Archer Aviation Inc.

Good afternoon. Thank you for attending today's Archer Aviation Q1 2025 Financial Results Conference Call. My name is Cole, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call. With opportunity for questions and answers at the end, if you'd like to queue for a question, you can do so by pressing star 1 on your telephone keypad. I'd now like to pass it over to Eric Lentil. Please go ahead.

Thank you for joining Archer's earnings call. This is Eric Lentel, Archer's General Counsel. During today's call, we will be making forward-looking statements. These statements are based on assumptions as of today, and we undertake no obligation to update them as a result of new information or future events. There are risks and uncertainties that may cause our actual results to differ materially from those contemplated. For more information about these risks and uncertainties, please refer to the risk factors in our SAC filings. Today, we will also be discussing both GAAP and non-GAAP financial measures. A reconciliation of those financial measures is included in today's shareholder letter and earnings release. And now I'll turn it over to Adam. Adam?

Thanks, Eric. All right, let's dive in. Archer is pushing the boundaries of what's possible and reshaping the future of aviation for years to come. Today, we're going to talk about how we're making that future happen. As I've talked about before 2025 is an inflection point for Archer. On the commercial front, after years of engineering work and flight tests, the team is focused on transitioning to piloted operations and early commercial deployment. We remain on track to launch later this year in the UAE and are preparing for subsequent deployments with Midnight, Launch Edition customers, and several other international markets. The Archer defense team is deeply integrated with their counterparts at Anduril through our exclusive partnership to build the next generation hybrid electric VTOL for the U.S. and its allies. All of this is complemented by the work we are doing to build an AI-based aviation software platform of the future in partnership with Palantir. Our progress speaks for itself, but it's made even clearer by the caliber of the companies who have chosen to partner with us. Andral selected Archer to jointly shape the next generation of defense aviation. Palantir chose Archer to pioneer AI-driven aviation technology. And soon we'll be announcing what I think will be one of the industry's most important partnerships. Stay tuned. Today, I'll share more about this quarter's progress and what you can expect to see over the remainder of 2025. At the risk of sounding like a broken record, our number one goal remains to bring midnight safely to market as quickly as possible. This is the impetus behind our launch edition program. We are doing something that has not been done in decades, bringing a new type of aircraft to market. The launch program creates a scalable commercialization framework for safely deploying aircraft in early adopter markets. The goal is for us to demonstrate the aircraft's capabilities, drive public acceptance, build operational excellence, and generate early revenue. We remain on track to deliver our first piloted aircraft as part of that program to Abu Dhabi Aviation in the UAE later this year. We've already started the flight test program for that aircraft here in California. and we expect piloted flights to begin in the coming days. I think it is important to revisit how we got here. We started with Maker, a sub-5,000-pound aircraft with a 40-foot wingspan. It was clear to us the size of that aircraft platform would not support the payload necessary for the business case, so we chose not to take that aircraft through to certification and mass production. Instead, we designed and built Midnight around the same configuration but scaled up to 6,500 pounds with a 50-foot wingspan. We believe the industry will consolidate around that size of aircraft in order to support a pilot plus four passenger payload. The second key decision we made was to shift away from pouch cells, which we used in Maker, to cylindrical cells used in Midnight's battery pack. We made this decision for multiple reasons, but primarily because of the concerns about the safety and reliability of the pouch cells that were available when we were building Maker, and because the readily available sources were Chinese suppliers. Those concerns obviously would have presented a number of problems from a safety certification defense and tariff perspective. that's what led to our decision to partner with molly cell on an aviation specific variant of their cylindrical cell that offers both high power and energy density, while also being exceptionally safe reliable and scalable. This has been key to putting us in a position to certify our battery pack and scale our power train manufacturing. This cylindrical cell is being used by others across the industry, including Beta. The advantage we, the FAA, MaliCell, and Beta get from this joint effort is the sharing of test and reliability data across programs. We were deliberate about both of these choices, as aviation has long design and development cycles, and the need to redesign for these types of reasons can result in years of delay. Focusing on a commercially viable product has been core to the mission of ARCHER. The aircraft testing we have been doing leading up to our planned early deployment in the UAE is critical for ensuring safety. And it's just one of the facets of the larger team effort we have underway in the UAE to support our launch plans. In addition to the aircraft, our team is working with local government and industry partners across the other five key building blocks for launch. Building block number one, government support. The government of Abu Dhabi has been incredibly helpful in launching in the UAE. In particular, the Abu Dhabi Investment Office and two of the country's largest sovereign wealth funds, which have invested in Archer. Building block number two, regulatory pathway. This support from audio and those investors has helped us forge a great partnership with the nation's regulator, the GCAA, to carve out a regulatory framework