Examining Avigilon's Financial Performance

By John Honovich, Published Sep 30, 2010, 08:00pm EDT

In this update, we examine megapixel/HD speciliast Avigilon's revenue, growth rate, competitive positioning and future strategic challenges. Starting with 1 employee and $50,000 annual revenue in 2005, Avigilon grew over 33,000% [link no longer available] between 2005-2009. Now, Avigilon is reporting [link no longer available] 100 employees and projecting 2010 revenue of $40 Million CAD (approximately 1:1 exchange rate to USD). Update: Profit200 reports [link no longer available] 2010 audited revenue for Avigilon at $32.3 Million CAD.

While Avigilon does not disclose funding or financial details, we can make some estimates:

  • Total funding is likely between $10 - $17 Million. Only 1 round of funding is publicly disclosed, a $7.5 Million round in 2008 [link no longer available]. This funding is likely a secondary, higher round following smaller earlier funding to launch/develop the initial product.
  • The company is almost certainly profitable and perhaps significantly so. With 100 employees and approaching $40 Million in revenue, that is a very high ratio of revenue per employee indicating profitability.

Compare Avigilon's revenue to a number of other manufacturers:

  • IndigoVision's revenue for year ending 7/31/2010 is 28 Million GBP (approximately $44 Million USD).
  • Mobotix's revenue for year ending 6/30/2010 is 54 Million Euros (approximately $71 Million USD).
  • Exacq's 2010 revenue projection is $17 Million

For a company with Avigilons' rather short history, $40 Million is at the very high end of revenue growth level/achievements in the video surveillance industry. This revenue comes from a mix of network cameras, encoders, VMS software and NVR appliances. Avigilon specializes in selling total solutions so it is likely that the total number of customers/deployments is lower than competitors with similar revenue but that the average amount sold per project is significantly higher.

A key factor to Avigilon's success is that it was the only company to develop a megapixel focused end to end solution. IndigoVision also has an end to end solution but their focus shifted to megapixel later than Avigilon and with a narrower range of MP/HD product options. A case can be made that Mobotix also provided an end-to-end solution via building in VMS and storage into the camera. This certainly has merit. However, Mobotix has 3rd party VMS support while Avigilon has had none to date (by their own design).

This certainly further validates the financial success than MP network cameras are enjoying in the marketplace.

On the other hand, Avigilon does face a number of risks in the near future:

  • In the mid to late 2000s, Avigilon benefited greatly from being only one of a small number of providers to bet correctly on the value and feasibility of megapixel. However, now everyone is jumping on the megapixel bandwagon (radically increasing the number of competitors and reducing the uniqueness of Avigilon's offering).
  • Avigilon's production cameras cannot be used with 3rd party VMS systems, forcing users to buy Avigilon's VMS if they want their cameras. With more options on the market, users are likely to be less inclined to accept this lock-in.
  • Avgilon's production product offering is dependent on JPEG2000 and a very high default bandwidth consumption (as we examined in our Avigilon camera tests). With H.264 becoming ubiqiutious even with multi-megapixel cameras, the dependence on JPEG2000 is a non-trivial tax on Avigilon users.

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