Archer Aviation Aktie

Hello, everyone. Thank you for joining us, and welcome to the Archer Aviation Company Q1 2026 Financial Results Conference Call. After today's prepared remarks, we will host a question-and-answer session. [Operator Instructions]. I will now hand the conference over to Kate Kiewel, Head of Investor Relations. Kate? Please go ahead.

Welcome to Archer's earnings call. This is Kate Kiewel, Archer's Head of Investor Relations. Today, we will be making forward-looking statements that are based on current assumptions. We don't undertake any obligation to update those assumptions as a result of new information or future events.

Risks and uncertainties may cause our actual results to differ materially from those contemplated by these statements. For more information about potential risks and uncertainties and review the risk factors in our SEC filings. Today, we will also be discussing both GAAP and non-GAAP financial measures. A reconciliation of those measures is included in our earnings release from today.

Now I'll turn it over to Adam. Adam?

Thank you, and good afternoon. I want to start by stepping back because the opportunities unfolding across the aerospace and defense market right now are massive. The future is arriving all at once, and the investments we are making across our civil, defense and AI software businesses are forming a flywheel that increasingly reinforces itself.

We are seeing that momentum unfold across the ecosystem. The U.S. government is leaning in. President Trump, the DOT and the FAA delivered the eVTOL integration pilot program last year, creating real-world testing environments for next-generation aircraft. And recently, Archer was selected as a partner and 3 of the winning EIPP applications across 8 states. We are on track to begin flying under that program in U.S. cities later this year.

Simultaneously, this administration is targeting to deploy over $20 billion for ATC modernization, an investment that would unlock new levels of safety and throughput across the national airspace. Foreign governments are following suit. -- the UAE, Saudi Arabia, Korea, Japan and numerous others are building infrastructure and accelerating regulatory pathways to position themselves at the forefront of this new form of transportation.

The largest airlines worldwide are also recognizing this moment in stepping up. We already work with 7 of them across our businesses and our multibillion-dollar order book for midnight continues to grow. In the world's biggest stages are eager to showcase this future. We are collaborating closely with the LA '28 Olympic Games, DOT, FAA, surrounding communities and other stakeholders to plan our launch of air taxi operations as the official provider for the games.

It will be millions watching as the future is being built in America. Let's focus on our air taxi progress. The reason we are positioned where we are today, a leader in the industry, traces back to the decisions that we made on day 1. Archer's path to commercializing eVTOL has always been rooted in our first principles approach designing a safe passenger-carrying aircraft, purpose built for rapid back-to-back trips of 20 to 50 miles in urban environments at low cost with a low noise profile.

When I entered this sector, most of the competitors had spent a decade cycling through configurations. Archer committed very early on to a partial tilt architecture designed for the air taxi use case and for FAA certification from day 1. That discipline has compounded. Eight years in, no 1 else in the eVTOL industry has moved as fast as we have. And while the majority of our team is battling day to day to get through the final phase of certification and bring this new mode of transportation to market I am focused on ensuring we future-proof our ability to scale.

A type certifiable design is not enough. It requires us to solve 2 additional challenges. The first key unlock is industrial scale. We need to continue pushing our entire industrial base forward here in the U.S., which will deliver meaningful cost and performance improvements with each new generation of midnight, advanced materials, new manufacturing processes, further advanced propulsion systems and components built for volume production on the scale of autos.

We have to prove out these innovations before the FAA will allow us to use them in commercially certified aircraft. We will deploy them first in autonomous attritable dual-use aircraft for cargo and defense and then flow these technologies back to future iterations of midnight, helping unlock step-change improvements in cost and performance.

This is just 1 example of how our 3 business lines compound on 1 another. The second key unlock is modernizing our national airspace. Americas aerospace today is a limiter on America's GDP growth. and we have to give it the ability to scale. While it can likely safely handle the additional traffic -- we expect over the next 3 to 5 years, the long-term scale of air taxis and AAM will require the U.S. to rework the infrastructure and software underlying air traffic control.

The good news is this administration and in particular, Secretary Duffy and Administrator Bedford, get this and are tackling it head on. Today's system was not built for the volume or the kind of traffic that's coming over the next decade. This is why we have partnered with category-defining technology leaders, including Palantir, which was recently down selected as a finalist for the FAA's SMART program as well as NVIDIA and Starlink, both of which will bring next-generation capabilities to midnight.

We are focused on bringing the most innovative technologies to address the challenges we face. These are not adjacencies. They are the imperatives that will drive the flywheel unlocking massive scale, but they are years-long efforts. The time to invest is now. And the good news is we are already executing against all of them.

Let me turn to how we executed this quarter. We had a banner quarter on certification. Archer became the first eVTOL company to close Phase II of the FAA's 4-phase type certification process, and we have been advancing Phase I in parallel for some time now.

Coupled with that exciting progress, this was also our most expensive quarter for our flight test program with piloted Vtal and STAL flights across our expanded midnight fleet on a nearly daily basis and often multiple times a day.

This quarter, we also took over operations at Hawthorne Airport in L.A. We have begun modernizing it, so it can serve as an air taxi and mobility hub for the city of L.A. and its surrounding communities, and as our innovation hub for the next-generation aerospace technology we are developing with our partners.

On the defense side, our work with Anderol continues to accelerate. As I discussed, in my letter to the shareholders, defense procurement is a performance and cost equation. You cannot retrofit your way into the right solution. You must take a first principles approach. Our partnership with Anderol is doing just that. We chose to partner with Anderol because, among other strengths, they deeply understand what the U.S. and its allies need a next generation of BTL aircraft beyond the legacy programs that have been entrenched for 50-plus years.

Together, we have designed and begun building our clean sheet hybrid aircraft, drawing on the technologies. Archer has developed for midnight and the IP we acquired from Karam over air and William. The window for these decades-long programs of record are approaching fast, and we will be ready.

I continue to be amazed by what our teams can do. I firmly believe the Archer Anderol team is 1 of the greatest aerospace teams of this generation. top technical fellows from Boeing, former Chief Engineer from Lockheed, leading PhD researchers from Stanford. You only get a chance to be part of a team like this once.

I believe our hybrid dual-use autonomous aircraft will be the most sophisticated vertical lift platform ever developed in its category. It is not incremental. It is generational. When people see what we have built, they will recalibrate their beliefs about what America can field. I cannot wait to show it off, stay tuned.

Archer is now a multi-threat company. We expect to start initial air taxi operations in U.S. cities begin winning phased government defense awards and begin to deploy our AI solutions later this year. And we are executing from a position of strength with $1.8 billion in liquidity. I have never been more confident in what Archer is building. We're more proud of the team building it.

With that, I'll turn it over to Priya.

Thanks, Adam, and good afternoon, everyone. I'll now take you through the key financial highlights for the quarter and provide our guidance for Q2. We continue to maintain a very healthy balance sheet with $1.8 billion in liquidity, 1 of the strongest positions in our sector.

And with less than $100 million in debt, our liquidity is clean, flexible and fully available to fund our strategic priorities without the overhang of significant leverage. Our spend for Q1 came in on guidance, a reflection of the rigor and intentionality we bring to every capital allocation decision. As discussed in our last call and in line with the updates Adam shared today, this planned increase in our spend directly correlates to the opportunities we are seeing across civil, defense and software and the platforms we are building in each of those areas that we believe will allow us to capture a meaningful portion of the market.

Our revenue for Q1 began to grow as we expanded operations at the Hawthorn Airport in L.A. We expect this revenue to increase in Q2 and as we continue to progress our plans to modernize that airport and its operations. Looking ahead, as we advance our commercial readiness with midnights expanded flight test program and operations under the EiPP and NLA, make advancements in the design, development and build of our next-generation hybrid autonomous aircraft platform and advance our AI software platform, we expect to slightly increase our investments for the quarter.

For Q2, we estimate our adjusted EBITDA loss to be in the range of $170 million to $200 million. This expansion of our investment reflects our level of conviction in the multibillion dollar opportunities in front of us, not a deviation from discipline. We believe our multi-platform strategy is what separates Archer from the field, and our liquidity gives us the strength to execute it. And with that, I will turn it back over to the operator.

[Operator Instructions] We will now begin the question-and-answer session. [Operator Instructions] Your first question comes from the line of Andres Sheppard from Cantor Fitzgerald.

Congrats on all the great progress so far. Adam, for the first question, I wanted to touch on maybe defense and autonomy. It's sounding more and more that this is going to be a big focus for Archer going forward. So -- just curious if you could maybe give us a bit more color there? What kind of opportunities might you be pursuing? Or are you excited about to the extent that you can talk about it? But how should we think about defense and autonomy for Archer going forward? .

Thanks, Andreas. I'm going to let Tom answer that question to go through some of the defense opportunities. And as you might recall, explained in the past, Tom has been leading the defense platform, while Benjamin has been really pushing hard to get the midnight platform through certification, but I'll turn it over to Tom. .

Andres, Well, Adam touched on some of the themes earlier in the call, but just to kind of like recap how we thinking about defense. Going back to the beginning of Archer, it was all about building towards a mission and taking a first principles approach -- and so midnight was optimized around this mission of moving people in and out of cities optimized for low cost, high safety, low noise and obviously, design bottoms up for certain manufacturing.

So initially, if you looked at if we could use a version of midnight for defense, and we did work with Air Force over the years, and there might be some niche applications there, but for the significant opportunities, the ones with the largest need that we're targeting now, you can't expect to modify midnight and have that function well for this different mission like it just doesn't make sense.

So -- as we've said, we're developing clean sheet new aircraft, that's a hybrid vehicle, partnering with Anderol. And so again, we've taken this first principles approach for that aircraft, but it's obviously optimized around a different mission. So this dual use mission we're looking at has very specific payload speed range cost targets, obviously, quite different from midnight.

So I can't get into the details on any of those numbers, but we're now like pretty far into the development of this vehicle, and I'm confident it's going to be a pretty incredible machine. So based off of that progress and what we've seen from some of the customers that we're targeting, we've got a really strong conviction and optimism that our aircraft is going to be selected for some of these very large opportunities that are coming up in defense. So our goal is to show that aircraft later this year and ultimately win some of these phase down selects this year. So super exciting time.

Wonderful. Got it. That's super helpful. I appreciate all that color. And maybe just as a quick follow-up. I'm curious if we can get an update on piloted transition flight. Any updates there? Or when should we be targeting it?

Andres, this is Benjamin. Thanks for the question. Like we were saying, we're already very much in the midst of our piloted Vital test campaign, and we've been rapidly expanding our cadence. So we're flying multiple aircraft multiple times a day. And really, the focus right now is on progressing and advancing through more and more complex test points ahead of full transition.

So really central to that is the software verification and validation. -- which requires a higher level of rigor for piloted operations. So we're working through that methodically, and we're confident in the time line. And just a little bit more color on that. We moved through the HOVR regime, which is that first phase faster than any prior phase.

And this is the fastest we progressed from a first flight through this point in a test campaign and also with the fewest issues. So we're not too far away, but it will be in the second half of the year, and our goal is to complete piloted transition and enter EIPP operations this year. .

Your next question comes from the line of Edison Yu from Deutsche Bank. .

I wanted to ask about the ATC modernization efforts that you cited and the need for it in the U.S. Can you give us a sense what kind of ecosystem you envision for this? And sort of what are the roles of the various parties, whether it's some of those partners that you mentioned, like Pantera, the airlines, -- just how the kind of stakeholders everything kind of comes together to get this ATC modernized? .

Thanks, Edison. This is a new and really evolving discussion that's taking place right now. But -- the good news is we've been working on our broader AI products, specifically around ATC solutions for several years now. And there are lots of different groups that are participating. Palantir, for example, 1 of our partners is participating in the Smart program.

And whether Palantir wins or not, I think Archer has an opportunity to be part of the modernization effort as we've already built a lot of tools that I think can add a lot of value. We haven't shown our solutions publicly as it's still a very competitive space, but we do intend to show it pretty soon. So more on that to come. .

Okay. And -- and then just on -- back to the, call it, the commercial side. I know you talked about scaling and the importance of that. As you kind of do your work and evaluate the manufacturing process, what are you finding to be the biggest bottleneck, if any? And how are you sort of addressing those?

Today, a lot of our work really has to do with getting the aircraft through the certification process. And we got through the third phase of certification, which was a big deal because completing all that really unlocked our ability to go through now the TIA process. .

When your music appliance is not finished, that means you likely have existing issue papers, which are things that you are unwilling to agree to, meaning things that you can't actively solve. So when we solved all those and we're able to agree, it really unlocked really our ability to keep moving through this process and ultimately get through TIA and certification.

On the manufacturing front, a lot of the work that we're doing has to do with putting the processes and manufacturing tools and equipment in place to allow us to scale. We have put in place as we've been building out this first initial fleet of 8 to 10 aircraft, but ultimately building towards that 50 aircraft per year production capacity. So we've been working through the tooling to go do that. And really, it has to do with the time line of type certification. So once we get through the certification side, we can really scale our production side. Of course, all of this is just trying to balance the EIPP with our own certification flight test program with the launch addition program.

Your next question comes from the line of James Kirby from JPMorgan.

Maybe just following up with the previous questions. You mentioned on advancing you're working in Phase I for some time now. Do you mind just expanding on that in terms of what milestones are left or what should we be looking for, for what remains for progress in that stage.

Sure. This is Benjamin. So as we talked about, we just completed Phase III, and we're deep in the Phase I. And what this really means is we don't have any unsolvable technical challenges, and we're deep in execution. So -- our -- while this is not easy, the rules are in place and we've got our maintenance of compliance done. So the next step is really in making sure that all of our seats, which are now materially in final form, working with the FAA in order to get through those administrative processes to get full approval.

Okay. That makes sense. I appreciate that. I guess for my second question, there was a house bill that was signed last month in Florida for Virtiport network build out. Adam just your thoughts there in terms of the infrastructure build-out needed to align with the EIPP. Is there more needed? How do you expect that to ramp up kind of over the next 3 years once the EIPP starts? .

Yes. The infrastructure is really going to be kind of a mix of public private partnerships. So we've been working on the infrastructure side for several years now. And so domestically, we focused on a lot of what turned out to be the EIPP markets, New York, Florida and then ultimately California.

On the New York side, we worked with the Port Authority and then some of the private airports. On the Florida side, we've worked with related hard rock, and we're targeting from Miami only up to West Palm Beach. In California, Los Angeles has been our kind of central focus where we took control of the Hawthorne Airport. We partnered with SoFi Stadium, USC and then a bunch of the major FPOs ahead of 2. And so you're seeing really this nice mix of groups that are coming into place.

As it relates directly to the EIPP, we're still really finalizing a lot of the details with the different cities, with the different specific routes. And so there's still more to come. But what it's really done is really opened up the level of interest, and we've now seen just a lot of folks that want to partner on this side. And so I think you'll start to see that expand. We've also done a lot of work with beta and really talking through the charging infrastructure that is going to be necessary there.

And so I think you'll see the industry come together, the different cities come together and then public partner -- public-private partnership come together to build all the infrastructure needed.

Your next question comes from the line of Austin Moeller from Canaccord Genuity.

So just my first question, can we talk about the restricted pipe significant that was issued for the midnight in the UAE -- and what kind of flight test can be performed under the restricted type certificate? And can that data be fed back to the FAA to facilitate certification in the U.S. .

Yes. Thanks, Austin. So what we've been working on with the UAE has been transitioning midnight into the restricted type certificate program. And this is just a difference from what we have been previously working on, which was called the type of qualification -- and the restricted-type certification program is more of an internationally recognized pathway that would allow Midnight to begin limited commercial operations.

We are still working through that. This will help us launch -- accelerate our launch addition program in the UAE and allow for early commercial operations in Abu Dhabi, which we work with Abi Dhabi Aviation to fulfill. But ultimately, what it does is gives us an ability to generate early revenue and early real-world flight experience. .

Okay. And I was wondering if you could comment on the opportunity to help improve the aerospace infrastructure with Palantir -- do you see that as providing software or hardware to or specifically software to the FAA to deconflict aerospace? Or do you view it more as using EV tolls as a vector to test these technologies before they're implemented on aircraft nationwide?

A lot of this is still new and being worked on. But from the Archer perspective, we've been working on the application layer, so actual software that would be used. And we think about this, because the sort of the flywheel that we need to create. We're not just building aircraft. We have to build aircraft that ultimately can scale. And because the air traffic control system is constrained. It will limit what we can do. So we want to participate in any way we can, even if it meant that we are ultimately not generating significant amount of revenue, it's still really valuable in order to help the larger flywheel of the industry expand. That being said, we do have some very neat products that we've been working on that ultimately, I do think will become adopted and can generate significant revenue. So we've really focused more on the application layer versus a Palantir of the world that's focusing more on the integration layer. .

Your next question comes from the line of Savanthi Syth from Raymond James.

Hey, good afternoon, everyone. I think this Edison's question, if I might follow up on. Just curious how many aircraft have you built with this kind of current configuration where you're doing -- plan to do transitions like as well? And just kind of curious, as you launched the EIP program, and you're doing certification as well? Like how many aircraft do you expect to need and to have built this year? .

Thanks, Savi. So we have 2 aircraft that are flying today, and we're still working through that initial fleet of 8 to 10 aircraft. Those are going to be allotted across the flight test program, EIPP launch edition as well as we're putting in place the infrastructure to ramp production to up to 50 aircraft per year. So it's really a mix of the two. .

Got it. That's helpful. And just another follow-up on the defense side. I know your -- you have some U.S. programs that you're going after. You also have some U.K. I was curious if there's any pacing that we should consider between the U.S. and U.K. program? .

Savi, this is Tom. But as you're aware, there's interest around the world for vehicles like we are developing now with Anderol. So there is an active program that the U.K. is working through their kind of procurement process that we're competing for, along with Anderol. So I can't talk about any details there, but I think it just goes to show that the opportunity is massive. It's not just 1 country.

And I'll kind of follow up there as well, Savi, there's new capabilities that have become very clear that the global governments are interested in. And as we've identified those new opportunities, it has just become very clear that there is an aircraft that we can build that can meet that need, and it can leverage a lot of the the tools, the systems, the supply chain that we've already put in place for the core midnight aircraft, even though it's a new type of aircraft.

