REG - Seeing Machines Ltd - H1 FY2025 Trading Update & Quarterly KPIs

Seeing MachinesAnnouncement

26/02/2025 07:15

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RNS Number : 4496Y  Seeing Machines Limited  26 February 2025

 

Seeing Machines Limited ("Seeing Machines" or the "Company")

 

 

26 February 2025

 

H1 FY2025 Trading Update & Quarterly KPIs

 

Strong cash position, 90% increase in cars on road & new partnerships

position Company for success against wider market turbulence

 

 

Seeing Machines Limited (AIM: SEE), the advanced computer vision technology
company that designs AI-powered operator monitoring systems to improve
transport safety, provides a trading update for the six months to 31 December
2024 ("H1 2025") and quarterly Key Performance Indicators ("KPIs") for the
quarter ended 31 December 2024, based on unaudited numbers.

 

Key Financial Highlights:

 

-     Reported Revenue for H1 2025 is expected to be US$25.3m, in line
with the equivalent period in the prior year (H1 2024: US$25.7m)

-     Annualised Recurring Revenues of US$13.4m (H1 2024: US$13.0m)

-     Strong balance sheet, with cash at 31 December 2024 of US$39.6m (30
June 2024: US$23.4m)

-     Reduction in operating expenses(1) for H1 2025 of US$5.7m compared
to H1 2024 and a reduction of US$2.2m compared to H2 2024

-     EBITDA loss continues to improve with H1 2025 expected to be around
US$9.5m to US$10.0m (H1 2024: loss US$14.3m)

-     Adjusted EBITDA loss expected to be around US$17.5m to US$18.0m (H1
2024: loss US$26.5m)

-     Cars on the road with Seeing Machines' technology increased to
2,883,745 units

 

(1) Operating expenses include research and development costs capitalised and
exclude one-off/other items

 

Key Operational Highlights:

 

-     Seeing Machines secured a landmark £26.2m (US$32.8m) investment as
part of its partnership with Mitsubishi Electric Mobility Corporation
("MELMB"), a global leader in the design and manufacture of automotive
products and technologies. Following an additional purchase of shares, MELMB
now holds 19.9% of Seeing Machines' issued share capital, strengthening the
Company's balance sheet and providing a strong foundation for future growth.

-     The investment by MELMB was underpinned by a collaboration agreement
where the two companies have joined forces to grow their market share in Japan
and harness rising demand for driver safety solutions as the Japanese
Automotive OEMs prepare for regulatory deadlines in Europe and beyond.

-   The Mitsubishi collaboration will also extend to all areas of Seeing
Machines' transport related business and is intended to eventually expand into
adjacent markets where Seeing Machines' Intellectual Property may be leveraged
to enhance segments in which Mitsubishi has an existing competitive advantage.

-     Valeo and Seeing Machines entered a strategic collaboration to grow
market share in Automotive. The market leading scale of Valeo, alongside its
expertise in cutting-edge cameras and processing units, software and system
integration, will help to accelerate adoption of the Company's AI-powered DMS
and OMS technology. The companies are working closely together to jointly
pursue new business as Seeing Machines strategically partners with a small
number of blue-chip Tier 1s to enhance opportunities for growth.

-  Seeing Machines acquired software company Asaphus Vision GmbH
("Asaphus"), providing a significant material boost to AI and Machine Learning
capabilities. Asaphus, now operating as Seeing Machines Berlin, provides the
Company with a European footprint, leaving it strongly positioned to support a
rapidly growing customer base with both technical and operational staff.

-   The UK's largest electric bus manufacturer, Northern Ireland based
Wrightbus, became the first commercial vehicle manufacturer to achieve
homologation (i.e. been approved and certified) for Europe's General Safety
Regulation, leveraging Seeing Machines' Guardian Generation 3, installed in
vehicles as they are sold into Europe.

Post period end

-   Signed Referral Agreement with Mitsubishi Electric Automotive America
Inc. ("MEAA"), enabling Seeing Machines to leverage Mitsubishi's significant
Aftermarket distribution network and customer base of over 1m individual
vehicles across The Americas to accelerate sales of the Company's Guardian
Generation 3 AI-powered driver monitoring solution.

 

Q2 FY2025 KPI highlights:

 

-   Cars on the road with Seeing Machines' technology increased to
2,883,745 units, representing an increase of 90% from 12 months ago (Q2
FY2024: 1,516,545)

-   In line with weakness across the wider automotive market, Quarterly
production of 266,654 units, down 34% from the previous quarter (Q1 FY2025:
405,669) and up 28% from the previous corresponding quarter (Q2 FY2024:
208,231), demonstrating continued year on year growth despite
quarter-on-quarter volatility.

-   Annual Recurring Revenue (ARR), excluding Caterpillar, increased by 3%
in US$ compared to the same period 12 months ago. ARR in US$ declined by 1%
from the previous quarter, however, increased by 6% in constant currency
terms. The majority of recurring revenues are derived in A$, which weakened
against the US$ towards the end of Q2 2025.

