01—Abstract
Summary
Summary of the 10-K filed December 17, 2020. Cited figures are marked; the original filing is the authoritative source.
Keysight Technologies, Inc. reported revenues of $4.22 billiona for the fiscal year ended October 31, 2020.
The company's business is focused on providing electronic design and test solutions across various industries, with a significant portion of its revenue generated from the Communications Solutions Group, serving the commercial communications and aerospace/defense/government sectors. The Electronic Industrial Solutions Group targets automotive, energy, and general electronics markets. The company's strategy emphasizes expanding software-centric solutions, a shift towards subscription-based models, and providing complete solutions with services.
Keysight is actively investing in high-growth areas like 5G, automotive, and IoT. Despite a slight revenue dip compared to the prior year, primarily due to COVID-19 impacts on operations and supply chains, the company demonstrated resilience with stable orders and a focus on operational efficiency, leading to improved gross and operating margins compared to the previous fiscal year. The company also continues to return value to shareholders through its stock repurchase program.
02—Key points
Key Highlights
- Revenue for fiscal year 2020 was $4.22 billion, a slight decrease from $4.30 billion in fiscal year 2019, largely impacted by COVID-19 disruptions.
- Net income for fiscal year 2020 was $627 million, a modest increase from $621 million in fiscal year 2019, reflecting improved margins and cost management.
- The Communications Solutions Group remains the largest segment, generating $3.13 billion in revenue, serving the commercial communications and aerospace/defense/government markets.
- The Electronic Industrial Solutions Group generated $1.09 billion in revenue, with strategic investments in automotive and energy sectors.
- Keysight is actively pursuing a strategy to increase recurring revenue through software-centric and subscription-based business models, exemplified by the acquisition of Eggplant software test automation.
- The company ended the fiscal year with a strong cash position of $1.76 billion, indicating financial stability.
- Keysight repurchased $410 million of its common stock in fiscal year 2020 under its share repurchase program.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, Keysight Technologies, Inc. kept $0.15.
- Revenue$4.22B100.0%
- Cost of revenue−$1.69B40.0%
- Gross profit$2.53B60.0%
- Operating costs−$1.77B41.9%
- Operating income$765.0M18.1%
- Interest, other & tax−$138.0M3.3%
- Net income$627.0M14.9%
Where FY2020 revenue went
$4.22B- Cost of revenue: $1.69B, 40% of revenue
- SG&A: $1.10B, 26% of revenue
- R&D: $715.0M, 17% of revenue
- Net income: $627.0M, 15% of revenue
- Interest, other & tax: $138.0M, 3.3% of revenue
Kept 15% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed December 17, 2020Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $4.22B$4.30B | −1.9% |
| Cost of Revenue | $1.69B$1.77B | −4.6% |
| Gross Profit | $2.53B$2.53B | 0.0% |
| R&D Expenses | $715.00M$688.00M | +3.9% |
| SG&A Expenses | $1.10B$1.16B | −5.0% |
| Operating Expenses | $3.46B$3.59B | −3.8% |
| Operating Income | $765.00M$711.00M | +7.6% |
| Interest Expense | $78.00M$80.00M | −2.5% |
| Net Income | $627.00M$621.00M | +1.0% |
| EPS (Basic) | $3.35$3.31 | +1.2% |
| EPS (Diluted) | $3.31$3.25 | +1.8% |
| Shares Outstanding (Basic) | 187.00M188.00M | −0.5% |
| Shares Outstanding (Diluted) | 189.00M191.00M | −1.0% |
05—Questions
Frequently Asked Questions
What were Keysight Technologies' key financial results for the fiscal year ended October 31, 2020?
Keysight Technologies reported revenue of $4.22 billion and net income of $627 million for the fiscal year ended October 31, 2020. This represents a slight decrease in revenue compared to the previous year, attributed to the impact of COVID-19, but an increase in net income due to improved margins and cost efficiencies.
How did the COVID-19 pandemic impact Keysight's business?
The COVID-19 pandemic led to temporary site closures and supply chain disruptions, which impacted revenue. However, Keysight took proactive measures to manage costs and preserve liquidity, and the company has since reopened many sites and ramped operations while implementing safety procedures. Despite the headwinds, the company noted steady demand in several end markets, particularly for next-generation technologies like 5G.
What are Keysight's main strategies for future growth?
Keysight's primary growth strategies include expanding its software-centric solutions to increase recurring revenue, shifting towards subscription-based business models, and providing complete solutions that incorporate services. The company is also strategically investing in key growth areas such as 5G, automotive technologies (including electric and autonomous vehicles), and the Internet of Things (IoT).
How is Keysight returning capital to shareholders?
Keysight Technologies repurchased approximately $410 million of its common stock during fiscal year 2020 under its share repurchase program. The company also announced a new $750 million stock repurchase program in November 2020, demonstrating a commitment to shareholder returns, although it does not currently pay dividends.
06—Continue