Thanks very much, [Lou]. Good morning, everyone. Thanks for joining us. Appreciate everyone taking time this morning as we review our Q2 2026 results and discuss a lot of the momentum that's continued to build across the company. Today we're going to focus on a couple of areas. We'll talk about the quarterly highlights, we'll talk about commercial performance, the progress on the capacity expansion, the financial results, and ultimately, why we believe 6K Additive is exceptionally well-positioned for the next stage of growth. Before we begin, I'd like to take a step back and put the quarter maybe into a little bit of context.
The first half of 2026 really has continued to reinforce an overall trend that we've talked about for several quarters now, and that's a growing trend of where the U.S. government and OEMs are really focused on prioritizing secure domestic supply chains for critical materials. Across aerospace, defense, energy, and a variety of advanced manufacturing forums, you're seeing customers move beyond that qualification stage with suppliers and really placing production level orders. That shift has really got a couple of main drivers. The focus on reshoring manufacturing of critical materials, the national security priorities, and then an overall acceleration and adoption of additive manufacturing. Because of this, we believe 6K is really positioned uniquely at the intersection of all three of those trends.
With that, we'll start with a brief overview of what really differentiates 6K Additive, because we're not really a simple metal powder producer like many of our competitors. We're a U.S.-based producer of critical advanced materials built around proprietary processes. That's UniMelt plasma, a variety of feedstock and post-processes, coupled with complementary atomization capabilities for powder. The technology allows us to convert all forms of domestic scrap and recycling those into specialty materials, premium products that are going into a wide variety of end-use applications, aerospace, defense, space exploration, medical, energy, and a variety of industrial markets. Increasingly, the U.S. government and customers are looking beyond simply purchasing powder for the manufacturing of parts. They're really focusing on securing domestic supply chains and with the ultimate goal of reducing their dependence on foreign entities and ultimately building resilient manufacturing capability.
That fundamental structural shift really aligns well with our current business model. This slide, there's a lot of words here, but this slide really summarizes how we're uniquely positioned in the overall market. You've got companies out there that are producing powders, and legacy means they manufacture a variety of alloys. Very few have an integrated platform like we have at 6KA. Really what's different about us is, number one, our technology really creates a structural advantage over a lot of our competitors. Industry-leading yield is a big part of that, 85%-95% yield. This means that we're converting more feedstock into saleable powder than conventional approaches. Higher yield ultimately leads to lower manufacturing costs, improved profitability, and then just fundamentally a much more efficient use of critical raw materials.
As the volumes grow, as we continue to scale, efficiency becomes increasingly meaningful and becomes a big competitive advantage. The second differentiator here is the overall feedstock strategy. As I mentioned earlier, we're converting scrap into premium products where a lot of our competitors rely on virgin materials that are coming through global supply chains, and that can mean sometimes very expensive, especially in the U.S. with the current tariff situation and a lot of overall volatility. For us, bringing in domestic scrap and converting that into premium products, a lot of those materials are coming from our customer through what we call customer buyback programs, where we're buying their scrap and converting it back into premium products for high-end applications. This is where we're able to really control or create a closed loop supply chain. That's giving us greater security of supply.
It's giving us better cost control, but most importantly, it's giving us a strategic relationship with our customers. A lot of our customers, they don't look at us as just a powder supplier. They look at us as a recycling and supply chain partner. That's a big differentiator in the industry. The overall breadth of materials that we're able to manufacture with our technology is really unmatched. Where you have many of our competitors, they're out there and they're able to produce one or two alloys. 6K Additive with our proprietary technology, we're really unlimited in terms of the alloys we're able to manufacture for really any end-use market. We're out there selling to, as I mentioned, aerospace defense, medical, and a lot of different industrial applications, and not relying on one single market. Very diverse in terms of the market we're serving.
Another key differentiator is we've got commercial validation. That's probably the biggest validation that we have, is we're already selling to the market. We already have qualifications. We've got repeat orders. We're serving more than 100 unique customers, and our annual revenue continues to grow now, exceeding $28 million in annualized run rate here in the June quarter. We're in a situation where we've got a growing pipeline. The demand is there for our product, and we're expanding to meet those demands. The expansion of the existing business is really what's de-risking the future growth. Our construction project well underway. I'll talk about that here in a minute. The overall infrastructure is continuing to progress in terms of enhancing our infrastructure on the property.
A lot of the critical components and equipment that have longer lead times they've already been ordered, and all of this investment is supported by current demand. Strong government support goes along with that, and ultimately a strong balance sheet. We're not in a situation where we're building capacity in anticipation of the market growing and us becoming qualified. We're building capacity because that market is already here and it's pulling us. I think when you put all of these pieces together, proprietary technology, industry-leading yields, secure domestic feedstock, broad material capability, that breadth of alloys that we're able to manufacture, we believe that we've built a competitive moat that becomes stronger as the market for advanced materials continues to grow. Let's focus now on the second quarter highlights, specifically revenue to start. Record revenue for the company at just over $7 million.
