Archer Announces Fourth Quarter and Full Year 2023 Results; Now In Final Phase of Midnight’s Certification Program as it Readies for Launch in 2025
- Archer Aviation Inc. reported strong operating and financial results for Q4 and full year 2023.
- Construction of three conforming Midnight aircraft is underway as the flight test program progresses rapidly.
- Archer expects to complete 400 test flights in 2024.
- The company has a strong liquidity position of approximately $625M at the end of Q4 2023, with cash balances increasing quarter over quarter.
- None.
Insights
The announcement by Archer Aviation regarding the progress on its Midnight aircraft and the construction of three conforming aircraft is a positive signal for stakeholders. The company's ability to source 80% of subsystems and components from certified suppliers suggests a strategic approach to risk management and could potentially expedite the certification process. The planned completion of 400 test flights in 2024 indicates an aggressive development schedule that could position Archer as a frontrunner in the electric vertical takeoff and landing (eVTOL) industry.
The mention of a strong liquidity position, with approximately $625 million at the end of Q4 2023, is crucial for investor confidence. This financial stability is essential for a company in the capital-intensive aerospace sector, particularly one that is in the development phase and has yet to generate significant revenue from product sales. The quarter-over-quarter increase in cash balances is indicative of prudent financial management, which is key for sustaining operations and investing in future growth.
Archer's update on its fiscal performance and the collaboration with Stellantis for building out a manufacturing facility in Georgia suggests a strategic alignment with established automotive manufacturing expertise. This partnership could yield cost efficiencies and expedite scale-up operations, potentially giving Archer a competitive advantage in the eVTOL market. Investors should note the implications of such a partnership, as it may lead to improved margins and a more robust supply chain.
However, the capital-intensive nature of the aerospace industry and the uncertainty surrounding the commercial viability of eVTOL technology are factors to consider. While Archer's liquidity position is strong, the company will likely continue to incur significant expenses related to research and development, as well as infrastructure expansion. Stakeholders should weigh the potential for high growth against the risks associated with emerging technologies and the long road to profitability.
The emphasis on certification heritage from suppliers is a strategic move by Archer that could mitigate regulatory risks and streamline the path to market entry. The aerospace industry is heavily regulated and the certification process for new aircraft is notoriously rigorous and time-consuming. By leveraging suppliers with a proven track record, Archer may reduce the time and resources typically required for certification. This approach could be a differentiator in an industry where time-to-market is critical.
Additionally, the construction of three conforming Midnight aircraft and the commitment to a high volume of test flights demonstrate a robust approach to safety and reliability. These efforts align with industry norms where extensive testing is mandated to ensure aircraft meet stringent safety standards. For investors, Archer's progress in these areas may signal a commitment to quality and a strategic approach to overcoming one of the biggest hurdles in bringing new aircraft to market.
-
Approximately
80% of Archer’s Midnight aircraft’s subsystems and components are sourced from leading aerospace suppliers with certification heritage giving it a significantly de-risked path to certification - Construction of three conforming Midnight aircraft underway as flight test program makes rapid progress and Archer expects to complete 400 test flights in 2024
-
On track to complete build out of volume manufacturing facility alongside Stellantis in
Georgia later this year -
Strong liquidity position of
~ at end of Q4 2023 with cash balances increasing QoQ$625M
Commenting on fourth quarter and full year 2023 results, Adam Goldstein, Archer’s CEO said:
“The Archer team is excited to announce that Midnight is now in the final phase of its certification program. With the vast majority of the aircraft’s subsystems and components being sourced from leading aerospace suppliers with certification heritage we have a significantly de-risked path to certification from here. 2024 will be all about building conforming Midnight aircraft to be used in piloted for credit testing with the FAA and completing the build out, alongside Stellantis, of our volume manufacturing facility in
Archer will be conducting its earnings conference call at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) today. You can access a live webcast on our investor relations website at investors.archer.com or the conference call by dialing 404-975-4839 (domestic) or +1 833-470-1428 (international) and entering the access code 725920.
A replay of the webcast will be available on our investor relations website. In addition, a telephonic replay of the conference call will be accessible for one week following the call by dialing 866-813-9403 (domestic) or +44 204-525-0658 (international), and entering the access code 369724.
