Nearmap share price on watch as revenue leaps 29%

Here's how Nearmap glided through FY22…

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Key points

  • The Nearmap share price will be on watch today after the release of its FY22 results
  • Nearmap delivered a 29% increase in its revenue compared to the prior, while losses widened to $30.8 million
  • Management remains confident positive free cash flow will be achieved in FY24

The Nearmap Ltd (ASX: NEA) share price is on watch this morning after the company released its full-year results for FY22.

Shares in the aerial imaging company finished 2.1% higher yesterday, lifting the share price to $1.925.

Nearmap share price primed amid strong growth

  • Statutory revenue up 29% year on year to $145.9 million
  • Annual contract value (ACV) up 31% to $167.6 million
  • Subscription revenue incorporating premium content increased to 73% of the portfolio
  • Gross profit up 37% to $111 million
  • Net loss widened from $18.8 million to $30.8 million
  • Cash balance of $93.7 million at the end of June 2022

Nearmap's North American operations contributed the lion's share of ACV portfolio growth during the period. According to the earnings results, North American ACV experienced a significant 45% growth, reaching US$64.3 million.

The company also delivered growth in the Australian and New Zealand (ANZ) region. For the full year, ACV climbed a more modest 8% to $74.3 million. However, Nearmap's ANZ division touted wider gross margins than North America at 91% compared to 56%.

What else happened in FY22?

The most notable news event for the Nearmap share price during FY22 is probably the most recent. Only two days ago, shareholders were treated to a takeover bid from Thoma Bravo L.P.

Most excitingly, the offer price of $2.10 represents a substantial premium to what Nearmap shares have been trading for. At this stage, the company believes the offer to be credible enough the grant non-exclusive due diligence to Thoma Bravo.

What did management say?

Nearmap CEO and managing director Dr Rob Newman commented on the results, stating:

Nearmap has produced another strong set of results, validating the razor-sharp focus we have on our strategy. Our team continues to successfully execute to this strategy, delivering consistently strong growth from our core industry verticals.

We have now clearly established our market leadership position in the North American market and continue to extend our market leadership position in Australia & New Zealand.

Furthermore, Newman reiterated that the ongoing legal matters in the US have no operational impact, saying:

We've delivered these results with a disciplined approach to cash management, ending FY22 in a strong position with $94 million of cash on the balance sheet and no debt. Excluding the impact of the litigation expense related to the US District Court, which I would reiterate continues to have no operational impact on our business, we consumed less than $20m of cash in FY22, lower than initial guidance of $30m.

What's next?

Management refrained from providing any specific guidance for the next financial year. Although, Newman did note that the Nearmap remains on track to generate positive free cash flow by FY24.

Operationally, the company plans to produce and deliver five HyperCamera3 systems during the first half of FY23.

Nearmap share price snapshot

The Nearmap share price had been in the red for much of this calendar year. However, thanks to the recent takeover bid, shares in the aerial imaging company are now up 25% year-to-date.

For comparison, the S&P/ASX 200 Index (ASX: XJO) is down 6.4% over the same window of time.

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

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