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)

Undisclosed Manufacturer #1

03/01/17 04:46pm

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. 

John Honovich

IPVM | In reply to Undisclosed Manufacturer #1 | 03/01/17 04:54pm

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. 

Kevin Bryner

03/07/17 01:44pm

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

 

John Honovich

IPVM | In reply to Kevin Bryner | 03/07/17 01:52pm

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 6,379 reports, 860 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

Chinese Manufacturer Kickstarter Campaign Huge Success (EverCam) on Apr 23, 2018
In a week, a Chinese manufacturer's expertly done Kickstarter campaign has received $1.4 million in pledges, an incredible amount for a video...
Geovision 4MP Super Low Cost Turret Tested (EBD-4700) on Sep 29, 2017
~$100 cameras, even for 4MP, are now expected by many dealers, as price cuts and ongoing sales have set this expectation. At the same time, many...
Qognify Significantly Cuts OnSSI HQ on Feb 25, 2019
Qognify, having acquired OnSSI less than 2 months ago, in December 2018, has cut ~25% of OnSSI total employees, primarily at OnSSI's HQ in Pearl...
25% China Tariffs Finalized For 2019, 10% Start Now, Includes Select Video Surveillance on Sep 18, 2018
A surprise move: In July, when the most recent tariff round was first announced, the tariffs were only scheduled for 10%. However, now, the US...
4MP Camera Shootout - Axis, Dahua, DW, Hanwha, Hikvision, Uniview, Vivotek on Sep 24, 2018
4MP usage continues to climb, especially for low cost fixed lens models. To see who was best, we bought and tested seven 4MP models from Axis,...
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...
Avigilon Profits Surge, Stock Jumps (Q2 2017) on Aug 10, 2017
Avigilon said earlier this year they would shift their strategy to maximizing profits. Now, they are delivering it and the stock market is...
Chinese Direct Disruptor Reolink Tested on May 31, 2017
Another Chinese disruptor, Reolink, is gaining attention. This one is selling direct from its own website, with fulfillment by Amazon. And a...
PRC Government Increases Hikvision Ownership on Nov 12, 2018
The PRC government - Hikvision's controlling shareholder - is increasing its ownership of the video surveillance giant amid sharp stock price...
Avigilon Q3 2017 Results on Nov 08, 2017
Avigilon's profit-driven business strategy continues. Q3 2017 results show strong growth in several regions, but weaker results in the US. This was...

Most Recent Industry Reports

Avigilon ACC Cloud Tested on Jul 08, 2020
Avigilon merged Blue and ACC, adding VSaaS features to its on-premise VMS, offering remote video and health monitoring that was previously limited...
The US Fight Over Facial Recognition Explained on Jul 08, 2020
The controversy around facial recognition has grown significantly in 2020, with Congress members and activists speaking out against it while video...
Sperry West / Alibaba Tablet Temperature Measurement Tested on Jul 07, 2020
In April, we ordered a ~$500 temperature tablet from Alibaba. We set it to the side while doing 18 other temperature screening tests but, after...
Facial Recognition: Weak Sales, Anti Regulation, No Favorite, Says Security Integrators on Jul 07, 2020
While facial recognition has gained greater prominence, a new IPVM study of security systems integrators shows weak sales, opposition to...
Video Surveillance 101 Book Released on Jul 07, 2020
IPVM's unique introduction to video surveillance series is now available as a 145-page eBook. Designed for managers, salespeople, and engineers new...
Startup Duranc Presents AI VSaaS on Jul 06, 2020
Duranc presented its system at the May 2020 IPVM Startups show. A 30-minute video from Duranc including IPVM Q&A Background on the...
Low Voltage Nation Wants to "Help You Carve Out A Fulfilling Career" Interviewed on Jul 06, 2020
It is difficult to make your way in this industry as there is little formal schooling. However, one person, Blake Urmos, the Founder of Low Voltage...
The Next Hot Fever Detection Trend - $100 Wall-Mounted Units on Jul 06, 2020
The first wave of the booming fever detecting market was $10,000+ cameras, now interest for ~$2,000 tablets is high and the next big thing may be...
Cisco Meraki Unlocks IP Cameras With RTSP Tested on Jul 06, 2020
Meraki opened up its cameras to 3rd party NVRs/VMSes by offering RTSP streaming because of "the need to solve a business problem". We tested...