Momentum continued with strong YOY order growth across all regions and business units
Q1 2021 Highlights
- Revenue of $335 million, up 8 percent year-over-year
- GAAP gross margin of 72 percent and non-GAAP gross margin of 75 percent
- Fully diluted GAAP EPS of $0.03 and fully diluted non-GAAP EPS of $0.32
- Cash and short-term investments of $299 million as of Mar. 31, 2021
AUSTIN, Texas — (BUSINESS WIRE) — April 29, 2021 — NI (Nasdaq: NATI) today announced Q1 2021 revenue of $335 million, up 8 percent year-over-year, a record for a first quarter.
For Q1 2021, the company's orders were up 19 percent year-over-year. For Q1, year-over-year orders in the Americas region were up 8 percent, in EMEA orders were up 2 percent, and in APAC orders were up 51 percent.
Geographic revenue in U.S. dollar terms for Q1 2021 compared with Q1 2020 was up 1 percent in the Americas, up 26 percent in APAC and down 1 percent in EMEA. Historical revenue from these three regions can be found on NI’s investor website at www.ni.com/nati.
In Q1, GAAP gross margin was 72 percent and non-GAAP gross margin was 75 percent. GAAP operating expenses were $230 million, up 8 percent year-over-year. Total non-GAAP operating expenses were up 4 percent year-over-year at $201 million. GAAP operating margin was 3 percent in Q1, with GAAP operating income of $10 million, down 94 percent year-over-year, due primarily to the sale of our AWR subsidiary in Q1 2020. Non-GAAP operating margin was 15 percent in Q1, with non-GAAP operating income of $52 million, up 27 percent year-over-year.
GAAP net income for Q1 was $4 million, with fully diluted earnings per share (EPS) of $0.03, and non-GAAP net income was $42 million, with non-GAAP fully diluted EPS of $0.32.
“Momentum continued with an all-time record for first quarter orders. Demand was above typical seasonality with orders up year-over-year across all regions and business units,” said Eric Starkloff, NI CEO. “I'm inspired by our long-term growth opportunities and confident in the solid global execution of our growth strategy. Our continued focus on systems and enterprise software can serve as a strong foundation to deliver sustainable growth while creating value for all our stakeholders.”
"In Q1, we reported record revenue for a first quarter. Due to broad supply chain constraints across our industry, not all orders were shipped within the quarter resulting in an increase in backlog,” said Karen Rapp, NI CFO. “We remain confident in our ability to ultimately ship our backlog and optimistic in the continued strength in our business as we continue to align resources to higher growth opportunities in pursuit of our long-term financial model. Our ability to accelerate our growth strategy is indicative of the value customers see in our innovative platform, stability provided by our industry diversity, and our operational excellence."
As of Mar. 31, 2021, NI had $299 million in cash and short-term investments. During Q1, NI paid $36 million in dividends. The NI Board of Directors approved a dividend of $0.27 per share payable on June 1, 2021, to stockholders of record on May 10, 2021.
The company’s non-GAAP results exclude, as applicable, the impact of 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.
Company expects revenue in Q2 to be constrained by component availability with estimated order growth in the range of 20 percent to 25 percent YOY. NI currently expects Q2 revenue to be in the range of $304 million to $334 million and Q2 non-GAAP revenue, which we define as GAAP revenue adjusted to exclude the impact of purchase price accounting (which for Q2 2021 we expect to relate to our acquired OptimalPlus subsidiary) to be in the range of $305 million to $335 million. The company currently expects that GAAP diluted EPS will be in the range of ($0.02) to $0.12 for Q2, with non-GAAP diluted EPS expected to be in the range of $0.21 to $0.35. For 2021, NI estimates its non-GAAP effective tax rate to be approximately 17 percent to 18 percent.
Conference Call Information
Interested parties can listen to the Q1 2021 earnings conference call with NI Management today at www.ni.com/call or dial (855) 212-2361 and enter confirmation code 4779981. Replay information is available by calling (855) 859-2056, confirmation code 4779981, shortly after the call through May 4 at 11:59 p.m. CT or by visiting the company’s website at www.ni.com/call.
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, provision for income taxes, net income, net margin and diluted EPS for the three-month periods ending Mar. 31, 2021 and 2020, on a GAAP and non-GAAP basis. In this news release the company has also presented its non-GAAP revenue, and guidance for its Q2 non-GAAP revenue as well as guidance for its Q2 non-GAAP fully diluted EPS. In this news release revenue is also referred to as net sales, and non-GAAP revenue is also referred to as non-GAAP net sales. In this news release the company has also presented its estimated non-GAAP effective tax rate for 2021. The company includes a reconciliation of the non-GAAP results to the GAAP results in the tables accompanying this news release. 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. Management believes that including the non-GAAP results assists investors in assessing the company’s operational performance and its performance relative to its competitors. The company presents these non-GAAP results as a complement to results provided in accordance with GAAP, and these results should not be regarded as a substitute for GAAP. Management uses these non-GAAP measures to manage and assess the profitability and performance of its business and does not consider purchase accounting fair value adjustments, stock-based compensation expense, 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 businesses, impairment losses on equity-method investments and capitalization and amortization of internally developed software costs in managing its operations. Specifically, management uses non-GAAP measures to plan and forecast future periods; to establish operational goals; to compare with its business plan and individual operating budgets; to measure management performance for the purposes of executive compensation, including payments to be made under bonus plans; to assist the public in measuring the company’s performance relative to the company’s long-term public performance goals; to allocate resources; and, relative to the company’s historical financial performance, to enable comparability between periods. Management also considers such non-GAAP results to be an important supplemental measure of its performance.
This news release discloses the company’s EBITDA for the three-month periods ending Mar. 31, 2021 and 2020. The company believes that including the EBITDA results assists investors in assessing the company’s operational performance relative to its competitors. A reconciliation of EBITDA to GAAP net income is included with this news release.