Axis Q1 2011 Financial Results Examined

JH
John Honovich
•Published Apr 13, 2011 00:00 AM
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For Q1 2011, Axis turned in its 5th consecutive quarter of strong growth, growing sales 39% in local currency terms year over year. The continued strong growth is quite significant for a number of reasons:

  • Looking back exactly 2 years ago, Axis had its worst quarter (probably ever). In Q1 2009, Axis sales growth in local currency terms actually declined. While this was the depth of the recession, the results were particularly troubling as most IP camera manufacturers were still growing, even if modestly.
  • A year later, in Q1 2010, Axis's financial rebound started with the company growing sales 36% year over year (compared to the horrible Q1 2009). For the rest of 2010, Axis's strong growth continued. On the other hand, that growth was relative to a very weak 2009 - making this somewhat easier to achieve.
  • Now, in Q1 2011, Axis's sales grew 39% against an already strong Q1 2010 - a much more challenging and impressive pace.
  • Total revenue for Q1 2011 was approximately 800 Million Swedish Kroner - roughly equivalent to $125 Million USD. This means that Axis's 2011 revenue will almost certainly surpass $500 Million USD (a half billion dollars) - an important milestone and rare feat for video surveillance companies (only a few divisions of the mega conglomerates due as much).

On the particulars of the results, a few points to call out:

  • By region, local currency growth was: Americas 53%, Asia 23%, EMEA 14%; The Americas growth is particularly amazing considering that Axis is now generating about $250 Million revenue in just the Americas and growing at an extremely high rate
  • Gross margins were down slightly, operating margins were up slightly
  • Axis aggressively hired throughout the quarter with their biggest burst easily in the last 2 years (see PowerPoint deck for graphic)

We expect strong growth from Axis to continue as their new product release schedule was very strong at ISC West (see our reviews of their low cost new products, the Axis M50s, the panoramic camera and the AVHS iomega NAS for details).