Keysight Technologies : First Quarter 2025 Financial Information

Published: 2025-02-25 16:12:12 ET KEYS

KEYSIGHT TECHNOLOGIES, INC.

Financial Information Index of Schedules

Financial Statements:

Page

Condensed Consolidated Statement of Operations - Three months ended January 31, 2025 and 2024

1

Condensed Consolidated Balance Sheet as of January 31, 2025 and October 31, 2024

2

Condensed Consolidated Statement of Cash Flows - Three months ended January 31, 2025 and 2024

3

Supplemental Data:

Communications Solutions Group (CSG) Segment Results

4

Electronic Industrial Solutions Group (EISG) Segment Results

5

Reconciliations:

Gross profit and operating margin reconciliations

6

Operating expenses reconciliations

7

Net income and diluted EPS reconciliation

8

Reconciliation of core revenue by segment and region

9

Revenue by end markets

10

Free Cash Flow

11

Non-GAAP Financial Measures

12

Fiscal Periods:

Q1 - Three months ended January 31

Q2 - Three months ended April 30

Q3 - Three months ended July 31

Q4 - Three months ended October 31

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(In millions, except per share data)

(Unaudited)

PRELIMINARY

Three months ended

January 31,

2025

2024

Orders

$

1,263

$

1,220

Revenue

$

1,298

$

1,259

Costs and expenses:

Cost of products and services

478

446

Research and development

249

232

Selling, general and administrative

361

362

Other operating expense (income), net

(8)

(2)

Total costs and expenses

1,080

1,038

Income from operations

218

221

Interest income

19

23

Interest expense

(20)

(20)

Other income (expense), net

(18)

5

Income before taxes

199

229

Provision for income taxes

30

57

Net income

$

169

$

172

Net income per share:

Basic

$

0.97

$

0.98

Diluted

$

0.97

$

0.98

Weighted average shares used in computing net income per share:

Basic

173

175

Diluted

174

176

Page 1

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEET (In millions, except par value and share data)

(Unaudited)

PRELIMINARY

January 31, 2025

October 31, 2024

ASSETS

Current assets:

Cash and cash equivalents

$

2,060

$

1,796

Accounts receivable, net

797

857

Inventory

1,039

1,022

Other current assets

560

582

Total current assets

4,456

4,257

Property, plant and equipment, net

764

774

Operating lease right-of-use assets

224

234

Goodwill

2,354

2,388

Other intangible assets, net

556

607

Long-term investments

147

110

Long-term deferred tax assets

365

378

Other assets

521

521

Total assets

$

9,387

$

9,269

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable

$

289

$

313

Employee compensation and benefits

253

295

Deferred revenue

594

561

Income and other taxes payable

131

90

Operating lease liabilities

43

43

Other accrued liabilities

199

125

Total current liabilities

1,509

1,427

Long-term debt

1,790

1,790

Retirement and post-retirement benefits

79

81

Long-term deferred revenue

209

206

Long-term operating lease liabilities

187

197

Other long-term liabilities

426

463

Total liabilities

4,200

4,164

Stockholders' Equity:

Preferred stock; $0.01 par value; 100 million shares authorized; none issued and

outstanding

-

-

Common stock; $0.01 par value; 1 billion shares authorized; 202 million and 201 million

shares issued, respectively

2

2

Treasury stock, at cost; 28.9 million shares and 28.4 million shares, respectively

(3,497)

(3,422)

Additional paid-in-capital

2,731

2,664

Retained earnings

6,394

6,225

Accumulated other comprehensive loss

(443)

(364)

Total stockholders' equity

5,187

5,105

Total liabilities and equity

$

9,387

$

9,269

Page 2

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(In millions) (Unaudited)

PRELIMINARY

Three months ended

January 31,

2025

2024

Cash flows from operating activities:

Net income

$

169

$

172

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

31

30

Amortization

35

38

Share-based compensation

62

48

Deferred tax expense (benefit)

(10)

6

Excess and obsolete inventory-related charges

9

8

Unrealized loss (gain) on equity and other investments

(37)

(4)

Other non-cash expense (income), net

1

-

Changes in assets and liabilities, net of effects of businesses acquired:

Accounts receivable

53

124

Inventory

(26)

