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I'll 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, 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. 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. Recently, Archer was selected as a partner in three of the winning EIPP applications across eight 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 and stepping up. We already work with seven of them across our businesses, and our multi-billion dollar order book for Midnight continues to grow. The world's biggest stages are eager to showcase this future. We are collaborating closely with the L.A. 2028 Olympic Games, DOT, FAA, surrounding communities, and other stakeholders to plan our launch of air taxi operations as the official provider for the games.

There 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 a 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 one else in the eVTOL industry has moved as fast as we have.

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. America's airspace 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've 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. 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 3 of the FAA's 4-phase type certification process, and we have been advancing phase 4 in parallel for some time now. Coupled with that exciting progress, this was also our most expansive quarter for our flight test program. With piloted VTOL and CTOL 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 airspace technology we are developing with our partners. On the defense side, our work with Anduril 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 Anduril is doing just that. We chose to partner with Anduril because, among other strengths, they deeply understand what the U.S. and its allies need in next generation of VTOL 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 Karem, Overair and Lilium. 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 Anduril team is one of the greatest aerospace teams of this generation.

Top technical fellows from Boeing, former chief engineers 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. We are executing from a position of strength with $1.8 billion in liquidity. I've never been more confident in what Archer is building or more proud of the team building it.

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

Thanks, Adam, 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, one of the strongest positions in our sector. 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 Hawthorne Airport in L.A. We expect this revenue to increase in Q2 as we continue to progress our plans to modernize that airport and its operations.

Looking ahead, as we advance our commercial readiness with Midnight's expanded flight test program and operations under the eIPP and in L.A. 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-$200 million. This expansion of our investment reflects our level of conviction in the multi-billion dollar opportunities in front of us, not a deviation from discipline. We believe our multi-platform strategy is what separates Archer from the field. Our liquidity gives us the strength to execute it. With that, I will turn it back over to the operator.

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, please press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Andres Sheppard from Cantor Fitzgerald. Your line is now open.

Hey, everyone. Good afternoon. Thank you so much for taking our questions, and 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 gonna be a big focus for Archer going forward. 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? How should we think about defense and autonomy for Archer going forward? Thanks.

Thanks, Andres. I'm going to let Tom answer that question to go through some of the defense opportunities. As you might recall, I've 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.

Yeah. Hey, Andres. Well, Adam touched on some of the themes earlier in the call, just to kind of like recap how we can get them out defense. Going back to the beginning of Archer, it was all about building towards a mission and taking a first principles approach. You know, Midnight was optimized around this mission of moving people in and out of cities. It's optimized for low cost, high safety, low noise, and obviously designed bottoms up for certain manufacturing. Initially, we looked at if we could use a version of Midnight for defense. You know, we did work with the Air Force over the years, and there might be some niche applications there.

For the significant opportunities, the ones with the largest need that we're targeting now, like you can't expect to modify Midnight and have that function well for this different mission. It just doesn't make sense. As we've said, we're developing a clean sheet new aircraft that's a hybrid vehicle, partnering with Anduril. Again, we've taken this first principles approach for that aircraft, but it's obviously optimized around a different mission. This dual use mission we're looking at has very specific payload, speed, range, cost targets, obviously quite different from Midnight. 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.

Based off of, you know, 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. Our goal is to show that aircraft later this year and ultimately win some of these phased down-selects this year. Super exciting time.

Wonderful. Got it. That's super helpful. I appreciate all that color. 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? Thank you.

Yeah, Andres. This is Benjamin. Thanks for the question. Like we were saying, you know, we're already very much in the midst of our piloted VTOL test campaign, and we've been rapidly expanding our cadence. We're flying multiple aircraft multiple times a day. Really the focus right now is on progressing and advancing through more and more complex test points ahead of full transition. Really central to that is the software verification and validation, which requires a higher level of rigor for piloted operations. We're working through that methodically and we're confident in the timeline. Just a little bit more color on that, we've moved through the hover regime, which is that first phase, faster than any prior phase.