That's 63% year-over-year growth, 14% sequential growth. That run rate, as I mentioned now, over $28 million versus $24 million last quarter. That's supported by our powder business, number one, and I'll talk about some of the specifics there. All core products really showing an improvement quarter-over-quarter. Operationally, the team is continuing to execute at a high level, maintaining an outstanding safety performance. We strengthened the team significantly with the appointment of Brandon Davis as Chief Operating Officer. We're continuing to expand and advance some of our strategic government initiatives. The Defense Logistics Agency programs that we're running, all focused on the production and manufacturing of some of those refractory metals going into space, hypersonic-type applications. We hosted the EXIM chair, John Jovanovic, at our Burgettstown campus a couple of weeks ago.
I'll talk a little bit more about our relationship with EXIM here in a few moments. Overall, seeing broad-based demand essentially across every strategic market that we're serving. The overall campus expansion is well underway, and a lot of progress made in Q2. One of the questions that we're asked quite frequently is, can we keep up with the growing demand? The answer is yes. That's exactly why we're investing. During the quarter, some of the milestones achieved, all the major construction contracts were awarded. The long lead time equipment purchases have been made. The infrastructure work and planning well underway now. I think most importantly is our overall capacity expansion plan and schedule, it's intact. When completed, the first phase of this project is really focused on the big growth engine for the business. That's the powder.
That will result in a 5x increase in capacity, 200 metric tons going to over 1,000. At the completion of all phases of this project, through Phase I, II, and III, we'll end up with a facility that's capable of doing over 6,000 metric tons of total production capacity across all product lines. A 3x increase from where things sit today. That project's fully funded, with the capital raised as part of the IPO plus the non-dilutive DPA Title III grant that we received. The plan is really fully aligned with the demand we're seeing today rather than a speculative demand. We're building capacity because we've got customers asking for it. I think that's a pretty important distinction in terms of where we sit in the market.
To take a deeper dive into the powder business segment, this is the real growth driver of the business. Revenues reached $5 million, t hat's a quarterly record. Seeing exceptional growth on all products, t i, nickel, you see that refractory up 500% quarter-over-quarter. That's another example of alloy sets that are really starting to emerge as a growth platform for the business as we continue to add capacity. I think probably the most encouraging statistic isn't the revenue, it's that the demand continues to exceed the capacity. That's the position we want to be in. That's the position we'll maintain. As we're continuing to execute that expansion program. For us, as the customer adoption continues to increase, our repeat business continues to remain extremely high.
We're seeing customers more increasingly value secure domestic supply and seeing the value proposition that 6K Additive brings over some of the low-cost suppliers. This is the position we'll continue to maintain and leverage as we continue to add capacity. On the alloy business segment, this is another strong quarter of performance, $2.1 million in overall revenue. You're seeing market share gains here, a lot of recurring customers, building backlog that's giving us visibility into the second half of the year. I think the key here is there's a lot of tailwinds on this side of the business as well. Strategically, this business is poised for growth as aluminum producers are looking to reshore production here in the U.S., several large facilities and investments are being made with aluminum manufacturing here in the United States over the next several years.
This alloy segment is really positioned for growth and will maintain pace. Many of these new facilities that are coming online in 2026 and 2027, we already have a qualified position or an ongoing commercial arrangement with some of their sister facilities. Really poised for growth on the alloy business segment as well. From a government standpoint, I think one of the biggest validations for our approach and our strategy continues to be the support we get from the United States government. We mentioned the $23.4 million DPA Grant, non-dilutive funding, all really geared towards helping us continue to expand our capabilities.
Our expanding work with the Defense Logistics Agency and what we're doing there with the DLA in terms of enhancing the capability of turning depot scrap, refractory metal scrap, in this case, into high-value powder that then we can print parts for the hypersonics and defense industry. The support of EXIM Bank, and John Jovanovic taking time out of his schedule to visit. I think maybe just a little bit of color here. The visit from John at EXIM is notable for a couple of reasons. This was the first deal that he approved as chairman of the bank. Really it was all centered around eliminating the critical materials choke point. That is, the U.S. is just so reliant on materials coming from foreign entities. The U.S. government identified that as a significant bottleneck.
