AL3 secures A$9.9M order with the USA’s largest military shipbuilder

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 6,378,029 AL3 Shares at the time of publishing this article. The Company has been engaged by AL3 to share our commentary on the progress of our Investment in AL3 over time. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs. Any forward-looking statements are uncertain and not a guaranteed outcome.

We have all seen the situation escalating in the Middle East.

The US currently has a significant part of its Navy deployed in the region.

And after Venezuela a couple of months ago, it feels like this won’t be the last we’ll be hearing about the US Navy over the coming years.

The USA has made naval shipbuilding a strategic priority, after off-shoring a huge amount of shipbuilding overseas.

US president Donald Trump said: "We used to make so many ships. We don't make them anymore very much, but we're going to make them very fast, very soon. It will have a huge impact."

Our 2024 Tech Pick of the Year and defence Investment AML3D (ASX:AL3) speeds up the production and maintenance of naval ships, submarines and other military assets.

AL3 sells 3D printing systems that produce complex parts using metals - faster, stronger and cheaper than traditional casting and forging processes.

Last week AL3 sealed a $9.9M order with a subsidiary of $23BN Huntington Ingalls Industries.

Over 70% of the current US Navy fleet was built by Huntington Ingalls Industries.

It has a record $53.14B backlog of orders (source)

(source)

$9.9M is a material order for AL3, given it booked $3.2M in revenue in H1-FY26. (source)

(there’s also ~ $16.5M in orders in hand - $7.5M signed in H1 of 2026 and $9M of orders carried over from FY25)

AL3’s (now regular) customer Huntington Ingalls is the largest US military shipbuilder.

This $23BN defence company also produces submarines and aircraft carriers for the US military - here are some of the ships it has built from its website:

Huntington Ingalls Industries is a repeat customer of AL3.

The latest order is for four of AL3’s 3D printing systems, expected to be installed by Q3 FY2027. (Source)

This adds to the two systems that the same division ordered from AL3 back in October 2025. (source)

That means the one customer - $23BN Huntington Ingalls, the biggest builder of US military ships (aircraft carriers, submarines and destroyers) is doubling down (literally) on AL3’s additive manufacturing systems.

(Hopefully Huntington’s adoption opens the doors to other manufacturers in the US defence market).

As we mentioned above, AL3 sells 3D printing systems that produce complex parts using metals - faster, stronger and cheaper than traditional casting and forging.

AL3’s complex software drives a giant robot arm that welds layers and layers of metal wire into the shape of the required part - on site, at the point-of-need - check it out below.

(The tech is actually called “additive manufacturing” - more on exactly what that is in a second)

As well as Huntington Ingalls, AL3's customers include the US Navy (via an alliance), Boeing, Chevron, Exxon and a growing list of US defence contractors:

• Austal USA
• US Navy Centre of Excellence
• BAE Systems
• ST Engineering
• Laser Welding Solutions

We first Invested in AL3 back in June 2024 - just as the company was starting its expansion into the US market.

Nearing two years on, AL3 has launched its US facility in Ohio, raised $30M and already committed to doubling its capacity in the US.

AL3 still had $29.2M cash in the bank at 31 December 2025 and is now capped at ~$91M. (source)

We think AL3 is now in a position where the company is set up to take full advantage of all the capital available in the US intended to reshore manufacturing.

Especially inside the US military-industrial complex.

AL3 already has a Master Licensing Agreement in place with Blue Forge Alliance - the US Navy intermediary that was budgeted US$951M to redirect into “uplifting the U.S. Submarine Industrial Base”. (source)

And then in July last year, AL3 received a Letter of Intent from the US Navy forecasting demand for:

• 100 new 3D printing systems** across the US Marine Industrial Base
• ~400 manufactured parts in FY26**, growing to ~1,600 parts by FY30

The Navy also told AL3 to get ready to deliver because AL3 would play "a pivotal role in achieving these targeted needs”. (Source)

(source)

We did some rough calculations in our last AL3 note on what that LOI could mean in terms of addressable market:

• ARCEMY systems (AL3’s 3D printing systems) have sold for between A$1M and A$2.5M each
• 100 systems could be worth somewhere between ~A$100M to A$250M in gross revenue
• Even 40% of that demand means $40M - $100M in gross sales, and
• That doesn't include the ~$250K per year in recurring service/software fees per system.

Please note these are rough back of the napkin calculations - there is no guarantee AL3 will secure anywhere near 100 systems, how much any of them will sell for, plus costs, taxes and operational challenges would reduce the net financial impact.

AL3 is a small cap investment with risk - see our full section on risks we see at the end of this note.

For now, we are starting to see some of that “forecast demand” turn into sales for AL3.

