ACHR earnings call transcript, November 9, 2026

Hey, Anthony.

Um, we still look at this as, um, an interesting application to sell aircraft and I think we have to earn. Turn our way into the operating side. And so the early years of, you know, post certification, I think will be very focused on selling aircraft. Um, we still will certainly have some fleet that we want to operate ourselves to learn, um, and ultimately to grow. Um, but I think we're gonna have to earn our way, um, into the air taxi side. Um, I also think the aftermarket will be attractive, um, with things like battery packs that will ultimately be replaced, um, on a, on a regular cadence and things like engines, but we'll be on. A longer timescale. Um, I think there's, there's more to dig into over time, but ultimately sales will be a big driver of that. I also think that on the defense side, um, that's going to drive a lot of the early revenues as well. And so it will be similar types of dynamics there too. Adam, um, on that, are you saying that you think that there's going to be aftermarket opportunity on, on the defense side, or are you just saying, um, maybe if you can just help me understand what. What you mean by that, that that'd be great. And is there a way for us to think about, um, in the quarter, how many engines you guys delivered on Omin and, um, maybe like what the ASP is of that, uh, going forward. Yeah, I think I was, uh, you know, referring to, uh, you know, partnerships like we have with Andrell on Omin. That's a great example of, uh, you know, selling parts. Um, but I'll let Tom give a little bit more color on Omin.

Um, yeah, not too much more to add. Uh, obviously we've mentioned we started to deliver, uh, against our engine and battery supply contract with Andrell. Can't get into too much color there, just given the nature of the agreement. But I think the exciting thing is that it's a great proof point for the core tech that we've developed over the last several years here that we have been applying and certifying on midnight, but obviously it's applicable much more broadly. If you think about Halo platform, you know, Andrell platform and as well as. You know, it's hit you platforms coming up post a transaction close.

Great.

Thanks, guys.

Well, if you look at the core capabilities of what we've built, we have incredible design expertise, an in-house powertrain capability, a full-stack software team, and this really enables us to build large and small aircraft, both manned and unmanned. And the Midnight platform is allowing us to go after the large trillion-dollar AirTaxi TAM that we set the company up to go after. The Halo platform really reuses that same powertrain and the flight control software stack to go after the multi-deca-billion-dollar Defense Group 5 Vertical Lift products. And the in-situ platform, with customers in 35 countries, is already generating revenue and ripe for new products that can allow the company to dramatically scale revenue in the near term. And so post-closing of the transaction, ACHR will have a diversified revenue stream coming from both civil and defense applications across manned and autonomous platforms. And I think that really uniquely positions us as a diversified next-gen A&D company. Got it. Very helpful. And maybe as a follow-up, can you expand on the flight test campaign opportunities in LA? And latest on production plans and timeline for Midnight and Thunder?

Sure, Peter. This is Benjamin. Just a quick update on flight tests. You know, this quarter has been a record quarter for us. We're talking over 118 test flights. Up to 16 flights a week. And really, all of that culminated in our FAA approval to operate Midnight under that market survey special airworthiness certificate. And we had to do a lot for that. Like, we had to demonstrate that the aircraft performance was kind of substantiated through its entire flight envelope. We could build 50 hours of testing in that stable configuration. And then after that, the FAA reviewed all of our data and energy management range predictions to make sure that the aircraft did what we said it was going to do. And all of that led to them authorizing us to do flight not only over densely populated areas, but in a really busy airspace. And so with our no roads tour that kind of kicked off. This big test of our operational capability. So think 28 flights in just 13 days across eight airports in Silicon Valley, Oakland and San Francisco metropolitan areas. And what that kind of took us to really get to is that. Our investment in developing midnight for this really high tempo urban operation works out. It's really, really smooth. So we're going to take that forward in the further flight testing in L.A. and in the rest of the no roads. To her. Got it. Very helpful. We'll pass it on.

I guess, then, Benjamin, how are you allocating the how many aircraft are going to be just doing market surveys that just. Non-piloted midnight that you have built today or, you know, are these midnights going to be ready for, you know, to allocate between market survey and certification? Yeah, so we will definitely be able to use those midnight across those multiple purposes and. These are piloted midnights at it. All right. Thank you.

Thanks, Edison.

Tom, I'll do the first part of your question. I guess I'll just give you an update on progress for for Halo. So Adam mentioned on the call, we've already started running the turboshaft engine. That's basically like the heart of the new hybrid powertrain that we're developing. And that's really the main thing, gives Halo its differentiated payload. Range and speed, you know, first midnight. We've also started spinning first electric motors that are going to drive the rotors on that vehicle. And like we've talked about before, those are really built off the same core tech that we've. developed for midnight, those electric motors. And so that's how we're able to get through the development so quickly as we're using a lot of that same hardware and software. So all of that has put us on track to fly next year between now and then. And obviously you'll see hardware coming together, tests being completed, all working up towards that milestone, but things are looking great. And Edison, your second question. So regarding revenue for in-situ, right? I think you've heard us talk about it. In-situ is like operating. Historically, in revenues north of $200 million a year. And what we're going through right now as part of integration planning activities is to understand that core base that they have with the real programmatic revenues across the globe. And then see opportunities to potentially grow that in the future. So again, we really look forward to sharing more of that with you as we get to the other side of close. Great. Thank you.

Thanks for the question.

So that's correct. We unlocked. Market survey for our CETOL aircraft. And we also built the kind of the playbook for how to roll through this entire process and do it efficiently and quickly. So we're going to roll that same playbook on the VTOL. Platform, which we expect to do very much in the near future here. So we'll get through our pilot transition campaign, build the 50 hours, transparently share all that data with the FAA, just like we did it on the CETOL campaign, and roll through in a market survey on the. Okay, and should we be thinking that this is a CETOL aircraft that you're going to certify, and you might sell this to potential customers, or this is just a step on the way to VTOL market survey and VTOL OEM operations? Yeah, I think you can think about it as a step along the way. It's not something we intend to sell as a CETOL-only aircraft. Okay, perfect. And just one more, if I could. Can you, when you talk about pilot transition by year-end, I guess I'd love to just hear what's different now versus, you know, previous conference. to that same milestone. Is it something, is it something different on the hardware side with the S4? Is it software that's been updated, batteries? Like, I'd just love to hear what's different now and giving you confidence in the year-end for piloted transition. Yeah, sure. I'll take that for you. So, first off, we've done over 260 piloted test flights at this point, of which 100, over 100, have actually been part of that piloted transition campaign. So, we're well on our way. But remember, while we previously transitioned with our autonomous midnight,

in our piloting campaign, that bar for rigor in safety is much higher, and in particular, in software verification, as again, we previously talked about. So, the good news is that we've gotten through that software verification process. And we're in good shape. So, we're continuing with the campaign. There aren't any surprises so far with that new software. So, we're on track for the end of this year, and we'll keep you informed. Okay, sounds great.

Thank you and good luck.

Thanks, James.

So just as a reminder, Z is our foundation model that we launched back in July and we've trained. It on a whole host of different data, including locations, comms, weather, terrain, and we're leveraging third-party data for that, as well as creating our own proprietary data set that we collect worldwide. And the products that we're building range from. airline ops, airspace management, pilot assistance, and we're currently in discussion with several different groups around pilot programs. This is across groups like governments and airlines, so we'll have to stay tuned there for more on this. We'll provide more on that in the near term. SkyGrid has built a certifiable ATM platform that is in use today, and the products are common operating picture, flight plan validations, surveillance, and confliction. And so we're also seeing demand from governments for that, also demand from ANSTs, airports, airlines globally. So hold tight and we'll provide more on that here in the near future.

