Keysight Technologies Inc. · NYSE:KEYS
Keysight Technologies — Q3 2020 Earnings Presentation
23 slides from Keysight Technologies's earnings presentation, Aug 20, 2020
Slide 1: Keysight Technologies Q3 Fiscal Year 2020 Results
Keysight Technologies Q3 Fiscal Year 2020 Results AUGUST 20, 2020 hahbbubhe KEYSIGHT TECHNOLOGIES
Slide 2: Forward-looking statements
This communication contains forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbors created therein. Statements preceded by, followed by, or that otherwise i
Slide 3: Q3 results highlights
• Stronger-than-expected orders and revenue drove strong margin and solid cash flow performance • 13% q/q revenue growth due to exceptional execution in capacity ramp and supply chain management • Record non-GAAP operating margin1 of 26% • Orders of $1.1B declined 4% y/y vs. last year’s record third
Slide 4: Orders, Revenue, Operating Margin
Orders Revenue Operating Margin $1,067M $1,011M 26.1% -4%y/y (-4% core*) -7%y/y (-7% core*) +90 basis points y/y * Core growth excludes the impact of currency, acquisitions or divestitures closed in last twelve months. 4 ** Reconciliations to closest GAAP equivalent provided. Non-GAAP revenue exclud
Slide 5: Q3'20 Revenue by Segment and Region
INOCVEIUC DY CCYINCHL G@ VY NCYION By Segment By Region KEYSIGHT TECHNOLOGIES
Slide 6: Regional Highlights
-18% (-18% core*): Solid order demand in -13% (-14% core*): Strong order demand in +5% (+5% core*): Stable order demand in ADG, with weakness in CC and EI as EI, with weakness in ADG and CC as CC and EI, with weakness in ADG as COVID disruption tempered revenue ramp revenue reflects COVID impact rev
Slide 7: Communications Solutions Group
Revenue • Record CSG operating margin of 25.9% $760M • Commercial Communications: Continued investments in next-generation -4% y/y (-4% core*) technologies, such as 5G and 400G-related data center investment. Operating Margin • Aerospace, defense and government: Strong U.S. orders offset by lower 25
Slide 8: Electronic Industrial Solutions Group
Revenue • EISG operating margin of 26.5% $251M -15% y/y (-16% core*) • Continued investment in advanced process node technologies drove double-digit Operating Margin order growth in semiconductor measurement solutions. 26.5% • Decreased demand for automotive and general electronics. -160 basis point
Slide 9: End Market Revenue YoY %
End Market Revenue YoY % Commercial +2% Communications $559M Aerospace, Defense & -17% Government $201M Electronic Industrial -15% Solutions $251M Total* $1,011M -7% * Reconciliations to closest GAAP equivalent provided. Non-GAAP revenue excludes the impact of amortization of acquisition-related bal
Slide 10: Q4'20 Guidance and FY20 Financial Considerations
Q4'20 Guidance Revenue $1,170 - $1,190M Revenue Growth +4% to +6% Non-GAAP Earnings per share $1.42 - $1.48 FY20 Financial Considerations • Net Interest and Other Income/Expense: $7-10M net expense / quarter • Non-GAAP tax rate of 12% • Weighted-average diluted share count of approximately 190M shar
Slide 11: Investor Day March 2020 Videos
Investor Day March 2020 Videos (single-click access to each executive’s presentation) Company Overview and Strategic Direction Ron Nersesian Chairman, President and CEO (36 minutes) Culture and Talent Transformation Ingrid Estrada SVP, CAO (13 minutes) Technology Leadership and Software Differentiat
