Core Insights - The collaboration between SynaXG, Keysight Technologies, and Arm aims to enhance energy efficiency in Open RAN (O-RAN) through realistic traffic testing and validation [1][2][3] - SynaXG's ultra-low-power O-DU/CU is designed to set a new industry benchmark for energy efficiency in O-RAN networks, reducing power consumption by up to 30% [6] - The partnership focuses on ensuring that O-RAN deployments meet stringent energy efficiency benchmarks while maintaining carrier-grade reliability [2][3] Company Overview - SynaXG is recognized as a leader in AI-driven RAN solutions, providing scalable and energy-efficient platforms for mobile carriers and private networks [6] - Keysight Technologies is an S&P 500 company that delivers market-leading design, emulation, and test solutions across various industries, including communications and industrial automation [5] Technological Advancements - The integration of Keysight's KORA solutions with SynaXG's O-DU/CU allows for extensive carrier-grade traffic testing, confirming the performance and efficiency of O-RAN networks [2][3] - The Arm architecture utilized in SynaXG's solutions enables operators to deploy O-RAN at scale while significantly reducing power demand [2][3] Industry Impact - The collaboration is positioned to address sustainability challenges in the telecommunications sector by significantly reducing power consumption in next-generation networks [3] - The advancements in energy efficiency are expected to cut operational costs for telecom operators, enhancing the overall sustainability of network deployments [6]

Core Viewpoint - Keysight Technologies, Inc. reported strong first-quarter fiscal 2025 results, with adjusted earnings and revenues exceeding Zacks Consensus Estimates [1][2]. Financial Performance - Net income on a GAAP basis was $169 million or 97 cents per share, a slight decrease from $172 million or 98 cents per share in the same quarter last year [3]. - Non-GAAP net income for the quarter was $317 million or $1.82 per share, up from $286 million or $1.63 per share year-over-year, surpassing the Zacks Consensus Estimate by 13 cents [3]. - Quarterly net sales increased to $1.3 billion from $1.26 billion in the prior year, exceeding the high-end of guidance, with total orders rising 4% year-over-year to $1.26 billion [4]. Segment Performance - The Communication Solutions Group (CSG) generated $883 million in revenues, a 5% increase from $839 million in the prior year, driven by strong demand in commercial communications and defense markets [5]. - The Electronic Industrial Solutions Group (EISG) saw revenues decrease to $415 million from $420 million year-over-year, impacted by mixed demand, particularly in the automotive sector, while semiconductor-related demand remained strong [7]. - Region-wise, revenues from Asia-Pacific were $488 million, down from $490 million, while revenues from the Americas increased by 7% to $551 million, and Europe saw a slight increase to $259 million from $255 million [8]. Profitability Metrics - Non-GAAP gross profit for the quarter was $854 million, with gross margins of 65.8%, compared to 67.2% in the prior year [9]. - Non-GAAP operating margin was 27.3%, slightly down from 28.2% year-over-year [9]. Cash Flow and Liquidity - Keysight generated $378 million in cash from operating activities, up from $328 million a year ago, with cash and cash equivalents totaling $2.06 billion and long-term debt at $1.79 billion as of January 31, 2025 [11]. Outlook - For the second quarter of fiscal 2025, Keysight expects revenues between $1.27 billion and $1.29 billion, with non-GAAP earnings estimated to be between $1.61 and $1.67 per share [12].

Core Insights - Keysight Technologies (NYSE: KEYS) has experienced a moderate performance over the past year, with shares gaining over 40% since summer lows [1] - Recent concerns regarding technology spending have led to a pullback in Keysight's stock price [1] Company Performance - The stock has shown a significant recovery, rising over 40% from its summer lows [1] - Despite the recovery, the stock has faced recent declines amid questions about future technology spending [1] Market Sentiment - There is a prevailing uncertainty in the market regarding technology expenditures, which has impacted Keysight's stock performance [1]

