In what is likely the first time ever, Axis beat Avigilon's revenue growth for Q1 2017.
Inside this note, we examine Avigilon's Q1 2017 financial performance, shifts in priorities and in comparison to Axis.
Quarter ********
******** ** *********** ****** *** ** **% ** constant currency *****, **** $**.* ******* *** revenue *** ******* ** **%.
** **** *** * **** ******* for ********, ** **** ****** **** made *********** ****** ****** *** ******** but ** *** ***.
Axis Beats ********
** ********,**** ** **** ************* *** ** **% ** ******** ******** terms, ******* ****** **** ********. ***** Avigilon ******** ******* * ****** ***, their ******* ****** *** ********* ****, even ** ** * *** ***** ago ***** ******* *** ********* ******* 50%+. *******, **** ******* *** * positive ******* ** ******** *** ******* Axis ******* ***** **** ****. ***********, clearly *** *** ********* ****** ******** have *********.
Avigilon ********** ******* ***** *** ******** **** ****
** ** ******** *** ***** **** *** *******, ******** ** *** ******* ************ profits **** ********** ******* ******. **** was ********* ** *** ** **** results. *** ******* ***** *** ********* expenses **** ** * ****** *% year **** **** *** **** ******* as * ********** ** *******:
********, ********'* *** ********** **** **** in *** ***** ******* *****, ********* uncommon *** *** ****** ****** ***** executive:
** ** ** ********* **** **** from ********** **$**.* *******
Diminished ******* *** *******
******** *** **** ******* ****** *******, near **%, ***** ** **** **** margins **** ** **%. ** **** was *** ****** *********** ******* ** lowered ******* *** ********, ****** ** unlikely **** ******* **** ****** ** previous ****** ******. **** ** **** likely *** ** **** ** *** bottom ******, ******* *** ******* ******* ****** ** ** *******, *** ********* *** **** ******* targeted ** *****-****** *******.
Capex/Building ***********
** *** ******** ****, ******** ****** that *** $*** ** ******* ******** was "****** ******* ** ******** ***********", which ************ **** *** $*** ******* ***. *** ******* **** ********* *** 2017's ******* ******** ***** ** ******* similar ** ****'* ($**.**), ***** ***** go ********* ** ******** ***********.
Receivables ****
*********** **** **** ************* **** *** end ** ** ****, *** *********** were ********** ******. * **** **** overall, ****** ** ** ******** ******** will ******** ** *** ******* ***** in *********** ***** *******, ****** **** are ********** ****** ****** *****, ** otherwise ****** ** ************ ****** ***********.
H3 ******** - ** *** *******
*** ** ****** **** *** ********* as ***** ***** "****** *******", *** unlikely ** ** ***'* ***** *** H4SL **** ** ***** *** **** the **** ******* ***. **** ** good **** *** ******** *******, ** the ** ***** **** **** ******* them ** ** **** *********** ******* other ****** ******, *** *** **** for *******, ** *** ** ***** cuts **** ********* **** * ************ factor ** ********'* ******* ******.
Hardware *************** *********
********'* *** ********* (** ********) **** hardware ** ******* ******** ************ ****** *** industry, ****** ** ******** ** ** analyst ** *** **** ****** ***** analytics *** ******** *********:
*** ** ********** ************* *** **** **** ******purely ************ and then the value will be really in the embedded software that’s contained in the software along with the video management software. [emphasis added]
*** *** **** **** ** * good ***** *** ********, ** ******* hardware ***** ******* ** **** ******* purchased ***** **** **** ******** / recording:
** ** *** ******* ******* *****, not **** *** ********, *** ******-***-***** from *** ************* ** *** ******* selling ***** **** ****, ** ***** the ********** ***** ************ ******* **** analytics **** ********** ** ** **** increasing ******. *** **** *** *** benefit ** *********** ******** ********* **** ourselves *** ******* *** ***** ********** software ** **** **** ******** *** to ****** *********** ******* **** ***** from *** ******** ** ******* ** the ********.
***** ******* ******** ***** *** **** up **** ******** *******, ********* *** understandably ****** ** ****** * ~$*** license (**** ** ********'* ********** ******* with **** ********* *******) *** * $100 ******.
No ******* ** ********* ******* *******
*** ***** ** ********* ** ********* details ** *** ********* ********* ******* ********* on *** **** ******** ****. ** specifics **** ***** ** *** ****** of *********, ** *** ******* ************ to *** ******** **** *** ******* program, **** **** ** *** * growing *******.
Outlook - ****** *********
*******, **** *** ******** ** **** more ******* ** ******** ***** *** generating *******, ** **** **** ********* have ********* *** **** ****.
*******, **** **** ********'* ****** ********** into ***** *** ********* ************ ** years **** ****** ***** ******* ******, Avigilon's ********** ** ***** ************ *** could **** ****** ****** **** ***********.
Wow, amazing how things have changed. Just 3 years ago, Q1 2014, Avigilon doubled their sales expenditures year over year:
For those of you who remember, this was at the same time of the CFO departure / 'sickness'.
And even in Q1 2015, just 2 years ago, sales and marketing expenses were up 72%:
Now, Q1 2017 just 5%...
On the investor call, Avigilon stated that the $12M in capital expenses was "mostly related to building renovations", which they recently sold for $107 million CAD.
I didn't see anything about the leaseback part of the sale in the call, (like the rent for instance), did I miss it?
Also, they continue to insist that the licensing program is in its infancy, with AF downplaying its current and near term impact and not even knowing the number of licensees. Do you think this is for lack of effort or have they decided not to play hardball?
They did not disclose leaseback/rent details.
I also thought him not knowing the number of licensees for the analytics licensing program, which has been heavily touted, was an interesting comment on the call. Though I can see why keeping a lot of that information private helps them when negotiating with new companies, if you do not know the growth rate or other details of the program in general it is harder to negotiate.
Nothing to shocking in there. Two strong brands still doing well in an industry where the Chinese are looking for world domination by way of SALE SALE SALE. Right it's late, I'm out the back door...
I did not make the call, was there any more talk around the $500 million annual revenue, or the now quarterly 'run-rate'? Outside of analytics, was there any strong indication of strategy moving forward?
was there any more talk around the $500 million annual revenue
Avigilon's interpretation of $500 million was 'run rate' in Canadian dollars, meaning a single quarter of $125 million CAD (equivalent currently to ~$92 million USD), which they achieved in Q3 and Q4 2016.
Last year, Avigilon's CEO touted aiming for $3 Billion but the 2017 annual revenue projection is ~$400 million USD.
