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Keysight Technologies, Inc. 8-K Report, Financial Results (Feb 25, 2025)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed February 25, 2025
Period End
February 25, 2025
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 February 25, 2025. Cited figures are marked; the original filing is the authoritative source.

Keysight Technologies (NYSE: KEYS) reported first fiscal quarter 2025 results (quarter ended January 31, 2025) that beat the high end of its guidance, with revenue of $1.30 billiona, up from $1.26 billion a year earlier, a return to year-over-year growth.

Orders rose to $1.263 billionb from $1.220 billion. GAAP net income was $169 million ($0.97 per diluted share), roughly flat versus $172 million ($0.98) in the prior year, while non-GAAP net income rose 11% to $317 million ($1.82 per share) from $286 million ($1.63). The gap between GAAP and non-GAAP results was driven largely by $98 million of acquisition and integration costs and $62 million of share-based compensation, partly offset by a $24 million restructuring-related benefit.

Investors should note that the non-GAAP figures exclude real expenses and that the lower non-GAAP tax rate of 14% (versus 17% a year earlier) contributed meaningfully to non-GAAP EPS growth. Segment performance was mixed. Communications Solutions Group (CSG) revenue grew 5% to $883 millionc with operating margin steady at 27%, supported by 5% growth in both commercial communications and aerospace, defense and government.

Electronic Industrial Solutions Group (EISG) revenue fell 1% to $415 milliond, and its operating margin compressed sharply from 31% to 27% as gross margin declined from 65% to 61%. Cash generation was strong: operating cash flow rose to $378 million from $328 million and free cash flow increased to $346 million from $281 million. Cash and equivalents climbed to $2.06 billion, while long-term debt was unchanged at $1.79 billion.

Management guided fiscal Q2 2025 revenue to $1.27 billion to $1.29 billion and non-GAAP EPS to $1.61 to $1.67, describing a gradual recovery in 2025 demand. The company also disclosed that the results are preliminary and unaudited.

The filing is an informational Item 2.02 disclosure, and the press release is furnished rather than filed, so it does not carry the same liability exposure as a filed document. Forward-looking statements flag risks including macroeconomic conditions, export controls, geopolitical tensions, and customer order timing.

02—Key points

Key Highlights

  1. Revenue of $1.30 billion rose 3% year over year from $1.26 billion, and management said results came in above the high end of guidance.
  2. Orders increased to $1.263 billion from $1.220 billion, a useful leading indicator of demand.
  3. GAAP diluted EPS was $0.97, down slightly from $0.98, while non-GAAP diluted EPS rose 12% to $1.82 from $1.63.
  4. Free cash flow increased 23% to $346 million from $281 million, and cash and equivalents rose to $2.06 billion.
  5. CSG revenue grew 5% to $883 million with a stable 27% operating margin, while EISG revenue fell 1% to $415 million and its operating margin dropped from 31% to 27%.
  6. Acquisition and integration costs of $98 million were the largest non-GAAP adjustment, a item to monitor for future integration progress.
  7. Q2 FY2025 guidance calls for revenue of $1.27 billion to $1.29 billion and non-GAAP EPS of $1.61 to $1.67, with a 14% non-GAAP tax rate assumed.

03—Questions

Frequently Asked Questions

  1. Did Keysight's underlying business actually grow this quarter?

    Yes, modestly. Reported revenue rose 3% to $1.30 billion, and orders grew about 3.5% to $1.263 billion. CSG drove the growth with 5% increases in both commercial communications and aerospace, defense and government, while EISG declined 1%.

  2. Why did non-GAAP EPS grow much faster than GAAP EPS?

    GAAP net income was flat, and the non-GAAP adjustments were large, including $98 million of acquisition and integration costs and $62 million of share-based compensation. The non-GAAP tax rate also fell to 14% from 17%, which boosted non-GAAP earnings. Investors should weigh GAAP results alongside the adjusted figures, since the excluded items are real costs.

  3. What is driving the margin decline in EISG?

    EISG gross margin fell from 65% to 61% and operating margin fell from 31% to 27%, while revenue declined 1%. The filing does not explain the cause in detail, so investors should look to the earnings call for management's commentary on pricing, mix, or cost factors.

  4. Is Keysight generating enough cash to support its operations and shareholder returns?

    Yes. Operating cash flow was $378 million and free cash flow was $346 million, both higher than a year ago. The company repurchased $75 million of treasury stock and ended the quarter with $2.06 billion in cash, against $1.79 billion of long-term debt that was unchanged from the prior year-end.

  5. What should investors expect for the next quarter?

    Management guided fiscal Q2 2025 revenue to $1.27 billion to $1.29 billion and non-GAAP EPS to $1.61 to $1.67, based on about 174 million diluted shares and a 14% non-GAAP tax rate. The company described demand as consistent with a gradual recovery in 2025, though the guidance implies a sequential revenue decline from Q1 at the midpoint.

04—Continue

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