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.

******* ********'* ***** ***** ********, management ********, ************ ****** and *** ******, ******** CEO ***** **** ** is ********** ** ****.

** **** ******, ** examine ********'* *** ******* and *** *** ***** ** top **** ******* ****** has ****** ** ******** for *** *******.

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

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)

Where is the 30B from?

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.).

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]"

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.

"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.

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?

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.

Ask Hikvision :)

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

Axis Shrugged.

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...

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

PSIM CNL Acquired By Everbridge on Mar 09, 2020
The end has finally come for CNL. Despite for years saying they would revolutionize the industry, they have been taken over in a footnote of a...
Vivint Valuation Falls $1.5 Billion on Dec 19, 2019
Residential market struggles continue. Now, Vivint's valuation has fallen $1.5 billion in its impending merger. Inside this note, we examine...
"Stress in the Residential Market" - Major Lender Exits on Nov 06, 2019
The residential security / 'alarm' market is getting worse, at least for traditional players. Now, one of the biggest lenders in the industry has...
Resideo Stock Plunges 37%, CFO Ousted on Oct 23, 2019
The horrible year for the ADI / Honeywell Home spinout, Resideo, just got worse, with their stock plunging another 37% today. Not even a year...
Knightscope Sells Just 1 Net New Robot In 6 Months on Oct 04, 2019
For the first half of 2019, US government records show that Knightscope has sold just 1 net new robots ('machines-in-network'), inching up from 52...
OpenALPR Doubles Prices on Jun 06, 2019
There is no 'race to the bottom' in cloud / AI video surveillance. In May, Verkada increased their prices. Now, OpenALPR is doing the same with a...
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...
Verkada Gets Half Billion Dollar Valuation on Apr 26, 2019
Last week, when we profiled Verkada (The Fastest Growing Video Surveillance Sales Organization Ever - Verkada), we predicted they would raise $40...
Failed Integrator Rollup, Securadyne Sells to Guard Giant Allied on Apr 10, 2019
One of the most ambitious integrator rollups of the decade has reached its conclusion—selling to a mega guard company. Allied Universal has...
Brinks Home Security / ASCMA Risks Bankruptcy on Apr 08, 2019
ASCMA, aka MONI, aka Brinks Home Security has issued a warning in their most recent financials that they risk bankruptcy. In this note, based on...

Most Recent Industry Reports

USA's Feevr Thermal Temperature System Examined on Mar 31, 2020
This US company has burst on to the scene, brashly naming itself 'feevr' and branding itself as a "COVID 19 - AI BASED NON CONTACT THERMAL...
JCI Coronavirus Cuts on Mar 31, 2020
JCI has made coronavirus cuts, the company told employees in an email that IPVM has reviewed. Inside this note, we examine the cuts made, the...
Add Door Operators To Fight Coronavirus on Mar 31, 2020
IPVM recommends that integrators advocate and end-users consider adding door operators to fight the spread of coronavirus. This delivers...
Video Surveillance Business 101 on Mar 30, 2020
This report explains the fundamental elements of the video surveillance business for those new to the industry. This is part of our Video...
FDA Gives Guidance on 'Coronavirus' Thermal Fever Detection Systems on Mar 30, 2020
The US FDA has given IPVM guidance on the use of thermal fever detection systems being marketed for coronavirus, as an explosion of such devices...
Worsen: Integrators Hit Even Harder By Coronavirus on Mar 30, 2020
Integrator's problems have worsened over the past 2 weeks, according to new IPVM survey results. Inside this report, we share statistics and...
Pivot3 Mass Layoffs on Mar 27, 2020
Pivot3 has conducted mass layoffs, the culmination of grand hopes, a quarter of a billion dollars in VC funding, and multiple failures to gain...
Athena CEO Criticizes 'Deplorable' 'Nitpicking', IPVM Refutes on Mar 27, 2020
UPDATE: NBC News Report Cites IPVM On Coronavirus 'Fever Detection' Cameras Athena Security's CEO Lisa Falzone has strongly objected to IPVM's...
Hikvision Admits Sanctions Harming Its Financial Performance on Mar 27, 2020
While Hikvision initially downplayed being sanctioned for human rights abuses, the company is now admitting a significant impact in a new PRC...