Axis Monstrous Q3 2011 Results

Author: John Honovich, Published on Oct 19, 2011

Axis's financial results for Summer 2011 are simply monstrous - very high growth both relative to their own historical pace and compared to the overall video surveillance market. Net sales were up 32% year over year and, more importantly for measuring overall market penetration, net sales in local currency terms increased a remarkable 45%.

Even compared to other fast growing companies, such as Avigilon whose recently announced IPO coincides with their own massive growth, Axis's is still very impressive.

Looking at Axis's Q3 2011 Interim Report, a few other important financial details stand out:

  • Gross margins actually grew 1% up from 50.4% to 51.5%
  • Profit margins surged from 16.3% to 23.1% - not only is Axis selling a lot, they are making a ton of profits
  • For the quarter, Axis's sales were 971M SEK or about $145 Million USD. This is a $600 Million USD annual pace.
  • Year over year, in dollar terms, revenue increased about $35 Million USD. To put this in perspective, it's roughly the equivalent of them acquiring ACTi, a Top 10 IP camera sales company and doing that in 3 months.
  • Geographically: Americas sales were up ~38%, EMEA was up ~25% and Asia was up ~27%
  • The numbers were so good, Axis added disclaimers for the growth in the quarter, noting, "Different inventory strategies of the distributors were contributory factors to this trend. During the third quarter, sales growth in the Americas region was affected to some extent by stockbuilding among our US distributors."
  • Stock price: despite the strong growth, Axis's stock price continues to drift with no major gains over the last 6 months and still with a market cap valuation of ~$1.5 Billion USD (though the stock surged over 10% on this news - from kr124.75 to kr141).

What makes this especially impressive is how big Axis already is. Even with Avigilon's own massive growth, Axis is still about 10 times the size of Avigilon. Now, that Axis has surged passed $500 Million annual run rate, it's one of, if not the largest company in all of video surveillance.

In any market, as companies get bigger, it tends to get harder to match overall market growth rates. However, Axis continues to match or beat the overall IP surveillance market's growth rate. We think this is almost certainly coming at the expense of incumbent analog providers who are stuggling to match Axis's aggressive expansion.

New Product Releases

A key driving force behind this growth is clearly Axis's impressive product expansion. In Spring 2011, we selected Axis as the big winner of the season due to their broad and significant number of new product releases. 

Going forward, it will be interesting to see how many and what types of new products Axis delivers. Currently, Axis spends about 400 M SEK annually on R&D (~$65 Million USD). To put that in perspective, Axis spend more on R&D than Arecont, a major IP camera supplier, generated in total 2010 revenue. On the other hand, Axis' R&D spending was actually slightly lower in Q3 than Q2 2011, despite the surge in revenue (see slide 6 of the Q3 2011 powerpoint). 

The big question is what will Axis do next? Will they throttle back R&D spending and soak up extra profits as they did this quarter? Or will they push R&D spending even higher?

Love or hate Axis, they are pretty clearly in a strong position that is hard to beat. Competitors will need to step up their offerings to compete and hope Axis gets lazy as well.

Comments : PRO Members only. Login. or Join.

Related Reports

Stealth / UCIT - Remote Video Monitoring Provider Profile on May 18, 2018
Can 2 remote video monitoring companies, Stealth Monitoring from the US and UCIT from Canada combine to impact the market and compete in a changing...
Worst Manufacturer Technical Support 2018 on May 16, 2018
5 manufacturers stood out as providing the worst technical support to 190+ integrators in new IPVM results. These integrators answered: In the...
March Networks Targets Cannabis Market on May 10, 2018
Will the next March Networks customer appreciation event be held a steakhouse or at a Taco Bell at 2 am? Can March sell the types of systems to the...
Canon Acquires Briefcam, Now Owns Briefcam, Milestone and Axis on May 09, 2018
Canon already owns two of the biggest names in video surveillance, Axis (acquired in 2015) and Milestone (acquired in 2014). Now, Canon...
Integrators Divided On Website Importance to Business (Statistics) on May 04, 2018
Are websites important? Still quite a number of integrators have no websites.  New IPVM statistics show that nearly half of all integrators find a...
Correcting Hikvision USA's False Accusations on May 01, 2018
Hikvision USA has falsely accused IPVM's DeepInMind test. The truth, which Hikvision USA knows, despite their statements to the contrary, is...
Milestone 2017 Financials Examined on Apr 24, 2018
For ISC West 2018, Milestone released ... their financials, touting "strong revenue growth in 2017". However, there were discrepancies with the...
Rare Video Surveillance Fundraising - Verkada $15 Million on Apr 19, 2018
Fundraising in video surveillance (and the broader physical security market) has been poor recently. Highlights are few and far in between...
Worst Access Control Manufacturer 2018 on Apr 18, 2018
Three access control providers stood out as providing the most problems for integrators. In this report, we analyze the answers to: "In the...
Eocortex / Macroscop VMS Company Profile on Apr 09, 2018
Eocortex is the international brand of Russian VMS manufacturer Macroscop. Macroscop was founded in 2008, and the Eocortex name created in 2013. We...

Most Recent Industry Reports

Dahua Intrusion Analytics And VMD Tested on May 21, 2018
Dahua ships basic analytics on practically all their cameras, ranging from low cost to high end. To see how these analytics work in real world...
Exacq Improving Technical Support, Responding To Integrator Complaints on May 21, 2018
Exacq had been a long-term favorite of integrators, but since their 2014 Tyco acquisition, Exacq has fallen in IPVM integrator studies (though...
Best Manufacturer Technical Support 2018 on May 21, 2018
While 5 manufacturers made the worst technical support 2018 list, only 3 stood out as providing the best technical support to 190+ integrators in...
Stealth / UCIT - Remote Video Monitoring Provider Profile on May 18, 2018
Can 2 remote video monitoring companies, Stealth Monitoring from the US and UCIT from Canada combine to impact the market and compete in a changing...
Cybersecurity for IP Video Surveillance Guide on May 18, 2018
Keeping surveillance networks secure can be a daunting task, but there are several methods that can greatly reduce risk, especially when used in...
Forced Entry / Duress Access Tutorial on May 17, 2018
Even though access control normally keeps people safe, tragedies have revealed a significant issue. If users are forced to unlock doors for...
ADT Stock Drops 50% Since IPO on May 17, 2018
It has been a brutal 4 months for ADT. They first expected to IPO at ~$18. They IPOed at $14, dropping immediately to $12.39 And now, not even...
Dahua 12MP Fisheye Camera Tested (NK8BR4) on May 16, 2018
Continuing our coverage of 12MP sensor fisheye cameras, we bought and tested the Dahua NK8BR4, examining: Default vs. Optimized...
Worst Manufacturer Technical Support 2018 on May 16, 2018
5 manufacturers stood out as providing the worst technical support to 190+ integrators in new IPVM results. These integrators answered: In the...
Installing Cameras in Plenums Tutorial on May 15, 2018
There is often confusion about plenum ceilings, with misinformation about what is required when running cables through them and mounting cameras...

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