Keysight Technologies delivers robust Q4 results amidst challenging market conditions

Keysight Technologies Inc., a leader in electronic design and testing solutions, reported its financial results for the fourth quarter and fiscal year ending October 31, 2024. The company demonstrated resilience and exceeded the high end of its guidance, despite persistent headwinds in the market.

Keysight President and CEO, Satish Dhanasekaran, attributed the strong performance to strategic execution and the company’s differentiated portfolio. He expressed optimism about the future, highlighting the firm’s deep customer relationships and the rapid pace of technological advancement as key drivers for continued success.

Fourth-quarter financial performance

Keysight posted fourth-quarter revenue of $1.29 billion, slightly down from $1.31 billion in the same quarter last year. Despite this modest decline, the company maintained steady performance through disciplined execution.

However, the quarter was impacted by a GAAP net loss of $73 million, translating to a loss per share of $0.42. This downturn stemmed from a $315 million tax expense related to a new Singapore tax incentive, which significantly reduced deferred tax assets. On a non-GAAP basis, the company reported net income of $288 million, or $1.65 per share, compared to $352 million, or $1.99 per share, in the prior year.

Cash flow from operations totaled $359 million, with free cash flow amounting to $328 million, reflecting a slight decrease from last year’s $340 million.

Fiscal year 2024 highlights

For the full fiscal year, Keysight generated revenue of $4.98 billion, compared to $5.46 billion in fiscal 2023. GAAP net income for the year reached $0.61 billion, or $3.51 per share, down from $1.06 billion, or $5.91 per share, the previous year. Non-GAAP net income was reported at $1.10 billion, or $6.27 per share, reflecting a decrease from $1.49 billion, or $8.33 per share, in 2023.

Free cash flow for the year stood at $0.91 billion, compared to $1.21 billion last year, while cash and cash equivalents as of October 31, 2024, totaled $1.80 billion.

Reporting segment breakdown

Communications Solutions Group (CSG)

The CSG segment reported flat revenue of $894 million, with a 4% growth in commercial communications offsetting a 6% decline in the aerospace, defense, and government sector. The commercial communications growth was fueled by investments in AI-related technologies, which have become a pivotal area for the company.

Electronic Industrial Solutions Group (EISG)

EISG revenue for the quarter declined 6% year-over-year to $393 million. The drop was largely attributed to persistent constraints in manufacturing-related customer spending, a challenge the company has faced throughout the fiscal year.

Outlook for fiscal 2025

Keysight anticipates revenue for the first fiscal quarter of 2025 to range between $1.265 billion and $1.285 billion. Non-GAAP earnings per share are expected to fall within the range of $1.65 to $1.71, reflecting confidence in the company’s ability to adapt to evolving market dynamics.

Dhanasekaran underscored Keysight’s strategic positioning, citing its advanced portfolio and alignment with emerging technologies such as AI, as key to outperforming competitors and capturing growth as markets recover.