Archer Aviation (ACHR) 11 Aug 222022 Q2 Earnings call transcript

Good afternoon, and thank you for attending today's Archer Aviation Second Quarter 2022 Conference Call. My name is Daniel, and I will be your moderator for today's call. [Operator Instructions]. I would now like to pass the conference over to our host, Andy Missan, Chief Legal Officer. Please proceed.

operator. you, Thank and review everyone, for us joining Good second thank quarter to Archer's XXXX today afternoon, you financial results. Andy My Archer is Missan, Legal Chief name Officer Aviation, Inc. the of Goldstein, the today CFO; on Tom COO. our Muniz, Mark us With and are Adam Mesler, our call our CEO; We posted QX detailing letter XXXX business and results a our to shareholder overview IR our financial website. an on our This available call be is archive being will recorded, website. and IR

making actual call, forward-looking would like to annual everyone or Securities in presented website. we website. Before on described shareholder certain Relations filings are XX-K, our this will Except on and report today's as included of Also or Relations any by these to and those in events. period forward-looking to Archer law, make note, that statements. to letter our required obligation such new be please forward-looking XX-Q non-GAAP uncertainties for actual Investor implied These we financial and the on and measures posted our the I disclaims begin, in basis. These results March on result financial revisions Exchange future other Factors to subject statements our SEC's call, statements. update that GAAP the are comparable remind measures materially statements are as are measures events Investor a forward-looking on non-GAAP or of uncertainties website Reconciliations Risk and quarterly XX, most directly a Commission to XXXX, information during from risks available our future differ on expressed the ended risks could with or Form the of the section cause

commentary to the up with then Adam? begin like over And questions. call the with will call to turn that, Goldstein. I'd open Adam to we'll We and

Thanks, Andy.

today you to excited are with that share made. have progress the all continued We we

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be operating evidenced for target the model. will million to payment received we see Customers number production that well the of technical certification Archer's active website We calendar over engaging do United. eVTOL we has course we all primary the on continues as In letter. can Midnight from in a detailed function. financial as laser-focused and months. PDR The coming teachings by Finally, what educate to progress phase education gate and focuses over enable further sector starting that provided will of is series respect topics exiting investors, commercialization with of key this on pre-delivery and available business the very goals. to be to our of and conferences, advance to for data many of milestone as are stakeholders we as plan and our capabilities we a cost on meeting the going industry. with Archer the community us Further summary, shareholder attending our critical coming our and the our Relations be continues say confidence with quarters we hold are to doing on aircraft. Investor to financial our the Successfully that one efforts the of $XX well the validate variables Investor

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Instructions]. [Operator

Edison from of comes Yu question first Deutsche Bank. The

questions. the recent X have Congratulations milestones. on I

roadmap United terms provide was of payments. you of what First associated prepayments. with in on that? milestones if wondering some the could future will pre-delivery of be also And I sort kind

Edison, this is Adam.

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limited there's the of so in going early years supply market. the to extremely And be eVTOL

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mature will further, planes you more ultimately as online. around So into announcements that and areas that to different will the will hear updates starts additional launch we and come

think I I'll how on work. that. to come deposits more Mark to So turn the to and payments about talk over it

payment look of can future and traditional you on terms. milestones the think payment aerospace I at deposits any sort

haven't be but probably with and those that aircraft. of deploying We assume you the then disclosed manufacturing they'd could ultimately aligned publicly,

it's So to market. typical I what pretty you probably in think the see of going be

any can test like upgrades wanted I key either to been that you've you or doing, up on question, takeaways PDR? ramping the ask sort Do potential you improvements maybe have kind also of about based flights. and learnings obviously, on of Second post test share

is Hey, Edison. This Tom.

learn of we've of as regard to right? decisions the about that early product. forward Just the Maker context, of that answering into made in as been aircraft broader we're to the kind some always our strategy part that possible carrying has key with

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broader and the control aerodynamic system well flight the So the features. as vehicle, other flight model control for laws as

the design. have get recently. that has maturing as lessons PDR us essentially, moving And those be possible. confidence commercialization been given through Midnight our able with have we low said, you with we And of great certification forward high learned incorporated. that very as we'll All our And completed confidence risk and of to as now data all

could more, just a in if high-level sneak at one Do I very question. consumer all worry And about you adoption.

