Imperial Capital Security Investor Conference 2018 Review - ADT, Resideo, Alarm.com, Arlo, Eagle Eye, ACRE, More

By: John Honovich, Published on Dec 14, 2018

Imperial Capital Security Investor Conference is an event matching industry executives with financiers that frequently leads to future funding and acquisitions. Among the 60+ companies presenting this year were ADT, Resideo (i.e., Honeywell Home / ADI), Alarm.com, Arlo, Eagle Eye, ACRE and more.

We bought a ticket and attended. In this note, we examine:

  • How ADT is pitching its commercial (re-)expansion to investors and how it views the Amazon threat
  • What Resideo is most bullish about going forward
  • How Alarm.com is pitching the business market expansion to investors
  • How Arlo plans to compete against the growing number of low-cost wirefree competitors
  • Why Eagle Eye says it has supercharged its growth through the Brivo acquisition
  • How OpenEye did or did not pitch investors and how it contrasted to Eagle Eye
  • How ACRE is expanding again with a new acquisition and why they dislike the camera business
  • What a Columbia University professor advocated to these investors and what he got wrong about the video surveillance business
  • Who was there (and not there) not presenting but notable in the industry (Axis, Avigilon, etc.)

******** ******* ******** ******** Conference** ** ***** ******** industry ********** **** ********** that ********** ***** ** future ******* *** ************. Among *** **+ ********* presenting **** **** **** ADT, ******* (*.*., ********* Home / ***), *****.***, Arlo, ***** ***, **** and ****.

** ****** * ****** and ********. ** **** note, ** *******:

  • *** *** ** ******** its ********** (**-)********* ** investors *** *** ** views *** ****** ******
  • **** ******* ** **** bullish ***** ***** *******
  • *** *****.*** ** ******** the ******** ****** ********* to *********
  • *** **** ***** ** compete ******* *** ******* number ** ***-**** ******** ***********
  • *** ***** *** **** it *** ************ *** growth ******* *** ***** acquisition
  • *** ******* *** ** did *** ***** ********* and *** ** ********** to ***** ***
  • *** **** ** ********* again **** * *** acquisition *** *** **** dislike *** ****** ********
  • **** * ******** ********** professor ********* ** ***** investors *** **** ** got ***** ***** *** video ************ ********
  • *** *** ***** (*** not *****) *** ********** but ******* ** *** industry (****, ********, ***.)

[***************]

Abnormal ******** ********** - **** ****** *****

**** ***** ** **** different **** ***** ******** people ********* ** ** like *** ****, *****, ASIS. ******** ******* ** most ********* ********** (*** their ******* ********), ****** than *********** ******* *** space *** ********* ** sell ******* ** ********.

******** ******* ** *** broadly ***** *** **** companies *** ****** *** or ** ****** **** need * ****** ** help ****** *** *******, justify *** *********, ******** investors, ***. ******** ** one ** **** * few *** *********** ** this *** *** ******** industry *** **** *** ***** behind *** ****** ** notable *****, *.*., *** recent*** ***********,*******'* ***********,**********'* ***********,***'* ***, ***., ** ***** slide ***** (**** *** red ********) *****:

***** *** $*** ****** for * ***-*** ***** is ***** *** ******** standards, **** ******* ********* pricing, **** ******** **** money ** **.

*** ****** *** **** and *** ************ ** that **** *********** ************* and ********** ******* *** two ******* ******** ***** to ***** ******** ** that **** ** *** paid **** ***** *** closed.

Few ********, ****** *********** ** *** *********

***** ** ** ** 'investor' **********, *** ********* presenting *** ****** ***** companies, *** **** ********, which ******** *** ***** of ********'* **** ******. It ****** **** **** old ********* **** *** to ***'* **** ****** where *** ******** ** "Wow, **** *** ***** in ********", ** *** excerpt **** ***** ******** below *****:

Mostly *****, **** ***** *** ******

*** ********** ** ********* centered ****** ***** ********** companies, ***** ** ****** a ********** ** ***** companies ******* **** ********* (since ***** ****** *** based ** ***** **** flow ******** *** *** sales *** ****** ** over *** **** ** the ******** / ********* revenue) *** *** **** of ******** *******'* ******** division, **** **** [**** no ****** *********], ***'* background ** ****** *** Protection1.

