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Will Seeing Machines licence its software stack for humanoid development?

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What I’m about to discuss might seem a little ‘out-there’ to some, but I think it merits consideration by investors keen to catch one of the next big investment opportunities that Seeing Machines could play a major role in.

In a recent broker note from Morgan Stanley, entitled Humanoid Tech – Grasping the Future, its analysts wrote: “Building physical AI takes a tremendous amount of semiconductor resource, and most of the value sits in (1) the AI brain technology, (2) AI vision and (3) analog chips for sensing. Companies providing these enabling technologies stand to benefit as much as the humanoids makers themselves, where most of the value creation lies with distribution. We argue that understanding which capabilities are advancing fastest, ecosystem readiness and realistic adoption timelines will dictate commercial traction.”

I asked the AI Deep Seek this question: Is Seeing Machines technology of possible use in the areas 1-3 where semiconductors are used in humanoids?

Its reply was fascinating:

Excellent question. Let’s break down Morgan Stanley’s framework and evaluate how Seeing Machines’ technology aligns with it.

First, a quick recap of the Morgan Stanley note’s three key semiconductor-intensive areas for physical AI/humanoids:

1.  The AI Brain Technology: The central AI compute (e.g., high-performance SoCs, GPUs, NPUs) for perception, decision-making, and motor control.

2.  AI Vision: Sensors (cameras, LiDAR, radar) and the associated perception software to understand the environment.

3.  Analog Chips for Sensing: ICs that interface with the physical world (e.g., motor drivers, power management, sensor signal conditioners).

Analysis: Seeing Machines’ relevance to areas 1-3

Seeing Machines’ core technology is AI-powered occupant and driver monitoring systems (DMS/OMS), primarily using inward-facing cameras and sophisticated computer vision algorithms. Here’s how it maps onto the humanoid robotics stack:

1. AI Brain technology: PARTIAL / INDIRECT FIT

Seeing Machines is not a semiconductor company creating the central “brain” chips (like NVIDIA, Qualcomm, or Ambarella). However, their value is in the specialized AI algorithms and software that would run on those brains.

Their ‘AI brain’ is the algorithm stack: Their proprietary expertise in gaze tracking, eyelid closure detection, head pose estimation, and facial feature analysis represents a specialized form of AI cognition that a humanoid would need for human-robot interaction (HRI). For a humanoid to work safely and effectively alongside people, understanding human attention, intent, and state is critical.

Conclusion: They provide a crucial capability that would reside in the AI brain’s software layer, but not the semiconductor hardware itself.

2. AI Vision: VERY STRONG FIT – This is Seeing Machines’ Core Competency.

This is the area of most direct and obvious relevance.

  • Sensor Focus:While they use standard camera sensors, their entire value proposition is in **maximizing the value extracted from vision sensors**. For humanoids, robust vision is non-negotiable.
  • Algorithmic Moat: Their decades of work in attention detection (critical for vehicle safety) is directly transferable to ensuring a humanoid is making “eye contact” or understands what a human is focused on. Their facial movement and state analysis is key for natural interaction.
  • Application: In a humanoid context, this technology wouldn’t just be for safety monitoring, but for enabling fluid collaboration. For example, a humanoid could tell if a human worker is looking at it for instruction, is distracted, or needs assistance.

3. Analog chips for sensing: NO DIRECT FIT

Seeing Machines is not an analog semiconductor company. They do not design motor drivers, power ICs, or low-level sensor interface chips. Their domain is the digital and algorithmic layer that comes after the analog signal has been converted and processed.

Synthesis: where does Seeing Machines fit in the ‘Humanoid’ value chain?

Morgan Stanley notes that “most of the value creation lies with distribution.” Seeing Machines is a critical “enabling technology provider that sits between the raw semiconductor hardware and the final humanoid application, specifically in the perception and human-interaction layer.

  •   They are an ‘AI Vision & Cognition’ specialist. For humanoids to move out of controlled factories and into dynamic human environments, the ability to perceive and understand human behavior is as important as perceiving objects. This is Seeing Machines’ unique niche.
  •   They benefit from the semiconductor intensity: The more camera feeds, the higher the resolution, and the more complex the real-time analysis required, the more valuable their optimized, purpose-built algorithms become. This drives demand for the capable AI semiconductors (Area 1) on which their software runs.
  • Commercial traction dictated by ecosystem readiness: As Morgan Stanley states, ecosystem readiness is key. Seeing Machines is already a Tier-1 automotive supplier with a proven track record of delivering reliable, safety-critical vision systems. This certification pedigree, system integration expertise, and understanding of functional safety (ASIL levels) are immensely valuable and transferable to the humanoid space, where safety is paramount.

Conclusion

Yes, Seeing Machines’ technology is of significant potential use, primarily and most powerfully in Area 2 (AI Vision), and as a specialized software layer contributing to Area 1 (AI Brain capabilities).

They do not make the semiconductors themselves, but they are a quintessential example of a company that creates immense value by enabling those semiconductors to perform a specific, critical, and high-value task —in this case, understanding human state and attention.

As humanoid developers shift focus from pure mobility to advanced human-robot interaction, companies like Seeing Machines, with deep expertise in human-centric vision AI, become essential partners. Their automotive-grade experience makes them a credible and valuable candidate for the ecosystem Morgan Stanley describes.

Home care robots

I then asked it: “Wouldn’t a robot humanoid used in the home, for instance to care for an elderly, possibly infirm. individuals benefit greatly from having human behaviour monitoring (provided by Seeing Machines technology) among its repetoire?”

