Core Insights - Keysight reported revenue of $1.32 billion for the quarter ended April 2025, reflecting an 8% increase year-over-year and surpassing the Zacks Consensus Estimate of $1.28 billion by 2.85% [1] - Earnings per share (EPS) for the quarter was $1.70, up from $1.41 in the same quarter last year, exceeding the consensus EPS estimate of $1.64 by 3.66% [1] Revenue Breakdown - Communications Solutions Group generated $913 million, exceeding the average estimate of $884.15 million by analysts, marking an 8.7% year-over-year increase [4] - Commercial Communications revenue reached $612 million, surpassing the estimated $588.52 million, also reflecting an 8.7% increase compared to the previous year [4] - Aerospace, Defense & Government revenue was $301 million, slightly above the estimated $295.62 million, with an 8.7% year-over-year growth [4] - Electronic Industrial Solutions Group reported $393 million, slightly below the estimated $395.34 million, but still showing a 4.5% increase year-over-year [4] Operational Performance - Income from operations for the Electronic Industrial Solutions Group was $92 million, exceeding the average estimate of $81.74 million [4] - Income from operations for the Communications Solutions Group was $236 million, slightly below the estimated $238.62 million [4] Stock Performance - Keysight's shares have returned +23.4% over the past month, outperforming the Zacks S&P 500 composite's +13.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - Keysight reported revenue of $1.3 billion and earnings per share of $1.7, exceeding the high end of guidance, marking the second consecutive quarter of revenue growth [6][19] - Orders grew 8% year over year and 4% sequentially to $1.3 billion, indicating a solid demand environment [6][19] - Gross margin was reported at 65%, with operating margin at 25%, an increase of 100 basis points year over year [19] Business Segment Data and Key Metrics Changes - The Communications Solutions Group (CSG) generated revenue of $913 million, up 9% on both reported and core basis, driven by strong demand in wireline and wireless sectors [21] - The Electronics Industrial Solutions Group (EISG) reported revenue of $393 million, a 5% increase, with growth in semiconductor and general electronics offsetting declines in automotive [21] - Software and services accounted for approximately 36% of total revenue, with annual recurring revenue at 28% [22] Market Data and Key Metrics Changes - Orders in the aerospace, defense, and government sector grew, driven by strength in the U.S. and Europe, with notable contracts awarded [12][61] - The demand environment in China was mixed, with overall orders flat but strengths in certain sectors [96] Company Strategy and Development Direction - The company is focused on long-term investments aligned with technology trends, particularly in AI and digital infrastructure [17][32] - Keysight is maintaining a diversified global supply chain with minimal exposure to China, actively working to mitigate tariff impacts [8][24] - The company is pursuing a balanced return of capital while investing for long-term growth, having returned over $1.7 billion to investors via repurchases over the past twelve quarters [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the market leadership and operating model, noting no material adverse effects on demand from tariffs [8][25] - The company raised its full-year growth expectations, now anticipating revenue growth at the midpoint of the 5% to 7% long-term target [25] - Management highlighted a healthy pipeline of opportunities and strong customer engagements entering the second half of the fiscal year [6][25] Other Important Information - The company ended the quarter with $3.12 billion in cash and cash equivalents, generating $484 million in cash flow from operations [22] - Keysight is progressing through regulatory reviews for pending acquisitions, including Spirent and Optical Solutions Group [22][23] Q&A Session Summary Question: Update on AI traction and its significance for the business - Management views AI as a long-term secular trend with a multiyear roadmap, contributing to growth in wireline business [32][33] Question: Incremental view on top-line outlook - The company raised top-line expectations based on strong performance in the first half and a solid pipeline of opportunities [40][42] Question: Clarification on tariff impact - The estimated annual exposure to tariffs is approximately $75 million to $100 million, with efforts underway to mitigate this impact [47][48] Question: Insights on aerospace and defense orders - Orders grew in the aerospace and defense sector, with strong bookings from prime contractors in the U.S. and Europe [61][62] Question: Wireless business performance - The wireless business remains stable, with strength in network infrastructure and ongoing investments in new technologies [71] Question: Growth in Software and Services - The company is focused on growing software and services, which have shown resilience during downturns [73][74] Question: Demand for wireline testing - The wireline business is heavily R&D oriented, benefiting from increased manufacturing activity as the industry ramps up for digital infrastructure [103][104] Question: Competitive landscape for semiconductor testing - The company is well-positioned to address the complexities of semiconductor testing, with ongoing investments in optical and electrical capabilities [108][116]

