Archer Aviation (ACHR) 9 May 242024 Q1 Earnings call transcript

Good afternoon. Thank you for attending today's Archer Aviation Q1 '24 Financial Results Conference Call. My name is Cole, and I'll be the moderator for today's call. [Operator Instructions] I'd now like to pass it over to our host, Eric Lintel.Please go ahead.

Thank you, operator. thank quarter joining operating and review today everyone, first Archer's and afternoon, you us for to Good financial results. Eric is name Lentell, Counsel. General My Archer's

statements. On by These our actual materially CTO.During our call, Adam may we Mesler, the cause making today results the risks today's CFO; and from forward-looking and be statements. that our Muniz, CEO; differ Mark involve those call Goldstein, Tom and forward-looking will me statements contemplated with to Founder are uncertainties

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

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

believe flight XX-foot envelope, air size prove commercialize in near I a what transition largest this a it accelerating goal excited industry. has be differentiator And exceed Thanks, for and an we we couldn't globally.When optimal design potential be to automobile market next with making what the maximize all both Midnight that goal, including to this decided QX, vision of certifiable the I provide to would to a called our became reaching I Archer, commute a over the our we while XX and We Maker.In aircraft. nearly flying flights to then the XXXX and production world-class to benefiting focus flight wingspan, Midnight of XXX at and with for lessons our to XXX the to more aligned as And higher Tom lessons cities year. X,XXX-pound in design that electric XX-tilt-X the the capabilities We envelope, At XXXX one was congested when a out payload XX-foot focused from used then Midnight that in the expand to we that a of believe industry. intentionally XX-mile designed performance that as will soon think through will and being continue our manufacturable Today, us make single the built an to down and are flight. desired in the is pace choice weight that vehicle ] full Maker. team the And flight air sketch steadfast test XX-mile [ cutting-edge future. as at and Midnight. vehicle growth be weight all comforts, back possible, evolution, we first flight capture taxi midnight market aircraft continue to commercial high-speed every logged on shepherded Muniz commercializing a corridors of mission. those build designed We've on Midnight. a sat wingspan max gross mimic pursuit design to our aircraft transition today.We day it cadence, to aircraft endurance.As bringing for remain aircraft gridlock to XXXX, to Bower, X,XXX-pound Eric. one and flights, our We learned XX we Geoff aircraft on tremendously the to scale, flights addressing eVTOL we form purpose-built we see on full-scale aircraft, this from the our as max payload such test aircraft conditioning.I day in necessary velocity this our be meaning were putting aiming Midnight

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of track final year.Yesterday, in on to our assembly those flights and and comprehensive production later test tour this in piloted is first begin a video integrated lab now we The California. of facility published

capability industry will spent in is years Given having need over manufacturing our our our to made our our support ramp. to manufacturing planned timeline throughput with battery there test battery and for certification similar to have production producing million this to also come.We the packs line aircraft aircraft our production progress with we I to and capable the in automated will confident are leading are across to earlier engineering and investment installing that that in chain we the $XX on supply way enough This am suppliers pack scale decided forward year. programs, high flight we our with this line they able ensure ramp Georgia. our support of move and achieve the pay off our investments

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Thanks, Tom.

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Edison Our from Instructions] [Operator Deutsche with Bank. first Yu question is

in lot there business is or aircraft India? a of UAE for international should sense think a the the placed economics as opportunities early you years? The you about clearly give places range gaining you a would are such amount momentum. us Can And what say can the how realistic of for model we

is Adam. Edison, this

think are I correct. you yes, So

the and We are East. very the excited GCC Middle or international the about opportunities entire even

specific One maybe guidance for think but in. the on sizes, given very any fleet specific about it. a haven't way is you leaned to is here's We region

specifically places one have a world. the on GCC we've we the UAE aircraft will talked the lot that And in first that that of confidence note. I be about so And increasing the deploy

As believe that be you will people look bigger much market the across the think. entire actually we GCC, than

happening in industry. this You airline the can see

and India airlines, where So the about and excited of volumes largest side. But is X get Etihad. Qatar, on the built really the I most region more the Emirates, revered

continue to to that potential in the one believe India I be so largest world. of the has markets the eVTOL And

we're so set And all with working to InterGlobe up those operations.

