ni.com Safe Harbor Warning During the course of this presentation, we will make projections or other forward-looking statements regarding the future financial performance of the company or future events, including our strategic goals, operating leverage, revenue from our largest customer, market growth and trends, growth plans, marketing strategy, non-GAAP operating margin for Q1 2016, and effect of foreign exchange impact on Q1 2016. 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 and our Form 10-Q filed on October 30, 2015. 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 this presentation, 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 and operating income. Our nonGAAP 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, 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 investor.ni.com. For periods prior to March 31, 2005, 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 and the impact of foreign currency exchange (i.e., “core revenue” growth). We have included a reconciliation of such YOY core revenue growth to our GAAP YOY revenue growth on our website at ni.com/nati and in the appendix of this presentation. . ni.com 2 Long-Term Track Record of Growth Revenue (in millions) Revenue: $1.23 billion in 2015 Global Operations: Approximately 7,400 employees; operations in almost 50 countries Broad customer base: More than 35,000 companies served annually Diversity: No industry >15% of revenue $1,400 $1,200 $1,000 $800 $600 $400 $200 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 $0 ni.com 3 Our Mission – Who We Are We equip engineers and scientists with the systems that accelerate productivity, innovation, and discovery. ni.com 4 Our Customers Industrial Machinery Wireless ni.com Aerospace and Defense Electronics Academic & Research Energy Automotive Transportation and Heavy Equipment 5 What We Do We provide graphical software with modular hardware to build measurement and control systems. Low-Cost Modular Measurement and Control Hardware ni.com Productive Software Development Tools 6 Highly Integrated Systems Platforms The Long -Term View Qualitative Quantitative ni.com 100 Year Plan Core Values Culture The NI Way 10 Year Plan Core Strategic Vision People Learning and Development Platforms 5 Year plan Products/Markets Company Goals Growth Goals Quality Goals 1 Year Plan Sales Forecasts Goal Deployment Quarterly Plan Financial Goals Sales and Profits Update Goals 7 Evolution of NI’s Core Strategic Vision First Decade Second Decade Third Decade Fourth Decade Connecting to Instruments Virtual Instrumentation Modular Instruments Platform-Based Design ni.com 8 Empowering Users Through Software Providing unique differentiation and preserving customer investments ni.com 9 Leveraging Commercial Technology Expanding measurement capability 28 26 24 Traditional Instruments 2015 Resolution [Bits] 22 2015 RF 20 18 16 NI Products 14 12 1995 10 2015 2015 RF 8 6 4 1 10 100 1K 10K 100K 1M 10M 100M Sample Rate [Samples/s] ni.com 10 1G 10G 100G NI’s Platform-Based Approach ni.com 11 