Financial Data and Key Metrics Changes - Keysight reported revenue of $1.3 billion and earnings per share of $1.7, exceeding the high end of guidance, marking the second consecutive quarter of revenue growth [5][18] - Orders grew 8% year over year and 4% sequentially to $1.3 billion, indicating a solid demand environment [5][18] - Gross margin was reported at 65%, with operating margin increasing by 100 basis points to 25% year over year [18] Business Segment Data and Key Metrics Changes - The Communications Solutions Group (CSG) generated revenue of $913 million, up 9% on both reported and core basis, driven by strong demand in wireline and wireless sectors [21] - Aerospace, Defense and Government revenue increased by 9% to $300 million, reflecting strong order growth in the U.S. and Europe [21] - The Electronics Industrial Solutions Group (EISG) saw revenue return to growth at $393 million, a 5% increase, with semiconductor and general electronics growth offsetting declines in automotive [21] Market Data and Key Metrics Changes - Orders in the aerospace and defense sector grew, driven by investments in defense modernization in the U.S., Europe, and Asia [11][12] - The demand environment in Asia was strong, particularly in commercial communications and semiconductor sectors, although automotive demand in China remained weak [92] Company Strategy and Development Direction - Keysight is focused on long-term investments aligned with technology trends, emphasizing a diversified global supply chain with minimal exposure to China [6][24] - The company is pursuing a balanced return of capital while investing for long-term growth, having returned over $1.7 billion to investors through share repurchases [6][7] - Keysight's strategy includes expanding its software and services segment, which now accounts for approximately 36% of revenue, with a focus on simulation and virtual prototyping [70] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in market leadership and the strength of the operating model despite macroeconomic uncertainties [6][25] - The company raised its full-year revenue growth expectations to the midpoint of its 5% to 7% long-term target, anticipating a strong Q3 based on a solid backlog [25] - Management noted that while tariffs pose risks, they have not seen material adverse effects on demand and are actively working to mitigate tariff impacts [24][25] Other Important Information - Keysight's cash flow from operations was strong at $484 million, with free cash flow of $457 million [22] - The company has a backlog of $2.4 billion entering Q3, indicating a solid scheduled shipment position [25] - Keysight is progressing through regulatory reviews for pending acquisitions, including Spirent and Optical Solutions Group [22] Q&A Session Summary Question: Update on AI traction and its significance for the business - Management views AI as a long-term trend with a multiyear roadmap, contributing to growth in wireline business, which grew double digits in the first half [30][33] Question: Incremental improvement in top-line outlook - The increase in top-line expectations is based on strong performance in the first half and a solid pipeline of opportunities [39] Question: Clarification on tariff impact - The estimated annual tariff exposure is $75 million to $100 million, with efforts underway to mitigate this impact [44][45] Question: Insights on aerospace and defense orders - Orders grew in the U.S. and Europe, with notable contracts awarded, indicating a strong spending environment [56] Question: Understanding the wireless business performance - The wireless business remains stable, with strength in network infrastructure and ongoing investments in new technologies [66] Question: Growth in Software and Services segment - The company is focused on growing software and services, which have shown resilience during downturns, with double-digit growth in simulation business [70] Question: Demand in wireline and semiconductor testing - The wireline business remains heavily R&D oriented, benefiting from increased manufacturing activity as the industry ramps up for digital infrastructure [96]

Keysight Technologies Q2 Fiscal Year 2025 Results May 20, 2025 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 otherwise include the words "anticipate," "assume," "plan," "estimate," "expect," "guidance," "intend," "implied," "target," "believe," "outlook," a ...