That being said, we've taken the Anderol approach where we are doing early ahead of these programs being announced because by the time they get announced, we want to be in a position to win them. And as we've gone down that path, what we're building has turned out to be pretty incredible, and that's why we've had a lot of confidence in this product will become very interesting around the world.

And so you'll have to wait and see what happens. I guess we'll all have to wait and see what happens, but we have an increased level of conviction that the aircraft that we're building is going to have global demand and become very interesting.

Your next question comes from the line of Amit Dayal from HC Wainwright &Co.

Congrats on all the progress. I had 1 question on the burn for this year. How much of that is going towards manufacturing preparedness? .

Thanks, Amit. So let me just give the bigger picture here, and then I'll let Priya just provide some more specifics. So we are executing a multiplatform strategy across Civil and Defense. And in the defense side, it's a generational product. It's not something that's simply being hybridized, so that does take real investment -- but the good news is that we have already obviously invested in a world-class engineering team, infrastructure, testing assets, and we're deploying that across both of our platforms.

But as our certainty has increased that we will win some of these defense contracts -- it's given us the ability to go out there and spend more. So the good news is if we do win a defense contract, there will be dollars awarded, which will help offset the spend. If we don't want a defense contract, we will immediately cut the spend. So you'll likely see some -- a few quarters of elevated spend followed by a potential to reduce that from current levels.

And Amit, I mean, just digging a little bit deeper, right, specific to the quarter that you talked about earlier, we're ramping spend in 2 core areas. Adam talked about our increased spending on the defense platform. And then on the other one, as you rightly highlighted, right, on the Midnight program as we're advancing our commercialization effort -- we are increasing our spend in midnight for the slightest expansion and ramping the production efforts ahead of the operations in EIPP and other launch markets. So again, we expect this elevated levels to be short-lived. -- and then potentially come down thereafter. .

Understood. And just a follow-up to that is, is there any certification activity going on for the manufacturing facilities that are in place so far? .

Yes, there is. And so we've been working through the production certificate as well. And so we will try to time that as well with our type certificate progress. .

Your next question comes from the line of Chris Pearce from Needham.

Just 1 big-picture question and 1 kind of near-term question. I guess when I hear you guys talk about the defense opportunity, is there a world where in 3 to 5 years, Archer is primarily a defense company and the midnight sort of I mean backburn is not the right word, but it's something where you see an opportunity? You're winning contracts, you're ramping your manufacturing there, and that's a large company and that sort of a path? Or will you always sort of want to work on both these paths because of both opportunities? .

It's a good question, Chris. From a big picture perspective, I think the opportunity for civil products is substantially larger than the opportunity for defense products because we're talking about global use by the consumers. And so the analogy or sort of example I'd like to give is if you think about selling a few dozen of aircraft in the top 1,000 markets, you can build or sell over $100 billion worth of aircraft. So that is a pretty large number to think about. On the defense side, it will be more targeted, and it will go to U.S. allies for specific use cases.

So I do think that the defense market will ultimately be smaller. That being said, the beauty of the defense market is you can start to deploy some of these aircraft, not going through the same type of FAA-type certification process, which means it could be faster -- and you can also start to use advanced materials and advanced processes that can ultimately lead to a better civil product.

And so that's the flywheel that we are trying to create. We're trying to build amazing products that reinforce each other that ultimately allow for a big market in both. But I do think it's the type of thing where we will be involved in both. But ultimately, I think the civil products will be bigger.

Okay. And then more near term, going back to Savi's question, it sounds like you have the 2 aircraft now working to build more, but you need to keep a certain amount of aircraft, I'm assuming in Northern California or in Hawthorne, I guess now what should we expect for EIPP deployment? Should it be multiple aircraft per site? Or will it be more likely one aircraft and maybe more likely flying fetal cargo? Or like what would be disappointing, what would be upside surprise. I just want to get a sense of where expectations should be. .

So we are still in talks with the different EIPP markets and partners and we're waiting to see the different cities and routes that ultimately come to fruition. But we are balancing our own certification process against EIPP opportunity against the launch edition opportunity. And so we are building to be able to support all 3 of those but we're going to have to weigh those different opportunities. And as there's more clarity on it, we'll start to give you more detailed information. .

And now I would like to turn the call over to Adam for our retail questions. Adam, please go ahead.

So we received a question that I thought was a bit more personal that might relate to a lot more people. And it was I'm a real person who doesn't have an apartment in New York who won't be flying to its house in the Hamptons. So how will I be able to use midnight? .

I think it's a great question. I think it's an important one. So this product was not designed for the rich. It was designed for the masses. We are targeting use cases that are applicable to most people. So a typical example that we like to give is flying from city center to an airport. So I grew up in Tampa, Florida, and it took me an hour to get to the airport.

But if you're able to fly over the water and fly 150 miles per hour in a straight line, that would be a real short cut. If I was able to do that at a similar cost of ride share, that would be an attractive alternative as just another normal guy growing up in Florida. So hopefully, you can see yourself in a product like this and know it is made for everyone and not just for the select few.

Thank you very much. There are no further questions at this time. I would now like to turn it back to Adam for any closing remarks.

Thank you, everyone, for dialing in and listening to us. We'll talk to you next time.

This concludes today's call. Thank you for attending. You may now disconnect.

Good afternoon. Thank you for attending today's Archer Aviation Company Q4 '25 Financial Results Conference Call. My name is Tamia, and I will be your moderator for today's call. [Operator Instructions] I would now like to pass the conference over to your host, Kate Kiewel, Head of Investor Relations. You may proceed.

Welcome to Archer's earnings call. This is Kate Kiewel, Archer's Head of Investor Relations. Today, we will be making forward-looking statements that are based on current assumptions. We don't undertake any obligation to update those assumptions as a result of new information or future events. Risks and uncertainties may cause our actual results to differ materially from those contemplated by these statements. For more information about potential risks and uncertainties, review the risk factors in our SEC filings. Today, we will also be discussing both GAAP and non-GAAP financial measures. A reconciliation of those measures is included in our shareholder letter and earnings release from today.

Now I'll turn it over to Adam. Adam?

Thanks, Kate. At Archer, we are building a next-generation aerospace company with civil and defense applications. We have formed an ecosystem with some of the best partners in the world from Anduril to SpaceX to NVIDIA. We have great momentum, and I'm excited to walk you through it today. I published a more detailed shareholder letter that I encourage everyone to read. I'm going to keep my remarks relatively brief and dedicate most of this call to Q&A from analysts and retail investors.

Last year, our pilots took Midnight through its CTOL campaign, flights over 50 miles, over 30 minutes of flight time at altitudes above 10,000 feet and speeds exceeding 150 miles per hour. And we have now begun Midnight's piloted VTOL flight test campaign. We will continue to expand our piloted Midnight fleet and the flight envelope throughout 2026, enabling us to begin TIA activities with the FAA as soon as this year.

As we expand our flight test program, we are simultaneously preparing to be ready for air taxi operations. We are on track to begin deploying Midnight this year, both in American cities as part of the White House's eVTOL Integration Pilot Program, or eIPP, and in the UAE as part of our commercial launch program.

Before we go into our plans for the UAE this year, I want to acknowledge the current geopolitical situation in the Middle East. Our team and partners in the region are in our thoughts, and their safety will always be our top priority. We will continue to monitor the situation closely. Despite that current uncertainty, we remain focused on rapidly progressing our commercialization strategy in the UAE.

I am pleased to share that Archer is the first eVTOL manufacturer to establish a Restricted Type Certificate program with the GCAA, which sets us up to deliver additional Midnight aircraft to the country this year for piloted and passenger carrying operations, while simultaneously building out our network of certified vertiports across Abu Dhabi.

While our team is hard at work commercializing the United States and the UAE, our global backlog continues to grow. Our order book is in the billions with 7 of the world's largest airlines choosing to partner with us. Some new partners include Saudi Arabia's PIF and the Serbian government. The commercial momentum is real, and it is built on a certification strategy that we've been executing against for 7 years. This quarter, the FAA confirmed its final acceptance of 100% of Midnight's Means of Compliance. I believe this makes us the first eVTOL company to achieve this level of progress with the FAA. Completing Midnight's Means of Compliance unlocks the ability to finish the next phase, finalizing its remaining certification plans. We expect those to get there in the coming quarters, clearing the path for TIA work to begin on the program as soon as this year.

Our partnership with Anduril is central to our defense strategy. We are designing an autonomous, hybrid-electric VTOL aircraft built for dual use, a loyal wingman for defense, and cargo or medevac for commercial customers. We remain optimistic about winning a major defense contract this year.

We are always looking for opportunities to apply the proprietary technologies we have developed for our commercial aircraft to other adjacent applications. In November, we announced our first third-party powertrain deal with Anduril and EDGE Group to power their Omen autonomous air vehicle. Anduril spent 5 years searching for a propulsion solution for Omen, and I'm proud they chose ours.

Beyond commercial aircraft and defense, we see a third opportunity, software. We partnered with Palantir for next-generation air traffic control, movement control and route planning. We are working with NVIDIA to integrate their IGX Thor platform into Midnight for safety-critical autonomy applications, and we are working with SpaceX's Starlink to bring high-speed, low-latency connectivity to our aircraft. We plan to unveil our first software product in this category later this year.

Executing across all of these fronts requires exceptional leadership. I want to highlight Benjamin Lyon, who has integrated fully into his role at Archer as President of Aircraft OEM. Benjamin is a long-time pilot who spent decades at Apple, shaping some of the most complex hardware programs they ever built, then served as CTO at Aptiv, one of the world's leading industrial technology companies. He is exactly the kind of operator you want driving a program towards commercialization, and his impact on our engineering, manufacturing and certification velocity is tangible. Tom Muniz continues to support the Midnight program, but has now taken a leadership role in developing our hybrid aircraft. Together, Benjamin and Tom represent exactly the caliber of leadership the opportunity requires.

We ended Q4 with approximately $2 billion in liquidity. While this is a strong position, I try to be ruthless about cutting anything that does not earn its place. My job is to drive execution, fly aircraft, deploy them in cities, complete certification, scale manufacturing and deliver to the customers who are waiting. Thank you to our team, our partners, the government agencies and our shareholders that all play a part in our success. Deep tech is extremely challenging, and you give us the ability to pursue it. I do not take your support for granted, and we will work every day to continue to earn it.

With that, I'll hand it over to Priya.

Thanks, Adam. On today's call, I'm not going to walk through all the detailed financial results as those are set out in our earnings release. Instead, I'll briefly discuss the key highlights, our liquidity position, capital allocation priorities and overall financial discipline. First, with respect to liquidity, as Adam highlighted, we closed the quarter with a very strong balance sheet and total liquidity of approximately $2 billion, which is the highest watermark in Archer's history. Our financial strength allows us to think and act beyond a single program.

With respect to our priorities for deploying capital, it is very straightforward. In the near term, commercializing Midnight remains our #1 priority. This includes progressing certification activities, scaling manufacturing and advancing market launch efforts. Beyond the Midnight platform, as we position Archer as a category leader, our next investment priority is in adjacent opportunities such as the hybrid aircraft program and our software platform. These efforts meaningfully expand our long-term optionality and total addressable market.

Our focused capital allocation carries through to day-to-day execution, with Q4 spending tightly aligned to the guidance we outlined in the last earnings call. We are moving steadily towards industrialization and market entry. That naturally requires increased but disciplined spend. For Q1, we estimate our adjusted EBITDA loss to be in the range of $160 million to $180 million. The step-up in investment is deliberate and is a direct reflection of the meaningful progress we are planning for the year. We will continue to provide transparency on spend trajectory and liquidity as we continue to execute against our key priorities.

And with that, I will turn it back over to Adam.

Thanks, Priya. I want to first start by addressing some of the retail questions. And the first question is, how is the pathway for Archer to be the main air taxi service for the Summer 2028 Olympics? Well, the Summer 2028 Olympics is the most important commercialization milestone for Archer, because it represents an unslippable date for us, and it's driving the regulators and it's really driving us towards making decisions and ultimately making progress. But it's not just certification that has to be ready for the launch, it really is all about the infrastructure, the supply chain, the technical progress, all just converging at the same time. And just last quarter, you saw us invest in the Hawthorne Airport, and our team is on the ground every day there working through initial flight operations, pilot training. And so this is a very important event for the administration. And so we are coordinating at the highest levels to make sure that this goes off smoothly.

And with that, I'll turn it back to the operator to open up for questions.

[Operator Instructions] The first question comes from Edison Yu with Deutsche Bank.

I want to start off on eIPP. Can you give us a sense of what the next milestones are and the sequencing of events that need to happen before you start to fly the aircraft?

Sure. Thanks, Edison. So just to take a quick step back on the eIPP program, we view this really as a big moment for the industry. I'd like to call it our Waymo moment. If you think about like the first time you saw a Waymo, it felt like science fiction to you, but now the goal is to have 0.5 million people in the biggest cities in the country start to see these aircraft as part of your everyday commute just like they started to see Waymo every day. And that's what I think the eIPP has the power to do for air taxis. So seeing new aircraft flying over major cities will be exciting at first, but we do need to get people comfortable with them and ultimately accept them as an everyday outcome. And that is how we're going to drive consumer acceptance across the industry and in turn, regulatory approval. And so all that is on track, and Archer is on track to participate in that event.

For the eIPP, we've had a lot of inbound interest from the municipalities. And then ultimately, we've submitted the applications, and there's roughly a dozen or so municipalities that we partner with, including Southern California, Texas, and Florida. And now we are looking forward to the DOT announcing the finalist later this month. And then once the finalists are announced, we'll begin working directly with the selected localities to establish the initial operational plans, and then we'll focus on public flights as soon as the second half of the year. So it's really back to the DOT's hands at this point. We're waiting for them on next steps.

Understood. And then in terms of the piloted vertical for transition, I think in the letter, you mentioned kind of the next few months are the test campaign. I guess what is the, I guess, broader plan for the number of aircraft for the levels of flying that you will do for the rest of the year?

Edison, this is Tom. Well, just maybe to take a step back, as we mentioned earlier, we're now in the piloted VTOL and transition part of our flight test, and that's all kind of in support of and on track for the eIPP work that Adam mentioned earlier on the call. And just to kind of remind everybody, this comes on the back of all the VTOL flying we've done on Midnight without a pilot on board over the last several years and the extensive CTOL campaign that we did last year. So we believe we're in a strong position with the testing that we've done.

We also are really glad we invested time in that detailed CTOL campaign, as having the ability to do both those conventional takeoffs and landings and vertical takeoffs and landings, we think is a huge advantage for the product and a big differentiator, obviously, for the business case, safety case, things we've talked about. So our goal is, with this aircraft and the others that are coming online, to efficiently get through the transition testing in support of eIPP, but then we'll get right into TIA activity, all of this with the goal of being certified for the Olympics.

Understood. And if I could just sneak one in on the -- I think you mentioned the first one to get 100% on the MOC. Can you just maybe walk us through maybe the last couple of kind of percentage points? It seems like the industry in general has struggled a little bit to get to those last pieces. What do you think held that up? And why were you able to get through that?

Yes. So it's a good question. So I would say it's definitely fair to say the last few percent were the hardest to close. But I think the fact that we've, from the very beginning, taken really best practice approaches or conventional approaches to topics like lightning strike, gust loads, occupant protection, those sort of things, that are all enabled by us having a larger heavier aircraft meant we were able to get through those topics with the FAA. And we did that instead of by sort of pushing back, we were able to just accept sort of the, again, the best practice approach. So I think that's what enabled us to get through it.

The next question comes from Savi Syth with Raymond James.

Can I ask -- I'm sure it really depends on all the activity that you plan on doing this year. But just curious at a high level, maybe where that EBITDA can step up as you go through the year? And maybe any kind of commentary on CapEx expectations for 2026.

Savi, thanks for the question. It's Priya. So you know that we don't give annual or multiyear guidance, but I'll walk you through the flavors of where spending is going towards. So at the core of which, we're investing in 3 focused areas. The first is, as you can expect, the supply chain readiness and manufacturing capacity, and that's to ensure that we can aggressively ramp up Midnight production and deploy it. Second, as we've talked about, in development of our dual-use hybrid aircraft, as we believe the opportunity is now to win contracts from the U.S. and its allies as they pursue this new vertical lift form factor. And third, of course, is our development of AI autonomy software platform.

So while all these 3 result in spending being elevated in 2025, we think there are a lot of near-term opportunities to win awards on the defense side that could offset some of the spending or early revenues on the software side and the air taxi side as part of our Launch Edition program. So the goal really long term here is to have a diversified set of opportunities that can allow us to get to meaningful long-term sustainable revenue. And as and how we progress through the quarters, we'll keep providing our quarterly guidance. But hopefully, that gives you again a framework to think about where are we deploying capital.

That's helpful, Priya. And then just on the GCAA side, could you explain a little bit more about what the key features are of a restricted flight approach? Like what is and isn't included in that versus kind of a full certification?

Sure. Savi, this is Adam. So our progress in UAE is obviously continuing. And given the kind of current geopolitical situation, we're just mindful of it and how fast to push and how to support our partners best over there. And obviously, safety for our people is going to be important, safety for our partners over there is going to be really important. But with that as a backdrop, we aligned with the GCAA on a pathway for commercialization. And we chose the Restricted Type Certificate really because it was more of a recognized alternative than some of the other choices such as like a type qualification. And it just really gives you broader operational flexibility and a scalable foundation to bring Midnight to market in the Middle East. But we really have to kind of wait and see how all that plays out here. And I think there's more details to come on that.

The next question comes from Andres Sheppard with Cantor Fitzgerald.

Congratulations on the quarter and all the great progress. Adam, I wanted to maybe circle back to eIPP for a minute. Obviously, with the projects now in the application stage, I'm just curious, like how are you thinking about those projects? Like what would you call a success? And particularly the California project, is that maybe where most of the attention is focused on? Or just kind of how are you thinking about winning those projects? And what would you characterize as a successful eIPP entry?

Thanks, Andres. I think the eIPP kind of win will largely be an industry win where we have lots of aircraft flying around in multiple cities and getting the general public comfortable with what we're doing. So I think that's really the #1 takeaway that can come from this. There are a lot of very interesting cities and states that have applied. And so I'm hopeful California and Texas and Florida ultimately get picked. But of course, we have to wait and see what happens. Any one city or location is not going to necessarily determine a success or failure of this. So we have lots of options here that can get picked.

