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1. Company Snapshot

1.a. Company Description

Seeing Machines Limited, together with its subsidiaries, provides driver monitoring technologies in Australia, North America, the Asia Pacific, Europe, and internationally.It operates through two segments: Original Equipment Manufacturer (OEM) and Aftermarket.The company offers operator monitoring and intervention sensing technologies and services for the automotive, mining, transport, and aviation industries.


It develops, sells, and licenses products, services, and technology to detect and manage driver fatigue and distraction, as well as provides software, after-sales monitoring, and consulting services.The company was incorporated in 2000 and is headquartered in Fyshwick, Australia.

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1.b. Last Insights on SEE

Negative drivers behind Seeing Machines Limited's recent performance include downward revisions to sales forecasts by analysts, as seen in the latest analyst coverage. The company's first half 2025 earnings revealed a US$0.004 loss per share, a slight improvement from the US$0.005 loss in the same period last year, but still indicating a decline in profitability. Revenue also decreased by 1.7% year-over-year to US$25.3 million.

1.c. Company Highlights

2. Seeing Machines' FY '25 Earnings: A Year of Transition and Growth

Seeing Machines reported a revenue decrease in FY '25 compared to FY '24, largely due to the transition from Gen 2 to Gen 3 in Guardian and a reduction in revenues from aviation. However, auto royalties increased by around 30% throughout the year, driven by a strong pipeline. The company's adjusted revenue, which recognizes revenue as production happens and amounts are owed, is expected to drive a significant increase in revenue from Gen 3 in FY '26. Analysts estimate next year's revenue growth at 57.6%. The actual EPS came out at 'None' relative to estimates at 'None'.

Publication Date: Oct -28

📋 Highlights
  • 35% Production Volume Growth: to over 1.5 million units in FY '25, driven by automotive demand.
  • 30% Auto Royalty Increase: in FY '25, with EU GSR regulations expected to boost royalties substantially in FY '26.
  • 50% Market Share: in automotive production volume, underpinning royalty stability and growth potential.
  • $22M Cash Balance: and target of $10M quarterly cash generation by 2026 to address Magna’s convertible note maturity.
  • $42M in New Royalty Agreements: from three programs projected to start production in FY '26, enhancing revenue visibility.

Financial Performance

The company's revenue was impacted by the transition to Gen 3, but the increase in auto royalties is a positive sign. Seeing Machines is expecting to achieve a cash flow breakeven run rate by the end of this calendar year and become cash generative in the current fiscal year. The investment phase of the business is largely complete, which will lead to benefits of scale in R&D expenditure and operating costs.

Market Share and Partnerships

Seeing Machines has around a 50% market share on a production volume basis and has partnerships with several companies, including CAT, Valeo, MiTAC, Magna, and Mitsubishi. The Mitsubishi partnership is expected to open up new adjacent markets, including insurance and smart factory. Paul McGlone notes that OEMs often choose multiple suppliers for each new generation of software, which is normal business.

Valuation Metrics

The company's valuation metrics indicate a mixed picture. The P/E Ratio is -7.82, and the P/S Ratio is 3.67. The EV/EBITDA is -24.89, indicating that the company's enterprise value is not justified by its EBITDA. The ROE is -52.97%, and the ROIC is -16.86%. These metrics suggest that the company's profitability is a concern.

Outlook

Seeing Machines expects a significant increase in auto royalties in FY '26, driven by the implementation of GSR regulations in the EU. The company expects to reach a breakeven cash flow position by the end of the calendar year, driven by cost management changes and increased auto royalties. The company aims to generate around $10 million of cash per quarter by the end of 2026.

Growth Opportunities

The company is developing a China strategy through partners to deliver specific features at a lower cost. Seeing Machines is also exploring opportunities in the aftermarket, with a large addressable market and a material pipeline. The company's aerospace business is developing capabilities with a major partner, Collins.

