Archer Guided To A $200 Million Quarterly Loss. It Has Ab…

An aircraft in flight.

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A bigger loss each quarter

Adjusted EBITDA (a non-GAAP measure of earnings before interest, taxes, depreciation, and amortization, with further adjustments that exclude items stock-based compensation) is the figure Archer guides on. A year ago, the quarterly loss on that basis was $118.7 million. This year’s first quarter came in at $172.5 million, and the second at $177.1 million. And the new guidance brackets that number rather than shrinking it.

Total operating expenses rose 61% year over year to $284 million. The $28 million step-up from the first quarter, management says, reflects expanded flight testing, certification work, and production of its Midnight aircraft, plus its hybrid military aircraft and ZEE, its aviation artificial intelligence (AI) model.

The all-in cash number runs higher still. Cash and investments fell by $215 million during the quarter, with $156 million of that used in operations. Most of the rest went to capital expenditures and to buying the operator business at Hawthorne Airport.

Of course, that last piece was a $25 million one-time purchase. But the balance has stepped down all the same, from $1.96 billion at the end of December to $1.78 billion in March to $1.56 billion in June.

Two years of room

The reason to spend at this pace is that Archer believes it is close. In April, the company became the first in its industry to close the third phase of the FAA’s four-phase type certification process. It is now in the final phase, where Midnight’s compliance is demonstrated through formal testing.

Operations are supposed to come sooner. In July, Midnight flew its first piloted city-to-city trips in California. Over the next few months, Archer plans to begin flying in the Los Angeles area from Hawthorne. Later this year, it expects to commence operations in Texas under the White House’s eVTOL Integration Pilot Program.

I’d argue those dates matter more here than they would at most companies, because the waiting itself now has a price. At the guided pace, six months of schedule slippage costs about $400 million.

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The Boeing test

The deal Archer announced alongside the results brings the first substantial revenue the company has ever had. Insitu, which builds unmanned military aircraft and operates across 35 countries, takes in over $200 million of revenue a year — and does so profitably. The transaction, which also hands Archer the autonomy developer Wisk Aero and the airspace-software company SkyGrid, is slated to wrap up before 2026 ends.

Boeing, for its part, is set to take a stake in Archer and to invest in the company.

But does the deal lighten the spending, too? In his holder letter, CEO Adam Goldstein wrote that he has tasked his team with integrating the companies “in a thoughtful and synergistic way that will not structurally increase our overall cash burn.”

The third-quarter guidance can’t confirm that either way. The deal hasn’t closed, so none of the acquired businesses are in the numbers yet. However, the first guidance Archer issues after closing is where the commitment becomes checkable.

Ultimately, the math is unusually simple for a growth stock this speculative. Archer’s own guidance puts its quarterly losses as deep as $200 million, and the balance sheet holds about eight quarters of losses that size — fewer if cash keeps leaving faster than the guided measure, the way it did last quarter. If Midnight starts carrying passengers on schedule and the Boeing businesses arrive without pushing spending higher, that could be plenty. I’d just note that both of those are still plans, and that the loss has grown in each of the past three quarters.