If even a fraction of the US Navy’s pipeline converts, the revenue growth could be significant.

For context, AL3's current market cap is ~$91M. (source, source)

The US Navy’s “Manhattan Project” - AL3 can help

We think the macro backdrop for AL3 just got a lot stronger - especially after the war in the Middle East started.

The single biggest thing being talked about right now is the Strait of Hormuz in the Middle East - which is blocking oil and gas exports out of the gulf into the rest of the world.

We think the whole situation has put naval capacity and superiority front of mind for the US, if it wasn't already.

This should lead to more urgency on capital and attention into the US naval shipbuilding industrial complex.

We saw the following a few weeks ago:

The US FY2026 defence budget allocated US$27.2BN for Navy shipbuilding - covering 17 new ships including fast attack submarines and medium landing ships.

(IF Trump’s proposed 2027 defence budget of $1.5 trillion ends up happening then that number could go up to “at least 34 ships) (source)

Plus another US$1.5 BN for maritime industrial base upgrades.

(source)

At the same time, the US Department of War's FY2026 budget allocated US$3.3BN for additive manufacturing:

(source)

And remember, the ‘Big Beautiful Bill’ that passed into law last year specifically earmarked US$450M for additive manufacturing in shipbuilding:

(source - page 110)

The US Navy has called metallic additive manufacturing its “Manhattan Project" and has told parts suppliers to either adopt 3D printing or get left behind. Here is that quote from Matt Sermon, Executive Director of PEO-Strategic Submarine (linked to NAVSEA):

(source)

NAVSEA is responsible for the acquisition, development and maintenance of US Navy strategic submarine systems/programs. (source)

Which includes efforts to accelerate construction through technologies including 3D-printed metal parts and is also directly linked with Huntington Ingalls Industries. (source)

AL3 is right in the middle of all of this.

AL3 has a Master Licensing Agreement with Blue Forge Alliance (the US Navy intermediary that received a US$951M DoD contract):

(source)(source)

A Letter of Intent from the US Navy forecasting demand for 100 additive manufacturing systems across the Marine Industrial Base.

(source: US Navy Letter of Intent to AL3)

And after last week - six AL3 systems to be utilised by the biggest military shipbuilder in the US.

If all of that capital comes into this space and the US's largest military shipbuilder sees benefits from using AL3’s systems - then we doubt it will stop at six systems too.

(source)

One of the main reasons for our Investment in AL3 was for the company's expansion into the US market.

Since we first Invested, AL3 has shifted its business to predominantly sell into the US and raised $30M to build (and then double capacity) a manufacturing facility in Ohio.

(It’s flagged additional investment in the US to expand capacity, which we imagine will be tied to growth in new orders)

AL3’s move into the US was before the Trump administration induced push to re-shore manufacturing in the US.

With all of the fresh capital available for companies helping make that a reality, we think AL3 is in a strong position to capture some of those capital flows.

(we are hoping to see more deals like the one announced last week, from different parts of the US defence industry).

Here is the table we look at when thinking about where those different AL3 customers might come from:

(source)

Recap: What does AL3 do?

AL3’s technology combines robotics, welding, automation and software.

A robot arm paired with AL3’s software welds layers and layers of metal wire into the shape of the required metal part.

And it gets the job done faster and cheaper than the traditional method of casting parts. (source)

(source)

AL3 makes revenue from three areas:

• ARCEMY system sales - this is where the customer pays upfront for one of AL3’s printing systems and gets it installed on site (typically $1M-$2.5M each).
• Software & services recurring fees - ~$250K per year, per system for software licensing, hardware maintenance and tech support.
• Manufacturing/prototype deals - this is where AL3 uses its own fully owned systems to print specific parts for customers.

Some of the key customers right now include:

• The US Navy (via Blue Forge Alliance MLA and Austal-run AM Centre of Excellence)
• HII / Newport News Shipbuilding ($23BN) - now 6 ARCEMY X systems
• Boeing ($172BN) - Defence Manufacturing License Agreement
• Austal ($2.6BN) - Australian military shipbuilder
• Chevron, Exxon (oil & gas)
• Tennessee Valley Authority (largest US public utility)
• FasTech LLC (US defence contractor)
• BAE Systems ($118BN) - This one is an “alloy testing” contract, IF successful it could turn into system sales/manufacturing deals (fingers crossed)
• Philips Corporation ($35BN) - value added reseller in the US

Over the last 18 months, AL3’s focus has been on expanding its US business.

AL3 raised $30M in November 2024 (at 19c), opened its US technology centre in Ohio (in June 2025) and is now looking to double the size of that facility.

(AL3 still has $29M cash in the bank as at December 31st, so has a healthy cash runway to deliver that expansion too)

And then there's Europe and the UK.

