Stockhouse.com uses cookies on this site. By continuing to use our service, you agree to our use of cookies. Cookies are used to offer you a better browsing experience and to analyze our traffic. We also use them to share usage information with our partners. See full details.
I Agree
×
Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Privacy Policy | Disclaimer

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Privacy Policy | Disclaimer
Please Try Again {{ error }}

Send my password

Return to Login
SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
News   Press Releases

Keysight Technologies Reports Second Quarter 2016 Results

KEYS | May 19, 2016

Keysight Technologies Reports Second Quarter 2016 Results

Highlights:

  • GAAP net income of $88 million, or $0.51 per share
  • Non-GAAP net income of $106 million, or $0.61 per share(1)
  • GAAP revenue of $731 million
  • Non-GAAP revenue of $735 million(2)

Keysight Technologies, Inc. (NYSE: KEYS) today reported GAAP revenue of $731 million and non-GAAP revenue of $735 million for the second fiscal quarter ended April 30, 2016.(2)

“Keysight delivered second quarter results with revenue and earnings at the high-end of our guidance range as we continued to successfully navigate a challenging market environment and execute on our strategy to transform our business. We achieved measurable progress on our key growth initiatives while maintaining our focus on operating discipline,” said Ron Nersesian, Keysight president and CEO.

“We repurchased $42 million of common stock under the share repurchase program we initiated in February, reflecting our confidence in our long-term market opportunities and demonstrating our commitment to create value for shareholders,” added Nersesian.

Total revenue declined 1 percent year-over-year, or 7 percent on a non-GAAP core basis.(2) Compared with the second quarter of last year, communications market revenue was flat, or grew 2 percent on a non-GAAP basis,(2) driven by the acquisition of Anite and increased 5G sales, which was partially offset by the expected cautious capital spending sentiment. Aerospace & Defense market revenue grew 3 percent driven by strength in Asia combined with consistent spend among prime contractor customers in North America. Industrial, computer and semiconductor market revenue declined 4 percent driven by market softness in the computer and semiconductor markets. From a geographic perspective, total revenue grew year-over-year in Europe and Asia excluding Japan, and declined in the Americas and Japan.

Second quarter GAAP gross margin of 55.5 percent, compared with 56.3 percent in the second quarter of 2015. Non-GAAP gross margin of 57.8 percent increased 70 basis points as the mix of R&D and software revenue improved.(1)

Second quarter GAAP income from operations was $95 million, or 13.0 percent of revenue and non-GAAP income from operations was $135 million, or 18.3 percent of revenue.(1)

Second quarter GAAP net income was $88 million, or $0.51 per share. Second quarter non-GAAP net income was $106 million, or $0.61 per share,(1) which excludes net adjustments of $18 million.

Third Fiscal Quarter Outlook

Keysight provides guidance based on current market conditions and expectations.

Keysight’s third quarter 2016 non-GAAP revenue is expected to be in the range of $697 million to $737 million.(2) Third quarter non-GAAP earnings per share are expected to be in the range of $0.50 to $0.64.(3)

Webcast

Keysight’s management will present more details about its second quarter FY2016 financial results and its third quarter FY2016 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 and select Q2 2016 Keysight Technologies Inc. Earnings Conference Call in the Investor News & Events – Upcoming Events section at www.investor.keysight.com. 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, May 19 through May 26 by dialing +1 855-859-2056 (or +1 404-537-3406 from outside the U.S.) and entering pass code 85416330.

About Keysight Technologies

Keysight Technologies (NYSE:KEYS) is a global electronic measurement technology and market leader helping to transform its customers’ measurement experience through innovations in wireless, modular, and software solutions. Keysight’s electronic measurement instruments, systems, software and services are used in the design, development, manufacture, installation, deployment and operation of electronic equipment. The business had revenue of $2.9 billion in fiscal year 2015. Information about Keysight is available at www.keysight.com.