Of course, we are hopeful that the Huntington Beach location does get picked given our plan to ramp operations ahead of the Olympics. But there are lots of great opportunities across many other cities that we think will also be great opportunities as well. So I would say showcasing the aircraft, showing what they can do, having multiple operators doing this, getting the general public comfortable with this and ultimately, getting everybody comfortable with this industry just as they have gotten comfortable with Waymo in their cities.

Got it. That's super helpful. I appreciate all that detail. And maybe just as a quick follow-up. I wanted to touch on -- so I see that you recently conducted a piloted VTOL flight on the new aircraft. And apologies if I missed this earlier, but can you maybe just walk us through your flight plans for this year and kind of how you expect to ramp up those flight hours throughout this year and again, ahead of eIPP and UAE?

Andres, it's Tom. So yes, we're super excited that we're now in that piloted VTOL phase. So what you expect to see over the coming weeks and months is just additional flying working out towards full piloted transition. Obviously, after that, then we get into TIA and on with certification, but also in support of the Olympics.

And maybe this is a good chance for Benjamin to comment here. There were a lot of lessons that we've learned in flight test, and I think it would be good for Benjamin to comment on some of those.

Thanks, Adam. One of the learnings we got from the CTOL campaign was that it was actually the software update cycle that paced our progress. And that's because for our first piloted campaign, we wanted to stick with a well-understood path. So we used traditional aerospace methods. And we learned along the way that about half the time taken was due to manual steps that could actually be easily automated using best software practices from Silicon Valley.

So as part of preparing for the VTOL campaign, we actually made updates to our software infrastructure. Like one such example is we now automatically deploy software updates to the Midnight aircraft. And as you can imagine, the team is very proud of having reduced multi-month long cycles and often just a few days, while maintaining the highest standards of safety.

Congrats again on the recent success.

The next question comes from Amit Dayal with H.C. Wainwright.

So Adam, just can you provide any color on how many aircraft will you have available for the certification and testing and then for the eIPP program?

Sure. I'll give you a flavor of that, Amit. Thanks for the question. So we're in the late stages of building that initial fleet of Midnight aircraft that we've talked about, and we're going to deploy those in '26 and '27 for our flight testing, our TIA activities and then also as part of our eIPP and the international launch program. And so the focus of those aircraft is really to get us through the piloted VTOL transition testing and then ultimately to demonstrate air taxi ops under the eIPP and launch programs. And then, of course, we need to use that to get to TIA and then ultimately type certification.

But in parallel, we're also really stepping up our manufacturing and supply chain capacity to put it in a position to allow us to aggressively ramp aircraft builds as we get into '27 and '28 as we're ready for the commercial ops in Los Angeles for the Olympics and beyond.

Understood. That's where I was going next, Adam. So from a manufacturing perspective, what else needs to be sort of put in place for you guys to be ready to sort of meet the time lines you just talked about? And any color on how much CapEx is going towards that effort?

Yes, it's a good question. And so as we go through the certification process, we are really focused on making sure we have the right aircraft that's designed for a great consumer experience, very, very safe and that can carry the appropriate amount of payload, but can also be mass manufactured. And I talked a little bit about that in the shareholder letter. It's very challenging balancing the performance, the certification side of it, as well as manufacturing ramp.

So the good news is we've already stood up Georgia, the Covington plant. We've invested pretty heavily in CapEx, pretty heavily in a lot of the NRC and tooling. And so while our spend has been elevated here, I think we are in a pretty good position here to actually ramp once we get through the certification program.

Next question comes from Austin Moeller with Canaccord.

So just my first question here, does the 100% means of compliance completion on the FAA side, does that mean that you're essentially close to or through critical design review, and we shouldn't expect any more aircraft changes? I know that you had changed the landing gear last year.

Austin, this is Tom. I mean the reality is, I can't say we won't make any further design changes until we get through all the cert testing. And the reality is there's pros and cons there. It's actually an opportunity for us to make improvements where we have time and bandwidth in the program. But like that being said, we're really comfortable with the architecture of the aircraft, and we don't see any technology issues today. One thing I can also say is, the approach to design for certification from the very beginning, like I mentioned, it's meant we have a larger and heavier aircraft than some of our competitors. It's really positioned us well. And so Adam kind of touched on this earlier. The challenge here is making sure that the design has the right performance, the right cert path and the manufacturing path to actually launch the product, and we're really comfortable with where those are coming together.

Okay. And if we just think about the Iran operation and the first use by the Pentagon of one-way attack drones, should we think about a Midnight rotorcraft drone as potentially competing on future phases of like the drone dominance program? Or do you think it would be more in line with like a collaborative combat aircraft-type program, specifically set aside for rotorcraft where they're looking for something credible?

Yes. I think the conflicts have really reinforced what's always been true, Austin, which is that air dominance is just the decisive factor and it's key to military superiority. And so what we're seeing now, what you're asking about is really the beginning of a generational shift in how nations are thinking about aerial warfare. And that shift, we think, will play out over a multi-decade period of time.

But I think one thing is clear is that simply hybridizing an air taxi to get some additional range or payload, it may get you some short-term win, but it's divergent from what the administration really and what Americas allies want and what they're demanding. And so that's why we partnered with Anduril to build an autonomous hybrid VTOL aircraft with dual use capabilities for both civil and defense applications. But on the military side, we think the demand is going to be for a loyal wingman, and that's for armed reconnaissance attack helicopters. And so due to the sensitive nature of it, though, I can't share much more details at this point. But our hope is that we can show the aircraft this year, which will translate into some really key wins. And to really help accelerate our progress there, we opened up a new hub in Bristol, U.K., where we've already hired 20-plus seasoned engineers.

The next question comes from David Zazula with Barclays.

Adam, in your first question response, you said that the Olympic 2028 date was driving the regulators. Maybe if you could unpack that statement a little bit. What do you mean? Do you mean resource allocation? What was kind of behind that statement?

Sure. Back in 2022, the FAA was the one that put out the goal of being able to fly eVTOL aircraft in mass in one city at the LA '28 Olympic Games. They called it Innovate 2028. So it really wasn't an FAA program kind of concept to begin with. Since then, you've seen this administration be heavily leaned into the Olympics, wanting to show all the great things America has done, the reindustrialization of America, America's leadership in aviation. And so it's become a big, I think, selling point for the Olympics in general. And so it really has been, one, I think, an exciting thing for everybody to rally behind and people to be proud in America that we're leading in aviation, and also an important point for the administration to make sure that we get this done.

But what it did was create an unslippable date. And so it's a date that everybody knows things have to be done by. And so in this industry, it's tricky, right? We've had some companies that have been around for a long time, and they keep putting out dates and us, too. And the challenge is how do you get anybody to sort of stick to these dates. The way to do that is to align everybody to some unslippable date. And I think the Olympics has done that. It's really just forced everybody to get moving to make sure that all these challenging things that we have to get done are getting done. So hopefully, that gives you a perspective, but I think a lot of it has to do with the culture and really the excitement that is around the games.

Helpful. And then you got asked a little bit about deployment earlier. Maybe specifically for what you have in production right now, can you just give us the breakdown of what you expect to be kind of UAE-based versus what U.S. based on the testing plan for this year?

Sure. I think it's a little bit difficult for us to predict too much stuff in the UAE right now, just sort of given the ongoing conflict. Our goal is to keep getting through some of the testing and the certification progress over there, as well as the certification process testing and eIPP over in the U.S. So I think we'll have to wait and see kind of how that plays out to determine the volumes that we're going to put it in each of the different locations. So I would say let's wait and see how that turns out.

The next question comes from Chris Pierce with Needham.

Just one quick one on eIPP and then one on design. I guess if we think about the applications that you put out there, is CTOL involved? Or should we only expect you guys to see VTOL flights? And is there a possibility we could see VTOL flights up, down, even though we don't have full transition at that time, and that's enough to help sort of move the industry forward. I just kind of want to make sure be on the right page of what we might be looking for later in this year.

Chris, we do expect to be through the full flight envelope at that point. And so I would expect us to certainly see VTOL full transition flights. But because the aircraft was designed to do both VTOL and CTOL, we have the capability to do both. I think that's what's unique about the aircraft. And so there's an opportunity to do both.

Okay. And then the letter talks about the benefits of 4-bladed design. And I know you had a 2-bladed design prior. Is it just that you didn't know what you didn't know? And I guess, you talked about software before, like is there some sort of 4-bladed design give you increased confidence in transition flight? Or is that the wrong way to think about it and those aren't that correlated?

I think it goes back to just the broader philosophy of trying to balance performance certification and manufacturability. And so that is what is -- well, that's where all the work of the industry is going into right now. And I think it's very doable to build an aircraft that can fly really far or fly really high or fly really fast. But once you try to certify that, a lot of the case falls apart because the FAA is extremely rigorous in terms of the standards that they make you have.

And so what we do is we look at different trades. And so all 3 are possible and can be done. You can use a 2-bladed propeller, a 3-bladed propeller, or a 4-blade propeller. You can even probably use a 5-blade propeller. They just all come with different trades. And so what we mentioned in the letter was, a 2-bladed propeller had more of a weight penalty on the trade versus a 4-bladed propeller had more of a drag penalty. So one gives you more range, one gives you more payload. We optimize around payload, which is why we chose the 4-bladed propeller. And we just use that as an example to help show there are literally thousands of trades that go on like that throughout these programs.

And so some could be design trades, where there are industrial designs for like better looks where it can look, but it might picture performance. Some might be payload, some might be range, some might be speed. So those are just trying to give you a flavor for how we think about design here. But any of them are possible, we went with the 4-bladed option because we thought it optimized for what we needed to make sure we can build a proper business case around.

There are currently no more questions at this time. So I'll pass it back over to the team for closing remarks.

Well, thank you very much for attending the call. We certainly have a lot of work ahead of us, but I could not be more excited about where we are headed. Every day, our team shows up with the same urgency that we had on day 1, and that is not changing. I do not take your support for granted. We will keep earning it every day. Thank you very much.

This concludes today's conference call. Thank you for your participation. You may now disconnect your lines.

Good afternoon. Thank you for attending today's Archer Aviation Company Third Quarter 2025 Financial Results Conference Call. My name is Victoria, and I'll be your moderator today. [Operator Instructions]

I would now like to pass the conference over to our host, Katie Kiewel, Head of IR. Katie, please proceed.

Welcome to Archer's Q3 2025 earnings. This is Kate Kiewel, Archer's Head of Investor Relations. Today, we will be making forward-looking statements that are based on assumptions as of today and we don't undertake any obligation to update them as a result of new information or future events.

Risks and uncertainties may cause our actual results to differ materially from those contemplated by these statements. For more information about these risks and uncertainties, review the risk factors in our SEC filings.

We will also be discussing both GAAP and non-GAAP financial measures today. A reconciliation of those measures is included in our shareholder letter and earnings release from today.

Now I'll turn it over to Adam. Adam?

Thanks, Kate. Last quarter, I spoke about the growing support our sector is receiving from the highest levels of the U.S. government and how the Olympics mandate has become a global stage for us to showcase air taxis as we work to commercialize and drive global scale. This quarter, we made meaningful progress on every front worldwide from L.A. to Abu Dhabi to Seoul.

With multiple White House executive orders now establishing a presidential imperative to begin air taxi deployments in America as early as next year, the eVTOL Integration Pilot Program has enabled Archer to shift decisively from vision to execution, scaling commercial air taxi operations across the UAE, America and in select other cities globally.

We're especially focused on winning Los Angeles because if we can prove electric air taxis work in one of the world's most congested, complex and highly regulated cities, I believe we can subsequently scale the product across the U.S. and the world.

Today, I'll start by sharing a strategic development that gives us a unique ability to launch and scale in L.A., a one-of-a-kind opportunity to acquire control of Hawthorne Airport, one of L.A.'s most strategically located airfields and use it as our anchor hub for air taxis ahead of the LA28 Olympic Games and beyond as well as a testbed for our AI technologies under development.

After that, I'll discuss key recent highlights from across the company, including breakthroughs in technology and certification, momentum in global partnerships and the maturation of Archer Defense.

We announced earlier today that we have signed definitive agreements to acquire control of Hawthorne Airport, a rare asset located less than 3 miles from LAX and the closest airport to Downtown L.A., The Forum, Intuit Dome and SoFi Stadium, a site of the 2028 Olympic opening ceremony.

The team and I are actually holding today's call from Hawthorne this afternoon. Hawthorne is an 80-acre airport with an approximate 5,000-foot runway capable of supporting some of the largest aircraft used in private aviation, such as a Gulfstream G650 and benefits from 24/7 operating authority and has the capacity to handle significantly more movements than it does today.

The site features hangar space, office and terminal space and significant expansion opportunities with the ability to more than double the existing hangar footprint. It is a profitable enterprise with a long-term master lease in place through 2055.

Establishing Hawthorne as a key pillar of the Archer network in L.A. gives us a structural advantage, a generational opportunity to control a key airport and build the first purpose-built eVTOL hub at the center of a world-class aviation corridor. But Hawthorne is more than an airport. It's a landmark of American aerospace history.

The city built this airfield in the 1920s to attract Jack Northrop to Hawthorne. Northrop went on to create some of the most innovative aircraft of the 20th century here, including the flying wing and the T-38 Talon pushing the boundaries of flight.

During World War II, this airfield became a symbol of American innovation and resilience. Thousands of workers, including the women who inspired Rosie the Riveter, powered the nation's aerospace transformation. Hawthorne's motto at the time said it all, more jobs than people.

The same tarmac that once launched Northrop's breakthroughs later became home to SpaceX's L.A. operations and served as a proving ground for the Boeing Company's first test tunnel. Archer plans to now carry that legacy forward, ushering in the next chapter of advanced aviation right here in the heart of Los Angeles.

Today, Hawthorne Airport is already a profitable enterprise. For Archer, it will become even more, the blueprint for a new class of urban aviation hubs around the world. We envision Hawthorne as L.A.'s Grand Central Station for air taxis, the centerpiece of our Southern California network where passengers will one day seamlessly fly above L.A. congestion on predictable 5- to 15-minute routes between key destinations, including Hollywood, Downtown and Orange County.

It will also serve as Archer's innovation testbed for next-generation aviation technologies, including AI-driven air traffic control and operations management, seamless passenger identification and security and more.

Alongside this acquisition, we're announcing that we've raised $650 million of new equity capital, reinforcing Archer's sector-leading balance sheet with over $2 billion in liquidity.

To make this vision real, we continue to focus on scaling manufacturing to support both certification and early commercial deployments. Our near-term goals remain to ramp production up to 50 aircraft per year across our roughly 700,000 square feet of manufacturing and test facilities across California and Georgia.

As I discussed last quarter, we're assembling our initial fleet of Midnight aircraft. These aircraft will move directly into testing or early commercial use. We're now nearing completion of the piloted CTOL flight regime, validating operational performance across distance, speed, time and altitude.

Our test pilots have expanded both speed and duration profiles to reflect real-world commercial missions. Recent exciting milestones include 55 miles of range, over 30 minutes of flight time and flying at altitudes up to 10,000 feet at speeds exceeding 150 miles per hour.

The consistency between simulator and the real-world performance continues to validate our engineering approach and reinforces our readiness. Tom will share more shortly, but I'm proud to say that this quarter, Midnight took center stage at urban flight demonstrations around the world. At the California International Air Show, tens of thousands watched and barely heard Midnight fly.

In the UAE, we initiated commercial deployment with our Launch Edition partner, Abu Dhabi Aviation, one of the region's leading operators. This quarter, we expanded our flight test program with our first international flight in the heart of Abu Dhabi against the backdrop of the Sheikh Zayed Grand Mosque, one of the nation's most iconic landmarks.

We've since continued to progress our flight testing as we look to validate the aircraft's performance in the region's extreme heat and humidity and advance regulatory approvals with the GCAA towards passenger carrying operations. Excitingly, we've now begun receiving initial payments for these commercial operations under our Launch Edition program.

Momentum has been particularly strong in Asia-Pacific, where we recently solidified relationships with the national airline carriers of Japan and Korea. A few weeks ago in Seoul, we announced a partnership with Korean Air, which selected Archer as its exclusive air taxi partner in the country following a rigorous evaluation process with plans to purchase up to 100 Midnight aircraft.

As Korean Air moves towards completing its acquisition of Asiana, it will become the nation's largest airline and we're proud to partner in shaping Korea's adoption of next-generation VTOL technology.

In Japan, our consortium with Japan Airlines, Sumitomo and Soracle continues to make meaningful progress. Earlier this quarter, Osaka officially selected Japan Airlines and Sumitomo's joint venture, Soracle, using Archer's Midnight aircraft as its air mobility partner. That makes Archer the first U.S. eVTOL manufacturer positioned to play a central role in establishing commercial air taxis in Osaka.

And just yesterday, Tokyo followed suit, selecting our consortium led by Japan Airlines as 1 of 2 groups that will lead eVTOL commercialization. I recently hosted Japan's Minister of Land, Infrastructure, Transport and Tourism at our headquarters, a milestone that reflects Japan's commitment to leading in advanced air mobility and its confidence in Archer as a key partner in that effort.

These advancements across the Middle East and Asia position Archer at the center of the 2 most advanced aviation regions outside the U.S. You can expect to see us continue to mature our operational plans with the world's top governments and airlines.

Our international growth continues to attract increasing interest from defense opportunities worldwide, including our ongoing collaboration with Anduril. Last quarter, I shared details of 2 strategic acquisitions that advanced our defense platform, key technology from Overair, a Karem Aircraft spin-off and composite manufacturing capabilities at a facility in Southern California.

These advancements position Archer at the intersection of America's commercial, defense and regulatory momentum, building the foundation for the next era of flight.

Sitting here today, watching aircraft take off and land as I deliver this update couldn't be more energizing. The era of advanced aviation has arrived, not as a distant vision, but as a tangible reality. At Archer, we are not waiting for the future. We are building it. The time to seize this transformative opportunity is now. Over to Tom.

Thanks, Adam. From day 1, our focus has been consistent, finding the most efficient path to making urban air mobility a reality. We have been disciplined in our engineering approach and deliberate in the decisions around aircraft design, manufacturing readiness, certification strategy and flight test operations. That approach continues to cement us as one of the leaders in this sector.

