Avigilon Strong Growth Continues Q2 2013

By: John Honovich, Published on Aug 08, 2013

Continuing to buck the trends of the broader surveillance market, Avigilon's revenue was up 61% year over year for Q2 2013. Here is the full financial report. [Bonus - at the end, we break down the revenue of Avigilon's recent acquisition of RedCloud.]

  • Net profitability rose to 8.6%, which is a significant improvement over last year and approaching the rates of mature surveillance companies (such as Axis and Mobotix), indicating that Avigilon is not just 'buying' market share.
  • Growth in the US was the lowest of all geographic regions at just 41%. At nearly half of Avigilon's total revenue ($18 million for the quarter), this could be an indicator of increasing challenge in expanding in a fairly saturated market. On the other hand, Avigilon grew ~90% outside of the US, which could continue to fuel overall significant growth.
  • Gross margins increased 5 points from 48% to 53%, which puts them in line with more historically profitable and mature surveillance businesses (such as Axis).
  • Sales and marketing expenses were up 55%, lower than their overall growth rate, which indicates efficiency in expansion.
  • Gross R&D expenditures were up over 80%, a good sign compared to historical concerns of underinvesting in R&D.
  • Market stats: Avigilon cites both IMS and ABI for market statistics. Avigilon cites a 49% CAGR for IP camera sales from ABI though the other report they cite from IMS projects a CAGR half that. However, that data point is not mentioned.
  • Market cap is now ~$725 million, an all time high, more than 150% higher than a year before.

Here are a few details gleaned from Avigilon's Q2 call:

  • At Avigilon they call their new micro-dome [link no longer available] “The Analog Killer” because at a around $300 they want to take away any reasons an end user would want analog. Revenue from the mini-dome is not reflected in Q2 results but they expect it to be a hot selling product. That said, there are a lot of existing equal or lower cost minidomes.
  • Avigilon only took on six new employees with the Red Cloud acquisition and says the acquisition was not about getting its customers or its revenue - because it was a relatively small company - but about combing to improve technology.
  • The company expects strong growth in its Russian and Eastern European markets as it expands sales operations.

RedCloud

Buried at the end of Avigilon's financials is a disclosure of RedCloud's revenue and losses. For the first half of 2013, RedCloud's revenue was just under $1 million, putting them on a $2 million annual pace. Given the $17 million price paid, that's an extremely high 8+ times revenue.

That said, RedCloud's low revenue is unsurprising. Avigilon is clearly buying them for potential 'synergies' in targeting end to end security systems, especially with larger customers that highly value this.

Also not surprising, but worth noting, is that RedCloud was losing a fairly significant amount of money. Expenses were roughly double revenue leading to a whopping 50% net loss. Despite being 7 years old, RedCloud was likely unsustainable absent an acquisition or new funding round. Given their position, RedCloud did very well with this deal.

Here's the excerpt from the financial report covering RedCloud:

Note: given the obtuse way this is listed, you need to adjust relative to their actual financials for the year.

Comments (13) : Members only. Login. or Join.

Related Reports

Sony 61MP Surveillance Sensor Examined on Sep 04, 2020
For a decade, the highest resolution single-imager surveillance cameras have...
The Booming Multi-Billion Coronavirus Fever Camera Market on Apr 21, 2020
The market for elevated body temperature detection cameras, aka 'coronavirus...
Directory Of 150 Video Analytics Suppliers on Dec 17, 2019
This directory provides a list of video analytics providers to help you see...
Hikvision Returns To Growth Driven By Overseas Fever Cameras on Jul 29, 2020
While Hikvision's revenue fell in Q1 2020, it rebounded in Q2 attributed to...
Anyvision Raises $43 Million, Focusing on Access Control And Remote Authentication on Sep 04, 2020
While Anyvision has had a tumultuous 2020 with significant layoffs, the...
The Battle For the VSaaS Market 2020 - Avigilon, Arcules, Eagle Eye, OpenEye, Qumulex, Tyco, Verkada on Jan 13, 2020
While VSaaS suffered from inflated expectations in the 2010s, 2020 marks a...
Costar Technologies / Arecont H1 2020 Financials Examined on Sep 16, 2020
Costar's financial results have been hit by the coronavirus with the company...
Top 2020 Trend - AI Analytics on Nov 22, 2019
170+ Integrators answered: What do you think will be the top industry...
ADI Returns To Growth, Back To 'Pre-COVID Levels' on Aug 05, 2020
While ADI was hit hard in April, with revenue declining 21%, the company's...
Uniview H1 2020 Financials Examined on Sep 08, 2020
While Dahua and Hikvision, helped by fever camera sales, are recovering from...
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...
Mobotix Thermal Detection Camera Tested on Jun 09, 2020
For years Mobotix has struggled but now sales are surging driven by Mobotix's...
Integrators Rising Against Coronavirus on May 27, 2020
IPVM integrator statistics make it clear - Coronavirus's impact on business...
PSIM CNL Acquired By Everbridge on Mar 09, 2020
The end has finally come for CNL. Despite for years saying they would...
Directory of 96 Video Surveillance Startups on May 20, 2020
This directory provides a list of video surveillance startups to help you see...

Recent Reports

OnTech Smart Services Partners With Google and Amazon To Compete With Integrators on Sep 25, 2020
A pain point for many homeowners to use consumer security and surveillance is...
The Future of Metalens For Video Surveillance Cameras - MIT / UMass / Immervision on Sep 25, 2020
Panoramic cameras using 'fisheye' lens have become commonplace in video...
Hikvision Sues Over Brazilian Airport Loss on Sep 24, 2020
Hikvision was excluded from a Brazilian airport project because it is owned...
China General Chamber of Commerce Calls Out US Politics on Sep 24, 2020
While US-China relations are at an all-time low, optimism about relations...
Verkada Disruptive Embedded Live Help on Sep 24, 2020
Call up your integrator? Have someone come by the next day? Verkada is...
IP Networking Course Fall 2020 - Last Chance - Register Now on Sep 23, 2020
Today is the last chance to register for the only IP networking course...
Drain Wire For Access Control Reader Tutorial on Sep 23, 2020
An easy-to-miss cabling specification plays a key role in access control, yet...
Norway Council of Ethics Finds Hikvision Human Rights Abuses "Ongoing" on Sep 23, 2020
Hikvision's involvement in "serious human rights abuse" in Xinjiang is...
IPVM Camera Calculator User Manual / Guide on Sep 23, 2020
Learn how to use the IPVM Camera Calculator (updated for Version 3.1). The...
Installation Course Fall 2020 - Save $50 - Last Chance on Sep 22, 2020
This is a unique installation course in a market where little practical...
SimpliSafe Business Security Launched Examined on Sep 22, 2020
SimpliSafe has launched "SimpliSafe Business Security" that the company...
FLIR CEO: Many New Fever Entrants "Making Claims That The Science Just Won't Support" on Sep 22, 2020
FLIR's CEO joins a growing number calling out risks with fever / screening...
China Bems Temperature Measurement Terminal Tested on Sep 22, 2020
Guangzhou Bems (brand Benshi) is the manufacturer behind temperature...
Axis Exports To China Police Criticized By Amnesty International on Sep 21, 2020
Axis Communications and other EU surveillance providers are under fire from...
Milestone XProtect on AWS Tested on Sep 21, 2020
Milestone finally launched multiple cloud solutions in 2020, taking a...