Record First Quarter GAAP Revenue of $1B Grew 20 Percent

GAAP Earnings Per Diluted Share Grew 21 Percent

SANTA ROSA, Calif. — (BUSINESS WIRE) — February 21, 2019 — Keysight Technologies, Inc. (NYSE: KEYS) today reported financial results for the first fiscal quarter of 2019 ended Jan. 31, 2019.

“Keysight delivered an outstanding first quarter with both revenue and earnings exceeding the high-end of our guidance. Revenue grew 20 percent on a GAAP and non-GAAP core basis to surpass $1.0 billion, while GAAP and non-GAAP earnings grew 21 and 81 percent respectively. We continue to see broad-based momentum across multiple end markets with our differentiated solutions. Given our strategic positioning in key areas of the market, we believe we are well-positioned to continue to build on our success and expand our leadership,” said Ron Nersesian, Keysight president and CEO.

First Quarter Financial Summary

• GAAP revenue grew 20 percent to reach $1,006 million, when compared with $837 million last year. Non-GAAP revenue, which excludes the impact of fair value adjustments to acquisition-related deferred revenue balances, grew 18 percent to reach $1,009 million. Non-GAAP core revenue, which also excludes the impact of foreign currency changes and revenue associated with businesses acquired or divested within the last twelve months, increased 20 percent.
• GAAP net income was $114 million, or $0.60 per share, compared with GAAP net income of $94 million, or $0.50 per share, in the first quarter of 2018.
• Non-GAAP net income was $176 million, or $0.93 per share, compared with $97 million, or $0.51 per share in the first quarter of 2018.
• As of January 31, 2019, cash and cash equivalents totaled $1,098 million.

Reporting Segments

As previously announced, Keysight recently completed an organizational change to align its services business with its customers and end markets. With this change, services, which was previously reported as Services Solutions Group (SSG), is now reported in the segment in which the services are delivered. Keysight reports results for three operating segments: Communications Solutions Group (CSG), Electronic Industrial Solutions Group (EISG) and Ixia Solutions Group (ISG). 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 reported revenue of $623 million in the first quarter, up 25 percent, driven by demand for 5G R&D across the wireless ecosystem, data center related next-generation 400GbE digital test and aerospace, defense and government.
• Electronic Industrial Solutions Group (EISG)
  EISG revenue grew 13 percent in the first quarter to $257 million, driven by strength in automotive and emerging IoT applications, while the semiconductor market moderated as expected.
• Ixia Solutions Group (ISG)
  ISG revenue was $129 million in the first quarter, compared with $127 million in the prior year first quarter, driven by network visibility solutions, while test revenue remained inline with last year.

Outlook

Keysight’s second fiscal quarter of 2019 GAAP revenue is expected to be in the range of $1,057 million to $1,077 million and non-GAAP revenue for the second fiscal quarter of 2019 is expected to be in the range of $1,060 million to $1,080 million.

Non-GAAP earnings per share for the second fiscal quarter of 2019 are expected to be in the range of $0.93 to $0.99, which exclude items that pertain to future events and are not currently estimable with a reasonable degree of accuracy. Therefore, no reconciliation to GAAP amounts 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 first quarter FY2019 financial results and its second quarter FY2019 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 “ Q1 2019 Keysight Technologies Inc. Earnings Conference Call” to participate or dial +1 833-245-9654 (U.S. only) or +1 647-689-4226 (International) and enter passcode 8679259.

The webcast will remain on the company site for 90 days. A telephone replay of the conference call will be available at approximately 4:30 p.m. PT after the call and remain available for one week. The replay may be accessed by dialing +1 800-585-8367 (or +1 416-621-4642 from outside the U.S.) and entering passcode 8679259.