Let's start with flight testing. Over the past few months, our Midnight program has consistently delivered strong results. We are now routinely flying longer, faster and higher as we expand the aircraft's operational envelope.

Recent flights have exceeded 55 miles, more than 30 minutes of flight time, altitudes up to our 10,000-foot service ceiling and speeds in excess of 150 miles per hour. These missions are providing valuable certification data and importantly, they closely mirror the majority of mission profiles we expect in early urban deployment environments.

This quarter, we were thrilled to fly as part of the California International Air Show at our home airport in Salinas, where tens of thousands of spectators saw Midnight fly. The consistent feedback we got at the event was how remarkably quiet our aircraft is.

It really is a special experience to see the aircraft fly by at well over 100 miles per hour and barely be audible above the ambient noise. It was also a special moment for our team, many of which got to bring their families to see the aircraft fly.

The exciting news is that we are nearing completion of Midnight's piloted CTOL test campaign and the consistency we are seeing across repeated mission profiles continues to solidify our confidence in our path to certifying Midnight, both in the UAE and the U.S.

Our next flight test phase with Midnight will be piloted VTOL, including full transition flights with our type certification intent 4-blade aft propellers. Unlike the CTOL envelope that we are now close to completing testing on, the VTOL and transition flight regimes are not new for Midnight, as we have previously completed an extensive flight test campaign with Midnight without a pilot on board.

As always, our focus remains the same: disciplined execution, safety and readiness for commercial operations. The momentum continues to build and the team continues to deliver.

As Adam mentioned, we are continuing to build our initial fleet of piloted Midnight aircraft across our facilities in Silicon Valley and Georgia. The next piloted Midnight aircraft is just wrapping up manufacturing and will move into ground testing shortly and flight testing as soon as it's ready.

This aircraft is equipped with the 4-blade aft propellers that are part of our type cert design and will be used for piloted VTOL and transition flight testing.

We continue to build out the capabilities needed to support a rate of 50 aircraft per year across nearly 0.75 million square feet of our manufacturing and test facilities. Our golden manufacturing line in Silicon Valley remains the foundation of our manufacturing ramp.

As a reminder, this is where our engineering and manufacturing teams refine build processes, tooling and quality controls to ensure repeatability and efficiency.

The lessons and tools established on that line are feeding into our high-volume production ramp. Across all our locations, we remain focused on building a production system that is reliable, scalable and ready for certification.

The progress we are making in parallel on manufacturing and flight testing gives us high confidence in our ability to transition Midnight from development into commercial service smoothly and with the discipline this industry requires.

On the certification front, we have obviously all been impacted by the government shutdown and are hopeful that this will be resolved soon.

On the positive side, part of the FAA has continued working our program despite the shutdown and we have continued with certification efforts in several areas, including continued [ soy ] audits as well as continued work with FAA policy team to close the remaining industry-wide policy topics related to flight test.

Finally, I want to touch on our progress on the defense side. Over the past quarter, we've focused heavily on integrating the technologies, capabilities and teams we acquired from Overair and mission-critical composites. Bringing that talent and technology into our program is key to accelerating our development cycle.

We now have in-house composite structures manufacturing capability, giving us expanded rapid prototyping capacity, which is key for the new aircraft we are developing. We also continued maturing our hybrid electric VTOL aircraft program.

While the specifics remain confidential, our work here is centered on delivering a clean sheet next-generation aircraft designed to incorporate the best of Archer and Overair's technology, meeting the needs of operators who face demanding and complex missions.

Momentum across the defense platform remains strong and we are encouraged by the deep engagement from allied countries worldwide. We look forward to sharing additional updates as and when we can.

Also, this quarter, we completed our acquisition of Lilium's patent portfolio. This was one of the most significant technology portfolios in electric aviation, particularly in ducted fan propulsion, high-voltage systems and advanced flight controls.

Integrating this IP strengthens our long-term leadership position and expands our design space for future hybrid and electric platforms. It also positions us well against emerging opportunities unlocked by the MOSAIC rule, which enables a more flexible path to field innovative aircraft across both light sport and regional mobility categories.

We view this as a strategic advantage for both our defense road map and potential future commercial variants.

And now I'll turn it over to Priya to talk about the financials for the quarter.

Thanks, Tom. With our team continuing to deliver significant advancements across the key priorities you and Adam have discussed, our core focus from a financial perspective is ensuring we are operating from a position of strength. The key to that is maintaining a strong balance sheet.

We closed Q3 '25 with $1.64 billion in cash, cash equivalents and short-term investments and today, announced an additional equity raise of $650 million. As Adam and I have discussed previously, our goal is always to be opportunistic with our fundraising activity and that's exactly what occurred here.

As we considered options to finance the Hawthorne transaction, we received substantial inbound interest that led us to do the offering announced today, which had a very strong outcome with the round being well oversubscribed. We view our ability to raise capital as a core strategic advantage that helps power our ability to seize on key opportunities.

We often hear from government, commercial and other strategic partners that liquidity is a key driver to their decisions of who to partner with. They understand the capital-intensive nature of our industry and want to work with partners who will be around for decades to come. Some examples of this include LA28's decision to select Archer and us winning the Lilium IP bid process over our competitors.

With our total liquidity now over $2 billion, we intend to continue to use this as a tool to win future strategic opportunities across the business.

But it's not good enough just to have a strong balance sheet. We must remain focused on ensuring every capital allocation decision directly supports long-term value creation for our shareholders.

As we've consistently emphasized, we take a very disciplined approach to how we invest that capital. Our Q3 spending reflects our continued investment in our key priority areas: aircraft and AI technology development, certification, manufacturing ramp and commercial operations infrastructure to support all our planned line of business in civil and defense, both domestically and abroad.

Our continued emphasis on execution is what has led us to land our financial results within our guided range and this quarter was no different.

Our net loss for Q3 '25 was $130 million. This was a $76 million reduction from Q2 '25, primarily due to the noncash impact of warrant revaluation. Our GAAP operating expenses for Q3 '25 were $175 million and stayed essentially flat quarter-over-quarter, as increased people-related costs were more than offset by the timing of material and supply-related spend.

Our GAAP operating expenses for the quarter included approximately $53 million of noncash stock-based compensation-related expenses, which reflects the cost associated with stock issued to our employees, non-employees and vendors.

Our adjusted EBITDA for Q3 was a loss of $116 million, landing within our guidance range of $110 million to $130 million. Our Q3 adjusted EBITDA loss represents an approximately $3 million decrease from the previous quarter due to the reasons we have discussed earlier.

With regards to cash burn, our cash used in operations and in purchase of property, equipment and intangibles for Q3 '25 was $126 million, which was essentially flat quarter-over-quarter.

For Q3, our cash used in purchase of property and equipment was $20 million, generally in line with the guidance I provided during our last call and represents a slight decrease of $4 million over the previous quarter, which included our strategic acquisitions of composite manufacturing assets and over our patent portfolio.

Looking ahead for the upcoming quarter, we estimate our adjusted EBITDA loss to be between $110 million to $140 million. We expect our core capital investments to increase in Q4 as we continue to build aircraft and expand investments in our manufacturing capabilities. These estimates do not include the costs associated with the Lilium and Hawthorne acquisitions.

As we announced today, we closed the Lilium acquisition for approximately $21 million earlier in Q4 and we expect the initial closing of the Hawthorne acquisition to occur by year-end, which will entail us funding the $126 million purchase price in cash.

What's clear is that now is the time to ensure we solidify our position as a market leader across electric air taxis, the future of vertical lift for defense and cargo and the AI-based technologies that will be used for decades to come. This is how we can deliver enduring outsized value to shareholders.

With that, I'll turn it back over to Adam for Q&A.

Great. Adam, the line is open.

Thank you, operator. We're going to open the call up to Q&A. First, we'll start with the analyst community and then we will move into the retail folks at the end. Operator?

[Operator Instructions] Our first question will come from the line of Edison Yu with Deutsche Bank.

I want to ask about the big news on the airport. What kind of advantages do you think you will gain by taking ownership of it? And does this signal kind of some intention on what you might do from a software standpoint on air traffic control on autonomy?

So this was a very unique opportunity. Airports don't really change hands very often, sometimes not at all. If you look back over the past 5 years, there are only a handful of assets that have traded in the entire U.S. So opportunities like this are, I think, very rare.

Now you know our big strategy has been focused around Los Angeles, especially with the Olympics coming up. And so as we've been building out the infrastructure, Hawthorne was a real opportunity to not only just be a major hub, but also to be a point where we can go test, roll out, do all of our [indiscernible], all of our MRO at. And so our vision is to create this Grand Central like opportunity for the Hawthorne Airport.

We looked at it as you can go out and buy a hangar. We would have had to pay somewhere between $50 million to $100 million to buy a large hangar. And so the opportunity to actually get control of the airport plus the FBO, plus all the different growth opportunities was something that we couldn't pass up.

But I think most unique is the opportunity to actually go roll out our software in an airport that's in the middle of a large city. So the Hawthorne Airport operates in Class D airspace, not in the Class B airspace, where big LAX planes are operating.

There is an FAA contracted tower here. And so it gives us a really unique opportunity to really roll this stuff out. It's more than just looking at it from a revenue or EBITDA perspective. It is structurally advantageous for us to have this right in the middle of L.A.

It also happens to be less than 3 miles from both LAX and SoFi Stadium. It also happens to be located all in the different Elon Musk company territories like the Boeing Company. The Boring Company has tunnels that run underneath the airport. And so lots of interesting creative opportunity potential in the future.

Understood. Understood. And then I know you mentioned that it's already quite profitable. Any way to kind of mention the contribution financially from them going forward?

The revenue has the opportunity to be in the tens of millions and it is EBITDA positive. But we don't really think about it like that because there's some decisions that we have to think about.

So one is do we sell hangars? Do we build new hangars? Do we lease new hangars? Or do we consume them ourselves? And so there's a bunch of decisions that have to get made in terms of how we will utilize the airport, but we look at it mostly from a strategic standpoint.

I think if we wanted to, we could carve out the airport and make money, but that's certainly not the goal. The goal is really to take it as a strategic asset and use it to have a structural advantage in the industry.

Got you. And just on the raise, I know you're using some of it to -- for the deal, but it seems like the deal is fairly small in size. So you actually raised quite a bit more. Any insight as to, I guess, what that -- what the extra was for?

Yes. It was opportunistic. We weren't looking to go out there and raise capital. There was a very large reverse inquiry from very high-quality investors. So that was, I think, unique for this period of time.

I'm guessing a lot of that came off the back of the beta IPO because there's a lot of interest in the industry and I view that as just a very positive signal. So I think that was one thing.

The strategic asset was also a really unique thing that came up as well to go do that. So the viewpoint was we have been looking at both the civil and the defense side of the business.

As the civil side of the business starts to approach getting close to market and the defense side of the business starting to ramp up, we thought it would be prudent to add a little bit of extra cushion to the balance sheet.

And then finally, from an offense perspective, we have found that the capital has been a real weapon in terms of going out and being able to do things that we might not have been able to do. For example, the Lilium portfolio.

We were actually the lowest bid when it came to the different bids that were out there, but there was a lot of confidence in our ability to close and we ended up winning that because there have been previously some issues that the bankruptcy group had been through before.

Also going to customers like the big defense partners, when we show up with a large balance sheet, they take us a lot more seriously because the programs that we're looking at are so large, they look at us and say, if we're going to go get you guys involved in a many tens of billions of dollar sized program that's going to last for, they call them generational programs, you need to go deliver against that.

And so it puts us in a position of strength to do that. So while this was opportunistic, I think we are done raising capital for a while for now.

Our next question comes from the line of Andres Sheppard with Cantor Fitzgerald.

Andres here. Congrats on the quarter. Adam, I was wondering if you could maybe help us flush out your latest vision for commercialization in the UAE and through your Launch Edition. Just wondering if you can maybe remind us timing or expectations there? Are you looking to sell aircraft in the region? Just a little more color on your vision there for commercialization.

So we kicked off our Launch Edition program in the UAE this summer and we delivered an aircraft and began test flights in Abu Dhabi and we did that in partnership with our partner out there, Abu Dhabi Aviation.

And as a reminder, each of the Launch Edition programs carry a multiyear commercial value in the tens of millions of dollars to Archer. And so we've already started receiving initial cash payments in the 7-figure range tied to operational milestones.

And then beginning in 2026, we expect to recognize payments as revenue under the accounting treatment for the program takes place. And then just this week, we saw the Director General of the UAE's National Aviation Regulator reaffirm publicly that they remain on track for certification as early as Q3 '26.

So that would enable our partner, Abu Dhabi Aviation to begin commercial passenger service in the country once that takes place.

But as a reminder, we sell aircraft. As we sell aircraft, we start to recognize revenue and collect cash. So we have the ability to do that really all over the world, as you've seen with our Launch Edition partners.

So right now what we're doing is balancing the volume of aircraft we're building against testing in the U.S., the eIPP program and the Launch Edition customers. So there's certainly lots of opportunities to do all 3.

Got it. That's super helpful. I appreciate that color. And revenues next year, that's exciting. Maybe as a follow-up, I was wondering if you could -- either you or Tom can maybe expand a little bit further on the defense side and maybe on the hybrid propulsion.

What kind of opportunities there are you able to share with us that you might be pursuing, whether it's with Anduril or other partners there? Just another maybe update on the defense side.

Sure. So we are deep in the process of product development with Anduril and we've been working closely with the customer on building for specific missions. What's become very clear as we've gone through this process is that you cannot just take a hybrid powertrain and put it onto an existing eVTOL platform. The defense industry is not interested in that as a product.

There are specific missions that need to be filled. And so we're building a platform that is reusing as many of our systems, subsystems, manufacturing processes as possible. And if we're selected for that program, I think it will change the game for vertical lift warfare.

And so when we have something to show, we will -- we'll show everybody. But if you look at the size of past rotorcraft programs, they are absolutely massive and they last for decades.

So we continue to be very excited, engaged in that. We continue to be very positive that good opportunities will come. And so that's largely where the defense opportunity, we think, sits.

Our next question comes from the line of Savi Syth with Raymond James.

Adam, I wonder if you could talk a little bit more about the kind of the eIPP program. Just curious what the thinking or the strategy is behind it for the DOT and how you think it's going to work.

Sure. So there's been a lot of speculation about the eIPP and it really is still forming. But the purpose of the eIPP is not really about generating revenue. It's actually about introducing aircraft into urban environments and gaining the trust of the flying public, gaining the trust of municipalities and regulators.

And so the program will roll out conservatively, simple point-to-point routes in good weather, VFR conditions. And the goal is really to prove the safety and capability of the aircraft.

We all know the type certification process is sort of an all or nothing type process. And while I understand the purpose of that, I believe the way that autonomous cars or Waymos have been rolled out makes actually a lot of sense.

You start in a small area, you gain the trust of the public and then you start to expand. And I think by having a process like this, it will release the certification pressure valve and it should accelerate the path towards certification and commercialization.

That's helpful. And if I can just follow up briefly on the -- I think in the 8-K release, it was kind of called out that $171 million for Hawthorne. It seems like the purchase price is $126 million.

I'm kind of curious what the spend -- the near-term spend you see at Hawthorne and kind of what that incremental spend there is and just kind of how you think about spend over the next kind of year or 2?

Sure. So there is the core price, which is the $126 million for the airport, there are development rights and then there's the FBO and that adds up to the $171 million. There's decisions that we can make in terms of how much to spend, but there's not some like big giant number that we're going to go deploy into the -- that's expected for us to go deploy into the airport in the near term.

And so we'll look at that in terms of the value that can be created, the operations that we need to scale L.A. and scale into the Olympics. But those are still decisions to be made, but I would not expect some giant dollar number.

I also would not expect us to go try to replicate this all over the country or over the world. These opportunities don't even really exist. This is like an end of one asset. And so it is pretty unique from that standpoint.

Our next question comes from the line of Bill Peterson with JPMorgan.

This is Mahima on for Bill. I was hoping to follow up a little bit on certification. Would you be able to share your latest expectations around when you expect to begin TIA testing and when you also expect to be testing Midnight with FAA pilots on board for credit?

This is Tom. I'll answer that. So we're actually getting pretty close to starting our first TIA campaign with the FAA and that could happen as soon as the end of this year. Just to kind of level set everybody, as I said in the past, the TIA process, at least for us, will be broken into many phases on the order of, say, 10 different TIAs, each one targeting compliance for a very specific system or aspect of the aircraft. So the first one of those, again, we plan to start around the end of the year.

And the way you could think about the evolution here is as we continue to deliver or finish manufacturing of these aircraft, each one will be built with systems and aspects that conform in order to support further TIA testing, ultimately building up to a final fully FAA-conformed aircraft doing kind of the final F&R function reliability testing for the aircraft.

I think one thing that's important to know is that right now, as we said before, we still do have a couple of policy items open with the FAA. And so us or anybody in the industry can't do that final TIA for the purposes of flight performance until a couple of those items are resolved.

And we're still optimistic that that will happen very shortly. Otherwise, progress is looking really good.

Awesome. And then as you kind of ramp up your manufacturing capacity here, I think you mentioned up to 50 aircrafts in the coming months. Do you think that that's sufficient to support all the demand that you see in the next year between the test aircraft, the eIPP defense and then some of your international Launch Edition programs?

This is Adam. The demand far exceeds what we can build. And so we're really in the phase where we kind of broke this out into chunks. We said we built that first chunk of, call it, single digit aircrafts and then we're looking at that next chunk, which is in the 50-aircraft range.

And so we're looking at from the standpoint of making sure we can have enough aircraft to support the different opportunities we have coming, whether that's the Launch Edition programs or looking ahead and supporting the Olympics and really trying to think about where the near-term opportunities will be.

But if we theoretically had hundreds of airplanes, I think we could deploy them, sell them, put them out there. But I also think we are learning how to build. And so there's different chunks that we're going through as we scale that up.

And we're also, of course, finishing up and getting through the certification process in the U.S. and then, of course, internationally as well.

So it's a balance amongst all of those, but I think it really starts with there's a high-level demand for the product and then it's us being able to deliver against that from a manufacturing and then ultimately certification.

