2018 Investment Conference - Investor Relations

2018 Investment Conference Agenda

From Focus Comes Growth and Profitability

- Alex Davern, President and CEO

10:00 AM

Growth in Target Customer Segments Based on Our Software-Defined Platform

- Eric Starkloff, EVP Global Sales & Marketing

Q&A

Reorient Sales Organization to Unlock Growth Potential

- Jason Green, Sr. VP Global Sales

Focusing to Deliver Growth and Profitability

- Karen Rapp, CFO

Q&A

Break and Lunch in room12:30 PM

Afternoon Keynote1:00 PM

Expo Tours2:15 PM

Safe Harbor WarningDuring today’s presentations, we will make projections or other forward-looking statements regarding the future financial

performance of the company or future events, including our strategic goals, priorities, vision, market share gains, performance

relative to peers, operating leverage, target operating model, M&A strategy, market growth and trends, growth plans (including in

the semiconductor, transportation and aero/defense markets), marketing strategy, guidance, improved profitability, market

opportunities, and product features and performance. We wish to caution you that such statements are just predictions and that

actual events or results may differ materially. We refer you to the documents the company files regularly with the Securities and

Exchange Commission, specifically the company’s most recent Form 10-K filed on February 22, 2018 and Form 10-Q filed on May

1, 2018. These documents contain and identify important factors that could cause our actual results to differ materially from those

contained in our projections or forward-looking statements.

Non-GAAP Information:

In certain of today’s presentations, we have included certain non-GAAP financial results with respect to some or all of the following

items: revenue, gross margin, research and development and other operating expenses, operating margin, operating income, net

income, and diluted EPS. Our non-GAAP results exclude, as applicable, the impact of stock-based compensation, amortization of

acquisition-related intangibles, acquisition accounting for deferred revenue, acquisition-related adjustments, acquisition-related

transaction costs, restructuring charges, foreign exchange loss on acquisitions, taxes levied on the transfer of acquired intellectual

property, and impairment of minority cost basis investments. In each of our quarterly earnings press releases since March 31,

2006, we have included a reconciliation of our GAAP results to our non-GAAP results for the applicable periods and such press

releases are available on our website at ni.com/nati. For periods prior to March 31, 2006, our non-GAAP results are the same as

our GAAP results. We also include information in this presentation about our year-over year (YOY) GAAP revenue growth

excluding the effect of our current largest customer. We have included a reconciliation of such YOY revenue growth (excluding our

largest customer) to our GAAP YOY revenue growth on our website at ni.com/nati.

ni.com

From Focus Comes Growth and Profitability

Alex Davern

CEO

OUTPERFORM THE COMPETITION

4-7% Faster YOY

Revenue Growth

INCREASE NON-GAAP OPERATING MARGINS

18% Through

the Cycle

Key Objectives

A reconciliation of GAAP operating income and operating margin to Non-GAAP operating income and operating margin is available in the appendix.

OPERATING

MARGINS

REVENUE

GROWTH

EMPLOYEE

DEVELOPMENT

CUSTOMER

RELATIONS

2017 Priorities

Revenue Profile

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

45

46

47

48

49

50

51

52

53

54

55

2013 2014 2015 2016 2017

Glo

ba

l M

an

ufa

ctu

rin

g P

MI

----- Manufacturing PMI ----- National Instruments Revenue Growth YOY*

NI R

eve

nu

e G

row

th Y

OY

Investment in Next-Generation Software Platform

*Excludes Largest Customer

A reconciliation of revenue growth to revenue growth excluding the impact of largest customer is available at

ni.com/nati.

Software

Data

Acquisition

& Control

Modular

Instruments

<$20K >$20K

<$20K >$20K

Product Profile

2017 % of Revenue

Order Size

Order Size

Order Size

<$20K >$20K

REVENUE UP 4% YoY

Double digit growth in Software

Broad Strength

Double digit growth in Data

Acquisition & Control

Single-Digit decline in Modular

Instruments due to:

• End-of-life low ROI products

• Mobile device supply chain

Concentrated Weakness

Q1 Record Revenue

-$5M

-$10M

Non-GAAP EPS improvement of 24% YOY, up 63% over Q1 2016

$ in t

ho

usan

ds

Fully Diluted EPSRevenue

Q1 Record Revenue

A reconciliation of GAAP fully diluted earnings per share to Non-GAAP fully diluted earnings per share is available in the appendix.

