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.

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.

Read this IPVM report for free.

This article is part of IPVM's 6,541 reports, 882 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

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...
Drako's Companies (Brivo, Eagle Eye) Take $4+ Million in PPP Funds on Jul 14, 2020
While centimillionaire Dean Drako is the owner of two of the largest SaaS...
Uniview H1 2020 Financials Examined on Sep 08, 2020
While Dahua and Hikvision, helped by fever camera sales, are recovering from...
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...
Cast Presents PoE Perimeter Lighting on Apr 28, 2020
Cast Lighting presented its PoE powered Perimeter fence system during the...
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...
Anyvision Presents AI Facial Recognition and Mask Detection on Jun 08, 2020
AnyVision presented its AI facial recognition and mask detection at the May...
The Booming Multi-Billion Coronavirus Fever Camera Market on Apr 21, 2020
The market for elevated body temperature detection cameras, aka 'coronavirus...
Startup Calipsa Presents AI False Alarm Filtering on Jul 21, 2020
Calipsa presented its AI false alarm filtering platform at the 2020 IPVM...
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...
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...
2020 Mid Year Video Surveillance Industry Guide on Jul 27, 2020
The first half of 2020 has been shocking, for the world generally, and for...
China Dali Fever Cameras and Booming Sales Examined on Sep 11, 2020
Zhejiang Dali, one of China's original thermal technology developers, has...
Brazil's Biggest Domestic Surveillance Company Intelbras Profile on Jul 29, 2020
While Intelbras is not widely known outside of Latin America, Intelbras is a...

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...