Nearmap Ltd's (ASX: NEA) potentially lucrative expansion into the United States is tracking ahead of schedule with the promising small-cap stock announcing that it has made its first commercial sales in the region.
So What: The company, which provides geospatial mapping technology for business, enterprises and government customers, has already proven its worth in the Australian market but announced last year that it would expand into the much larger US market.
It recently upped its capture target from 100 million people to 150 million people, which it believes it can achieve without an increase in spend from $8 million. This morning, it announced that it has successfully sold annual subscriptions of its products and data services to a number of local government departments and small-business enterprises (SMEs) in several US states on commercial terms.
These sales were made well ahead of initial market guidance of 30 June, 2015. Management also took the opportunity to reaffirm its revenue targets, stating that it was still on track to hit $30-50 million by December 2015 in the Australian business, and aimed for the same run rate for the US business by December 2017.
The market responded well to the update, bidding the shares as much as 9% higher to hit 59 cents early in the session.
Now What: Investors should not underestimate the potential of Nearmap's products. There's a lot to like about its subscription-based business model (i.e. recurring revenues) and its products can save customers an enormous amount of time and costs. This bodes well for Nearmap's future.