3. NewsRoom

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Fatigue risk persists in commercial transport globally according to Seeing Machines' latest Guardian Insights Report, released today

Dec -04

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Seeing Machines launches world-first 'attention sharing' feature for enhanced distraction detection capability in commercial fleets

Nov -13

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Retail investors account for 52% of Seeing Machines Limited's (LON:SEE) ownership, while public companies account for 24%

Oct -29

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Analysts Just Shipped A Notable Upgrade To Their Seeing Machines Limited (LON:SEE) Estimates

Oct -09

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Earnings Update: Seeing Machines Limited (LON:SEE) Just Reported And Analysts Are Trimming Their Forecasts

Sep -29

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Seeing Machines Announces Groundbreaking Impairment Detection Capability

Sep -09

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Are Investors Undervaluing Seeing Machines Limited (LON:SEE) By 46%?

Aug -19

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Exploring 3 Undervalued Small Caps In Global With Insider Buying

Aug -08

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.08%)

6. Segments

Aftermarket

Expected Growth: 10.3%

Growing demand for road safety and fleet management solutions, increasing adoption of advanced driver-assistance systems, and government regulations mandating driver monitoring systems drive the aftermarket growth.

Original Equipment Manufacturer

Expected Growth: 14.1%

Growing demand for advanced driver-assistance systems, increasing adoption of autonomous vehicles, and stringent safety regulations drive the OEM segment's growth, with Seeing Machines' technology integrated into vehicles at the manufacturing stage, enabling driver monitoring and safety features.

7. Detailed Products

Driver Monitoring System (DMS)

A computer vision-based system that tracks and analyzes a driver's attention, fatigue, and distraction in real-time.

FOVIO

A software development kit (SDK) that enables the integration of eye-tracking technology into various applications.

Occula

A cloud-based platform that provides real-time analytics and insights on driver behavior and attention.

Guardian

A fatigue monitoring system designed for the mining and transportation industries.

FaceLAB

A facial analysis software that tracks and analyzes facial expressions and emotions.

8. Seeing Machines Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Seeing Machines Limited is medium due to the availability of alternative solutions for driver monitoring systems.

Bargaining Power Of Customers

The bargaining power of customers for Seeing Machines Limited is low due to the company's strong brand reputation and limited alternatives.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Seeing Machines Limited is medium due to the availability of multiple suppliers for components and services.

Threat Of New Entrants

The threat of new entrants for Seeing Machines Limited is high due to the growing demand for driver monitoring systems and the relatively low barriers to entry.

Intensity Of Rivalry

The intensity of rivalry for Seeing Machines Limited is high due to the presence of established competitors and the high stakes in the driver monitoring system market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 39.25%
Debt Cost 4.04%
Equity Weight 60.75%
Equity Cost 9.05%
WACC 7.08%
Leverage 64.61%

11. Quality Control: Seeing Machines Limited passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Karooooo

A-Score: 6.8/10

Value: 2.7

Growth: 7.7

Quality: 9.0

Yield: 5.8

Momentum: 8.0

Volatility: 7.7

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GigaCloud Technology

A-Score: 5.7/10

Value: 5.9

Growth: 9.1

Quality: 6.2

Yield: 0.0

Momentum: 7.0

Volatility: 5.7

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Amdocs

A-Score: 5.7/10

Value: 4.9

Growth: 4.9

Quality: 7.1

Yield: 4.0

Momentum: 3.0

Volatility: 10.0

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Gen Digital

A-Score: 5.4/10

Value: 3.5

Growth: 4.6

Quality: 7.0

Yield: 4.0

Momentum: 5.0

Volatility: 8.3

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GoDaddy

A-Score: 4.6/10

Value: 3.1

Growth: 8.7

Quality: 6.8

Yield: 0.0

Momentum: 2.0

Volatility: 7.3

1-Year Total Return ->

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Seeing Machines

A-Score: 4.3/10

Value: 6.8

Growth: 5.7

Quality: 4.6

Yield: 0.0

Momentum: 1.5

Volatility: 7.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

0.05$

Current Price

0.05$

Potential

-0.00%

Expected Cash-Flows