National Instruments reports record quarterly revenue

27 July 2012

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National Instruments is announcing Q2 revenue of $292 million, an all-time revenue record and a 15 per cent increase from Q2 2011. In constant currency terms, Q2 revenue increased 18 per cent from Q2 2011. Orders were up 24 per cent year-over-year in Q2, with backlog increasing by $16 million and short-term deferred revenue increasing by $5 million during the quarter. In Q2, the company’s orders greater than $20,000 grew 40 per cent year-over-year, and the average order size reached a new record of approximately $5,300.

GAAP net income for Q2 was $26 million, with fully diluted earnings per share (EPS) of $0.22, and non-GAAP net income was $33 million, with non-GAAP fully diluted EPS of $0.27. EBITDA, or Earnings Before Interest, Taxes, Depreciation and Amortisation, was $47 million, or $0.38 per share.

In Q2, GAAP gross margin was 76 per cent and non-GAAP gross margin was 77 per cent, down sequentially from 77 and 78 per cent, respectively.

The company’s non-GAAP results exclude the impact of stock-based compensation, amortisation of acquisition-related intangibles, acquisition accounting for deferred revenue, acquisition-related transaction costs and the adjustment of NI’s GSA accrual. Reconciliations of the company’s GAAP and non-GAAP results are included as part of this news release.

A significant contributor to National Instruments’ success in the first half of 2012 was winning the largest application sale in the history of the company. This application involves the use of NI LabVIEW system design software and the NI PXI hardware platform to rapidly develop a production test system. This test system offers the customer outstanding performance and accuracy at a very low cost of test per unit. In H1 2012, National Instruments received $40 million in orders for this application – $25 million of this was recognised as revenue in Q1 and Q2, and the company anticipates recognising the remainder in Q3.

Dr James Truchard, co-founder, president and CEO, says: “The resilience of our business despite a significant weakening of the global industrial economy demonstrates the strength of our long-term approach. The strong growth in larger orders and the record quarter for PXI products illustrate the increased acceptance of our technology, and I remain optimistic that our strategic investments over the last decade will support our goal of achieving $2 billion in annual revenue by 2016.”

Excluding NI’s recent AWR and Phase Matrix acquisitions, geographic revenue in US dollar terms for Q2 2012 compared to Q2 2011 was down 2 per cent in the Americas, down 4 per cent in Europe and up 45 per cent in Asia. In local currency terms, revenue was up 1 per cent in Europe and up 48 per cent in Asia. Also during the quarter, the acquisitions of AWR and Phase Matrix contributed $10 million of revenue. Including these acquisitions, revenue was up 9 per cent in the Americas.

As of June 30, NI had $351 million in cash and short-term investments. The National Instruments Board of Directors approved a quarterly dividend of $0.14 per share on the company’s common stock payable on August 31 to stockholders of record on August 13.

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