Valuations ***** ****

**** *****, ** *** video ***** *********, **** valuations *** ***** ****:

ADT ******** ********* **** *******

*** *** ***** ******** pitch **** ***** ******* expanding ********** ******** ****** by *********** ***** *********** (15 *****), **** ***********'* *** ****, ** **** ***** shows:

***'* *** *** *** Commercial ********, *** **********, made *** ***** *** why *** ********** ********* is * ***** ****. In *** ***** *****, he ***** ***** *** many ** *** ******** companies (*** ******* **** those *********) *** ******** 'friends' ** *** *** that **** *** ** for *** **** **** with ***:

*** **** *** *** is **** ***** '*******' leave, **** ***** **** of ******** **** *** and **** ********* ******* out ** * *** years. ********* ** ****-**** continuity ** ******** ********** in * *******-******** ******** is *********, ** **** tend ** ****** ****** or ***** ** ***** a *** ******* ** sell ** *** **** struggling ****-***********.

ADT **** ********* **** ******

*** ******* ***** ******** pitch ** *** ****** was * ******* ** them, ***********, *.*., **** they **** *** **** professional ******** ** *** upcoming***** *****(****** ****** **** ******'* Ring **** **** **** access ** ***** ***** as ****).

**** **** ***** ***'* SVP ******* *** ******** Relations ***** ***** ***** long-term *********** **** ******, he ********* ** ** a *** ******** ****** that ** ***** ****** the ****** *** ******** and ********** *******, ** the ***** ** *** response ***** *******:

**** ** ********* ****. The ******** *** ********* for *** *** ******* that ********* **** **** or **** ***'* *********** business. ***** *** ****** for ******** ***** ** larger **** **** **** Netflix *** *******, ***** is ******* *********** ******** ****. ***** *** ** unlikely ** **** ***********'* exact ****, *** ******** pressure ** *******, ******* and ********* ***** ** severe.

*******

*** **** ***** *** for *********'* *** ********* / ******** / ********** panel, *****, ** *** video *****, **** ****** the '**** **** ******** product ** *** *******'* history', ****** *** ******* is ~* ***** *** (joking *****, ** *** not ******* *** ********** they **** ********* **** products *********).

******* ****** *** ***** would ** ****** *** dealers ** *******, *** even ******** ***-***** ** upgrade ********** ** ********* 'cartridge' ******* **** *** base ******* ******* ********* technician '*********' ******* *****. They **** ********* *** new ****** **** ******* 'interchangeable **********' *** ******* like *******, ** ********* basic ************ ********** ***** for ************ ** ******** without ******** ** *************** of *** ******.

*** ******* **** ***** are ** ***** ** discontinue ********* ***** ***** panels *** ****-**** *********** would ****** ** *** next ~* *****.

************, ******* ********* *** return / ****-********** ** Videofied, ** *** ***** below:

*** *** ****** ******** video ****** ***** ****** detector ******** '* ** 5 ****' ******* **** that ********** **** * next-generation ***** ******. *** sensor's ***** ***** **** be ******** ** * cloud ****** *** *** base ******* *** **** be ********* ** **** indoor *** ******* ***** models.

********* ******** *** / Videofied** **** *** $*** million.

* **** ***, **************** *********'* ******** ********* offering*** **** ************** *** ******** **** a ************ *******. ** **** ***** the *** ******* ** detail ** ** ** released.

*****.***

**** * ***** ****** in *********** ******** (**** $300+ ******* ****** ******* and *** ** *** highest ************* ******* ** the ********), *****.*** ********* in**** *** ********* **** the ********** / *** market.

***** ***** **** ** Chief ******** ******* ******* Bedell [**** ** ****** available] *** ******** ********* side ** **** **** their ******** *********** ****:

*************, ** ********* *** commercial ****** ** '**********' and ******* '**** ** competition' ** ****** ******* to ****. **** *** perspective ** *** ************ competitors, **** ** ********* true, ****** *** ********** market ** ****** ********** with ************ ***** ************ systems.

*** *** *** ***** business ********* ** ******** 'a ******* ********'. ***** 'unified' *** ****** * popular ***** ***** ****** scale ****** ********* **** Genetec *** **, *****.*** centered **** ** *** their ********* **** *** business ******:

*****.*** ******* ******* ********** rules *** ** ******** vision ******* - *.*., the ****** ********* ******* a *** ***** **** the ******** **** ** the ******, ** *** video ***** ******:

****

****'* *** ********* ********** that *** ******* ********* goal *** **** *** to ******** *** ******** rate ** ************ ********. While ****'* ******* ****** has **** ********** (*.*.,**** $*** ******* ** 2017), ******* ** ************** from ******* *****, **** only ~*% ** ********* subscribing *** **** ********. In ****, **** ***** Smart ******** / ** video *********, ********** ** the ************:

** ****** ****'* ********* in *********** ********* *********** *** * ****** residential ***********, **** ****** well **** ******* ***** alerts.

