Q3 2025 Archer Aviation Inc Earnings Call

Today.

All lines will be needed during the presentation portion of the call with an opportunity for questions and answers at the end.

I would now like to pass the conference over to our host Katy Kilo head of IR Katy. Please proceed.

Welcome to archers Q3, 2025 earnings this is Kate QL 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 resource.

All of the 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 seething from the highest levels of the U S government and how the Olympics mandate has become a global stage for us to showcase ear 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 Whitehouse executive orders now establishing a presidential imperative to begin air taxi deployments in America as early as next year that you'd be tall 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.

One of a kind opportunity to acquire control of Hawthorne Airport one of L. A is most strategically located airfields and use it as our anchor hub for air taxis head of L. A 28 Olympic games and beyond as well as a test bed 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've signed definitive agreements to acquire control of Hawthorne Airport, a rare asset located less than three miles from L. Ax and the closest airport to downtown L. A the forum Intuit Dome and Sofa Stadium site of the 2028 Olympic opening ceremony, the team and I are actually.

Holding today's call from Hawthorne This afternoon.

Hawthorne has an 80 acre airport with an approximate 5000 foot runway capable of supporting some of the largest aircraft used in private aviation such as Ah Gulfstream <unk> hundred 50 and benefits from 24, seven 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 hanger 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 our key airports and build the first purpose built <unk> hub at the center of a world class Aviation corridor, but.

But hawthorne is more than an airport, it's a landmark of American aerospace history.

The city built this airfield in the 19 twenties to attract Jack North route 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.

Speaker #1: Hawthorn is an 80 acre airport with an approximate 5000 foot runway capable of supporting some of the largest aircraft used in private aviation , such as a Gulfstream G650 , and benefits from 24 over seven operating authority , and has the capacity to handle significantly more movements than it does today .

Operator: Call. My name is Victoria, and I'll be your moderator today. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. I would now like to pass the conference over to our host, Kate Kiewel, Head of Investor Relations. Kate, please proceed.

During World War two this airfield became a symbol of American innovation and resilience thousands of workers, including the women, who inspired Rosie the ribbon or powered the nation's aerospace transformation hawthorne's motto at the time set at all more jobs than people.

Kate Kiewel: 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.

Speaker #1: The site features hangar space , office and terminal space , and significant expansion opportunities with the ability to more than double the existing hangar footprint .

The same tarmac that once launched northrop's breakthroughs later became home to Spacex is L. A operations and served as a proving ground for the born companies first test tunnel.

Speaker #1: It is a profitable enterprise with a long term master lease in place through 2055 . Establishing Hawthorn as a key pillar of the Archer network in LA 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 .

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.

Speaker #1: But Hawthorn 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 Hawthorn .

We envision Hawthorne as L. A is grand Central station for Air Taxis, the centerpiece of our southern California network or passengers will one day seamlessly fly above la congestion on predictable five to 15 minute routes between key destinations, including Hollywood downtown and Orange County.

Speaker #1: 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 Two .

Adam Goldstein: Thanks, Kate. Last quarter, I spoke about the growing support our sector is receiving from the highest levels of the US 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.

Speaker #1: 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 .

It will also serve as archers innovation Testbed for next generation aviation technologies, including AI, driven air traffic control and operations management Sema.

Speaker #1: Hawthorn'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 LA operations and served as a proving ground for the Boring Company's first test tunnel .

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 of liquidity.

To make this vision real.

Speaker #1: Archer plans to now carry that legacy forward , ushering in the next chapter of advanced aviation right here in the heart of Los Angeles .

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 700000 square feet of manufacturing and test facilities across California and Georgia.

Speaker #1: 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 .

Speaker #1: We envision Hawthorne as LA's Grand Central Station for air taxis . The centerpiece of our Southern California network , where passengers will one day seamlessly fly above LA congestion on predictable 5 to 15 minute routes between key destinations , including Hollywood , downtown and Orange County .

As I discussed last quarter, we're assembling our initial fleet of midnight aircrafts. These aircraft will move directly into testing or early commercial use.

Adam Goldstein: 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 US 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 LA 2028 Olympic Games and beyond, as well as a test bed 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're now nearing completion of the pilot see tall 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 reached.

Speaker #1: 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 .

Recent exciting milestones include 55 miles of range over 30 minutes of lifetime and flying altitudes up to 10000 feet at speeds exceeding 150 miles per hour.

Speaker #1: 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 .

The consistency between stimulator in 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.

Speaker #1: 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 700,000ft² of manufacturing and test facilities across California and Georgia .

Adam Goldstein: We announced earlier today that we have signed definitive agreements to acquire control of Hawthorne Airport, a rare asset located less than 3mi from LAX and the closest airport to downtown L.A., the Forum, Intuit Dome, and SoFi Stadium, the 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 5,000ft 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.

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 shape Ziad Grande mosque, one of the nation's most iconic landmarks. We've since continued to progress our flight testing as we look to validate the aircrafts performance in the regions extreme heat and humidity and advanced <unk>.

Speaker #1: 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 .

Speaker #1: We're now nearing completion of the piloted CTL 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 .

Geo Tory approvals with the G C a a towards passenger carrying operations.

Speaker #1: Recent exciting milestones include 55 miles of range , over 30 minutes of flight time , and flying at altitudes up to 10,000ft at speeds exceeding 150mph .

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.

Speaker #1: 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 .

A few weeks ago and sold 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.

Adam Goldstein: 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. 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.

Speaker #1: 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 .

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

Speaker #1: 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 regions extreme heat and humidity and advance regulatory approvals with the Gcaa towards passenger carrying operations .

In Japan, our consortium with Japan Airlines Sumitomo historical continues to make meaningful progress.

Earlier this quarter Osaka officially selected Japan Airlines, and Sumitomo joint venture Circle, using Archer's midnight aircrafts as its air mobility partner.

That makes archer the first U S E V toll manufacturer positioned to play a central role in establishing commercial air taxis in Osaka and.

Speaker #1: Excitingly , we've now begun receiving initial payments for these commercial operations under our launch program . Momentum has been particularly strong in Asia Pacific , where we recently solidified relationships with the national airline carriers of Japan and Korea .

Just yesterday, Tokyo, followed suit selecting our consortium led by Japan Airlines as one of two groups that will lead commercialization.

Adam Goldstein: 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 five to 15-minute routes between key destinations including Hollywood, downtown, and Orange County.

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.

Speaker #1: A few weeks ago in Seoul , we announced a partnership with Korean Air , which selected Archer as its taxi partner in the country .

Speaker #1: Following a rigorous evaluation process with plans to purchase up to 100 aircraft as Korean Air moves towards completing its acquisition of Asiana , it will become the nation's largest airline .

These advancements across the middle East and Asia positioned Archer at the center of the two most advanced aviation regions outside the U S. You.

Speaker #1: 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 Circle continues to make meaningful progress .

You can expect to see us continue to mature our operational plans with the worlds top governments and airlines.

Our international growth continues to attract increasing interest from defense opportunities worldwide, including our ongoing collaboration with <unk>.

Speaker #1: Earlier this quarter , Osaka officially selected Japan Airlines and Sumitomo's joint exclusive air venture Circle using Archer's Midnight Aircraft as its air mobility partner .

Last quarter I shared details of two strategic acquisitions that advanced our defense platform.

Key technology from over here at Carom aircrafts spinoff and composite manufacturing capabilities at a facility in southern California.

Speaker #1: That makes Archer the first US 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 one of two groups that will lead Evtol commercialization .

Adam Goldstein: It will also serve as Archer's innovation test bed 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 700,000sq ft 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.

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.

Speaker #1: 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 .

Ed Archer, we're not waiting for the future. We are building at the time to seize this transformative opportunity is now over to Tom.

Speaker #1: These advancements across the Middle East and Asia position Archer at the center of the two most advanced aviation regions outside the US . You can expect to see us continue to mature our operational plans with the world's top governments and airlines .

Thanks, Adam.

Day, one 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 and the decisions around the aircraft design manufacturing readiness certification strategy and flight test operations that.

Speaker #1: Our international growth continues to attract increasing interest from defense opportunities worldwide , including our ongoing collaboration with Anduril . Last quarter , I shared details of two strategic acquisitions that advanced our defense platform .

That approach continues to cement us as one of the leaders in the sector.

Let's start with flight testing over the past few months, our midnight program has consistently delivered strong results.

Speaker #1: Key technology from over air , 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 .

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

We are now routinely flying longer faster and higher as we expand the aircraft's operational envelope.

Flights have exceeded 55 miles more than 30 minutes of flight time altitudes up to our 10000 foot service ceiling and speeds in excess of 150 miles per hour.

Speaker #1: 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 .

These missions are providing valuable certification data and importantly, they closely mirrored the majority of mission profiles, we expect in early urban deployment environments.

