Archer Aviation (ACHR) 7 Nov 242024 Q3 Earnings call transcript

Good afternoon. Welcome to today's Archer Aviation Third Quarter 2024 Financial Results Conference Call. My name is Victoria, and I'll be your moderator today. [Operator Instructions] I would now like to pass the conference over to your host, Eric Lentell, Archer's General Counsel. Thank you.

Eric. proceed, may You

are thank Lentell, joining call statements. no Archer's making forward-looking will update and today, differ as may This we that forward-looking and as today, earnings by is be statements Those statements. Eric General forward-looking cause results on to you afternoon, assumptions the undertake from Archer's of a for call. we based Good Counsel. On information those new the uncertainties of obligation risks events. future and to materially contemplated or These statements, result statements involve actual our

those For more information refer and about filings. in risks factors the our SEC to risk please uncertainties,

measures be Adam. earnings of on both reconciliation call the GAAP with A from is We and non-GAAP the over our to financial Adam? today. And legalese those discussing shareholder letter included today's will release the in and call. way, financial measures legal of turn also non-GAAP I'll GAAP to

the constant founding Thanks, reality. Archer, Since pursue an mobility urban Eric. path has everyday our been to air making to most mission efficient

the have establish allow foundation to transition worked to to X we seamlessly Over the Archer from to concept years, past commercialization.

the next and industry the eVTOL we the of we're collective moving SFAR piece Mike Federal signed the a rest was momentum Billy Special regulatory key the hear is Aviation America's phase phased safe from peers. Today, and of grateful their our in and out the us when rollout and our the FAA increasingly aviation lay and leaders his envision in and on the The internationally for unique we for the month at path the administrator enter the for round Archer, to position the here why few Nolen. Whitaker updates lockstep, the predecessor, we corner U.S. team framework towards into structured in entire capital Chief a our and of his continued deepening administrator, moments, entry Archer outcome over the across to the championing share Regulatory and honored Officer and service Whitaker, in Captain U.S., we a I'm gives entry that technologies months. of you'll of certification, path us our and puzzle industry forward. The operational as also In eVTOL. At giving Affairs be partnership the Regulation, energized Billy the Stellantis industry both how positive directly SFAR, and service. This will I'll SFAR manufacturing, shift. are of commercialization advancements are we and clear final at scaling team leadership regulators the for advanced our of eVTOL. momentum Now in alongside XX forefront Archer's unmistakable powered-lift last engineering I into as on our with FAA partnership expectations for experiencing the believe advantage, the and

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motivating. an This Thanks, so is the work to firsthand with type The vision to passion dedicated to reality and drive me our see making incredibly what Every a that Adam. of drew the opportunity team day, this had progress opportunity Archer. to fuels is progress. I

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Thanks, Billy.

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several phase this years finished we know, you As ago.

the criteria is aircraft. phase FAA certification phase final Federal airworthiness for this second or The formally Register. is the process spring basis, requirements criteria where finished our published requirements the the essentially FAA's the of the definition, past sets in safety this FAA airworthiness which the We when

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the XXXXG With will the any operating FAA design FAA, publication we with able we so of don't now in address be the requirements. the discussions needing anticipate to changes design is that rules the Based our on compliant, finalize to existing SFAR, the believe this.

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working to board, is merely will These into prototype. we faster to aircraft on next flown pilot We using a billet housings production. In aluminum to also housings building to to we certify. our and move year. from phase. I that material hardware focused we they and us design software battery management are are used production processes the will properties mass instead be in the updated and packs, of make to our machined with it align the a we aircraft. for only are to ramp battery the not credit and type being on testing implemented forged B-sample this manufacturing we early to test the of allow B-sample hardware This believe improved and to that software working is during for we and design want test refinements capable decision clear that piloted be this are hardware manufacturability. design to aircraft to certify our as will working the flight thermoplastic begin flights It for that because certify the conscious enclosure made developmental piloted a wait some made our We type are

timing matured, bring up factory to Georgia. With ideal in it's the type now design our

to be facility for parts is aircraft to that passengers already the We year. planned aircraft with used next with and for market a start I'll plan Priya. survey building January per to aircraft in over order that, units the ramp plan XXXX. And in is demonstration with in it production XXXX to exit XXXX, of we to on our turn month initial flights a Georgia in beyond X piloted in plan produce rate to and goal Our have at with that

Thanks, Tom. afternoon, Good everyone.

