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(Sharecast News) - Seeing Machines reported lower first-half revenue but narrowing losses on Wednesday, as it prepared for the 7 July EU General Safety Regulation deadline mandating camera-based driver monitoring systems in all newly registered vehicles.
The AIM-traded computer vision technology group said revenue for the six months ended 31 December was expected to be between $23.4m and $24m, compared with $25.3m a year earlier.
It said the decline reflected lower non-recurring engineering activity as major automotive programmes transition into production, and the absence of licence revenue linked to prior exclusivity arrangements.
Annualised recurring revenue rose to $14m as at 31 December from $13.5m on 30 June, supported by growing Guardian connections.
The adjusted EBITDA loss was expected to narrow to between $13.1m and $13.7m, compared with $17.7m in the prior year period, with operating expenses reduced following a strategic reorganisation in the 2025 financial year.
Cash at period end stood at $3.4m, down from $22.6m on 30 June.
The $19.1m reduction comprised around $13.1m related to operating performance, $5m to working capital movements and $1m of deferred consideration for the Asaphus acquisition announced in July 2024.
Seeing Machines said the increase in working capital was primarily driven by higher inventory levels, which were expected to unwind in the second half as delivery commitments are met.
Post period end, the company received an accelerated lump sum royalty payment of $14.1m from a tier one automotive customer under an existing Automotive Program Guarantee.#
In automotive, cars on the road using Seeing Machines' driver and occupant monitoring system technology reached 4,818,731 units, up 67% year on year from 2,883,745 on 31 December 2024.
Production volumes rose 62% to 1,088,530 units, driving a 43% increase in automotive royalty revenue to $9m from $6.3m.
The group also secured an expansion of an existing European tier one and OEM programme with an expected additional $10m in initial lifetime value, with production due to commence in 2028, and a new production award in Japan with Mitsubishi Electric Mobility Corporation alongside an advanced development project with another Japanese OEM.
In aftermarket, the company received a $1.8m Guardian order from a North American autonomous vehicle operator and a 1,100-unit order from a US-based multinational fleet operator.
It also formed a dedicated Future Mobility Group to support the autonomous and next-generation mobility ecosystem.
Seeing Machines said automotive production volumes were expected to increase materially over the coming quarters as GSR implementation approaches, with adjusted EBITDA anticipated to turn positive in the third quarter and the second half of 2026.
The company said it continued to trade in line with market expectations.
"During the first half, we made strong progress in reshaping the business for scale as we approached a key regulatory and commercial inflection point," said chief executive Paul McGlone.
"Looking ahead, we expect royalty revenues to accelerate as OEMs roll out their compliance strategies, alongside continued growth in Guardian connections driving higher annual recurring revenue.
"Our focus remains firmly on generating positive cashflow in the second half of 2026."
The company said it would publish its unaudited first-half results and directors' report in March.
At 0936 GMT, shares in Seeing Machines were down 25.56% at 3.13p.
Reporting by Josh White for Sharecast.com.