Keysight Technologies Inc. · NYSE:KEYS
Keysight Technologies — Q3 2022 Earnings Presentation
21 slides from Keysight Technologies's earnings presentation, Aug 17, 2022
Slide 1: Keysight Technologies Q3 Fiscal Year 2022 Results
Keysight Technologies Q3 Fiscal Year 2022 Results
Slide 2: Forward-looking statements
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 revenue and earnings per share; record third quarter orders
Record revenue and earnings per share; record third quarter orders • Orders of $1.46B grew 12%, or 14% on a core* basis • Revenue of $1.38B grew 10% y/y, or 13% on a core* basis, and exceeded high end of guidance • Gross margin of 65% and operating margin of 30% – monetizing differentiation and main
Slide 4: Orders, Revenue, Operating Margin, EPS
Orders Revenue Operating Margin EPS $1.461B $1.376B 30.1% $2.01 +12%y/y (+14% core*) +10%y/y (+13% core*) +290 basis points y/y +31%y/y * Core growth excludes the impact of currency, acquisitions or divestitures closed in last twelve months, reconciliations included. 4 Reconciliations to closest GAA
Slide 5: Q3'22 Revenue: $1,376M
nevenue MY VCYCIIt & VY INGUYIVII en e—SC—SSSCSC‘CCCs By Segment By Region Asia Pacific 44% KEYSIGHT °
Slide 6: Revenue growth by segment and region
+13% y/y (+12% core*): Strength in CC +3% y/y (+10% core*): Strength in EI and +11% y/y (+15% core*): Strength in CC, EI, and EI CC and ADG Key: * Core revenue growth excludes the impact of currency, acquisitions or divestitures closed in last twelve months, reconciliations included. ADG – Aerospace
Slide 7: Communications Solutions Group
Revenue • Record third quarter CSG orders and all-time record revenue $970M • Commercial Communications: Record third quarter orders and all-time record +11% y/y (+13% core*) revenue driven by 5G, O-RAN, 400G, 800G, and high-speed digital applications • Aerospace, Defense & Government: Record third
Slide 8: Electronic Industrial Solutions Group
Revenue • All-time record orders and revenue; supply continues to temper revenue $406M • Automotive: Record Q3 orders and all-time record revenue driven by continued +10% y/y (+13% core*) investment in new EV and AV technology • Semiconductor: Advanced node technologies and capacity expansion drove
Slide 9: End Market Revenue YoY %
End Market Revenue YoY % Commercial $694M +17% Communications Aerospace, Defense & $276M (2)% Government Electronic Industrial $406M +10% Solutions Total $1,376M +10% 9
Slide 10: Five-year annual trend: Orders, Revenue, Operating Margin, EPS
Orders Revenue Operating Margin EPS $5.356B $4.941B 27.9% $6.23 12% CAGR 11% CAGR +950 basis points 25% CAGR 10 5-Year annual trend represents 2017-2021. Reconciliations to closest GAAP equivalent provided for all non-GAAP measures.. Non-GAAP revenue excludes the impact of fair-value adjustments to
Slide 11: Q4'22 and FY22 guidance
Q4'22 FY22 Revenue $1.38B – $1.40B $5.37B – $5.38B Revenue Growth 6.7% – 8.2% Approaching 9% y/y (11% on a core* basis) Non-GAAP Earnings per share $1.94 – $2.00 $7.43 – $7.49 (19 – 20% y/y) Capital Expenditures $170M – $210M *Core growth excludes the impact of currency, acquisitions or divestitures
Slide 12: Investor resources and quick links
Recent Reports Quick Links 2021 CSR Report: OUR STRATEGY, PROGRESS, AND Why Keysight ACCOUNTABILITY Recent Investor Presentations and Webcasts The Keysight Leadership Model 2021 DEI Report: YEAR IN REVIEW Corporate Social Responsibility Investor Day March 2020 Videos (single-click access to each exe
Slide 13: Reconciliations
Reconciliations
Slide 14: Non-GAAP Operating Margin Reconciliation
KEYSIGHT TECHNOLOGIES, INC. NON-GAAP OPERATING MARGIN RECONCILIATION (In millions, except where noted) (Unaudited) PRELIMINARY Three months ended Nine months ended July 31, July 31, 2022 2021 2022 2021 Income from operations, as reported $ 357 $ 284 $ 955 $ 731 Amortization of acquisition-related ba
Slide 15: Non-GAAP Gross Margin Reconciliation
KEYSIGHT TECHNOLOGIES, INC. NON-GAAP GROSS MARGIN RECONCILIATION (In millions, except where noted) (Unaudited) PRELIMINARY Three months ended Nine months ended July 31, July 31, 2022 2021 2022 2021 Gross Profit, as reported $ 877 $ 788 $ 2,540 $ 2,232 Amortization of acquisition-related balances 12
Slide 16: Non-GAAP Net Income and Diluted EPS Reconciliation
KEYSIGHT TECHNOLOGIES, INC. NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATION (In millions, except per share data) (Unaudited) PRELIMINARY Three months ended Nine months ended July 31, July 31, 2022 2021 2022 2021 Net Diluted Net Diluted Net Diluted Net Diluted Income EPS Income EPS Income EPS Inco
Slide 17: Reconciliation of Core Revenue
KEYSIGHT TECHNOLOGIES, INC. RECONCILIATION OF CORE REVENUE (In millions) (Unaudited) PRELIMINARY Year-over-year compare Percent Q3'22 Q3'21 Inc/(Dec) Revenue $ 1,376 $ 1,246 10% Adjustments: Revenue from acquisitions or divestitures (2) — Currency impacts 33 — Core Revenue $ 1,407 $ 1,246 13% Refer
Slide 18: Reconciliations of Core Revenue by Segment and Region
KEYSIGHT TECHNOLOGIES, INC. 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 Q3'22 Q3'21 YoY % Chg. Q3'22 Q3'21 Q3'22 Q3'22 Q3'21 YoY % Chg
Slide 19: Revenue by End Markets
KEYSIGHT TECHNOLOGIES, INC. REVENUE BY END MARKETS (In millions) (Unaudited) PRELIMINARY Percent Q3'22 Q3'21 Inc/(Dec) Aerospace, Defense and Government $ 276 $ 280 (2)% Commercial Communications 694 595 17% Electronic Industrial 406 371 10% Total Revenue $ 1,376 $ 1,246 10% Refer to non-GAAP financ
Slide 20: Free Cash Flow
KEYSIGHT TECHNOLOGIES, INC. FREE CASH FLOW (In millions) (Unaudited) PRELIMINARY Three months ended July 31, 2022 2021 Net cash provided by operating activities $ 224 $ 257 Less: Investments in property, plant and equipment (32) (40) Free cash flow $ 192 $ 217 Refer to non-GAAP financial measures sl
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
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