NI Reports Record Quarterly Revenue

The following tables provide details with respect to the amount of GAAP charges related to stock-based compensation, amortization of acquisition-related intangibles and fair value adjustments, acquisition-related transaction costs, disposal gains on sale of business/assets and related charitable contributions, tax effects related to businesses held-for-sale, capitalization and amortization of internally developed software costs, and restructuring charges that were recorded in the line items indicated below (unaudited) (in thousands):

	Three Months Ended				Years Ended
	December 31,				December 31,
	2020		2019		2020		2019
Stock-based compensation
Cost of sales	$	979	$	887	$	3,766	$	3,475
Sales and marketing	5,462		4,868		22,288		19,612
Research and development	5,129		4,236		17,769		16,265
General and administrative	4,251		3,393		14,552		12,086
Provision for income taxes	(445)		(1,433)		(8,705)		(9,337)
Total	$	15,376	$	11,951	$	49,670	$	42,101

Amortization of acquisition-related intangibles and fair value adjustments
Net sales	$	1,961	$	—	$	3,260	$	—
Cost of sales	4,313		823		9,892		3,348
Sales and marketing	1,965		485		5,264		1,970
Research and development	9		28		94		112
General and administrative	846		—		846		—
Other expense (income)	124		124		487		409
Provision for income taxes	(606)		(127)		(2,554)		(703)
Total	$	8,612	$	1,333	$	17,289	$	5,136

Acquisition related transaction and integration costs, restructuring charges, and other ^(1)(2)(3)(4)
Cost of sales	$	1,620	$	—	$	1,626	$	—
Sales and marketing	23,309		5,356		32,079		13,646
Research and development	1,184		3,266		6,374		4,166
General and administrative ⁽¹⁾⁽⁴⁾	8,685		2,002		21,279		11,527
Gain on sale of business/asset ⁽¹⁾⁽²⁾	—		—		(159,753)		(26,842)
Other expense (income)	191		—		589		—
Provision for income taxes ⁽³⁾	(1,602)		(13,477)		32,364		(12,237)
Total	$	33,387	$	(2,853)	$	(65,442)	$	(9,740)
(1): During the third quarter of 2019, the company recognized a gain of $27 million related to the sale of an office building, presented within "Gain on sale of business/assets". The company also recognized a charitable contribution expense of $7 million related to an infrequent donation using a portion of the proceeds from the sale of the building, presented within "General and administrative".
(2): During the first quarter of 2020, we recognized a gain of $160 million related to the divestiture of AWR, presented within "Gain on sale of business/assets".
(3): During the fourth quarter of 2019, we recognized an income tax benefit of $11 million related to the recognition of deferred taxes on the outside basis difference of our AWR business, which was held-for-sale as of December 31, 2019.
(4): During the third quarter of 2020, we recognized $5 million of compensation expense related to the replacement of unvested options acquired from OptimalPlus. These amounts were accounted for as post-combination expense and will be recognized over the required service period.

(Capitalization) and amortization of internally developed software costs
Cost of sales	$	6,936	$	7,012	$	27,931	$	27,085
Research and development	(1,248)		(1,887)		(4,043)		(9,066)
Provision for income taxes	(1,195)		(1,076)		(5,017)		(3,784)
Total	$	4,493	$	4,049	$	18,871	$	14,235



National Instruments
Reconciliation of GAAP to Non-GAAP Measures
(in thousands, unaudited)

	Three Months Ended				Years Ended
	December 31,				December 31,
	2020		2019		2020		2019
Reconciliation of Net sales to Non-GAAP Net sales
Net sales, as reported	$	367,838	$	367,468	$	1,286,671	$	1,353,215
Impact of acquisition related fair value adjustments	1,961		—		3,260		—
Non-GAAP net sales	$	369,799	$	367,468	$	1,289,931	$	1,353,215

Reconciliation of Gross Profit to Non-GAAP Gross Profit
Gross profit, as reported	$	258,642	$	276,333	$	915,550	$	1,016,324
Stock-based compensation	979		887		3,766		3,475
Amortization of acquisition-related intangibles and fair value adjustments	6,274		823		13,152		3,348
Acquisition transaction and integration costs, restructuring charges and other	1,620		—		1,626		—
Amortization of internally developed software costs	6,936		7,012		27,931		27,085
Non-GAAP gross profit	$	274,451	$	285,055	$	962,025	$	1,050,232
Non-GAAP gross margin	74%		78%		75%		78%

Reconciliation of Operating Expenses to Non-GAAP Operating Expenses
Operating expenses, as reported	$	245,186	$	222,652	$	875,753	$	868,612
Stock-based compensation	(14,842)		(12,497)		(54,609)		(47,963)
Amortization of acquisition-related intangibles and fair value adjustments	(2,820)		(513)		(6,204)		(2,082)
Acquisition transaction and integration costs, restructuring charges and other	(33,178)		(10,624)		(59,732)		(29,339)
Capitalization of internally developed software costs	1,248		1,887		4,043		9,066
Non-GAAP operating expenses	$	195,594	$	200,905	$	759,251	$	798,294

