AVG Technologies 2012 Revenue - View Far From Investment Firms

The below is a quick look at AVG Technologies’ 2012 revenues.  The bulk of the figures below are from AVG Technologies Form 6-K, available on their web site.  Disclosure - I can comfortably talk with the “smartest guys in the room” and even own multiple suits.  This is not a look at the marketing strategy.  Just some bullet point observations from afar about revenue, net income, cash.

March 7 addendum -  CEO JR Smith  resigns -  AVG Technologies N.V. (AVG) said J.R. Smith will step down as chief executive after a six-year tenure at the helm of the Internet and mobile-security provider, which is conducting a search for his successor. http://online.wsj.com/article/BT-CO-20130307-715759.html  He is remaining  on the board.

• Overall revenue up 31% to $356 million - Good.  Subscription based revenue was up 12% while platform based revenue was up 65%.  Platform based revenue now comprises  45% of AVG’s revenue (Can you say Google?).  
  
• In a Seeking Alpha article - “AVG: Feb 1st Google Policy Updates Threaten AVG's Growth Engine, Signals Steep Downside”.  Google would require companies to make use of “opt-out” instead of having “opt-in” checked automatically on the customer’s behalf.  The author of the article, Eiad Asbahi, is forecasting reduced revenue for AVG because of this.  http://kensek.blogspot.com/2013/02/avg-technologies-ipo-one-year-birthday.html
• Net income dropped 44% to $46 million in 2012 from 2011.  This usually isn’t a good thing, especially when revenue is up 31%.  Not a sustainable model.
• Gross profit margin dropped 3% from 89% to 86%.  Most industries would be envious, even with the decline.
• From Motley Fool. Short shares as a percent of float 18.6%.  For Symantec, the figure is 1.6%.
• From Motley Fool.  Short shares increase between January 31 and February 15, 278.5%.  Ouch for both of the figures from Motley Fool.  One would like investors to have confidence that the stock will go up.  http://www.fool.com/investing/general/2013/03/04/shorts-are-piling-into-these-stocks-should-you-22.aspx
• Current ratio Symantec – 1.06.  Current ratio – AVG Technologies  - .54.
• Happiness is positive cash flow -AVG has been generating cash.

An interesting statement in the notes - "The Company’s profit and loss tax charge varies from period to period and has shown significant variations from its cash tax charge.  In particular, the Company’s entry into an innovation tax regime in the Netherlands resulted in a significant tax credit in June 2011, which will be reversed in future periods."  You have to love companies with offices in the Netherlands, and Ireland, and bank in the Cayman Islands.  All legal.  All companies with some combination of these should be required to state the number of square feet dedicated to the company  that they rent in these locations. No counting shared conference rooms. And a picture of the Post Office box.   For a discussion on some of this:  

 http://kensek.blogspot.com/2012/04/double-irish-with-dutch-sandwich-yummy.html

It should be an interesting year two for AVG Technologies as a public company following their IPO (initial public offering).  They appear to have an increasing reliance on securing mobile devices.  They just announced a deal with Samsung in the UK for purchasers of Samsung mobile users to download AVG’s mobile product for  free .  On the laptop/PC side and  on the free download side, Avast had 1.21 million downloads on www.download.com  versus 0.87 million for AVG Free Antivirus for the week ending March 3.  However,  CEO JR Smith has stated that AVG has been diversifying their product line. Perhaps this gap compared to Avast  is to be expected. Avast cancelled their IPO over a year ago.

Summer Best Free Antivirus Software Mashup - Avast, Avira, AVG Technologies

The end of the summer is approaching.  Companies are starting to roll out their Antivirus 2013 and Internet Security 2013 solutions.  Others are in beta.  The table below is a brief mash-up of 2012 test results/reviews update for three of the most well known vendors offering free antivirus software.  Avast, Avira, and AVG Technologies.  These products ranked first, fourth, and fifth    (13.5%, 7.5%, 6.8) in the table for “AV Products Worldwide June 2012” in the June 2012 OPSWAT “Security Industry Market Share Analysis”. Click on the table to enlarge it.

