Seeing Machines has announced a $31m expansion to an existing automotive program with a major European OEM, covering additional vehicle models across China, the US and Europe, with production commencing in the second half of 2026. Crucially, this is a pure royalty revenue opportunity - given it is an extension of an existing production program, so no non-recurring engineering (NRE) work is required, meaning the revenue will carry near-100% margins from the outset. Furthermore, the quantum or value (being $5-6m pa.) is also material hence reinforcing our confidence in SEE’s potential to double u/l OEM revenue FY26-28 (from $37m to $76m). Finally, this also highlights how OEM growth is not solely dependent on new customer wins or the EUGSR regulatory catalyst, as existing OEMs are rolling out SEE’s DMS/OMS technology across their broader vehicle portfolios globally. If correct, this represents upside to our valuation hypothesis, which centres on the near-term European market opportunity. Buy rec reiterated, n/c to forecasts or 8.6p TP (25x cal-27 P/E).
