Milestone Financials and Profitability Examined

By: John Honovich, Published on Aug 30, 2011

In this note, we examine the financials and profitability of VMS developer Milestone Systems. As one of the largest pure-play software only VMS providers, Milestone's progress is often looked as a benchmark for the overall market segment.

Fortunately, Danish companies are required to regularly disclose financial information to the Central Business Register (CVR). Milestone Systems has a CVR page [link no longer available] summarizing their disclosures.

From the 2010 Milestone financial report, here are key notable financial points:

  • 2010 revenue is approximately ~$42 Million USD
  • For the 3 year period from 2007 - 2010, CAGR was ~35%. 
  • Milestone has grown 374% from 2006 to 2010
  • The best growth year was last year (2010) when growth was ~55%
  • The worst growth year was 2009 (during the recession) when growth was ~11%
  • Maximum net profit margin in the past 5 years was ~10%
  • Milestone had a net loss in 2008 and a net profit margin of 3% in 2009
  • Gross profit margins have consistently been between 75% and 79%
  • Milestone is cash flow positive and has ~36 million DKK (or ~$7 million USD) cash on hand

For specific numbers per year, take a look at the copied table (with translated headers) below:

Revenue Compared to other VMS Vendors

While Milestone discloses their annual revenue, comparing revenue fairly is challenging because:

  • The mix of products different vendors sell (e.g., Milestone historically has only sold software, not hardware, while most competitors sell both; note: in 2011, Milestone entered the hardware business)
  • Fluctuations of exchange rates over the last few years. Over the past 3 years, DKK / USD exchange rates have fluctuated more than 30%.

That noted, using 8/31/11 exchange rates, Milestone's 2010 revenue of 217 million DKK is equal to ~$42 Million. That is roughly similar to Genetec's and twice as much as Exacq and Axxonsoft (though note all other manufacturers include hardware / non VMS software revenue). Additionally, not disclosed, but important to understanding Milestone's revenue is how much they generate from their 'ingredient OEM' [link no longer available] deal with OnSSI.

Profitability Comparison

Reviewing Milestone's financial report, the company's relatively modest profitability stands out. While there are no publicly audited financial documents for any other pure-play VMS software providers, a number of IP camera manufacturers do disclose. Companies like Axis and Mobotix generally have net profit margins over 15%, notably higher than Milestone's. We asked Milestone about this. Here is their response:

"Milestone has not historically planned for high profits. As we are still a privately held entity, we have the 'luxury' of long-term planning over short- term share price optimization, which very often has to be the case for publicly traded companies. In a growth market such as ours for global VMS, it has been much more relevant for Milestone to reinvest as much as possible to further build our company (geographical presence, products and branding). Please be aware that if you want to compare apples to apples, you are likely to use “EBITDA” as the guidance for profits. Our longer term planning is a 35-40% EBITDA margin, based on IFRS accounting principles. When we reach this level of longer term profits, and given that the surrounding markets are ready, Milestone is likely to go public."

It is difficult for us to assess the strategy though certainly one could argue that companies like Axis and Mobotix have achieved similar growth rates as Milestone and higher margins at the same time. Ultimately, future growth rates will have a major impact in determining which strategy is the best. This is more a matter for investors than integrators and end users.

Note: The full 23 page 2010 Milestone financial report can be purchased from this section of the CVR [link no longer available]. By CVR rules, we are not allowed to redistribute/share the financial report copy we purchased.

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

Bosch Budget 3000i Cameras Tested on Dec 05, 2019
Bosch has long had a hole in its lineup for, as it describes, "competitively-priced cameras". Now, Bosch has released its 3000i series cameras...
AVTech ~$70 IP Cameras Tested Vs Dahua and Hikvision on Dec 04, 2019
Taiwanese manufacturer Avtech is taking direct aim at low cost leaders Dahua and Hikvision with ~$70 starlight and white light illuminator...
Vunetrix Health Monitoring Company Profile on Nov 26, 2019
Vunetrix boasts that they make the integrators the 'HERO' by using Vunetrix's monitoring. We spoke to Vunetrix to better understand their...
Top 2020 Trend - AI Analytics on Nov 22, 2019
170+ Integrators answered: What do you think will be the top industry trend in 2020? Why? For the 4th year in a row, AI/video analytics was...
Avigilon H4 Intercom Tested on Nov 20, 2019
Avigilon is well-known for video surveillance and access, but how well does the company's intercom work? We purchased and tested Avigilon's H4...
Open vs End-to-End Systems: Integrator Statistics 2019 on Nov 11, 2019
Preference for open systems is on the decline, according to new IPVM statistics. We asked integrators: For video surveillance systems, do you...
Rhombus Cameras, VMS and Analytics Tested on Nov 06, 2019
Rhombus boasts they have created "the new standard in Enterprise, cloud-managed video security" and told IPVM in January 2019 they offer twice the...
100+ Companies Profile Directory on Nov 06, 2019
While IPVM covers the largest companies in the industry regularly (like Axis, Dahua, Hikvision, etc.), IPVM strives to do a profile post on each...
Aiphone Video Intercom Tested (IX Series 2) on Nov 05, 2019
Aiphone was one of integrator's favorite intercom manufacturers but how well do their products work? The company's newest offering, the IX Series 2...
Avigilon Appearance Search Tested on Oct 30, 2019
Avigilon Appearance Search claims that it "sorts through hours of video with ease, to quickly locate a specific person or vehicle of interest...

Most Recent Industry Reports

Disruptor Wyze Releases Undisruptive Smartlock on Dec 06, 2019
While Wyze has disrupted the consumer IP camera market with ~$20 cameras, its entrance into smart locks is entirely undisruptive. We have...
Bosch Budget 3000i Cameras Tested on Dec 05, 2019
Bosch has long had a hole in its lineup for, as it describes, "competitively-priced cameras". Now, Bosch has released its 3000i series cameras...
Anixter Resisting Takeover From Competitor on Dec 05, 2019
Mega distributor Anixter is going to be acquired but by whom? Initially, Anixter planned to go private, being bought by a private equity firm....
Security Sales Course 2020 - Last Chance Save $50 on Dec 05, 2019
This sales course is customized for the current needs and challenges specific to professionals selling video surveillance and access control...
Ireland National Children's Hospital Chooses Hikvision End-to-End With Facial Recognition on Dec 05, 2019
The world's most expensive hospital project ever, the New Children's Hospital in Ireland, has chosen an all-Hikvision surveillance system including...
AVTech ~$70 IP Cameras Tested Vs Dahua and Hikvision on Dec 04, 2019
Taiwanese manufacturer Avtech is taking direct aim at low cost leaders Dahua and Hikvision with ~$70 starlight and white light illuminator...
Ultinous European Analytics Startup Company Profile on Dec 04, 2019
European analytics-startup Ultinous pitches customers to "Have your own video analysis service!" We spoke to Ultinous to better understand their...
Access Startup Multi-Mount Aims To Streamline Reader Installs on Dec 03, 2019
Startup Multi-Mount claims it makes installing access readers 'Fast', 'Secure,' and fit 'any size frame.' The company states its bracket 'fits most...
Resideo CEO To Step Down on Dec 03, 2019
Resideo's CEO, Mike Nefkins, is stepping down, just 18 months after being brought in to lead the now plagued spin-out. Inside this note, we...
Arcules CEO Retracts False GDPR Claim + Dahua and Milestone Claims Examined on Dec 03, 2019
Arcules CEO has retracted a false claim about his organization being a "fully compliant GDPR company" after IPVM reporting (Arcules CEO Threatens...