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“Keysight delivered strong second quarter results with revenue and earnings per share above the high end of guidance. This quarter’s performance underscores the strength of our long-term strategy, deep customer engagement and disciplined execution,” said Satish Dhanasekaran, Keysight’s President and CEO. “Even as we are monitoring the overall macroeconomic environment, we continue to see a healthy funnel of opportunities and are raising full-year growth expectations to the midpoint of our long-term 5-7% target.”

Keysight’s third fiscal quarter of 2025 revenue is expected to be in the range of $1.305 billion to $1.325 billion. Non-GAAP earnings per share for the third fiscal quarter of 2025 are expected to be in the range of $1.63 to $1.69, based on a weighted diluted share count of approximately 173 million shares. 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.

Keysight’s management will present more details about its second quarter FY2025 financial results and its third quarter FY2025 outlook on a conference call with investors today at 1:30 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 “Q2 FY25 Keysight Technologies Inc. Earnings Conference Call” to participate. The call can also be accessed by dialing 1-404-975-4839 or 1-833-470-1428 toll-free (access code 420906). The webcast will remain on the company site for 90 days.

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 "assume," “expect,” “intend,” “will,” “should,” "outlook" 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 Keysight’s 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 company’s goals, revenues, financial condition, earnings, and operations that involve risks and uncertainties that could cause Keysight’s results to differ materially from management’s current expectations. Such risks and uncertainties include, but are not limited to, impacts of global economic conditions such as inflation or recession, slowing demand for products or services, volatility in financial markets, reduced access to credit, increased interest rates; impacts of geopolitical tension and conflict outside of the U.S., export control regulations and compliance; net zero emissions commitments; customer purchasing decisions and timing; and order cancellations.

Net 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 and six months ended April 30, 2025. Following the reconciliations is a discussion of the items adjusted from our non-GAAP financial measures and the company’s reasons for including or excluding certain categories of income or expenses from our non-GAAP results.

At Keysight (NYSE: KEYS), we inspire and empower innovators to bring world-changing technologies to life. As an S&P 500 company, we’re delivering market-leading design, emulation, and test solutions to help engineers develop and deploy faster, with less risk, throughout the entire product lifecycle. We’re a global innovation partner enabling customers in communications, industrial automation, aerospace and defense, automotive, semiconductor, and general electronics markets to accelerate innovation to connect and secure the world. Learn more at Keysight Newsroom and www.keysight.com.


KEYSIGHT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share data)
(Unaudited)
PRELIMINARY


	Three months ended				Six months ended
	April 30,				April 30,
	2025		2024		2025		2024

Orders	$	1,316	$	1,219	$	2,579	$	2,439

Revenue	$	1,306	$	1,216	$	2,604	$	2,475

Costs and expenses:
Cost of products and services	492		453		970		899
Research and development	250		228		499		460
Selling, general and administrative	360		361		721		723
Other operating expense (income), net	(3)		(3)		(11)		(5)
Total costs and expenses	1,099		1,039		2,179		2,077

Income from operations	207		177		425		398

Interest income	21		18		40		41
Interest expense	(20)		(20)		(40)		(40)
Other income (expense), net	112		—		94		5

Income before taxes	320		175		519		404

Provision for income taxes	63		49		93		106

Net income	$	257	$	126	$	426	$	298


Net income per share:
Basic	$	1.49	$	0.73	$	2.47	$	1.71
Diluted	$	1.49	$	0.72	$	2.45	$	1.70

Weighted average shares used in computing net income per share:
Basic	172		174		173		175
Diluted	173		175		174		175


KEYSIGHT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions, except par value and share data)
(Unaudited)
PRELIMINARY


	April 30, 2025		October 31, 2024

ASSETS
Current assets:
Cash and cash equivalents	$	3,118	$	1,796
Accounts receivable, net	758		857
Inventory	1,026		1,022
Other current assets	578		582
Total current assets	5,480		4,257

Property, plant and equipment, net	769		774
Operating lease right-of-use assets	226		234
Goodwill	2,433		2,388
Other intangible assets, net	556		607
Long-term investments	138		110
Long-term deferred tax assets	379		378
Other assets	568		521
Total assets	$	10,549	$	9,269

LIABILITIES AND EQUITY
Current liabilities:

Accounts payable	317		313
Employee compensation and benefits	319		295
Deferred revenue	626		561
Income and other taxes payable	175		90
Operating lease liabilities	46		43
Other accrued liabilities	145		125
Total current liabilities	1,628		1,427

Long-term debt	2,532		1,790
Retirement and post-retirement benefits	82		81
Long-term deferred revenue	218		206
Long-term operating lease liabilities	187		197
Other long-term liabilities	425		463
Total liabilities	5,072		4,164