I all world big sort concern about do that kind way high among we kind we've of what looking a think that operate. this going kind in How we're this sort UAM at, look, is think the -- investors you're that is, of of heard you level? at infrastructure, some the changes to of a of just need

is Adam. This

X one the think to going And kind put order the perspectives to of that. of is I So will kind consumers second the take in look that's one do vehicles? want at. infrastructure then to the is, be And necessary there's first in place to

airport is going from is go-to-market we strategies So early those of think be I call what city centers, to one routes. flying interesting the what's to are trunk that and

so the And we already is take routes seen we've demand that there to for ride people share. as these know

lifts of are of routes. for the substantial world the So amounts demand showing these

We lift. for example same the also of a pay to there's using willingness know

will convenience cool think of to the be demand I vehicles a I the lot adopters of to have of the there. early market. the attracted be factor so top And product gives these think And on will

brand high early. lot to that you I a confidence vehicle adopt want that a for add itself, If which the pretty to users of United of degree the will have you think then there like be you that products stands a and safety, take

second of of The relates infrastructure. really kind question phase the to

use drives seen products is what of And time over so think I really of case products. demand the we've

is infrastructure certainly And so very be to yes, challenging. going

going WeWork has definitely as the estate previously real stand gentleman that's Development of obviously amount just to think up through X the challenges Head years. of who Global in to incredible one recent to much be a past He hired battle WeWork for most We recently an as the of tricks. had Brian at I history. Bernhard, the named was

to demand start right stand am that And I really it with last likely the that comment optimistic be be amount stood for is, and to the so infrastructure very early with that and see able My the around right airports. of gets product will that out there the we'll on we infrastructure. up up will team get

And big dynamic. to airport and where a in having so walk customer you to yourself. the when it's like in It's you like different with if conversation United, by different United, in a you a walk a partner walk talk than

to And that think I so market to really a gives unique us advantage here. get

question of next comes from Raymond The James. Syth Savi

curious clear On vice-versa. of side, you're suppliers, see what what you your place? to these the them as commitments I'm supplier trying type I was understand agreements in putting And to are and

this Yes, hello, Savi, Tom. is

about think So is we supplier context way first the the the agreements of essentially. supply our in of securing several years

in partnering to material. with going published that focused our to to that's rates we've guidance Strategically, because some on our strategy delivering successful of companies risk minimize have part to the proven up agreements of aerospace of previous that long-term records support market. negotiating hardware we're certified production So track we're broader

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I future the things in advisory maybe committee talked is you those call, the And more calls the kind of I confidence locations ask any on of days, maintenance was able from mentioned the while about looking with Adam know that terms Midnight, Midnight you do. being thinking? I of early talk of earnings that can your last targeting. learnings -- still might are and kind different in about Have it's But conversations -- and gained if joint have about at, you're you had you've the earlier what wondering if new to maybe operations you

This is Adam.

investor an go-to-market I a pretty relationship the buying to -- or with time us operational of that's maintenance through have United, different a we matters helping planes. special. and think, and dedicated They've think strategies. just it's not So They're lot group strategies

say probably talking included, taught United day probably at myself basis. would basis, every I So is on other Archer somebody to not has weekly if

with They've pretty And in we're that. helpful so very them. deeply been integrated doing

iterative like you So have, necessarily there's a a an that conversations. process. big not lot aha but It's of it's moment

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discussions led identification our and for the So United strategies. -- really in of go-to-market the routes locations have to with

And deposits have the starting are announced that to specific XXX around conversations we against to are -- very so routes. the aircraft relating we high-level we're

those so and, are specific against And vehicles I routes think, go-to-market very very specific considered being attractive cities.

