Archer Aviation (ACHR) 26 Feb 242023 Q4 Earnings call transcript

Good afternoon, and thank you for joining the Archer Aviation Inc. Q4 '23 Financial Results Conference Call. My name is Kate, and I will be the moderator for today's call. [Operator Instructions]. I would now like to turn the call over to your host, Andy Missan, Chief Legal Officer.

proceed. may You

is Good us operator. Full and you My thank Year of Legal Thank Archer. to afternoon, review joining name Results. Financial today Operating and Missan, Archer's for Chief XXXX Officer you, and everyone, Andy Fourth Fiscal Quarter

today Goldstein, the our and Mesler, our CEO; call On and Tom Founder Mark CFO; Muniz, are Adam our COO.

those uncertainties to call, statements. statements. These risks from and forward-looking differ forward-looking will results statements actual making that by be we cause During today's may the contemplated materially involve

to For more call refer result a statements under Risk information assumptions undertake about and information update new this events. uncertainties, of obligation today, forward-looking based are these the these future to please risks of statements that Factors. Any on we as filings as our make or on we SEC and caption no

both this now call is non-GAAP and Adam. GAAP non-GAAP will financial in to over on included IR we our posted During A GAAP turn measures the of like letter to our call, certain discuss to reconciliation measures. I'd shareholder website. And

that these path gives has commercialization. XXXX. our certification, unique of a in and towards taken will we why to going positioned go focused through live each to scaling I'm manufacturing confidence take Archer me be you approach and areas in

First and our have we aircraft designed since most certification. importantly, Day One for

before phase, in calls our will implementation through last industry. of derisked certification anyone Midnight's phase certification the and to believe type approach major our which the to that allow the Now program, the focus else move to is FAA shifting team's that to path certification us has we our

of components subsystems either other suppliers leading heritage, aerospace that from that with sourced on thousands today, As certified. other are approximately you earlier from certified our aircraft saw been or XX% previously are derived they flying today or which they are of designs, meaning hundreds certification have midnight already from and announcement

meaningful the and become us is to their these already to best gone Midnight's to allowing budget down has the scale R&D facing believe deeply certification about to integrated history. we that as the in execute velocity we our a vertically familiar have be uncertainty mature aircraft launch certification is risk ability company the to our strategy commercial findings flight a and used Credit systems a we certification suppliers minimized incurring pathway, with focused to operations. enabled Instead, us alongside compliance relentless had experienced part simultaneously would at us order what fully now three our in even conforming first more of magnitude building with type This risk testing an continued aerospace of of redesign. to testing, teams be the and and rapidly and that, in FAA FAA the be program. It FAA clear to production costly sector Given and design most For higher industry piloted be

the detail is steps will able sourcing the part letter, you phase scale to detail the the ensuring our seen in aircraft goal Tom subsystems to providing through on into greater focused demand. line walk we team's the be FAA efficient with of we've how as as through as components of plan with certification through our our shareholder As more progress can in and clarity our this we we in program. certification been of around make a our provided continue significant of amount strategic well of important have will steadfast to and working have manufacturing implementation process. Equally

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of there, Aviation. leading Air with air We have Falcon operators and the Chateau partnered two

expect us. an for to UAE launch be market to continue early We

but arguably largest continue market we strategy: Mumbai most last, whom the for India's rapidly conglomerate, up and crucial air foremost our an efficiency. partner, taxi Bengaluru across part be us hospitality launch are brings travel, our of also service flying XXXX. That to InterGlobe to and India the in plan Capital progress with will Delhi, aviation to globally, we JV a believe and cars We standing making Enterprises,

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Thanks, Adam.

