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National Instruments Corp (NATI) Q1 2019 Earnings Call Transcript

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National Instruments Corp  (NASDAQ: NATI)
Q1 2019 Earnings Call
April 30, 2019, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to National Instruments First Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. (Operator Instructions) Later, we will have a question-and-answer session. (Operator Instructions) As a reminder, this conference is being recorded.

Now, it's my pleasure to turn the call to Marissa Vidaurri, Head of Investor Relations.

Marissa Vidaurri -- Head of Investor Relations

Good afternoon. Thank you for joining our Q1 2019 earnings call. Speakers today are Alex Davern, Chief Executive Officer; Eric Starkloff, President and Chief Operating Officer; and Karen Rapp, Chief Financial Officer. We will start with an update on our business and then take your questions.

During the course of this conference call, we shall make forward-looking statements, including statements regarding future growth and profitability, our focus, plans, vision and strategic direction, our customers continuing to innovate, our cash deployment and our guidance for revenue and EPS for Q2. We wish to caution you that such statements are just predictions and that actual events or results may differ materially, and could be negatively affected by numerous factors, including any weakness in global economies, fluctuations in revenue from our large customers, foreign exchange fluctuations, expense overruns, manufacturing inefficiencies, adverse effective price changes and effective tax rates. We refer you to the documents the Company files regularly with the Security and Exchange Commission, including the Company's Annual Report on Form 10-K filed on February 21, 2019. These documents contain and identify important factors that could cause our actual results to differ materially from those contained in our forward-looking statements.

With that, I will now turn it over to Chief Executive Officer, Alex Davern.

Alex Davern -- Chief Executive Officer

Thank you, Marissa. Good afternoon, everyone and thank you for joining our first quarter conference call. Key financial updates from today are, revenue of $311 million with backlog up $10 million in Q1. Record non-GAAP net income for first quarter up 21% year-over-year and we repurchased approximately 1 million shares of common stock at an average price of approximately $45 per share.

I'm proud of our team's execution in the first quarter despite a weakening industrial economy, especially in Europe. Orders were slightly ahead of our expectations in Q1, but revenue came in below the midpoint of guidance. Backlog increased by $10 million as a result of timing and mix of orders in Q1. Despite the shortfall in revenue, we achieved the midpoint of our earnings guidance, as a result of strong gross margins and the ability to scale our operating expenses.

In Q1 2019, the value of the Company's total orders was up 1% year-over-year with orders over $20,000 being up 6% year-over-year as we saw a continued growth in our system level business. And orders under $20,000 were down 6% year-over-year, in line with the weakening global PMI and the stronger dollar. Combined, the impact of foreign exchange, changes and the impact of the change software revenue recognition standard reduced our comparable orders by $12 million year-over-year, or 4%. While we're cautious about revenue growth in the first half of 2019 given the currency and macro concerns, we expect improved conditions in the second half as we lap these headwinds, and we expect to see the benefit of early 5G millimeter wave demand.

In Q1, we delivered record non-GAAP net income for the first quarter. We've been very disciplined in our execution over the last two years and Q1 non-GAAP net income was up 21% year-over-year, and up almost 80% compared to Q1 2017. In Q1 '17 -- sorry, in -- excuse me, in 2017 and in 2018, we achieved our financial goals, delivering record revenue and significant operating leverage. Looking out to the rest of 2019, I believe we are well positioned to deliver record revenue and record non-GAAP net income again in 2019. I'm excited about the opportunity for NI in the long-term, and I'm looking forward to seeing the full impact of the changes we have put in place.

During the last two years, we have established a new core strategic vision to be the leader in software-defined automated test and automated measurement systems. We have realigned our R&D investments to drive innovation and to take advantage of the major disruptive trends in communications and automotive technology. We have reoriented our sales teams from a geographic focus to an account and applications focus to help us accelerate our growth and we have committed to delivering operating leverage. While the full impact of these changes will take time to bear fruit, we are pleased to have navigated the recent short-term headwinds and still deliver record profitability in Q1.

Let's talk through the details of our performance and highlight the 25th anniversary of the industry's leading user conference, NI Week.

I'd like to turn it over to Eric Starkloff, President and Chief Operating Officer.

Eric Starkloff -- President and Chief Operating Officer

Thank you, Alex, and good afternoon. Our core strategic vision continues to provide focus for our business and our employees, and it orient us around the value that we can deliver to our customers. Despite some recent economic headwinds, we know that our customers continue to innovate and our platform helps them to stay ahead of their competition. I will now provide some context on our order growth in this quarter by region and by industry, and provide a preview of our upcoming NI Week conference.

