Avigilon Q3 2012 Up 69%

By: John Honovich, Published on Nov 06, 2012

After turning in a 'weak' quarter of 'only' 52% growth in Q2, Avigilon's growth jumped back up to 69% for Q3 2012. Plus, profitability soared, fueled by marketing investments and limited R&D expenditures. Now, Avigilon has the mega integrator Tyco on board, offering great promise to them yet a threat for their existing partners. Inside this note, we dig into the financials and future outlook.

Improved Profitability

Gross and net margins both improved significantly.

  • Gross margins jumped from 45% to 51% driven by changes in the sales mix but, more importantly, economies of scale. Avigilon reiterated that its target gross margins is actually lower (50% or less) and that it would maintain this target (i.e., keep prices lower) to maximize market share and top line expansion.
  • Net margins leaped to 8.5%, their highest level ever for Avigilon. While it is still modestly lower than the 13-18% of mature competitors, this is far better than the typical <4% net margins Avigilon historically has.

For details, review the 29 page Q3 financial report.

Marketing Expenditures

While Avigilon reduced marketing expenditures quarter over quarter, due to it being the Summer, they were still up nearly 100% over the same time last year. Additionally, Avigilon anticipates its biggest ever marketing expenditure next quarter, larger than the massive $3 million in Q2 2012.

R&D Expenses

R&D grew but at a slower rate than nearly every other Avigilon metric, increasing year over by just under 50% from $1.13 to $1.69 million CAD. We remain concerned by the continued modest new product releases and relative low R&D investment.

New / Upcoming Products

When asked about upcoming products, Avigilon was vague but did mention, "steady stream of new cameras, lower cost cameras, lower cost software, etc." It would seem low cost is an emphasis for the future.

Get Notified of Video Surveillance Breaking News
Get Notified of Video Surveillance Breaking News

Avigilon de-emphasized the role and value of video analytics, saying that it was a few years into the future and still held back by processing cost. Avigilon does not support any video analytics, beyond basic motion detection, on their cameras.

Tyco Signed On

Avigilon was quite excited about officially signing up Tyco (formerly ADT security integration). Before this, they were only selling through branch offices but are now approved corporate wide for Tyco. Avigilon estimated that Tyco is the "single biggest video surveillance reseller", moving "$800 million year of surveillance equipment" annually, concluding that they "don't expect to get 100% but over time [they] will get a significant part." With the agreement, Avigilon will be on Tyco's official price catalog, will have better inducements and an easier purchasing process.

While this may be good news for Avigilon, it is a yellow flag for their existing dealers. Given Tyco's broad reach, this increases the risk that traditional loyal Avigilon dealers will have to deal with their most disliked national competitor.

Enterprise Accounts

Avigilon emphasized the growth in their business development team to target enterprise / large accounts. They recently hired away a Verint salesperson to be their VP BD.

Distribution

While Avigilon said they have no plans to change or expand distribution, they noted that they do use distributors in certain markets such as Latin America, Asia and the UK (Mayflex).

Revenue Geographically

  • Best areas - Asia: ~300% growth to $1.7 million CAD for the quarter; then Canada and Latin America both roughly doubled
  • Worst area - UK - roughly flat year over year, cited a big project last year as the reason
Comments : Members only. Login. or Join.