NI’s Market Opportunity Areas Test and Measurement Embedded Monitoring and Control Design Design Validation and Verification Prototype Production Deploy Total Market: $21 Billion Total Market: $36 Billion Source: Frost & Sullivan, Prime Data, and NI Estimates ni.com 12 Test and Measurement (T&M) ni.com The Traditional Approach to Automated Test Programmable Switch Generator Function Communications Analyzer Logic Analyzer Pattern Generator Spectrum Analyzer Power Supply LCR Meter Source: Agilent, Keithley, and Nicolet ni.com Oscilloscope 14 DMM NI’s Platform-Based Approach to Automated Test Traditional Instruments PXI Modular Instruments VS. ni.com 15 • 20X reduction in test time • Better test coverage • Microsecond simulation loop rates • Complex interaction of gasoline and electric power Subaru quickly brings its first hybrid vehicle to market using LabVIEW and PXI for HIL testing ni.com 16 • 200X faster test speeds • Significantly improved test coverage • Lower test costs • Better device characterization Qualcomm creates a customized, flexible WLAN test system using the NI PXI platform ni.com 17 Embedded Monitoring and Control ni.com NI’s Platform-Based Approach to Embedded System Design Traditional Design Approach ni.com vs. 19 Flexible Off-The-Shelf Solution The Internet of Things Unit Volume Smart Phones Wearables $2T Semiconductor Manufacturing Smart Grid Biotechnology ni.com 20 $36B Construction & Agricultural Equipment Power Plant • • • • Airbus adds intelligence to its tools and shopfloor systems using LabVIEW and NI System on Module ni.com 21 10X faster development time Simplified production process Improved production efficiency Increased quality assurance • Scalable for the ever-changing grid • Easily accessible data • Better grid measurements • More cost effective National Grid plans for the future grid using LabVIEW and CompactRIO. ni.com 22 5G and Semiconductor Test ni.com Our Platform-based Approach Opens New Opportunities Software Defined Radio for Wireless Communication Prototyping and Test “The complexity associated with the development of 5G and its prototypes has made NI’s software-defined radio platform an indispensable tool for both academic researchers and the telecom equipment vendors involved in 5G innovation. NI has now put itself in a unique position in the 5G community.” Junko Yoshida, EETimes “5G is a disruptive change, and NI is exploiting its unique architectural position to leverage the change to gain market share…. NI’s strategy is essentially a platform innovation play.” Larry Desjardin, EDN ni.com 24 Our Platform-based Approach Opens New Opportunities Semiconductor Characterization and Production Test “Traditional ATE systems require major costly retooling efforts as generations of test systems become obsolete or unable to meet new test requirements, but the nature of the open PXI architecture of the STS helps us retain our original investment and build upon it rather than throw it away.’’ Glen Peer, Director of Test “We improved test speeds by more than 200X compared to traditional rack-and-stack instruments while significantly improving test coverage." ni.com 25 Financial History ni.com Long-Term Track Record of Growth Revenue (in millions) $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 '87 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 ni.com 27 Simplifying the Revenue Growth Picture ni.com 2015 2016 Q1 Actual Q1 Actual Growth in USD 2% -1% Growth in Constant $ 8% 5% 28 Long-term Track Record of Revenue Growth $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 '80 ni.com '85 '90 '95 29 '00 '05 '10 15 Test & Measurement Industry Landscape Source: Stifel Investment Banking ni.com (1) Ametek, Cobham, Fortive, Keysight, Spectris and Teledyne core growth excludes the impact of foreign currency and acquisitions. NI core growth excludes the impact of largest customer and foreign currency. Anritsu, Rhode & Schwarz, Spirent, Teradyne and Viavi core growth excludes the impact acquisitions. 30 Worldwide Order Mix Orders Under $20,000 Orders Between $20,000 and $100,000 350 Orders in millions USD 300 250 200 150 100 50 0 ni.com 31 Orders Over $100,000 Largest Customer Orders and Recognized Revenue 30.0 In Millions USD 25.0 20.0 15.0 10.0 5.0 0.0 Q1 Q2 Q3 Q4 Q1 Q2 2013 Q4 2014 Orders ni.com Q3 Net Revenue Recog 32 Q1 Q2 Q3 2015 Q4 Q1 2016 Global Manufacturing PMI vs WW Revenue Growth -30.0% 36.0 -35.0% 34.0 -40.0% ni.com 33 Q1-16 38.0 Q3-15 -25.0% Q1-15 40.0 Q3-14 -20.0% Q1-14 42.0 Q3-13 -15.0% Q1-13 44.0 Q3-12 -10.0% Q1-12 46.0 Q3-11 -5.0% Q1-11 48.0 Q3-10 0.0% Q1-10 50.0 Q3-09 5.0% Q1-09 52.0 Q3-08 10.0% Q1-08 54.0 Q3-07 15.0% Q1-07 56.0 Q3-06 20.0% Q1-06 58.0 Q3-05 25.0% Q1-05 60.0 Q3-04 30.0% Q1-04 62.0 Q3-03 35.0% Q1-03 64.0 Q3-02 40.0% Q1-02 66.0 Q3-01 45.0% Q1-01 68.0 Q3-00 50.0% WW Revenue Growth Worldwide Revenue Growth 70.0 Q1-00 Global Manufacturing PMI Global Manufacturing PMI Global Manufacturing PMI vs WW Core Revenue Growth* Global Manufacturing PMI Core YoY Revenue Growth (1) 70.0 50.0% 68.0 66.0 40.0% 64.0 62.0 30.0% 60.0 Global Manufacturing PMI 58.0 20.0% 56.0 54.0 10.0% 52.0 50.0 0.0% 48.0 46.0 -10.0% 44.0 42.0 -20.0% 40.0 38.0 -30.0% 36.0 Q1-16 Q3-15 Q1-15 Q3-14 Q1-14 Q3-13 Q1-13 Q3-12 Q1-12 Q3-11 Q1-11 Q3-10 Q1-10 Q3-09 Q1-09 Q3-08 Q1-08 Q3-07 Q1-07 Q3-06 Q1-06 Q3-05 Q1-05 Q3-04 Q1-04 Q3-03 Q1-03 Q3-02 Q1-02 Q3-01 -40.0% Q1-01 34.0 *Core Revenue Growth excludes the effect of our current largest customer and the impact of foreign currency exchange, see reconciliation of core revenue to GAAP revenue in appendix and at ni.com/investors ni.com 34 Optimizing Our Operating Model 25% 20% 15% 10% 5% 0% Actual Non-GAAP Operating Income as % of Revenue Actual Non-GAAP R&D as % of Revenue A reconciliation of Non-GAAP operating income to GAAP operating income and Non-GAAP R&D to GAAP R&D results is available at investor.ni.com ni.com 35 Preserving our Non-GAAP* Gross Margins 100% 80% 60% 40% 20% *A reconciliation of GAAP gross margin to non-GAAP gross margin results is available at investor.ni.com ni.com 36 Q1 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 