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NI Achieves Record Revenue for Q4 and Fiscal Year 2022

Company’s transformation continues to deliver improved operating performance

Q4 2022 Highlights

  • All-time record revenue of $448 million, up 7 percent year over year
  • Q4 GAAP operating margin of 13 percent; Q4 non-GAAP operating margin of 25 percent
  • Strong diluted GAAP EPS of $0.30; all-time record diluted non-GAAP EPS of $0.63
  • Cash and cash equivalents of $140 million as of December 31, 2022

National Instruments Corporation (Nasdaq: NATI) today announced Q4 2022 revenue of $448 million, up 7 percent year over year and an all-time quarterly record.

In Q4 2022, the value of the company’s total orders was down 3 percent year over year. Geographic order growth for Q4 2022 compared with Q4 2021 was down 7 percent in the Americas, down 9 percent in APAC and up 7 percent in EMEA.

In Q4, GAAP gross margin was 68 percent and non-GAAP gross margin was 70 percent. Total Q4 GAAP operating expenses were $244 million, down 1 percent year over year. Total Q4 non-GAAP operating expenses were $201 million, down 6 percent year over year. GAAP operating margin was 13 percent in Q4, with GAAP operating income of $60 million, up 21 percent year over year. Non-GAAP operating margin was 25 percent in Q4, with non-GAAP operating income of $112 million, up 16 percent year over year.

GAAP net income for Q4 was $40 million, with diluted earnings per share ("EPS") of $0.30, and non-GAAP net income was $83 million, with non-GAAP diluted EPS of $0.63.

“2022 was a strong year as we continued to make strides in transforming NI into a higher-growth, more profitable, and more resilient company. Despite ongoing global macroeconomic uncertainty, we delivered on the 2022 targets we shared at our September investor conference with record revenue of $1.7 billion, up 13 percent YOY, and non-GAAP operating margin of 20 percent, up 130 bps as compared to 2021," said Eric Starkloff, NI president and CEO. “As we head into 2023, even in a recessionary environment, we now expect to exceed our 300 bps non-GAAP margin expansion target.”

“In my first few weeks at NI, I've been impressed with the high level of talent in the organization, as well as the NI culture of engineering and commitment to its customers,” said Daniel Berenbaum, NI CFO. “My focus will be on accelerating operational improvements to achieve our margin targets, improving working capital management and cash flow generation, and building investor confidence in our ability to execute. We have already undertaken a number of initiatives which underpin our confidence in being able to generate significant operating margin improvement in 2023.”

NI’s non-GAAP results exclude, as applicable, the impact of purchase accounting fair value adjustments, stock-based compensation, amortization of acquisition-related intangibles, acquisition-related transaction and integration costs, taxes levied on the transfer of acquired intellectual property, foreign exchange gain/loss on acquisitions, restructuring charges, tax reform charges, disposal gains on buildings/assets and related charitable contributions, tax effects related to businesses held for sale, gain on sale of businesses, and capitalization and amortization of internally developed software costs. Reconciliations of NI’s GAAP and non-GAAP results are included as part of this news release.

FY 2022 Highlights

  • All-time record revenue of $1.66 billion, up 13 percent year over year
  • GAAP operating margin of 12 percent; Non-GAAP operating margin of 20 percent
  • Strong diluted GAAP EPS of $1.05; record diluted non-GAAP EPS of $1.93
  • Returned $300 million to stockholders through dividends and stock repurchases

In 2022, GAAP operating expenses were $964 million, up 4 percent year over year, and non-GAAP operating expenses were $836 million, up 1 percent year over year. GAAP net income in 2022 was $140 million, up 56 percent year over year, and non-GAAP net income was $255 million, up 14 percent year over year.

As of December 31, 2022, NI had $140 million in cash with $43 million in cash generated from operations in 2022. During Q4, NI paid $37 million in dividends. For the year, we returned $300 million to our stockholders through dividends and stock repurchases, including the repurchase of 3.8 million shares at an average price of $40.04 per share. The NI Board of Directors approved a dividend of $0.28 per share payable on March 6, 2023, to stockholders of record at the close of business on February 13, 2023.

