The Nearmap Ltd (ASX: NEA) share price is on watch after revealing more growth in its North American annual contract value (ACV) portfolio.
Nearmap provides clients with high resolution aerial imagery, city-scale 3D content, AI data sets and geospatial tools. It takes wide-scale images of urban areas in Australia, New Zealand, the US and Canada several times each year. This helps clients conduct virtual site visits.
Nearmap’s North American portfolio performs
It announced that its North American ACV portfolio is expected to exceed the ANZ ACV portfolio before the end of the FY22 second quarter, which ends at the end of December 2021.
Management expect that North America will continue to be a larger slice of the pie as that market continues to grow at a faster pace.
However, Nearmap did confirm that its the Australia and New Zealand business continues to perform well.
Nearmap said it was very confident in the outlook of the business in North America, Australia and New Zealand. Regarding its guidance range of A$150 million to A$160 million, management said the company continues to perform very strongly.
The North American ACV portfolio has surpassed US$50 million and the group ACV portfolio has grown to more than US$100 million. The Nearmap share price looks more attractive as the ACV grows.
Management comments
Nearmap Managing Director and CEO Dr Rob Newman said:
“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 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 execution.”
Final thoughts on Nearmap and the share price
Nearmap shares have fallen 33% since the end of October 2021. Perhaps that means it’s better value, considering its ACV continues to grow. Lots of high-growth ASX shares have been sold off in recent times, so there may be some which didn’t deserve as harsh a reaction.
Rising interest rates would affect things, but Nearmap seems like a business with decent prospects. The lower price improves my thoughts on the risks and rewards on the business.
However, there are other ASX growth shares that are higher on my watchlist.
