Tag Archives: Paul McGlone

Seeing Machines wins contracts worth $11.6m 

Posted on by
Reply

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.

Seeing Machines seals Amazon contract in the US

Posted on by
Reply

Seeing Machines (AIM: SEE) has finally won the Amazon.com contract for Guardian Gen 3, which should be the first of many decent-size Gen 3 contracts over the next few months. 

In an RNS issued today Seeing Machines confirmed that it has won the “US-based multinational” and would support the initial installation of 1,100 Guardian units, which are scheduled for completion by this December. Discussions are also ongoing for further expansion in the New Year for Amazon’s heavy truck fleet.

According to information I’ve obtained (which are likely to be an underestimate), Amazon in the US has a fleet of approximately 1,645 tractors (cabs) and 12,835 trucks. 

KPIs

Seeing Machines also released its latest set of KPIs for Q1 FY 2026, with confirmation that it now has 4.24m cars on the road with its DMS technology. An additional 510,000 cars were produced in the latest quarter, 4% up on the previous quarter, demonstrating continued growth in what is traditionally a subdued quarter.

Sales of Guardian Gen 3, at 368, did disappoint. However this was due to delayed large deals, which are now coming through as is clear from the Amazon win.

In a note issued today, analyst Peter McNally from house broker Stifel commented: “Guardian unit sales in the quarter were 368 (fiscal Q425: 2,536) as certain expected deals slipped into the current quarter, including a significant aftermarket order announced today for the 1.1k units before December 2025. This means that shipments in Q2 so far are already greater than 2,600 units and therefore have been more of an issue of timing rather than quantity, as we are less than halfway through fiscal Q2.”

He added: “The aftermarket pipeline remains healthy, with multiple pilots and commercial contracts progressing, and partnerships such as Mitsubishi Electric Automotive America expected to support production scaling through FY26. We estimate current quarterly capacity at roughly 6k units with c.$800 ASP and ~40% gross margin, highlighting improved unit economics versus Gen-2 and stronger leverage potential as volumes rebuild.”

Importantly, CEO Paul McGlone has confirmed: “We remain on track to achieve our cashflow break-even run rate target by the end of this calendar year.” 

While some traders have cashed out their winnings, most investors are holding as the share price rise seems set to continue, as auto volumes ramp in anticipation of EU legislation that comes into force in July 2026. Also, tougher Euro NCAP safety ratings apply from January 2026 and will necessitate a camera-based DMS/OMS for a car to achieve a 5 star safety rating.

McNally’s view is clear: “We expect momentum to build through FY26 as full compliance with the July 2026 GSR mandate approaches. Seeing Machines remains the DMS market leader with over 4.2m vehicles deployed, ahead of Smart Eye (~2m). With customers representing c.12.5m of the 16.1m European vehicles forecast to be sold in Europe in 2026, the installed base should continue compounding, though the pace of inflection will vary by OEM depending on inventory and model cycles.”

In addition, I expect multiple new contract wins in auto and aftermarket to materialise by Christmas.

The writer holds stock in Seeing Machines.

The bad, the good and the ugly

Posted on by
4

Seeing Machines put out a half year trading update yesterday that for entertainment value rivalled a Spaghetti Western. All that was lacking was a thumping soundtrack by Ennio Morricone, though many investors’ racing hearts would have supplied that as they read the announcement and accompanying broker note.

Certainly, the update was a slight disappointment, albeit a massive improvement on the first half a year earlier.

The Bad

Although the company’s guidance for the full year to June 30th 2020 remains unchanged, house broker Cenkos (in a note littered with errors – see page 3) took the opportunity to downgrade revenue projections, increase losses, indicate that SEE could need cash by end of financial year 2021, all while lowering its valuation to 11.4p from 12.1p. No wonder the price dropped!

Here are the changes for the current financial year:

  • Estimated revenues for financial year 2020 reduced from A$47.5m to A$45.5m.
  • Adjusted pre-tax loss increased to A$39.2m from A$35.9m

In FY 2021, according to Jean-Marc Bunce’s own figures this leads to a funding shortfall of A$4.4m.

The concern in investors minds must therefore be how might SEE deal with this if these figures turn out to be accurate? It’s certainly worth keeping an eye on.

The good

Still, both SEE and Cenkos hint that it may be a problem that will soon find a solution. After all, Seeing Machines “remains in advance (sic) discussions with parties for a licensing deal” say Cenkos, quoting Paul McGlone. It assumed that this is for aviation and cranes/ferries but may also be for gaming via Qualcomm.

There are also long overdue OEM auto deals that haven’t yet been announced that I believe SEE has won as well as many more due this year. For example, I’m in the camp that believes SEE have already won Volvo and I am hoping that Veoneer will announce a win its forthcoming quarterly update.