Stockholders' Equity:
Preferred stock; $0.01 par value; 100 million shares authorized; none issued and outstanding	—		—
Common stock; $0.01 par value; 1 billion shares authorized; 202 million and 201 million shares issued, respectively	2		2
Treasury stock, at cost; 29.9 million shares and 28.4 million shares, respectively	(3,648)		(3,422)
Additional paid-in-capital	2,765		2,664
Retained earnings	6,651		6,225
Accumulated other comprehensive loss	(293)		(364)
Total stockholders' equity	5,477		5,105
Total liabilities and equity	$	10,549	$	9,269


KEYSIGHT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
(Unaudited)
PRELIMINARY

	Six months ended
	April 30,
	2025		2024

Cash flows from operating activities:
Net income	$	426	$	298
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	64		62
Amortization	70		76
Share-based compensation	98		82
Deferred tax expense (benefit)	(40)		(9)
Excess and obsolete inventory-related charges	22		18
Unrealized loss (gain) on equity and other investments	(23)		(6)
Other non-cash expenses (income), net	2		1
Changes in assets and liabilities, net of effects of businesses acquired:
Accounts receivable	109		121
Inventory	(18)		(50)
Accounts payable	7		(11)
Employee compensation and benefits	20		(26)
Deferred revenue	66		14
Income taxes payable	56		(35)




Other assets and liabilities	3		(97)
Net cash provided by operating activities(a)	862		438

Cash flows from investing activities:
Investments in property, plant and equipment	(59)		(83)
Acquisitions of businesses and intangible assets, net of cash acquired	(3)		(556)


Other investing activities	(4)		8
Net cash used in investing activities	(66)		(631)

Cash flows from financing activities:
Proceeds from issuance of common stock under employee stock plans	31		33
Payment of taxes related to net share settlement of equity awards	(29)		(28)
Proceeds from issuance of long-term debt	748		—
Acquisition of non-controlling interests	—		(458)
Treasury stock repurchases, including excise tax payments	(228)		(139)
Debt issuance costs	(7)		(5)

Repayment of debt	—		(24)
Net cash provided by (used in) financing activities	515		(621)

Effect of exchange rate movements	10		—

Net increase (decrease) in cash, cash equivalents, and restricted cash	1,321		(814)
Cash, cash equivalents, and restricted cash at beginning of period	1,814		2,488
Cash, cash equivalents, and restricted cash at end of period	$	3,135	$	1,674


KEYSIGHT TECHNOLOGIES, INC.
NET INCOME AND DILUTED EPS RECONCILIATION
(In millions, except per share data)
(Unaudited)
PRELIMINARY

	Three months ended								Six months ended
	April 30,								April 30,
	2025				2024				2025				2024
	Net Income		Diluted EPS		Net Income		Diluted EPS		Net Income		Diluted EPS		Net Income		Diluted EPS

GAAP Net income	$	257	$	1.49	$	126	$	0.72	$	426	$	2.45	$	298	$	1.70
Non-GAAP adjustments:
Amortization of acquisition-related balances	34		0.19		37		0.21		67		0.38		75		0.43
Share-based compensation	37		0.22		36		0.21		99		0.57		86		0.49
Acquisition and integration costs (benefits)	(74)		(0.42)		27		0.15		24		0.14		40		0.23
Restructuring and others	26		0.15		23		0.14		2		0.01		38		0.22
Adjustment for taxes(a)	15		0.07		(2)		(0.02)		(6)		(0.03)		(4)		(0.03)
Non-GAAP Net income	$	295	$	1.70	$	247	$	1.41	$	612	$	3.52	$	533	$	3.04

Weighted average shares outstanding - diluted	173				175				174				175


KEYSIGHT TECHNOLOGIES, INC.
SEGMENT RESULTS INFORMATION
(In millions, except where noted)
(Unaudited)
PRELIMINARY



Communications Solutions Group							Percent
	Q2'25			Q2'24			Inc/(Dec)
Revenue	$	913		$	840		9%
Gross margin, %	67		%	68		%
Income from operations	$	236		$	223
Operating margin, %	26		%	27		%


Electronic Industrial Solutions Group							Percent
	Q2'25			Q2'24			Inc/(Dec)
Revenue	$	393		$	376		5%
Gross margin, %	59		%	58		%
Income from operations	$	92		$	71
Operating margin, %	23		%	19		%

Management uses both GAAP and non-GAAP financial measures to analyze and assess the overall performance of the business, to make operating decisions and to forecast and plan for future periods. We believe that our investors benefit from seeing our results “through the eyes of management” in addition to seeing our GAAP results. This information enhances investors’ understanding of the continuing performance of our business and facilitates comparison of performance to our historical and future periods.

These non-GAAP measures should be considered supplemental to and not a substitute for financial information prepared in accordance with GAAP. The discussion below presents information about each of the non-GAAP financial measures and the company’s reasons for including or excluding certain categories of income or expenses from our non-GAAP results. In future periods, we may exclude such items and may incur income and expenses similar to these excluded items. Accordingly, adjustments for these items and other similar items in our non-GAAP presentation should not be interpreted as implying that these items are non-recurring, infrequent or unusual.