excitement factories producing in of there's But we'll next facilities. build year. there as opportunities Georgia soon the And for aircraft start out as definitely as local to of So also to lot a do there's well. us that

of or of to know from you would to millions give that just start sense milestone-based? how a mentioned hundreds look through? need what Is when it that, happen? you to I you flowing terms of And do And that that the of, that is follow-up support like might us in UAE. Can -- make to something

Yes.

coming us really of enticing activity to of months. some The the to with on details economically investments to the framework share a region our It's comprehensive and in and it's things and move in like the there. reaching being aircraft make our will that And scale I'll focused very us engineering in this to ours subsidizing for to bring us specifically ramp timing tied and it's on agreement. a more of up operations attractive accelerate be region. it's multi-year But So Abu base Dhabi. specific intended agreement. And

from Our next with Cantor question Fitzgerald. Andres is Sheppard

on Just a these potential to markets enter feasible? term. understand. want the an curious maybe markets UAE India obviously potential massive market. of to And I'm something those congratulations be I'm more kind that guess, build the is as and the to is there the and less TC? vision your there without of that question. these to just to enter curious I you would But the on Adam, interested, entry in how the that as infrastructure trying opportunity markets, And either I near given into to Would quarter. see markets on maybe be

Yes.

And to the side. on and I'll over I'll So certification about it the then UAE. to Tom start talk hand I'll with start

government identify the a which commercialize to of routes, us done analysis for of dozens to is with first we've lot make our on the and lot of region. partners UAE with So a the sense

from factors It's there. between of kind to Emirates the then incredibly as One so and ecosystem quickly look Dubai, then year, across several X initial to plan been expand at launch is intracity all early our that right Dhabi flights And course, Abu Abu there. looking And well.So is there's we now of with and supportive. at. in as Dhabi and next as expand routes

with not there are local are well we who So go operators compete to established. going

partner to We are with going them.

announced Air the [ Jumeirah, placed they've both Hotel the so is Falcon one and announced operational ] is Dhabi the which of Atlantis bird helipads And Falcon, partnerships, have Corniche. Aviation midnight at the have with their several also with other we've Chateau, on orders first those in other Palm Dubai in in and for Abu And today. One reports. aircraft.With both

not it's there. like take So there's a of launch time huge would gap that to

And this side. the as more category Emirates unlocks investment sharing helps but we'll routes, unlock obviously well. is service so next And also be really routes on specific the on the intracity it the about too.The think to between those

support And well. investors big we've so as the from had

funds as we've sovereign within and investor, Abu ADIO and So early Investment Mubadala Dhabi sovereign from Archer been Office, seen fund Abu the Dhabi has big them, support an wealth support other also but region, well. wealth from

And millions plans believe we're landmark the I only of accelerate that of framework the investment the in that agreement, -- We agreement dollars hundreds announced are we side in of covers a to commitment. our actual on the that. really become to help that deal us operational.The sector the from with government comes announce capital ones is the government like And UAE. to other

His UAE, show Mohammed Abu family. the Hamdan there another number bin a His Highness Sheikh opportunity bin Sheikh Maktoum, and Prince Crown royal -- Zayed the of in Hamdan other to Highness Al the bin in family, members So Dhabi of we've and of the Mohammed Midnight Dubai, to ruling the had

timeline huge entire well. some answer really seen amount there of well.I'll from we've the of And Tom, the support certification so a just from as -- as questions government have

absolutely. Yes,

that state is the the the country that is we're the based. certify the right? aircraft we're FAA. the for framework And design using been to where U.S., mind has together in thing one to of So put That's by keep

and that Adam GCAA of case, and even the we're the those. the interest different UAE globe said, with regulators, across is seeing one really So from as being

So where we've are we're them, process. the engaging talk still been we and certification about to engaged with in

only and wherever Our we're and north very the that. the think airplane a we'll world really on honestly, with to put market, FAA that. we're continuing star And the that on is execute this. GCAA down we're in marching on safe aligned we're is into with clear, UAE process We aligned

I soon to UAE to exactly to you market or I be But or what year. So we'll a you other as safer tell ready country. tell that we'll U.S. as when bring in any is can aircraft can't market next be

just obviously wouldn't and could markets without you Tom, maybe type that in get enter having without would see just markets these in type could a where certificate? certificate? I possibility that that that, the that, guess event delay you to to potential be follow-up there process, Not on a situation you these enter of in yet operate a a

Sure.

