We hear a lot about operating leverage these days. We believe there is significant operating leverage and value stored up in $NATI 's historically high backlog which we discuss in our latest Substack.
" If a company increases its price for a widget by 8%, the revenue number goes up even if it ships the same number of widgets as last year. Yes, companies are experiencing higher costs for inputs like raw materials, labor, and freight. However, many input costs are relatively fixed meaning they don’t go up as much or remain the same -think costs like depreciation on equipment and insurance on the property. Higher revenue run over these relatively fixed costs results in an upward lift for profit margins."