Archer Aviation Inc.

Andy Misson, Chief Legal Officer. You may proceed.

Thank you, operator. Good afternoon, everyone, and thank you for joining us today to review Archer's fourth quarter and full fiscal year 2023 operating and financial results. My name is Andy Misson, Chief Legal Officer of Archer. On the call today are Adam Goldstein, our founder and CEO, Mark Messler, our CFO, and Tom Yuniz, our COO. During today's call, we will be making forward-looking statements. These statements involve risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. For more information about these risks and uncertainties, please refer to our SEC filings under the caption risk factors. Any forward-looking statements that we make on this call are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we will discuss both GAAP and non-GAAP financial measures. A reconciliation of certain GAAP and non-GAAP measures is included in our shareholder letter posted on our IR website. And now, I'd like to turn the call over to Adam.

Archer has taken a unique and focused path towards certification, scaling manufacturing, and commercialization. I'm going to take you through why our approach in each of these areas gives me confidence that we will be positioned to go live in 2025. First and most importantly, we have designed our aircraft since day one for certification. Now that our team's focus is shifting to the last major phase of midnight's type certification program, which the FAA calls the implementation phase, we believe that our approach has de-risked our path to certification and will allow us to move through to certification before anyone else in the industry. As you saw from our announcement earlier today, approximately 80% of Midnight's subsystems and components are sourced from leading aerospace suppliers with certification heritage, meaning that they are either already flying on hundreds or thousands of other certified aircraft today, or that they're derived from other designs which have been previously certified. Given that, the FAA is already deeply familiar with these systems and their certification history. This strategy has enabled us to rapidly mature Midnight's design and testing, allowing us to become what we believe to be the first company in the sector to be simultaneously building three conforming aircraft to be used in piloted flight testing and for credit FAA compliance findings as part of our FAA type certification program. It is even more clear to us now that had we gone down the fully vertically integrated pathway, we would be facing an order of magnitude higher R&D budget, certification risk, and uncertainty about our ability to scale production and launch meaningful commercial operations. Instead, our teams have continued to execute at a relentless, focused velocity alongside the best and most experienced suppliers in the aerospace industry, with a minimized risk of incurring a costly redesign. As you have seen in our shareholder letter, we have provided a significant amount of detail around the strategic sourcing of our aircraft subsystems and components, as well as the steps we will be working through as part of the implementation phase of our certification program. Tom will walk through this in more detail with the goal of providing greater clarity into how we've been able to and plan to continue to make efficient progress through the FAA certification process. Equally important, is our team's steadfast focus on ensuring we can scale our manufacturing in line with demand. You may not have realized it, but Stellantis was actually the first of the strategic relationships we formed even before United. When I founded Archer, I knew from watching the EV industry that developing the capability to manufacture our aircraft at high volumes was perhaps the number one enabler of our future success alongside the design and certification of the aircraft. We have been doing that with Stellantis since 2020, and together we're on track to complete the build-out of our high-volume manufacturing facility in Georgia later this year, which will be capable of producing up to 650 aircraft per year. This puts us in position as the only company in the industry with the facilities to produce and deliver aircraft at scale in 2025 and into the later half of this decade. There's still a lot of hard work to be done to scale manufacturing, but there's no better partner to do that with than Stellantis. who recently announced that they have turned a profit on EVs and are full speed ahead on electrification. Our commercial team is seeing a high level of demand for eVTOL aircraft globally, and potential customers are very excited about what Midnight can deliver. So we are lucky to have multiple viable options both domestically and abroad for early commercial launch. Those same customers are now identifying that for the coming years we are likely to be the only player in the industry selling an aircraft that is FAA certified and that can be produced in high volumes. As a result, our team has built a strong indicative order book for up to 700 aircraft potentially worth $3.5 billion, which puts us in a formidable position to have our partners around the world take delivery of Midnight and in turn start generating significant revenue for Archer as soon as next year. In the Emirates, we are seeing promising markets for midnight in both Abu Dhabi and Dubai, as well as an air corridor between the two cities. We have partnered with two of the leading air operators there, Air Chateau and Falcon Aviation. We continue to expect UAE to be an early launch market for us. We also continue to believe India will be the