Nearmap (ASX:NEA) share price jumps 10% on strong US growth

Nearmap shares are on form on Tuesday…

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The Nearmap Ltd (ASX: NEA) share price has been a positive performer on Tuesday.

In morning trade, the aerial imagery and location intelligence company's shares are up 10% to $1.62.

Why is the Nearmap share price jumping?

Investors have been bidding the Nearmap share price higher on Tuesday following the release of a trading update.

According to the release, the company expects the Annualised Contract Value (ACV) of its North America portfolio to surpass the ACV of its Australia and New Zealand portfolio for the first time in the near future.

In fact, management suspects this milestone could be achieved by the end of the first half. After which, it expects this side of the business to continue its growth and become the majority of Group ACV in the future as that market continues to accelerate.

The release explains that North America ACV has just surpassed US$50 million, taking group ACV beyond US$100 million. This compares to North American ACV of US$44.5 million at the end of FY 2021.

This puts Nearmap on course to achieve its FY 2022 ACV guidance of A$150 million to A$160 million on a constant currency basis, which represents an increase of 17% to 25% year on year.

"Very positive momentum"

Nearmap's Managing Director and Chief Executive Officer, Dr Rob Newman, commented: "This historical milestone for Nearmap follows the very positive momentum we're seeing in our business in North America."

"We purposefully refined our go-to-market strategy in the region at the beginning of FY21 to focus on three core industries: government, insurance, and roofing. This approach was aligned to our strengths and follows strong demand from customers in these sectors. Since that time, we have delivered consecutive record half-year results. We're also seeing this momentum continuing into FY22, which validates our strategy and our execution."

This should be supported by the company's expanding footprint in the key market.

Dr Newman explained: "Nearmap will continue to invest in this strategic market. We are doubling the coverage footprint in FY22 of our US capture program to ~80% of the population up to three times each year. Following a successful pilot, we're also expanding access to all sectors in North America our 'Nearmap ImpactResponse' product to assist disaster relief efforts following catastrophic weather."

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Nearmap Ltd. The Motley Fool Australia owns and has recommended Nearmap Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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