Press Release Details

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

Company shares new three year model for margin expansion

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)--Apr. 28, 2022-- 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.

 

Marissa Vidaurri
Investor Relations
(512) 683-5215

Source: National Instruments Corporation

Contact Investor Relations

Marissa Vidaurri, Head of Investor Relations

marissa.vidaurri@ni.com or 512-683-5215

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