(42)

Accounts payable

(16)

1

Employee compensation and benefits

(38)

(74)

Deferred revenue

43

27

Income taxes payable

34

38

Other assets and liabilities

68

(44)

Net cash provided by operating activities(a)

378

328

Cash flows from investing activities:

Investments in property, plant and equipment

(32)

(47)

Acquisition of businesses and intangible assets, net of cash acquired

-

(478)

Other investing activities

(1)

14

Net cash used in investing activities

(33)

(511)

Cash flows from financing activities:

Proceeds from issuance of common stock under employee stock plans

31

32

Payment of taxes related to net share settlement of equity awards

(29)

(28)

Acquisition of non-controlling interests

-

(458)

Treasury stock repurchases

(75)

(93)

Other financing activities

(1)

(1)

Net cash used in financing activities

(74)

(548)

Effect of exchange rate movements

(8)

8

Net increase (decrease) in cash, cash equivalents, and restricted cash

263

(723)

Cash, cash equivalents, and restricted cash at beginning of period

1,814

2,488

Cash, cash equivalents, and restricted cash at end of period

$

2,077

$

1,765

Interest payments

$

-

$

-

Income tax paid, net

$

9

$

12

Page 3

KEYSIGHT TECHNOLOGIES, INC.

COMMUNICATIONS SOLUTIONS GROUP (CSG)

(In millions, except where noted)

(Unaudited)

PRELIMINARY

FY 2025

Q1

Q2

Q3

Q4

Total

Revenue

$

883

$

883

Gross margin, %

68.0%

68.0%

Income from operations

$

240

$

240

Operating margin, %

27.2%

27.2%

FY 2024

Q1

Q2

Q3

Q4

Total

Revenue

$

839

$

840

$

847

$

894

$

3,420

Gross margin, %

68.4%

68.0%

67.0%

67.2%

67.6%

Income from operations

$

226

$

223

$

223

$

249

$

921

Operating margin, %

27.0%

26.5%

26.3%

27.9%

26.9%

Segment revenue and income from operations is consistent with the respective non-GAAP financial measures as discussed on last page.

Page 4

KEYSIGHT TECHNOLOGIES, INC.

ELECTRONIC INDUSTRIAL SOLUTIONS GROUP (EISG)

(In millions, except where noted)

(Unaudited)

PRELIMINARY

FY 2025

Q1

Q2

Q3

Q4

Total

Revenue

$

415

$

415

Gross margin, %

61.1%

61.1%

Income from operations

$

114

$

114

Operating margin, %

27.4%

27.4%

FY 2024

Q1

Q2

Q3

Q4

Total

Revenue

$

420

$

376

$

370

$

393

$

1,559

Gross margin, %

64.9%

58.2%

57.5%

58.3%

59.9%

Income from operations

$

129

$

71

$

74

$

83

$

357

Operating margin, %

30.6%

19.0%

20.1%

21.1%

22.9%

Segment revenue and income from operations is consistent with the respective non-GAAP financial measures as discussed on last page.

Page 5

KEYSIGHT TECHNOLOGIES, INC.

GROSS PROFIT AND OPERATING MARGIN RECONCILIATIONS

(In millions, except where noted)

(Unaudited)

PRELIMINARY

Reconciliation of Gross Profit to non-GAAP Gross Profit

Three months ended

January 31,

2025

2024

Gross Profit, as reported

$

820

$

813

Amortization of acquisition-related balances

19

17

Share-based compensation

11

8

Acquisition and integration costs

1

-

Restructuring and others

3

8

Non-GAAP Gross Profit

$

854

$

846

GAAP Gross margin, %

63.1%

64.6%

Non-GAAP Gross margin, %

65.8%

67.2%

Reconciliation of Income from Operations to non-GAAP Income from Operations

Three months ended

January 31,

2025

2024

Income from operations, as reported

$

218

$

221

Amortization of acquisition-related balances

33

38

Share-based compensation

62

50

Acquisition and integration costs

28

17

Restructuring and others

13

29

Non-GAAP income from operations

$

354

$

355

GAAP Operating margin, %

16.8%

17.6%

Non-GAAP Operating margin, %

27.3%

28.2%

Please refer to the last page for details on the use of non-GAAP financial measures.

