How did the Ixia acquisition impact the financial results?

The Ixia acquisition, completed in April 2017, continued to contribute to revenue growth, representing 9% of total Keysight revenue for the three months ended April 30, 2018. While integration efforts presented some short-term challenges, the company reported completing a significant phase of integration, which is expected to yield long-term value.

What is the company's outlook and how is it managing capital?

Keysight's outlook is positive, driven by R&D investments and completed acquisitions. They are focused on growing in faster-growing markets. The company also announced a new stock repurchase program of up to $350 million, signaling confidence in its financial position and commitment to shareholder returns. They also anticipate total 2018 capital spending of approximately $130 million.

Were there any significant one-time items affecting net income?

For the six months ended April 30, 2018, net income was flat year-over-year primarily because higher revenue volumes and benefits from U.S. tax reform offset one-time gains in the prior year related to a Japan pension settlement and a land sale. The current period also saw increased amortization of acquisition-related balances and integration costs.

KEYS 10-Q Quarterly Report Q2 FY2018 — Revenue, Net Income, EPS

Q: What was the primary driver of Keysight's revenue growth in this quarter?

The primary driver of Keysight's revenue growth was a broad-based increase across its operating segments, particularly the Communications Solutions Group and Electronic Industrial Solutions Group. The integration of the Ixia acquisition also continued to contribute significantly to revenue.

Summary

Keysight Technologies, Inc. reported a strong second quarter for fiscal year 2018, with significant year-over-year revenue growth driven by broad-based strength across its segments, particularly the Communications Solutions Group and Electronic Industrial Solutions Group. The acquisition of Ixia continues to contribute substantially to revenue, although integration efforts presented some short-term headwinds. Net income saw a modest increase, benefiting from higher revenue volumes and positive impacts from U.S. tax reform. The company also highlighted a robust order growth and a new, significant stock repurchase program, indicating confidence in its future performance and commitment to shareholder returns.

Financial Highlights

54 data points

Beta

Revenue

$990.00M

0.5% Gross Margin

Net Income

$64.00M

0.1% Net Margin

EPS (Diluted)

$0.34

Total Assets

$5.92B

Cash & Equivalents

$784.00M

Free Cash Flow

$77.00M

Financial Statements

Beta

Revenue	$990.00M
Cost of Revenue	$451.00M
Gross Profit	$539.00M
R&D Expenses	$160.00M
SG&A Expenses	$305.00M
Operating Expenses	$904.00M
Operating Income	$86.00M
Interest Expense	$21.00M
Net Income	$64.00M
EPS (Basic)	$0.34
EPS (Diluted)	$0.34
Shares Outstanding (Basic)	188.00M
Shares Outstanding (Diluted)	190.00M

Key Highlights

1Total net revenue increased by 31% to $990 million for the three months ended April 30, 2018, compared to the prior year period.
2Income from operations grew significantly by 131% to $100 million for the three months ended April 30, 2018.
3Diluted EPS increased to $0.34 for the three months ended April 30, 2018, up from $0.27 in the prior year.
4The acquisition of Ixia contributed positively to revenue growth, with Ixia Solutions Group revenue representing 9% of total Keysight revenue for the quarter.
5The company announced a new stock repurchase program authorizing up to $350 million of common stock.
6Operating margin for the three months ended April 30, 2018 improved to 10.1% from 5.5% in the prior year period.
7Net cash provided by operating activities was $282 million for the six months ended April 30, 2018, a significant increase from $164 million in the prior year.

Keysight Technologies, Inc. Quarterly Report for Q2 Ended Apr 30, 2018

Summary

Financial Highlights

Key Highlights

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