Speaker #1: At Archer , we are not waiting for the future . We are building it . The time to seize this transformative opportunity is now .

This quarter, we were thrilled to fly as part of the California International Air show at our home Airport, insulate us where tens of thousands of spectators Saab midnight fly the.

Speaker #1: Over to Tom . Thanks , Adam . one , our focus has been consistent . Finding the most efficient path to making urban air mobility a reality .

The consistent feedback we got at the event with how remarkably quiet aircraft is.

Adam Goldstein: 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.

Speaker #1: 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 .

It really is a special experience to see the aircraft fly by at well over 100 mph 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.

Speaker #1: Let's start with flight testing . Over the past few months , our midnight program has From day delivered strong results . We are now routinely flying longer , faster and higher as we expand the aircraft's operational envelope .

The exciting news is that we are nearing completion of midnight pilot and see tall test campaign and the consistency we're seeing across repeated mission profiles continues to solidify our confidence in our path to certifying midnight, both in the UAE and the U S.

Speaker #1: 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 150mph .

Our next flight test phase with Tonight will be piloted VTOL, including full transition flights with our type certification intent for blade App propellers.

Speaker #1: These missions are providing valuable certification data and importantly , they closely mirror the majority of mission profiles we expect in early urban deployment environments .

Unlike the SITA envelope that we are now close to completing testing on the Vitol and transition flight regimes are not new for midnight as we have previously completed an extensive flight test campaign with midnight without a pilot onboard.

Speaker #1: 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 .

Adam Goldstein: 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 Soraco continues to make meaningful progress. Earlier this quarter, Osaka officially selected Japan Airlines and Sumitomo's joint venture, Soraco, using Archer's Midnight aircraft as its air mobility partner. That makes Archer the first US eVTOL manufacturer positioned to play a central role in establishing commercial air taxis in Osaka. Just yesterday, Tokyo followed suit, selecting our consortium led by Japan Airlines as one of two 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.

As always our focus remains the same disciplined execution safety and readiness for commercial operations the.

Speaker #1: 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 100mph , and barely be audible above the ambient noise .

The momentum continues to build and the team continues to deliver.

As I mentioned, we are continuing to build our initial fleet of pilot had been nine aircraft across our facilities in Silicon Valley and Georgia.

Speaker #1: 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 Seatlle 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 US .

The next pilot at 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 four blade apropos of ours that are part of our types of 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 three quarters of a million square feet of our manufacturing and test facilities.

Speaker #1: Our next flight test phase with the night will be piloted vital , including full transition flights with our type certification intent for blade aft propellers .

Our Golden manufacturing line in Silicon Valley remains the foundation of our manufacturing ramp.

Speaker #1: Unlike the setal 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 a reminder, this is where our engineering and manufacturing teams refined build processes tooling and quality controls to ensure repeatability and efficiency.

Adam Goldstein: These advancements across the Middle East and Asia position Archer at the center of the two most advanced aviation regions outside the US. 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 two strategic acquisitions that advanced our defense platform: key technology from OVAIR, a carom aircraft spinoff, and composite manufacturing capabilities at a facility in Southern California. These advancements positioned 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.

The lessons and tools established on that line are feeding into our high volume production ramp.

Speaker #1: 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 .

Across all our locations we remain focused on building our production system that is reliable scalable and ready for certification.

Speaker #1: As Adam mentioned , we are continuing to build our initial fleet of piloted midnight aircraft across our facilities in Silicon Valley and Georgia .

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.

Speaker #1: 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 .

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 continuing to work with FAA policy.

Speaker #1: This aircraft is equipped with the four blade propellers that are part of our type design , and will be used for piloted VTOL and transition flight testing .

Speaker #1: We continue to build out the capabilities needed to support a rate of 50 aircraft per year across nearly three quarters of 1,000,000ft² of our manufacturing and test facilities .

Team to close the remaining industry wide policy topics related to flight test.

Speaker #1: 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 .

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 over and mission critical composites brings.

Adam Goldstein: 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.

Speaker #1: 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 system that is reliable , scalable , and ready for certification .

Tom Muniz: Thanks, Adam. From day one, 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 55mi, more than 30 minutes of flight time, altitudes up to our 10,000ft service ceiling, and speeds in excess of 150mi 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.

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.

Speaker #1: 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.

Speaker #1: On the certification front , we have obviously all been impacted by the government shutdown and are hopeful that this will be resolved soon .

<unk> designed to incorporate the best of Archer and over its technology meeting the needs of operators, who face demanding and complex missions.

Speaker #1: 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 production continued soil audits as well as continued work with FAA policy team to close the remaining industry wide policy topics related to flight test .

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 the Williams patent portfolio. This was one of the most significant technology portfolios and electric aviation, particularly inducted San propulsion high voltage systems and advanced flight controls.

Speaker #1: 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 .

Tom Muniz: 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 100mi per hour and barely be audible above the ambient noise. It was also a special moment for our team, many of whom 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 US.

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.

Speaker #1: We now have in-house composite structures , manufacturing capability , giving us expanded rapid prototyping capacity , which is key for the new aircraft .

Speaker #1: We are developing . We also continued maturing our hybrid electric VTOL aircraft program . While the remain confidential , our work here is centered on delivering a clean sheet .

We view this as a strategic advantage for both our defense roadmap and potential future commercial variance.

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

Speaker #1: Next generation aircraft designed to incorporate the best of Archer and ovaries technology , meeting the needs of operators who face demanding and complex missions .

Thanks, Tom.

That team continuing to deliver significant advancements across the key priority you and Adam have discussed.

Speaker #1: 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 .

Gold focus from a financial perspective, ensuring we are operating from a position of strength.

Tom Muniz: Our next flight test phase with Midnight will be piloted VTOL, including full transition flights with our type certification intent for 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.

The key to that is maintaining a strong balance sheet.

Speaker #1: Also , this quarter , we completed our acquisition of Liliums 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 .

We closed Q3 25 with $164 billion in cash cash equivalents and short term investments.

And today announced an additional equity lease of $650 million.

Speaker #1: 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 .

And I don't know and I have discussed previously.

Goal is always to be opportunistic with our fundraising activity.

And that's exactly what occurred here.

He considered options to finance the Heartland transaction, we received substantial inbound interest that led us to do the offering announced today, which had a very strong outcome with their own being well oversubscribed and give you our ability to raise capital and is a core strategic advantage that helps power ability to seize.

Speaker #1: We view this as a strategic advantage for both our defense roadmap and potential future commercial variants . And now I'll turn it over to Priya to talk about the financials for the quarter .

On key opportunities.

Speaker #2: 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 .

Tom Muniz: This aircraft is equipped with the four-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 750,000sq ft 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.

We often hear from government commercial and other strategic partners and that liquidity is a key driver to their decisions of who to partner with.

They understand the capital intensive nature of our industry and wanted to work with partners, who will be around for decades to come.

Speaker #2: The key to that is maintaining a strong balance sheet . We close Q3 25 with $1.64 billion in cash . Cash equivalents and short term investments , and today announced an additional equity raise of $650 million .

Some examples of this include a 28 decision to select Archer and us winning the lithium IP bid process or 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.

Speaker #2: 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 .

That's not good enough just to have a strong balance sheet.

Speaker #2: 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 must remain focused on ensuring every capital allocation decision directly support long term value creation for our shareholders.

Tom Muniz: 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 SOI audits, as well as continued work with the 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 OVAIR and mission-critical composites.

And we've consistently emphasized we take a very disciplined approach to how we invest that capital.

Speaker #2: 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 .

Our Q3 spending reflects our continued investment in our key priority areas.

Aircraft any eye technology development certification manufacturing ramp and commercial operations infrastructure to support all of our planned line of business in civil and defense, both domestically and abroad.

Speaker #2: 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 air 28 decision to select Archer and us winning the Lilium IP bid process over our competitors , with our total liquidity now over $2 billion .

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

Our net loss for Q3 25 with $130 million.

Speaker #2: 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 .

This was a $76 million reduction from Q2, 'twenty five primarily due to the noncash impact of warrant revaluation.

Tom Muniz: 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 OVAIR'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. This quarter, we completed our acquisition of Lilium's patent portfolio.

Our GAAP operating expenses for Q3, 25 or $175 million.

Speaker #2: 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 .

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.

Speaker #2: 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 .

This reflects the cost associated with stock issued to our employees not employees and vendors.

Our adjusted EBITDA for Q3 was a loss of $116 million lending within our guidance range of $110 million to $130 million.

Speaker #2: 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 Q2 adjusted EBITDA loss represents an approximately $3 million a decrease from the previous quarter due to the reasons, we have discussed earlier.

Tom Muniz: 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 roadmap and potential future commercial variants. I'll turn it over to Priya to talk about the financials for the quarter.

