Archer Aviation (ACHR) 11 Nov 222022 Q3 Earnings call transcript

Good afternoon. Thank you for attending today's Archer Aviation Inc. Q3 2022 Financial Results Conference Call. My name is Bethany, 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, with Archer Aviation. proceed. Please

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

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

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the balance equivalents, to turn netted quarter. $XX.X with our quarter. financial and in let's investments of the in of for $XXX.X Now cash sheet. cash, We payments cash We million million ended performance our the short-term quarter

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efforts. sector. timing business. our expenses, hired materials $XX.X operating $XX.X We build spending and to of most compensation Non-GAAP companies by which and other R&D of well the to sequentially below growth lower the operating staff more the our range support related expenses to estimates capitalized warrant the was stock-based total expenses, end due people the we be excludes non-recurring as costs expected, to one million in and supplier which necessary areas our for certain increased programs to of the of engineering were million, the out Non-GAAP continue as

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expense XXXX million. of QX, shifted XXXX. plan GAAP to expenses and million million. of million, total QX, operating in We million expenses operating stock-based reflects spending into non-GAAP warrant expected $XXX $XXX $XX $XX approximately of of total compensation and Some $XX that This to anticipate has

very XXXX. into and will we active a QX, outreach QX, have investor We XXXX, continue in calendar that

provided in Archer's the on detailed financial We've of We will letter. a be and in conferences, with calendar meeting investors, community a engaging leadership discuss our our sector and it. to shareholder website participating with in and number this

to operating of continues Finally, our week financial House. at we are goals. be to with we many going and on to doing what Archer laser-focused do next look forward you summary, to say In our respect we Open seeing

Session see up to is go-to With excited aircraft market achieved is to technology am that Question-and-Answer I according we that progressing open our approach progress efficient executing. can let's in and our the capital certification it for how team questions. and QX, efforts, you about from plan, As our operator, advancing

Thank you.

is line now Savi Instructions] of ahead. the James. the Please [Operator session. go question The begin Raymond Syth with will first We on question-and-answer

little morning. talk to talked what about of but Hey, good rates? puts you I burn. cash the the burn the you about as progress might XXXX into in here, Mark, cash thinking we takes a afternoon and don't Good kind and everyone. get of about Could terms mean you're be greedy head XXXX

Yeah.

about when materially nothing's think conversation our Savi, we it. changed from capitalization, So, last on

We our continue our and invest as programs, et our well stand that parts to engineering in as well this for the headcount, NRC big operations as our costs quarter cetera. impacting you around programs, up parts to see is a with subsystems, foundational as vendors. are certain chunk or tooling, non-recurring costs Those

So, you'll see fairly those be lumpy. to

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little the the been or it's of bit all super the helpful. clarity a more since certification little confusing That's I side on appreciate bit. so a color kind And kind

more that is to updates? timeline ESA converges couple the A Does recent of happens kind a if the there. already lot it kind added these stretch out built FAA What or [ph]? that to into more, out is pointed requirements in Midnight. of FAA similar you of Just

way is so it. actually and it, the Archer Happy global circling our see it's The is farthest your we Yeah. what think have that that that. to standardize the answer like keep here leading we're FAA's Hey, we basis like stating. groups about this Today, XXXX these you're much updated I with highest eVTOL position mean, the GX Savi, and We just are more how to feel likely to earlier, looking most other along. point ready we maybe -- to it's that's our thinking back states super capitalized are of program the executing way it's Tom. from companies vehicles. regards stable. a to B, regulators on signed we're But we're in

helpful. That's Thank you.

Thank you.

comes a one with has line Bill go dropped. Apologies. question from looks Please of next ahead. Our like his It Morgan. Peterson JP

Andres Our next line Cantor of to go goes ahead. with Fitzgerald. Sheppard Please the question

afternoon, a Adam, you everyone. taking give about? came the in just the you target more mentioned and how announced this and I to the to in of thank can us and wondering, Good as our color Hello, for as past quarter. kind the little question I'm you congrats California first know you regards maybe first had Florida targeting that on Maybe route, were market.

