Archer Aviation (ACHR) dropped its fourth-quarter earnings report after the markets closed yesterday, giving investors a glimpse at a company building a whole new industry from scratch.
Archer is aiming to transform how we move through cities aboard electric vertical takeoff and landing (eVTOL) air taxis, but it’s not making money from operations yet, even as it gears up for commercial flights later this year.
The market liked what it saw, though, and shares are spinning up 12% higher.
Archer’s vision is to create a new way to travel with flying taxis zipping over traffic in crowded cities like Abu Dhabi, Tokyo, and Los Angeles. The eVTOL stock unveiled its “Launch Edition” program, a plan to deploy Midnight aircraft commercially in “dozens of early adopter markets” before getting full FAA type certification, which isn’t expected until late 2025.
Abu Dhabi Aviation (ADA) is Archer’s first customer for this, with plans to start flying Midnight later this year, supported by Archer’s pilots, technicians, and engineers. This isn’t just a test as Archer is aiming to generate revenue and build operational know-how, essentially creating the eVTOL industry from nothing.
It’s also starting production at its ARC facility in Georgia, planning to build up to 10 Midnight aircraft this year for testing and early deployments. CEO Adam Goldstein said Archer is “on track to deliver our first revenue-generating Midnight aircraft later this year,” showing it big bet on pioneering urban air mobility.
But Archer isn’t making money from operations yet. Its Q4 financials show a net loss of $198.1 million and an adjusted EBITDA loss of $94.8 million, with operating expenses at $124.2 million.
That’s a lot of cash going out the door, mostly on R&D, manufacturing, and partnerships, with no revenue from flying passengers to offset it. Sure, Archer has $1.14 billion in liquidity, boosted by an equity offering, and over $500 million in cash. That gives it a runway to keep going, but it’s not a business yet. A lack of operational revenue means Archer’s still in the expensive startup phase, burning through cash to build something unproven.
Despite no revenue, Archer is poised to start commercial operations later this year through its Launch Edition program. It already has a $6 billion order book, with deals in the United Arab Emirates, Japan, and the U.S., like a $500 million agreement with Japan Airlines (JAPSY) and Soracle for air taxi services in Japan’s congested cities.
The FAA’s recent powered-lift Special Federal Aviation Regulation (SFAR) sets the stage for safe commercialization in the U.S., and Archer is in the final phase 4 process of FAA certification.
Archer is also partnering with Anduril to develop hybrid VTOL aircraft for defense, tapping into military demand, which could bring in early revenue if successful. With its Georgia factory set to produce 650 aircraft annually by the late 2020s, Archer is laying the groundwork to scale fast.
But Archer faces some tough hurdles. The eVTOL industry is untested. No one’s flown paying passengers at scale yet, and regulatory delays could push FAA certification into 2026 or beyond, stalling commercial launches.
Safety is also a huge concern. Midnight needs to prove it is reliable or public trust could tank, especially after recent high-profile crashes. Archer’s cash burn remains steep, and if it can’t generate revenue soon, that $1.14 billion won’t last forever. Investors could see potential dilution if it needs more funding. Economic slowdowns or Trump’s tariffs could also cut demand for expensive air taxi rides, especially if inflation squeezes consumer budgets.
Competition is fierce with Joby Aviation (JOBY) a key rival. While it expects to produce 56 eVTOL aircraft by 2030 compared to Archer’s 465, Joby is further along in FAA certification and has deals with Delta Air Lines (DAL) for airport transfers. Lilium (LILM) and Vertical Aerospace are also in the race, focusing on Europe and Asia. Big players like Airbus (EADSY) and Boeing (BA) are developing eVTOL tech, too, with deeper pockets to weather delays.
Archer’s $6 billion order book sounds impressive, but these are “indicative orders,” not firm commitments, and could vanish if competitors deliver first or cheaper.
Archer is trying to create a new industry, and it’s making bold moves to get there, with commercial operations on the horizon. But regulatory hurdles, cash burn, competition, and economic uncertainty could derail its plans.
It’s a high-stakes gamble. Although there doesn’t appear to be too much turbulence for Archer Aviation to gain altitude, you’re betting on a future that’s not guaranteed and you need to go in with eyes wide open.
