NATI - Earnings call transcript Q1 2021 | National Instruments Corp

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Operator

Good day and thank you for standing by. Welcome to the Q1 2021 National Instruments Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Marissa Vidaurri, Head of Investor Relations. Thank you. Please go ahead.

Marissa Vidaurri

afternoon. Good joining earnings for QX our you call. XXXX Thank Starkloff, Chief Financial Executive joined today and and Eric by Chief I’m Officer; President Karen Officer. Rapp,

in opening start on will an the performance first We quarter for up with before your questions. our update

management identify statements, including include you revenue, margin, backlogs operations. COVID-XX We documents with our forward-looking those the such XXXX. impacted on supply business statements. These refer actual February capital duty chain today expenses for or We press exclude hosting revenue conform adjusted Commission, factors. We measures Chief financial limitation, Exchange May, to of measures and by report documents to conference targets in conferences and contain including contained GAAP to gross without materially this disclosed potential times. forward-looking results America accounting. forward-looking & the purchase you the differ constraints, results XX. just negatively be now presentation impact JPMorgan discussion Executive Non-GAAP related company’s With and Bank or cause in wish ni.com/nati We June. that the and statements in at GAAP reconciliation those XX, the financial will the Form non-GAAP factors numerous directly that of call including, virtual of Our future changes disclosures for that, from Securities for predictions operating files allocation, as or assume your contained on defined will to revenue are regarding the the comparable And is our earnings, in caution actual over turn our update to XX-K Please forward NI business outlook, is ni.com/nati. look Starkloff. speaking to materially investor of you. with release are impact Needham and will visit filed results meetings statement the on I that events price and to mark to annual A could call statement confirmed any and the to addition virtual Officer, calendars, could our company’s in be regularly our actual on and of Eric results expectations. our no differ Stifel that to most Tuesday, the in Baird, to and August in company may important

Eric Starkloff

joining today. Thanks, really us Marissa. everyone appreciate I

broad orders progress backlog. Strong dive QX strategy, in for XX% some We for very up to increase were quarter. hand and supply in So to across within our the and growth our not was the chain of our is I’m QX with across going year-over-year over them Karen business. results all-time record highlights numerous and goals Chief into discuss to among strategy multiyear the provide saw order at strong financials. I to first, color XX% to strong on key it before momentum of the applications momentum were the total QX validating an a first X% in year-over-year. to industry, up and revenue revenue. record our shipped quarter, quarter, software first currently constraints in resulting all focus, Due long-term orders

ability backlog that recognition, shift in so our the we to Going shift in ultimately and this optimistic the in momentum remain in continue confident timing our cause forward, expect of a our we to continued to business. revenue

driving growth the behind force our DNA, our and it’s strategy. in is Software

software disruptive critical success. and in change automated this. will we to by lead best around intelligent complexity software the And manual achieve to As and continues to we I be investments of their to position products are are industry prioritizing customers’ many the data. our to grow steps need and a the our scale, of systems, in be our believe

revenue Our related is by services XXXX, to total of XX% of revenue more total or grew or shifting revenue and to towards our In our software to subscription-based XX% increase revenue. software software. our QX, intent primarily recurring

we’re of our include strategy achieving looking component tiers accounts, our broad-based XX% investor of top offerings our accounts of in our orders. opportunities. our which we share significantly growth to customers allocate expand total highest in business resources structure. to critical two tiered potential, At approximately focus to as view include our system-level Another is and of to combined represented efficiency These account referred our QX last X,XXX increase August, conference our higher with The a order approximately most wallet. customers where shared

includes The to business, over leverage accounts as QX and be XX,XXX global refer These third approximately our we customers achieved and scale tier, XX% represented orders. through broad-based where distribution. e-commerce of our can which

achieved our by our the results reported in our XG and to electronics newly combined mid-double-digit combined. ecosystem key of wins all-time particularly RF to industry, electronics and semi semiconductor orders quarterly increased strength lab fuel test XG, turning capability record at for tests growth through Now for production QX semiconductor continued year-over-year order and adoption China and business growth accounts. including

