Strong Q409 Financial Results Examined

By: 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

Repositionable Multi-Imager Camera Shootout - Avigilon, Axis, Dahua, Hanwha, Hikvision, Panasonic, Vivotek on Jun 19, 2019
Repositionable multi-imager cameras are one of the fastest growing segments in video surveillance, with a slew of new offerings being recently...
Genetec Synergis Cloud Link - Complex, Costly and Confusing on Jun 18, 2019
Genetec's Synergis Cloud Link is complex, costly and confusing compared to competitor access control architectures. Inside this note, we examine...
Startup Vaion Launching End-to-End AI Solution Backed with $20 Million Funding on Jun 17, 2019
An EU / USA video surveillance startup, Vaion, founded by ex-Cisco Senior Directors is launching an end-to-end VSaaS platform with $20 million in...
Biometrics Usage Statistics 2019 on Jun 17, 2019
While face and fingerprint recognition are used regularly for smartphones, it is not as common in physical security. In this note, we examine...
The Scheme Hikvision and China Importers Use To Avoid Tariffs on Jun 17, 2019
Hikvision and numerous China importers are avoiding 25% tariffs by including an SD card slot in their IP cameras to claim they are 'digital still...
Sighthound Transforms Into Enterprise AI Provider Profile on Jun 14, 2019
Sighthound is now rapidly expanding its R&D team, building an enterprise AI service. This may come as a surprise given their origins 6 years...
ADT Eliminating Acquired Brands, Unifying Under 'Commercial' Brand on Jun 14, 2019
ADT is eliminating the brands of the many integrators it has acquired over the past few years, including Red Hawk, Aronson Security Group (ASG),...
NSA Director Keynoting Dahua and Hikvision Sponsored Cybersecurity Conference [Canceled] on Jun 13, 2019
The technical director for the NSA’s Cybersecurity Threat Operations Center will be keynoting a physical security cybersecurity conference that is...
Farpointe Data Conekt Mobile Access Reader Tested on Jun 13, 2019
California based Farpointe Data has been a significant OEM supplier of conventional access readers for years to companies including DMP, RS2, DSX,...
Embattled $400 Million China Funded Philippines Surveillance System Proceeds on Jun 13, 2019
An embattled 12,000 camera surveillance system project that will cost ~$400 million will proceed.  The project contract was awarded, had its...

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