Slide 1: Keysight Technologies Q4 Fiscal Year 2023 Results
Keysight Technologies Q4 Fiscal Year 2023 Results November 20, 2023
Slide 2: Safe Harbor
Safe Harbor This communication contains forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbors created therein. Statements preceded by, followed by, or that
Slide 3: Q4'23 & FY'23 Highlights
Q4’23 & FY'23 Highlights Solid Q4 results and record full-year revenue, • Fourth quarter revenue and earnings per share exceeded the high end of guidance 1 gross margin, and operating margin in what • Gross margin of 65%, increased 130bps y/y; operating margin of 29% remains a challenging macro envi
Slide 4: Q4'23 Non-GAAP Financial Highlights
Q4’23 Non-GAAP Financial Highlights Orders Revenue Operating Margin EPS $1.327B $1.311B 29.3% $1.99 -16%y/y (-16% core*) -9%y/y (-10% core*) -60 basis points y/y -7%y/y * Core growth excludes the impact of currency, acquisitions or divestitures closed in last twelve months, reconciliations included.
Slide 5: Revenue by Segment & by Region
Revenue by Segment & by Region Q4'23 Revenue: $1.311B 5
Slide 6: Revenue Trend by Region
Revenue Trend by Region -4% y/y (-5% core*): Revenue decline in -2% y/y (-4% core*): Revenue decline in -17% y/y (-16% core*): Revenue decline in CC and EI partially offset by growth in ADG. CC and ADG partially offset by growth in EI. CC, EI, and ADG. Key: * Core revenue growth excludes the impact
Slide 7: Q4'23 Communications Solutions Group Highlights
Q4’23 Communications Solutions Group Highlights Revenue • Commercial Communications: Investment driven by network and data center AI- $891M ML expansion, Open RAN, 5G release 17, quantum, and non-terrestrial networks, -10% y/y (-10% core*) while broader sector spending remained cautious. Operating M
Slide 8: Q4'23 Electronic Industrial Solutions Group Highlights
Q4’23 Electronic Industrial Solutions Group Highlights Revenue • Automotive: Investment remained strong in EV technologies, as well as software-defined vehicles, cybersecurity, and V2X, while production-related investment was subdued. $420M • Semiconductor: Demand remained strong for Keysight’s prop
Slide 9: Q4'23 Revenue By End Market
Q4’23 Revenue By End Market End Market Revenue YoY % Commercial $568M -17% Communications Aerospace, Defense & $323M +4% Government Electronic Industrial $420M -7% Solutions Total $1,311M -9% 9
Slide 10: FY23 Non-GAAP Highlights & Annual Trend
FY23 Non-GAAP Highlights & Annual Trend Orders Revenue Operating Margin EPS $5.190B $5.464B 30.2% $8.33 4% CAGR 6% CAGR +620 basis points 15% CAGR 5-Year annual trend represents 2019-2023. Reconciliations to closest GAAP equivalent provided for all non-GAAP measures. Non-GAAP revenue 10 excludes the
Slide 11: Guidance and Financial Considerations
Guidance and Financial Considerations Q1'24 Guidance Revenue $1.235B – $1.255B Non-GAAP Earnings per share $1.53 – $1.59 FY24 Financial Considerations • R&D expected to be approximately 17% of revenue • Non-GAAP tax rate of 17% • Guidance assumes Q1 weighted average diluted share count of approximat
Slide 12: Investor Resources
Investor Resources Recent Reports: Quick Links 2022 CSR Report 2022 DEI Report 2023 TCFD Report Why Keysight Recent Investor Presentations and Webcasts The Keysight Leadership Model Corporate Social Responsibility Investor Day March 2023 Videos (single-click access to each executive’s presentation)
Slide 13: Reconciliations
WW KEYSIGHT Reconciliations
Slide 14: Operating Margin Reconciliation
OPERATING MARGIN RECONCILIATION (In millions, except where noted) (Unaudited) PRELIMINARY Three months ended Year ended October 31, October 31, 2023 2022 2023 2022 Income from operations, as reported $ 317 $ 379 $ 1,358 $ 1,334 Amortization of acquisition-related balances 19 25 90 103 Share-based co
Slide 15: Gross Margin Reconciliation
GROSS MARGIN RECONCILIATION (In millions, except where noted) (Unaudited) PRELIMINARY Three months ended Year ended October 31, October 31, 2023 2022 2023 2022 Gross Profit, as reported $ 844 $ 910 $ 3,532 $ 3,450 Amortization of acquisition-related balances 5 11 34 48 Share-based compensation 5 4 2
Slide 16: Net Income and Diluted EPS Reconciliation
NET INCOME AND DILUTED EPS RECONCILIATION (In millions, except per share data) (Unaudited) PRELIMINARY Three months ended Year ended October 31, October 31, 2023 2022 2023 2022 Net Diluted Net Diluted Net Diluted Net Diluted Income EPS Income EPS Income EPS Income EPS Net income, as reported $ 226 $
Slide 17: Reconciliation of Core Revenue
RECONCILIATION OF CORE REVENUE (In millions) (Unaudited) PRELIMINARY Year-over-year Year-over-year Percent Percent Q4'23 Q4'22 Inc/(Dec) FY23 FY22 Inc/(Dec) Revenue $ 1,311 $ 1,443 (9)% $ 5,464 $ 5,420 1% Adjustments: Revenue from acquisitions or divestitures (5) — (17) — Currency impacts — — 94 — C
Slide 18: Reconciliations of Core Revenue by Segment and Region
RECONCILIATIONS OF CORE REVENUE BY SEGMENT AND REGION (In millions) (Unaudited) PRELIMINARY Year-over-Year Revenue from acquisitions or Currency Revenue divestitures Adjustments Core Revenue Revenue by Segment Q4'23 Q4'22 YoY % Q4'23 Q4'22 Q4'23 Q4'23 Q4'22 YoY % Communications Solutions Group $ 891
Slide 19: Revenue by End Markets
REVENUE BY END MARKETS (In millions) (Unaudited) PRELIMINARY Percent Percent Q4'23 Q4'22 Inc/(Dec) FY23 FY22 Inc/(Dec) Aerospace, Defense and Government $ 323 $ 311 4% $ 1,250 $ 1,171 7% Commercial Communications 568 681 (17)% $ 2,435 $ 2,632 (7)% Electronic Industrial 420 451 (7)% $ 1,779 $ 1,617 1
Slide 20: Free Cash Flow
FREE CASH FLOW (In millions) (Unaudited) PRELIMINARY Three months ended Year ended October 31, October 31, 2023 2022 2023 2022 Net cash provided by operating activities $ 378 $ 398 $ 1,408 $ 1,144 Less: Investments in property, plant and equipment (38) (58) (196) (185) Free cash flow $ 340 $ 340 $ 1
Slide 21: Non-GAAP Financial Measures
Non-GAAP Financial Measures Management uses both GAAP and non-GAAP financial measures to analyze and assess the overall performance of the business, to make operating decisions and to forecast and plan for future periods. We believe that our investors benefit from seeing our results “through the eye