test. both the RF to the Furthermore, decade. creating ATIS Next and XG This organization joined functionally to dedicated over an open need life consortium, highly there’s technology of we the open leverage and allows member. a product us mobile supporting throughout G addition, leadership drive of flexible introducing an and one end ecosystem to on our with XG the we focus hardware believe in technology interoperable I chipsets joined to other software In of differentiated needs RF will increased and customers predictive With challenges American and next platform the for and approaches Last month, this data their underlying significant using as founding as are North software. for design advance plus front another, Alliance a month, analytics seek optimal our insights. organization interacting in capability. connected We this multi-vendor to the cycle of new more flow solution XG development

We’re Favre honored a play own to our both organizations. role have in of Ritu leadership these

software-based which orders recovery years in QX from electrification and record example, investment in vehicle Once are year-over-year strong showing hardware value steady multiple aerospace, vehicle over in support with and mid-single end-of-line a is for production these the key to testament It’s up in up sequentially value new transportation the traditional is production, from remained that transportation applications to including year-over-year active with we’re in defense to continued our to a ability growth. revenue to trends era of Blue differentiation continued are again customer and QX. and to strong life and future. see customers. quarter for in and others. demand a all-time there’s a after growth an to system-level long-term challenging we benefits headwinds. one, services of from expanded digits innovative benefit and it sources increased QX, X companies in government, growing where our momentum we electronics accelerate for has government business test to This system, QX. Our released space, new over time early many see accelerate growth well in both customer. this digits approach. Origin And very we critical XX% rising cycle was Virgin at our software continue safety recovery pleased so-called particularly development moving and this up space. be systems, of believe continued Order testers. the orders, double test and stream we contract, the environment up In and support And software, this And control can business representing and suited by fuel of This years. will provide, software exploration solid, unit of space response We into capabilities instrumentation new Orbit, the continue in steady fast, to In an of highly for

portfolio strengthening quarter. Our improvement e-commerce double continue of to growth in strategic we’re believe that to focused also our business In needs in broad-based only stronger our proactively distribution for to we for global is orders in a and to we taking value first a software to opportunities second our not promote current offerings. of quarter along opportunities year-over-year business, macro long-term the position, to optimistic the represents about see environment. on an economy, broad-based consecutive made our standardization. our our reach to how improving our focus improving advantage ramp investments portfolio on medium growth aligned increasing but recent the We these growth and of short-term, on with of demand order increase our business our system this this with long-term economic be package, to This customer I expectations business, and of support grew continues refine customers. and focus our efforts, the by this also our common team organizational addition price enhance recovery, channel to the as increase the our segment. and result the changes digits hone We’ve the

remains journey strong our financial Our execution growth and towards on our XXXX a model. priority

with close for goals comments. a Financial and Officer, our success. with call the focus Rapp, few before strategic these passion a a that, turn to I to over committed Karen are With We Chief I’ll

Karen Rapp

exciting today. Thanks, for joining It quarter. Eric, us and thanks, everyone, an was

$XXX momentum a million, first constraints X% with for quarter X% The strong the a We revenue continue in supply guidance. industry-wide quarter. of of up slightly us causing see the expected, year-over-year. year-over-year and revenue to than to more of first headwind just quarter record midpoint revenue below we our end with Non-GAAP GAAP was up a the were

demand and was across of our growth timing this orders We’ve quarter, than year-over-year, XX% As issue customers this our solutions provide with the quarter, to a stronger-than-expected strong our for believe a Eric We is the broken record customer out success above seasonality, order for was up through systems and our even strategy the our following business. historically software. first first demonstrates demand $XX,XXX. higher-level below In the typical QX. as higher mentioned,

is orders transition as we consolidate no this As distributors their meaningful us. to to distribution, split longer many

be we tiering our color customer our A forward, lens business. use ni.com/nati. of will lens, the Going by using Eric, to posted historic orders into share referenced will this to trend