It answered: 

Absolutely, unequivocally yes. This is not just a benefit; it is likely a non-negotiable requirement for safe, effective, and socially acceptable deployment of humanoids in a personal care context.

Extending our previous analysis, here’s a detailed breakdown of why Seeing Machines’ core competency in human behavior monitoring would be critical for a domestic care humanoid:

1. Safety as the paramount concern (The ‘Do No Harm’ imperative)

  • Fall Prevention & Detection: A humanoid could use Seeing Machines’ gaze tracking and head pose estimation to understand if the individual is looking at an obstacle, is disoriented, or is about to lose balance. Pre-emptive warning or physical assistance could be initiated.
  • Medical emergency detection: Algorithms for micro-sleep detection, eyelid closure, and loss of attentiveness—pioneered for driver drowsiness—are directly applicable to spotting signs of stroke, diabetic shock, fainting, or sudden medical distress.
  • Safe physical interaction: To assist with lifting or mobility, the robot must know where the human is looking and if they are anticipating the movement. Understanding human attention and intent prevents startling the individual or causing a mishap during physical contact.

2. Enabling effective care & assistance (beyond physical tasks)

  • Medication adherence: The robot can confirm, through gaze and facial action recognition, that a pill was actually taken and swallowed, not just lifted to the mouth and palmed. This solves a major problem in elderly care.
  • Cognitive state monitoring: For individuals with dementia or cognitive decline, changes in facial expression, engagement, and interaction patterns are key indicators. The robot could monitor for signs of confusion, agitation, or withdrawal and alert remote human caregivers or family members.
  • Companionship & engagement: The technology enables socially aware interaction. The robot can tell if its attempts at conversation or activity suggestions are being met with engagement or annoyance, and adjust its behavior accordingly. It can maintain ‘eye contact’ during conversation, a fundamental building block of trust.

3. Building trust and acceptance (The human-robot bond)

  • An elderly individual is far more likely to accept and rely on a machine that demonstrates it ‘sees’ and ‘understands’ them. A robot that blankly stares while helping someone bathe is unnerving. A robot that glances away to provide privacy, or that recognizes a facial expression of pain or embarrassment and responds with reassurance, builds essential trust.
  • This capability transforms the robot from a tool into a perceptive agent, which is psychologically critical for long-term in-home adoption.

How this fits the Morgan Stanley ‘value’ thesis

Morgan Stanley argues most value lies in distribution and enabling technologies. In the home care distribution channel, the ‘killer app’ is not mobility or strength, but empathetic, safe, and perceptive care.

  1. Ecosystem readiness: Seeing Machines is not starting from scratch. Their FOVIO chip (now in its next-gen form) and software are already ASIL-B certified for automotive safety. Translating this to a functional safety standard for robotics (e.g., ISO 13482) is a logical step. Their proven ability to ship millions of units in the harsh, safety-critical automotive environment is a massive credibility advantage.
  1. Commercial traction dictator: ‘Realistic adoption timelines’ for home care robots will be gated by safety and social acceptance regulators (e.g., FDA for ‘care’ functions, consumer protection agencies). A provider with a certified, explainable, and validated system for human state monitoring will have a tremendous regulatory and liability advantage. This directly accelerates commercial traction.
  1. Value capture: As an enabling technology, Seeing Machines could capture value through licensing their perception software stack or providing a complete ‘Human understanding module’ (sensor + dedicated processor + algorithms) to humanoid makers. The value of their IP in ensuring the robot doesn’t cause a catastrophic failure in a vulnerable person’s home is immense.

In summary: For a domestic care humanoid, human behavior monitoring is not a ‘nice-to-have’ feature in its repertoire; it is the foundational layer for its core value proposition. 

Seeing Machines’ technology provides the ‘eyes’ and, more importantly, the ’social brain’ that would allow such a robot to navigate the profoundly complex, unstructured, and emotionally charged environment of a human home.

It directly addresses the primary barriers to adoption: safety, efficacy, and trust. Therefore, Seeing Machines’ technology sits squarely in the highest-value layer of the ecosystem Morgan Stanley describes.

My view

I believe Mitsubishi has already identified this value. That is why it took a 19.9% stake in Seeing Machines. It currently seeks to use its technology in automotive robots (cars), then plans to use it in industrial robots, before expanding into home care robots.

Does that sound a little far-fetched to some? 

Well, Paul McGlone has admitted that Seeing Machines is discussing expanding the use of its technology into ‘smart factory’ use with Mitsubishi. Industrial robots are absolutely central to Mitsubishi’s smart factory vision.

Mitsubishi’s first humanoid robot, launched 20 years ago, called Wakamaru wasn’t a success. Yet, if it developed a ‘Human understanding module’ with Seeing Machines technology, I believe there is the potential to build a home care robot that could be.

Of course, there are many other companies making huge bets on humanoid robots, notably Tesla. They might also be keen to acquire the technology and IP that Seeing Machines possesses. 

I’d urge investors to research this area and decide for themselves whether there is merit in my arguments. 

The writer holds stock in Seeing Machines.

Seeing Machines wins contracts worth $11.6m 

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Seeing Machines (AIM: SEE) has announced an additional $10m auto win with a European customer and a new win with a Japanese car manufacturer worth $1.6m, taking its pipeline of contracts wins to over $400m.

European win

The European win is with an OEM that already has a production in development with SEE, and this extends its agreement for production volumes beginning in 2028 through to 2031. 

