Archer Aviation (ACHR) - 2025 Q2 - Quarterly Report

Part I—Financial Information Financial Statements The company reported a Q2 2025 net loss of $206.0 million and holds $1.72 billion in cash from financing activities Consolidated Condensed Balance Sheets Total assets grew to $1.94 billion by June 2025, driven by a significant increase in cash to $1.72 billion Consolidated Condensed Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $1,724.0 | $834.5 | | Total current assets | $1,757.0 | $858.4 | | Total assets | $1,938.3 | $1,001.2 | | Liabilities & Stockholders' Equity | | | | Total current liabilities | $78.8 | $71.1 | | Total liabilities | $257.4 | $248.6 | | Total stockholders' equity | $1,680.9 | $752.6 | | Accumulated deficit | $(1,985.0) | $(1,685.6) | Consolidated Condensed Statements of Operations The Q2 2025 net loss widened to $206.0 million from $106.9 million year-over-year due to higher operating expenses Statements of Operations Summary (in millions) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Research and development | $122.4 | $89.8 | $226.1 | $173.3 | | General and administrative | $53.7 | $31.4 | $94.0 | $90.1 | | Total operating expenses | $176.1 | $121.2 | $320.1 | $263.4 | | Loss from operations | $(176.1) | $(121.2) | $(320.1) | $(263.4) | | Net loss | $(206.0) | $(106.9) | $(299.4) | $(223.4) | | Net loss per share | $(0.36) | $(0.32) | $(0.53) | $(0.68) | Consolidated Condensed Statements of Cash Flows Financing activities provided $1.12 billion in cash, offsetting operational and investing outflows for H1 2025 Cash Flow Summary for Six Months Ended June 30 (in millions) | Activity | 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) | - Financing activities in the first six months of 2025 were primarily driven by $1,151.8 million in proceeds from a registered direct offering and $10.0 million from a PIPE financing[36] Notes to Consolidated Condensed Financial Statements Notes detail the eVTOL business, confirm liquidity for 12 months, and disclose financing, litigation, and loan details - The company is developing an electric vertical take-off and landing (eVTOL) aircraft and plans to operate in two business lines: Commercial and Defense[38][39][40] - As of June 30, 2025, the company had cash and cash equivalents of $1,724.0 million, which management believes is sufficient to fund operations for at least the next 12 months[41] - The company has a $65.0 million credit agreement with Synovus Bank for the construction of its manufacturing facility in Covington, Georgia, which has been fully drawn down[77][81] - The company is involved in a consolidated class action lawsuit alleging breaches of fiduciary duties in connection with its merger, though the court has narrowed the claims[90][91][92] - Significant financing was raised through registered direct offerings, including $289.5 million in February 2025 and $816.8 million in June 2025[103][105] - Total stock-based compensation expense was $81.9 million for the six months ended June 30, 2025, a notable increase from $63.5 million in the same period of 2024[134] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses rising operating expenses for eVTOL development and a strong liquidity position of $1.72 billion Results of Operations Q2 2025 operating expenses rose 45.3% to $176.1 million, driven by increased R&D and G&A costs Comparison of Operating Results (in millions) | Expense Category | Q2 2025 | Q2 2024 | Change $ | Change % | | :--- | :--- | :--- | :--- | :--- | | Research and development | $122.4 | $89.8 | $32.6 | 36.3% | | General and administrative | $53.7 | $31.4 | $22.3 | 71.0% | | Total operating expenses | $176.1 | $121.2 | $54.9 | 45.3% | | Net loss | $206.0 | $106.9 | $99.1 | 92.7% | - The increase in R&D expenses for Q2 2025 was driven by an $11.8 million increase in stock-based compensation and a $10.1 million increase in personnel costs[173] - The increase in G&A expenses for Q2 2025 was primarily due to a $21.2 million increase in stock-based compensation[175] Liquidity and Capital Resources The company holds $1.72 billion in cash, sufficient for the next 12 months, bolstered by over $1.1 billion from recent offerings - Principal sources of liquidity as of June 30, 2025, were cash and cash equivalents of $1,724.0 million[179] - The company closed a registered direct offering on June 16, 2025, selling 85,000,000 shares for net proceeds of approximately $816.8 million[184] - The company closed another registered direct offering on February 12, 2025, selling 35,500,000 shares for net proceeds of approximately $289.5 million[183] - In July 2025, subsequent to the reporting period, the company sold 3,921,875 shares under its ATM Program for net proceeds of $46.3 million[159][181] Quantitative and Qualitative Disclosures About Market Risk The company faces interest rate risk from its variable-rate debt and investments, and credit risk from cash deposits - The company is exposed to interest rate risk from its variable-rate loan (SOFR + 2.0%) and its cash equivalent investments in money market funds[198] - Credit risk is concentrated in cash and cash equivalents held at several U.S. financial institutions, where balances may exceed FDIC insurance limits[199] Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes in internal controls - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective[200] - No material changes were made during the quarter ended June 30, 2025, that are reasonably likely to materially affect the company's internal control over financial reporting[202] Part II—Other Information Legal Proceedings The company is involved in a class action lawsuit related to its merger, with details in Note 7 of the financials - A description of material pending legal proceedings can be found in Note 7 - Commitments and Contingencies, which details the Delaware Class Action Litigation[204] Risk Factors This section refers to the company's Form 10-K and Form 8-K for a comprehensive overview of investment risks - The company refers to its Annual Report on Form 10-K and a Current Report on Form 8-K (filed June 13, 2025) for a full description of risk factors[205] Other Information The company plans to issue $28.0 million in stock to vendors and a warrant for 314,760 shares in August 2025 - On or about August 11, 2025, the company will issue $28.0 million of Class A common stock to vendors for services and goods[211] - On or about August 11, 2025, the company will issue a warrant to purchase 314,760 shares of Class A common stock at an exercise price of $0.01 per share[212] - During Q2 2025, no directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement[214] Exhibits This section lists key filed exhibits, including agreements, legal opinions, and required officer certifications - Key exhibits filed include the Form of Warrant to Purchase Shares (4.1), Opinion of Fenwick & West LLP (5.1), a Securities Purchase Agreement (10.1), and CEO/CFO certifications[215]