Milestone 2017 Financials Examined

By John Honovich, Published on Apr 24, 2018

For ISC West 2018, Milestone released ... their financials, touting "strong revenue growth in 2017". However, there were discrepancies with the 2016 report and the announcement only had a summary.

Inside, based on speaking with Milestone and obtaining the full report, we examine their growth, competitive positioning and the important financial role of support/maintenance contracts.

Full ********* ******

*****-**** **** ********* ********* **** ******* **** the ***** *******.

Net ****** ** ***% - ***** *** *** ***** ******

*** **** *********** ****** in *********'* ********** *** net ****** ********** ** ~$12 ******* ***, **** net ******* ******** **** ~6% ** ******* ** ~13% ** *******. *** factors ****** ****:

(*)********* **** ***** ** court *** ******** ** *********** *****. While *** ***** ****** was *** *********, ** was ******** ****** **** it ********* ********** ** the **** ******:

** ******** ** *** in *** ***** ** a *** ******* *******, based ** *** ********** that ** ** *** less * *******, ** likely ***** **** **** immaterial *** ** ** was **** **** ** million, *** ****** ***** have ****** *** ** be *********.

(*) ***** ******** ****** was **** ***** ** 2017 **** ** ****, increasing ** **** *% in **** ** ********** 21% ** ****. ********* said **** *** ***** ahead ** **** ** 2016 *** ***** *********** helped ****** *** ************* in ****. ****: ***** was * *********** ******* the *** ****'* ********** reports *** ********* **** that *** * ********** error.

Invoiced ******* ** *** *******

** ****, *********'* ************ led **** '******** *******'. However, ** ****, '******* revenue' *** ******* *** only '*** *******' *** shown. ********* ********* **** 'invoiced *******' ******** ***-******** for ****, ***** *********** / ******* ******** **** *** ****** years (*.*., ** **** but *** **** ** 2019, ***.). ** ****, this ********* *** **% of *********'* ***** ******** revenue.

2017 *** ******* - ~$*** ******* / ******* ***********

*********'* **** *** ******* was ~$*** *******, ** from ~$*** ******* ** 2016. 

****** ** ***** ** revenue, ********* ** ******* ** ex-FLIR's *** / ***** division, *******, ********* *** Verint's ***** ************ ********. However, ********* ********* ***** software ********, *** ********. Clearly, ********* ** * much **** ********* ******* than *** ******* ****** indicate. *******'* ******** ******* is $***+ *******, ****** Genetec *** *********** ****** control *** *** ********** as **** ** ****. See ************ ******* / ********** Directory.

CARE *********** / ******* *********** ******* ******

'******' *** **** / licensing *** * ****** ** contention ** *** ********, with **** *********** *** users ********* **** *** some ************* *** ** not ****** **** (*.*., Avigilon) ***** ** ** a ***** ******* ***** against ***** ***********.

** ******** ** ** half ** *********'* **** net ******* ***** **** their '****' *********** /******* charges, ***** ** ~**% of ******* ******* ***** from **** ****** ***-********. Moreover, ***** *** ******** of *** ********* *****, there *** ****** *** more ******** *** ******** already **** **** *** be **** ** * given ****.

***** ***** ******* *********** / ******* ********* *** certainly *************, *** * company **** ********* **** focuses ** ******** ***********, these ******* *** ******* critical *** ***** ********.

Competitive ******** ******

****** **** ***** **********, IPVM's********** *** ************ ************** **** ********* ******* strong *************. ** ****, Milestone *** *** **** first *** **** ************* increased ***** **** **** competitors. **** ** **** is ***** ***** ** software *********** *** ** least ******* ******** *** been *********'* ********** ** continue ** ** ****, both ** ***** ** development ********** *** ******** partnership. ** ********, ***** has ******* ****** **** inward ******* ** *** / **** *** ******* has ******* **** ** their *** '*******' *********.

***** ** *** **** nearly * ***** ********** ******** *********, ********* *** ********* to *********** *** ********** open *****, ***** *** served ** **** *************. Their *** ******* *** be *************** **** ** 2017 *** ** ***-*** factors ***, ** **** as ***** ****** *********'* independent *********, ** *** a **** ****** ** continue ** ** ************* strong.

Note: ******* *********

*********'* **** ********** **** them ** *** ***% owner ******* ******, *** *******, the ***** *******. *********, *******, ***** that ** ** **** month, ********* ** *** only * ******** ***** of *** *******.

Comments (6)

John,

What % of the VMS market would you estimate Milestone has? 

Also, what do you think the % of Genetecs estimated revenue is their VMS?

Paul, good question. It's a hard one to answer depending on how categorization is done. Most importantly, do you only include VMS software licenses or do you count NVR units? E.g., when Milestone runs press releases saying they are #1, this is for only VMS software licenses. There's obviously a lot of NVR unit sales. Also, Milestone market share in China, the now largest market in video surveillance, is something like 0.01%.

If you only looked at mid to high-end installs (say 50+ cameras and above) in the West, I think Milestone is roughly 20% of that market. Of course, that leaves out all of China and all SMB sales.

As for Genetec, with them, I don't think they like to talk about 'VMS', but in terms of non-access control, non-LPR revenue, I would think it would be in the range of 50 - 75% of their revenue.

Good info

Personally I would count NVR.

Genetecs revenue was always a point of interest because they don't seem to have ne the amount of market share as Milsestone, but have so much more revenue

Personally I would count NVR.

For sure, understanding usage requires counting NVRs. Recall, in the old days, NVR sales skewed revenue numbers up because it was effectively software + hardware. Now, NVRs are routinely sold for less than VMS software, i.e., 16 channels of mid-tier Milestone is significantly more expensive than a 16 channel Hikvision NVR. 

Genetec almost certainly has less total customers than Milestone but a larger average customer size, i.e., Genetec wins more mega-accounts.

 

For ISC West 2018, Milestone released ... their financials...

Seems like an odd campaign:

Hey Folks,

New to the group. Seems like a lot of really meat-and-potato discussions going on. Since I'm still undergoing 'immersion training' in the market segment itself, can you guys give me your take on how important scalable/separable/centralized storage is in the market as opposed to an appliance approach?

Thanks!

Meir

NOTICE: This comment has been moved to its own discussion: How Important Scalable/Separable/Centralized Storage Is In The Market As Opposed To An Appliance Approach?

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