Speaker #2: Our net loss for Q3 25 was $130 million . This was a $76 million reduction from Q2 25 , primarily due to the non-cash impact of warrants evaluation .

With regards to cash burn or cash used in operations and in purchase of property equipment and intangibles for Q3 25 with a $126 million.

Speaker #2: 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 .

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 a strategic acquisition of composite manufacturing outfit and over our patent portfolio.

Speaker #2: Our GAAP operating expenses for the quarter included approximately $53 million of non-cash stock based compensation related expenses , which reflects the cost associated with stock issued to our employees .

Priya Gupta: 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 2025 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.

Looking ahead for the upcoming quarter, we estimate our adjusted EBITDA loss to be between $110 million to $140 million.

Speaker #2: Non-employees and vendors . Our adjusted EBITDA for Q3 was a loss of $116 million , landing within our guidance range of 110 to $130 million .

We expect our cole capital investments to increase in Q4, and we continue to build aircraft and expand investment in our manufacturing capabilities.

Speaker #2: 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 .

These estimates do not include the cost associated with the limb and Houghton acquisitions.

And we announced today, we close the lithium acquisition for approximately $21 million earlier in Q4, and we expect the initial closing off the hook on acquisition to occur by year end, which will entail us funding the $126 million purchase price in cash.

Speaker #2: 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 .

Speaker #2: Our cash used in purchase of property and equipment was $20 million . Generally in line with the guidance . I provided during our last call .

What is clear is that now is the time to ensure we solidify our position as the market leader across electric taxis, the future of vertical lift for defense and cargo and the AI based technologies that will be used for decades to come.

Speaker #2: 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 .

Priya Gupta: 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. 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.

This is how we can deliver enduring outsized value to shareholders.

Speaker #2: Looking ahead for the upcoming quarter , we estimate our adjusted EBITDA loss to be between 110 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 .

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.

Speaker #2: 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 .

Of course, we will now begin the question and answer session. If you'd like to ask a question. Please press star followed by one on your telephone keypad. If for any reason you would like to remove that question. Please press star followed by two again to ask a question press Star one.

As a reminder, if you are using a speakerphone. Please remember to pick up your handset before asking your question.

Speaker #2: 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 .

Our first question will come from the line of Edison you with Deutsche Bank.

Priya Gupta: 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 lines 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 2025 was $130 million. This was a $76 million reduction from Q2 2025, primarily due to the non-cash impact of warranty valuation. Our GAAP operating expenses for Q3 2025 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.

Your line is now open Edison.

Okay.

Good afternoon, everyone.

Wanted to ask about the <unk>.

Speaker #2: This is how we can deliver enduring , outsized value to shareholders . With that , I'll turn it back over to Adam for Q&A .

The Big news on the on the airport.

What what kind of advantages do you think you will you will gain by taking ownership of it and does this signal kind of.

Some intention or what you might do from a software standpoint on air traffic control on autonomy.

Speaker #3: Gray , Adam , the line is open .

Speaker #1: 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 .

Thanks Edison. 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 five 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.

Speaker #1: Operator .

Speaker #3: Of course , we'll now begin the question and answer session . If you'd like to ask a question , please press star , followed by one on your telephone keypad .

Speaker #3: If for any reason you would like to remove that question , please press star followed by two . Again , to ask a question , press star one .

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.

Speaker #3: As a reminder , if you are using a speakerphone , please remember to pick up your handset before asking your question . Our first question will come from the line of Edison Yu with Deutsche Bank .

An opportunity to not only just be a major hub, but also to be a point, where we can go test rollout do all of our depot in all of our MRO at and so our vision is to create this grand central like opportunity.

Speaker #3: Your line is now open . Edison .

Priya Gupta: Our GAAP operating expenses for the quarter included approximately $53 million of non-cash 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 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 2025 was $126 million, which was essentially flat quarter over quarter.

Speaker #4: Thank you . Good afternoon everyone . I want to ask about the , you know , the big news on the on the airport .

For the heart of an airport we looked at it as you can go out and buy a hanger, we would've had to pay somewhere between $50 million to $100 million to buy a large hanger and so the opportunity to actually get control of the of the airport plus the IPO plus all the different growth opportunities, but something that we couldn't pass up but I think most unique is the opportunity to actually go rollout our software.

Speaker #4: What kind of advantages do you think you will you will gain by taking ownership of it . And does this signal kind of some some intention on what you might do from a software standpoint on air traffic control , on autonomy ?

And in airports in the middle of.

Speaker #1: Thanks , Edison . So this was a very unique opportunity . Airports don't really change hands very often . Sometimes . Not at all .

A large city.

So the Hawthorne Airport operates in class D aerospace not in the class B airspace, where a big lacks the planes are operating there isn't FAA contracted tower here and so it gives us a really unique opportunity to really roll to stuff out it's more than just looking at it from a revenue or EBITDA perspective. It is structurally advantageous for us to have.

Speaker #1: If you look back over the past five years . There are only a handful of assets that have traded in the entire US .

Speaker #1: 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 .

This right in the middle of La It also happens to be less than three miles from both <unk> and Sofia Stadium. It also happens to be located all in.

Speaker #1: And so as we've been building out the infrastructure , Hawthorne was a really opportunity to not only just be a major hub , but also to be a point where we can go test rollout , do all of our depot , all of our MRO at .

Priya Gupta: 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 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.

The different Elon musk companies territories like the boring company the board and company of tunnels that run underneath the airport and so lots of interesting accretive opportunity potential in the future.

Speaker #1: 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 .

Understood understood and then I know you mentioned that it's already quite profitable any way to dimension the contribution financially from from them going forward.

Speaker #1: We would have had to pay somewhere between 50 to $100 million to buy a large hangar . And so the opportunity to actually get control of the of the airport , plus the FBO , plus all the different growth opportunities , was something that we couldn't pass up .

The revenue has the opportunity to be in the tens of millions.

Speaker #1: 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 .

And it is it is EBITDA positive, but we don't really think about it like that because there are some decisions that we have to think about so one is.

Speaker #1: 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 contract tower here .

Do we sell hangars do we build new hangars to be leased new hangars, where 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.

Speaker #1: And so it gives us a really unique opportunity to really roll all this stuff out . It's more than just looking at it from a revenue or EBITDA perspective .

Speaker #1: It is structurally advantageous for us to have this right in the middle of L.A. . It also happens to be less than three miles from both LAX and SoFi Stadium .

As a strategic asset and use it to have a structural advantage in the industry.

Speaker #1: It also happens to be . Located all in the different Elon Musk companies territories , like the Boring Company . The Boring Company has tunnels that run underneath the airport , and so lots of interesting creative opportunity potential in the future .

Gotcha and just on the on the raise I know you're using some of it to the deal but it seems like it's fairly small in size.

Priya Gupta: 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.

So it was actually raised quite a bit more.

Any insight as to I guess, what that what the extra was four.

Speaker #4: Understood ? Understood . And then I know you mentioned that it's already quite profitable . Any way to I mention the contribution financially from from them going forward ?

Yeah. It was a it was opportunistic we weren't looking to go out there and raise capital.

Was very large reverse inquiry from very high quality investors so that was.

Speaker #1: The revenue has the opportunity to be in the tens of millions . And it is 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 .

I think unique for this period of time I'm guessing a lot of that came off the back of the beta IPO because theres a lot of interest in the industry and I view that as just a very positive signal.

Operator: Great. Adam, the line is open.

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

Speaker #1: So one is , you know , do we sell hangars ? Do we build new hangars , do we lease new hangars or do we consume them ourself ?

So I think that that was 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.

Speaker #1: 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 .

Priya Gupta: Of course. We will now begin the question-and-answer session. If you'd like to ask a question, please press Star followed by 1 on your telephone keypad. If for any reason you would like to remove that question, please press Star followed by 2. Again, to ask a question, press Star 1. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. Our first question will come from the line of Edison Yu with Deutsche Bank. Your line is now open, Edison.

Speaker #1: 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 .

Thought it would be prudent to add a little bit of extra cushion to the balance sheet and then finally from an office 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 lilien portfolio. We were actually the lowest bid when it came to the different bid that were out there.

Speaker #4: Gotcha . And just on the 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 .

Speaker #4: So you actually raised quite a bit more . Any insight as to , I guess what that what the extra was for ?

Edison Yu: Thank you. Good afternoon, everyone. 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? Does this signal kind of some intention on what you might do from a software standpoint on air traffic control, on autonomy?

But there was a lot of confidence in our ability to close and we ended up winning that because they're having previously some issues that the bankruptcy group had been through before also.

Speaker #1: Yeah , it was , it was opportunistic . We weren't looking to go out there and raise capital . There was very large , robust inquiry from very high quality investors .

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 many tens of billions of dollar size program, that's going to last for the column generational programs you need to go deliver against that and so it puts us in a.

Speaker #1: So that was , you know , 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 .