Q1 2023 Guidance

  • GAAP revenue to be in the range of $415 million to $445 million, up 12 percent year over year at the midpoint
  • GAAP diluted EPS to be in the range of $0.14 to $0.28, up 2 cents year over year at the midpoint
  • Non-GAAP diluted EPS expected to be in the range of $0.48 to $0.62, up 34 percent year over year at the midpoint

Conference Call Information

Today, NI management will host a call with the investment community to discuss the company's financial performance in the fourth quarter. Investors can listen to the Q4 2022 earnings conference call beginning at 4:00 p.m. CT today. This event will be webcast in listen-only mode. Listeners may log on to the call at www.ni.com/investor-relations under the “Events and Presentations” section and select “Q4 2022 NATI Earnings Conference Call” to participate. The webcast will remain on the company site for 90 days.

Non-GAAP Presentation

To supplement NI’s financial statements presented on a GAAP basis, NI has provided non-GAAP financial information, including non-GAAP revenue or net sales, gross profit, gross margin, operating expenses, operating income, operating margin, provision for income taxes, net income, net margin and diluted EPS and non-GAAP guidance for diluted EPS. A reconciliation of the adjustments to GAAP results is included in the tables below. Additionally, certain non-GAAP financial measures presented on a forward-looking basis, such as non-GAAP operating margin, were not reconciled to the comparable GAAP financial measures because the reconciliation could not be performed without unreasonable efforts due to the unpredictability of the amounts and timing of events affecting the items we exclude from non-GAAP measures. Non-GAAP financial information is not meant as a substitute for GAAP results, but is included because management believes such information is useful to our investors for informational and comparative purposes. In addition, certain non-GAAP financial information is used internally by management to evaluate and manage the company. The non-GAAP financial information used by NI may differ from that used by other companies. These non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP.

Forward-Looking Statements

This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 including without limitation those statements about our expectations of accelerating growth and progress to meet or exceed our financial targets and long-term financial model, our continued momentum across regions and business units, our opportunities to drive growth, profitability and efficiency in our business, confidence in our strategy and the strategic changes made to our business, our ability to successfully integrate acquisitions and execute our growth strategy, our ability to turn backlog to revenue, our ability to drive customer demand through focus on high growth opportunities, the impacts of war in Europe, supply chain constraints and software licensing model transition on our financial results, the outcome of the Company’s restructuring activities and strategic alternatives process and our guidance and expectations for our Q1 2023 revenue, diluted EPS and non-GAAP diluted EPS, and future operating expenses, backlog, lead times, gross margin, operating margin and tax rate. These statements are subject to a number of risks and uncertainties, and actual results may differ materially from any future results expressed or implied by the forward-looking statements. Risks and uncertainties include without limitation: the global shortage of key components; effect of the global economic and geopolitical conditions; our international operations and foreign economies; adverse public health matters, including epidemics and pandemics such as the COVID-19 pandemic; our ability to effectively manage our partners and distribution channels; interruptions in our technology systems or cyber-attacks on our systems; the dependency of our product revenue on certain industries and the risk of contractions in such industries; concentration of credit risk and uncertain conditions in the global financial markets; our ability to compete in markets that are highly competitive; our ability to release successful new products or achieve expected returns; the risk that our manufacturing capacity and a substantial majority of our warehousing and distribution capacity are located outside of the U.S.; our dependence on key suppliers and distributors; longer delivery lead times from our suppliers; risk of product liability claims; dependence on our proprietary rights and risks of intellectual property litigation; the continued service of key management, technical personnel and operational employees; our ability to comply with environmental laws and associated costs; our ability to maintain our website; the risks of bugs, vulnerabilities, errors or design flaws in our products; our restructuring activities; our exposure to large orders; our shift to more system orders; our ability to effectively manage our operating expenses and meet budget; fluctuations in our quarterly results due to factors outside of our control; our outstanding debt; the interest rate risk associated with our variable rate indebtedness; seasonal variation in our revenues; our ability to comply with laws and regulations; changes in tax rates and exposure to additional tax liabilities; our ability to make certain acquisitions or dispositions, integrate the companies we acquire or separate the companies we sold and/or enter into strategic relationships; risks related to currency fluctuations; provisions in charter documents and Delaware law that delay or prevent our acquisition; and risks related to our strategic review process. In addition, our ability to declare and/or pay declared dividends is subject to compliance with the terms of our existing credit agreement. The company directs readers to its Form 10-K for the year ended December 31, 2021, its subsequent Form 10-Qs, and the other documents it files with the SEC for other risks associated with the company’s future performance. These documents contain and identify important factors that could cause our actual results to differ materially from those contained in our forward-looking statements. All information in this release is as of the date above. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