In Q1, total orders were up 1% year-over-year in US dollars after the impact from foreign exchange and software accounting that Alex mentioned. From a regional perspective, our EMEIA region was adversely impacted by a weakening PMI and a foreign exchange headwind contributing to orders being down 5% in US dollars in Q1. Our Americas region saw growth with orders up 3% year-over-year. The software accounting change reduced order growth in Americas by 5% in Q1. We believe the multi-year growth trajectory of our Americas region is attributed to our targeted investments in our sales team evolution and the deep relationships we are building directly with our customers in key accounts. The APAC region reported orders up 4% year-over-year and we were pleased to see a rebound in China in Q1 after softness in Q4 2018.

Now, turning to industry performance. In semiconductor, we continue to see strong double-digit year-over-year growth in orders, a proof point for our strategy to build system level offerings targeted at focus growth industries. Our customers continue to adopt our semiconductor test offering across characterization, validation and production tests. We are seeing strong traction in the validation and production test of sub-6 gigahertz 5G, and working closely with strategic customers as they plan for the automated validation and production test of millimeter wave 5G, later this year.

In our transportation business, orders declined slightly year-over-year in Q1. The business was impacted by the overall softness of the automotive industry. While the overall production rate of automobiles weaken, our automotive customers continued to shift investment to new technologies to stay ahead of their competition. Using the NI platform, customers are addressing fast growing technologies such as electric and hybrid powertrains and autonomous vehicles, and we continue to see strong growth in these applications.

Our aerospace, defense and government orders grew low-single digits year-over-year in Q1. Our platform continues to add significant value to this industry, which benefits from our software-centric modular approach as it helps these customers meet their need for highly customized and long lifecycle systems. Much of our success in this industry is being driven by strong software adoption and growth of our RF and software defined radio products.

With respect to our broad portfolio of customers in all other industries, which represents approximately half of our business, orders were down slightly year-over-year. Historically, this part of our business has been more affected by broad economic trend as represented in indices, such as the PMI. We do believe the stability and this broad set of customers demonstrates the broad applicability and impact of our continued product innovation.

For example, in the first quarter, we continue to see strong growth in the adoption of NI software with software seat growth up 13% year-over-year in Q1. This adoption was driven by the continued uptake of new LabVIEW capability, as well as the new software products we've released over the past two years, such as our SystemLink Systems Management software.

Now, I would like to share a preview of NI Week 2019, the 25th anniversary of our annual user conference and the premier customer event in our industry. Thousands of engineers and technology leaders will arrive in Austin next month to learn how to solve the challenges they face and bring in new technologies to market at an ever-increasing pace. At this year's NI Week keynotes, you'll hear directly from leading semiconductor, automotive and aerospace companies about the business impact they are experiencing through the adoption of our platform. We will also launch new products for 5G testing, electric vehicle validation, software for managing highly distributed test systems, and we'll demonstrate how we are using artificial intelligence and data analytics to more effectively monitor critical industrial assets. NI Week is the best for to see firsthand how the NI platform enables some of the most impactful engineering applications and scientific advances.

In summary, we know the innovation from our customers must continue and our platform is a critical component to their success. We remain confident in our vision and strategy, and our ability to deliver record revenue and record profitability in 2019.

Now, I'd like to turn it over to Karen Rapp, our Chief Financial Officer for the financial update.

Karen Rapp -- Chief Financial Officer & Treasurer

Thank you, Eric. I'm pleased with our earnings performance in Q1. With NI's increased scalability and culture of operational efficiency, we were able to deliver 21% year-over-year increase in non-GAAP net income on flat revenue. We believe our strong gross margins remain a testament to the value of our brand and the benefits our platform provides to our customers.

In Q1, we returned almost $80 million to shareholders through dividends and stock buybacks. For Q1, revenue was $311 million with backlog up $10 million. Non-GAAP gross margin in Q1 was 78%. Our Q1 non-GAAP operating margin was 14%, up 170 basis points from a year ago. The Company reported Q1 GAAP net income of $23 million, or $0.17 per share. Q1 non-GAAP net income was $40 million, and an increase of almost 80% over the last two years. Non-GAAP earnings per share was $0.30, up 20% year-over-year.