Forward-Looking Statements

This news release contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. The forward-looking statements contained herein include, but are not limited to, information regarding Keysight’s future revenues, earnings and profitability; the future demand for the company’s products and services; and customer expectations. These forward-looking statements involve risks and uncertainties that could cause Keysight’s results to differ materially from management’s current expectations. Such risks and uncertainties include, but are not limited to, unforeseen changes in the strength of our customers’ businesses; unforeseen changes in the demand for current and new products, technologies, and services; customer purchasing decisions and timing, and the risk that we are not able to realize the savings or benefits expected from integration and restructuring activities.

In addition, other risks that Keysight faces include those detailed in Keysight’s filings with the Securities and Exchange Commission, including our Form 10-Q for the fiscal quarter ended Jan. 31, 2016. Forward-looking statements are based on the beliefs and assumptions of Keysight’s management and on currently available information. Keysight undertakes no responsibility to publicly update or revise any forward-looking statement.

Non-GAAP Measures

Keysight uses a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of the business, for making operating decisions and for forecasting and planning for future periods. The definition of these non-GAAP financial measures may differ from similarly titled measures used by others, and such non-GAAP measures should be considered supplemental to and not a substitute for financial information prepared in accordance with GAAP. Keysight generally uses non-GAAP financial measures to facilitate management’s comparisons to historic operating results, to competitors’ operating results and to guidance provided to investors. In addition, Keysight believes that the use of these non-GAAP financial measures provides greater transparency to investors of information used by management in its financial and operational decision-making.

(1) Non-GAAP gross margin, non-GAAP income from operations, non-GAAP net income, and non-GAAP net income per share exclude primarily the impacts of share-based compensation, restructuring and related costs, separation and related costs, acquisition and integration costs, acquisition-related fair value adjustments, asset impairments and non-cash intangible amortization. Keysight also excludes any tax benefits or expenses that are not directly related to ongoing operations and which are either isolated or cannot be expected to occur again with any regularity or predictability. Earnings per share is based on diluted shares. Reconciliations between non-GAAP gross margin and GAAP gross margin and non-GAAP income from operations and GAAP income from operations is set forth on page 6 and the reconciliation between non-GAAP net income and GAAP net income is set forth on page 7 respectively of the attached tables, along with additional information regarding the use of this non-GAAP measure.

(2) Non-GAAP revenue excludes the impact of fair value adjustment to acquisition-related deferred revenue balances for the Anite acquisition. Non-GAAP revenue as projected for Q3 FY16 also excludes the impact of fair value adjustment to acquisition-related deferred revenue balances. Core revenue is defined as non-GAAP revenue excluding the impact of currency and revenue from acquisitions until the first anniversary of the acquisition closing date. Reconciliation between GAAP revenue, non-GAAP revenue and core revenue is provided on page 5 and reconciliation between GAAP and non-GAAP revenue by region and GAAP and non-GAAP revenue by market is provided on page 9 and page 10 of the attached tables, respectively, along with additional information regarding the use of these non-GAAP measures.

(3) Non-GAAP earnings per share as projected for Q3 FY16 exclude primarily the impacts of share-based compensation, restructuring and related costs, separation and related costs, acquisition and integration costs, acquisition-related fair value adjustments, asset impairments and non-cash intangible amortization. Most of these excluded amounts pertain to events that have not yet occurred and are not currently possible to estimate with a reasonable degree of accuracy. Therefore, no reconciliation to GAAP amounts has been provided. Keysight is utilizing a fixed long-term projected non-GAAP tax rate. When projecting this long-term rate, Keysight excludes any tax benefits or expenses that are not directly related to ongoing operations and which are either isolated or cannot be expected to occur again with any regularity or predictability. Additionally, Keysight evaluates its current long-term projections, current tax structure and other factors such as existing tax positions in various jurisdictions and key tax holidays in major jurisdictions where Keysight operates. This long-term non-GAAP tax rate eliminates the effects of non-recurring and period specific items. This tax rate could be subject to change in the future for a variety of reasons, including but not limited to significant changes in geographic earnings mix including acquisition activity, or fundamental tax law changes in major jurisdictions where Keysight operates.

Additional information about Keysight Technologies is available in the newsroom at www.keysight.com/go/news.

