Seeing Machines has finally reached a milestone that long-suffering shareholders have been waiting for.
Following its FY2026 trading update and Q4 KPIs, the company has achieved positive adjusted EBITDA in the second half of the financial year.
After years of investment, Seeing Machines is beginning to demonstrate the operating leverage that should come as its automotive royalties ramp up.
But profitability may not be the most interesting development.
The production of 2.1 million vehicles fitted with Seeing Machines’ Driver and Occupant Monitoring Systems (DMS/OMS) in Q4 takes the installed base to around 8.2 million vehicles on the road.
That makes Seeing Machines the clear leader in camera-based DMS/OMS and, more importantly, demonstrates that its technology is now being deployed at a genuinely industrial scale.
The significance of that should not be underestimated. At the company’s half-year results, Seeing Machines had just over 4.8 million vehicles on the road. It has added roughly 3.4 million more in just six months.
The company has now moved from an investment story towards a profitable technology business.
Peter McNally, an Analyst at house broker Stifel, appears to agree. In a note published following the latest KPIs, he described the figures as a potential “turning point” for the share price, pointing to further catalysts from rising production, a possible improvement in the Aftermarket business and a potential resolution of the company’s convertible loan note, which is due to be repaid in October.
That is the conventional Seeing Machines investment case.
But there is another story emerging – and potentially a much bigger one.
From cars to robots
Seeing Machines has now secured a contract to deliver a Proof of Concept for its Perception Map sensing technology for industrial robots.
The customer has been described as an unnamed global industrial technology company focused on factory automation and human-robot interaction.
We do not know who it is and I don’t think that is the most important detail. What really matters is that a serious industrial technology company is sufficiently interested in Seeing Machines’ technology to test it in robotics.
The customer may ultimately become a major commercial partner (or already be one). Equally, it may simply be the first of several companies now looking closely at what Seeing Machines has developed.
That is potentially much more significant than the value of the initial PoC.
For years, Seeing Machines has been developing technology that enables machines to understand humans.
In a car, that means recognising where a driver is looking, whether they are distracted or fatigued and what they are doing. The company has subsequently extended this capability into broader occupant monitoring and 3D cabin perception.
Now the same fundamental expertise is being applied outside the vehicle.
A robot working alongside humans needs to understand where those humans are, what they are doing and how they are likely to behave.
A humanoid robot operating safely in the real world will require an even more sophisticated understanding of people.
This is why the Perception Map development deserves attention.
It suggests that Seeing Machines’ technology may have applications far beyond the transport market.
The company’s addressable market could be changing from the monitoring of people in machines to enabling machines to understand people.
A technology looking for new markets
That distinction matters.
Seeing Machines has spent more than two decades developing expertise in computer vision, machine perception and human factors.
The automotive industry has provided the first enormous commercial opportunity for that technology.
But it will not be the last.
Over the next six months, its technology will be advancing across an extraordinary range of applications:
Autos.
Trucks.
Aviation.
Trains.
Industrial robots.
And potentially humanoids.
I am not suggesting Seeing Machines has suddenly become a humanoid robotics company. It hasn’t.
Nor has it necessarily announced a contract with a humanoid manufacturer. Though some of its existing partners are moving in that direction.
The industrial robotics project is a Proof of Concept, and there is no guarantee that it will become a significant commercial business.
But the technological progression is logical.
A driver-monitoring system needs to understand a human’s head position, gaze, attention and behaviour.
An occupant-monitoring system needs to understand multiple humans within a shared environment.
A robot working alongside humans needs to understand those humans and its surroundings.
And a humanoid robot will ultimately need to do the same thing in an enormously more complicated environment.
This is why I have long believed that Seeing Machines’ technology could eventually find its way into humanoid robots.
The opportunity is not necessarily for Seeing Machines to manufacture robots.
It could be much simpler – and potentially more profitable.
It could license the technology that helps those robots understand the humans around them.
And then there is Mitsubishi
I want to mention a thesis I first outlined more than a year ago: that Seeing Machines’ relationship with Mitsubishi could eventually lead to a takeover.
Mitsubishi Electric Mobility invested £26.2 million in Seeing Machines and now owns 19.9 per cent of the company.
The relationship has been focused on automotive applications, aftermarket sales and expanding Seeing Machines’ technology into new markets.
But the more Seeing Machines’ technology moves beyond cars, the more interesting that investment becomes.
Mitsubishi is not simply a Japanese automotive supplier. It is a huge, global industrial technology group with interests in factory automation and robotics.
Which brings me to the question I increasingly find myself asking: “What is Seeing Machines worth to Mitsubishi if its technology becomes strategically important to robotics as well as automotive?’
That is a very different question from asking what Seeing Machines is worth based purely on its automotive revenues.
If Seeing Machines remains primarily an automotive DMS supplier, Mitsubishi’s 19.9 per cent stake can be viewed largely through the prism of the automotive partnership.