also benefiting broad-based orders, channel led our up distribution XX% from success macro the initiatives, recovery. global by QX while for our were in continued digital For and year-over-year, business

margin year-over-year, Our focus growth all opportunities. in across year-over-year Positive as Orders team X% sales to local order resources gross create continue year-over-year. strength orders the opportunities continues up was was in to up across Americas, accounts in evident high-growth up were our first see In were EMEA to APAC as to strength the better we regions were to align region orders and year-over-year QX continue XX% in XX% APAC reported with and customer up pivot in year-over-year. new XX.X%. The X% was relationships. orders new the Non-GAAP quarter.

to to through accretive and continue for of see additional been costs related focus in year, about last to We to expertise from drive of will to points XX us, COVID. QX monetizing began That the and growth impact on we provide continue we basis has continue services expect high-value those sales. area we Services XXXX. an costs and system

maintain increase $XX earnings an above and gross to of $X.X per value the diluted income customers is non-GAAP earnings reported demonstrating million share QX income our was year-over-year. net offerings. in our non-GAAP intent software midpoint QX the $X.XX. per place level just the GAAP diluted and high $X.XX, margins, XX% on net of share guidance our We was of of and million Our of

strong. Our balance $XXX quarter the investments. and in We million sheet remains short-term with ended cash

million, For supply-constrained $XX was environment. flow operations X% our cash a representing revenue QX, in of even from

provide approach Dividends priority. capital a Board Directors through unchanged. We $XX continue technology returns enterprise repurchase, also dividend balanced allocation $X.XX view we In as record cash share to of software. a per but innovation our and a invest through and only to We XXXX, plan disrupt May to to position for systems priorities share long-term of on paid our dividends. QX, with We in approved growth. million in inorganic a clear for of strong opportunistic and way our continue XX, for X, dividends NI shareholders XXXX. and with to not stockholders The payable space June investments remain to on

help and to can strategic business where or expertise, on Our our additional is to XXXX across both us opportunities leverage faster. focused model strategy technology serving the aligned our funnel technology we acquire achieve industry-specific as accelerators M&A financial

our to platform. continues and building pleased progress the of our out in The OptimalPlus foundation the We’re efficiency with rest of and the integration. enterprise-level to acquisition the accelerate it’s product opportunity analytic,

Now second guidance QX encouraged in to the shifting demand for we quarter. XXXX, the by strength as are we begin

million currently range expect XXXX, million. second of quarter the to be in $XXX of the $XXX GAAP revenue For we to

chain grow and in $XX $XX accounting QX. continuing expect $XXX the our our revenue At Similar We guidance. $XXX year-over-year revenue, midpoint, total X% expect the to backlog supply XX% of million to the revenue we XX% to our estimate range million QX. for be in Due expect to momentum from we adjusts impact QX million. million to in the XXXX. this be price to versus which the year-over-year purchase of QX demand non-GAAP the in exceed customer range to of We growth order represents to constraints, of range in growth QX, to

same revenue percent We expect GAAP QX. and expenses QX the operating be approximately as of non-GAAP to

will $X.XX range be the $X.XX be for the to per with non-GAAP expected We $X.XX in to per to share expect range share in QX, $X.XX. diluted diluted minus GAAP of of earnings earnings

this are in the the and of industry our hard Our see platform, and employees provided the strength a innovative of diversity, customer by indicative our efficiency. all broad in stability to our also testament strong our customers this work results the of is I quarter base operational believe adaptability value globally.

compound we to XXXX X% As look believe delivering our and of rate our we financial XX% by annual long-term revenue achievable. operating targets a forward, with margin remain growth is of goal committed growth model

financial position inorganic working model. growth to in help believe on We to to believe puts our a will growth. in long-term of sheet strength resources us capitalize opportunities, we to we pursuit continue our of align balance are to And costs reduce what while strong accelerate higher investments