XX

RECORD Revenue

RECORD EPS

for a 2nd Quarter at the

mid-point of guidance

Modular Instruments

mid single-digit

POSITIVE order growth

CONFIRMED GUIDANCE

Continued DOUBLE-DIGIT

order growth for

Software

Data Acquisition & Control

CONTINUED YOY ORDER

GROWTH

Q2 Update May 21, 2018

RETURN to YOY ORDER

GROWTH

ni.com

NI Vision and Strategic Plan for Growth


4-7% Faster YOY

Revenue Growth


18% Through

the Cycle

Key Objectives


Revenue Profitability*

$1,050

$1,100

$1,150

$1,200

$1,250

$1,300

$1,350

$1,400

2013 2014 2015 2016 2017 2018*

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

2013 2014 2015 2016 2017 2018*

Transition Starting Point

*Non-GAAP Net Income

A reconciliation of GAAP net income to Non-GAAP net income is available in the appendix.

Leadership Priorities

4-7%Faster Than

the Competition

18%*Through

The Cycle

*Non-GAAP Operating Margin

Introduce New Core Strategic Vision to Drive Focus

Deliver Our Platform Priorities

Accelerate Growth by Targeting Customer Segments

Reorient our Direct Sales Channel to Optimize Growth

Deliver on Our Profit Opportunity

Outperform the Market


ni.com

“The best performing of your businesses is likely to be the one furthest under its potential.”

—Profit From The Core, Chris Zook

0

300

600

900

Mill

ions

Industry

Revenue Delta 2017-2012 Revenue 2012

0

300

600

900

Mill

ions

Product Line

0

300

600

900

<$20K >$20K

Mill

ions

Software


Modular

Instruments

All Other

Industries

Semiconductor

Transportation

Aerospace/Defense

Products Customer Segments Order Size

Revenue 2012 Revenue Growth 2012-2017

5 Year View Growth Engines$

Mill

ions

$ M

illio

ns

$ M

illio

ns

Excludes Largest Customer

0

300

600

900

Mill

ions

Industry

Revenue Delta 2017-2012 Revenue 2012

0

300

600

900

Mill

ions

Product Line

0

300

600

900

<$20K >$20K

Mill

ions

Excludes Largest Customer

A reconciliation of revenue to revenue excluding customer is available in the appendix.

Software


Modular

Instruments

All Other

Industries

Semiconductor

Transportation

Aerospace/Defense

Products Customer Segments Order Size

Revenue 2012 Revenue Growth 2012-2017

5 Year View Growth Engines$

Mill

ions

$ M

illio

ns

$ M

illio

ns

NI equips engineers and scientists with systems

that accelerate productivity, innovation, and discovery.

M I S S I O N S TAT E M E N T

NI MODULAR

HARDWARE

NI PRODUCTIVE

DEVELOPMENT

SOFTWARE

NI SYSTEMS AND

DATA MANAGEMENT

NI SERVICES AND SUPPORT

NI PLATFORMN

I E

CO

SY

ST

EM

NI E

CO

SY

ST

EM

THIRD PARTY

SOFTWARE

THIRD PARTY

HARDWARE

ni.com

Our Customers’ World Is Changing

More capability

defined in software

Increasingly complex

to design and test

Shorter product

lifecycles

ni.com

From focus comes growth

ni.com

To Be the Leader in Software-Defined Automated Test

and Automated Measurement Systems

NI’s Core Strategic Vision

To Be the Leader in Software-Defined Automated Test and Automated Measurement Systems

NI's Core Strategic Vision

Deliver value that gives our customers a competitive advantage.

Provide a differentiated platform for software-defined Automated Test and Automated Measurement systems.

Add system-level offerings to more fully meet customers’ enterprise wide challenges.

Focus on customer segments that benefit from our platform’s disruptive capabilities.