Fourth Quarter and Fiscal Year 2023 Financial Results |
|||||||||||
|
Q4 2023
|
Q4 20231
|
FY 2023
|
FY 20231
|
|||||||
Total Operating Expenses |
$ |
107.3M |
$ |
87.5M |
$ |
446.9M |
$ |
311.8M |
|||
Net Loss |
$ |
(109.1M) |
NA |
$ |
(457.9M) |
NA |
|||||
Adjusted EBITDA |
|
NA |
$ |
(85.2M) |
|
NA |
$ |
(305.3M) |
|||
Cash and Cash Equivalents |
$ |
464.6M |
NA |
$ |
464.6M |
NA |
|||||
(1) |
A reconciliation of non-GAAP financial measures to the most comparable GAAP measures is provided below in the section titled “Reconciliation of Selected GAAP To Non-GAAP Results for Q4 2023 and FY 2023.” |
First Quarter 2024 Financial Estimates
Archer’s financial estimates for first quarter of 2024 are as follows:
-
GAAP total operating expenses of
$100 million $120 million -
This includes expected stock-based compensation, warrant expense and other one-time expenses of approximately
$25 million
-
This includes expected stock-based compensation, warrant expense and other one-time expenses of approximately
-
Non-GAAP total operating expenses of
$75 million $95 million
We have not reconciled our non-GAAP total operating expense estimates because certain items that impact non-GAAP total operating expense are uncertain or out of our control and cannot be reasonably predicted. In particular, stock-based compensation expense is impacted by the future fair market value of our common stock and other factors, all of which are difficult to predict, subject to frequent change, or not within our control. The actual amount of these expenses during 2024 will have a significant impact on our future GAAP financials. Accordingly, a reconciliation of non-GAAP total operating expenses is not available without unreasonable effort.
About Archer
Archer is designing and developing electric vertical takeoff and landing aircraft for use in urban air mobility networks. Archer’s mission is to unlock the skies, freeing everyone to reimagine how they move and spend time. Archer's team is based in
To learn more, visit www.archer.com.
Source: Archer
Text: ArcherIR
Forward-Looking Statements
This press release contains forward-looking statements regarding Archer’s future business plans and expectations, including statements regarding our expected financial results for the first quarter of 2024, the planned buildout of Archer’s manufacturing facility, and the development, testing, and certification of its eVTOL aircraft. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors. The risks and uncertainties that could cause actual results to differ from the results predicted are more fully detailed in our filings with the Securities and Exchange Commission (SEC), including our recent Annual Report on Form 10-K for the year ended December 31, 2022, subsequent Quarterly Reports on Form 10-Q, and our Annual Report on Form 10-K for the year ended December 31, 2023 to be filed with the SEC, which are or will be available on our investor relations website at investors.archer.com and on the SEC website at www.sec.gov. In addition, please note that any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of the date of this press release. We undertake no obligation to update these statements as a result of new information or future events.
Reconciliation of Selected GAAP To Non-GAAP Results for Q4 2023 and FY 2023
Reconciliation of Total Operating Expenses (in millions; unaudited): A reconciliation of total operating expenses to non-GAAP total operating expenses for the three months and twelve months ended December 31, 2023 is set forth below.
|
Three Months Ended
|
Twelve Months Ended
|
|||||
Total operating expenses |
$ |
(107.3 |
) |
$ |
(446.9 |
) |
|
Adjusted to exclude the following: |
|
|
|||||
Stellantis warrant expense (1) |
|
4.4 |
|
|
17.5 |
|
|
Other warrant expense(2) |
|
- |
|
|
2.1 |
|
|
Stock-based compensation (3) |
|
20.4 |
|
|
45.2 |
|
|
Technology agreement and dispute resolution expense (4) |
|
(5.0 |
) |
|
70.3 |
|
|
Non-GAAP total operating expenses |
$ |
(87.5 |
) |
$ |
(311.8 |
) |
|
(1) |
Amount includes non-cash warrant costs, classified as research and development expenses, for the warrants issued to Stellantis in connection with certain services they are providing to the Company. |
|
(2) |
Other warrant expenses associated with the United warrant agreement. |
|
(3) |
Amount includes stock-based compensation for options and restricted stock units issued to both employees and non-employees, including the grants issued to our founders in connection with the closing of the business combination and the one-time credit for the founder’s grant forfeiture. |
|
(4) |
Amounts reflect non-cash charges relating to the Boeing Wisk Agreements (as defined in our shareholder letter). |
Reconciliation of Adjusted EBITDA (in millions; unaudited): A reconciliation of net loss to Adjusted EBITDA for the three months and twelve months ended December 31, 2023 is set forth below.
