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]