To The Moon

$Archer Aviation Inc.(ACHR)$

Archer Aviation is making notable strides toward the launch of its air taxi service, slated to begin later this year in the United Arab Emirates. The company’s management recently reaffirmed this timeline, underscoring a pivotal milestone for the young firm. With this significant event on the horizon, it’s a good time to examine Archer’s financial position and strategic progress — both critical to sustaining momentum in the competitive urban air mobility (UAM) market.

Below, we’ll review the company’s latest earnings, capital structure, key initiatives, and why its strategic choices may give it a long-term edge.

$1 Billion in Cash: A Record Quarter for Liquidity

Archer’s first-quarter 2025 results show the company is entering the back half of the year with its strongest liquidity position to date. The company raised an additional $300 million in equity capital during the quarter, ending Q1 with $1 billion in cash and equivalents — its highest quarter-ending balance ever. Notably, this figure does not include the up to $400 million of potential funding from Stellantis, which has preliminarily agreed to support scaling production of the Midnight aircraft.

For a company burning roughly $100 million in cash per quarter, this $1 billion gives Archer close to two years of operational runway at current spending levels. In early-stage, capital-intensive businesses like UAM, liquidity is paramount — and Archer is well capitalized to reach its next big milestone: revenue-generating operations in the UAE.

Hitting Milestones to Unlock More Capital

With pre-revenue businesses, progress is best measured by execution against milestones — and Archer seems to understand this dynamic well. The UAE launch not only marks the company’s transition into commercial operations but also signals to investors that it is capable of delivering on promises.

This is crucial. Investors tend to view milestone achievement as validation that a management team can be trusted as good stewards of capital. As Archer continues to hit its development goals — from certification of its Midnight aircraft to scaling production — it will likely have less difficulty raising additional funds to keep advancing.

Management also noted that the UAE’s sovereign wealth fund and Stellantis remain supportive backers, both financially and strategically. With a clear path and credible partners, Archer appears well-positioned to maintain investor confidence.

Earnings in Line With Guidance

From an operating perspective, Q1 2025 results were within expectations. The company posted an adjusted EBITDA loss of $109 million, which fell comfortably within its forecast range of $95–$110 million. Operating cash burn was similarly aligned at $105 million, roughly equivalent to adjusted EBITDA.

Notably, this was Archer’s third consecutive quarter of both growing its cash reserves and advancing strategic initiatives — no small feat for a company still in the pre-revenue phase.

Looking ahead, management expects Q2 adjusted EBITDA losses between $100–$120 million, a modest uptick at the midpoint, which is consistent with ongoing manufacturing ramp-up and certification expenses.

Scaling Production: Manufacturing and Capex

The company is investing between $15–$20 million more in capital expenditures in Q2 compared to Q1. This incremental investment supports the build-out of domestic manufacturing capacity, particularly for its Midnight aircraft.

Importantly, Archer’s decision to prioritize U.S.-based sourcing and production has proven prescient given the current global trade environment. Manufacturing operations in California and Georgia shield the company from the rising import tariffs that have made overseas production more costly and unpredictable.

A Smart Domestic-First Supply Chain

Under the current U.S. administration, tariffs on imports have remained elevated, even when new trade deals are struck. For example, the recent U.S.–Vietnam agreement still enforces a 20% base tariff on imports — significantly higher than pre-2016 levels, when rates were often in the low single digits.

This policy shift reflects a broader push to rebalance trade and discourage outsourcing. Archer’s foresight in committing early to a domestic supply chain is now paying dividends: its cost structure remains predictable, and its production is insulated from international tariff volatility.

While production volumes remain low today, this advantage could grow significantly when Archer begins scaling output in 2026–2027, as planned. Companies that rely on offshore manufacturing may face steeper cost increases over time.

Strategic Priorities: Certification, Testing, and Growth

Management outlined several key priorities for 2025:

• Advancing Midnight aircraft certification.

• Continuing rigorous testing.

• Building and refining manufacturing capabilities.

So far, progress appears strong across all three fronts, with certification and manufacturing timelines tracking toward their stated goals. The speed at which Archer is preparing to launch commercially in the UAE — well ahead of what many expected — underscores how aggressively the company is executing its strategy.

Key Insights: What Investors Should Know

Here are the eight most important takeaways from Archer’s latest update:

1. UAE Launch On Track: Commercial operations in the UAE are expected to begin later this year, a key milestone.

2. Record Cash Balance: Archer ended Q1 with $1 billion in cash and equivalents, its strongest liquidity position yet.

3. Manageable Burn Rate: With ~$100 million in quarterly cash burn, Archer has ~2 years of operational runway at current spending levels.

4. Strong Partnerships: Backing from Stellantis and the UAE sovereign wealth fund bolsters both capital access and credibility.

5. Earnings Within Guidance: Q1 results met expectations, demonstrating disciplined financial management despite being pre-revenue.

6. Manufacturing Ramp-Up: Capex is rising to support increased production capability in U.S.-based facilities.

7. Tariff-Resistant Supply Chain: Domestic manufacturing shields Archer from the higher import tariffs many competitors face.

8. Strategic Progress Continues: Certification, testing, and manufacturing remain on schedule, with momentum building into 2026.

Conclusion: Progress With Purpose

Archer Aviation is charting a deliberate and disciplined path in the urban air mobility market. Backed by robust cash reserves, supportive strategic partners, and a smart domestic-first production strategy, it is well-positioned to launch its UAE operations successfully.

For investors, the key is to watch whether Archer continues hitting its milestones — particularly aircraft certification, production scaling, and commercial launches. Each successful step reduces risk and paves the way for further capital raises, which are inevitable in this capital-intensive industry.

If the company maintains its current trajectory, it could emerge as a leading player in next-generation transportation. As always, investors should weigh the risks inherent in pre-revenue startups, but Archer’s progress to date is a strong indication that it is on the right track.

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

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