Archer Aviation Inc. Q3 FY2025 earnings call

• Acquired control of Hawthorne Airport, a strategically located airfield near LA, to use as anchor hub for air taxis and testbed for AI technologies. • Raised $650 million in new equity capital, boosting liquidity to over $2 billion. • Focus on scaling manufacturing to support certification and early commercial deployments, aiming to ramp production to 50 aircraft per year. • Midnight aircraft nearing completion of piloted CTOL flight regime, with recent milestones like 55 miles range, over 30 mins flight time, and speeds over 150 mph. • Global progress: Midnight featured in urban flight demos, commercial deployment initiated in UAE with Abu Dhabi Aviation, solidified partnerships in Asia-Pacific with Korean Air and Japan Airlines. • Defense advancements: Integrating technologies from Overair and mission-critical composites, maturing hybrid electric VTOL program. • Completed acquisition of Lilium's patent portfolio, strengthening technology leadership.

No specific breakdown of product segments' financial performance in absolute terms and revenue contribution % provided in detail.

• Estimates Q4 adjusted EBITDA loss to be between $110 million to $140 million. • Expect core capital investments to increase in Q4 as they continue to build aircraft and expand manufacturing capabilities. • Closed Lilium acquisition for approximately $21 million earlier in Q4 and expects initial closing of Hawthorne acquisition by year-end, with $126 million purchase price funded in cash.

• Government shutdown impacting certification progress. • General risks associated with the capital-intensive nature of the eVTOL industry, including regulatory approvals and market adoption challenges. • Uncertainties related to executing on strategic initiatives and meeting production and certification timelines.

Q: What kind of advantages does taking ownership of Hawthorne Airport provide and its relation to software on air traffic control and autonomy?

A: Hawthorne is a unique opportunity, strategically located near LA. It provides a hub for air taxi operations, testing grounds for software like AI-driven air traffic control, and is structurally advantageous for rolling out operations in LA.

Q: Can you provide more color on commercialization in the UAE and Launch Edition?

A: Kicked off Launch Edition program in UAE with Abu Dhabi Aviation, received initial cash payments tied to operational milestones, and UAE's National Aviation Regulator expects certification as early as Q3 '26 enabling commercial passenger service.

Q: What are the latest expectations around certification, specifically TIA testing and Midnight with FAA pilots?

A: Close to starting first TIA campaign with FAA, potentially end of 2023, TIA process involves multiple phases targeting specific system compliance.

Q: Any color on the Lilium asset acquisition and its integration?

A: Acquired Lilium's patent portfolio with around 300 patents, including ducted fan and high-voltage systems, which is a long-term enabler for future architectures and adjacent segments unlocked by MOSAIC rule.

Q: Thoughts on the purchase of Hawthorne Airport and its real estate use?

A: Airport is large and can be used as a centralized hub, partnering with industry groups, testing software and AI capabilities, and helping propel the industry forward in LA.