PC World didn’t provide numerical scores in the write-ups.  PC Magazine and Neil Rubenking did in his write-ups.  None of the above company’s paid products were included in AV-Test’s May/June test of corporate solutions.  The Virus Bulletin VB100 testing results were for those tests done in 2011 and 2012.  The Avast fail was in 2011.  The AVG Technology fails were in 2011 and 2012.

The Virus Bulletin RAP Averages Quadrant doesn’t show numerical scores.  If you eyeball the three vendors compared with one another, Avira,  Avast, and AVG Technologies come in first, second, and third.  AVG Technologies and Avast have test reports on the ICSA and West Coast Labs websites.  These reports aren’t for the free products. 

You can scroll through this site for more detailed blogs on test results of the organizations.  As always, it’s best to go to the test organization web  sites for the detailed write-ups.   Retentive reader alert -  awards, logos, and certifications can end up on a vendor’s site nowhere near the product that was actually tested and/or  stay posted  for a few years.    Just sayin…..

http://www.pcworld.com/article/254121/free_antivirus_you_can_trust.html  

http://www.pcmag.com/article2/0,2817,2401321,00.asp

http://www.av-test.org/en/tests/home-user/mayjun-2012/  

http://computershopper.com/feature/the-best-free-software-security-and-antivirus

http://www.softpedia.com/reviews/windows/avast-Free-Antivirus-7-Review-260395.shtml

www.opswat.com

www.av-test.org

www.av-comparatives.org

www.virusbtn.com

Check Point Launches ZoneAlarm Free Antivirus + Firewall 2013

On May 1, Check Point Software Technologies announced   ZoneAlarm Free Antivirus + Firewall 2013 as a free Internet security solution for consumers (the license agreement also makes it available for non-profits as well, but not for businesses).  With this offering, Check Point is jumping into the antivirus freemium model marketplace.  The best-known companies in this market include:

•  Avast – Top downloaded antivirus product on CNET’s www.download.com  site.  They’ve recently announced their intentions to go IPO (Initial Public Offering).  First in  installed base  global market share for antivirus (www.OPSWAT.com )
• AVG Technologies - Went public in February.  Third in OPSWAT market share.
• Avira -  Second in OPSWAT market share

Microsoft’s product is fourth in OPSWAT’s most recent report.

“Most consumers are unwittingly making themselves an easy target for cyber criminals,” said Bari Abdul, Vice President, and Head of ZoneAlarm, Check Point Software Technologies consumer business.  “They lack a strong 2-way firewall, are unwilling or unable to pay for security, or they just have left their security on the backburner.  People are putting themselves at serious risk by not having minimum security, which at least includes a firewall and antivirus software.  It’s basically like leaving your home with the doors unlocked.”

ZoneAlarm hasn’t created a lot of excitement in the marketplace with their internet security solutions.  This is even though they scored 4.0 stars for their Zone Alarm Extreme Security 2012 product from PC Magazine http://kensek.blogspot.com/2011/08/best-internet-security-suites-2012-pc.html  Their Zone Alarm Antivirus Plus Firewall 2012 only scored 3.0 stars.  http://kensek.blogspot.com/2011/08/best-antivirus-software-2012-pc.html .  They had looked at the consumer security appliance market place several years ago, but didn’t enter it. 

This does present an opportunity to increase ZoneAlarm brand recognition over just their firewall.  "The way that we make money is that first we give it away for free to build brand awareness ... then convert customers to use paid for products,” said Abdul.  Check Point   offers five different flavors of  security solutions for home users -  (ZoneAlarm) Extreme Security + DataLock, Internet Security Suite, PRO Antivirus + Firewall, SocialGuard, and DataLock.  