Source: IR-KEYS

 
 
KEYSIGHT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)
PRELIMINARY
                             
 
Three Months Ended
April 30, Percent
  2016     2015   Inc/(Dec)
 
Orders $ 761 $ 697 9 %
 
 
Net revenue $ 731 $ 740 (1 %)
 
Costs and expenses:
Cost of products and services 325 324 — %
Research and development 108 96 12 %
Selling, general and administrative 207 192 8 %
Other operating expense (income), net   (4 )   (5 ) (28 %)
Total costs and expenses   636     607   5 %
 
Income from operations 95 133 (29 %)
 
Interest income ─ 1 (100 %)
Interest expense (12 ) (11 ) 9 %
Other income (expense), net   4     (1 ) (500 %)
 
Income before taxes 87 122 (29 %)
 
Provision (benefit) for income taxes   (1 )   26   (104 %)
 
Net income $ 88   $ 96   (8 %)
 
 
Net income per share:
Basic $ 0.52 $ 0.57
Diluted $ 0.51 $ 0.56
 
Weighted average shares used in computing net income per share:
Basic 170 169
Diluted 172 171
 
 
 
The preliminary income statement is estimated based on our current information.
 
 
Page 1
                               
 
 
KEYSIGHT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)
PRELIMINARY
 
 
Six months ended
April 30, Percent
  2016     2015   Inc/(Dec)
 
Orders $ 1,440 $ 1,388 4 %
 
 
Net revenue $ 1,452 $ 1,441 1 %
 
Costs and expenses:
Cost of products and services 654 642 2 %
Research and development 216 192 13 %
Selling, general and administrative 407 398 2 %
Other operating expense (income), net   (18 )   (11 ) 62 %
Total costs and expenses   1,259     1,221   3 %
 
Income from operations 193 220 (12 %)
 
Interest income 1 1 — %
Interest expense (24 ) (23 ) 4 %
Other income (expense), net   1     2   (50 %)
 
Income before taxes 171 200 (15 %)
 
Provision for income taxes   19     34   (44 %)
 
Net income $ 152   $ 166   (8 %)
 
 
Net income per share:
Basic $ 0.89 $ 0.99
Diluted $ 0.88 $ 0.97
 
Weighted average shares used in computing net income per share:
Basic 171 168
Diluted 172 171
 
 
 
The preliminary income statement is estimated based on our current information.
 
 
Page 2
                 
 
 
KEYSIGHT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In millions, except par value and share amounts)
PRELIMINARY
 
 
April 30, October 31,
  2016     2015  
(unaudited)
ASSETS
 
Current assets:
Cash and cash equivalents $ 620 $ 483
Accounts receivable, net 408 398
Inventory 475 487
Deferred tax assets 75 74
Other current assets   159     137  
Total current assets 1,737 1,579
 
Property, plant and equipment, net 531 518
Goodwill 731 700
Other intangible assets, net 226 246
Long-term investments 58 70
Long-term deferred tax assets 264 295
Other assets   108     100  
Total assets $ 3,655   $ 3,508  
 
LIABILITIES AND EQUITY
 
Current liabilities:
Accounts payable $ 168 $ 209
Employee compensation and benefits 174 168
Deferred revenue 198 175
Income and other taxes payable 39 50
Other accrued liabilities   73     84  
Total current liabilities 652 686
 
Long-term debt 1,100 1,099
Retirement and post-retirement benefits 250 280
Long-term deferred revenue 69 61
Other long-term liabilities   84     80  
Total liabilities   2,155     2,206  
 
Total Equity:
Preferred stock; $0.01 par value; 100 million shares
authorized; none issued and outstanding — —
Common stock; $0.01 par value, 1 billion shares
authorized; 171 million shares at April 30, 2016
and 170 million shares at October 31, 2015, issued 2 2
Treasury stock at cost; 1.6 million shares at April 30, 2016 and zero (42 ) —
shares at October 31, 2015
Additional paid-in-capital 1,211 1,165
Retained earnings 766 614
Accumulated other comprehensive loss   (437 )   (479 )
Total stockholders' equity   1,500     1,302  
Total liabilities and equity $ 3,655   $ 3,508  
 
 
 
The preliminary balance sheet is estimated based on our current information.
 