Outperform the Competition, growth 4-7% Faster




*Non-GAAP Operating Margins



Deliver on Our 18% Non-GAAP

Profit Opportunity

Complete our NI Software Platform Investment

Expand Data Acquisition Portfolio

Accelerate Growth of Modular Instruments

4-7%Faster Than

the Competition18%*

Through

The Cycle


Continue Software Leadership

by enabling user-defined IP development with LabVIEW NXG and unmatched integration with NI hardware and 3rd party software and hardware

Expand User Base

with higher-level application software for targeted customer segments and significantly enhanced enterprise capabilities

Invest in Future Growth

with an agile and flexible software platform to more rapidly deliver customer value from NI and our partner ecosystem

Software Growth Strategies

Empower hundreds of thousands of

loyal application software developers

Data Acquisition and Control Growth Strategies

Provide differentiated value where automated

systems interact with the physical world


by delivering new value through LabVIEW NXG and application-specific software

Expand User Base

through new distributed and rugged products


with new platform capabilities for targeted

customer segments

Modular Instruments Growth Strategies

Grow market share in automated validation

and automated production test


by delivering new value through LabVIEW NXG, significantly enhanced enterprise capabilities, and the ability to build IP into NI instruments through LabVIEW FPGA

Expand User Base

by being first-to-market for next-generation standards and technologies, such as 5G NR, automotive radar and more


with new platform capabilities for targeted customer segments


4-7%Faster Than

the Competition

18%*Through

The Cycle

*Non-GAAP Operating Margin





Deliver on Our Profit Opportunity

Outperform the Market


ni.com

NI PLATFORM

SEMICONDUCTOR TRANSPORTATION AEROSPACE/DEFENSE ACADEMIC RESEARCH

TIER 1 ACCOUNTS | Account-Based Model


TIER 3 ACCOUNTS | Geography-Based Model

Sales A New Approach

Percentages of 2017 Annual Revenue

2017 Delivering Financial Leverage to the Bottom Line

5%

25%

Revenue Growth Non-GAAP Operating Income Growth

2017

Op Margin grew

5X FASTERthan revenue

Accelerate

Redeploy

Optimize


OPERATING

MARGINS

REVENUE

GROWTH

EMPLOYEE

DEVELOPMENT

CUSTOMER

RELATIONS

2018 Company Priorities

Record Revenue

$1,000

$1,050

$1,100

$1,150

$1,200

$1,250

$1,300

$1,350

$1,400

2012 2013 2014 2015 2016 2017 2018*

* Mid-Point of Analyst’s Consensus as of May 21, 2018


4-7% Faster YOY

Revenue Growth


18% Through

the Cycle

Key Objectives


ni.com

Eric StarkloffExecutive Vice President

Global Sales & Marketing

21 Years of Experience

Shelley GretleinKaren RappExecutive Vice President

Chief Financial Officer


Vice President

Global Marketing


Jason GreenSenior Vice President

Global Sales


ni.com

Growth in Target Customer Segments based on our Software-Defined Platform

Eric Starkloff

Executive Vice President, Global Sales and Marketing


More capability

defined in software


to design and test

Shorter product

lifecycles


More capability

defined in software


to design and test

Shorter product

lifecycles

Multiband Power Amplifier Advanced Driver Assist System (ADAS)