Our next question comes from the line of Austin Moeller with Canaccord.

So I just wanted to ask about the Lilium asset acquisition. Is Lilium silicon-dominant anode battery or the ducted fan technology more important to you? And when might this be incorporated into one of your aircraft platforms?

So we've been following Lilium closely for several years and we have a lot of respect for the engineering ambition that Daniel and his team brought to the sector. And they built very impressive technology with world-class European talent and they invested $1.5 billion behind it.

And so our consolidation of the innovation by winning that bid for us was, I think, actually quite positive and that there were a number of foundational eVTOL technologies around ducted fan, propeller systems, high-voltage systems and many others that we were able to accumulate patents on.

So it adds around 300 patents -- patent assets to the Archer portfolio, bringing our portfolio to more than 1,000 patent assets globally. But much of the technology that was being developed there, we believe was still a little bit ahead of its time, but it holds meaningful potential as the industry matures.

And so the depth of the ducted fan IP, we think, is quite compelling. We're laser-focused on Midnight, but that technology one day could support new architectures, including some of the smaller format or light sport concepts, as the regulatory pathways from MOSAIC unlocks innovation in those adjacent segments.

So we view this as a very important long-term enabler and just another example of us consolidating the technology foundation of the industry.

Okay. And just on the purchase of the Hawthorne Airport, I think when we were in your office, we discussed the importance of real estate at airports for eVTOL. So are you planning to transfer any of the space at those airports either to FBOs or airline customers to be able to use? Or how are you thinking about using that valuable real estate?

So the airport is quite large. It's 80 acres. And so we have partners in the industry like Beta, who come and electrify airports. And there's groups out there that we partner with that I think could also find value in the airport. So there's lots of ways to think about it.

One is we can build a centralized hub that everybody can use. And so it could be a way to help bring the industry together and create a main point of interest for us all to use to really help unlock a city like Los Angeles. And so I think that's one really attractive way to look at it.

Another one is as the industry matures, it gives us a real central hub for all the maintenance, for all the [indiscernible] of aircraft in the middle of the city. So when you think about like launching operations, you don't really want to fly your aircraft in 30 minutes, 45 minutes from somewhere significantly outside the city.

So this was just super unique from that standpoint that we could use that. But I think it's an opportunity to really help the industry propel forward in a complicated city.

And then this other side of it is it gives us an incredible opportunity to go out and test out all the software, the AI capabilities that we've been building from air traffic management to all the other capabilities we mentioned.

The industry is going to need to evolve to support the large advanced air mobility expectations. And so that's not just on manufacturing. That also has to come from the software side as well. And so we plan to use this airport as a testbed to deploy that, partnering with the regulators to really showcase a lot of these technologies.

Our next question comes from the line of Amit Dayal with H.C. Wainwright.

Congrats on all the progress. I apologize if you already discussed this, but any color on the burn rate for 2026?

Yes. Amit, this is Priya. So when we think about 2026, the biggest expense will continue to be our Midnight program. So next year, we'll be producing and deploying additional aircraft.

As we've talked about earlier, we'll balance where we deploy these aircraft between UAE, eIPP, flight test and other opportunities. Some of those opportunities will be generating cash and they'll net these expenses we've talked about.

But when we think about beyond this core program, we expect to invest in our defense and software development as well. So first, for the defense program, we do plan to leverage a large portion of the existing resources we have as well as the test infrastructure.

But we do expect to invest incrementally to support the program, which again locks a lot of the value and big defense contracts that Adam has talked about.

For software, we'll be, again, investing to build the product, which could generate revenues in the future. Timing of that is still to be determined and we'll talk about it closer to the time when we get there.

And then, of course, finally, we talked about the Hawthorne acquisition today. We'll be integrating that into our business next year, which is, again, generating revenues and will be generating margins. So we'll be incorporating that into our financial results for next year.

So again, hopefully, that gives you again a framework as and how we think about next year and we'll get into official guidance when we get to that point in time next quarter. So hopefully, that helps.

That's helpful. And then just a clarification on the number of aircrafts you may need to get through certification and commitments in UAE, et cetera. Like are we targeting around 10 aircrafts over the next 6 to 9 months?

Yes. So there's 6 aircraft in production now with parts on order for many more than that. But as Priya mentioned, we're sort of trying to judge or be opportunistic with where to use those aircrafts. So certainly, there's a planned portion of those at least that will be used for FAA certification testing.

But others, we want to send to eIPP locations in order to support that testing as well as our activities in the UAE. So until all those things start to materialize, we have optionality for kind of how many to send to which location.

Understood. And just last question, Adam. This is an interesting acquisition of this airport, strategic asset for you guys. Do you think this sort of triggers a little bit of a land grab in terms of other sort of players or even direct participants trying to get involved in taking ownership of such assets, given they are limited in number and some of these could be in critical locations that could support expansion efforts in the long term? Like how should we think about some of these types of assets that are adjacent to the story that now kind of comes to the fore after this deal that you've undertaken?

I think that some of the competitors would be interested in doing that. I just don't think there are opportunities to do that. These assets just change hands so rarely and sometimes never because they're owned by municipalities.

So they're very unique in nature when they come up. Again, we plan to use this asset as a hub for Los Angeles and to really build around it and we welcome the competitors to actually use it and to kind of unify more as an industry to together help operationalize an incredible city of Los Angeles, which can have a huge opportunity and there will be plenty of room for us all to help change the urban landscape here.

Our next question comes from the line of David Zazula with Barclays.

I guess, first, on the Launch Edition aircraft, I know you're -- there's not that much you can say, but is there -- are there any modifications that you anticipate to be able to use the currently flying Launch Edition aircraft as the conforming aircraft forecasting with [indiscernible]?

With regards to the certification in UAE, which was with the GCAA, as I've talked about in past calls, we've got a very detailed kind of step-by-step plan for delivering data to them to support the kind of phased integration of the aircraft and ultimately getting to passenger service in that country.

A lot of that is leveraging testing we've already done or already doing with the FAA. And from there, it kind of tees into the discussion we had earlier around TIA.

And so I would just go back to our framework there of each aircraft we're building is really targeted to generate specific data to provide to regulators, both in the UAE and the U.S. in order to show compliance.

So again, that kind of merged with trying to, let's say, balance where we put our priorities as far as allocating aircrafts. We've got essentially like a lot of past, but they all lead to really exciting things for next year.

Very helpful. And then Tom, could you maybe give a little more color on any impact that the shutdown has had on the certification time line and the ability to progress towards the confirming aircraft in the U.S.?

Yes, absolutely. I touched on it briefly earlier on the call, but we are still engaging with the FAA despite the shutdown. So on our program, some resources continue to work, which is fantastic.

Others are unfortunately not available. So hopefully, that situation gets resolved soon. But in several areas, we're sort of unconstrained just continuing to execute all the areas that have approved cert plans and we're just in execution mode.

Our next question comes from the line of Chris Pierce with Needham.

Apologies if this came up earlier, but with the acquisition of Hawthorne, given its much different geographic footprint versus Salinas, do you have kind of carte blanche to fly test flights in that area? Or do you need to talk to the regulators further, given the higher population density or just broadly kind of going into basically a city?

So you can break this down in a couple of different ways. So this will not be used as our core test flight facility. We will still be using Salinas as our core test flights facility.

Once you get kind of certain hours maturity on the aircraft, you can start to fly and get permissions to fly in and around urban environments.

eIPP, as an example, is a way to help accelerate some of these paths. And so the eIPP is expected to have -- the cities get announced in the first quarter of next year. It's expected there'll be 5 and then for flights to take place starting in the summer.

And so we're hopeful that Hawthorne gets picked and that's one of the places that we can operate out of. It would make sense. It's right in the middle of all these operations that we're working on. But we'll see what happens.

And nonetheless, we'll be still using the airport as building up the different assets here as we build into just commercializing and ultimately into the Olympics.

And did you feel like you needed to make this acquisition because maybe partners within the L.A. area weren't moving as fast as you like? Or is that kind of just some of the conjecture? Or I just kind of want to get a sense of what drove you to pull the trigger beyond just these assets don't come up for sale very often.

It's just very unique, Chris. It's not -- it's something like if we didn't do it now, it may never come up ever again or at least in my lifetime for us to go do something like that. And so need, I think the answer is no. Super opportunistic, I think the answer is definitely.

And so in the aviation world, I think this is viewed as like a absolutely treasured asset right in the middle of the city. And this airport is 3 miles from LAX.

So if you think about all the complexities that are at LAX, which we will not have to deal with. And so if you can connect this airport to LAX, it could end up being a massive terminal that is used to shuttle not just even hundreds of people, but potentially even thousands of people to the airport because you're out of a complex airspace where there's a jet landing at LAX every 90 seconds.

So just the opportunities here are quite incredible and it was just something that we couldn't pass up. And so it was viewed as something that was sort of a once-in-a-company kind of opportunity.

That will conclude our analyst question-and-answer session. I would now like to pass the call back over to Adam.

Thanks. So I'm going to go -- I know we're running -- I'm still going to go through at least one of the retail questions that was just asked. And so the question was, with the recent deal with Korean Air, are you pursuing further eVTOL deals and agreements with other major Asian aviation conglomerates?

So yes, I am personally spending a lot of time in the second half of this year abroad and I've been with customers, senior government leaders and particularly in the Middle East and in Asia and the reception has been very strong and incredibly validating. And so our model is certainly resonating.

The progress that we're making in the UAE, both in flight testing and on the regulatory development has driven a lot of inbound interest across the region and especially at countries that are looking to fast track commercial service with proven partners.

So we're seeing that same momentum in Asia and in Europe, as governments are looking to integrate urban air mobility into the national transportation strategies. So you've seen it in Korea and Japan, where we were selected as the air taxi partners for both of the national flag carriers.

And I think there's going to be a lot more coming. A lot of these conversations will converge at the Dubai Air Show. And so we look forward to sharing a lot more when the time is right.

So with that, I think I will wrap up the call. So I want to thank everybody for joining. This is a very meaningful time for our industry and we are building thoughtfully and steadily towards our vision. I want to thank the team, the partners for all their work and commitment and we look forward to sharing more progress next quarter. Thanks.

That concludes today's call. Thank you for your participation, and enjoy the rest of your day.

All right. Good morning. Welcome to the second of 3 in a row fireside chats with some eVTOL companies. We've invited these companies to our Auto Conferences, a lot of these companies have partnerships with automotive companies. But the reality is that if we think about the mobility scheme over the long term, urban air mobility is going to be a key part of that.

And we have Nikhil Goel, maybe I said that wrong. But anyway, you can introduce yourself in a second, but then I'd like you to introduce the company, and then we'll do a fireside chat. Happy to take questions from the audience, which I failed to do in the first one, but we'll do it better this time. But thanks for supporting our Auto Conference for the first time, and hopefully, we can do this annually.

All right. Good morning. Thanks for having me. Welcome, everyone. Good morning. Nikhil Goel from Archer Aviation, Chief Commercial Officer.

With that, if you can maybe provide an overview of the business as well. There's probably people here that are generalists or maybe just don't know the story as well. So maybe if we're less familiar, you can frame the opportunity as well as the opportunity for eVTOL in the market over the longer term.

Yes, absolutely. So Archer Aviation, we built all electric vertical takeoff and landing air taxis. Our founder, Adam Goldstein, founded the company in 2018. I personally was at Uber prior to that, where I founded the Uber Elevate business, which is one of the first in the world to really look at the market based on the data and the insights that Uber had, we had the insight that all electric vertical takeoff and landing air taxis would be potentially very large form of modality to move people in and around cities.

And Archer is one of the companies that was founded to really help capture that mission. So today, we've raised about $3.3 billion to date. We've got about 1,200 employees at our San Jose headquarters and several others all over the world. On the commercial side of the business, we are focused on commercializing air taxis, both here in the United States as well as abroad, starting with the UAE.

We also have a defense business, Archer Defense, in which we're focusing on building a hybrid electric variant of our Midnight aircraft that is focused on defense use cases as well. And then we've got a software business that we haven't spoken too much about where we are using artificial intelligence to help further advancements in aviation. So excited to be here this morning and happy to chat more.

Great. So maybe starting off on a high level, can you help frame the U.S. regulatory landscape as it relates to advanced air mobility, especially given a lot of recent news flow around government support for drones, autonomous, hybrid aircrafts and so forth?

Yes, absolutely. Look, at a high level, what I will say and having been in the eVTOL industry for about a decade, this is probably the most leaned in I've seen not just the federal government, but governments at all levels across the United States ever on eVTOL and just on advanced air mobility in general. So the federal government, in particular, have spent a lot of time out in D.C. with our Founder and CEO, Adam. And there have been so many executive orders across the field of aviation, things like Supersonic, things like ATC.

There are 2 in particular that have been really, really relevant to Archer. The first was just last week. So a couple of months ago, Archer was selected as the official and exclusive partner for the LA28 Olympics. And that was really important because what it did for the very first time in the industry was it sort of aligned public sector and private industry around a specific date, which is in the summer of 2028, the vision that a single city, Los Angeles, would be not just launched, but at scale with certified eVTOLs, moving people in and around Southern California.

And so that was really big for us. And then last week, President Trump issued an executive order where he commissioned a White House task force. That task force is responsible for overseeing security and transportation for the Olympics. And so that was really great to see kind of that federal level of lean in. And then at the local level, the way that, that's transpired is you've seen real estate groups, both our existing real estate partners like SoFi Stadium and USC as well as new real estate groups really lean in and say, hey, I want to be a piece of the puzzle. You've seen our technology suppliers and our vendors say, okay, this is an unmovable date. We're going to make sure to scale up our production and have certified parts for you. We've seen all of our partners really come together in a magical way.

The second was in June, we worked very, very closely with the former CTO of the White House, Michael Kratsios, now Director of the Office of Science, Technology and Policy, Secretary Duffy, the Secretary of Transportation and several others across D.C. to craft what became the executive order for "American dominance" in the space. And this is really important. It was actually very similar to something Michael Kratsios and team put together during the last Trump administration for delivery drones and other UAV use cases.

But this time, a large focus of the EO was on eVTOL. So what it did was it established the eVTOL IPP, the integration pilot program. And what that envisions is and what that will implement with the DOT and with the FAA is a program across 5 jurisdictions, 5 geographies in the United States with different American OEMs where they will be deployed early as soon as next year against specific use cases like air taxi. And so that, to your point, Bill, creates what we believe to be an expedited pathway. And all of these things just really showcase how leaned in the federal government is, how leaned in the FAA is and how much support we're getting at the federal and regulatory levels.

Yes. So are you saying that the EO actually potentially accelerates the pace of adoption as well as potentially bringing from the certification time line? Or -- I mean, I think how does the EO relate to basically the FAA and their own certification and all the procedures they have?

Yes. Look, it's not sort of deterministic in that exact way. The way that we think about it is, first of all, it just shows how much the federal government, the DOT and the FAA are valuing eVTOLs. Two, is what it does is it bookends on how you should think about our deployment and certification in the U.S. So on the sort of left side of the bookend, it's deploying eVTOLs as soon as next year in an American city under the executive order passed in June. And then on the right side of the equation, you can envision our air taxis as part of our LA28 partnership at scale in Los Angeles.

And so think about all the steps that have to happen in between there. You've got to sort of scale your deployments. Obviously, you've got to get FAA certified. And then you have to prove that you are operating multiple routes across certified vertiports in Los Angeles and really get to a point where you're at steady state at scale for the Olympics. And that's what the FAA is looking for. That's what we have committed to our partners. And so that puts us at roughly 1,000 days between now and then. So there's a lot of wood to chop, but we feel very, very good about the support we're getting from the FAA.

So sticking on the theme of certification and maybe a bit in the weeds, but what is the significance of being on the path to begin TIA flight testing in the next several months?

Yes. So Adam talked about this on the earnings call on Monday. One of the things that we are working through the FAA is just sort of getting kind of out of the policy phase. And so there's us and another industry peer that have our final airworthiness criteria published by the FAA a while back. And so that puts us in a place that we're -- that's allowed us to continue a lot of our R&D. And then where we are today is nobody is quite yet out of the policy phase.

And so what we are working with the FAA on is sort of the final pieces to get out of that policy phase. What we also announced alongside that is that we are currently building 6 additional Midnight aircraft. 3 of those are in final assembly. And so the vision for those is some of those are going to go abroad, part of our Launch Edition program, which I think we'll talk about in a minute. And some of those will be retained at our Silicon Valley headquarters and our Salinas flight test facility, where we will push forward certification flight testing as we look towards TIA.

What are the remaining steps left before you complete vertical takeoff and landing piloted flights? I know you've done unpiloted flights on your conforming aircraft in the U.S. as well as the UAE later this year.

Yes. Well, here's how to think about sort of our flight testing and our fleet broadly. So last year, we completed over 400 flights. We sort of well exceeded our goal there. A large portion of those were VTOL transition wing-borne flights with Midnight. So for us, that was our first sort of opportunity to go out there and prove and test and validate our VTOL transition flight regime.

At the same time, earlier this year, we announced our piloted flight regime. And we made the very intentional decision to do those CTOL, so conventional takeoff and landing with the runway at the outset. There are a couple of reasons for that. One is just as we approach TIA, the CTOL testing is a very critical part of TIA and those tests were things that we needed to go out and prove. And so we said, hey, let's go start our piloted flight regime with conventional takeoff.

The other sort of reason was many of our customers, both civil and defense, demand conventional takeoff and landing as part of the certification of the aircraft. And that's because they look at CTOL's way to provide operational flexibility, increased levels of safety, et cetera. And so we said, hey, we're going to start our piloted flight regime here in the U.S. with CTOL. At the same time, we delivered our first aircraft to the UAE, and there we're focused on hot weather testing.

And so to give you a little bit of context there, the UAE, when we were flying in July, temperatures reached about 110 degrees. That was just ambient. But then inside of the aircraft, many of the components actually got to 140 degrees Fahrenheit. And so there's a lot of testing that needs to be done. Obviously, our aircraft was built and designed to withstand those conditions. You still want to get reps on the board, though.

Given that this year -- this conference is an autos-focused conference, I wanted to spend a little bit of time on the partnership with Stellantis, which is also a large shareholder. First, maybe the background of the program, I guess, how has the partnership been evolving? And I'll maybe ask a few more questions about the relationship as well.