About NI

At NI, we bring together people, ideas and technology so forward thinkers and creative problem solvers can take on humanity’s biggest challenges. From data and automation to research and validation, we provide the tailored, software-connected systems engineers and enterprises need to Engineer Ambitiously™ every day.

National Instruments, NI, ni.com and Engineer Ambitiously are trademarks of National Instruments. Other product and company names listed are trademarks or trade names of their respective companies. (NATI-F)

 

National Instruments

Condensed Consolidated Balance Sheets

(in thousands)

 

December 31,

December 31,

 

2022

2021

 

(unaudited)

 

ASSETS

 

 

Current assets:

 

 

Cash and cash equivalents

$

139,799

 

$

211,106

 

Accounts receivable, net

 

445,279

 

 

341,275

 

Inventories, net

 

388,164

 

 

289,243

 

Prepaid expenses and other current assets

 

115,677

 

 

89,925

 

Total current assets

 

1,088,919

 

 

931,549

 

Property and equipment, net

 

265,380

 

 

253,668

 

Goodwill

 

615,734

 

 

575,992

 

Intangible assets, net

 

200,850

 

 

220,418

 

Operating lease right-of-use assets

 

59,176

 

 

58,641

 

Other long-term assets

 

128,479

 

 

74,717

 

Total assets

 

2,358,538

 

 

2,114,985

 

 

 

 

LIABILITIES AND EQUITY

 

 

Current liabilities:

 

 

Accounts payable (1)

 

54,639

 

 

59,063

 

Accrued compensation

 

71,422

 

 

111,261

 

Deferred revenue

 

137,208

 

 

137,818

 

Operating lease liabilities

 

13,834

 

 

13,137

 

Other taxes payable

 

67,615

 

 

59,109

 

Debt - current

 

25,000

 

 

 

Accrued expenses and other current liabilities (1)

 

153,157

 

 

64,826

 

Total current liabilities

 

522,875

 

 

445,214

 

Debt - non-current

 

516,637

 

 

300,000

 

Deferred income taxes

 

1,676

 

 

14,249

 

Income tax payable - non-current

 

40,646

 

 

54,195

 

Deferred revenue - non-current

 

63,066

 

 

32,822

 

Operating lease liabilities - non-current

 

30,588

 

 

30,468

 

Other long-term liabilities

 

26,926

 

 

14,340

 

Total liabilities

 

1,202,414

 

 

891,288

 

 

 

 

Stockholders' equity:

 

 

Preferred stock

 

 

 

 

Common stock

 

1,310

 

 

1,323

 

Additional paid-in capital

 

1,207,420

 

 

1,129,647

 

Retained (deficit) earnings

 

(14,741

)

 

112,858

 

Accumulated other comprehensive loss

 

(37,865

)

 

(20,131

)

Total stockholders' equity

 

1,156,124

 

 

1,223,697

 

Total liabilities and stockholders' equity

$

2,358,538

 

$

2,114,985

 

(1): In the fourth quarter 2022, we reclassified $26.9 million of accrued liability balances from “Accounts payable” to “Accrued expenses and other current liabilities.” To conform with the current period presentation, the following amounts reported in previous periods have also been reclassified: $25.6 million at September 30, 2022, $29.8 million at June 30, 2022, $23.2 million at March 31, 2022, and $24.2 million at December 31, 2021.