Financial Data and Key Metrics Changes - Keysight reported first-quarter revenue of $1,298 million, exceeding guidance and reflecting a 3% year-over-year increase on both reported and core basis [22] - Earnings per share were $1.82, with net income of $317 million [22] - Orders grew 4% year-over-year to $1,263 million, with a backlog of $2.3 billion at the end of the quarter [22] Business Line Data and Key Metrics Changes - The Communication Solutions Group (CSG) generated revenue of $883 million, up 5% year-over-year, with commercial communications and aerospace, defense, and government each increasing by 5% [24] - The Electronic Industrial Solutions Group (EISG) saw revenue decline by 1% to $415 million, with stable orders reflecting mixed demand across end-markets [24][16] Market Data and Key Metrics Changes - Strong demand in wireline offerings driven by AI, while wireless business remained stable with ongoing activity related to 5G and early 6G [11][13] - Aerospace, defense, and government revenues reached a first-quarter record, although orders were down due to continuing resolutions [15] Company Strategy and Development Direction - Keysight is focused on leveraging technological trends such as increased memory, faster processing, and greater bandwidth to drive future growth [10] - The company is well-positioned for future opportunities in AI, 6G, and advanced semiconductor technologies, with a robust innovation pipeline [20][12] Management Comments on Operating Environment and Future Outlook - Management expects a gradual recovery in 2025, despite monitoring potential policy changes in the U.S. [9] - The company remains optimistic about long-term growth opportunities in defense spending and technology modernization [41][100] Other Important Information - Approximately 40% of Keysight's revenue now comes from software and services, with recurring revenue at about 31% [19] - The company repurchased 450,000 shares at an average price of approximately $167, totaling $75 million [26] Q&A Session Summary Question: Upsides from the Commercial Communications segment - Management noted stability in wireless and strong growth in wireline driven by AI, with expectations for continued infrastructure spending [35][36] Question: Current budget environment for aerospace and defense - Management indicated a stable long-term outlook for defense budgets, with strong demand for solutions despite near-term continuing resolution issues [41][44] Question: Performance of the ESI Group and software aspect - The acquisition remains on track, with consistent renewal rates, although softness in the auto market impacted upsell opportunities [72][73] Question: Visibility on revenue conversion for parametric test orders - Management confirmed building backlog in the parametric test business, with a short order acceptance window for revenue conversion [128] Question: Business trends in China amid geopolitical volatility - Management emphasized strong customer relationships in China and a pivot towards supporting customers' global strategies [131]

Financial Data and Key Metrics Changes - Keysight reported Q1 revenue of $1.298 billion, exceeding guidance and reflecting a 3% year-over-year increase on both reported and core basis [22] - Earnings per share for the quarter were $1.82, with net income of $317 million [22] - Orders increased by 4% year-over-year to $1.263 billion, with a backlog of $2.3 billion at the end of the quarter [22] Business Line Data and Key Metrics Changes - The Communication Solutions Group (CSG) generated revenue of $883 million, up 5% year-over-year, with commercial communications and aerospace, defense, and government segments each increasing by 5% [24] - The Electronic Industrial Solutions Group (EISG) saw revenue decline by 1% to $415 million, with stable orders reflecting mixed demand across end-markets [24][16] Market Data and Key Metrics Changes - Strong demand in wireline offerings driven by AI, while wireless business remained stable with ongoing activity related to 5G and early 6G [11][13] - Aerospace, defense, and government revenues reached a first-quarter record, although orders were down due to continuing resolutions [15] Company Strategy and Development Direction - Keysight is focused on leveraging technological trends such as increased memory, faster processing, and greater bandwidth to drive future growth [10] - The company is well-positioned to capitalize on AI as a long-term secular tailwind for next-generation technologies [12] Management's Comments on Operating Environment and Future Outlook - Management expects a gradual recovery in 2025, despite monitoring potential policy changes in the U.S. [9] - The company remains optimistic about its ability to create value for stakeholders through strong customer engagement and a robust innovation pipeline [20] Other Important Information - Approximately 40% of Keysight's revenue comes from software and services, with recurring revenue at about 31% [19] - The company repurchased 450,000 shares at an average price of approximately $167, totaling $75 million [26] Q&A Session Summary Question: Upsides from the Commercial Communications segment - Management noted stability in wireless and strong growth in wireline driven by AI, with expectations for continued infrastructure spending [35][36] Question: Current budget environment for aerospace and defense - Management indicated a stable long-term outlook for defense budgets, with strong demand for solutions despite near-term continuing resolution issues [41][44] Question: R&D activity and commercialization of satellite communication - Management sees satellite communications as an incremental opportunity alongside 5G and 6G, with increased R&D investments expected [50][52] Question: Positive sales funnel and customer engagements - Management reported an improving sales funnel and customer decision-making velocity, supporting a gradual recovery thesis [60][61] Question: EV sales trends - Management indicated that EV sales remain constrained, particularly in R&D for battery development, but there is an uptick in e-mobility investments [68][70] Question: Performance of the ESI Group - Management confirmed that the ESI acquisition is on track, with consistent renewal rates, although softness in the auto market impacted upsell opportunities [72][73] Question: Pending acquisitions and their significance - Management stated that two pending acquisitions are contingent on the closure of the Synopsys and Ansys deal, with excitement about their potential contributions [75] Question: Operating expenses and investment outlook - Management expects a sequential increase in operating expenses in Q2, with plans for incremental investments in R&D and technology advancements [84][86] Question: Gross margin outlook - Management indicated that gross margins are mix-dependent, with expectations to return to mid-60% levels over time [106][110] Question: Business trends in China - Management reported strong customer relationships in China, with a focus on supporting customers' global strategies amid geopolitical challenges [131][132]