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our lot year, direct order we partners. of building a in sale our an indicative book Over the of last have achieved for to the traction aircraft

shareholder This book. selling in letter, Further, potentially in for following piece, we FAA-certified a order to available billion for in the cash order aircraft place revenues purchase business. that XXXX have the outlined be that we own who likely XXXX order only from it. a for our get in grow would the volume. opportunity of an their to only key pieces XXX are the commercialization recognize in to the proceeds work operating and and With to clearly many model price up is we we continue our indicative can networks. hard significant into aircraft UAM industry in confident to need currently are fall their have team relative we is we to with to deliver do an up we have ahead, on There estimated expect to This As direct early aircraft creates of tremendous but in place to arrangements average the aircraft certification. have a to potential $X book OEM million be produced $X.X to business generate will sales be and differentiator revenue that to and as market others to in in lots are

on very our performance. thoughtful our we manage Now how let's been get We've to financial liquidity.

four has balance Over unrestricted the quarters, past relatively remained cash flat. Archer's

has supported 'XX. by can a QX of cash The to In liquidity that relationship been our increased our 'XX strength QX actually from fact, Stellantis. you slightly with see

year, a last capital our that Archer to with of to provided million $XXX allowed at discretion. stock price take opportunistically a advantage access Stellantis This Just agreement dilution. minimize us allowed to forward equity purchase that us strong

that to liquidity continue will support type Stellantis We through this commercialization. provide of expect

this of our available of are debt company, of attractive combined equity remaining do of strategic structures. We million liquidity, ended million partner our approximately sheet, approximately on positioned we which a included the with 'XX $XXX.X to cash with under attractive various and cash $XXX Given proceeds and FY arrangements. equivalents through as million they $XXX expect on long-term them the terms and balance

of We also million restricted another have cash. $X.X

$XXX.X $X.X cash $XXX.X approximately million. $XXX.X also QX equipment a used million expenses $XX.X $XXX.X did part by which total $XX operations $X.X of stock-based expenses. prior and the Specifically, the [ property, used rendered plant services for I by Cash million the equity financing ] increased million net million by offset in $XXX.X million to proceeds million, $XXX of for and Force $XXX.X year. Switching In app and as net approximately property, million GAAP quarter-over-quarter we and to by $XXX.X in $XX.X from financing with contract results from we expenses. million. our to them 'XX of estimates [ range note driven of million quarter, $X our On operating and of receive DoD included activities that compensation were warrant of the ] were These $XX.X of debt basis, the purchase operations to cash $XXX for decreased in in Year-over-year, the equity debt equipment, in million. of cash from was plant million activities primarily million was million, which offset by fourth million, purchase million. within

including $XXX.X GAAP expenses, total and warrant 'XX, which million, FY other million of expense year operating noncash stock-based full included compensation, expenses the $XXX.X items. were For of

expenses in first top from costs costs and three opportunistically for certain we to the incurred quarter three as operating conforming are the we total mature quarter approximately million of expenses $XX estimate our parts QX million. started XXXX. as quarter per aircraft the of nonrecurring aircraft. $XX experiencing expenses that which supplier of above ended was manufacturing $XX suppliers We 'XX as non-GAAP range accelerating with was services Our and Due nonrecurring our quarters well million, to which the $XX.X were the for of up our just million first during $XX end million

year total were full operating the $XXX.X For FY 'XX, our non-GAAP million. expenses

Our operating elements the commercialization to expenses achieve of investments plan. include the required our for key year

production approximately made in expenses we and to of build our components costs the people total aircraft. Further, to SG&A systems million the mature certification our our the We incurred continue in was suppliers. in nonrecurring expenses operating that to to partners design, test for investments of Of scale to non-GAAP establish required and our and activities and the at California $XXX.X for million manufacture development, invest our to infrastructure operations. several capabilities the supply our expenses functions Midnight in $XX aircraft. Midnight facilities out for for year, at and We chain

spending add in critical in aircraft functions in and support capabilities our planned bringing of outlined, and and Turning enable which we're to teams In highly XXXX will the with that our for we investing briefly other efforts, discuss remaining way and building our will and the focus our engineering, for tight to year impact I'll manufacturing support piloted capital most commercialization. certification test of conforming our our disciplined first in spending. dynamics manufacturing continuing that sites, up commercialization XXXX, facility and in scaled to Tom support to on supplier have our infrastructure efficient their the begun to our high-volume to Georgia, six the our Covington, invest possible. get efforts already continuing to Adam spending manufacturing have three, completing workforce fleet component our our of at the support the of

