I think he was right to be cautious, and right to continue to be cautious.
No one can really say how big the market is so even though they managed to pull in $5.2m in receipts this past quarter it doesn't mean they will achieve the same in the current quarter. Keep in mind these are all annual subscriptions so for the first year of these new plans every quarter is effectively new sales.
Only in FY2014Q3 will we have seen a full year's worth of subscribers on the new plans and assuming no major changes to the business model then Nearmap could start providing reasonable estimates going forward (e.g. based on a 95% renewal rate). Also keep in mind a bunch of the subs will be multi-year so you can't simply take the reported numbers and expect to annualise them.
From a forecasting POV it'd be nice if they provided the breakdowns requested by many analysts, or pro-rate the recognised revenue by the reporting period. i.e. if a customer is on a 3 year agreement, recognise only 1/12 of the revenue this quarter. Maybe they are doing that, we have only seen cashflow statements.
NEA Price at posting:
25.0¢ Sentiment: Hold Disclosure: Held
