10-QPeriod: Q2 FY2022

Keysight Technologies, Inc. Quarterly Report for Q2 Ended Apr 30, 2022

Filed June 1, 2022For Securities:KEYS

Summary

Keysight Technologies, Inc. reported a solid second quarter for fiscal year 2022, demonstrating continued revenue growth and improved profitability. Total revenue increased by 11% year-over-year to $1,351 million, driven by strong performance in both the Communications Solutions Group (CSG) and Electronic Industrial Solutions Group (EISG). Net income saw a significant jump of 38% to $258 million, reflecting effective cost management and higher sales volumes. Despite ongoing supply chain challenges and macroeconomic headwinds, Keysight's strategic investments in R&D and its diversified end-market exposure, particularly in areas like 5G, automotive, and defense, position it well for future growth. The company also continued its commitment to returning capital to shareholders through stock repurchases, indicating confidence in its financial health and future prospects. Investors should monitor the company's ability to navigate supply chain constraints and currency fluctuations, as well as the impact of ongoing litigation and tax examinations.

Financial Highlights

52 data points
Beta

Revenue

$1.35B

63.6% Gross Margin

Net Income

$258.00M

19.1% Net Margin

EPS (Diluted)

$1.41

Total Assets

$7.76B

Cash & Equivalents

$1.90B

Free Cash Flow

$245.00M

Financial Statements
Beta
Revenue$1.35B
Cost of Revenue$492.00M
Gross Profit$859.00M
R&D Expenses$210.00M
SG&A Expenses$319.00M
Operating Expenses$1.02B
Operating Income$327.00M
Interest Expense$19.00M
Net Income$258.00M
EPS (Basic)$1.42
EPS (Diluted)$1.41
Shares Outstanding (Basic)181.00M
Shares Outstanding (Diluted)183.00M

Key Highlights

  • 1Total revenue increased 11% year-over-year to $1,351 million.
  • 2Net income grew by 38% year-over-year to $258 million.
  • 3Operating margin improved to 24.2% from 19.3% in the prior year period.
  • 4Strong growth in both Communications Solutions Group (CSG) and Electronic Industrial Solutions Group (EISG).
  • 5Continued investment in R&D, representing 16% of revenue.
  • 6Significant treasury stock repurchases, with $705 million remaining on the authorized program.
  • 7Gross margin improved by 3 percentage points to 63.6%.

Frequently Asked Questions

Keysight Technologies demonstrated strong performance, with total revenue increasing by 11% year-over-year to $1,351 million for the three months ended April 30, 2022. Net income also saw a substantial increase of 38% year-over-year, reaching $258 million. This growth was accompanied by an improvement in operating margin to 24.2%.

Revenue growth was driven by strong performance across both of Keysight's segments: the Communications Solutions Group (CSG) and the Electronic Industrial Solutions Group (EISG). Both segments experienced increased demand, with CSG seeing strength in commercial communications and aerospace/defense, and EISG benefiting from investments in semiconductor and automotive technologies. Diversified end-market exposure and ongoing investments in next-generation technologies like 5G and automotive were key contributors.

Keysight's outlook remains positive, supported by investments in next-generation technologies like 5G/6G, automotive, and IoT. The company is actively managing macroeconomic challenges, including supply chain disruptions and geopolitical tensions, by leveraging its strong portfolio and global team. While these headwinds have impacted procurement and material costs, Keysight remains confident in its long-term growth trends and operating model.

Keysight continues to return capital to shareholders through its stock repurchase program. The company repurchased $1.878 million worth of shares in the three months ended April 30, 2022, under a program with approximately $705 million remaining authorization, demonstrating confidence in its financial position and commitment to shareholder value.