So, just route kind of Thanks. curious how this New York came to place. take

Andres. Thanks

so when know years several JFK, that's heavy I've to airport XX, a that taking New looking congestion, definitely at became to that we we launch New you go-to-market municipalities our there's laid partner York think We're with for want And look considerations especially out, have the market local that that tech these are can forward, that is densely a the cities that a have considered. at. into, the United, It's services. strategy market look that different about traveled. traffic, for people mean, that through spend of you in brutal I trip. per the lived typically and and year XX XX center So, when XX attractive And markets we LaGuardia cities cities York very I most city are sat route, the the think probably minutes I one I call almost miles. XX that we going XX, in Newark, our something around, dense it's between, routes routes, million it's what country. trunk very

willingness We demand. because pay to there's every these day. trips is know no know we share there's taking ride So,

of with mayor, And with lot a the we United, excitement, so and around specifically the we route. this worked port authority, with saw

so, saw it clear a really we make And path to happen.

it's And it actually so, it's to route going we now constituents in. with to sees globally. together like first something not that think all we're we have It's happen. make those eVTOL force to the that a working be probably route And

Thanks Maybe No, Adam. to regards quick it. question very just a that's helpful. just in Got certification.

So full half XXXX. certification if correctly, you expectation the of reaffirming your to in second get understanding I'm are that

And so company missing if certification the that's the to unless the get case, eVTOL be something, I'm first FAA. with you'll

guess, expect important Thanks. of of be, that how capturing do kind I question particularly terms So, quickly is, share? you in my market to

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second build one. certifiable a to was The that from vehicle was day

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are. Maker transitioning be here but thought than less nobody So, we a year, in we'd

out. at at this the think Aircraft I coming And all Johnson, there Rotors on I the is of it European this even FAA really Director earlier side. Certification Conference So, the the we're very said is, to identical just mean, that you're so, kind laid the of there's time. can in to similar that he we've Germany, the Mel really plan effectively this together week, FAA you has -- in the are And he's assuming other we've -- saying, short period Archer, or nearly JOB, indicated the FAA of were at done really And projects, certification a he's spots process. see spots, that at and referring in basically referring that right? identical

so, of And to on went to also say comments the that both planned disposition he our simultaneously criteria. to airworthiness they --

a with, and laid we exactly we've we're out. we it how quick think, neck here it it neck in doing certification the are and manner, I process and done in So pretty efficient really

short In Mark. squeeze quick you. -- of you Thank I one, investments. quarter, cash $XXX maybe one if your looks the million you last unrestricted into just like it. Got for shifted term And about question could

the So me reason Thanks. Just help just, what understand. was here?

prudent environment put an to money clearly us. to work The environment rate just capital That's is Yeah. management, your Andres. attractive for

investment average We're our so an now, count say, was on are X.X% markets a -- bank. I think behind that So, with earning purpose fairly doing the our preponderance can we're I -- earning little of over the an in that We The money. but little invested that. rates we invested different. you or a that's different cash know just management of early.

good really prudent management. cap -- Just capital

Fair it. Got enough.

Okay. it very the pass Congrats on. on much. quarter. Thank you I'll

Andres. Thanks

Thank you.

Our question next of Please Peterson Morgan. JP comes line Bill from the ahead. go with

me okay you specific means wanted guess, with come any at areas better there to to time. completion, of of to afternoon. needs it's sure can you not just percentage that what agreed I upon. the you're appropriate that Hi, of is like terms even this -- working if compliance? can to or in good maybe be FAA if color in I'm still you quantify terms to of hear Hopefully, on remains I certification. back be provide accepted

Yeah. Hey, Bill. good question. a This is It's Tom.

we year FAA is by submitted XX, step meets of with accepts. interesting to under So, part reality Getting under step think of certifying about And giving two-thirds is, kind some way more compliance been dental kind into we've blanket that the of topics. the been on, areas pretty were we just stuff back been have meets the context The had the that standard kind when FAA set part focusing of that you of complete are proposed over there. compliance. the those all through the basically we've XX, a about it working last

more focus So remaining new the -- like novel interesting, which the one-third, they're are on if we areas. all in and

