The Nearmap Ltd (ASX: NEA) share price is acting with a lot of volatility after the FY21 result. It’s currently down after being up in initial reaction.
Nearmap’s FY21 result
The aerial imaging business reported that it generated statutory revenue of $113.4 million. That represents growth of 17%.
Nearmap said that its reported annualised contract value (ACV) portfolio at 30 June 2021 was $128.2 million. In constant currency terms, that would have been $133.8 million of revenue and growth of 26%.
The ACV growth of $21.8 million was driven by record growth from the North American portfolio. Management said that this validated its ‘go-to-market’ strategy.
Subscription retention increased to 93.1%, up from 90.1%. There was an ongoing focus by Nearmap on improving the customer experience and retention.
This revenue growth helped reduce the statutory net loss to $18.8 million, a big improvement from the loss of $36.7 million in FY20.
Its group cash outflow for the year was less than $5 million, excluding the net proceeds of the capital raising
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Nearmap saw group EBITDA (EBITDA explained) of $24.3 million, up from $9.1 million. This reflected operating leverage of increased scale in North America, according to management.
The company ended the year with a cash balance of $123.4 million.
Regional breakdown
In North America, the ACV portfolio was US$44.5 million at 30 June 2021, representing 54% growth year on year.
North American ACV growth from roofing, insurance and government was 48% on the prior corresponding period, and was accompanied by a “strong contribution” from adjacent verticals. North America now represents 46% of the overall ACV portfolio (up from 39% at 30 June 2020).
In Australia and New Zealand, the ACV portfolio at 30 June 2021 was $69.1 million. This was only 7% growth year on year. But it was an extension of the company’s market leadership position.
FY22 outlook for Nearmap and the share price
Nearmap is looking to build on its success from last financial year into FY22. In this new financial year it’s going to complete the testing of its new HyperCamera3 aerial camera systems prior to manufacture and commercial roll-out over the course of the financial year.
The company is aiming on becoming the global leader in ‘subscription-based location intelligence’. If it continues to grow at the overall double digit rate it reported today, then it may well reach that goal over time.
But it’s hard to know what a good Nearmap share price is to buy the business at. But it’s good to see EBITDA profitability rising. However, there are other ASX growth shares I’d rather buy.