As I the remember, on and to wishes is leadership behalf and medical want leave. team, moment you been may guidance for invaluable Mark currently entire Mesler take temporary organization, Mark's a wish to On best smooth to of the recovery. to him a him extend have we well. our

During worked high-level leading corporate been our have as have Mark of the to scale help the at now I and capitalized our CFO. Archer doesn't continue us this over stepping today's of aircraft. we XX I additional and cash for manufacturing XX Stellantis over various XXXX the years years QX of time, our to companies spend. With on with a Archer's the end $XXX to last Interim the the QX we and 'XX Archer commit privilege across over of include for has understanding I million go for this liquidity, will had public in to finance up team. the capital of And for regards over the agreed with X in in In any months. our sheet. at best Midnight call, for estimates This financial million At our framework balance principle been 'XX, companies be QX cash liquidity to profile, of one cash have the equivalents have of 'XX, $XXX.X the industry. position results strongest puts

this As that approval support commitment. Furthermore, finalize shareholder manufacturing have years earlier of nearly of week, can production of build-out ramp large-scale has through may been us come, now you the our financed that for will all seen have our which deal we to are the favorable facility seeking terms. highly so we announce we completed

expect operations next our manufacturing in continue spending associated we that feel and and powertrains. our the ahead and confident invest testing aircraft we As in quarter, we year, as capital development, we this to regards have certification will commercial our to very to capabilities, Midnight look Midnight sufficient their aircraft access ramp-up manufacturing test towards and to the we additional deliver. With we of build of and ramp, the

As million within guided range our $XXX QX a $XX.X and 'XX that were our result, quarter-over-quarter. million of for relatively flat to expenses million, non-GAAP $XX operating is

Our basis total for QX also to GAAP $XXX.X which a quarter. on were operating the prior 'XX relatively million, expenses is flat

onetime operating included expenses GAAP the Our driven primarily compensation. of million approximately of stock-based $XX.X non-cash $XX.X or by million expenses,

aircraft. operating for Within we the parts non-recurring continue million and we expenses, incurred of the chain Midnight as with the $XX non-GAAP of suppliers million of our during to supply in $XX.X approximately quarter, Midnight and engineering costs maturation material the our our invest procure for manufacture of

to of This our uptick expenses engineering we QX of well our labor enable to and we spending, tied we suppliers ramp million. $XX non-recurring activity. material an spend for costs planned manufacturing plan manufacturing as our range represents million total our anticipate to in an increase operating $XXX in look in As 'XX, to non-GAAP as an ahead as ramp, with increase

manufacturing costs with As of expect majority we these our going arrangement the future. Stellantis to we labor XXXX, foreseeable contract under finalize and manufacturing for into that be the construct CapEx covered

For think discuss how for I'll spend. about framework XXXX, our you the should

buckets. X to aligns XXXX for spend Our

and to core non-recurring operations per to our million SG&A for on $XX down the core year. in a the direct suppliers non-GAAP expect engineering to builds; run our SG&A; MRO aircraft cost rate to our Archer flat and commercial fourth, range the and rate of expenses spend we has efforts. In CapEx; basis year, support costs expenses core material for this engineering and costs bucket, for and quarter engineering to necessary this flight first and First, be our $XX with been manufacturing; third, costs labor lastly, support second, next commercialization supplier our million

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first comes the Our Instructions] Cantor question line Andres of from Sheppard [Operator Fitzgerald. with

behalf This Congrats of the is Andres. on on Anand quarter.

conforming that So and the some key was more while wondering that advantages a prototype you of describe on if bit it are a I see here aircraft, could focusing your elaborate building seems strategy building what of more aircraft. a on focusing on peers little you're you as your

Happy Yes, answer. absolutely. This to is Tom.