Page 6

KEYSIGHT TECHNOLOGIES, INC.

OPERATING EXPENSES RECONCILIATIONS

(In millions) (Unaudited)

PRELIMINARY

Reconciliation of research & development expenses to non-GAAP research & development expenses

Three months ended

January 31,

2025

2024

Research & development expenses, as reported

$

249

$

232

Share-based compensation

(16)

(13)

Acquisition and integration costs

(1)

-

Restructuring and others

(2)

(5)

Non-GAAP research & development expenses

$

230

$

214

Reconciliation of selling, general & administrative expenses to non-GAAP selling, general & administrative expenses

Three months ended

January 31,

2025

2024

Selling, general & administrative expenses, as reported

$

361

$

362

Amortization of acquisition-related balances

(14)

(21)

Share-based compensation

(35)

(29)

Acquisition and integration costs

(26)

(17)

Restructuring and others

(8)

(16)

Non-GAAP selling, general & administrative expenses

$

278

$

279

Reconciliation of other operating expense (income), net to non-GAAP other operating expense (income), net

Three months ended

January 31,

2025

2024

Other operating expense (income), net, as reported

$

(8)

$

(2)

Non-GAAP other operating expense (income), net

$

(8)

$

(2)

Reconciliation of operating expenses to non-GAAP operating expenses

Three months ended

January 31,

2025

2024

Operating expenses, as reported

$

602

$

592

Amortization of acquisition-related balances

(14)

(21)

Share-based compensation

(51)

(42)

Acquisition and integration costs

(27)

(17)

Restructuring and others

(10)

(21)

Non-GAAP operating expenses

$

500

$

491

Please refer to the last page for details on the use of non-GAAP financial measures.

Page 7

KEYSIGHT TECHNOLOGIES, INC.

NET INCOME AND DILUTED EPS RECONCILIATION

(In millions, except per share data)

(Unaudited)

PRELIMINARY

Three months ended

January 31,

2025

2024

Net Income

Diluted EPS

Net Income

Diluted EPS

GAAP Net income

$

169

$

0.97

$

172

$

0.98

Non-GAAP adjustments:

Amortization of acquisition-related balances

33

0.19

38

0.21

Share-based compensation

62

0.36

50

0.29

Acquisition and integration costs

98

0.56

13

0.08

Restructuring and others

(24)

(0.14)

15

0.08

Adjustment for taxes(a)

(21)

(0.12)

(2)

(0.01)

Non-GAAP Net income

$

317

$

1.82

$

286

$

1.63

Weighted average shares outstanding - diluted

174

176

Page 8

KEYSIGHT TECHNOLOGIES, INC.

RECONCILIATIONS OF CORE REVENUE BY SEGMENT AND REGION

(In millions) (Unaudited)

PRELIMINARY

Year-over-Year

Revenue from

Currency

acquisitions or

Revenue

divestitures

Adjustments(a)

Core Revenue

Revenue by Segment

Q1'25

Q1'24

YoY % Chg.

Q1'25

Q1'25

Q1'25

Q1'24

YoY % Chg.

Communications Solutions Group

$

883

$

839

5%

$

6

$

(6)

$

883

$

839

5%

Electronic Industrial Solutions Group

415

420

(1)%

-

(4)

419

420

-

Total Revenue

$

1,298

$

1,259

3%

$

6

$

(10)

$

1,302

$

1,259

3%

Revenue from

Currency

acquisitions or

Revenue

divestitures

Adjustments(a)

Core Revenue

Revenue by Region

Q1'25

Q1'24

YoY % Chg.

Q1'25

Q1'25

Q1'25

Q1'24

YoY % Chg.

Americas

$

551

$

514

7%

$

1

$

(1)

$

551

$

514

7%

Europe

259

255

1%

4

(2)

257

255

1%

Asia Pacific

488

490

(1)%

1

(7)

494

490

1%

Total Revenue

$

1,298

$

1,259

3%

$

6

$

(10)

$

1,302

$

1,259

3%

Please refer to the last page for details on the use of non-GAAP financial measures.

Page 9

Disclaimer

Keysight Technologies Inc. published this content on February 25, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on February 25, 2025 at 21:11:12.533.