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 [link no longer available] that Axis is aiming for 10% growth...
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 [link...
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 : Members only. Login. or Join.

Related Reports

ADT Stock Drops After Announcing Loss And Amazon Delay on Mar 12, 2019
ADT's stock price dropped significantly after reporting heavy losses and delays in its Amazon partnership, as seen in the screenshot below: In...
Verkada Gets Half Billion Dollar Valuation on Apr 26, 2019
Last week, when we profiled Verkada (The Fastest Growing Video Surveillance Sales Organization Ever - Verkada), we predicted they would raise $40...
Knightscope Adds Just 2 Total Customers In Past Year, Yet Raising Money at $300 Million Valuation on May 02, 2019
This is no longer funny. While Knightscope has laughed it up promoting robot selfies, joking about a 'suicidal robot', the man who attacked a...
Avigilon President Henderson Is Out on Jul 09, 2019
Avigilon's President and COO James Henderson is out, abruptly, after a remarkable ascension over the past 8 years, Motorola VP Jack Molloy has...
Vivotek Revenue Soars on Aug 05, 2019
Vivotek's revenue has soared so far in 2019, growing 45%. Inside this note, we examine import records and see who is driving Vivotek's growth...
Resideo Stock Plunges 37%, CFO Ousted on Oct 23, 2019
The horrible year for the ADI / Honeywell Home spinout, Resideo, just got worse, with their stock plunging another 37% today. Not even a year...
"Stress in the Residential Market" - Major Lender Exits on Nov 06, 2019
The residential security / 'alarm' market is getting worse, at least for traditional players. Now, one of the biggest lenders in the industry has...
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...
"Good Market, Bad Business Models" - Residential Security on Dec 11, 2019
Industry banker John Mack, at his company's annual event, took aim squarely at the problems in the residential security...
Vivint Valuation Falls $1.5 Billion on Dec 19, 2019
Residential market struggles continue. Now, Vivint's valuation has fallen $1.5 billion in its impending merger. Inside this note, we examine...

Most Recent Industry Reports

Every VMS Will Become a VSaaS on Feb 21, 2020
VMS is ending. Soon every VMS will be a VSaaS. Competitive dynamics will be redrawn. What does this mean? VMS Historically...
Video Surveillance 101 Course - Last Chance on Feb 20, 2020
This is the last chance to join IPVM's first Video Surveillance 101 course, designed to help those new to the industry to quickly understand the...
Vulnerability Directory For Access Credentials on Feb 20, 2020
Knowing which access credentials are insecure can be difficult to see, especially because most look and feel the same. Even insecure 125 kHz...
AI/Smart Camera Tutorial on Feb 20, 2020
Cameras with video analytics, sometimes called 'Smart' camera or 'AI' cameras, etc. are one of the most promising growth areas of video...
China Manufacturer Suffers Coronavirus Scare on Feb 20, 2020
Uniview suffered a significant health scare last week after one of its employees reported a fever and initially tested positive for coronavirus....
Cheap Camera Problems at Night on Feb 19, 2020
Cheap cameras generally have problems at night, despite the common perception that integrated IR makes cameras mostly the same, according to new...
Milestone Launches Multiple Cloud Solutions on Feb 18, 2020
Milestone is going to the cloud, becoming one of the last prominent VMSes to do so. Milestone is clearly late but how competitive do these new...
Video Surveillance Architecture 101 on Feb 18, 2020
Video surveillance can be designed and deployed in a number of ways. This 101 examines the most common options and architectures used in...
UK Stands Behind Hikvision But Controversy Continues on Feb 18, 2020
Hikvision is exhibiting at a UK government conference for law enforcement, provoking controversy from the press, politicians, and activists due to...
IronYun AI Analytics Tested on Feb 17, 2020
Taiwan startup IronYun has raised tens of millions for its "mission to be the leading Artificial Intelligence, big data video software as a service...