design bring aircraft is really and really to this manufacturing think from step-by-step that a that's certification optimized beginning an our reflection methodical I market. the approach to strategy very take of aircraft a So and to for

commercial planning the we're And then FAA aircraft to we're production into ramp building planning to design test the for to credit. the with design, same now use that it's And right we're operations. that type the next so, for year aircraft early are that

that made business. strategy the is decisions integrate that and through So entire seeing on you're to we the again, like think pragmatic and something just we focus pragmatic to flow vertically achievable, everywhere not just same

appreciate expect with I you. to Got And to recent give line the begin was you're the I the able Japan more when color. of to regards announcement, if a in you area? little to deliveries time bit us a as wondering

Thanks question. Adam. This for is the

the manufacturing chart production that you the put get can So where if you out go back ramp. may a to you to start quarter, see we sense for the volumes, last can how

then ramps and there. it up XXXX So you'll from see XX aircraft in

go. UAE, are So for early there talked opportunities about and where some a will lot deployment, the aircraft we've

We test there's some some aircraft of some to well. aircraft with will some even think our obviously the deploy customers use capacities. And we Western then, also opportunities in as

are to great we to and all hard pathway to So really develop work a infrastructure launch there. really and Japan is the opportunity, starting

starts And so, more that as will to provide mature, we information. detailed

up? the Got there if you. with you you commercialize how lastly, this plan you it your ramping to on and mentioned, how Appreciate UAE, and it. just plans to remind market you as how you plan enter could us see And

say, So the has as path efficient been goal our to to commercialization. find we most always

we means UAE, And design, once look all stabilizing final testing then building you and at the the done so, lot good that, really a we're doing. we really And that aircraft do have which we've deploy it, relationships if which and that it. And of safely there.

Abu the put largely is coordinated been Dhabi Mubadala, ecosystem, long-time of Archer. Abu in some of So like investor fund our that's includes that's that the We've And partners been consortium Aviation. Dhabi Etihad Abu the through Falcon Office. and together sovereign wealth and engaged entire Investment Dhabi a

has clear. regulatory as soon become more quarter able enabled next us launch pathway much year. That to to the So now as fourth be

through different Tom you turn that of to process, hopefully, that a walk And over coming sense it together. but I'll for all the to so, parts gives some the are

of to the again, I it's, to just think pragmatic strategy very Yes. that, add taking a to same on approach launching the And business.

It's of UAE there. a to out into aircraft FAA in that great strategy we're infrastructure. support the service the for is to data generating entering there to the already our existing lot partner operators so, with leverage And leverage to same

with So I same same working my we're already the I've operating a cert that in respect Falcon just through team, UAE to spent the we're week trips, the plan, leveraging just partner and Aviation, details on to helicopters But data piece. that we develop. there. With a operated the into certification, clicking aircraft worked by details of other out lot in there. our flown on some

by our have AOC. don't Falcons. company we was Family to can just is this build another out so, there. that And We the on fly own is And founded Royal example a

experienced risk, time flights all those stand need super to So take existing that don't And infrastructure, expense to the we up. so group. are and using

UAE for, you commercial making is us towards step-by-step think and for next out what the starting year for look I in initial So operate there. flights to progress should service

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

we conducting do any First or timing off, updated thinking flight? the on piloted have first

Well, is this towards make working that we're flight Tom. piloted clear Edison, it of our I want aircraft. to just our first type design

in we're with working is the commercial time that a a ones to production So this only the think FAA industry first up I this the decision for is flight, UAE in places. and And about piloted testing the next don't specific the really other ramping we're for I as on early give for that. line safety aircraft us. year the want are talking really launch the that certification and doing same

So that I we're I But put to milestone. undue say on pressure can getting close is don't what to the want that team. really

is the production to Understood. I Understood. carrying things -- is the version. are reiterating that version, aircraft. this those those payload, just intended capable of this for is confirm the all the point your on capable want you're real metrics, distance, And the this then to all payload, the this performance -- still

Correct.