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Keysight Technologies reported strong Q2 FY25 financial results, exceeding guidance and raising full-year growth expectations, driven by robust performance across key segments and significant improvements in net income and cash flow [Q2 FY25 Performance Overview](index=1&type=section&id=Q2%20FY25%20Performance%20Overview) Keysight Technologies reported strong financial results for the second fiscal quarter ended April 30, 2025, with revenue and earnings per share exceeding the high end of guidance, driven by disciplined execution and deep customer engagement - Keysight delivered strong Q2 FY25 results, with revenue and EPS above the high end of guidance[2](index=2&type=chunk) - Performance highlights the strength of the company's long-term strategy, deep customer engagement, and disciplined execution[2](index=2&type=chunk) [Full-Year Outlook Improvement](index=1&type=section&id=Full-Year%20Outlook%20Improvement) Despite monitoring the macroeconomic environment, Keysight is raising its full-year growth expectations to the midpoint of its long-term target of 5-7%, reflecting a healthy funnel of opportunities - Keysight is raising full-year growth expectations to the midpoint of its long-term **5-7% target**[2](index=2&type=chunk) - The company continues to see a healthy funnel of opportunities[2](index=2&type=chunk) [Key Financial Highlights (Q2 FY25 vs Q2 FY24)](index=1&type=section&id=Key%20Financial%20Highlights) Keysight reported significant year-over-year growth in Q2 FY25, with revenue increasing by 7%, GAAP net income more than doubling, and non-GAAP net income rising by 19%. Operating and free cash flow also saw substantial improvements | Metric | Q2 FY25 | Q2 FY24 | Change (YoY) | | :------------------------- | :---------- | :---------- | :----------- | | Revenue | $1.31 billion | $1.22 billion | +7% | | GAAP Net Income | $257 million | $126 million | +104% | | GAAP EPS | $1.49 | $0.72 | +107% | | Non-GAAP Net Income | $295 million | $247 million | +19% | | Non-GAAP EPS | $1.70 | $1.41 | +21% | | Cash Flow from Operations | $484 million | $110 million | +340% | | Free Cash Flow | $457 million | $74 million | +518% | | Cash and Cash Equivalents (as of April 30, 2025) | $3.12 billion | N/A | N/A | [Segment Performance Highlights (Q2 FY25 vs Q2 FY24)](index=1&type=section&id=Segment%20Performance%20Highlights) Both the Communications Solutions Group (CSG) and Electronic Industrial Solutions Group (EISG) reported revenue growth in Q2 FY25. CSG saw a 9% increase, driven by commercial communications and aerospace, defense, and government sectors. EISG grew by 5%, primarily from semiconductor and general electronics, despite a decline in automotive and energy | Segment | Q2 FY25 Revenue | Q2 FY24 Revenue | YoY Growth | | :-------------------------------- | :-------------- | :-------------- | :--------- | | Communications Solutions Group (CSG) | $913 million | N/A | +9% | | Electronic Industrial Solutions Group (EISG) | $393 million | N/A | +5% | - CSG growth was driven by **9% increases** in both commercial communications and aerospace, defense, and government[4](index=4&type=chunk) - EISG growth was primarily from semiconductor and general electronics, partially offset by a decline in automotive and energy[4](index=4&type=chunk) [Outlook](index=1&type=section&id=Outlook) Keysight provides its financial guidance for Q3 FY25, projecting revenue and non-GAAP earnings per share within a specified range [Q3 FY25 Financial Guidance](index=1&type=section&id=Q3%20FY25%20Financial%20Guidance) Keysight projects its third fiscal quarter 2025 revenue to be between $1.305 billion and $1.325 billion, with non-GAAP earnings per share expected in the range of $1.63 to $1.69 | Metric | Q3 FY25 Guidance | | :-------------------- | :--------------------- | | Revenue | $1.305 billion to $1.325 billion | | Non-GAAP EPS | $1.63 to $1.69 | | Weighted Diluted Share Count | Approximately 173 million shares | [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents Keysight's condensed consolidated financial statements, including statements of operations, balance sheet, and cash flows, detailing the company's financial position and performance [Condensed Consolidated Statement of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations) For the three months ended April 30, 2025, Keysight reported revenue of $1,306 million, an increase from $1,216 million in the prior year. Net income significantly increased to $257 million from $126 million, resulting in diluted EPS of $1.49 compared to $0.72 Three Months Ended April 30 | Metric | 2025 (Millions) | 2024 (Millions) | | :-------------------------- | :-------------- | :-------------- | | Orders | $1,316 | $1,219 | | Revenue | $1,306 | $1,216 | | Income from operations | $207 | $177 | | Income before taxes | $320 | $175 | | Net income | $257 | $126 | | Diluted Net income per share | $1.49 | $0.72 | Six Months Ended April 30 | Metric | 2025 (Millions) | 2024 (Millions) | | :-------------------------- | :-------------- | :-------------- | | Orders | $2,579 | $2,439 | | Revenue | $2,604 | $2,475 | | Income from operations | $425 | $398 | | Income before taxes | $519 | $404 | | Net income | $426 | $298 | | Diluted Net income per share | $2.45 | $1.70 | [Condensed Consolidated Balance Sheet](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheet) As of April 30, 2025, Keysight's total assets increased to $10,549 million from $9,269 million at October 31, 2024, primarily driven by a significant increase in cash and cash equivalents. Total liabilities also rose to $5,072 million, while total stockholders' equity increased to $5,477 million As of April 30, 2025 vs October 31, 2024 | Metric | April 30, 2025 (Millions) | October 31, 2024 (Millions) | | :-------------------------- | :------------------------ | :------------------------ | | **ASSETS** | | | | Cash and cash equivalents | $3,118 | $1,796 | | Total current assets | $5,480 | $4,257 | | Total assets | $10,549 | $9,269 | | **LIABILITIES AND EQUITY** | | | | Total current liabilities | $1,628 | $1,427 | | Long-term debt | $2,532 | $1,790 | | Total liabilities | $5,072 | $4,164 | | Total stockholders' equity | $5,477 | $5,105 | | Total liabilities and equity | $10,549 | $9,269 | [Condensed Consolidated Statement of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended April 30, 2025, net cash provided by operating activities significantly increased to $862 million from $438 million in the prior year. Net cash used in investing activities decreased, while net cash provided by financing activities turned positive, primarily due to proceeds from long-term debt issuance Six Months Ended April 30 | Metric | 2025 (Millions) | 2024 (Millions) | | :------------------------------------------ | :-------------- | :-------------- | | Net cash provided by operating activities | $862 | $438 | | Net cash used in investing activities | $(66) | $(631) | | Net cash provided by (used in) financing activities | $515 | $(621) | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $1,321 | $(814) | | Cash, cash equivalents, and restricted cash at end of period | $3,135 | $1,674 | - Proceeds from issuance of long-term debt contributed **$748 million** to financing activities in 2025, compared to none in 2024[20](index=20&type=chunk) [Segment & Market Performance](index=9&type=section&id=Segment%20%26%20Market%20Performance) This section details Keysight's financial performance by segment and end market, highlighting revenue growth and margin trends for CSG and EISG [Segment Results Information (Q2 FY25 vs Q2 FY24)](index=9&type=section&id=Segment%20Results%20Information) The Communications Solutions Group (CSG) reported a 9% revenue increase to $913 million, though its gross and operating margins slightly declined. The Electronic Industrial Solutions Group (EISG) saw a 5% revenue increase to $393 million, with improved gross and operating margins Communications Solutions Group (CSG) | Metric | Q2'25 | Q2'24 | Inc/(Dec) | | :------------------ | :---- | :---- | :-------- | | Revenue | $913 | $840 | 9% | | Gross margin, % | 67 % | 68 % | -1 pp | | Income from operations | $236 | $223 | N/A | | Operating margin, % | 26 % | 27 % | -1 pp | Electronic Industrial Solutions Group (EISG) | Metric | Q2'25 | Q2'24 | Inc/(Dec) | | :------------------ | :---- | :---- | :-------- | | Revenue | $393 | $376 | 5% | | Gross margin, % | 59 % | 58 % | +1 pp | | Income from operations | $92 | $71 | N/A | | Operating margin, % | 23 % | 19 % | +4 pp | [Revenue by End Markets (Q2 FY25 vs Q2 FY24)](index=11&type=section&id=Revenue%20by%20End%20Markets) Keysight's total revenue increased by 7% year-over-year in Q2 FY25. Commercial Communications and Aerospace, Defense and Government markets both grew by 9%, while Electronic Industrial revenue increased