Slide 12: Reconciliations
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Slide 13: Non-GAAP Operating Margin Reconciliation
KEYSIGHT TECHNOLOGIES, INC. NON-GAAP OPERATING MARGIN RECONCILIATION (In millions, except where noted) (Unaudited) PRELIMINARY Three months ended July 31, 2020 2019 Income from operations, as reported $ 182 $ 197 Amortization of acquisition-related balances 54 56 Share-based compensation 19 16 Acqui
Slide 14: Non-GAAP Net Income and Diluted EPS Reconciliation
KEYSIGHT TECHNOLOGIES, INC. NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATION (In millions, except per share amounts) (Unaudited) PRELIMINARY Three months ended July 31, 2020 2019 Net Diluted Net Diluted Income EPS Income EPS GAAP Net income $ 176 $ 0.93 $ 159 $ 0.83 Non-GAAP adjustments: Amortizat
Slide 15: Reconciliation of Non-GAAP Core Revenue
KEYSIGHT TECHNOLOGIES, INC. RECONCILIATION OF NON-GAAP CORE REVENUE (In millions) (Unaudited) PRELIMINARY Year-over-year compare Percent Q3'20 Q3'19 Inc/(Dec) GAAP Revenue $ 1,011 $ 1,087 (7)% Amortization of acquisition-related balances - 1 Non-GAAP Revenue $ 1,011 $ 1,088 (7)% Adjustments: Revenue
Slide 16: Non-GAAP Revenue by Segment and Region
KEYSIGHT TECHNOLOGIES, INC. RECONCILIATIONS OF NON-GAAP REVENUE BY SEGMENT AND REGION (In millions) (Unaudited) PRELIMINARY Year-over-Year Amortization of acquisition- GAAP Revenue related balances Non-GAAP Revenue Revenue by Segment Q3'20 Q3'19 YoY % Chg. Q3'20 Q3'19 Q3'20 Q3'19 YoY % Chg. Communic
Slide 17: Non-GAAP Core Revenue by Segment and Region
KEYSIGHT TECHNOLOGIES, INC. RECONCILIATIONS OF NON-GAAP CORE REVENUE BY SEGMENT AND REGION (In millions) (Unaudited) PRELIMINARY Year-over-Year Revenue from acquisitions or Currency Non-GAAP Revenue divestitures Adjustments Non-GAAP Core Revenue Revenue by Segment Q3'20 Q3'19 YoY % Chg. Q3'20 Q3'19
Slide 18: Segment Revenue Reconciliation
KEYSIGHT TECHNOLOGIES, INC. SEGMENT REVENUE RECONCILIATION (In millions) (Unaudited) PRELIMINARY Keysight Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 GAAP Revenue $ 1,087 $ 1,120 $ 1,095 $ 895 $ 1,011 Amortization of acquisition-related balances 1 2 - - - Non-GAAP/Segment Revenue $ 1,088 $ 1,122 $ 1,095 $ 895 $ 1
Slide 19: Non-GAAP Revenue by Region
KEYSIGHT TECHNOLOGIES, INC. RECONCILIATION OF NON-GAAP REVENUE BY REGION (In millions) (Unaudited) PRELIMINARY Keysight Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 GAAP Revenue $ 1,087 $ 1,120 $ 1,095 $ 895 $ 1,011 Amortization of acquisition-related balances 1 2 - - - Non-GAAP Revenue $ 1,088 $ 1,122 $ 1,095 $ 8
Slide 20: Non-GAAP Revenue by End Market
KEYSIGHT TECHNOLOGIES, INC. RECONCILIATION OF NON-GAAP REVENUE BY END MARKET (In millions) (Unaudited) PRELIMINARY Amortization of acquisition-related GAAP Revenue balances Non-GAAP Revenue Percent Percent Q3'20 Q3'19 Inc/(Dec) Q3'20 Q3'19 Q3'20 Q3'19 Inc/(Dec) Aerospace, Defense & Government $ 201
Slide 21: Free Cash Flow
KEYSIGHT TECHNOLOGIES, INC. FREE CASH FLOW (In millions) (Unaudited) PRELIMINARY Q3'20 Net cash provided by operating activities $ 183 Less: Investments in property, plant and equipment (32) Free cash flow $ 151 21
Slide 22: Non-GAAP Financial Measures
Non-GAAP Financial Measures 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 eye
Slide 23: Keysight Technologies
TECHNOLOGIES
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