|
Three Months Ended
|
Twelve Months Ended
|
|||||
Net loss |
$ |
(109.1 |
) |
$ |
(457.9 |
) |
|
Adjusted to exclude the following: |
|
|
|||||
Other expense, net (1) |
|
7.2 |
|
|
26.9 |
|
|
Interest income, net |
|
(5.6 |
) |
|
(16.4 |
) |
|
Income tax expense |
|
0.2 |
|
|
0.5 |
|
|
Depreciation and amortization expense |
|
2.3 |
|
|
6.5 |
|
|
Stellantis warrant expense (2) |
|
4.4 |
|
|
17.5 |
|
|
Other warrant expense (3) |
|
- |
|
|
2.1 |
|
|
Stock-based compensation (4) |
|
20.4 |
|
|
45.2 |
|
|
Technology agreement and dispute resolution expense (5) |
|
(5.0 |
) |
|
70.3 |
|
|
Adjusted EBITDA |
$ |
(85.2 |
) |
$ |
(305.3 |
) |
|
| (1) | Amount includes changes in fair value of the public and private warrants, which are classified as warrant liabilities and other warrant costs; gain on share issuance and accretion and amortization income of short-term investments. |
|
| (2) | Amount includes non-cash warrant costs, classified as research and development expenses, for the warrants issued to Stellantis in connection with certain services they are providing to the Company. |
|
| (3) | Other warrant expenses associated with the United warrant agreement. |
|
| (4) | Amount includes stock-based compensation for options and restricted stock units issued to both employees and non-employees, including the grants issued to our founders in connection with the closing of the business combination and the one-time credit for the founder’s grant forfeiture. |
|
| (5) | Amounts reflect non-cash charges relating to the Boeing Wisk Agreements. |
Non-GAAP Financial Measures
To supplement our condensed consolidated financial results prepared in accordance with GAAP, we use a number of non-GAAP financial measures to help us in analyzing and assessing our overall business performance, for making operating decisions and for forecasting and planning future periods. We consider the use of non-GAAP financial measures helpful in assessing our current financial performance, ongoing operations and prospects for the future as well as understanding financial and business trends relating to our financial condition and results of operations.
While we use non-GAAP financial measures as a tool to enhance our understanding of certain aspects of our financial performance and to provide incremental insight into the underlying factors and trends affecting our performance, we do not consider these measures to be a substitute for, or superior to, the information provided by GAAP financial measures. Consistent with this approach, we believe that disclosing non-GAAP financial measures to the readers of our financial statements provides useful supplemental data that, while not a substitute for GAAP financial measures, can offer insight in the review of our financial and operational performance and enables investors to more fully understand trends in our current and future performance.
In assessing our business during the quarter and year ended December 31, 2023, we excluded items in the following general categories from one or more of our non-GAAP financial measures, certain of which are described below:
Stock-Based Compensation Expense: We believe that providing non-GAAP measures excluding stock-based compensation expense, in addition to the GAAP measures, allows for better comparability of our financial results from period to period. We prepare and maintain our budgets and forecasts for future periods on a basis consistent with this non-GAAP financial measure. Further, companies use a variety of types of equity awards as well as a variety of methodologies, assumptions and estimates to determine stock-based compensation expense. We believe that excluding stock-based compensation expenses enhances our ability and the ability of investors to understand the impact of non-cash stock-based compensation on our operating results and to compare our results against the results of other companies.
Warrant Expense and Gains or Losses from Revaluation of Warrants: Expense from our common stock warrants issued to United Airlines and Stellantis, which is recurring (but non-cash) and gains or losses from change in fair value of public and private warrants from revaluation will be reflected in our financial results for the foreseeable future. We exclude warrant expense and gains or losses from change in fair value for similar reasons to our stock-based compensation expense.
Technology and Dispute Resolution Agreements: Amounts reflect non-cash charges relating to the Boeing Wisk Agreements.
Each of the non-GAAP financial measures presented in this release should not be considered in isolation from, or as a substitute for, a measure of financial performance prepared in accordance with GAAP and are presented for supplemental informational purposes only. Further, investors are cautioned that there are inherent limitations associated with the use of each of these non-GAAP financial measures as an analytical tool. In particular, these non-GAAP financial measures have no standardized meaning prescribed by GAAP and are not based on a comprehensive set of accounting rules or principles and many of the adjustments to the GAAP financial measures reflect the exclusion of items that are recurring and may be reflected in our financial results for the foreseeable future. In addition, the non-GAAP measures we use may be different from non-GAAP measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information in the reconciliation included in this release regarding the GAAP amounts excluded from the non-GAAP financial measures. In addition, as noted above, we evaluate the non-GAAP financial measures together with the most directly comparable GAAP financial information. Investors are encouraged to review the reconciliations of these non-GAAP measures to their most directly comparable GAAP financial measures included in this release.
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Source: Archer Aviation
FAQ
What were Archer Aviation Inc.'s financial results for Q4 and full year 2023?
How many conforming Midnight aircraft are currently under construction?
How many test flights does Archer expect to complete in 2024?
What is Archer Aviation Inc.'s liquidity position at the end of Q4 2023?
