Strong Q409 Financial Results Examined

Author: John Honovich, Published on Feb 03, 2010

Reversing a year long negative trend, Axis's Q4 2009 financial results were very strong, raising the question, why?

Revenue was up 32% (Q409 compared to Q408). The results were even better in local currency terms - up almost 40% [Note: for most of 2009, currency exchange swings made Axis's financial performance look better than they were. Now, it's the reverse).

Despite the strong 4th quarter, for the full year (2009), Axis growth was nearly flat, with only 3% local currency growth compared to 2008.

Compare this to the previous quarter (Q308), where growth in local currency terms was negative. Also, Axis's stock price has shot up about 65% in 6 months (from about 65 Kroner in Summer 2009 to almost 110 Kroner on Feb 3, 2010).

Why Such Strong Growth Now?

Axis's explanation for this growth was:

"The strong close to the year is due to a generally good inflow of orders as well as conclusion of deals relating to previously deferred projects."

This raises two important questions: (1) How much did deferred deals drive revenue growth? and (2) How strong is the pipeline? The released documentation did not provide much guidance on either.

A third factor to take into account was that Q4 2008 was a very weak quarter for Axis so the comparable is 'easy'. Looking at the Q4 2008 report, Q4 2008 was only up 5% over Q4 2007. Q4 2008, of course, was the first quarter after the market crash.

What will be interesting to see is whether such growth is sustainable. This will become clear as the next 2 quarters of results are reported. On the other hand, even for now, this is clearly better performance than ADT/Tyco, which continues to struggle significantly

Product Development Strong

One other factor that Axis cites for its growth is Axis's continued aggressive product launches. Looking back over the last year, while most vendors introduced 720p/1080p box/dome cameras, Axis has introduced a broad number of differentiated products, like thermal cameras, a video analytics platform, a mobile NVR, domes with interchangeable cameras, a 3MP camera with a new type of iris, a mini-encoder, etc., etc. 

We still think Axis will lose the low end of the market (with the rise of Asian manufacturers and the adoption of 'standards'). However, with their product development pace and minimal competitive response, Axis is building a strong buffer against their mid-tier competitors. We are interested to see the Spring releases from other IP manufacturers and how they compare.

4 reports cite this report:

Axis Crushes Q1 2010 Financial Results on Apr 19, 2010
Now, there should be little doubt of the IP video's market growth rebound. After a year of rapidly deteriorating financial results, Axis strong...
Aims for 10% 2010 Growth on Mar 13, 2010
In a March 2010 interview with a regional business magazine, Axis's co-founder states that Axis is aiming for 10% growth in 2010.  This is a...
Modest Growth 2nd Half 2009 on Mar 12, 2010
Following monster growth in the last fiscal year, IndigoVision's revenue growth rate was positive but far more modest in the 2nd Half of 2009 of...
Improved Growth - Q409 on Feb 10, 2010
Mobotix's financial growth has started to improve with a positive trend emerging from their 2009 end of year financial results. In Q309, their...
Comments : PRO Members only. Login. or Join.

Most Recent Industry Reports

19 Facial Recognition Providers Profiled on Apr 23, 2019
IPVM interviewed 19 facial recognition providers at ISC West to understand their claimed accuracy, success and positioning. 9 from China, where...
Locking Down Network Connections Guide on Apr 23, 2019
Accidents and inside attacks are risks when network connections are not locked down. Security and video surveillance systems should be protected...
Hikvision Admits USA Sales Falling on Apr 22, 2019
Hikvision, in a new Chinese financial filing, has admitted that its USA sales are now falling. Less than a year after the US government passed a...
Speco Ultra Intensifier Tested on Apr 22, 2019
While ISC West 2019 named Speco's Ultra Intensifier the best new "Video Surveillance Cameras IP", IPVM testing shows the camera suffers from...
Arecont Favorability Results 2019 on Apr 22, 2019
Arecont's net negativity remained the same in IPVM's 2019 integrator study, though integrator's feeling became relatively more neutral compared to...
H.265 Usage Statistics on Apr 19, 2019
H.265 has been available in IP cameras for more than 5 years and, in the past few years, the number of manufacturers supporting this codec has...
ACRE Acquires RS2, Explains Acquisition Strategy on Apr 19, 2019
ACRE continues to buy, now acquiring RS2, just 5 months after buying Open Options. One is a small access control manufacturer from Texas, the...
Access Control Course Spring 2019 - Last Chance on Apr 19, 2019
 Register for the Spring 2019 Access Control Course----Closed IPVM offers the most comprehensive access control course in the industry. Unlike...
Riser vs Plenum Cabling Explained on Apr 18, 2019
You could be spending twice as much for cable as you need. The difference between 'plenum' rated cable and 'riser' rated cable is subtle, but the...
Verint Victimized By Ransomware on Apr 18, 2019
Verint, which is best known in the physical security industry for video surveillance but has built a sizeable cybersecurity business as well, was...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact