Keysight Technologies Reports Fourth Quarter and Fiscal Year 2023 Results
$KEYS #4Q23--Keysight Technologies, Inc. (NYSE: KEYS) today reported financial results for the fourth fiscal quarter and fiscal year ended October 31, 2023. “Keysight delivered solid fourth quarter ...
Achieved Record Full Year Revenue, Gross Margin, and Operating Margin
SANTA ROSA, Calif.: $KEYS #4Q23--Keysight Technologies, Inc. (NYSE: KEYS) today reported financial results for the fourth fiscal quarter and fiscal year ended October 31, 2023.
“Keysight delivered solid fourth quarter results and finished the year with record revenue, gross margin, and operating margin,” said Satish Dhanasekaran, Keysight’s President and CEO. “In what remains a challenging macro environment, our strategic customer engagement is high, and we are continuing to capitalize on opportunities across a broad and diverse set of end markets, positioning us well for an eventual recovery.”
Fourth Quarter Financial Summary
- Revenue was $1.31 billion, compared with $1.44 billion last year.
- GAAP net income was $226 million, or $1.28 per share, compared with $299 million, or $1.66 per share, in the fourth quarter of 2022.
- Non-GAAP net income was $352 million, or $1.99 per share, compared with $386 million, or $2.14 per share in the fourth quarter of 2022.
- Cash flow from operations was $378 million, compared with $398 million last year. Free cash flow was $340 million, compared with $340 million in the fourth quarter of 2022.
- As of October 31, 2023, cash and cash equivalents totaled $2.47 billion.
Fiscal Year 2023 Financial Summary
- Revenue was $5.46 billion, compared with $5.42 billion last year.
- GAAP net income was $1.06 billion, or $5.91 per share, compared with $1.12 billion, or $6.18 per share in fiscal 2022.
- Non-GAAP net income was $1.49 billion, or $8.33 per share, compared with $1.39 billion, or $7.63 per share in fiscal year 2022.
- Cash flow from operations was $1.41 billion, compared with $1.14 billion last year. Free cash flow was $1.21 billion, compared with $0.96 billion in fiscal year 2022.
Reporting Segments
- Communications Solutions Group (CSG)
CSG reported revenue of $891 million in the fourth quarter, down 10 percent over last year, reflecting a 17 percent decline in commercial communications, while aerospace, defense, and government increased 4 percent driven by investments in defense technology modernization, electromagnetic spectrum operations, radar, and space and satellite.
- Electronic Industrial Solutions Group (EISG)
EISG reported revenue of $420 million in the fourth quarter, down 7 percent over last year, reflecting contraction in semiconductor and manufacturing-related customer spending, while investment in new mobility automotive, advanced research, and digital health held steady.
Outlook
Keysight’s first fiscal quarter of 2024 revenue is expected to be in the range of $1.235 billion to $1.255 billion. Non-GAAP earnings per share for the first fiscal quarter of 2024 are expected to be in the range of $1.53 to $1.59. Certain items impacting the GAAP tax rate pertain to future events and are not currently estimable with a reasonable degree of accuracy; therefore, no reconciliation of GAAP earnings per share to non-GAAP has been provided. Further information is discussed in the section titled “Use of Non-GAAP Financial Measures” below.
Webcast
Keysight’s management will present more details about its fourth quarter and fiscal year 2023 financial results and its first quarter FY2024 outlook on a conference call with investors today at 1:30 p.m. PT. This event will be webcast in listen-only mode. Listeners may log on to the call at www.investor.keysight.com under the “Upcoming Events” section and select “Q4 2023 Keysight Technologies Inc. Earnings Conference Call” to participate or dial +1 833-470-1428 (Toll-Free) or +1 646-904-5544 (Local) and enter passcode 581293. The webcast will remain on the company site for 90 days.
Forward-Looking Statements
This communication contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. The words “expect,” “intend,” “will,” “should,” and similar expressions, as they relate to the company, are intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties that could significantly affect the expected results and are based on certain key assumptions of Keysight’s management and on currently available information. Due to such uncertainties and risks, no assurances can be given that such expectations or assumptions will prove to have been correct, and readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Keysight undertakes no responsibility to publicly update or revise any forward-looking statement. The forward-looking statements contained herein include, but are not limited to, predictions, future guidance, projections, beliefs, and expectations about the company’s goals, revenues, financial condition, earnings, and operations that involve risks and uncertainties that could cause Keysight’s results to differ materially from management’s current expectations. Such risks and uncertainties include, but are not limited to, impacts of inflation and a mixed demand environment; impacts of geopolitical tension and conflict; export control regulations and compliance; net zero emissions commitments; our ability to retain key personnel; our ability to successfully integrate key acquisitions; changes in the demand for current and new products, technologies, and services; customer purchasing decisions and timing; and order cancellations.
In addition to the risks above, other risks that Keysight faces include those detailed in Keysight’s filings with the Securities and Exchange Commission on Keysight’s yearly report on Form 10-K for the period ended October 31, 2022, and Keysight’s quarterly report on Form 10-Q for the period ended July 31, 2023.
Segment Data
Segment data reflects the results of our reportable segments under our management reporting system. Segment data are provided on page 6 of the attached tables.
