Axis Q3 2009 Financial Results Examined

By: John Honovich, Published on Oct 16, 2009

Axis challenges continued in Q3 2009 with the company admitting for the first time the impact of "tougher competition."

While Axis emphasized higher sales quarter over quarter (e.g., Q3 vs Q2), the year over year trend (Q3 2009 vs. Q3 2008) shows more negative conditions (growth -11% in local currency for Q3 2009 compared to Q3 2008).

This analysis draws metrics from Axis Q3 2009 powerpoint presentation and Axis Q3 2009 overview report.

In local currency terms, Q3 2009 sales compared to Q3 2008 were down in all 3 regions: -11% in Americas, -12% in EMEA and -5% in Asia.

Gross margins were also down in Q3 2009 to 52.3% from 54.8% in Q3 2008 (Axis historic gross margins have been about 55%). Axis acknowledged that tougher competition impacted their gross margins.

Operating margins were higher relative to recent quarters (16.7% in Q3 2009, compared to under 10% in Q1 and Q2 2009) though historically Axis operating margins have been at or over 20%. However, Axis achieved this by significantly reducing costs across the board - R&D, sales and marketing and administration.

These challenges are especially noteworthy given that Axis has aggressively expanded their product offerings in 2009 with many major new launches including next generation box, dome and PTZ cameras. While the quality and innovation in these product offerings are clear, sales are weak and market share is certainly being lost to lower cost, lower quality product alternatives.

Throughout 2009, top line revenue growth has benefited from the depreciation of the Swedish Kroner (SEK) relative to many currencies (most significantly the US dollar where Axis does 50% of sales). For example, see SEK-USD comparison charts for 2008 and 2009. On the other hand, over the last 6 months, the SEK has been appreciating against many currencies, reducing the exchange rate benefit. Indeed, unless the SEK starts depreciating soon, Axis top line revenue growth (measured in SEK) will be negatively impacted in 2010 by this "swing back".

While short term currency exchange variances have a minor impact on overall competitiveness, they can distort financial metrics. Below is the slide that shows the positive impact currency effects have had this year:

Despite that, sales for 2009 are clearly trending down and would be worse if not for the positive impact of currency effects.

5 reports cite this report:

Axis Crushes Q1 2010 Financial Results on Apr 19, 2010
Now, there should be little doubt of the IP video's market growth rebound. After a year of rapidly deteriorating financial results, Axis strong...
IP Video Sales Rebound, Analog CCTV Continues to Fall on Mar 17, 2010
An important market shift for the video surveillance market is occurring. In the last 6 months, while IP video sales have rebounded, analog sales...
Strong Q409 Financial Results Examined on Feb 03, 2010
Reversing a year long negative trend, Axis's Q4 2009 financial results were very strong, raising the question, why? Revenue was up 32% (Q409...
Pelco Layoff Examined on Jan 12, 2010
Pelco has announced a layoff of 100 employees, or approximately 4% of their global workforce of 2400. Pelco cites 3 main factors: "the result of...
Forecast: 200% Growth IP Video Surveillance 2010-2012 on Nov 19, 2009
Over the next 3 years, attacks against analog CCTV will accelerate on all sides. We forecast IP video surveillance product sales will increase by...
Comments : PRO Members only. Login. or Join.

Related Reports

Acquisitions - Winners and Losers on Dec 10, 2019
Most major manufacturers have been acquired over the last decade. But which have been good deals or not? In this report, we analyze the...
Security Sales Course 2020 - Last Chance Save $50 on Dec 05, 2019
This sales course is customized for the current needs and challenges specific to professionals selling video surveillance and access control...
Freebie Face-Off: Rise of ~$30 Giveaways Examined on Dec 02, 2019
The freebies are growing. Verkada started this (see The Fastest Growing Video Surveillance Sales Organization Ever - Verkada) and now has given...
Vunetrix Health Monitoring Company Profile on Nov 26, 2019
Vunetrix boasts that they make the integrators the 'HERO' by using Vunetrix's monitoring. We spoke to Vunetrix to better understand their...
Top Manufacturers Gaining and Losing 2019 on Nov 18, 2019
2019 has been an explosive year for video surveillance, with the world's two largest manufacturers, Dahua and Hikvision, being sanctioned for human...
Hikvision USA Fights LTS on Nov 04, 2019
Hikvision's USA subsidiary is fighting with LTS, having recently quietly dropped LTS as an authorized distributor amidst ongoing face-offs between...
Axis Cracks Down On Illicit Channel Sales on Nov 01, 2019
Axis has stepped up efforts to crack down on illicit channel sales according to various industry sources, though, Axis denies this. Online sales...
Struggling Arcules Changes Chief Revenue Officer on Oct 29, 2019
Canon / Milestone spinout Arcules has struggled, now changing their Chief Revenue Officer, just a year after he came on board. The issue is not...
nFlux AI Startup Profile on Oct 28, 2019
nFlux, an Amazon, Google, and Microsoft funded AI startup told IPVM their mission is to build the most intelligent video analytics platform in the...
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...

Most Recent Industry Reports

IP Camera Browser Support: Who's Broken / Who Works on Dec 10, 2019
For many years, IP cameras depended on ActiveX control, whose secure flaws have been known for more than a decade. The good news is that this is...
Acquisitions - Winner and Losers on Dec 10, 2019
Most major manufacturers have been acquired over the last decade. But which have been good deals or not? In this report, we analyze the...
IP Camera Installability Shootout 2019 - Avigilon, Axis, Bosch, Dahua, Hanwha, Hikvision, Uniview, Vivotek on Dec 09, 2019
What are the best and worst cameras to install? Which manufacturers make it the hardest or easiest to install their cameras? We tested 35 total...
Viisights Raises $10 Million, Behavior Analytics Company Profile on Dec 09, 2019
Viisights, an Israeli AI analytics startup marketing "Behavioral Understanding Systems", announced $10 million Series A funding. We spoke to...
Disruptor Wyze Releases Undisruptive Smartlock on Dec 06, 2019
While Wyze has disrupted the consumer IP camera market with ~$20 cameras, its entrance into smart locks is entirely undisruptive. We have...
Bosch Budget 3000i Cameras Tested on Dec 05, 2019
Bosch has long had a hole in its lineup for, as it describes, "competitively-priced cameras". Now, Bosch has released its 3000i series cameras...
Anixter Resisting Takeover From Competitor on Dec 05, 2019
Mega distributor Anixter is going to be acquired but by whom? Initially, Anixter planned to go private, being bought by a private equity firm....
Security Sales Course 2020 - Last Chance Save $50 on Dec 05, 2019
This sales course is customized for the current needs and challenges specific to professionals selling video surveillance and access control...
Ireland National Children's Hospital Chooses Hikvision End-to-End With Facial Recognition on Dec 05, 2019
The world's most expensive hospital project ever, the New Children's Hospital in Ireland, has chosen an all-Hikvision surveillance system including...
AVTech ~$70 IP Cameras Tested Vs Dahua and Hikvision on Dec 04, 2019
Taiwanese manufacturer Avtech is taking direct aim at low cost leaders Dahua and Hikvision with ~$70 starlight and white light illuminator...