The Nearmap Ltd (ASX: NEA) share price has the wobbles today following its annual general meeting and FY21 guidance. At the time of writing, shares in the aerial imagery specialist are trading flat at $2.48 after dropping as low as $2.45.
Let's take a closer look at what was said in its annual address to shareholders, and its outlook for FY21.
Image source: Getty Images
Key highlights
During FY20, Nearmap completed a number of significant milestones.
Annualised contract value (ACV) surpassed 10,000 subscriptions, which saw the average revenue of each subscription rise more than $10,000. This was achieved despite COVID-19 challenges, which resulted in a small loss of customers in the North American market.
After the successful introduction of wide-scale 3D content in FY19, the release of artificial intelligence content expanded Nearmap's product offering. The premium subscription service helped drive revenue growth, with enterprise sales across multiple industries.
In North America, ACV grew 27% and is becoming a larger part of the company's total ACV portfolio. In addition, the company entered new geographical markets in Canada, capturing content to increase revenue streams.
The Australian and New Zealand business surged in the second-half of FY20, offsetting the softening demand experienced in the first-half. This was due to sales leaders focusing their efforts on expansion in the North American market. However, after a re-organisation of sales leadership, customer experience retention teams delivered improved performance. ACV increased 11% in FY20 and management advised that the ANZ segment continues to generate a steady flow of cash.
Fortunately for Nearmap, its business operations have not been impacted by COVID-19 as employees work remotely. In terms of cash management, the company made a number of small headcount reductions and cut salaries to all staff, ensuring continuity.
FY21 guidance
As momentum remains strong, Nearmap expects the end of FY21 to produce ACV of between $120 million and $128 million.
Management stated that forecasts are based on a constant currency basis and do not factor any unforeseen circumstances.
Furthermore, Nearmap will deploy around $10–$15 million in investment activities to support acceleration of ACV. The company is targeting between 20% and 40% ACV growth over the medium to long term, with underlying churn below 10%.
Nearmap share price summary
The Nearmap share price has been climbing higher since the dilution of shareholder value through a capital raising last month. Gaining more than 6% since the start of October, the company has been on the march to reach its former highs.
In June 2019, the Nearmap share price soared higher than $4. Today, shares can be bought for little over half the price at $2.47.