Now, an update on our capital allocation strategy. Our cash balance remained strong at $480 million at the end of Q1. Our trailing 12 months cash flow from operations was $277 million, up 27% year-over-year and representing approximately 20% of revenue. During the first quarter, we paid $33 million in dividends and repurchased approximately 1 million shares of our outstanding common stock, returning approximately $80 million to our shareholders. The NI Board of Directors approved a dividend of $0.25 per share for shareholders of record on May 13, 2019. Over the last 12 months, our dividends represent approximately 53% of free cash flow, which we believe underscores their sustainability.

Through yesterday, our orders for April are up low-single digits year-over-year. And our guidance assumes that our backlog will increase again in Q2 as we continue our strategy of growing more system sales. For second quarter 2019, we remained cautious due to economic uncertainty. We currently expect total revenues to be in the range of $326 million to $356 million. We expect GAAP fully diluted earnings per share will be in the range of $0.16 to $0.30 for Q2 with non-GAAP fully diluted earnings per share expected to be in the range of $0.28 to $0.42. At the midpoint of our guidance, non-GAAP net income will be up over 10% for the first half of 2019, ahead of the leverage plan we communicated at our Investor Conference, last year. For these forward looking statements, I must caution you that our actual revenues and earnings could be negatively affected by numerous factors.

In summary, in Q1, we delivered a 21% year-over-year increase in non-GAAP net income on flat revenue, thanks to our increased scalability and strong culture of operational efficiency. We remain committed to delivering long-term shareholder value and focused on the key industries where we believe our platform is best suited to take advantage of major technology disruptions.

With that, I will now turn it over to Alex for some closing comments.

Alex Davern -- Chief Executive Officer

Thank you, Karen. We are confident in our strategy and are positioning NI for long-term growth. With record profitability and a strong balance sheet, we are well positioned to continue investment in our differentiated software defined platform. I believe we have made great progress over the last two years, delivering innovative new products to drive value for our customers, improving results for our shareholders, securing new growth opportunities for our partners, and creating outstanding career opportunities for our employees.

I'd like to thank our employees for their hard work and operational excellence, as we continue our journey to be the leader in software defined automated test and automated measurement systems. I welcome you to join us at NI Week for our Investor Conference on May, 21.

We will now open up for your questions.

Questions and Answers:

Operator

Thank you. (Operator Instrucstions). And our first question is from John Marchetti with Stifel. Your line is open.

John Marchetti -- Stifel -- Analyst

Hi. Thanks very much. Alex, I wanted to go back to a comment that you made in sort of your earlier remarks about the expectation for sort of improvement in the second half. And how much of that maybe is tied to specific programs, whether it's around 5G or some things like that, and how much of that is maybe your expectation for either an improving economic backdrop or if we should see sort of PMI improving here? Just trying to get a sense of how much of that is geared toward some specific verticals versus how much of that maybe is more sort of an expectation for general economic improvement.

Alex Davern -- Chief Executive Officer

Very good question, John. And it is a mix. Certainly in the last couple of quarters, we've seen declining PMI, tougher certainly exchange rate situation. And those I think we'll past from a headwind point of view as we go into Q3, into Q4. That's my expectation. We had a tough Q4 because of that and in a relatively challenging Q1, despite having orders ahead of our expectations.

So I think as we get later in the year, that will become a benefit for us. And then as we look from a specific vertical opportunity, we clearly see the investments that are being made in 5G and we're excited about the traction we're gaining. Obviously, a lot of the early stage investments are being made at a stage of the engineering cycle where we don't participate quite as much. But as these move -- technologies move in a high volume production test later in '19, into 2020, we see an opportunity for optimism there.

John Marchetti -- Stifel -- Analyst

And then maybe just as a follow-up to that, if you could just spend a moment on sort of the automotive group. That had been an area that obviously -- had been an area of strength for a number of quarters for you. Certainly, we all are aware of kind of what those headline unit numbers have been doing. But it seem like you were fairly disassociated for that for a while. Are we at a point maybe where customers have caught up a little bit and now you're a little bit more tied to end unit demand or is there something else there that we need to account for?

Alex Davern -- Chief Executive Officer

I think the whole automotive industry is, as you well know, John, has gone through a real transition at this point in time. There has been a very definite significant investments in electrification and also in the autonomy investments that are going on right now. We are seeing, as you see the headlines, a lot of the automotive companies have seen a lot of profit pressure. And as a result, they're shifting spend from more of their legacy investments to try to fund the new technology investments. We obviously participate quite significantly in some of those legacy areas. And so that transition is going to take a period of time until the growth, which we're still seeing very strong growth in these technology areas sufficient to offset that headwind.