So, of you're sort that talking batteries, about about talking electric engines, you're stuff.

something transparent going as FAA, our that exactly part but final again, agreement XXXX acceptance those got through GX. feel B process, the is XXXX unlocked vast just of formal good kind have the of been those B of been focused the we with of just we've majority to by all really experts be of the discussions we're now areas. our FAA signoff with this Today, So at really on back and like alignment of this or that's

questions. your So, that answers hopefully,

for the agreement, Thanks providing this United Andres' that Yeah. follow Yeah. question. up color. On just on to

of not be. how how in side. the I involvement you cookie like do could else done permitting, cases, And Will because asking then in sites things equipment other more or guess, know, and in that really blueprint cities. the both the this York city already what -- And you Newark exclusive? CapEx Archer's or of city you already remains expect seems heliport be similar for particular presumably the it -- I'm what like Manhattan you be what's guys kind exists in I heliport that be area how in charging that? other learn in helicopter don't are approvals, this the the rest be You I'm that would to to of, of terms readiness, heliports public, terms at in I both on to, area importantly, mentioned perhaps There's sure routes. to other like a cutter open Manhattan. from or, can maybe it But airport thinking New guess, to this Will and would of and about side? throughout that the

Adam. is This Bill. Thanks

route the because sense routes and at could So, Archer criteria. identified specifically, of United was we both taking our really viable, to met this made be step much look we a that so think routes that it first and

part largest forums Newark market. is of bring customer sustainable the Newark. important a so airport help We the and conversations at obviously think side, it of On the United to strategy I is had aviation United to with Newark

launching this that's in And towards so, route. what we're really working

the a we'll ports work bring are So, routes. electrify done needed there helicopter lot need existing to there done. certainly basic is start, this and already basically that of get to get But the to infrastructure to that's

routes So is Newark, going -- like Liberty demand City New York there from already for to International. this known and

going But certainly done work it's of in work so to get my XXXX, said order we going were we're and start agree. advance, together, -- we the to be we we in one the remarks that's definitely there. right? and done. to launch This I there's in why for So, started that think on one so, other this this to cities blueprints become can in XXXX And in to route far

So, on I that. to come think more

Thanks. Okay.

Thank you.

question ahead. next go comes Our Bank. with Please from the line Yu of Edison Deutsche

Hey, questions. thanks the for taking

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Yeah.

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the So, at a hope share lot more we'll can you make event. it,

on sure. for? a from How lookout deposits? I do got know What then question, the be we milestones And deposit future United. we For you think financial about should

oftentimes small But And those typical Yeah. think talking could the that's Edison. That's we depending shipment. from Hey, And the three anywhere loosely six a The on would from delivered. is come clearly that's then to ones of milestones the counterparty there's would going is X% market or deposit And to in. to milestones would shipment about where Typical held until we're more the with can milestones, Mark. clearly be that the customers. see. how it. be commercial are one. This with little preponderance how next months is so you're payments aircraft you negotiating

thought there. say And the got Is if this I what to United your upon. be a about of in the Got it. going have this to with improved in app? one more integrated sneak interface to terms they app, be which own thoughts United. could Have on going consumer Is sees? the lot you Any I

This is Adam. Hey, Edison.

own with about on also thought this working some our we a this partners. have end. our we our app, on will expectation our integrate but we So, of we It develop that will actually is and lot are

flight app an I aircraft a app, ability the So, a on through in would to to as expect ability Archer book well. book to be there Arch as well as United an through

Cool. Thanks. the for taking Thanks questions.

Thanks Edison.

you. Thank

Josh Our Please next question ahead. comes of from with the Benchmark line go Company. The Sullivan

Hey, good afternoon.

Hey, Josh.

Michael Romanowski certification having contributed approach And how point, at this he so to been couple for has your joining now Archer, fairly months a hire. there to interesting far?