But if Seeing Machines develops a commercially valuable perception platform that can be deployed in factories, industrial robots and eventually humanoid machines, its strategic value to Mitsubishi could be considerably greater.
And Mitsubishi is unlikely to be the only company capable of reaching that conclusion.
The race to secure the technology
This is why I don’t think it matters particularly who the unnamed customer is.
The important development is that the technology has crossed another threshold. Someone operating in the industrial robotics industry is sufficiently interested to test it.
If that Proof of Concept succeeds, other companies are likely to take notice.
They will have to ask themselves a simple question: if Seeing Machines really has developed a technology capable of giving machines a better understanding of humans, when should we secure access to it?
The answer may be different depending on the company.
Some may want a commercial partnership.
Some may want to license the technology.
Some may want to develop it jointly.
And some may conclude that owning the technology is preferable to licensing it.
That is where the strategic value of Seeing Machines becomes particularly interesting.
The longer the company remains independent while demonstrating successful applications in new markets, the more valuable the technology could become.
But that also creates a dilemma for a potential acquirer. Why wait until the robotics opportunity is proven if you believe it is coming?
An acquisition today could potentially value Seeing Machines largely on the basis of its rapidly growing automotive business, while giving the buyer the upside from robotics.
Wait until the technology is proven commercially and the price could be considerably higher.
And by then, other potential buyers may have noticed the same opportunity.
Could Mitsubishi make a bid?
I think that the most logical initial bidder for Seeing Machines would be Mitsubishi.
It already owns 19.9 per cent.
Its engineers have been working with Seeing Machines.
It has an established commercial relationship with the company.
And it has already conducted the due diligence required to make a substantial strategic investment.
The expansion into industrial robotics makes the relationship even more interesting.
If Seeing Machines’ perception technology proves useful in factories and collaborative robots, Mitsubishi would be exceptionally well placed to exploit it.
That does not mean a bid is necessarily imminent. I have no proof that Mitsubishi is currently preparing one, and investors should not confuse my thesis with an announced transaction.
But the strategic logic is becoming stronger.
I continue to believe that, if Mitsubishi eventually decided it wanted full control, a friendly transaction – potentially through a Scheme of Arrangement – would be the most natural route.
But I no longer think Mitsubishi necessarily needs to be the end point of the investment thesis.
The more important possibility is that Seeing Machines becomes strategically valuable to a number of global technology companies. For example, it is already working with Waymo – a subsidiary of Alphabet. It is working on AI brains for robots and SEE’s tech might be a useful addition.
If that happens, Mitsubishi’s 19.9 per cent stake could turn out to be considerably more valuable than simply a strategic investment in an automotive supplier.
Two potential catalysts
The next six months could, therefore, be exceptionally important for Seeing Machines for two reasons.
The first is the refinancing of its convertible loan note, which is on track to happen in the next few weeks.
Management has already indicated that it is working towards refinancing the facility. A successful refinancing would remove one of the principal uncertainties surrounding the company and allow investors to focus more clearly on the underlying business.
The second is the robotics Proof of Concept.
A successful PoC would not immediately transform Seeing Machines’ financial results, but it could do something potentially more important. It could provide evidence that the company’s perception technology has commercial value outside automotive.
Put those two developments together and the potential significance becomes clearer.
The refinancing would remove the financial overhang at precisely the time that the robotics development begins to demonstrate strategic value.
That could create a catalyst not only for the share price, but for corporate action.
A potential acquirer looking at Seeing Machines today might see a profitable company with rapidly increasing automotive production and a promising robotics project.
Six months from now, it could instead see a profitable automotive technology company whose perception platform has been validated in industrial robotics and whose balance sheet has been strengthened by a successful refinancing.
That could be a very different proposition.
The inflection point
This is why I think the latest news represents something more important than a good set of quarterly numbers.
The automotive business is finally reaching scale.
Profitability has arrived.
The number of vehicles on the road is accelerating.
The Aftermarket business still offers upside.
The regulatory tailwind from mandatory driver monitoring is strengthening.
And, just as investors are beginning to see the financial rewards of the automotive investment, the company is opening another door into industrial robotics.
The real visionary in all of this may ultimately be Tim Edwards, who, alongside Seeing Machines’ original founders, began working decades ago towards a world in which machines could understand humans.
The technology is now moving into markets that barely existed when that journey began.
The next six months may therefore tell us considerably more than whether Seeing Machines can make money from driver monitoring.
They could begin to tell us what the technology is actually worth.
And perhaps the most interesting question is not whether Mitsubishi wants to own Seeing Machines.
It is: “What is Seeing Machines worth to Mitsubishi if its technology becomes strategically important to robotics as well as automotive?”
That is the question I suspect an increasing number of potential customers – and perhaps potential acquirers – will soon be asking themselves.
The writer holds stock in Seeing Machines.