Axis Q3 2017 Financial Results

By IPVM Team, Published Oct 23, 2017, 08:49am EDT

A big issue for Axis this past quarter was their product shortage.

Despite that, new Q3 numbers for Axis show solid financial results.

In this note, we examine the results, the shortage, Axis video vs non-video, and why the race to the bottom is diminishing.

Results Overview

**** ******* **** **% in ***** ********** **** over **** *** *** been ****** ****** *** year **** ****** ** the *** ** *** teens. Net ****** ******* **** ********, increasing ** **.*%.

******* **** *******, ***** margins ********* ** *.* percentage ****** **** **.*% to **.*%. **** ** a ******** ********* **** Axis *** **** ** grow ******* ****** ** cut ***** ******.

******* ** ************* ******.

Shortage ******

****** ************ ** ******, *** ******* *** ****** from * ******* ********. In ***** ********* ******, they **** **** ** this *****. ****** ** August, **** ********* * component ******** *******:

**** ********* ** ****:

*** ******* ********* *** a ****** ** **** demand *** ****** ***** than **********. *** ******** from *** *** *********** take ****** **** ****** due ** *** ***** supply ********* *** ******* components. 

*** ******** ** ****** a ******** ****** *** Q4 ********* ******* ** backordered ******** *** ****.

*******, *********** *** **** continue ** *******:

  • **** *****: *,***.* ***
  • ** **** ***: ***.* ***
  • ** **** ***: ***.* ***

***** ********** *********** *********** is *******, **** *********** are *** ***, **** ** available ******* *** **** sales *** **** ***********.

Expansion ******* ***** **** 

*** ******** ***** *** **** was **** ***-***** ***** were **** **** **** year, * ***** ** quite **** ****:

* ***** ****** ** 'other' ****** *** **** acquisitions, **** ********* ** *** ****. *** **** *** acquisitions *** **** **** a **** ***, ****** will **** ** **** from ******* ***** *********.

**** *********:

** ******** ** *** a ****** ***** *** our *** ******** ******** when ** ****** *** sales ******. ***** ******* relatively ***** ****** ******** to *** **** ******** and ********** ******* ***** fluctuate ** *** ******** reporting ** ***** ** to ************. 

** **** ** *********** to *** *** ***-***** growth **** ***** ******* as ** *** **** a ***** **** ** Axis *************** ******* ******* the **** ** *** bottom. ** ** ***, 'other' ** ***** **** ~6% ** **** ***** sales.

Tough ******* - ***** ******* *** ****** ****

**** ****** *** ******** in * ******* - South ******* *** *** Middle ****:

*** ****** **** ** particular *** ********** **** a ****** ****** *** Axis *** ***** *************. However, downward ****** ** *** oil ********, ***** ****** most ** *** *******/******** in *** ****** ****, and ** * ****** extent ***** *******, **** caused declining ******** ** ***** countries ********** **** ** 2017. 

Race ** *** ****** ***********

** ******* **** ***** results **** *** **** to *** ****** ** diminishing.

****** ** ****, **** had ***** ************, ****** **** ****** ** just *%***** **** ******* ********* 1%. *** ** ****** as **** ****,**** ***** ****** *** down (** ****). ***** **** ******* are ******** ****** **** they **** ********** ********, given *** ******* ********.

*** *** ******** ******* include:

  • ********* *** ***** *** increasingly ********** *** ****** for ***** *** **** to *** ***** **** professional ******** *** ** becoming ************ ********* ** find **** ** ***** customers.
  • *** **** ** ******* in 2017 ** **** *********** than ** **** *** **** some ***** ** *************, especially ** ** ****.
  • ********* *** ***** **** suffered **** ******* ************* issues *** ***** ******* problems **** **** **** switching ** **** **** attractive ** **** *********.

** ***** *** ** prudent ** **** *** '****' over ***, ** ***** and ********* *** ***** showing ***** *********** ** spend *******, *** **** is ******* ****** ********** it ** **** **** **** did ** ****.

Comments (9)

Undisclosed Manufacturer #1

10/23/17 02:14pm

I think this is a positive indicator for the industry that Axis is still able to grow despite the low cost Chinese competitors desperation moves. The fact that the drop in pricing in 2016 is less significant than in 2015 is also quite surprising considering the fact that Hikvision Addicted To Across The Board Sales.

 

 

John Honovich

IPVM | In reply to Undisclosed Manufacturer #1 | 10/23/17 09:07pm

quite surprising considering the fact that Hikvision Addicted To Across The Board Sales.

In the last few months, Hikvision has really dialed back the across the board sales. They first switched to only the lower end products and now they have not had any 'ALL PRODUCTS' sales at ADI in 2 months or more.

Also, in 2016, there was notable across the board permanent price cuts whereas in 2017 it has been more of a focus on running periodic sales, which again have diminished later this year.

Related, I bet Hikvision is realizing there is only so many people that are motivated to buy on sale and that the cost of the sales as you get larger gets worse and worse as existing customer who would have bought regardless simply get price cuts. Stats: Importance of Sales To Integrators - Statistics

Undisclosed Integrator #2

10/23/17 03:00pm

Very encouraging news for not only Axis Communications, but anyone that supplies products or services that sell quality and support rather than a focus on a race to the bottom with cutting price as a mistaken goal. Kudos to the Axis Team (from an integrator deep in the heart of Texas w/ the ability to deliver Axis and the Chinese options as well). Once an Axis fan; always an Axis fan.

Undisclosed #3

IPVMU Certified | 10/23/17 03:58pm

A rising tide lifts all boats.  

What would the industry look like if/when overall market growth stagnates?

John Honovich

IPVM | In reply to Undisclosed #3 | 10/23/17 09:08pm

What would the industry look like if/when overall market growth stagnates?

Are you implying that overall market growth is or is not stagnant right now? Because over the last few years, overall revenue growth has been stagnant as volume shipments spiked but was offset by price declines, e.g., 2016 Collapsed Growth, Collapsed Pricing, IHS Now Admits.

Undisclosed #3

IPVMU Certified | In reply to John Honovich | 10/23/17 09:32pm

Good point.  I meant growing.

If you believe IHS, revenue was projected to grow 5.5% this year, with possibly a disproportionate amount of it from the Chinese again.

Still, not flat...  

btw, do you think that the IHS numbers are picking up on the DIY/Sams Club/Nest etc surge?

John Honovich

IPVM | In reply to Undisclosed #3 | 10/23/17 09:39pm

If you believe IHS, revenue was projected to grow 5.5% this year

But that's IHS move, issue projections at a high level, later quietly issue actual growth at lower numbers.

As for DIY, I do not know how IHS handles that. IHS has a general challenge of trying to estimate / account for a wide range of private companies data that is impossible to without a significant margin of error.

Undisclosed #4

10/25/17 12:58pm

Nice to see Axis holding their ground. Still trying to make sense of the Axis audio play... numbers don't lie.

Undisclosed #4

In reply to Undisclosed #4 | 10/27/17 10:00pm

Oh wait... they are just copying Bosch... I get it now.

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