Avigilon Growth Down, Expenses Up, Stock Slammed (Q1 2015)

By: John Honovich, Published on May 04, 2015

Avigilon growth rate continues to slow down sharply yet the company's aggressive spending continues.

Because of that, the stock market is punishing Avigilon yet.

In this note, we break down Avigilon's financial results, look at the causes of Avigilon's challenges and the future for the former high flier.

******** ****** **** ********* to **** **** ******* yet *** *******'* ********** spending *********.

******* ** ****, *** stock ****** ** ********* Avigilon ***.

** **** ****, ** break **** ********'* ********* results, **** ** *** causes ** ********'* ********** and *** ****** *** the ****** **** *****.

[***************]

Growth **** ****

**** * **** *** a **** ***, *************** *** *******. **** * **** ago, ********'******** **** **%.

***, *** *** **** concluded ** **** *******, revenue ****** *** **%. Equally ***********, **** ******* / ***** ******** ****** was ****** ** *** 25% *****, ** ******** benefited **** ******** ******* currency ******* *** ** undisclosed ************ **** ****** Video ****** ********* (******** said ** *** '**********' but **** *** *** clarify ** **** ***** $0 ** $* *******, etc., ** ******** $*.* million******* *** ******* ** 2014).

******* ********* *** *** stock *****, ********'* ******* levels **** ** ***** the ************* ********(******** $**.*, ****** ******** $76.7, ********* ******** $**.*).

Comparative ******** ******

*** '****' **** *** Avigilon ** **** **** of *** ****** (********* established ******* ******) *** struggling ** ****, **** notably ******** ** ****'**** *% ******** ***** ********** *** the **** *******.

** *** ***** ****, Avigilon's **** ****** *********** have **** ********* ** far ***** ****** ***** for *** **** *** years. * **** ***, when ******** *** ***** at **%, **** *** at**% ******. * **** *** a **** ***, **** Avigilon ******* *******, **** was ****% ******, ***. ******* ** this, ********'* ****** ********* / ******* ** ********* overall.

*** *** *** ****** area ** ******* *** "$100 ** ****** ******". Whether ** ** ***-**** IP ** *** ***** really ***-****** ******, **** ** ***** the *** ****** ** within ***** ************ ***** now *** ** ** primarily ***** ** ******* companies (**** ***** *** Hikvision) *** ***** ****. Most ******* ****** *** not ************* ** **** at ***. **** **** and ********, ** **********, have ** *** ******* to ******* ****.

Avigilon ********* ******** *** **********

******** *** ************* **** in *** ******** *** in ********** *****; ***** internationally *** ** *** SMB.

** **********, ********** ***** now ******* *** **% of ***** *******, * portion **** ********* ** rise. *******, **** ***** that *** / ***-********** market ** ******* **** slower, ****** ** *** mid *****.

** ******* **** **** pattern ** **** ********* by ********'* ********* ****** competitive ******** ** *** higher ***, ******* ****** but **** ******** ** struggling **** *** ********* number ** **** ***** cost, '**** ******' ************ arising ** *** *** end ** *** ******.

******* **** ********'* *** said ***** ** *** conference **** **** **** are '*** ******* ***** pressure' *** ******** ** rationale *** ***** ****** rate ********* ** ******* so ******* *** ****** than *** ******* *********.

Expenses **

********* ******** **** ** sharply, ** **%, ************* higher **** *******. *******, Avigilon ***** **** **** 79 ****** ** ** and *** *** *** total *********.

** **********, ***** *** marketing ******** **** ** 72% *** *&* ******** were ** **%. *&* expenses ****** ********** ******** but *** **** ** 47%. *&* *********** ** now **% ** *******, which ** ** ************* from * *** ***** ago **** ******** ***** only *% ** ******* on *&*.

******** ******** **** *** continued ********** **** **** ****** growth *** *********.

Stock *******

********'* ***** ** **** ~25% ** *** ***** of ******* **** *******. Avigilon *** ** $**.** before *** ******* **** released, *** *** **** to $**.**.

********'* ***** ***** *** been ********* ********, **** repeated ***** ***** ***** peaking ~$** ** ***** 2014, ********* ***** ****** '***********' ************** ******* ***** ** 2014.

Avigilon ***********?

********'* **** ******* ** the **** ******* *** a *** ******** **** one ****** *** **** at **** **** **** results, **** ****** **** at ******** ****** ******. Either ***, ******, ******* at *** **** *** *****, the ****** ******* ** clearly ******* ****.

**********, ******** ******* ** that**% ** *** ****** was ******, *** **** **** just *** * **** portion ** *** ******, so ******* ****** *** easy. ***, **** **** shifted ** *** ******** that **** *** ******* much ****** **** ******** average. *** *****, ******, is **** *** *** between ********'* ****** **** and *** ******** ******* has ******** **** *************.

** *** ******** ****, Avigilon ** ******* ***** well **** ***** *********, which *** *** ************* as ***** '**********' *** 'fantastic' ****** **** ** numbers ****** **. *** challenge ** **** *** broad ********* *** ** sold. ** ******* **** in *** ****** *** market, ********* *** ***** valuable *** * $*** analytic ****** ** * $100 ****** ** ****** is * ***** *** most ** *** ***** end ******, ***** *** big ******* ****** ** now.

Background ******

**********: ******** ** **** ****** *** ******** ** **** call ********** [**** ** longer *********]

Comments (5)

Patents, trademarks, copyright, and trade secrets support a multi-faceted approach to protection and enforcement of Avigilon’s End-to-End Solutions and Avigilon’s competitive position. - Avigilon Q1 2015 Financials

Correct me if I'm wrong, but I believe Avigilon may be the only vendor offering fully enforced end-to-end solutions.