ZoneAlarm Internet Security Suite and ZoneAlarm Extreme Security + DataLock would be the upgrades, offering additional functionality such as PC Tune-Up, Virtual Browsing, Private Browsing, Keylogger/Screengrabber Jamming, DataLock Hard Drive Encryption, and Parental Controls.  Depending on your bent, more comprehensive security, the uber suites, everything but the kitchen sink, Bloatware.  Nonetheless, everyone is doing it.  To see the various functionalities of the ZoneAlarm solutions:

 

http://www.zonealarm.com/security/en-us/compare-anti-virus-spyware-software.htm

Check Point's t ZoneAlarm antivirus products have not  been part of www.av-test.org group’s most recent testing.  Twenty-three consumer products were av-test's  March 2012 test and seven in their business test.  Nor is ZoneAlarm among the twenty companies whose products on the test group www.av-comparatives.org radar for testing. They did receive VB100 awards from Virus Bulletin in the most recent April test, however.  Time to man up on the others! 

    

Through growth and acquisition, Check Point offers a number of end security solutions:   Check Point Policy Management, Full Disk Encryption, Media Encryption, Antimalware and Program Control, Firewall & Compliance Check, Remote Access VPN, WebCheck, Check Point GO, and Mobile Access Software Blade.

Check Point has exported some nice talent.  Palo Alto Networks’ founder and Chief Technology Officer  Nir Zuk was a principal engineer at Check Point Software Technologies and was one of the developers of stateful inspection technology.  Palo Alto Networks will be having an IPO (Initial Public Offering) something this year.  They filed their intentions in April.  They’re known for their Next Generation Firewall Technology (NGFW).  Gartner and NSS Labs like their products.  

http://kensek.blogspot.com/2012/03/sonicwall-palo-alto-networks-top.html

 

It will take awhile to see the results of this announcement by Abdul and Check Point. There may be some discussion about this news in the headquarters of the leading antivirus freemium model companies. 

PC Magazine Best Free Software of 2012

This year’s PC Magazine Best Free Software of 2012 list contains 257 products in over 40 categories. Something for everyone! http://www.pcmag.com/article2/0,2817,2381528,00.asp In the interests of this being a security focused blog, below is a link getting you right to the antimalware (best free antivirus) “stuff”.

Antimalware (Antivirus)

Below are the preferred free antivirus products, in order. There are links taking you to these products. You may want to look at sites such as www.av-comparatives.org , www.virusbtn.com and www.av-test.org to see how these companies’ products test, in general. For some of the advanced features for the free antivirus, you may be required to download and install a toolbar.

1. AVG Anti-Virus Free 2012

2. avast! Free version

3. Avira Free Antivirus 2012

4. Comodo Cleaning Essentials

5. Malwarebytes' Anti-Malware

http://www.pcmag.com/article2/0,2817,2381531,00.asp

Should you decide to upgrade from the free antivirus to the paid Antivirus product or Internet Security Suite, visit the above sites to see how well these companies stop malware. You can also go to

http://kensek.blogspot.com/2011/08/best-internet-security-suites-2012-pc.html None of the companies in the top 5 above are among PC Magazine’s top 5 Internet Security Suites.

Only Avira (in the products above) was represented in the AV-Comparatives Summary Report for 2011 (www.av-comparatives.org ) as having a top 5 product with Kaspersky topping the list. This 129-page report containing information on a number of internet security suite solutions is well worth checking out.

About AV-Test.org http://www.av-test.org

The AV-TEST Institute is a leading international and independent service provider in the fields of IT security and anti-virus research. The aim of the research work carried out by AV-TEST is to directly detect the latest malware, to analyze it using state-of-the-art methods and to inform their customers of the top-quality results obtained.

About AV-Comparatives.org http://www.av-comparatives.org

AV-Comparatives is an Austrian Non-Profit-Organization, which provides independent Anti-Virus software tests free to the public.

Avast Free Weekly CNET Download Volume Tops 2 Million

Avast had over 2 million downloads of their free antivirus  solution on download.com  for the week ending July 7.  to trounce the other malware vendors. They took the lead over post IPO AVG Technologies.    See the table below. Avast retains a large lead in installed base, close to 190 million to about 107 million for AVG.  Divide   (weekly downloads times 52) by installed base  to get an estimate of churn. For both, it's kind of ouch.   Since the vast majority of  the company's installed base are  "free" and have little switching costs, the companies obtain search revenue from the replacements. However, they lose the opportunity for cross sell and upgrade revenue.

