Avigilon Weakest Quarter Ever (Q1 2016)

By: John Honovich, Published on May 11, 2016

Just 2 years ago, Avigilon revenue grew an astounding 74%.

Now, that feels like 20 years ago.

Avigilon's growth rate continues to fall, while struggling with profitability. In this note, we examine the results, the CEO's error and what this means for the future of Avigilon.

**** * ***** ***, Avigilon *********** ** ********** **%.

***, **** ***** **** 20 ***** ***.

********'* ****** **** ********* to ****, ***** ********** with *************. ** **** note, ** ******* *** results, *** ***'* ***** and **** **** ***** for *** ****** ** Avigilon.

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

Financial ******* - ******, ******* ****

********'******** ***** **% **** **** year ** ******** ********. By **********, ******** *********** **% * **** ago*** * ***** *** it *** **%. **** after ********* *** ******** currency ******** ***** ** previous *****, ********'* **** growth ** ******* ****.

********, ********* ****** *** down ~**% **** **** year, ** **** ~*%.

Competitive **********

**** **** ***** ** the **** ******* *** **** ******, up **%** ******** ********, **** far ****** ******* **** Avigilon. **** ** * huge ****** **** **** 2 ***** ***, **** Avigilon *** ******* ~** Axis *** *** ******** average.

***, ***** *** ******** certainly *** ******** *********, major ******* ************* *** still ******* ** *** 10% ***** ***, ** course, ********* *** ***** are ***** * ** 5x ***** ******.

Geographic *********

********** ********* *** *** much ******.

*** ******** ****** *** Asia, **** **% ******, though **** * **** small **** *** **** Avigilon ***'* ************* ******* to ******* ********** ** that ******.

****** / *** ****** East *** ************ **** at **** *%, ********** compared ** **** ****** 20-30% ****** *****. ** suspect ********'* ***** ************** is ****** *** ** strong ***** ** ** is ** ***** *******. Also, *************, ******** ******* reporting ******** ** ** sales, ***** **** **** been ********** ** *** past ****.

Sales ******* ****** ******* ****

***** *** ********* ******** grew ** ***** ****** rate ****, ** **** 7%. ** **** ****, sales *** ********* ******** were ** **%, * tremendous *********. *******, ** saw **** ********* ********** the ******* ** ******** slowed ******, *** *****, eliminated ********* ******** **** the *** **** *****, etc.

**** ** ********** ********* to ******* ** ******** historically *** ******* ** sales *** ********* ***********, arguing **** **** **** key ** **** ****** up. **** ****** ** minimal *** *********, **** could *** ******* ******** pressure ** ********'* ****** growth.

Patent *********

******** **** **** *** have ** ***** ****** licensees ***** ** ***** adopter's *****, ** **** a ********** ******** **. Based ** ******* ** their******* ******** ****, ******** ***** ****, IQrity ***., *** ********, IVS **********, *******, *** Topview, **** ** ***** are **** ***** ** likely **** ******* *********.

********'* *** ***** ******** to ******* ******* *******, only ****** **** ** was '******** ** ******** of *******', ***** ***** ***** ****** ******** acquired ****. ** *** *** that *** ******* ***** eventually "**** ***** ************" and **** "**** ******** ** ******** participants **** ********** ******* a ******* **** **."

**** *********** *** *************, Avigilon's *** ********** **** delaying **** *** **** them *****, ** ******** fully ******* ** *******"***** ** ********" *** historical ************* *** ** higher ***** **** ***** adopters ***** ***.

CEO *****

******** *** ********* **** that *** "******* ** **** ** hardware ** **** ** [their] ********", ********** **** the ***** ** **** in ******** *** **** declining ******** ***** ******** solutions '**** **********.'

**** ***** ** ***** and ** *** *** even **** ** ******** this. ***, ******** ********* most ** ***** ******* selling ******** *** **** camera ****** ******* ** they ** (*** ********'* have *** *******), ** makes ******** ******* *** harder ** ******* *************. Two, *** ******** ** deliver *** *** ** end ******** ********, **** have ** **** ********, by **********. *** ***** the **** ** *********** hardware, *** **** ** a ******* ***** ******** effectively **.

