Keysight Technologies Inc. · NYSE:KEYS
Keysight Technologies — Q3 2019 Earnings Presentation
23 slides from Keysight Technologies's earnings presentation, Aug 21, 2019
Slide 1: Q3 Fiscal Year 2019 Results
Keysight Technologies Q3 Fiscal Year 2019 Results TECHNOLOGIES
Slide 2: Forward-looking statements and non-GAAP notice
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 otherwise i
Slide 3: Record third quarter non-GAAP revenue and EPS
• Record third quarter non-GAAP revenue of $1.09B1 grew 8% y/y, or 9% on a core1,2 basis • Above high end of guidance range and fifth consecutive $1B+ revenue quarter • Record non-GAAP EPS of $1.25 increased 41% y/y • Above high end of guidance range and sixth consecutive quarter of double-digit ear
Slide 4: Orders, revenue, operating margin and EPS trends
Orders Revenue Operating Margin $1,110M $1,088M 25.2% +10%y/y (+10% core*) +8%y/y (+9% core*) +500 basis points y/y Orders Non-GAAP Revenue** Non-GAAP EPS** 1,200 1,200 $1.40 $1,124 $1,121 $1,110 $1,093 $1,088 $1.25 $1,051 $1.22 $1,007 $1,016 $1,008 $1,009 $1.20 1,000 1,000 $1.01 $1.00 $0.93 800 800
Slide 5: Q3'19 Non-GAAP Revenue by Segment and Region
Q3’19 NON-GAAP REVENUE*: $1,088M By Segment By Region ISG 10% Asia EISG Pacific Americas 27% 42% 41% CSG 63% Europe 17% * Reconciliations to closest GAAP equivalent provided. 5
Slide 6: Regional revenue: Americas, Europe, Asia Pacific
Americas Europe Asia Pacific $187 $189 $179 $180 $182 $600 $600 $200 $487 $462 $444 $416 $437 $425 $405 $425 $405 $426 $ millions $450 $150 $ millions $400 $ millions $300 $100 $200 $150 $50 $0 $0 $0 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 +10% (+11%
Slide 7: Communications Solutions Group results
Revenue • Record CSG revenue and operating margin • Commercial Communications: Double-digit order and revenue growth driven +13% y/y (+14% core*) by broad strength across the wireless ecosystem as increased 5G R&D investment continued Operating Margin • Aerospace, Defense & Government: Spending grow
Slide 8: Electronic Industrial Solutions Group results
Revenue • Record EISG gross and operating margin and second-highest quarterly revenue $295M +3% y/y (+4% core*) • Growth in automotive and general electronics partially offset by expected lower capital investments by semiconductor customers Operating Margin • Breadth of product solution portfolio an
Slide 9: Ixia Solutions Group results
Revenue • High single-digit growth in network visibility solutions driven by enterprise sales in the U.S. and Asia $110M -7% y/y (-7% core*) • Network test market remains soft as modest 400G investment at protocol layer • ~$50M in Ixia acquisition cost synergies benefit all business groups, the majo
Slide 10: Revenue by end market
End Market Revenue YoY % Ixia Solutions Commercial 10% $440M +23% Communications Aerospace, Defense & Commercial $243M -1% Electronic Comms Government Industrial 41% Solutions 27% Electronic Industrial $295M +3% Solutions Aerospace, Defense Ixia Solutions $110M -7% & Government 22% Total* $1,088M +8
Slide 11: Q4'19 Guidance and FY19 Financial Considerations
Q4’19 Guidance GAAP Revenue $1,078 - $1,098M Non-GAAP Revenue $1,080 - $1,100M Non-GAAP Revenue Growth +3% to +5% Non-GAAP Earnings per share $1.14 to $1.20 FY19 Financial Considerations • FY19 full-year non-GAAP revenue growth expectation of 9-10%. • Net Interest and Other Income/Expense: $2M-5M ne
Slide 12: Investor Day March 2018 Videos
