Keysight Technologies(US:KEYS)2023-12-14 16:00Financial Performance - Keysight generated $5.5 billion in revenue for the fiscal year 2023, an increase from $5.4 billion in 2022 and $4.9 billion in 2021[15]. - The backlog as of October 31, 2023, was approximately $2,290 million, down from $2,550 million a year earlier, due to revenue outpacing orders[82]. - The company does not currently pay dividends on its common stock, and future dividend payments will depend on various factors including financial condition and capital requirements[186]. - The company has not paid any dividends and does not anticipate paying cash dividends in the foreseeable future[205]. - The company’s financial condition and results of operations are subject to various uncertainties that could cause actual results to differ materially from expectations[212]. Research and Development - The company invested approximately 16% of its revenue in R&D, totaling $882 million in 2023[26]. - Keysight's R&D investments focus on developing first-to-market solutions and improving existing products to meet evolving industry requirements[54]. - The company is investing significantly in new technologies across communications, aerospace and defense, automotive, Internet of Things, and mobile industries[127]. Acquisitions and Strategic Initiatives - Keysight acquired Cliosoft Inc. in 2023 to enhance its design and intellectual property data management capabilities[27]. - In November 2023, Keysight acquired a controlling block of share capital of ESI Group SA to broaden its software capabilities[27]. - Keysight's strategy includes growing recurring revenue through increased software content and a dedicated global enterprise software sales force[28]. - The company is focused on integrating completed acquisitions and transitioning to lower-cost regions as part of its strategic direction[212]. Workforce and Diversity - The company employs approximately 14,900 employees globally, with a turnover rate of approximately 7.5% over the past three years, lower than the industry average[70]. - The average employee tenure at Keysight is 12.6 years, indicating a stable workforce and effective retention strategies[70]. - As of October 31, 2023, women represented 31% of the global workforce, while underrepresented minorities accounted for 44.4% of the U.S. workforce[75]. - In 2023, 33.9% of global external new hires were women, surpassing the goal of 33.6%, and 61.1% of external new hires in the U.S. were underrepresented minorities, exceeding the goal of 50.1%[76]. - At the senior executive level, 27.6% of positions were held by women and 31.8% by underrepresented minorities[75]. - The company has established a global Inclusion Council to help formulate inclusion goals and track progress[80]. - The company provides multiple avenues for employee input, including an Open-Door Policy and the MyVoice program[80]. - The company offers a comprehensive Employee Well Being program, including twelve free sessions with therapists and mental health coaches per year[81]. Manufacturing and Operations - Keysight's manufacturing operations are centralized in Penang, Malaysia, which is the largest facility, focusing on final assembly and calibration of sophisticated instruments[59]. - The company utilizes both in-house and contract manufacturers to maximize productivity and respond to market conditions[59]. - The company centralizes most accounting processes in India and Malaysia, which could affect operations if conditions in those countries change[116]. - The company has 134 operating facilities globally, primarily located in the United States, Malaysia, Japan, China, Germany, India, United Kingdom, Taiwan, Spain, Korea, Singapore, and Romania[193]. Market and Economic Conditions - Economic uncertainty, including inflation and potential recession, may adversely affect the company's operating results and financial condition[110]. - International operations are expected to continue representing a majority of total revenue, but there are risks associated with global economic conditions and trade restrictions[112]. - The company faces challenges in forecasting demand due to volatile economic environments, which could lead to reduced orders and increased pricing pressures[121]. - Increased geopolitical tensions and conflicts could lead to market instability and negatively impact the company's financial results[120]. - The company is actively managing risks associated with international operations, including potential sanctions and trade restrictions[114]. Compliance and Legal Risks - The company is subject to various regulations, including environmental, data privacy, and anti-corruption laws, which may impact operations and compliance costs[84][91][92]. - The company faces risks of civil or criminal actions and significant expenses if operations are found to be out of compliance with evolving laws and regulations[158]. - The company is involved in ongoing litigation regarding intellectual property rights, which could result in significant legal expenses and impact product sales[160]. - The company relies on various intellectual property rights to maintain its competitive position, and failure to enforce these rights could harm operating results[162]. - Cybersecurity attacks pose a risk to the company's IT systems, which could adversely affect business operations and financial condition[166]. - The company is subject to various international and local regulations, and failure to comply could result in substantial financial penalties and operational disruptions[171]. - The company must comply with anti-corruption laws, and violations could lead to fines, criminal sanctions, and damage to its brand and operations[176]. Stock and Shareholder Information - As of December 12, 2023, there are 16,230 shareholders of record for the company's common stock listed on the NYSE under the ticker symbol "KEYS"[203]. - The company’s stock price performance is tracked against the S&P 500 Index and the S&P 500 Information Technology Index, with historical performance not indicative of future results[204]. - A total of 4,913,548 shares of common stock were purchased during the fiscal year ended October 31, 2023[207]. - The stock repurchase program authorized the purchase of up to $1,500 million of the company's common stock, replacing a previous program of $1,200 million[208]. - The approximate dollar value of shares that may yet be purchased under the stock repurchase program is $923,835,624[208]. Environmental and Sustainability Initiatives - The company is committed to achieving net zero Scope 1 and Scope 2 emissions by the end of fiscal year 2040, which may involve significant costs and regulatory compliance[156]. - The company plans to reduce energy consumption through efficiency measures, investments in renewable energy, and purchasing certified offsets for residual emissions[156]. - The company has developed Scope 3 reduction and engagement targets, which were approved by the Science Based Target Initiative (SBTi) on October 27, 2023[156]. - Achieving net zero emissions may require substantial capital improvements and could increase manufacturing and shipping costs, potentially leading to price increases for customers[157]. - The company has significant exposure to potential liabilities from environmental contamination, which could impact future operations and financial condition[181].