This is the fastest we've progressed from a first flight through this point in a test campaign and also with the fewest issues. We're not too far away, but it'll be in the second half of the year. Our goal is to complete piloted transition and enter eIPP operations this year.

Wonderful. Thank you so much, and congrats again. We'll pass it on.

Thank you. Your next question comes from the line of Edison Yu from Deutsche Bank. Your line is now open.

Hey, good afternoon. Thanks for taking our questions. 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 Palantir, 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. The good news is we've been working on our broader AI products, specifically around ATC solutions for several years now. There are lots of different groups that are participating. Palantir, for example, one of our partners, is participating in the SMART program. 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. More on that to come.

Okay. Just on back to 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 bottlenecks, if any? How are you sort of addressing those?

Today a lot of our work really has to do with, you know, getting the aircraft through the certification process. You know, 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 means of compliance 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. When we solved all those and we were able to agree, it really unlocked really our ability to keep, you know, 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, you know, tools and equipment in place to allow us to scale. We have put in place, you know, as we've been building out this first initial fleet of, you know, 8 to 10 aircraft, but ultimately building towards that, 50 aircraft per year, production capacity. We've been working through the tooling to go do that, and really it has to do with the timeline of type certification. Once we get through the certification side, we can really scale our production side. Of course, all this is just trying to balance the eIPP with our own certification flight, test program with the Launch Edition program.

Thank you.

Thank you for your questions. Your next question comes from the line of James Kirby from JPMorgan. James, your line is now open.

Hey, good afternoon. Thanks for the time. Maybe just following up with the previous questions. You know, you mentioned you've been advancing your work in phase IV 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. As we talked about, we just completed phase 3, and we're deep into phase 4, and what this really means is we don't have any unsolvable technical challenges and we're deep into execution. Our, while this is not easy, you know, the rules are in place, and we've got our means of compliance done. The next step is really in making sure that all of our certs, 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 Vertiport network build-out. Adam, maybe 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 it to ramp up kind of over the next three years once the eIPP starts?

The infrastructure is really going to be, kind of a mix of, you know, public-private partnerships. We've been working on the infrastructure side for several years now. 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 all the way 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 FBOs ahead of L.A. '28.

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, there's still more to come. 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. I think you'll start to see that expand. We've also done a lot of work with BETA in really talking through the charging infrastructure that is gonna be necessary there. I think you'll see the industry come together, the different cities come together, and then public-private partnership come together to build all the infrastructure needed.

Okay. Got it. Thank you.

Your next question comes from the line of Austin Moeller from Canaccord Genuity. Austin, your line is now open.

Hi, good afternoon. Just my first question, can we talk about the restricted type certificate that was issued for the Midnight in the UAE, and what kind of flight tests 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.?

Thanks, Austin. 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 had been previously working on, which was called the Type Certificate. 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 Edition program in the UAE and allow for early commercial operations in Abu Dhabi, which, you know, we work with Abu Dhabi Aviation to fulfill. Ultimately, what it does is gives us an ability to generate early revenue and early real-world flight experience.

Okay. 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 airspace, or do you view it more as using eVTOLs 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. We think about this because there's sort of a 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. We want to participate in any way we can. Even if it meant that we are ultimately not generating significant amounts 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. We've really focused more on the application layer versus a Palantir of the world that's focusing more on the integration layer.

That's super helpful. I'll pass it back there. Thank you.

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

Hey, good afternoon, everyone. I think this is 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, you know, plan to do transitions life as well? Just kind of curious as you launch the eIPP 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. We have 2 aircraft that are flying today, and we're still working through that initial fleet of 8 to 10 aircraft. Those are gonna be allotted across the cert, flight test program, eIPP, Launch Edition, as well as, you know, we're putting in place the infrastructure to ramp production to up to 50 aircraft per year. It's really a mix of the 2.

Got it. That's helpful. Just another follow-up on the defense side. I know you have some U.S. programs everywhere 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. programs.

