Archer: ‘Aggressive roadmap’ led to ‘significant milestones’ in 2022

Archer’s roadmap for 2022 has led to the achievement of number of “significant milestones” over the past year, according to Adam Goldstein.

GAAP total operating expenses for the fourth quarter (Q4) 2022 were $108.1m, higher than Q3 by $14.3m, primarily due to increased investment made in people, materials, and engineering services to support its Midnight programme. Year-over-year (YoY), total operating expenses for Q4 2022 were higher than the Q4 2021 by $54.8m. Total operating expenses for the fiscal year 2022 were $347.4m, a decrease of $10.9m over fiscal year 2021, largely due to a reduction of warrant expenses by $110.6m.

Founder & CEO, Goldstein said: “We entered 2022 with an aggressive roadmap to advance our business across four key areas: technology development, manufacturing build out, certification and commercial operations. We exited 2022 with tremendous momentum with the Archer team achieving significant milestones in each area.

“I’ll recap for you a few of what I believe to be the most noteworthy highlights that demonstrate our leadership in this market,” continued Goldstein. “Taking Maker from hover to full transition in less than a year receiving an industry first $10m non-refundable pre-delivery payment on 100 aircrafts from United Airlines; announcing with United, the first commercial electric air taxi route in the US from downtown Manhattan to Newark Liberty International Airport; unveiling our production aircraft Midnight at our Open House in the Bay Area, and announcing the industry’s first high volume eVTOL manufacturing facility in Covington.”

Net loss was $95.4m in Q4 2022, an increase of $4.4m from Q3, driven primarily by an increase in operating expenses, said Archer. YoY net loss for Q4 2022 was higher than the Q4 2021 by $52.1m, primarily due to the increase in operating expenses. Archer’s fiscal year 2022 net loss was $317.3m, which decreased by $30.5m from $347.8m in the previous fiscal year.

Adjusted EBITDA for the fourth quarter of 2022 was a loss of $76m, an increase of $15.9m from Q3 2022, and an increase of $43.6m YoY from an adjusted EBITDA loss of $32.4m in Q4 2021. Adjusted EBITDA for the fiscal year 2022 was a loss of $224.4m, which increased by $116.4m from a loss of $108m in 2021.

Archer exited the quarter with $531.2m in cash, cash equivalents and short-term investments — down $69.4m from Q3 2022, and a decrease of $215.4m from Q4 2021. 

Looking to the future, Tom Muniz, COO, Archer told investors 2023 and 2024 at the OEM are “all about building and flying” both “non-conforming and piloted conforming” Midnight aircraft to enter into service in 2025.

Archer’s business model is to come to market with two segments — Archer Direct and Archer Air. Direct is the direct sale of its eVTOL to operators, similar to an OEM relationship. Air is where Archer itself will operate the aircraft in urban environments similar to a ride sharing model. “We anticipate the revenue mix to be roughly 50% for each in the early years of commercialisation,” said Mark Mesler, CFO, Archer. 

The goal of Archer Direct’s segment is to recognise revenue with a sale of each aircraft. “So we would generally recognise revenue for the average selling price of the aircraft at approximately the time of delivery to the operator,” explained Mesler. As an example, Archer’s current agreement with United contemplate the selling price of $5m per aircraft for up to 200 aircraft or $1bn of revenue. “The goal of Archer Air’s revenue stream is to recognise revenue for each flight, so rather than a selling price for each aircraft, we recognise revenue per flight and price those by seat mile,” said Mesler.

On Archer’s last earnings call, Mesler outlined a framework to understand this revenue model for the recently proposed route from Manhattan to Newark Liberty International Airport with our four passenger payload at around $6 per seat mile. “Our Midnight aircraft could generate up to $3.2m of revenue per year, assuming full load capacity, 25 trips per day, and operating 365 days per year,” said Mesler.