Seeing Machines Limited (M2Z.F) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Seeing Machines Limited Investor Presentation. [Operator Instructions] Due to the number of attendees on today's meeting, we may not be able to get through every question received, but the company will review all questions submitted today, and will publish responses where appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Paul McGlone, CEO; Martin Ive, CFO. Good afternoon.

Thank you. Thank you very much. Thanks, everyone, for joining us to hear our H1 results for financial year FY '23. This will be the first time you get an opportunity to hear from Martin, who will be taking us through the detail of the numbers today. But I'll just kick off with a summary. And from our perspective, this is a good set of results. I believe it's a good strong set of results for the half. We're showing growth across the business. I think it's evident in the numbers that the cost management initiatives that we've put in place are appropriate and working. I think we have appropriate investment for both the short, medium and long term. Our R&D is now balanced over the 3 horizons so that we can be certain that we can hit the requirements that we have for current programs but still be ahead of the game for those programs that we know will be coming down the pipeline in the next year or 2. And I think furthermore, we have a balance sheet today that is strong, and will see us through to the fulfillment of our current business plan. So all in all, a good set of results across the board. In terms of pipeline, remains strong also in each of the 3 areas of our business: Automotive, Fleet and Aviation. Across the board, we're very focused, not just on winning our fair share of the market, but also doing that profitably. And I'm quite pleased with the results so far. We're holding our price premium in the market across the board, which I think is very important not just for what we can announce as wins, but for the returns that are generated from each program that we do win and execute over what is a very long period of time. So from that perspective, very pleased. And I think just finally on the opportunity side, we have a growing addressable market across the board. And that is so in Automotive, it is so in Fleet and also in Aviation as we see new markets and new segments within the markets that we operate opening out. Just in terms of the numbers from a very high level, I've been talking about the revenue mix and margin improvement over time. I think this set of results is the first time where you can see evidence of that revenue mix change and how that's beginning to affect margin. And I think the important part of the news in this set of H1 results, insofar as it provides an insight into the future, is that we are seeing strong growth. And at the same time, the revenue mix change is delivering increasing margins and that all goes very well for our pursuit of profit. So this is, I believe, a very good position for us to be in. All of the hard work and effort over the last few years are now coming to fruition. And this combination of strong growth, revenue mix change to higher-margin revenue streams happening at the same time, will deliver us very good results over the coming next couple of years. And then just finally, before I introduce Martin, you'll notice that we have switched our reporting currency to U.S. dollars. Martin will explain why we've done that and what it means and also take us through the detail of the results. So thank you, and over to you, Martin.

Thanks, Paul, and good afternoon, everybody. Just to reiterate on Paul's point there, because of the increasing proportion of Seeing Machines' business conducted in U.S. dollars, from the 1st of July, a functional currency of the group has changed to U.S. dollars. And from now on, we'll report our financial information in that currency. We're pleased to report that revenue was USD 24.4 million for the half, an increase of 54% from the previous corresponding period. Underlying metrics of the performance was strong, with Guardian connections increasing to 46,018 and auto production volumes of 253,824 resulting in cars on the road with our DMS system of over 700,000. Additional funding of USD 47.5 million was secured from Magna through a convertible note of which USD 30 million has been accessed to date. This contributed to the cash balance, which increased to USD 52.2 million at the end of the period. The balance sheet is now considerably stronger than at the start of the financial year, and we have sufficient funding for our business plans. Free cash flow was negative USD 18.5 million for the half year. This has secured additional resources for current automotive projects, investment in research and development for next-generation features as well as the design and development of our soon-to-be-launched Guardian Gen 3 units. We expect a similar level of free cash flow in the second half as working capital requirements increase with the delivery of more Guardian units during the half before free cash flow improves in FY '24. The balance sheet strength sets us apart from our Tier 2 competitors. We are well-funded and a trusted partner, able to continue delivery on long-tail business well into the future. As mentioned, revenue increased 54% on the corresponding period a year ago, which demonstrates the tailwinds that we're experiencing with the pending regulatory requirements from Euro NCAP and the European General Safety Regulation in the EU expanding to more regions globally and the increasing focus on driver monitoring systems to support semi automation. The revenue mix for Seeing Machines has also started to change from nonrecurring engineering services, referred to as NRE, and other lower-margin revenues, to royalties and licensing, which are higher-margin revenue streams. As a result, gross profit has more than doubled to USD 15.5 million, just USD 2 million short of the gross profit of FY '22. Net loss reduced to USD 5.4 million compared to USD 10.1 million in the first half of last year. These results have been achieved in a period in which Aftermarket, the traditional revenue-generating business unit of Seeing Machines, has been constrained by supply of new units of Guardian hardware. The results of this constraint meant that only 1,536 hardware units were sold during the first half compared to 4,285 units in the first half of last year and overall business unit revenue declined 14% to USD 10.3 million. The number of Guardian units connected and subscribing to our monitoring service continued to grow, reaching over 46,000 by the end of December. The recurring net revenue from monitoring services increased to USD 5.9 million for the half with ARR increasing to USD 11.9 million as of the end of December. Churn on Guardian monitoring services continues to be low at less than 2%, demonstrating the value of this accumulating recurring revenue stream. Supply constraints for the production of Guardian have now started to ease, with a delivery schedule in place from December which will meet the majority of the pent-up demand for Guardian hardware. The first shipments were received towards the end of December and will continue for the current production run into the first half of FY '24. The initial impact of this has been very positive, with Guardian unit sales and hardware revenue in this early stage of H2 already exceeding what was achieved in the first half. Automotive revenues increased by over 300% on the prior corresponding period. This was largely driven by USD 5.4 million in revenues from the exclusive collaboration agreement with Magna. Royalty revenue also more than doubled as some of the early-stage programs in production increased in volume. Excluding the license payment from Magna, Automotive revenue was more than double the revenue from the first half of FY '22 and was 31% higher than the second half of FY '22. Production volumes in the half were 253,824 growing 123% and 25% from the first and second half of last year, respectively. Volumes from current programs are expected to continue to ramp in the second half of FY '23 and 4 new programs will enter production in the next 12 to 18 months, including 2 of the larger programs that we have been awarded to date. The shift in revenue mix in Automotive from NRE to royalties and licensing will continue to increase gross profit and be a major contribution as we move along the path to profitability. Aviation generated USD 300,000 in revenue for the half year, through a combination of hardware, license and NRE sales. The Aviation business is in a similar position to the Automotive business a few years ago, and is prime to grow as the avionics industry recovers from COVID to deal with significant pilot shortages, resulting in heightened risks of fatigue and distraction. On the cost side, margin has improved due to the change in revenue mix for the period with the growth in higher-margin revenues. It is expected that margin will reduce in the second half as a larger proportion of second half revenue will consist of the lower-margin Guardian unit hardware sales as product availability catches up with demand. However, it is expected that the ongoing trend for gross margin will be upwards as the revenue mix continues to change with a larger proportion of royalty and services revenue as well as the introduction of the Generation 3 Guardian products with its lower production cost. Operating expenses increased by 20%, including capitalized R&D, compared to the prior corresponding period. The main contributor was growth in R&D expenses from additional resources used for automotive projects and the development of Guardian Gen 3. No step change is required to meet current commitments from ongoing automotive projects. However, some incremental costs may be required for any new Automotive wins and cost growth in the other functions will be disciplined and measured. This half year demonstrated the impact of the change in revenue mix from low or no-margin NRE to high-margin services, licensing and royalty revenue. With the tailwinds from regulatory changes and the transport focus on fatigue and distraction, these high-margin revenue streams will continue to grow. In combination with the growing high-margin recurring revenue stream from the Aftermarket business, the financial performance of the company is on the path to profitability. In conclusion, Seeing Machines' total addressable market is expanding, underpinned by compelling structural drivers and regulatory tailwinds, which present an exciting opportunity to grow market share and deliver long-term growth. In the short term, company financial performance is expected to be in line with consensus expectations in FY '23. I'll pass over to Paul for some concluding remarks before we go to Q&A.

Okay. Thanks, Martin. So just to recap, we have an expanding addressable market, which is good. The pipeline continues to grow. It remains strong. We're seeing growth fall through to our numbers now, as demonstrated in this half's result. We expect that to continue. The revenue mix change that we've talked about for a while is real. You can see that coming through the numbers. And I think a very important sort of point to triangulate towards our profitability which we now have a line of sight to. And the final point, of course, the balance sheet that will support us to do what we need to do without any concerns about continuing to have to raise money or deliver any additional dilution. So I'm pretty pleased with the result, pretty pleased with the balance sheet. And I'll turn to some questions.

Fantastic. Thank you very much indeed for your presentation. [Operator Instructions] But just while the team take a few moments to review those questions submitted today, I'd like to remind you the recording of the presentation along with a copy of the slides and the published Q&A can be accessed via your investor dashboard. As you can see, we had a number of questions come throughout today's meeting. We did have a number of pre-submitted ones. So perhaps I may start with those, Paul, and perhaps you can just take them or direct to Martin. The first one reads as follows. In any future vehicles with no human driver input, do you see the role of your technology in occupant monitoring?

Yes, we do. And I think there's a couple of factors there that are really important. It's very clear today that full autonomous vehicles that are going to take material share of the total vehicle market, I mean, that's going to be a very, very long way off. So the road to full autonomy is semiautonomy and that road requires interior monitoring and specifically driver monitoring. So we see that being relevant and required for a very long time. And even in an environment where you have full autonomy, there is already programs underway to deliver a whole range of features sensing inside the cabin. So yes, certainly.

Fantastic. Next one we've got here. How long will it take you to release the quarterly KPIs after each quarter? For the last quarter ended December '22, then approximately 8 weeks to release date in February seems to be a long wait.

Yes, it is a long wait. But we release them when we get them. So the terms and conditions that we have with the Tier 1s but then back to back with the OEMs, the OEM provide the production schedule to the Tier 1; the Tier 1 delivers the product; and then roughly 8 weeks after that, we get a report that shows us how many units have been moved and that's the structure of the industry. So we put those out as soon as we receive them, and it's about 8 weeks.

That's great. And what happened to the several collaborations with the aircraft simulator companies?

Well, they continue. Some airlines over the last few years have continued. Others have put the handbrake on all kinds of development. I think what's important right now, though, if you look around the world, I mean here we are in New York today, there's big news everywhere about issues with airlines. The number of near misses are increasing. Back in our hometown in Australia, Qantas were recruiting 2,300 pilots over the next 18 months. So this revitalization is happening all over the world, and I suspect that we'll see the same flow through to the inquiry patterns and the purchasing patterns of airlines for both training and pilot monitoring. It's a long-tail business. It's been badly affected. It's clearly coming back and issues of fatigue and cognitive overload and the like in airlines today are profound. So that's a set of conditions that I think are positive.

That's great. If Seeing Machines is the only company offering a DMS solution for commercial vehicles, then why are you so conservative? Why aren't you forecasting not to sweep the board?

Well, we're not the only company. We'd argue that we have the high-performing signals that address the specific risks of fatigue and distraction, but we're certainly not the only company. And the matter of forecasting when you're small is complex and the -- as everybody would know, I think, the opportunity for significant variances, up or down, is almost an absolute. So we tend to be somewhat measured, positive but measured, and that's a function of where we are in the market, our size and a whole range of other normal commercial factors.

And next one reads as follows. Why in a recent interview did Mobileye say they were working on their own DMS when they've signed a collaboration agreement with us? I thought we only work with companies that abandon their own DMS projects.