Speaker #1: And I view that as just a very positive signal . So I think that that was that was one thing . The strategic asset was also a really unique thing that came up as well .

Adam Goldstein: Thanks, Edison. This was a very unique opportunity. Airports do not really change hands very often, sometimes not at all. If you look back over the past five years, there are only a handful of assets that have traded in the entire US. Opportunities like this are, I think, very rare. You know our big strategy has been focused around Los Angeles, especially with the Olympics coming up. As we have 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 depoting, all of our MRO at. Our vision is to create this grand central opportunity for the Hawthorne Airport. We looked at it as you can go out and buy a hangar.

<unk> of strength to do that.

Speaker #1: 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 .

So while this was opportunistic but I think we are done raising capital for a while for now.

Great. Thank you.

Okay.

Thank you for your questions.

Our next question comes from the line of injury and Shepherd with Cantor Fitzgerald.

Speaker #1: We thought it would be prudent to add a little bit of extra cushion to the balance sheet . And then finally , from an offensive 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 .

Your line is now open.

Hey, guys. Good afternoon, Andreas here congrats on the quarter.

Adam I was wondering if you could maybe help us walk out your latest vision for commercialization.

Speaker #1: For example , the Lillian portfolio , we were actually the lowest bid when it came to the different bids that were out there .

Uh huh.

In the UAE and through your allowance addition, just wondering if you could maybe remind us timing or expectations. There or are you looking to sell aircrafts in the region.

Speaker #1: But there was a lot of confidence in our ability to close , and we ended up winning that because there had been previously some issues that the bankruptcy group had been through before .

Adam Goldstein: We would have had to pay somewhere between $50 to $100 million to buy a large hangar. 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. 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. 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, so it gives us a really unique opportunity to really roll all 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 LA.

Speaker #1: 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 .

A little more color on your vision, therefore commercialization. Thank you.

Yeah.

Thanks, Andreas So we kicked off our launch edition program in the UAE. This summer and we delivered an aircraft and began a test flights in Abu Dhabi and we did that in partnership with our.

Speaker #1: They look at us and say , if we're going to go get you guys involved in a many tens of billions of dollars sized program , that's going to last for , they call them generational programs .

Our partner out there Abu Dhabi aviation and as a reminder, each of the launch additional 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.

Speaker #1: You need to be able 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 .

Speaker #1: For now .

And the seven 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 National Aviation regulator, we affirm publically that they remain on track for certification as early.

Speaker #4: Great . Thank you .

Speaker #3: Thank you for your questions . Our next question comes from the line of Andreas Shepard with Cantor Fitzgerald . Your line is now open .

Adam Goldstein: It also happens to be less than three miles from both LAX and SoFi Stadium. It also happens to be located all in the different Elon Musk companies' territories, like The Boring Company. The Boring Company has tunnels that run underneath the airport, so lots of interesting, creative opportunity potential in the future.

Speaker #5: Hey , guys . Good afternoon . Andreas here . Congrats on the quarter . Hey , Adam . I was wondering if you could maybe help us flush out your latest vision for commercialization .

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 aircrafts as we sell aircrafts, we start to recognize revenue.

Speaker #5: You know , in the UAE and through your launch edition , just wondering if you could maybe remind us timing or expectations there .

Edison Yu: Understood. I know you mentioned that it's already quite profitable. Any way to dimension the contribution financially from them going forward?

And collect cash so we have the ability to do that really all over the world as you've seen with our launch of different partners. So right now what we're doing is balancing the volume of aircraft. We're building against testing in the U S. The IPP program and the launch edition customers. So there is certainly lots of opportunities to to do all three.

Speaker #5: Are you looking to sell aircrafts in the region ? Just . Just a little more color on your vision there for commercialization . Thank you .

Speaker #1: Thanks , Andreas . 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 .

Adam Goldstein: The revenue has the opportunity to be in the tens of millions, and it is EBITDA positive. We don't really think about it like that because there's some decisions that we have to think about. One is, do we sell hangars, do we build new hangars, do we lease new hangars, or do we consume them ourselves? There's a bunch of decisions that have to get made in terms of how we will utilize the airport. 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.

Speaker #1: 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 multi-year commercial value in the tens of millions of dollars to Archer .

Got it that's super helpful. I appreciate that color and revenue next year that's exciting.

Maybe just a follow up I'm wondering if you could either you would call them can maybe expand a little bit further on the defense side and maybe on the hybrid propulsion.

Speaker #1: And so we've already started receiving initial cash payments in the seven 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 .

What kind of opportunities there are you able to share with us that you might be pursuing whether it's with a neural or or other partners. There just to fund another maybe update on the defense side. Thank you.

Edison Yu: Gotcha. Just on the raise, I know you're using some of it for the deal, but it seems like the deal is fairly small in size. You actually raised quite a bit more. Any insight as to, I guess, what the extra was for?

Sure. So we are deep in the process of product development with Andrew.

Speaker #1: So that would enable our partner , Abu Dhabi Aviation , to begin commercial passenger service in the country . Once that takes place .

And we've been working closely with the customer on building for specific missions.

It'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 you'd be tall platform 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 and subsystems manufacturing processes as possible and if were.

Speaker #1: 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 .

Adam Goldstein: Yeah. 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. 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. I think that was one thing. The strategic asset was also a really unique thing that came up as well to go do that. The viewpoint was, we have been looking at both the civil and the defense side of the business.

Speaker #1: As you've seen with our launch So right now , what we're doing is balancing the volume of aircraft . We're building against testing in the US , the IOP program and the launch edition customers .

Speaker #1: So there's certainly lots of opportunities partners . to do all three .

<unk> for that program.

I think it will change the game for vertical with the warfare.

Speaker #5: 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 the defense side and maybe on the hybrid propulsion .

So when we have some who show we will will 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 and that we can continue to be very positive that I'm. Good opportunities will come and so that's that's largely where the defense opportunity we think since.

Adam Goldstein: 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. 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 had been previously some issues that the bankruptcy group had been through before.

Speaker #5: What kind of opportunities there ? Are you able to share with us that you might be pursuing , whether it's with Andoral or or other partners there ?

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

Thanks.

Speaker #5: Just just another maybe update on the defense side . Thank you .

Thank you for your questions.

Our next question comes from the line of Savi <unk> with Raymond James.

Speaker #1: 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 .

Line is now open.

Okay.

Hey, good afternoon and I.

I Wonder if you could talk a little bit more about the kind of the E. P. P program.

Speaker #1: 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 .

Curious, what the thinking or the strategy is behind it for the D O T and how you think it's going to work.

Speaker #1: That 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 .

Adam Goldstein: 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 dollars sized program that's going to last for, they call them generational programs, you need to go deliver against that. It puts us in a position of strength to do that. While this was opportunistic, I think we are done raising capital for a while for now.

Sure. Thanks, Savi, so theres been a lot of speculation about the IPP and it really is still forming but the purpose of the IPP is not really about generating revenue, it's actually about introducing aircraft into urban environments.

Speaker #1: And if we're selected for that program . I think it'll change the game for vertical lift warfare . And so when we have something to show , we will we'll show everybody .

Speaker #1: But if you look at the size of pass rotorcraft programs , they are absolutely massive and they last for decades . So we continue to be very excited and engaged in that .

And gaining the trust of the flying public our gaining the trust of the municipalities and the regulators and so the program will rollout conservatively simple point to point routes in good weather VFR conditions and the goal is really to prove the safety and capability of the aircrafts.

Speaker #1: We can to be very positive that good opportunities will come . And so that's that's largely where the defense opportunity we think sits .

Edison Yu: Great, thank you.

We all know the type certification process is a it's sort of an all or nothing type process and while I understand the purpose of that.

Priya Gupta: Thank you for your questions. Our next question comes from a line of Andrea Shepherd with Cantor Fitzgerald. Your line is now open.

Speaker #5: Wonderful . Thank you so much . And congrats again . I'll pass it on .

Speaker #1: Thanks .

Speaker #3: Thank you for your questions . Our next question comes from the line of Savi Smith with Raymond James . Your line is now open .

I believe the.

The way that autonomous cars or way most have been rolled out mix actually a lot of sense, you're starting to small area. You gained 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.

Andrea Shepherd: Hey, guys. Good afternoon. Andre's here. Congrats on the quarter. Hey, 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 could 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. Thank you.

Speaker #6: Hey good afternoon . I wonder if you could talk a little bit more about the kind of the AIP program . Just curious what the thinking or the strategy is behind it for the DoD and how you think it's going to work ?

That's helpful.

If I can just follow up briefly on the the 100 and I think in the really 8-K release, it was kind of called out that $171 million for.

Speaker #1: Sure . Thanks , Savi . So there's been a lot of speculation about the AIP , and it really is still forming , but the purpose of the AIP is not really about generating revenue .

