Tag Archives: 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.

Investors seek answers for share price decline at Seeing Machines

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Following the precipitous decline in its share price over the past few months, investors in Seeing Machines are seeking answers.

The decline, initially caused by delays in the roll out of its Guardian Gen 3 product and poorer than expected quarterly KPIs seems to have gathered pace recently. The share price is now at lows last experienced during Covid, with no clear explanation from the company.

A wave of redundancies in the past week, together with a restructuring of its senior management appears to indicate that measure have been taken to address problems. However, a lack of clear knowledge of what those problems are has left much room for negative speculation. 

In this void it appears market makers have been only too eager to drop the price and trigger stop losses, fanning fears among private investors. Fortunately, the company has plenty of cash and there is no reason to fear it is going bust. Yet, management credibility has been questioned by some and investor trust needs to be regained.

What is needed at the forthcoming Town Hall event on April 2nd is clear communication as to what caused the issues with the roll out of Guardian Gen 3 and the subsequent poor sales and what is being done to fix them. Until that is done, the share price is likely to languish in the absence of firm contract news in either its Auto or Aftermarket divisions.

I’m a firm believer in the potential of this company but I do think investors deserve a full explanation.

The writer hold stock in Seeing Machines.

Volkswagen’s small ‘BEV for All’ will feature Seeing Machines technology

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Volkswagen has confirmed that its Volkswagen ID2, set to go on sale in 2026, will feature a camera-based driver monitoring system (DMS) in its rear view mirror. Powered by Seeing Machines technology it is expected to feature both driver and occupant monitoring.

This small battery electric vehicles (BEV), based on the ID2.all concept, which was revealed in 2023, is intended to be a huge seller for the German car company. It is expected to retail for around ÂŁ22k for the entry-level model. 

As a spokesperson for Volkswagen confirmed: “The all-new Volkswagen T-Roc and our up-coming small BEV will be the next vehicles to be equipped with the camera-based DMS from start of production. Since the function (Attention and Drowsiness Assist) will be required by EU law from mid-2026, we are working on equipping all other vehicles with a camera-based DMS.”

Seeing Machines has previously stated that when it comes to cost and packaging complexity, its integrated rear-view mirror (RVM) solution, offered exclusively by the Tier 1 Magna, is best in class.

I’m therefore expecting many other car manufacturers who are late to the DMS/OMS party (but whose cars sell in Europe and are therefore required to meet GSR2 mandatory safety legislation) to choose the rear view mirror solution for their new cars.

Seeing Machines’ cutting-edge DMS/OMS is also available in a two camera-solution, should car manufacturers wish to use that.

The writer holds stock in Seeing Machines.

Disappointing growth, SEE’s broker downgrades

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Following Seeing Machines’ disappointing first half Trading Update combined with quarterly KPIs, both house broker Stifel and Peel Hunt downgraded their price targets and cut revenue expectations, while increasing their estimates for the losses expected for this year. 

In terms of the KPIs: cars produced with SEE technology grew more slowly than expected, falling 34% to 267K in 2Q25 compared with the previous quarter. In addition, sales of Gen 3 Guardian were only 288, making just 1,779 units sold in the first half of the 2025 financial year.

House broker Stifel’s Analyst Peter McNally cut his Price Target from 11.4p to 9.6p but maintained his ‘Buy’ recommendation. McNally summarised his view as follows:

“Seeing Machines’ H1 performance is indicative of wider auto industry struggles, with broadly flat revenues and ARR, leading to a larger-than-expected adjusted cash EBITDA loss of $17.5-18.0m. 

However, cost initiatives over the past 12 months and further planned in H2’25 should reduce cash operating expenses significantly. We also highlight the recent $32.8m strategic investment from Mitsubishi Electric Mobility, which provides  stability as the company gets closer to reaching cash flow breakeven.

While cars on the road has been healthy with 90% y/y growth, Q2 production was down 34% q/q. Although there is a lack of certainty with regard to when exactly this volatility will reverse, we still expect a strong tailwind from the approaching GSR deadline (July 2026) as it moves closer.

Sales of Aftermarket Guardian 3 units have also faced slight delays, however we expect sales to accelerate in H2 as a result of a full commercial release and benefit from the new referral agreement with Mitsubishi Electric Automotive America, which opens the Guardian 3 up to a 1m+ vehicle fleet market.

We reset revenue estimates to a more conservative level based on market uncertainty, but do expect a reduction in the cost base by FY26E to mitigate much of this in FY26/27E. We moderate our target price to 9.6p (from 11.4p) to reflect these new forecasts.”

Explaining in more detail his changes in forecast and valuation, McNally said: 

“We reduce FY25-27E revenues by $10m, primarily as a result of softer royalties, prudently assuming that production volumes do not pick up in FY25E, with possible upside. While the FY25E adj. EBITDA loss increases by $7.5m to $24.4m, we expect the revenue reduction beyond FY25E to be largely mitigated by cost initiatives and as a result we reduce adj. EBITDA profit by just $2m in FY26/27E. As a result of our forecast changes, our DCF-based target price reduces to 9.6p (11.4p). At current levels the shares trade at 3.6x our FY25E EV/Sales, or 11.8x FY26E EV/EBITDA. Buy.”