And some of the other things I'd point to when we look at some of the semiconductor bellwethers that are proximate to our market companies like TI, ADI, NXT, the impact that they're seeing in this timeframe, and I think it's pretty aligned with some of the shorter-term challenges we're seeing in that space.

John Marchetti -- Stifel -- Analyst

And then maybe if I could just ask one -- one last one and then I'll jump out of the queue here. Is there a difference by geography in terms of how those order sizes skew? I'm just trying I guess to get a sense of if certain geographies are a little bit more weighted toward your sub $20,000 order size versus other geographies, maybe seeing more on the 20% or greater side?

Eric Starkloff -- President and Chief Operating Officer

Hi, John. This is Eric. I mean in general, as you've seen across all the geographies, we've had a shift that's been happening over a number of years now toward the larger orders, that's now approximately 60% of our business. And it continues to be a growth driver. It's growing faster than the rest of the business in every region. Now, as we said before, we tend to characterize the under $20,000 business has more impacted by the general economic indices. So if you look into Q1, the weakness in Europe in particular did affect that under $20,000 business and sort of that broader based business more clearly based on the weakness in the European economy. And you saw that in really weak European PMIs.

Alex Davern -- Chief Executive Officer

And just one last point on it. John, if you look at that mix, obviously from all in reporting number, orders over $20,000 were up 6%, but as Eric mentioned in his remarks, the change in software accounting last year kind of created a bit of an artificial impact there. So that brought down the growth rate of our large orders as we reported to 6%. It would have been 3% higher on an apples-to-apples basis.

John Marchetti -- Stifel -- Analyst

Got it. Thanks very much.

Alex Davern -- Chief Executive Officer

Thanks, John.

Eric Starkloff -- President and Chief Operating Officer

Thank you, John.

Operator

Thank you. And our next question is from Richard Eastman with Baird. Your line is open.

Richard Eastman -- Robert W. Baird -- Analyst

Yes. Good afternoon. Thank you. Alex, just to follow up on the software accounting change, did that impact the Americas business, and also -- is that also what we're seeing in the maintenance software revenue that declined sequentially? Because I guess what I'm looking at is the Americas business declined 16% quarter-to-quarter, typically it's half that at best. And I'm curious if the software accounting impacted that number or Americas, maybe the backlog applied to the Americas or if you follow me.

Alex Davern -- Chief Executive Officer

Yes. (multiple speakers) So first of all (inaudible)

Richard Eastman -- Robert W. Baird -- Analyst

Sure.

Alex Davern -- Chief Executive Officer

The software accounting change impact was the highest in the Americas and so that...

Richard Eastman -- Robert W. Baird -- Analyst

Okay.

Alex Davern -- Chief Executive Officer

...again, if you make apples-to-apples comparison in order growth, it was high-single digits in the Americas.

Richard Eastman -- Robert W. Baird -- Analyst

Okay. That's a year-over-year number, correct?

Alex Davern -- Chief Executive Officer

That's -- sorry, that's a year-over-year number, that's correct, over Q1.

Richard Eastman -- Robert W. Baird -- Analyst

Yes, OK.

Eric Starkloff -- President and Chief Operating Officer

And it affects -- as you said, it affected the Q1 software maintenance and a lot of the revenue gets recognized in that vein, Rick. So those two things are connected.

Richard Eastman -- Robert W. Baird -- Analyst

Okay. So -- OK, so aside, if we pulled that out, again, I'm kind of looking at the revenue by geography. And it would appear to me that EMEIA maybe came a little bit short of the midpoint or just say a plan and then also the Americas looks short, but most of the Americas shortfall might have been more related to the software accounting change there?

Eric Starkloff -- President and Chief Operating Officer

It's a combination of the software and the backlog, both that impacts on the...

Richard Eastman -- Robert W. Baird -- Analyst

And backlog? Okay.

Eric Starkloff -- President and Chief Operating Officer

...order growth.

Richard Eastman -- Robert W. Baird -- Analyst

Okay. And when you look at EMEIA, again, the weakness there, I guess maybe you suggested it was more PMI driven, that's what we saw the weakest number. Is there any particular market there? I mean, did auto for instance, automotive was that softer in EMEIA or any particular end market that you can point to versus the PMI?

Alex Davern -- Chief Executive Officer

Yes. So I'll break it down a couple of ways. So if we look at I think it was about a 3% impact in EMEIA from currency.

Richard Eastman -- Robert W. Baird -- Analyst

Yes.