For the week ending July 7:

1. 2.04 million - Avast
2. 1.43 million - AVG Technologies
3. 0.16 million - Ad-Aware
4. 0.10 million - Avira

For the week ending June 30:

1. 1.13 million - AVG Technologies
2. 1.11 million - Avast
3. 0.38 million - Ad-Aware
4. 0.09 million - Avira

Companies do use multiple sites for downloads. When this is taken into account, the one and two positions may, in fact, be different. 

For the first time in quite awhile, Avast tops the CNET download site for free antivirus. Figures for the week ending March 11:

1. 1.1 million - Avast
2. 1.0 million - AVG Technologies
3. 0.4 million – Avira
4. 0.04 million – Ad-Aware

March 18 addendum

Avast topped AVG Technologies on this site for the second week in a row - March 18

1. 1.48 million - Avast
2. 0.95 million - AVG Technologies
3. 0.43 million - Avira
4. 0.04 million - Ad-Aware

No change in order as of April 4

1. 1.32 million - Avast
2. 0.94 million - AVG Technologies
3. 0.40 million - Avira
4. 0.04 million - Ad-Aware

April 8 ranking

1. 1.03 million - Avast
2. 0.81 million - AVG Technologies
3. 0.34 million - Avira
4. 0.04 million - Ad- Aware

April 15 ranking

1. 1.10 million - Avast
2. 0.93 million - AVG Technologies
3. 0.40 million - Avira
4. 0.04 million - Ad-Aware

April 22 ranking

1. 1.02 million - Avast
2. 0.74 million - AVG Technologies
3. 0.34 million - Avira
4. 0.03 million - Ad-Aware

April 29 ranking

1. 1.13 million - Avast
2. 0.86 million - AVG Technologies
3. 0.39 million - Avira
4. 0.04 million - Ad-Aware 

May 6 ranking

1. 1.14 million - Avast
2. 0.85 million - AVG Technologies
3. 0.41 million - Avira
4. 0.05 million - Ad-Aware

CNET appeared to not do a revised table the week ending May 13

May 20 ranking

1. 1.20 - AVG Technologies
2. 1.12 - Avast
3. 0.31 - Ad-Aware
4. 0.27 - Avira

Ad-Aware had a big leap in activity for some reason to take the 3rd spot.

http://download.cnet.com/windows/

The first two products have both received 4.5 stars from CNET Editors while Avira and Ad-Aware have received 4.0 stars. It’s important to note that the figures below are downloads only from this site. Vendors frequently use multiple download sites for their products. Firms can vary the allocation. They can also vary the degree of online ads they use to push downloads. It does seem to be a requirement that your company name begins with an “A” to top the list.

What’s more important in the greater scheme of things than free downloads is how many of these downloads are installed and active. Active leaves the vendors some wiggle room since they get to define active. In the March Opswat “Security Industry Market Share Analysis”, Avast, Avira, and AVG Technologies are one, two, and three respectively for global vendor market share. 

Look for a smackdown between the vendors to take place in Prague's Old Town Square. Pivo for everyone. Na zdravi.

September 2011 OPSWAT Report on Worldwide Security Industry Market Share

OPSWAT Inc. has published their report on “Security Industry Market Share Analysis” September 2011. The results may not match the results published by the vendors themselves. The data OPSWAT used was collected between May 16 and August 15, 2011.

Worldwide Security Industry Market Share Leaders – Companies

• Avast Software – 16.6% (1st in June report)
• AVG Technologies – 12.9% (2nd in June report)
• Avira – 10.8% (3rd in June report)
• Microsoft – 10.6%
• Symantec – 8.9%
• Eset – 8.4%


Avast had a 4% plus gain versus June. Avg Technologies had a slight gain while Avira dropped.