 

Automotive Production Volumes (production of new vehicles using Seeing
Machines' Driver Monitoring System (DMS) technology):

 

                         Q2 FY2024  Q3 FY2024  Q4 FY2024  Q1 FY2025  Q2 FY2025
 Production FY2024 - 25  208,231    313,662    381,215    405,669    266,654
 % Growth Qtr on Qtr     (6%)       51%        22%        6%         (34%)
                         Q2 FY2023  Q3 FY2023  Q4 FY2023  Q1 FY2024  Q2 FY2024
 Production FY2023-24    141,747    173,802    211,325    222,138    208,231
 % Growth Comparative    47%        80%        80%        83%        28%

 

The Company has experienced ongoing year on year growth in Automotive
production volumes, but consistent with turbulence in the global automotive
market, Q2 FY2025 has seen increased volatility resulting in a reduction in
sequential volumes across all OEM customers. While this volatility has
influenced the timing of some high margin royalty revenue, the Company remains
in a unique position where several programs have minimum payment guarantees
which are now being received, but not yet being recognised as revenue in H1
2025.

 

Importantly, as the EU's General Safety Regulation (GSR) introduces the
requirement for Advanced Driver Distraction Warning (ADDW) in July 2026 for
all new cars, vans, trucks and buses, this will generate increased adoption,
and therefore the Company's expectations for production volumes and associated
high-margin royalty revenue in 2026 remain largely unchanged.

 

As OEMs respond to the regulations, Seeing Machines expects to continue to
benefit from the increasing adoption of driver monitoring technologies across
a widening range of global markets.

 

Aftermarket (Guardian) (technology for commercial transport fleets and
logistics organisations):

                                         Q2 FY2024  Q3 FY2024  Q4 FY2024  Q1 FY2025  Q2 FY2025
 Guardian Hardware unit sales            3,037      1,660      9,807      1,491      288
 ARR excluding Caterpillar (historical)  $13.0m     $12.9m     $13.3m     $13.6m     $13.4m
 % Growth Qtr on Qtr                     8%         (1%)       3%         2%         (1%)

 

Guardian Generation 3, the Company's aftermarket safety technology targeting
the commercial transport and logistics segment, is now in production and being
trialed globally in several large fleets. These trials are well underway and
have seen Guardian outperform its competition due to its precision detection
of fatigue and distraction by leveraging the Company's automotive grade DMS
technology, coupled with its unique 24/7 monitoring services and cloud-based
platform.

 

While slightly delayed, the production ramp will increase substantially during
H2 FY2025 helping to meet demand and the requirements of the robust global
pipeline.

 

Despite the delay, Guardian units continue to be connected across transport
and logistics fleets as previously sold Guardian Generation 2 units are
installed, largely in the Asia Pacific region, contributing to Annual
Recurring Revenue. The Referral Agreement with MEAA will also see an
acceleration of opportunities for Guardian Generation 3 across The Americas as
Seeing Machines works with MEAA to successfully leverage their significant
customer base in the region.

 

Paul McGlone, CEO of Seeing Machines, commented: "We continue to identify
growth opportunities created by the rising demand for driver monitoring
systems, despite some turbulence across the global automative market. Our
collaboration and work with Mitsubishi is extremely promising, and the
Referral Agreement with MEAA is expected to contribute this financial year.
Together, these partnerships place us in a strong position from which to grow
our overall market share within the transport and logistics sector.

 

Prior to the introduction of ADDW requirements for GSR in July 2026, which
will increase DMS fitment across Europe, we remain focused on working to
achieve a sustainable cashflow break-even run rate. The exact timing of
achieving this is dependent on the recovery of automotive royalty revenue and,
given the wider market volatility mentioned above, we now expect this target
to be reached by the end of the 2025 calendar year.

 

Global road safety continues to be a priority for world leaders, and our
technology is set to play a key role in achieving that. Our disciplined cost
management initiatives over the past 12 months are contributing to progress,
and we are well positioned to make further improvements through H2 FY2025 to
achieve a significantly lower cost base by FY2026 that will enable us to more
effectively exploit the growing global and structural adoption of DMS."

 

The Company expects to publish its unaudited H1 FY2025 results on 27 March
2025.

 

This announcement contains inside information under the UK Market Abuse
Regulation. The person responsible for arranging for the release of this
announcement on behalf of the Company is Paul McGlone, CEO.

 

 

Enquiries:

 

 Seeing Machines Limited                                            +61 2 6103 4700
 Paul McGlone - CEO

 Sophie Nicoll - Corporate Communications

 Stifel Nicolaus Europe Limited (Nominated Adviser and Broker)                                       +44 20 7710 7600
 Alex Price

 Fred Walsh

 Ben Good

 DGA Group (Media Enquiries)                                        +44 20 7664 5095

 James Styles

Methuselah Tanyanyiwa

 Matthias Jarosz

 seeingmachines@dgagroup.com (mailto:seeingmachines@dgagroup.com)

 

About Seeing Machines (AIM: SEE), a global company founded in 2000 and
headquartered in Australia, is an industry leader in vision-based monitoring
technology that enable machines to see, understand and assist people. Seeing
Machines is revolutionizing global transport safety. Its technology portfolio
of AI algorithms, embedded processing and optics, power products that need to
deliver reliable real-time understanding of vehicle operators. The technology
spans the critical measurement of where a driver is looking, through to
classification of their cognitive state as it applies to accident risk.
Reliable "driver state" measurement is the end-goal of Driver Monitoring
Systems (DMS) technology. Seeing Machines develops DMS technology to drive
safety for Automotive, Commercial Fleet, Off-road and Aviation. The company
has offices in Australia, USA, Europe and Asia, and supplies technology
solutions and services to industry leaders in each market vertical.

www.seeingmachines.com (http://www.seeingmachines.com)

 

 

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