27 Jul 2012

National Instruments Reports Record Quarterly Results

National Instruments quarterly results released on 27 July 2012 showed revenues for quarter 2 of $292 million. This is record for the company and has been achieved with a 15% increase over the same period last year.

Orders were up 24% year-on-year for the quarter, with backlog increasing by $16 million and short-term deferred revenue increasing by $5 million during the quarter. Also the large value orders, i.e. those over $20 000 grew 40%, with the average order size increasing to about $5,300.

GAAP (Generally Accepted Accounting Principles) 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 Amortization, was $47 million, or $0.38 per share.

However it was found that during this quarter, GAAP gross margin was 76% and non-GAAP gross margin was 77% down from 77% and 78% respectively.

Although gross margin is down, to some degree this is an indicator of the tough trading conditions worldwide especially in areas such as the Eurozone where extreme difficulties are being experienced by many companies resulting in the NI margin being depressed.

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 solution. This test solution 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 recognized as revenue in Q1 and Q2, and the company anticipates recognizing the remainder in Q3.

"The resilience of our business despite a significant weakening of the global industrial economy demonstrates the strength of our long-term approach," said Dr. James Truchard, co-founder, president and CEO. "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."

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