So commercial this plus production we're X take design into to the into is passengers. pilot planning aircraft launch, that

to numbers, I thing sense ones. know payment we relative on the And that you for other predelivery Understood. have is? maybe big Do mentioned you provide order. can't last realize just a how on amount new -- but maybe I Understood. Japan exact the the

Edison, this is Adam.

collected from of have we our So customers. several PDPs

broken from in and out Airlines and haven't we out We $X PDP venture payments The Sumitomo, first all forward. going additional the that joint haven't payment Penn million, was [ from broken detail. the the ]

Our line next comes Syth James. question with Savi from of the Raymond

well, you on the cost coming the like for as around on curious contract if follow curious up costs. I this to to comments XXXX. cover like Priya, should was if to through given to those manufacturing with as following helpful financing news manufacturing was you is of us your think up cost, cash in that Stellantis I over or equity might component the agreement? comes commitment have what an other the And through comments that? And think that I I Stellantis Am debt financing, labor are the with we there, their then component know just with kind understand just I that about provided buckets how X X or

Savi, Thanks, the for question.

off your for lead financing with about I'll how think let we're reiterate framework. just question answering me thinking but materials, maybe I again specific to the the --

working relationship, we're look for see can think like. the specifically with looking engineering SG&A. next And would the we're and Stellantis financing, follow and materials inventory what's that to us. And detailed keeping to shareholder as for terms target manufacturing. But So multiple the mechanisms, the favorable essentially finance goal to having and that as after with best, said, Stellantis financing entities our traditional conversations going of said, for we're flat to for going And expenses about we're capital, to now, on we seen, the I the later you've regards in right for terms for the that XXXX, we'll relationship and right, year. up core we is as the approval CapEx we at portion, down labor talk most through what

I it understand aircraft, for on helpful if on waiting the going kind very forward then what And just it. Tom, was certification might, of are to with you that. Got

of is much like how Just of X you're can been fairly was how kind that of very Midnights of on now, kind built. you in close But terms built? any of I it scale as And learnings of built kind production? built -- sounds much has it's you've if that getting how the that curious

Yes, absolutely.

design to -- aircraft So almost complete. aircraft aircraft getting is the ready first that type that fly, the we're

we flight the before last So testing we're do system phase, that to send in test. integration the we'll basically step the aircraft

do but really some getting again, to there, work close. still So

learnings are -- on the on terms lessons now, exact all X here the that with learning is design production we manufacturing, context plan that are in test aircraft and certify. broader of the to aircraft we In again, right the other

lots of on in there And laying there's initial of extensive the has line testing that then have out hardware. so, parallel, been all lots lessons Georgia. And learned, lab been the of in informed beyond how of that, going we're that,

we've and powertrain using gotten some learnings going we're the lab that mentioned the year. that from plans test, test to that flight to next I data executing start of that together, manufacturing against taking basically So all develop

well. will production aircraft aircraft is Tom not this just Savi, The that they will ultimately other we're because mentioned that be also only aircraft, are carry as they're but that building people Adam. piloted,

we're safety what And level. doing at very is of standard the so, the highest

aircraft groups people. don't call producing other I'll these they that piloted it, So but looks or producing are rapidly carry people, aircraft still that I prototype are like carry will know

So these we we're every single we're and I safety market sure And crossing because be high. the that will very standard going here single making every is dotting aircrafts. with T to

comes Our line JPMorgan. of the next question Bill from Peterson with

next plans? of on couple Kakani have the cadence over they'll accept your when of Mahima verification is the kind see sense to do certification and continue the plans. around FAA your nice accept Do to some begun of compliance was pace a approve that the have to this the XXX% will quarters? Bill. of This of expectation for which Do It FAA you of and any has you

Yes.

back our in which type is the put certification. think to lays that way I letter, defined phases the FAA right out that you at point the answer the So X the we to that leading chart shareholder up

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industry. item that And is FAA the landing, one we so, emergency open highlighted finalizing topic that's the the that topic remaining for entire and this a around is

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Mahima, this is Adam.

you break way how leading is of of the groups progress of made remarks. some different number, an Archer. understand is The especially out. That points Phase then And paper actually the end the advanced. issue Tom of is prepared to the quite hard industry it's phase, do during issue the paper. when the but at industry-wide may kind in X high terms And other one look certification be is unique to the the up groups reiterating pretty not XXXXG it, compared all to Just because we a that it implementation XX% actually