translating flight anticipate additional storage and training non-GAAP million up into we we expense includes and Further, As anticipate Onetime flight supply have pilot battery [ headcount, commitments to expenses QX Spending total our do year to proceeds development. operating expenses u XXXX, finalizing payments throughout related operating a open new simulator of GAAP of spend manufacturing from Operator, $XXX Adam parts for our autonomy million, our and of ]p opportunity current $XX manufacturing and expenditures. goal around standing million, contracts the contract related manufacturer, we with executed. stock-based Archer's and in receiving receive also expenses questions. to approximately as to which thus to act that expected work $XXX million. cash for total our to, it cash $XX the context, and cash the materials test expect delivery it capital our and mentioned, will now other ]. With [ and aircraft relates any respect that predelivery chain, deal we additional future, expenditures systems, our Within to the receipts, DoD substantially compensation order reduce offset as we energy from aircraft to with million in $XX Stellantis we of arrangements to

question is [Operator with first of The line Raymond the from Syth Savi Instructions] James.

or is I Just think of Mark, get because being cash But well. it bit understand was to it -- do was quarters, little helpful steadier. tailwinds to these the step some -- go up to curious you go wonder more burn, there tailwinds, you I cash as of the some you the in could you kind we should on as if what's going of expect a that the as through of

think through framework, I'd talk Savi. I a to you

nonrecurring got outlined, head with NRE The count increase generally to in year and I cost four in the and in related and be more and We've onetime covered spending parts, program conforming this vehicles CapEx as our reliance in nature. on investments Tier So should our is modest our ]. maturity, growth X flight parts given in than people, suppliers vendors [ more test past. Those are buckets.

you our should you the second I that mean, come half. see when so that for in second expect to year. down see quarterly I provided could say rate, run I the contract QX, the rate half run in the And And of range

have the you timing of the bit XXXX. in if And will of work how the versus the that have be testing. flight you might, the of that around what's done on a kind of aircraft the that the here I And will how aircraft? magnitude much the on want Could appreciate you just provide kind on conforming to of much be? Just current color little just year more --

last It's flight months question. the for been thanks a Savi, in great few testing.

flights last on we earnings mentioned the call, now we over and As did that. really the between XX with happy We're call.

X and the per were and to we more coming ramp of day, that the Some plan up or times months. days weeks really we over flying

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the will with Yu Edison of Bank. Deutsche line question from be next The

time I had the one line. just on

cert put a ] and together realistic operations? flight outcomes or If getting everything you sort range you on testing, time what's you of of that a line to [ mentioned could for see

Tom. is this Edison,

that So I think way just at our strategy looking about right the think holistically. is to

everything the been around minimizing based risk has So quarter, this tried highlight done in to as we really we've certification. materials

from using suppliers all a clear design, aircraft of heritage to with with to components everything partnering So have as us that's a with cert possible. very simple combined that, enabling forward path

to lot making in can forward. today, is say confident maturity really we're a There's our here I of with the work the aircraft relationship certification. obviously, through the FAA to get path progress. I'm Standing and of aircraft of lot design positive still But super and a do, the

specific to timing As certification. for

everything really I but year. think this up commercialize to to FAA at point, that's in ready next to the power we're doing be our

over first contribution. sent still got think you And be year? And early you've XXXX? on then about contribution in a follow-up for to this mentioned we is track do I some the aircraft How know the also DoD. on the

is this Adam. Edison,

flight been Midnight So successful. has program as the test

for that basically the DoD. prioritized date the we we're aircraft, when do in other switched with term. so near to efforts that in to into flight We we mode begin the continue meantime, delivery can we execution to But waiting that the a and DoD, process up the DoD expect with the start on have sometime now be with testing

we've we've simulators, mentioned of and on already topics. the started autonomy, well. against other as of collecting flight work certification results cross-use prepared several So of Mark And in remarks, as that started some test

to that do we throughout the but ramp up to on year, year. this guidance given like haven't We we that a get expect expect total amount dollar

question from The Sheppard line Andres of be with Fitzgerald. will next the Cantor

I the the X. to in referring, to ask on certification wanted different case, components. guess I Slide guess, I of I'm this