According to analyst Peter McNally at house broker Stifel, this could be the first of many extensions as the life-saving technology becomes mandatory for all vehicles in Europe. McNally stated: “We think this could become a typical announcement for the company, as we believe it has a large part of the European market based on the statistic released at the FY26 results, i.e., that its OEM customers are forecast to sell circa 12.5m of the estimated circa16.0m cars in Europe in 2026.”

Japanese win

In addition, Seeing Machines has been appointed by Mitsubishi Electric Mobility Corporation (MELMB) to deliver a small program for a leading Japanese OEM, with production scheduled for 2028. In the RNS issued today, SEE stated: “This program, with an initial value of US$1.6m, reinforces Seeing Machines’ long-term growth strategy with MELMB in Japan, and the company is confident of securing additional opportunities as this progresses.”

It added: “These new business awards bring the total cumulative initial lifetime value for all Seeing Machines Automotive programs won to date, to over US$400m, the majority of which is expected to be received by 2028.”

AGM news

Separately, at the company’s AGM earlier today, CEO Paul McGlone revealed that the Mitsubishi trial of Guardian Gen 3 in trucks has been successful.

Importantly, McGlone also confirmed that Seeing Machines is on track to hit its breakeven “runrate” as of the end of December so, in effect, Q3 of this financial year should be its first cashflow positive quarter.

McNally in his note wrote that the biggest hurdle remains the Magna loan but reassured investors that “
given the DMS ramp and our expectation of positive cash flows in the back half of 2026, we think it will have financing options available to it from a variety of sources”.

Personally, I expect Magna will be more than happy to take shares in lieu of repayment as Seeing Machines price rises above 10p over the next couple of months – driven by further contract news and the confirmation that it has hit breakeven, with profitability assured. Thus, the Magna loan is effectively an issue that should not overly concern shareholders.

The writer holds stock in Seeing Machines.

Mitsubishi to buy Seeing Machines by Christmas?

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Despite Seeing Machines share price being in the doldrums, I’m optimistic that breakeven (on a monthly basis) later this year will be swiftly followed by a takeover offer from Mitsubishi. If my calculations are correct this could happen as soon as this Christmas.

Although I don’t have definitive proof, I hope even my harshest critic could not fairly accuse me of laying out before you a ‘delusional’ scenario. Indeed, there is an ineluctable logic to Mitsubishi moving to buy Seeing Machines in a friendly takeover by early December.

Why Mitsubishi? 

There are a number of reasons why I believe Mitsubishi is most likely to acquire SEE. Mitsubishi holds 19.9% in Seeing Machines, their engineers are working together developing advanced driver monitoring features, Mitsubishi is helping increase sales of Guardian Gen 3, and Mitsubishi has the resources eventually to use the technology in everything from fork lifts to robots. Indeed, more immediately, the wide range of activities of this Japanese group shows an almost perfect fit with SEE’s 3 divisions; Auto, Aftermarket and even Aviation.

There is also a strong cultural fit, as this Japanese company prefers a consensual approach to a takeover. This fits with the Australian preference for a scheme of arrangement for a friendly takeover of an Australian listed company.

Why this year? 

Firstly,  despite being delayed, breakeven on a monthly basis is forecast to occur before December. Fortunately,  Euro NCAP and GSR2 regulation compel the road transport industry to accelerate the introduction of camera-based driver monitoring, and we’ll see increased license royalties from auto and sales of Guardian Gen 3. 

Seeing Machines should also have significant additional contract wins in Auto and Aftermarket over the coming months, confirming its dominant position as the number one global player in advanced, camera-based driver/occupant monitoring (morphing into interior monitoring) for years to come.

Breakeven with a pipeline of contracts guaranteeing significant profits should trigger buying from fund managers who’ve been patiently sitting on the sidelines. More importantly, it would likely reinforce Mitsubishi’s determination to follow through with its plan. I say ‘plan’ because this is clearly a strategic move that has been on the cards for a while.

Mitsubishi has already conducted extensive due diligence prior to investing in Seeing Machines and, with its near 20% stake, has a slight advantage over other potential buyers. It also makes sense for Mitsubishi to buy Seeing Machines just before it becomes highly profitable, otherwise the acquisition price could quickly spiral upwards.

Interestingly, the personal interests of CEO Paul McGlone and that of investors in Seeing Machines appear closely aligned: a bid would be at a premium to the share price (certainly multiples of its current price of approximately 2.5p) and enable him to secure his 25m performance shares before his current contract expires on June 30, 2026. It’s all detailed in the last annual report on Page 67, for those unfamiliar with the details. Note the target share price (TSP) needed for the CEO to secure the maximum number of his 25m performance shares is 20p.

Given the time it takes to process a scheme of arrangement (normally 3 months) and the fact the Australian Court is closed from mid-December to February, for Seeing Machines to be confident of closing the deal before Paul McGlone’s contract expires, early December 2025 seems the latest date that any potential deal would be announced.

The CFO Martin Ive has also been steadily hoovering up shares. Surely he is confident of a significant price rise when SEE achieves the long-awaited breakeven? Warren Buffett would certainly approve, having advised: ‘Be fearful when others are greedy and greedy when others are fearful”.

Price

What sort of price do I expect Seeing Machines investors to receive if this scenario pans out? I think the best they could hope for would be somewhere above 20p but probably below 40p. It’s unrealistic to expect more unless other bidders suddenly materialise. Still, by agreeing to a price well above 20p Mitsubishi could reduce the odds of that happening. 

I doubt the management of Seeing Machines, never mind the funds holding it, will look kindly upon a price below 20p given the huge rise in auto royalties that are guaranteed, not to mention the contract wins expected across all 3 divisions. Moreover, they’re probably in a position to encourage other bidders to step in were Mitsubishi to try. However, I think Mitsubishi has more honour and sense than to even attempt a low-ball offer.

