Following on from a positive quarterly update last month, shares in Nearmap Ltd (ASX: NEA) traded as high as $0.55 cents before heading back to the low $0.40’s in cents. Shares have jumped again today after the company announced a $1 million contract win with an existing Australian customer.

Nearmap reported that it was pleased to ‘broaden and enhance‘ its relationship by signing a $1.1 million annual contract with ‘one of Australia’s largest digital infrastructure companies‘. This is the second $1 million contract executed by Nearmap recently, although the net benefit is probably smaller considering this business was already a Nearmap customer.

Given that Nearmap earned revenues of $23 million in the last full financial year, the current contract is likely to represent a material increase in earnings, although management did not specify how much. Nearmap also came close to achieving a positive operating cash flow in the last six months which, when combined with its bank balance of $14 million, puts the company in a solid financial position.

The guppy in the room

Some in the market are worried about SPOOKFISH FPO (ASX: SFI), the recently listed Australian competitor to Nearmap. Spookfish recently signed a partnership with US business Eagleview, which will purportedly help Spookfish launch its technology in the US.

However, Spookfish will not be a direct Nearmap competitor. Rather, it is licensing its capture platforms to EagleView in return for royalties. EagleView has been issued interest free notes that convert into a 10% interest in Spookfish, and it can acquire another 9.9% if certain revenue milestones are met.

While Nearmap certainly doesn’t need any extra competition, it also doesn’t appear to have much to fear from Spookfish, which has a limited cash balance, no revenues at the end of last quarter, and is in the process of trading away equity to its business ‘partners’. Long-term Nearmap followers can see how long it took that business to expand, and there are unlikely to be any easy shortcuts. Nearmap shares continue to look like decent value today, and I bought my first parcel at $0.56 approximately 11 months ago.

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Motley Fool contributor Sean O'Neill owns shares of Nearmap Ltd.. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.