Investor Day March 2018 Videos (single-click access to each executive’s presentation) • Ron Nersesian - President and CEO (43 minutes) • Jay Alexander - SVP and Chief Technology Officer (27 minutes) • Satish Dhanasekaran - SVP, President – Communications Solutions Group (27 minutes) • Mark Pierpoint
Slide 13: Reconciliations
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Slide 14: Non-GAAP Operating Margin Reconciliations
KEYSIGHT TECHNOLOGIES, INC. NON-GAAP OPERATING MARGIN RECONCILIATIONS (In millions) (Unaudited) PRELIMINARY Three months ended July 31, 2019 2018 Income from operations, as reported $ 197 $ 117 Amortization of acquisition-related balances 56 56 Share-based compensation 16 14 Acquisition and integrat
Slide 15: Non-GAAP Net Income and Diluted EPS Reconciliations
KEYSIGHT TECHNOLOGIES, INC. NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATIONS (In millions, except per share amounts) (Unaudited) PRELIMINARY Three months ended July 31, 2019 2018 Net Diluted Net Diluted Income EPS Income EPS GAAP Net income $ 159 $ 0.83 $ 121 $ 0.63 Non-GAAP adjustments: Amortiza
Slide 16: Reconciliation of Revenue Guidance and Non-GAAP Core Revenue
KEYSIGHT TECHNOLOGIES, INC. RECONCILIATION OF REVENUE GUIDANCE AND NON-GAAP CORE REVENUE (In millions) (Unaudited) PRELIMINARY Q4'19 Guidance Year-over-year compare Percent Low end High end Q3'19 Q3'18 Inc/(Dec) GAAP Revenue $ 1,078 $ 1,098 $ 1,087 $ 1,004 8% Amortization of acquisition-related bala
Slide 17: Reconciliations of Non-GAAP Revenue by Segment and Region
KEYSIGHT TECHNOLOGIES, INC. RECONCILIATIONS OF NON-GAAP REVENUE BY SEGMENT AND REGION (in millions) (Unaudited) PRELIMINARY Year-over-Year Amortization of acquisition- GAAP Revenue related balances Non-GAAP Revenue Revenue by Segment Q3'19 Q3'18 YoY % Chg. Q3'19 Q3'18 Q3'19 Q3'18 YoY % Chg. Communic
Slide 18: Reconciliations of Non-GAAP Core Revenue by Segment and Region
KEYSIGHT TECHNOLOGIES, INC. RECONCILIATIONS OF NON-GAAP CORE REVENUE BY SEGMENT AND REGION (in millions) (Unaudited) PRELIMINARY Year-over-Year Revenue from acquisitions or Currency Non-GAAP Revenue divestitures Adjustments Non-GAAP Core Revenue Revenue by Segment Q3'19 Q3'18 YoY % Chg. Q3'19 Q3'18
Slide 19: Segment Revenue Reconciliation
KEYSIGHT TECHNOLOGIES, INC. SEGMENT REVENUE RECONCILIATION (in millions) (Unaudited) PRELIMINARY Keysight Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 GAAP Revenue $ 1,004 $ 1,047 $ 1,006 $ 1,090 $ 1,087 Amortization of acquisition-related balances 4 4 3 3 1 Non-GAAP/Segment Revenue $ 1,008 $ 1,051 $ 1,009 $ 1,093
Slide 20: Reconciliation of Non-GAAP Revenue by Region
KEYSIGHT TECHNOLOGIES, INC. RECONCILIATION OF NON-GAAP REVENUE BY REGION (In Millions) (Unaudited) PRELIMINARY Keysight Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 GAAP Revenue $ 1,004 $ 1,047 $ 1,006 $ 1,090 $ 1,087 Amortization of acquisition-related balances 4 4 3 3 1 Non-GAAP Revenue $ 1,008 $ 1,051 $ 1,009 $
Slide 21: Reconciliation of Non-GAAP Revenue by End Market
KEYSIGHT TECHNOLOGIES, INC. RECONCILIATION OF NON-GAAP REVENUE BY END MARKET (In millions) (Unaudited) PRELIMINARY Amortization of acquisition-related GAAP Revenue balances Non-GAAP Revenue Percent Percent Q3'19 Q3'18 Inc/(Dec) Q3'19 Q3'18 Q3'19 Q3'18 Inc/(Dec) Aerospace, Defense & Government $ 243
Slide 22: 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
Slide 23: TECHNOLOGIES
TECHNOLOGIES
Keysight Technologies — Q3 2019 Earnings Presentation on 6ix