UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

July 28, 2022
____________________

National Instruments Corporation
(Exact name of registrant as specified in its charter)

Delaware
 
000-25426
 
74-1871327
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)

11500 North MoPac Expressway
Austin, Texas 78759
(Address of principal executive offices, including zip code)

(512) 683-0100
(Registrant's telephone number, including area code)

N/A
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value
NATI
The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02
Results of Operations and Financial Condition

Attached hereto as Exhibit 99.1 and incorporated by reference herein is the text of the press release of National Instruments Corporation (“NI”), dated July 28, 2022, regarding the unaudited financial results for NI’s second fiscal quarter ended June 30, 2022.

The information in the press release attached hereto as Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

Item 8.01
Other Events

On July 28, 2022, NI announced that its Board of Directors declared a dividend of $0.28 per share payable on August 29, 2022 to stockholders of record at the close of business on August 8, 2022. A copy of the press release announcing the dividend is attached hereto as Exhibit 99.1.


Item 9.01
Financial Statements and Exhibits

(d)  Exhibits.

Exhibit No.
Description
 
99.1
 
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
NATIONAL INSTRUMENTS CORPORATION
   
By:
/s/ R. Eddie Dixon, Jr.
 
 
Name: R. Eddie Dixon, Jr.
Title:  Chief Legal Officer, Senior Vice President & Secretary

Date:  July 28, 2022
Contact:  
Marissa Vidaurri
 
Head of Investor Relations
 
(512) 683-5215


NI Reports Record Revenue for a Second Quarter, up 14 Percent YOY
Company reaffirms guidance for full year 2022 and increases expectations for full year 2023

Q2 2022 Summary
Record GAAP revenue for a second quarter of $396 million, up 14 percent year over year
Record orders for a second quarter,  up 20 percent year over year
Strong diluted GAAP EPS of $0.09 and diluted non-GAAP EPS of $0.36
Cash and cash equivalents of $111 million as of June 30, 2022

AUSTIN, Texas - July 28, 2022 - National Instruments Corporation (Nasdaq: NATI) today announced Q2 2022 revenue of $396 million, up 14 percent year over year, a record for a second quarter.

In Q2 2022, the total value of the company's orders was up 20 percent year over year. For Q2, year over year orders were up 33 percent in the Americas, up 16 percent in APAC, and up 7 percent in EMEA.

In Q2, GAAP gross margin was 68 percent and non-GAAP gross margin was 71 percent. Total GAAP operating expenses were $247 million and non-GAAP operating expenses were $218 million. GAAP operating income for Q2 was $21 million with non-GAAP operating income of $61 million. In Q2, GAAP operating margin was 5 percent with non-GAAP operating margin of 15 percent.

GAAP net income for Q2 was $12 million and non-GAAP net income was $48 million, with GAAP diluted EPS of $0.09 and non-GAAP diluted EPS of $0.36.

“NI has delivered strong performance over the last several quarters, driven by our highly differentiated technologies and offerings targeted at segments with powerful growth drivers, including electric and autonomous vehicles, wireless communication, and new space technology. We believe our focused strategy is leading to ongoing share gains,” said Eric Starkloff, NI President and CEO. “Momentum continued in the second quarter with orders up 20 percent year over year and revenue up 14 percent year over year. These results bring us increased confidence in achieving revenue growth and earnings per share in line with current consensus estimates."

“We continue to see the benefits of the actions we have taken to increase scale into our business model. Despite the temporary headwinds to gross margin, we have improved diluted non-GAAP EPS by 15 percent year over year in the first half of 2022. Looking ahead, we will continue to sharpen our focus on making intentional investments for growth and on streamlining processes for greater efficiency,” said Karen Rapp, NI CFO. "With many key initiatives underway, we are confident in our ability to deliver on our commitment to non-GAAP operating margin improvement. Even in a potential recessionary environment, we now expect to increase our non-GAAP operating margin by 300 basis points in 2023, followed by 100 basis points of additional improvement each year through 2025.”

As of June 30, 2022, NI had $111 million in cash and cash equivalents. During the second quarter, NI paid $37 million in dividends and repurchased approximately 987,000 shares of our common stock at an average price of $39.06 per share. The NI Board of Directors approved a quarterly dividend of $0.28 per share payable on August 29, 2022, to stockholders of record on August 8, 2022.
NI'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 loss on acquisitions, restructuring charges, tax reform charges, disposal gains on buildings and related charitable contributions, tax effects related to businesses held for sale, gain on sale of businesses, and capitalization and amortization of internally developed software costs. Reconciliations of the NI's GAAP and non-GAAP results are included as part of this news release.

