Avigilon CEO Aims For $3 Billion

By: John Honovich, Published on Oct 05, 2016

Despite Avigilon's stock price collapse, management turnover, decelerating growth and net losses, Avigilon CEO shows that he is optimistic as ever.

In this report, we examine Avigilon's CEO outlook and why the focus on top line revenue growth has proven so damaging for the company.

Background - $*** *******

*** ******** ******** *** proclamation *** ** **** / **** ************ ******** ***** $*** million ******* (***) **** for ****. ******** ***** ********* / **-*** ** ** the **** ****** ** achieve $*** ******* ****** run ****.

******, **** ******* ** it *** *** **** *** they ****** ***** **. While **** *** **** far **** ********* $*** million *** ******* *** the ****, ** **** do $*** ******* *** for **** ******* (** 2016), **** **** **** accomplished *** '*** ****' (i.e., $*** * * quarters = $*** *******). To ** **, **** will **** * **** over **** ****** **** of ~**% *** **, which ** ******** ***** what **** **** ***** doing this ****.

*******, ******* *** ********** large ******** ****** ************ against *** *** **** the **** * ***** (~25% *****), ******** ***** not **** **** *****, even *** *** ****** run **** *******.

New ****

********'* *** ** *** keynote ** ** ******** Canadian ******** *****. ****** that*********, ** ****** *** *** ********* his **** **** *** then **** **** ****:

**** * *** **** you ** **** **’* to **** ******* *** continue ** ***** *** top **** *** *************. It’s ** *** **** a ******* ******* ** annual ******* *** ****. It’s **** ** ****** our *********** ******, *** to **** **be *** ******** ****** ** *** $** ******* ****** ** ****** ** ********* * ** *** **** ****** ***** ** ******. [IPVM emphasis added]

$* ******* ******* ** the ************ ********* **** 10% ** * $** billion ******.

*** ********** ****** ** the ****** ******* ****** out ** **** **** is * **** ***** where ** ** ***** celebrated. ** **** ***, he *** **** **** be ************. *******,******* ** *** ********* as * *****, ***** ** ** doubt ********'* *** ** still ******* ** *** line ******* ****** ****** anything ****.

Focus ** ******* ********

***********, ******** ** ******* in ** *** $*** million ****:

  • ********** *** ******* ** 'win ** *** *****'**** ** *** ********** team (******* ********).
  • **************** ******* *** *********** ** ******** ** see ******** ** *********** instability / ******* ******** coming **** ********'* *** / ********** ********. 
  • *** ***** ****** *** following ******** ** *** stock ***** (** ** $34, **** *** ** ~$8.50) *** ******* * huge ****** ** ******** attention ** *** *******, along **** ********* ********** from ********* (*.*., ******** '************ **********' / 'Authoritarian' ***).
  • *** ***** *** ** ~$8.50 ** *** **** exact ***** ** *** 4 ***** *** **** Avigilon's *** ******* ********* the $*** ******* ****, so *** *** ****, *** the ***** *** ********* no *** **** ** the **** * *****.

**** ********* *** ******* closely, ** ***** *** focus ** ******* ***** all **** *** ****** this. ** ** *********, allowing *** ***** **** revenue ***** ** *** expense ** ******** *********** long **** ***********.

Never ****

** ******** ***** ************ Avigilon's ******************, ** ** **** from *** *********:

*** *** ****** *** thing ** ** ***** quit. *** **** ** be ********* *** *** have ** *********. ******* comes **** *** **** to ******* **** ****. Success *** ******* *** always ********, *** ** stems **** *** ****** up.

***** ** ** ***** perseverance ** ********* *** there *** **** ****** that ****** ** ******* done. ******* ***'* **** against * **** **** than ****** **** **** not ********* *** **** open *** **** *****; you *** ****** ***** yourself ***.

***** ********'* ******* ********** channel (***** ****** ****** of *******/*********) *** *********'* Chinese ********** ****** ****** invasion, ***** ** **** so **** ********'* *** can **.

******** *** ********* ** a *** **** *******. They *** ********* ** a **********, ******, ******* but **** ** **** become **** ******** ***** building * ******* ************ and *** ** ******** with **** *** **** revenue ******.

**** ** ******? *** knows? **** *** ***** price ** ****** ****, we ***** *** ** acquisition ** *** **** sensible ***** *******.

Comments (11)

Avatar

Sean Grimm

Hitachi | 10/05/16 05:47pm

Where is the 30B from?

John Honovich

IPVM | In reply to Sean Grimm | 10/05/16 05:53pm

Sean, good question, that is based on forecasts for the combined future revenue of video surveillance and access control.

Here is a related slide:

Obviously, that slide says $25B, not $30B but surely there are many market others forecasts with numbers much higher or forecasts that look further out (to 2022, etc.).

Undisclosed Manufacturer #3

In reply to John Honovich | 10/06/16 09:18am

This chart says that the global market is $25B but Avigilon's CEO stated that the US market is $30B.

