Seeing Machines Ltd
LSE:SEE
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Seeing Machines Ltd
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Good afternoon and welcome to the Seeing Machines Limited Investor Presentation. For analyst recorded presentation investors will be in listen-only mode. Questions are encouraged can be submitted anytime by the Q&A tab situated in the right hand corner of your screen, simply type in your question and press in.
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, where published responses where appropriate to do so. Before we begin, we'd like to submit the following poll.
I'd now like to hand it 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 this 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 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 three 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 two.
And I think furthermore, we have a balance sheet today that is strong. And we'll see through to the fulfillment of our kind of business plan. So all in all, a good set of results across the board. In terms of pipeline remained strong also, in each of the three 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 - 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 in automotive it is so inflate, 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 that 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 and are coming to fruition.
And its 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 - we'll explain while we've done that, 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 first of July functional currency of the group is 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 US$24.4 million for the half and increase of 54% from the previous corresponding period, underlying metrics of the performance were 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 US$47.5 million was secured for Magna through our convertible notes, of which US$30 million has been accessed to-date. This contributed to the cash balance, which increased to US$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 US$18.5 million for the half year. This is secure 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 GEN3 units.
We expect a similar level of free cash flow in the second half as working capital requirements increase with a delivery of more Guardian units during the half before free cash flow improved 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 tailwind that we're experiencing with a, pending regulatory requirements from Euro NCAP and the European General Safety Regulation in the EU, expanding to more regions globally, and increasing focus on Driver Monitoring Systems to support semi automation.
The revenue mix for Seeing Machines has also started to change from non-recurring 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 US$15.5 million, just US$2 million short of the gross profit of FY '22.
Net loss reduced to US$5.4 million, compared to US$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 and Seeing Machines have been constrained by supply of new units of Guardian hardware.
The result 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 US$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 US$5.9 million for the half with ARR increasing to US$11.9 million as at the end of December. General Guardian monitoring services continues to be low at less than 2% demonstrating the value that this accumulating recurring revenue stream. Supply constraints for the production of Guardian have now started to be 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 to 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 revenue increased by over 300% on the prior corresponding period. This was largely driven by US$5.4 million in revenues from the exclusive collaboration agreement with Magna. Royalty revenue also more than doubled at 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 part of FY '22. Production volumes for 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 four new programs will enter production in the next 12 to 18 months, including two 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 US$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 it's trying to grow as the avionics industry recovers from COVID to deal with significant pilot shortages, resulting in heightened risks for 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 product with its lower production costs.
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 GEN3. No step changes 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 has been 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 tailwind from regulatory changes, and the transport focus on fatigue and distraction, these high margin revenue streams will continue to grow. In combination with a growing high margin recurring revenue streams for 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 presents 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, remain strong, we're seeing growth fall through to our numbers. Now, as demonstrated in this, half results, we expect that to continue. The revenue mix change that we've talked about for a while it's real you can see that coming through the numbers.
And I think a very important sort of point to triangulate towards that profitability, which we now have 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. Ladies and gentlemen, please continue to submit your questions using the Q&A tab situated in the right hand corner of your screen, but just for the team take a few moments to review those questions submitted today. I'd like to remind you the recording the presentation along with a copy of the slides in the published Q&A can be accessed via your investor dashboard. As you can see, we've 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 on direct them 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 - I think there's, a couple of factors that are really important. It's very clear today that four 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 semi-autonomy. 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 thank you very much indeed. The 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 eight weeks to release date in February seems to be a long wait?
Yes it's a long wait, but we released them, when we get them so the terms and conditions that we have with the Tier 1s, that then back-to-back with the OEMs the OEM provide the production schedule for the Tier 1, the Tier 1 delivers the product. And then, roughly eight 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 data as soon as we receive them, and it's about eight weeks.
That's great, thank you Paul. And what happened to the several collaborations the aircraft simulator companies?
Well, they - continue, you know, some airlines over the last few years that 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, a number of new misses are increasing back in our hometown, and Australia, monitor 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. So - the one Tier business has been badly affected, it's clearly coming back. And issues of fatigue, and cognitive overload and the like, in our lives today are profound. So as I said the conditions that I think are positive.
That's great, thanks, Paul. It seems, seems 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 don't argue that we have the highest 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 variance is up or down is almost an absolute. So we tend to be somewhat measured, yes positive but measured. And that's a function of, you know, where we are in the market, how far as and a whole range of other normal commercial factors.
Thanks, Paul. And that's one reason as follows why in a recent interview did Mobileye say they were working on their own DMS when they signed a collaboration agreement with us? I thought we only work with companies that abandoned their own DMS projects?
Well, I think we're kind of mixing subjects into the one. I mean, what we've discussed and agreed with Mobileye that we will offer our aftermarket products through their sales channel. So this is not the same as a conversation with the Tier 1 that's developing DMS for an OEM it's quite a different conversation that specific hope we'll on Mobileye specifically about aftermarket. It's not the same conversation as what we would have with a Tier 1 or an OEM. And you know, Mobileye plans are and Mobileye plans. Our focus with them today is an aftermarket.