YTD 2022 Summary
Record GAAP revenue of $781 million, up 15 percent year over year
Record orders, up 22 percent year over year
Strong diluted GAAP EPS of $0.28, up 75 percent year over year and record diluted non-GAAP EPS of $0.77, up 15 percent year over year

Guidance
Q3 GAAP revenue to be in the range of $410 million to $440 million, up 16 percent year over year at the midpoint
GAAP diluted EPS to be in the range of $0.34 to $0.48 for Q3, up 105 percent year over year at the midpoint
Non-GAAP diluted EPS expected to be in the range of $0.46 to $0.60, up 26 percent year over year at the midpoint

Conference Call Information

Today, NI management will host a call with the investment community to discuss the company's financial performance in the second quarter. Investors can listen to the Q2 2022 earnings conference call beginning at 4:00 p.m. CT today. This event will be webcast in listen-only mode. Listeners may log on to the call at www.ni.com/investor-relations under the “Events and Presentations” section and select “Q2 2022 NATI Earnings Conference Call” to participate. The webcast will remain on the company site for 90 days.

Annual Investor Conference

As is our annual tradition, NI management will host an investor conference in September with more details to be shared in the coming weeks. Despite expectations for a weaker macro entering 2023, we believe we have several factors that will drive our performance – our exposure to key growth opportunities and secular cycles, the favorable gross margin impacts as supply chain pressures ease, the growing impact of recurring revenue, and the full year impact of our expense management focus. In fact, our current expectation is for strengthening revenue growth and non-GAAP operating margin growth well above our 100 bps commitment in 2023. We plan to walk through these elements to our model and discuss our 3 year strategic plan at this event.

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 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. Additionally, certain non-GAAP financial measures presented on a forward-looking basis, such as non-GAAP operating margin, were not reconciled to the comparable GAAP financial measures because the reconciliation could not be performed without unreasonable efforts due to the unpredictability of the amounts and timing of events affecting the items we exclude from non-GAAP measures. 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 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 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 turn backlog to revenue, our ability to drive customer demand through focus on high growth opportunities, the impacts of war in Europe, supply chain constraints and software licensing model transition on our financial results, and our guidance and expectations for our Q3 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 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 and ni.com and Engineer Ambitiously are trademarks of National Instruments Corporation. 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)
 
 
 
June 30,
   
December 31,
 
 
 
2022
   
2021
 
 
 
(unaudited)
       
Assets
           
Cash and cash equivalents
 
$
110,873
   
$
211,106
 
Accounts receivable, net
   
356,077
     
341,275
 
Inventories, net
   
343,627
     
289,243
 
Prepaid expenses and other current assets
   
122,361
     
89,925
 
Total current assets
   
932,938
     
931,549
 
Property and equipment, net
   
258,155
     
253,668
 
Goodwill
   
603,793
     
575,992
 
Intangible assets, net
   
237,059
     
220,418
 
Operating lease right-of-use assets
   
64,476
     
58,641
 
Other long-term assets
   
71,435
     
74,717
 
Total assets
 
$
2,167,856
   
$
2,114,985
 
 
               
Liabilities and Stockholders' Equity
               
Accounts payable and accrued expenses
 
$
91,227
   
$
83,218
 
Accrued compensation
   
50,199
     
111,261
 
Deferred revenue - current
   
122,029
     
137,818
 
Operating lease liabilities - current
   
14,813
     
13,137
 
Other taxes payable
   
51,958
     
59,109
 
Other current liabilities
   
44,148
     
40,671
 
Total current liabilities
   
374,374
     
445,214
 
Deferred income taxes
   
16,575
     
14,249
 
Income tax payable - non-current
   
40,646
     
54,195
 
Deferred revenue - non-current
   
42,943
     
32,822
 
Operating lease liabilities - non-current
   
34,520
     
30,468
 
Debt - non-current
   
475,000
     
300,000
 
Other long-term liabilities
   
15,291
     
14,340
 
Total liabilities
 
$
999,349
   
$
891,288
 
                 
Stockholders' equity:
               
Common stock
   
1,323
     
1,323
 
Additional paid-in capital
   
1,173,131
     
1,129,647
 
Retained earnings
   
21,533
     
112,858
 
Accumulated other comprehensive loss
   
(27,480
)
   
(20,131
)
Total stockholders' equity
   
1,168,507
     
1,223,697
 
Total liabilities and stockholders' equity
 
$
2,167,856
   
$
2,114,985
 


National Instruments
 
Condensed Consolidated Statements of Income
 
(in thousands, except per share data, unaudited)
 
 
                 
 
 