********, ****'* *** ******* their '***** ********', * ********* ******** to *** *** ******* video ******** ******* ** residential *******. ** *** video *****, ** ****** the ******** ** ********** the ****** **** *** IoT ******** *** ***** work ** ******* ***** quality:

** **** *** ****** Arlo's ***** ******** *** may ** *** ******.

Eagle ***

*** **** *********** **** of ***** ***'* ************ was ********* *** ******* explanation ***** ********'* ****** ** ***** for $** ******************* ***** ***'* ******. The ***/*** ** **** while ***** *** *** challenged ** ***** **** larger ******* **** ***, once ***** ****** **-**** old *****, **** ***** Eagle *** ** *** Brivo ***** **** *** circumvented *** ******* *** vendor ******* ******* **** is * ******* *** most ******** **** ***** Eye. ** *** ***** below, ******* ******** **:

***** *** *** *** give *** ******** ******* numbers ** **** ********* accepted ****** ******* ****** they *** ******* **** slide **** *** *** interpret ** *** ****:

***** ** ** ***** they *** ******* ******* but *** **** ** that ** *** ** the ***** *********** ****** ************* ************* *** *****, *** is ***** ***** ******* level.

***** *** *** ********* how **** *** ***** well *** *****-**** ****** (lots ** *********, *** cameras *** ****), ***** we ******* *** *** as * **** *** for * ***** ******* service. ** *** ***** below, ******* ******* * question ***** ********* ** the ********** ******** ** that *****-**** ******:

** ***** ** ************ 'enterprise' (*.*., ********, ******* HQs, ******, ***.),*** **** ***** *** testing***** *** ******* ***** has *********** ************ ** incumbents **** ******* ******** Center, ********* ********, ***.

*******

*******'* *** **** ******** presented ** *** **********, noting  $** ******* ****** revenue *** ******* **% growth ** ***** ****** 'direct *******' ******** **** year ** ***** *****:

*******'* *** **** ****** his '****** *****' **** gave * ******* **** his *********** *** ********:

**** ********** *** ** investor's **********, ** ***** that ******* *** ***** received *** ******** **********. The **** **** ** was ********** **** ***** that **** *** **** to **. ** ***** they **** **** ** to ******* **** ****-****** companies **** ***** *** (above) *** *** ***** charge ***** ****** ** strategic *****.

****

*** ********, ******** *** least ******** ************ ** sat ** *** ********'**** *** ****** [**** no ****** *********]. *** company, ** *** ***** history, *** ******* **** quite **** ****** *** then******* *** ********** * *********** ******, as ** ********* ** the ***** *****:

****** **** ********* **********, ACRE **** **** ** a ******* ******* *** growing ** ********* ******** businesses, ********* ***** **** are **** *****.

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

  • ********* ******* ****** ****** 'really **** *******' *** very ********** ******.
  • *** *********** ** ******* Security ******** ***** * 'real ***** *****' **** 'had **** ****** * lot ** *****'. **** noted **** **** **** been ******* **** ******.

*** ******* ********* ** 2019 ******* ** $*** million, ** *** ***** below *****:

Grillo ********* ****** ********

****'* *** ********** ********** the ***** ************ ****** business ** * **** business *** ** *** race ** *** ******, price ********, ***. ** the ****** **** "**'* not *****". ** ** think *** ****** ******** future ********* *** **** better ******* **** *** Chinese '********' *** ********* and *** ****** ** AI *** ***** ** a ************** **** ** not ** **** ** commodify.

ACRE ******** ***********

**** **** ** ********** an *********** ** ** access ******* ******* ** Monday, *** ****. ** agreed ** *** ******** the **** ***** ** is ********* ** ********** communicating **** *** ******** company's ****.

Columbia ********* ** ************

*** **** ******** ************ of *** *** *** from ******** ******* ******** Professor **** ********** *** provided * **** ***** overview ** ** *** investors ** ***** ** distinguished ******* '******' *** 'weak' **, *********** **** while '******' ** ** science ******* **** '****' AI *** ******* *********** financial ********, ** **** slide *****:

*** ******* ** **** most ***** ************ ** applications **** **** * 'medium' ********. **** *** not ** ********** ** building * ********** ***** but **** *** *** more *********** **** ****** OCR ************ ********* *****. Facial *********** ** ****** detection ** * ***** example. ****** ***** ** 'weak', ** *** *************** but ******** ***** ********* to *** ***** ***** out ** * ******* is, ** *** '******' AI, ********* *** ****.

**** '******' ********** ************ is * ****** ****.

*** ********* **** *********** 'some ********' ****** *** underestimates *** **** ** a ******** ******* **** is *** ********* ******** paying *** ****, ** he ********* ** *** clip *****:

*************, ** ****** * marketing **** **** ***** face-recognition ******* ********* ********* this '************ *********** **********'.

