Avigilon Breaks $400 Million Revenue, Quadruples Profit, Weakens Competitiveness

JH
John Honovich
•Published Mar 07, 2018 13:58 PM

The last annual Avigilon financials are here. With the imminent Motorola acquisition completion, Avigilon will cease to be an independent publicly traded company. 

But Avigilon's tactics to get acquired has significantly impacted both their financials and their competitiveness. While Avigilon has successfully and significantly increased their profits, they have done it at the expense of growth and investment into sales and R&D. In this note, we examine the tradeoffs, comparing it to Axis (who recently broke 1 billion revenue) and examining how this will impact Avigilon as a Motorola subsidiary.

$400 Million Revenue 

Avigilon did $408.6 million USD revenue in 2017. 5 years ago, in 2012, Avigilon just did $100 million, meaning the company quadrupled revenue in 5 years for a compounded annual growth rate of 32%.

2017 Growth Rate Just 15%

*******, ********'* **** ****** **** *** far ***** ***** *****, ** **** 15% ** ***** **********, **** **** 2016's **% ****** *** ****'* **%.

Profits **********

** *** ******** **** *** ********, their *** ****** ******* ********** **** just $* ******* ** **** ** $28 ******* ** ****. ***** *** margins *** *** * ****** ~*% *** much ****** **** ****'* ****** *********** ~2%.

Headcount *******

*** *** ***** **** ****** ****, Avigilon ********* / ********* ******** **** over ****, ** **, ** ****:

** *** *,*** ****-**** ********* ** at ******** **, ****, ******** ** 1,210 ****-**** ********* ** ******** **, 2016.

** ********, ** ****, ******** ***** a *** *** *** *********.

R&D ******** ***** **** **% ** *% ********

********'* **** *&* ******** *** ****** flat ******** ** *** ******** ****'* robust **% ******:

 

Sales *** ********* ******** **** *%

******** *** *** *** ****** ** sales *** ********* ********* ** ****:

  • ****: **% 
  • ****: *%
  • ****: *%

**** **** *** *********** ***** ******** and ******* **** ** ********* ***** of *** ************.

Surge ** ***** *****

** *** ******** ****, ********'* ***** price *** ****** ***** **** ********* *********** into *&*, ***** *** *********.

************ ******* ********** **** *** ** acquisition** ******* ****, ***** ***** ***** *** ~$8. * **** *****, *** ***** had **** **** ******* ** ~$** per *****, ********* ****** ** ********* in *************.

It ******

*** **** *** ***** ****** ********* reward ********'* ******* ****, ** ***** the ********** ********* ** ** ******* Motorola's $* ******* *********** *****. ** clearly ****** *** *** ********* ** selling *** *******, ***** ******** *** been ******* ** *** **** **** a ****.

Weakened ***************

*** ******* ** ******** *** ******** its ***************. ***** **** ******* ******* longer **** ******** ** ***** ******** and ******* ***********. ************** ********* ***** ********* financials **** ********** *** ***** ** harder ** *** ****** *****, ***** on ***** *** ******** ** *** horizon *** ******** ***** *****.

Vs ****

**** ** *.** ****** (** *******) **** Avigilon, **** *** **** ****** **** for *** **** **** (**** **% in ***** **********) *** ****** *** profits (*.*% ** *%) ***** **** grew *&* ******** **% *** ***** and ********* **%, *** **** ********** than ********'* *********** *% *** *% increase.

*** ***** ***** ***** *** ********'* growth **** *** ******** **** *** last * ***** ***** **** *** strengthened:

Motorola's **** ****

***** ******** *** *********** ****** * ****** acquisition ***** *** ******** ***************, *** **** question *** ******** ****** **** ** what ******** ***** ** ** **** Avigilon. ** ********** **** *** **** *** *********, Motorola *** * ********* *****(****** ****** / ***** ******) *** a ********* ******* ***** (**** *** install ******) **** ********. ***** *** how **** ***** ******** ********* ** Avigilon **** ** *** ** ************* where *** ******* ***** *** *** much *********** ******** ******* *** ********* win ** ****.

Comments (6)
TD
Terry Delmonaco
•Mar 07, 2018

I was working on a job about 7 years ago where Motorola had hired us to install some CCTV equipment at a city owned skate park in South Florida. Motorola was in bed with Sony for years trying to break into the CCTV market thinking that they could leverage existing communication contracts and relationships with Public Safety, City and Transportation. The Motorola communications sales team knew nothing about CCTV and sold equipment off a list of state contract approved SKUs not really knowing how the parts and pieces worked together. That strategy failed miserably. 

Motorola also sold off their Canopy line of wireless PTP and PTMP microwave network radios including the fledgling Canopy engineering team to Cambium. Cambium then resurrected the neglected Canopy radio line dumping a ton of R&D money into it. By doing so they created an excellent portfolio of carrier class network radio products that still exhibits traces of the original Motorola DNA. 

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U
Undisclosed #1
•Mar 07, 2018

I am sure sales will continue to climb, given that Avigilon is announcing integrations with their own products:

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UM
Undisclosed Manufacturer #2
•Mar 07, 2018
In reply to Undisclosed #1

Death by Banality: The LinkedIn Case Study!

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UM
Undisclosed Manufacturer #3
•Mar 08, 2018
In reply to Undisclosed #1

Oh, hey, look!

 

Another cascade of undisclosed comments from 'business professionals' in the security industry publicly singling out, dare I say bullying, and disparaging another security professional. Just another day that ends in "y" here on IPVM. Keep up the great work.

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JH
John Honovich
•Mar 08, 2018
IPVM
In reply to Undisclosed Manufacturer #3

Another cascade of

Dear Avigilon employee, do you know what the word 'cascade' means? 2 comments were made.

Do you have anything insightful to say about Avigilon's reduced headcount and impending new ownership?

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U
Undisclosed
•Mar 08, 2018

I thought the Motorola radio comments here were helpful.  I'm hearing about Avigilon + Motorola radio folks selling together.  Interesting to know that trick has been attempted before.

Also fyi I don't think Avigilon vs. Axis is apples to apples.  Avigilon does a bunch of stuff (well or not) and oh by the way they sell cameras.  Axis does cameras (well or not) and dabbles in other stuff but it's not the same thing.

Here's some insight for you: watching a company chew it's own arm off to look pretty for the suits on wall street is really disappointing from a customer perspective.  That's a generic statement that happens to apply to this company this day.  That gives signal about whether or not the vendor cares about customers (or just wants to cook the books so the stock price looks good.)

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