AUSTIN, Texas - April 26, 2007 - National Instruments (Nasdaq: NATI) reported quarterly revenue in the first quarter of $172 million, up 11 percent from Q1 2006. Diluted earnings per share (EPS) for Q1 2007 was 23 cents with net income of $19 million. This represents a 51 percent increase in net income compared to Q1 2006.Non-GAAP (Generally Accepted Accounting Principles) diluted EPS in Q1 2007 was 28 cents with non-GAAP net income of $22.5 million, up 39 percent from Q1 2006.
For Q1 2007, non-GAAP operating margin was 15.5 percent, up from 13 percent in Q1 2006. This 250 basis point increase in Q1 non-GAAP operating margin has positioned the company well to achieve its goal of 18 percent non-GAAP operating margin for the full year. The company's non-GAAP results exclude the impact of both stock-based compensation and the amortization of acquisition-related intangibles.
Reconciliations of the company's GAAP and non-GAAP results are included as part of this press release.NI virtual instrument and graphical system design products, which constitute the vast majority of the company's product portfolio, had 13.4 percent year-over-year revenue growth in Q1. This represents the third consecutive quarter of strong revenue growth from these products despite three sequential quarterly declines in the Global Purchasing Managers Index. NI believes this continued strong organic growth validates the company's strategy of increased investment in R&D to drive new product success.
Revenue from NI instrument control products declined by 6 percent year-over-year in Q1, compared to a 5 percent decline year-over-year in Q4 2006. The company believes this decline in revenue from instrument control products reflects the recent slowdown in the traditional test and semiconductor test markets. Instrument control represented less than 11 percent of NI revenue in Q1 2007, down from 13 percent in Q1 last year. "I am very pleased with the strong revenue growth we saw in Q1 in the areas of LabVIEW FPGA, CompactRIO, USB data acquisition, modular instruments, RF and PXI," said Dr. James Truchard, NI president and CEO.
"We believe our strategy of increased investment in R&D over the last six years has allowed us to significantly outperform our competitors during this weaker period for the industry."