The table in the OPSWAT document lists the top 15. Other companies in the top 15 in the worldwide market share table include, Microsoft, Eset, Symantec, Kaspersky, McAfee, and Panda.

Worldwide Market Share Leaders - Product

• Avast Free Antivirus - 12.0% - (was 3rd in June report)
• Microsoft Security Essentials – 10.3% (was 1st in June report)
• Avira Antivir Personal - Free – 9.1% (was 2nd in June report)

AVG Technologies - 4th at 7.9%, ESET - fifth at 5.3%, AVG 10 - 6th at 4.4%

Both Avast and AVG have a pair of products in the table where the data above came from. The top three product market share leaders in North America – Microsoft, Avast, and AVG Technologies .


Avast is promoting 134 million active users and 171 registered users http://www.avast.com/en-us/about on their site. Avira and AVG are both promoting just under 100 million. Each company varies in how they count active users.

The OPAWAT report also contains information about Windows Operating System Deployments, and Instant Messenger market share.

Large Number of Vendors but Consolidated Industry

According to OPSWAT, global, the top 15 vendors have about 93% of the market. The top 5 had just under 60%. OPSWAT market share reports are available at http://www.opswat.com/media/reports . The report contains details on how the data was captured.

For some information on the OPSWAT June Report http://kensek.blogspot.com/2011/06/june-2011-opswat-report-on-worldwide.html

About OPSWAT

OPSWAT was founded in 2002. OPSWAT provides software engineers and IT professionals with development tools and data services to power manageability and security solutions. www.opswat.com

The End Is Near For Paid Antivirus On PCs

This was the premise of an interesting article by Mathew Schwarz in an Information Week article on June 23. http://www.informationweek.com/news/security/antivirus/231000191 . Eric Domage, manager of western European security research and consulting for IDC, stated, “This is a highly commoditized sector. It used to be a market, but now it's a commodity--look at what Microsoft is now doing for free."

The freemium market has worked for several vendors. Microsoft created a bit of a disruptive event when they unleashed their free Microsoft Security Essentials. Excluding trial basis programs, www.download.com has approximately 60 free antivirus downloads on their site.

Some of this may be a definition issue. Antivirus is only a small portion of “malware”. The masses use the phrases interchangeably. Antivirus vendors hope that people will migrate up to a paid antivirus product or an internet security suite.

At the same time, traditional viruses are not the problem. Most major security vendors have written though leader ship whitepapers on internet threats. They detail the most current threats and how the battle has moved out to the cloud and there is more danger from getting infected while surfing the internet.

The larger vendors, on the business side of the fence, promote a multi-layered approach that begins with the cloud and often ends at the desktop. Or increasingly, they utilize a cloud solution for their desktops, road warriors, and mobile devices.

"McAfee and Symantec have decided to escape this market," said Domage in the article. CA decided to sell much of its security portfolio to UpData partners in June http://www.crn.com/news/security/229500801/ca-to-sell-antivirus-business.htm

A new market for these vendors is mobile devices using Symbian (shrinking) and Android operating systems. This includes tablets as well as smart phones. Some of the security vendors have a free product. Others have incorporated it into other technology security solutions. Those offering a free product often market a premium version. Trend Micro, Kaspersky, AVG Technologies, F-Secure, and McAfee, for example, all offer some kind of mobile security solution. some of them free.

In the denouement, while the end may be near for paid antivirus on the desktop, threats still exist. The battlefield has moved more extensively out to the internet. Protection is still essential. It costs companies to develop solutions. They need to continue to invest and these investments have to be recouped.

Below is a non-comprehensive set of links to some vendors providing security solutions for mobile devices.

http://www.f-secure.com/en_US/products/mobile/, http://usa.kaspersky.com/products-services/home-computer-security/mobile-security, http://us.trendmicro.com/us/products/personal/mobile-security-for-android/, http://home.mcafee.com/Store/ , http://www.avg.com/us-en/antivirus-for-android