01—Abstract
Summary
Summary of the 10-K filed December 21, 2015. Cited figures are marked; the original filing is the authoritative source.
Keysight Technologies, Inc. operates as a dedicated measurement company, spun off from Agilent Technologies in November 2014.
For the fiscal year ended October 31, 2015, the company reported net revenue of $2.86 billiona, a slight decrease from the previous year. The company experienced a net income of $513 million, a significant increase driven by a substantial tax benefit. A key strategic move during the year was the acquisition of Anite for $558 million, which strengthened Keysight's wireless software and network testing capabilities.
The business is structured into two segments: Measurement Solutions, which generates the majority of revenue through hardware and software products, and Customer Support and Services, providing repair and calibration. Keysight serves diverse markets including communications, aerospace and defense, and industrial, computer, and semiconductor sectors.
The company emphasizes its long history of technological leadership, a broad product portfolio, and a global sales channel as key strengths. While facing competitive pressures and market cyclicality, Keysight is focused on investing in R&D for new wireless and modular solutions to drive future growth.
02—Key points
Key Highlights
- Keysight Technologies became an independent public company on November 1, 2014, following its separation from Agilent Technologies.
- Net revenue for fiscal year 2015 was $2.86 billion, a decrease of 3% from fiscal year 2014.
- Net income significantly increased to $513 million in fiscal year 2015, up from $392 million in fiscal year 2014, largely due to a tax benefit.
- The company acquired Anite for $558 million in August 2015 to enhance its wireless software design and test portfolio and expand into Network Test.
- Keysight operates two reportable segments: Measurement Solutions (generating the vast majority of revenue) and Customer Support and Services.
- The company is investing in R&D for new wireless communication measurement solutions, modular solutions, and software enhancements.
- Keysight has a strong global sales channel, with 65% of its 2015 revenue generated outside the United States.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Keysight Technologies, Inc. kept $0.18.
- Revenue$2.86B100.0%
- Cost of revenue−$1.27B44.4%
- Gross profit$1.59B55.6%
- Operating costs−$1.16B40.5%
- Operating income$431.0M15.1%
- Interest, other & tax$82.0M2.9%
- Net income$513.0M18.0%
Where FY2015 revenue went
$2.86B- Cost of revenue: $1.27B, 44% of revenue
- SG&A: $787.0M, 28% of revenue
- Operating income: $431.0M, 15% of revenue
- R&D: $387.0M, 14% of revenue
Kept 15% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed December 21, 2015Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $2.86B$2.93B | −2.6% |
| Cost of Revenue | $1.27B$1.31B | −3.4% |
| Gross Profit | $1.59B$1.62B | −2.0% |
| R&D Expenses | $387.00M$361.00M | +7.2% |
| SG&A Expenses | $787.00M$790.00M | −0.4% |
| Operating Expenses | $2.42B$2.46B | −1.6% |
| Operating Income | $431.00M$469.00M | −8.1% |
| Interest Expense | $46.00M$3.00M | +1433.3% |
| Net Income | $513.00M$392.00M | +30.9% |
| EPS (Basic) | $3.04$2.35 | +29.4% |
| EPS (Diluted) | $3.00$2.35 | +27.7% |
| Shares Outstanding (Basic) | 169.00M167.00M | +1.2% |
| Shares Outstanding (Diluted) | 171.00M167.00M | +2.4% |
05—Questions
Frequently Asked Questions
What is Keysight Technologies' primary business and market focus?
Keysight Technologies is a measurement company that provides electronic design and test solutions, including instruments, software, and services, primarily to the communications and electronics industries. Key markets include wireless communications, aerospace and defense, and industrial, computer, and semiconductor sectors.
What was the financial performance of Keysight in fiscal year 2015?
For the fiscal year ended October 31, 2015, Keysight reported net revenue of $2.86 billion, a slight decrease compared to the prior year. Net income was $513 million, showing a substantial increase from $392 million in fiscal year 2014, largely driven by a significant tax benefit. Operating cash flow was $376 million.
What significant strategic actions did Keysight undertake in fiscal year 2015?
The most significant strategic action was the acquisition of Anite plc in August 2015 for $558 million. This acquisition was aimed at strengthening Keysight's wireless software design and test capabilities and expanding its reach into the network testing market. The company also initiated targeted workforce reductions to optimize operations and cost structure.
Does Keysight pay dividends?
No, Keysight has not paid any dividends to date and does not currently intend to pay cash dividends in the foreseeable future. The company plans to retain future earnings to fund business development and growth.
06—Continue