Archer Aviation (ACHR) - 2025 Q2 - Quarterly Results

Q1 2025 Shareholder Letter Operational and Financial Highlights Archer reports significant progress in Q2 2025 across key areas: ramping up Midnight aircraft manufacturing, securing a partnership for the LA 2028 Olympics supported by a White House executive order, launching its first international program in the UAE, accelerating its defense division with strategic acquisitions, and strengthening its financial position to over $1.7 billion in cash - Six Midnight aircraft are in production, with three in final assembly, as the company progresses towards its production certificate with the FAA[3] - Selected as the Official Air Taxi Provider for the LA 2028 Olympic Games, with a White House Executive Order promoting U.S. leadership in eVTOL technology[4] - Activated its first international Launch Edition program in the UAE, delivering the first Midnight aircraft and commencing the flight test program in Abu Dhabi[5] - Accelerated the Archer Defense program through two strategic acquisitions: a patent portfolio and talent from Overair, and defense composite manufacturing assets from Mission Critical Composites[6] - Achieved a sector-leading cash position surpassing $1.7 billion following a Q2'25 capital raise of $850 million[7] Manufacturing Capabilities and Production Certificate Progress The company is focused on ramping up manufacturing to a rate of 50 aircraft per year. Currently, six Midnight aircraft are in production across its Silicon Valley "golden line" and high-volume Georgia facility. The FAA is actively conducting reviews for the production certificate. The company is also scaling up its proprietary electric engine and battery pack production lines - The near-term focus is to ramp up production capabilities to achieve a rate of 50 aircraft per year[10] - Six Midnight aircraft are in various stages of production, with three in final assembly. The FAA is concurrently conducting inspections for the production certificate[11] - A "golden manufacturing line" in Silicon Valley is used for early Midnight builds to inform the ramp-up of high-volume manufacturing in Covington, Georgia[12][13] - The company is ramping production of its proprietary electric engines and its "automotive style" battery packs at its Silicon Valley facilities[20][22] U.S. Commercialization and Government Support Archer's U.S. launch is significantly advanced by its role as the Official Air Taxi Provider for the LA 2028 Olympics and a supportive White House Executive Order. The FAA's Innovate28 plan aims for scaled eVTOL operations by 2028. The executive order establishes an eVTOL Integration Pilot Program to fast-track real-world deployment, with discussions for flights as early as next year - Selected as the Official Air Taxi Provider for the LA 2028 Olympic Games, aligning federal and local stakeholders[4][23] - The Trump Administration has committed support for the FAA's Innovate28 plan, which targets meaningful eVTOL operations by 2028, and established a White House task force for the Olympics[24] - A June 2025 White House Executive Order, "Unleashing American Drone Dominance," created the eVTOL Integration Pilot Program to accelerate commercialization and integration into U.S. airspace[30][31] - Discussions are underway with the DOT and FAA for potential early deployments of Midnight aircraft as soon as next year under the new pilot program[31] International Expansion: UAE Launch Archer has activated its first international "Launch Edition" program in the UAE. The company signed definitive agreements with Abu Dhabi Aviation and the Abu Dhabi Investment Office, delivered its first Midnight aircraft to the region, and has commenced its flight test program in Abu Dhabi. Initial commercial payments are expected later this year - Signed definitive agreements with Abu Dhabi Aviation and the Abu Dhabi Investment Office to activate the first Launch Edition program[36] - The first Midnight aircraft was delivered to the UAE, and the flight test program has commenced in Abu