to certify Midnight. Our teams are collaborating through joint working sessions in both UAE and California, and the GCAA is closely tracking all the progress we are making with Midnight. as they work with us on the pathway to begin flying passengers in country. Building block number three, operating partner. Earlier this year, we announced that Abu Dhabi Aviation, the region's largest helicopter operator, was signing on to be our first launch edition customer. Over the last quarter, our teams have been working together hand in hand to map out our initial network operations within the country. We are close to having alignment on the first dozen nodes and we'll be sharing more on this soon. Building block number four, pilot training. Archer and ADA are working together with Etihad, one of the world's leading operators of aviation training, to recruit and train pilots and prepare local MRO facilities. In fact, we just delivered the first midnight flight simulator to Etihad. The plan is for it to reside at their headquarters in Abu Dhabi as we are jointly training pilots for our aircraft in the region. Building block number five, infrastructure. Finally, we're collaborating with numerous partners to ready a handful of Abu Dhabi's 70-plus existing helipads for eVTOL operations. This is an example of how we can rapidly stand up takeoff and landing infrastructure without significant spend or regulatory work. Stay tuned for a lot more excitement to come as we continue to gain momentum in the UAE. Other potential early adopter markets are taking stock of what they are seeing from us in the UAE, and we're seeing demand in a number of other countries for our launch addition program. For example, earlier this quarter, we announced our second launch edition customer, Ethiopian Airlines, one of United's key partners in the Star Alliance, with the plan being to establish UAM's first foothold in East Africa's rapidly growing aviation market. Expect to see more of these strategic partnerships from us. In parallel to our tremendous progress overseas, we continue to see strong momentum here in the U.S. Just last month in New York City, we jointly hosted an event with United, bringing together key regulatory municipal and industry leaders to unveil our shared vision for our initial New York City network. Thank you to the Port Authority of New York and New Jersey, as well as the New York Economic Development Council for their continued support and partnership. As a longtime New Yorker i'm deeply passionate about the impact our midnight aircraft could have on the commutes for those who live in and visit Manhattan. We designed our network to take advantage of the existing aviation infrastructure in the New York area, including all three major international airports, Manhattan's three urban heliports, including the newly dubbed downtown Skyport, and important regional hubs such as Teterboro and Westchester. To support our launch plans, we continue to ramp up manufacturing across our facilities in Silicon Valley and Georgia, both of which are now fully operational. I look forward to sharing more milestones as we continue to scale those capabilities. This quarter I spent a significant time in Washington DC with senior lawmakers, including Secretary of Transportation Sean Duffy and acting FAA Administrator Chris Rochelleau. Just in the last few weeks we've had important conversations with key members of the House and Senate leadership, including Senator Ted Cruz, who leads the Congressional Subcommittee on Aviation Safety, Operations, and Innovation, as well as important White House leaders, including Michael Kratzios, Director of the Office of Science, Technology, and Policy. With all the recent announcements from this administration, it is clear that they're committed to rapidly upgrading America's commercial and defense aviation technologies to ensure we retain our global leadership. I'm proud that Archer is in a position to play a leading role in that effort. This comes in the form of ramping up our aircraft manufacturing here in the US, safely launching commercial air taxi operations in major cities across the US, designing and building the next generation of defense aircraft here in the US, and utilizing AI to build the future systems that will power our country's airspace. I'm also grateful that Secretary of Defense Pete Hegeseth and his team are supportive of modernizing our fleet through efforts such as our Archer Defense Initiative. We continue to deepen our exclusive partnership with Anduril as we work in earnest to mature the design for our first joint product, a hybrid electric autonomous VTOL that is targeting a program of record. As I've indicated before, because of the nature of this work, I cannot share more at this time, but will as soon as I'm able. What I can share is that this technology's compelling dual use potential is already attracting significant interest from leaders across both civil and defense sectors. Additionally, we recently executed on two strategic acquisitions that we believe will help accelerate Archer Defense. First, we acquired a key IP portfolio from an industry player. Second, we acquired a specialized high-performance composite manufacturing facility tailored for defense applications, significantly strengthening our capabilities. This quarter, we also took a decisive step forward on our software plans, partnering with Palantir to jointly architect the AI foundation for what we believe can be the next generation of aviation systems across manufacturing, operations, movement control, and route planning. This collaboration has the opportunity to be a key contributor to our country's ambitious vision, modernizing our aviation ecosystem in record time so that we can ensure that we continue to safely manage the ever-growing volumes of air traffic we are seeing and lay the foundation for the scale we plan to achieve with urban air mobility. We end Q1 maintaining over $1 billion of liquidity, the highest cash balance in the industry. As I said last quarter, we still remain in the early innings of a generational opportunity. Our team is relentless in its commitment to build. I can't wait to continue to showcase it for all of you. Over to Tom.