A

D

C

D

A

C

PM

IC

A

D

CD

A

C

> 20X the bands and channels

> 500 hours to test

> 2.7X ADAS sensor revenue by 2022

> Software content in cars increasing by 15% CAGR


NI’s Core Strategic Vision





NI MODULAR

HARDWARE

NI PRODUCTIVE

DEVELOPMENT

SOFTWARE

NI SYSTEMS AND

DATA MANAGEMENT

NI SERVICES AND SUPPORT

NI PLATFORMN

I E

CO

SY

ST

EM

NI E

CO

SY

ST

EM

THIRD PARTY

SOFTWARE

THIRD PARTY

HARDWARE

Our Customers’ Challenges Are More Software-Centric

Millions

A Boeing 787 runs on 7 million lines of code

Microsoft Windows contains 50 million lines of code

150 million lines of code in the Ford F-150

100 120 140 160 180 20020 40 60 800

The amount of software in vehicles is increasing with a CAGR of 10-15%

Lin

es o

f C

od

e

Source: InformationisBeautiful.net

NI’s Software Position Drives Loyalty and Long Term Revenue

NI accounts that use

LabVIEW purchase

10Xmore than NI

hardware-only

accounts

Intentional Investments to Strengthen our Software Advantage

2014 2015 2016 2017 2018

Overall Application

Software Investment

% Next-Generation

Software Platform Investment

Opportunity

To Re-Invest

Shared Software Platform

MODERN EDITOR

DATA CAPTURE AND

STORAGE

ENGINEERING UI

ELEMENTS

HELP AND LEARNING

COMPILER

SERVICES

INSTALLATION

AND DISTRIBUTION

HARDWARE

CONFIGURATION

SYSTEMS

MANAGEMENT

UX DESIGN

PATTERNS

Shared Software PlatformReuse Our Investments

…

Programming Environment

Device Drivers

Application Software

Measurement IP

Systems and

Data Management

…

…

More than LabVIEW A Comprehensive Software Stack

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-2017 Q4-2017 Q1-2018

TTM Growth

Strengthening Software Sales After Re-Building

Next-Generation Software Platform Investment

Trailing Twelve Months of Software Revenue Growth

Q3-17 Q4-17 Q1-18

Tw

elv

e m

onth

avera

ge Y

oY

% g

row

th

NI’s Software Enables a Common Test Platform

from R&D through Production

Consistent need across our customer base decades-long investment focus for NI

2007 2017

ni.com

NI PLATFORM


Example of Market Dynamics – Testing IoT Devices

Production TestValidation Test

WiFi

Radio

BT

Radio

Digital:Digital:

SPI, I2C

Micro-

controllerAD

Cs D

AC

s

Fast execution speed

Parallel test

Optimized cost

High accuracy

Long test scripts

Rich data visualization

Common Needs:• Broad range of I/O

• Fast test time

• Common software

• Fast test development

Semiconductor Growth Opportunity

5G Creating New Challenges for our Customers

Downstream applications influenced by 5G adoption

5G Semiconductor test

market opportunity

IoT

Automotive

Consumer

Electronics

5G prototyping market

opportunity

5G is a technology inflection, not a market

PLATFORM ADVANTAGES:

Common software and hardware from lab to fab

Faster measurement time

Ability to add new measurements as requirements change

FOCUS APPLICATIONS:

RF/Wireless (including 5G)

Analog / Mixed Signal

Optoelectronics / Sensors / MEMs

MARKET DYNAMICS:

Rapid increase in complexity

High levels of integration

Intense time to market pressures



GROWTH OPPORTUNITY:

Market Growth

Subsegment Growth Goal

Growth Goal from Share Gains

2018-2020 NI Growth Goal

6%

+2%

+2 to +7%

10-15%

$1.5BMarket Served

6%Market Growth

10-15%NI Growth Goal

Sources: IC Insights and NI estimates


NI Currently has a Leadership Position

in Standardized Lab Test

500+ NI PXI systems sold to semiconductor

characterization each year


“Lab to Fab” Builds on Leadership Position in the Labs

and the Customer Need for Common Platforms

Labs Production Floor

Same Software and Hardware Platform

NI Service & Support

Technical Support Training Repair and Calibration

Installation & Bring-Up Onsite Maintenance

Ecosystem

Load Board Development Test Programs

Semiconductor ATE System Targeted Products

Semiconductor Test System SoftwareSystem Enclosure Standard Docking and Interfacing

General Purpose Products

PXI FPGA Enabled I/O Test and Data Management Software

Leveraging our Platform to Create a Semiconductor ATE System

ni.com

Full ROI in 21 months

for the NI STS

Improved test

throughput 2X

Up to 70% time savings

from standardizing on

NI software


Real-time software

Ability to connect to many I/O types and sensors

Flexibility – can update system quickly

FOCUS APPLICATIONS:

ADAS

Electrification

MARKET DYNAMICS:

Electronic content increasing 30%+

Increasing sensors (from 4.6B to 22B units)

Electrification CAGR >20%

Transportation Growth Opportunity

Sources: Yole, Wood Mackenzie, Strategy Analytics and NI Estimates

Transportation Growth Opportunity

GROWTH OPPORTUNITY:

Market Growth




3%

+4%

+3 to +5%

10-12%

$1.7BMarket Served

3%Market Growth

10-12%NI Growth Goal

Sources: Yole, Wood Mackenzie, Strategy Analytics, Frost and Sullivan and NI Estimates


Technical Support Training

Repair and Calibration Startup Assistance

Ecosystem

System Integration Fault Insertion Load Board Development

Custom Signal Conditioning Software Integration

Hardware-in-the-loop Targeted Products

SLSC


PXI FPGA Enabled I/O

Software Test Rack Infrastructure Automotive Network Interfaces

Leveraging our Platform to Create an Automotive HIL System

Test and Data Management Software

ni.com

Creating a Global Standard

Hardware in the Loop System

“This system dramatically reduced workload and was a huge advantage

for Mazda. Testing time and required man hours were reduced by

90% compared to our old methods, resulting in hundreds of millions of

yen saved per year”

Tomohiko Adachi, Mazda



Complete software stack for automated test

Real-time software, FPGAs, software defined radio

FOCUS APPLICATIONS:

Radar and Spectrum Record/Playback

Software-Defined Radios & Transponders

Production and Maintenance ATE

MARKET DYNAMICS:

Demonstrated need for modular and software-based platform

Long service life requirements

Increasing in global defense R&D budgets

Aerospace / Defense Growth Opportunity

Aerospace / Defense Growth Opportunity

GROWTH OPPORTUNITY:

Market Growth




3%

+2%

+1 to +4%

6-9%

$1.5BMarket Served

3%Market Growth

6-9%NI Growth Goal

Sources: Deloitte, IHSMarkit, US Department of Operational Test & Evaluation

Annual Report, and NI Assessments


Technical Support and Training Repair and Calibration

Life-Cycle Planning Obsolescence Management

Ecosystem

Cabling & Mass Interconnects Test Adapters & Fixture Design

Test Program Set (TPS) Development

Aerospace ATE Targeted Products

Test System

Fleet Management


Hardware and

Measurement Abstraction Test Rack Infrastructure Avionics Buses

High-Power

Instruments

PXI FPGA Enabled I/O

Leveraging our Platform to Create an Aerospace ATE System

Test and Data Management Software

ni.com

“Standardization on a common test platform has

reduced test cost by 40%.”

Mark Keith, Honeywell

Standard test platform

scaling to 100s of programs

and 1000s of test assets

ni.com

NI PLATFORM


ni.com

Q&A

ni.com

Reorient Sales Organization to Unlock Growth Potential

Jason Green

Sr. Vice President, Global Sales

Focus on Customer Engagement


NI's Core Strategic Vision





Sales Historical Approach

SINGLE TIER FOR ALL ACCOUNTS

Field Sales

Partners

Inside Sales

Support

$1.3 Billion ORGANIZATION

35,000 CUSTOMERS

Sales Historical Approach



TIER 1 ACCOUNTS | ~100 Accounts

TIER 2 ACCOUNTS | ~5,000 Accounts

TIER 3 ACCOUNTS | ~30,000 Accounts


Account-Based Model

Generate Demand in Target Customer Segments

Geography-Based Model

Serve Customer Requests and Prioritize Digital

Account-Based Model

Build Partnerships with High-Potential Accounts27%

57%

16%

Percentages of 2017 Annual Revenue

Sales Key Differentiators in New Approach

Building trusted relationships with

top customers

Engaging directly with more customers

using inside sales team

Leveraging our partner ecosystem

to scale systems business

Building Trusted Relationships with Top Accounts

Prioritize key growth areas to unlock platform potential

Understand customer needs and capture more share of wallet

Guide technology investment from direct customer insights

About 100 accounts, 27% of revenue

Build Partnerships with High-Potential Accounts


GROWTH

in pipeline $

ni.com

“We will change our schedule to align to your recommendation.”

–Manager for Production Test

Engaging Directly with More Customers Using Inside Sales Team

Maintain direct customer interface using modern technology

No geographical limitations

Operates within our financial model


TIER 3 ACCOUNTS | Geography-Based Model

About 5,000 accounts, 57% of revenue

About 30,000 accounts, 16% of revenue

Generate Demand in Target Customer Segments

Serve Customer Requests and Prioritize Digital

25%INCREASEin accounts

with pipeline

ni.com

Opening new opportunity pipeline with customers who

previously didn’t consider NI

Leveraging Our Partner Ecosystem to Scale Systems Business

NI Partner Ecosystem

1,000 partners to amplify our software-defined platform

Broaden customer value through joint engagement

Domain experts offer complete solution to customer

ni.com

Increasing customer’s confidence, realized business

value and success through partner relationships

Deliberate Investment Strategy with Sales

Global Sales

Regional Sales

Field Sales,

Account Management

Inside Sales

Global Services

Support

Applications Engineering

Systems Engineering

Operations

Deliberate Investment Strategy with Sales

Global Sales

Regional Sales

Field Sales,

Account Management

Inside Sales

Global Services

Support

Applications Engineering

Systems Engineering

Operations

Invest Leverage

Focus on Customer Engagement

ni.comNI CONFIDENTIAL

Focusing to Deliver Growth and Profitability

Karen Rapp

CFO

Safe Harbor WarningDuring today’s presentations, we will make projections or other forward-looking statements regarding the future financial