Core Revenue is revenue excluding the impact of foreign currency changes and revenue associated with acquisitions or divestitures completed within the last twelve months. We exclude the impact of foreign currency changes as currency rates can fluctuate based on factors that are not within our control and can obscure revenue growth trends. As the nature, size and number of acquisitions can vary significantly from period to period and as compared to our peers, we exclude revenue associated with recently acquired businesses to facilitate comparisons of revenue growth and analysis of underlying business trends.

•Acquisition-related Items: We exclude the impact of certain items recorded in connection with business combinations from our non-GAAP financial measures that are either non-cash or not normal, recurring operating expenses due to their nature, variability of amounts and lack of predictability as to occurrence or timing. These amounts may include non-cash items such as the amortization of acquired intangible assets and amortization of items associated with fair value purchase accounting adjustments. We also exclude other acquisition and integration costs associated with business acquisitions that are not normal recurring operating expenses, including gain/loss on foreign exchange contracts and legal, accounting and due diligence costs. We exclude these charges to facilitate a more meaningful evaluation of our current operating performance and comparisons to our past operating performance.

•Share-based Compensation Expense: We exclude share-based compensation expense from our non-GAAP financial measures because share-based compensation expense can vary significantly from period to period based on the company’s share price, as well as the timing, size and nature of equity awards granted. Management believes the exclusion of this expense facilitates the ability of investors to compare the company’s operating results with those of other companies, many of which also exclude share-based compensation expense in determining their non-GAAP financial measures.

•Restructuring and others: We exclude incremental expenses associated with restructuring initiatives including those of acquired entities, usually aimed at material changes in the business or cost structure. Such costs may include employee separation costs, asset impairments, facility-related costs, contract termination fees, and costs to move operations from one location to another. These activities can vary significantly from period to period based on the timing, size and nature of restructuring plans; therefore, we do not consider such costs to be normal, recurring operating expenses.

We also exclude “others”, not normal, recurring, cash operating income/expenses from our non-GAAP financial measures. Such items are evaluated on an individual basis, based on both quantitative and qualitative factors and generally represent items that we do not anticipate occurring as part of our normal business. While not all-inclusive, examples of such items would include net unrealized gains on equity investments still held, significant non-recurring events like realized gains or losses associated with our employee benefit plans, costs and recoveries related to unusual events, gain on sale of assets/divestitures, adjustment attributable to non-controlling interest etc. We believe that these costs do not reflect expected future operating expenses and do not contribute to a meaningful evaluation of the company’s current operating performance or comparisons to our operating performance in other periods.

•Estimated Tax Rate: We utilize a consistent methodology for long-term projected non-GAAP tax rate. When projecting this long-term rate, we exclude any tax benefits or expenses that are not directly related to ongoing operations and which are either isolated or cannot be expected to occur again with any regularity or predictability. Additionally, we evaluate our current long-term projections, current tax structure and other factors, such as existing tax positions in various jurisdictions and key tax holidays in major jurisdictions where Keysight operates. This tax rate could change in the future for a variety of reasons, including but not limited to significant changes in geographic earnings mix including acquisition activity, or fundamental tax law changes in major jurisdictions where Keysight operates. The above reasons also limit our ability to reasonably estimate the future GAAP tax rate and provide a reconciliation of the expected non-GAAP earnings per share for the third quarter of fiscal 2025 to the GAAP equivalent.

Management recognizes these items can have a material impact on our cash flows and/or our net income. Our GAAP financial statements, including our Condensed Consolidated Statement of Cash Flows, portray those effects. Although we believe it is useful for investors to see core performance free of special items, investors should understand that the excluded costs are actual expenses that may impact the cash available to us for other uses. To gain a complete picture of all effects on the company’s profit and loss from any and all events, management does (and investors should) rely upon the Condensed Consolidated Statement of Operations prepared in accordance with GAAP. The non-GAAP measures focus instead upon the core business of the company, which is only a subset, albeit a critical one, of the company’s performance.


Interest payments	$	39	$	38
Income tax paid, net	$	44	$	146


KEYSIGHT TECHNOLOGIES, INC.
FREE CASH FLOW
(In millions)
(Unaudited)
PRELIMINARY

	Three months ended				Six months ended
	April 30,				April 30,
	2025		2024		2025		2024

Net cash provided by operating activities	$	484	$	110	$	862	$	438
Less: Investments in property, plant and equipment	(27)		(36)		(59)		(83)
Free cash flow	$	457	$	74	$	803	$	355


KEYSIGHT TECHNOLOGIES, INC.
REVENUE BY END MARKETS
(In millions)
(Unaudited)
PRELIMINARY



					Percent
	Q2'25		Q2'24		Inc/(Dec)

Aerospace, Defense and Government	$	301	$	277	9%
Commercial Communications	612		563		9%
Electronic Industrial	393		376		5%
Total Revenue	$	1,306	$	1,216	7%