Notably, through DPA Title III and some of the other government programs that we're doing, they see 6K Additive as a big help in eliminating that choke point. This was why EXIM prioritized this, and John prioritized this as his first deal. EXIM Bank, the history of EXIM Bank is it was originally established by President Roosevelt in 1934. This 6K Additive, our deal is the first deal that EXIM Bank has ever partnered with the DoD to come together and fund the expansion of a facility here in the U.S. in producing critical materials. Kind of a milestone event and one that EXIM Bank's pretty proud of, and we're excited to be a part of. These aren't just simply funding programs. They're really, if you take a step back, it represents a validation.
The capability that we're building and the fact that it has national strategic importance. With that, I'm going to hand it over to Jonathan to walk through some of the quarterly financials.
Great. Thank you. Thank you, Frank. I really want to review where we finished with Q2 from a cash flow perspective. Closing out the quarter with $22.1 million of cash. Again, our cash used in operating activities was in line with what we saw in Q1, despite, as Frank mentioned, 14% higher sequential sales, as well as thus building some inventory to continue to support future sales in the upcoming quarter. Really overall strong operating cash performance. You can also see that our capital expenditures upticked in line with the capacity expansion. We had about $740,000. That is expected to continue. We previously guided to about $11 million-$12 million full year spend, and we're still planning on that as the building erections and other projects start ramping up in the second half of the year. Again, overall, ending with $22.1 [million] of cash.
Again, strong performance, again, enough liquidity to support the strategic initiatives that we've talked about before. Just again, highlighting our use of funds compared to the prospectus. The prospectus total is our full capacity expansion over the full two years since our IPO in December. The actual really reflects seven months of that. You can see, going forward, there's going to be a significant increase in the powder expansion buildings, and the other capital items here in the second half of the year. The really thing that I want to highlight here is we talk a lot about the strength of our balance sheet, the $22.1 million of cash. As Frank mentioned, we still have $13.7 [million] remaining from our DPA Title III grant, which will go towards this capacity expansion. Then again, Frank mentioned the EXIM loan.
That is another $27.4 million funding opportunity that we can pivot to enhance our growth profile going forward. Again, we expect that EXIM, all the paperwork, everything has been negotiated, really the paperwork and closing out that in the third quarter.
Thanks, Jonathan. In summary, there's four key takeaways that investors should remember. First, demand is continuing to accelerate, revenue's growing, the backlog continues to increase, and the customer adoption's expanding. Second, we're executing operationally, commercially, financially, and the expansion program all executing on track. Third, we're building capacity, as I mentioned, to satisfy an existing demand, not hoping that the demand comes after construction is complete. Finally, the structural trends supporting the business continuing to strengthen. Those things are all being supported by governments and industry continuing to recognize that secure domestic supply chains for critical materials are essential. That plays right into our strengths. At 6K, we believe we really have a differentiated technology platform. We have a growing commercial business, strong government validation, a clear pathway towards significantly higher production capacity. We're really excited for what lies ahead.
Appreciate the investors' continued support and really appreciate you for joining us today. With that, I'm going to hand it back to [Lou] for any questions.
Thank you, Frank, and thank you, Jonathan. Let's move into the questions. You've touched on this previously, Frank, in your presentation. Can you speak a bit more about reshoring and domestic manufacturing in the United States? Can you explain why this is such an important aspect of what you're currently doing with 6K?
Yeah. Obviously, we are part of that story. There is a huge trend, a growing trend to bring manufacturing back, especially of critical materials, and eliminate the reliance on adversarial countries. We're a country that has very little mining and refining anymore. What we're focused on at 6K Additive is solving that problem by taking materials that we already have here in the States and upcycling them back into premium products, powders, notably, that can go into the world's most demanding end-use applications without needing mining or refining. Really kind of closing the loop, and leveraging materials that are already here, and doing it at high yield, which is maximizing the overall efficiency and use of those products going into those end-use applications. That's our approach. It's quite simple and we're well on the way of executing that strategy.
Thanks, Frank. Another one coming through. You've previously indicated that your revenue capacity is around $23 million-$25 million per annum, but you were able to generate a run rate of $28 million per annum during Q2 2026. Where has the extra capacity come from?
It's solid execution from the team. Some organic gains in efficiency has allowed us to stretch some strengthening partnerships with customers. We're able to source a little more used powder. If you back up, the bottleneck for 6K Additive today is our ability to take an abundance of raw material and then convert that into a feedstock that we can put in the UniMelt. The team's done a nice job in engaging those key partnerships. I think last time we mentioned, in the last webinar, about the partnership with Siemens Energy and sourcing their used powder to help boost overall revenue. That product comes in and goes right to the, essentially through all its vetting, but then ultimately does not need to be sized, goes right to the UniMelt to convert into a premium product.
That's allowing us to stretch beyond what we would call nameplate capacity. It's solid execution from the team that's enabling that.