by 5% Q2 Revenue by End Market | End Market | Q2'25 (Millions) | Q2'24 (Millions) | Inc/(Dec) | | :------------------------------ | :--------------- | :--------------- | :-------- | | Aerospace, Defense and Government | $301 | $277 | 9% | | Commercial Communications | $612 | $563 | 9% | | Electronic Industrial | $393 | $376 | 5% | | Total Revenue | $1,306 | $1,216 | 7% | [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) This section explains Keysight's use of non-GAAP financial measures, providing reconciliations for net income, EPS, and free cash flow to offer a clearer view of core business performance [Use of Non-GAAP Financial Measures (Introduction)](index=2&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures%20%28Introduction%29) Keysight uses non-GAAP financial measures, in addition to GAAP, to provide management's view of performance, enhance investor understanding of business performance, and facilitate comparisons. These measures include Non-GAAP Net Income/Earnings, Non-GAAP Net Income per share/Earnings per share, and Free Cash Flow - Management uses both GAAP and non-GAAP financial measures to analyze business performance, make operating decisions, and forecast future periods[11](index=11&type=chunk)[33](index=33&type=chunk) - Non-GAAP measures include Net Income/Earnings, Net Income per share/Earnings per share, and Free Cash Flow[12](index=12&type=chunk) [Net Income and Diluted EPS Reconciliation](index=7&type=section&id=Net%20Income%20and%20Diluted%20EPS%20Reconciliation) Keysight reconciles GAAP net income and diluted EPS to non-GAAP figures by adjusting for items such as amortization of acquisition-related balances, share-based compensation, acquisition and integration costs, restructuring, and tax adjustments. For Q2 FY25, non-GAAP diluted EPS was $1.70 compared to GAAP diluted EPS of $1.49 Three Months Ended April 30 | Metric | GAAP Net Income (Millions) | Non-GAAP Adjustments (Millions) | Non-GAAP Net Income (Millions) | | :------------------------------------ | :------------------------- | :------------------------------ | :----------------------------- | | GAAP Net income | $257 | N/A | N/A | | Amortization of acquisition-related balances | N/A | $34 | N/A | | Share-based compensation | N/A | $37 | N/A | | Acquisition and integration costs (benefits) | N/A | $(74) | N/A | | Restructuring and others | N/A | $26 | N/A | | Adjustment for taxes | N/A | $15 | N/A | | Non-GAAP Net income | N/A | N/A | $295 | | **Diluted EPS** | | | | | GAAP Diluted EPS | $1.49 | N/A | N/A | | Non-GAAP Diluted EPS | N/A | N/A | $1.70 | Six Months Ended April 30 | Metric | GAAP Net Income (Millions) | Non-GAAP Adjustments (Millions) | Non-GAAP Net Income (Millions) | | :------------------------------------ | :------------------------- | :------------------------------ | :----------------------------- | | GAAP Net income | $426 | N/A | N/A | | Amortization of acquisition-related balances | N/A | $67 | N/A | | Share-based compensation | N/A | $99 | N/A | | Acquisition and integration costs (benefits) | N/A | $24 | N/A | | Restructuring and others | N/A | $2 | N/A | | Adjustment for taxes | N/A | $(6) | N/A | | Non-GAAP Net income | N/A | N/A | $612 | | **Diluted EPS** | | | | | GAAP Diluted EPS | $2.45 | N/A | N/A | | Non-GAAP Diluted EPS | N/A | N/A | $3.52 | - Management uses a non-GAAP effective tax rate of **14%** for the three and six months ended April 30, 2025, compared to **17%** for the same periods in 2024[22](index=22&type=chunk) [Free Cash Flow Reconciliation](index=10&type=section&id=Free%20Cash%20Flow%20Reconciliation) Free cash flow is calculated by adjusting net cash provided by operating activities for investments in property, plant, and equipment. For Q2 FY25, free cash flow was $457 million, a significant increase from $74 million in Q2 FY24 Three Months Ended April 30 | Metric | 2025 (Millions) | 2024 (Millions) | | :------------------------------------ | :-------------- | :-------------- | | Net cash provided by operating activities | $484 | $110 | | Less: Investments in property, plant and equipment | $(27) | $(36) | | Free cash flow | $457 | $74 | Six Months Ended April 30 | Metric | 2025 (Millions) | 2024 (Millions) | | :------------------------------------ | :-------------- | :-------------- | | Net cash provided by operating activities | $862 | $438 | | Less: Investments in property, plant and equipment | $(59) | $(83) | | Free cash flow | $803 | $355 | [Non-GAAP Financial Measures Explanation (Detailed)](index=12&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation%20%28Detailed%29) Keysight provides detailed explanations for its non-GAAP adjustments, which include acquisition-related items (amortization of intangibles, integration costs), share-based compensation, restructuring expenses, and other non-recurring operating income/expenses. The company also defines 'Core Revenue' and explains its methodology for the estimated non-GAAP tax rate, emphasizing that these measures offer insights into core business performance but should be considered supplemental to GAAP results - Non-GAAP measures are used to analyze overall business performance, make operating decisions, and forecast future periods, providing investors with management's view of performance[33](index=33&type=chunk) - Adjustments include acquisition-related items (amortization of acquired intangibles, integration costs), share-based compensation expense, restructuring and other incremental expenses, and other non-normal, recurring, cash operating income/expenses[37](index=37&type=chunk)[38](index=38&type=chunk) - Core Revenue excludes the impact of foreign currency changes and revenue from acquisitions or divestitures within the last twelve months to facilitate comparisons of revenue growth and underlying business trends[36](index=36&type=chunk) - A consistent methodology is used for the long-term projected non-GAAP tax rate, excluding tax benefits or expenses not directly related to ongoing operations[37](index=37&type=chunk) [Corporate Information](index=2&type=section&id=Corporate%20Information) This section provides essential corporate information about Keysight Technologies, including company overview, webcast details, forward-looking statements, and contact information [About Keysight Technologies](index=3&type=section&id=About%20Keysight%20Technologies) Keysight Technologies (NYSE: KEYS) is an S&P 500 company that provides market-leading design, emulation, and test solutions. They serve as a global innovation partner for customers in communications, industrial automation, aerospace and defense, automotive, semiconductor, and general electronics markets, aiming to accelerate innovation and secure the world - Keysight delivers market-leading design, emulation, and test solutions to help engineers develop and deploy technologies faster and with less risk[13](index=13&type=chunk) - The company serves customers in communications, industrial automation, aerospace and defense, automotive, semiconductor, and general electronics markets[13](index=13&type=chunk) [Webcast Information](index=2&type=section&id=Webcast%20Information) Keysight's management hosted a conference call on May 20, 2025, at 1:30 p.m. PT to discuss Q2 FY25 financial results and Q3 FY25 outlook. The webcast is available in listen-only mode on the company's investor relations website for 90 days - A conference call was held on May 20, 2025, at 1:30 p.m. PT to discuss Q2 FY25 results and Q3 FY25 outlook[7](index=7&type=chunk) - The webcast is available in listen-only mode on www.investor.keysight.com under the 'Upcoming Events' section for 90 days[7](index=7&type=chunk) [Forward-Looking Statements & Risks](index=2&type=section&id=Forward-Looking%20Statements%20%26%20Risks) This communication contains forward-looking statements subject to risks and uncertainties that could materially affect actual results. These risks include global economic conditions (inflation, recession), slowing demand, market volatility, geopolitical tensions, export control regulations, customer purchasing decisions, and order cancellations. Readers are cautioned not to place undue reliance on these statements - Forward-looking statements involve risks and uncertainties that could significantly affect expected results[8](index=8&type=chunk) - Key risks include impacts of global economic conditions (inflation, recession), slowing demand, volatility in financial markets, geopolitical tension, export control regulations, customer purchasing decisions, and order cancellations[8](index=8&type=chunk) - Additional risks are detailed in Keysight's annual report on Form 10-K for the period ended October 31, 2024, and quarterly report on Form 10-Q for the period ended January 31, 2025[9](index=9&type=chunk) [Contact Information](index=3&type=section&id=Contact%20Information) Contact information for investor relations and media inquiries is provided for Keysight Technologies - Investor Relations contact: **+1 707-577-6915**, Investor.Relations@Keysight.com[14](index=14&type=chunk) - Media Contact: Andrea Mueller, **+1 408-236-1541**, andrea.mueller@keysight.com[14](index=14&type=chunk)