Dhabi[36] - The airline operations team is working with Etihad Aviation Training to build operational readiness for pilot training, maintenance, and security[36] Archer Defense Program The Archer Defense division is experiencing strong demand from major allied defense programs. To accelerate its path to market, the company made two strategic acquisitions during the quarter: a patent portfolio and key talent from Overair, and specialized composite manufacturing assets and a facility from Mission Critical Composites - Acquired a patent portfolio and critical employees from Overair, a spin-off of Karem Aircraft, which specialized in high-efficiency tiltrotors[39] - Acquired key composite manufacturing assets and a ~60,000 sq ft facility from Mission Critical Composites to bring core composite fabrication in-house for rapid prototyping[40] Q2 2025 Financial Review Archer ended Q2 2025 with a record cash balance of $1.724 billion, bolstered by an $850 million capital raise. Total GAAP operating expenses were $176.1 million, with a net loss of $206.0 million. The company projects an Adjusted EBITDA loss of $110 million to $130 million for Q3 2025 Summary Financials and Liquidity The company's cash and cash equivalents reached a record high of $1.724 billion at the end of Q2 2025, a significant increase from $1.030 billion in Q1 2025, primarily due to an $850 million registered direct offering. Cash used in operating and investing activities for the quarter was $127.5 million Summary Financials and Liquidity (in millions) | | JUN 30, 2025 | MAR 31, 2025 | JUN 30, 2024 | | :--- | :--- | :--- | :--- | | TOTAL OPERATING EXPENSES | $176.1 million | $144.0 million | $121.2 million | | NET LOSS | ($206.0 million) | ($93.4 million) | ($106.9 million) | | NON-GAAP TOTAL OPERATING EXPENSES | $123.5 million | $113.1 million | $96.4 million | | ADJUSTED EBITDA | ($118.7 million) | ($109.0 million) | ($93.8 million) | | CASH, CASH EQUIVALENTS | $1,724.0 million | $1,030.4 million | $360.4 million | - Ended Q2 2025 with a record $1,724.0 million in cash and cash equivalents, an increase of $693.6 million from Q1 2025, mainly due to an $850.0 million gross proceeds from a direct offering[50] Operating Performance and Outlook In Q2 2025, total GAAP operating expenses rose to $176.1 million, and non-GAAP operating expenses were $123.5 million, reflecting increased investment in development and operations. The net loss was $206.0 million, and the Adjusted EBITDA loss was $118.7 million. For Q3 2025, the company forecasts an Adjusted EBITDA loss between $110 million and $130 million - Q2 2025 total GAAP operating expenses were $176.1 million, up $32.1 million from Q1 2025. Non-GAAP operating expenses were $123.5 million, up $10.4 million from Q1 2025[54][55] - Q2 2025 net loss was $206.0 million, an increase of $112.6 million from Q1 2025, primarily due to an $82.0 million non-cash change in fair value of warrant liability[56] - Q2 2025 Adjusted EBITDA was a loss of $118.7 million, an increase of $9.7 million from Q1 2025[58] - The company anticipates an Adjusted EBITDA loss of $110 million to $130 million for Q3 2025[59] Consolidated Financial Statements The consolidated financial statements detail Archer's financial position as of June 30, 2025. The balance sheet shows total assets of $1.94 billion. The statement of operations reports a Q2 2025 net loss of $206.0 million. The cash flow statement indicates a net cash increase of $889.2 million for the first six months of 2025, driven by financing activities Consolidated Balance Sheets (in millions) | | JUN 30, 2025 | DEC 31, 2024 | | :--- | :--- | :--- | | Total current assets | $1,757.0 | $858.4 | | Total assets | $1,938.3 | $1,001.2 | | Total current liabilities | $78.8 | $71.1 | | Total liabilities | $257.4 | $248.6 | | Total stockholders' equity | $1,680.9 | $752.6 | | Total liabilities and stockholders' equity | $1,938.3 | $1,001.2 | Consolidated Statements of Operations (in millions, for Three Months Ended June 30) | | 2025 | 2024 | | :--- | :--- | :--- | | Total operating