National Instruments Reports Record Quarterly Revenue

Company Reports Record Net Income for a Quarter and a Full Year 

Q4 2019 Highlights

  • Revenue of $367 million, up 2 percent year over year
  • Orders up 9 percent year over year
  • GAAP gross margin of 75 percent
  • Non-GAAP gross margin of 78 percent
  • GAAP net income of $59 million
  • Non-GAAP net income of $73 million
  • Diluted GAAP EPS of $0.45
  • Diluted non-GAAP EPS of $0.56
  • EBITDA of $71 million
  • Cash and short-term investments of $433 million as of Dec. 31, 2019

AUSTIN, Texas — (BUSINESS WIRE) — January 30, 2020 — National Instruments (Nasdaq: NATI) today announced Q4 2019 revenue of $367 million, up 2 percent year over year and an all-time quarterly record.

In Q4 2019, the value of the company’s total orders was up 9 percent year over year; orders over $20,000 were up 19 percent year over year; and orders under $20,000 were down 5 percent year over year.

GAAP net income for Q4 was $59 million, with diluted earnings per share ("EPS") of $0.45, and non-GAAP net income was $73 million, with non-GAAP diluted EPS of $0.56. EBITDA, or Earnings Before Interest, Taxes, Depreciation and Amortization, was $71 million for Q4.

In Q4, GAAP gross margin was 75 percent and non-GAAP gross margin was 78 percent. Total Q4 GAAP operating expenses were $223 million, up 6 percent year over year. Total Q4 non-GAAP operating expenses were $201 million, up 1 percent year over year. GAAP operating margin was 15 percent in Q4, with GAAP operating income of $54 million, down 13 percent year over year. Non-GAAP operating margin was 23 percent in Q4, with non-GAAP operating income of $84 million, up 3 percent year over year.

"I am proud of our ability to grow in a tough industrial economy with record quarterly revenue. I believe this is a reflection of our realignment, execution to our strategy and commitment to operational excellence,” said Alex Davern, NI CEO. "I am pleased with our 9 percent year-over-year order growth in Q4 and believe we are entering 2020 with renewed momentum. I remain confident in the continued success of NI under Eric, our new CEO."

“I am honored to assume the leadership of a company that delivers innovative systems to our customers that are building some of the world's most impactful technology. As we begin a new decade of business, I believe we are in a stronger position than ever,” said Eric Starkloff, NI President and COO. “We have created a solid foundation which we believe will help accelerate our growth and achieve our long-term aspirations for all our stakeholders.”

Geographic revenue in U.S. dollar terms for Q4 2019 compared with Q4 2018 was down 1 percent in the Americas, up 18 percent in APAC and down 7 percent in EMEIA. Excluding the impact of foreign currency exchange, revenue was down 1 percent in the Americas, up 19 percent in APAC and down 5 percent in EMEIA. Historical revenue from these three regions can be found on NI’s investor website at

As of Dec. 31, 2019, NI had $433 million in cash and short-term investments with $224 million in cash generated from operations this year. During Q4, NI paid $33 million in dividends and repurchased approximately 800,000 shares of our common stock at an average price of $42.98 per share. For the year, we returned over $300 million to our shareholders through dividends and stock repurchases, including the repurchase of 4 million shares at an average price of $42.83 per share. The NI Board of Directors has approved a dividend increase of 4%, to $0.26 per share, payable on March 9, 2020, to stockholders of record on February 18, 2020.

The company’s non-GAAP results exclude, as applicable, the impact of stock-based compensation, amortization of acquisition-related intangibles, acquisition-related transaction costs, taxes levied on the transfer of acquired intellectual property, foreign exchange loss on acquisitions, restructuring charges, tax reform charges, disposal gain on buildings and related charitable contributions, tax effects related to businesses held for sale, gain on divestment, 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.

FY 2019 Highlights

  • Revenue of $1.35 billion, flat year over year
  • GAAP gross margin of 75 percent
  • Non-GAAP gross margin of 78 percent
  • GAAP net income of $162 million, up 5 percent year over year
  • Non-GAAP net income of $217 million, up 4 percent year over year
  • Diluted GAAP EPS of $1.22
  • Diluted non-GAAP EPS of $1.63
  • EBITDA of $246 million
  • Dividends paid of $132 million, or $1.00 per share

In 2019, GAAP operating expenses were $842 million, down 1 percent year over year, and non-GAAP operating expenses were $798 million, down 2 percent year over year. GAAP net income in 2019 was $162 million, up 5 percent year over year, and non-GAAP net income in 2019 was $217 million, up 4 percent year over year.

"I am proud of our performance as we closed out the year strong. We exceeded our goal of 18% non-GAAP operating margin and achieved record net income in both Q4 and for the year,” said Karen Rapp, NI CFO. “I believe our strong results show the stability provided by our broad customer base and end-market diversity, the value customers see in our innovative platform, and our ability to scale.”


NI currently expects Q1 revenue to be in the range of $308 million to $338 million, which would be a new Q1 record at the midpoint. At the midpoint, this represents an increase of 6% year-over-year excluding our recently divested AWR business. The company currently expects that GAAP diluted EPS will be in the range of $0.99 to $1.13 for Q1, with non-GAAP diluted EPS expected to be in the range of $0.24 to $0.38. GAAP EPS guidance for Q1 includes $0.93 from the gain on the sale of our AWR business. For 2020, NI estimates its non-GAAP effective tax rate to be approximately 17 percent to 18 percent.

Conference Call Information and Availability of Presentation Materials

Interested parties can listen to the Q4 2019 earnings conference call with NI management today, January 30, at 4:00 p.m. CT at or dial (855) 212-2361 and enter confirmation code 6598515. Replay information is available by calling (855) 859-2056, confirmation code 6598515, shortly after the call through February 1 at 11:59 p.m. CT or by visiting the company’s website at

Non-GAAP Presentation

In addition to disclosing results determined in accordance with GAAP, NI discloses certain non-GAAP operating results and non-GAAP information that exclude certain charges. In this news release, the company has presented its gross profit, gross margin, operating expenses, operating income, operating margin, income before income taxes, provision for income taxes, net income, net margin and diluted EPS for the three-month and 12-month periods ending Dec. 31, 2019 and 2018, on a GAAP and non-GAAP basis. NI is also providing guidance on its non-GAAP diluted EPS and expected effective tax rate. 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.

In the quarter ended June 30, 2018, NI began moving toward more frequent releases for many of its software products. Specifically, for many of its software development projects, NI started applying agile development methodologies, which are characterized by a more dynamic development process with more frequent and iterative revisions to a product release's features and functions as the software is being developed. Due to the shorter development cycle and focus on rapid production associated with agile development, NI expects that for a significant majority of its software development projects the costs incurred subsequent to the achievement of technological feasibility will be immaterial in future periods and it expects to record significantly less capitalized software development costs than under its historical software development approaches. NI also expects amortization of previously capitalized software development costs to steadily decline as previously capitalized software development costs become fully amortized over the next four years. As a result, beginning with its non-GAAP metrics for the three months ended June 30, 2018, NI has been excluding the net effects of capitalization and amortization of software development costs from its non-GAAP operating results, along with its previously excluded non-GAAP items, and providing a reconciliation of such non-GAAP results to its GAAP results. NI believes these changes are useful to investors as they provide greater comparability between its R&D spend in future periods. NI also makes available on its website its historical non-GAAP results, excluding the effects of software capitalization and amortization together with other applicable non-GAAP adjustments, for the fiscal quarters ended March 31, 2005 through December 31, 2019.

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