In addition, Peel Hunt today downgraded from a ‘Buy’ to ‘Reduce’, slashing its Price Target from 7p to 3p. In its note, analysts wrote: “We cut FY25/26/27E revenue by 17%/19%/10% to reflect weaker automotive demand and the slow start from the Guardian generation 3.”

My view

Naturally, I’m disappointed by the update today. I had expected cars on the road to whizz past 3m, despite volatility in the auto market. I didn’t expect car makers to sacrifice safety in an effort to cut costs, thereby risking reputational damage by producing more dangerous cars for consumers. It is shocking that saving lives from driver fatigue and distraction is deemed a lower priority than making profits. Still, it highlights why regulation (in the form of GSR) and pressure from Euro NCAP are vitally important in forcing car manufacturers to improve car safety.

I don’t hold the management of Seeing Machines responsible for this atrocious attitude from car manufacturers, although it has clearly impacted revenues in the short term – and is likely to continue for two more quarters we’ve been advised.

Still, it shouldn’t be ignored that Seeing Machines continues to have more cars on the road with its technology than any of its rivals and I don’t expect this to change.

That is because I expect Seeing Machines to win a significant share of the RFQs that are currently underway. News of a significant contract win could ease investor concerns and encourage brokers eventually to upgrade estimates.

However, I’m far less forgiving of the time it has taken to ramp up production of Guardian Gen 3, which to be frank was late to launch and has so far sold only in small volumes. It’s no wonder many private investors have sold out. However, given CEO Paul McGlone’s statement in a video interview with Tylah Tully that there are 7 significant trials in progress – one of which I believe is Amazon – I hope that things are now on track for significant sales in the final quarter of this financial year. 

Fortunately, the company currently has a $39.6m cash balance and time to set things right before the end of this financial year.

Personally, I’m prepared to hold as I expect the share price to rebound on contract news before the end of this financial year. However, do your own research.

The writer holds stock in Seeing Machines.

Mitsubishi’s strategic stake in Seeing Machines

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A few thoughts on the strategic investment in Seeing Machines taken by Mitsubishi Electric Mobility Corporation, part of the huge Mitsubishi conglomerate.

  • It secures the cash for Seeing Machines to hit breakeven regardless of the vagaries of the economy, automotive sector or machinations of any single industry player or partner. 
  • It ensures that when a bid is made for Seeing Machine it will be at a very competitive price. The company cannot possibly go on the cheap. 
  • It provides a local partner in the Japanese market, which should make it much easier to gain a strategic stranglehold in the Japanese automotive sector, while also ensuring further diversification in its Tier 1 relationships.
  • Via Mitusubishi’s network we should see Gen 3 Guardian sales in trucks rocket from here on in. It also produces and sells buses and trucks via the FUSO brand – a collaboration with Daimler Trucks. 
  • It potentially opens up new markets to Seeing Machines technology. Mitsubishi manufacturers road construction, agricultural equipment and even forklifts, which could use Seeing Machines’ driver monitoring technology to reduce accidents caused by driver fatigue.
  • The fact that Mitsubishi was determined to take the maximum percentage of shares it could take without triggering a bid (19.9 per cent) tells me how highly it values this investment. It plans to develop more personalised robots in the future for a rapidly ageing society in Japan and combining Seeing Machines’s human fatigue/cognitive state detection with heartbeat detection would be useful features for a domestic ‘carer’ robot to have. 

Consumer Electronics Show

With the Consumer Electronics Show (Jan 7-9) expected to bring news of further license deals, the list of possible buyers of Seeing Machines grows ever longer. 

Moreover, in calendar 2025 I expect its market leadership to become both undeniable and unassailable in the medium term, as:

  • It surpasses 5m cars on the road with its DMS/OMS technology
  • It becomes profitable on a monthly basis by June.
  • Guardian goes past 100k units.
  • The Aviation product is readied for use. 

VW Tayron on sale now

The Volkswagen Tayron, which includes Seeing Machines DMS in its rear view mirror, is due to go on sale in the UK this week. 

The first UK reviews of the vehicle should take place in the spring, possibly mid-to-late March; there may well be some reviews from overseas drives before that, in late February or early March.

This should rapidly boost the profile of its life-saving technology, not to mention public interest in buying shares in a tangible AI product.

The writer holds stock in Seeing Machines

Stifel flash note: SEYE KO’d by Seeing Machines?

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In a flash note published yesterday, Stifel confirmed that Smart Eye’s Q3 results clearly show it is taking at beating at the hands of the global leader Seeing Machines.

Stifel analyst Peter McNally confirmed what well researched investors already know; that the auto industry is in a tough place, particularly for Smart Eye. Regarding Smart Eye, he commented: “Automotive revenue shows a slight dip (-1.5% q/q) to SEK 32.4m and is therefore similar to last quarter, which was flattish also. Part of the reason for being flattish is a transition away from services (NRE) to licences, which grew 100% y/y to an undisclosed amount.”