 

National Instruments

Condensed Consolidated Statements of Income

(in thousands, except per share data, unaudited)

 

 

 

 

 

 

Three Months Ended

 

Years Ended

 

December 31,

 

December 31,

 

2022

2021

 

2022

2021

 

 

 

 

 

 

Net sales:

 

 

 

 

 

Product

$

412,607

 

$

377,303

 

 

$

1,500,716

 

$

1,304,609

 

Software maintenance

 

35,669

 

 

43,338

 

 

 

156,259

 

 

165,072

 

Total net sales

 

448,276

 

 

420,641

 

 

 

1,656,975

 

 

1,469,681

 

 

 

 

 

 

 

Cost of sales:

 

 

 

 

 

Product

 

139,700

 

 

119,857

 

 

 

517,854

 

 

406,342

 

Software maintenance

 

4,621

 

 

3,739

 

 

 

16,870

 

 

14,621

 

Total cost of sales

 

144,321

 

 

123,596

 

 

 

534,724

 

 

420,963

 

 

 

 

 

 

 

Gross profit

 

303,955

 

 

297,045

 

 

 

1,122,251

 

 

1,048,718

 

 

 

68

%

 

71

%

 

 

68

%

 

71

%

Operating expenses:

 

 

 

 

 

Sales and marketing

 

118,252

 

 

122,304

 

 

 

483,267

 

 

467,352

 

Research and development

 

81,100

 

 

92,301

 

 

 

331,710

 

 

335,986

 

General and administrative

 

44,272

 

 

32,543

 

 

 

148,841

 

 

127,215

 

Total operating expenses

 

243,624

 

 

247,148

 

 

 

963,818

 

 

930,553

 

Gain on sale of assets

 

 

 

 

 

 

33,636

 

 

 

Operating income

 

60,331

 

 

49,897

 

 

 

192,069

 

 

118,165

 

Other income (expense)

 

(11,571

)

 

(4,739

)

 

 

(20,193

)

 

(14,590

)

Income before income taxes

 

48,760

 

 

45,158

 

 

 

171,876

 

 

103,575

 

Provision for income taxes

 

8,694

 

 

4,822

 

 

 

32,232

 

 

14,260

 

Net income

$

40,066

 

$

40,336

 

 

$

139,644

 

$

89,315

 

 

 

 

 

 

 

Basic earnings per share

$

0.31

 

$

0.31

 

 

$

1.06

 

$

0.68

 

Diluted earnings per share

$

0.30

 

$

0.30

 

 

$

1.05

 

$

0.67

 

 

 

 

 

 

 

Weighted average shares outstanding -

 

 

 

 

 

Basic

 

130,842

 

 

132,215

 

 

 

131,738

 

 

132,311

 

Diluted

 

131,746

 

 

133,225

 

 

 

132,533

 

 

133,562

 

 

 

 

 

 

 

Dividends declared per share

$

0.28

 

$

0.27

 

 

$

1.12

 

$

1.08

 

 

National Instruments

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

Years Ended December 31,

 

2022

2021

 

(unaudited)

 

Cash flow from operating activities:

 

 

Net income

$

139,644

 

$

89,315

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

Depreciation and amortization

 

90,707

 

 

99,402

 

Stock-based compensation

 

78,615

 

 

74,583

 

Disposal gain on sale of business/asset

 

(33,636

)

 

 

Loss from equity-method investees

 

163

 

 

5,719

 

Deferred income taxes

 

(71,590

)

 

(15,796

)

Net change in operating assets and liabilities

 

(160,939

)

 

(109,724

)

Net cash provided by operating activities

 

42,964

 

 

143,499

 

 

 

 

Cash flow from investing activities:

 

 

Acquisitions, net of cash received

 

(72,319

)

 

(223,080

)

Proceeds from sale of assets/business, net of cash divested

 

40,987

 

 

 

Capital expenditures

 

(48,193

)

 

(40,975

)

Capitalization of internally developed software

 

(388

)

 

(1,463

)

Additions to other intangibles

 

(3,558

)

 

(2,751

)

Acquisitions of equity-method and other investments

 

 

 

(15,753

)

Sales and maturities of short-term investments

 

 

 

60,297

 

Net cash used by investing activities

 

(83,471

)

 

(223,725

)

 

 

 

Cash flow from financing activities:

 

 

Proceeds from term loan

 

500,000

 

 

 

Payments of term loan

 

(6,250

)

 

(98,750

)

Proceeds from revolving line of credit

 

268,000

 

 

300,000

 

Payments of revolving line of credit

 

(518,000

)

 

 

Debt issuance costs

 

(2,348

)

 

(1,993

)

Proceeds from issuance of common stock

 

31,815

 

 

32,518

 

Repurchase of common stock

 

(151,830

)

 

(55,000

)

Dividends paid

 

(147,835

)

 

(143,113

)

Net cash provided by (used by) financing activities

 

(26,448

)

 

33,662

 

 

 

 

Impact of changes in exchange rates on cash

 

(4,352

)

 

(2,562

)

 

 

 

Net change in cash and cash equivalents

 

(71,307

)

 

(49,126

)

Cash and cash equivalents at beginning of period

 

211,106

 

 

260,232

 

Cash and cash equivalents at end of period

$

139,799

 

$

211,106

 

 

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,

 

2022

2021

 

2022

2021

Stock-based compensation

 

 

 

 

 

Cost of sales

$

884

 

$

1,092

 

 

$

4,658

 

$

4,580

 

Sales and marketing

 

4,991

 

 

6,284

 

 

 

26,430

 

 

25,233

 

Research and development

 

6,034

 

 

5,811

 

 

 

24,556

 

 

23,515

 

General and administrative

 

5,862

 

 

5,335

 

 

 

22,970

 

 

21,384

 

Provision for income taxes

 

(2,418

)

 

(2,010

)

 

 

(10,105

)

 

(12,047

)

Total

$

15,353

 

$

16,512

 

 

$

68,509

 

$

62,665

 

 

 

 

 

 

 

Amortization of acquisition-related intangibles and fair value adjustments

 

 

 

 

 

Net sales

$

254

 

$

352

 

 

$

1,367

 

$

2,324

 

Cost of sales

 

5,878

 

 

6,700

 

 

 

22,903

 

 

19,391

 

Sales and marketing

 

4,955

 

 

3,334

 

 

 

22,379

 

 

10,192

 

Research and development

 

 

 

320

 

 

 

(320

)

 

320

 

Other expense (income)

 

467

 

 

531

 

 

 

1,968

 

 

2,007

 

Provision for income taxes

 

(1,705

)

 

(1,626

)

 

 

(7,507

)

 

(4,071

)

Total

$

9,849

 

$

9,611

 

 

$

40,790

 

$

30,163

 

 

 

 

 

 

 

Acquisition-related transaction and integration costs, restructuring charges, and other(1)(2)

 

 

 

 

 

Net sales

$

 

$

 

 

$

(411

)

$

 

Cost of sales

 

1,270

 

 

25

 

 

 

9,819

 

 

(25

)

Sales and marketing

 

7,014

 

 

1,687

 

 

 

12,478

 

 

7,759

 

Research and development

 

2,422

 

 

9,682

 

 

 

3,977

 

 

11,104

 

General and administrative (2)

 

11,068

 

 

865

 

 

 

15,547

 

 

8,254

 

Gain on sale of asset (2)

 

 

 

 

 

 

(33,636

)

 

 

Other expense (income) (1)

 

(400

)

 

 

 

 

(5,685

)

 

4,322

 

Provision for income taxes

 

(4,433

)

 

(2,708

)

 

 

60

 

 

(6,837

)

Total

$

16,941

 

$

9,551

 

 

$

2,149

 

$

24,577

 

(1): During the first quarter of 2021, we recognized a $3.5 million impairment loss related to one of our equity-method investments.

(2): During the third quarter of 2022, the company recognized a gain of $34 million related to the sale of land and office buildings, presented within "Gain on sale of assets". The company also recognized a charitable contribution expense of $10 million related to an infrequent donation using a portion of the proceeds from the sale of the building, presented within "General and administrative".

 

(Capitalization) and amortization of internally developed software costs

 

 

 

 

 

Cost of sales

$

773

 

$

5,041

 

 

$

5,863

 

$

23,674

 

Research and development

 

 

 

(188

)

 

 

(388

)

 

(1,433

)

Provision for income taxes

 

(179

)

 

(1,085

)

 

 

(1,238

)

 

(4,877

)

Total

$

594

 

$

3,768

 

 

$

4,237

 

$

17,364

 

 

 

 

 

 

 

National Instruments

Reconciliation of GAAP to Non-GAAP Measures

(in thousands, unaudited)

 

 

 

 

 

 

 

Three Months Ended

 

Years Ended

 

December 31,

 

December 31,

 

2022

2021

 

2022

2021

Reconciliation of Gross Profit to Non-GAAP Gross Profit

 

 

 

 

 

Gross profit, as reported

$

303,955

 

$

297,045

 

 

$

1,122,251

 

$

1,048,718

 

Stock-based compensation

 

884

 

 

1,092

 

 

 

4,658

 

 

4,580

 

Amortization of acquisition-related intangibles and fair value adjustments

 

6,132

 

 

7,052

 

 

 

24,270

 

 

21,715

 

Acquisition transaction and integration costs, restructuring charges and other

 

1,270

 

 

25

 

 

 

9,408

 

$

(25

)

Amortization of internally developed software costs

 

773

 

 

5,041

 

 

 

5,863

 

 

23,674

 

Non-GAAP gross profit

$

313,014

 

$

310,255

 

 

$

1,166,450

 

$

1,098,662

 

Non-GAAP gross margin

 

70

%

 

74

%

 

 

70

%

 

75

%

 

 

 

 

 

 

Reconciliation of Operating Expenses to Non-GAAP Operating Expenses

 

 

 

Operating expenses, as reported

$

243,624

 

$

247,148

 

 

$

963,818

 

$

930,553

 

Stock-based compensation

 

(16,887

)

 

(17,430

)

 

 

(73,956

)

 

(70,132

)

Amortization of acquisition-related intangibles and fair value adjustments

 

(4,955

)

 

(3,654

)

 

 

(22,059

)

 

(10,512

)

Acquisition transaction and integration costs, restructuring charges and other

 

(20,504

)

 

(12,234

)

 

 

(32,002

)

 

(27,117

)

Capitalization of internally developed software costs

 

 

 

188

 

 

 

388

 

 

1,433

 

Non-GAAP operating expenses

$

201,278

 

$

214,018

 

 

$

836,189

 

$

824,225

 

 

 

 

 

 

 

Reconciliation of Operating Income to Non-GAAP Operating Income

 

 

 

Operating income, as reported

$

60,331

 

$

49,897

 

 

$

192,069

 

$

118,165

 

Stock-based compensation

 

17,771

 

 

18,522

 

 

 

78,614

 

 

74,712

 

Amortization of acquisition-related intangibles and fair value adjustments

 

11,087

 

 

10,706

 

 

 

46,329

 

 

32,227

 

Acquisition transaction and integration costs, restructuring charges and other

 

21,774

 

 

12,259

 

 

 

41,410

 

 

27,092

 

Net amortization of internally developed software costs

 

773

 

 

4,853

 

 

 

5,475

 

 

22,241

 

Gain on sale of business/assets

 

 

 

 

 

 

(33,636

)

 

 

Non-GAAP operating income

$

111,736

 

$

96,237

 

 

$

330,261

 

$

274,437

 

Non-GAAP operating margin

 

25

%

 

23

%

 

 

20

%

 

19

%

 

 

 

 

 

 

Reconciliation of Provision for income taxes to Non-GAAP Provision for income taxes

 

 

 

Provision for income taxes, as reported(1)

$

8,694

 

$

4,822

 

 

$

32,232

 

$

14,260

 

Stock-based compensation

 

2,418

 

 

2,010

 

 

 

10,105

 

 

12,047

 

Amortization of acquisition-related intangibles and fair value adjustments

 

1,705

 

 

1,626

 

 

 

7,507

 

 

4,071

 

Acquisition transaction and integration costs, restructuring charges and other

 

4,433

 

 

2,708

 

 

