I edited that document to make it easier to read – not that it menyiopned anything new. By the way, Old Hot Copper is better for pasting to HC, because it tends not to join words, and I find it better anyway, so I always switch to Old Hot Copper. I found when pasting content via New HC, the best way to bypass the word-joining problem was to do a “search and replace that replaced each space with two spaces. The HC software removes superfluous spaces, but fixes the word-joining problem.
In the words below I converteda a few points to blue font, because they pertained to the model I am tinkering with to help me consider future ACV and revenue. I comment on them later.
Picture perfect Europe push
WA-born aerial imaging company plots expansion. DANIEL NEWELL
WA-born aerial imaging and geospatial intelligence company Nearmap is plotting a potential push into Europe just as growth of its North American business overtakes its Australian operations.
Chief executive Rob Newman, right, said a concerted shift into the US almost seven years ago had not been without its challenges but it was finally paying dividends for the company, with about 130 of its 400 staff now based in Utah’s Salt Lake City.
The company, founded in Mt Lawley in 2007, revealed in mid-December that the annualised contract value of its North American portfolio was set to hit $US50 million($70m) by year’s end, more than half of yearly contracts and for the first time surpassing its portfolio at home. It is tipping full-year annualised contract value of between $150m and $160m.
“Nearmap started in Perth. We proved up that business model over the first six years,” Mr Newman said. “The plan was always if we can prove it here, we can do it in North America.“Because it’s a larger market,finding our feet took a few years, but now that business is really accelerating.”Four of the top six US property and casualty insurers in North America now tap into Nearmap’s technology, also used by government organisations in 40 of America’s 50 states, covering1740 urban areas and 80 percent of the population. The company has also grown its reach into Canada over the past two years, and now covers 60 urban areas and more than 60 per cent of the population.
Nearmap provides high resolution imagery using its own patented, plane-mounted camera systems alongwith city-scale 3D content, artificial intelligence datasets and tools for a range of clients. About 90 per cent of Australia’s top construction companies rely on its technology and content. It also has 250 customers across government and insurance on its books and streams frequent spatial content updates to more than 113,000 active users — more than double the number of users six years ago.
While Nearmap — which last year reported a $18.8million loss on the back of $113m in statutory revenue— said its focus was still on expanding into the lucrative $2 billion US market, its growing client base could provide a springboard for a launch into Europe.“We do know that expanding into a new geography like Europe takes a fair amount of investment so the priority at the moment is still to grow that North American market,” Mr Newman said. “However, we do have a number of North American customers who are interested in European content.” He said the introduction of systems that allowed for automated generation of 3D content, AI tools and the development of Nearmap’s fourth-generation cameras and lenses meant there was also still further potential to grow in Australia.“We’ve got incredible talent here. We’ve built a really strong technical team."
My Comments
$150m and $160m. My forecasting model forecasts NA in $US, and I use a parameter to convert the results to $A. This means the model is not good at reflecting NA history, but that is of no significant concern for me. However, my current parameter is set at the current exchange rate of $US 1.00 = $A1.38. In the FY21 Financial report, the spot price of 0.7818 was stated, and its reciprocasl is 1.279. Using 1.38 my model forecasts an ACV of $A168.73. If I change the parameter to 1.279, the estimated ACV becomes $A161.073. A number rounded to $160m has lititude to allow it to be higher.
1740 urban areas and 80 percent of the population. The focus on the urban population is the reason why I have held that the NA market is 6.5 times the ANZ market. The NA:ANZ ratio of data capture square kilometres is 6 to 1. To be conservative, I have set a sizing factor of 6 in the relevant parameter. I use adjusted-to-size relative performance to guide how I bring NA's growth factor down to be much closer to ANZ's low growth factor over seven years. Why seven years? Seven is a key figure in numerology – it was God's favourite number, it seems, so what's good enough for God is good enough for me.
113,000 active users and . . . still further potential to grow in Australia. The nature of NEA's offering, and the small size of its user base relative to total population suggests that it does not take long before growth flattens, other things being equal. 113,000 active users in a population of circa 400 million is about 3 users thousand people. Other things are not equal, so there is scope for ANZ to grow, but not exponentially for very long.
My model does not consider geographical expansion, so if a major US customer, like Trimble, drags NEA into Europe, that would be a bonus. By the way, my model merely tries to mirror what I think, and show up inconsistent thinking. It is reflective in the sense that in an iterative process I forced the logic to mirror what I want, rather than being prophetic.
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