Avigilon Weak Profits Continue - Q2 2015

By John Honovich, Published on Aug 03, 2015

After spending $39 million buying back their own stock, one would think (or hope) Avigilon would report great earnings.

Alas, no.

Avigilon's weak profits continue along with lower growth, fostering concerns about the company's long-term prospects and pulling the stock down more.

In this note, we review Avigilon's Q2 2015 financials, examining growth trends, earnings challenges, the Avigilon CFO ambush, the patent monetization push, and industry trends impacting them. 

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

**** ****, ** **, revenue ****** *** ** 66%. **** ****, ** Q2, ****** *** ** 38%.

*******, **** ******* ****** is ***** ****** / helped ************* ** ******** exchange ************. ******* ****, measured ** ******** ********, growth *** ** **%. And ******* ****** ** somewhat *****, ** **** 26% ******** *** ************* from *** ** ******* purchased ** *** *** of **** ****.

** *** ******** ****, low ** ***-******** ******* revenue ****** ** ***** competitively **** ****. ** contrast, **** ******* ******** shrunk *% ** *** same *******. *******, *********'* H1 **** ******* *** up **%, *** ********* Avigilon **** ** ****** rate *** ***** ****** increase.

Earnings ******** / **** ********

*** ****** ********* **% year **** ****. *** income ********** *** **** 2.5%

*** ****** *** ****** though, ** ******** ******** fluctuations. **** ******** ********, revenue ***** **** **** $8 ******* ****, ************* reducing income *******. 

********, ****** ******** ***** R&D ******** **** **** ~13%, **** **** **** tripled *** **** ** those **** ***********. **** further ****** *****-**** *** income, ******* ***** *****:

**** *******,******** ******. **** ******* (** 2015), *** **** *** more ****** *******. *** most ******* ******** *** a ***% ***** ** G&A ********, ***** *****:

** ******* **** * significant ******* ** **** comes **** ******** *** manufacturing ******** ** *****, including *** ****** ** 48 ******* *** ****. The ****** ** **** is ********** ********** ******** for ******* / ********.

Commoditization ********

********'* *** *********** *** ******* of ************* ******* *** falling ******* ****** *** emphasized **** ** ** not ********* ****:

"*** *** ******* ** the ******* *************** ** hardware ... ***** *****'* really ********** ****** *** business, ******* ** *** not * ******** ******* nor *** ** * camera *******, ** *** a ***-**-*** ******** ********, and ** ** **** partner **** *** **** majority ** **** ** low **** ************* *** there."

** ******, ******** ** ********* heavily ** ******** * facility **** ***** ********. And ** ******** ***** really ***** ******* ***** low-cost ****** *************, ** will ***** ***** ******** model. *** ** ********'* revenue ****** ** ****** the ***** ****, *** a ***** ***** **** Genetec ****. ******* ***********, selling ******** ******* ******** to ************ *** ****** ******* fees**** ***** **** **** competitive ******* *********** **** Genetec *** *********. ***** Avigilon ***** *********** '*******' with ***-**** ************* **** Hikvision, **** ****** ****** to **** ** ***** parts ** *** ***** to ****. *******, ** our ******** ** ********* **** shows, ******** ** **** at *** *** *** of *** ****** ******.

Industry ********

*** ****** ***** ** beyond ********. *** ******** is ** * **** / ********* *****.

*** ******* ************* ******** to *** **** ******** pressure ** ****** ******* while *** ********* ** IP ** ****** ********** done ** *** *** to ****-***, ********* *** market ** *********** *********** / ********* ******.

******* ******** *** ****** products, *** ***** *** factors **** **** **** against ***** *********** ******* brand. ******** ****** ** better **** ****, *** that ***** ****** ** 10% ** **% ****** (constant ********) ******, ******* of ******* ** ** 50%.

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

********'* *** *********** ** ******** ********* TV ****** ** ******* *** results, ** *** ****** you **** ** **** bad *** ***. ******* these ********** *** **** pieces, *** **** *** stock ********** ** ******* and ********* ***** ***** the **** ** ********, the **** **** ***** him. *** *** ******** CFO, ******* ****** *** * month ***, ****** *** ********** to *********** ******** **. What ** ** *** understand ** *** ********'* CEO *** *** **** this *********.

