News & Analysis

Aerial mapping startup Nearmap just had a bumper year but is still posting losses

- August 21, 2019 3 MIN READ
A Nearmap image of Sydney
  • Nearmap is is an Australian aerial imagery tech and location data company
  • Revenue grew by 36% to to $90.2m last year thanks in part to US market growth
  • The company posted a bigger-than-expected loss of nearly $15m
  • Investors punished the company, pushing shares down 15% in early trade
ASX-listed tech startup Nearmap has released its FY19 financial results, posting 36% growth in revenue to $90.2 million.

Nearmap Ltd (ASX:NEA) earnings before before interest, tax, depreciation and amortisation (EBITDA) were $15.5 million more than trebling 2018’s $4.9 million. But the group EBIT figure was less flattering, with an $11.17 million loss.

Net operating cash inflows were $24.9m (FY18: $13.7m) and the group portfolio Lifetime Value (LTV) more than doubled over the year to $1.2 billion (FY18: $0.5bn).

But the startup’s NPAT (net profit after tax) loss of $14.9 million was more than double market expectations of $6.1 million and Nearmap shares were smashed, falling by around 15% in early trade to a low of $2.64 before recovering slightly to be at $2.78 by lunchtime on Wednesday.

Nearmap CEO & MD Dr Rob Newman. Photo: supplied

CEO and managing director Dr Rob Newman said the North American side of the business was growing well and now contributed more than a third of revenue, alongside increased sales from a suite of new services.

“FY19 has been a milestone year for Nearmap, with record portfolio growth as we delivered a step change in our product offering with Nearmap 3D and our beta release of Artificial Intelligence content,” he said.

“These investments place Nearmap in an excellent position to deliver another year of strong growth in FY20, as we consolidate our market leadership in Australia and execute on the growing momentum in North America.”

Group annualised contract value (ACV) grew by a record $24.0m in FY19 to $90.2m, while statutory revenue was up 45% to $77.6m on the prior comparative period ($53.6m).

Global subscriptions rose 11% to 9,800, with group average revenue per subscription increasing 23% to $9,208. Customer churn reduced to 5.3% (FY18: 7.5%).

Dr Newman 40% of the group ACV portfolio is backed by multi-year subscriptions, and $26m (29%) of the portfolio now relates to subscriptions incorporating premium product features (FY18: $9.0m).

 

US potential

North America holds the biggest growth potential for the Sydney-based business. At 30 June 2019, Nearmap had an ACV portfolio of US$22.7m, representing 76% growth on 12 months earlier. The US now accounts for 36% of the overall company portfolio, up from 26% in 2018.

“We have always seen tremendous growth opportunity in North America, and the increasing traction we’ve recorded this year in the market demonstrates its strong potential,’” Dr Newman said.

“With our investment in sales and marketing capabilities, as well as our expansion into Canada, we’re well positioned to accelerate our presence in the region.”

Meanwhile, growth in Australia continued with the ANZ ACV up 19% to $57.9m compared to 12 months earlier. Subscriptions grew modestly to 8,375, with ACV churn also reduced to 5.6%

Dr Newman said it was a strong period of growth in the ANZ markets.

“Customers are increasingly accessing enhanced content such as oblique and 3D, and this is only set to continue as we commercialise and expand upon the new content that we launched in FY19,” he said.

Nearmap’s group cash balance at June 30 was $75.9 million, up from $17.5m 12 months earlier, largely due to a $70m capital raise in September 2018. Core business cash balance now sat at $17.8m, an increase of $0.3m compared to 2018.

From the raise, $9 million has been invested in accelerating growth initiatives, including expanding the capture program to Canada, investment in North American sales and marketing, establishing a second North American sales office and further investments into research and development.

Dr Newman said the focus in FY20 was increased investment into people and technology to deliver better content.

“Nearmap 3D and the beta release of our Artificial Intelligence content represents an exciting time in the evolution of our company,” he said.

“With our unique technology and business model which no other aerial imagery company has been able to replicate at scale, Nearmap continues to focus on the global opportunity to become the world’s leading provider of subscription-based location intelligence.”

Nearmap launched in Perth in 2008.

 

 

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