01—Abstract
Summary
Summary of the 10-K filed December 22, 2014. Cited figures are marked; the original filing is the authoritative source.
Keysight Technologies, Inc. (KEYS), a spin-off from Agilent Technologies, Inc., officially became an independent publicly-traded company on November 1, 2014.
The company provides electronic measurement solutions, encompassing instruments, systems, software, and services, catering to the communications and electronics industries. For fiscal year 2014, Keysight reported net revenue of $2.9 billiona, with 64% generated from international markets. The company operates through two segments: Measurement Solutions, which accounts for the majority of revenue, and Customer Support and Services.
Keysight's strategy focuses on investing in product development, particularly in wireless communication, modular solutions, and software, to address evolving market demands driven by faster data rates and new technology standards. The company highlights its 75-year legacy of innovation, technology leadership, a broad product portfolio, commitment to quality, a large customer installed base, and a global sales channel as key strengths. Despite a competitive landscape, Keysight is positioned to leverage its expertise to drive future growth.
Investors should note the significant R&D expenditures and the company's focus on new product introductions to maintain its competitive edge in a rapidly changing technological environment. The company also raised $1.1 billionb in senior notes in October 2014 to fund its operations and liquidity needs.
02—Key points
Key Highlights
- Keysight Technologies, Inc. was established as an independent publicly traded company on November 1, 2014, following its spin-off from Agilent Technologies, Inc.
- The company generated $2.9 billion in net revenue for fiscal year 2014, with 64% derived from international markets.
- Keysight operates two key segments: Measurement Solutions (hardware and software) and Customer Support and Services (repair, calibration, and used equipment resale).
- The company's strategic focus includes significant investment in R&D for wireless communication solutions, modular offerings, and software to meet evolving market demands.
- Keysight emphasizes its 75-year history, technology leadership, broad product portfolio, and strong customer relationships as core competitive strengths.
- The company raised $1.1 billion in senior notes in October 2014 to support its financial needs.
- Research and Development (R&D) expenses were $361 million in fiscal year 2014, reflecting a commitment to innovation and product development.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2014, Keysight Technologies, Inc. kept $0.13.
- Revenue$2.93B100.0%
- Cost of revenue−$1.31B44.8%
- Gross profit$1.62B55.2%
- Operating costs−$1.15B39.2%
- Operating income$469.0M16.0%
- Interest, other & tax−$77.0M2.6%
- Net income$392.0M13.4%
Where FY2014 revenue went
$2.93B- Cost of revenue: $1.31B, 45% of revenue
- SG&A: $790.0M, 27% of revenue
- Net income: $392.0M, 13% of revenue
- R&D: $361.0M, 12% of revenue
- Interest, other & tax: $77.0M, 2.6% of revenue
Kept 13% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2014filed December 22, 2014Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $2.93B$2.89B | +1.6% |
| Cost of Revenue | $1.31B$1.26B | +3.8% |
| Gross Profit | $1.62B$1.62B | −0.2% |
| R&D Expenses | $361.00M$375.00M | −3.7% |
| SG&A Expenses | $790.00M$752.00M | +5.1% |
| Operating Expenses | $2.46B$2.39B | +3.0% |
| Operating Income | $469.00M$496.00M | −5.4% |
| Interest Expense | $3.00M$0 | — |
| Net Income | $392.00M$457.00M | −14.2% |
| EPS (Basic) | $2.35$2.74 | −14.2% |
| EPS (Diluted) | $2.35$2.74 | −14.2% |
| Shares Outstanding (Basic) | 167.00M167.00M | 0.0% |
| Shares Outstanding (Diluted) | 167.00M167.00M | 0.0% |
05—Questions
Frequently Asked Questions
What is Keysight Technologies' primary business focus?
Keysight Technologies primarily provides electronic measurement instruments and systems, along with related software, software design tools, and services, to the communications and electronics industries. These solutions are used in the design, development, manufacture, installation, deployment, and operation of electronic equipment.
How did Keysight Technologies become an independent company?
Keysight Technologies became an independent publicly-traded company on November 1, 2014, through a spin-off transaction where Agilent Technologies, Inc. distributed 100% of Keysight's common stock to Agilent shareholders.
What were Keysight's key financial highlights for fiscal year 2014?
For fiscal year 2014, Keysight reported net revenue of $2.9 billion, with 64% of revenue generated from international operations. The company also raised $1.1 billion in senior notes in October 2014.
What are Keysight's main strategic priorities for growth?
Keysight's strategic priorities include investing in product development to meet evolving market needs, with a specific focus on new wireless communication measurement solutions, modular solutions, and accelerating the value migration to software solutions.
06—Continue