Axis Slowing Growth - Q4 2011

By: John Honovich, Published on Feb 01, 2012

The end of 2011 marked Axis's slowest growth quarter in more than 2 years plus the company offered pessimistic guidance for the short term. While Axis is still expanding notably, especially for its size, it is down from its incredible growth pattern of the recent past. In this note, we break down the financial details and examine Axis's future plans.

Let's start with a review of key datapoints in the Axis Year End Report (see Text report and Powerpoint):

  • Axis finished 2011 with total revenue of 3578 SEK, equivalent to ~$530 Million USD, breaking the half billion mark. Their run rate at the Q4 2011 revenue level is ~$600 Milion USD.
  • However, Q4 2011 revenue growth, year over year was only 22% in local currency terms. In the past two year, 30-45% growth was far more common.
  • Axis warns of a slowdown in early 2012 claiming that it is seasonable and "in line with the trend for the same period for the same period of recent years." We find this to be suspect. One, if its seasonal, it should not impact year over year growth for any given quarter. Two, the growth in the 1st quarter of 2010 and 2011 was extremely strong. The most favorable interpretation we see of this statement is that quarter over quarter growth (between Q4 2011 and Q1 2012) will be weak. However, if Axis turns in a Q1 2012 that is weak year over year, this will be a bad sign.
  • US growth was robust but Europe and Asia lagged: While EMEA and Asia both grew ~12%, the Americas, Axis' largest geographical segment, grew at 30%. Axis claimed that weak growth in EMEA was 'in line with the market' though only 12% growth for EMEA strikes us as low for IP surveillance.
  • At the end of last year, Axis warned that the Thailand floods could "reduce sales by 10-15% over the next 3-4 months." However, in the Q4 2011 financial report that 'the impact on sales of the floods in Thailand was much lower than expected."

Industry watchers should look carefully at Axis's next quarterly report scheduled for April 2011. If Axis turns in weak year over year numbers, this would be a negative sign and show a trend.

However, we do not see any specific mistake Axis is making. Their new product development was strong throughout 2011 and no obvious self-inflicted errors are appearant.

Axis's Future Plans

One of the most interesting slides we found in Axis' presentation was about their future. While the slide is titled 'Industry Future', we see this as much more about Axis's future positioning:

The slide, in 3 major blocks, nicely summarizes Axis's development and positioning priorities:

  • Image Usability vs Pure Pixels: We see this as one of the most interesting industry battles over the next few years as vendors fight over whether more pixels or better image 'usability' at lower pixel counts is best for customers. Our test results show that image 'usability' is more important for most users than a fixation on tens of megapixels. Furthermore, if this is Axis priority number #1, expect Axis to spend heavily on 'edu-marketing' this point.
  • On board storage vs centralized storage: While centralized storage is certainly not going away, Axis clearly sees more intelligence and more resposibility for cameras as a key driver. Axis has been improving its edge storage capabilities and with growing 3rd party VMS support, we do expect it to become a more significant mainstream factor in the next few years.
  • Cloud computing: The way we read the chart, cloud computing is the lowest priority and most long term of the three elements.

Interesting to note, video analytics is left out of Axis's big 3 bullets for the industry future.

This noted, we think the foundation of image usability and on board storage are two solid pillars for future mid term growth.

1 report cite this report:

Surveillance Trends at Milestone Conference 2012 on Feb 15, 2012
Each year, the Milestone Partner conference provides an opportunity for Milestone and their manufacturer partners such as Axis to share their...
Comments : Members only. Login. or Join.

Related Reports

Hikvision 2018 Revenue Tops $7 Billion USD But Growth Slows To Low on Feb 15, 2019
Hikvision's annual revenue topped $7 billion for the first time in 2018, although growth slowed sharply. In this post, we analyze the latest...
Dahua Posts Slowing But Strong Revenue Growth 2018 on Mar 04, 2019
Despite significant job cuts in China, Dahua's revenues grew more than 25% last year hitting a total of ~$3.5 billion USD, according to its latest...
ADT Stock Drops After Announcing Loss And Amazon Delay on Mar 12, 2019
ADT's stock price dropped significantly after reporting heavy losses and delays in its Amazon partnership, as seen in the screenshot below: In...
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...
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...
Avigilon President Henderson Is Out on Jul 09, 2019
Avigilon's President and COO James Henderson is out, abruptly, after a remarkable ascension over the past 8 years, Motorola VP Jack Molloy has...
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...
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...
"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...
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...

Most Recent Industry Reports

Favorite Video Analytic Manufacturers 2020 on Feb 25, 2020
Video analytics is now as hot as ever, driven by the excitement of advancing deep learning offers. But what are actually integrator's...
Latest London Police Facial Recognition Suffers Serious Issues on Feb 24, 2020
On February 20, IPVM visited another live face rec deployment by London police, but this time the system was thwarted by technical problems and...
Masks Cause Major Facial Recognition Problems on Feb 24, 2020
Coronavirus is spurring an increase in the use of medical masks, which new IPVM test results show cause major problems for facial recognition...
Every VMS Will Become a VSaaS on Feb 21, 2020
VMS is ending. Soon every VMS will be a VSaaS. Competitive dynamics will be redrawn. What does this mean? VMS Historically...
Video Surveillance 101 Course - Last Chance on Feb 20, 2020
This is the last chance to join IPVM's first Video Surveillance 101 course, designed to help those new to the industry to quickly understand the...
Vulnerability Directory For Access Credentials on Feb 20, 2020
Knowing which access credentials are insecure can be difficult to see, especially because most look and feel the same. Even insecure 125 kHz...
AI/Smart Camera Tutorial on Feb 20, 2020
Cameras with video analytics, sometimes called 'Smart' camera or 'AI' cameras, etc. are one of the most promising growth areas of video...
China Manufacturer Suffers Coronavirus Scare on Feb 20, 2020
Uniview suffered a significant health scare last week after one of its employees reported a fever and initially tested positive for coronavirus....
Cheap Camera Problems at Night on Feb 19, 2020
Cheap cameras generally have problems at night, despite the common perception that integrated IR makes cameras mostly the same, according to new...