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Highlights

  • Seeing Machines shares plunge 22.17% on 18 February 2026, following its mixed H1 FY26 results.
  • H1 FY2026 revenue dips to USD 23.4–24.0 million, down from USD 25.3 million.
  • Adjusted EBITDA losses narrow sharply to USD 13.1–13.7 million from USD 17.7 million.
  • Automotive production volumes surge 62% to over 1.08 million units in H1 FY2026.
  • Vehicles equipped with DMS/OMS reach 4.82 million, up 67% year-on-year.
  • Post-period royalty payment of USD 14.1 million boosts near-term cash position.

Seeing Machines Ltd (LSE:SEE) shares fell 22.17% to GBX 3.27 during the morning session on 18 February 2026. The stock is also down 15.75% over the past year, reflecting continued pressure despite operational progress.

The decline followed the company’s H1 FY2026 trading update, which presented a combination of softer top-line performance and improving operational momentum as the 7 July 2026 EU General Safety Regulation (GSR) deadline approaches.

Revenue Dips, But Losses Narrow

For the six months to 31 December 2025, reported revenue is expected between USD 23.4 million and USD 24.0 million, compared with USD 25.3 million in H1 FY2025. The decline reflects lower non-recurring engineering activity and the absence of prior licence revenue linked to exclusivity arrangements.

However, adjusted EBITDA losses narrowed significantly to an expected USD 13.1 million to USD 13.7 million, versus USD 17.7 million a year earlier. Operating expenses also declined following the company’s FY2025 strategic reorganisation.

Annualised Recurring Revenue (ARR) rose to USD 14.0 million, up from USD 13.5 million as of 30 June 2025, supported by growing Guardian connections.

Automotive Volumes Surge Ahead of Regulation

Operationally, momentum in Automotive remains strong. Vehicles on the road using Seeing Machines’ Driver and Occupant Monitoring System (DMS/OMS) reached 4,818,731 units, marking 67% year-on-year growth.

Production volumes increased 62% to 1,088,530 units during H1 FY2026. Automotive royalty revenue climbed 43% to USD 9.0 million from USD 6.3 million a year earlier.

The company also expanded an existing European Tier 1 and OEM programme, adding approximately USD 10 million in expected initial lifetime value, with production slated for 2028. In Japan, a new production award with Mitsubishi Electric Mobility Corporation and an advanced development programme with another major OEM signal continued geographic expansion.

With GSR implementation imminent, camera-based Driver Monitoring Systems will become mandatory in newly registered EU vehicles, positioning Seeing Machines at what management describes as a “growth inflection point”.

Aftermarket Orders Provide Support

In Aftermarket, the company secured a USD 1.8 million Guardian order from a North American autonomous vehicle operator and a 1,100-unit fleet order from a US-based multinational operator. Discussions for further expansion are ongoing.

A dedicated Future Mobility Group has also been formed to support autonomous and next-generation mobility applications.

Cash Position Tightens

Cash on 31 December 2025 stood at USD 3.4 million, down from USD 22.6 million at 30 June 2025. The USD 19.1 million reduction included USD 13.1 million related to operating performance and USD 5.0 million in working capital movements, largely due to higher inventory levels expected to unwind in H2 FY2026.

Post period-end, the company received an accelerated lump sum royalty payment of approximately USD 14.1 million from a Tier 1 automotive customer under an existing programme guarantee, providing near-term liquidity support.

H2 Outlook Remains in Focus

Management stated that the company continues to trade in line with market expectations and anticipates materially higher production volumes in the coming quarters as OEM compliance strategies move into full production.

Adjusted EBITDA is expected to turn positive in Q3 and in the second half of FY2026, with a focus on generating positive cash flow during H2.

While revenue softness and cash drawdown weighed on investor sentiment, accelerating royalty volumes and regulatory tailwinds suggest the company is positioning for stronger momentum in the second half of the financial year.

Frequently Asked Questions (FAQs)

Q1: Why did Seeing Machines shares fall sharply on 18 February 2026?

Shares fell 22.17% following softer H1 FY2026 revenue and cash drawdowns, despite operational growth in automotive volumes.

Q2: How did the company perform financially in H1 FY2026?

Revenue declined to USD 23.4–24.0 million, but adjusted EBITDA losses narrowed to USD 13.1–13.7 million, reflecting improved operational efficiency.

Q3: What are the growth drivers for Seeing Machines in H2 FY2026?

Accelerating automotive production, mandatory EU GSR compliance, and expanded aftermarket orders are expected to drive stronger momentum.