Adam Goldstein: Thanks, Andres. We kicked off our launch edition program in the UAE this summer, and we delivered an aircraft and began test flights in Abu Dhabi. We did that in partnership with our partner out there, Abu Dhabi Aviation. As a reminder, each of the launch edition programs carry a multi-year commercial value in the tens of millions of dollars to Archer. We've already started receiving initial cash payments in the seven-figure range tied to operational milestones. Beginning in 2026, we expect to recognize payments as revenue under the accounting treatment for the program. 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 2026.

For hearth on and it seems like the purchase price is 126 I'm kind of curious what the spend the near I can't spend you see at Hawthorne and I don't know what that incremental spend there is and just kind of how you think about spend over the next year or two.

Speaker #1: It's actually about introducing aircraft into urban environments and gaining the trust of the flying public , gaining the trust of the municipalities and the regulators .

Speaker #1: 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's .

Sure. So there's the core price, which is the $126 million four for the airport. There are development rights and then Theres the F B L.

Speaker #1: We all know the type certification process is . It's sort of an all or nothing type process . And while I understand the purpose of that , I believe the the , you know , the way that autonomous cars or Waymo's have been rolled out makes actually a lot of sense .

It adds up to $171 million.

Those decisions that we can make in terms of how much to spend but theres not some like big giant number that we're gonna go deploy into the that's expected for us to go deploy it into the airports and 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.

Speaker #1: 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 .

Adam Goldstein: That would enable our partner, Abu Dhabi Aviation, to begin commercial passenger service in the country once that takes place. As a reminder, we sell aircraft. As we sell aircraft, we start to recognize revenue and collect cash. We have the ability to do that really all over the world, as you've seen with our launch edition partners. Right now, what we're doing is balancing the volume of aircraft we're building against testing in the US, the EIPP program, and the launch edition customers. There's certainly lots of opportunities to do all three.

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 of the world. These opportunities don't even really exist. This is like an N of one asset and so it is pretty unique from that standpoint.

Speaker #6: That's helpful if I can just follow up briefly on the the 100 , I think in the release AK release , it was kind of called out that 171 million for Hawthorne , and it seems like the purchase price is 126 .

Makes sense. Thank you.

Speaker #6: I'm kind of curious what the spends 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 year or two .

Thank you for your questions.

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

Andrea Shepherd: 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, 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. Thank you.

Your line is now open.

Hi, Good afternoon. This is in him on for Don.

I was hoping to follow up a little bit on the certification and would you be able to share your latest expectations around when you expect to begin TIAA testing and then when you also expect to be testing midnight with FAA pilots onboard for credit.

Speaker #1: Sure . So there's the core price , which is the 126 million for for the airport . There are development rights . And then there's the FBO .

Speaker #1: And that adds up to 171 million . There's decisions that we can make in terms of how much to spend , but there's not some 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 .

Yes. This is Tom I'll answer that.

So we're actually getting pretty close to starting our first TIAA campaign with the FAA and that could happen as soon as the end of this year.

Adam Goldstein: Sure. We are deep in the process of product development with Anduril, and we've been working closely with a 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, so we're building a platform that is reusing as many of our systems, subsystems, and manufacturing processes as possible. If we're selected for that program, I think it'll change the game for vertical lift warfare. When we have something to show, we'll show everybody. If you look at the size of past rotorcraft programs, they are absolutely massive, and they last for decades. We continue to be very excited and engaged in that.

Speaker #1: And so we'll look at that in terms of the value that can be created . The operations that we need to scale LA and scale into the Olympics .

Just to kind of level set everybody as I've said in the past the TIAA process at least for us will be broken into many phases on the order of say 10 different ti as each one targeting compliance for a very specific system or aspect of the aircrafts. So the first one of those again.

Speaker #1: 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 , all over the world .

Speaker #1: These opportunities don't even really exist . This is like one asset . And so it is pretty unique from that standpoint .

Speaker #1: an end of

Speaker #6: Makes sense . Thank you .

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 our finished manufacturing of these aircrafts. Each one will be built with systems and aspects that conform it in order to support further TIAA testing ultimately building up to a final fully.

Speaker #3: Thank you for your questions . Our next question comes from the line of Bill Peterson with J.P. Morgan . Your line is now open .

Speaker #7: Hi . Good afternoon . This for Bill . I was hoping to follow up a little bit on certification . Would you be able to share your expectations around when you expect to begin ?

Adam Goldstein: We continue to be very positive that good opportunities will come. That's largely where the defense opportunity, we think, sits.

S. A conformed aircraft doing kind of the final ethanol function and 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.

Speaker #7: Testing and when you also expect to be testing midnight with FAA pilots on board for credit ?

Andrea Shepherd: Wonderful. Thank you so much, and congrats again. I'll pass it on.

Adam Goldstein: Thanks.

Speaker #1: Yeah . Hey , 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 .

Priya Gupta: Thank you for your questions. Our next question comes from a line of Savi Syth with Raymond James. Your line is now open.

Us or anybody industry can't do that final TIAA for the purposes of flight performance until a couple of those items are resolved and we're still optimistic that that'll happen very shortly otherwise.

Savi Syth: Hey, good afternoon. I wonder if you could talk a little bit more about 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.

Speaker #1: 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 , ten different Tias , each one targeting compliance for a very specific system or aspect of the aircraft .

<unk> is looking really good.

Awesome. Thank you so much for the color.

And then as you kind of ramped up your manufacturing capacity here I think you mentioned up to 50 aircraft and yeah in the coming months do you think that that's sufficient to support all the demand that you see on the next share between the test aircraft in the IPP Defense and then some of your international wants tradition programs.

Adam Goldstein: Sure. Thanks, Savi. There's been a lot of speculation about the EIPP, and it really is still forming. 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 the municipalities, and the regulators. The program will roll out conservatively, simple point-to-point routes in good weather, VFR conditions. 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. 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.

Speaker #1: 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 FNR function reliability testing for for the aircraft .

Hey, Matt This is Adam.

Demand Forest Park.

Far exceeds what we can build and so we're really in the phase where we kind of broke this out. It's chunks. We said we've 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.

Speaker #1: I think one thing that's kind of important to know is that right now , as we said before , we still do have a couple policy items open with the FAA .

Speaker #1: And so , you know , us or anybody , industry can't do that . Final Tia , for the purposes of flight performance until a couple of those items are resolved .

<unk>, we have coming.

Coming whether that's the launch initial programs or looking ahead and supporting the Olympics and really trying to think about where the near term opportunities will be but if we if we theoretically pad hundreds of airplanes I think we can 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 were going through as we scale that up.

Adam Goldstein: 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.

Speaker #1: And , you know , we're still optimistic that that will happen very shortly . Otherwise , you know , progress is looking really good .

Speaker #7: Awesome . Thank you so much for the color . And then as you kind of ramp up your manufacturing capacity here , I think you mentioned up to 50 aircraft .

Savi Syth: That's helpful. If I can just follow up briefly on the, I think in the 8K release, it was kind of called out that $171 million for Horizon. It seems like the purchase price is $126 million. I'm kind of curious what the near-term spend you see at Horizon and what that incremental spend there is, and just kind of how you think about spend over the next year or two.

We're also of course finish.

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 theirs.

Speaker #7: You know , in the coming months , do you think that that's sufficient to support all the demand that you see in the next year between , you , the test aircraft , the AIP defense , and then some of your international launch edition programs ?

There's a high level of demand for the for the product and then it's also being able to deliver against that from a manufacturing dominant ultimately certification.

Speaker #1: Hey , Mahima , this is Adam , the demand far , far exceeds what we can build . And so we're really in the phase where , you know , we kind of broke this out into chunks .

That's super helpful. Thank you.

Adam Goldstein: Sure. There's the core price, which is the $126 million for the airport. There are development rights, and then there's the FBO. That adds up to the $171 million. There are decisions that we can make in terms of how much to spend, but there's not some big giant number that we're going to go deploy into the airport in the near term. We'll look at that in terms of the value that can be created, the operations that we need to scale LA, and scale into the Olympics. 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.

Thank you for your question.

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

Speaker #1: We said we've , you know , built that first chunk of called single digit aircrafts . And then we're looking at that next chunk which is in the the 50 aircraft range .

Your line is now open.

Hi, good evening, so I just wanted to ask about the the William asset acquisition.

Speaker #1: And so we're looking at from the standpoint of making sure we can have enough aircraft to support the different opportunities we have . You know , coming , whether that's the launch edition programs or looking ahead and supporting the Olympics .

Lithium silicon dominant anode battery or the Doctor the fan technology more important to you and when might this be incorporated into one of your aircraft platforms.

Speaker #1: And really trying to think about where the near-term opportunities will be . But if we if we theoretically had hundreds of airplanes , I think we could deploy them , sell them , put them out there .

Thanks for the question Austin, So we've been following William 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.

Speaker #1: 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 .

Adam Goldstein: It is pretty unique from that standpoint.

Speaker #1: And we're also , of course , you know , finishing up and getting through the certification process in the US . And then of course , internationally as well .

Savi Syth: Makes sense. Thank you.

And we invested $1 billion behind it.

Speaker #1: So it's a balance amongst all of those . But I think it really starts with , you know , there's a high level demand for the for the product .

And so our consolidation of the innovation by winning that did for US was I think actually quite quite positive and that there were a number of foundational <unk> technologies around Dr. <unk> band propeller systems high voltage system and many others that we were able to.

Priya Gupta: Thank you for your questions. Our next question comes from a line of Bill Peterson with JP Morgan. Your line is now open.

Speaker #1: And then it's us being able to deliver against that from a manufacturing perspective. And then ultimately, certification.

Mihi Maon: Hi, good afternoon. This is Mihi Maon 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? When you also expect to be testing Midnight with FAA pilots on board for credit?

Speaker #7: That's super helpful. Thank you.

Patents on.

Speaker #3: Thank you for your questions . Our next question comes from the line of Austin Moller with Canaccord . Your line is now open .

So that's around 300 patents.

Patent assets to two the archer portfolio, bringing our portfolio too.

More than 1000 patent assets globally, but.

Speaker #8: Hi . Good evening . So I just wanted to ask about the the Lilium asset acquisition is Lilium silicon dominant anode battery or the ducted fan technology .

But much of the technology that was being developed there. We believe we're still a little bit ahead of its time, but it holds meaningful potential as the industry matures and so the depth of the duct advance IP, we think is quite compelling.

Adam Goldstein: Yeah. Hey, Mihi Maon. This is Tom. I'll answer that. 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've 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. The first one of those, again, we plan to start around the end of the year. 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.

Speaker #8: More important to you . And when might this be incorporated into one of your aircraft platforms ?

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 for our 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 <unk>.

Speaker #1: Thanks for the question , Austin . So we've been following Lilium closely for 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 a billion and a half dollars behind it .

Technology Foundation of the industry.

Speaker #1: And so our consolidation of the of the innovation by winning that bid for us was , I think , actually quite , quite positive and that there were a number of foundational technologies around ducted fan propeller systems , high voltage systems and many others that we were able to accumulate patents on .

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 free veto. So are you planning to transfer any of the space at those airports either to Ipos your airline customers to be able to use or how are you thinking about using that valuable real.

Speaker #1: So it adds around 300 patents , you know , patent assets to to the Archer portfolio , bringing our portfolio to more than 1000 patent assets globally .

Adam Goldstein: Fully FAA-conformed aircraft, doing kind of the final FNR or function reliability testing for the aircraft. I think one thing that's kind of important to know is that right now, as we said before, we still do have a couple of policy items open with the FAA. 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. We're still optimistic that that'll happen very shortly. Otherwise, progress is looking really good.

State.

So the.

Speaker #1: But much of the technology that was being developed there , we believed , was still a little bit ahead of its time . But it holds meaningful potential as the industry matures .

The airport is quite large it's 80 acres and so we have partners in the industry like beta who come and electrify airports theres 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.

Speaker #1: 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 .

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 <unk> of aircraft in the middle of the city. So when you think about like launching operations, you don't really want us to fly.

Speaker #1: As the regulatory pathways from mosaic unlocks innovation in those adjacent segments . So we view this as very important long term enabler and just another example of us consolidating the technology foundation of the industry .

Mihi Maon: Thank you so much for the color. As you kind of ramp up your manufacturing capacity here, I think you mentioned up to 50 aircraft 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?

Speaker #8: 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 in airports , free VTOL .

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 the other side of it is it gives us an incredible opportunity to go out and test out.

Speaker #8: 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?

Adam Goldstein: Hey, Mihi Maon. This is Adam. The demand far exceeds what we can build. We are really in the phase where we kind of broke this out into chunks. We said we have built that first chunk of, called, single-digit aircraft, and then we are looking at that next chunk, which is in the 50 aircraft range. We are looking at it from the standpoint of making sure we can have enough aircraft to support the different opportunities we have coming, whether that is the launch edition programs or looking ahead and supporting the Olympics, and really trying to think about where the near-term opportunities will be. If we theoretically had hundreds of airplanes, I think we could deploy them, sell them, put them out there. I also think we are learning how to build, and there are different chunks that we are going through as we scale that up.

All of the software the AI capabilities that we didn't building.

Speaker #1: So the the , the airport is quite large . It's 80 acres . And so we have partners in the industry like beta who come and electrify airports .

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. It 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.

Speaker #1: 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 .

Speaker #1: 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 .

Speaker #1: 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 depots of aircraft in the middle of the city .

Great. Thanks for all the details I'll pass back.

Adam Goldstein: We're also, of course, finishing up and getting through the certification process in the US and then, of course, internationally as well. It's a balance amongst all of those. 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.

Thank you. Thank you for your questions.

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

Speaker #1: So when you think about like launching operations , you don't really want to have to fly your aircraft in 30 minutes , 45 minutes from somewhere , you know , significantly outside the city .

Your line is now open.

Thank you.

Good afternoon, everyone. Congrats on all the progress.

Speaker #1: 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 .

I apologize if you already discussed this but any color on the burn rate for 2026.

Mihi Maon: That's super helpful. Thank you.

Priya Gupta: Thank you for your questions. Our next question comes from a line of Austin Moeller with Canaccord. Your line is now open.

Speaker #1: And then the other side of it is it gives us an incredible opportunity to go out and test out all of 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.

Yeah, Mike This is Phil Thanks for the question. So you know when you think about 2026 are the biggest expense will continue into the illuminate program. So next year, we'll be producing in deploying additional aircraft I just talked about earlier will balance the way we deploy these aircraft between UAE.

Andrea Shepherd: Hi, good evening. I just wanted to ask about the Lilium asset acquisition. Is Lilium's 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?

Speaker #1: 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 .

Yeah P. P flight testing other opportunities all of.

Those opportunities will be generating cash and they let these expenses we've talked about but you know when do you think it won't be on this call program, we expect to invest in our defense and software development as well. So first the defense program, we do plan to leverage the large portion of the existing resources behalf as well as the test infrastructure, but we do expect.

Speaker #1: Partnering with the regulators to really showcase a lot of these technologies .

Adam Goldstein: Thanks for the question, Austin. 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. They built very impressive technology with world-class European talent, and they invested $1.5 billion behind it. Our consolidation of the innovation by winning that bid for us was, I think, actually quite positive in 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. It adds around 300 patent assets to the Archer portfolio, bringing our portfolio to more than 1,000 patent assets globally.

Speaker #8: Great . Thanks for all the details . I'll pass it back .

Speaker #1: Thank you .

Speaker #3: Thank you for your questions . Our next question comes from the line of Armidale with H.C. Wainwright . Your line is now open .

To invest incrementally to support the program, which again blocks a lot of the value and big defense contract that Adam talked about.

The software will be again investing to build the product, which could generate revenues into Q2 and 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 Watson acquisition today, we'll be integrating that into our business next year, which is again generating revenues and we'll be generating margin.

Speaker #9: Thank you . Good afternoon everyone . Congrats on all the progress . I apologize if you already discussed this , but any color on the burn rate for 2026 .

Speaker #10: Hamlet , this is Priya . Thanks for the question . So you know , when we think about 2026 , the biggest expense will continue to be our midnight program .

We'll be incorporating that into our financial growth for next year.

So again hopefully that gives you again, a faint Luke isn't how we think about next year.

Speaker #10: So next year we'll be producing and deploying additional aircraft at least talked about earlier . We'll balance where we deploy these aircraft , you know , between UAE , the YP flight test and other opportunities .

Adam Goldstein: Much of the technology that was being developed there, we believed, was still a little bit ahead of its time, but it holds meaningful potential as the industry matures. 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 unlock innovation in those adjacent segments. We view this as a very important long-term enabler, and just another example of us consolidating the technology foundation of the industry.

And when you get into you know official guidance when we get to that point in time next quarter. So hopefully that helps.

Thank you.

And then just clarification on the number of aircrafts medium you need to get through certification and commitments in UAE at Centurylink, we're targeting around 10 acres.

Speaker #10: Some of those opportunities will be generating cash, and they'll net these expenses. We've talked about this. But, you know, when we think about beyond this program, we expect to invest in our defense and software development as well.

Speaker #10: So first , for the defense program , we do plan to leverage large portion of the existing resources we have , as well as the test infrastructure .

So over the next six to nine months.

Yes, so there's six aircraft in production now with parts are on order for many more than that but as <unk> mentioned, we're sort of trying to judge or be opportunistic with where to use those aircrafts. So certainly there's a you know a planned portion of those at least.