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

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 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 Anduril approach, where we are building early ahead of these programs being announced because by the time they get announced, we wanna be in position to win them. 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 that this product will become very interesting around the world. You'll have to wait and see what happens.

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

Appreciate the call. Thank you.

Your next question comes from the line of Amit Dayal from H.C. Wainwright & Co. Your line is now open.

Thank you. Greetings, everyone, and congrats on all the progress. Adam, 1 question on the burn for this year. How much of that is going towards, you know, manufacturing preparedness?

Thanks, Amit. Let me just give the bigger picture here, and then I'll let Priya provide some more specifics. We are executing a multi-platform strategy across civil and defense. In the defense side, you know, it's a generational product. It's not something that's simply being hybridized, so that does take real investment. The good news is that, you know, we have already obviously invested in a world-class engineering team, infrastructure, testing assets, and we're deploying that across both of our platforms. 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. The good news is if we do win a defense contract, there will be $ awarded, which will help offset the spend.

If we don't win a defense contract, we will immediately cut the spend. You'll likely see a few quarters of elevated spend, followed by a potential to reduce that from current levels.

Amit, just digging a little bit deeper, right? Specific to the quarter, as you talked about earlier, we're ramping spend in two core areas. Adam talked about our increased spending on the defense platform. On the other one, as you rightly highlighted, right, on the Midnight program. As we're advancing our commercialization efforts, we are increasing our spend in Midnight for the flight test expansion and ramping the production efforts ahead of the operations in EIPP and other launch markets. Again, we expect this elevated levels to be short-lived, and then potentially come down thereafter.

Understood. Thank you for that, guys. Just follow-up to that, is there any certification activity going on for the manufacturing facilities that are in place so far?

Hey, Amit. Yes, there is. We've been working through the production certificate as well. We will, you know, try to time that as well with our type certificate progress.

Got it. Thank you, guys. That's all I have. Appreciate it.

Your next question comes from the line of Chris Pierce from Needham. Your line is now open.

Oh, hey, just one big picture question and one kind of near-term question. I guess when I hear you guys talk about the defense opportunity, is there a world where in three to five years, Archer is primarily a defense company and the Midnight is sort of I mean, backburner is not the right word, but it's something where you see an opportunity, you're winning, you know, contracts, you're ramping your manufacturing there, and that's a large company, and that's sort of a path? Or will you always sort of wanna 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, you know, global use by the consumers. The analogy or sort of example I like to give is if you think about selling, you know, a few dozen of aircraft in the top 1,000 markets, you can build or sell, you know, over $100 billion worth of aircraft. That is a pretty, you know, large number to think about. On the defense side, it will be more targeted and it will go to, you know, U.S. allies for specific use cases. 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. You can also start to use advanced materials and advanced processes that can ultimately lead to a better civil product. 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. 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. More near term, going back to Savi's question, it sounds like you have the 2 aircraft now working to build 8 more, but you need to keep a certain amount of aircraft, I'm assuming, in, you know, 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 1 aircraft and maybe more likely flying CTOL cargo? Like what would be, you know, disappointing? What would be, you know, upside surprise? I just want to get a sense of where expectations should be.

We are still in talks with the different eIPP markets and partners, and we are waiting to see the different cities and routes that ultimately come to fruition. We are balancing our own certification process against eIPP opportunity, against the Launch Edition opportunity. We are building to be able to support all three of those. We are going to have to weigh those different opportunities. As there is more clarity on it, we will start to give you more detailed information.

Okay. Thank you and good luck.

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

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 a house in the Hamptons. How will I be able to use Midnight?" I think it's a great question, and I think it's an important one. 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. A typical example that we like to give is flying from city center to an airport. I grew up in Tampa, Florida, and it took me an hour to get to the airport.

If you're able to fly over the water and fly 150 miles per hour in a straight line, that would be a real shortcut. If I was able to do that at a similar cost of rideshare, that would be an attractive alternative as just another normal guy growing up in Florida. Hopefully you can see yourself in a product like this and know it is made for everyone and not just for the select few. I'll turn back to the operator.

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.