Axis Bad Financial Results (Q1 2015)

By: John Honovich, Published on Apr 20, 2015

In their first financials after Canon has agreed to purchase Axis at a massive premium, Axis delivers more bad results.

Inside this note, we break down the results, and what this shows about their future, challenges and the overall state of the video surveillance market.

** ***** ***** ********** after ***** *** ****** to ******** **** ** a ******* *******, **** delivers **** *** *******.

****** **** ****, ** break **** *** *******, and **** **** ***** about ***** ******, ********** and *** ******* ***** of *** ***** ************ market.

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

Results ********

*** **** *** ******** have **** *** *** Axis, **** ****** ** local ********** ** *% *** both ** *** ** 2014.

***,**** *** **** *% growth** ***** ********** *** Q1 ****, *** ******* to **** ** *** recall **** *****.

******* ****, **** ********* to *** ***** "**** on *** ******* ****** growth **** ******* *********," which ** ****** ******** they ***** ** ** - **%, * ****** they *** ********* *** from.

*** *** *****-**** ******* for **** *** **** positive ******* ******** *******, turning *% ****** ** local ********** **** **% increase ** *** *****. Gross ******* *** *** margins **** ******, ** 52.4% *** **.*% ************, however, ***** **** ************* helped ** ******** ******* currency ******.

Americas ********** ***

*** ************, *% ****** implies ********** ****** *** board. ********** ********, *** Americas *** *** ***** with ** ****** ** all. **** *********** *** that "***** **** ******** by * **** *********** in ***** ******* *** unfavorable ******** ****** ** Mexico *** ******." ***********, it ******* **** *** US, ****' ******* ********** country, *** ******.

********, **** **** **** 5% ** **** *** in ****. *** *** Asia ****** ** ********** bad ***** **** *** volume ***** *** *** Asian ******'* ****** ******.

Causes - ******** ** *** *** ***

**** ***** * *** factors - "********* ************* situation ** ******* ** Axis’ *******", "*** ********* levels ** ****** ************", and "**** ** *** Thai ********** **** ** November". *******, ****** *** macroeconomic *********** ******** ** quite *****. *** *** inventory ****** ******** ** less ** ** ****** than * *** ****. 

** ******* *** **** factor ******* **** **** is **** **** *** being ********* ** *** low *** / ***** sensitive ***** ** *** market (********* **** *** clearly ***** ** *** ************* ******* *** Losing ******). ***** **** ***** a *** ***** "***** and ****** ***** *************", on *** ******* **** their ********* (*** *** releases) *** ************** ******** to *** **** ***. On ***** *** (*/**** through *** *******),**** *** ******** ***** *** ******. While **** **** **** modestly, *** ***** *** at *** *** *** (where ***** ******** *** not ********) ** ***** too ***** ** **** market ***** ******. *****,******* *** ****** ** with ***** *** **** line, ******* ******* ***** pressure.

Axis **** *** ***** **** ** *** *** ***

**** ***** *******, ** is ***** **** **** is ******** *** ** fight ********* / ***** / ******* / ** al. *** *** $*** MP ****** ******. ***** or *****, **** ***** what ** ********* *** has ******* ** *** budget ****** ** *** new ***** *** ****** to ******* *****.

*** ******* ** **** is ***** ****** ** the *******, **** **** users *** ***** *** previously *** ****** ****** or ***** *** *** defecting **** ** *** $100 ***** *** **** the ******* **** ****** and *** ******* ** be *** *** ******* factor.

Axis ************* ** *** **********

*** **** **** *** Axis ** **** **** are ********* * *** of *** ******** *** many ** **** *** innovative (*** ** ****, the ******* ********* ****, the **** ********* ******, the ***** **** ***** / ****** ******* *****, etc.).

*** ******* *** **** is **** *** ***** IP **** **** ****, there *** **** ******** $100 ** ******* ****. Given ***** ****, ** is **** ** **** revenue $*** ******* *** year (** **-**%) ******* IP ***** *** ******* resistant *******.

*** **** **** ***** make * **** ********** difference ***********, ***** ******* ******** big ******* *******. *******, it ** *** ***** how **** ** **** take ****** ** *****.

**** * ******* / technology **********, ******* **** is *** ***** **** and **** ****** *, if *** ***, *** choice *** ****-*** *******. The ***** ** ****** how **** ** *** small ** ***-****** **** will ******** ** ****.

