Archer Aviation Inc. (ACHR) FY 2024 Financial Analysis Report for Retail Investors

Key Metrics (Historical Comparisons)

Executive Summary

Archer Aviation Inc. (ACHR) demonstrated significant asset growth in FY 2024, with total assets increasing by approximately 81% compared to FY 2023. Cash reserves expanded substantially, driven by multiple capital raises including PIPE financings and ATM offerings, positioning the company with over $834 million in cash and equivalents. Despite robust liquidity, the company continues to incur substantial operating losses, totaling $536.8 million for FY 2024, reflecting ongoing investments in R&D, manufacturing, and strategic partnerships. The increase in stockholders’ equity underscores investor confidence amidst the company’s aggressive growth and development trajectory.

Management Discussion and Analysis (MD&A)

Archer’s strategic focus during FY 2024 has centered on advancing its eVTOL aircraft development and expanding its partnerships, notably with United Airlines and Stellantis. The company has prioritized capital raising activities, successfully securing over $700 million through PIPE offerings and ATM programs, to fund its operations and manufacturing ramp-up. Operating expenses increased significantly, primarily due to heightened R&D and personnel costs, while the net loss widened, indicating aggressive investment in future capabilities. Liquidity remains strong, with over $834 million in cash, which management believes is sufficient for at least the next 12 months, although ongoing operational scaling and market competition pose risks to profitability.

Income Statement Analysis

FY 2024 revenue remains negligible as the company is in pre-revenue stage. Operating expenses surged to approximately $510 million, driven by research and development (about $358 million) and general administrative costs ($152 million). The gross loss widened to the same extent as operating expenses, reflecting heavy upfront investments in aircraft design and certification activities. Net loss for FY 2024 was approximately $536.8 million, with EPS at -1.42 USD, an improvement of 16% YoY, yet still significant. The YoY decline in net loss margin indicates some operational leverage as revenue generation remains pending.

Balance Sheet Analysis

Assets increased notably, with cash and equivalents constituting over 83% of total assets, supporting liquidity needs. Property and equipment grew from $57.6 million to $126.8 million, mainly due to investments in manufacturing facilities and aircraft prototypes. Total liabilities rose to $248.6 million, primarily from warrant liabilities and notes payable, but leverage remains manageable with a debt-to-assets ratio of approximately 25%. Equity increased over 105%, reflecting the capital influx, while the company’s liquidity position remains robust with over $834 million in cash, providing a cushion for continued R&D and operational scaling.

Cash Flow Analysis

Cash flows from operating activities were negative at around $369 million, primarily due to ongoing net losses and increased working capital investments. Investing activities involved significant capex of approximately $82 million, mainly for property and equipment, indicating ongoing manufacturing capacity buildout. Financing activities generated over $820 million, largely from PIPE financings and ATM offerings, boosting cash reserves. The companyu2019s strategic liquidity management supports its long-term R&D and manufacturing goals although operational cash burn remains high.

Ratios & DuPont Analysis

Net margin remains deeply negative at approximately -53.7%, typical for pre-revenue growth-stage aerospace companies. ROA is approximately -53.7%, reflecting high asset utilization costs without revenue yet. ROE is also negative, around -71%, influenced by accumulated losses. Asset turnover is currently minimal, as revenue is absent, but the high asset base indicates substantial investment in R&D and manufacturing assets. The equity multiplier is about 1.33, indicating moderate leverage. Overall, the DuPont analysis confirms a high-risk profile with significant growth potential if aircraft commercialization succeeds.

Risk Factors

Key risks include regulatory hurdles related to aircraft certification, market competition from established aerospace and tech firms, operational risks in scaling manufacturing, and financial risks from high cash burn and dependence on continuous capital raises. Macroeconomic factors such as interest rate fluctuations and supply chain disruptions could impact capital access and production costs. Additionally, the company faces legal and patent litigation risks, notably from Wisk Aero LLC, which could impact strategic partnerships and operational plans.

Notes & Additional Commentary

FY 2024 included several one-time and non-recurring items, notably the significant fair value adjustments of warrant liabilities and various strategic investments. The companyu2019s heavy R&D expenditure and commitment to aircraft certification are consistent with its long-term growth outlook but continue to suppress profitability. The recent capital raise on February 12, 2025, with $301.8 million in gross proceeds, provides further liquidity support, signaling investor confidence but also indicating ongoing need for external funding to sustain operations.

Investment Implications

In the short term, Archeru2019s strong cash position and strategic capital raises mitigate immediate liquidity concerns, enabling continued R&D and manufacturing scale-up. However, the company remains risk-laden due to heavy losses, regulatory uncertainties, and market competition. Long-term, successful certification and commercialization of its aircraft could unlock substantial value, but investors should remain cautious of execution risks and high capital requirements. A balanced outlook suggests disciplined monitoring of progress towards certification milestones and market acceptance.