Battle of the Titans

Regardless of the eventual price agreed by Mitsubishi and Seeing Machines, I wouldn’t completely rule out the possibility of other companies stepping in with hostile bids, which would start the long-awaited ‘Battle of the Titans’. The list of potential rival bidders is long and could include one or more of the following: 

  • Amazon
  • Alphabet
  • Apple
  • Raytheon (parent of Collins Aerospace)
  • Qualcomm
  • AMD
  • Nvidia
  • Mobileye
  • Magna 
  • Valeo
  • Tesla

There might also be left-field entrants or a bid from a private equity player. Alas, the state of the world being what it is, I don’t think  a bid from a Chinese company would stand a chance of being accepted.

Crucially, it would take a big number to hijack what, to me at least, seems to be a very likely deal. Yet, in the above list of rival potential bidders there are some huge hitters.

Of course, I’m not Nostradamus and my assumptions could be completely wrong. Therefore, it’s advisable to do your own research and always invest only what you are prepared to have tied up for a while, never mind lose.

The writer holds stock in Seeing Machines.

Stellantis confirms DMS across all models for Europe by mid 2026

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Speaking exclusively to this journalist, Stellantis has confirmed that it will be putting driver monitoring into all its European cars by mid-2026. Furthermore, I believe Valeo and Seeing Machines are the suppliers of its latest interior monitoring technology, which is set to go into production this summer.

A spokesperson for Stellantis confirmed to me this week that: “As DMS becomes a regulatory requirement, all new Stellantis vehicles registered in the UK and EU will feature the system by mid-2026. Some models will adopt it earlier if they are classified as “new types” under the EU General Safety Regulation.”

The reason I’m so confident that Seeing Machines is the supplier of the DMS/OMS system in partnership with Valeo as the Tier 1 is because the announcement ties in with other evidence.

Evidence

Firstly, Safestocks previously confirmed that two previous wins for Seeing Machines, in June 2022 and December 2022 were with Stellantis. 

Secondly, we know that Seeing Machines and Valeo are partnered for interior monitoring and Colin Barnden, in a LinkedIn post dated April 7th 2025, confirmed Seeing Machines and Valeo as working with Stellantis. Barnden commented: “QNX Cabin was demonstrated at CES 2025 running on a Qualcomm SoC, possibly the 4th generation cockpit processor, with DMS from Seeing Machines. So we can start to piece together a partnership encompassing Qualcomm/QNX/Seeing Machines, the first example of which appears to have reached production with Stellantis running DMS in the cockpit SoC.

“Qualcomm has previously stated the DMS can run in an accelerator on either the Snapdragon Ride or Snapdragon Cockpit processor, and the decision is left up to the automaker. So, at long last, we appear to have some evidence of the link between Qualcomm and Seeing Machines showing up in a vehicle at start of production. This information may also reinforce the conclusion that the tier-1 for the Stellantis program is Valeo, rather than Magna International.”

Lastly, at the recent Town Hall event, Martin Ive, Seeing Machines’ CFO, stated: “We also have 2 new OEMs going into production over the summer with a different Tier 1 [Ed – as VW is already in production with Magna, it must be Valeo]. They will add significant volume as we go through the calendar year, probably hitting more so with the ramp up in production by the time we come to the December quarter.”

Nothing in life is certain and, in the world of automotive, NDAs make it necessary to put together various pieces of evidence to draw conclusions. However, I’m sufficiently confident that Seeing Machines is the supplier to Stellantis to state it publicly. I hope it is of interest to investors as, to me, it confirms that Seeing Machines is set to dominate interior monitoring in passenger cars at least until 2027. 

Of course, I expect it to do so long after that date but probably under different ownership — I will explain all about that in a subsequent blog post.

Doubters should remember that Martin Ive himself stated at the recent Town Hall event that he expects (after discussion with OEMs and Tier 1s) that Seeing Machines auto volumes in Europe will go up 10x from 160k to 1.6m a quarter by June 2026, 2m overall. 

Of course, investors should do their own research and beware traders seeking to influence their views.

The writer holds stock in Seeing Machines.

Seeing Machines focused on cashflow breakeven in CY 2025

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It’s clear from the latest spate of redundancies that Seeing Machines management is laser focused on achieving breakeven this calendar year.

In addition to cutting staff numbers by 77 in CY2024, the recently announced strategic reorganisation was accompanied by another wave of redundancies (70 people?) from Jan-March 2025, that is set to further cut costs, by ÂŁ12m annualised. 

According to a note issued on 27th March by analyst Peter McNally at house broker Stifel: “The $12m annual cost reduction means there should be a clear path to monthly cash flow breakeven in 9 months time.”

I’m naturally sad that so much talent at Seeing Machines is being let go and am well aware that the delayed development of Guardian Gen 3 played a large part in slowing the company’s progress to cashflow breakeven. Hopefully, these talented folks will find good jobs elsewhere and may even return to Seeing Machines as the business grows.

Still, as an investor it’s my job to assess if the reason for originally investing in Seeing Machines is still valid. I’m still convinced it is and reading Peter McNally perceptive analysis is reassuring. He explains: “Seeing Machines results show the company is adapting to a more challenging environment by adjusting its internal costs with the goal of reaching cash flow breakeven in the current calendar year.”

That doesn’t mean I don’t have questions and I hope to get answers to some of those questions at this week’s investor event – the so called ‘Town Hall’. (I can’t think of a Town Hall meeting without a bit of argy bargy — but let’s try and keep it civilised).