Speaker #10: But we do expect to invest incrementally to support the program , which again , locks a lot of the value . And big defense contracts that Adams talked about for software will be , again , investing to build the product , which could generate revenues in the future .

Andrea Shepherd: Okay. 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. 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?

Speaker #10: 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 .

That will be used for FAA certification testing, but others, we want to send to the IPP and locations in order to support that testing as well as our activities.

Speaker #10: Today , we'll be integrating that into our business next year , which is again generating revenues . And we'll be generating margin . So we'll be incorporating that into our financial results for next year .

Activities in the UAE, so until all of those things start to materialize, we have optionality for kind of how many to send to which locations.

Speaker #10: So again , hopefully that gives you again a framework as in how we think about next year . And we'll get into official guidance when we get to that point in time next quarter .

Adam Goldstein: The airport is quite large. It's 80 acres. We have partners in the industry like Beta who come and electrify airports. There are groups out there that we partner with that I think could also find value in the airport. There are lots of ways to think about it. One is we can build a centralized hub that everybody can use. 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. 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 depoting of aircraft in the middle of the city.

Understood.

Just last question on that and this is an interesting acquisition.

Speaker #10: So hopefully that helps .

It's a strategic asset for you guys do you think this sort of triggers a little bit of.

Speaker #9: Yeah . Thank you . That's that's helpful . And then just on the number of aircrafts , you know you may need to get through certification and commitments in UAE etc.

And grab in terms of.

Other sort of players or are you really direct participant straying too.

Speaker #9: . Like are we targeting around ten aircrafts . You know over the next 6 to 9 months .

In wound in.

Taking ownership of such assets given.

Speaker #1: Yeah . So there's six aircraft in production now with parts on order for many more than that . But as Priya mentioned , we're we're sort of trying to judge or be opportunistic with where to use those aircraft .

Limited in number and so when these could be even critical locations that could.

<unk>.

Expansion efforts in the long term how should we think about some of these types of assets that are adjacent to the story you know that.

Adam Goldstein: When you think about launching operations, you don't really want to have to fly your aircraft in 30 minutes, 45 minutes from somewhere significantly outside the city. This was just super unique from that standpoint that we could use that. I think it's an opportunity to really help the industry propel forward in a complicated city. The other side of it is it gives us an incredible opportunity to go out and test out all of 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. That's not just on manufacturing. That also has to come from the software side as well.

Speaker #1: So certainly there's , you know , a planned portion of those at least , that will be used for FAA certification testing . But others we want to send to IIP and locations in order to support that testing , as well as our other activities in the UAE .

No credit comes to the Florida after this deal.

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 the municipalities. So they are very unique in nature. When they come up again, we plan to use this this asset as a hub for Los Angeles into really.

Speaker #1: So until all those things start to materialize , we have optionality for kind of how many to send to which location .

Speaker #9: And , you know , just last question , Adam . You know , this is an interesting acquisition of this airport strategic asset for you guys .

Build around it and we welcome.

The competitors to actually use it into kind of unified more as an industry to together helped operationalize a incredible city of Los Angeles, which can have a huge opportunity and there'll be plenty of room for us all to help change the urban landscape here.

Speaker #9: Do you think this sort of triggers a little bit of a , you know , land grab in terms of other sort of players or even direct participants trying to , you know , get involved in taking ownership of such assets , given , you know , there are limited in number and some of these could be in critical locations that , you know , could support expansion efforts in the long term .

Adam Goldstein: We plan to use this airport as a test bed to deploy that, partnering with the regulators to really showcase a lot of these technologies.

Well listen thank you for that.

Thats all I have guys. Thank you.

Thank you. Thank you for your questions.

Andrea Shepherd: Great, thanks for all the details. I'll pass it back.

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

Adam Goldstein: Thank you.

Priya Gupta: Thank you for your questions. Our next question comes from a line of Amit Dayal with HC Wainwright. Your line is now open.

Your line is now open.

Speaker #9: How should we think about some of these types of assets that are adjacent to the story ? You know , that now kind of comes to the fore after this deal that you've undertaken .

Hey, good afternoon, Thanks for taking my question.

Just first.

Tom Muniz: Thank you. Good afternoon, everyone. Congrats on all the progress. I apologize if you already discussed this, any color on the burn rate for 2026?

Lots of different aircraft I know you're.

There's not that much you can say, but I get it.

Speaker #1: I think that some of the competitors would be interested in doing that . I just don't think there are opportunities to do that .

Is there are there any modifications that you anticipate.

To be able to.

Speaker #1: These assets just change hands . So rarely . And sometimes never , because they're owned by the municipalities . So they're very unique in nature .

Adam Goldstein: Hey, Amit. This is Priya. Thanks for the question. When we think about 2026, the biggest expense will continue to be our Midnight program. 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 tests, and other opportunities. Some of those opportunities will be generating cash, and they'll net these expenses we've talked about. When we think about beyond this core program, we expect to invest in our defense and software development as well. 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. We do expect to invest incrementally to support the program, which, again, locks a lot of the value and big defense contracts that Adam's talked about.

Use the currently fly in lots of different aircraft.

Conforming aircraft forecasting.

Speaker #1: When they come up again , we plan to use this , this asset as a as a hub for Los Angeles . And to really build around it .

Right.

Okay.

With regards to the certification in UAE, which is with the GC a a 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.

Speaker #1: 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 .

Speaker #1: And there'll be plenty of room for us all to help change the urban landscape here .

A lot of that is leveraging testing we've already done are already doing with the FAA and from there it kind of tease into the discussion I had earlier around TIAA and and so I would just go back to our framework there of each aircraft that we're building is really targeted to generate specific data.

Speaker #9: Thank you for that . That's all I have . Thank you .

Speaker #1: Thank you .

Speaker #3: Thank you for your questions . Our next question comes from the line of David with Barclays . Your line is now open .

Speaker #11: Hey . Good afternoon . Thanks for taking my question . I guess first on the launch of different aircraft , you know , I know you're there's not that much you can say , but I guess , is there are there any modifications that you anticipate to be able to , you know , use the currently flying launch Edition aircraft as the conforming aircraft for testing with the GCA .

Adam Goldstein: 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. 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 margin. We'll be incorporating that into our financial results for next year. Hopefully, that gives you, again, a framework as in how we think about next year. We'll get into official guidance when we get to that point in time next quarter. Hopefully, that helps.

Uh huh.

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 the balance where we put our priorities as far as allocating aircraft.

Essentially like a lot of pass, but that will lead to really exciting things for next year.

Very helpful and then.

Speaker #1: With regards to the certification in UAE , which is 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 .

How could you maybe give a little more color on any impact of the shutdown has had on.

Tom Muniz: Yeah, thank you. That's helpful. Just clarification on the number of aircraft you may need to get through certification and commitments in UAE, etc. Are we targeting around 10 aircraft over the next six to nine months?

The certification timeline and the ability to perhaps towards the conforming aircraft in the U S.

Yeah.

Yeah, 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.

Speaker #1: A lot of that is leveraging testing . We've already done or already doing with the FAA . And , you from there , it kind of tees into the discussion we had earlier around Tia .

Some resources continue to work, which is fantastic others are unfortunately not available so.

Adam Goldstein: Yeah. There are six aircraft in production now, with parts on order for many more than that. As Priya mentioned, we're sort of trying to judge or be opportunistic with where to use those aircraft. Certainly, there's a planned portion of those, at least, that will be used for FAA certification testing. Others, we want to send to EIPP locations in order to support that testing, as well as our activities in the UAE. Until all those things start to materialize, we have optionality for kind of how many to send to which location.

Speaker #1: And and so I would just go back to our , our framework there of each aircraft that we're building is really targeted to generate specific data to provide to regulators , both in the UAE and the US , in order to to show compliance .

Hopefully that situation gets resolved soon but in several areas, we're sort of unconstrained and just continuing to execute all the areas that are you know have approved a surplus emergence in execution mode.

Speaker #1: So again , that kind of merged with trying to , let's say , balance where we put our priorities as far as allocating aircraft .

Thanks, Tom.

Yeah.

Thank you for your questions.

Our next question comes from the line of Chris <unk> with Needham.

Speaker #1: You know , we've got essentially a lot of paths , but they all lead to really exciting things for next year .

Your line is now open.

Hey, good afternoon apologies if this came up earlier, but.

Speaker #11: Very helpful . And then could you maybe give a little more color on any impact that the shutdown has had on the certification timeline and the ability to to progress towards the conforming aircraft in the US ?

Tom Muniz: Understood. 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? 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?

With the acquisition of Hawthorne, given its much different geographic footprint versus Salinas.

Do you have kind of a carte blanche to fly test flights or 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 a.

Speaker #11: Thanks .

Speaker #1: Yeah , absolutely . I touched on it briefly earlier on the call , but we are still engaging with FAA despite the shutdown .

Basically the city.

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

Speaker #1: So on our program , you know , some resources continue to work , which is fantastic . Others are unfortunately not available . So hopefully that situation gets resolved soon .

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

Speaker #1: But in several areas we're sort of unconstrained . Just continuing to execute all the areas that , you know , have approved CERT plans and emergency and execution mode .

<unk> as an example is a way to help accelerate some of these paths into the IPP is expected to have the cities get announced in the first quarter of next year. It's expected there'll be five and then for flights to take place starting in the summer and so we're hopeful that Hawthorne gets picked.

Speaker #11: Thanks, Tom. I appreciate it.

Adam Goldstein: 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 the municipalities. They are very unique in nature when they come up. We plan to use this asset as a hub for Los Angeles and to really build around it. 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'll be plenty of room for us all to help change the urban landscape here.

Speaker #3: Thank you for your questions. Our next question comes from the line of Chris Pearce with Needham. Your line is now open.

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 of these operations that were that were working on but we will see what happens and.

Speaker #11: Hey .

Speaker #4: Good afternoon . Apologies if this .

Speaker #5: Came up earlier , but .

Speaker #4: With the acquisition of .

Speaker #5: Hawthorne .

Speaker #4: Given its much different .

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

Speaker #5: Geographic footprint versus Salinas .

Speaker #4: 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 , you know , just broadly kind of going into a into a city ?

Okay.

Okay.

Did you feel like you needed to make this acquisition because maybe partners within the L. A area, we're moving as fast as you'd like or is that kind of just silly conjecture I just kind of want to get a sense of what drove you to pull the trigger beyond just.

Speaker #1: So you can break this down in a couple of different ways . So this will not be used as a core test flight facility .

Tom Muniz: Understood. Thank you for that. That's all I have, guys. Thank you.

These assets don't come up for sale very often.

Adam Goldstein: Thank you.

Priya Gupta: Thank you for your questions. Our next question comes from a line of David Zazula with Barclays. Your line is now open.

Speaker #1: We will still be using Salinas as our core test flight facility . Once you get kind of certain hours of maturity on the aircraft , you can start to fly and get permissions to fly in and around urban environments .

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 the 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.

Andrea Shepherd: Hey, good afternoon. Thanks for taking my question. Yeah. I guess first, on the launch edition aircraft, I know there's not that much you can say. I guess, are there any modifications that you anticipate to be able to use the currently flying launch edition aircraft as the conforming aircraft for testing with the GCAA?

Speaker #1: IIP as an example , is a way to help accelerate some of these paths . And so the IPE is expected to have the cities get announced in the first quarter of next year .

Absolutely treasured asset right in the middle of the city of this airport is three miles from L. A X. So if you think about all the complexities that are at lax.

Speaker #1: It's expected there will be five flights, and then for flights to take place starting in the summer. We are hopeful that Hawthorne gets picked.

We will not have to deal with and so if you can connect with their portelli actually could end up being a massive terminal that is used to shuttle not just even hundreds of people potentially been thousands of people to the airport.

Speaker #1: 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 that we're working on , but we'll see what happens .

Speaker #1: And , you know , 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 .

Adam Goldstein: With regards to the certification in UAE, which is 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 are already doing with the FAA. From there, it kind of tees into the discussion we had earlier around TIA. I would just go back to our framework there of each aircraft that we're building is really targeted to generate specific data to provide to regulators, both in the UAE and the US, in order to show compliance. Again, that kind of merged with trying to, let's say, balance where we put our priorities as far as allocating aircraft.

Does your out of the complex aerospace, where theres a jet landing at L. A X 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.

Speaker #1: Okay .

Speaker #4: And did you feel like you needed to make this acquisition ? Because maybe partners within the LA area weren't moving as fast as you like ?

It was viewed as something that was sort of a once in a company kind of opportunity.

Speaker #4: Or is that kind of just silly 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 .

Okay. Thank you.

Yeah.

Thank you for your questions Chris.

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

Speaker #1: 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 the , you know , in my lifetime for us to go do something like that .

Yeah.

Thanks, So I'm going to go I know, we're running I'm still going to go through it was one of the retail questions that was just asked and so.

Speaker #1: 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 , you know , absolutely treasured asset right in the middle of the city .

The question was with the recent deal with Korean Air are you pursuing further <unk> deals and agreements with other major major Asian aviation.

Speaker #1: This airport is three miles from LAX. So if you think about all the complexities that are at LAX, which we will not have to deal with.

Aviation conglomerates.

Yes, I am personally spending a lot of time.

Adam Goldstein: We've got essentially a lot of paths, but they all lead to really exciting things for next year.

Speaker #1: And so, if you can connect the airport to LAX, it could end up being a massive terminal that is used to shuttle not just hundreds of people, but potentially even thousands of people to the airport because you're out of the complex airspace where there's a jet landing at LAX every 90 seconds.

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.

Andrea Shepherd: Very helpful. Tom, could you maybe give a little more color on any impact that the shutdown has had on the certification timeline and the ability to progress towards the confirming aircraft in the US? Thanks.

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 that countries that are looking to fast track fast track commercial service our 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 Nash.

Speaker #1: So just the opportunities here are quite incredible . And it was just something that we couldn't pass up . And so , you know , it was it was viewed as something that was sort of a once in a company kind of opportunity .

Adam Goldstein: Yeah, absolutely. I touched on it briefly early on in the call, but we are still engaging with the FAA despite the shutdown. On our program, some resources continue to work, which is fantastic. Others are, unfortunately, not available. Hopefully, that situation gets resolved soon. In several areas, we're sort of unconstrained to just continuing to execute all the areas that have approved CERT plans, and we're just in execution mode.

Speaker #4: Okay . Thank you .

Speaker #3: Thank you for your questions , Chris . That will conclude , our analyst question and answer session . I would now like to pass the call back over to Adam .

Transportation strategies, so you've seen it in Korea and Japan.

We were selected as the air taxi partners for both of our National flag carriers, and I think theres 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.

Speaker #1: Thanks. So I'm going to—I know we're running. I'm still going to go through at least one of the retail questions.

Speaker #1: That was just asked . And so the question was with the recent deal with Korean Air , are you pursuing further evtol deals , agreements with other major , major Asian aviation conglomerates ?

So with that I think I will wrap up the call.

Andrea Shepherd: Thanks, Tom.

Priya Gupta: Thank you for your questions. Our next question comes from a line of Chris Pierce with Natum. Your line is now open.

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.

Speaker #1: 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 .

Savi Syth: Hey, good afternoon. 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?

Speaker #1: 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 , fast track , commercial service with proven partners .

That concludes today's call. Thank you for your participation and enjoy them.

Speaker #1: 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 .

Adam Goldstein: You can break this down in a couple of different ways. 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 of 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. The EIPP is expected to have the cities get announced in the first quarter of next year. It's expected there'll be five, and then for flights to take place starting in the summer. 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.

Speaker #1: 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 .

Speaker #1: And I think there's going to be a lot more coming , a lot of these conversations will converge at the Dubai Air Show .

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: I want to thank the team , the partners , for all their work and commitment , and we look forward to sharing more progress next quarter .

Adam Goldstein: We'll see what happens. 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.

Speaker #1: Thanks .

Savi Syth: Did you feel like you needed to make this acquisition because maybe partners within the LA area weren't moving as fast as you like, or is that kind of just silly conjecture? 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.

Adam Goldstein: It's just very unique, Chris. 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. Need, I think the answer is no. Super opportunistic, I think the answer is definitely. In the aviation world, I think this is viewed as an absolutely treasured asset right in the middle of the city. This airport is three miles from LAX. If you think about all the complexities that are at LAX, which we will not have to deal with.

Adam Goldstein: 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 the complex airspace where there's a jet landing at LAX every 90 seconds. Just the opportunities here are quite incredible. It was just something that we couldn't pass up. It was viewed as something that was sort of a once-in-a-company kind of opportunity.

Savi Syth: Okay. Thank you.

Priya Gupta: Thank you for your questions, Chris. That will conclude our analyst question and answer session. I would now like to pass the call back over to Adam.

Adam Goldstein: Thanks. I'm going to go through at least one of the retail questions that was just asked. The question was, with the recent deal with Korean Air, are you pursuing further eVTOL deals and agreements with other major Asian aviation conglomerates? 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. The reception has been very strong and incredibly validating. 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, especially at countries that are looking to fast-track commercial service with proven partners.

Adam Goldstein: 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. You've seen it in Korea and Japan, where we were selected as the air taxi partners for both of the national flag carriers. I think there's going to be a lot more coming. A lot of these conversations will converge at the Dubai Air Show. We look forward to sharing a lot more when the time is right. With that, I think I will wrap up the call. 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.

Priya Gupta: That concludes today's call. Thank you for your participation and enjoy the.