National Instruments Corporation (NASDAQ:NATI) Q1 2018 Earnings Conference Call - Final Transcript

Apr 26, 2018 • 05:00 pm ET

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National Instruments Corporation (NASDAQ:NATI) Q1 2018 Earnings Conference Call - Final Transcript

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Q & A
Executive
Karen Rapp

to this agile methodology and leverage that for our customers to deliver these features much faster. And so, the guidance that I provided was that we will be increasing our target for R&D. We were running at a target of 16% and now that will go up to 18% to align with that new view of non-GAAP R&D transparency.

Executive
Alex Davern

Obviously, we expect our gross margin to move up correspondingly. So you'll see two areas in the model that will move substantially offsetting as we provide that. I think really more transparent and industry norm view of both our R&D and our gross margin. And we'll be talking about our evolution of our long-term model at NIWeek. So we'd be happy to get into it in more detail at that point.

Just a couple of comments about this is I'll reflect, NXG for us, the LabVIEW NXG in particular, has been a multi-year very large investment and we've been looking forward to the opportunity as that we drive adoption of NXG, completeness. It's been a very stable release. I'm excited that the R&D team now is able to transition to a much more rapid development process so we can bring features to market for our customers much more quickly. And I'm glad that we'll be able to align with what's more common industry practice as we move forward.

Analyst
Vijay Bhagavath

Okay. Thank you.

Executive
Alex Davern

Thanks.

Executive
Eric Starkloff

Thank you, Vijay.

Executive
Karen Rapp

Thanks.

Operator
Operator

Thank you. (Operator Instructions) Our next question is from the line of Rob Mason of Baird. Your line is open.

Analyst
Rob Mason

Yes. Good afternoon. Thanks for taking the question. So question first just about the second quarter guidance. So at the low end, essentially revenues would be flat year-over-year. I'm just, I'm curious what your thought process is around what delivers flat revenues if we've kind of discounted the wireless guys going forward or maybe they present a comparable a year-over-year comparison issue?

Executive
Alex Davern

Obviously, from a year-over-year point of view, we did have revenue from those guys last year, Rob, as you mentioned. Obviously, we've always kept that kind of range consistent. So the real thing I think to focus on is the midpoint. From a sequential point of view, given the decline we saw on those accounts in Q1, I don't really anticipate that they can have an impact on our ability to hit our guidance in Q2 from a guidance point of view.

We will be looking to build some backlog if we can, and obviously we're very successful in terms of delivering on the profit element here. So we'd like to have other than more backlog, to be more efficiently able to manage the business. So going forward, from a Q2 guidance point of view, that set of accounts that Eric mentioned, handful in the mobile devices supply chain unlikely to have any substantial impact on our ability to hit our guidance for Q2.

Analyst
Rob Mason

Okay. Okay. And then, I want to dig in geographically just a little bit, a couple things. Asia, you