*********

*** **** **** ******** is **** **** ** the *** ****** -- Avigilon ******* ** ******* to ***** ******* ******** financial *********. ********'* ******** are ***** ******, ****** they, **** ********, *** constrained ** ******* ***** low **** *******.

*******, ***** ** * real **** ** ******* deterioration. ** ** *** 9 ****** ************'*******'**********'. ***** ***** *** an ******* ***** ** relief ****** *** ******** organization, *** *** ******* of ****** ******, ***** going *** ******* **** controls ***** ******* *********** the *******'* ********.

*** *** ****** *** extraordinary ****** ** *** patent ********* *******, ****** that ****** *** *** operational ***** ** ***** / ******** ***********, ** ObjectVideo ***** ***. **** if *** ****** ******* is *********** **********, *** core ******** **** *** have **** *********** *** the ******** ****** ** once *** (*.*., ****** '*************' **** ************).

** ***** ******* **** the **** ****** ****, and ******** *** **** for ********'* ***, ** Avigilon ******* ***. ***** is ***** * **** market *** ***** ************ manufacturers (*.*.,****** ********** *** *******) *** ********, **** new ********** / ****, could ****** * **** term ***** ********* *** a ****** ************.

Comments (16)

Hikvision has about 2 billion left of that 3 Billion better hurry and make a sale for they run out!

A Hikvision / Avigilon deal makes good sense. If it was cash (and Chinese companies are good coming up with all cash bids), I think Avigilon's CEO would got for it. And for Hikvision, they get their high-end play / vehicle for the West.

I hope this does not occur. I suspected that the "poison pill" was setup for just this eventuality.

The poison pill was setup to force a minimum acquisition price far above the current stock price. So any acquirer could still acquire Avigilon if they were willing to pay the price.

That said, I do not believe that Hikvision would attempt a hostile takeover, regardless of price willing to pay, as those are messy and would undermine the rationale of buying a company like that.

On the other hand, I do not believe Avigilon CEO would have any objection to selling to anyone if the money was right. He's always been about maximizing money / 'shareholder value' and I doubt he would object to the source of the money.

How's the run rate looking for 2016?

This quarter was ~70 million, 4th quarter needs to be ~125 million to cover.

You're mixing currencies. This quarter was ~70 million USD. The 125 figure is in CAD, which makes it easier, since 125 CAD is equal to ~97 USD today.

So they need 125 million CAD to cover their revised goal of "$500 million in annual run-rate revenue". They have already implicitly acknowledged they will not meet the original $500 million (CAD) annual target.

If they really want to pull out a $125 million Q4 2016, they may be able to do it but not clear how much that means either way, unless they fundamentally re-energize the business.

You're mixing currencies...

They report in USD, but forecast in CAD?

They just started switching to USD. Back when they made the target / goal, it was all CAD.

Fair enough.

As long as they stick with what they are good at, selling cameras and currency arbitrage, they should be able to make it.

Does anyone know if they have the resources to go private?? It may be in their best interest in the long run.

In terms of going private, they would have to raise more money, but it's possible.

The bigger question, to me, is to what end would Avigilon's CEO want to go private. That tends to make sense if you want to dedicate years to turning things around and then selling off or going back public. I suspect he would find it more attractive to sell, declare victory and then launch a new startup, whether in this market or somewhere else.

Well, they are already moving in that direction by buying back tens of millions of dollars of their own stock and then shredding it.

With the introduction of analytics on the cameras (EOL for Rialtos around the corner), this will help sales of Avigilon hardware (cameras and NVRs) instead of dealers using 3rd party equipment.

"Vast majority of industry participants will eventually require a license from us."

They don't think anyone will come up with anything new?

Their position is that they hold fundamental patents that apply broadly, even if new developments are built on top of them. Whether they are right or whether they can enforce, I do not know.

