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 ** ********** ******

** *** ******** ****, **** ********* ****** that *** ******* *** shifting *** ********** ** focus ** ************* **** growth:

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

******:

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

**** ** * ******* shift *** *** *******, as **** *** ********** been ***** *** ******** heavily ** ******** ***** market ********, ********* ******* a ***** ***** **** had *** ********* ** blanket *********** **** ********* to **** ******* ******* their *******.

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 *******, *** *** not ******** **** ******** has ***** **** ******** in **** ******.

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

Dahua USA Celebrates 5 Years of Errors on May 22, 2019
Dahua USA is, in their own words, 'celebrating' 5 years in North America or as trade magazine SSN declared: Dahua Technology finds success in...
ASCMA / Monitronics Declares Chapter 11 Bankruptcy Plan on May 22, 2019
Monitronics is entering into Chapter 11 bankruptcy. The company, also called Ascent Capital Group Inc., aka ASCMA, aka Brinks Home Security,...
US Considers Sanctions Against Hikvision and Dahua on May 22, 2019
The US government is considering blacklisting "up to 5" PRC surveillance firms, including Hikvision and Dahua, Bloomberg reported, with human...
Trump Signs 'Huawei Ban' - Executive Order Targeting Foreign Adversary Technology on May 16, 2019
US President Donald Trump has signed an executive order targeting technology provided by 'foreign adversaries', in what is widely being called a...
China PRC Government New National Video Surveillance Standards on May 14, 2019
The People's Republic of China (PRC) government has released a new set of overarching standards for authorities to follow when they install video...
Bluecherry Open Sources Entire VMS on May 13, 2019
Bluecherry announced they have "released the entire Bluecherry software application open source with a GPL license". We spoke to Bluecherry's...
Vivotek Talks About Taiwan, China, Bans, AI And Business Development on May 10, 2019
Vivotek, Taiwan's biggest manufacturer by revenue, did not have a booth at Taiwan's Secutech 2019 (which we are covering). However,...
10 Facial Recognition Providers Review (Secutech) on May 09, 2019
Adding to our 19 Facial Recognition Providers Profiled report from ISC West, IPVM focused on facial recognition technology for our Day 2 coverage...
Secutech Taipei 2019 Show Report, Impacted By Expected Hikua Ban on May 08, 2019
IPVM is in Taipei attending SecuTech 2019: The most significant new development at the show is Dahua and Hikvision pulling out after many years...
Dahua and Hikvision Products Illegally Sold To US Government GSA on May 06, 2019
Dahua and Hikvision products are being widely and illegally sold to the US government GSA. The sellers are falsely claiming these China products to...

Most Recent Industry Reports

NJ Law Requires Apprenticeship For Public Works Integrators on May 24, 2019
Few integrators do a formal apprenticeship program. However, now a NJ law is requiring any integrator on public works projects (such as state...
Security / Privacy Journalist Sam Pfeifle Interview on May 24, 2019
Sam Pfeifle is best known as the outspoken former Editor of Security Systems News. After that, he was publications director at the International...
Verkada Video Quality Problems Tested on May 23, 2019
Verkada suffers from numerous video quality problems, not found in commercial IP cameras, new IPVM testing of Verkada vs Axis and Hikvision...
Average Frame Rate Video Surveillance 2019 on May 23, 2019
What is the average frame rated used in video surveillance systems? In IPVM's 2011 statistics, the average was 6-8fps increasing to ~10fps in...
Access Control Job Walk Guide on May 22, 2019
Significant money can be saved and problems avoided with an access control job walk if you know what to look for and what to ask. By inviting...
ASCMA / Monitronics Declares Chapter 11 Bankruptcy Plan on May 22, 2019
Monitronics is entering into Chapter 11 bankruptcy. The company, also called Ascent Capital Group Inc., aka ASCMA, aka Brinks Home Security,...
US Considers Sanctions Against Hikvision and Dahua on May 22, 2019
The US government is considering blacklisting "up to 5" PRC surveillance firms, including Hikvision and Dahua, Bloomberg reported, with human...
Dahua USA Celebrates 5 Years of Errors on May 21, 2019
Dahua USA is, in their own words, 'celebrating' 5 years in North America or as trade magazine SSN declared: Dahua Technology finds success in...
Axis ~$150 Outdoor Camera Tested on May 21, 2019
Axis has released the latest in their Companion camera line, the outdoor Companion Dome Mini LE, a 1080p integrated IR model aiming to compete with...
Covert Facial Recognition Using Axis and Amazon By NYTimes on May 20, 2019
What if you took a 33MP Axis camera covering one of the busiest parks in the US and ran Amazon Facial Recognition against it? That is what the...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact