Axis Market Weakness Continues in Q2 2009

Author: John Honovich, Published on Jul 08, 2009

So much for green shoots - at least for Axis. In their just released Q2 financial report, Axis leads with "No Change in Sales Trend" which is not a good thing considering their abrupt drop from last year's almost 40% growth rate.

This will certainly generate a new round of debate on the future of IP and Axis as the market's leader. While privately lots of industry people talk about how things are improving, this is not a sign in that direction. On the other hand, it's quite likely that the IP market as a whole is doing better than Axis is currently.

Resources to Review

The best official resources on Axis recent financial performance are:

Currency Impact -- NOTE

Axis performance is significantly impacted by currency exchanges. Sometimes they cite both local currency and Swedish currency, other times they use one or the other. This is important because the results look much better when using the Swedish Kroner. As an exporter, Axis benefits from changes in Sweden's currency driven in the last few quarters of economic turmoil. However, local currency is the best guide for actual product sales and success in individual regions.

Quantified Financial Results

In local currency terms, video product sales shrank 8% in the first half of 2009 compared to the first half of 2008. 

In 2 of 3 regions, Axis overall revenue (measured in local currency) shrank in the Second Quarter 2009:
  • Americas down 5%
  • Asia up 4%
  • EMEA (Europe, Africa, Middle East) down 24% (not a typo)

At the same time, the Q2 report does claim, "The Video product area reported sales of SEK 531 M (473) for the second quarter. Growth totaled 12 percent in local currency terms." However, this does not seem consistent with the general revenue decreases reported. The print division may be one explantion but it's too small (about SEK 20M Q208 and SEK 10M Q209 or 2% of total revenue) to cause the discrepency.

Their Q2 powerpoint deck shows a few other interesting points:
  • Sales and Marketing expenditures dropped approximately 8-10% quarter over quarter
  • Administration costs rose over 10% quarter over quarter (why?)
  • R&D expenditure was steady to slightly up
  • Currency effects were massive and even more of a help in Q2 than in Q1
  • Gross margins dipped slightly but nothing out of the normal trend for the last few years
  • With Europe sales continuing to shrink, Americas is now over 50% of Axis total revenue

Stock Market Reaction

Axis stock is down about 17.6% in the first day after this announcement.  Not surprisingly, the market was not happy with that announcement. For current stock price, see: Yahoo Finance tracker on Axis.

On the other hand, until the past week, Axis had recovered all of its losses since its surprise announcement last Fall about them not going to make their number (in October 2008 the stock was at about 80, dropped down to 40 at the market's bottom in March and rallied back over 80 on July 1st). Today (July 8th), it's at 64.25.

Axis on the Future

Last year at this time, Axis Q2 financial report reported "Continued Successful Expansion" and claimed, despite the "financial turmoil," that "the network video market is expected to grow in a fast phase. Axis goal and expansion plans remain unchanged."

Now, Axis states, "The network video market continues to be relatively weak with generally lower activity than in 2008 within all customer segments." Axis is also slowing new hiring. This is a reflection of slowing growth as well as a sign that growth may not big pick up immediately.

Axis pointed to increased marketing efforts and product development as key strategic/tactical factors in driving growth. I certainly think they continue to develop a lot of products including many which are clearly innovative. However, the spending of trade shows (they cite attending 20 shows in Q2) is questionable. In a market where end users are cutting back and with such an expensive marketing cost, shows seem to be a waste of money. Indeed, many of the bigger IP video companies I have talked with are cutting back to only a handful of the very biggest "must attend" shows.

3 reports cite this report:

Publicly Traded Video Surveillance Company Directory on Oct 20, 2009
This directory indexes publicly traded video surveillance companies, aggregating recent financial results and analyzing their impact. The directory...
Only 5% market share for IP Surveillance Cameras? on Jul 13, 2009
A debate is emerging on what the 'true' market share for IP cameras. The generally accepted statistic is approximately 20% of cameras sold annually...
Top 5 IP Camera Problems: 2009 on Jul 12, 2009
In the last year, IP cameras have made great strides and while there are still important barriers that constrain broader use, problems are...

Related Reports

Security Robot Sales Struggle on Mar 21, 2018
2 year ago, PSA Security CEO Bill Bozeman called security robots one of “the biggest game changers” in decades for security integrators. Just over...
Free Manufacturer Trip To China - CCTV.Net / Univew on Mar 15, 2018
Pack your bags? 'Closer than you think'? Well, a non-stop flight from NYC to Shanghai is 15 hours plus another 100 miles to Hangzhou...
Panasonic Selling Off Security Camera Factory on Mar 14, 2018
Panasonic is OEMing cameras from Dahua, as IPVM testing confirmed in 2017. Now, Panasonic is selling their security camera factory, according to...
Favorite Camera Manufacturers 2018 on Mar 12, 2018
A number of major moves in integrator's favorite camera rankings for 2018: Two manufacturers make major moves up One major manufacturer moves...
Avigilon Breaks $400 Million Revenue, Quadruples Profit, Weakens Competitiveness on Mar 07, 2018
The last annual Avigilon financials are here. With the imminent Motorola acquisition completion, Avigilon will cease to be an independent publicly...
Hanwha Techwin Spins Out Security Business on Mar 06, 2018
In an era of security acquisitions and mergers, with most recently Avigilon being acquired by Motorola and Bosch merging its security businesses,...
ADT: "Hate That Company" Loses Billion On Amazon Ring Deal on Mar 02, 2018
It has not been a good 2018 for ADT. And this week has been even worse. In the aftermath of Amazon acquiring Ring for a billion plus, ADT's...
Avigilon Admits Contacting 70 Bidders on Mar 01, 2018
A new Avigilon financial disclosure shows that Avigilon, via its banker, had contacted 70 bidders in a formal 'sales process' conducted in late...
Favorite Integrator Sales Quote Software (Statistics) on Feb 23, 2018
What application do integrators use the most to issue sales quotes? Nothing? Spreadsheet? MS Project? Online software? Of the many offerings out...
Aruba Networks Profile on Feb 22, 2018
Aruba Networks' presence in the video surveillance market has historically been limited. With a company focus on Wi-Fi first and switching...

Most Recent Industry Reports

Save $50 Ends Tomorrow - April 2018 IP Networking Course on Mar 21, 2018
Save $50 ends this tomorrow, March 22nd. Register now and save. Lots of generic network training exists but none of it really explains how it...
Security Robot Sales Struggle on Mar 21, 2018
2 year ago, PSA Security CEO Bill Bozeman called security robots one of “the biggest game changers” in decades for security integrators. Just over...
Dahua Global Launch LeChange on Mar 20, 2018
Dahua is getting into the consumer video surveillance market globally, with "LeChange", an offering long available inside of China is now being...
Axis Z-Wave IP Camera Tested Poorly on Mar 20, 2018
Z-Wave is drawing notable interest for video surveillance use. In IPVM's initial coverage, 84% expressed interest in it, with nearly half being...
'As-Built' Drawings Tutorial on Mar 20, 2018
Closeout documentation can be invaluable for future expansions or maintenance work, and 'as-built' drawings are a key aspect for finishing projects...
Hikvision RSM Professional Misconduct on Mar 19, 2018
A Hikvision RSM engaged in professional misconduct of a US State's licensing law, involving continuing education held at an ADI branch. In this...
Thank You - Today, IPVM Turns 10 Years Old on Mar 19, 2018
IPVM turns 10 years old today. 10 years ago, IPVM was an experiment. Today, it is the largest and most read publication in our industry. I wanted...
Integrator Help Desk Software Usage (Statistics) on Mar 19, 2018
Maintaining accounts and customer satisfaction often depends on the effectiveness of responding to issues. Keeping an integrator's support...
May 2018 Camera Course on Mar 16, 2018
Our next course starts on May 8th. Register now for the Spring 2018 Camera Course This is the only independent surveillance camera course, based...
ADT Hammered Again, Loses Another Billion In Market Cap on Mar 16, 2018
ADT's CEO told investors that, 'in baseball terms', ADT was batting 5 for 5. But investors told ADT's CEO, 'in baseball terms', that he was...

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