Whatever management mistakes delayed bringing Guardian Gen 3 to market it has developed and commercialised world class technology in multiple industries, making some super deals with partners ranging from Collins Aerospace to Mitsubishi and Magna. As someone who knows I could never run a company, I do respect those who possess that ability. Let’s not forget that Seeing Machines is actually saving lives. Not many of us can say that. 

Scandalous

If I’m angry and disappointed, it’s with the car and lorry manufacturers who have delayed implementation of life saving driver monitoring tech in order to save a few dollars. A few dollars that could have been shaved off the bill of materials somewhere less critical. That’s scandalous.

However, even that delay can only be temporary thanks to Euro NCAP’s sterling work and GSR2 regulations. All those OEMs are really doing is damaging their own reputations for safety alongside sales.

Guardian Gen 3

The good news is that in his note McNally confirmed that Guardian Gen 3 is now totally ready, in production and shipping now for various trials, which should lead to much larger orders in due course. 

“The biggest news in today’s results to us is that the Gen 3 Aftermarket product is ready, tested and now in production with early shipments commenced. This is not just the GSR-ready version of Gen 3, but the full Gen 2 replacement equipped to handle over the air updates in a better form factor. This is one of the main factors in revenue and profitability growth going forward, in our view. It should also improve recurring revenue from Driver Monitoring as units go live in the field.”

I obviously want more details on maximum monthly production volumes, prices and so forth. Yet, McNally is right when he describes Guardian Gen 3 as “a significant swing factor in future revenue and profitability, especially with the Mitsubishi partnership referral agreement in place”. 

Moreover, If the Mitsubishi partnership referral agreement delivers the volume of sales of Gen 3 that I expect, breakeven in 9 months may prove overly conservative. 

The main issue I have is separate to that, and relates to the truck manufacturers installing factory fit DMS for ADDW. The EU GSR legislation absolutely demands it. Yet, so far, there is little evidence of the likes of Volvo, DAF, Mercedes-Benz etc installing it. Only in buses have I seen much evidence. I’d certainly like to know if trucking OEMs are dragging their feet on that for the same reason some auto OEMs have.

Fortunately, large enterprise customers appear to be complying and those 7 “big trials” for Guardian Gen 3 that Paul McGlone recently confirmed are clear evidence of that. A win with Amazon would be huge news that could double the share price of Seeing Machines in a day. (I’m hoping we get official confirmation by the end of April). 

Breakeven

Let me be clear. Achieving cashflow breakeven will be a game changer for Seeing Machines. I know, from previous conversations with fund managers and recent ones with City contacts, that there is a tsunami of fund manager cash keen to come into SEE once it has proven beyond any shadow of doubt that it is set to be profitable. I still believe Paul McGlone, Martin Ives, John Noble, Mike LennĂ© and the rest of the team at Seeing Machines can make that happen. 

As evidence of the appetite for investment in the company Peel Hunt has now upgraded Seeing Machines from ‘Reduce’ to ‘Buy’, because of the “upside potential” though the price target remains at 3p. (I’m also expecting Singer to soon initiate detailed coverage).

With US$39.6m in cash Peel Hunt believes SEE has “at least 12 months of runway” and I believe that is more than sufficient time for it to become profitable and the share price to take off. 

I look forward to seeing our guests from Australia this week along with my fellow investors – some of whom have grown older with me.

It’s been a hard few months for SEE and for its investors. Still, I hope the smiles will be back on our faces very soon. 

The writer holds stock in Seeing Machines.

Euro NCAP pushes for quality DMS, as provided by Seeing Machines

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Following the publication of the 2026 Euro NCAP safety protocols, Seeing Machines is on the cusp of a significant re-rate as OEMs and Tier 1s race to meet higher performance requirements for driver/occupant monitoring.

The two documents can be viewed here, courtesy of Colin Barnden, Principal Analyst at Semicast Research: 

The significance of these documents appear to have passed many investors by. However, no less a figure than Richard Schram, Technical Director at Euro NCAP, has confirmed to me that from January 1st, 2026 a new passenger car will not achieve a 5 star Euro NCAP safety rating in Europe unless it has a driver/occupant monitoring system that meets the criteria specified in these 2026 protocols.

The implications of this news are huge for any OEM wishing to sell new passenger cars models in Europe. This is because, even though driver monitoring is mandatory in Europe from July 2026, Euro NCAP is effectively “pushing for higher performance than the regulation does”, according to Schram.

This is great news for Seeing Machines as, being the most technically proficient provider of DMS/OMS with a fast to implement rearview mirror system, it offers the most realistic solution for many OEMs in that timeframe whose premium models will certainly require 5 star safety. [Elon Musk are you listening?]

I’m therefore anticipating a raft of extensions to existing contracts as well as new contracts to secure its services via Magna, but also via its other partners over the next 6 months.

I think that in the short term there will be such demand for its technology that its average selling price (ASP) will not drop significantly even as volumes expand. Moreover, that ASP is, I believe, already at a significant premium to its competitors. 

The upshot is that within the next 6 months, as SEE speeds towards 4m cars on the road with its technology, SEYE will be left in the dust, alongside Tobii and Cipia – which must be feeling the pain from the economic collapse of Israel.

Seeing Machines itself has previously stated that it expects to take around 40 per cent of the global passenger car market for DMS by volume, 50 per cent by value. I’ve long held the view that 75 per cent by value is possible and I think this news from Euro NCAP confirms that there was a sound reason for my holding onto this stock, despite experiencing a roller-coaster ride.