expenses | $176.1 | $121.2 | | Loss from operations | ($176.1) | ($121.2) | | Other income (expense), net | ($40.0) | $9.3 | | Interest income, net | $10.2 | $5.1 | | Net loss | ($206.0) | ($106.9) | | Net loss per share, basic and diluted | ($0.36) | ($0.32) | Consolidated Condensed Statements of Cash Flows (in millions, for Six Months Ended June 30) | | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($198.0) | ($167.0) | | Net cash used in investing activities | ($34.1) | ($38.2) | | Net cash provided by financing activities | $1,121.3 | $100.8 | | Net increase (decrease) in cash | $889.2 | ($104.4) | | Cash, end of period | $1,730.5 | $367.1 | GAAP to Non-GAAP Reconciliation This section provides detailed reconciliations of GAAP to non-GAAP financial measures. For Q2 2025, total operating expenses of $176.1 million are reconciled to non-GAAP total operating expenses of $123.5 million. Net loss of $206.0 million is reconciled to an Adjusted EBITDA loss of $118.7 million by excluding items such as stock-based compensation and changes in warrant liability value Reconciliation of Operating Expenses (in millions) | | JUN 30, 2025 | MAR 31, 2025 | JUN 30, 2024 | | :--- | :--- | :--- | :--- | | TOTAL OPERATING EXPENSES (GAAP) | $176.1 | $144.0 | $121.2 | | Stellantis warrant expense | (0.8) | (0.8) | (2.0) | | Stock-based compensation | (51.8) | (30.1) | (22.8) | | NON-GAAP TOTAL OPERATING EXPENSES | $123.5 | $113.1 | $96.4 | Reconciliation of Adjusted EBITDA (in millions) | | JUN 30, 2025 | MAR 31, 2025 | JUN 30, 2024 | | :--- | :--- | :--- | :--- | | NET LOSS (GAAP) | ($206.0) | ($93.4) | ($106.9) | | Other (income) expense, net | 40.0 | (42.0) | (9.3) | | Interest income, net | (10.2) | (8.7) | (5.1) | | Income tax expense | 0.1 | 0.1 | 0.1 | | Depreciation and amortization | 4.8 | 4.1 | 2.6 | | Stellantis warrant expense | 0.8 | 0.8 | 2.0 | | Stock-based compensation | 51.8 | 30.1 | 22.8 | | ADJUSTED EBITDA | ($118.7) | ($109.0) | ($93.8) | Upcoming Events Archer has outlined its participation in several upcoming investor and industry conferences throughout August and September, including events hosted by Canaccord, JP Morgan, Needham, Deutsche Bank, H.C. Wainwright, and the Global Aerospace Summit. The company also provided details for its Q2 2025 earnings webcast and conference call Upcoming Events Schedule | Date | Event | Location | | :--- | :--- | :--- | | AUG 12 | Canaccord 45th Annual Growth Conference | Boston | | AUG 13 | JP Morgan Autos Conference | New York | | AUG 18 | 14th Annual Needham Industrial, Tech & Cleantech Conference | Virtual | | SEP 3 | Needham Transportation Conference | New York | | SEP 4 | Deutsche Bank 15th Annual Aviation Forum | New York | | SEP 8 | H.C. Wainwright 27th Annual Global Investment Conference | New York | | SEP 9-11 | Global Aerospace Summit | Washington D.C. | - Details for the earnings webcast and conference call were provided, accessible via the investor relations website and a dedicated conference call line[44] Forward-Looking Statements & Disclaimers This section contains standard legal disclaimers regarding forward-looking statements made within the shareholder letter. It cautions that statements about future performance, timelines for certification and manufacturing, and business plans are subject to numerous risks and uncertainties. Readers are advised that actual results could differ materially and that they should not place undue reliance on these projections - The letter includes forward-looking statements regarding future performance, financial results, business strategy, aircraft development, and commercialization timelines, which are subject to risks and uncertainties[83] - Actual results could differ materially due to a variety of factors, including the early-stage nature of the business, manufacturing challenges, regulatory hurdles, supplier dependencies, and market adoption risks[84] - The company directs readers to its SEC filings, including its Form 10-K and Form 8-K, for a more detailed discussion of risks and uncertainties[87]