Seeing Machines Ltd (AIM:SEE, OTC:SEEMF) has experienced a significant increase in demand for its driver monitoring systems (DMS) technology, with over 2.6 million vehicles now equipped with its systems across eight automotive programs. This marks a doubling of the figure from the same period last year, demonstrating strong growth for the company despite challenges in the automotive industry.
The DMS technology, which uses artificial intelligence to detect driver drowsiness and distraction, aims to enhance road safety by continuously monitoring driver behavior. In the first quarter of the 2025 fiscal year, production volumes of vehicles with Seeing Machines’ DMS reached 405,669 units, according to the company’s investor update.
CEO Paul McGlone expressed confidence in the company’s growth trajectory, highlighting the successful progress of its automotive programs to production. He emphasized the importance of regulatory developments and the increasing demand for driver monitoring systems in driving future growth.
In the Aftermarket segment, Seeing Machines has adjusted its performance metrics following a licensing agreement with Caterpillar, a heavy equipment manufacturer. The agreement brought in an upfront license fee of $16.5 million, with a portion recognized as revenue in the previous fiscal year and the remainder to be spread over the contract’s term. This arrangement is expected to provide stable income for the company, smoothing out revenue fluctuations.
The company has introduced updated performance indicators for its Aftermarket Guardian product, focusing on hardware unit sales and annual recurring revenue (ARR) to better reflect ongoing growth. Excluding the impact of the Caterpillar deal, ARR has grown by 13.4% year-over-year. Guardian hardware sales are anticipated to rise in the second half of the fiscal year as production of the third-generation product increases.
Seeing Machines’ recent updates have received positive feedback from investment banks, with Stifel reiterating its ‘buy’ recommendation and setting a target share price significantly higher than the current trading price. The bank’s analysis highlights the company’s attractive valuation relative to its enterprise value and annual sales, positioning Seeing Machines as a leader in the industry poised for steady growth.
Stifel’s optimistic outlook is supported by strong growth forecasts, projecting a compound average growth rate (CAGR) of 23% in revenue and a 42% increase in gross profit through 2027. The bank’s analysis suggests that Seeing Machines could become a key player in the automotive safety technology market, with the potential to sell an additional 1.9 million DMS-equipped units in 2025.
Peel Hunt, another investment firm, also rates Seeing Machines as a ‘buy’ up to 7p, aligning with its performance expectations but anticipating a second-half weighted performance. Overall, the company’s robust start to the new financial year signals confidence in its growth trajectory and market position.