 

6,378

 

 

6,837

 

Net amortization of internally developed software costs

 

179

 

 

1,085

 

 

 

1,238

 

 

4,877

 

Gain on sale of business/assets

 

 

 

 

 

 

(6,438

)

 

 

Non-GAAP provision for income taxes(1)

$

17,429

 

$

12,251

 

 

$

51,022

 

$

42,092

 

(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 and Non-GAAP Diluted EPS

(in thousands, except per share data, unaudited)

 

 

 

 

 

 

 

Three Months Ended

 

Years Ended

 

December 31,

 

December 31,

 

2022

2021

 

2022

2021

 

 

 

 

 

 

Net income, as reported

$

40,066

 

$

40,336

 

 

$

139,644

 

$

89,315

 

Adjustments to reconcile net income to non-GAAP net income:

 

 

 

 

 

Stock-based compensation

 

17,771

 

 

18,522

 

 

 

78,614

 

 

74,712

 

Amortization of acquisition-related intangibles and fair value adjustments

 

11,554

 

 

11,237

 

 

 

48,297

 

 

34,234

 

Acquisition transaction and integration costs, restructuring charges and other

 

21,374

 

 

12,259

 

 

 

35,725

 

 

31,414

 

Net amortization of internally developed software costs

 

773

 

 

4,853

 

 

 

5,475

 

 

22,241

 

Gain on sale of business/asset

 

 

 

 

 

 

(33,636

)

 

 

Income tax effects and adjustments(1)

 

(8,735

)

 

(7,429

)

 

 

(18,790

)

 

(27,832

)

Non-GAAP net income

$

82,803

 

$

79,778

 

 

$

255,329

 

$

224,084

 

Non-GAAP net margin

 

18.5

%

 

18.9

%

 

 

15.4

%

 

15.2

%

 

 

 

 

 

 

Diluted EPS, as reported

$

0.30

 

$

0.30

 

 

$

1.05

 

$

0.67

 

Adjustment to reconcile diluted EPS to non-GAAP diluted EPS

 

 

 

 

 

Stock-based compensation

 

0.14

 

 

0.14

 

 

 

0.59

 

 

0.56

 

Amortization of acquisition-related intangibles and fair value adjustments

 

0.09

 

 

0.09

 

 

 

0.37

 

 

0.26

 

Acquisition transaction and integration costs, restructuring charges and other

 

0.16

 

 

0.09

 

 

 

0.27

 

 

0.23

 

Net amortization of internally developed software costs

 

0.01

 

 

0.04

 

 

 

0.04

 

 

0.17

 

Gain on sale of business/asset

 

 

 

 

 

 

(0.25

)

 

 

Income tax effects and adjustments(1)

 

(0.07

)

 

(0.06

)

 

 

(0.14

)

 

(0.21

)

Non-GAAP diluted EPS

$

0.63

 

$

0.60

 

 

$

1.93

 

$

1.68

 

(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.

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

Basic

 

130,842

 

 

132,215

 

 

 

131,738

 

 

132,311

 

Diluted

 

131,746

 

 

133,225

 

 

 

132,533

 

 

133,562

 

 

Reconciliation of GAAP Diluted EPS Guidance to Non-GAAP Diluted EPS Guidance

(unaudited)

 

Three Months Ended

 

March 31, 2023

 

 

 

 

Low

High

GAAP Diluted EPS, guidance

$

0.14

 

$

0.28

 

Adjustment to reconcile diluted EPS to non-GAAP diluted EPS:

 

 

Stock-based compensation

 

0.14

 

 

0.14

 

Amortization of acquisition-related intangibles and fair value adjustments

 

0.08

 

 

0.08

 

Acquisition transaction and integration costs, restructuring charges and other

 

0.19

 

 

0.19

 

Net amortization of internally developed software costs

 

 

 

 

Income tax effects and adjustments(1)

 

(0.07

)

 

(0.07

)

Non-GAAP Diluted EPS, guidance

$

0.48

 

$

0.62

 

(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.

 

Contacts

Marissa Vidaurri

Vice President of Investor Relations

(512) 683-5215

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