Financial Performance - Keysight Technologies is set to release its second-quarter financial results on May 20, with expected earnings of $1.65 per share, an increase from $1.41 per share in the same quarter last year [1] - The company projects quarterly revenue of $1.28 billion, up from $1.22 billion a year earlier [1] Collaborations and Developments - On April 29, Keysight EDA and Intel Foundry announced a collaboration on EMIB-T Silicon Bridge Technology aimed at next-generation AI and data center solutions [2] Stock Performance and Analyst Ratings - Keysight Technologies shares fell by 1.6% to close at $162.77 on the preceding Monday [2] - Morgan Stanley analyst Meta Marshall maintained an Overweight rating and raised the price target from $156 to $180 [8] - JP Morgan analyst Samik Chatterjee maintained an Overweight rating but reduced the price target from $200 to $172 [8] - Baird analyst Richard Eastman maintained an Outperform rating and increased the price target from $180 to $190 [8] - Wells Fargo analyst Aaron Rakers maintained an Overweight rating and raised the price target from $180 to $190 [8] - Barclays analyst Tim Long maintained an Overweight rating and increased the price target from $180 to $200 [8]

Core Insights - Keysight (KEYS) is expected to report quarterly earnings of $1.65 per share, reflecting a year-over-year increase of 17% [1] - Anticipated revenues for the quarter are projected to be $1.28 billion, indicating a 5% increase compared to the same quarter last year [1] Earnings Estimates Revisions - Over the past 30 days, the consensus EPS estimate has been adjusted downward by 0.3%, indicating a reassessment by analysts [2] - Revisions to earnings estimates are crucial for predicting investor actions and have shown a strong correlation with short-term stock price performance [3] Revenue Estimates by Segment - The consensus estimate for 'Revenue- Communications Solutions Group' is $884.15 million, reflecting a year-over-year change of +5.3% [5] - 'Revenue- Commercial Communications' is estimated at $588.52 million, suggesting a change of +4.5% year over year [5] - 'Revenue- Aerospace, Defense & Government' is forecasted to reach $295.62 million, indicating a change of +6.7% from the previous year [5] - 'Revenue- Electronic Industrial Solutions Group' is expected to be $395.34 million, with a year-over-year change of +5.1% [6] Income from Operations - 'Income from operations- Electronic Industrial Solutions Group' is projected to be $81.74 million, compared to $71 million from the previous year [6] - 'Income from operations- Communications Solutions Group' is expected to be $238.62 million, up from $223 million in the same quarter last year [7] Stock Performance - Keysight shares have increased by +22% in the past month, outperforming the +9% move of the Zacks S&P 500 composite [7] - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to mirror overall market performance in the near future [7]

Core Viewpoint - The article emphasizes the hidden challenges in AI infrastructure, particularly in data center operations, where inefficiencies lead to significant asset waste and operational issues. The need for improved testing, validation, and optimization processes is highlighted as essential for the advancement of AI capabilities [1][10][22]. Group 1: Company Evolution - Keysight Technologies has transformed from a hardware-centric company to a software-focused entity, spanning multiple sectors including communication, semiconductors, automotive electronics, and AI over the past decade [3][6]. - The company has completed over 20 acquisitions, enhancing its capabilities from the physical layer to application layer testing, reflecting its proactive adaptation to industry changes [6][7]. Group 2: AI Market Insights - The AI market is projected to reach $1.3 trillion by 2030, with current investments primarily focused on computational infrastructure. However, future value will increasingly derive from applications and services [13]. - The rapid evolution of AI technology necessitates advancements in underlying network bandwidth, storage, and interconnect technologies, with