Archer Aviation's FAA Certificate Is a Milestone, But It Isn't the Final One

Key Points

• Archer Aviation's third-quarter revenue beat estimates, but its per-share loss widened year over year.
• Midnight received an FAA certificate permitting conventional takeoff and landing operations, but full type certification remains outstanding.
• Archer's planned acquisitions could increase revenue, although cash burn and certification delays remain risks.

Shares of Archer Aviation NYSE: ACHR dropped the morning after the company reported its third-quarter 2026 earnings. Archer delivered revenue of $5.1 million, which beat expectations of $3.57 million.

But it's the bottom line that draws concern. Investors were expecting a GAAP loss per share (EPS) of 34 cents. Instead, Archer's results were a penny worse at a loss of 35 cents. The per-share loss also widened from 20 cents on a year-over-year (YOY) basis.

To be fair, analysts had expected the loss to widen YOY. But missing an already low bar is a reminder of what Archer and competitors like Joby Aviation NYSE: JOBY and Vertical Aerospace NYSE: EVTL are attempting to do. That is, create a category with a complex Federal Aviation Administration (FAA) certification process, making valuations difficult for analysts.

That's reflected in analysts' initial responses after the report. Both Needham & Company and Cantor Fitzgerald reiterated bullish ratings on ACHR. However, both firms lowered their price targets to $7 and $10, respectively. Both are below the consensus price target of the analysts tracked by MarketBeat of $11.

Future Revenue Can't Come in Fast Enough

Archer's revenue figure was mostly due to its initial engine deliveries for Anduril's Omen program. Management expects fourth-quarter revenue of $5 million to $6 million, driven by more Omen deliveries and operations at Hawthorne Airport. This is part of the company's strategy to become less reliant on its eVTOL business.

To that end, the company said its acquisitions of Wisk, SkyGrid, and Insitu from Boeing NYSE: BA are close to completion, with just one regulatory approval remaining. Insitu alone has historically generated more than $200 million in annual revenue and positive operating cash flow.

An additional revenue stream is particularly important because Archer is still burning cash as the certification process for its Midnight aircraft continues without a confirmed timeline for completion. The company ended the quarter with approximately $1.35 billion in cash, cash equivalents, and short-term investments, down about $207 million from the prior quarter. It also guided for an adjusted EBITDA loss of $185 million to $205 million in Q4. Cash burn risks will exist as long as the certification process is incomplete.

A Certificate, But Not the Certificate

The FAA headline from the report was that Midnight received a Market Survey Special Airworthiness Certificate. CEO Adam Goldstein called it the company’s most important commercialization milestone to date. It allows Archer to begin piloted flights in Los Angeles, based out of Hawthorne Airport, in the coming weeks.

Why does that matter? Archer plans to use these flights to build toward carrying passengers under the Department of Transportation’s eVTOL Integration Pilot Program. The ultimate showcase is the 2028 Los Angeles Olympic Games, where Archer is the official air taxi provider.

However, investors should be clear on what this certificate is and isn’t. It is not type certification, which Archer needs before routine commercial service. Instead, it allows Midnight to fly in real-world conditions, including over densely populated areas and in busy airspace. To earn it, Archer completed 50 hours of testing in a stable configuration and submitted performance and range data for FAA review.

There’s also an important limitation. Management confirmed the certificate applies to Midnight in its conventional takeoff and landing (CTOL) configuration. That means it takes off and lands like an airplane. Archer has not yet completed piloted transition flight, the shift from vertical lift to wing-borne flight that defines an eVTOL. The company expects to finish that campaign by year-end. It then plans to follow the same process to earn a market survey certificate for vertical operations.

As for type certification itself, Midnight remains in the fourth and final phase of the FAA’s process. In this implementation phase, Archer must demonstrate compliance against the test plans it agreed to with the agency. Systems and equipment testing is underway, but management did not offer a completion date.

Patience Remains the Price of Admission

Should investors be concerned about how long FAA certification is taking? That depends on individual time frames and risk tolerance. Archer has already conducted piloted flights in California, and Goldstein now expects passenger flights to begin in 2027.

This is a new category, and delays in the certification process were expected, albeit perhaps not to this extent. Joby also expects FAA flight testing under its Type Inspection Authorization process to begin in 2027, highlighting the lengthy certification process facing both companies.

Nevertheless, type certification is not guaranteed, although Archer continues to make progress. And that’s where patient investors can take their cue. If Midnight were to fail to get approval, that’s a different conversation. The earnings report did not identify a new certification setback. If anything, the market survey certificate shows the FAA is willing to let Midnight prove itself in busy, real-world airspace.

Institutional buying supports the optimistic view. Over the past year, institutional buyers have outnumbered sellers, according to MarketBeat. That said, institutional ownership is below 60%, and short interest remained above 15% of the float as of Oct. 15, which could contribute to short-term volatility in ACHR.