Seeing Machines reports continued royalty revenue growth

Driver monitoring technology developer Seeing Machines reported consistent growth in high-margin royalty revenue in its third quarter on Thursday, despite challenges faced by the automotive industry.

The AIM-traded firm said the number of cars on the road increased by 177% over the 12 months ended 31 March to 874,851 units.

Guardian connections also saw growth, increasing 30% over the period to 49,050.

Additionally, 4,913 Guardian units were sold and yet to be connected.

The company said it exceeded its 50,000 Guardian connection milestone as at 30 April.

Seeing Machines was optimistic as it continued to experience quarter-on-quarter growth in high-margin royalty revenue.

It said the growth was expected to continue as new programmes started production, despite challenges in seasonality, the supply chain, and global economic factors affecting the automotive industry.

The company also said that in the aftermarket segment, quarterly Guardian connections had grown steadily, and units sold but yet to be connected had decreased, contributing to annual recurring revenue.

It noted that the monitored connections figure did not include additional hardware sales from Guardian upgrades, from the first to the second generation.

As Australia was phasing out its 3G networks in favour of 4G over the next year, it said replacement sales counted for an additional 1,294 units.

“I am pleased with the consistent, steady quarterly growth across both automotive and aftermarket, and exceeding the major milestone of 50,000 Guardian units installed as at the end of April was particularly important in the face of supply chain issues over the past couple of years,” said chief executive officer Paul McGlone.

“The annual growth for cars on road of 177% and 30% for Guardian connections, is significant and will continue to accelerate as more cars start production across increasing programs, and as we get our next generation of Guardian technology into the market.”

McGlone said regulatory momentum continued to be a key driver across the business, as Europe's General Safety Regulation would require driver monitoring system technology to reduce risks on roads, and the United States moved to a similar safety-focussed approach.

“Our market leading position, diversified go to market strategy and scale means we are ideally positioned to continue benefiting from the ever-growing focus on transport safety around the world.”

At 1129 BST, shares in Seeing Machines were down 0.37% at 5.66p.

Reporting by Josh White for Sharecast.com.