Reconciliation of Operating Income to Non-GAAP Operating Income
Operating income, as reported	$	13,456	$	53,681	$	199,550	$	174,554
Stock-based compensation	15,821		13,384		58,375		51,438
Amortization of acquisition-related intangibles and fair value adjustments	9,094		1,336		19,356		5,430
Acquisition transaction and integration costs, restructuring charges and other	34,798		10,624		61,358		29,339
Net amortization of internally developed software costs	5,688		5,125		23,888		18,019
Gain on sale of business/assets	—		—		(159,753)		(26,842)
Non-GAAP operating income	$	78,857	$	84,150	$	202,774	$	251,938
Non-GAAP operating margin	21%		23%		16%		19%

Reconciliation of Provision for income taxes to Non-GAAP Provision for income taxes
Provision for income taxes, as reported ⁽¹⁾	$	10,515	$	(4,304)	$	55,103	$	18,393
Stock-based compensation	445		1,433		8,705		9,337
Amortization of acquisition-related intangibles and fair value adjustments	606		127		2,554		703
Acquisition transaction and integration costs, restructuring charges and other	1,328		2,715		4,122		7,136
Net amortization of internally developed software costs	1,195		1,076		5,017		3,784
Gain on sale of business/assets	274		10,762		(36,486)		5,101
Tax reform charge (benefit)	—		—		—		(2,774)
Non-GAAP provision for income taxes ⁽¹⁾	$	14,363	$	11,809	$	39,015	$	41,680
(1): The income tax effect related to each non-GAAP item is calculated based on the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment, and considers the current and deferred tax impact of those adjustments.



Reconciliation of GAAP Net Income and Diluted EPS to Non-GAAP Net Income, Non-GAAP Diluted EPS, and EBITDA
(in thousands, except per share data, unaudited)

	Three Months Ended				Years Ended
	December 31,				December 31,
	2020		2019		2020		2019

Net income, as reported	$	4,738	$	58,596	$	143,659	$	162,151
Adjustments to reconcile net income to non-GAAP net income:
Stock-based compensation	15,821		13,384		58,375		51,438
Amortization of acquisition-related intangibles and fair value adjustments	9,218		1,460		19,843		5,839
Acquisition transaction and integration costs, restructuring charges and other	34,989		10,624		61,947		29,339
Net amortization of internally developed software costs	5,688		5,125		23,888		18,019
Gain on sale of business/asset	—		—		(159,753)		(26,842)
Income tax effects and adjustments ⁽¹⁾	(3,848)		(16,113)		16,088		(23,287)
Non-GAAP net income	$	66,606	$	73,076	$	164,047	$	216,657
Non-GAAP net margin	18.0%		19.9%		12.7%		16.0%

Diluted EPS, as reported	$	0.04	$	0.45	$	1.09	$	1.22
Adjustment to reconcile diluted EPS to non-GAAP diluted EPS
Stock-based compensation	0.12		0.10		0.44		0.39
Amortization of acquisition-related intangibles and fair value adjustments	0.07		0.01		0.15		0.04
Acquisition transaction and integration costs, restructuring charges and other	0.27		0.08		0.47		0.22
Net amortization of internally developed software costs	0.04		0.04		0.18		0.14
Gain on sale of business/asset	—		—		(1.21)		(0.20)
Income tax effects and adjustments ⁽¹⁾	(0.03)		(0.12)		0.12		(0.18)
Non-GAAP diluted EPS	$	0.51	$	0.56	$	1.24	$	1.63
(1): The income tax effect related to each non-GAAP item is calculated based on the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment, and considers the current and deferred tax impact of those adjustments.

Net income, as reported	$	4,738	$	58,596	$	143,659	$	162,151
Adjustments to reconcile net income to EBITDA:
Interest expense (income), net	592		(1,934)		(2,016)		(8,089)
Tax expense (benefit)	10,515		(4,304)		55,103		18,393
Depreciation and amortization	25,836		18,995		87,064		73,541
EBITDA	$	41,681	$	71,353	$	283,810	$	245,996

Weighted average shares outstanding
Basic	131,277		130,776		131,082		131,722
Diluted	131,732		131,432		131,799		132,734



Reconciliation of GAAP to Non-GAAP Diluted EPS Guidance
(unaudited)
	Three Months Ended
	March 31, 2021

	Low			High
GAAP Diluted EPS, guidance	$	(0.05	)	$	0.09
Adjustment to reconcile diluted EPS to non-GAAP diluted EPS:
Stock-based compensation	0.13			0.13
Amortization of acquisition-related intangibles and fair value adjustments	0.06			0.06
Acquisition transaction and integration costs, restructuring charges and other	0.12			0.12
Net amortization of internally developed software costs	0.05			0.05
Income tax effects and adjustments ⁽¹⁾	(0.07		)	(0.07		)
Non-GAAP Diluted EPS, guidance	$	0.24		$	0.38
(1): The income tax effect related to each non-GAAP item is calculated based on the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment, and considers the current and deferred tax impact of those adjustments.



Reconciliation of GAAP Net Sales to Non-GAAP Net Sales, Guidance
(unaudited)
	Three Months Ended
	March 31,
	2021		2020
	(midpoint)				Percent Inc(Dec)
GAAP Net sales, guidance	$	339,000	$	309,381	10%
Impact of purchase accounting fair value adjustments	1,000		—
Non-GAAP Net sales, guidance	$	340,000	$	309,381	10%

« Previous Page 1 | 2 | 3 | 4 Next Page »