AL3: US Navy announces it will deploy 3D metal printing “at unprecedented speeds” (starting from 3 days ago)

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 8,110,529 AL3 Shares and the company’s staff own 128,000 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.

🚨 Effective from 3 days ago:

The US Navy says it is fast tracking the use of 3D printed metal parts into its submarine fleet - “at unprecedented speeds” :

(source)

These new (effective immediately) US Navy standards:

“strip away legacy administrative and engineering hurdles, clearing the launchpad for Additive Manufacturing (AM) to be integrated directly into submarine construction, maintenance, and combat-ready repair at unprecedented speeds.”

So it sounds like the US Navy is now OFFICIALLY going hard and fast on metal 3D printing, starting from 3 days ago.

The US Navy's Director of Submarine Programs (Vice Admiral Robert Gaucher) said:

"This is exactly the type of barrier we must remove if we are going to unlock 21st century technology to get our submarine programs on plan." (source)

Meaning suppliers to the US Navy can insert 3D printed parts into their supply chains NOW.

Without the historical layers of engineering assessments and testing that used to slow down every single part.

Our 3D metal printing Investment AML3D (ASX:AL3) makes 3D printing systems that produce complex parts using metals.

Faster, stronger and cheaper than traditional casting and forging.

AL3 also owns and operates its own fleet of printers - to print parts for customers on demand (customers like the US Navy, defence, shipbuilding, oil and gas, aerospace and utilities).

AL3 already has its systems installed inside the US Navy's submarine industrial base:

• Huntington Ingalls (builder of 70% of the current US fleet)
• $1.8BN Austal, and the US Navy's own Additive Manufacturing Centre of Excellence.

AL3 has also received a letter from the US Navy forecasting demand for 100 additive manufacturing (metal 3D printing) systems across the Marine Industrial Base and telling AL3 it would play a "pivotal role" in meeting these needs. (source)

And guess which company’s 3D printing tech the US Navy used in its press release?

Yep - AL3’s:

(source)

Perhaps because AL3’s 3D metal printing robot arm looks pretty bad-ass... or maybe because AL3 is already working with the US Navy.

Here is one of AL3’s robots, “additive manufacturing” in action:

(source)

Until Friday last week, every 3D printed part needed to pass engineering sign-offs and different testing programs based on each use case the parts were made for.

Huge friction for any technology to get off the ground.

Imagine having to walk to your local post office and verify your ID every time you wanted to login to Netflix... usage would be near zero.

AFTER Friday's announcement, the US Navy can procure 3D-metal printed parts for its submarines a lot simpler AND a lot faster than before.

We think that the rollout of the 3D-metal printing (additive manufacturing) systems will really start to ramp up after Friday’s announcement.

Hopefully meaning the Letter of Intent AL3 received from the US Navy last year starts to play out.

Remember this letter from July last year:

(Source: US Navy Letter of Intent to AL3)

It was forecasting demand for 100 x 3D printing systems and up to 1,600 x 3D printed parts per year by 2030 across the US submarine and shipbuilding industrial base...

...and telling AL3 to get ready, because AL3 would play (in the US Navy's own words) a "pivotal role in achieving these targeted needs".

(Source: US Navy Letter of Intent to AL3)

Since that letter, AL3 has landed:

• A $4.5M order (two systems) from a subsidiary of ~US$12BN Huntington Ingalls Industries (HII), the largest military shipbuilder in the USA (source)
  
• A $9.9M follow-up order (four more systems) from the same customer - AL3's biggest ever order, taking their installations to six systems in under six months (source)
  
• A $2.6M order to 3D print five submarine parts the US Navy can no longer source anywhere else. (the original manufacturers stopped making them) (source)
  
• A $1.7M system sale to a US Navy component supplier (source), And
  
• AL3's first portable, containerised 3D printing system went live at the US Navy's Additive Manufacturing Centre of Excellence in May. (source)

All of that contributed to AL3 delivering the best year in its history - cash receipts of ~$10.4M in FY26 (source), AND

$20M in new orders signed during FY26 - taking the order book to a peak of $29M. (source)

Despite all of that, AL3 is currently capped at ~$50M market cap with $26.7M cash (at 30 June 2026).

Trading at an enterprise value of ~$24M... (less than its peak order book)

And we think AL3 can break new records again in FY27.

(no guarantees of course - sales can take longer than we are anticipating)

AL3 has already carried $16.8M of signed orders into FY27 AND its current sales pipeline sits at ~A$78M. (source)

(source)

That was all before Friday’s news, as of Friday.

So some of that sales pipeline could start converting into sales pretty quickly too.

We said this in our last AL3 note back in March:

Source: AL3: New $2.6M US Navy submarine parts order... A week after $9.9M military shipbuilding order.

We have seen a few deals get signed between now and then - but we are hoping Friday’s news really gets things going over in the US.

Especially with AL3 basically ready to ramp up operations over there.

So how does AL3 actually sell into all this and who is buying from AL3 already?

AL3 makes money in three ways:

1. Selling its 3D printing (ARCEMY) systems (for ~$1-2.5M),
   
2. Recurring software/services fees on every installed system (~$250K per system per year), and
   
3. Contract manufacturing of parts (like the $2.6M submarine parts order). (source)

(source)

AL3 currently has a “Master Licensing Agreement” with BlueForge which was given a US$951M budget from the Department of War to deploy into the US submarine supply chain.

A Master Licensing Agreement is basically AL3 being plugged into the parts database that the BlueForge Alliance covers.

(Sort of like the Uber Eats for parts the US military industrial complex needs)

That $2.6M submarine parts order we mentioned earlier was through BlueForge.

AL3 also sells its systems to a division of Huntington Ingalls Industries (HII) - the biggest military shipbuilder in the USA.

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

HII has ordered a total of six of AL3’s custom systems - two are now live, the remaining four are being built in Ohio for delivery in early 2027.

(source)

AL3 also has systems installed with $1.6BN Austal in the US Navy's Additive Manufacturing Centre of Excellence.

That US Navy ‘Centre of Excellence’ is the US Navy's flagship additive manufacturing facility, where there are three AL3 systems installed, including AL3's first portable, containerised ARCEMY (nice to show off the system that can be installed in 1-2 days).

The portable unit is a new product line - and a preview of "forward deployed" manufacturing for multiple branches of the US military. (source)

We think the “forward deployment opportunity” hasn’t really been tested by AL3 yet.

We think we could start to see a lot more news on that front over the coming months.

Where else could more AL3 contracts come from?

Everything mentioned above is just related to the US Navy.

We think the biggest opportunity for AL3 will come after embedding itself within the Navy supply chain.

Starting with submarines, we think AL3 can treat that as a proof of concept - showing the US Navy that its tech works and can be relied upon.

The reality is that a lot of the companies that are doing the submarine building also happen to build other important stuff for the US government.

Like Huntington Ingalls, which as we mentioned earlier (who has six of AL3’s systems installed/on order).

That large company also produces aircraft carriers AND destroyers AND unmanned systems for the wider US military:

(source)

Assuming AL3 can show customers like Huntington the reliability of its tech, we think there could be more orders to come.

AL3 could expand into the US Army and Air Force - where the US is likely having the same manufacturing challenges it is having with the submarine programs (speed/flexibility).

(source)

Outside the US government, AL3 already sells systems and parts to customers like:

• ~US$170BN Boeing through a “Defence Manufacturing License Agreement”
• Tennessee Valley Authority - the largest public utility in the USA ($2.27M system)
• Chevron and ExxonMobil - selling mostly parts.

So we think there could also be demand from the oil & gas, utilities and aerospace industries.

Aerospace especially.

Fun Fact: Elon Musk’s SpaceX builds its rocket engines using metal 3D printing.

The day SpaceX IPO’ed this year, there were news articles which called SpaceX "one of the world's most significant users of additive manufacturing".

Here is Musk sharing a 3D metal printer back in 2013:

(source)(source)

Then there is the potential EU/UK growth story

At the 2025 NATO summit an agreement was made to increase defence spending to 5% of GDP by 2035 - with a specific commitment to "innovate, and strengthen the defence industrial base". (source)

Right now ~A$125BN BAE Systems (a major EU/UK defence contractor) is completing a $1.2M alloy testing and materials feasibility program with AL3.