Three Months Ended
   
Six Months Ended
 
 
 
June 30,
   
June 30,
 
 
 
2022
   
2021
   
2022
   
2021
 
 
                       
Net sales:
                       
Product
 
$
354,805
   
$
306,490
   
$
698,489
   
$
601,583
 
Software maintenance
   
40,710
     
40,206
     
82,281
     
80,295
 
Total net sales
   
395,515
     
346,696
     
780,770
     
681,878
 
 
                               
Cost of sales:
                               
Product
   
123,307
     
95,722
     
238,332
     
187,379
 
Software maintenance
   
4,167
     
3,516
     
8,370
     
7,273
 
Total cost of sales
   
127,474
     
99,238
     
246,702
     
194,652
 
 
                               
Gross profit
   
268,041
     
247,458
     
534,068
     
487,226
 
 
   
67.8%

   
71.4%

   
68.4%

   
71.5%

Operating expenses:
                               
Sales and marketing
   
124,908
     
111,199
     
245,064
     
227,983
 
Research and development
   
85,589
     
81,434
     
167,750
     
161,520
 
General and administrative
   
36,772
     
30,277
     
69,949
     
63,636
 
Total operating expenses
   
247,269
     
222,910
     
482,763
     
453,139
 
Operating income
   
20,772
     
24,548
     
51,305
     
34,087
 
Other expense
   
(3,505
)
   
(2,963
)
   
(3,473
)
   
(8,031
)
Income before income taxes
   
17,267
     
21,585
     
47,832
     
26,056
 
Provision for income taxes
   
4,833
     
4,279
     
10,162
     
4,254
 
Net income
 
$
12,434
   
$
17,306
   
$
37,670
   
$
21,802
 
 
                               
Basic earnings per share
 
$
0.09
   
$
0.13
   
$
0.29
   
$
0.17
 
Diluted earnings per share
 
$
0.09
   
$
0.13
   
$
0.28
   
$
0.16
 
 
                               
Weighted average shares outstanding -
                               
Basic
   
131,973
     
132,498
     
132,039
     
131,996
 
Diluted
   
132,708
     
133,539
     
132,948
     
133,157
 
 
                               
Dividends declared per share
 
$
0.28
   
$
0.27
   
$
0.56
   
$
0.54
 

   
Condensed Consolidated Statements of Cash Flows
 
(in thousands, unaudited)
 
   
Six Months Ended June 30,
 
   
2022
   
2021
 
       
Cash flow from operating activities:
           
Net income
 
$
37,670
   
$
21,802
 
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
   
45,742
     
50,024
 
Stock-based compensation
   
40,804
     
37,208
 
Loss from equity-method investees
   
(131
)
   
5,360
 
Deferred income taxes
   
943
     
1,301
 
Net change in operating assets and liabilities
   
(169,930
)
   
(63,372
)
Net cash (used in) provided by operating activities
   
(44,902
)
   
52,323
 
                 
Cash flow from investing activities:
               
Acquisitions, net of cash received
   
(72,802
)
   
(19,784
)
Capital expenditures
   
(24,509
)
   
(17,411
)
Capitalization of internally developed software
   
(187
)
   
(721
)
Additions to other intangibles
   
(2,478
)
   
(1,519
)
Acquisitions of equity-method investments
   
     
(12,551
)
Sales and maturities of short-term investments
   
     
45,671
 
Net cash used in  investing activities
   
(99,976
)
   
(6,315
)
                 
Cash flow from financing activities:
               
Proceeds from revolving loan facility
   
175,000
     
100,000
 
Payments on term loan
   
     
(98,750
)
Debt issuance costs
   
     
(1,993
)
Proceeds from issuance of common stock
   
17,859
     
17,239
 
Repurchase of common stock
   
(70,000
)
   
 
Dividends paid
   
(74,034
)
   
(71,428
)
Net cash used in financing activities
   
48,825
     
(54,932
)
                 
Impact of changes in exchange rates on cash
   
(4,180
)
   
(887
)
                 
Net change in cash and cash equivalents
   
(100,233
)
   
(9,811
)
Cash and cash equivalents at beginning of period
   
211,106
     
260,232
 
Cash and cash equivalents at end of period
 
$
110,873
   
$
250,421
 


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 and integration costs, capitalization and amortization of internally developed software costs, restructuring charges, gains on sale of business/assets, and other that were recorded in the line items indicated below (unaudited) (in thousands)
 