Well, I think we're kind of mixing 2 subjects into the one. I mean what we've discussed and agreed with Mobileye is that we will offer our aftermarket product through their sales channel. So this is not the same as a conversation with a Tier 1 that's developing DMS for an OEM. It's quite a different conversation. So it's specific. What we're doing with Mobileye is specifically about aftermarket. It's not the same conversation as what we would have with a Tier 1 or an OEM and Mobileye's plans are Mobileye's plans. Our focus with them today is in aftermarket.

Are you planning to list on NASDAQ? And what would be the time line?

Look, as mentioned before, it is on our horizon. It's not on our immediate horizon. Several reasons for that. Current market would be one. I think we need to be in a position where our upward momentum is continued for another half or 2, at least so that we can be confident in the long-term trajectory as we'd be telegraphing those long-term forecasts for that kind of event. So it is in our thoughts, but it's not in our immediate thoughts.

Smart Eye seems to be winning tenders there, the most recent being in commercial vehicles. Are they surprising you with their win rate and getting a foothold in the commercial vehicle sector?

Look, no. No, I don't get surprised at all. I mean, if you look at announcements, that's one thing. If you look at new automotive RFQs, that's a completely different thing. So if you break it down, of the last 8 RFQs that were published to all participants, of the last 8 that were awarded, we won 4 of the 8. So that's the 50% I've been referring to for some time. And 1 of those a year and a bit ago was the largest RFQ ever awarded. So 40% to 50% is kind of where we sit. How people announce additional wins from incumbent programs is another matter, but they're not RFQs. We don't participate in those. But as far as truck OEMs go, I mean, we've elected not to pursue that business. We have received RFIs and RFQs. From our perspective, and I can't speak for others, but from our perspective, we can't make the economics work. They're complex programs. They run over a much longer time frame than typical passenger vehicles, and the ASP tends to be challenging. So for us, given the opportunity cost, I mean, we'd prefer to put our effort into higher value, higher margin passenger vehicle opportunities. I mean our focus for the truck market will be what we're calling after manufacturer, and that's a specific opportunity driven by GSR primarily in Europe at this point in time.

Where are we with regards to Guardian 3.0? What are the differences between Level 3 versus Level 2?

Look, that's -- there's a lot of detail in that question. But in summary, we're well advanced. We've received the prototypes. We've tested prototypes. That activity will continue right through this financial year. In summary, it's a small form factor. It has a very complete telematics integration capability that's very easy. It's got automotive-grade features, which will be -- I've already mentioned that we believe the performance of our features for the risk that we capture are best in market, but they'll be enhanced even further in this new product. It meets GSR requirements, and it's -- the unit cost is materially lower. And the installation and process are materially faster.

That's great. Is Magna mirror, maybe with their ClearView function, essentially Guardian 3.0? Or have we something further for aftermarket? Does this route eventually die off once commercial vehicles add DMS during production?

No. Look, I've heard all kinds of comments about Magna, Magna mirror and Guardian Generation 3, which is an aftermarket product. I mean most trucks don't have rear view mirrors, right? Because they have a trailer behind the cabin, so that's -- I'm not sure about the origin of that particular comment. That's not the starter. And no, we're not talking to Magna about production of our fleet product.

Great stuff. With a constant focus on costs, can you provide an update on the internal resource capability to handle the ongoing stream of new business we are winning?

Yes. Yes, I can. I mean we've been focused on cost for a while. And importantly, at the same time, we've been beefing up our engineering capability for a while, more than a year, probably 18 months now. And it takes that long to find them, bring them on board, upskill them and enable them to be fully productive. The big change that we've made is whilst we've continued to bring in core personnel into our business as full-time employees, we've also grown our relationship with external third parties, more than 1, and depending on what activity we're specifically referring to, but in general terms, our core engineering capability has been complemented by a third party where we've offshored a significant number of resources that complement our local team or teams. So I'm very comfortable that we have the right level of capacity. But more important than that, we have the right mix of capacity in terms of not just skills, but also in terms of full-time employees and third party. Now that affords us considerable flexibility should we require increasing resources, let's say, for additional programs that are complex that are required to work, we can up those engineering numbers quite quickly externally. And by the same token, we can turn them down. So this level of flexibility is really important and it's something we've been working on for 1.5 years, and we have very good partners in place now that are operating at a high level of productivity, and I'm really confident in their capability.