0% Global PMI v Order Growth 80 200% 180% 75 160% 140% 120% 65 100% 80% 60 60% 40% 55 20% 50 0% -20% 45 -40% -60% 40 -80% 35 2007 Global PMI ni.com 2008 2009 2010 2011 Growth in orders under $20K 2012 2013 Growth in orders $20-100K 37 2014 2015 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 -100% 2016 Growth in orders $100K+ Bookings Growth Global Manufacturing PMI 70 Leveraging Our Investments Worldwide Headcount 8000 7000 6000 5000 4000 3000 2000 1000 0 1999 2000 2001 2002 2003 2004 2005 R&D Headcount ni.com 2006 2007 2008 Field Sales Headcount 38 2009 2010 2011 All Other Headcount 2012 2013 2014 2015 Q1 2016 Deployment of Cash (in USD $millions) YTD 2015 5 Years 10 Years Dividend $ 98 $ 360 $ 519 Share Repurchase $ 75 $ 75 $ 352 Acquisitions $ 126 $ 225 $ 246 Total $ 299 $ 660 $ 1,117 5 Years: 2011 to 2015 10 Years: 2006 to 2015 ni.com 39 2016 Operating Leverage Scenarios Revenue Growth Leverage* Est Expense Growth* 0% Growth 5% Growth 10% Growth 15% Growth 100% 60% 55% 50% 0% 2%–4% 5%–6% 7%–8% * This represents NI Managements current planning as of April 28, 2016. ni.com 40 2016 Strategic Goals Drive Organic Revenue Growth • • • Leverage our strategic investments in R&D and field sales Broaden and deepen our customer relationships Gain market share Deliver Strong Profitability • • • Preserve our strong gross margins Drive efficiency of resources Optimize operating expenses ni.com 41 ni.com Appendix ni.com Historical Regional Revenue $400 Americas EMEIA APAC $350 $300 $86 $250 $84 $87 $65 $70 $92 $67 $92 $88 $69 $76 $70 $79 $75 $84 $67 $61 $66 $56 $83 $89 $57 $200 $53 $54 $46 $102 $150 $69 $70 $87 $100 $83 $88 $90 $95 $86 $100 $97 $94 $108 $92 $100 $101 $96 $116 $95 $96 $98 $120 $92 $66 $100 $50 $111 $107 $113 $118 $117 $120 $113 $97 $94 $97 $104 $99 $90 $79 $128 $124 $115 $120 $130 $131 $118 $127 $126 $125 $111 $- Q1 Q2 Q3 2010 ni.com Q4 Q1 Q2 Q3 2011 Q4 Q1 Q2 Q3 Q4 Q1 2012 Q2 Q3 2013 44 Q4 Q1 Q2 Q3 2014 Q4 Q1 Q2 Q3 2015 Q4 Q1 2016 Reconciliation of YoY GAAP revenue growth to YoY GAAP revenue growth excluding the effect of our current largest customer and the impact of foreign currency exchange 00 - Q1 00 - Q2 00 - Q3 00 - Q4 01 - Q1 01 - Q2 01 - Q3 01 - Q4 02 - Q1 02 - Q2 02 - Q3 02 - Q4 03 - Q1 03 - Q2 03 - Q3 03 - Q4 27.7% 24.8% 23.6% 22.3% 14.9% -1.9% -16.8% -17.3% -12.3% -4.3% 12.9% 12.8% 4.7% 7.1% 9.0% 14.4% YoY GAAP revenue growth, as reportetd Effect of excluding our current largest customer YoY GAAP Revenue growth, exluding our largest customer 0.0% 27.7% 0.0% 24.8% 0.0% 23.6% 0.0% 22.3% 0.0% 14.9% 0.0% -1.9% 0.0% -16.8% 0.0% -17.3% 0.0% -12.3% 0.0% -4.3% 0.0% 12.9% 0.0% 12.8% 0.0% 4.7% 0.0% 7.1% 0.0% 9.0% 0.0% 14.4% Effect of excluding the impact of foreign currency exchange Core YoY revenue gowth 1.6% 29.3% 3.0% 27.8% -0.9% 22.7% 3.4% 25.7% 6.1% 21.0% 4.3% 2.4% 4.1% -12.7% 1.7% -15.7% -1.3% -13.6% 0.2% -4.1% -2.9% 10.0% -1.0% 11.8% -0.9% 3.8% -3.7% 3.4% -2.0% 7.0% -3.3% 11.2% 04 - Q1 04 - Q2 04 - Q3 04 - Q4 05 - Q1 05 - Q2 05 - Q3 05 - Q4 06 - Q1 06 - Q2 06 - Q3 06 - Q4 07 - Q1 07 - Q2 07 - Q3 07 - Q4 25.7% 26.9% 19.8% 12.4% 4.1% 10.8% 13.0% 16.6% 19.3% 13.7% 15.9% 13.6% 10.9% 12.1% 12.4% 12.9% YoY GAAP revenue growth, as reportetd Effect of excluding our current largest customer YoY GAAP Revenue growth, exluding our largest customer 0.0% 25.7% 0.0% 26.9% 0.0% 19.8% 0.0% 12.4% 0.0% 4.1% 0.0% 10.8% 0.0% 13.0% 0.0% 16.6% 0.0% 19.3% 0.0% 13.7% 0.0% 15.9% 0.0% 13.6% 0.0% 10.9% 0.0% 12.1% 0.0% 12.4% 0.0% 12.9% Effect of excluding the impact of foreign currency exchange Core YoY revenue gowth -7.6% 18.1% -6.8% 20.1% -3.8% 16.0% -4.1% 8.3% -6.1% -2.0% -5.8% 5.0% -2.6% 10.4% -2.2% 14.4% 3.7% 23.0% 2.7% 16.4% -1.6% 14.3% -1.6% 12.0% -2.7% 8.2% -3.1% 9.0% -2.3% 10.1% -4.5% 8.4% 08 - Q1 08 - Q2 08 - Q3 08 - Q4 09 - Q1 09 - Q2 09 - Q3 09 - Q4 10 - Q1 10 - Q2 10 - Q3 10 - Q4 11 - Q1 11 - Q2 11 - Q3 11 - Q4 12.4% 17.3% 16.6% -1.3% -18.2% -27.7% -23.3% -0.3% 21.1% 39.1% 33.6% 24.0% 24.5% 19.6% 15.7% 11.2% YoY GAAP revenue growth, as reportetd Effect of excluding our current largest customer YoY GAAP Revenue growth, exluding our largest customer 0.0% 12.4% 0.0% 17.3% 0.0% 16.6% 0.0% -1.3% 0.0% -18.2% 0.0% -27.7% 0.0% -23.3% 0.0% -0.3% 0.0% 21.1% 0.0% 39.1% 0.0% 33.6% 0.0% 24.0% -0.5% 24.0% -1.0% 18.6% -8.9% 6.8% -2.0% 9.2% Effect of excluding the impact of foreign currency exchange Core YoY revenue gowth -5.2% 7.2% -7.9% 9.4% -6.3% 10.3% 0.8% -0.5% 3.9% -14.3% 6.2% -21.5% 4.6% -18.6% 0.0% -0.2% -5.5% 15.6% -6.9% 32.3% 2.0% 35.6% -1.6% 22.4% 1.1% 25.0% -3.9% 14.7% -5.8% 1.0% 0.2% 9.4% 12 - Q1 12 - Q2 12 - Q3 12 - Q4 13 - Q1 13 - Q2 13- Q3 13- Q4 14-Q1 14-Q2 14-Q3 14-Q4 15 - Q1 15 - Q2 15 - Q3 15 - Q4 16-Q1 15.4% 13.7% 8.0% 9.7% 1.3% -0.3% 0.2% -0.6% 5.6% 8.5% 10.6% 1.7% -3.5% -4.4% 0.5% -0.8% YoY GAAP revenue growth, as reportetd 9.8% Effect of non-GAAP revenue adjustments Effect of excluding our current largest customer YoY GAAP Revenue growth, exluding our largest customer 0.5% -1.8% 8.5% -0.2% -7.3% 7.9% -6.7% -2.3% 4.7% -0.7% -3.7% 3.6% -0.5% 0.7% 9.8% 0.2% -0.7% 0.8% 0.0% 8.6% 8.3% 0.0% 4.1% 4.3% 0.0% -1.2% -1.8% 0.0% 1.6% 7.2% 0.0% -4.4% 4.1% 0.0% -1.1% 9.6% 0.0% 1.0% 2.7% 0.0% 3.5% 0.0% 0.0% 3.5% -0.9% 0.0% -0.7% -0.2% 0.0% -1.4% -2.2% Effect of excluding the impact of foreign currency exchange Core YoY revenue gowth -0.6% 8.0% 2.8% 10.7% 4.0% 8.7% 0.3% 3.9% -0.4% 9.5% 0.9% 1.7% 0.2% 8.5% 0.7% 5.0% 1.2% -0.6% -0.3% 6.9% -1.0% 3.1% 2.3% 11.9% 6.0% 8.7% 6.2% 6.3% 5.5% 4.6% 4.5% 4.3% 5.6% 3.4% ni.com National Instruments Corporation Reconciliation of revenue growth percentage under U.S. GAAP to revenue growth percentage excluding the effect of foreign currency changes and changes in revenue from our largest customer (unaudited) Three Months Ended March 31, 2016 Revenue growth percentage as reported in USD Effect of excluding the decrease caused by foreign currency changes 5.60% Effect of excluding the revenue increase from our largest customer -1.40% Pro-forma revenue growth percentage excluding the impact of currency and our largest customer ni.com -0.80% 3.40% ni.com