Thank you. Are you planning to list on NASDAQ and what will be the timeline?
Look, it's mentioned before it is on our horizon, it's not on our immediate horizon. There is several reasons for that current market would be one, I think we need to be in a position where our average momentum is continued for another half or two, 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.
Thanks Paul. Smart Eye seems to be winning tenders, the most recent being in commercial vehicles, are they surprising you in their win rate and getting a foothold in the commercial vehicle sector?
Look - no, I don't get surprised at all. I mean, if you look at the announcements that's, one thing. If you look at new automotive RFQs, that's a completely different thing. So if you break it down off the last eight RFQs that were published that all participants of the last eight were awarded, we won 4 of the 8. And so that's the 50% I've been referring to, for some time. And you know, one 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 are complex programs.
They run over a much longer timeframe than typical passions of 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, high margin passion vehicle opportunities, I mean, our focus for the truck market will be what we call an after manufacturer. And that's a specific opportunity driven by GSR primarily in Europe at this point in time.
Thanks, Paul. Where are we with regards to Guardian 3.0 out what the differences between Level 3 versus Level 2?
Look that's - there is a lot of detail in that question. In summary, we will advance we've received the prototypes. We tested prototypes that activity will continue right through this financial year. In summary, it's smaller form factor that has 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 risks that we capture our best in market that will be enhanced even further in this new product. It makes GSR requirements and it's - the unit cost is materially lower, and the installation process materially faster.
That's great, thanks, Paul. Is [McNamara] may be with their ClearView function essentially Guardian 3.0 or have we something for - aftermarket does this will eventually die off once commercial vehicles at DMS during production?
No, I've heard all kinds of comments about [Magna, Magna Mirror] and Guardian Generation 3, which is an aftermarket product. Most trucks don't have rearview mirrors, right? Because they have a trailer behind the cabin so that's - I'm not sure that - the origin of that particular comment. That's, that's not a starter. And now we are not talking to Magna about production of our fleet product.
Great stuff. When it comes to focus on cost, can you provide an update on the internal resource capability to handle the ongoing stream of new businesses, new business, we are winning?
Yes, I mean I can, 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 up-skill them and enable them to be fully productive.
The big change that we've made is, whilst we've continued to bring in coal personnel into our business as full time employees we've also grown our relationship with external third parties more than one 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, our 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, you know, full time employees and third-party. Now that affords us considerable flexibility. Should we requiring increasing resources, let's say for additional programs that the complex will require extra 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 something we've been working on for a year and a half. 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, thanks Paul. Why has the ARR dropped from US$12.7 million on the trading update to US$11.9 million on the H1 results?
Martin, you'll take that one.
Yes sure, so we included an explanation to this, I think in the results fact when they were out yesterday. We reviewed what was included in the ARR numbers of 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 at source, it does relate to one-off sales that caterpillar makes to 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 two numbers that you would have seen in the trading update. And what we've included in the more recent results announcement.
That's great, thanks very much indeed. We are moving with some of the other questions we've had through Paul, I think you have touched on this, if there's anything further to add any comment on Smart Eye 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 what Smart Eye have announced 13 wins to our four in the last 12 months?
Yes I am, and got to share - the number of wins is almost an irrelevance. I mean, it's interesting, what's more important is the volume of each new RFQ win and the value of the new RFQ win obviously the underlying average selling price for the licenses that are that are offered. So of the last eight RFQ awards as I said we are back at 50% of those, including that which was the largest have awarded. So I'm still confident with that position.
Great, thanks Paul. But one few Martin and why did you join Seeing Machines and make such a large personal investment very quickly?
So I can answer that - why I joined Seeing Machines. So that you know, I've been involved in the tech sector for a number of years, both here and in the U.S. also, we're here in the U.S. at the moment. So in the U.S. and back in Australia and its 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'd say 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 it.
That's great. Thank you very much indeed Martin. And Paul, can you tell us about GEN2 supply and the flow through to the launch of GEN3?
Yes, yes so GEN2 has been constrained for more than a year. I think, I've mentioned several times now that in the 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 constraints, we probably would have sold at 8,000 or 9,000 units in H1.
And what's happened to that demand? Well, that demand carried over and what I can say is that so far, in the 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's a difficult month, because of availability of trucks for Christmas trading and New Year training and the light.
But since then, we've been receiving stock that will continue right through June, July. And as I say, we've sold more in the second half so far than the whole of H1. So we see that stock problem is resolved. And we see demand now been fulfilled - there's not really a strong correlation between that and Generation 3, Generation 3 is designed, you know, to access new markets, because of the characteristics that I mentioned earlier that's the position on stock.
That's great, thank you very much indeed. How do you see your margins increasing maybe one for you Martin perhaps this?
Yes, so you know, I think as we've kind of talk through this presentation, we are moving from low or zero margin and are ready to the stage with the automotive business that is generating royalties. Now 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, that's when that revenue switches to a very high margin revenue stream. Similarly, with the aftermarket business, I think there are probably two 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 high margin revenue stream. And as we move from GEN2 to GEN3, we will see a decrease in margin from the hardware sales. So as the GEN2 unit is now, even though it's been redesigned, it's still quite an old generation of products. And so over time, that has become more costly to produce. And so as we move to the new generation product, we'll see that unit cost decrease and the margin increase from those sales.
So I think the combination of those three elements, see the overall margins for the business growing, and as the revenue from those revenue streams increases, obviously that flows through to the to the bottom line and generates the margins with our kind of discipline cost growth in operating expenses. See those margins flow through to the overall profit of the company.
That's great. Thanks very much indeed. Martin. Other questions here I just blend them together. I'm just looking at profitability accounting profit. Same cost 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 it's same cost 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 bounced up their gross profit for the second half to account for the fact that we're 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 you know, 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. Thank you very much indeed. 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 are 46,018 and up to 6,126 or 15.3%. From H1 '22 to get secured annualized monitoring, recurring revenue only increased by US$800,000 or 6.7%. That's just those new installs would generate the following monthly monitoring income US$800,000 divided by 6,126 divided by 12 at US$10.88, my understanding was more likely that that would be significantly higher, around sort of US$20 and direct around US$14?
Yes, so I could 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 two things to grow at the same rate. However, we do have a number of things that do cause a dislocation in those two 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 a build and run into the ARR in Australian dollars. And so as the Aussie dollar 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 - particularly over the last six 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 SKU has been more towards recent connections being at a lower rate, as well as a depreciation of the Aussie dollar and the overall ARR balance over the last 12 months. So there are the factors that have caused that dislocation to occur.
That's great, thanks very much indeed Martin. Smart Eye [ph] as a fleet contract recently have we closed any OEM truck deals once again I think you did touch 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 RFQ, since you last announced I think it was 12 RFQs? Are we close to completing?
So what I can say - as I've said before, you know, of the eight - of the last eight RFQs is not extension wins, which is a different thing with one, four of those. I expect of the balance of RFQs that we have on hand, you know, and according to the best steers that we get from the Tier 1, there's probably four or five of those of the significant ones that are due in the next three to six months to be awarded.
And just to reiterate, it's very similar to the issue and forecasting. These are the indications that we get on the award timeframe. And they're subject to a whole range of reasons that would cause them to move one way or another, but there's, four or five significant RFQs that according to the few ones that we're dealing through are to be awarded through six 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 RFPs not - small extensions or anything of that nature.
So, still a significant number, the number changes of those that have been awarded we've one half, I think the four or five probably five in the next three to six months to be awarded subject to the timelines are driven down by the OEMs and another three, four or five of the same kind of volume of new significant RFQs to arrive. I think one other point I'll 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 like an analyst [ph] just like FY '28, and FY '28, of that statement 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 the MS business has been awarded so far, that we can calculate. That's about seven $700 million.
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 10 times more volume to be awarded, just to get to the FY '28 forecast of external auto tech analysts. So there's just a lot of a lot of road and a lot of runway to go in terms of RFQs for the full OEMs that will simply expand models, or expand volumes on existing programs, all of those things will happen.
Fantastic, thanks very much, indeed. Welcome isn't last few I think we're going to get time in for here. Is the company close to license fee aviation product?
Yes, we're continuing to work down that path. It's these things are complex. And it's a little bit similar to predicting an RFQ window. But what I can say is, we've been working on this for a long time, it is our intent that it will be closed. And I'm confident that it will be.
Thank you, Paul. And can you discuss the difference between an OEM project and a specific auto model on whether your competitors use a similar definition or not?
I don't know I use this they do what they do an OEM program is an award that we will 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 anti-so about a quarter of our programs, we have minimum guarantee volume, which is quite unique. But in terms of model numbers, it's at the move facing [Premier Pack]. So we tend not to require that we tend to focus on the OEM, what's the volume over time? And to me, that's, that's very far the data and that's important data.
Fantastic, Paul and Martin I thank you very much indeed, you've covered a lot of questions there. And we have got a few more through 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, and it's particularly important to you and the team I am going to just ask you for a few closing comments, please.
Well, firstly, thanks for taking the time to hear. I guess the next level of detail on what we write about, are half as I said, I'm pleased the team was quite pleased with the progress that we've made. I think all of the numbers, despite the supply constraints that we've had, 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 evident and appearing in the numbers.
And we have growing demand, 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, please ask the investors not to close the session, I mean, are 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 is greatly valued by the company. On behalf of the management team Seeing Machines Limited. We'd like to thank you for attending today's presentation. That concludes today's session. Thank you and good afternoon to you all.