Okay. helpful color. That's really

take piloted can't on could potentially But service? timing how of in you have before sense you you'll send touch the UAE. of specific really many that do and there a flight testing how question, I second for entering aircraft For appreciate into long that then

are to the to are service of the Well, we is coming one some in next next to in the gave couple year. production aircraft will over we team it's Georgia And executing guidance years. that's plan, commercial the general UAE against deploying a starting we the be months that UAE. Adam produce the that be aircraft that the in and in challenging on end are The have certainly a and plan but Yes. doable. of aircraft before we

of this same we're design, early also in other for So UAE we'll the or the places. about batch is but testing, deployed they commercial be remaining flight aircraft, aircraft for these be operations, currently think way producing to to then additional intended it conforming the FAA use whether

will lot have be GCAA, what's is piloted the a These from aircraft from think in compelling regulator we which UAE. of I the And local is support the day X.

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have we done. get line And work to and so, straight we in have get pretty to do go there, it hard now to how a the

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Adam. This Josh. Thanks, is Yes.

engage Archer around of, company or I from market with the early that's get to become is if going we that it's So not clear to the one when increasingly customers first. world, think

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market in-market then flights and Second launching doing look start demonstration is at aircraft delivering to we'll flights ultimately survey there. followed by

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sense you this is a shape So -- hopefully, out. to for is how starting that this how gives

as great for it a specifically big aircraft. Japan, think market. a relates to the XXX potential I at It market. It's least Japan has is

airport talking trips at look the about city to we're rides. from you If very the center, long some of

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of line comes Barclays. David next Zazula Our question from with the

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absolutely. Yes,

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if effect in will, much or And so, battery is be you principles the fuel, the to left there first energy just how then they're defining flight. needs the

range sets maximum sort that missions. of So

ways. So they X did that in

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what urban good did color. I been really minutes don't is but remarks Billy out as in questions, left airspace he integration, the call. taking the That's had only far X worked know prepared mention as there's in if

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[ give -- to is not into on the don't actually Q&A Why unfortunately, He's portion us go David, you Billy ] today. that. some a and traveling. call of

the line Our next Wainwright. question with comes Amit from Dayal of H.C.

readiness, Good nicely cities to these coming of It burden plans few does U.S. of cities of here derisking will into need to compare How mapped. looks fruition. these commercialization U.S. guess, the bring seems market? a the operationally for in and some that You steps for the I much the to of begin lot to on How UAE targeting. strategy a you're sort that you see to mentioned like take financially sites operations and

Adam. This is

it. a So looking we're fleet couple the ways when deploying different of we're that building, at that thinking about we're there's

The And revenue. great are a that, first that is at there's generate there's from a there do pathway looking pathway the lot about. to go I do and talked which to we've think UAE, a -- to

don't And a selling we're be financial there because think burden aircraft. necessarily so, will I

of lot a there. created that's side infrastructure is been already other there's existing The

of exist within them, are So that existing them dozens Dhabi. Abu there of many helipads,

existing And routes. so, existing pilots, there's existing operators,

to as allow some the use relates to learning we to with right and And so, going early learning there's partnering it U.S., about how as first minimal a away that to launch us off bringing aircraft about case additional well, are be to our get with to is customers of how investment. In to to and the aircraft ground the scale. the all really deploy lot

charging the of opportunity or to start so, to and is may example, a to aircraft to say, a can't stand to access. go there's parking So infrastructure capital world, the Newark going engaging a of at the to the fleet we early year investment requires different these have you for See go? a the that that that that. is Where None that pilots do over drop operations later. work? many lot do Liberty is and engage that. International all of be needs going you planning just thank of process the There's off go that. customers How up an you. to Where interact going are heavy try early really to to lot want customers How groups really with airport be? And into want Because this? multiyear to going a itself to

believe do with the needs that there's flow I even potentially opportunity early positive minimal to operations. investment generate into generate So an to go revenue, cash

remarks. conference CEO like pass Founder would Goldstein, to I to closing time, the Adam Archer, and of now this his At back for

our Thank quarter. was to with great soon. listening you call. you another look very for to quarterly much again I speaking forward It

today's your participation, day. rest enjoy and you the of concludes your for call. Thank That