01—Abstract
Summary
Summary of the 10-K filed December 20, 2017. Cited figures are marked; the original filing is the authoritative source.
Keysight Technologies, Inc. (KEYS) reported a significant increase in net revenue in fiscal year 2017, reaching $3.2 billiona, up from $2.9 billion in fiscal year 2016.
This growth was largely driven by strategic acquisitions, notably Ixia for $1.622 billionb and ScienLab for $60 million. These acquisitions expanded Keysight's capabilities in network testing, visibility, security, and automotive e-mobility solutions. The company's revenue growth was also supported by strong performance in its Electronic Industrial Solutions Group, particularly in semiconductor measurement and the automotive and energy markets.
While the Communications Solutions Group saw flat revenue due to mixed performance in its sub-segments, the overall revenue increase and expanded market reach highlight Keysight's strategic execution. Despite increased operating expenses, including R&D and SG&A driven by acquisitions, the company is positioning itself for future growth in evolving technology sectors like 5G and electric vehicles.
02—Key points
Key Highlights
- Net revenue increased by 9% to $3.2 billion in fiscal year 2017, driven by acquisitions and organic growth in key segments.
- Completed two significant acquisitions: Ixia for $1.622 billion and ScienLab for $60 million, expanding its product portfolio and market reach.
- Electronic Industrial Solutions Group revenue grew by 8%, led by semiconductor measurement and automotive/energy markets.
- Communications Solutions Group revenue remained flat, with growth in commercial communications offset by declines in aerospace, defense, and government.
- Research and development expenses increased by 17% to $498 million, reflecting continued investment in innovation and new technologies.
- Selling, general, and administrative expenses rose by 28%, largely due to acquisition integration costs and investments in sales resources.
- The company ended fiscal year 2017 with $818 million in cash and cash equivalents, demonstrating a strong liquidity position.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2017, Keysight Technologies, Inc. kept $0.03.
- Revenue$3.19B100.0%
- Cost of revenue−$1.49B46.6%
- Gross profit$1.70B53.4%
- Operating costs−$1.55B48.7%
- Operating income$148.0M4.6%
- Interest, other & tax−$46.0M1.4%
- Net income$102.0M3.2%
Where FY2017 revenue went
$3.19B- Cost of revenue: $1.49B, 47% of revenue
- SG&A: $1.06B, 33% of revenue
- R&D: $507.0M, 16% of revenue
- Net income: $102.0M, 3.2% of revenue
- Interest, other & tax: $46.0M, 1.4% of revenue
Kept 3.2% as net incomeNet income $102.0M · 3.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2017filed December 20, 2017Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $3.19B$2.92B | +9.3% |
| Cost of Revenue | $1.49B$1.29B | +14.9% |
| Gross Profit | $1.70B$1.62B | +4.8% |
| R&D Expenses | $507.00M$425.00M | +19.3% |
| SG&A Expenses | $1.06B$818.00M | +29.3% |
| Operating Expenses | $3.04B$2.51B | +21.1% |
| Operating Income | $148.00M$406.00M | −63.5% |
| Interest Expense | $80.00M$47.00M | +70.2% |
| Net Income | $102.00M$335.00M | −69.6% |
| EPS (Basic) | $0.57$1.97 | −71.1% |
| EPS (Diluted) | $0.56$1.95 | −71.3% |
| Shares Outstanding (Basic) | 180.00M170.00M | +5.9% |
| Shares Outstanding (Diluted) | 182.00M172.00M | +5.8% |
05—Questions
Frequently Asked Questions
What was Keysight Technologies' revenue performance in fiscal year 2017?
Keysight Technologies reported net revenue of $3,189 million for the year ended October 31, 2017, an increase of 9% compared to $2,918 million in fiscal year 2016. This growth was significantly influenced by acquisitions, contributing 7 percentage points to the revenue increase.
What were the key strategic moves made by Keysight in fiscal year 2017?
Keysight made two significant strategic acquisitions in fiscal year 2017: Ixia for $1,622 million and ScienLab for $60 million. These acquisitions expanded the company's offerings in network test, visibility, security, and automotive test solutions, particularly for electric vehicles.
How did the different business segments perform?
The Electronic Industrial Solutions Group saw an 8% revenue increase, driven by semiconductor and automotive/energy markets. The Communications Solutions Group's revenue was flat, as gains in commercial communications were balanced by declines in aerospace, defense, and government. The Ixia Solutions Group, acquired in April 2017, contributed $256 million in revenue, and the Services Solutions Group grew by 4%.
What is Keysight's outlook for future growth?
Keysight is optimistic about future growth, citing increased investments in R&D and the expansion of its technology portfolio and addressable market through acquisitions. The company is focused on delivering solutions for fast-growing markets driven by next-generation digital and electronic technologies, such as 5G and e-mobility.
06—Continue