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Keysight Technologies, Inc. 8-K Report, Financial Results (Nov 19, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed November 19, 2024
Period End
November 19, 2024
Security
KEYS
In the record · 2016–202610-K1110-Q338-K96

KEYS filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 96 current reports (8-K) between 2016 and 2026.

  1. Deal closed8-K · Apr ’17Apr ’17
  2. Leadership change8-K · May ’22May ’22
  3. Leadership change8-K · Aug ’26Aug ’26

01—Abstract

Summary

Summary of the 8-K filed November 19, 2024. Cited figures are marked; the original filing is the authoritative source.

Keysight reported fourth-quarter fiscal 2024 revenue of $1.29 billiona, down 2% from $1.31 billion a year earlier, and non-GAAP EPS of $1.65 versus $1.99.

Management said results were above the high end of guidance for both revenue and EPS. GAAP results were much weaker: Q4 GAAP net loss was $73 millionb ($0.42 per share), driven by a $315 million tax expense tied to a new Singapore tax incentive and a corresponding decrease in deferred tax assets. For fiscal 2024, revenue fell 9% to $4.98 billion, GAAP diluted EPS was $3.51 (versus $5.91), and non-GAAP EPS was $6.27 (versus $8.33).

Operating cash flow was $1.05 billionc and free cash flow was $905 million, both down from fiscal 2023. Segment performance was mixed. The Communications Solutions Group (CSG) was flat at $894 million, with commercial communications up 4% on AI-related investment offset by a 6% decline in aerospace, defense, and government against a record prior-year quarter.

The Electronic Industrial Solutions Group (EISG) fell 6% to $393 milliond as manufacturing-related customer spending remained constrained, and its operating margin compressed to 21% from 30%. Balance sheet activity was significant: goodwill rose to $2.39 billion from $1.64 billion and long-term debt rose to $1.79 billion from $1.20 billion, reflecting acquisitions ($681 million cash outlay), a $458 million purchase of non-controlling interests, and $443 million in share repurchases. Cash fell to $1.80 billion from $2.47 billion.

For fiscal Q1 2025, Keysight guided revenue to $1.265 billion to $1.285 billion and non-GAAP EPS to $1.65 to $1.71. Investors will likely focus on whether the commercial communications and AI-related demand can offset weakness in industrial and aerospace/defense markets, the durability of the lower GAAP tax rate after the Singapore incentive, and the returns on recent acquisitions.

02—Key points

Key Highlights

  1. Q4 FY2024 revenue of $1.29B was down 2% year over year, but above the high end of guidance; non-GAAP EPS of $1.65 was down from $1.99.
  2. Q4 GAAP net loss of $73M ($0.42/share) reflects a $315M tax expense from a new Singapore tax incentive and a related decrease in deferred tax assets.
  3. FY2024 revenue declined 9% to $4.98B; GAAP diluted EPS fell to $3.51 from $5.91 and non-GAAP EPS to $6.27 from $8.33.
  4. Free cash flow for FY2024 was $905M, down from $1.21B, and cash and equivalents ended the year at $1.80B versus $2.47B.
  5. CSG revenue was flat at $894M (commercial communications +4% on AI investment; aerospace, defense and government -6%); EISG revenue fell 6% to $393M with operating margin down to 21% from 30%.
  6. Balance sheet expanded with goodwill rising to $2.39B and long-term debt to $1.79B, reflecting acquisitions, a $458M purchase of non-controlling interests, and $443M in share buybacks.
  7. Q1 FY2025 guidance calls for revenue of $1.265B to $1.285B and non-GAAP EPS of $1.65 to $1.71; GAAP EPS guidance was not provided due to uncertain tax items.

03—Questions

Frequently Asked Questions

  1. Why did Keysight report a GAAP net loss in Q4 2024 when it beat guidance?

    The GAAP net loss of $73 million reflects a $315 million tax expense related to a new Singapore tax incentive and a corresponding decrease in deferred tax assets. This is a non-operating, largely non-cash accounting charge. Operating performance, as shown by revenue and non-GAAP EPS, came in above the high end of guidance.

  2. How did Keysight's business segments perform in the fourth quarter?

    CSG revenue was flat at $894 million, with commercial communications up 4% on AI-related investment offset by a 6% decline in aerospace, defense, and government against a record prior-year quarter. EISG revenue fell 6% to $393 million, with manufacturing-related customer spending still constrained, and its operating margin dropped to 21% from 30%.

  3. What is the outlook for the first quarter of fiscal 2025?

    Keysight expects Q1 FY2025 revenue of $1.265 billion to $1.285 billion and non-GAAP EPS of $1.65 to $1.71. The company did not provide a GAAP EPS reconciliation because future tax-rate items cannot be estimated with reasonable accuracy.

  4. How much did fiscal 2024 earnings and cash flow decline?

    Fiscal 2024 revenue fell 9% to $4.98 billion. GAAP net income was $614 million ($3.51 diluted EPS) versus $1.06 billion ($5.91) in fiscal 2023. Non-GAAP EPS was $6.27 versus $8.33. Operating cash flow dropped to $1.05 billion from $1.41 billion, and free cash flow fell to $905 million from $1.21 billion.

  5. What major balance sheet and capital allocation changes occurred in fiscal 2024?

    Goodwill increased to $2.39 billion from $1.64 billion and long-term debt increased to $1.79 billion from $1.20 billion, reflecting acquisitions that used $681 million in cash. Keysight also spent $458 million to acquire non-controlling interests and $443 million on share repurchases. Cash and equivalents declined to $1.80 billion from $2.47 billion.

04—Continue

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