The Nearmap Ltd (ASX: NEA) share price has surged 15% higher in early morning trade today. This comes after Nearmap released a positive trading update on recent business performance and detailed the launch of its new 'Nearmap AI' product.
Continued Nearmap growth across key segments
Nearmap informed the market that its overall recent business performance has been relatively strong. It's seen continued month by month growth across its main industry segments despite challenging economic conditions triggered by the coronavirus crisis.
The company reports its actual cash value (ACV) portfolio to be in excess of $102 million. It anticipates a closing FY20 ACV portfolio value of between $103–$107 million, on a constant currency basis.
Sales activity levels were reported to have remained strong since the coronavirus onset and with customer churn to now be below 10% on a 12-month rolling basis. This is a significant reduction from the 11.5% last reported at the end of 2019.
The company did indicate there has been some downward momentum on sales growth. Some customers have delayed their purchasing decisions, however, Nearmap sees minimal overall impact on their expanding sales pipeline.
Cash flow break-even target on track
Back in April, Nearmap announced that a number of cash management initiatives were to be implemented to preserve its cash position and strengthen its balance sheet to avoid the need to raise additional capital. These measures were aimed at reaching breakeven point by the end of FY 2020 through an approximate 30% reduction in operating and capital costs.
Pleasingly, Nearmap reported today that it is currently on track to achieve its cashflow breaking target. The company predicts its cash balance to be between $32–$35 million by the end of this financial year.
Launch of Nearmap AI product
Nearmap announced that its new artificial intelligence (AI) product; Nearmap AI, is scheduled for initial launch on 1 June in both its Australian and United States markets. The launch of this new Nearmap AI product follows recent launches of the 3D and rooftop geometry products.
Nearmap will initially be targeting Nearmap AI in the insurance, utility and local government markets. All three of these markets saw strong demand for the new product while it was still in beta mode.
