Seeing Machines Ltd (AIM:SEE, OTC:SEEMF) CEO Paul McGlone talked with Proactive about the company’s recent Q4 KPIs and ongoing progress towards cash flow breakeven and profitability. McGlone said Seeing Machines had significantly reduced costs by over $1 million per month, a key milestone already flowing through to the company’s accounts and growth plans.
He highlighted a “dramatic recovery” in automotive royalties, with Q4 showing 36% quarter-on-quarter growth. McGlone added, “If that growth rate just maintains at, say, 20% for the next two quarters, we’ll be right in the middle of our $700,000 to $750,000 range per quarter.”
The CEO also shared positive developments in aftermarket demand for Guardian Generation 3, noting strong uptake across EMEA, the Americas, and Asia-Pacific. The company delivered more than 2,500 Gen 3 units in the quarter, and is targeting between 6,000 and 6,500 units per quarter by year-end.
McGlone explained that sales momentum is underpinned by regulatory drivers such as the upcoming General Safety Regulation (GSR) in Europe, as well as an active RFQ pipeline and trials with around 20 new customers globally.
On the automotive side, while RFQ closures have been delayed due to the European summer, McGlone said, “The RFQ pipeline is actually really strong,” adding that all current programs are hitting start-of-production timelines.
He reaffirmed the company’s two strategic focus areas: growth in royalties and Gen 3 unit sales. With GSR set to drive significant royalty expansion through to July 2026, McGlone expressed confidence in the company’s growth trajectory.
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Proactive: Paul, very good to speak with you. Could you give us your general view on the KPIs released in London yesterday?
Paul McGlone: The quarterly KPIs for Q4 — we're really pleased with the results. There are two key items to call out. We've seen a quite a dramatic recovery in our automotive royalties, which we have been expecting, so it's good to see that that's now happening — 36% growth quarter on quarter, which was very important. And we're starting now to see sales come through in our Generation 3 aftermarket product. We did just over 2,500 units. That is pretty consistent with our expectations and those we’ve provided to the market. So quite pleased with the result, and I do expect that momentum will continue right through to the end of this financial year.
Proactive: Paul, can you elaborate on the growing demand in aftermarket for Guardian Generation 3?
Paul McGlone: Yes. It’s very well known that we were delayed in bringing that product to market for a whole range of reasons. But we do have a very strong level of demand. We're beginning to approach our quarterly production capacity of between 6,000 and 6,500 units. That's the target we're looking to sell by the end of this calendar year, and then build from there.
Of the three regions we operate in, there’s a different profile in each. In the Americas, we have two distributors and one resale agreement, which is through Mitsubishi, as we’ve published before. The big effort there is direct, and we have a strong pipeline of large direct opportunities.
EMEA is a different mix. We already have around 6,000 or 7,000 trucks connected there. In the lead up to General Safety Regulation (GSR), that’s a very strong opportunity. We're working with OEMs, focusing on new business and new distributors.
In Asia-Pacific, we have a strong customer base and distribution network. The single biggest opportunity is expanding penetration with existing customers. We’re also running about 20 trials around the world, mostly with new customers. So we feel pretty good about the prospects over the next two quarters.
Proactive: And in automotive, are you expecting RFQs to finalize in the short term?
Paul McGlone: Yeah. This has been one of life's great disappointments — trying to predict RFQ award dates. As I’ve mentioned before, we respond to an RFQ, have multiple rounds of negotiation on price and technical issues, we’re given a date, and that date has constantly moved in the last year.
All of the RFQs that were nearest a couple of months ago butted up against the European summer. So we didn’t close anything prior to the end of July, as we thought we would. But we are very hopeful they will close as our customers in Europe return to work.
The RFQ pipeline is actually really strong. What’s most important right now is that the programs we’re working on hit start of production. They are all hitting that on time. Two factors will drive royalty growth: GSR with existing customers, and new programs hitting start of production. That is the consequence of our effort in developing these programs.
Proactive: Paul, looking back on your recent town hall in London where you announced some cost management initiatives. Do you have an update on that?
Paul McGlone: Yes, I do. There were three key points at the town hall. The main objective was to reach our cash flow breakeven run rate by the end of this calendar year — and we are absolutely on track for that.
The three areas we focused on were: automotive royalties reaching $700,000 to $750,000 per month by year-end, selling Guardian Gen 3 units at our current capacity of 6,000 to 6,500 per quarter, and reducing our monthly operating costs by $1 million. I’m pleased to say we’ve reduced operating costs by just over $1 million — that’s booked and flowing through into our monthly accounts.
On automotive royalties, we posted 36% quarter-on-quarter growth for Q4. If that growth maintains at even 20% for the next two quarters, we’ll be right in the $700,000 to $750,000 range. The cost work is done — we can tick that box. Now it’s all about royalties and Generation 3 sales, and we’re feeling more confident.
Proactive: What's next for Seeing Machines?
Paul McGlone: What’s going to be interesting for us and everyone else is watching European car sales. The top three OEMs by volume in Europe are our customers, which is really important. GSR underpins that. So we’re very focused on program delivery performance to drive royalties.
Overarching all of this is our commitment to cash flow breakeven and profitability. To deliver that, two things need to happen: costs managed — which we’ve done — and growth in royalties and Guardian Gen 3 sales. We’re highly confident in royalty growth through to July 2026 when GSR kicks in. There may be quarterly fluctuations, but the trajectory seems locked in.
Now it’s about engaging new sales teams in Europe and the Americas and pushing the Guardian product through our existing and new channels. That’s a big part of our focus.
Proactive: Well, Paul, I hope you'll continue to keep us updated with your progress. Thank you very much for taking the time today.