And more on we maturing to we'll United. that with details give to as continue that. start so are And that, mature here we strategy

your for you Can something that get maintenance Archer to partners the Adam, would I plan clarify some do that of is is to do? the support or

evaluating different there. So strategies we're

of I with but there, full think little spoken of that. And different so a have early kind we the bit to several give it's understanding parties

The of next question David Zazula from Please proceed. is Barclays.

all can time, for And systems well range really of Midnight You pounds. X,XXX some of the that the as you're ultimately, planned life. end with you helpful operating the similarly, is turned battery is for these that as the metrics on planning at that confirm out board charge XXX-mile on XX-minute flight

in this Some industry. numbers get around thrown

sure So I specific in we're language. just same make the talking to want

to turn Tom. I'll it This I'll open an you is over give and Adam.

going vehicle. design we specific have through the of So start to really about PDR, getting really the

drilling. So actually suppliers. sign just We're not theoretical, it's not to it's starting up

level the so very And fidelity into the of goes that engineering high. is

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an has that. top pounds several we on pounds margin hundred X,XXX that of So of additional put that

comfortable going will certified I very land we has believe vehicle feel a pounds that of we also that's industry-leading. payload. X,XXX So with be that to

the of look back so you in aviation that's so critical of And the is reason if why when important history, comes us to to it economic drivers payload is one viability. been

establishing to business. long-term a think we passengers so ability to carry And least the X profitable core is do at

vehicle about to of And back-to-back. missions As been really the it that have XX Midnight can always really we've relates the kind been designed numbers upwards on missions around many do. to has you the thought range, how back-to-back of focused do

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able that want XX all vehicle back-to-back longer XX to miles to XX the don't ground to on of charging rapid that a you to So do missions the design in because time. than miles, to you go sit can order be need

that numbers lot changed So different around can on a you assumptions be have. of these based

faster, you expense at just for using that charge but can life So the comes example, battery your cycles faster. up of

we a of is turn minutes period the And our charging lower thought a operations. talk -- a more of to And the typical the looked it a peak where then rate over higher XX the slower range at vehicle. charging XX concept so during and during Tom time throughout and a about might bit of have operations charge operations day day at I'll what we've done a to where between and typical at be a day the of about of we little rate

vehicle as as it described. don't use just really cost I've operating much the a direct think I real-world that summarized you range case design We the for well. the as of and think target maximum

care numbers into make maximum vehicle between that XX The really time, day. to by the we up is we true it's money theoretical is flights reality, context, per what then this right? the selling we many of per put can tickets turnaround battery, get driver flights as a people and lets could there. that amount, miles up as can the day, mention way day. charge in to as us the to That's many flying vehicle the as times So vehicle it per time flights tens brand-new While fast more with putting in about do XXX of fly

really few All go in high targets. in why operating to our we that's confidence ride are down market we'll shares, able bucks that of per to into which our have comparable actually on we're we earlier, that coming passenger model. ticket be than prices better with existing that right, And direct touched costs, boils to internal

Tom, having the about can being program a transition testing little assumptions far you're and to yet? come so talk flight you able a to it's bit comfortable forward range discuss without why as

Absolutely. Sure,

completed So second as phase Adam touched we the test on on Maker earlier, flight campaign. of our

to that tests, utilization design landing important robustness in of uptime. high that's series of validated the the piece again, of and another, So capabilities essentially cross-win we because

that So to robust, sideways up to demonstrated backwards very limits. crosswind up the been We've we've knots. vehicle flying high XX is

of the driver that that's validates really as comes primary the flight Midnight. aircraft well into Maker. that coming to though, system the forward control not validating it as range were So a When configuration on

lot as the testing et in goes well validation will very get drag into of support we Midnight the estimating is of our terms confidence on We the of for extensive cell aerodynamic more vehicle, aircraft the data wind-tunnel our which ground But gather as testing. in tests, battery a to where really cetera. both model,

testing some So wind we've completed tunnel already.

models to in final coming wind-tunnel are high-fidelity currently launch test our our months. final campaign We the building

to in in of good. maturity our the All the where us validation come looking really give data are more will we're even all, But design, of that together in all estimates. we performance