So the is faster opposed narrative understand behind smoother? which, will is manufacturing you just these you by be the trying because trying a the I'm I'm way, us, slide. guess, understand process or My perspective them to components just then there. that are it's essentially sourcing question process the anticipate to I to great I thought certification as I think the that

If a you can that little bit would maybe be explain great. further,

Tom. is this Absolutely. Andres,

So yes, ago. laid executing the couple really that on right. that's us we've strategy of a years out It's

majority progress Garmin, with very to alongside propulsion vast it's that we're line us to from the have aircraft chart can we really forward. you the And in-house, do the make with hit referencing, sight these to electric working certification of Safran, do. past experienced FACC so need that a a lot suppliers for basically components reason, clear we the aerospace all able to helping these Honeywell, And all partnering systems, heritage. exception of and drive things companies and We of where by of the you're system, have and with choosing we home experience other that and have knowledge, that programs, want what which for subsystems of like of see expertise,

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suppliers, companies commercial traditional aerospace could certification are take actuator Those there's on using like not an the may moving those. or on an the from exact window, the on is we're today, you a lot airliner based sourced of if the everybody control on out aircraft what imagine wing, Honeywell see flying you moving the flaps technology we so you're like be So look a same same example, while seeing that all doing you're out with that's today, expertise. there services

through efficiently. us last process So that well make we certification phase our way really this of the think positions to

from you've continuing of build of follow-up. sense, direct order continue to that and update my the a Trying manufacturing the is quick coming you emphasis guess still that there UAM. a quarters? book disclosed, the maybe a something maybe Or real more to and the model? And area regards into In business to in anticipate question large to get is to is as this the book certification this order grow is, focus I

as order trying next Just year? sense forward look and into get about should be regards a into in what and thinking we book XXXX to of to we the

Adam. it's Andreas,

starting to the show highlighting of deliver to the kind really that as readiness start in to a this phase book of the wanted has next order we So company aircraft. really actually way

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of question The Pearson will with line from Bill JPMorgan. the be next

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to answer Yes, happy that.

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parts take on a sort you sign can your care then responsibility FAA with between that Are the Archer sort of breakdown comment to is follow-up, as can there they and of the or these And and working on off of not vendors of on parts conforming behalf? conforming? Archer's

the Yes. idea. That's exactly

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David, this is Adam.

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just rapidly strategy. we is do to strategy So that next to here the making have it's that think I I at months. clear us progress. that are with all FAA. be really really over And easy from of significant the we'll with that And continue Again, chart a we choices pay through stages go should back put the shows the but that that moving in looking that out the the the original that this And lot to has not chose beginning. of off XX we think we

pay need to any could how in from that the And the think certification at 'XX feedback very share there? of and that really, feel path do your the up, based senior certification If have you FAA senior Do some some there? to you to specifically on on I your FAA the to hosted could got recently is critical in the Boeing then going you like that follow the personnel you events to increased negative Could you of side. personnel ramifications terms attention 'XX? are recent

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us. simplicity, And all the think of really so that's easier for appreciated it's because it I the by work FAA makes

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is this Adam. David,

our people getting pulled off of any slowdown the a type or addressing project around specifically have comments No, we Just not in Boeing. seen work.

In [ administrator a gone OEMs to and fact, with accelerated way. just encouraging really the in seat D.C. had administrator it the amongst the the I it's recently, that actually with was Washington, at and meet the Advanced [indiscernible] are other table And large was that ] AAM, building. new

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can we think I it. call

turn to closing some session, Adam remarks. the will will over That back Absolutely. conclude Q&A it and I Goldstein for

joining today. for call you Thank the

we industry partners being proud and you to in go us of entire capital-efficient as approach entire execution helping us Thank a year. since which enter and call. leadership market FAA the Day liquidity the addition XXXX. next the Archer tenured to strategy that leapfrog excited the In the the maintain for that also for position team FAA really of employees taken much others position to our on bringing process. I'm -- very flying into stages the strong the enabled cars of suppliers, final sector we've helped and with has about very in maintaining the relentless certification Very the has our and and one

concludes your you lines. That Thank participation, today's all your may call. disconnect and for now you