TechDogs-"NI Reports Record Orders for a First Quarter, up 27 Percent Year Over Year"

Consumer Electronics Technology

NI Reports Record Orders for a First Quarter, up 27 Percent Year Over Year

By Business Wire

Business Wire
Overall Rating

Company shares new three year model for margin expansion

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Q1 2022 Highlights

  • Revenue of $385 million, up 15 percent year-over-year in a challenging supply chain environment
  • Record orders for a first quarter, up 27 percent year over year
  • Strong double digit order growth across all business units and regions
  • Diluted GAAP EPS of $0.19 and diluted non-GAAP EPS of $0.41

AUSTIN, Texas--(BUSINESS WIRE)--National Instruments Corporation (Nasdaq: NATI) today announced Q1 2022 revenue of $385 million, up 15 percent year-over-year, a record for a first quarter.

For Q1 2022, the value of the company's total orders was up 27 percent year-over-year. For Q1, year-over-year orders in the Americas region were up 40 percent, in EMEA orders were up 22 percent, and in APAC orders were up 17 percent.

In Q1, GAAP gross margin was 69 percent and non-GAAP gross margin was 71 percent. GAAP operating expenses were $235 million, up 2 percent year-over-year. Total non-GAAP operating expenses were up 3 percent year-over-year at $208 million. GAAP operating margin was 8 percent in Q1, with GAAP operating income of $31 million, up 220 percent year-over-year. Non-GAAP operating margin was 17 percent in Q1, with non-GAAP operating income of $66 million, up 28 percent year-over-year.

GAAP net income for Q1 was $25 million, with diluted earnings per share (EPS) of $0.19, and non-GAAP net income was $54 million, with non-GAAP diluted EPS of $0.41.

“Demand exceeded expectations in the first quarter with record orders for a first quarter up 27 percent year over year. Orders serve as the leading indicator in our business and a direct result of our strategic initiatives,” said Eric Starkloff, NI president and CEO. “Our focus on high growth areas such as electric and autonomous vehicles, wireless communications, and new space technologies, brings us confidence in our ability to grow faster than the overall market. The flexible, modular test solutions we provide are built on our leading interoperable software that enables customers to automate their test processes to bring their products to market faster and with high quality."

“We continue to strengthen our competitive advantages and make our business more scalable. Our strategy proved to be resilient as we navigated lack of component availability and the widely publicized logistics challenges facing our industry in the first quarter,” said Karen Rapp, NI CFO. “Given the current supply uncertainty, we are widening our 2022 target to 12 percent to 18 percent revenue growth year over year. We remain focused on margin expansion and are targeting an increase of our non-GAAP operating margin by 100 bps each year starting this year through 2025.”

As of March 31, 2022, NI had $143 million in cash and cash equivalents. During Q1, NI paid $37 million in dividends and repurchased approximately 772,000 shares of our common stock at an average price of $40.74 per share. The NI Board of Directors approved a dividend of $0.28 per share payable on May 31, 2022, to stockholders of record on May 9, 2022.

The company’s non-GAAP results exclude, as applicable, the impact of purchase accounting fair value adjustments, stock-based compensation, amortization of acquisition-related intangibles, acquisition-related transaction and integration costs, taxes levied on the transfer of acquired intellectual property, foreign exchange gain/loss on acquisitions, restructuring charges, tax reform charges, disposal gain/loss on buildings and related charitable contributions, tax effects related to businesses held for sale, gain/loss on sale of business, impairment losses on equity-method investments, and capitalization and amortization of internally developed software costs. Reconciliations of the company’s GAAP and non-GAAP results are included as part of this news release.

Q2 2022 Guidance

  • GAAP revenue to be in the range of $370 million to $410 million
  • GAAP diluted EPS to be in the range of $0.01 to $0.15
  • Non-GAAP diluted EPS expected to be in the range of $0.25 to $0.39

Conference Call Information

NI management will discuss Q1 2022 results today, April 28, at 4:00 p.m. CT at www.ni.com/call or dial (855) 212-2361 and enter confirmation code 4984403. The call and an accompanying slide presentation will be webcast on the investor website, www.ni.com/nati, under “Events & Presentations.” Replay is available by calling (855) 859-2056, confirmation code 4984403, shortly after the call through May 3, at 11:59 p.m. CT.

Non-GAAP Presentation

To supplement NI’s financial statements presented on a GAAP basis, NI has provided non-GAAP financial information, including non-GAAP revenue or net sales, gross profit, gross margin, operating expenses, operating income, operating margin, provision for income taxes, net income, net margin, EPS and diluted EPS and non-GAAP guidance for diluted EPS. A reconciliation of the adjustments to GAAP results is included in the tables below. The company is not able to provide guidance on its GAAP tax rate or a related reconciliation without unreasonable efforts since its future GAAP tax rate depends on its future stock price and related information that is not currently available. Non-GAAP financial information is not meant as a substitute for GAAP results, but is included because management believes such information is useful to our investors for informational and comparative purposes. In addition, certain non-GAAP financial information is used internally by management to evaluate and manage the company. The non-GAAP financial information used by NI may differ from that used by other companies. These non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP.

