an important commercial milestone as the company's PM-HIP capabilities progress from development activities into initial production.

What Stands Out to Us

One of the more encouraging aspects of Amaero's latest results is the growing commercial relationship with US defence customers.

Its contract backlog reached US$13.4 million at 30 September 2026, increasing 180% from US$4.8 million a year earlier and 96% from December 2025.

Of particular significance is the US$4.5 million contract awarded by the US Department of War in July 2026 to develop alternative refractory alloy powders. Two high-temperature alloys have already been selected and produced using Amaero's gas atomisation technology.

The 13-month programme, expected to conclude in August 2027, is intended to support efforts to reduce costs and dependence on foreign sources of critical raw materials.

Amaero has also secured its first US$0.3 million low-rate initial production contract with Bechtel Plant Machinery, supporting the US submarine industrial base.

Together, these developments demonstrate progress in establishing Amaero as a supplier of specialised materials and components within strategically important US manufacturing supply chains.

The commercial opportunity extends beyond individual contracts. As defence and aerospace manufacturers seek reliable domestic sources of advanced materials, Amaero's US-based production capabilities could provide a platform for further customer relationships and repeat orders.

However, converting this commercial progress into sustainable financial performance remains the next important milestone.

Quarterly production costs reached US$8.5 million against revenue of US$4.1 million, resulting in a gross loss of US$4.4 million.

Management attributed the result partly to a six-week titanium production pause following safety incidents, alongside lower production yields during the optimisation of its upgraded sieving system.

Titanium production resumed in late July, with no customer purchase order cancellations or employee attrition during the pause.

Importantly, management believes much of the fixed manufacturing cost base is already in place, meaning higher production volumes could improve operating leverage and gross margins over time.

There are early signs of improvement in cash consumption at the quarterly level. Net cash used in operating activities declined to US$6.3 million in the September quarter, compared with US$7.3 million a year earlier.

Nevertheless, nine-month operating cash outflows reached US$19.2 million, alongside US$13.9 million in capital expenditure.

The October Nasdaq capital raising has strengthened the company's financial position, generating US$17 million in net proceeds and lifting cash and cash equivalents to US$19.3 million at 31 October.

Amaero also amended its EXIM Bank credit agreement, reducing its pledged cash collateral requirement from 20% to 10% and releasing approximately US$2.1 million of restricted cash.

The company's September balance sheet carried approximately US$23 million in debt at net carrying value. It also had US$12.1 million in outstanding inventory purchase and contracted capital expenditure commitments.

Management expects the IPO proceeds and existing cash resources to support operating expenses and capital expenditure into the second quarter of 2027.

However, its latest Form 10-Q explicitly states that additional financing will be required to continue operations. Management also disclosed substantial doubt about the company's ability to continue as a going concern over the following 12 months, noting that its current financing plans do not alleviate this uncertainty.

This makes the ability to secure additional capital, improve manufacturing margins and convert contracted demand into cash generation important considerations as the company enters its next stage of expansion.

Expanding Production Capacity and Improving Efficiency

Amaero is continuing to invest in manufacturing infrastructure to support anticipated demand growth.

The company commissioned its third EIGA Premium atomiser in June 2026 and subsequently completed installation of a custom-designed titanium powder sieving system in August.

Together, these upgrades have approximately doubled titanium throughput capacity.

Amaero now operates three atomisers, comprising two dedicated to titanium and one to refractory alloys, with total annual powder production capacity of approximately 680 tonnes.

Further expansion is planned over the coming months.

An argon gas recycling facility is on track for commissioning in the first quarter of 2027. The system is expected to reduce argon costs by at least 77%, potentially providing a meaningful improvement in the cost structure of titanium powder production.

The company is also progressing its fourth EIGA Premium atomiser, targeted for commissioning in June 2027.

This additional equipment would increase annual titanium powder capacity from approximately 480 to 720 tonnes, lifting total powder production capacity from approximately 680 to 920 tonnes.

These investments are intended to support higher production volumes, improve manufacturing efficiency and provide additional capacity to service future customer requirements.

The challenge will be ensuring that production yields and utilisation improve sufficiently to translate this expanded capacity into stronger gross margins and operating cash flow.

Insight: A Growing Position in Advanced US Manufacturing

We think Amaero is making meaningful progress in establishing its position within the US advanced manufacturing and defence supply chains.

Its growing contract backlog, initial production relationship with Bechtel Plant Machinery and US Department of War development programme provide encouraging evidence of commercial traction.

The Nasdaq listing is another important milestone, aligning the company's capital markets presence with its US manufacturing operations and customer base.

There is also potential for meaningful operating leverage as its recently installed production equipment moves towards higher utilisation. The expected commissioning of the argon recycling facility and fourth atomiser could further strengthen its manufacturing capabilities.

However, the transition from production expansion to sustainable profitability remains critical.

Amaero's current funding position provides additional flexibility, but management has been clear that further capital will be required. Its ability to secure financing on acceptable terms while improving production yields and controlling cash consumption will be central to the next stage of its development.

Overall, we see a company making tangible commercial and operational progress, with an increasingly important role in specialised US manufacturing. The opportunity is supported by growing customer relationships and expanding production capabilities, although execution and funding remain important considerations.

What Happens Next?

Several developments will help shape Amaero's progress over the coming quarters.

Fourth-quarter revenue delivery will provide an indication of whether the company can achieve its US$16 million to US$16.5 million full-year guidance.

Production yields and throughput will also be important, particularly as the upgraded titanium sieving system becomes fully optimised.

Further milestones include commissioning the argon recycling facility in Q1 2027 and bringing the fourth atomiser online in June 2027.

On the commercial front, progress under the US Department of War refractory alloy development programme and the Bechtel Plant Machinery production contract could provide further evidence of customer adoption.

The longer-term opportunity rests on Amaero converting its growing backlog and expanded manufacturing capacity into repeat orders, stronger margins and more sustainable cash generation.

For now, the company has established an encouraging commercial foundation. The next challenge is to demonstrate that its manufacturing expansion can deliver the financial performance needed to support its ambitions.