Seeing Machines (AIM:SEE) shares shot up around 9% on Tuesday, to 5.17p, after the AIM-listed maker of AI-powered driver monitoring technology announced financials ahead of market expectations, with adjusted revenue up 45% to $76.3m in the year ended 30 June, from $52.8m in FY2025.
The growth accelerated sharply in the second half, with revenue up 126% to $52.9m from $23.4m in the first half, as the mix shifted toward higher-margin automotive royalties.
Earnings (adjusted EBITDA) for the second half is expected to be positive, in a range of $10.7m to $11.7m, reversing a $13.7m loss in the first half; the full-year Adjusted EBITDA loss is expected to narrow to between $2m and $3m.
Automotive production volumes using the company's technology rose 195% to 4.5m units in FY2026, with the fourth quarter alone up 333% year-on-year to 2.1m units, as OEMs ramped up ahead of the EU's General Safety Regulation mandating camera-based monitoring systems, which came into force on 7 July.
Cash stood at $4.3m at 30 June, up from $3.4m at the end of December, with trade receivables and royalties owed rising to $25.3m from $11.6m as royalty revenue built through the fourth quarter.
Guardian annual recurring revenue grew 12% to $15m, and the company secured $5.6m in Guardian orders from a robotaxi customer alongside a roughly 1,100-unit fleet deployment win.
"FY2026 was a pivotal year for Seeing Machines, with record Automotive production volumes, strong revenue growth and a profitable second half that demonstrates the operating leverage in our business," said chief executive Paul McGlone.
The company is in exclusive negotiations to refinance its convertible loan note ahead of its 4 October maturity, and expects to publish audited results before the end of September.
News Intelligence what this means for the company
Seeing Machines swung to profitability in H2 FY2026 on a 126% revenue surge driven by automotive royalties, as OEMs accelerated production ahead of the EU's July safety mandate. The company reported 4.5m units using its technology in FY2026 (up 195%), with Q4 alone jumping 333% year-on-year to 2.1m units, and expects full-year Adjusted EBITDA loss to narrow to $2–3m from a $13.7m H1 loss. This marks the inflection from R&D-heavy to cash-generative that the company has been targeting, though a near-term refinancing of its convertible note due 4 October remains a material near-term risk.
The H2 profitability and operating leverage demonstrate the business model is working at scale, but the company's $4.3m cash position is tight relative to the $25.3m in receivables and royalties owed—execution on the refinancing is now critical to avoid dilution or covenant stress. The EU mandate pull-forward is a one-time event; sustaining growth depends on new OEM wins and Guardian recurring revenue, which grew only 12% to $15m.
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Another derisking event for the investment case
Shore Capital Markets reacted to the latest positive update by repeating a 'Buy' rating that comes with a 9.5p price target, which compares to Tuesday's market price of 5.17p.
Analyst Alasdair Young, in a note, highlighted that Tuesday's trading update further "de-risks the investment case", as it shows Automotive royalty volumes materially exceeding expectations.
Young meanwhile points to a shift in investor focus from balance-sheet concerns to execution and earnings delivery amid indicative refinancing negotiations. Q4 volumes of 2.11m units were about 35% ahead of Shore's 1.57m forecast, prompting updated FY26F numbers while FY27F forecasts were left unchanged.