                         
   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
                         
   
2022
   
2021
   
2022
   
2021
 
Stock-based compensation
                       
Cost of sales
 
$
1,253
   
$
1,191
   
$
2,475
   
$
2,305
 
Sales and marketing
   
7,202
     
6,922
     
14,291
     
12,617
 
Research and development
   
6,271
     
6,180
     
12,359
     
11,893
 
General and administrative
   
5,951
     
5,854
     
11,680
     
10,520
 
Provision for income taxes
   
(1,993
)
   
(3,916
)
   
(4,648
)
   
(7,241
)
Total
 
$
18,684
   
$
16,231
   
$
36,157
   
$
30,094
 
                                 
Amortization of acquisition-related intangibles and fair value adjustments
                               
Net sales
 
$
371
   
$
738
   
$
742
   
$
1,551
 
Cost of sales
   
6,415
     
4,226
     
10,218
     
8,497
 
Sales and marketing
   
5,573
     
2,357
     
11,712
     
4,528
 
Research and development
   
     
     
(320
)
   
 
Other (expense) income
   
503
     
554
     
1,019
     
948
 
Provision for income taxes
   
(2,094
)
   
(979
)
   
(3,530
)
   
(1,969
)
Total
 
$
10,768
   
$
6,896
   
$
19,841
   
$
13,555
 
                                 
Acquisition transaction and integration costs, restructuring charges, and other
                               
Cost of sales
 
$
1,159
   
$
(118
)
 
$
1,944
   
$
(43
)
Sales and marketing
   
2,339
     
839
     
2,646
     
5,487
 
Research and development
   
487
     
548
     
1,102
     
1,036
 
General and administrative
   
1,248
     
873
     
3,019
     
6,539
 
Other (expense) income
   
(265
)
   
280
     
(2,132
)
   
4,006
 
Provision for income taxes
   
(779
)
   
(578
)
   
(1,356
)
   
(3,463
)
Total
 
$
4,189
   
$
1,844
   
$
5,223
   
$
13,562
 
                                 
(Capitalization) and amortization of internally developed software costs
                               
Cost of sales
 
$
1,896
   
$
6,227
   
$
3,929
   
$
13,101
 
Research and development
   
     
(495
)
   
(187
)
   
(721
)
Provision for income taxes
   
(436
)
   
(1,204
)
   
(843
)
   
(2,600
)
Total
 
$
1,460
   
$
4,528
   
$
2,899
   
$
9,780
 

National Instruments
 
Reconciliation of GAAP to Non-GAAP Measures
 
(in thousands, unaudited)
 
 
                       
   
Three Months Ended
   
Six Months Ended
 
   
June 30,
   
June 30,
 
   
2022
   
2021
   
2022
   
2021
 
                         
Reconciliation of Net sales to Non-GAAP Net sales
                       
Net sales, as reported
 
$
395,515
     $
346,696
     $
780,770
   
$
681,878
 
plus: Impact of acquisition-related fair value adjustments
   
371
     
738
     
742
     
1,551
 
Non-GAAP net sales
 
$
395,886
     
347,434
     
781,512
   
$
683,429
 
                                 
Reconciliation of Gross Profit to Non-GAAP Gross Profit
                 
Gross profit, as reported
 
$
268,041
   
$
247,458
   
$
534,068
   
$
487,226
 
Stock-based compensation
   
1,253
     
1,191
     
2,475
     
2,305
 
Amortization of acquisition-related intangibles and fair value adjustments
   
6,786
     
4,964
     
10,960
     
10,048
 
Acquisition transaction and integration costs, restructuring charges and other
   
1,159
     
(118
)
   
1,944
     
(43
)
Amortization of internally developed software costs
   
1,896
     
6,227
     
3,929
     
13,101
 
Non-GAAP gross profit
 
$
279,135
   
$
259,722
   
$
553,376
   
$
512,637
 
Non-GAAP gross margin
   
70.5%

   
74.8%

   
70.8%

   
75.0%

                                 
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses
                 
Operating expenses, as reported
 
$
247,269
   
$
222,910
   
$
482,763
   
$
453,139
 
Stock-based compensation
   
(19,424
)
   
(18,956
)
   
(38,330
)
   
(35,030
)
Amortization of acquisition-related intangibles and fair value adjustments
   
(5,573
)
   
(2,357
)
   
(11,392
)
   
(4,528
)
Acquisition transaction and integration costs, restructuring charges and other
   
(4,074
)
   
(2,260
)
   
(6,767
)
   