Forward-Looking Statements

This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 including without limitation those statements about our expectations of accelerating growth and progress to meet or exceed our 2022 financial targets and long-term financial model, our ability to grow faster than the overall market, our continued momentum across regions and business units, our opportunities to drive growth, profitability and efficiency in our business, confidence in our software strategy, confidence in our strategy and the strategic changes made to our business, including the transition to subscription-based licensing model for software offerings, our ability to successfully integrate acquisitions and execute our growth strategy, our ability to drive customer demand through focus on high growth opportunities, the impacts of war in Europe, COVID-19, including pandemic-related shutdowns, supply chain constraints and software licensing model transition on our financial results, and our guidance and expectations for our Q2 2022 revenue, diluted EPS and non-GAAP diluted EPS, and future operating expenses, backlog, lead times, gross margin, operating margin and tax rate. These statements are subject to a number of risks and uncertainties, and actual results may differ materially from any future results expressed or implied by the forward-looking statements. Risks and uncertainties include without limitation: the global shortage of key components; effect of the global economic and geopolitical conditions; our international operations and foreign economies; adverse public health matters, including epidemics and pandemics such as the COVID-19 pandemic; our ability to effectively manage our partners and distribution channels; interruptions in our technology systems or cyber-attacks on our systems; the dependency of our product revenue on certain industries and the risk of contractions in such industries; concentration of credit risk and uncertain conditions in the global financial markets; our ability to compete in markets that are highly competitive; our ability to release successful new products or achieve expected returns; the risk that our manufacturing capacity and a substantial majority of our warehousing and distribution capacity are located outside of the U.S.; our dependence on key suppliers and distributors; longer delivery lead times from our suppliers; risk of product liability claims; dependence on our proprietary rights and risks of intellectual property litigation; the continued service of key management, technical personnel and operational employees; our ability to comply with environmental laws and associated costs; our ability to maintain our website; the risks of bugs, vulnerabilities, errors or design flaws in our products; our restructuring activities; our exposure to large orders; our shift to more system orders; our ability to effectively manage our operating expenses and meet budget; fluctuations in our quarterly results due to factors outside of our control; our outstanding debt; seasonal variation in our revenues; our ability to comply with laws and regulations; changes in tax rates and exposure to additional tax liabilities; our ability to make certain acquisitions or dispositions, integrate the companies we acquire or separate the companies we sold and/or enter into strategic relationships; risks related to currency fluctuations; and provisions in charter documents and Delaware law that delay or prevent our acquisition. In addition, our ability to declare and/or pay declared dividends is subject to compliance with the terms of our existing credit agreement. The company directs readers to its Form 10-K for the year ended December 31, 2021, and the other documents it files with the SEC for other risks associated with the company’s future performance. These documents contain and identify important factors that could cause our actual results to differ materially from those contained in our forward-looking statements. All information in this release is as of the date above. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

About NI

At NI, we bring together the people, ideas and technology so forward thinkers and creative problem solvers can take on humanity’s biggest challenges. From data and automation to research and validation, we provide the tailored, software-connected systems engineers and enterprises need to Engineer Ambitiously™ every day.

National Instruments, NI, ni.com and Engineer Ambitiously are trademarks of National Instruments. Other product and company names listed are trademarks or trade names of their respective companies. (NATI-F)

National Instruments

Condensed Consolidated Balance Sheets

(in thousands)

March 31,

December 31,

2022

2021

(unaudited)

Assets

Cash and cash equivalents

$

142,883

$

211,106

Accounts receivable, net

312,939

341,275

Inventories, net

307,892

289,243

Prepaid expenses and other current assets

109,764

89,925

Total current assets

873,478

931,549

Property and equipment, net

253,976

253,668

Goodwill

592,074

575,992

Intangible assets, net

216,292

220,418

Operating lease right-of-use assets

60,931

58,641

Other long-term assets

74,717

74,717

Total assets

$

2,071,468

$

2,114,985

Liabilities and Stockholders' Equity

Accounts payable and accrued liabilities

$

81,824

$

83,218

Accrued compensation

51,461

111,261

Deferred revenue - current

134,640

137,818

Operating lease liabilities - current

13,265

13,137

Other taxes payable

57,600

59,109

Other current liabilities

51,154

40,671

Total current liabilities

389,944

445,214

Deferred income taxes

11,583

14,249

Income tax payable - non-current

54,195

54,195

Deferred revenue - non-current

35,766

32,822

Operating lease liabilities - non-current

32,584

30,468

Debt - non-current

325,000

300,000

Other long-term liabilities

14,958

14,340

Total liabilities

$

864,030

$

891,288

Stockholders' equity:

