The Nearmap Ltd
(ASX: NEA) share price is on watch today after releasing a FY21 update showing it beat its recent guidance.
Nearmap’s strong update
The aerial imaging business revealed that it expects its annualised contract value (ACV) for FY21 to close at $133.8 million on a constant currency basis. This means it has exceeded the recently upgraded guidance of $128 million to $132 million. The $133.8 million figure represents growth of 26%.
This ACV growth was driven by another record performance in North America, which the company said validated its refined go-to-market strategy. The ACV portfolio at 30 June 2021 was US$44.5 million, representing 54% growth. North America now makes up 46% of the group portfolio, an increase from 39% in FY20.
Nearmap said that North America’s strong momentum has continued with new and existing customers across the company’s new and existing customers.
In Australia and New Zealand, it saw ACV growth of 7% to $69.1 million. The FY21 saw it further extend its market leadership position.
Nearmap explained that strong ACV growth from the SME portfolio has continued in ANZ, demonstrating the benefit of a scalable and repeatable sales and marketing engine. Nearmap’s sales leadership is in place to drive renewed growth within the enterprise portfolio from FY22.
It ended the financial year with a cash balance of $123.4 million.
HyperCamera3
Nearmap also said that its HyperCamera3 prototype has been tested in flight, representing a significant technological breakthrough and further extended its technology leadership.
The company explained that it has been fitted with component parts which have never been successfully manufacture before and have been custom designed.
It’s more efficient and also enables Nearmap to serve use cases requiring higher resolution content at altitudes currently flown with HyperCamera2.
The commercial roll-out of HyperCamera 3 remains on track for FY22.
US court proceedings
Nearmap has engaged globally recognised patent litigators to represent the company and lead its defense against claims of patent infringement
made by Eagle View Technologies and Pictometry International in the US.
The company maintains the allegations are fundamentally without merit and will vigorously defend the claims
Summary thoughts on the Nearmap share price
Nearmap continues to grow and beating guidance is a good sign. HyperCamera3 could be a good step in improving its market position.
However, I’m not sure if the company is worth buying at this share price – I don’t know how profitable it can be in the future or how large the realistic total addressable market is.
I’m happy to look at other ASX growth shares for now.
