Highlights:

• GAAP revenue of $715 million grows 7 percent; GAAP EPS of $0.53 grows 29 percent
• Non-GAAP revenue of $718 million grows 8 percent; non-GAAP EPS of $0.63 grows 15 percent

SANTA ROSA, Calif. — (BUSINESS WIRE) — August 17, 2016 — Keysight Technologies, Inc. (NYSE: KEYS) today reported financial results for the third fiscal quarter ended July 31, 2016.

“We are pleased with our solid third quarter financial performance, which included delivering strong revenue growth and double-digit growth in net income,” said Ron Nersesian, Keysight president and CEO. “While we continue to see market headwinds, which were further compounded by economic concerns in Europe this quarter, customers are accelerating investment in next-generation technologies. With the targeted investments we are making to develop innovative solutions and transform Keysight for growth, we are starting to build momentum in the market and are well positioned as the market for these next-generation technologies continues to evolve.”

Third Quarter Financial Summary

• Total GAAP revenue grew 7 percent year-over-year to $715 million, compared with $665 million in the third quarter of 2015.
• Total non-GAAP revenue grew 8 percent year-over-year to $718 million, compared with $665 million in the third quarter of 2015. Non-GAAP core revenue, which excludes revenue from acquisitions and the impact of currency, grew 2 percent year-over-year.
• GAAP operating margin was 15 percent, compared with 15 percent in the third quarter of 2015.
• Non-GAAP operating margin was 20 percent, compared with 19 percent in the third quarter of 2015.
• GAAP net income was $91 million, or $0.53 per share, compared with net income of $70 million, or $0.41 per share, in the third quarter of 2015.
• Non-GAAP net income was $108 million, or $0.63 per share, compared with $94 million, or $0.55 per share, in the third quarter of 2015.
• As of July 31, 2016, cash and cash equivalents totaled $664 million.

Reconciliations between GAAP and non-GAAP information are contained in the attached tables and discussed in the section titled "Non-GAAP Measures".

As previously announced, Keysight has changed its reporting segments in order to align the company’s reporting segments with its new management reporting structure, which is based on the company’s end markets and provides increased visibility into end market performance. Additional information regarding Keysight’s new reporting segments and prior period results are available on the company’s website at investor.keysight.com.

• Communications Solutions Group (CSG)
  • CSG revenue grew 9 percent year-over-year to $424 million, compared with $389 million in the third quarter of 2015. CSG revenue was driven by the addition of revenue from the acquisition of Anite, growth in aerospace defense and government and increased sales of 5G next-generation solutions. This growth was tempered by on-going headwinds in the wireless supply chain and softness in Europe.
  • CSG operating margin was 18 percent, compared with 18 percent in the third quarter of 2015.
• Electronic Industrial Solutions Group (EISG)
  • EISG revenue grew 9 percent year-over-year to $191 million, compared with $175 million in the third quarter of 2015. EISG revenue was driven by strong sales for our parametric semiconductor measurement solutions, partially offset by softness in Europe.
  • EISG operating margin was 23 percent, compared with 19 percent in the third quarter of 2015.
• Services Solutions Group (SSG)
  • SSG revenue grew 2 percent year-over-year to $103 million, compared with $101 million in the third quarter of 2015. SSG revenue was driven by growth in multi-vendor calibration services and an increase in used equipment sales.
  • SSG operating margin was 19 percent, compared with 19 percent in the third quarter of 2015.