performance of the company or future events, including our strategic goals, priorities, vision, market share gains, performance

relative to peers, operating leverage, target operating model, M&A strategy, market growth and trends, growth plans (including in

the semiconductor, transportation and aero/defense markets), marketing strategy, guidance, improved profitability, market

opportunities, and product features and performance. We wish to caution you that such statements are just predictions and that

actual events or results may differ materially. We refer you to the documents the company files regularly with the Securities and

Exchange Commission, specifically the company’s most recent Form 10-K filed on February 22, 2018 and Form 10-Q filed on May

1, 2018. These documents contain and identify important factors that could cause our actual results to differ materially from those

contained in our projections or forward-looking statements.

Non-GAAP Information:

In certain of today’s presentations, we have included certain non-GAAP financial results with respect to some or all of the following

items: revenue, gross margin, research and development and other operating expenses, operating margin, operating income, net

income, and diluted EPS. Our non-GAAP results exclude, as applicable, the impact of stock-based compensation, amortization of

acquisition-related intangibles, acquisition accounting for deferred revenue, acquisition-related adjustments, acquisition-related

transaction costs, restructuring charges, foreign exchange loss on acquisitions, taxes levied on the transfer of acquired intellectual

property, and impairment of minority cost basis investments. In each of our quarterly earnings press releases since March 31,

2006, we have included a reconciliation of our GAAP results to our non-GAAP results for the applicable periods and such press

releases are available on our website at ni.com/nati. For periods prior to March 31, 2006, our non-GAAP results are the same as

our GAAP results. We also include information in this presentation about our year-over year (YOY) GAAP revenue growth

excluding the effect of our current largest customer. We have included a reconciliation of such YOY revenue growth (excluding our

largest customer) to our GAAP YOY revenue growth on our website at ni.com/nati.

Continuing to Deliver Exceptional Stockholder Value

Financial Objectives:

Strict financial discipline to achieve target model

Growth Faster than Market

Operating Margin Expansion

Improve Cash Flow

Strong EPS Growth

Software-defined Platform

Direct Sales Channel

Strong Partner Ecosystem

Competitive Differentiators:

2017 Year of Record Revenue

$1,173

$1,244

$1,225

$1,289

$1,228

2013 2014 2015 2016 2017

5%INCREASE

YOY in 2017

$ Millions USD

2017 Continued Share Gains

2017

Over $20K

56%

Under $20K

44%

Over $20K

33%

2007

Under $20K

67%

% Order Size

$ M

illio

n, U

SD

2017 Moving Up the Value Chain with Systems Growth

11%10 YR CAGR

Revenue from

Orders Over

$20k

Semiconductor

Transportation

Aerospace & Defense

Focus to Deliver Growth

All Other Industries

10 - 15%

10 - 12%

6 - 9%

5 - 6%

Goal of

4-7%Faster Than

the Competition

Growth Goal

Non-GAAP Gross Margin Strength

Robust Software + Hardware Platform

continues to create value for our customers

A reconciliation of GAAP gross margin to Non-GAAP gross margin is available in the appendix

76%Average

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

12.2%

15.0% 14.7%15.6%

13.2%

2017 Year of Record Non-GAAP Operating Income

2013 2014 2015 2016 2017

25%YOY Increase

in non-GAAP

operating

income for

2017


Non-GAAP Operating Margin % of Revenues

$110

$156

$128

$160

$120

2017 Record Non-GAAP Net Income

2013 2014 2015 2016 2017

33%YOY Increase

A reconciliation of GAAP net income to Non-GAAP net income is available in the appendix