 
Page 3
                       
 
 
KEYSIGHT TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
(Unaudited)
PRELIMINARY
                             
 
Six Months Ended
April 30,
  2016     2015  
 
Cash flows from operating activities:
Net income $ 152 $ 166
 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 67 46
Share-based compensation 29 42
Excess tax benefit from share-based plans — (3 )
Deferred Taxes 3 13
Excess and obsolete inventory related charges 11 17
Gain on sale of land (10 ) —
Other non-cash expenses, net 2 1
Changes in assets and liabilities:
Accounts receivable (3 ) (5 )
Inventory (11 ) (17 )
Accounts payable (27 ) 1
Payment to Agilent, net — (28 )
Employee compensation and benefits 11 7
Income taxes payable 2 3
Retirement and post-retirement benefits (20 ) (21 )
Other assets and liabilities   3     (62 )
Net cash provided by operating activities (a)   209     160  
 
Cash flows from investing activities:
Investments in property, plant and equipment (62 ) (31 )
Acquisition of businesses and intangible assets, net of cash acquired (10 ) —
Proceeds from sale of land 10 —
Proceeds from sale of investment securities   —     1  
Net cash used in investing activities   (62 )   (30 )
 
Cash flows from financing activities:
Issuance of common stock under employee stock plans 24 8
Treasury stock repurchases (40 ) —
Return of Capital to Agilent — (49 )
Excess tax benefit from share-based plans   —     3  
Net cash used in financing activities   (16 )   (38 )
 
Effect of exchange rate movements   6     (8 )
 
Net increase in cash and cash equivalents 137 84
 
Cash and cash equivalents at beginning of period   483     810  
 
Cash and cash equivalents at end of period $ 620   $ 894  
 
(a) Cash payments included in operating activities:
Income tax payments, net $ 8 $ 22
Restructuring payments $ 3 $ 1
Interest payments on senior notes $ 22 $ 24
 
The preliminary cash flow is estimated based on our current information.
 
 
Page 4
                                         
 
 
KEYSIGHT TECHNOLOGIES, INC.
RECONCILIATION OF REVENUE EXCLUDING CURRENCY IMPACTS AND M&A
(In millions)
(Unaudited)
PRELIMINARY
 
 
 
Percent
Q2'16 Q2'15 Inc/(Dec)
GAAP Revenue $ 731 $ 740 -1 %
Acquisition related fair value adjustments   4     — —
Non-GAAP Revenue $ 735 $ 740 -1 %
Currency Impacts   3     — —
Non-GAAP Revenue, net of currency impacts $ 738 $ 740 — %
Less revenue from acquisitions included in segment results   (51 )   — —
Core Revenue $ 687   $ 740 -7 %
 
Non GAAP Revenue is defined to exclude the fair value adjustments to acquisition related deferred revenue balances for the Anite acquisition.
 

Core revenue is defined as Non-GAAP revenue excluding the impact of currency and acquisitions.
 
Management believes that these measures provide useful information to investors by reflecting an additional way of viewing aspects of Keysight's operations that, when reconciled
to the corresponding GAAP measures, help our investors to better identify underlying growth trends in our business and facilitate easier comparisons of our revenue performance
with prior and future periods and to our peers. We excluded the effect of recent acquisitions because the nature, size and number of these can vary dramatically from period to
period and between us and our peers, which we believe may obscure underlying business trends and make comparisons of long-term performance difficult.
 
 
 
 
 
 
The preliminary reconciliation of GAAP to Core revenue is based on our current information.
 