David, this Adam. And is

here. in chiming of kind Just

the going people I that's many And I how much how of think viability that do these will going you cost vehicles. payload, be can range industry to of be speed will think economic ultimately and the judged to the and is that. fast way how to move, it be meaning mix a

about ultimately so that's so we're what have what excited PDR solving here, so what and the that's the results we're for. And that's exciting. of And been

our we very felt advancement commercialization. thinking of about why So comfortable the that's

that's cash program now of think very a the what to I excited a got about and cash this okay, deposit, a point warrants deposit. significant the United where maturity they said, deposit,

kind highest way do you think this. the that And farthest so flying about so And not just can It's then fastest, plane, build build we of flying, you for the much can you vehicle about make that's viable? mission? how the a economically

in about a on up for based guess of United, the filings I that, disclosed clean your tidy stake you've is unchanged? in agreement with on just extension United Mark, existing Archer

I last repeat Could missed This is Mark. part. you the that?

United's ownership? from their disclosed, you've stake what in unchanged previously Archer is

Yes, that's correct.

next Fitzgerald. of The comes question from Sheppard Cantor Andres

Congrats on little the you've maybe the announcement that just wanted $XX today guess quarter. a I more understand. I trying million I'm get on with to clarity to made United.

capital? is not additional Just do the now? there or I will R&D, fund timing. some as to the this the third it why to you this FAA sense And Is So eventually sorry, using maybe guess, commercialization and of anticipate to what revenue? us give Why CapEx, maybe that where closer And manufacturing? recognized part as is strategy be certification?

start Andres, now, I'll to with Adam. Mark. then this over is why the and I'll turn it

the of Archer specifically. has that category, but just my this to back really has to think earlier around I do eVTOL United also really some comments confidence So the with

supply. so think of But big of then X those driver really big limited have is I the of this. the And drivers third are kind we

to do levels, we we so build that's we're And manufacturing back planes our what to XXXX, and go still. said you if would stated XXX in on track

have to operating engaged of has then seen We've Archer other Archer and also in vehicles, lots going many have be different the is lot we with been There and also orders out United. of announcements a industry. groups. around so excitement there, And been

I concept you we're with of Archer balance see the we're see think could you United, a is doing it here think so the matured see then there specific and test, interesting you it can lot PDR. to it operations. in could starting has the that where of And routes about this the work across Maker-flight And program, in

And their to for so they it as to corporate XXXX. will sure sponsor to planes here them strong well. to to get And made lock a make as spot sense in in access commit Archer

think it's big doing I that And a of signal so them now.

over it turn I'll So to Mark.

commercial look at and because should So is standard it is, arrangement. what it again, a this I you think is

question, a turn contract delivery or way the that's yes, a that simplistic of deposit So this as your deposit. hang upon most And it. That's planes, think balance on up this about structured. the to eventually prepayment a right? is our will is how sheet So to cash to would the cash revenue

et purposes, talking It going go all for cash go on Midnight for us to will for terms towards factory, been and advancement we've or commercialization. of new of of cetera, mean, CapEx the corporate In the about use, is which general towards et I this things R&D be is cetera.

certification are, is consolidating the regards which macro the FAA's certification in Maybe as certification the in process of for or the of question better to we -- in lot my There's industry than a stringent. follow-up aware conversations you're more been and Adam. about for somewhat possibility Europe, delivered mirroring

the would thoughts. if impact, they X of consolidation any, place? XX I degree your what I'm timeline? see to your so, the to think love And you wondering I might get that requirements. have Do on taking have negative if safety certification -- that

the levels as So the with then we And a with speaking speaking the we're daily or at FAA the level basis. highest are engineering daily FAA well. at on almost

the been active market. the way had FAA will a up And the so I with to top leading reassured the administrator have position have that eVTOL to conversations the in confidence and all bringing take

their today on FAA as of from that the And do eVTOL and But stance me back chime to bringing see standards. don't them to Tom not behalf away tells I'll that on see in existing anything adopting let well. I going so I is market,

Yes.

than we administer that no expect last agree designing changes few obviously that since of B should Just can the to just this even we've reiterated, the what requirements A had to. months, add with reconfirmation that's thing error to I could I to Adam say change, what said, already what over seen, is we been is, XXXX

our expect essentially issue at make XXXX GX to have So just paper, we administrative to don't change change even anything to they pointing an B.

so And we changes. document, no that in seen have

right that just on the confirmation we're path. So further

next The of JPMorgan. line comes [Operator Instructions]. from question of Bill Peterson the

on Bill is for Kakani Mahima This Peterson.

