NI Reports Second Quarter 2020 Results

  • NI (formerly National Instruments) reports second quarter revenue of $301 Million.
  • NI currently expects Q3 GAAP revenue to be in the range of $283 million to $323 million and Q3 non-GAAP revenue, which adjusts for the impact of purchase price accounting related to OptimalPlus, to be in the range of $285 million to $325 million.

# Q2 2020 Summary
– Revenue of $301 million, down 10 percent year over year and down 8 percent year over year on an organic basis
– GAAP gross margin of 71 percent
– Non-GAAP gross margin of 74 percent
– GAAP net income of $11 million and non-GAAP net income of $34 million
– EBITDA of $33 million for second quarter
– Cash and short-term investments of $608 million as of June 30, 2020, a significant portion of which was used to fund the OptimalPlus acquisition on July 2, 2020
# H1 2020 Summary
-Revenue of $611 million, down 5 percent, and down 3 percent on an organic basis, as compared to the first six months of 2019
-GAAP net income of $144 million, which includes $123 million gain, net of tax, related to AWR divestment
– Non-GAAP net income of $68 million
NI announced Q2 2020 revenue of $301 million, down 10 percent year over year and down 3 percent sequentially. Organic revenue, which we define as GAAP revenue excluding the impact of acquisitions and divestitures completed within the past twelve months, declined 8 percent year over year.

In Q2 2020 the value of NI’s organic orders, which we define as the value of the company’s orders excluding the impact of acquisitions and divestitures noted above, was down 6 percent year over year; organic orders over $20,000 were up 4 percent year over year; and organic orders under $20,000 were down 21 percent year over year. For Q2, on an organic order basis, the Americas region had year over year order growth of 1 percent, EMEA orders were down 23 percent, and in APAC orders were flat during the quarter. We previously included order value and net sales attributable to our operations in India within the EMEA region. In the second quarter of 2020, we began including these amounts within the APAC geographic region, to reflect recent changes within our organizational structure. India represents approximately 2 percent of our total orders.

Geographic revenue in U.S. dollar terms for Q2 2020 compared with Q2 2019 was down 6 percent in the Americas, down 7 percent in APAC and down 19 percent in EMEA. Excluding the impact of foreign currency exchange, revenue was down 5 percent in the Americas, down 4 percent in APAC and down 17 percent in EMEA.

In Q2, GAAP gross margin was 71 percent and non-GAAP gross margin was 74 percent. Total GAAP operating expenses were $199 million, down 9 percent year over year. Total non-GAAP operating expenses were down 11 percent year over year at $181 million. GAAP operating margin was 5 percent in Q2, with GAAP operating income of $16 million. Non-GAAP operating margin was 14 percent in Q2, with non-GAAP operating income of $44 million.

GAAP net income for Q2 was $11 million and non-GAAP net income was $34 million at the midpoint of our guidance. EBITDA, or Earnings Before Interest, Taxes, Depreciation and Amortization, was $33 million for Q2.

For the first half of 2020, revenue was $611 million, down 5 percent year over year and on an organic basis, revenue was down 3 percent year over year. The value of the company’s first half 2020 total organic orders was also down 3 percent year over year.

“I am proud of the ability of our employees to adapt as the COVID-19 pandemic continues globally. We delivered results within expectations shared June 9, 2020 and our operational continuity ensured we were able to meet customer demand,” said Eric Starkloff, NI CEO. “The core strengths of NI are clear — our broad customer base, diversity of business, and the value our customers see in our software-connected systems. I believe we are in a stronger position strategically as compared to past industrial recessions with a focus on the parts of the market where our customers continue to invest.”

As of June 30, 2020, NI had $608 million in cash and short-term investments. During the second quarter of 2020, NI amended and restated its credit agreement to provide for an initial credit facility of $145 million, with the potential to request, subject to the terms and conditions of the credit agreement, including obtaining commitments from existing lenders or new lenders, additional term loan or revolving commitments of up to $105 million in the aggregate. During the second quarter, NI paid $34 million in dividends and repurchased approximately 500,000 shares of our common stock at an average price of $34.08 per share. The NI Board of Directors approved a quarterly dividend of $0.26 per share payable on September 8, 2020, to stockholders of record on August 17, 2020.

The company’s non-GAAP results exclude, as applicable, the impact of purchase accounting 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.