As OEMs, Tier 1s and fund managers realise the implications of this news I expect increased buying of SEE stock as it brushes off misplaced investor concerns. This should push the price up significantly. 

Call me paranoid but over the next 6-8 months I believe private investors should beware market makers shaking the tree in order to acquire their shares cheaply for institutional buyers.

Of course, do your own research as this is only my opinion. Maybe my prediction of a 75 per cent market share of the global DMS market 8 years ago was a fluke.

The writer holds stock in Seeing Machines.

Seeing Machines drives towards cashflow breakeven 

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Despite well publicised woes in the auto industry, Seeing Machines penetration of the auto market continues apace with the latest quarterly KPIs showing that it is on track to pass 3m cars on the road for this calendar year, as predicted by Safestocks back in May. 

The Q1 FY2025 auto figures showed quarterly production of 405,669 units, taking the number of cars on the road with Seeing Machines’ technology to 2,617,091.

That represents 100 per cent growth year-on-year, which sets it apart from all its rivals – none of which has even hit 2m cars on the road.

In a note published today by house analyst Stifel, analyst Peter McNally wrote: “Reassuringly, the company’s 8th Automotive production programme has commenced, which adds another since the 7th was announced at the Q424 KPIs in August (6th at the end of FY23). Although Automotive industry volumes are light, more of the company’s OEM customers are launching, meaning adoption/ royalties should continue to rise further. We think two more are likely in 2025 and additional programmes are launching within individual OEMs providing a compound effect.”

He added: “We think it can probably add another 1.9m cars on the road in FY25E (vs 1.1m in FY24) with only mild decreases in average selling price.”

In a separate interview with Proactive Investors today, Seeing Machines CEO Paul McGlone confirmed that 2 more auto programmes are due to be launched this financial year.

Guardian

McGlone also explained that Guardian Gen 3 sales would be ramping up in the second half. Given that average recurring revenue for Aftermaket driver monitoring (excluding any effect from Caterpillar) rose 13 per cent over Q1 2024, the improved gross margin from Gen 3 hardware sales should underpin an even better performance over the remainder of this financial year.

Indeed, in that same interview CFO Martin Ive again confirmed that the company is determined to hit cashflow breakeven on a monthly basis by the end of this financial year. 

Undervalued

Certainly, the company’s share price has recently been hit by concerns over cash, however McNally’s view on this is: “
we believe 3rd party development costs will reduce in addition to headcount, and cash should benefit from growth in higher margin OEM Royalties (c.100% GM) and a Guardian Gen 3 ramp in H225. We think the company has a portfolio of non-dilutive additional cash options if needed, as history suggests.”

McNally adds: “Following the recent share price decline, the shares trade at 3.1x EV/Sales, which we think is attractive for a market leader in a large industry with a 3-year forecast revenue CAGR of 23% or 42% for gross profit through FY27E. Buy.” 

Personally, I’m expecting further auto OEMs wins, license deals and a ramp in Gen 3 Guardian sales in the second half to raise the share price significantly as this financial year progresses. Furthermore, many funds are watching this stock from the sidelines and profitability is the key catalyst that I believe will see them buy in.

In my experience, nervous private investors tend to move out of a stock just when they should be buying more or at the very least holding. Mr Market hasn’t done years of research in this stock and is driven by fear and greed. Of course, do your own research.

The writer holds stock in Seeing Machines

Auto industry woes affect Seeing Machines

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While Seeing Machines’ FY24 results illustrated a year of significant progress, auto industry headwinds and a slower than expected ramp in Guardian Gen 3 sales have led to Stifel reducing its revenue estimates for FY25-26. This in turn has led to it reducing its DCF-based target price to 11.4p from 13p.

It’s certainly disappointing news for shareholders but Peter McNally, analyst at Stifel, commented in a detailed note issued on October 31st: “Despite delays we maintain our positive stance on the shares moderating our target price to 11.4p (13.0p) and see the company extending its leadership with proven implementation and deployment into an increasingly regulated market.”

Revenues for 2025 are now predicted to be US$73.1m with a pre-tax loss of $13.3m, while in 2026 revenues of $97.5m produced a pre-tax profit of $5m.

Material uncertainty

In the full Annual Report (on page 46), the auditor PWC also made a comment about ‘material uncertainty’, reflecting the cash outflow of $11.9m in the FY24 results. Personally, I believe they are only fulfilling their obligations to warn investors about potential risks (while also covering themselves), yet it is unsettling for green investors unused to the conservative ways of auditors.

Stifel’s McNally certainly didn’t appear unduly concerned, stating: “We note the auditor’s “material uncertainty” comment but see a path to breakeven given strong (although reduced) operational drivers and cash costs containment”.

He went on to explain his estimate changes and assumptions in detail: “We reduce FY25/26E revenue by 11%/17% assuming a slightly higher GM% of 64% (62%), driven by a slightly higher software mix resulting in a cash EBITDA loss of $14.9m ($10.8m) for FY25E but profit of $8.6m ($19.5m) in FY26E. This is based on stable cash opex of $65m, resulting in $9.8m cash at FY25E year-end and cash generation thereafter as royalties continue to ramp and Guardian Gen 3 volumes increase.”

In his presentation today on Investor Meet, Paul McGlone reiterated that the company still expects to hit breakeven on a monthly basis in Q4 of this financial year.

He went to explain that if additional working capital is required due to the lumpy nature of automotive revenues: “We have a reasonably simple solution in the form of receivables funding and that process is underway. We expect it to deliver additional working capital in the range of $5-10m.”