***, ** ********, **** marketing ** ** ********* is ** '************ ***********' element *** ********** ** to **** ** **** operational ********* ** ***. And ***** **** *******, unless *** ******* ********** wants ** ******** ** subsidize half-working ******* (*****, ** fairness, **** ** *** years, *** ****** *** this ********** **** ** small.

*** ******** ***** *** when ** ****** *** valuation ******* *** ** companies ***** ********:

** ******, ****'* *** the **** / *** space, *** ******** ******** companies *** ***** *** ******** per ********.

********

*******, ******* ** ****, *** ****** * niche ******** ** ********** for **** *** ********, like ********* *** *****. It ** ***** ******* many ***** **** ***** own ********* ******** ********** (e.g., ********* *****,******* ***********, ***.) *** ** the ***-***, ******* ********** are ******* ** *** for ***** **** ***** costs).

*******'* ******* ********* ** the ***** ***, ** the ***** *****, ********* their ***** ******* *** search *** *** **** raising ** ****:

*** ******* *********** ** * *** CEO, **** ********* [**** no ****** *********], **** outside *** ******** **** month (******** ****).

IHS ****** **** *********

*** *** *** ** the ******** ** *** event, ********** ***** ****** size *********.

***** ***** ************ ***** are ******* **** ** the ******** ******** ********* market, *** ********* **** is ***** ***** $** billion, *** **** ******* over *** **** *** years, ** *** **** to *** ****** ****** that **** ****** ******** from ********* **** ******:

** *** **** ****, the ****** ** ******* being ******* *** **********, over *** ******* *** year ********* ** ***:

* **** ******** **: Who ** ***** *** these ************ *******? ******: mostly *****. *** ********* that ***** ** **** than ***** *** **** of *** ** ******:

***** *** ********* ***** claim ******** ***** ******* of ~$* *******. *** since *** ******* ******* prices ** ******* ****** of ***** ** **** than ** *** **, it ***** **** ** a **** *****, ***** is ******** ********* ~*** more ******* ******** **** the ** *** **** than *** **** ** the ***** ********.

Who *** ***** *** *** *****

** *** **** *****, Hikvision, ****, *********, *******, etc *** ****. ********'* CEO *** ********* ******.***** *******, ****** **** Arecont * **** ***, *** *** *** chairman, *** ** ****** a ************ *********, *** also *****. 

*******, ***********'* *** *** there. ****** *** ******* did *** *******, ** was ** ******** ****** *** #1 **** ******* ******* company ** *** *****.

Comments (7)

****: **** *** ***** Eye *** *** ***** yet *** **** ** in * **** (** 12:30 ** **). ***** its ****** *** **** is * **** ****, I ****** ** *** it *** *** **** fill ** ***** **** 2 ******** *******.

**** *** ***** *** is *****.

*** ** **** **** questions *** ****. ***** was * *********** ****** I *** *** ***** due ** **** *** space ***********. 

*** ***** *** ******* selling ****** ** ******* inside ** ***** ** less **** ** *** US, ** ***** **** on * **** *****, China ** ******** ********* ~10x **** ******* ******** than *** **...

*** ******* ***** ** arguably **** **** *** U.S., *** ** ** 4x ****?

* ***'* **** *** sure *** **'* * factor **:

(*) *** ***** *** a ***** ******* ** the * ********

(*) *** *** ** products **** ** *** 2 *********

* ***** (*) ** probably * *** ******, i.e., ** *** ** a **** ****** ********** of **** ****** **** cameras *** ****, *.*., $500 ********* *******, $*,*** multi-imagers, $*,*** ****, ***. whereas ** *****, *** skew ** ** **** basic ***** ***** ******* that *** *** *** $20, ***.

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

*** ****** **** * different ***** **********, ******’* you ****** **** *** cheapest ********** ***** ** be ******** ***** ** the **-***** *****, ***** it **** ************ ******** the **** ******?  

 

**** **** *** ******** aliexpress price **** ** ** with *** ** ******? As * ********** ** cameras **** ** *** US, ********* ** ** sales *** ****.

*’* *** ****** * point ***** ********** ** particular, *** ***** *** any **** ****** ******.  I’m ******** **** *** cheapest **** ****** ***** of * ********** ******* camera ** ******** *  way ** ******** *** in-China ***** ** *** camera.  

** ******, ** ***** still **** *** ********** markup ** *** ******.

*** * ** ***** that *** *.*. ***** mix ******** **** ****-*** product, ***** *** ***** justify **** *** ********.

****** *** ********* *** mix ******, ** ****** high ** **.

 

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