# Seeing Machines reports improved margins and royalty growth in H1 FY2026 - Link: https://www.directorstalkinterviews.com/seeing-machines-reports-improved-margins-and-royalty-growth-in-h1-fy2026/4121246743 - Published: 2026-03-27T07:13:03+00:00 - Author: Amilia Stone **Seeing Machines Limited **(LON:SEE), the advanced computer vision technology company that designs AI-powered operator monitoring systems to improve transport safety, has published its unaudited results and financial report for the six months to 31 December 2025 (“H1 FY2026”). > **Paul McGlone, CEO of Seeing Machines** commented: “_We delivered strong underlying > performance in the half, with Automotive royalties growing 33% alongside a 62% > increase in production volumes, and continued expansion in Guardian driving recurring > revenue growth and improved margins._ > _We are scaling rapidly, with over 4.8 million cars on road, new program wins > across Europe and Japan and increasing Aftermarket momentum. At the same time, > continued innovation, including our 3D Cabin Perception Mapping platform and impairment > detection capabilities, reinforces our technology leadership._ > _As regulatory adoption accelerates, particularly with GSR in Europe, we expect > further growth in production and royalties and remain on track to deliver positive > Adjusted EBITDA in the second half of FY2026.”_ **FINANCIAL HIGHLIGHTS:** **–    ** Adjusted Revenue for H1 FY2026 of US$23.4m (H1 FY2025: US$25.3m) reflects a decline in non-recurring engineering (NRE) activity in OEM and removal of certain license revenue as previous exclusivity arrangements conclude o  Annualised Recurring Revenues (“ARR”) increased to US$14.0m (30 June 2025: US $13.5m) as Guardian connections grew o  Aftermarket revenue of US$12.7m reflects an 18% increase on the previous year( H1 FY2025: US$10.8m) as Guardian Generation 3 sales flow through o  As previously disclosed, OEM (Automotive and Aviation) revenue was US$10.7m ( H1 FY2025: US$14.5m) as NRE and license fees reduced by US$3.7m and US$2.1m respectively – High margin per vehicle royalty revenue, derived from Automotive production volumes, increased 33% to US$8.4m (H1 FY2025: US$6.3m) **–    ** Gross Profit decreased slightly in H1 FY2026 to US$13.3m (H1 FY2025: US $14.0m), however Gross Profit margin increased from 55% to 58% over the same period driven by sales mix **–    ** Adjusted EBITDA loss improved by US$4.0m to US$13.7m (H1 FY2025: loss US$17.7m) **–    ** Cash at 31 December 2025 of US$3.4m (30 June 2025: US$22.6m). Post period end, an accelerated lump sum royalty payment of US$14.1m was received from a Tier 1 automotive customer under an existing Automotive Program Guarantee **OPERATIONAL HIGHLIGHTS:** Strong Automotive growth, new program wins and a growing technology leadership position Seeing Machines for accelerating scale. **Market Leadership** –     Cars on road reached 4,818,371 units, up 67% from the previous period (31 December 2024: 2,883,745 units), reinforcing global leadership in Driver and Occupant Monitoring System (DMS/OMS) fitment –     Automotive production volumes during H1 FY2026 reached 1,088,530 units, up 62% from 672,323 units in H1 FY2025 –     Automotive royalties increased 33% to US$8.4m (H1 FY2025: US$6.3m), reflecting growing programme maturity and scale **Business Wins** –     Expansion of European Tier 1/OEM programme, adding ~US$10m to its initial lifetime value, supporting semi-automated driving with a start of production expected in 2028 –     New Japanese production award with Mitsubishi Electric Mobility Corporation and additional OEM development collaboration with another major Japanese OEM, expected to progress toward formal award in the first half of CY2026 –     Aftermarket momentum: o  US$1.8m Guardian order from North American autonomous vehicle operator o  1,100-unit fleet order from multinational operator, with expansion discussions underway o  First US Guardian fleet win with Mitsubishi Electric Automotive America (MEAA) as the pipeline of opportunities with Mitsubishi Europe progresses **Technology Leadership** –     3D Cabin Perception Mapping successfully debuted at CES 2026, enabling scalable, real-time in-cabin intelligence for future mobility, factory automation and robotics –     Launch of impairment detection capability addressing alcohol and broader non- transient impairment, aligned with US regulatory focus –     Establishment of Future Mobility Group to support autonomous and next-generation mobility programmes **Outlook and Current Trading:** As GSR implementation approaches, royalties from automotive production volumes are projected to rise significantly in the upcoming quarters. Seeing Machines stands to benefit from increased royalty volumes, a broader base of recurring revenue, and greater operating efficiency as OEMs transition their compliance strategies into active production. The Company has made good progress to finance the Convertible Note, which matures in October 2026, and expects to complete the process by the end of FY2026. Post period end, Seeing Machines secured a receivables funding facility of up to A$11 million (US$7.8 million), established to support the Company’s working capital requirements and strengthen cashflow management, particularly in the context of extended payment cycles for automotive royalties which operate on a quarterly basis and are paid in arrears. The Company continues to trade in line with market expectations^([1]) and remains encouraged by its ongoing positive momentum. Adjusted EBITDA is expected to be positive in both Q3 and the second half of FY2026. The H1 FY2026 Financial Report is now available at https://www.seeingmachines.com/ investors/finance-reports _^([1]) Consensus expectations for FY2026 are for revenue of US$79.7, Adjusted EBITDA of US$(3.9)m_ Share on: