Axis Q1 2013 Financial Results

By: John Honovich, Published on Apr 14, 2013

Axis's growth rate appears to have settled into a slower growth rate range, as shown by just released Q1 2013 and 2012 financial results. In this note, we examine what is holding Axis back and, in particular, Axis's performance in Asia. Plus, we dig into the financial call transcript for greater details and commentary.

Financial Report Overview

Key details from Axis' financials include:

  • 16% revenue growth year over year in local currency terms; Previous quarter was 15% for the same metric. Key rationale for this lower number was 'macroeconomic uncertainty'.
  • EMEA remained the weakest region at 10% growth in local currency terms, though interestingly Axis called out the UK as 'a positive trend' citing a 'technology shift' from analog to IP.
  • America's growth was 19% in local currency terms, up from 14% for the same metric in the 4th quarter. This was particularly impressive since Americas is now 52% of Axis' total revenue.
  • Asia growth was 23% in local currency terms, a marked drop from the 34% in the 4th quarter. Asia remains, by far, Axis' smallest market, at only 12% of their total revenue.
  • Margins across the board were fairly stable.

Going Forward?

While Axis emphasized that the long term growth prospects were in the 20-25% range, they were more cautious about the rest of this year, saying that they were 'not saying return to 20-25%" growth for the rest of this year. Equally important, Axis acknowledged that Q2 2012 was strong, and while they would not comment on how this would impact next quarter's performance (Q2 2013), we would not be surprised if that number was equal or lower than this quarter's.

Performance in Asia

Axis acknowledged that 23% growth in Asia is below their expectations and that they were 'not happy' with it. Factors they cited for this included:

  • Slower general economic development within Asia
  • "Takes time for [their] investments [in Asia] to pay off"
  • "Tougher from a competitive perspective" as they face off against the "biggest and growing Chinese competitors in their home market"

We are bearish on Axis' ability to compete in Asia. While their budget offerings are attractively priced for the more mature and richer Western markets, the price pressures are far more severe in emerging markets. Additionally, the political barriers to any Western company are significant for the mega projects driving Chinese companies.

Interestingly, Axis said that they did not expect gross margins to be reduced as their percentage of revenue within Asia grew. This is surprising to us, because we would expect Axis would have to cut prices within Asia (reducing gross margins) if they want to expand faster. This might signal that Axis is focusing more on profits than overall market share and be another sign why Asia sales should lag.

Comments (0) : Members only. Login. or Join.

Related Reports

Vivint Valuation Falls $1.5 Billion on Dec 19, 2019
Residential market struggles continue. Now, Vivint's valuation has fallen $1.5 billion in its impending merger. Inside this note, we examine...
"Stress in the Residential Market" - Major Lender Exits on Nov 06, 2019
The residential security / 'alarm' market is getting worse, at least for traditional players. Now, one of the biggest lenders in the industry has...
NetPosa Revenue Plunges 90% on Nov 04, 2019
Revenue for China's long-time largest VMS provider NetPosa plunged 90% in the latest quarter, adding to the firm's serious financial...
Resideo Stock Plunges 37%, CFO Ousted on Oct 23, 2019
The horrible year for the ADI / Honeywell Home spinout, Resideo, just got worse, with their stock plunging another 37% today. Not even a year...
Knightscope Sells Just 1 Net New Robot In 6 Months on Oct 04, 2019
For the first half of 2019, US government records show that Knightscope has sold just 1 net new robots ('machines-in-network'), inching up from 52...
OpenALPR Doubles Prices on Jun 06, 2019
There is no 'race to the bottom' in cloud / AI video surveillance. In May, Verkada increased their prices. Now, OpenALPR is doing the same with a...
Knightscope Adds Just 2 Total Customers In Past Year, Yet Raising Money at $300 Million Valuation on May 02, 2019
This is no longer funny. While Knightscope has laughed it up promoting robot selfies, joking about a 'suicidal robot', the man who attacked a...
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...
Hikvision Admits USA Sales Falling on Apr 22, 2019
Hikvision, in a new Chinese financial filing, has admitted that its USA sales are now falling. Less than a year after the US government passed a...
Brinks Home Security / ASCMA Risks Bankruptcy on Apr 08, 2019
ASCMA, aka MONI, aka Brinks Home Security has issued a warning in their most recent financials that they risk bankruptcy. In this note, based on...

Most Recent Industry Reports

GeoVision Presents AI and Facial Recognition on May 22, 2020
GeoVision presented its AI analytics and facial recognition at the April 2020 IPVM New Products show. Inside this report: A 30-minute video...
Density Presents Occupancy Monitoring For Coronavirus Protection on May 22, 2020
Density presented its cloud-based occupancy sensor to deal with Coronavirus at the May 2020 IPVM Startups show. Inside this report: A...
Openpath Presents Two Door PoE Controller on May 21, 2020
Openpath presented its new PoE controller at the May 2020 IPVM Startups show. Inside this report: A 30-minute video from Openpath including...
Bosch Presents MIC 7100 Extreme PTZs on May 21, 2020
Bosch presented its MIC 7100 Extreme PTZs at the April 2020 IPVM New Products show. Inside this report: A 30-minute video from Bosch...
Hikvision Chairman Targeted For Sanctions As Federal Watchdog Calls Out Hikvision "Serious Religious Freedom Violations" on May 21, 2020
The US government's religious freedom watchdog has criticized Hikvision for being "credibly implicated in serious religious freedom violations"....
Hikvision Temperature Screening Tested on May 20, 2020
Hikvision has ramped up the promotion of its 'temperature screening' system, including their salespeople arguing for no blackbody needed. But how...
Axxon Presents VMS 4.4 and AI Behavior Analytics on May 20, 2020
AxxonSoft presented its VMS 4.4 and AI behavior analytics at the April 2020 IPVM New Products show. Inside this report: A 30-minute video...
Indoor Robotics Presents Tando Aerial Drones on May 20, 2020
Indoor Robotics presented Tando indoor autonomous drones at the May 2020 IPVM Startups show. Inside this report: A 30-minute video from...
Directory of 89 Video Surveillance Startups on May 20, 2020
This directory provides a list of video surveillance startups to help you see and research what companies are new or not yet broadly...
FLIR Cancelling Contract With X.Labs / Feevr on May 20, 2020
While X.Labs announced the signing of a new agreement with FLIR on May 12, 2020, FLIR said, in response, on May 18, 2020, that they had cancelled a...