North America ACV about to exceed ANZ, page-48

On an irrelevant point of detail, the data-capture coverage for Canada is 64%, not 66%. I meant to check it, but forgot. The FY21 Financial report states, “Using its own patented camera systems and processing software, the Group captures wide-scale urban areas in Australia (89% population coverage), New Zealand (73% population coverage), the United States (71% population coverage) and Canada (64% population coverage) multiple times each year. The updated content is delivered to customers as Orthogonal (2D) imagery, Oblique cardinal direction imagery, 3D imagery and, as of June 2020, via Nearmap AI, a new product that enables customers to more accurately and efficiently measure change and quantify attributes through a series of datasets constructed from machine learning models deployed across the Group’s high-definition aerial images.”

I only mention this Canadian coverage issue as an excuse to say that I gave the data-capture growth some thought, and increasing it by 5% Y-on-Y is a crude approach that I would change if I were tempted to be more scholarly. My reason for not expending time on the topic was because I thought the expenses to get to “Profit/loss before tax” was more important. For now, a simple percentage-increase approach suffices, but 5% Y-on-Y uplift may be too low.

My view is that the comparing the current and past data-capture costs to the future costs is comparing apples to pears, because the marketing switch to verticals (and hence more AI) is going to require more geographic coverage, and probably greater frequency. That is why the above quoted words includes the second sentence. The Presentation clearly states, “Acceleration of the roll-out of HyperCamera3 (HC3) systems generating expanded coverage at higher fidelity . . .” Management's interest in HyperCamera3 would, IMO, be misplaced if its sole driver were to lower the cost of the status quo, because the Australian history informs us that without HyperCamera3 the cost o0f data-capture and storage would tend to circa 10% of Revenue if the non-Australian markets matched Australia's performance.

For now, I'll stick to the crude percentage-increase approach – delving into the foregoing considerations is too difficult. There maybe a mismatch between the more-of-the-same approach to data-capture costs, whereas the accelerating revenue may imply a market shift, not more-of-the-same.

This style of thinking is a waste of time if one is not into understanding NEA's business, just like all the different cuts of pork, and ways of cooking them would be a waste of time for a religious Jew who rigidly sticks to Jewish dietary laws, and is hence not interested in the preparation of pork for consumption.