Furthermore, he added: “To the extent that we need additional cash, we have a whole range of opportunities before us, some of which are well progressed and are consistent with the types of programmes or results that we’ve delivered in the last 2-3 years.”

I assume here that he is referring to license deals which, as Stifel points out have had a dramatic effect on profitability and cash given its similar 100% gross margin nature to royalties. McNally teased in his note: “Licensing is very difficult to predict but the company has benefitted from licensing deals over the past few years from Magna for $5.4m in October 2022, Collins Aerospace for $10.0m in May 2023, and most recently Caterpillar for $16.5m in June 2024.”

I’m therefore fairly confident Paul McGlone and his team will pull another rabbit out of the bag this year. Happily, it seems smarter people that me are thinking the same.

Speaking directly about the cash concerns McNally wrote: “With $23.4m of cash on the balance sheet we feel that the company has sufficient cash for the year with the goal of reaching run-rate cash flow break even by the end of FY25E (June). The company also has a history of sourcing strategic funding and software license agreements that have benefited cash. We believe these options still exist and can provide additional cash if required.”

Peel Hunt

In a short note issued today Peel Hunt reiterated its ‘BUY’ rating but reduced its target price to 7p from 9p. Analyst Oliver Tipping stated:

“Management has re-affirmed its commitment to reach a cash break-even run rate in FY25. However, we believe this could be challenging. 

“Ultimately,  OEMs  across  the  industry  have  been  struggling  and  they dictate the speed of production. We fear timelines could shift to the right. 

“Seeing Machines’ ability to reach its break-even  run  rate  goal  is  likely  to hinge on its ability to control costs. Competitors, like Tobii, have already begun severe  spending  cuts  and we  believe  Seeing  Machines  will  require similar measures given  its  current  cash  burn  rate of $2m a month. To account for wider industry weakness, we reduce our TP from 9p to 7p.”

Reasons to be cheerful

While the share price tanked on Thursday, as nervous private investors do what they usually do when real life intervenes; panic and sell low, there are reasons to be cheerful.

In the Investor Meet presentation today Seeing Machines did confirm that for this financial year it expects: 

  1. 1.9 – 2.1 million annual production units for Automotive, contributing to high-margin royalty revenue. 
  2. A 20% increase in connected Guardian units generating monthly services revenue. 
  3. 13,000 – 15,000 Guardian Gen 3 units to be sold, predominantly in Q2 at a much higher margin (50%) than previously with Gen 2 units (10%). 
  4. Aviation to achieve Blue Label (functioning prototype) product delivery, adaptable for certain fields of use (simulator, air traffic control). 
  5. Cash flow break-even run rate target at end of FY2025.

In addition, during the Investor Meet presentation CEO Paul McGlone revealed that there has been a resurgence in the inflow of RFIs and RFQs for the auto industry. “We are currently processing RFQs for OEMS based in Japan, Korea, Europe, China and North America. The vehicles associated with those RFQs are largely for Europe, Japan and North America and would have start of production timing between 2027 and 2029. And we expect the sourcing of these programmes to begin in 2025 calendar year.”

Thus, I think Peel Hunt’s fears of auto timelines shifting to the right are unfounded. Indeed, Seeing Machines has already suffered from that and the market is now hot for DMS/OMS once more.

Amazing news?

Regarding Gen 3 sales, I’m also hearing a whisper that Seeing Machines has begun trials with a global US online retailer, which is A household name. If they are successful and a deal is announced a few months from now I’m pretty confident the share price will soar on that news alone. Can you guess the name?

I’ve been in this stock a long time, too long in truth. However, I’ve no intention of selling out when the company is so close to achieving breakeven. That’s because I believe it will trigger a bidding war. Do your own research of course.

The writer holds stock in Seeing Machines.

P.S. If anyone does make any money from this information do please consider making a small donation to a charity for the people in Gaza. As we worry about money they are being murdered en masse and ethnically cleansed, which according to international law constitutes genocide. Thanks.

Significant Xeros license deal but Indian delay impacts short term revenues

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Investors in Xeros saw it fall approximately 40% last week, despite news that it has won its most significant licence deal to date with the huge Chinese company Donlim. 

The main reason for the fall was a separate Trading Update warning of increased losses and reduced revenues for the current financial year and FY2025, putting back breakeven on a monthly basis to late 2025. House broker Cavendish stated: “Net cash was £4.0m on 30 August, with FY24 cash expected at £2.9m. The Board expects to have sufficient cash resource to see the company through until it achieves net monthly cash breakeven during the latter part of FY25. On lower near-term forecasts, we reduce our Target Price from 18p to 16p, although the longer- term market opportunity and the environmental benefits of its technology remain significant.”

The main reason behind this disappointing update was short term delays to the launch of its Indian partner IFB’s 9kg washing machine. Still, having spoken at length with CEO Neil Austin, I’m convinced that the share price fall to 0.7p is an over-reaction. My reasoning is fairly straightforward and outlined below: 

1) The quality of the licence deal with Donlim, opens up a huge global market in filtration for Xeros, which includes China. Donlim (owner of the Murphy Richards brand) is listed on the Shanghai Stock Exchange and trades in 120 countries with annual revenues of over ÂŁ1.5bn. It will be manufacturing its external washing machine filter (XF3), as well as the internal one (XF1). My understanding is that for each internal device sold Xeros will receive between ÂŁ2-3 licence fee and slightly more for the external device. Mass production of the XF3 external filter is set to begin in Q2 FY2025.