Use of Non-GAAP Financial Measures
In addition to financial information prepared in accordance with U.S. GAAP (“GAAP”), this document also contains certain non-GAAP financial measures based on management’s view of performance, including:
- Non-GAAP Net Income/Earnings
- Non-GAAP Net Income per share/Earnings per share
- Free Cash Flow
Income per share is based on weighted average diluted share count. See the attached supplemental schedules for reconciliations of each non-GAAP financial measure to its most directly comparable GAAP financial measure for the three months ended October 31, 2023 and fiscal year 2023. Following the reconciliations is a discussion of the items adjusted from our non-GAAP financial measures and the company’s reasons for including or excluding certain categories of income or expenses from our non-GAAP results.
About Keysight Technologies
At Keysight (NYSE: KEYS), we inspire and empower innovators to bring world-changing technologies to life. As an S&P 500 company, we're delivering market-leading design, emulation, and test solutions to help engineers develop and deploy faster, with less risk, throughout the entire product lifecycle. We're a global innovation partner enabling customers in communications, industrial automation, aerospace and defense, automotive, semiconductor, and general electronics markets to accelerate innovation to connect and secure the world. Learn more at Keysight Newsroom and www.keysight.com.
Source: IR-KEYS
KEYSIGHT TECHNOLOGIES, INC. | |||||||||
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | |||||||||
(In millions, except per share data) | |||||||||
(Unaudited) | |||||||||
PRELIMINARY | |||||||||
| |||||||||
| Three months ended |
| ||||||||
| October 31, | Percent | ||||||||
| 2023 |
|
| 2022 |
| Inc/(Dec) | |||
| |||||||||
| Orders | $ | 1,327 |
| $ | 1,570 |
| (16)% | ||
| |||||||||
| Revenue | $ | 1,311 |
| $ | 1,443 |
| (9)% | ||
| |||||||||
| Costs and expenses: |
| ||||||||
| Cost of products and services |
| 467 |
|
| 533 |
| (12)% | ||
| Research and development |
| 218 |
|
| 215 |
| 1% | ||
| Selling, general and administrative |
| 313 |
|
| 321 |
| (2)% | ||
| Other operating expense (income), net |
| (4 | ) |
| (5 | ) | (27)% | ||
| Total costs and expenses |
| 994 |
|
| 1,064 |
| (7)% | ||
| |||||||||
| Income from operations |
| 317 |
|
| 379 |
| (16)% | ||
| |||||||||
| Interest income |
| 32 |
|
| 10 |
| 194% | ||
| Interest expense |
| (20 | ) |
| (20 | ) | — | ||
| Other income (expense), net |
| (53 | ) |
| (1 | ) | 1510% | ||
| |||||||||
| Income before taxes |
| 276 |
|
| 368 |
| (25)% | ||
| |||||||||
| Provision for income taxes |
| 50 |
|
| 69 |
| (27)% | ||
| |||||||||
| Net income | $ | 226 |
| $ | 299 |
| (24)% | ||
| |||||||||
| |||||||||
| Net income per share: |
| ||||||||
| Basic | $ | 1.28 |
| $ | 1.67 |
|
| ||
| Diluted | $ | 1.28 |
| $ | 1.66 |
|
| ||
| |||||||||
| Weighted average shares used in computing net income per share: |
| ||||||||
| Basic |
| 176 |
|
| 179 |
|
| ||
| Diluted |
| 177 |
|
| 180 |
|
| ||
| |||||||||
Page 1 | |||||||||
| |||||||||
KEYSIGHT TECHNOLOGIES, INC. | |||||||||
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | |||||||||
(In millions, except per share data) | |||||||||
(Unaudited) | |||||||||
PRELIMINARY | |||||||||
| |||||||||
| Year ended |
| ||||||||
| October 31, | Percent | ||||||||
| 2023 |
|
| 2022 |
| Inc/(Dec) | |||
| |||||||||
| Orders | $ | 5,190 |
| $ | 5,984 |
| (13)% | ||
| |||||||||
| Revenue | $ | 5,464 |
| $ | 5,420 |
| 1% | ||
| |||||||||
| Costs and expenses: |
| ||||||||
| Cost of products and services |
| 1,932 |
|
| 1,970 |
| (2)% | ||
| Research and development |
| 882 |
|
| 841 |
| 5% | ||
| Selling, general and administrative |
| 1,307 |
|
| 1,283 |
| 2% | ||
| Other operating expense (income), net |
| (15 | ) |
| (8 | ) | 80% | ||
| Total costs and expenses |
| 4,106 |
|
| 4,086 |
| 1% | ||
| |||||||||
| Income from operations |
| 1,358 |
|
| 1,334 |
| 2% | ||
| |||||||||
| Interest income |
| 102 |
|
| 16 |
| 518% | ||
| Interest expense |
| (78 | ) |
| (79 | ) | (1)% | ||
| Other income (expense), net |
| (25 | ) |
| 14 |
| — | ||
| |||||||||
| Income before taxes |
| 1,357 |
|
| 1,285 |
| 6% | ||
| |||||||||
| Provision for income taxes |
| 300 |
|
| 161 |
| 87% | ||
| |||||||||
| Net income |
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