For those who still think Smart Eye is a contender for the automotive crown, McNally’s killer punch is that: “On a like-for-like basis, Seeing Machines Automotive revenue (excluding Aerospace) in FY24 was well over $60m versus Smart Eye’s $11.4m (Q323- Q224), so it still looks like Seeing Machines is well ahead.”

According to McNally, two more take-aways from the results were, firstly: “Commentary on growth in Automotive licences is positive saying the growth rate should increase in Q4 and ‘even higher growth in 2025.’ Clearly this suggests that they see adoption is increasing, which is good news for the industry, but we still think they are playing catch up at this stage as their revenues are significantly lower.”

Secondly, “Smart Eye is also suggesting that volumes will pick up in Q4 in Aftermarket, which somewhat agrees with Seeing Machines’ expectation of a ramp in volumes in its fiscal H225 (Jan-Jun 2025).”

Having listened to the Smart Eye presentation, I found the reluctance of the company to state the number of cars on the road with its technology a telling indication that it has been bested in autos by Seeing Machines. Smart Eye once used to boast of having 1m cars on the road but, as Seeing Machines approaches 3m by the end of this calendar year, the Swedish company has yet to announce hitting 2m, preferring to use the opaque terms ‘design wins’ and ‘models’.

Of course, do your own research.

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.

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.

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

Seeing Machines Gen 3 Guardian fitted into first commercial vehicle manufacturer

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Seeing Machines has confirmed that its recently launched Guardian Gen 3 AI-powered Driver Monitoring System (DMS) has been successfully fitted into Wrightbus and achieved ‘homologation’, the formal process of being approved and certified for use.

In a note issued today by house broker Stifel, its analyst Peter McNally explained that the actual contract with the Northern Irish bus manufacturer is likely to be worth ÂŁ0.8m-1.5m per year to Seeing Machines at full production.

While that’s not huge, the real significance of this news is that it paves the way for further approvals from bus and truck manufacturers. For example, Seeing Machines revealed that 3 other OEMs are currently going through the approval process, which McNally noted: “indicates that the company has won another customer since the last update”.

OEMs Future Proofing

McNally also reiterated a point that has been ignored/misunderstood by many investors; some manufacturers will increasingly seek to future-proof their commercial vehicles by installing advanced DMS, to be ready for the introduction of more stringent regulations in Europe that come into effect in 2026. 

Here’s how he explained it in his note: 

“On 7 July, two key regulatory changes to Europe’s GSR came into effect:
(1) Driver Drowsiness and Attention Warning (DDAW): DDAW, which requires driver monitoring systems for signs of drowsiness, is as of 7 July mandatory for all new road vehicles sold. While the regulation does not appear to require advanced DMS, allowing a wider scope of solutions, we would expect the change to increase demand for DMS, with Seeing Machines’ products a market- leading option for OEMs now necessitated to at least provide monitoring for drowsiness. However, this can also be provided by steering wheel torsion.

(2) Advanced Driver Distraction Warning (ADDW): A more stringent standard requiring direct or camera-based DMS to detect driver distraction, ADDW points more directly towards Seeing Machines’ offerings. As of 7 July, this is mandatory for all new ‘types’ of registered vehicles, but we shall have to wait two years before it is mandatory for all new vehicles sold. However, for customers installing DMS in the short term to meet the DDAW regulation, there is now an incentive to future- proof vehicles for when ADDW fully comes into effect in 2026, with the Guardian 3 a market-leading option.”

It’s therefore a no brainer that the more proactive, safety-conscious, OEMs are going to accelerate the process of installing advanced, camera-based DMS. With its technological lead further buttressed by leadership in gaining regulatory approval and certification for use by commercial vehicle manufacturers Seeing Machines should take a very healthy chunk of the market in Europe.

Massive market in Europe

The scale of this regulation-driven opportunity is huge as McNally conveyed with some stats: “The European Automobile Manufacturers’ Association (ACEA), which ‘unites’ Europe’s 15 major car, truck, van and bus makers, stated that European bus production rose 19% to 33k vehicles in 2023. In addition, commercial truck production rose 16% to 347k. For comparison, Seeing Machines reported a total of 14.8k hardware units sold in FY23 which produced $14.5m in revenue from hardware and installations.”

McNally reiterated his investment case for Seeing Machines with ‘BUY’ recommendation and a 13p price target. “We continue to think that Seeing Machines is leading the DMS market. At current levels, the shares trade at 4.0x FY24E EV/sales or 3.3x FY25E, which we think is attractive for a market leader in a large industry with a three-year forecast revenue CAGR of 27% or 42% for gross profit through FY26E.”

Personally, I’m expecting upgrades this financial year as Seeing Machines market leadership in Aftermarket and Auto (never mind Aviation) becomes glaringly obvious and profitability is achieved.

The writer holds stock in Seeing Machines