01—Abstract
Summary
Summary of the 10-K filed December 15, 2023. Cited figures are marked; the original filing is the authoritative source.
Keysight Technologies, Inc. (KEYS) reported revenue of $5.464 billiona for the fiscal year ended October 31, 2023, a slight increase of 1% year-over-year, despite a 13% decline in orders.
This performance was driven by strong revenue in the Electronic Industrial Solutions Group (EISG), which grew 10%, offsetting a 3% decrease in the Communications Solutions Group (CSG). Net income for the year decreased by 6% to $1.057 billionb, impacted by higher operating expenses, particularly R&D and SG&A, and a significant increase in income tax expense. Despite the challenging macroeconomic environment and cautious customer spending leading to lower orders, Keysight demonstrated resilience through its differentiated solutions and focus on key growth areas like next-generation automotive, high-speed data centers, and defense modernization.
The company also advanced its strategic initiatives, including key acquisitions aimed at expanding its software capabilities and moving further upstream in customer design cycles. Financially, Keysight maintained a strong liquidity position with substantial cash reserves and generated significant operating cash flow.
The company continued its share repurchase program, underscoring its commitment to returning capital to shareholders. Looking ahead, Keysight remains confident in its long-term growth prospects, driven by secular trends in its served markets, despite ongoing macroeconomic uncertainties.
02—Key points
Key Highlights
- Revenue for fiscal year 2023 reached $5.464 billion, a 1% increase from the prior year, demonstrating revenue stability amidst challenging market conditions.
- Orders decreased by 13% year-over-year, reflecting cautious customer spending and broader macroeconomic headwinds impacting the electronics industry.
- Net income for the year was $1.057 billion, a 6% decrease compared to 2022, primarily due to higher operating expenses and income tax provisions.
- The Electronic Industrial Solutions Group (EISG) showed strong performance with a 10% revenue increase, driven by growth in automotive, energy, and semiconductor markets.
- The Communications Solutions Group (CSG) experienced a 3% revenue decline, impacted by softening demand in commercial communications, although aerospace, defense, and government sectors showed growth.
- Keysight made strategic acquisitions, including Cliosoft Inc. and a controlling stake in ESI Group SA, to enhance its design software portfolio and advance its position earlier in customer design cycles.
- The company maintained a robust financial position, with $2.488 billion in cash, cash equivalents, and restricted cash as of October 31, 2023, and generated $1.408 billion in net cash from operating activities.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Keysight Technologies, Inc. kept $0.19.
- Revenue$5.46B100.0%
- Cost of revenue−$1.93B35.4%
- Gross profit$3.53B64.6%
- Operating costs−$2.17B39.8%
- Operating income$1.36B24.9%
- Interest, other & tax−$301.0M5.5%
- Net income$1.06B19.3%
Where FY2023 revenue went
$5.46B- Cost of revenue: $1.93B, 35% of revenue
- SG&A: $1.31B, 24% of revenue
- Net income: $1.06B, 19% of revenue
- R&D: $882.0M, 16% of revenue
- Interest, other & tax: $301.0M, 5.5% of revenue
Kept 19% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed December 15, 2023Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $5.46B$5.42B | +0.8% |
| Cost of Revenue | $1.93B$1.97B | −1.9% |
| Gross Profit | $3.53B$3.45B | +2.4% |
| R&D Expenses | $882.00M$841.00M | +4.9% |
| SG&A Expenses | $1.31B$1.28B | +1.9% |
| Operating Expenses | $4.11B$4.09B | +0.5% |
| Operating Income | $1.36B$1.33B | +1.8% |
| Interest Expense | $78.00M$79.00M | −1.3% |
| Net Income | $1.06B$1.12B | −6.0% |
| EPS (Basic) | $5.95$6.23 | −4.5% |
| EPS (Diluted) | $5.91$6.18 | −4.4% |
| Shares Outstanding (Basic) | 178.00M180.00M | −1.1% |
| Shares Outstanding (Diluted) | 179.00M182.00M | −1.6% |
05—Questions
Frequently Asked Questions
How did Keysight's financial performance change in fiscal year 2023 compared to 2022?
In fiscal year 2023, Keysight reported a slight revenue increase of 1% to $5.464 billion, but experienced a 13% decline in orders. Net income decreased by 6% to $1.057 billion, mainly due to increased operating expenses (R&D, SG&A) and higher income taxes.
What were the key drivers behind the revenue performance in each segment?
The Electronic Industrial Solutions Group (EISG) was a strong performer, with revenue up 10% year-over-year, driven by demand in automotive, energy, and semiconductor markets. The Communications Solutions Group (CSG) saw a 3% revenue decrease, primarily due to weaker demand in commercial communications, although growth in aerospace, defense, and government sectors provided some offset.
What strategic moves did Keysight make in fiscal year 2023?
Keysight focused on strategic growth by acquiring Cliosoft Inc. to bolster its design software capabilities and securing a controlling stake in ESI Group SA. These acquisitions aim to enhance its software portfolio and integrate further upstream into customer design workflows.
How is Keysight managing its financial health and shareholder returns?
Keysight maintained a strong liquidity position with over $2.4 billion in cash and equivalents and generated substantial operating cash flow. The company actively pursued its stock repurchase program, demonstrating a commitment to returning capital to shareholders while investing in strategic growth areas.
06—Continue