Axis Slowing Growth - Q4 2011

Author: 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 : PRO Members only. Login. or Join.

Related Reports

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...
BCDVideo Expansion And Switch From HP To Dell Examined on Mar 11, 2019
BCDVideo says they have more than tripled revenue in the past 5 years and are continuing to grow, powered most recently by switching their lead...
Arcules Favorability Results 2019 on Mar 08, 2019
Arcules has amazing advantages. Tens of millions of funding from Canon. Unlimited access to Milestone's source code (see our test results). But...
Salient CompleteView 20/20 VMS Tested on Feb 27, 2019
In IPVM's last test of Salient 3 years ago, we found various problems and deficiencies. Now, Salient says their new CompleteView 20/20 "unified...
Security Installation Tools Guide - 22 Tools Listed on Feb 19, 2019
In this guide, we cover 22 tools that security installers frequently use. This is one part of our upcoming Video Surveillance...
Sales Cuts At Rasilient on Feb 19, 2019
Over the past 2 years, video surveillance storage specialist Rasilient has expanded its workforce significantly, aiming to build its own branded...
Casino Surveillance Pro Interview: James Lathrop on Feb 15, 2019
James Lathrop has been working in casinos for almost 25 years. During that time, he says he has held "just about every job you can do in the...
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...
Cisco Meraki Cloud VMS/Cameras Tested on Feb 13, 2019
Cisco Meraki says their cameras "bring Meraki magic to the enterprise video security world". According to Meraki, their magic is their management...
Solink Raises $12 Million - Company Profile on Feb 12, 2019
Most industry professionals have never heard of Solink, a company whose tagline is: It's time to revolutionize the way business uses...

Most Recent Industry Reports

IBM / Genetec Surveillance System Investigated Over Philippines Human Rights Abuses on Mar 22, 2019
A lengthy investigation into an IBM video surveillance project in the Philippines, raising concerns IBM helped local police conduct a bloody...
Eagle Eye Favorability Results 2019 on Mar 21, 2019
Eagle Eye has been the biggest spender in the cloud VMS market including (via their owner) acquiring Brivo for $50 million and CameraManager from...
Large Hospital Security End User Interview on Mar 21, 2019
This large single-state healthcare system consists of many hospitals, and hundreds of health parks, private practices, urgent care facilities, and...
Silicon Valley Cybersecurity Insurance Startup Coalition Profile on Mar 20, 2019
Many industry people believe cybersecurity insurance is not worth it, as the voting and debate in our Cybersecurity Insurance For Security...
Covert IP Camera Shootout - Axis, Hanwha, Hikvision, March, Vivotek on Mar 20, 2019
Covert cameras were one of the last holdout areas for analog cameras. However, in the past few years, IP / HD covert cameras have become...
Top Metrics For Ensuring Integrator Profitability - Statistics on Mar 20, 2019
How do integrators ensure the profitability of their projects? As part of our profitability study, 100+ integrators answered the following...
Avigilon Launches 'Renewed Products Program' on Mar 19, 2019
There are lots of 'pre-owned' cars but pre-owned IP cameras? While such programs are common in other industries, in video surveillance, they are...
Genetec Security Center 5.8 Tested on Mar 19, 2019
Genetec has released Version 5.8. This comes after a wait of more than a year that caused frustrations for many Genetec partners. Our previous...
Retired Mercury President Returns As Open Options President on Mar 18, 2019
Open Options experienced major changes in 2018, including being acquired by ACRE and losing its President and General Manager, John Berman who...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact