Keysight Technologies(US:KEYS)2023-08-29 16:00Financial Performance - Total orders for the three and nine months ended July 31, 2023 were $1,244 million and $3,863 million, respectively, a decrease of 15% and 12% year-over-year [96]. - Revenue for the three and nine months ended July 31, 2023 was $1,382 million and $4,153 million, respectively, flat and an increase of 4% compared to the same periods last year [97]. - Net income for the three and nine months ended July 31, 2023 was $288 million and $831 million, respectively, compared to $338 million and $825 million for the same periods last year, reflecting a 15% decrease for the three months and a 1% increase for the nine months [98]. - Total revenue for the three months ended July 31, 2023 was $918 million, a decrease of 5% year-over-year, while revenue for the nine months ended July 31, 2023 was $2,794 million, down 1% year-over-year [125]. - Total revenue for the three months ended July 31, 2023, was $464 million, a 14% increase year-over-year, while revenue for the nine months was $1,359 million, up 17% from the previous year [135]. Margins - Gross margin for the three months ended July 31, 2023 was 64.8%, an increase of 1 percentage point compared to the same period last year, while the nine-month gross margin was 64.7%, also up 1 percentage point [107]. - Operating margin for the three and nine months ended July 31, 2023 increased by 1 percentage point to 26.4% and 25.1%, respectively, compared to the same periods last year [111]. - Gross margin for the three months ended July 31, 2023 was 67.6%, an increase of 1 percentage point year-over-year, while the nine-month gross margin was 67.7%, also up 1 percentage point [128]. - Operating margin for the three months ended July 31, 2023 was flat year-over-year at 30.0%, while the nine-month operating margin increased by 1 percentage point to 29.0% [132]. - Operating margin for the three months ended July 31, 2023, improved to 33.9%, an increase of 3 percentage points compared to the same period last year [140]. Expenses - Research and development (R&D) expenses for the three and nine months ended July 31, 2023 were $215 million and $664 million, representing increases of 4% and 6% year-over-year [103]. - R&D expenses for the three and nine months ended July 31, 2023 increased by 1% and 3%, respectively, driven by investments in key growth opportunities [129]. - Selling, general and administrative expenses decreased by 6% for the three months ended July 31, 2023, and by 1% for the nine months ended July 31, 2023, primarily due to lower selling costs [130]. - Selling, general and administrative expenses for the three months ended July 31, 2023, rose by 8% compared to the same period last year, driven by higher selling costs [138]. Cash Flow and Investments - Net cash provided by operating activities for the nine months ended July 31, 2023, was $1,030 million, an increase of $284 million compared to the same period last year [142]. - Net cash used in investing activities increased to $250 million for the nine months ended July 31, 2023, compared to $190 million in the same period last year [142]. - Cash, cash equivalents, and restricted cash as of July 31, 2023, totaled $2,588 million, up from $2,057 million as of October 31, 2022 [149]. - The company expects capital spending to be approximately $215 million in 2023, primarily for capacity expansion and technology investments [154]. Market Segments - The Communications Solutions Group and the Electronic Industrial Solutions Group represented 66% and 34% of total revenue for the three months ended July 31, 2023, respectively [97]. - The Communications Solutions Group revenue decreased 5% and 1% for the three and nine months ended July 31, 2023, respectively, with a 12% decline in the commercial communications end market [126]. - The aerospace, defense, and government end market revenue increased 11% and 8% for the three and nine months ended July 31, 2023, respectively, representing 33% of total Communications Solutions Group revenue [127]. Future Outlook - The company anticipates continued R&D investments in next-generation technologies, including 5G, early 6G, AI-ML network modeling, and industrial IoT [99]. - The company continues to invest in technologies supporting 5G, including Open Radio Access Networks and early 6G research, despite cautious customer spending across the communications ecosystem [125]. - The company announced an intention to acquire ESI Group SA for €913 million, expected to be funded with existing cash [151]. Other Income - Interest income for the three and nine months ended July 31, 2023 was $29 million and $70 million, respectively, compared to $4 million and $6 million for the same periods last year, marking increases of 599% and 1113% [112]. - Other income for the three and nine months ended July 31, 2023 was $14 million and $28 million, respectively, compared to $5 million and $15 million for the same periods last year, primarily driven by net gains on equity investments [113]. Workforce - As of July 31, 2023, the company's headcount was approximately 14,800, an increase from approximately 14,700 at July 31, 2022 [114].