Core Insights - Keysight reported revenue of $1.3 billion for the quarter ended January 2025, reflecting a 3.1% increase year-over-year and a surprise of +1.76% over the Zacks Consensus Estimate of $1.28 billion [1] - Earnings per share (EPS) for the quarter was $1.82, up from $1.63 in the same quarter last year, resulting in an EPS surprise of +7.69% compared to the consensus estimate of $1.69 [1] Revenue Breakdown - Communications Solutions Group generated revenue of $883 million, exceeding the estimated $866.03 million, marking a +5.2% change year-over-year [4] - Commercial Communications revenue was reported at $572 million, surpassing the average estimate of $564.95 million, also reflecting a +5.2% year-over-year increase [4] - Aerospace, Defense & Government revenue reached $311 million, compared to the estimated $301.08 million, indicating a +5.4% change year-over-year [4] - Electronic Industrial Solutions Group reported revenue of $415 million, slightly below the average estimate of $407.80 million, showing a -1.2% year-over-year change [4] Operational Performance - Income from operations for the Electronic Industrial Solutions Group was $114 million, exceeding the average estimate of $97.80 million [4] - Income from operations for the Communications Solutions Group was $240 million, slightly above the estimated $239.07 million [4] Stock Performance - Keysight's shares have returned +2.9% over the past month, contrasting with a -1.8% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Company Performance - Keysight reported quarterly earnings of $1.82 per share, exceeding the Zacks Consensus Estimate of $1.69 per share, and up from $1.63 per share a year ago, representing an earnings surprise of 7.69% [1] - The company posted revenues of $1.3 billion for the quarter ended January 2025, surpassing the Zacks Consensus Estimate by 1.76%, and an increase from $1.26 billion year-over-year [2] - Over the last four quarters, Keysight has consistently surpassed consensus EPS and revenue estimates [2] Stock Movement and Outlook - Keysight shares have increased approximately 8% since the beginning of the year, outperforming the S&P 500's gain of 1.7% [3] - The sustainability of the stock's price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.60 on revenues of $1.27 billion, and for the current fiscal year, it is $6.97 on revenues of $5.25 billion [7] Industry Context - The Electronics - Measuring Instruments industry, to which Keysight belongs, is currently ranked in the top 21% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Keysight's stock performance [5][6]