This is Josh. Hey, Adam.

FAA process. the has will a Dr. in through the role Romanowski develop eVTOL large in pretty So certification at aircraft go played helping that frameworks

really end he's our up as group. on ramp so, relations helpful And our we really government been

will much market. think supportive to entire eVTOL other been that we different with ecosystem more regulators are different help have other and we officials engaged of the involved and So, congressmen, and that very bring

So, it we closer have up and looking think together get affairs aircraft go FAA. the across parties timeline, I bring the ramp it infrastructure, just important government to side. the beyond across to across because for the certification the does But the at is to side, manufacturing as airline we will different us

you milestones? more follow you get to financially you changed willing on Are hit relationship the closer as that as the support then suppliers, with up how's And to they certification? question

Yeah. good That's question. a is Tom. This

from base kind found actually of strong our we've really engagement throughout program supply So, here. development the

the are and the to about We suppliers excited space also partner with who opportunity. big choose

-- or the have missed them would really they opportunities. seen some since that and go-to-market. boat, with them, I on commercialization is doing we're our think lot And focused other right, I kind and of everything a and Archer, resonates strategy see of we're say,

our can successful groups, long-term we program in So, these be that, relationships successful getting said long-term suppliers in such and place on can our too. that be having we're supply focused building agreements with

York, with regard And just dense, thinking addressing don't operational colder how in then the are obviously has last announcement one to valuable this point? And and think following eVTOL climates colder you advantages route, then, up Archer any but you how United scope? are just with about New other at climates or you one, do on

building vehicle the So, we are icing. no able to all outside, into to fly conditions be

when geographies. that's so we of one at big the when And we looking different of look the considering are at considered that condition one conditions

will it open is think climates, certainly to colder So, we and be do helpful. looking at I

In are big some advantages. fact, there

the it have yet. the next snow So difficult very can to it's you around and mess ice cleared. there's then snows The and all in day, and everywhere York a city's get City, New imagine conditions

cold So, it we transportation think but really limitations. weather, actually in it can come some does mode of valuable be with

it. you time. the Got for Thank

Josh. Thanks

Instructions] [Operator Zazula Our next line of Barclays. with David you. Thank from the ahead. comes Please question go

these the subject cert can for real get that my year, kind it think afternoon like of end certification critical you a what Hey, thanks up see be item more of are. pace to we'd I little level want tracking. and taking that if color next what plans, think Wanted good high you on the might question. Because areas being seems be the next specific will

Yeah. Absolutely. This Hey, David. is Tom.

specific subjects to XX cert need that project. agree got for So, the think our we've to FAA with about on way it is we'll plans

are FAA letter, As They're for one. essentially review just drafted first at be the The others now. completely we've XX in to that we looking we're wrote to submitted ready our them. the shareholder and waiting

through all back go again, checking and then this because the B XXXX bases kind right, think reset, on XXXX is the we administrative in step made year. about of FAA of progress and had it kind this going of you If back in of means this But compliance cert box. back context, this

next your probably right? been terms technologies. pretty It's, new in around months on ones, So, the that's the focused most the they're harder kind what's agreed SSCPs few and for are with the of or and getting to novel obvious, has them next, To question of really are FAA. interesting again, team which what

things FAAs or flight some certification say standards, The the stuff, based on one. propulsion So, an ATM right? They're that's still aircraft, straightforward let's integration interesting the engine material super process like more that. simple newer ones, like but it's the interesting. the controls, plans, of and right, on for existing more, those And are

that's our we'll come plans, what House, some on you the chart they this in a exactly if the week to I So, of good you hope thoughts cover and each Hopefully cover, next Open what detail, one. sur in deep which whole color do, got they dive, areas for are, you.

