Seeing Machines H1 FY26: Automotive Royalties Surge 33% as Fleet Grows Beyond 4.8M Vehicles, EBITDA Profitability on Horizon

Seeing Machines H1 FY26: royalties up, cars on road surge, EBITDA break-even in sight

Seeing Machines has posted a solid half-year update for the six months to 31 December 2025, with the story firmly about scaling royalties in Automotive, a growing installed base, and a tighter cost base. The headline: Automotive royalties rose 33% while cars on road jumped to 4.8 million. Management expects Adjusted EBITDA to turn positive in Q3 and across H2 FY2026.

The flip side is cash was tight at period end, reflecting royalty payment timing and the wind-down of one-off licence and engineering income. Post period, the company shored up working capital with an accelerated lump-sum royalty receipt and a receivables facility. If you’re backing the royalty model into the EU’s GSR mandate from July 2026, this reads like a business gearing up for operating leverage.

Key numbers at a glance

Automotive engine firing: scale, royalties and GSR tailwind

Automotive is doing what it should in a model like this: production up 62% to 1,088,530 units, cars on road up 67% to 4,818,371, and royalties up 33% to US$8.4m. As programmes mature, the mix shifts from non-recurring engineering (NRE) to high-margin per-vehicle royalties – exactly what long-term holders want to see.

Two drivers to call out. First, the European General Safety Regulation (GSR) requires camera-based driver monitoring systems in all new vehicles sold in the EU from July 2026. OEMs are already accelerating production through H2 FY2026, which should feed royalty growth in coming quarters. Second, Seeing Machines says it retains more than 50% share of current production volumes, a strong base as fitment rates rise globally.

Programme momentum continues: a European Tier 1/OEM expansion added about US$10m of lifetime value with SOP expected in 2028, a new Japanese production award with Mitsubishi Electric Mobility Corporation, and a further Japanese OEM collaboration moving toward a formal award in H1 CY2026. Aviation contribution was softer due to timing and partner changes at Collins Aerospace.

Aftermarket Guardian: Gen 3 rollout and new wins

The Aftermarket division held up well with revenue up 18% to US$12.7m. Hardware and installations more than doubled (+101%) on the Guardian Generation 3 rollout, while high-margin driver monitoring services were flat year-on-year, with APAC growth offset by lower Latin America volumes. ARR edged up to US$14.0m as connections grew.

Order intake and partnerships look encouraging:

• US$1.8m Guardian order from a North American autonomous vehicle operator.
• 1,100-unit fleet order from a multinational operator, with expansion under discussion.
• First US Guardian fleet win with Mitsubishi Electric Automotive America, as the Mitsubishi Europe pipeline progresses.

Licensing from Caterpillar nearly doubled (+95%) on support and maintenance services, while Caterpillar NRE eased as projects completed. The newly formed Future Mobility Group targets autonomous and next-generation mobility programmes – a sensible move to corral capability and go-to-market in that space.

Margins up, costs down – but mind the cash

Group gross margin improved to 58% (from 55%), helped by the richer royalty mix and better hardware margins on Gen 3. Adjusted EBITDA loss narrowed to US$13.7m, a US$4.0m improvement, with adjusted operating expenses down 14% to US$27.7m following the FY2025 restructuring. Headcount reduced to 353 (from 455 a year earlier).

On IFRS, the operating loss was US$18.8m and the net loss US$22.5m, with a basic loss per share of 0.4568 cents. Capitalised development was lower as several major OEM programmes completed and new awards are in the prep phase, which also pushes more development expense through the P&L near term.

Cash at 31 December 2025 was US$3.4m, down from US$22.6m at year end, reflecting working capital swings and the absence of prior one-off licence cash receipts. Post period, the company received a US$14.1m accelerated lump-sum royalty from a Tier 1 under an existing Automotive Program Guarantee and secured a receivables funding facility of up to A$11 million (US$7.8 million) to smooth quarterly-in-arrears royalty cash cycles. Borrowings of US$54.4m are now current (previously non-current), consistent with the Convertible Note maturing in October 2026, which management expects to refinance by year end FY2026.

Tech leadership: 3D cabin perception and impairment detection

Seeing Machines showcased its 3D Cabin Perception Mapping at CES 2026, pitching scalable, real-time in-cabin intelligence for automotive, factory automation and robotics. It also launched impairment detection for alcohol and broader non-transient impairment – timely given US regulatory focus. These add to the existing integrated rear-view mirror solution that’s already in production.

Outlook: GSR-driven royalty ramp and EBITDA positivity targeted

Management expects royalties to rise significantly as GSR implementation approaches and as OEMs move programmes into active production. The company says it is trading in line with market expectations and expects Adjusted EBITDA to be positive in both Q3 and across H2 FY2026. The RNS footnote cites consensus for FY2026 revenue of US$79.7 (unit not specified in the RNS footnote) and Adjusted EBITDA of US$(3.9)m.

The H1 FY2026 financial report is available on the company’s site for the full detail: Seeing Machines investor reports.

My take: why this matters for investors

Positives:

• Clear scaling in Automotive – more vehicles, more royalties, better margins. That’s the flywheel this business is built on.
• Aftermarket resilience with Gen 3 rollout and fresh wins in the US and autonomous segments.
• Cost base reset is showing up in improved Adjusted EBITDA despite lower NRE/licence income.
• Strategic positioning ahead of the EU GSR mandate is attractive, with more than 50% share of current production volumes.

Watch-outs:

• Cash was very tight at period end; while the US$14.1m accelerated royalty and A$11m facility help, working capital discipline and timing of receipts remain critical.
• IFRS losses widened year-on-year, and the shift away from one-off licence/NRE revenue depresses reported revenue near term even as quality improves.
• Competition is rising, Aviation contribution was lighter, and execution through a rapid production ramp is always operationally demanding.
• Convertible Note due October 2026 – management aims to complete refinancing by FY2026 year end, which will be a key catalyst.

What to watch next

• Delivery of positive Adjusted EBITDA in Q3 and H2 FY2026.
• Further OEM programme awards, especially in Europe and Japan, and evidence of GSR-driven volume uplift.
• Aftermarket order flow for Guardian Gen 3, particularly in North America and with Mitsubishi channels.
• Cash trajectory and collections as quarterly-in-arrears royalties scale; progress on Convertible Note refinancing.
• Commercial traction for 3D Cabin Perception Mapping and impairment detection solutions.

Bottom line

This is a classic transition from development-heavy revenue to a recurring, high-margin royalty model, and H1 FY2026 shows that transition accelerating. If the GSR tide lifts volumes as expected and management lands EBITDA positivity in H2, the operating leverage should start to show through. Near-term, keep a close eye on cash, collections and the refinancing path – but the core growth engine looks in good shape.