 
Page 5
                                   
 
 
KEYSIGHT TECHNOLOGIES, INC.
NON-GAAP GROSS PROFIT AND INCOME FROM OPERATIONS RECONCILIATION
THREE AND SIX MONTHS ENDED APRIL 30, 2016
(In millions)
(Unaudited)
PRELIMINARY
 

Reconciliation of Gross Profit to Non-GAAP Gross Profit
 
Three Months Ended Six Months Ended
April 30, April 30,
  2016     2015     2016     2015  
 
Gross Profit, as reported $ 406 $ 416 $ 798 $ 799
Intangible amortization 10 2 19 4
Acquisition and integration costs 1 — 1 —
Acquisition related fair value adjustments 4 — 9 —
Separation and related costs — — — 1
Share based compensation 4 4 7 8
Other   —     —     2     —  
Non-GAAP Gross Profit $ 425   $ 422   $ 836   $ 812  
 
GAAP Gross Margin 55.5 % 56.3 % 54.9 % 55.5 %
Non-GAAP Gross Margin 57.8 % 57.1 % 57.2 % 56.4 %
 
 
 

Reconciliation of Income from operations to Non-GAAP Income from operations
 
Three Months Ended Six Months Ended
April 30, April 30,
  2016     2015     2016     2015  
 
Income from operations, as reported $ 95 $ 133 $ 193 $ 220
Intangible amortization 11 2 22 4
Acquisition and integration costs 5 — 7 —
Acquisition related fair value adjustments 4 — 9 —
Separation and related costs 5 5 10 12
Share based compensation 13 13 29 42
Other   2     1     (6 )   —  
Non-GAAP income from operations $ 135   $ 154   $ 264   $ 278  
 
Income from operations as a percent of revenue 13.0 % 18.0 % 13.3 % 15.3 %
Non GAAP income from operations income as a percent of revenue 18.3 % 20.9 % 18.1 % 19.3 %

 
We provide non-GAAP gross profit, non GAAP gross margin, non-GAAP income from operations and non -GAAP income from operations as a percent of revenue in
order to provide meaningful supplemental information regarding our operational performance and our prospects for the future. These supplemental measures exclude,
among other things, charges related to the amortization of intangibles, the impact of restructuring and related costs, asset impairments, acquisition and integration
costs, share based compensation, separation and related costs and acquisition related fair value adjustments. Some of the exclusions, such as impairments, may be
beyond the control of management. Further, some may be less predictable than revenue derived from our core businesses (the day to day business of selling our
products and services). These reasons provide the basis for management's belief that the measures are useful.
 
 
 
 
 
 

Our management uses non-GAAP measures to evaluate the performance of our core businesses, to estimate future core performance and to compensate employees.

Since management finds this measure to be useful, we believe that our investors benefit from seeing our results “through the eyes” of management in addition to seeing

our GAAP results. This information facilitates our management’s internal comparisons to our historical operating results as well as to the operating results of our competitors.

 
 
 
Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction
with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other
companies.
 
 
 
The preliminary reconciliation from GAAP gross profit and income from operations to Non-GAAP gross profit and income from operations is estimated
based on our current information.
 
 
 
Page 6
                                     
 
 
KEYSIGHT TECHNOLOGIES, INC.
NON-GAAP NET INCOME AND DILUTED EPS RECONCILIATION
(In millions, except per share amounts)
(Unaudited)
PRELIMINARY
                       
Three months ended Six months ended
April 30, April 30,
2016   2015 2016   2015  
Net Income     Diluted EPS Net Income     Diluted EPS Net Income       Diluted EPS Net Income     Diluted EPS
 
GAAP Net income $ 88 $ 0.51 $ 96 $ 0.56 $ 152 $ 0.88 $ 166 $ 0.97
Non-GAAP adjustments:
Intangible amortization 11 0.06 2 0.01 22 0.13 4 0.02
Share Based Compensation 13 0.08 13 0.08 29 0.17 42 0.25
Acquisition and integration costs 5 0.03 — — 5 0.03 — —
Acquisition related fair value adjustments 4 0.02 — — 9 0.05 — —
Separation and related costs 5 0.03 5 0.03 10 0.06 12 0.07
Other 2 0.01 3 0.01 (4 ) (0.02 ) 2 0.01
Adjustment for taxes (a)   (22 )   (0.13 )   1   0.01   (22 )   (0.13 )   (10 )   (0.06 )
Non-GAAP Net income $ 106   $ 0.61   $ 120 $ 0.70 $ 201   $ 1.17   $ 216   $ 1.26  
 
Weighted average shares outstanding - diluted 172 171 172 171
 
(a) The adjustment for taxes excludes tax benefits that management believes are not directly related to ongoing operations and which are either isolated or cannot be expected to occur again with any regularity or predictability. For the six months ended April 30, 2016 and 2015, management uses a non-GAAP effective tax rate of 17% , that we believe to be indicative of on-going operations.
   
