Seeing Machines FY2025 Results Show Growth as EU DMS Mandate Nears

Other moving parts:

• NRE (non-recurring engineering) was US$9.4m, broadly flat, helped by contributions from the newly acquired Asaphus Vision GmbH.
• Licence revenue fell to US$3.2m as the Magna exclusivity period ended on 30 June 2025; these licence agreements are one-off in nature.
• The Asaphus acquisition adds AI/ML depth and a Berlin base; a collaboration was also launched with Valeo.

Why it matters: the EU mandate for Advanced Driver Distraction Warning (ADDW) from July 2026 requires camera-based DMS, which should underpin continued programme awards and a rising installed base. Royalty earnings tend to lag programme wins, so today’s NRE and integration work are future revenue signals.

Aftermarket: Guardian Gen 3 finally in production, Mitsubishi channel opening

Guardian Generation 3 moved into full production. After earlier delays, Q4 FY2025 hardware sales rebounded 120% quarter-on-quarter to 2,536 units, with 5,466 units sold in FY2025. Referral agreements with Mitsubishi Electric Automotive America, Inc. and Mitsubishi Electric Europe B.V. are in place to accelerate sales across the Americas and Europe, with the first US deal signed post period end.

Segment dynamics:

• Driver monitoring (recurring connections) revenue rose 9% to US$13.6m – attractive, high-margin recurring revenue.
• Hardware and installations dropped 66% to US$6.4m due to earlier Gen 3 production delays; management says Gen 3 units are now available to meet pipeline demand.
• Aftermarket royalties were nil after Caterpillar royalty agreements were replaced by a five-year licence in June 2024.
• US$1.2m Guardian BdMS contract secured with a leading North American autonomous vehicle company.
• UK bus homologation achieved for Guardian Gen 3 with two manufacturers.

My read: the Q4 hardware bounce and Mitsubishi referrals suggest the “go-to-market” is strengthening. The mix shift back towards installations should help top-line growth, while connections sustain margin quality.

Costs, cash and the path to break-even

The strategic reorganisation removed around US$12m from the annualised cost base. Headcount fell from 509 to 393 (including 34 from Asaphus). Excluding one-offs, adjusted operating expenses fell 16% year-on-year. This flowed through to a smaller Adjusted EBITDA loss and a markedly better H2 run rate.

Cash ended steady at US$22.6m. Operating cash outflow was US$12.3m, reflecting inventory payments to wind down Generation 2 and ramp Generation 3. On an adjusted basis (excluding one-off licence receipts), combined operating and investing cash outflow improved to US$33.5m (FY2024: US$37.2m). Borrowings rose to US$51.3m, and finance costs increased to US$8.0m.

Outlook-wise, management reiterates a cashflow break-even run rate by end of calendar 2025 and a push to be cashflow positive in H2 FY2026 and beyond. Current trading is said to be in line with expectations.

Regulation and industry momentum: tailwinds building

EU GSR has already required DDAW (drowsiness and attention warning) across all new vehicles since July 2024. The key step-up is ADDW from July 2026, which mandates eye-tracking to detect distraction – effectively requiring camera-based DMS. Euro NCAP also rewards vehicles with DMS, nudging OEM adoption further.

Beyond Europe, the US NHTSA is progressing proposed rulemaking with a phased roadmap for distraction, drowsiness, alcohol impairment and eventual safe stops. Australia is focusing on heavy vehicle safety, and China and Japan are moving towards mandates. Seeing Machines is active in policy forums and technical working groups, which helps keep its tech aligned with evolving standards.

What could move the shares next

• New automotive programme awards linked to EU ADDW – management expects awards in the coming months.
• Q1 FY2026 KPIs in early November – a checkpoint on royalty volumes and Guardian momentum.
• Aftermarket deal flow via Mitsubishi in the Americas and Europe, plus UK bus rollouts.
• Evidence of cashflow break-even run rate by year-end and continued H2 profitability progress.

Management will present the results today at 10:00 BST via Investor Meet Company. If you want the primary source, the link is here: Seeing Machines FY2025 results presentation. Background on the company is available at www.seeingmachines.com.

My take: increasingly positive setup, with a few watch-outs

Positives

• Royalty flywheel is starting to turn: +35% royalty revenue and a 69% larger installed base position the business well for the 2026 EU deadline.
• Margin quality improved sharply to 63%, reflecting the model’s operating leverage as mix shifts to royalties and licences.
• Aftermarket catalysts: Gen 3 availability, UK bus homologation and Mitsubishi referrals, plus a credible AV contract in North America.
• Cost discipline: meaningful opex reduction and better H2 EBITDA run rate.

Watch-outs

• Headline revenue benefited from US$10.2m of guaranteed minimum royalty recognition; underlying adjusted revenue fell 22% year-on-year.
• Still loss-making with negative operating cash flow; borrowings increased and finance costs rose.
• Aftermarket hardware was held back by earlier Gen 3 delays (now resolved), and licence revenue can be lumpy by nature.

Bottom line: the regulatory clock is ticking in Seeing Machines’ favour, and the H2 momentum is encouraging. If automotive royalty volumes keep compounding and the Mitsubishi channel delivers Guardian wins, the path to cashflow break-even in late 2025 and positive H2 FY2026 looks achievable. Execution over the next three quarters – programme awards, Guardian sell-through and cash discipline – will be the proof points to watch.