I know most of you probably given up on Avigilon, but I believe this company is experiencing growing pain as it pushes toward that $500MM run rate. They are making investments that eating some of the earnings now so they can perform better later. I am willing to keep some funds here for few more quarters. Avigilon 1YPEG is 0.6 with a P/E around 21 and given Q2 and Q3 are usually their better quarters I am willing to wait this out for at least couple more quarters. I sold some of my shares few months back and contemplating if I should buy them back now given this is the lowest P/E since its IPO .

Here are some comments from the last conference call:

Q1 - Seasonality

There is also seasonality in our business with Q1 historically being the lowest revenue quarter. We believe evaluating our business on a trailing 12-month basis provides a better representation of our performance in viewing our business strictly on a quarterly basis. On a trailing 12-month basis, revenue grew 44%, gross margin was 57%, and adjusted EBITDA grew 30%.

Focus on that $500 run rate

At our current annual revenue run-rate of over $300 million, we are on track to achieve our target run-rate of $500 million by the end of 2016.

Market Potential

Our security solutions address a very large global market for video surveillance and electronic access control estimated at over US$18 billion in 2014 and growing to over US$28 billion annually by the end of 2018. We remain focused on top line growth and gaining market share and doing it profitably. Our sales growth in Q1 was broadly based across our major geographic regions. Compared to the prior year, North America, including the United States and Canada grew 43%, while our international business grew 25%.

No single customer was larger than 4% of revenue for the quarter.

New Products

We introduced the world’s first and only single sensor 7K security camera, further extending our technological leadership in providing maximum coverage with the greatest level of detail. This breakthrough was made possible in part by our patented high-definition stream management technology.
We recently added our patented self learning video analytics technology to our 4K and 5K HD Pro series cameras. We are unmatched in combining wide scene coverage with the highest image quality and the artificial intelligence to automatically detect and manage business and security problems. This is a game changer for our industry.


At the end of Q1 2015, we had 261 U.S. and international patents issued and 269 patents pending.

And we believe that we have the strongest portfolio of intellectual property in video analytics both from a technology perspective and a patent perspective.

Employees up

Our growth and success are built upon our investment in people. At the end of Q1, we had 775 employees, up from 696 at the end of 2014.

Plant in USA

The addition of our U.S. manufacturing facility in Plano [ph], Texas will effectively double our total manufacturing capacity to $1 billion of revenue. We remain on track to begin manufacturing at our U.S. facility in the second half of 2015.

It provides redundancy and scalability, improves delivery times at a lower cost, acts as a natural hedge and opens up opportunities where U.S. products are given preference.

On Q2 – will be strong

I can’t comment on Q2 at this time, we are reporting our Q1 results. But what I can tell you is the business is strong and there is nothing happening to the business that would suggest that our growth trends would be any different.




Everything looks good to me except for 2 things:

  1. Earnings aren’t growing. When Fernandes gets to $500M run rate, what then? Will he want to get to $1B at the expense of earnings growth? I wouldn’t be surprised because that’s what he’s demonstrated so far.

  2. I can’t trust what Fernandes says, and if I can’t trust what management says I just can’t stay invested, period. He said that he’d double the workforce through the end of 2014 and then the spending spree would cease for awhile. Well, he’s increased the employee count by another 10% just last quarter. Yes, the comparison should be good next quarter but then it will be tough for the following 2 quarters. You might even see yoy EPS declines in Q3 and Q4.

The markets for digital video security and surveillance are rapidly growing. I got out right after Q1 earnings and redeployed into AMBA. If I had waited a few days before selling AIOCF, I would have sold for 20% higher. Oh well, at least AMBA is up too and I feel much better about AMBA being able to deliver progressively higher EPS numbers going forward.



Nice right up Lego, I have the 1YPEG at 1.22, The P/E at 18.35, Eps at $.78/$.68 and growth at 15%.

Am I seeing something wrong?



Nice right up Lego, I have the 1YPEG at 1.22, The P/E at 18.35, Eps at $.78/$.68 and growth at 15%.

Am I seeing something wrong?


We both have 0.78 TTM EPS. YoY quarterly EPS is .18/.17 so growth was negative. I estimated the worst case growth rate to be flat at .17 for Q2, so .24 + .25 + .17 + .17 = 0.83, and with price 17.03, P/E is 20.52.

I was trying to avoid the anomaly for Q1 rate being negative.

Even so, with the AVO.TO price at 17.03 and .78, P/E = 21.83


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Thanks Lego,
I should have remembered to look at avo instead of Aiocf.