largest market for flying cars globally, and we are rapidly making progress standing up a JV with our partner InterGlobe Enterprises. India's foremost travel, aviation, and hospitality conglomerate, with whom we plan to launch an air taxi service across Delhi, Mumbai, and Bengaluru in 2026. That brings us to the last but arguably most crucial part of our strategy, capital efficiency. We are laser-focused on executing a capital-light approach to growing the business. That approach extends across everything we do, from our decision to work with leading aerospace suppliers across 80% of our subsystems and components instead of vertically integrating, and more broadly, to how we approach manufacturing and how we deploy aircraft. In an EV and eVTOL business, scaling manufacturing would typically be one of the largest capital requirements. Our goal has been to focus our use of capital on designing and certifying the aircraft and minimizing the capital we must deploy to achieve volume manufacturing capabilities. That is why last year we announced our decision to have Stellantis contract manufacture our aircraft for us. Our plan is for Stellantis to absorb past and future CapEx required to manufacture hundreds of midnight aircraft per year, and we will jointly collaborate on ensuring we have proper supply chain and approach to manufacturing aircraft at the lowest possible cost. From there, we plan to have a turnkey relationship with Stellantis who will help us fulfill our needs for aircraft for our direct-to-consumer UAM business, as well as our global customer base who wish to order aircraft and ship midnight aircraft around the world to be deployed commercially. We are maturing our contract manufacturing plans rapidly, and our goal is to finalize the details later this year, with Stellantis then absorbing the vast majority of the capital expenditures and working capital requirements to manufacture our aircraft at scale. I believe that we are the only eVTOL company in the world to announce a relationship like this with a top automotive manufacturer, And this gives us significant cashflow advantages compared to competitors who are investing hundreds of millions of dollars in manufacturing off their own balance sheet. We will continue to share more details on the strategy in the coming quarters, but this puts us in an unprecedented position to commercialize this business very efficiently. You can see that efficiency in our cash position, which has remained essentially flat over the last few quarters, even through some of the most intense periods of spending as we built out our test labs, production facilities in California, and have been standing up our supply chain and building multiple aircraft. Mark will walk through that in more detail, as well as our forecasted spend, but I do want to highlight that our current spend forecast includes the CapEx and working capital that could potentially shift to Stellantis when we finalize our contract manufacturing arrangement. So that represents a significant potential reduction in spend that we expect to realize in the future. Between this planned strategic contracting manufacturing relationship with Stellantis, and their continued willingness to invest capital directly into Archer, I'm very pleased by their alignment to ensure we remain well capitalized as we work together to commercialize the business as soon as possible. It was great hosting Stellantis CEO Carlos Tavares, Chairman of the Board John Elkin, and several other executives from the Stellantis team at Archer's headquarters and integrated test lab and manufacturing facility just last month to further align on our strategy. I want to now take a moment to thank the FAA for its continued partnership and support of our industry. I flew to Washington DC to meet the administrator Michael Whitaker a couple weeks ago and I'm pleased that the administration has chosen to prioritize innovation in advanced air mobility more than ever before. This has been evident in our interactions with the regulators over the last several months, especially as we've had an opportunity to regularly host the FAA leadership at our California facilities. Notably, the FAA recently awarded Archer our Part 145 certification, and we're grateful to be one of only two companies globally to reach this milestone, which is a major vote of confidence from the FAA towards Archer's goal of entering into service next year. Finally, you may have heard me use the term flying cars today. As we broaden Archer's reach around the world, we've also started doing a lot of thinking on the industry's nomenclature for our aircraft. Former NASA executive Mark Moore first coined the term eVTOL, or electric vertical takeoff and landing, with his invention of the revolutionary Puffin aircraft in 2009. In turn, he helped launch our industry, and the name has lasted over a decade. But there's no question that it remains a mouthful for newcomers. Peter Thiel famously quipped that the world wanted flying cars and instead got 140 characters. He wasn't wrong. He was just off by a few years. So we've decided to embrace the term flying cars because to make urban air mobility accessible to the general public, we need to bring the future of transportation into today's reality. The fact that flying cars are starting to weave into the fabric of society is a testament to the hard work that everyone here at Archer and our partners and others around the industry are doing. We're not just innovating within the realm of transportation, redefining it, turning the once dreamt of into reality one flight at a time. With that, I'll turn it over to Tom. Thanks, Adam.