Yep. Continuing on from that trend, another question for you, Frank. 90% repeat order is a fantastic result. Where are you at with the addition of new customers?
Yeah. Continuing to bring on new customers every quarter, albeit in a measured and calculated way. Many of our existing accounts are growing organically and we want to maintain our market share with them so they get the priority. There are a number of strategic accounts out there where we're nurturing. We put them into that nurture category where we have many calls going on, or we're metering until the capacity expansion comes on, what we're able to do with them. Bringing on new customers every quarter and we'll continue to do that, and as the new capabilities come online and things start to ramp late this year and into 2027.
Thanks, Frank, and maybe this one for you, Jonathan. From a financial position, when is it anticipated for 6KA to be cash flow positive?
Sure. Yeah, great question. That's really predicated on the powder expansion being done, so Phase I of our expansion. Right now, the plan is still to have that capacity come online in Q4. Immediately after we begin ramping up that capacity will be when we anticipate getting to a operating cash flow breakeven number.
Amazing. Thank you, Jonathan, and back to you, Frank. What progress has been made since the DLA contract award? How has U.S. government engagement developed, and what are the next key milestones?
Wow. That's a question. That's several questions. Let's start at the beginning. The progress that's been made is, we're early phase into this new project, and so there's a lot focused on the sourcing of materials. Some key partnerships that have been established with some of the depots within the DLA to source some of those critical refractory materials. Those are well underway. Our team at 6K Additive are working with them directly, and there's some sort segregate activities that are happening on site at some of the depots. There's some automation that's happening. Part of this program allows for the sort segregate portion of scrap flowing through the supply chain to have robotic analysis of the scrap as it's being conveyed through the process. There's been some automation milestones with robotics and automated testing that's been underway.
A good solid start to those programs. We'll continue that work. In terms of the relationships with U.S. government, we're in talks with them, not quite daily, but weekly, with varying agencies throughout the U.S. DoD. So DLA, some of the army, and then a variety of the national labs that are supporting some work. We're continuing to expand those relationships. We've got solid engagement with the folks in D.C., and as we're continuing to look for additional funding opportunities and sources and trying to solve problems that they're finding. Those relationships continue to progress, and I think I've mentioned before, I feel like we've only just begun. As we continue to demonstrate our capabilities, we're really building momentum.
Where we go next is, these programs for us are building blocks, and so we continue to scale them, prove our capabilities, and then ultimately, our long-term vision is to become a trusted partner with U.S. DoW to ensure that all the scrap that they're generating is being upcycled to the highest value, and then ultimately going back into the national stockpile.
Thanks, Frank. Another one for you. You indicated initial production at the expansion site will commence at the start of 2027. At what point do you expect a step change in revenue in 2027? Is that going to be as soon as you can ramp up production, or is it contingent on the new customers being signed?
Not contingent on the new customers being signed. Obviously, I think our long-term vision here is we'll be bringing on capabilities. It's not like we're going to flip the switch and everything comes on at once. The step function will be in the first half of 2027. As things come online and we continue to optimize, there should be a notable uptick in overall performance, and capability within the company.
Another one coming through. You have previously talked to a $250 million pipeline in the annual report with a qualified pipeline of $60 million. Could you provide an update on this amount at 30 June ?
We are in the probably getting close to $270 million in total pipeline. The qualified position is probably $10 million higher than it was. We're probably around $70 million now, maybe a little bit north of that.
Perfect. Thank you, Frank, and thank you, Jonathan. That looks like the last question for today. Before we wrap up the webinar, Frank, do you have any closing remarks?
I do. I think if I were to sum up where we are and what I'm most excited about, is the growing demand and support from our customers and U.S. government. I think those are key validations. Building on those relationships and continuing to expand them and bring on new customers and see that adoption is something I'm very excited about. The expansion is something that we're all laser-focused on within the company, and ensuring that that timeline and making sure that the facility build-out and subsequent commissioning of equipment happens here by year-end is putting us in the best position possible. That's another area of focus. I think lastly, it's the continued excellent execution of the team. We've got a strong group of men and women that are working hard day in and day out to execute this strategy.
They're doing a phenomenal job. I'm really excited to see how this plan continues to thrive, and the strategy is deployed successfully, because of their hard work. Those are kind of the three things that I get excited about and gets me jazzed up and keeps me coming in. I think lastly, just appreciate all the support from the investors. We've got a fully funded plan, and we're really excited about where we're going, and I hope everybody's equally excited about the results so far.
Thank you, Frank, and thank you all for joining us today for 6K Additive, Inc's Q2 FY 2026 Appendix 4C and Quarterly Report briefing. A recording of today's session will be made available on the 6K Additive website in the coming days. We appreciate your time and interest, and we look forward to hosting you again soon.