Seeing Machines (SEE) H1 2025 earnings summary

Executive summary

• Management emphasized a clear path to profitability, driven by automotive royalty growth, Gen 3 product rollout, and significant cost reductions, including a $12m annualized reduction targeting break-even in 2025.

• The company resolved major supply and technical issues with Gen 3, enabling resumed shipments and improved margins.

• Strategic partnerships and investments included a $32.8m investment from Mitsubishi Electric Mobility for a 19.9% equity stake and reseller agreement, as well as collaborations with Valeo and the acquisition of Asaphus Vision to expand AI/ML capabilities and European presence.

• Regulatory changes in Europe (GSR 2026) are expected to drive a tenfold increase in royalty volumes over the next 15 months.

• The company is confident in its ability to repay the $60 million Magna convertible note due October 2026, supported by projected cash flow.

Financial highlights

• H1 FY2025 revenue was $25.3m, down 2% year-over-year; OEM revenue rose 27% to $14.5m, Aftermarket fell 25% to $10.8m.

• Gross profit increased 32% to $14.0m, with gross margin improving to 55% (H1 FY2024: 41%) and a target of 70% by June 2026.

• Cost reductions of $12 million annualized have reduced cash burn from $3 million to $2 million per month.

• EBITDA loss improved to $9.7m (from $14.3m); adjusted EBITDA loss improved by $8.8m to $17.7m.

• Cash balance at December was just under $40 million, up from $23.4m at June, with break-even expected during calendar 2025.

Outlook and guidance

• Automotive royalty volumes in Europe are expected to rise from 160,000 units in Dec 2023 to 1.6 million per quarter by June 2026.

• Board expects FY2025 performance in line with consensus: revenue $58m, adjusted EBITDA $(28.9)m.

• Aftermarket Gen 3 production capacity will reach 6,000 units per quarter, generating $1 million/month in additional margin.

• Cash flow generation of $10 million per quarter is projected by mid-2026, supporting debt repayment.

• Expects cash flow break-even run rate during calendar 2025.