10-KPeriod: FY2017

Keysight Technologies, Inc. Annual Report, Year Ended Oct 31, 2017

Filed December 20, 2017For Securities:KEYS

Summary

Keysight Technologies, Inc. (KEYS) reported a significant increase in net revenue in fiscal year 2017, reaching $3.2 billion, up from $2.9 billion in fiscal year 2016. This growth was largely driven by strategic acquisitions, notably Ixia for $1.622 billion 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.

Financial Highlights

55 data points
Beta

Revenue

$3.19B

53.4% Gross Margin

Net Income

$102.00M

3.2% Net Margin

EPS (Diluted)

$0.56

Total Assets

$5.93B

Cash & Equivalents

$818.00M

Free Cash Flow

$256.00M

Financial Statements
Beta
Revenue$3.19B
Cost of Revenue$1.49B
Gross Profit$1.70B
R&D Expenses$507.00M
SG&A Expenses$1.06B
Operating Expenses$3.04B
Operating Income$148.00M
Interest Expense$80.00M
Net Income$102.00M
EPS (Basic)$0.57
EPS (Diluted)$0.56
Shares Outstanding (Basic)180.00M
Shares Outstanding (Diluted)182.00M

Key Highlights

  • 1Net revenue increased by 9% to $3.2 billion in fiscal year 2017, driven by acquisitions and organic growth in key segments.
  • 2Completed two significant acquisitions: Ixia for $1.622 billion and ScienLab for $60 million, expanding its product portfolio and market reach.
  • 3Electronic Industrial Solutions Group revenue grew by 8%, led by semiconductor measurement and automotive/energy markets.
  • 4Communications Solutions Group revenue remained flat, with growth in commercial communications offset by declines in aerospace, defense, and government.
  • 5Research and development expenses increased by 17% to $498 million, reflecting continued investment in innovation and new technologies.
  • 6Selling, general, and administrative expenses rose by 28%, largely due to acquisition integration costs and investments in sales resources.
  • 7The company ended fiscal year 2017 with $818 million in cash and cash equivalents, demonstrating a strong liquidity position.

Frequently Asked Questions

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.

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.

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%.

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.