What happened

Shares of Velodyne Lidar (VLDR), a specialist in the manufacture of light detection and ranging (lidar) sensors for drones and self-driving cars -- and a late-2020 SPAC IPO -- exploded higher in early trading on the Nasdaq today.

As of 10:10 a.m. EST, Velodyne Lidar stock is up 10.6%, responding to Velodyne's announcement this morning that it has signed a "multi-year sales agreement" with an Australian company called Emesent, which Velodyne describes as "a world-leader in drone autonomy, lidar mapping and data analytics."  

Drone controller screen image showing a 3D urban environment

Image source: Getty Images.

So what

Velodyne Lidar will be supplying Emesent with Puck LITE lidar sensors to power Emesent's Hovermap mobile scanning system for guiding drones in "hazardous and GPS-denied environments," such as within buildings or underground -- areas where a drone may have to navigate on its own, without aid from satellites.

Velodyne explains that Hovermap is especially suitable for use in the "mining, construction / infrastructure, forestry, defense, oil and gas, and film industries."

Now what

Velodyne Lidar did not state when deliveries to Emesent will begin, did not state any particular sales volume, and did not give a value for the announced contract. So it's difficult to say how financially significant today's news is for Velodyne Lidar stock -- or whether it justifies investors bidding up Velodyne's market capitalization by more than $370 million this morning.

At the very least, however, the customer win would seem to further validate Velodyne's technology. That may be giving investors hope that the company -- which is unprofitable and did less than $100 million in sales over the past year, and which sells for roughly 45.5 times sales -- at least has a path to grow over time.