Avigilon Shifts Strategy To Maximizing Profitability (Q4 2016 Results)

By: Brian Karas, Published on Mar 01, 2017

Avigilon had previously been known for big spending, hiring a large sales force and throwing lavish partner parties at tradeshows like ISC West. Now, the company says they are going to focus on profitability first.

In this report we analyze Avigilon's Q4 2016 financial results, and statements from the CEO on the future of their business.

******** *** ********** **** known *** *** ********, hiring * ***** ***** force *** ******** ****** partner ******* ** ********** like *** ****. ***, the ******* **** **** are ***** ** ***** on ************* *****.

** **** ****** ** analyze ********'* ** **** financial *******, *** ********** from *** *** ** the ****** ** ***** business.

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

Revenue ** **%

********'* ** ******* *** up **% ******** ** Q4 ****, **** $**** USD ***** *******. *** income **** **** *%, to $*.**, ******** ** part ** **** ***** margins, **% ** ** 2016 **. **% ** Q4 **** ** **** as ********* ************ / amortization.

Stock **

*** ***** *** ** modestly ** ******** ** this ****, ~*%. 

*******, ***** ***** ******** bottom, ** $* *** share, **** **** * months ***, ***** ***** has *** ******* ** $16 *** *****, ******* significant ******** ******** ***** a *****-**** **** **** its *** **** **** of $**.

[******: *** ** *** day ***** *** *******, stock ******** ** **.**, up *.**% *** **** from *** ***'* ****** start.]

Shift ** ********** ******

** *** ******** **** [link ** ****** *********], Alex ********* ****** **** the ******* *** ******** its ********** ** ***** ** profitability **** ******:

** *** ***** ** growth ****, *** *** bias ***** ******* ** towards ********** ************* **** growth ** ******* ** maximum ****** **** ******.

******:

*** *** **** **'** well-established *** **'** ********** as ** ******* ** we're *** ******* **** play ** *** ******** today *** *** ***** video ********* *******, **plan ** **** **** ** **** ****** ***. [emphasis added]

**** ** * ******* ***** for *** *******, ** they *** ********** **** known *** ******** ******* to ******** ***** ****** presence, ********* ******* * sales ***** **** *** the ********* ** ******* territories **** ********* ** help ******* ******* ***** product.

R&D *******, *****/*********, *&* ****

******** ** ***** ********* in *&*, *** *** clearly *** ***** ** other ***** ***********. *&* spending *** ** **%, while ***** *** ********* and *&* ******** **** effectively ****, **** **** year *** **.

US ******* **** ************

***** ******* *** *** US *** ** **% on * *** *****, it *** **** ~*% from ** ****. **** is **********, ** *** US *** ************* **** Avigilon's ******* ******, *** had ********** ***** ********** quarter **** ******* ****** as **** ** **** over **** ******.

Asia ******* ** **%

*** **** ******* ******, which *** **** ********* quarter-over-quarter *** **** *** a **** ******* *****, up **% ** $*.**. No ************ **** ***** for **** *********** ****.

Analytics ********* ***** *** ********

******** ********* ** **** their ********* ******* ** a *********** ** *******, but **** *** ***** it *** ** *** financials. **** ********* ****** the ******* ******* "******* ******* **** **** for *** *******", ********* it ** ********, ********, and ***********. **** ********* is ******* ********** **** Avigilon **** *** ****** to **** ********* ** licensing *******.

** *** ********** ********* revenue, ******** ***** ** more ********* ** ******** interpret ***** **********, *** example *** *** ** US ******* ***** ** due ** ** ******* large ****** ******* **** in ** **** ************ boosted ** *******, *** would **** *** ******* trend *** ** ******* more ********. *********, *** Asia ******* ******'* ******** could ** *** ** a ********* **** ** catch-up *******, *** *** *** indicate **** ******** *** truly **** ******** ** this ******.

Headcount ****

******** *** ************* *********** the ******* ****** ** the ******* ** ***** of **** ******* *** headcount, ******* **** ************ that ***** ********* ******** decreased ******* ** **** and ** ****. ** was ***** ** * "small *********", *** *** not ******* ***** *********** were ********.

Receivables ** *************

*********** *********** ** *** invoices (>** ****) *** twice ** **** ******** to *** *** ** Q4 ****. **** ******** in *********** ** ******** as ******* *********, *** that ** ******* ********* in ******* *********** (******** not **** ***, *** not *** **** **** the ********** **** ********). A *********** ****** ** old *********** *** ******** the ******* ** ****** problems ********** **** *******, which *** ****** ***** partners **********, ***** ***** also ****** ****** *******.

Fierce ******* ***********

********'* *** ************ *** race ** *** ****** trends, ******* ** ******* "****** ******* ***********" ********** 2017. ** ******* ** pricing, ** **** "** **** ** ***** at **** ****** ** do ******** *******", *** did **** *** ** ****** ***** *********** ** * ****** ******** to ****** ****** ** regards ** *****.

H3 ******* ***** ******

** ******* **** ****** to **** ****** **** ever **** ******, *** that ***** **** ** plans ** *********** ****. While **** ** **** for ******* ******, ** does ******** **** * large ****** ** ********* still ****** *****-**** ******* over ******-****** ** ******** with *********. ******** ************ this ** * ******* degree, ********** **** **** keep *** ** ******** until **** *** ******* it **** * ***** line ** ***-**** *******.

Future ********

******** **** **% ******* growth ******** *** **** they ****** ******* ******* $390M *** $**** *** 2017, *** **** ******* profits ******* ********** ********* of *****. ***** ********** indicate **** ***** ******** expects ** ******** ***** growth, ** **** ** at * **** ******* pace **** ******** *****.

*******

***** *** ****** ********* period ** *** **** 2 *****, *** ****** positive **** ******* ** a ******* **** *** Avigilon. **** ******* ** be **** ** ** the **** ** ** continue *** **** ** is ** ** ******** is ********* ****** *** an ***********, ***** *********** on ************* **** ********* ** the **** * ******. ***** **** *** quarters ***** ** * significant ***** ** *** price / ******* ** an *********** ** ********.

Comments (4)

Sounds like the board as set the profit bar for the CEO and most likely will result in a change if that profit number is not achieved. 

Avigilon's CEO effectively controls the board so I am skeptical that he will be removed / a change will happen unless things get far worse (and right now they are on a roll, albeit from a low point).

For the last few years, analysts have been complaining about the lack of profit generation so I suspect this move is in response to that, i.e., make the investors happy with more profits, get rewarded with a higher valuation.

And I do agree with Avigilon's CEO's approach here. They are fairly mature at this stage and the market will only allow so much further growth, so they might as well make profits. 

AKA buyout. CEO wants to get the most $$ for his shares as possible. Plain and simple, IMO.

 

Kevin, you may want to enter the contest: Win $500 - What Company Will Be Acquired Next? :)

And, yes, reducing costs like this could help polish Avigilon up for a buyout.

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

Hikvision CEO Alleged Illegal Activities Investigated on Dec 13, 2019
Hikvision's CEO Hu Yangzhong is under investigation for suspected illegal activities, according to the PRC's securities regulator. This has become...
Acquisitions - Winners and Losers on Dec 10, 2019
Most major manufacturers have been acquired over the last decade. But which have been good deals or not? In this report, we analyze the...
IP Camera Installability Shootout 2019 - Avigilon, Axis, Bosch, Dahua, Hanwha, Hikvision, Uniview, Vivotek on Dec 09, 2019
What are the best and worst cameras to install? Which manufacturers make it the hardest or easiest to install their cameras? We tested 35 total...
Security Sales Course 2020 on Dec 05, 2019
This sales course is customized for the current needs and challenges specific to professionals selling video surveillance and access control...
AVTech ~$70 IP Cameras Tested Vs Dahua and Hikvision on Dec 04, 2019
Taiwanese manufacturer Avtech is taking direct aim at low cost leaders Dahua and Hikvision with ~$70 starlight and white light illuminator...
Hikvision Global News Reports Directory on Dec 02, 2019
Hikvision has received the most global news reporting of any video surveillance company, ever, ranging from the WSJ, the Financial Times, Reuters,...
Freebie Face-Off: Rise of ~$30 Giveaways Examined on Dec 02, 2019
The freebies are growing. Verkada started this (see The Fastest Growing Video Surveillance Sales Organization Ever - Verkada) and now has given...
China Uyghur Analytic Projects Require Intel And NVIDIA, Intel Condemns, NVIDIA Silent on Dec 02, 2019
At least 8 PRC China police projects require NVIDIA and Intel chips to power their Uyghur-detecting analytics, according to procurement documents...
Directory of Access Reader Manufacturers on Nov 27, 2019
Credential Readers are one of the most visible and noticeable parts of access systems, but installers often stick with only the brand they always...
Vunetrix Health Monitoring Company Profile on Nov 26, 2019
Vunetrix boasts that they make the integrators the 'HERO' by using Vunetrix's monitoring. We spoke to Vunetrix to better understand their...

Most Recent Industry Reports

ADT CEO Not Worried About DIY: "2 Discrete Markets" on Dec 13, 2019
ADT's CEO is not worried about DIY, characterizing DIY and ADT's DIFY as "2 discrete markets" at the Imperial Capital Security Investor's...
Hikvision CEO Alleged Illegal Activities Investigated on Dec 13, 2019
Hikvision's CEO Hu Yangzhong is under investigation for suspected illegal activities, according to the PRC's securities regulator. This has become...
Video Surveillance 101 Course Opened on Dec 12, 2019
IPVM is adding a Video Surveillance 101 course, designed to help those new to the industry to quickly understand the most important terms,...
Verkada Notification Outage on Dec 12, 2019
Verkada is suffering an event notification outage and analytic search failures. Inside, we examine what the issues are, what Verkada told IPVM...
Hikvision DS 2nd Gen Intercom Tested on Dec 12, 2019
With its newest IP intercom, Hikvision proclaims users can 'get full control over an entrance' regardless of where it is installed, home or office...
Honeywell 30 Series Cameras Tested Vs Dahua and Hikvision on Dec 11, 2019
Honeywell has infamously OEMed Dahua and Hikvision for years, but now they have introduced an NDAA-compliant line, the 30 Series, claiming "lower...
"Good Market, Bad Business Models" - Residential Security on Dec 11, 2019
Industry banker John Mack, at his company's annual event, took aim squarely at the problems in the residential security...
IP Camera Browser Support: Who's Broken / Who Works on Dec 10, 2019
For many years, IP cameras depended on ActiveX control, whose security flaws have been known for more than a decade. The good news is that this is...
Acquisitions - Winners and Losers on Dec 10, 2019
Most major manufacturers have been acquired over the last decade. But which have been good deals or not? In this report, we analyze the...
IP Camera Installability Shootout 2019 - Avigilon, Axis, Bosch, Dahua, Hanwha, Hikvision, Uniview, Vivotek on Dec 09, 2019
What are the best and worst cameras to install? Which manufacturers make it the hardest or easiest to install their cameras? We tested 35 total...