Axis Strong Q2 2018 Results

JH
John Honovich
•Published Aug 20, 2018 13:05 PM

Axis reported strong Q2 2018 financial results and, for the first time in many years, Axis grew faster than Hikvision.

However, the company's strong growth has not come without problems as Axis faces a product shortage for the second year in a row.

Inside this note, we examine:

  • Key drivers of Axis growth
  • Geographic strength and weakness for Axis
  • The impact of the product shortage
  • Why Axis gross margins may be too high
  • Axis growth vs Hikvision and potential financial impact of the ban

Financials ********

**** **** **% ** ** ****, in ***** ******** *****, **** **** year. ********, ***** ******* ********* **** 51.3% ** **% *** *** ******* jumped **** *.*% ** **.*%.*** **** ** **** ********* ******.

3,000+ *********

**** *** ******* **** **** *,*** employees, ** **** ~*,*** * ***** ago, **** ********** **** ****** ******** *********** ********** ****** ** **** *** ********* in *** **** *** *****.

Geographic ********* - ******** *****

*** ******** ***** **** ******* ****** with **% ***** **** *** * modest **%. 

**** *** **** * *****, **************, Axis *** ************ *** ********* ** the ********, *** *********** **% ** total ******* ***** **** *** ********* in **** ** ** *** ******* been ******* *** ** *** ******* Chinese ****** ******, ** *** *********** geographic ********* ***** *****:

Impact ** ******* ********

**** *** *** **** ***** *** much ***** ******* ******** *** ******** their ******* ******. *** ****** *** be **** **** ** ** ****, as **** ** **** *** ******* reports ****** (*.*., **** ****).

Too **** ***** *******?

**** ******* **** **** ******* ****** is *** ***** ** *******:

***** ****** ******** ** * ****** level *** ******** ** **.* ******* (51.3) ****** *** *******, ***** *** be ********* **, ***** ***** ******, a ********* ******* *** *** ******** currency *******.

*** *****, **** ***** ******* **** been ** *** **% *****, **** 55% ***** *************** ****. ************* ***** margins (**** ****** ******* ******) ** certainly * ******** **** ** ** shows * ******* *** ******* * premium ** *** ****** ******** ** the **** ** **********.

*******, *** **** ***** ******* *** also **** * ****** *********** ** lower ****** *** **** ******* ******* and ****** *****.

Hikvision **********

*******,*********'* ******** ***** ******* ********* *** **** **** ******, ******** from ****** **% ** **.*%. ********, Hikvision's ******* ** ****** *********** ** ~22%, ***** **** **** ******.

**** ** * ******** ** *** past *** *****, ***** *********'* ********* domestic ******** *** ***** ********** ** overseas ********* *** ********* ************* ********** Axis.

Future ******?

*** **** ******** **** *****? **** do **** * *** ******* ******* against ****:

** *** ***** ****, **** *** decreased ***** *******, ********* ** ****** heavily ** *** ******** ***, ** their ******* ******, **** ******* **** the *** ***.

Poll / ****

Comments (3)
UM
Undisclosed Manufacturer #1
•Aug 20, 2018

During a time where a lot of other Manufacturers are crumbling, this is a strong sign that there still people out there that are not just buying on price - a great sign for the industry as a whole.

(14)
Avatar
Robert Baxter
•Aug 29, 2018

I heard today two other manufacturers advise that they too were experiencing component shortages requiring them to buy 6mo supply: some components only available from china, china tarrifs, our industry manufacturers are with cellular manufactures, foxcom for supply of the same chip sets. Would find a deeper dive on this issue would be helpful in our strategic outlook.

UI
Undisclosed Integrator #2
•Aug 30, 2018

Imagine what the revenue numbers would have been if they could manufacture and ship all the cameras on back order 

(2)