Okay. Got it. Sounds good. And then second question, maybe just in the EDA Airways, I know it seems like a smaller announcement, but, you know, Adam, any color on how that, you know, came to be and if there's any certification? I guess in Europe that you need to go through to get that going as well as any update, I kind of international activity. That'd be great. Thanks. Yeah. So if you look at how it's played out in the US, we spent a lot of time. I am educating the regulators, the government, the overall community, which I think has gone very, very well. It's gone through us talking. It's gone through flight demonstration. It's gone through building an entire new industry, right? It's the first. New category that the FAA has put out there in many, many decades. And so when the airlines get involved, it's very helpful in really expanding that description and understanding of what we're doing. And so all we're doing is doing that on a. Much on broader scale on a global scale now. So we've spent a lot of time in the Middle East and now we're starting to do that in Europe as well. And so it's the same campaign that we're doing really to help the different governments, to help the regulators, to help the consumers understand what we're doing and how. Having a large flag carrier like ETA is a really good way in Europe to help bring that data abroad. We are doing this in close coordination with YASA and so that is going to be the regulator.

That we will deal with there and of course the FAA and YASA have spent a lot of time together also working to try to align their certification frameworks. Got it. Thank you.

Hey, Austin.

The good news is that In-Situ has been operating for three decades and has customers in 35 countries. So the answer is really all of the above. So they have customers. All over the world. Of course, post the acquisition closing, we'll have more information and understanding the depth of those relationships and our ability to go expand those. Those relationships and agreements. We've spent a lot of time, as you know, on the civil side, talking to many different countries and setting up a lot of the frameworks to bring the eVTOL side. And now we're going to have to do the same thing on the defense side. There are a lot of opportunities on both the core aircraft and the payload side, as well as new products that we've been working on. So Archer today, you know, has built some of the most complex vertical lift aircraft that exists between midnight and the halo platform. The ability to go use our existing stack across powertrain and software and our, you know, autonomy capability will be very exciting to go develop new products and ultimately sell that across the existing channel that they have. Okay. And I understand we've got transition by end of year. Some of your competitors have indicated that once FAA pilots begin flying themselves in TIA, that they don't always opt to do all the flights that they're considering. How do you view this as potentially accelerating the TC process for ACHR?

I'm not sure exactly what our competitors are referring to. I think there's a very rigorous flight test plan that we are planning on going through. And so I think each company might have their own approach to it, but I think we're pretty confident in the approach that we're taking. Great. I'll pass. Back there. Thanks.

Thanks for the question.

So we have been working across so far five U.S. networks, L.A., New York, the Bay Area, Miami, and Texas. And really, we announced these networks in early partnership with regulators, airports, and landlords. And we do that. Also with key partners like Signature and Atlantic. The reason we really do that is to help bring everybody along for that journey, to make sure that we're educating groups along the way, and really to make sure that we can find these new partners that will help us, you know, ultimately finance a lot of this. We've partnered with Beta and Macquarie to launch what we call our ACES network, which is all about interoperability, so we can bring low-cost charging to the industry. But it's really about creating the network, bringing in lots of partners, and we do not expect it to be a significant, you know, use of our capital.

Thank you for that.

Thank you, Chris.

The answer is, we will be able to do both. That's the plan. And so we have, you know, we brought a plane down to LA. So our plane is sitting at Hawthorne today. And over the coming weeks, you'll see us flying in around Hawthorne across. our previously announced network. We also do plan on taking the additional aircraft through the transition campaign and then ultimately through market survey as well and flying passengers in 27. So that is still within our plans of expectations. In 27, I plan to be our first passenger in midnight, and then we look forward to bringing on additional passenger flights under market survey certification. In LA, I do think it is super important though to demonstrate I think it is great. This and to really learn about integrating into America's some of America's most complex airspace, and we'll do that, of course, hand in hand with the FAA. And then we're going to obviously continue evolving the Hawthorne Airport into this future mobility hub that we've been building. And that means building out rapid charging, working together with the communities. But ultimately, all this is refining operations ahead of the 2028 Olympic Games. So that's largely how we're viewing it. Perfect.

Thank you again.