Amaero International: A Strategic Play in U.S. Reshoring and Advanced Materials Manufacturing

The U.S. government's push to re-shore critical manufacturing capabilities has created a unique opportunity for companies positioned to fill supply chain gaps in high-value sectors. Amaero International Limited (ASX:3DA), a leader in advanced materials production, is rapidly capitalizing on this trend through strategic capital allocation and government-backed financing. Recent milestones—including accelerated atomizer commissioning, a $23.5 million EXIM Bank loan, and an A$22 million institutional placement—signal that the company is poised to deliver near-term commercialization success while solidifying its role as a critical supplier for defense and aerospace markets.

The Atomizer Advantage: Scaling Production Ahead of Schedule

Amaero's core asset is its ability to produce high-purity metal powders for additive manufacturing (AM), a process vital to producing complex components for hypersonic systems, missiles, and next-generation aircraft. The company's EIGA Premium gas atomization technology, the only such system in the U.S., enables spherical powders with industry-leading yields, directly addressing shortages in refractory alloys like niobium (C103), titanium, and tungsten.

Recent progress underscores Amaero's execution excellence:
- First Atomizer: Operational since mid-2024, it already achieved full technical specifications and began supplying powders to customers like SpaceX and Velo3D.
- Second Atomizer: Originally slated for late 2025 commissioning, this unit is now expected to come online ahead of schedule, by June 2025, per Q1 updates. It will focus on C103 and refractory alloys for defense applications.
- Third Atomizer: Ordered in early 2025, with plans to install by late 2026, further expanding annual production capacity to over 800 metric tonnes—a scale unmatched by U.S. competitors.

Government Backing and Non-Dilutive Funding: A Tailwind for Growth

Amaero's success is amplified by its alignment with U.S. industrial policy. The EXIM Bank's $23.5 million loan under the “Make More in America” program is a game-changer. This non-dilutive financing covers 100% of capital equipment costs (e.g., atomizers), preserving equity and enabling Amaero to focus on scaling production without equity dilution. The loan's terms—interest-only payments for the first two years, followed by full amortization—align with the company's cash flow trajectory, with EBITDA breakeven expected by FY2026.

Complementing this, a A$22 million institutional placement (completed in early 2025) further strengthens liquidity, ensuring Amaero can meet its FY2025 capital expenditure targets without financial strain. These moves reflect investor confidence in Amaero's strategic vision and execution.

Strategic Partnerships: A Pipeline of Demand

Amaero's partnerships are its secret weapon. The exclusive five-year supply agreement with Velo3D (valued at A$35 million) guarantees a steady revenue stream while embedding Amaero's powders into high-margin additive manufacturing workflows. Velo3D's Sapphire printers—used by SpaceX for rocket engine components—are now paired with Amaero's C103 and titanium powders, creating a vertically integrated supply chain that reduces reliance on foreign suppliers.

Other collaborations, such as its PM-HIP (powder metallurgy/hot isostatic pressing) joint ventures with aerospace primes, further cement Amaero's position as a mission-critical supplier. These partnerships are underpinned by proprietary process enhancements, including parameter optimizations for hypersonic systems and strategic missile components.

The Investment Case: Near-Term Catalysts and Long-Term Value

Amaero's near-term catalysts are clear:
1. Second Atomizer Online by June 2025: Increases production capacity by ~50%, directly boosting revenue from defense and aerospace contracts.
2. Velo3D Supply Agreement Qualification: By November 2025, Amaero's powders will be qualified for Velo3D's printers, unlocking recurring revenue.
3. EXIM Loan Drawdowns: The first $12 million tranche in Q2 2025 will fund critical infrastructure, ensuring no capital constraints.

Looking ahead, Amaero's path to EBITDA breakeven by FY2026 is credible. With FY2025 capital expenditures fully funded and production scaling, gross margins are set to expand as fixed costs are absorbed. Meanwhile, the $35 million Velo3D deal alone represents ~10% of Amaero's FY2026 revenue target, with additional contracts in the pipeline.

Risks and Considerations

• Execution Risk: Accelerating timelines require flawless execution; delays could pressure cash reserves.
• Government Contract Delays: U.S. budgetary politics (e.g., the Continuing Resolution) could slow defense contracts.
• Competition: Foreign competitors (e.g., China's state-owned enterprises) may undercut pricing, though Amaero's domestic focus mitigates this risk.

Conclusion: A Strategic Buy for U.S. Reshoring Plays

Amaero's combination of non-dilutive funding, proprietary technology, and strategic partnerships positions it as a key beneficiary of U.S. reshoring initiatives. With FY2025 atomizer milestones on track and a clear path to EBITDA breakeven by 2026, the company is primed to deliver outsized returns as advanced materials demand surges.

Investment Recommendation: Buy Amaero International (ASX:3DA) with a 12-18 month horizon, targeting a 30-40% upside. Key triggers to watch include second atomizer completion (June 2025), Velo3D qualification (Q4 2025), and FY2026 EBITDA breakeven. For investors focused on U.S. industrial resilience and advanced manufacturing, Amaero is a compelling, under-the-radar opportunity.