****** *** ********* ******, these ***** ** ****** decrease ******** ********** ** the ******* (*******, ******** '************ **********' / 'Authoritarian' ***).

Wearing ****

******** *** **** ******* with ***** *** ********* PR ******** *** * quarters ***, ******** **** the '****' *** ******. The ********** ********, **** the ***** ********* *** again ***** ***** ******** were ********. ***, **** are ******** ** **** up ******* ********* **************** ** ***** ***********.

*** ** *** ******* strengths ** ******** *** been ***** ******* ** 'run ****', *** ** until **** **** **** was ******** **** ********* success ** **** ********. But *** *** **** has ******* ****** *** pusing **** ** *** face ** ********** ******** will **** ****** **** difficult.

*** ******* *** **** from *** ****** ********* if **** *** **** that *****, *** *** risks *** ********.

Comments (6)

Posting results like these and little to show for a strategy to improve, it's no surprise the CEO is running for cover and letting the new CFO take the bullets. When all else fails and there's not much by way of a glimmer of light at the end of the tunnel it's time to leverage IP. Don't have any? Buy it! Seems like a very costly short term plan to generate revenue.

What a trial by fire! A bit overzealous.

Maybe Alex F. had to cancel at the last moment, disappointing 'The Close'. That might explain the extra venom from the host, as well as the un-tailored shirt.

Though put under intense pressure to explain why Avigilon won't be affected by the corporate 'purse being snapped shut', Ric admirably never mentions patents nor describes the license program as ramping/lawyering up. I wonder if that was intentional...

I used to admire Avigilon from afar. Good product and very aggressive marketing. I admired the great strides they made but thought the end game was to get big, get bought, and get out ...but they didnt/haven't.

The increasingly negative feedback/buzz both internally and externally about them, the lingerig OV/patent 'troll' issue, and now this. It all seems a bit...

https://en.wikipedia.org/wiki/George_Armstrong_Custer

'The battle is popularly known in American history as "Custer's Last Stand." Custer and his men were defeated so decisively at the Little Bighorn that it has overshadowed all of his prior achievements'

I wouldnt work there for all the tea in Chi ...maple syrup in Canada

"thought the end game was to get big, get bought, and get out ...but they didnt/haven't."

From what we hear from investors, Avigilon is definitely opened to be acquired. However, the price point they want is at or close to Canon / Axis levels. Related, Avigilon has recently started to market / talk about reaching a billion in revenue.

Of course, they can want whatever they want, the problem is whether someone will pay the price. At the beginning of last year, they had a ton of momentum and double the market valuation, which would have made a deal a lot easier. Now, not so much...

However, the price point they want is at or close to Canon / Axis levels.

Ironically, since they are an end-to-end total solution, they don't appeal as much to someone buying ala carte...

Someone who already is a major camera or VMS manufacturer might not want to pay for something they already have, as well as the integration headaches that would come along with it.

So maybe most value for the Google/Microsoft/Apple/Intel* crowd and less for the Hikua, Hanwha and Honeywell sort.

*Culture clash aside - <edit>

Also, the former group of companies have a lot more cash on hand and willigness to pay high valuations. Now, will Google, Microsoft, Apple, etc. buy Avigilon or any surveillance mnufacturer? Probably not but Avigilon only needs one company who wants to make a costly gambit like Canon did for Axis.

Read this IPVM report for free.

This article is part of IPVM's 6,599 reports, 889 tests and is only available to members. To get a one-time preview of our work, enter your work email to access the full article.