(13,062
)
Capitalization of internally developed software costs
   
     
495
     
187
     
721
 
Non-GAAP operating expenses
 
$
218,198
   
$
199,832
   
$
426,461
   
$
401,240
 
                                 
Reconciliation of Operating Income to Non-GAAP Operating Income
                 
Operating income, as reported
 
$
20,772
   
$
24,548
   
$
51,305
   
$
34,087
 
Stock-based compensation
   
20,677
     
20,147
     
40,805
     
37,335
 
Amortization of acquisition-related intangibles and fair value adjustments
   
12,359
     
7,321
     
22,352
     
14,576
 
Acquisition transaction and integration costs, restructuring charges and other
   
5,233
     
2,142
     
8,711
     
13,019
 
Net amortization of internally developed software costs
   
1,896
     
5,732
     
3,742
     
12,380
 
Non-GAAP operating income
 
$
60,937
   
$
59,890
   
$
126,915
   
$
111,397
 
Non-GAAP operating margin
   
15.4%

   
17.2%

   
16.2%

   
16.3%

                                 
Reconciliation of Provision for income taxes to Non-GAAP Provision for income taxes(1)
                 
Provision for income taxes, as reported
 
$
4,833
   
$
4,279
   
$
10,162
   
$
4,254
 
Stock-based compensation
   
1,993
     
3,916
     
4,648
     
7,241
 
Amortization of acquisition-related intangibles and fair value adjustments
   
2,094
     
979
     
3,530
     
1,969
 
Acquisition transaction and integration costs, restructuring charges and other
   
779
     
578
     
1,356
     
3,463
 
Net amortization of internally developed software costs
   
436
     
1,204
     
843
     
2,600
 
Non-GAAP provision for income taxes(1)
 
$
10,135
   
$
10,956
   
$
20,539
   
$
19,527
 
(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
   
Six Months Ended
 
 
 
June 30,
   
June 30,
 
 
 
2022
   
2021
   
2022
   
2021
 
 
                       
Net income, as reported
 
$
12,434
   
$
17,306
   
$
37,670
   
$
21,802
 
Adjustments to reconcile net income to non-GAAP net income:
                               
  Stock-based compensation
   
20,677
     
20,147
     
40,805
     
37,335
 
Amortization of acquisition-related intangibles and fair value adjustments
   
12,862
     
7,875
     
23,371
     
15,524
 
Acquisition transaction and integration costs, restructuring charges and other
   
4,968
     
2,422
     
6,579
     
17,025
 
Net amortization of internally developed software costs
   
1,896
     
5,732
     
3,742
     
12,380
 
Income tax effects and adjustments(1)
   
(5,302
)
   
(6,677
)
   
(10,377
)
   
(15,273
)
Non-GAAP net income
 
$
47,535
   
$
46,805
   
$
101,790
   
$
88,793
 
Non-GAAP net margin
   
12.0%

   
13.5%

   
13.0%

   
13.0%

   
Diluted EPS, as reported
 
$
0.09
   
$
0.13
   
$
0.28
   
$
0.16
 
Adjustment to reconcile diluted EPS to non-GAAP diluted EPS
                               
 Stock-based compensation
   
0.16
     
0.15
     
0.31
     
0.28
 
Amortization of acquisition-related intangibles and fair value adjustments
   
0.10
     
0.06
     
0.18
     
0.12
 
Acquisition transaction and integration costs, restructuring charges and other
   
0.04
     
0.02
     
0.05
     
0.13
 
Net amortization of internally developed software costs
   
0.01
     
0.04
     
0.03
     
0.09
 
Income tax effects and adjustments(1)
   
(0.04
)
   
(0.05
)
   
(0.08
)
   
(0.11
)
Non-GAAP diluted EPS
 
$
0.36
   
$
0.35
   
$
0.77
   
$
0.67
 
(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 - Diluted
   
132,708
     
133,539
     
132,948
     
133,157
 



Reconciliation of GAAP Diluted EPS to Non-GAAP Diluted EPS Guidance
 
(unaudited)
 
 
 
Three Months Ended
 
 
 
September 30, 2022
 
 
           
 
 
Low
   
High
 
GAAP Diluted EPS, guidance
 
$
0.34
   
$
0.48
 
Adjustment to reconcile diluted EPS to non-GAAP diluted EPS:
               
Stock-based compensation
   
0.15
     
0.15
 
Amortization of acquisition-related intangibles and fair value adjustments
   
0.10
     
0.10
 
Acquisition transaction and integration costs, restructuring charges, and other(1)
   
(0.12
)
   
(0.12
)
Income tax effects and adjustments(2)
   
(0.01
)
   
(0.01
)
Non-GAAP Diluted EPS, guidance
 
$
0.46
   
$
0.60
 
(1): Includes $23 million of pre-tax income related to disposal gains from sale of buildings and property, partially offset by charitable contribution using a portion of the sale proceeds.
 
(2): 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.