Keysight Technologies Inc. · NYSE:KEYS
Keysight Technologies — Q2 2015 Earnings Presentation
18 slides from Keysight Technologies's earnings presentation, May 19, 2015
Slide 1: Keysight Technologies Q2 Fiscal Year 2015 Results
Keysight Technologies Q2 Fiscal Year 2015 Results May 19, 2015
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking statements (including, without limitation, information and future guidance on the company’s goals, priorities, revenues, demand, growth opportunities, customer service and innovation plans, new product introductions, financial condition, earning
Slide 3: Q2'15 Financial Highlights
Q2’15 Financial Highlights Orders 900 782 760 • Orders: $697M, -11% y/y (-8% core*) 800 722 691 697 700 600 • Revenues: $740M, 0% y/y (+3% core*) $ millions 500 400 • Operating Margin**: 20.3% of revenue, 300 200 -80 basis points y/y 100 0 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Revenues EPS ** 900 $1.00 757
Slide 4: Q2'15 Revenue Distribution
Q2’15 Revenue Distribution Q2’15 Revenue: $740M Revenue by Segment Revenue by Region Customer Support & Services 14% Americas Asia 38% Measurement Pacific Solutions 45% 86% Europe 17% Page 4
Slide 5: Q2'15 Revenue Distribution by Region
Q2’15 Revenue Distribution by Region Americas 350 304 282 282 Q2’15 Y/Y Revenue Growth 300 264 250 237 • Americas +19% (+19% core*) $ millions 200 • Europe -6% (+4% core*) 150 • Japan 0% (+13% core*) 100 • Asia Pacific ex-Japan -14% (-14% core*) 50 0 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Asia Pacific Europe
Slide 6: Q2'15 Measurement Solutions Highlights
Q2’15 Measurement Solutions Highlights • Revenues: $638M, 0% y/y (+3% core*) • Operating Margin: 20.7% of revenue, +20 basis points y/y MS Net Revenue MS Income from Operations $680 $160 $145 $663 $133 $656 $140 $131 $132 $660 $640 $120 $107 $638 $640 $100 $ millions $ millions $620 $80 $606 $60 $60
Slide 7: Q2'15 Customer Support & Services Highlights
Q2’15 Customer Support & Services Highlights • Revenues: $102M, -1% y/y (+3% core*) • Operating Margin: 17.7% of revenue, -730 basis points y/y CSS Net Revenue CSS Income from Operations $105 $30 $103 $26 $25 $102 $25 $23 $101 $100 $99 $20 $18 $ millions $ millions $15 $13 $95 $95 $10 $5 $90 $0 Q2'1
Slide 8: Q2'15 Revenue Distribution
Q2’15 Revenue Distribution Q2’15 Revenue: $740M Revenue by End Market Measurement Solutions 86% Aerospace & Defense Industrial, 21% Comps & Semi 46% Comm- unications 33% Page 8
Slide 9: Keysight End Market Performance – Q2'15
Keysight End Market Performance – Q2’15 ICS and U.S. A/D growth offset by softening in Communications and International A/D Keysight Results % of Keysight Market Size** End Markets Q2’15 vs. Q2’14 LTM Revenue* $12B 3% decline on softness in wireless manufacturing. Last year’s strength in Communicati
Slide 10: Q3'15 Guidance
Q3’15 Guidance Guidance Q3’15 Revenue $635M - $675M Revenue Growth -16.1% to -10.8% Earnings per share* $0.37 to $0.51 * Presented on a non-GAAP basis Page 10
Slide 11: Quarterly Financial Results
Quarterly Financial Results* (adjusted for stock-based compensation) $M (except per share amounts) Q2’14 Q3’14 Q4’14 Q1'15 Q2'15 Revenue 743 757 762 701 740 Cost of Goods Sold 323 337 335 311 318 Gross Margin 420 420 427 390 422 GM% 56.6% 55.5% 56.1% 55.6% 57.1% R&D 88 89 88 91 95 SG&A 175 173 171 1
Slide 12: GAAP to NON GAAP Operating profit reconciliation - Q2'14
GAAP to NON GAAP Operating profit reconciliation - Q2’14 KEYSIGHT TECHNOLOGIES, INC. RECONCILIATION FROM GAAP TO NON-GAAP NET INCOME THREE MONTHS ENDED APRIL 30, 2014 (Unaudited) NON-GAAP ADJUSTMENTS Project Sapp Intangible Pre-Separation Share Based Others Adjustment (In millions, except per share
Slide 13: GAAP to NON GAAP Operating profit reconciliation - Q3'14
GAAP to NON GAAP Operating profit reconciliation - Q3’14 KEYSIGHT TECHNOLOGIES, INC. RECONCILIATION FROM GAAP TO NON-GAAP NET INCOME THREE MONTHS ENDED JULY 31, 2014 (Unaudited) NON-GAAP ADJUSTMENTS Project Sapp Intangible Pre-Separation Share Based Others Adjustment (In millions, except per share a
Slide 14: GAAP to NON GAAP Operating profit reconciliation – Q4'14
GAAP to NON GAAP Operating profit reconciliation – Q4’14 KEYSIGHT TECHNOLOGIES, INC. RECONCILIATION FROM GAAP TO NON-GAAP NET INCOME THREE MONTHS ENDED OCTOBER 31, 2014 (Unaudited) NON-GAAP ADJUSTMENTS Project Sapp Intangible Pre-Separation Share Based Others Adjustment (In millions, except per shar
Slide 15: GAAP to NON GAAP Operating profit reconciliation – Q1'15
GAAP to NON GAAP Operating profit reconciliation – Q1’15 KEYSIGHT TECHNOLOGIES, INC RECONCILIATION FROM GAAP TO NON-GAAP NET INCOME THREE MONTHS ENDED JANUARY 31, 2015 (Unaudited) NON GAAP ADJUSTMENTS Project Sapp Intangible Separation Share Based Adjustment (In millions, except per share amounts) G
Slide 16: GAAP to NON GAAP Operating profit reconciliation – Q2'15
GAAP to NON GAAP Operating profit reconciliation – Q2’15 KEYSIGHT TECHNOLOGIES, INC. RECONCILIATION FROM GAAP TO NON-GAAP NET INCOME THREE MONTHS ENDED APRIL 30, 2015 (Unaudited) NON-GAAP ADJUSTMENTS Project Sapp Intangible Separation Share Based Asset Adjustment (in millions, except per share amoun
Slide 17: Organic Non-GAAP revenue reconciliation – Q2'15
Organic Non-GAAP revenue reconciliation – Q2’15 KEYSIGHT TECHNOLOGIES, INC. RECONCILIATION OF ORGANIC Non-GAAP REVENUE (In Millions) (Unaudited) PRELIMINARY Percent Q2'15 Q2'14 Inc/(Dec) Non-GAAP Revenue $ 740 $ 743 0% Less revenue from acquisition and divestitures included in segment results (1) —
Slide 18: Core Non-GAAP revenue by segment and region reconciliation – Q2'15
Core Non-GAAP revenue by segment and region reconciliation – Q2’15 KEYSIGHT TECHNOLOGIES, INC. RECONCILIATIONS OF Non-GAAP CORE REVENUE BY SEGMENT AND REGION Non-GAAP CORE REVENUE IS Non-GAAP ORGANIC REVENUE EXCLUDING THE IMPACT OF CURRENCY ADJUSTMENTS (in millions) (Unaudited) PRELIMINARY Year-over
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