That's great. Why has the ARR dropped from USD 12.7 million on the trading update to USD 11.9 million on the H1 results?

Martin, you'd take that one?

Yes. Sure. So we included an explanation to this, I think, in the results pack that went out yesterday. We reviewed what was included in the ARR numbers at the trading update, which included some amount of hardware royalties that we received from Magna, which had previously been included in ARR as a recurring revenue. And whilst it is a recurring revenue stream of sorts, it does relate to one-off sales that Caterpillar makes through their mining vertical. So from Caterpillar, we get a royalty for hardware sales as well as the monitoring services. And so the monitoring services continues to be included in ARR, but we've now excluded the hardware royalty. And so that's the difference between the 2 numbers that you would have seen in the trading update and what we've included in the more recent results announcement.

That's great. Moving on to some of the other questions we've had through. Paul, I think you have touched on this, but if there is anything further to add, any comment on Smart Eye's recent design wins in [ proportion ] to the same time period for Seeing Machines?

Well, I think I've answered that already.

Perfect. Are you still confident of a 40% volume share and 50% value share in Automotive after all Smart Eye have announced 13 wins to our 4 in the last 12 months?

Yes. Yes, I am. And like I said, the number of wins is almost an irrelevance. I mean it's interesting. What's more important is that the volume of each new RFQ win and the value of the new RFQ win and obviously, the underlying average selling price for the licenses that are offered. So over the last 8 RFQ awards, as I said, we've won about -- well, exactly 50% of those, including that which was the largest ever awarded. So I'm still confident of that position.

Great. One for you, Martin. Why did you join Seeing Machines and make such a large personal investment very quickly?

So I can answer the why I joined Seeing Machines. So that I've been involved in the tech sector for a number of years, both here and in the U.S., and so we're here in the U.S. at the moment. So in the U.S. and back in Australia. And it's sector I enjoy. I was with a company that grew significantly over a number of years. And I saw that Seeing Machines was in a similar position to where I was at Altium about 10 years ago, and I just feel that it was a really enjoyable time for me working with a good group of people that could get a company to grow significantly over an extended period of time and add a significant amount of value to shareholders. And I see that, that is something that I have the opportunity to do here again. And some people never get that opportunity. So for me to have had that twice in my career is something I want to make the most of.

That's great. Paul, can you tell us about Gen 2 supply and the flow through to the launch of Gen 3?

Yes, yes. So Gen 2 has been constrained for more than a year. I think I've mentioned several times now that in H2 last year, we actually ran out of stock; we oversold the stock balance. We've sold about 1,500-odd units in H1 of FY '23 as reported. And if you put that into perspective, if we didn't have the supply constraint, we probably would have sold 8,000 or 9,000 units in H1. Now what's happened to that demand? Well, that demand's carried over. And what I can say is that so far, in this second half, we've sold more volume than the entirety of H1. Okay? So we just saw a return to normal production and delivery patterns at the very end of the year, which really didn't materialize until January. January is a difficult month because of availability of trucks with Christmas trading and New Year trading and the like. But since then, we've been receiving stock. That will continue right through June, July. And as I said, we've sold more in this second half so far than the whole of H1. So we see that stock problem is resolved, and we see demand now being fulfilled. So there's not really a strong correlation between that and Generation 3. Generation 3 is designed to access new markets because of the characteristics that I mentioned earlier. But that's the position on stock.

That's great. How do you see your margins increasing? Maybe one for you, Martin, perhaps first?