Historical amounts are reclassified to conform with current presentation.
 
We provide non-GAAP net income and non-GAAP net income per share amounts in order to provide meaningful supplemental information regarding our operational performance and our prospects for the future. These supplemental measures exclude, among other things, charges related to the amortization of intangibles, the impact of restructuring and related costs, asset impairments, acquisition and integration costs, share based compensation, separation and related costs and acquisition related fair value adjustments. Some of the exclusions, such as impairments, may be beyond the control of management. Further, some may be less predictable than revenue derived from our core businesses (the day to day business of selling our products and services). These reasons provide the basis for management's belief that the measures are useful.
 
Intangible amortization include non-cash intangible amortization recognized in connection with acquisitions.
 
Share-based compensation includes expense for all share-based payment awards made to our employees and directors including employee stock option awards, restricted stock units, employee stock purchases made under our employee stock purchase plan (“ESPP”) and performance share awards granted to selected members of our senior management under the long-term performance plan (“LTPP”) based on estimated fair values.
 
Acquisition and Integration costs include all incremental expenses incurred to effect a business combination which have been expensed during the period. Such acquisition costs may include advisory, legal, accounting, valuation, and other professional or consulting fees. Such integration costs may include expenses directly related to integration of business and facility operations, information technology systems and infrastructure and other employee-related costs.
 
Acquisition related fair value adjustments includes business combination accounting effects from the acquisition including reduction in revenue and increase in cost of sales due to the respective estimated fair value adjustments to deferred revenue and inventory.
 
Separation and related costs include all incremental expenses incurred in order to effect the separation of Keysight from Agilent, including the cost of new hires specifically required to operate two separate companies. The intent is to only include in non-GAAP expenses what would not have been incurred if we had no plan to spin-off. These costs include, among other things, branding, legal, accounting and other advisory fees and other costs to separate and transition from Agilent.
 
Our management uses non-GAAP measures to evaluate the performance of our core businesses, to estimate future core performance and to compensate employees. Since management finds this measure to be useful, we believe that our investors benefit from seeing our results “through the eyes” of management in addition to seeing our GAAP results. This information facilitates our management’s internal comparisons to our historical operating results as well as to the operating results of our competitors.
 
 
Our management recognizes items such as amortization of intangibles, restructuring charges etc. that can have a material impact on our cash flows and/or our net income. Our GAAP financial statements including our statement of cash flows portray those effects. Although we believe it is useful for investors to see core performance free of special items, investors should understand that the excluded items are actual expenses that may impact the cash available to us for other uses. To gain a complete picture of all effects on the company’s profit and loss from any and all events, management does (and investors should) rely upon the GAAP income statement. The non-GAAP numbers focus instead upon the core business of the company, which is only a subset, albeit a critical one, of the company’s performance.
 
Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-GAAP information may be different from the non-GAAP information provided by other companies.
 
 
The preliminary reconciliation from GAAP to Non-GAAP net income is estimated based on our current information.
 