their And aircraft to working leverage that we the that CERT say towards. CERT into they can that. that So the countries, is the bring are ecosystems, ours regulators us obviously, But their and for we can that data regulators execute can't I gathering continue in I are what for charge speak FAA the as other push of to into program are like effort.

will other need feel agrees kind craft certainly, for come and the time and mechanisms safe So they've point making our a will is that same data reviewed of conclusion. a FAA own there we there and the launch where ready their so regulators be determine to and to the

last one just one Maybe Mark. for

the words, incur, expenses incurred, other stock-based about guess, I that Or the into you a future Should think I consider well? year? there should So as we be other in thinking throughout Is that that? mentioned could you and comp we that you is one-time expense. resolved? quarters any Or

our range. Andres, comp, million $XX rates to run to respect that in million $XX With stock-based typical Yes.

So could consider going that's you the think forward. range I

on the Congratulations again. quarter

from next Savi question is James. with Our Raymond Syth

aircraft, build? I insights you as kind curious building of and Midnight any the were certification build next was kind versus and aircraft these your just you first learnings as of

that's this we're a conforming building Tom. these great first learning Yes, a Savi, Yes, question. ton is aircraft.

of things. really it's So think categories X I

the and The aircraft. first about together assembly aircraft is learning the design essentially and the process putting of the

LRUs So companies if we've is we we really assembly. and of you all of integrating suppliers, talk final strategy manufacturing is because batteries of This electric get always the outside remember, big the taken, aerospace from engines about. our just

are Those certainly, just kind usual there. So the things. there's of some type learnings

like is integration different this I eighth production manufacturing to one have building important really to overall just So system. fleet score. up teaching at X the aircraft think that scalable keep in better and get through better is is thing set we the every aircraft Archer, here that gone and is we're Building that here. And mind us process this how time.But at process not a

coming that a from also learnings are of lot So side.

execution that aircraft, safety data build our implements up in So as we manual. all this ties quality system things that collects our setting and of like how processes our manufacturing

a both enable position to up of in FAA ramp certificate manufacturing these to So get years. our things really to scale to all and coming in production are the us put here critical us the with

on settled? going was? we maybe, this we of is kind expect quarter. adjustment kind And -- Could fully forward? color kind the more what little with kind then of give you Do that a of And do Boeing of that just Mark,

had There a a Yes, adjustment technology had mark-to-market -- with them. resolution fully to to of the we we're agreements period see them that the arrangement final in we more you Recall make that's was February, that that that make. adjustment for ]. that. with ended any true-up that had series won't we [ obviously as settled we was last of That's had so

is from Canaccord. Moeller Austin Our next with question

existing you prototypes needed to first million on the to use compare expect cash additional question $XXX does How for certification? how the building much Midnight of And my that liquidity? Just here. do

Mark. is this Austin,

haven't cost they're the I we aircraft what builds. So disclosed those essentially of mean, are. early of each prototype

of going forward. million cost $XXX However, within those the the liquidity fully is contemplated

we're comfortable So there. pretty

needed follow-up, process, and to to the Certification feel generate do own you need certification or doing many their through pilots from you'll either data flight just for with on now how XXXX for to FAA on getting And comfortable conduct board the Type think the to flights tests?

absolutely. Yes,

So categories as you referenced, there. flights there's kind of X of

but to is the to the the that And to pilots flying start that FAA Authorization. design testing. basically ourselves what on or we do acronym, That's FAA flying safe. there's designees enables is exact each That's to the then number gather there's I one very stands to prove logically has flights building, Type gate of TIA So a of X post data Inspection an company ourselves TIA. specific for I have the hours aircraft. say is objectives that don't go objectives we're an or can gather, and into of what a aircraft for set you, fleet sequenced this they're of for quite bins test and things.

if of testing like hundreds talking here, about hours of of magnitude, activities. of something not terms hours testing these into X,XXX orders In of we're across

from is question Benchmark. Josh next Our Sullivan with

on certification? there, follow-up need the the tent when the do you ahead you there to gave cash Just left but comments, some question And cash are cashes of large what for peaks? the during corridors think poles

