Seeing Machines Ltd (AIM:SEE, OTC:SEEMF) CEO Paul McGlone talked with Proactive about the company’s latest announcement regarding an accelerated lump sum payment linked to automotive royalties, its improving financial position, and key technology demonstrations at CES.
McGlone explained that the payment follows a material change to an automotive production program, enabling Seeing Machines to trigger contractual guarantees tied to minimum volumes or absolute payments. As a result, the company has negotiated the full value of expected royalties, discounted over five years, to be received as a lump sum and recognised this month. He described the outcome as “a very good deal for us,” noting that the revenue will flow directly through to profit and cash.
Importantly, McGlone emphasised that the payment is incremental to Seeing Machines’ existing trajectory. He confirmed that the company achieved a cash-flow breakeven run rate by the end of December, stating that “the December month was a cash flow positive and profitable month, the first for us.” He added that Seeing Machines is highly confident of profitability in the third and fourth quarters, meaning the entire second half is expected to be profitable, even without factoring in the accelerated royalty payment.
The discussion also covered Seeing Machines’ presence at CES, where the company is demonstrating advanced 3D interior perception mapping technology with partners including Valeo. McGlone highlighted growing opportunities across software-defined vehicles, robotics and autonomous vehicle applications, as well as progress in intoxication detection technology and future mobility initiatives.
Proactive: Paul, very good to speak with you and happy New Year. You’ve certainly hit 2026 with the ground running. Let’s start with the announcement you made yesterday. You’ve notified the markets that you’re to receive an accelerated lump sum payment related to automotive royalties. There are a few questions around that. You mentioned there was a change to an automotive production program. Can you explain that in more detail?
Paul McGlone: We’ve mentioned a number of times to the market that we have a number of programs and contracts that are underwritten by guarantees, either minimum volume guarantees or absolute payment guarantees. We have four of those in total, and this program represents one of them.
What’s occurred in this case is that, for reasons outside our control, the program at the customer end has been materially changed in timing and volume. Those changes enabled us to trigger the guaranteed commitment and renegotiate the outcome. The outcome we’ve negotiated is fabulous for the company.
We’ve agreed the entirety of the amount, discounted for the time value of money over five years, resulting in a lump sum payment that will be booked this month. That payment will fall into this quarter and the second half as revenue, and it drops straight to profit and cash.
Normally, when programs are delayed, you have to wait until the end of the program to discuss settlement. In this case, because of the contractual guarantees, we’ve been able to negotiate a very good outcome. All other programs with this customer are either in production or approaching production and are entirely on track.
Proactive: You mentioned profits and cash flow. What is the impact of this payment on profitability and cash flow?
Paul McGlone: It’s profoundly positive. But stepping back to the statements we’ve been making for the last couple of quarters, we committed to achieving a cash-flow breakeven run rate by the end of December, and I can confirm that has been achieved. December was a cash-flow positive and profitable month, the first for us.
We are also highly confident that we will achieve profitability in our third and fourth quarters, and therefore the whole of the second half. We are now on the path to profit, and that’s without considering the impact of this accelerated royalty payment.
This payment improves revenue, profit and cash. It isn’t the trigger that enables profitability; it’s a material addition to our existing commitments.
Proactive: While we have you, your team is at CES. What’s the focus of the demonstrations this year?
Paul McGlone: CES was really busy for us. The market is changing rapidly with the explosion of software in vehicles, robotics and autonomous vehicles. We’re becoming more focused on that area and are running deep proof-of-concept demonstrations with key customers.
With Valeo in particular, we’re demonstrating an advanced 3D interior perception map that brings the cabin experience to life. We see it as a technological breakthrough that’s ahead of the market.
We’ve also released a video demonstrating intoxication detection, showing both the algorithms and the real-world use case of what happens if a vehicle detects intoxication.
In addition, we’ve announced a focus on future mobility. We’ve brought together teams working with autonomous vehicle players, initially selling backup driver monitoring technology. Now, we’re in dialogue with several key players around a more advanced fusion of interior and exterior sensing, with our technology at the core. These are existing resources and products repurposed to capitalise on a new opportunity, and discussions are progressing positively.
Proactive: It sounds like an exciting and profitable year ahead. Thanks for your time.