Just talking on the deposit again. United

on network? also ahead potentially elaborate between and you plan operations? as And ahead direct United As look production, sales well then latest of head this can line passenger as of at does the you put the your your on the Archer's mix to the thinking network

This is Adam.

capital a to that said, So is network. the a always UAM to the Archer way path is to and going good require to long-term the do business. And fund long-term selling goal build has planes is help

be we said our and we've be as of will of production case to so date, will think production, our used. sold base And XX% XX% our

And so United is a launch great partner. go-to-market

has to But the XXXX. markets. centers evaluating the the get scenarios with is I in to with get working We lift all infrastructure there. But doing routes city I and understand that at a easier. terms we're up in market big best to these think think, core set partners, there goal that helps so large different this And together again, way this finding from of get make on trunk to with airports here eVTOL to considerably real do operational

of Archer, it's airports talk some speaking the of that's strategies of theme past I at that and been with with. of to had we're municipalities not to also And some just that the sort everybody think So at we've advancement over commercialization the with been United feeling. not exciting. our of quarter the internally either, it's this is around local the just the what feeling is really it's we've kind like is starting that And but

what's this so at where there's all we kind with think And excited everybody feel. are to gotten that of today. we're And that's momentum starting I

on the I'll and between from difference batteries. current batteries Maybe just heard terms certification. touch of We a air there's cylindrical in that pouch

challenges certify then on And all bit So areas it the on as plan you what to see using regulators batteries types more are today you that convince is then that and well share little that the a on Archer risks today, batteries the and you the the the as you with? details safe? are need can of to ones key as

is that. to This answer be happy I'll Tom.

we're want don't batteries exactly to commercially we But can manufactured reasons, what competitive that available what is I they're by disclose for off-the-shelf cells companies. say using. So well-established

reliability and that extremely the that up. data to So high with cells back come

approach and our higher ease energy, the there. reliability, So range performance has lower but strategy commercialization. safety much been taking terms much certification essentially higher of in we're and of That's and

accepted think designed we to the for certified, systems risks, an about of this, we terms In meet batteries, these FAA needs right? is DO-XXXA well-established to similarly way compliance has certification and that we've get requirements standard.

all it So just essentially, push are for And targets aircraft that about day. the we're nice on. FAA is in that this doing it's that's the achieve one worried our possible what and envelope trying to main the the because still we're things as make of of to of commercial the not easy and with the make can do really our all as thing about best we

rapid the manufacturing. day. to is always did these what our we beginning, is lot reduce lot that, across see a efficient can an multiple to an is We've the I from everywhere, trips this which the XX back-to-back there Archer been just what made there, certification that to was and design around can path about mile can risk to reduce Adam, reduce a decisions we've And getting And of missions as the a per where has goal if you and of add said always around mass business then risk And risk find since of on our is to announcements. to commercialization. these market. aircraft we do case, XX

message that will all the think aircraft. I So of across be parts consistent

at this Thank There no registered are you. currently time. questions additional

will the remarks. for Adam back to CEO, Goldstein, over So I closing conference pass

Thanks call. for attending quarter our second

realize you a success United in strong the of progress flight is to work share more -- we're Maker so our proof We about that day. track so advancing test and the I'm really the I it's points And of get why This campaign, the every Midnight excited to team PDR The you. results everyone the to opportunity. excited, the opportunity on efforts. have why wait our world. generational months. excited, vision. really are commercialization now come to does the the are really Airlines with transform commercial is details coming over to Thank see can't deposits Midnight