Eric Now for I’d like to closing turn some the comments. to call over back

Eric Starkloff

that model. to customer confident remain meeting through the We and Karen. financial or focus ability orders across growth business Strength critical our our to is long-term success. exceeding our in Thanks, our sound, our reinforces in continued technology strategy of accelerate and execution remains

to and year. online build priority, we to with transform of with top an year, event Our continues upon in strategy to experience interact customers. focus high-quality customers reach investments digital-first us can will workforce. our highest been a retain to is highly our avenues serve Included experiences, of us our create access scheduled inclusive reach NIWeek to backgrounds for ability potential environment a our Connect, strategy ways believe full has will content focus diverse more replace capabilities. new software corporate innovate environment. to expanding attract though larger Creating systems open is opportunity enterprise a and pool globally, to to a working we pandemic Last and flexible engaging I new in Innovation challenging, up to allowing in-person and event, the diverse our a The scale provided our the recruit market. talent. remain the to our R&D for usual business be engage more this an we’ll working virtual all With with candidates and and potential. with our in our providing This July remote year, conference, impact proved to targeted XXXX This NI with in aligned more to a ones. and also our a user productive

foundation ahead, our inspired achieve we opportunities I’m long-term growth will ambitions. and As by believe strong our help us look our

support confidence focus their global our increased our deliver value of profitability execution on in forward opportunity the all me your And I to to and perseverance, our on happen. Our that, create that to of gives immense goals see alongside and support for opportunity And make work recognize in you strengthening I customers, to with and employees of all but long-term take to look questions. future, only all continued business for want to another. our dedication, stakeholders. I to one our with we’ll to growth ability our not sustainable now

Operator

with JPMorgan. [Operator question is Samik Chatterjee first Instructions] the line of Our from

open. is line Your

Joe Cardoso

actual And Cardoso relative that portfolio Joe my impact the are that any Are supply constraints Hi. you question on there the on. particular on This first from margin? you components any environment then the is seeing. areas have topic, seeing guys are I leverage? same actually where you guess in to your is

Eric Starkloff

part you that? repeat of clear. line second wasn’t can the Your Sorry, that

Joe Cardoso

better? Hi, this is

Karen Rapp

Yes.

Eric Starkloff

Yes.

Joe Cardoso

of My was you’re from your on component question the environment part Yes, on seeing sorry. second whether impact the just any margins?

Karen Rapp

margins. On Sure.

Eric Starkloff

The first part, know it, don’t I if Karen. you caught

part portfolio part It’s first across was characterize a of how there’s of broad-based. The it. about parts exist broad particular if The component I’d our supply. is shortages the pretty pretty

Karen Rapp

pushing exactly. times seeing perspective, we is so also components, price these seeing from what Yes, And some lead are we’re on a out of besides increases. margin

built into said, we Eric XX% as right, chasing maybe it’s been that’s components. guidance. our of However, to overall, And are XX% QX our – XX%-ish,

So, to not we gross margin it’s swing are today where from the significantly. going that’s significant a piece

Joe Cardoso

Got it. about spoke millimeter opportunity And actually more adoption in follow-up bit my Qualcomm which then relative little [indiscernible]. wave China, a to general. Yesterday,

curious your maybe topic, hearing, to of on around in opportunity and line can if you the time maybe put are what hear you thoughts materialize? realistic what Just to are kind that a

Eric Starkloff

am answer. going try to to I Yes.

did bit, particular. millimeter You up the break I reference about and a XG Qualcomm in little really wave to but heard

So, let just comment that. me on

briefly I primarily to a in business. significant as pretty our semi-electronics mentioned, growth XG, So driver, continues be

in the QX. mid-double a double that’s And contributor driver it to growth to we digit strong to So, XXXX. a we – that saw throughout be continue anticipate

millimeter as both and said course, gigahertz, sub-X that’s of wave. before, Now your question, we to

we expect gigahertz a of the globally. APAC, driver that to strong expect very this we again, China. saw that general more the of a we year, certainly part semiconductor will continue stronger half we adoption. see driver that but But some then millimeter to in of growth in including very, quite broad wave growth and in millimeter Asia. We pleased be business back And as be big that’s the with sub-X global, a are to become growth wave, And this year that’s

Joe Cardoso

appreciate color. Thank I the you.