Good eye. I've never seen anyone tout enforced end-to-end solutions. We'll see when they start enforcing what that will consist of.

John,

it appears that for the first few years after the IPO, the Avigilon executive team always talked about "a goal of $500M in revenu in 2016", although that position seemed to shift last August to "a run-rate of $500M in sales by the end of 2016", meaning Q4 2016 would generate revenues of $125M or more, meaning the target of $500M in revenue over 4 quarters would most likely be reached by Q3 2017.

What is your opinion of this change? Are you surprised analysts have not picked up on this?

Good eye. Good question.

Yes, they did quietly but materially change their target. At first, I thought maybe people misread them at first (e.g., us) but it is definitely a change on their part.

At the end of 2013, in their Q3 2013 report, they state:

"In 2013 we are continuing our successful strategy of expanding our sales team, enhancing marketing and brand awareness, and increasing research and development activities, as we strive towards our goal of $500 million in revenue by 2016."

However, at the beginning of 2014, in their Q3 2014 report, they state:

"In 2014 we will continue our successful strategy of expanding our sales team, enhancing marketing and brand awareness, and increasing research and development activities, as we strive towards our goal of $500 million in run-rate revenue by the end of 2016"

On the other hand, this is a company with a track record of many spins and fabrications, so relatively speaking, I am not even sure how high this one ranks.

Instead of doing $500 million next year, they are effectively saying they will do $125 million in Q4 of next year (2016).

In Q4 of 2014, they did just shy of $80 million. They need to grow at 25% year over year in 2015 and 2016 to hit. That is achievable to the silently revised target.

Login to read this IPVM report.
Why do I need to log in?
IPVM conducts unique testing and research funded by member's payments enabling us to offer the most independent, accurate and in-depth information.

Related Reports

Megvii Financials and Growth Examined on Aug 30, 2019
Megvii has already received more than a billion dollars in investment. Now, the company, a top China facial recognition provider, has filed for an...
How To Quickly Research An Unknown Company on Jul 23, 2019
There are hundreds of companies in the physical security markets, ranging from a flood of new startups to small companies that may or may not be...
Avigilon President Henderson Is Out on Jul 09, 2019
Avigilon's President and COO James Henderson [link no longer available] is out, abruptly, after a remarkable ascension over the past 8 years,...
RaySharp Revealed - Major China OEM For Western Consumer Video Surveillance on Jul 02, 2019
RaySharp is mostly unknown, even among people in the video surveillance industry, though it is a major supplier of OEM surveillance equipment such...
Alibaba Makes Major Investment Into Uniview on May 30, 2019
China's e-commerce and cloud services giant Alibaba has bought 15% of the shares of Uniview's parent company, TransInfo, in a deal worth ~$500...
ASCMA / Monitronics Declares Chapter 11 Bankruptcy on May 22, 2019
Monitronics is entering into Chapter 11 bankruptcy. The company, also called Ascent Capital Group Inc., aka ASCMA, aka Brinks Home Security,...
Milestone Execs on Financials, China and Future on Apr 29, 2019
Milestone has released a 44-page annual report for 2018, an atypical and unrequired move for a subsidiary of a large company, however, Milestone...
Hikvision Admits USA Sales Falling on Apr 22, 2019
Hikvision, in a new Chinese financial filing, has admitted that its USA sales are now falling. Less than a year after the US government passed a...
Brinks Home Security / ASCMA Risks Bankruptcy on Apr 08, 2019
ASCMA, aka MONI, aka Brinks Home Security has issued a warning in their most recent financials that they risk bankruptcy. In this note, based on...
ADT Stock Drops After Announcing Loss And Amazon Delay on Mar 12, 2019
ADT's stock price dropped significantly after reporting heavy losses and delays in its Amazon partnership, as seen in the screenshot below: In...

Most Recent Industry Reports

Hikvision Global News Reports Directory on Oct 17, 2019
Hikvision has received the most global news reporting of any video surveillance company, ever, ranging from the WSJ, the Financial Times, Reuters,...
Camera Calculator V3.1 Release Improves User Experience on Oct 17, 2019
IPVM has released a new version of our Camera Calculator, V3.1, with significant user experience improvements, a new development plan, and an...
Securing Access Control Installations Tutorial on Oct 17, 2019
The physical security of access control components is critical to ensuring that a facility is truly secure. Otherwise, the entire system can be...
Access Control Course Fall 2019 - Last Chance on Oct 17, 2019
Register Now - Fall 2019 Access Control Course. Thursday, October 17th is the last day to register. IPVM offers the most comprehensive access...
US DoD Comments on Huawei, Hikvision, Dahua Cyber Security Concerns on Oct 16, 2019
A senior DoD official said the US is "concerned" with the cybersecurity of Hikvision, Dahua, and Huawei due to "CCP" (China Communist Party)...
Pelco Sarix Pro3 Camera Tested on Oct 16, 2019
Pelco has released their Sarix Professional Series 3 cameras, claiming "more security detail in challenging scenes with excellent low light and...
IPVM Camera Calculator User Manual / Guide on Oct 16, 2019
Learn how to use the IPVM Camera Calculator. The guide below includes instructions, images, gifs, and videos demonstrating and explaining the...
Altronix Claims Tango 'Eliminates Electricians' on Oct 15, 2019
Power supply provider Altronix claims its new Tango power supply 'eliminates the need for an electrician, dedicated conduit and wire runs'. In...
Pelco CEO Out, New CEO Found on Oct 15, 2019
Just 2 months after Pelco was sold, Pelco's CEO is out, with Pelco bringing in an outside President and searching for a new CEO from the industry,...