Related Reports

Verkada Speaks On Disrupting Security Sales Channel on Aug 28, 2020
Verkada's fast growth has taken the industry by storm and their enterprise...
Costar Technologies / Arecont H1 2020 Financials Examined on Sep 16, 2020
Costar's financial results have been hit by the coronavirus with the company...
Integrators Rising Against Coronavirus on May 27, 2020
IPVM integrator statistics make it clear - Coronavirus's impact on business...
HID Presents Signo on Apr 23, 2020
HID Global presented their new Signo readers they claim read farther and...
ADI Returns To Growth, Back To 'Pre-COVID Levels' on Aug 05, 2020
While ADI was hit hard in April, with revenue declining 21%, the company's...
Hikvision Returns To Growth Driven By Overseas Fever Cameras on Jul 29, 2020
While Hikvision's revenue fell in Q1 2020, it rebounded in Q2 attributed to...
Motorola Solutions Acquires Pelco on Aug 03, 2020
Motorola Solutions has acquired Pelco, pledging to bring blue back and make...
Sunell "Panda Cam" Thermal Body Temperature System Examined on Apr 09, 2020
Sunell's Panda Cam is the most visually recognizable coronavirus camera, sold...
Anyvision Presents AI Facial Recognition and Mask Detection on Jun 08, 2020
AnyVision presented its AI facial recognition and mask detection at the May...
US Startup Fever Inspect Examined on Aug 03, 2020
Undoubtedly late to fever cameras, this US company, Fever Inspect, led by a...
Mobotix Thermal Detection Camera Tested on Jun 09, 2020
For years Mobotix has struggled but now sales are surging driven by Mobotix's...
Uniview H1 2020 Financials Examined on Sep 08, 2020
While Dahua and Hikvision, helped by fever camera sales, are recovering from...
Opgal ThermApp MD Thermal Screening System on Apr 21, 2020
Israeli thermal provider Opgal claims they were first on the market detecting...
Verkada Coronavirus Response: Free Temp Systems For Government and Health Care on Apr 07, 2020
Verkada has built a reputation on giving away things for free - free Yeti...
Hikvision Fever Screening Thermal Solutions Examined on Apr 13, 2020
Hikvision is marketing "safer, faster, smarter" with their Fever Screening...

Recent Reports

Axis Compares Fever Camera Sellers to 9/11 on Sep 18, 2020
Axis Communications, the West's largest surveillance camera manufacturer, has...
Avigilon Elevated Temperature Detection Camera Tested on Sep 17, 2020
Avigilon has entered the temperature screening market with the release of...
Chilean Official Investigated for Motorola And Hikvision Contracts on Sep 17, 2020
A corruption investigation is underway in Chile after a crime prevention...
Huawei HiSilicon Production Shut Down on Sep 17, 2020
Huawei HiSilicon chips are no longer being manufactured or supplied to...
Virtual ISC West and GSX+ Exhibiting Contrasted on Sep 17, 2020
Both ISC West and ASIS GSX are going virtual this year, just weeks apart, but...
X.Labs Sues FLIR on Sep 16, 2020
X.Labs, the maker of Feevr, has sued FLIR, the publicly traded thermal...
Video Surveillance 101 September Course - Last Chance on Sep 16, 2020
Today is the last chance to sign up for the Fall Video Surveillance 101...
No Blackbody Mistake, Half Million Dollar, Hikvision Fever Camera System in Georgia on Sep 16, 2020
A Georgia school district touted buying Hikvision fever screening "about...
Costar Technologies / Arecont H1 2020 Financials Examined on Sep 16, 2020
Costar's financial results have been hit by the coronavirus with the company...
Startup Cawamo Presents Live Alerts With Edge AI and Cloud VMS on Sep 15, 2020
Cawamo, an Israeli edge-to-cloud analytics and VMS startup, presented its...
Favorite Access Control Credentials 2020 on Sep 15, 2020
Credential choice is more debated than ever, with hacking risk for 125kHz and...
Dangerous Hikvision Fever Screening Marketing In Africa on Sep 15, 2020
A multi-national African Hikvision distributor is marketing dangerously...
New Products Show Fall 2020 Announced - Register Now on Sep 14, 2020
IPVM's sixth online show will feature New Products from over 25...
Hanwha 8K / 33MP Camera Tested on Sep 14, 2020
Hanwha Techwin has released an 8K / 33MP resolution camera, the TNB-9000 with...
Gait Recognition Examined on Sep 14, 2020
Facial recognition faces increasing ethical and political criticisms while...