Yes. So I think as we've kind of talked through this presentation, we are moving from low or 0 margin NRE to the stage with the Automotive business that is generating royalties. The royalties are very high margin. Most of the work that is undertaken for the production royalties is upfront in terms of the R&D work that goes into creating the features and then commercializing the features. So a large part of that cost has already been incurred. So as we move into the production phase for the automotive programs, now that's when that revenue switches to a very high-margin revenue stream. Similarly, with the Aftermarket business, I think there are probably 2 drivers there, one of which is the accumulating balance of annual recurring revenue from the monitoring services as the number of connections increase, and that, again, is a higher-margin revenue stream. And as we move from Gen 2 to Gen 3, we will see an increase in margin from the hardware sales. So as the Gen 2 unit is now -- even though it's been redesigned, it's still quite an old generation of product. And so over time, that has become more costly to produce. And so as we move to the new generation product, we'd see that unit cost decrease and the margin increase from those sales. So I think the combination of those 3 elements, sees the overall margins for the business growing. And as the revenue from those revenue streams increases, obviously, that flows through to the bottom line and generates the margins. With our kind of disciplined cost growth in operating expenses, sees those margins flow through to the overall profit of the company.

That's great. A couple of questions here. I'll just blend them together, just looking at profitability, accounting profits. [ Samecross' ] latest forecast once again shows costs increasing, previous revenue forecast downgraded and point of profitability being pushed out. What's your view on that?

So I think [ Samecross] actually increased their revenue guidance for FY '23. I'm not sure what their position on '24 and '25 was. But I also know from the cost side of things, that they balanced up their gross profit for the second half to account for the fact that we were going to have a higher volume and a higher proportion of hardware sales, which will reduce the margin compared to the first half. In terms of the point of profitability, and I saw there was another question about when will we reach an accounting profit, I think this really depends on the timing of the ramp-up of the production royalties from the larger OEM wins that we've had. A couple of those will come online in the next 12 to 18 months. I think as those ramp up, which is something that we're not in control of those volumes, we do know that over time, they will increase and they will be significant. And they're, effectively, what are going to take us to the point of being profitable.

That's great. Right. The next one we've got here, where are we, here we go. Quite an in-depth question, but we'll break up into smaller parts. The recent trading update shows Fleet installs of 46,018, up 6,126 or 15.3% from H1 '22, yet secured annualized monitoring and recurring revenue only increased by USD 800,000 or 6.7%. That suggests those new installs will generate the following monthly monitoring income, $800,000 divided by 6,126 divided by 12, at $10.88. My understanding was more likely that, that would be significantly higher, around sort of $20 and direct around $40.

Yes. So I can take that one. So there are a number of things that impact. So I think what the question is asking is about the direct relationship between the ARR balance and the number of connected units. And conceptually, you would expect those 2 things to grow at the same rate. However, we do have a number of things that do cause a dislocation in those 2 numbers in the growth rate numbers. One of which, which is the most considerable over the last 12 months, which has been the depreciation of the Aussie dollar against the U.S. dollar. And so there is an FX impact on the ARR balance, given that the majority of the connections are in Australia and are billed and run into the ARR in Australian dollars. And so as the Aussie dollar's depreciated over the last 12 months, while the Aussie dollar amount has not changed, that amount reduces in U.S. dollars. So there's an impact there from that, which is, I think, the most significant dislocation over the last 12 months. We also have, which is picked up in the question, a difference in selling price between distributors or the distribution channel, the channel through Caterpillar and also our direct selling channel. And over -- particularly over the last 6 months, the majority of connections have been through the distribution channel, which is a much lower unit price than when we sell direct. So the skew has been more towards recent connections being at a lower rate as well as depreciation of the Aussie dollar in the overall ARR balance over the last 12 months. So they're the factors that have caused that dislocation to occur.

That's great. Smart Eye announced a fleet contract recently. Are we close to any OEM truck deals, which again, I think you did touch on a little bit, Paul, earlier on?

Yes. We did.

Next one we've got here, can you tell us whether you've increased the number of RFQs since you last announced? I think it was 12 RFQs. Are we close to completing?