At the 2025 NATO summit, allies agreed to increase defence spending to 5% of GDP by 2035.

AL3 has set aside ~$5M from the $30M raise to push into the UK market.

It's already signed an alloy testing contract with $118BN BAE Systems - which we think could be a precursor to deals being done in the UK/Europe (IF BAE like what they see).

We think the international expansion is a potential second act for AL3 once the US business is established. But we acknowledge it's early days and execution risk is real.

We have been to AL3's Australian facility in Adelaide a few times to check the systems out and it's genuinely amazing to see these things in motion.

(We don’t get out of the office much)

We saw the largest ever custom AL3 ARCEMY 3D printing system ever built, before it was to be shipped off to the USA:

As well as some of what the product software looks like:

To see our full site visit write up read: Our AL3 site visit and what we learnt.

8 reasons why we are Invested in AL3:

Here are the 8 reasons we Invested in AL3 from our first Investment Memo published on 27th June 2024.

Since then, a fair bit has changed in the world, markets and for AL3, so we have included updates below some of the reasons:

1) 3D printing product at the forefront of manufacturing innovation

AL3 sells large scale modular 3D printing systems to industrial manufacturers. Its product, ARCEMY, provides a better solution to manufacturing parts for complex industrial machinery.

2) Blue-chip client base including US Department of Defence

AL3 has a range of high-profile customers including the US Navy, US Department of Defence, Austal (the Australian military shipbuilder) as well as oil & gas giants Chevron and Exxon.

These customers provide validation for AL3's product in future sales as well as a network of potential smaller suppliers for AL3 to target.

🚨 UPDATE:

AL3 has continued to add big customers:

• Tennessee Valley Authority deal (largest US public utility)
• Sales to US defence contractor FasTech,
• An alloy testing contract with $118BN BAE Systems,
• And of course the six systems sold to a division of A$23BN HII - America's largest military shipbuilder.

3) Tiny EV for AL3 with proven tech with sales

At 7.3c AL3 has a market cap of ~$22M, with ~$8M in the bank has an Enterprise Value of ~$14M. AL3 is already at ~A$6.6M in revenue for the first 9 months of FY24.

AL3 has invested over ~$30M building out its tech.

🚨 UPDATE:

Today, AL3’s market cap sits at ~$91M with $29M cash in the bank as of 31 December 2025, so the Enterprise Value is currently ~$62M.

We think AL3 continues to be undervalued given it now has a much firmer presence in the USA via its established manufacturing facility, banked sales, and future growth prospects.

Defence is also a hot sector for capital right now.

4) New sales strategy already driving revenue growth

AL3 has moved from a "sell the 3D printed parts" to a "sell the 3D printing system" strategy. This new strategy means bigger contracts for AL3 and gives customers what they want because the parts are made closer to where they are needed.

🚨 UPDATE:

Last week’s $9.9M order is a great example of this - selling six systems to the one customer.

5) "Sell the 3D printing system" strategy opens up yearly recurring revenue

For new orders of the ARCEMY system, AL3 will now build in ARCEMY services to include software and services fees on a recurring revenue basis.

This includes software licensing fees, hardware maintenance, and tech support. This is an untapped stream of revenue for AL3 and a potential source of upside for the company as the company grows.

🚨 UPDATE:

AL3 has previously indicated potentially ~$250K per year per system in recurring fees - so for those six systems being sold to Huntington Ingalls alone, that could be ~$1.5M per year in recurring revenues from just one customer.

However these are rough calculations and we don't know for sure how much recurring revenue will be generated.

6) Strong US focus as AM Forward Program rolls out

In 2023 AL3 commenced its US focused strategy.

The US spends more on its defence than the next 9 countries combined and as such is easily the most lucrative defence market jurisdiction to operate in.

In 2022, the US has also launched the AM Forward Program to support 3D Printing across the industrial manufacturing sector. We think that the US is the right place for AL3 to grow its business.

🚨 UPDATE:

AL3 now has an established manufacturing facility in Ohio (and is looking to double its capacity), hired a US team to drive sales and deliver products and services to US clients. We expect AL3 to continue to focus on US sales.

7) US distribution partner Philips has proven its ability to sell AL3's product

AL3 has a value added reseller agreement with ~$35BN capped Philips Corporation.

Philips' sales team has already helped AL3 make two US sales, including an ARCEMY sale to the US Navy Centre of Excellence which we see as the first signs that Philips is an engaged partner and we expect their sales team to help drive the marketing of AL3's products.

8) US Navy to help to push AL3 to its parts suppliers

The early signs are there. We want to see AL3 expand into smaller US Navy parts suppliers who are following the US Navy's lead.