In addition the RNS states that ‘the strategic partnership further enables Donlim and Xeros to collaborate on the future development of innovative filtration and water saving products. For instance, given the fact that microplastic pollution is ubiquitous in the very air we breathe and water we drink everything from hoovers/fans to coffee makers could potentially use Xeros’ filtration expertise. 

2)  The delay to French legislation for microfibre filtration in washing machines, (which was supposed to come into effect in January 2025) is unlikely to stop it from happening within the next couple of years. Indeed, public concern and evidence of the dangers posed by such pollution is steadily growing and some with the EU are working to legislate standards to reduce microplastic pollution. Here in the UK environmental groups, such as the Marine Conservation Society are also pushing for such legislation. Before sceptics shout ‘Balls!’ – read this  article in The Guardian, which painfully brings home the need to reduce microplastic pollution in the environment.

3) The delay to the IFB launch of its 9kg machine with Xeros technology, doesn’t involve its water saving Xorbs technology and is merely a technical fix to avoid consumers overloading their machines. I expect it will be sorted out by the end of Q1 2025 given the ability of Indian companies such as IFB to quickly innovate. I’d also expect the new head of IFB’s consumer division to want to prove their worth by making this happen as soon as possible. 

4) Lastly, Neil Austin has proven he can make deals happen. He has said there are other significant license deals he progressing. Specifically, he mentioned “We are working with a major SE Asian washing machine brand, a major North American washing machine brand and a major European washing machine brand to effectively get them to license the Care technology.” While trials are ongoing I see no reason to doubt his ability to make close at least one or more of them in the next 6-8 months.

Cash position

Clearly, there are concerns over its cash position. It is expected to have £2.9m by year end and some fear it may need to raise again before the end of FY 2025. Currently, it is priced to go bust but I don’t think this is likely.

Of course, investors must be aware of the possible downside if deals/sales don’t pick up. Cash is set to be tight towards the end of 2025 and further funding could be needed. However, the company is aware of the constraints and has several levers at its disposal. Cost cutting is one option, it may also be possible to obtain an advance on license deal revenues. Other companies I follow have done this to avoid dilution, most notably Seeing Machines.

It’s certainly important to monitor the cash situation but I’m confident that further license deals currently under negotiation, revenues from sales from Yilmak, not to mention the launch of the IFB 9kg machine will raise revenues and increase the share price significantly over the next year.

I personally don’t view this as a get rich quick investment but more as a medium term one that could multi-bag on a 2-3 year time horizon. However, over the following months I will be monitoring it to ensure that my investment thesis remains intact.

As an investor it’s difficult to get in at the cheapest point and this is a high risk investment. However, I bought more on the 5th September (before speaking to Neil Austin) as I believed the deal with Donlim would prove to be hugely significant, while the delays are only temporary. Moreover, the backing of significant institutional investors who are in this for the long term gives me confidence that if the business continues to strengthen the revenues will rise, breakeven will be achieved and the price  has to rise significantly.

Interestingly, it seems other canny investors are also viewing the fall as an opportunity. On September 5th  William Black of Armstrong Investments increased his holding to just under 7.3%.

The writer holds stock in Xeros and Seeing Machines.

Seeing Machines takes gold with new world record

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Seeing Machines has proved to the world that it is the leading company in DMS, with its latest set of KPIs taking it past the 2.2m level for cars on the road an increase of 104% year-on-year. It seems set to pass the 3m level, as predicted here a few months ago.

Guardian sales for Aftermarket were also solid: monitored connections rose 19% over the past 12 months to 62k despite the Gen 2 box approaching end of production.

Peter McNally, analyst at house broker Stifel commented: “Seeing Machines seems strategically well positioned for continued market leadership with Tier 1 automotive suppliers Valeo and Magna as partners, rising adoption, a recently homologated Gen 3 aftermarket product and a healthy balance sheet as it heads toward a monthly cash break even run-rate in FY25E.” 

Paul McGlone, CEO of Seeing Machines, said: “We have maintained growth of over 100% in the number of cars on road featuring our technology from 12 months ago, despite the quarter-on-quarter volatility experienced during the year. Regulations are now in place so we are confident that these figures will continue to grow for existing Automotive programs and as new programs start production.

“Similarly in Aftermarket, the new regulation in Europe will require more commercial vehicle OEMs to seek After Manufacture fitment for our Guardian technology, underpinned by successful homologation (regulatory approval) with our Northern Ireland customer, Wrightbus, as announced on 30 July 2024. With Guardian Generation 2 stock sold we are now focused on Guardian Generation 3, initially with European commercial vehicle OEMs, then all customers across existing markets in Europe, The Americas and Asia Pacific.”

Unassailable lead

Seeing Machines has now surpassed Smart Eye and there appears to be no way its Swedish rival can catch up in the short term.

Peter McNally, gave a useful summary of where we stand now:

“Cars on the road is proof of engineering execution: Although its competitor Smart Eye was the first to break the 1 million cars on the road threshold in June 2022, it was still “not quite 2 million” in May 2024 (Smart Eye report Q224 on Aug 21st). Seeing Machines reached 1 million in June 2023 and has been the first to announce 2 million. Seeing Machines has 7 Automotive programs currently in production and we believe most of these are still ramping given it takes roughly 18 months to reach full production. The company has a total of 17 programmes signed worth $392m with many more likely to be added in the future given increasing regulatory drivers and evidence of execution.”

Were there a DMS Olympics Seeing Machines would take gold, with Smart Eye in second place. As for Bronze, I’d hoped to award it to Cipia. However, I wonder if Cipia may be hampered by the likely fallout from Israel’s escalating Israel war in the Middle East.

The writer holds stock in Seeing Machines