Revenue Performance - Revenue for Q1 2025 was $1.30 billion, a 3.1% increase from $1.26 billion in Q1 2024[6] - Total revenue for Q1 2025 was $1,298 million, representing a 3% increase from $1,259 million in Q1 2024[31] - The Communications Solutions Group (CSG) reported revenue of $883 million, a 5% increase year-over-year[4] - Revenue from the Communications Solutions Group rose by 5% to $883 million in Q1 2025, while the Electronic Industrial Solutions Group saw a 1% decline to $415 million[24][25] - The Electronic Industrial Solutions Group (EISG) reported revenue of $415 million, a 1% decrease year-over-year[4] - Revenue from Aerospace, Defense and Government increased by 5% to $311 million in Q1 2025[30] Income and Earnings - GAAP net income for Q1 2025 was $169 million, or $0.97 per share, compared to $172 million, or $0.98 per share in Q1 2024[6] - Non-GAAP net income for Q1 2025 was $317 million, or $1.82 per share, up from $286 million, or $1.63 per share in Q1 2024[6] - GAAP net income for Q1 2025 was $169 million, with diluted EPS of $0.97, compared to $172 million and $0.98 in Q1 2024[21] - Non-GAAP net income increased to $317 million in Q1 2025, with diluted EPS of $1.82, up from $286 million and $1.63 in Q1 2024[21] Cash Flow and Liquidity - Cash flow from operations was $378 million, an increase from $328 million in the same period last year[6] - Free cash flow for Q1 2025 was $346 million, an increase from $281 million in Q1 2024[28] - As of January 31, 2025, cash and cash equivalents totaled $2.06 billion, up from $1.80 billion at the end of Q4 2024[6] Assets and Liabilities - Total assets increased to $9.39 billion from $9.27 billion at the end of Q4 2024[17] - Total liabilities rose to $4.20 billion from $4.16 billion at the end of Q4 2024[17] Margins and Tax Rate - The effective non-GAAP tax rate was 14% for Q1 2025, down from 17% in Q1 2024[21] - The gross margin for the Communications Solutions Group remained stable at 68% for both Q1 2025 and Q1 2024[24] - Operating margin for the Electronic Industrial Solutions Group decreased to 27% in Q1 2025 from 31% in Q1 2024[25] Future Projections - For Q2 2025, revenue is expected to be between $1.27 billion and $1.29 billion, with non-GAAP earnings per share projected between $1.61 and $1.67[5] Non-GAAP Financial Measures - The company emphasizes the use of non-GAAP financial measures to provide a clearer view of operational performance, excluding certain non-recurring items[33]

Core Viewpoint - Keysight Technologies, Inc. is expected to report higher year-over-year revenues in the first quarter of fiscal 2025, driven by growth in the AI data center market, aerospace, defense, and government sectors, as well as strong momentum in software and services [2] Group 1: Product Developments - Keysight launched the Chiplet PHY Designer 2025, enhancing high-speed digital chiplet design for AI and data center applications, which improves prospects across various verticals [3] - The company introduced the AppFusion network visibility partner program, integrating third-party security and monitoring solutions to enhance network operations and reduce costs [4] - Keysight assisted Samsung Electronics in validating secure test cases for the Exynos Connect U100 chipset, which is expected to positively impact quarterly performance [7] Group 2: Strategic Alliances - Keysight joined the Intel Foundry Accelerator United States Military, Aerospace and Government Alliance to strengthen the U.S. Defense Industrial Base and expand access to advanced tools and technologies [5] - The company entered an agreement to provide electronic design automation software to six of the eight hubs in the U.S. microelectronics commons initiative, which is anticipated to generate incremental demand for its solutions [6] Group 3: Financial Expectations - The Zacks Consensus Estimate for Keysight's revenues in the first quarter of fiscal 2025 is $1.28 billion, reflecting a year-over-year increase from $1.26 billion [9] - Estimated revenues from the Communications Solutions Group segment are projected at $867.7 million, indicating a 3.4% year-over-year growth [8] - The consensus estimate for adjusted earnings per share is $1.69, an improvement from $1.63 reported a year ago [9]

Group 1 - Analysts project Keysight (KEYS) will announce quarterly earnings of $1.69 per share, a 3.7% increase year over year [1] - Revenues are expected to reach $1.28 billion, reflecting a 1.3% increase from the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the past 30 days, indicating analysts' reassessment of projections [1] Group 2 - Revisions to earnings projections are crucial for predicting investor behavior and are linked to short-term stock price performance [2] - Investors often rely on consensus earnings and revenue estimates to assess company performance during the quarter [3] Group 3 - Analysts predict 'Revenue- Communications Solutions Group' at $866.03 million, a year-over-year change of +3.2% [4] - 'Revenue- Commercial Communications' is estimated at $564.95 million, indicating a +3.9% change from the year-ago quarter [4] - 'Revenue- Aerospace, Defense & Government' is forecasted to reach $301.08 million, reflecting a +2.1% change from the previous year [4] Group 4 - 'Revenue- Electronic Industrial Solutions Group' is expected to be $407.80 million, showing a -2.9% change from the year-ago quarter [5] - 'Income from operations- Electronic Industrial Solutions Group' is projected at $97.80 million, down from $129 million year-over-year [5] - 'Income from operations- Communications Solutions Group' is estimated at $239.07 million, compared to $226 million from the previous year [6] Group 5 - Keysight shares have returned +7.2% over the past month, outperforming the Zacks S&P 500 composite's +2.6% change [6] - Keysight currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance in the near future [6]