What was the last part Josh? of that,

do when cash Just the think certification? you peak outlays into heading

I with facility the into our what are materials CapEx gone we nonrecurring the mean, the some discussed Covington, here out that period with the big well out California, facility. in base, consistent To vendor aircraft, the build of through as the buckets and costs building recall, in Georgia past, as our to this the has production

with quarters the cores you think capabilities. spending that functionality now to in these out those and those as it I can think right peak about are that we're respect building

range. to million I that guidance million $XX the provided the So in $XX

As sit here sort that and our we are we the right show where we've at our the construct models current -- today of now, are. spending we given and of peak rates company

think think materially I you're answers that -- it asking. what I answers

recognizing of as of should just cadence know, see AFWERX-related you when really the as, far contracts, that kind then we the revenue ramp? And

of we They training to that recognize. a from slated simulator of range to lot year, are the work. Josh, have course from tests there over this so anywhere work flight programs to

And a And some so we quarter, few I received fourth we think time. already long Last, million are cash well. receiving received different payments we've additional I a dollars. think, as this year

be of start come to But end it'll I there. that'll of through the in we go so order lumpy And think the magnitude, as it'll increase to forward through year.

a Bill question JPMorgan. from We Peterson have with

like what and the to then year. the ask, last you flight near later transition to Does guess maybe time mean this supposed future mean? it's be to achieved current does that quarter, expectations. this it full remains that I expect to are within I'd piloted third be appear, you relative And quarter? before what It does 'XX on maybe relative testing early least first at in or now, delayed was even this year to half the prior

the guess, what do doing are testing delays? ready to train of what the the be get you to piloted you'll to I and for end that? has led What So pilots And gives able year? you before confidence

absolutely. Yes, this is Tom. Bill,

Maker Midnight time happy with. a question part couple give the we transitioning first I just ago, that, through XX the stage for context of was you it to to your first under to months little us and which to of super transitioned regard took years the a or So with aircraft, that, first set on some get

Midnight, so for I ago, asking X think here. getting we little more months a the happen close X We're it'll months and started October, months coming or the in team in I'm did on date. couple precision the great. transition, you're to flying pretty confident

about regarding excited flight the really ramping piloted lot, testing. So flight a Learning in progress up testing general.Your question there.

XXX of working the taking safety that or have towards the team so and methodical we're that steps milestone working vast we thoughtful, folks, that engineering basically, first, here, all majority So towards comes goal. are

suppliers, safety deep can We're declaration look about getting you testing. flight if our of at coming can testing, talked pictures into aircraft getting letters you from see together, our you doing of so And Ironbird. shareholder letter, see the own the and

be to together we're we're this do job? happen doing great I everything's think year.Would to it So make like doing I think a coming Absolutely. But faster? I awesome. that

we're fly about safe progress. it's when good the feel to and fly ready, when we'll super So but

Adam. Bill, this is

of Just there. thing Archer. to going on starting This through. something color envelope, full little is go This add to aviation a the a unique including through test to transition, of the companies flight a not campaign, the have is all flight progress is

And so flight both talked the a physically even difference configuration. use Maker it about control between aero lot schemes. same same a We We though model. the Midnight, know I look and they Archer with use they're gets because different, XX-tilt-X largely the

through same So everyone's the thing. going

faster And progress have quite than Midnight within so year. been X I transitioning incredible Maker we actually than the less believe we'll has that. transition even And

And that's very as know to easy of understand programs. about the it. with to We some so transparent I just happen not necessarily be

should -- And excited really are today. expect lot flight about where so is to we content. test we're that see And you of a program

appear a overseas that least And any at an your knowing you some update to case, the feel, now, or on be good have in it'd get glance, to and opportunities of at a go-to-market lot of deemphasized efforts opportunities program. DoD does it million be either $XXX

that? deliver with the still think next the expect opportunities the of on how planning you just aircraft in us update to the guess, you'd DoD? maybe the DoD should to last I we DoD. I year milestones Are year? can this you think and quarter about actual And year, an them the second

Sure.

from the that to June, and But the all more priorities the entire DoD balancing paperwork near submitted process not are we the we then to program. cash we are So delivery DoD said, delivery test we'll related. And military in have flight believe programs term, receive of afterwards. necessary that being the to begin actually in expect our the airworthiness and

receive that items, to to So payments are that $X we items, million $XX there's can of for simulator work. other items, to training example, million testing the from to DoD related

a where as kind are other But to of items. comes. of prioritize come trying really some we'll we're coming of will those the a lot take And them I are of lot -- dollars from. it it those So from think the

about to terms Or testing the have do have parties? If a in-house partners whether of trying need your need? full-scale systems and to having programs? Just do testing get guess, your your, I Or sneak talked parts capability. testing for on for your just to peers can more, in credit, I third sense you kind or credit test for, through for one -- in the for you of access tooling it suppliers capability? you your do a one capabilities, be your test of

a of need. all everything that No, relationships this advantage we suppliers the capabilities have. and we broad have they nice is we got we've range have Obviously, and

