Seeing Machines reports milestone sales growth, $82m contract amid expanding automotive safety market
() , a computer vision technology company that designs AI-powered operator monitoring systems to improve transport safety, released its audited financial results for H1 2024 ended December 31, 2023.
Seeing Machines reported a revenue increase of 28% for H1 to US$25.6m, excluding one-off Magna exclusivity payments. Of that, OEM (automotive and aviation) revenue was US$11.4m, driven by high-margin per vehicle royalty revenue, derived from automotive production volumes up by 35% year-on-year to US$4.2m.
Seeing Machines' annualised recurring revenues also increased by 22% to US$14.5m from US$11.9m last year, and aftermarket (fleet and off-road) revenue was up 38% to US$14.3m from US$10.3m in H1 2023.
Gross profit decreased to US$10.6m as a result of revenue mix changes, specifically a lower proportion of revenue coming from license fees and a higher proportion from hardware sales, as well as a lower margin on services revenue. Net loss also increased to US$19.8m due to higher development expenditure, mainly driven by increased amortisation of previously capitalised expenditure. Development expenditure is expected to reduce in H2.
Net operating cashflows improved to a net outflow of US$1.1m, down from US$6.8m in H1 2023, thanks to stricter working capital management. Cash on December 31, 2023 was US$22.2m with cash burn of US$13.9m for the half-year. Cash position supported by receivables and inventory balance was US$31.1m, with working capital unwind of $5-6m expected in H2 FY2024.
Operationally, Seeing Machines began production of its highest volume programme to date, with an initial lifetime value of US$82m. The project is for interior cabin sensing (driver and occupant monitoring system technology) via a single camera system, delivered for a large German OEM.
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Good interim results from Seeing Machines, with double-digit underlying revenue growth and launch of its largest yet US$82m programme for a German automaker. The company recorded 1.5m cars on the road during the half amid continued operational and strategic progress. Overall, is well-placed for continued growth in FY24, expecting a typical weighting to H2, and retaining guidance that FY24 performance will be in line with market consensus.
Higher royalty revenues contributed to total revenue growth as Seeing Machines' fleet grew to 1.5m cars, up 116% over last year. In addition to the US$82m German contract, the company was appointed to deliver 2 additional automotive programs with a combined initial value of US$45m, bringing total won business to 17 programs with 11 individual OEM customers. This brings cumulative initial lifetime value of all OEM programs to US$366m, with the majority expected by 2028.
On the R&D front, Seeing Machines' Guardian Generation 3, its new aftermarket Driver Monitoring System (DMS) for the commercial transport sector, was independently tested at IDIADA's test and development facilities, and assessed to meet requirements for drowsiness detection in the European Commission's General Safety Regulation (GSR), which is set to come into effect in July 2024. Guardian is now installed and monitoring 56,896 individual vehicles, up 24% from last year.
Seeing Machines' business will be further buoyed by transport safety regulations in the coming years, mandating the fitment of driver monitoring technology into vehicle cabins. With a strong balance sheet, improving cashflows, growing recurring revenues, and strong momentum in its order book, is well-positioned for continued growth.
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