Page 7
                                         
 
 
KEYSIGHT TECHNOLOGIES, INC.
NON-GAAP RESULTS INFORMATION
(In millions, except where noted)
(Unaudited)
PRELIMINARY
 
 
 
Keysight
Q2'16 Q2'15 Q1'16
Revenue $ 735 $ 740 $ 726
Gross Margin, % 57.8 % 57.1 % 56.6 %
Income from Operations $ 135 $ 154 $ 129
Operating Margin, % 18.3 % 20.9 % 17.8 %
 
 
Measurement Solutions
Q2'16 Q2'15 Q1'16
Revenue $ 639 $ 638 $ 631
Gross Margin, % 60.6 % 59.3 % 59.2 %
Income from Operations $ 124 $ 136 $ 116
Operating Margin, % 19.5 % 21.3 % 18.3 %
 
 
Customer Support and Services
Q2'16 Q2'15 Q1'16
Revenue $ 96 $ 102 $ 95
Gross Margin, % 39.3 % 43.8 % 39.6 %
Income from Operations $ 11 $ 18 $ 13
Operating Margin, % 11.2 % 18.2 % 13.9 %
 
Income from operations reflect the results of our reportable segments under Keysight's management reporting system which
are not necessarily in conformity with GAAP financial measures. Income from operations of our reporting segments exclude,
among other things, charges related to the amortization of intangibles, share based compensation, restructuring and related
costs, asset impairment, acquisition and integration costs, acquisition related fair value adjustments and separation and
related costs.
 
 
 
 
 
Non-GAAP revenue for Measurement Solutions excludes the impact of fair value adjustments to acquisition related deferred
revenue balances for the Anite acquisition of $4M for Q2'16, $5M for Q1'16 and zero for Q2'15, respectively.
 
 
Readers are reminded that non-GAAP numbers are merely a supplement to, and not a replacement for, GAAP financial
measures. They should be read in conjunction with the GAAP financial measures. It should be noted as well that our non-
GAAP information may be different from the non-GAAP information provided by other companies.
 
 
 
 
The preliminary segment information is estimated based on our current information.
 
 
Page 8
                                     
 
 
KEYSIGHT TECHNOLOGIES, INC.
RECONCILIATION OF NON-GAAP REVENUE BY REGION
(in millions)
(Unaudited)
PRELIMINARY
           
GAAP Revenue

Acquisition

related

fair value adjs

 NON-GAAP Revenue
Percent Percent

Revenue by Region

 Q2'16 Q2'15 Inc/(Dec) Q2'16 Q2'16 Q2'15 Inc/(Dec)
 
Americas $ 257 $ 282 -9% $ 1 $ 258 $ 282 -8%
Europe 136 123 11% 1 137 123 11%
Japan 85 92 -7% — 85 92 -7%
Asia Pacific ex-Japan 253 243 4% 2 255 243 4%
Total Revenue $ 731 $ 740 -1% $ 4 $ 735 $ 740 -1%
 
 
Non GAAP Revenue is defined to exclude the fair value adjustments to acquisition related deferred revenue balances for the Anite acquisition.
 
 
The preliminary reconciliation of revenue by region is estimated based on our current information.
 
 
Page 9
                                                           
 
 
KEYSIGHT TECHNOLOGIES, INC.
RECONCILIATION OF NON-GAAP REVENUE BY MARKET
(In millions)
(Unaudited)
PRELIMINARY
     
GAAP Revenue

Acquisition

related

fair value adjs

 Non-GAAP Revenue
Percent Percent
Q2'16 Q2'15 Inc/(Dec) Q2'16 Q2'16 Q2'15 Inc/(Dec)
Aerospace & Defense 160 $ 156 3 % $ — $ 160 $ 156 3 %
Industrial/Computer/Semi-conductor 323 337 -4 % — 323 337 -4 %
Communications   248   247 — %   4   252   247 2 %
Total Revenue $ 731 $ 740 -1 % $ 4 $ 735 $ 740 -1 %
 
 
 
Non GAAP Revenue is defined to exclude the fair value adjustments to acquisition related deferred revenue balances for the Anite acquisition.
 
The preliminary Non GAAP revenue by market information is estimated based on our current information.
 
 
Page 10

Keysight Technologies, Inc.
EDITORIAL CONTACT:
Amy Flores, +1 408-236-1594
amy_flores@keysight.com
or
INVESTOR CONTACT:
Jason Kary, +1 707-577-6916
jason.kary@keysight.com

Related News

Recent U.S. Press Releases

More Press Releases »

Get the latest news and updates from Stockhouse on social media

Follow STOCKHOUSE Today