In September 2023, a Navy parts supplier called Laser Welding Solutions leased the ARCEMY product from AL3 - we hope the first of many contracts for AL3 from this type of smaller organisation.

🚨 UPDATE:

This is happening.

The US Navy issued a Letter of Intent in July 2025 naming six "preliminary opportunity" companies - three of which were already AL3 customers.

We think the repeat order announced last week is a strong signal of the US Navy actively pushing AL3's tech to its supplier base.

Our AL3 'Big Bet':

“AL3 re-rates to a $500M market cap on achieving significant sales growth across an expanding range of industries and jurisdictions”

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is no guarantee that our Big Bet will ever come true. There is a lot of work to be done, many risks involved, including development risk, country risk and regulatory risk - just some of which we list in our AL3 Investment Memo.

Success will require a significant amount of luck. Past performance is not an indicator of future performance.

What's next for AL3?

More system sales into the US market

We want to see more orders from the six US naval base companies named in the Navy's LOI.

US facility expansion

AL3 has flagged that it will be doubling the capacity of its Ohio facility.

In last week’s announcement it referred to plans to invest $12M to expand production capabilities.

The US Navy LOI said AL3 would receive "regular demand forecast briefings" to support this expansion.

We don't expect things to suddenly take off but a few system sales every few weeks/months would be a great outcome here.

UK and European market entry

AL3 has appointed distributors in the UK and Germany, and is running alloy testing with $118BN BAE Systems.

We think the alloy testing contracts are precursors for system sales/manufacturing deals - these testing contracts are where the bigger guys test AL3’s tech before buying.

Sales into Europe or the UK could change the way the market sees AL3’s future growth potential.

Revenue growth

Ultimately, we want to see AL3’s revenues grow and the company become profitable.

The $9.9M order from last week is AL3’s biggest (fingers crossed we see more of these get locked away over the coming months).

In the 2026 interim results, AL3 referred to ~ $16.5M orders in hand, made up of $7.5M signed last half, in addition to $9M in orders carried over from FY25. (source)

Not including new sales...

What could go wrong?

The key short term risk for AL3 is that no further sales are made OR there are delays to sales contracts.

If AL3 fails to deliver more sales and its financial performance suffers, the market may start to price in lower growth potential for the future and re-rate AL3's share price lower.

At the same time, any delays to big sales contracts could lead to protracted periods of no newsflow which would decrease market interest in AL3.

Sales risk

There is always the possibility that AL3 does not close more sales, and its financial performance suffers as a result.

Source: "What could go wrong" section - AL3 Investment Memo 27 June 2024

Other Risks

Like any emerging technology company operating in the defence sector, AL3 carries significant risk, here we aim to identify a few more risks.

A major risk for AL3 is customer concentration and reliance on US defence spending. The company's massive growth pipeline is heavily dependent on the US Navy and prime contractors like Huntington Ingalls. If US defence budgets are cut, political priorities shift, or the anticipated demand fails to materialise, AL3’s revenue projections would be severely impacted.

AL3 also faces significant execution and scale-up risk. Moving from selling a handful of systems to delivering multiple high-value robotic ARCEMY units requires flawless manufacturing, supply chain management, and installation capabilities. Any delays, cost blowouts, or technical failures during the rollout of its expanded Ohio facility could damage its reputation with tier-1 military clients.

Selling into the US military-industrial complex introduces intense regulatory and compliance risks. AL3 must navigate strict defence procurement rules, cybersecurity standards, and potentially ITAR (International Traffic in Arms Regulations). Any compliance failure or data breach could result in the immediate loss of contracts and exclusion from future US defence work.

The industrial 3D printing and additive manufacturing sector is highly competitive and rapidly evolving. AL3 competes against massive, well-funded global manufacturing and technology firms. There is a constant risk that competitors develop faster, cheaper, or more precise metal 3D printing technologies, which could render AL3’s ARCEMY systems obsolete or force them to slash margins to compete.

Finally, while the US Navy is pushing for the adoption of 3D printing, widespread industry adoption risk remains. Traditional shipbuilders and defence contractors may be slow to transition away from deeply entrenched casting and forging supply chains, potentially delaying AL3's sales cycle and slowing its path to profitability.

Investors should consider these risks carefully and seek professional advice tailored to their personal circumstances before investing.

Our AL3 Investment Memo

You can read our AL3 Investment Memo in the link below. We use this memo to track the progress of all our Investments over time.

In our AL3 Investment Memo, you can find the following:

• What does AL3 do?
• The macro theme for AL3
• Our AL3 Big Bet
• What we want to see AL3 achieve
• Why we are Invested in AL3
• The key risks to our Investment Thesis
• Our Investment Plan