Archer Aviation Inc.

Good afternoon. Thank you for attending the Archer Aviation fourth quarter 2024 financial results conference call. My name is Cameron and I'll be your moderator for today. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. And I would now like to pass the conference over to your host, Eric Lentail. You may proceed.

Thank you for joining Archer's earnings call. This is Eric Lentel, Archer's General Counsel. Today, we will be making forward-looking statements. These forward-looking statements 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. There are risks and uncertainties that may cause actual results to differ materially from those contemplated. For more information about these risks and uncertainties, please refer to the risk factors in our SEC filings. We will also be discussing both GAAP and non-GAAP financial measures. A reconciliation of those GAAP to non-GAAP financial measures is included in our shareholder letter and earnings release from today. And now I'll turn it over to Adam. Adam?

I founded ARCHER to fundamentally reshape the future of aviation and help transform how we move through the year. When you look 100 years into the future, it's clear that aviation will be ubiquitous, highly autonomous, and electric. This isn't wishful thinking, it's a necessity. Our cities are growing, our ground infrastructure can't keep up, and our legacy aviation software systems are antiquated and unscalable. By ubiquitous, I mean air travel that is accessible to the masses as the safest and fastest way to get from A to B. To truly democratize it, we need to scale aviation to 100x the people at 10,000x the locations, at one-tenth the cost we see today. It's estimated that 80% of the world's population has never flown. I believe this is the only way we can absorb the inevitable growth of our cities and populations without overwhelming our ground-based transportation networks. To achieve this scale and remain safe, aviation must become highly autonomous. Our current systems rely far too much on antiquated technology and places too high a burden on human operators already reaching its limits. Software-driven systems utilizing AI will be able to scale with ubiquitous operations delivering the highest levels of safety to our airspace at a fraction of the operating cost, allowing human operators to focus on oversight and strategic decisions. And this future of ubiquitous aviation can't come at the expense of our planet. Luckily, the cost curves of battery technology are following similar exponential improvements to what we saw in computing, so we will be able to increasingly use electric power trains to power an ever-increasing range of aircraft. The aviation industry has been stuck making incremental improvements for 50 years, constrained by the fundamental limits of legacy technology and the dominant force of an unchallenged duopoly in commercial aviation. But thanks to breakthroughs in technology over the last decades, including batteries, electric engines, and the rapid acceleration of AI, coupled with unprecedented levels of investment in our industry, we're now poised for an inflection. And I believe Archer has the opportunity and responsibility to lead the way. We're on track to begin deploying revenue generating midnight aircraft later this year. And over the next two decades, Archer has the opportunity to drive the technological transformation across global aviation. It's time to build. Our business today spans three integrated vectors. One, designing and manufacturing our civilian aircraft, Midnight, which is an electric air taxi we're working to deploy in the world's most congested cities, starting with paying customers this year. Two, defense. In partnership with Andrewal, our first product under development is a next generation hybrid propulsion vertical lift aircraft that I believe is a multi-billion dollar opportunity this decade with both the military and civilian use cases. And three, software, building advanced but simplified flight control systems that are highly automated, as well as leveraging AI to optimize our airspace. Today, I'll focus on our execution plan for deploying Midnight commercially and developing our next generation hybrid aircraft. As part of this, I'll dive into our exciting new partner we're bringing into the fold. Taking a step back, our commercial strategy remains the same as it has from day one, to find the most efficient path safely bring midnight to market. Last fall, the FAA put in place a structured framework for Archer and the rest of the industry. The final key piece of the puzzle needed to create a clear path for the safe phased rollout of eVTOLs in the US. While we continue to work through the final stages of our type certification program here in the US, we have the opportunity to work with several forward thinking regulators across the globe that are creating pathways for us to deploy midnight commercially in advance of FAA-type certification. After engaging dozens of these countries at the highest levels of governments over the last year, I'm excited today to share more details about our Launch Edition program, which will allow us to deploy midnight aircraft in early adopter markets worldwide to generate revenue. These early adopters are more than just customers. They are true partners who we will work with to stand up the early air taxi operations hand in hand. These partnerships will have two components first we will supply them with a small fleet of launch edition aircraft to showcase and operate in their countries. Over the next 18 to 24 months, as well as the services component, where we will provide an operational support team of pilots technicians engineers and local leadership. These arrangements will be tailored based on the partner and their strategic goals, but we are aiming for each one to generate 10s of millions of revenue and be margin positive. Our goal is to create a repeatable playbook we can scale to dozens, if not hundreds, of partners globally. And with that framework in place, I'm proud to announce today we have signed up Abu Dhabi Aviation, known as ADA, as our first launch addition partner. Our plan is to deploy aircraft with them in Abu Dhabi later this year, allowing us to generate revenue under the agreement. As part of this, Archer and ADA will continue to work with other in-country partners we have previously announced. This includes Etihad, which will help scale pilot training regionally, and Falcon, who we plan to partner with on infrastructure across the country. All of this continues to be unlocked thanks to our strong alignment with the GCAA, which regulates aviation federally in the UAE, who we are working closely with to ensure we have an expedited pathway to early operations in the country. Our progress in the UAE has catalyzed further interest across the broader Middle East, Asia, and Africa, with many countries in talks with us to bring early commercial operations ahead of our type certification in the US, creating multiple opportunities for us later this year and into next. Here in the US, we continue working with our partners, United Airlines and Southwest, to plan our initial operations in our key launch cities, LA, San Francisco, Miami, and New York. This includes route planning, building our plans to recruit and train pilots, and planning for the integration of Archer's aerial ride sharing software into our airline partners software stack. To enable all of this, we must scale manufacturing. We have completed our factory in Georgia, ARC, and plan to manufacture up to 10 midnight aircraft this year for use as part of our FAA certification program, as well as early commercial deployment internationally. Tom will share more about our progress but I want to take a moment to thank our team who has worked tirelessly to get us to that point. The first eVTOL OEM to be scaling commercial production of its piloted aircraft here in the U.S. We know there are endless challenges ahead, but I truly believe we have the best team in the world capable of tackling them. Finally, I want to talk about our exciting announcement from last December, Archer Defense. I'm seeing outsized demand for the hybrid aircraft we are developing with Anvil. Over the last few earnings calls, I've telegraphed how meaningful I expect the defense business will be for Archer. We partnered with Andral because they are two builders and have proved that new innovative companies can successfully sell to the Department of Defense. As part of our mission to build the future of aviation, modernizing America's military fleet, as well as those of our allies, is core, and I'm proud we have the opportunity to make an impact here. We're working closely with Andrew to develop what we think the future vertical lift requirements for the defense use cases is. I believe the aircraft we plan to build can result in multi-billion dollar programs of record, all without the need for FAA certification. Similar to SpaceX, we're now seeing synergies between our civil and defense vectors that have the potential to unlock a powerful flywheel. As I've met with the global leaders in the Trump administration over the last few months, It's clear that our technology, talent, and experience from the civil side builds credibility in diversified revenue streams, while our role in America's defense industry helps to further elevate eVTOL as a national priority. This becomes increasingly important when I engage leaders in Washington and abroad on how the technology we are building at Archer can both help build the cities of the future here in the U.S., modernize aviation, and ensure our military has access to the world's leading technologies. On the back of all this tremendous progress and opportunity, last month we announced that we raised an additional $300 million from investors thanks to strong inbound demand. This gives Archer over $1 billion in liquidity, our strongest liquidity position to date. Yet for us, our view is that it's still early innings. We have a once-in-a-generation opportunity to advance the technology that defines our skies and ultimately shape the future of aviation for generations to come. Let's keep building. Over to Tom.