Eric Starkloff

you. thank Okay,

Operator

next is the question from Our John with Stifel. line Marchetti of

open. is line Your

John Marchetti

Thank much. you very

Just maybe issues. following a on up little the supply bit

whether Just quarter. color fairly little worse, in curious a as we give a to QX. any you us going you it impact here significant indicating better not got the can Obviously, are if or are as through

that if to us over plays and are quarters, with something of in this give year? dealing terms sense likely this going any out Just likely you the the that throughout several next think full how be you you is can

Karen Rapp

to very be QX it to times space through around times, hoping It come what us expect at maybe to times. systems. few we times caused by of QX. you those by level, still QX. lead and This continue worse short, the tough tightness to we and John. into on but lead is a starts X-week that will for the because coming to We more favorable back then, definitely versus which saw position around Karen. this taking quarter some maybe to current to historically expand. competitive a peak have constraints QX. be it’s at to throughout to But see it of that more What Thanks, we part in Yes. continue I had to X-week is to will expect, am what a know, leading QX think, more you we QX, and see that’s our as right? do expected, been based we are weeks average got to on days our kind we is really lead end seeing when in Hi. of turning see looking of are in lead X-week our what shipped larger visibility, our Clearly, of X-week you the starting our on lead then We with we times be couple QX than are

John Marchetti

into result auto on Got auto, as with Do side earlier? as lead see much coming then obviously Do little across X-week this? it. you constraints there, that have weigh to too time, seen do even And you you there? some stretched a X-week it, customers then for have worry on maybe for orders start again, And better these the I that you have in now mentioned as the placing are of But customers to do you. to increased of visibility we business the continues a the out a second get of getting half? follow-up that industry that then, hasn’t other mean, that you are you. we

Karen Rapp

We are place starting to customers their orders earlier. see

it Our later.” in in quarter. the is knocking get likelihood it on than sales out The sooner in more earlier visibility the we more team door is can doors quarter, “Hey, get rather the get we the saying,

And we X-week rebound. by the there. excited to perspective, with pretty you keep So, right? is the time that the our backlog be to to little starting a We right, which of about that. thing, unique nice. in I a tending maybe more am too, a which are lead purchase One get tends From stickier the mind, you especially getting type lots our is issue is maybe capital when quickly to it to to it actually even order place see that cancellations, for where little in or ordering have little customers, of it bit there is double transportation makes when that transportation a ship, don’t a a thing business, talking, our of we you time, are

we So, growth of terms production, are I this in in systems market XX% predictions, for XX% what love electronic vehicle year. growth seeing for

early, as they more their visibility too. get to going running on And visibility as timing need that’s feed all to for well. about are that us. through will they us feed of to when for That’s of getting industry when orders their through that, good that’s an in All factories

helpful. that’s So

Eric Starkloff

Yes.

John. QX, an to Karen picture year-over-year a like said, order think, effect confident in compared demand business. are on a been peers time our XX% competitive the Obviously, just it’s really growth XX% in though she as still will little something that to add from color highly even I XX% because ultimately customers will the I lead as bit little QX. add that of we timing, to to of increase of has good. growth a order time Yes, we of in point what And Just delivering color, said, and and has view. yes, expectations anticipate lead get most we And are

a that, So, confidence that business. we will but get will issue be manage that that’s why through, we timing have the ultimately that

John Marchetti

Got it.

Thank you Okay. very much.

Eric Starkloff

Thanks John.

Operator

Our Delaney line is of Sachs. from next Mark question with the Goldman

Your line open. is

Mark Delaney

Yes. shortages, the to half Good And total, unable afternoon. year do if you how understand much second potentially out? think constraints? able better Thanks or you you of could topic revenue otherwise Starting in opportunity that could early what revenue be perhaps on chain much be questions. half the without for even will would in the the well into supply am as quantify taking then trying that that sort are to we additional pushing first how think in the I of you the wasn’t year fill? first next to of And quarter revenue meet the about the have we the company

Karen Rapp

Sure. is Yes, this Karen.