Alex Davern -- Chief Executive Officer

And then Rick, you follow our stock for a long time, so you know it's really, really well. But PMI of 44 (ph) in Germany is definitely a troubling data point for our business.

Richard Eastman -- Robert W. Baird -- Analyst

Yes.

Alex Davern -- Chief Executive Officer

And certainly that's heavily automotive. I can't...

Richard Eastman -- Robert W. Baird -- Analyst

Okay.

Alex Davern -- Chief Executive Officer

...put an exact number because the automotive supply chain in Germany is so deep and pervasive, but that is definitely a significant factor in that.

Richard Eastman -- Robert W. Baird -- Analyst

Okay. Yes. Okay. And then, could I just ask like, -- I think Alex, you were mentioning that kind of 5G business when we get around production test is going to start to help us maybe later this year, but certainly in 2020. I'm guessing some of the orders -- the larger orders might have that kind of a shipping timing and do we see that kind of 5G business, is that going to impact like the STS business on the semi -- the semiconductor piece, is that...

Alex Davern -- Chief Executive Officer

(multiple speakers)

Richard Eastman -- Robert W. Baird -- Analyst

...what we should look for that? Sure.

Alex Davern -- Chief Executive Officer

(multiple speakers) I'm just to trying to answer all your elements. (inaudible)

Richard Eastman -- Robert W. Baird -- Analyst

I may know your business reasonably well, but there's a lot of moving pieces here.

Alex Davern -- Chief Executive Officer

(inaudible) just on the first point, what we count as orders in the quarter are products that customer wants to take delivery off in the quarter. So everything we're talking about there...

Richard Eastman -- Robert W. Baird -- Analyst

Okay.

Alex Davern -- Chief Executive Officer

...products the customer wants delivery of in Q1. In terms of orders for millimeter wave production test that we will deliver in Q4 and maybe next year, those aren't counted in the order volume at this point, Rick, just to be clear.

Richard Eastman -- Robert W. Baird -- Analyst

Okay.

Alex Davern -- Chief Executive Officer

And when we look forward, definitely from a 5G point of view, it will have its most material impact on our semiconductor focused efforts. So STS is critical to that and that is a platform that we will be leveraging to ensure that we really take advantage of the investments we're making in millimeter wave technology.

Eric mentioned earlier on in his comments about NI Week.

Richard Eastman -- Robert W. Baird -- Analyst

Yes.

Alex Davern -- Chief Executive Officer

This will be a crucial launch platform so excited to see you and the team down for NI Week, we will see that in person. And to be able to hear from some of our large customers, how they intend to leverage our platform, our 5G production tests, I think that will be very, very interesting and help to get context around it. We'll have a customer panel as part of the IR conference as well, so you'll be able to ask questions directly as investors.

The other point I want to make, look at results here in Q1, I'm really pleased to see the team deliver record profitability on flat revenue growth. And I think as we look out to the rest of the year, that should give investors confidence that we are really committed to deliver 80% non-GAAP operating profitability through the cycle. This is kind of the first test of that commitment. And I think it's a very good result.

Richard Eastman -- Robert W. Baird -- Analyst

And just -- I just want to circle back though, but your benefit on the 5G is around two things, one is around semi-chip test around mixed signal or analog or, I mean, are you going to play more on the RF chip side test or is your -- is NATI's benefit is going to be more around handset production test? Can you separate the two?

Alex Davern -- Chief Executive Officer

Our real focus is on the former and then later down the cycle...

Richard Eastman -- Robert W. Baird -- Analyst

Okay.

Alex Davern -- Chief Executive Officer

...we will certainly be participating, and as we have for many years in the ecosystem for testing of all of the various elements and applications around the handset.

Richard Eastman -- Robert W. Baird -- Analyst

Okay. And then...

Alex Davern -- Chief Executive Officer

And the (inaudible) in domain.

Richard Eastman -- Robert W. Baird -- Analyst

Yes. And then just one last question, may I'll get one to Karen here. What was the FTE in the quarter and what is the plan there for the full-year?

Karen Rapp -- Chief Financial Officer & Treasurer

Hi, Rick. We're relatively flat, sequentially from a headcount perspective, you can expect us to stay about that down a little bit continuing through the year.

Richard Eastman -- Robert W. Baird -- Analyst

Okay. Sequentially, OK. Alright, very good. Thank you.

Alex Davern -- Chief Executive Officer

Thanks, Rick.

Eric Starkloff -- President and Chief Operating Officer

Thank you, Rick.