It's *****'* **** ***

*** ***** *********** '*****' is ****** **** **** a ********* ***.

**** *** *** **** release * ************ ** have * ********** ****, as **** ******** **, ********** to **:

"** *** ************ *** mainly *** ********* *** analysts ***** *** ** real ****** ** **** one **** **** ** we **** *** ********* left *** ********’ ******** to ***** **** ** this **** ** **** low."

**** ****** **** **** be ******** **** *****, and ** **** **** to *** **** ******* are **** *****. ***** *** ******** **** and ********* ** ****** independent *** ***** *** *************** of *** ****** ****** and *** **** ** 'solution' *****, ** ***** it ** **** * manner ** **** ****** Axis / ********* ******** begins.

Comments (14)

Wow - But I don't think they will the last high end camera manufacturer that is going to have these kind of results.

Agreed. Bosch, Sony, Panasonic, Pelco surveillance numbers are not public but I would not be surprised if most of them were just as bad or worse than Axis's.

Oh well, just another Pelco story, sell out before your numbers hit the skids.

Canon Better not force us to go with Axis overpriced crap

Consider this a warning, they do that, and I'll 1, stop paying Maint for every site, 2, move off to another solution so fast there heads will spin.

it's not hard to see how Axis was loosing out big time, it's just not worth spending so much for so little benefit compared to the other options..

not competing in the $100 market was their undoing

Another noteworthy victim of the influx of low cost cameras is Arecont. Granted, their poor reputation is a big factor in their fall from prominence, but supposedly their two founders are in debt, they borrowed around $80M from the government last year, and their biggest differentiator in recent years (multi-imager specialized cameras) are no longer so different.

The camera business is analagous to the Compact Disc business in that consumers no longer pay a premium, and they never will again.

...they borrowed around $80M from the government last year...

Is that in addition to or part of the $80M of debt they offered in Dec? I hope the U.S. Government has better use for its funds than that...

you said it better than me I think. As I understand it they have to pay back $80m to the goverment and I'm guessing they're doing some belt tightening to make good on it.

No suprise as we've seen this happen with every other HW technical inovation from Cell phones (ie; Blackberry) to HD / Flat Screen TVs in the last 20 years. HW can and will always eventually be commoditized

In my opinion, the next great waves in the space will be SW & Services driven

"In my opinion, the next great waves in the space will be SW & Services driven"

Axis agrees with you!

"The race for megapixels is over. The race for business and operational intelligence begins. With the ability to download and run applications directly at the edge, the IP camera is now the iPhone of the surveillance world"

Unfortunately, that was from 2012 and 3 years later they have made very little progress turning their cameras into iPhones of surveillance.

IMHO, 5 years ago they should have put out a VAPIX SDK enabled but otherwise bare bones SD IP camera with a retail < $100. Pushed the SDK hard. Created a real AppStore where you pay and download on the spot...

Easier said than done, but somebody's gonna have the first real camera AppStore sooner or later, who is it going to be?

"Created a real AppStore where you pay and download on the spot..."

I agree on that. While it would not solve everything, it would certainly have made it a ton easier for apps to be used.

As is, you need to get in touch with a person at the app developer, get pricing / access / etc. from then before you can do anything on the camera side. It's a model straight out of the 1980s...

Services are definately the name of the game. I work for a large, traditional manufacturer. We have been trying to become more services oriented for several years, but old habits die hard. I sincerely hope that my employer, as well as the other "old giants", can kill their habits before their habits kill them. There are generations of knowledge bouncing around in these engineering departments. The industry as a whole would suffer if these were lost.

What services can manufacturer make money providing? Do you know mean software as a service or labor services or?

There are lots of ways to do it. SaaS is a good example. Also, building far-reaching solutions involving many different partners that require large up front investments. For example, and I'm just making this up, a large security manufacturer may come up with a system to put a camera into cash registers for facial recognition, and then lease the system with 5 year contracts, making the money back in years 3-5. The manufacturer needs to upfront the whole system, which may be $100m, but they profit $300m down the road.

There is also the option of developing very close partnerships with integration partners and reselling thier services, which allows end users to take advanage of contract vehicles or financing offers that the manufacturer can provide.

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