This is an extension of the OV position that they held positions on any type of calibration (including auto calibration) and any time metadata is used with video analytics (i.e., data is recorded about the video based on analytics of that video). If valid, it would be hard for anyone to get around that.

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

ASCMA / Monitronics Declares Chapter 11 Bankruptcy Plan 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,...
Dahua USA Celebrates 5 Years of Errors on May 21, 2019
Dahua USA is, in their own words, 'celebrating' 5 years in North America or as trade magazine SSN declared: Dahua Technology finds success in...
Amazon Ring Public Subsidy Program Aims To Dominate Residential Security on May 20, 2019
Amazon dominates market after market. Quitely, but increasingly, they are doing so in residential security, through a combination of significant...
Inside Look Into Scam Market Research on May 17, 2019
Scam market research has exploded over the last few years becoming the most commonly cited 'statistics' for most industries, despite there clearly...
Bluecherry Open Sources Entire VMS on May 13, 2019
Bluecherry announced they have "released the entire Bluecherry software application open source with a GPL license". We spoke to Bluecherry's...
Vivotek Talks About Taiwan, China, Bans, AI And Business Development on May 10, 2019
Vivotek, Taiwan's biggest manufacturer by revenue, did not have a booth at Taiwan's Secutech 2019 (which we are covering). However,...
10 Facial Recognition Providers Review (Secutech) on May 09, 2019
Adding to our 19 Facial Recognition Providers Profiled report from ISC West, IPVM focused on facial recognition technology for our Day 2 coverage...
Verkada False Allegations Against Avigilon Exposed on May 08, 2019
Verkada has leveled false allegations against Avigilon, as part of their aggressive marketing tactics against the 'dinosaurs' in the 'ancient'...
Dahua and Hikvision Products Illegally Sold To US Government GSA on May 06, 2019
Dahua and Hikvision products are being widely and illegally sold to the US government GSA. The sellers are falsely claiming these China products to...
Knightscope Adds Just 2 Total Customers In Past Year, Yet Raising Money at $300 Million Valuation on May 02, 2019
This is no longer funny. While Knightscope has laughed it up promoting robot selfies, joking about a 'suicidal robot', the man who attacked a...

Most Recent Industry Reports

Access Control Job Walk Guide on May 22, 2019
Significant money can be saved and problems avoided with an access control job walk if you know what to look for and what to ask. By inviting...
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,...
US Considers Sanctions Against Hikvision and Dahua on May 22, 2019
The US government is considering blacklisting "up to 5" PRC surveillance firms, including Hikvision and Dahua, Bloomberg reported, with human...
Dahua USA Celebrates 5 Years of Errors on May 21, 2019
Dahua USA is, in their own words, 'celebrating' 5 years in North America or as trade magazine SSN declared: Dahua Technology finds success in...
Axis ~$150 Outdoor Camera Tested on May 21, 2019
Axis has released the latest in their Companion camera line, the outdoor Companion Dome Mini LE, a 1080p integrated IR model aiming to compete with...
Covert Facial Recognition Using Axis and Amazon By NYTimes on May 20, 2019
What if you took a 33MP Axis camera covering one of the busiest parks in the US and ran Amazon Facial Recognition against it? That is what the...
Amazon Ring Public Subsidy Program Aims To Dominate Residential Security on May 20, 2019
Amazon dominates market after market. Quitely, but increasingly, they are doing so in residential security, through a combination of significant...
LifeSafety Power NetLink Vulnerabilities And Problematic Response on May 20, 2019
'Power supplies' are not devices that many think about when considering vulnerabilities but as more and more devices go 'online', the risks for...
Facial Recognition Systems Fail Simple Liveness Detection Test on May 17, 2019
Facial recognition is being widely promoted as a solution to physical access control but we were able to simply spoof 3 systems because they had no...
Inside Look Into Scam Market Research on May 17, 2019
Scam market research has exploded over the last few years becoming the most commonly cited 'statistics' for most industries, despite there clearly...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact