Cadillac extension gives Seeing Machines US$10m boost

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News from Motor Authority that Cadillac is rolling out Super Cruise across its entire range of Cadillacs from the end of 2020 is very positive for Seeing Machines, as the system incorporates its Driver Monitoring System (DMS).

Cadillac

Global sales for Cadillac were 356,00 in 2017 and at approximately US$10 a car (only software being used not the chip, apparently), Seeing Machines can look forward to initial revenues with milestone payments of up to US$10m. Thereafter, annually it is likely to be less unless GM moves to a Gen 2 chip or extends the DMS to its entire range of cars.

The Super Cruise system, which enables safe hands-free semi-autonomous driving, was only this week voted the 2019 Technology of the year by Autoblog.

This extension across the entire Cadillac range is certainly materially important, so I’d expect a full RNS at some point. Personally, I think its the first stage in what eventually will be a roll-out across all GM cars. For, just as every car now has seat-belts, DMS is going to be mandated as an essential system around the world to prevent accidents from driver fatigue and inattention.

I’m also expecting confirmation, whether from news articles or RNS announcements, of several other huge auto OEM wins over the next few months.

Fleet

It’s also very encouraging to learn that First Bus, one of the UK’s leading bus operators, to deploy Guardian to numerous bus services across the UK & Ireland.

In the blog post on the Seeing Machines website (why not via an RNS?) the company revealed: “Following an extended evaluation of at the Reading RailAir coach service, running from Reading train station to Heathrow Airport, First Bus has decided to rollout the technology further across their fleet.

“Phase one of the agreement is the fit-out of Guardian to a number of services in the UK and Ireland and has begun with Glasgow Buchanan Street Bus Station to Glasgow Airport. The installation across the region will comprise a mix of retrofit to existing coaches and new builds with Guardian pre-installed. This phase is expected to cover more than 70 buses and coaches and to be completed in early 2019.”

Broker notes

I look forward to Cenkos, and yes even Canaccord Genuity, soon producing updated estimates for this year and well beyond. This is because I believe projected revenue growth over the next 3 years, led by auto, will amaze many. Moreover, contracted revenues should grow exponentially this year, led by further deals with auto manufacturers who are keen to incorporate Seeing Machines Fovio driver monitoring technology into their cars.

The writer holds stock in Seeing Machines.

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3 thoughts on “Cadillac extension gives Seeing Machines US$10m boost

  1. Definitely a positive development!

    Are you assuming the feature will become standard? Because I can’t figure out a way to get it on the current year CT6 without more than $30k extra in “platinum” trim features. Then again, maybe it is the brains behind the standard “teen driver” feature?

    Thanks again for your updates…

    • I’ve made a correction on the per car revenue for SEE as the Fovio chip isn’t being used. Though to balance that there will be milestone payments. I assume the feature will become standard but I don’t know that for a fact. I thought the CT6 is being discontinued by GM, isn’t that the case?

  2. Good point on the CT6, GM did say it’s being discontinued – I was just pointing out that its not an easy feature to add to that car, it seems as if one really needs to order the absolute highest trim package to get it… To your point, the other cars in Cadillac’s lineup (SUVs mainly, plus future electrics) are likely to be expensive enough to just make the feature standard. Good stuff! Kens comments in his recent interview back this up too (start high-end, spread all the way down over time).

    I think their just-released “Half-year Update” was “enough” and hints at huge future potential…

    Fleet is “independently profitable.” Whew. And sounds as if it will be increasingly so, with around 12K installed now.

    Aviation is going to ramp to a run-rate of a few million dollars over the next few years I believe. They dont talk about this, but as pilots get trained to live among the watching cameras in simulators, an after-market for montoring pilots should develop. I dont want to call it “PMS” for obvious reasons! Given there are thousands and thousands of planes in the sky carrying the most precious of cargo (humans), this could be massively larger over the long run.

    Caterpillar should at least double its high-margin contribution over the next 5 years, “off-road” $3.7 million in high-margin revenues last year. Adding rail to that mix should make that an easy doubling?

    Auto has existing pipeline totaling A$138 million spread across 4 years starting 2021(~$35mm annually), possibly double that amount and could also be even more. They say we’ll know for sure on the first “double” within 5 months (hopefully in time for the 2020 outlook release after full-year results)? Plus, BdMS will be “crystallized” in [calendar year?] 2019 and does not appear to be in guidance.

    Implies annual revenue should easily approach A$100 million within just a few years, and keep growing nicely, with relatively decent visibility into that in my opinion!

    The company did not address gross margin details (improvements, if any), capital needs (if any), or stock exchange upgrades (perhaps a dual-listing?) – important issues to communicate, in my opinion… I hope they share positive developments on these fronts in the next several months.

    This company is worth at least 5 times, and as much as ten times, the valuation on the “AIM.” VERY frustrating. Hopefully those brokers produce some high quality actionable research in the next week or so to get this ball rolling! Fundamentally, the stock should have risen on this update.

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