Ethernet and PCIe standards evolving at unprecedented rates [13][14]. Group 3: Infrastructure Challenges - Current AI data centers often operate under suboptimal conditions, with GPU utilization rates below 40%, leading to significant idle time and wasted resources [15][18]. - The complexity of AI model training requires robust network communication, where any single point of failure can lead to substantial efficiency losses [18][20]. Group 4: KAI Solution - Keysight's KAI (Keysight AI) solution aims to address the hidden inefficiencies in AI computational infrastructure by providing a comprehensive diagnostic platform that identifies performance bottlenecks and predicts potential failures [22][26]. - The KAI product matrix targets critical issues in AI data centers, including bandwidth limitations, energy inefficiencies, and low GPU utilization, transforming high-risk assets into more reliable investments [26][29]. Group 5: Industry Positioning - Keysight is evolving from a traditional testing equipment supplier to a comprehensive solution provider for AI infrastructure, integrating various aspects of performance management and operational efficiency [30][34]. - The company actively participates in industry standards organizations, positioning itself as a leader in establishing reliability and stability in AI networks, which are increasingly recognized as critical competitive factors [34].

Core Viewpoint - The market anticipates that Keysight (KEYS) will report a year-over-year increase in earnings driven by higher revenues when it releases its quarterly results for the period ending April 2025 [1][2]. Earnings Expectations - Keysight is expected to report quarterly earnings of $1.65 per share, reflecting a year-over-year increase of 17% [3]. - Revenue projections stand at $1.28 billion, which is a 5% increase compared to the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 0.34% over the last 30 days, indicating a collective reassessment by analysts [4]. - The Most Accurate Estimate for Keysight is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.37%, suggesting a bearish outlook from analysts [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the likelihood of actual earnings deviating from consensus estimates, with positive readings being more reliable [6][7]. - Stocks with a positive Earnings ESP and a Zacks Rank of 1, 2, or 3 have historically shown a nearly 70% chance of delivering a positive surprise [8]. Historical Performance - In the last reported quarter, Keysight exceeded the expected earnings of $1.69 per share by delivering $1.82, resulting in a surprise of +7.69% [12]. - Over the past four quarters, Keysight has consistently beaten consensus EPS estimates [13]. Conclusion - While Keysight does not currently appear to be a strong candidate for an earnings beat, investors should consider other influencing factors when making investment decisions ahead of the earnings release [16].

Core Viewpoint - Keysight Technologies, Inc. is expected to report higher year-over-year revenues for the second quarter of fiscal 2025, driven by strong performance across its segments and strategic collaborations with industry players [1][6]. Factors at Play - Keysight's collaboration with Coherent Corp. aims to enhance 3D sensing applications through advanced laser technology, which is expected to support AI/ML services while reducing power consumption and capital expenditure for data centers [2]. - The company introduced innovative products, including the Next-Generation Embedded Security Testbench, designed to address security challenges in modern chips, thereby improving testing efficiency and reliability [3]. - Keysight launched the Photonic Designer software to streamline workflows in photonic design, enhancing accuracy and compliance validation [4]. - The company expanded its RF and microwave instrument portfolio with new signal generators and analyzers, which are anticipated to drive demand and revenue growth [5]. Overall Expectations - Revenue estimates for the Communications Solutions Group are projected at $870.2 million, reflecting a 3.6% year-over-year increase, while the Electronic Industrial Solutions Group is expected to generate $409.2 million, an 8.8% increase [6]. - The overall revenue consensus for the second quarter is $1.28 billion, up from $1.22 billion year-over-year, with adjusted earnings per share expected to rise to $1.65 from $1.41 [6].