Seeing Machines Ltd (AIM:SEE, OTC:SEEMF) reported a rebound in automotive royalties, underpinned by stronger performance from its Guardian Gen3 product and growing momentum ahead of Europe’s General Safety Regulation (GSR) deadline in July 2026. McGlone said, “We are highly confident of an increasing growth rate in automotive royalties.” The company also highlighted solid progress toward cash flow breakeven, supported by top-line growth, productivity gains, and sustained cost control.
McGlone noted that the company manufactured 2,500 Guardian Gen3 units at the end of the last quarter, with expectations to scale quarterly output to between 6,000 and 6,500 units by year-end. He also pointed to new opportunities with Mitsubishi Electric, saying the partnership could unlock growth in adjacent markets beyond the company’s traditional segments.
Ive elaborated on the recognition of $10.2 million in guaranteed royalty revenue in FY25, tied to a production program that commenced in June. He further outlined expectations of an additional $43 million in guaranteed minimum revenues in FY26, with $800,000 and $5.3 million recognised in the first and second halves, respectively.
Proactive: Paul, Martin, very good to speak with you. Paul, I'll start with you — give us your view of the results, please.
Paul McGlone: We're very pleased with this set of results. The top line is growing as we indicated it would in April. What we have seen is a really strong rebound in our automotive royalties. We've seen our Guardian Gen3 product start to move. We are approaching production capacity and we made 2,500 units right at the end of the last quarter, so that sends a positive tone for what's coming next.
Costs — we've talked about that quite a bit. That’s really made a strong contribution to our underlying performance and reduced our burn rate. I think the combination of our top-line growth, general productivity inside the business, increasing confidence around royalties, and the absolute cost reduction we've managed is putting us in a very strong position to get to that cash flow breakeven. So — very pleased.
Proactive: Paul, as you mentioned, automotive royalties have started to increase again over the second half. Do you expect that to continue to grow during full year 2026?
Paul McGlone: Yes, we do. As most people know and as we've mentioned, the European General Safety Regulation kicks off on July 26th, along with Euro NCAP requirements which increase each year. What we're expecting to see from now through July — and beyond — is an accelerating growth rate in automotive royalties.
We're very confident. We have several new programs that will hit start of production, delivering increased volume into our plan. We also have the GSR opportunity pulling more volumes through the OEM. So at this point, we are highly confident of an increasing growth rate in automotive royalties.
Proactive: Martin, while you haven’t split out the revenue by business unit, you reported that auto revenues include 10.2 million USD in royalty revenue related to guaranteed minimum volumes. Could you expand on that?
Martin Ive: We've talked about this previously. We have several program awards that are fairly unique — they include a guarantee of a minimum volume of royalties over the life of the award. The amounts payable to us follow the planned production schedule.
We started receiving those payments during FY25. The first of those programs started production in June. Under accounting standards, this triggered recognition of revenue for the full program. For that program, this was 10.2 million USD — that’s been recognised as revenue for FY25.
Proactive: Martin, excess volume is included in adjusted EBITDA as it’s more closely aligned with operational performance. This means that any volumes relating to production vehicles but not under guarantee will be included in the adjusted EBITDA number. Is that correct? How does that ensure it's in line with performance?
Martin Ive: Yes, that’s correct. Our adjusted EBITDA metric is a proxy for cash flow and operating performance. The main element we adjust for is expensed capitalised R&D. We also exclude some one-off items — this year, for example, termination costs related to headcount reductions.
The revenue recognised for the minimum volume agreements is excluded from adjusted EBITDA as it doesn’t reflect current-period performance or cash flow. Instead, we've included the payment amounts related to FY25 — that amount was 700,000 USD. In future, as volumes increase above the minimum, we’ll include that in both top-line revenue and adjusted EBITDA.
Proactive: Martin, can you give us a quick view of what to expect in full year 2026 regarding these guaranteed revenues?
Martin Ive: Yes. We have three other programs that include minimum volume guarantees — the total minimum value is 43 million USD. They're all scheduled to start production during FY26, so they’ll be recognised as revenue in that year.
In terms of adjusted EBITDA, the payments scheduled are 800,000 USD in the first half, and 5.3 million USD in the second half. That skew shows the impact we expect as we get closer to the GSR deadline in July 2026.
Proactive: Paul, you're already well into the first quarter. How is full year 2026 shaping up so far?
Paul McGlone: I think we’re in for a very solid year. Our level of confidence around the accelerating growth rate in royalties is now well set. That means we’ll see a more quickly reducing monthly burn rate between now and December.
Beyond that, we expect royalties to grow at an even faster clip than last quarter. This is really positive. Our Guardian products — by the end of this calendar year — we expect to be producing and selling at full production capacity, between 6,000 and 6,500 units per quarter.
Also, our relationship with Mitsubishi Electric is now very strong. The growth prospects extend beyond the aftermarket automotive space into a range of verticals where Mitsubishi is strong. We're starting to explore the business case for entering these adjacent markets.
I think that bodes well not just for this fiscal year, but for the momentum going into FY27.
Proactive: Gents, I hope you will continue to keep us updated with your progress. Thank you very much for speaking with us today.