We think that program (if successful) COULD be the precursor to AL3's UK/European expansion.

AL3 also says “current negotiations point to a first European ARCEMY system being installed in the UK in the short to medium term”. (source)

So we could see a similar growth story in the UK/EU to the one we have seen in the US.

Ultimately, we are Invested in AL3 to see it grow its business in the US and/or the EU/UK:

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.

Why AL3 now?

The reason why we are bullish AL3 from a macro perspective right now goes back ~200 years...

Bear with us on this one.

Why is the US moving so fast on 3D printing?

Because for the last ~200 years, global superpower status has tracked one metric: shipbuilding capacity.

The last global superpower before the US was Britain.

At its peak in the 1890s, Britain built ~80% of the world's shipping tonnage. (source)

Then came the World Wars and at the peak of the war, the US was delivering ~800,000 tons of new ships every month - roughly 70 times its pre-war rate.

One California shipyard got so fast it built an entire ship in 7 days.

By 1945, the US had the largest navy ever assembled, the world's reserve currency... and the superpower title.

Britain's shipbuilding share never recovered - it slid from 57% in 1947 to 17% a decade later, and today the UK builds essentially no commercial ships at all. (source)

Now the same thing is happening between China and the USA.

China now builds more than 50% of the world's commercial ships.

The USA builds 0.1%. (source)

(source)

One single Chinese state-owned shipbuilder (CSSC) built more commercial tonnage in 2024 alone than the entire US shipbuilding industry has built since World War II. (source)

US Naval Intelligence estimates China's shipbuilding capacity at ~23.2 million tons per year versus less than 100,000 tons for the USA.

That is 232 times more capacity. (source)

So it makes sense that shipbuilding capacity has become one of the few genuinely bipartisan priorities in Washington.

US President Donald Trump: "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."

(source)

If the future is going to be robots working with software to build stuff, that’s where additive manufacturing comes in - and why the US Navy has been throwing money and urgency at it:

• The BlueForge Alliance was allocated US$951M specifically to rebuild the US submarine industrial base (source)
• The "Big Beautiful Bill" earmarked US$450M for additive manufacturing in shipbuilding. (source - page 110)
• The US Department of War's FY2026 budget allocated US$3.3BN for additive manufacturing (source)
• The Navy's FY27 budget request asks for US$65.8BN for shipbuilding. (source)

The US Navy has called metallic additive manufacturing its "Manhattan Project" - and told parts suppliers to either adopt 3D printing or get left behind.

Here's 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 submarine systems and programs - and is directly linked to Huntington Ingalls, AL3's biggest customer.

This is the same Matt Sermon who featured in AL3’s latest Investor presentation on slide 20:

(source)

We have been to AL3’s facilities, here is what we saw

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

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.

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.

And hopefully new channels after Friday’s news.

US facility expansion

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

AL3 plans to invest $12M to expand production capabilities.

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 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.

What could go wrong?

The single biggest risk right now is without a doubt order conversion risk.

The US Navy's Letter of Intent is a demand forecast, not a contract - it's non-binding, contains no guaranteed dollar value, and the Navy named other companies alongside AL3 that could help meet its targets.

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 small-cap industrial technology company, AL3 carries significant risk, here we aim to identify a few more risks.

AL3's heavy reliance on the US Navy and defense supply chain leaves it vulnerable to shifts in government policy, defense budget reallocations, or procurement delays. Any changes to military spending priorities could directly impact expected system deployments.

While the US Navy's Letter of Intent forecasts demand for 100 systems, it remains non-binding and carries no guaranteed revenue or purchase commitments. Failure to convert this pipeline into firm, binding contracts would significantly impair projected financial growth.

Expanding the Ohio facility with a planned $12M investment introduces operational execution risks and potential cost overruns. Scaling operations across both the US and UK/Europe could also strain management bandwidth and capital resources.

Additive manufacturing remains a highly competitive and rapidly evolving space, exposing AL3 to competition from alternative technologies or well-funded market entrants. Slower-than-expected industry adoption or technical qualification delays could slow revenue realization.

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