Nearmap plummets on earnings downgrade
Nearmap shares have sunk more than 20 per cent after the aerial mapping company issued a earnings warning, saying it had lost two major clients in North America as mapping for the driverless car industry stalled.
The former market darling said it expected to earn $102 million to $110 million in annualised contracts in fiscal 2020, down from the $116 million to $120 million previously forecast.
At 1047 AEDT, Nearmap shares were down 24.5 per cent to a one-year low of $1.835.
"The fundamentals of our business model remain firmly intact and we are confident in the outlook for the medium to long term," said Nearmap chief executive Rob Newman said.
But the results show the $1.1 billion company can still be impacted by a small number of larger companies, Mr Newman said.
It lost three major North American contracts in December that cost it $6.9 million in lost revenue, he said.
Two clients in the autonomous vehicle business downgraded their contracts as the industry went through a slump, while a different client was slapped with a permanent court injunction.
All were outside the company's control and in none of those cases Nearmap lost business to a competitor, he emphasised.
Nearmap had hoped to replace those lost contracts with a new major one, but in the end that company's budget constraints meant the deal didn't close, he said.
And as Nearmap's senior leadership focused their attention on the growing North American market, the company also missed opportunities with its existing customers in the Australian and New Zealand market.
Nearmap said it was hiring a US-based global chief revenue officer to strengthen its sales leadership there, relieving pressure on its Australian and New Zealand sales leaders who had been "stretched thin".
Nearmap said it remained confident that it would still be able to deliver 20 to 40 per cent year-on-year annualised contract value growth.
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