"It’s also to expand our addressable market, and to grow to be the dominant player in the $30 billion dollar US market by attaining a 10 per cent market share or higher. [IPVM emphasis added]"

John Honovich

IPVM | In reply to Undisclosed Manufacturer #3 | 10/06/16 11:33am

3, you are right, I missed that.

Now, I don't have any idea how he got a US $30 billion market. I am sure there is some stat out there or some segmentation that might claim that but it is way too high for the 'real' US video / access market.

Avatar

Sean Grimm

Hitachi | 10/05/16 06:28pm

"Not quitting" is not plan. Where will the cash influx come from to either grow your footprint by adding sales (outside/inside) and/or acquisition. The last thing a public company can do when your stock is not just flat but down is to spend money. Going from 500M to 3B is 600% growth which is ludicrous without significant, radical change.

Undisclosed Integrator #1

10/05/16 09:51pm

What's the advantage of chasing revenue growth in lieu of margins? To me that seems like it would only increase overhead, further eroding margins or resulting in price increases. Price increases would only further erode revenue. Kind of a catch-22. Not being facetious, just trying to understand why the revenue is so critical to Avigilon from a financial/business perspective. Is it pure market share?

John Honovich

IPVM | In reply to Undisclosed #1 | 10/05/16 09:57pm

What's the advantage of chasing revenue growth in lieu of margins?

Ask Hikvision :)

There are certainly are some economies of scale, both in manufacturing and marketing. Those could be advantageous though I am skeptical about how significant that is.

For early stage startups, revenue growth is generally the defining factor in valuation, since profits are neither expected nor encouraged early on. However, for Avigilon, now a decade old in a mature business, I do not get why top line revenue growth would make as much sense. And investors certainly have shown that the top line revenue growth at the expense of profits and a strong internal organization is not attractive.

Undisclosed Integrator #1

In reply to John Honovich | 10/06/16 09:29pm

Ask Hikvision :)

Be careful mentioning that name. If you say it two more times Marty Calhoun will appear in this thread.

Undisclosed #2

IPVMU Certified | 10/05/16 10:18pm

Axis Shrugged.

Undisclosed #2

IPVMU Certified | 10/06/16 12:24am

This is what I saw in my e-mail:

By the time I said 'Ding Dong!', I realized my error. Still it was a rush...

Undisclosed #2

IPVMU Certified | 10/06/16 02:15pm

How good is his aim?

Avigilon CEO Aims For $3 Billion

Hikvision Gets $3 Billion From Chinese Government Bank

Read this IPVM report for free.

This article is part of IPVM's 6,539 reports, 881 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

JCI / Tyco Security Products Layoffs on Jun 05, 2020
Johnson Controls / Tyco Security Products has confirmed COVID-19 related...
Costar Technologies / Arecont H1 2020 Financials Examined on Sep 16, 2020
Costar's financial results have been hit by the coronavirus with the company...
Uniview H1 2020 Financials Examined on Sep 08, 2020
While Dahua and Hikvision, helped by fever camera sales, are recovering from...
Verkada Raises $80 Million, Triples Valuation To $1.6 Billion on Jan 30, 2020
Verkada's rocketing valuation continues. 9 months ago, they got a...
Favorite Access Control Manufacturers 2020 on Sep 28, 2020
200+ Integrators told IPVM "What is your favorite access control management...
Integrators Rising Against Coronavirus on May 27, 2020
IPVM integrator statistics make it clear - Coronavirus's impact on business...
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...
Netposa Stock Surges 46% After US Human Rights Abuse Sanctions on May 27, 2020
Last Friday, the US government announced it would sanction PRC video...
YOLOv5 Released Amidst Controversy on Jul 27, 2020
YOLO has gained significant attention within video surveillance for its...
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...
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...
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...
HID Presents Signo on Apr 23, 2020
HID Global presented their new Signo readers they claim read farther and...
Avigilon Open Analytics Tested on Apr 16, 2020
After years of effectively closed analytics, Avigilon decided in late 2018 to...
Avigilon Social Distancing Analytics Tested on Aug 26, 2020
Avigilon released its social distancing analytics in response to the...

Recent Reports

New Products Show Fall 2020 continues tomorrow with Genetec, Milestone, Avigilon, Microsoft and more! on Sep 29, 2020
IPVM's sixth online show continues tomorrow and will feature New Products...
Avigilon / Motorola VS Virtual ISC West on Sep 29, 2020
ISC West has historically been so dominant that no player would think of...
Dartmouth College Deploys K3 Temperature Screening on Sep 29, 2020
While Dartmouth College has a $6+ billion endowment, the College has bought...
Hanwha AI Object Detection Tested on Sep 28, 2020
Hanwha has added detection and classification of people, cars, clothing...
Favorite Access Control Manufacturers 2020 on Sep 28, 2020
200+ Integrators told IPVM "What is your favorite access control management...
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...