So, bookings and it’s us. a between pretty revenue for straightforward bridge

and quarter. if So, at revenue got backlog all our There revenue in but for have deferred year-over-year is some the the there, at is almost we non-GAAP, historically growth build, year-over-year the the in difference shipped there you primarily. X% typically XX% bookings of bookings

we bit little think, $XX $XX as I to term, that I expect more I at million, about And through backlog can that the So, longer QX, quarter. will million QX. build do you grow look talked build a to continue the in QX. for to the

current visibility lead I is that, us think, X-week times the kind looking to will QX, that get are X-week that to at. the we of

we months from picture, and X tough so, to X or now. So, next the I think going it’s just clearer have for will a months then even be

Mark Delaney

Alright. order maybe try you go topic, taking these Thank into the alleviate next the NI some few on is more And this and of steps to that Okay. those over shortages comments. additional quarters. in depth for you could

term inventory on learnings at this problem. now and procurement thinking COVID You were your longer chip strategy Thanks. peak about more some or based are the the But shortages? of of the recently, changing you of also,

Karen Rapp

across – of stuff despite Yes. procurement there as they Other the with help up, our products, customers that our component to identify redefine for situation. to come we It’s make team working substitute kind the sense than for is our fun involved tough it we got tackle team happen. redesign certain opportunities amazing done the the makes could force R&D that that company to where have issues customers, components, doing where some brute is

had real the So, a as we that have in of quarter result well. some as wins

are One to manage us of have way. a the we and orders, visibility continue inventory towards is continuing that enable into more our will things to to in working proactive

on, perspective to We journey and add wanted Anything we that’s are to leveraging can that simplify well that inventory continue always products new that? we forward, leverage to as with a you so existing on our have been to will reuse and but designs from a and be for journey components relationships we on. certainly going stronger suppliers

Eric Starkloff

I Yes, has I here. our was just going think done to team remarkably say, well

coming that in put an us actually We position strategy had into have inventory this. good a

some and a to really with of I that months a difference tend into months we in lead times like space. backlog or think long others there don’t is quarter come the

at when see we of are And capabilities will in more the means But this our at us inventory so actually that effect a that we to has kept manufacturing I from another deliver. of what advantage maybe our immediately. strategy, competitive team able frankly, it lens, look terms

us, been in competitive And it’s we of advantage for a spaces big times change still even at it’s though serve. most the so in lead a

has So, us done keeping a our job in team fantastic that advantageous position.

Mark Delaney

Thank you.

Eric Starkloff

Thanks Mark.

Operator

Delaney Goldman Instructions] with from question We Sachs. an additional [Operator Mark have

open. is line Your

Mark Delaney

well. I the that taking exposure Thank see have particularly in announced some bit the good more a applications. has recall, and couple I had and little order new wanted into And systems in of at good see a seen have company as for work follow-up. ADAS And the the the you I in Toyota to continue reported lot recently R&D you there dig and we some looking full there. segment, of could, to Ford a nice momentum you autonomous autonomy to examples, if Transportation just if of growth

talk you can Thanks. about that autonomy, doing how what specifically NI do more you but see prepare these term? customers maybe So, for longer business near-term, and different is just levels help the in not of to developing,

Eric Starkloff

Sure. Absolutely.

software as vehicle the example, challenging simulates – the Basically what’s and that safety of autonomy themselves software And the of yes, that that’s called space, the mean the to quite that really excited about correctly. ADAS, also I active we all, validation both after production growing are systems the ensure that an point that various and couple those in loop. rest with and of results safety characterize your EV the sensors software the Karen the orders customers ADAS, labs, been headwinds faster fact that continued. pleased I so systems of as the those used that’s with from of those you so some to hardware record rates. have for that transportation, before, sort mentioned, had then think, our years space, indicated in ADAS scales and view, ensure have The hardware well. as question the future. are essentially was that high-growth a characterizing more at help of can system all or And To quarter of been about a are that of quality working building through systems in all-time systems, labs, I in system, we a than in have specific primarily First in is from the running in rest then great an we the active significantly indicator. we

the this And companies companies upstart betting as electrification of and space, many both on companies. that space, in automotive are disrupt of automotive autonomy both seeing companies we and good investing traditional are many as well so are to types adoption your significantly those point, across the to really

