Keysight Technologies Inc. · NYSE:KEYS
Keysight Technologies — Q4 FY2019 Earnings Presentation
24 slides from Keysight Technologies's earnings presentation, Nov 26, 2019
Slide 1: Q4 Fiscal Year 2019 Results
Keysight Technologies Q4 Fiscal Year 2019 Results NOVEMBER 26, 2019 TECHNOLOGIES
Slide 2: Forward-looking statements and non-GAAP disclosure
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 quarterly and full-year results
• Record quarterly and full-year revenue1 • Q4 non-GAAP revenue of $1.1B1 grew 7% y/y, on both a reported and core1,2 basis • FY19 non-GAAP revenue of $4.3B1 grew 10% y/y, or 11% on a core1,2 basis • Record quarterly and full-year non-GAAP EPS1 • Q4 non-GAAP EPS of $1.33 increased 31% y/y • FY19 non
Slide 4: Orders, Revenue and Operating Margin
Orders Revenue Operating Margin $1,194M $1,122M 25.8% +6%y/y (+7% core*) +7%y/y (+7% core*) +460 basis points y/y Orders Non-GAAP Revenue** Non-GAAP EPS** 1,400 1,200 $1.40 $1.33 $1,122 $1,093 $1,088 $1.25 $1,051 $1.22 $1,194 $1,009 1,200 $1,124 $1,121 $1.20 $1,110 1,000 $1,016 $1.01 1,000 $1.00 $0.
Slide 5: Q4'19 Non-GAAP Revenue by Segment and Region
Q4’19 NON-GAAP REVENUE*: $1,122M By Segment By Region ISG 12% Asia Pacific Americas EISG 41% 25% 44% CSG 63% Europe 15% * Reconciliations to closest GAAP equivalent provided. 5
Slide 6: Regional Highlights: Americas, Europe, Asia Pacific
Americas Europe Asia Pacific $189 $179 $180 $182 $600 $495 $600 $200 $173 $487 $462 $444 $454 $437 $425 $425 $405 $426 $ millions $450 $150 $ millions $400 $ millions $300 $100 $200 $150 $50 $0 $0 $0 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 +7% (+8% c
Slide 7: Communications Solutions Group results
Revenue • Record CSG revenue and operating margin • Commercial Communications: Record revenue driven by strength across the +7% y/y (+6% core*) wireless ecosystem as 5G investment continued Operating Margin • Aerospace, Defense & Government: Record revenue driven by U.S. direct government year-end s
Slide 8: Electronic Industrial Solutions Group results
Revenue • Record EISG gross margin and second-highest quarterly operating margin $284M +3% y/y (+4% core*) • Growth in general electronics and automotive solutions Operating Margin • Strength driven by the broad product solution portfolio in general electronics, on- going investment in next-generati
Slide 9: Ixia Solutions Group results
Revenue • Record quarterly revenue since the acquisition of Ixia $132M • Double-digit growth in both network test and network visibility solutions +15% y/y (+15% core*) • ~$50M in net annualized Ixia acquisition cost synergies benefit all business Operating Margin groups, ~70% are being realized wit
Slide 10: Revenue by end market
End Market Revenue YoY % Ixia Solutions Commercial 12% $443M +9% Communications Aerospace, Defense & Commercial $263M +3% Electronic Comms Government Industrial 40% Solutions Electronic Industrial 25% $284M +3% Solutions Aerospace, Defense Ixia Solutions $132M +15% & Government 23% Total* $1,122M +7
Slide 11: Q1'20 Guidance and FY20 Financial Considerations
Q1’20 Guidance Revenue $1,045 - $1,065M Non-GAAP Revenue Growth* +4% to +6% Non-GAAP Earnings per share $1.04 - $1.10 FY20 Financial Considerations • 5-point and 3-point year-over-year revenue growth headwind in Q1 and Q2 respectively due to China trade restrictions • Net Interest and Other Income/E
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 October 31, 2019 2018 Income (loss) from operations, as reported $ 208 $ (580) Amortization of acquisition-related balances 60 55 Share-based compensation 16 11 Acquisition
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 Year ended October 31, October 31, 2019 2018 2019 2018 Net Diluted Net Diluted Net Diluted Net Diluted Income EPS Income EPS(a) Income EP
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 Year-over-year compare Year-over-year compare Percent Percent Q4'19 Q4'18 Inc/(Dec) FY19 FY18 Inc/(Dec) GAAP Revenue $ 1,120 $ 1,047 7% $ 4,303 $ 3,878 11% Amortization of a
Slide 17: 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-related GAAP Revenue balances Non-GAAP Revenue Revenue by Segment Q4'19 Q4'18 YoY % Chg. Q4'19 Q4'18 Q4'19 Q4'18 YoY % Chg. Communica
Slide 18: 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 Q4'19 Q4'18 YoY % Chg. Q4'19 Q4'18
Slide 19: Segment Revenue Reconciliation
KEYSIGHT TECHNOLOGIES, INC. SEGMENT REVENUE RECONCILIATION (in millions) (Unaudited) PRELIMINARY Keysight Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 GAAP Revenue $ 1,047 $ 1,006 $ 1,090 $ 1,087 $ 1,120 Amortization of acquisition-related balances 4 3 3 1 2 Non-GAAP/Segment Revenue $ 1,051 $ 1,009 $ 1,093 $ 1,088
Slide 20: Non-GAAP Revenue by Region
KEYSIGHT TECHNOLOGIES, INC. RECONCILIATION OF NON-GAAP REVENUE BY REGION (In Millions) (Unaudited) PRELIMINARY Keysight Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 GAAP Revenue $ 1,047 $ 1,006 $ 1,090 $ 1,087 $ 1,120 Amortization of acquisition-related balances 4 3 3 1 2 Non-GAAP Revenue $ 1,051 $ 1,009 $ 1,093 $
Slide 21: 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 Q4'19 Q4'18 Inc/(Dec) Q4'19 Q4'18 Q4'19 Q4'18 Inc/(Dec) Aerospace, Defense & Government $ 263
Slide 22: Free Cash Flow
KEYSIGHT TECHNOLOGIES, INC. FREE CASH FLOW (in millions) (Unaudited) PRELIMINARY FY19 Net cash provided by operating activities $ 998 Less: Investments in property, plant and equipment (120) Free cash flow $ 878 Free cash flow as a percentage of GAAP Revenue 20% Free cash flow as a percentage of non
Slide 23: 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 24: TECHNOLOGIES
TECHNOLOGIES
Keysight Technologies — Q4 FY2019 Earnings Presentation on 6ix