Preferred stock

$

$

Common stock

1,319

1,323

Additional paid-in capital

1,152,349

1,129,647

Retained earnings

76,264

112,858

Accumulated other comprehensive loss

(22,494

)

(20,131

)

Total stockholders' equity

1,207,438

1,223,697

Total liabilities and stockholders' equity

$

2,071,468

$

2,114,985

National Instruments

Condensed Consolidated Statements of Income

(in thousands, except per share data, unaudited)

Three Months Ended

March 31,

2022

2021

Net sales:

Product

$

343,685

$

295,092

Software maintenance

41,571

40,090

Total net sales

385,256

335,182

Cost of sales:

Product

115,024

91,657

Software maintenance

4,203

3,757

Total cost of sales

119,227

95,414

Gross profit

266,029

239,768

Operating expenses:

Sales and marketing

120,157

116,783

Research and development

82,161

80,086

General and administrative

33,179

33,358

Total operating expenses

235,497

230,227

Operating income

30,532

9,541

Other income (expense)

33

(5,070

)

Income before income taxes

30,565

4,471

Provision (benefit) for income taxes

5,329

(24

)

Net income

$

25,236

$

4,495

Basic earnings per share

$

0.19

$

0.03

Diluted earnings per share

$

0.19

$

0.03

Weighted average shares outstanding -

Basic

132,105

131,483

Diluted

133,175

132,717

Dividends declared per share

$

0.28

$

0.27

National Instruments

Condensed Consolidated Statements of Cash Flows

(in thousands, unaudited)

Three Months Ended

March 31,

2022

2021

Cash flow from operating activities:

Net income

$

25,236

$

4,495

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

21,566

23,872

Stock-based compensation

20,128

17,189

(Gain) loss from equity-method investees

(602

)

4,173

Deferred income taxes

(3,615

)

(3,746

)

Net change in operating assets and liabilities

(66,561

)

(16,142

)

Net cash (used in) provided by operating activities

(3,848

)

29,841

Cash flow from investing activities:

Acquisitions, net of cash received

(17,510

)

Capital expenditures

(10,182

)

(8,488

)

Capitalization of internally developed software

(187

)

(226

)

Additions to other intangibles

(1,274

)

(1,018

)

Acquisitions of equity-method investments

(11,539

)

Sales and maturities of short-term investments

27,664

Net cash (used in) provided by investing activities

(29,153

)

6,393

Cash flow from financing activities:

Proceeds from revolving line of credit

25,000

Payments on term loan

(1,250

)

Proceeds from issuance of common stock

9,244

8,565

Repurchase of common stock

(31,455

)

Dividends paid

(36,976

)

(35,533

)

Net cash used in financing activities

(34,187

)

(28,218

)

Impact of changes in exchange rates on cash

(1,035

)

(1,536

)

Net change in cash and cash equivalents

(68,223

)

6,480

Cash and cash equivalents at beginning of period

211,106

260,232

Cash and cash equivalents at end of period

$

142,883

$

266,712

The following tables provide details with respect to the amount of GAAP charges related to stock-based compensation, amortization of acquisition-related intangibles and fair value adjustments, acquisition-related transaction costs, capitalization and amortization of internally developed software costs, disposal gains on sale of business, impairment losses on equity-method investments and restructuring charges that were recorded in the line items indicated below (unaudited) (in thousands):

Three Months Ended

March 31,

2022

2021

Stock-based compensation

Cost of sales

$

1,222

$

1,113

Sales and marketing

7,089

5,696

Research and development

6,088

5,714

General and administrative

5,729

4,666

Provision for income taxes

(2,655

)

(3,324

)

Total

$

17,473

$

13,865

Amortization of acquisition-related intangibles and fair value adjustments

Net sales

$

371

$

813

Cost of sales

3,803

4,272

Sales and marketing

6,139

2,171

Research and development

(320

)

Other (expense) income

516

394

Provision for income taxes

(1,355

)

(975

)

Total

$

9,154

$

6,675

Acquisition-related transaction and integration costs, restructuring charges and other

Cost of sales

$

785

$

75

Sales and marketing

307

4,648

Research and development

614

488

General and administrative

1,771

5,666

Other (expense) income

(1,866

)

3,725

Provision for income taxes

(658

)

(2,883

)

Total

$

953

$

11,719

(Capitalization) and amortization of internally developed software costs

Cost of sales

$

2,033

$

6,874

Research and development

(187

)

(226

)

Provision for income taxes

(407

)

(1,396

)

Total

$

1,439

$

5,252

National Instruments

Reconciliation of GAAP to Non-GAAP Measures

(in thousands, unaudited)