Operator

Thank you. (Operator Instructions) And our next question is from Vijay Bhagavath with Deutsche Bank. Your line is open.

Vijay Bhagavath -- Deutsche Bank -- Analyst

Yes. Hey, thanks. Hey, good afternoon. Two questions.

Alex Davern -- Chief Executive Officer

Hi, Vijay.

Vijay Bhagavath -- Deutsche Bank -- Analyst

Yes. Hi. Two questions. The first is, I mean, you obviously mentioned about the industrial economic indices. I think my question is more in terms of as we head into the back half, head into next year, are there any product cycles specific catalyst that we need to track and monitor because the industrial and economic indices are what they are? And then I have a follow on.

Eric Starkloff -- President and Chief Operating Officer

Yes. I'll make a comment on that, Vijay. It's is Eric. Yes. And then this is a -- I'll put in another quick plug for NI Week in the Investor Conference. That obviously is a key launching platform for us for a set of new product initiatives. I gave some color on our preview on a few of those and clearly 5G is a big portion of that. And the ramping of 5G millimeter wave in the back half of the year going into 2020 is a positive element. Also, as we see the shift in automotive that Alex talked about, the shift from some of the existing automotive applications that we serve that is a part of our portfolio and the growth of the new elements of automotive where a lot of our customers are shifting their investments into ADAS and the autonomy, as well as into hybrid and EV vehicles. That's becoming a bigger portion of our business and we will have product announcements around that area as well.

Vijay Bhagavath -- Deutsche Bank -- Analyst

Yes. Perfect. And then the quick follow on would be, we do have meaningful revenue exposure in Europe and Asia. So my question there is, are there any trends or catalysts that are fundamentally different in the EMEIA, APAC versus the US, so that we get kind of a geographic contrast of once again what we need to monitor in terms of demand trends, US and rest of the world. Thanks.

Alex Davern -- Chief Executive Officer

I think when we look at our business geographically, it's very diversified, which is great strength. It's relatively uniform geographically, but it does have concentrations. For example, in Taiwan, it's heavy semiconductor; in Germany, it's very heavy automotive; in Japan, it's quite heavy automotive. When you break down all the permutations is what we generally refer to things like the PMI indicates as a proxy for that particular geography's industrial mix. And certainly the downward trend in Europe is quite different than what we've seen in the Americas and we've seen the performance in the America quite -- Americas quite significantly better than we did in EMEIA in this particular quarter.

So I retain a belief that the broad macro indicators remain valid for looking at our business as well as some of the other industrial semi companies to really get an insight into the buying behavior of our customers. And then (inaudible) topical changes and certainly 5G and the automotive disruptive technologies will be key counters to those trends.

Vijay Bhagavath -- Deutsche Bank -- Analyst

Yes, perfect. The final question would be for Karen. How should we think of OpEx as percentage of revenues through rest of the year?

Karen Rapp -- Chief Financial Officer & Treasurer

Vijay, yes, we've been pretty transparent with our operating model and our goal is to stay true to what we presented at NI Week, last year. So as we model out revenue growth or as you make assumptions on revenue growth, please refer back to that model and then we'll be providing more context and color on that in May again at NI Week. But it's still our expectation Alex talked about maintaining the 18% operating income through the cycle. And that's continuing to be our goal.

Vijay Bhagavath -- Deutsche Bank -- Analyst

Okay. Thanks to all of you.

Alex Davern -- Chief Executive Officer

Thanks, Vijay.

Karen Rapp -- Chief Financial Officer & Treasurer

Thanks, Vijay.

Operator

Thank you. And I am not showing any further questions in the queue. I would like to turn the call to Alex Davern for his final remarks.

Alex Davern -- Chief Executive Officer

Thank you for joining us today. If you can't make the Investor Conference in Austin on August -- sorry, on May 21, I encourage you to dial in and listen to live stream, and join us over the web. Thank you.

Operator

And ladies and gentlemen, we thank you for participating in today's conference. This concludes the program and you may all disconnect. Have a wonderful day.

Duration: 31 minutes

Call participants:

Marissa Vidaurri -- Head of Investor Relations

Alex Davern -- Chief Executive Officer

Eric Starkloff -- President and Chief Operating Officer

Karen Rapp -- Chief Financial Officer & Treasurer

John Marchetti -- Stifel -- Analyst

Richard Eastman -- Robert W. Baird -- Analyst

Vijay Bhagavath -- Deutsche Bank -- Analyst

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