National Instruments Corporation (NASDAQ:NATI) Q1 2018 Earnings Conference Call - Final Transcript
Apr 26, 2018 • 05:00 pm ET
delivering strong results and we continue to be encouraged by the efficiency and effectiveness of these teams. During this process, our entire sales force has managed through changes in their coverage and growth in new capabilities. I'd like to thank the sales team for managing through this transition with minimal disruption and we looked forward to reaping the benefits in improved long-term growth and leverage. We will share more about our sales transformation and the initial results we've seen at our Investor Conference at NIWeek. I look forward to seeing you there.
Now, I'll turn the call over to Alex.
Thank you, Eric. While our revenue came in slightly below the midpoint of our guidance for Q1, we continue to drive operating leverage. Our revenue this quarter was negatively impacted by weakness in the mobile device supply chain, which was partially offset by improved growth in our broad-based business. As Karen mentioned, at the midpoint, we are guiding to record revenue and record non-GAAP net income for second quarter.
The strong growth of software bookings during the quarter helped us to deliver a significant year-over-year increase in our gross margins in Q1. We believe our software platform is our most crucial differentiator and value driver and its growth signals strength in our market position. We believe the reception to LabVIEW NXG and the increase in LabVIEW adoption that we've seen across our customer base validates the investment in our software platform.
I'm also very pleased with the performance of our broad-based data acquisition portfolio. These products provide measurement capabilities to systems across almost every industry. We believe the performance of these hardware products, along with strengthened software, demonstrate the broad health of our platform across a diverse set of customers and applications. This has long been the strength of NI's market position.
2018 has already been an exciting year in technology with the first tenders for 5G communication coming out of the 3GPP, a new autonomous functionality rolling out of the lab and onto public roads. Each new milestone in technology adds more and more complexity to validation and production test. Using a platform-based approach helps ensure that test costs and test time don't outpace product design.
Our customers have shown that our software-based platform is critical to managing the test challenges of rapidly evolving technology. At Mobile World Congress this year, we released a significant number of announcements including our plans to collaborate with Samsung on test environments for 5G new radio, to help test interoperability of next-generation base stations and mobile devices.
Our extensive work with innovators in this space has helped us bring 5G-capable technology to our platform quickly and positions us to meet the testing needs of these next generation wireless products. As the founders evolve and these companies bring innovative products to market, our platform will help ensure that they can scale from research to production and meets our cost, quality and time to market goals.
We're only four weeks out from NIWeek 2018 where