$ Millions USD

2017 Year of Record Cash Provided by Operations

$169

$195

$169

$224

$200

2013 2014 2015 2016 2017

14%

16%

14%

16%

17%

Cash Provided by Operations

as % of Revenue

Cash Provided by Operations

Cash Provided by Operations $ Millions USD

$2.2B

$685M

$261M

$247M

Objective of long-term, sustainable value for investors

Disciplined and Consistent Capital Allocation Priorities

10 years Deployed Capital $3.4B | 2008 – 2017Purpose

R&D Investment

Dividends

Share Repurchase

Acquisitions

Organic Growth

Return Capital to Investors

Return Capital to Investors

Strategic Acquisitions

$-

$20

$40

$60

$80

$100

$120

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Consistent Return of Cash Through DividendsD

istr

ibu

ted

Div

iden

ds, $M

-

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

Div

iden

d P

er

Sh

are

($)

Engagement and Cultivation of Prioritized M&A Targets

Automated Measurement

Market Expansion

Technology Differentiation

Platform Expansion

Software

ComplementTechnology

Gaps

Automated

Test Market

ExpansionEvaluation Consideration

Category Key Criteria

Strategic Fit

Operational Fit

Financial Fit

• Core Strategic Vision alignment

• Expands SAM, near adjacency

• Technology that broadens or improves

differentiation of product portfolio

• Sales channel fit

• Company culture alignment, talent retention

• Manufacturing and supply chain leverage

• Leverage cash and strong balance sheet

• Accretive to EPS with synergies

• ROIC above WACC in 3-5 years

M&A Strategy and Criteria

Beat our Non-GAAP operating model

Operating Model

2017/2018**

0% Rev

Growth

5% Rev

Growth

10% Rev

Growth

Operating expense

increase0% 1-2% 3-4%

Flow-Through 50-60% 50-60%

2017 Results

Revenue5% YoY

Growth

Operating

expense

Increase

0.3% YoY

*Operating

Margin 15.6%

of Revenues

*Non-GAAP

A reconciliation of GAAP operating income to Non-GAAP operating income is available in the appendix

**This represents NI management’s current planning as of May 22, 2018, given each revenue growth scenario

2017 Exceeded Non-GAAP Profitability Expectations

66%Flow-Through

5%

25%

Revenue

Growth YoY

Non-GAAP

Operating Income Growth YoY

2017

Op Income grew

5X FASTERthan revenue

Operating Model

2018*

0% Rev

Growth

5% Rev

Growth

10% Rev

Growth

Non-GAAP

Operating

expense increase

0% 1-2% 3-4%

Flow-Through 50-60% 50-60%

Remain committed to leverage model for 2018

18% Non-GAAP Operating Margin target

A reconciliation of GAAP operating income to Non-GAAP operating income is available in the appendix.

*This represents NI management’s current planning as of May 22, 2018, given each revenue growth scenario.

Delivered Financial Leverage to the Bottom Line

Non-GAAP Operating margin goal of 18% through the economic cycle

Revenue Growth Scenarios 0% Growth 5% Growth 10% Growth

Expense Growth 0% 2-3% 4-5%

Non-GAAP Operating Margin % 17% 18-19% 20-21%

Flow-Through 0% 45-50% 50-55%

2019 Non-GAAP Operating Model*

*This represents NI management’s current planning as of May 22, 2018, given each revenue growth scenario.

Target Operating Model Non-GAAP*

Non-GAAP Target Model Previous Target Model Revised

Gross Margin 76% 78%

R&D 16% 18%

Sales & Marketing 35% No change

G&A 7% No change

Operating Margin 18% through cycle 18% through cycle

+200 bps excl Amortization

+200 bps excl Capitalization

*This represents NI management’s current planning as of May 22, 2018.

Strategic Financial Plan to Maximize Shareholder Return

Maximize Total Shareholder Return

and Deliver on our Profit Opportunity

Focused: Aligned on Core Strategic Vision

Disciplined: Leverage platform to take market share

Results driven: Execution of operating model


4-7% Faster YOY

Revenue Growth


18% Through

the Cycle

Key Objectives


NI Strengthening Market Position

Unique Cost and Time-to-Market Advantages

Aligned to Major Technology Disruptions Driving Innovation

Focused on Best Opportunities for Growth

Delivering Significant Operating Leverage

ni.com

Q&A

Appendix Historical GAAP to Non-GAAP Reconciliations (in $USD thousands)

Appendix Historical GAAP to Non-GAAP Reconciliations

Documents

2018 Investment Conference - Investor Relations