Thus, while panicked investors and canny traders have recently been selling, an announcement on a material deal that puts to bed funding concerns will see a huge and immediate rise in the share price. That is surely why Volantis 1798 have been buying up shares as weak hands let go. They are big and active investors and seek to make huge gains. I expect them to continue buying up to 19.99% and obtain a boardroom seat.

I am sure that they, like me, believe See is fundamentally undervalued and potentially worth billions. Those who doubt this statement need to do more research and then decide for themselves. In the words of Warren Buffett: “Price is what you pay; value is what you get.”

The ugly

I don’t believe Paul McGone would risk his reputation saying deals are expected if they weren’t coming. He has already lost some credibility with the delay over the ‘imminent’ Aviation licensing deal. As a result he can’t be said yet to be ‘walking the walk’, although fleet does seem to be largely fixed. If SEE fails to close the Aviation deal and announce some OEM wins in the next 3 months, he’ll be looking as if he is walking like Max Wall (watch from 3m 50secs). The best option then might be to follow in the footsteps of previous management and say, ‘Auf Wiedersehen’.

What annoys me is the lack of transparency as per the fleet 20k installations saga.  I also don’t like the underplaying of contract sizes and Seeing Machines’ likely share of the automotive market. Yet, stealth has its advantages when your share price makes you vulnerable to a low-ball bid. 

The writer holds stock in Seeing Machines

The Pretenders are dead, long live the King of DMS

Posted on by
3

At yesterday’s Capital Markets Day for Seeing Machines it was standing room only, as Colin Barden an independent analyst at Semicast Research presented the news that investors in Seeing Machines have long waited to hear: though the coronation has been delayed, it will be the King of DMS.

It was hard news for rivals but, in one slide, Barnden presented his projections for the market shares come 2022. He estimates 40-45% for Seeing Machines, followed by 15-20% for Mitsubishi Electric. All other rivals are left lagging far, far behind, with Smart Eye in particular estimated at 5-7%.

That said, I saw no evidence of complacency from the Seeing Machines staff, quite the reverse. McGlone, in particular, came across as a man determined to deliver profitable growth. He certainly doesn’t look like the sort of guy who will let a rival eat his lunch.

Paul McGlone, CEO, Seeing Machines

Paul McGlone, CEO, Seeing Machines

The growing interest in its DMS technology was clear from the host of analysts I met at the event: Sanjay Jha of Panmure Gordon, Lorne Daniel at FinnCap, Caspar Trenchard at Canaccord Genuity and even one from Steifel (there may well have been others). I’m sure the house broker Cenkos was represented but house analyst Jean-Marc Bunce was the invisible man on this occasion.

Fleet

Probably, a wise decision on Bunce’s part as I’ve been trying to find out why he’s taken such a conservative stance on fleet. In his note dated 23rd September he states on page 1: “We believe the guidance for 27-30k connections at the end of FY20 is conservative and underpinned by a strong pipeline.”

Yet on page 4, he contradicts this, becoming ultra conservative, when he writes: “
.our Fleet connection forecasts are based on connections below the guidance of 27-30k”.

I wondered why he decided to do this and also upon what number of fleet connections he actually based his projected revenue figure of A$20.9m? By my calculations to arrive at A$20.9m he must have used less than 18,000 installations, which does appear excessively low.

Yesterday the new CEO, Paul McGlone was in combative mood as he faced down attempts to extract projections on the number of Fleet sales for 2020, sticking to guidance of 27-30k. He even declined to provide a current figure. I assume this is because Seeing Machines hopes to upgrade at the interims and doesn’t want to spoil the surprise. Personally, I don’t particularly like surprises even to the upside.

The reduction in the unit cost of Gen 2 Guardian by 21% announced yesterday must surely drive increased uptake from fleets as will the increasing number of distributors and deals with insurers.

Mike Lenne, the Human Factors expert who heads up Fleet does appear to be its secret weapon when it comes to persuading Fleets to use their technology to improve safety. HIs calm, analytical approach should pay dividends and puts Seeing Machines in a league of its own.

It was the first time I’ve met Tim Edwards, one of the original brains behind the technology along with fellow co-founder of the company Sebastien Rougeaux. Edwards comes across as a very modest man, particularly for a genius who jointly developed this life-saving technology.

Aviation

While CEO McGlone and Pat Nolan, who heads up Aviation, were chided slightly for building up expectations re. an aviation licensing deal with CAE and L3 Harris, I got the impression such a deal is at most a 2-3 months away. We’ll see I guess. The great news is that end users (such as Alaska Airlines) are now requesting that manufacturers of full flight simulators now have eye-tracking from Seeing Machines.