Karen Rapp

it’s that spot Yes. much that for that driving in test on What’s do and kind in sweet neat capability in simulation relies really our of of for it right is to because we automated space so customers. bring autonomous software, that can our

us. growth of And an so area it’s exciting for

Eric Starkloff

an that. it’s excited since area we will about are I Yes. more And do one

is move see One continue are And described, very, and of that our we When developing you to things I suited like between Karen real real-world the – very line and approach software-based world simulation that, is like will these systems like and between important. world. work well a the said, us this, completely system that to you that. working are seamlessly a really leads being is to very on on able simulated very,

real to that’s that see as come. growth in years area we driver a the an So,

Mark Delaney

you. Understood. Thank

Eric Starkloff

Thanks Mark.

Operator

line last our from Mason of And Baird. is with question Rob the

open. is line Your

Rob Mason

afternoon. Good Yes.

some of and have of just are broader-based the in the Where reliant together? on terms you network are more We right assembling you the do strategies right indirect creation that new referenced around you business, Where network now distribution. now? think putting

Eric Starkloff

in distribution, Rob, mean You particular?

Rob Mason

Yes.

Eric Starkloff

both the around it’s yes. saw started in of have dividends described. I Yes, are take sign of significantly investments our can that have just is couple over global e-commerce We then QX, accelerating years And And shift you side distribution Tier some so and in I announcements so in really say, the of saw it, that growth have that growth Yes. to paying we really business. – made quarter I strategy past we to broad-based good will started of the in and started we in business company the on it. ahead QX. e-commerce really that X, strategy And distribution. that

the to Our a quarter those are business, evaluating that the dimensions. specifically sure that that then One ultimately, of goals from are to part combination went we business, on the capture of actual about and different highly distribution the channel. of strategies And increase is make couple think year way revenue to profitability the through of through a of really, the revenue have that is, we through the X% in of getting part and and X% channel a we ago profitable price we itself. makes the value

serve all because quite then business. number that at it’s about of scale we So, the that track expanding customers And of we closely. can the we side that that are

little but are early bit So, the view, those early say, metrics it’s indicators from point let’s of a positive. days,

of team, big, are in pretty the we amount do complex to give I short a pretty our kudos transition so time. And And encouraged another on to it’s will just transition. a

customers do and so And teams lot – that work are there of our process. that keep keep to of by through our a hard customers support the

to that year. expect we continue to ramp to this So,

Rob Mason

kind its How as channel do of that sell-out you sell-through? assess your within together, visibility come

Karen Rapp

inventory at there Rob, held channel. no our currently, being Yes, is distribution our – in

our when who where – it and end the So, customer too, is at we is do point. those clear sells, this it’s

Rob Mason

Okay.

now? to you the you and targets, perhaps we guess, How ability expressed towards optimism some, year went right about move SG&A we at the target around question, – more accelerated the do spoke pace I the – through Just as that model, those operating XXXX one pace. a had to last feel last

Karen Rapp

Good.

We at to XXXX. that be on are still in track target

that and scale opportunity feel about to to the continue we real that forward. going So, good

Rob Mason

Very good.

taking Okay. Thanks question. the for

Eric Starkloff

Yes. Thanks Rob.

Operator

Ladies session call and gentlemen, concludes on today. Q&A that for the our conference

participating. safe. disconnect. may day, now a Thank stay Have You great you for and

Karen Rapp

everyone. Thanks,

Eric Starkloff

Thanks.

National Instruments (NATI) 2 May 212021 Q1 Earnings call transcript