Keysight Technologies Reports Fourth Quarter and Fiscal Year 2022 Results

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Keysight Technologies, Inc. (NYSE: KEYS) today reported financial results for the fourth fiscal quarter and fiscal year ended October 31, 2022. “Keysight’s exceptional fourth quarter performance capped off an outstanding record year. Strong execution by our teams again delivered results ahead of expectations, while navigating supply, geopolitical, and macro dynamics,” said Satish Dhanasekaran, Keysight’s President […]

Keysight Technologies, Inc. (NYSE: KEYS) today reported financial results for the fourth fiscal quarter and fiscal year ended October 31, 2022.

Keysight’s exceptional fourth quarter performance capped off an outstanding record year. Strong execution by our teams again delivered results ahead of expectations, while navigating supply, geopolitical, and macro dynamics,” said Satish Dhanasekaran, Keysight’s President and CEO. “We achieved record orders in the quarter and fiscal year, which underscored broad-based demand for Keysight’s high-value, differentiated solutions. Despite an uncertain macro environment, we remain confident in the resilience of our business, and the long-term secular growth trends across our markets.”

Fourth Quarter Financial Summary

  • Revenue grew 11 percent to reach $1.44 billion, compared with $1.29 billion last year, or 15 percent on a core basis, which excludes the impact of foreign currency changes and revenue associated with businesses acquired or divested within the last twelve months.
  • GAAP net income was $299 million, or $1.66 per share, compared with $282 million, or $1.52 per share, in the fourth quarter of 2021.
  • Non-GAAP net income was $386 million, or $2.14 per share, compared with $338 million, or $1.82 per share in the fourth quarter of 2021.
  • Cash flow from operations was $398 million, compared with $368 million last year. Free cash flow was $340 million, compared with $295 million in the fourth quarter of 2021.
  • As of October 31, 2022, cash and cash equivalents totaled $2.04 billion.

Fiscal Year 2022 Financial Summary

  • Revenue grew 10 percent and totaled $5.42 billion, compared with $4.94 billion last year, or 12 percent on a core basis.
  • GAAP net income was $1.12 billion, or $6.18 per share, compared with $894 million, or $4.78 per share in fiscal 2021.
  • Non-GAAP net income was $1.39 billion, or $7.63 per share, compared with $1.16 billion, or $6.23 per share in fiscal year 2021.
  • Cash flow from operations was $1.14 billion, compared with $1.32 billion last year. Free cash flow was $959 million, compared with $1.15 billion in fiscal year 2021.

Reporting Segments

  • Communications Solutions Group (CSG)

CSG reported revenue of $992 million in the fourth quarter, up 8 percent over last year, driven by 5G platform strength, continued O-RAN adoption, and investment in 800G and 1.6 Terabit R&D, as well as spectrum operations, cybersecurity, space, and satellite solutions. CSG reported growth across all regions.

  • Electronic Industrial Solutions Group (EISG)

EISG reported revenue of $451 million in the fourth quarter, up 20 percent over last year, driven by next-generation automotive and energy technologies, general electronics, and semiconductor solutions. EISG reported growth across all regions.

Outlook

Keysight’s first fiscal quarter of 2023 revenue is expected to be in the range of $1.36 billion to $1.38 billion. Non-GAAP earnings per share for the first fiscal quarter of 2023 are expected to be in the range of $1.81 to $1.87. Certain items impacting the GAAP tax rate pertain to future events and are not currently estimable with a reasonable degree of accuracy; therefore, no reconciliation of GAAP earnings per share to non-GAAP has been provided. Further information is discussed in the section titled “Use of Non-GAAP Financial Measures” below.

Webcast

Keysight’s management will present more details about its fourth quarter and fiscal year 2022 financial results and its first quarter FY2023 outlook on a conference call with investors today at 2:00 p.m. PT. This event will be webcast in listen-only mode. Listeners may log on to the call at www.investor.keysight.com under the “Upcoming Events” section and select “Q4 2022 Keysight Technologies Inc. Earnings Conference Call” to participate or dial +1 844-200 6205 (U.S. only) or +1 929-526-1599 (International) and enter passcode 058276. The webcast will remain on the company site for 90 days.

Forward-Looking Statements

This communication contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. The words expect, intend, will, should, and similar expressions, as they relate to the company, are intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties that could significantly affect the expected results and are based on certain key assumptions of Keysights management and on currently available information. Due to such uncertainties and risks, no assurances can be given that such expectations or assumptions will prove to have been correct, and readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Keysight undertakes no responsibility to publicly update or revise any forward-looking statement. The forward-looking statements contained herein include, but are not limited to, predictions, future guidance, projections, beliefs, and expectations about the companys goals, revenues, financial condition, earnings, and operations that involve risks and uncertainties that could cause Keysights results to differ materially from managements current expectations. Such risks and uncertainties include, but are not limited to, impacts of supply chain constraints; impacts of geopolitical tension and conflict; export control regulations and compliance; net zero emissions commitments; our ability to retain key personnel; changes in the demand for current and new products, technologies, and services; customer purchasing decisions and timing; and order cancellations.

In addition to the risks above, other risks that Keysight faces include those detailed in Keysights filings with the Securities and Exchange Commission on Keysights yearly report on Form 10-K for the period ended October 31, 2021, and Keysights quarterly report on Form 10-Q for the period ended July 31, 2022.

Segment Data

Segment data reflects the results of our reportable segments under our management reporting system. Segment data are provided on page 6 of the attached tables.

Use of Non-GAAP Financial Measures

In addition to financial information prepared in accordance with U.S. GAAP (GAAP), this document also contains certain non-GAAP financial measures based on managements view of performance, including:

  • Core Revenue
  • Non-GAAP Net Income/Earnings
  • Non-GAAP Net Income per share/Earnings per share
  • Free Cash Flow

Income per share is based on weighted average diluted share count. See the attached supplemental schedules for reconciliations of each non-GAAP financial measure to its most directly comparable GAAP financial measure for the three months ended October 31, 2022 and fiscal year 2022. Following the reconciliations is a discussion of the items adjusted from our non-GAAP financial measures and the companys reasons for including or excluding certain categories of income or expenses from our non-GAAP results.

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