Seeing Machines Ltd (AIM:SEE, OTC:SEEMF, FRA:M2Z), the AIM-listed AI-powered operator monitoring systems company, expects adjusted EBITDA to turn positive in both the third quarter and second half of its current financial year as approaching European road safety regulation drives a significant increase in automotive royalty volumes.
The company said royalties from automotive production volumes are projected to rise significantly in the coming quarters as the General Safety Regulation (GSR), which mandates driver monitoring technology in new European vehicles, moves into active implementation and OEMs transition their compliance strategies into production.
The outlook accompanied half-year results for the six months to 31 December, in which automotive royalties grew 33% to $8.4 million ($6.3 million).
This reflected a 62% rise in production volumes to 1,088,530 units, even as adjusted revenue dipped to $23.4 million ($25.3 million) due to a reduction in non-recurring engineering fees and the conclusion of certain exclusivity licence arrangements.
Cars fitted with Seeing Machines technology on the road reached 4,818,371 units, up 67% year on year, which the company said reinforces its global leadership in driver and occupant monitoring system fitment.
The adjusted EBITDA loss narrowed by $4.0 million to $13.7 million (loss of $17.7 million), while gross profit margin improved to 58% from 55%.
Cash stood at $3.4 million at 31 December 2025, though a post-period accelerated lump sum royalty payment of $14.1 million has since been received from a Tier 1 automotive customer under an existing programme guarantee.
The company has also secured a receivables funding facility of up to A$11 million ($7.8 million) to support working capital, and said it has made good progress toward refinancing a convertible note maturing in October 2026, with completion expected by the end of the financial year.
Business wins in the period included an expansion of a European Tier 1 programme, adding approximately $10 million to its lifetime value and a new production award with Mitsubishi Electric Mobility Corporation in Japan.