Prior to today, in the last two weeks the Nearmap Ltd (ASX: NEA) share price had tumbled over 22% despite there being no news out of the aerial imaging company.
Concerns over its slower-than-expected progress in the lucrative U.S. market appear to be behind the sell-off.
But thankfully for its shareholders the company has attempted to quash these concerns with the release of a business update this morning.
In early trade Nearmap's share price has responded positively and jumped 18% to 52 cents.
Today's update revealed that so far in the third quarter of FY 2017 Nearmap is on track to post its strongest trading quarter year-to-date with the addition of $3 million worth of incremental annualised contract value (ACV).
Pleasingly both its Australian and U.S. businesses have grown incremental ACV ahead of their first-half run rate.
According to the release this was driven by a combination of new customer acquisitions, upselling to its existing customer base, and an increase in average revenue per customer (ARPC).
In its half-year results ARPC increased strongly to $5,500, so it is great to see this trend continue in the third quarter.
The other good news is that the company hasn't broken the bank to do so. Sales productivity has grown to be greater than 100%, meaning that each dollar the company spent in direct sales and marketing returned more than one dollar of incremental ACV.
But, despite the strong performance, management has held firm its full-year earnings before interest, tax, depreciation, and amortisation guidance of between $4.5 million and $6.5 million.
Should you invest?
Although its shares may still look expensive at 5x sales, I like Nearmap at today's price. If the company can make a success of its U.S. operations then I believe there is significant growth potential ahead for the company which more than justifies paying a premium today.
Whilst progress has been slower-than-expected, this latest update gives me confidence that things are falling into place now.
For this reason I would put it up there as one of the better tech investments on the market alongside the likes of Altium Limited (ASX: ALU) and XERO FPO NZX (ASX: XRO).