National Instruments Corporation (NATI)
Bank of America Global Technology Conference
June 04, 2013 4:00 PM ET
Alex Davern – CFO and COO
Previous Statements by NATI
» National Instruments' CEO Discusses Q1 2013 Results - Earnings Call Transcript
» National Instruments' CEO Discusses Q4 2012 Results - Earnings Call Transcript
» National Instruments' CEO Hosts Q4 2012 Business Update Conference (Transcript)
Thanks so much Chris. Good afternoon. Thank you for your time and attention today. As Chris said, my name is Alex Davern, I am the Chief Operating Officer of National Instruments. I joined the company back in 1994. So I have been with the business for a quite a bit of this revenue growth, you see on the slide in front of you.
National Instruments is the leader in computer-based measurement and automation. Our mission in life is to make engineers’ time gets more productive to advanced discovery and we do that by disrupting the traditional instrument business that I’ll show as we go through.
We did little over $1.1 billion in revenue last year. We had very consistent growth over the decades outside of the two major global industrial recessions that we’ve seen in that time period back in 2001 as we saw our diverse business get impacted when many industries were under pressure, we returned to growth in 2002, had a record year in 2003 and then doubled the size of the company between 2003 and 2005 organically.
We then saw an impact from the broad great recession in 2009 rapidly recovered to record revenue in 2010 and on to new records in 2011 and 2012. When we look at the vision for the business, we look at the evolution of instrumentation over the course of the decades in three basic forms. One being vacuum tubes which was really the business that how it was run in its early days and then in the next thirty years or so, transistors and instrumentation led by what was Hewlett-Packard at the time, transitioned the market to electronics.
As we look at the platform approach of companies today, we are seeing the transition of the instruments world away from the power transistors towards software as the driving force of value and software built on common off to shelf harbor platforms that allow very strong performance.
Now what we do at National Instruments is we break the instrument mystery down into its core elements. In order to take a measurement, most measurements we are trying to take involve analog phenomena, whether it’s my voice or electrical current or wave forms from an RF device and you need to be able to convert the analog to digital.
You need a computing platform to process the digital data and then you need software to interpret the digital data to allow you to present your various different results.
At National Instruments, we disaggregate the traditional approach. We deliver measurement science of the plug-in board that could be coupled with standard PCs, we use a very high powerful LabVIEW software to allow the engineer and scientist to build custom applications around that measurement how we deliver system level platforms that allow our customers to extend those measurement platforms to their custom applications.
At the heart of our business is an application software product called LabVIEW. LabVIEW was first introduced to the market in on a Macintosh that make it fixed. The vision for LabVIEW is to be the spreadsheet for scientists and engineers. Scientists and engineers learn the language of building systems through a graphical flow chart or block diagram approach in engineering school.
The premise behind LabVIEW as a graphical portraying languages as you design the data flow you are competing the application program itself directly. So it’s an abstraction of measurement for engineering applications. That’s a very highly productive tool for scientists and engineers and it’s the dominant application software for building measurement systems in the world today.
Now LabVIEW spans from the incredibly easy to use, so LEGO is one of our largest OEMs in terms of unit volume. So LEGO is a toy company, their most successful product in their history is a robotics building set that allows children to build autonomous robots. That’s an OEM version of our LabVIEW application.
Again, abstracting the problem to a very high level certain age levels can build autonomous robotics. It spans in all the way to the SpaceX launch control application which again was built in our LabVIEW framework, so we are able to get from the very simple to use, very broad based but it’s also an incredibly powerful tool building some of the most sophisticated scientific instruments on the planet and its ability to span, and easy to use application is also very powerful that’s allowed us to be able to deploy LabVIEW to millions of different applications.
Now our vision for instrumentation is to be able to satisfy a greater scope of the measurement world we are commercial off the shelf technology. If we look at the world of measurement on it’s a chart in front of you, here the vertical axis here represents the accuracy with which you want to measure the signal expressed in bits of resolution. Think of it in terms of do I want to measure temperature for example within 1 degree in this room or within about a 11 degree in a wafer.