of I kind think Newark, And I it is if combination it like misconstruing Archer is description Am plan? think is it UAM the of that going going to I but the to be that? just I and route sounds mean, helpful. that said, direct question Definitely on, fell follow then, I a out earlier, Bill's the United. up bit, is out the could network, of a from some Archer little that

to we -- other is think going an the we public. this announcing journey. eVTOL David. that I were that I of a this way was just really just is than several -- company with back announce thought they is way, partner were This been even be us first customer. a United you to throughout They've companies public, which if unlocked going first Adam. to, part more mean, led sort mean, true the big about when a first more of that is, went announcement, which plan. public, it did company, that Hey, going whole in investor. the United a than we've in Yeah, They're

United's us -- able with that to opportunities we've since beginning get of challenges there these them announcement. to been these working and And to different be be really the the been market. So, and routes build through

well. that going and it is, on groups as we'd so, it's follow together. to we other But on too And about to as think one think important we be operating that market market do get that up like --

as and to because time to critical, utilize be for be standards, so, want a And there around big do opportunities is infrastructure, collaboration want to are other to I a we around there ultimately now, as to there long and some think we for We we of going collaboration this share in the supply want be infrastructure collaboration base. certification be think and groups saying we've well. industry there been

Appreciate Adam. Thanks it. Great.

David. Thanks

Thank you.

next up Our JP of Morgan. is Bill with follow question Peterson from the a ahead. line go Please

else do And Agility further follow launching I'm XXXX Thanks suppose that -- to with but I it's any Prime. for the of DOD early FAA you, nothing I not ask maybe context just the guess have asking to the to you has you other you in somewhere Yeah. some the is might there's would with at not engagements -- the guess some taking like up. that revenue them, I current to applications the you wanted did delays could about or allow there with have if time later. the passenger limit for in opportunity Do would work something on that cargo business on, or even or time? from XXXX work timeframe, start not

is This Bill. Hey Adam.

DOD we that So, opportunities DOD looking have through larger with the that at have out. working we programs different come yes, with the is several and the answer Agility and have Prime to been

to that that that an is so add want the But DOD with working do certainly heavy. is I resource dual And very we're tracking. opportunity

place. those all margin opportunities, There's the personnel in heavy There selective. in competitively you it's each that business, And And very likely are so, systems evaluate bid. pretty end to be requirements we put do have one because and have very they're of to limitations. low

there stay to to and an get interesting to our vehicle And But the ability opportunities do on ramp. off it very our focused assessing want FAA. could commercial are focused, So, those. with we are we provide market very with

have and And where stayed we put majority really really laser-focused of so our efforts. that's have

Thanks there. Well Yeah. color the for understood.

you. Thank

from next with Please James. the follow go line of is a Raymond question Savi ahead. Syth Our up

the thanks follow Hey, for up.

Just potentially a last talked you know adding partners. quick question. some quarter I about

this was partnership? a where want I that's curious, have with relationship United new you strong partner? what different feel United. from they You could the Like aspects would maybe what than

This is Savi. Hey, Adam.

ways couple I about that partners. So, we a think think there's

incredible in job side, lot we're doing a the OEM about the operationalizing think side. us United on of airline has an done helping the work On

OEM a we time that so, manufacturing this side. potentials at we've are, rather of And more partnership how That's terms we have about on the Stellantis in working potentials. than with the of a it. thought I on would been have through conversations side, lot lot the say But sales

And than we've so, on think I other for customers mostly engaged I do folks think we airline same in opportunities other been are rather partners with the partners, there more with traditional as the United. side, way but work

I get it.

them? So, would for buy and wanted be of their kind aircraft if operations somebody to operate

correct. That's

Thanks. Okay.

There are I additional Q&A remarks. no like for to any Goldstein, of closing at you. End this pass would back the Adam and waiting time. conference to Founder Thank CEO, questions

has my eVTOL The go-to traction, FAA's advancements really that across wingborne with Makers visible United, aircraft our achieved reinforced comments this that right our public was with markets route, -- earlier increased announcement we joint strategy. we've by certification and the first ever go-to-market our efforts have the flight, conviction with which week, our our the technology

Thanks have We the Archer team joining allow market. best us. will to to get that for

day. the financial hope XXXX concludes Inc. That rest Archer your the enjoy you QX of all Aviation call. conference I results

may disconnect lines. now You your