Guidance

NI currently expects Q4 revenue to be in the range of $331 million to $361 million, which would be a new Q4 record at the midpoint. Based on current exchange rates, the company expects that the impact of foreign exchange on dollar revenue will be minimal in Q4. The company currently expects that GAAP fully diluted EPS will be in the range of $0.27 to $0.41 for Q4, with non-GAAP fully diluted EPS expected to be in the range of $0.34 to $0.48. Included in the company’s Q4 2017 GAAP EPS guidance is approximately $1 million of restructuring charges. For 2017, NI estimates its non-GAAP effective tax rate to be approximately 21 percent.

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 year-over-year change in core revenue growth, gross margin, and operating margin for the three-month periods ending Sept. 30, 2017 and 2016, and its gross profit, operating expenses, operating income, income before income taxes, provision for income taxes, net income and basic and fully diluted EPS for the three-month and nine-month periods ending Sept. 30, 2017 and 2016, on a GAAP and non-GAAP basis. NI is also providing guidance on its non-GAAP fully 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.

When presenting non-GAAP information, the company includes a reconciliation of the non-GAAP results to the GAAP results. 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 stock-based compensation expense, amortization of acquisition-related intangibles, acquisition-related transaction costs, taxes levied on the transfer of acquired intellectual property, foreign exchange loss on acquisitions and restructuring charges 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 and nine-month periods ending Sept. 30, 2017 and 2016. 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. This news release also discloses the year-over-year change in the company's core revenue growth for the three-month period ending Sept. 30, 2017. The company believes that including its year over year change in core revenue growth assists investors in assessing the company’s operational performance. A reconciliation of its year over year change in GAAP revenue growth to its year over year change in core revenue growth is included with this news release.

Conference Call Information and Availability of Presentation Materials

Interested parties can listen to the Q3 2017 earnings conference call with NI management today, Oct. 26, at 4:00 p.m. CT at www.ni.com/call. Replay information is available by calling (855) 859-2056, confirmation code 92738818, shortly after the call through Oct. 29 at 11:59 p.m. CT or by visiting the company’s website at www.ni.com/call. Presentation materials referred to on the conference call can be found at www.ni.com/nati.

Forward-Looking Statements

This release contains “forward-looking statements” including statements regarding significant progress toward our target business model, strong alignment and focus throughout our organization, continued success in the key focus areas of semiconductor test, 5G, the electric and connected vehicle, and the Industrial Internet of Things, progress we have made in improving our operating performance, that the midpoint of our Q4 guidance would provide a 45 percent increase in our GAAP fully diluted EPS year-over-year for 2017, commitment from our employees as we all work toward alignment with our operational model, our belief that this focus on growth and profitability will keep us on track to achieve our goals this year and into 2018, expecting Q4 revenue to be in the range of $331 million to $361 million, expecting the impact of foreign exchange on dollar revenue will be minimal in Q4, expecting that GAAP fully diluted EPS will be in the range of $0.27 to $0.41 for Q4, with non-GAAP fully diluted EPS expected to be in the range of $0.34 to $0.48, approximately $1 million of restructuring charges in Q4, and estimating non-GAAP effective tax rate to be approximately 21 percent. These statements are subject to a number of risks and uncertainties, including the risk of adverse changes or fluctuations in the global economy, foreign exchange fluctuations, fluctuations in demand for NI products including orders from NI’s largest customer, component shortages, delays in the release of new products, the company’s ability to effectively manage its operating expenses, manufacturing inefficiencies and the level of capacity utilization, the impact of any recent or future acquisitions by NI, expense overruns, adverse effects of price changes or effective tax rates. Actual results may differ materially from the expected results.