NEA Showcases Strong Growth In 1H19; Customer Lifetime Value Exceeds $1B

  • May 02, 2019 AEST
  • Team Kalkine
NEA Showcases Strong Growth In 1H19; Customer Lifetime Value Exceeds $1B

Nearmap Ltd (ASX: NEA), technology-based company deals with frequently-updated and high-resolution aerial imagery. It is deemed as a location data company which provides online PhotoMap content and is known to cover aerial imagery. Engineering, rail, construction, property, and insurance are the various industries that Nearmap deals in.

On May 1st, 2019, NEA presented at the Macquarie Australia Conference. Following are the highlights of the presentation:

The annualised contract value (ACV) was up 44% compared to its prior corresponding period and was valued at A$78.3m which exceeds the value recorded in its prior corresponding year, 2017 at A$54.2m; together in the US and ANZ. Moreover, the ACV, underwent a six-fold growth in two years. The revenue for H1 FY19 was up 45% on pcp basis coming in at $35.5m. The gross margin was 82% witnessing a 200 bps improvement on pcp. The group sales team contribution ratio was 117%, up 20% on pcp. The group subscription churn, however, was down 3% on pcp, and is reported at 6.0%. Subscriptions accessing new product release soared 77% since 30 June 2018 and is valued at $16m.

On the operations side, the company lay its focus on the below 4 highlights:

  • Product enhancement- NEA launched new products, including offline 3D subscription availability, Roof measurement tools and Enhanced integration and scalability for enterprise customers.
  • Capture technology- they built a next generation of HyperCamera2 which allows higher and faster capture.
  • Machine learning research- the data science team is committed towards conducting research to conclude insight from extensive Nearmap data set.
  • Global opportunities- Expansion, sales and marketing, and product technology development are key growth strategies to scale the global business.

Nearmap Ltd has opened its New York office, which is fully staffed, allowing a leap into a market with GDP greater than total Australian GDP. Along with the NY office, the company has expanded to Canada wherein the Initial commitment to purchase Canadian content has already been signed. The company announced that 3D will be available online in (MapBrowser) in the month of May for all customers. The off line sales of the same have progressed well. These initiatives would aid in the capital raise growth initiatives.

Commenting on the guidance provided, the company stated that it is in line with the expectations and Group portfolio is projected at LTV4 >$1.4b at the end of Q3 FY19. The company would continue to invest towards sustainable growth. It would also invest in data analytics to achieve location intelligence and Identify other regions for future expansion.

NEA shares have shown a lucrative upside momentum, with shares up 292.35% over past 12 months.

On 29 April 2019 the company issued 708,345 fully paid shares on conversion of options. Out of this, 588,345 shares were issued to the Key personnel of the company and the remaining 125,000 to employees under Employees Incentive Schemes.

Stock Price Information:

On the technical front, the stock traded up by 5.571% as compared to the previous closing price of A$3.590 and closed at A$3.790 (as of 2nd May 2019). The stock has delivered a return of 151.93% in the previous six months, while the YTD return stands at 134.64%.


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