Three Months Ended

March 31,

2022

2021

Reconciliation of Net Sales to Non-GAAP Net Sales

Net sales, as reported

$

385,256

$

335,182

Impact of acquisition-related fair value adjustments

371

813

Non-GAAP net sales

$

385,627

$

335,995

Reconciliation of Gross Profit to Non-GAAP Gross Profit

Gross profit, as reported

$

266,029

$

239,768

Stock-based compensation

1,222

1,113

Amortization of acquisition-related intangibles and fair value adjustments

4,174

5,085

Acquisition transaction and integration costs. restructuring charges and other

785

75

Amortization of internally developed software costs

2,033

6,874

Non-GAAP gross profit

$

274,243

$

252,915

Non-GAAP gross margin

71.1

%

75.3

%

Reconciliation of Operating Expenses to Non-GAAP Operating Expenses

Operating expenses, as reported

$

235,497

$

230,227

Stock-based compensation

(18,906

)

(16,076

)

Amortization of acquisition-related intangibles and fair value adjustments

(5,819

)

(2,171

)

Acquisition transaction and integration costs. restructuring charges and other

(2,692

)

(10,802

)

Capitalization of internally developed software costs

187

226

Non-GAAP operating expenses

$

208,267

$

201,404

Reconciliation of Operating Income to Non-GAAP Operating Income

Operating income, as reported

$

30,532

$

9,541

Stock-based compensation

20,128

17,189

Amortization of acquisition-related intangibles and fair value adjustments

9,993

7,256

Acquisition transaction and integration costs. restructuring charges and other

3,477

10,877

Net amortization of internally developed software costs

1,846

6,648

Non-GAAP operating income

$

65,976

$

51,511

Non-GAAP operating margin

17.1

%

15.3

%

Reconciliation of Provision for income taxes to Non-GAAP Provision for income taxes

Provision for income taxes, as reported(1)

$

5,329

$

(24

)

Stock-based compensation

2,655

3,324

Amortization of acquisition-related intangibles and fair value adjustments

1,355

975

Acquisition transaction and integration costs. restructuring charges and other

658

2,883

Net amortization of internally developed software costs

407

1,396

Non-GAAP provision for income taxes(1)

$

10,404

$

8,554

(1): The income tax effect related to each non-GAAP item is calculated based on the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment, and considers the current and deferred tax impact of those adjustments.

Reconciliation of GAAP Net Income and Diluted EPS to Non-GAAP Net Income and Non-GAAP Diluted EPS

(in thousands, except per share data, unaudited)

Three Months Ended

March 31,

2022

2021

Net income, as reported

$

25,236

$

4,495

Adjustments to reconcile net income to non-GAAP net income:

Stock-based compensation

20,128

17,189

Amortization of acquisition-related intangibles and fair value adjustments

10,509

7,650

Acquisition transaction and integration costs. restructuring charges and other

1,611

14,602

Net amortization of internally developed software costs

1,846

6,648

Income tax effects and adjustments(1)

(5,075

)

(8,578

)

Non-GAAP net income

$

54,255

$

42,006

Non-GAAP net margin

14.1

%

12.5

%

Diluted EPS, as reported

$

0.19

$

0.03

Adjustments to reconcile diluted EPS to non-GAAP diluted EPS

Impact of stock-based compensation

0.15

0.13

Impact of amortization of acquisition-related intangibles and fair value adjustments

0.08

0.06

Impact of acquisition transaction and integration costs, restructuring charges and other

0.01

0.11

Impact of amortization of internally developed software costs

0.02

0.05

Income tax effects and adjustments(1)

(0.04

)

(0.06

)

Non-GAAP diluted EPS

$

0.41

$

0.32

(1): The income tax effect related to each non-GAAP item is calculated based on the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment, and considers the current and deferred tax impact of those adjustments.

Weighted average shares outstanding -

Basic

132,105

131,483

Diluted

133,175

132,717

Reconciliation of GAAP to Non-GAAP Diluted EPS Guidance

(unaudited)

Three Months Ended

June 30, 2022

Low

High

GAAP Diluted EPS, guidance

$

0.01

$

0.15

Adjustments to reconcile diluted EPS to non-GAAP diluted EPS:

Stock-based compensation

0.16

0.16

Amortization of acquisition-related intangibles and fair value adjustments

0.09

0.09

Acquisition transaction and integration costs, restructuring charges and other

0.02

0.02

Net amortization of internally developed software costs

0.01

0.01

Income tax effects and adjustments(1)

(0.04

)

(0.04

)

Non-GAAP Diluted EPS, guidance

$

0.25

$

0.39

(1): The income tax effect related to each non-GAAP item is calculated based on the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment, and considers the current and deferred tax impact of those adjustments.


Contacts

Marissa Vidaurri
Investor Relations
(512) 683-5215

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First published on Fri, Apr 29, 2022

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