Archer overestimates expenditure in Q3, remains on track to certify
Archer Aviation’s $61.1m non-GAAP operating expenses in the third quarter (Q3) came in under estimation, despite the firm making significant outlays in R&D and staffing.
As expected, Archer’s non-GAAP operating expenses increased by $11.1m on Q2, as the company hired more staff for its engineering programmes. It also invested in parts and materials for the Maker demonstrator and our Midnight production aircraft programme.
The company ended Q3 with $600.6m of cash, cash equivalents and short-term investments. It also netted $54.2m of cash payments in the quarter. For the nine months ended September 30th, 2022, cash used in operations and the purchase of property, plant and equipment totalled $136.8m.
“We continue to be one of the most well capitalised companies in the sector,” said Mark Mesler, chief financial officer.
“We incurred a loss on adjusted EBITDA of $60.1m . The sequential expansion of that loss by $10.9m relative to Q2, 2022 was primarily driven by our increase in non-GAAP operating expenses for the reasons mentioned,” he added.
On a GAAP basis, total operating expenses for Q3 came in at $93.8m, which included $26.2m of stock-based compensation and $6.5m of warrant expenses. These results were again below the low end of Archer’s estimates of $95m due to the timing of certain non-recurring supplier costs and spending for materials related to R&D.
The past quarter saw two milestones for Archer. Demonstrator, Maker completed its first wing-borne flight and will complete a full transition flight in the coming weeks. Also, in partnership with United Airlines, Archer announced its first US commercial route between Newark Liberty Airport and Downtown Manhattan Heliport.
In an upcoming “open house” event this month, Archer will unveil its commercial aircraft, Midnight.
CEO, Adam Goldstein, said: “With the announcement of our first urban air mobility route in New York with our partner, United Airlines and the completion of our first full wing-borne flight by our Maker aircraft, we are building on our momentum towards commercialisation.”
Looking towards Q4, Archer said it will see an uptick in spending to support non-recurring engineering costs related to the bring up of Midnight suppliers and increased spending on parts materials for the Midnight aircraft. Mesler explained: “Some of that plan spending in Q3 2022 has shifted into Q4 2022.”
Archer is predicting total GAAP operating expenses of $100m to $110m, and total non-GAAP operating expenses of $70m to $80m. “This reflects expected stock-based compensation and warrant expense of approximately $30m. We have a very active investor outreach calendar in Q3, 2022, and we will continue that into Q4, 2022,” concluded Mesler.