Government Shutdown Delays Amaero Revenue Despite Strong Contract Backlog

Updated Financial Guidance Reflects Timing Delays

Amaero Ltd (ASX, 3DA) has revised its full-year 2026 revenue guidance downward to between A$18 million and A$20 million, a significant reduction from its previous forecast of A$30 million to A$35 million. The adjustment primarily stems from timing delays linked to an extended U.S. federal government shutdown, which has temporarily slowed contract awards and revenue recognition.

Despite this setback, the company emphasises that underlying demand remains strong, particularly across its powder production and advanced manufacturing segments. December quarter revenue is expected to reach approximately A$3.1 million, representing a remarkable 390% increase compared to the same period last year. For the first half of FY2026, revenue is projected at around A$7.7 million, a 366% rise over the prior corresponding period.

Robust Contracted Revenue and Cash Position

Amaero has secured approximately A$9.7 million in contracted revenue for FY2026, with about A$2.5 million anticipated to be recognised in the third quarter and A$7.2 million in the fourth quarter. This contracted backlog provides a solid foundation for the company’s revenue outlook despite the government-related delays.

Financially, Amaero enters 2026 with a strong cash balance estimated at A$52.6 million as of 31 December 2025, including restricted cash of around A$5 million. This represents an increase of approximately A$1.7 million since the end of the September quarter, underscoring the company’s healthy liquidity position to support ongoing growth initiatives.

Operational Progress and Strategic Partnerships

Operationally, Amaero continues to advance its manufacturing capabilities, highlighted by major capital equipment orders for new plants including an Argon recycling facility and an advanced atomizer plant. These investments are supported by non-dilutive financing from the EXIM Bank, structured to align with equipment delivery and production ramp-up schedules.

Significantly, the United States Navy has formally validated Amaero’s Powder Metallurgy Hot Isostatic Pressing (PM-HIP) manufacturing process as a viable alternative to traditional casting and forging methods. This endorsement strengthens Amaero’s position in defense and aerospace markets.

Additionally, the company has converted its strategic partnership with Titomic Limited into an initial commercial supply order worth A$4.6 million for refractory alloy powders, further diversifying its customer base and product offerings.

Outlook Amid Government Uncertainty

Looking ahead, Amaero anticipates improved contracting momentum as the U.S. federal government resolves its funding impasse. The company remains focused on disciplined execution, scaling production to meet customer demand, and achieving sustainable positive earnings before interest, tax, depreciation, and amortisation (EBITDA).

Chairman and CEO Hank J. Holland expressed cautious optimism, noting that while the government shutdown has delayed some contracts, the long-term demand pipeline remains intact. He highlighted expected positive tailwinds in 2027 from anticipated increases in the defense budget and reforms aimed at streamlining procurement and strengthening domestic manufacturing supply chains.