Seeing Machines (SEE) H2 2025 earnings summary

Executive summary

• Auto royalties are expected to grow substantially, driven by new safety regulations in Europe, China, and the USA, with current market share around 50% on a production volume basis and over 3.7 million vehicles on the road.

• Guardian product and aftermarket solutions are poised for significant growth, supported by regulatory trends and new partnerships, notably with Mitsubishi Electric Mobility Corporation.

• Investment phase is largely complete, with cost reductions embedded and a clear path to cash flow break-even and profitability by the end of calendar 2025.

• Strategic collaborations with key partners (Caterpillar, AVALIO, Mitac, Magna, Mitsubishi Electric Mobility Corporation) are expanding market reach and opening new adjacent markets.

• Over $32.8M investment from Mitsubishi Electric Mobility for a 19.9% shareholding, expanding into new markets including insurance and smart factory.

Financial highlights

• Adjusted revenue reached $52.8M, up 22% year-over-year, with statutory revenue at $62.3M including minimum guaranteed royalties; FY2025 saw a $16M revenue decline compared to FY2024 due to product transition and reduced aviation revenues.

• Gross margin improved to 56.2%, up 9 percentage points from FY2024.

• Auto royalty revenue grew by about 30% in FY2025, with a shift in revenue mix toward higher-margin royalties and away from NRE.

• Minimum guaranteed royalty agreements resulted in $10.2M statutory revenue recognized upfront in FY2025, with $42M in additional minimum guarantees expected to go into production in FY2026.

• Cash balance at June 30, 2025 was $22.6M.

Outlook and guidance

• High double-digit revenue growth and margins above 60% projected for the coming year, with cash flow break-even targeted by end of calendar 2025 and positive cash generation expected in the second half of FY2026.

• Anticipated quarterly cash generation of ~$10M in latter half of 2026.

• Significant increase in production volumes anticipated as EU GSR regulations take effect, with fitment rates rising from 10% to 100% over the next four quarters.

• Focus on maximizing cash generation ahead of the October 2026 Magna convertible note maturity; company seeking additional debt facilities for repayment.