Auto

As for Nick DiFiore, who heads up Auto, I’m expecting him to deliver a lot. Volvo for one, VW for another pretty soon. Followed by Japanese OEMs. Oem decision-making has been the main reason for delays up to this point but See does appear remarkably well positioned with Xilinx to grab market share from Nvidia and Mobileye. The fact that Fovio can identify an incapacitated driver makes it a shoo-in for Volvo and parent Geely may well have decided it needs it too.

The US market really needs to hear this in its own accent and so it was good to be told by Paul McGlone that it will be getting a US broker. I do hope it is Morgan Stanley. I’ve long wished to read/hear Adam Jonas extol the virtues of Seeing Machines.

Overall then, while I would have liked more opportunity and time for detailed questions, I feel that further patience will be handsomely rewarded here. Of course, every investor should do their own research.

The writer holds stock in Seeing Machines.

Time to re-rate SEE 2.0

Posted on by
4

Seeing Machines’ (AIM: SEE) full year results indicated strongly that the issues that affected its fleet division are fixed and I expect news flow over the next few months to drive a significant re-rating.

In a note issued yesterday, house broker Cenkos upgraded its price target to 12p. Analyst John-Marc Bunce explained: ‘We believe the turnaround in fleet will drive the company to profitability in under 2 years with the cash runway looking sufficient even before accounting  for licensing deals or financing against recurring revenues.”

This was reiterated in a webcast from CEO Paul McGlone today in which he assured investors: “Fleet is fixed and starting to perform”. He added that there were no plans for a dilutive equity fundraise in his 3-year plan. Moreover, an aviation licence deal (expected to happen before year end) would effectively mean the company is funded to profitability.

Fortunately, the new CEO seems to have pressed the reset button and confirmed that over the past 6 months he has made significant changes: “The business is now focused on profitable revenue, we don’t chase strategic business.”

Cenkos has pencilled in a conservative (how I dislike that word) A$47.5m revenue figure for the full year to June 2020, with a pre-tax loss of A$35.9m. Thereafter losses fall in 2021 to A$10.6m and SEE reaches profitability in 2022 (A$47.5m).

I think these estimates will be revised over the course of the coming year, bringing forward breakeven by at least a year.

After so many years of disappointment and failure to deliver against financial targets I think this will be a transformational year for Seeing Machines. It will hinge on these 3 things happening:

  1. Acceleration in the installation of Guardian in fleets and cheaper units produced in H2.
  2. More auto OEM contract wins.
  3. Aviation licence deal by the year end.

 

Positives

Fortunately, signs look good for all three.

  1. Fleet growth should accelerate further this year as Cenkos confirms: “We believe the guidance for 27k-30k connections at the end of FY2020 is conservative and underpinned by a strong pipeline.” Moreover, the unit costs of Guardian are due to come down significantly from the the second half of this financial year, driving more profit. In addition, McGlone today revealed that SEE is expecting solid growth in the US market.
  2. I’m expecting two existing US customers to extend their existing contracts and Seeing Machines to win two more OEMs in Europe very soon. This is aside from continued progress in Asia over the course of this financial year.
  3. We now know (after the webcast) that Aviation licence deals are coming soon. That will improve the bottom line without involving significant risks and costs.

Lest we forget, there is also a bigger game afoot, as Bunce pointed out in his note:

“
 one could argue that Seeing Machines has greater strategic value than Mobileye has as we highlight the ever-increasing importance for reliable face, eye and emotion tracking in the real world for many applications beyond automotive and transportation; from retail, medical, personal robots and personal computing devices. This value would be seen not just but major chip and software platform providers like Intel, but also the world’s tech giants.”

I’d advise all investors to do their own research and the above is my opinion only.

The writer holds stock in Seeing Machines.

Volvo XC90: another win for SEE

Posted on by
2

The evidence is stacking up that Seeing Machines has won Volvo in the teeth of opposition from its Swedish rival Smart Eye.

Read this article on the Volvo XC90 and note the way it describes how the DMS system will work. Congrats to Nick DiFiiore and his team on this one. All we need now is the RNS.

I believe the delay in announcing auto OEM contract news is due to their being re-scoped and enlarged by car manufacturers in the light of EU legislation that will mandate DMS in all new type cars from 2022.

Of course, fund managers have been getting the inside track on developments this week so I am optimistic we will get some big buys.

Still, rather than a soft-focus video, private investors also deserve to meet the management. Hey, SEE, how about organising a webinar and answering some tough questions from people who’ve invested their hard earned money over a number of years? Or better still, call another meeting in London.

Certainly, in his most recent interview the new CEO, Paul McGlone, seemed very confident. He can certainly talk the talk and it is my hope he will also walk the walk over the next 6 months. Time will tell.

The writer holds shares in Seeing Machines.