Already a member? Login here | Join now

Related Reports

Dahua Revenue Grows But Profits Down, Cause Unclear on Oct 20, 2020
While Dahua's overall revenue was up more than 12% in Q3 2020, a significant...
ADT Slides Back, Disappointing Results, Poor Commercial Performance on Aug 06, 2020
While ADT had an incredible start to the week, driven by the Google...
Fever Camera Sales From Integrators Surveyed on Jun 01, 2020
Fever cameras are the hottest trend in video surveillance currently but how...
Hikvision Global Revenue Falls, Hit By Coronavirus on Apr 27, 2020
Hikvision's global revenue fell in the first quarter of 2020 due to the...
Uniview H1 2020 Financials Examined on Sep 08, 2020
While Dahua and Hikvision, helped by fever camera sales, are recovering from...
Infinova, March Networks and Swann H1 2020 Financials Examined on Sep 02, 2020
While Dahua and Hikvision, helped by fever camera sales, are recovering from...
Costar Technologies / Arecont H1 2020 Financials Examined on Sep 16, 2020
Costar's financial results have been hit by the coronavirus with the company...
ADI Sales Down 21% in April on May 14, 2020
ADI sales were down 21% in April, the company disclosed, as the pandemic hits...
Facial Recognition: Weak Sales, Anti Regulation, No Favorite, Says Security Integrators on Jul 07, 2020
While facial recognition has gained greater prominence, a new IPVM study of...
Six Flags' FDA Violating Outdoor Dahua Fever Cameras on Oct 26, 2020
As Six Flags scrambled to reopen parks amid plummeting revenues caused by the...
Dahua Profits Surge Due To Fever Camera Sales on Aug 25, 2020
While Dahua's overall revenue is down, driven by challenges within China, the...
Dahua Revenue Plunges, 3 Execs Resign Q1 2020 on Apr 29, 2020
Dahua's sales dropped by 19.47% in the first quarter of 2020 amid the...
The Booming Multi-Billion Coronavirus Fever Camera Market on Apr 21, 2020
The market for elevated body temperature detection cameras, aka 'coronavirus...
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...
FLIR Stock Falls, Admits 'Decelerating' Demand For Temperature Screening on Aug 07, 2020
Is the boom going to bust for temperature screening? FLIR disappointed...

Recent Reports

Consultants Online Show LIVE Today! on Oct 27, 2020
IPVM's 7th online show will feature 20+ consultants and recruiters presenting...
Eagle Eye Networks Raises $40 Million on Oct 27, 2020
Eagle Eye has raised $40 million aiming to "reinvent video...
Hikvision Q3 2020 Global Revenue Rises, US Revenue Falls on Oct 27, 2020
While Hikvision's global revenue rises driven by domestic recovery, its US...
VICE Investigates Verkada's Harassing "RawVerkadawgz" on Oct 26, 2020
This month, IPVM investigated Verkada's sexism, discrimination, and cultural...
Six Flags' FDA Violating Outdoor Dahua Fever Cameras on Oct 26, 2020
As Six Flags scrambled to reopen parks amid plummeting revenues caused by the...
ISC Brasil Digital Experience 2020 Report on Oct 23, 2020
ISC Brasil 2020 rebranded itself to ISC Digital Experience and, like its...
Top Video Surveillance Service Call Problems 2020 on Oct 23, 2020
3 primary and 4 secondary issues stood out as causing the most problems when...
GDPR Impact On Temperature / Fever Screening Explained on Oct 22, 2020
What impact does GDPR have on temperature screening? Do you risk a GDPR fine...
Security And Safety Things (S&ST) Tested on Oct 22, 2020
S&amp;ST, a Bosch spinout, is spending tens of millions of dollars aiming to...
Nokia Fever Screening Claims To "Advance Fight Against COVID-19" on Oct 22, 2020
First IBM, then briefly Clorox, and now Nokia becomes the latest Fortune 500...
Deceptive Meridian Temperature Tablets Endanger Public Safety on Oct 21, 2020
IPVM's testing of and investigation into Meridian Kiosk's temperature...
Honeywell 30 Series and Vivotek NVRs Tested on Oct 21, 2020
The NDAA ban has driven many users to look for low-cost NVRs not made by...
Ubiquiti Access Control Tested on Oct 21, 2020
Ubiquiti has become one of the most widely used wireless and switch providers...
Avigilon Aggressive Trade-In Program Takes Aim At Competitors on Oct 20, 2020
Avigilon has launched one of the most aggressive trade-in programs the video...
Mexico Video Surveillance Market Overview 2020 on Oct 20, 2020
Despite being neighbors, there are key differences between the U.S. and...