Yes. Our partnership with Stellantis remains as strong as ever. The Chairman of both Stellantis and Ferrari, John Elkann has been an incredible supporter of the company. We were just with him recently. And so I think the partnership at this point is several years old and over that time, has matured in a wonderful way. One is Stellantis continued to invest in the company. You've seen that over our last several fundraisings.

Two is we've really partnered with Stellantis on our manufacturing facility in a couple of different ways. One is just sort of physically. So there are dozens of full-time Stellantis employees at our Covington, Georgia facility working alongside us hand-in-hand as we sort of ramp up our manufacturing there. The second has really been more from an expertise perspective. Stellantis has decades of experience manufacturing high-value, low-cost vehicles all over the world.

And so they have a lot of experience with a lot of the types of decisions that you face when you're sort of thinking about ramping up manufacturing. I'll give you an example. One of the questions that any manufacturer, whether it's in automotive or aviation, et cetera, has is when do you start automating different parts of the process. And so as a simple example, paint, you can paint an aircraft in 5 days or you can paint an aircraft in 5 hours if you've got sort of the right machinery and automation around it.

And so the question is, is when do you go make the CapEx, CapEx investments to put in place things like automated paint. Do you do it on day 1? Or do you do it sort of when you're at a different point of the inflection curve. So that's just one of the many, many questions that we talk through with our partners, and they bring the judgment and the expertise to be able to help guide us through that decision-making.

I think part of what Adam talked about last year was especially in early stages, areas like working capital and things like that. Can you elaborate more on that? And the paint is a great example. Is there any other techniques that they're bringing to the table that otherwise wouldn't -- doesn't really even exist in the aerospace manufacturing world?

Yes. I think the financing of the working capital has been a big part of it. One of the things we've spoken about previously is an agreement that we have started to put in place around contract manufacturing and Stellantis providing us labor at our Georgia facility. And what that does, a few things. One is Stellantis has access to labor globally and sort of the right specialized skill sets that we're going to need both early and later on in the manufacturing process.

And two is just from a financial perspective, it's advantageous to us as well because they will provide that labor and then we'll be able to remunerate them in the form of Archer shares. And so both of those are advantageous to us.

How many aircraft, I guess, do you expect to produce next year versus the 10 you're targeting to produce this year and maybe the path to scale along -- just staying in the same vein?

We haven't given specific guidance. Here's how I would think about it at a high level. There are sort of different points in the manufacturing ramp that -- where you hit different inflection points. So right now, we are in the phase of sort of those 6 concurrent builds that we spoke about earlier. The place we're trying to get to here in the near term is a run rate of about 50 aircraft a year, so call it 4 a month. That's the point where across our 2 facilities, we are sort of at steady state with about 4 aircraft a month. And then just to give you a broad picture of our facilities, we've got 2. So on the West Coast in Silicon Valley at our headquarters, we've got what we call our golden line.

The way to think about that is our pilot manufacturing facility where you've got build, manufacturing, test, quality assurance and then flight test all in one place. The goal of that facility is to sort of ramp everything up, do what's called in the industry as new product introduction, make sure everything is working as intended and then use that blueprint as something you then go replicate at Georgia. At Georgia, we've got one of the largest aviation facilities in the world. That facility has been fully constructed. It's up and running. And so it's now at a place where we are starting to think about how you shift the bulk of that manufacturing from our golden line in Silicon Valley over to Georgia.

Maybe along those lines, it wasn't a question I had thought of, but this golden line, is this sort of like a copy exact or I mean, if you're thinking about the production part of the certification process, we've spoken about type certification a bit. How does that interact between San Jose and Georgia in terms of the production certification?

Yes, it's a good point. So our facility in Georgia, I think I mentioned earlier, it has a capacity to produce about 650 aircraft a year. And so what we're doing now is, to your question, the golden line in Silicon Valley is intended to basically get to a place where it can be a replicable carbon copy of the different lines that we're going to have in Georgia.

And to your point around production certification, that's something that's been well underway since the beginning of the year. And so we are in a place where we have FAA inspectors doing quality and safety checks at both of our facilities. And so we'll have more to report there soon, but the process is well underway.

Great. We're going to break it for a question here in a bit, but I want to just kind of get a sense for when should we expect air taxi operations with your partners to begin ramping up. I guess, what's needed from a resource perspective, thinking about infrastructure, labor, pilots, maintenance and maybe also importantly, community engagement.

Yes. Well, maybe I'll start with talking about who our partners are. So globally, we've talked about a multibillion-dollar order book. Here in the U.S., we work with both United and with Southwest. With United, we've got up to $1.5 billion of orders. That's a partnership that's been in place since 2021. United has not only put down nonrefundable deposits against that order, they've also invested in the company several times. And so they're a phenomenal partner. And we think about -- we work with them very closely as we think about how we launch and scale here in the U.S.

So markets we've talked about here domestically are New York, Los Angeles and San Francisco. One of the major things is infrastructure. So there's, call it, 3 or 4 buckets of infrastructure that we've talked about publicly. The first is major airports. So places like LAX, like Newark, like San Francisco Airport, these are all airports that United is a very, very big user of. And so we think about not just where to take off and land, but really how to go build the seamless end-to-end experience.

So if you're taking a Polaris business class flight from, call it, L.A. to New York, you land in Newark, how do we think about that Archer Midnight transfer to Manhattan being included as part of your journey? How do we think about making sure you have sort of a seamless transfer between your United wide-body airplane and your Archer Midnight so that when you land, you can be in Manhattan 10 to 15 minutes later. So that's sort of the domestic story.

Internationally, we've got a number of partners all over the world, places like UAE, Japan, Korea, India and more. What we have structured is a program called Launch Edition. And so this was a way, given we had so many customers all over the world who want to test and learn eVTOL and want to be one of the first in the world to deploy air taxis. The UAE has been at the forefront of this. So Mubadala is an investor. IHC is an investor. It's the largest listed entity in the Middle East. And so several others sort of across the region.

But given that partnership in the UAE, what we heard from the federal government was that they wanted to be the first in the world to commercialize air taxis. And so we've been working with them for the last couple of years, and we've done several things. One is a broad agreement with the government. So that's the Abu Dhabi Investment Office. We've spoken publicly about a framework agreement in the hundreds of millions of dollars over the next several years where they are going to invest to go commercialize air taxis on things like infrastructure.

We've also formed partnerships with the GCAA. So that's the federal regulator, the UAE equivalent of the FAA, where they have charted a pathway for us to commercialize early in the region. And then on the commercial side, Abu Dhabi Aviation is our big partner there. So Abu Dhabi Aviation is the largest helicopter operator in the Middle East. And we have formed that Launch agreement -- well, Launch Edition agreement with them where we can expect to receive tens of millions of dollars over the next 18 to 24 months. Some of those payments will hit in the second half of this year.

And under that agreement, what we plan to do is deliver additional Midnight aircraft and start ramping up our flights in the region. In parallel to that, it's go ready the infrastructure. And then it's also sort of set up all of the pieces that Abu Dhabi Aviation needs to operate at scale. So pilot training, maintenance, customer service, things like that.

Great. Any questions from the audience? All right. Maybe picking up on one of the things you said about infrastructure, and we've seen one of the competitors in the space basically looking to buy BLADE, their operations. And while it doesn't mean exclusivity, they do have actual physical infrastructure, things like lounges and things like that. If I was to think about a use case like Newark to downtown, maybe downtown is not a good example, like West 30th, like where there is somebody else's infrastructure, can you use that? Or how would you use that? Do you need a partner? Do you need somebody else to build a lounge or build some kind of Archer facility? How does that work out?

Yes. Look, that's a deal we looked at several times. It wasn't the right deal for us. Congratulations to Rob and BLADE. I've known them for quite a while. The way that we think about New York is -- and we've been fairly public about a lot of the infrastructure we've built out here and the deals we've built out here. One thing to remember is all the infrastructure here within Manhattan is fully publicly accessible.

So you've got 3 heliports. You have downtown Manhattan, West 30th and East 34th. Those are some of the largest heliports in the country, and they are all by law sort of owned by the city or the state. Downtown and East side are owned by the EDC, the Economic Development Corporation -- Council of New York City. And then the West side is owned by the Hudson River Park Trust, which is a city state entity here in New York. So they're all publicly owned. They have private operating agreements and we have partnerships with all of them. So we've talked about this publicly.

There's actually plenty of space there to go install lounge facilities. In fact, several years ago, when I was at Uber, my team launched a service called Uber Copter where we worked with the Premier Part 135 here in the region. We also established lounges, so a Premier lounge at Downtown Manhattan. And that was fairly straightforward to do, working with the operators. There's a bunch of operators that have those lounge facilities, and we would expect to have those as well.

There's also a number of FBOs in the region, so places like Westchester, Teterboro on Long Island that we've talked about. And then, of course, the big airports, Newark, JFK and LaGuardia.

You spoke earlier about the Launch Edition. Maybe you could kind of double-click on some of that. So I guess, how is this route maybe potentially more favorable than waiting for official certification? Will the Launch Edition customers receive conforming aircraft that you intend to certify with the FAA? I'm just trying to get a sense for the strategy here in a little bit more detail.

I mean the strategy is to launch, right? There are so many places in the world where the governments and our operating customers are very, very leaned in, and they're saying to us, hey, we want a pathway to test and learn eVTOL. So the goal is not to go deploy a large number of aircraft in any one place too early, but it's really to start testing and learning with aircraft that we believe are safe and that meet sort of the FAA rule set.

And so let's take the UAE as an example. What the GCA has said to us is, hey, now that your FAA airworthiness criteria is published, we have a very clear idea of what the rule set is, let us chart a pathway for you to have an expedited path to launch here in the UAE and start doing flights. And what that does is it forces the entire ecosystem to get it and come together. It forces the infrastructure to be ready. It forces the GCA to really, really understand the aircraft and the operations and it forces the commercial partners to sort of ramp up their operational prowess so that if and when we are ready to launch at scale and sort of bring a large order of aircraft, the whole system is working.

It's not too dissimilar from the executive order in June, where the mandate at a federal level was to sort of set up the same thing here in multiple geographies. And so that's how I would think about it. And so the goal -- the demand that we are seeing is across dozens of countries all over the world. The 3 that we've announced so far are the UAE, Ethiopia, which is one of the largest Star Alliance partners. It's the largest carrier in Africa. And then Indonesia, which if you've ever been to places like Jakarta or Bali are really struggling with the limited bandwidth of their ground transportation networks.

So you spoke just now just a little bit on the demand. What -- and probably this will just depend on what the company is able to build and also as well as strategy, but what could a revenue opportunity look like this year, next and even beyond for some kind of Launch Edition? Just trying to get a sense of like this business mix towards more aircraft sales for the foreseeable future.

Yes. Well, I'll talk about first sort of what one of these agreements look like. So what any one of these agreements looks like is sort of low tens of millions of dollars over a period of 18 to 24 months. And they're sort of payments that start at the delivery of the first aircraft and sort of sustain throughout that 18- to 24-month period. As I said, we have 3 of these that we've announced, UAE, Ethiopia and India.

We've talked about sort of how many aircraft we're building. So we haven't given specific guidance beyond that, but we do have demand across a lot of countries. What we look for is governments that are leaned in, a commercial reputable operating partner there in the country, the infrastructure readiness and sort of putting all those things together, if it makes for an attractive market, then it has the potential to become a Launch Edition market that we're excited about.

Okay. I want to pivot to defense, which has become pretty topical in the industry. So I guess, how would you characterize more broadly eVTOL's role in the U.S. defense space? Where is there a clear need for the technology?

One of the things Adam spoke about on the earnings call is if you look empirically over the last 100 years, basically, every major world conflict has been largely shaped by some advancement in technology, usually in aviation. If you go back to World War II and the fighter jet or the war on terror and drones and then even to the current war in the Ukraine and how first-person drones have really sort of commanded the narrative, technology and aviation have been a major part of every one of those conflicts. What we hear from the generals and the folks that we speak with is that the next global conflict will largely be shaped by vertical lift.

But today, the incumbent technology is like 1960s and 1970s, Chinooks and Black Hawks. And those have several issues. One is they're tremendously expensive. We're talking about systems that are in the tens of millions of dollars. They have very high both acoustic and thermal signatures, and they're human piloted. So they put human pilots at risk. And it's simply a technology that we don't think will scale or is ready for the next global conflict. And this is what we continue to hear from defense organizations all over the world.

And so as we have engaged those governments and customers with Archer Defense, one of the things that we continue hearing is that there is an increased level of demand for this technology. And then what we sort of announced at Archer Defense was an exclusive partnership to build hybrid electric VTOL. And one of the things that we have heard from our customers repeatedly is the first instinct, which might be to go put a hybrid powertrain on our existing civil eVTOL solution is insufficient.

That will give you more range, but it doesn't meet all of the other performance criteria that the military customers are looking for. What they have pretty much demanded is that we create a purpose-built aircraft for many of the specifications that they're looking for, things like range, things like payload and other capabilities. And so that's what we're doing now. And as I said, we've got a lot of demand for that across several companies around the world -- countries around the world.

Sure. I think Adam spoke to the defense potentially even being a bigger market opportunity, I'll call it, the nearest term. I don't -- you can correct me if I'm wrong. But I guess when should we think about the team being able to capitalize on the opportunity set you went with a hybrid VTOL, defense product be ready to commercial -- I guess, bring to market?

Yes. Look, as you know, we can't share much yet. There are a couple of things I'll say. One is we announced earlier last week that we've made 2 acquisitions in the space. That was, I think, a symbol of the investment we're making and how bullish we are on the opportunity. The first was MCC, Mission Critical Composites. It's a composite factory in Southern California. What that does is it allows us to sort of ramp up our iteration speed as we think about the new aircraft and really do some of the building and prototyping much more quickly.

The second was Overair, which is a spin-off of Karem. Karem was founded by Ab Karem, the sort of godfather of drones and the inventor of the predator drone. They bring a lot of IP and critical talent that's really important for what we're building. So both of those, I think, were symbols of the investment that we're making. In terms of how you can expect to see it at Archer, it's really hard to say. These programs are very, very large in size.

We're talking about multibillion-dollar programs of record. But as you know and I think as you've seen empirically, they go slow and then they go fast. And so it's hard to say what that would look like from a revenue mix perspective. I think it will be lumpy. But the good news is these customers are very real, very leaned in. And as I said, the size of the prize is pretty large.

Yes. How fungible is the tech and also, I guess, the internal investments that you're making between the current sort of battery eVTOL programs and the hybrid eVTOL aircraft designs?

Well, you have to think about what are the pieces that are really important to the customer. The big one is low acoustic and thermal signature. So the electric powertrain that we've built in-house. That's our bread and butter. We've got over 100 engineers from SpaceX, Tesla, Apple, et cetera, that have built, what I believe to be one of the world's best powertrain for aviation.

So that powertrain that we are using on the Archer Midnight is going to be very, very critical for the defense vehicle, especially to meet the performance criteria, the low acoustic signature, the low thermal signature that folks are looking for. And then a bunch of the propulsion technology as well, I think, is going to really come into play. So the important bits, I think, are very much reusable. And that is ultimately why we had -- why we felt Archer Defense was on mission and it's something that we were uniquely positioned to do.

Just want to pause again and see if anyone has any questions, feel free to ask. Okay. Defense has evolved a bit, right? So with the pullback of Agility Prime, how should we think about the current level of engagement with the DoD, various departments and so forth?

Agility Prime was a phenomenal way to kickstart the program. It was a really great way to get the U.S. Air Force to start looking at these technologies and for the public at large to start associating eVTOL with defense. So it's a phenomenal program. I think us and our peers really benefited from it. It was very much a research program. And so it's very much a way to evaluate the technology, and it's certainly not on a pathway to a program of record.

And so I think it was the right program for the right time. What we're looking at now, though, is how do you actually go in a program of record with sort of allied defense programs around the world. And so I'd say we're sort of on to the next phase, and that's where it goes back to a purpose-built vehicle for the specifications for what most around the world believe to be the next global conflict, and that's what we're sort of focused on.

And I think that the interest level there is higher than ever. Adam and I were recently with Hegseth, the Secretary of Defense. And the perspective from his end sort of resounded with kind of the bullishness of how important this is for the defense industry moving forward.

So the company recently raised an additional $850 million to support defense development, among others, really just bolster the balance sheet. But how far do you think your current cash balance takes you? Are there other avenues that you have to offset some of the spending that we'd assume to be pretty high level over the next few years?

Look, we're grateful to have roughly $1.7 billion in cash and cash equivalents. So from a liquidity perspective, that balance sheet puts us from our perspective at the lead of the industry. So if you look at the last quarter, we talked about, I think, roughly $119 million. And so from a runway perspective, we haven't given any guidance, but we're very comfortable with the cash position, and that allows us to stay heads down and execute.

So I guess we're kind of getting close to the end here. But I guess what other sort of closing remarks would you like to wrap up? I guess, maybe any particular milestones that investors should watch out for this year or maybe any discussions you've had with investors that maybe things that are just sort of misunderstood about the story?

I think the headline for us, as we've talked to investors this week has really been around manufacturing. I think the investments we're making there are indicative of, one, the demand we're seeing; two, the regulatory embrace that we're getting, not just here in the U.S. but abroad. And then three, is the maturation of our manufacturing processes in our facilities.

We're at a place where our Georgia facility is fully constructed and up and running and I think far ahead of the industry. And then we're at a place where in Silicon Valley, our golden line is very mature, and it puts us in a place where we can have 6 aircraft that we're concurrently building. And that gets us to a Midnight fleet that's very robust. It's going to allow us to deploy aircraft internationally for payments from international customers and then here domestically, including in cities as soon as next year. So we're excited about where we're at, and we're excited to share more next quarter.

Great. If there's no further questions, we can go ahead wrap up the session. But Nikhil, I appreciate you coming to our Auto Conference again for the first time. It's pretty enlightening for us. So I appreciate that, and good luck for the rest of your meetings today and in general for the company moving forward.

Always fun, Bill. Thanks for having me.

Thanks.

Good afternoon. Thank you for attending today's Archer Aviation Q2 2025 Financial Results Conference Call. My name is Tamia, and I'll be the moderator for today's call. [Operator Instructions]

I'd now like to pass it over to Eric Lentell. Please go ahead.

Thanks for joining Archer's earnings call. This is Eric Lentell, Archer's Chief Legal and Strategy Officer.

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, review the risk factors in our SEC filings.

We will also be discussing both GAAP and non-GAAP financial measures on the call. A reconciliation of those financial measures is included in our shareholder letter and earnings release from today.

And now I'll turn it over to Adam. Adam?

Thanks, Eric. We are living through the reindustrialization of America. Just 10 years ago, the best and brightest minds in the country were building SaaS products, marketplaces and consumer electronics. Now, think of what's going on today. We are building flying cars, modular reactors and autonomous fighter jets. The new heroes of today aren't influencers, they're builders, people like Palmer Luckey, Alex Karp and Zuck.

If you're listening to this while trading on Robinhood or doomscrolling Reddit, I would encourage you to put your phone down, pick up a tool belt and come build a future world with us and others out there doing it. What a time to be alive.

All right. Let's dive in. This quarter, we made some tremendous strides in ramping our manufacturing, which we highlighted in our shareholder letter today. First, I want to step back and talk about how unprecedented the level of support is for our sector within the highest levels of the U.S. government. There has been a clear shift in our industry from ambition to execution, focused on scaling commercial air taxi operations in the U.S. and select forward-leaning cities around the world.

First, there were multiple presidential executive orders directing an imperative for U.S. leadership in advanced aviation. Second, showcasing air taxis at the 2028 L.A. Olympics was made a national priority. And third, there was a series of unprecedented changes to FAA rules that will help unlock near-term commercial ops in the U.S.

Just a few weeks ago, I was in D.C. meeting with Vice President, JD Vance, FAA and DOT leadership and Secretary of Defense, Pete Hegseth. I left more convinced than ever. This is the most coordinated national effort in modern aviation history. My message to them was simple. Archer is committed to furthering America's lead in advanced aviation by building and deploying eVTOLs here at home and then exporting that innovation globally.

The Olympics mandate has become a national stage to showcase air taxis at scale. Two years ago, the FAA published its Innovate28 road map for scaling eVTOL ops in American cities by 2028. Earlier this quarter, the LA '28 Olympics announced that they selected Archer to be the official exclusive air taxi provider for the games.

And just last week, a new executive order established a White House task force personally led by President Trump and the Vice President to ensure maximum safety, secure borders and world-class transportation at the 2028 L.A. Olympics. This level of commitment is allowing us to rally our infrastructure partners, supply chain and the FAA around a national priority.

Our existing infrastructure partners, including SoFi Stadium and USC as well as new real estate groups are working with us to prepare over a dozen eVTOL vertiports to support Archer operations. Our key suppliers are ramping production and component level certification to align with our manufacturing scaling time lines. And the FAA is working closely with our teams to advance Midnight certification to support our operational readiness.

The executive order in June crafted in partnership with the White House, DOT and FAA is the most significant federal action to date in the eVTOL sector. It establishes a national directive for American dominance in this industry and a presidential imperative to begin air taxi deployments in the U.S. as early as next year. These early operations will allow us to validate Midnight's performance, safety and scalability in real-world conditions in advance of the games.

But to make all of this a reality, we must quickly ramp manufacturing to support our certification programs and early commercial deployments. Tom will unpack the details, but here's the headline. We now have 6 more Midnight aircraft in various stages of production, with 3 of those in final assembly across our facilities. When those are complete, that will bring our Midnight fleet to a total of 8 aircraft. Each of those will carry our production 4-bladed rear propeller design and will either go directly into certification flight testing or early commercial deployment.

Completion of these aircraft will bring our fleet to 8 Midnight aircraft. The capital we have deployed over the last few years to build out our test and manufacturing is now paying dividends. We are the only ones in the eVTOL sector capable of executing what we are doing today, using a golden line approach as a blueprint to scale our high-volume facility.

If you remember, we began construction on our high-volume facility in Covington in early 2023. Our team built that in 2 years at a record pace. And no other company in the eVTOL sector has even started construction on a comparable facility. We are pacing the industry. And location matters, too.

The FAA's Atlanta Aircraft Certification Office manages our certification program, and our Covington site is located in the suburban on the eastern side of Atlanta. The proximity enables frequent on-site engagement as we work through our certification program. Further, we began working on our production certificate in January, and the FAA is conducting regular reviews and inspections with our team as we go through these early builds.

The goal here is to ensure we are aligning the progression of our type certification with our production certificate, so that we can ramp manufacturing as soon as we receive Midnight's type certification. This quarter, we also commenced the piloted flight phase of our flight test campaign. By design, we deliberately started with conventional takeoff and landing flights as Midnight is uniquely capable of handling both vertical and conventional takeoff and landing as part of normal operations.

In recent years, our flight test campaigns have predominantly focused on VTOL and transition to wing-borne flight. As we eye TIA later this year, it was essential to first work through the CTOL campaign. The good news is that we are rapidly progressing through the flight envelope, hardening the aircraft's ability to handle our expected commercial operations.

For example, we've recently focused on flights in the 20- to 30-mile range, which are representative of many of our planned commercial operations. We also expanded our flight test program internationally with our first launch edition operations in the UAE, where we first focused on testing Midnight's performance in Abu Dhabi's extreme summer heat. This is important to validate Midnight safety and reliability in high heat, high humidity conditions essential for regulatory approval and subsequent commercial operations across the region.

We plan to deploy several of these early aircraft commercially under our Launch Edition program with strategic partners ahead of FAA type certification. We've announced 3 launch edition program partners so far, with the first being in the UAE, the second being in Ethiopia, and most recently, Indonesia. Demand from global operators and governments continue to grow.

This summer, we signed definitive agreements with Abu Dhabi Aviation and the Abu Dhabi Investment Office and kicked off operations under our first Launch Edition program in the UAE. This unlocks a multiyear commercial partnership that I expect will generate tens of millions of dollars for Archer, with initial payments expected later this year.

Let's run through some of the key activities from this launch program. Delivering our first Midnight aircraft and began flight testing with the GCAA in June, deploying our first flight simulator with Etihad, which our teams will be using to build local readiness across pilot training. converting existing aviation infrastructure into turnkey eVTOL vertiports in partnership with local stakeholders, including Jetex, the UAE's leading FBO operator.

Over the next several years, expect to see us continue to ready infrastructure, deliver additional Midnight aircraft to the region and begin early exhibition flights with passengers ahead of more robust commercial operations under authorization from the GCAA.

We also expanded Launch Edition into Asia, beginning with Indonesia, anchored by Jakarta, one of the world's fastest-growing megacities and Bali, a high-demand destination with limited access options. You can expect to see us both announce more global launch edition partners and continue to grow our multibillion-dollar order book with the world's top governments and airlines.

As we partner with the countries at the highest level of government, our growing commercial momentum is also attracting defense momentum. For over a century, every major conflict has been defined by a breakthrough in military technology. World War II introduced the fighter jet. The Gulf War showcased precision-guided munitions and stealth. Drones reshaped the war on terror.

Today, the war in Ukraine is being fought in real time with unmanned systems and satellite linked targeting. The next paradigm shift will be defined by advanced vertical lift. The U.S. and its allies, however, are still reliant on legacy platforms such as the Chinook and Black Hawk, expensive older technology from the '60s and '70s, but future conflicts will be won with low-cost, low thermal, low acoustic systems capable of rapidly moving through contested airspace without risking human pilots.

Over the last 18 months, I've learned from the global defense industry that our customers demand a purpose-built system designed to stay relevant for decades. You cannot simply slap a heavy fuel powertrain onto an existing eVTOL design. I am confident that Archer's technology positions us at the forefront of that shift, delivering the speed, agility and deployability modern militaries will require to win.

To accelerate our progress, we completed 2 strategic acquisitions this quarter. First, we acquired a key patent portfolio and technical team from Overair, a Karem Aircraft spin-off focused on advanced fixed wing and rotary wing platforms powered by high-efficiency tiltrotors.

Second, we bought a supplier of specialized defense composite manufacturing capabilities in-house by acquiring a 60,000 square foot facility in Southern California from mission-critical composites. These moves continue to build our proprietary moat as we push to meet the demands of our growing defense pipeline.

Following recent meetings in Washington with Secretary Hegseth and Secretary of the Army, Dan Driscoll, it's clear that Archer Defense is positioned to become a strategic pillar of our business. With over $1.7 billion in liquidity, we're not waiting on the future of aviation. We're building it now at global scale. This is what execution looks like. Over to Tom.

Thanks, Adam. The progress at Archer continues at an unprecedented pace. It's incredibly motivating to work with what I believe to be the best team in the world to turn the vision of advanced air mobility into an everyday reality across both commercial and defense.

This past quarter, Benjamin Lyon also further integrated into his role as President, Aircraft OEM, bringing decades of leadership experience from Apple and more recently as CTO at Aptiv. Partnering with Benjamin and the additional team members he has brought in has already meaningfully accelerated our progress across engineering, manufacturing and certification.

Since 2018, we've been relentlessly focused on finding the most efficient path to making urban air mobility a reality. We have worked tirelessly on the engineering front to ensure Archer leads the way in this new sector. We've outpaced the competition through a series of deliberate choices from our design to our manufacturing build-out to our approach to certification and flight testing.

Watching our Chief Test pilot, Jeff Greenwood, take Midnight to the skies this quarter marked a defining moment for our flight test program, as he stood on the shoulders of all that we've achieved over the last 7 years. This piloted phase of our program, like everything else we do, intentionally builds on years of safe autonomous flight testing across our various aircraft platforms, which validated our proprietary 12-tilt-6 VTOL configuration.

Here's how we got here and why I believe we're leading the industry with our pace of progress. I joined Archer in 2019 after spending nearly a decade working on this technology. With a small team of elite engineers, we went from a clean sheet to the first flight of our full-scale 12-tilt-6 eVTOL aircraft, Maker, in 2021. In 2022, less than a year later, we completed the full month-long transition test campaign on Maker, making Archer one of the first eVTOL companies to achieve that milestone.

In parallel, we matured our production aircraft platform Midnight, and it took flight in late 2023. Just 7 months later, in June 2024, Midnight became the largest eVTOL by gross weight to complete transition, an unmatched technical achievement. I have highlighted this point before and continue to do so because what I've learned from building more eVTOL aircraft across more programs than anyone else in the world over the last 15 years is that an aircraft of at least 6,000 pounds will be critical to being able to carry economically viable passenger payloads.

Then by fall 2024, we had already surpassed 400 test flights for the year, months ahead of schedule. Those flights demonstrated Midnight's ability to do high rate operations and advanced landing profiles, validated acoustic performance and demonstrated robustness to critical failures, all while optimizing Midnight's control laws. This pace set us up to achieve the 2 critical milestones Adam highlighted for our flight test program this quarter, flying Midnight with multiple pilots and commencing our first launch edition program by beginning international flights in Abu Dhabi.

Let's dive deeper into both of those. Our inaugural piloted flight was flown by Jeff Greenwood, who has been at the helm of some of the industry's most pivotal flight test programs. When he landed after his first flight piloting Midnight, which hit speeds of 125 miles per hour and altitude of over 1,500 feet, I'll never forget his first comment. Midnight flew just like the simulator. And that's exactly what you want to hear for any test flight.

This level of consistency isn't a coincidence. It's the product of our team's engineering and operational excellence with unmatched attention to detail and dedication to safety. While we designed Midnight to fly predominantly vertical takeoff and landing operations, it's important that the initial phase of our piloted flight test program with Midnight focus on conventional takeoff and landing operations for 2 reasons.

First, throughout Midnight's design and certification process, regulators, airlines and defense customers have stressed that they need us to certify both VTOL and CTOL operations for operational flexibility and enhanced safety as well as extended range for certain missions.

Second, it's the most pragmatic safe approach to flight testing. Our strategy has been to first validate Midnight's fixed wing flight and conventional landing performance and then return to focus on VTOL with pilots on board.

In the back half of the year, we'll continue to ramp up the pace of pilot and flight testing, rapidly expanding our performance envelope and commencing piloted VTOL operations. In parallel, we plan to continue our international flight testing, which we kicked off in Abu Dhabi earlier this quarter as part of our launch edition programs.

In early July, we flew Midnight at the Al Bateen Executive Airport located in the heart of Abu Dhabi, with our local customer and partners under oversight from the national regulator, the GCAA. Our initial vertical takeoff and landing testing was focused on UAE-specific performance conditions, including high temperature, humidity and dust exposure, as we work to ramp commercial operations in the country.

Just to give you a sense of how critical and difficult the operating environment is there, after just a few minutes on the tarmac, internal components within Midnight's avionics bay for flight heated to just over 140 degrees Fahrenheit immediately before takeoff. We are building Midnight to operate safely at these temperatures, and it was rewarding to test our performance across these more challenging conditions.

Over the coming quarters in the UAE, you can expect that we will expand on our in-country operations, including pilot training, MRO setup and flight testing, all in support of gathering additional data to inform our certification and commercialization plans in both the UAE and the U.S.

As Adam mentioned, we announced today that we are currently producing 6 Midnight aircraft, 3 of which are in final assembly across our facilities. Each of those aircraft will feature our production 4-blade rear propeller and will go directly into vertical takeoff and landing flight testing. We are building these across our facilities in both Silicon Valley and Georgia. We continue to be focused on developing the capabilities required to achieve a rate of 50 aircraft per year across our nearly 0.75 million square feet of manufacturing and test facilities.

During this new product introduction phase of our Midnight program, we are starting with our golden manufacturing line at one of our Silicon Valley facilities. This pilot line is where our engineering and manufacturing teams work together to refine the build process and equipment to ensure we can build the aircraft efficiently with high quality.

We then leverage this playbook developed in California, along with all of the lessons learned in the ramp of our high-volume manufacturing operations in Georgia. In the early months of our operations at Georgia, we have focused on dialing in the manufacturing processes related to Midnight's fuselage as this is the core part of the aircraft where the majority of the aircraft systems are installed.

All of this flight testing and manufacturing progress is enabling the continued rapid advancement of our Midnight certification programs with the FAA in the U.S. and the GCAA in the UAE. On the FAA certification front, as we've discussed on our most recent calls, we are primarily focused on the fourth and final phase of Midnight's certification program with the FAA having now approved about 15% of our compliance verification documents.

The executive order that Adam mentioned, along with our quickly advancing piloted flight test campaign have meaningfully accelerated our progress with the FAA. Over the past few months, we have successfully completed several SOI-3 audits, including one for our in-house developed powertrain software and hardware. These SOI-3 audits cover software testing and verification and are the penultimate step before the final certification review at SOI-4.

On the airframe certification side, we have now completed all of the composite material coupon testing for certifying Midnight's primary structure. This data from over 2,000 individual tests is in hand and certification test reports are now being finalized to provide to the FAA. This past quarter, we have also taken several steps aligning with the FAA on TIA entrance criteria and execution plans as we approach this next key phase of Midnight certification.

As has been our plan all along, we have agreed with the FAA to have multiple TIAs on the program, each targeting a specific system or set of systems in order to efficiently move through the work as certification test data for each area is matured in parallel. We believe our rigorous and collaborative approach with the FAA is setting the standard for the industry.

In the UAE, we delivered midnight to Abu Dhabi and commenced flight testing in the region, advancing our relationship with the GCAA. Over the coming months, we will continue our flight test campaign in the country as we work closely with the regulators to receive authorization for commercial flights ahead of FAA certification.

Finally, let's discuss our progress on the defense side of the house. We are rapidly maturing the design of our new hybrid electric aircraft. While I can't share details on the mission parameters or aircraft requirements due to the sensitive nature of the development, what I can share is that we are focused on building a revolutionary aircraft, not simply a hybridized version of an eVTOL. That's why we made 2 strategic acquisitions in this space over the last few months.

Just a few days ago, we highlighted 2 of those, Overair and Mission Critical Composites. We acquired Overair's patent portfolio and hired critical employees from Overair, a spin-off of Karem Aircraft, founded by Abe Karem, who invented the predator drone and is regarded as the founding father of drone technology, with decades of experience with DARPA and the DoD.

We believe this technology will accelerate our path to market with our defense aircraft and can also be utilized in future commercial variants of Midnight. We also acquired key manufacturing assets and a roughly 60,000 square foot defense specialized composite manufacturing facility for mission-critical composites in Southern California. These assets bring core composite fabrication capabilities in-house, supporting our defense program needs for rapid prototyping and iteration. Momentum is strong on the defense platform. We're excited about the path ahead, and we'll continue to share more details in the back half of this year.

And now I'll turn it over to Priya to talk about the financials for the quarter.

Thanks, Adam and Tom, for the strategic insights. I'm pleased to share our record financial results for the quarter. As Adam mentioned earlier, Q2 is a pivotal quarter for Archer. We have strong momentum across all our planned lines of business across civil and defense and domestic and international.

We're capitalizing on significant tailwinds, all while maintaining our unwavering focus on operational execution and market entry. We closed Q2 '25 with $1.7 billion in cash and cash equivalents, marking our fourth consecutive quarter of record liquidity and means we have almost twice as much cash on hand as our next competitor in the sector. This was all made possible, thanks to our successful capital raise strategy that we've executed on over the last 2 years, including the completion of our $850 million financing in June.

Our ability to raise capital in the manner we have, to ensure we maintain a strong balance sheet demonstrates the institutional confidence in our strategy and our ability to execute. Despite the strength of our balance sheet, we continue to maintain our disciplined approach to capital allocation, strategically investing in the initiatives that matter most.

Our financial results for Q2 '25 were in line with guidance and represent the investments made across key priorities we have highlighted over our last few calls, rapidly advancing our piloted Midnight air taxi through early commercial deployment and certification in the U.S. and UAE, ramping our aircraft manufacturing capabilities, accelerating the development of our defense aircraft and maturing our AI software platform approach.

Our net loss for Q2 '25 was $206 million, and our net loss per share was $0.36. This included approximately $92 million of noncash charges associated with stock-based compensation and warrant revaluation. Excluding these noncash charges, our adjusted net loss for Q2 '25 was $114 million, and our adjusted net loss per share was approximately $0.20.

Our adjusted EBITDA for Q2 was a loss of $190 million, falling within our guided range of $100 million to $120 million. This represents an approximately $10 million increase from the previous quarter, reflecting planned investments primarily in people-related costs to support our key priorities.

Our GAAP operating expenses for Q2 '25 were $176 million. It included approximately $52 million of noncash stock-based compensation-related expenses, which reflects the costs associated with stock issued to our employees, nonemployees and vendors.

GAAP operating expenses increased $32 million quarter-over-quarter, primarily due to the increase in people-related costs mentioned earlier, which reflects our accelerated progress in manufacturing, certification and other initiatives such as defense.

With regards to cash burn, our cash used in operating and investing activities for Q2 '25 was $127 million. For Q2, our cash used in investing activities was $24 million and in line with the guidance I provided in the last call. It represents an increase of $14 million over the previous quarter, reflecting strategic areas of investment in the quarter, such as the acquisition of the MCC composites manufacturing-related assets, the Overair patent portfolio for the defense program and aircraft material-related purchases.

As I touched on earlier, but I do think it bears repeating, even with these investments, our quarter end cash position was at record levels with an increase of $694 million compared to Q1 '25 and more than quadrupled year-over-year. Notably, this marks our fourth consecutive quarter of simultaneously growing our cash reserves while executing on strategic business objectives.

Looking ahead, our priorities for the quarter will continue into the second half of 2025. You can also expect that, we will continue to invest in the bring up of our operational footprint in UAE to execute on our launch edition and certification plans there. And we expect our UAE launch edition to start generating cash inflows later this year.

We will also continue to invest in ramping our manufacturing capacity and supply chain capabilities across both Archer and key vendor facilities, all in support of our plan to ramp commercial air taxi operations for LA28.

As a result, for the upcoming quarter, we estimate our adjusted EBITDA loss to be between $110 million and $130 million. We estimate CapEx in Q3 '25 to remain at similar levels as Q2 as we continue to build aircraft and expand investments in tooling and in equipment. Archer continues to be laser-focused on executing on the most efficient path to market, with a diversified business model across commercial air taxis, defense and software. We believe our investments to date in top-tier talent, leading technology, manufacturing and supply chain capabilities and strategic partnerships are helping us establish a competitive moat that will deliver long-term shareholder value.

With that, I'll turn it back over to Adam for Q&A.

Thanks, Priya. We're going to take our first question from the retail, and that is, when will we see mass production?

Yes. So really, when we think about mass production, we think about 2 different things. First is how to build the aircraft, how to actually put them together and then second, where to deploy them. So, one big change that happened for us over the last quarter was codifying this new goal for us to be at scale at the Olympics, and that's what we're building towards today.

So, as we touched on in the call, there's really 2 phases of manufacturing that we think about. The first is building on our golden line in California. That's where our engineering and manufacturing teams work together to refine the process that we use to build the airplane, refine our overall production system, reduce labor hours in all these learnings that we can then apply in Georgia at scale. And that's what we're in the process of doing right now.

So, as you can see in our shareholder letter, we're focused on developing all those capabilities required for mass production. We're deploying those in Georgia. And all of this is because the Olympics have given us that really great single date to drive everything towards to be at scale.

Thanks, Tom. And with that, operator, if you can open the line up for questions.

[Operator Instructions] The first question comes from Andres Sheppard with Cantor Fitzgerald.

Andres here. Congratulations on the quarter. Since I guess, I only have time for one question, maybe I'll make it a 2-part question, if I may. Adam, curious if you can just remind us your vision for commercialization in the UAE, kind of how do you see that unfolding? And what are the steps required between now and then? And maybe quickly for Tom, did I hear correctly? I'm just trying to understand like the aircraft in production currently, those will be used to test different components with the FAA for TIA credit. Just want to confirm that.

Thanks, Andres. We kicked off the first of several launch edition programs earlier this summer in the UAE, and we now have signed definitive revenue-generating agreements with both Abu Dhabi Aviation and Audio. And that sets us up for low tens of millions of dollars in payments over the next 18 to 24 months, with a portion of that starting this year.

And under the launch agreements -- the launch editions, we've delivered our first Midnight to UAE in June, and you can expect us to ramp up a small fleet in Abu Dhabi going forward. This year, we'll continue flight testing in hot weather. We'll train pilots with Etihad and we'll prepare infrastructure. And if you remember, on the infrastructure side, our strategy isn't to construct and certify new verticals. We don't think that's pragmatic in a place like the UAE that has hundreds of helipads, more than 70 of which are in Abu Dhabi.

What we've done is to work with the GCAA to release the world's first regulatory framework to certify existing helipads for eVTOL use. And then we're also working with a number of groups for access to their landing facilities. We announced several of them already. So, Abu Dhabi Cruise Terminal, Falcon Aviation, who is the exclusive operator at the Corniche and Palm Jumira in Dubai and Abu Dhabi Airports. And I'll let Tom answer the second part of that question.

Yes. Andres, so as we said, we're building 6 aircraft right now. And those are going to be used for both FAA flight testing and some of the launch tradition goals that Adam was just touching on. And so really, the strategy is the same as it's been for quite a while, where each specific aircraft has a specific test plan. And we're working to make sure that the aspects of the aircraft, the systems, the components that are required to be conformed to support that particular test are all kind of sequenced in with our overall plans.

And I think I highlighted earlier, we've had really good progress aligning with FAA on TIA plans. And so, a lot of those details and strategy we've had kind of laid out for the past year or so is really coming to fruition, which is super exciting.

The next question comes from Mackenzie Holleran with Needham.

You have Mackenzie on for Chris. So just one for me. So, in order to reach the early deployments of the Midnight aircraft with the DOT and FAA as soon as next year, could you just provide any color related to on the ground preparations needed to get the aircraft into commercial service? So specifically, where do things stand today on infrastructure readiness, aircraft production and any other key milestones in order to achieve that?

Mackenzie, this is Adam. So, we have a fairly comprehensive infrastructure strategy that's in place. So, we announced 3 vertiport networks that encompass many locations across New York, L.A., San Francisco, we're working on several others as well. And this infrastructure strategy focused on real estate, really across 4 main buckets.

First bucket was across the major international airports that we operate with our partners, United and Southwest. And so, you can think about places like Newark and LAX and SFO. The second one was around agreements with FBOs and portfolios around the big market leaders, Signature and Atlantic. So those are locations like Santa Monica and JFK. The third bucket was around municipal partnerships to install industry common chargers at city-owned infrastructure. So, you can think about the 3 heliports in Manhattan as an example, which are publicly accessible.

To be clear, no one has exclusive access to any of those. And the fourth bucket were proprietary deals where our data science team surgically identified key vertiport locations, and we formed partnerships with top-tier operators, things places like SoFi Stadium or Oyster Point in San Francisco. So, we've got a lot of the groundwork in place to operate there. And then from there, it's really getting the aircrafts in position to start operations.

The following question comes from Edison Yu with Deutsche Bank.

First, on UAE, I'm wondering if you can give us a rough road map on what to expect over the next, call it, 12 to 18 months. I know you have launch edition ramping up, but just in terms of the flight testing, I think, you also mentioned it's going to get more advanced. So, if you can share a rough path on what to look for in the next kind of year, 18 months?

Yes. Edison, this is Tom. So, as we announced, we did our first flight out in the UAE earlier this summer, which is super cool. Main goal of that was to learn about operating in the really high temperature environment out there. I talked about that a little bit on the call. What you can expect to see later this year is more flying in the UAE back half of the year.

And then big picture, what we're trying to do is parallel our efforts progressing both our FAA certification and UAE certification. So just like in the U.S. with the GCAA, we've got really detailed plans put in place that we're executing against. to gather all the requisite data from ground test and flight tests to support the commercial operations there ramping up over the next 12-month period you mentioned. But maybe Adam wants to chime in more about what that will look like from the commercial side.

Sure. So, we will grow the fleet from now through the first half of next year. We will get the commercial authority from the GCAA to begin flying. We will start exhibition flights, and those flights will mimic the actual passenger routes on the infrastructure that I mentioned and then ultimately have the full commercial flights take place. So hopefully, that gives you a little bit of a road map.

The next question comes from Amit Dayal with H.C. Wainwright.

Good to see all the progress. Congratulations. So, the balance sheet looks really solid, guys. How much of this is going to go towards the defense opportunity? And with respect to that, are there any catalysts on that front that we should be looking out for?

Yes. Thanks for the question. We don't separate the capital in terms of commercial versus defense. There's one kind of large engineering team here at Archer. The good news is as the Midnight program matures, a lot of the engineers can work over on the defense part of the business, too.

So, you can think about parts of the aircraft program on the Midnight aircraft like the Aero team, for example, that is more mature, can start working on the defense side as they're less needed on the Midnight aircraft. A lot of the Midnight team is still working on things like performance up and cost down. And as they start to roll off, they'll pick up steam on the defense side as well.

As far as the defense side goes, I think, you can see it in looking at the U.S. defense budgets, and there's a couple of pretty interesting data points. The Pentagon requested $13.4 billion for autonomous military systems, of which the majority was for aircraft.

So, as you know, in my previous calls, I can't say much about it, but I think there's 2 points that are quite interesting. One is we see this as a global opportunity, not just an opportunity in the U.S. This is something that makes sense all over the world. And so that makes this opportunity quite large. And the second is our goal is really a program of record, not just a budget allocation. And so, what we've learned over the past 18 months in our communications with the different defense departments is that you cannot simply hybridize a passenger eVTOL. You have to build a new bespoke aircraft. And so, we've been working on this for a while. I think we have a clear advantage over our peers here, and we think it represents a very exciting opportunity.

The following comes from Savi Syth with Raymond James.

Just based on Tom's comments, I'm guessing you're not out of policy completely, so you don't have your kind of compliance and cert plans approved. So, under this scenario, could you talk about what can be accomplished on the certification side? And then just a follow-up on the 2 blade versus the full blade. I was just wondering how much of a major design change that is? Or would that has an impact on the flying of the next few aircraft versus what you've done so far?

Sure. So, Adam, I'll take the first part of that. So, I think it's important to even just establish what you even mean to be in policy or out of policy. So, what this is really referring to is working with the FAA on policy things like certification basis, your means of compliance or certification plans. And so, both Archer and Joby are the only 2 that have published airworthiness criteria. And so, this means that we're really the only 2 in the final stages of policy. And so, while we are largely done, it's not completely done. And so, no OEM can fully conform an aircraft.

So, 18 months ago, we announced that we were building 6 conforming aircraft to be used in the FAA certification process. And we said that, each aircraft would be used for TIA testing, each one with different systems, and we expect it to be out of policy with the FAA in a short period of time. But given the industry issue papers and other policy matters that we were dealing with, that affected everyone, not just Archer, that did not transpire.

So as a result, we are still building 6 aircraft, and we expect to use those aircraft for TIA testing. And in fact, the aircraft we're flying today will be used for TIA testing likely this year. But since policy for the industry isn't done, we cannot fully conform the aircraft and finish TIA testing. In fact, the FAA told me directly that nobody is out of policy yet.

And so that's why we introduced the concept of the Launch Edition, which is where we sell the aircraft in advance of the FAA type certification process, and we'll do that to countries that want to start early. It allows us to generate revenue early. There's a list of countries that are very excited to do this.

And it also sort of shows the importance of why the Olympics and the executive order have been highlighted so much by Archer because it helps bookend this whole process with the FAA, where the highest levels of government have said, this is very important to the U.S. It's very important for specific events to make sure that the policy issues all get done and are resolved.

Savi, and then I guess on the second part of your question, as you know, we've been flying conventional takeoff and landing on Midnight with a pilot for the last few months here. And that was really intentional. It's been the plan for a long time. Kind of to put that in context and get to your question about the AF crops, we flew Midnight hundreds of times over the last couple of years without a pilot on board. And so, we got a huge amount of data on VTOL and transition. So, we know a lot about that flight regime.

So, it was really intentional to try and gather data focused on conventional takeoff and landing. One thing we did is we had multiple pilots fly our airplane at this point. So, we're getting feedback on landing from multiple of our test pilots. But just to be clear, every plane that we're manufacturing now is going to have that new aft 4-blade propeller and all of those will likely focus on VTOL flying. That's not to say that CTOL flying is not important, both for all the reasons I mentioned and because we're going to need to do TIA flight test for credit on the conventional takeoff and landing behavior.

So, all this stuff is stuff we need to do. But then just the last point is there still is a lot we can progress right now given where we are with policy. And really, the main area that we're waiting to close has to do with flight test and essentially flight test policy for the entire industry. And like Adam kind of mentioned, nobody can enter TIA if you're talking about flight performance until this is closed. And so, we see a path for that getting wrapped up in the near future and a good path to finish all the testing we need to get done.

The next question comes from Austin Moeller with Canaccord.

Just my first question. So, was the goal of the mission-critical composites acquisition, does that enable you to vertically integrate more carbon composites for the structures? And would that enable you to manufacture composites for the passenger aircraft as well as the unmanned aircraft and therefore, rely less on third-party aerospace suppliers?

Yes, Austin, thanks for the question. So as we've said many times, we think the defense opportunity is quite large, and we identified the need to have rapid in-house development capabilities around advanced composites. And so, this was a really great way to stand up that capability. There are things we think we will learn on the defense application that we'll be able to ultimately transfer over to the civil application.

And so you see this is quite common in the kind of broader commercial aviation industry, where defense a lot of times will lead to advancements in technologies for the civil side. But when we're just doing civil, it doesn't necessarily make sense for us to be doing experimental things that might not be applicable for civil. So, the defense side gives us that R&D capability, allows us to move quickly and ultimately mature technologies that will be very applicable and allow us to scale ultimately on the commercial side.

The following comes from Bill Peterson with JPMorgan. You may proceed.

I wanted to come back to a prior question on flight testing. And I guess, with the comments from the TIA and also locking in the propellers, when should we expect, I guess, a piloted transition like this full vertical takeoff and landing versus conventional? I mean, what needs to be completed ahead of this for this to be derisked? And I guess, when subsequently should we expect testing Midnight with FAA pilots on board?

Yes. Well, as I just mentioned in answering Savi's question, we've done a lot of flying VTOL on Midnight in the past without a pilot on board. So, we've got a lot of data that's given us confidence in the behavior of the aircraft in that flight regime. And so that was one of the main reasons we wanted to focus on conventional takeoff and landing. So having said that, we're planning to wrap up a lot of that CTOL test campaign and get back to VTOL flying with the pilots on board later this year. But we're going to take it step by step.

The other thing I mentioned is we're building aircraft right now that will have those new aft 4-blade propellers, and we've got some of those propellers in hand. So, all of that is sort of moving forward at pace. And so all that positions us to support PIA testing over the kind of hopefully starting the end of the year and then into next year. But last context there is we really have made tremendous progress with the FAA aligning plans for all the certification flight test. And so each of these aircraft that we're building, we're really targeting to go achieve specific flight test objectives. I think that's the key here to get through this efficiently.

[Operator Instructions]The following comes from David Zazula with Barclays.

You might have answered it earlier, but is the 15% number you mentioned during the prepared remarks, is that apples-to-apples with the 15% figure you mentioned during 1Q? Because we have been kind of anticipating that many of the roadblocks to progressing in acceptance had been overcome. So, I mean, is this flight test issue that is preventing more progress? Just more color on that, Tom, or just reference your prior answer, if applicable.

Yes, absolutely. So, to put that number into context, this is the FAA accepting compliance verification documents for the aircraft. So this is like the very last stage before TC. This is -- we've got data. It's been witnessed if it needs to be witnessed. Here you go, FAA sign-off. And so to answer your question, yes, we are about the same sort of percentage through that, that we discussed on the last call.

But no, like we don't see that as any issue. Like this is not something that we would expect to continuously ramp up and like a nice curve. It'll kind of come -- come and go or move forward in chunks as we work through the various systems. And so, one thing that we talked about on previous calls, and we talked about earlier on this call is there are still these handful of policy items open.

And so on the last call, we talked about emergency landing and specifically this industry paper around 2105G, like we talked about on the last call, we have gotten that issue paper, but we're still waiting for it to be finalized at Stage 4. And this is like kind of really in the weeds of FAA certification, but we know what the requirements are. We are in good shape against those. We're just waiting for the administrative process to roll through such that we can then start conforming items, making compliance findings, sending in those reports so that we can get that 15% number to tick up. So, kind of in the weeds, but hopefully, that gives you some context.

The next comes from Josh Sullivan with Benchmark.

Adam, maybe a higher-level question. Just how do we think about the defense opportunity at this point as you see it? You just noted that it's quite large, strong Pentagon support for the industry and budgets, a couple of high-profile executive orders and now 2 defense acquisitions here. I mean, do you think we could see Archer with anything like 50-50 between commercial and defense? Or how do you see defense technology settling into the portfolio maybe longer term?

I'll give you a higher-level answer than just specifically defense. So, when we started designing the aircraft, we assumed it would be relatively straight line through the type certification process. And as it's taken time, we announced the Launch Edition program. And that gave us a way to commercialize early the civil application. And so that was, I think, a creative way to find countries that wanted and saw this as a huge opportunity and wanted a way to monetize and start operationalizing the industry very early. And so we've been focused on that.

The second part has been obviously focusing on the type certification with the FAA here in the U.S., which ultimately gives you the ability to go global. And so that's also been a big focus of ours. And then the third side of it has been on the defense application. Now the defense application side is not as much focused on a certification process, but more focused on a program of record. That stuff is very chunky.

And so, there's not a lot I can give to disclose on where that's at today, but I do see it being a very large portion of the business over time. I do also think it's obvious by looking at the conflicts today that there is a very real need for autonomous and attributable solutions, not just in future vertical lift, but really across many different applications. And so, I do think it will continue to be something we focus on. I think it has the opportunity to be very large and very large in the early parts of the Archer revenue-generating process, but we'll have to wait and see how that all shakes out before we say too much.

There are currently no further questions queued. So, I will now pass it back to Adam Goldstein, CEO, for closing remarks.

Well, thank you, everyone, for joining us today. We're building the future of aviation now. We're not waiting for it. And each quarter, we're proving what's possible in this new era for our industry. I look forward to sharing our progress with you next quarter. Thanks.

This concludes today's conference call. Thank you for your participation. You may now disconnect your lines.