National Instruments (NI) makes a measurable difference, virtually, in the lab. The company's instrumentation hardware and graphical software convert standard PCs into industrial automation and test and measurement systems. These "virtual instruments" can observe, measure, and control electrical signals and physical attributes such as voltage and pressure. The company also offers programming environments (LabVIEW and Measurement Studio) for creating customizable graphical interfaces, controlling instruments, and capturing and analyzing data. In addition, NI provides test management software for running automated factory test systems. Customers outside the Americas account for around 60% of sales.
The company's product segment generates 92% of revenue with software maintenance accounting for the rest.
NI has offices in more than 40 countries. Its manufacturing plants are in Hungary and Malaysia; it is moving manufacturing from its Texas facility to the other two locations.
Customers located in North and South America account for 40% of sales. Europe accounts for 28% of sales, Asia brings in 23% with NI's Emerging Markets countries ( Southeast Asia, Africa, the Middle East, and the former Russian Republics) round out the remaining 9%.
Sales and Marketing
NI relies on a direct sales force to sell hardware and software to its customer base of 35,000 companies. Less than 10% of sales are made through alternative channels, such as distributors, original equipment manufacturers (OEMs), value-added resellers (VARs), system integrators, and consultants.
The company targets the automotive, aerospace, computer and electronics, automated test equipment, consumer electronics, education, government and defense, medical research, energy, pharmaceutical, semiconductor, and telecommunications industries, among others.
Throughout its history NI has relied on relentless promotion and publicity to get its name out in front of engineers and researchers. It advertises heavily in trade publications from Reed Business Information US, CMP Media, Penton Media, and other publishers, while unleashing barrages of product press releases on trade editors on an almost daily basis.
The company also promotes itself through technical seminars and conferences presented around the world and over the Internet. Its biggest event is the annual NIWeek conference, staged each summer at the Austin Convention Center, in NI's headquarters city. Held every year since 1995, NIWeek attracts thousands of attendees from all over the world.
NI posted record sales, profits, and cash flow in 2014. Sales rose 6% in 2014 to a record $1.24 billion. (NI hit the $1 billion mark for the first time in 2011.) The company rode improving market conditions with more revenue from new products to record sales gains in all geographic markets. Large orders (valued at more than $100,000) grew 18% in 2014. Profits increased 25% to reach $126 million in 2014. Cash flow from operations was $195 million in 2014, compared to about $170 million in 2013.
Mergers and Acquisitions
In 2015, NI acquired BEEcube, a supplier of high-performance field programmable gate array (FPGA) circuits for wireless research, wireless infrastructure, and military/defense applications. This acquisition aims to strengthen NI's Internet of Things (IoT) offerings as more become connected and transmit data. BEEcube's technology can be used in high-definition video processing, signal intelligence, radar-sonar arrays, bioinformatics, data mining, and medical imaging.