Well, what I can say, as I've said before, of the last 8 RFQs, not extension wins, which is a different thing, we've won 4 of those. I expect of the balance of RFQs that we have on hand and according to the best steer that we get from the Tier 1, there's probably 4 or 5 of those, of the significant ones, that are due in the next 3 to 6 months to be awarded. And just to reiterate, it's very similar to the issue around forecasting, these are the indications that we get on the award time frame and they're subject to a whole range of reasons that would cause them to move one way or another. But there's 4 to 5 significant RFQs that, according to the Tier 1s that we're dealing through, are to be awarded in the next 3 to 6 months. Now there's probably a similar number that we expect to arrive in terms of new RFQs. And I'm talking now about significant RFQs, not small extensions or anything of that nature. So still a significant number; the number changes. Of those that have been awarded we've won half. I think there's 4 or 5, probably 5 in the next 3 to 6 months to be awarded subject to the time lines driven down by the OEMs, and another 4 to 5 of the same kind of volume of new significant RFQs to arrive. I think one other point I'd just make is that as we look at the volumes in Automotive, I mean -- and if you take the expected fitment rate that the external automotive analysts put out, for now, let's just take FY '28. And FY '28 of a fitment rate of 60%, which is the third parties number, that's an addressable market of about $600 million per year. If you look at how much DMS business has been awarded so far that we can calculate, that's about $700 million, right? And we're talking $700 million awarded lifetime value versus a potential addressable market of $600 million per annum in FY '28. So roughly speaking, there's about 10% penetrated, therefore, about 10x more volume to be awarded, just to get to the FY '28 forecast of the external auto tech analysts. So there's just a lot of road and a lot of runway to go in terms of RFQs that would fall, OEMs that will simply expand models or expand volumes on existing programs. All of those things will happen.

Fantastic. All right, we'll count these as the last few I think we're going to get time in for here. Is the company close to license the aviation product?

Yes. We are continuing to work down that path. It's -- these things are complex and it's a little bit similar to predicting an RFQ win date. But what I can say is we've been working on this for a long time. It is our intent that it will be close and I'm confident that it will be.

Can you discuss the difference between an OEM project and a specific auto model and whether your competitors use a similar definition or not?

I don't know what they use because they do what they do. An OEM program is an award that we would be issued by a single OEM for a certain volume of vehicles over a given period of time. We tend not to get involved in models. I don't know how you reconcile the model count with any veracity. We seem to struggle to do that. You certainly don't know typically, in our case, anyway, the exact number of models at the starting point. You're very clear about the target volume or the minimum target volume. And in our case, for about 1/4 of our programs, we have minimum guaranteed volume, which is quite unique. But in terms of model numbers, it's a moving feast and pretty opaque, so we tend not to report on it. That's us. We tend to focus on who's the OEM, what's the volume over time. And to me, that's verifiable data and that's the important data.

That's fantastic. Paul, Martin, look, thank you very much indeed. You've covered off a lot of questions there. I know we have got a few more through that have come through from investors, but of course, we can review those and publish responses where appropriate to do so. Paul, perhaps before redirecting investors to provide you with their feedback, which I know is particularly important to you and the team, if I could just ask you for a few closing comments, please.

Well, look, firstly, thanks for taking the time to hear, I guess, the next level of detail on what we write about our half. As I've said, I am pleased, the team are quite pleased with the progress that we've made. I think all of the numbers, despite the supply constraints that we have, show either significant growth or evidence of significant growth. We have the margin mix change -- the revenue mix change that will drive margin. That's now evident and appearing in the numbers. And we have growing demand. And as I've just explained a minute ago, that demand must continue to grow, and it's driven by a whole range of regulatory factors that are harmonizing around the world. So pretty pleased with the half and we're on track for the full year.

Well, that's great. Thank you very much, indeed. Paul, Martin, thank you indeed for updating investors today. Could I please ask investors not to close the session. You should be now automatically redirected to provide your feedback and all the team can better understand your views and expectations. This will only take a few moments to complete and I know is greatly valued by the company. On behalf of the management team, Seeing Machines Limited, I'd like to thank you for attending today's presentation. That concludes today's session. Thank you, and good afternoon to you all.