So we're No of we're leveraging specific. those, all needs. executing nothing but today

I'll a is of this little you give me Adam. let give just -- bit Bill, color. you

inceptors, sticks. side aviation example called builds which an side the some was company by the Crouzet, the Tom that a So about right, for programs. are talked Those sticks made of large

are Our side similar to sticks the sticks side the very AXXX. used on

that people So Crouzet has there. work X,XXX

So that if did XX don't people, to you that we would in-house, do think I X know, that. about were we have, people

to help company that go people like X,XXX do Crouzet leverage we get has this. So to a

have everything our as place partnership we we with need So well investors, on partners in with the as that in-house, base. supply or our

And parts the buckets moving fast where keep increasing things the we're Especially, and progress, over the because you are progress. through show over comes been stuff as can we programs are in the going very they our really have shareholder many, the stuff really showing from You that's in that decades. many many doing we partners well. times letter, see with process, similar this many

accelerate. a it. first for be program who knows, to sense through the the is maybe gives I hopefully where where where excited, you think So part the this Actually, And at. is this we that get one we actually most of are will

question have from Barclays. We David with a Zazula

bit anything testing? to to dig Any just you've that one? and then Tom, expect for FAA during drop I on anything battery learned you unexpected the the transition or wanted to whether gotten battery little was a particularly into the the from test, testing, testing there on when in drop credit feedback

absolutely. Yes,

went shareholder about earlier as in battery drop the in talked So really script, well. we testing the letter and

It's kind drag whole down. and like feet then So anything because XXX-pound not just and And aircraft assembly. ground battery the pack. take that to a our on XX actually has to it the to impact the we have at Drop a rigging It's it for concrete from fail. paint we the of account picture, have crane. guides catastrophically

drops. several pack, still get continued could the surprised, After to did we log function, were each so we It meaning drop, was we battery on, And data. really working.

That for harder huge of booster tests to for was the team. pass. confidence us So one our

really So clear, great risk our testing. us through be was that for reduction getting that.To own for

So now we that it to do credit testing. data all have need the we for

get with in and up So able some credit the through testing of months. that papers this here well be confidence it the as advanced of to we've I lot sort earlier, a around coming we'll topic teed the do to of mentioned issue for quite

batteries that for up I maybe we're battery My the quickly against know is out per year of simple but on Covington. XX time, production. math everything that's enough for coming

that be battery capacity the a facilities facility? the Could that is have potentially from outsourcer? your a guess, to you level need what's of part? be additional to able to on I battery plan support So

Yes, that's a question. great

thoughts. several So

first is by production of thing driven is you versus volume. safety The see automation the that lot a really and there quality

a certificate be to and is get for batteries for building levels control line in plant, But see you'd that to state-of-the-art up these a to ourselves. things able quality supporting that automotive safe and So set production production what production. our automotive to really similar build need we aircraft be of robustness safe to

line, production, that us. is in need in battery fleet So battery gives that scale, to service we need to out packs don't also traceability. the be maybe aircraft for to new keep all we replacements in the a repeatability. but what We that's twice just absolutely.So needing mind system one us that's going once, off year. also when we're gives need there It thing ability And for the production coming

packs you per So sense. makes reason year. XXX math, that looks if that's Hopefully the like more than aircraft it do why, that battery

for questions, for time it Adam pass so back will closing of I to out Goldstein are We remarks.

moment that In our design the been the towards of progress and industry. as suppliers more continues with we've partnering with balanced closing, to industry. clear clear pay We're to as electric are we light make capital approach industry-leading take the entire From the step safety. This at performance than as a want Archer aerospace only today simple commercializing dividends Midnight the by our accomplishing progress rapid aviation.I we off. strategy paying the we is keep possible progress that appreciate best delivering while believe in to across is strategy but all continue not to back to this to outset, what are ever the making, be

BETA, demonstrated Vermont. a recently Our in partner, flight piloted transition

FAA, Our as emerge the do final joining electrification the neighbors, we their airworthiness also Joby, mainstream announced into shortly. us. aviation to with recently criteria expect Thank so to The for of you every continues day. increasingly

you for your call. today's concludes That all participation. Thank

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