Exacq Surging Revenue and Financials Reviewed

JH
John Honovich
•Published Jun 22, 2012 00:00 AM
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In the last year, revenue for VMS manufacturer Exacq has surged nearly 70% and in 2011, the company's total annual revenue surpassed $32 million USD [link no longer available]. With these gains, how does Exacq now compare to older and more established players such as Milestone and Genetec? In this note, we dig into Exacq's financial details and compare.

Background

Just 3 years ago, in 2009, Exacq's revenue was not even $10 Million. Now, the company is projecting 2012 revenue to be $50 Million - growth of 50%+ over 2011 and a compounded annual growth rate of 77% across the last year.

Exacq shared a number of other details on their performance:

  • Net profits in the mid teens - similar to Axis and Mobotix but much higher than Milestone
  • The company has not raised any new investment in 6 years
  • Appliance sales are ~60% while software license sales are ~40%; by contrast Milestone and Genetec sales are overwhelmingly software sales
  • International sales: Exacq's business is still overwhelmingly America based but they now have 4 employees based in Europe and are expanding in Asia; overall growth rate outside the US is faster than inside (though on a much smaller base)

Analysis

Exacq is getting pretty large, by surveillance industry standards. For instance, both Milestone and Genetec's revenue is in the $50 Million range. While a few years ago, both companies were 3x or more larger than Exacq, the current rates put them on a path to cross in the next 2 years. However, since Exacq sells mostly appliances while Genetec and Milestone sells mostly software, this is somewhat skewed. Nonetheless, the 3 companies market positioning is getting a lot closer.

The Exacq - Milestone matchup will be especially interesting to watch over the next few years as the competitors both focus on the mid market, with Milestone having a broader software portfolio but Exacq having a stronger appliance offering. While Milestone is intent on being the Microsoft of the market, Exacq is growing much faster and at a more profitable rate.

The other major player worth contrasting is Avigilon - whose growth rate exceeds that of Exacq's and is approaching $100 Million in revenue this year. While Avigilon sells cameras and VMS systems, it too, is poised to be a major threat to Exacq, Milestone and Genetec.