Keysight Technologies, Inc. (KEYS): history, ownership, mission, how it works & makes money

A Brief History of Keysight Technologies, Inc.

Keysight Technologies, Inc., a leading electronic measurement company, was established in 2014 as a spin-off from Agilent Technologies. The company specializes in providing hardware and software solutions for electronic design, test, and manufacturing. As of 2024, Keysight has made significant strides in various key areas, including telecommunications, automotive, and semiconductor industries.

Financial Performance Overview

For the third quarter ended July 31, 2024, Keysight reported a total revenue of $1,217 million, down 12% compared to $1,382 million in the same period of 2023. For the nine months ended July 31, 2024, the revenue decreased to $3,692 million from $4,153 million, reflecting an 11% decline year-over-year.

Segment Performance

Keysight operates primarily through two segments: Communications Solutions Group (CSG) and Electronic Industrial Solutions Group (EISG). In Q3 2024, CSG generated $847 million in revenue, representing a decrease from $918 million in Q3 2023. EISG revenue fell to $370 million from $464 million in the same period. For the nine months, CSG and EISG revenues were $2,526 million and $1,166 million, respectively.

Research and Development Investments

Keysight continues to prioritize research and development, investing $226 million in R&D for Q3 2024 compared to $215 million for Q3 2023. For the nine-month period, R&D expenses totaled $686 million, up from $664 million the previous year.

Cash Flow and Financing Activities

For the nine months ended July 31, 2024, Keysight reported net cash provided by operating activities of $693 million, a decrease from $1,030 million in the same period last year. The company utilized $781 million in investing activities, significantly higher than $250 million in 2023, primarily due to the acquisition of ESI Group. Financing activities resulted in a cash outflow of $753 million, compared to $259 million in 2023.

Outlook and Market Position

Looking ahead, Keysight remains focused on driving innovation in critical growth areas such as 5G, semiconductor technologies, and the Internet of Things (IoT). The company continues to engage with customers to adapt to evolving market demands and technological advancements, positioning itself as a leader in electronic measurement solutions.

A Who Owns Keysight Technologies, Inc. (KEYS)

Major Shareholders

As of 2024, Keysight Technologies, Inc. (KEYS) has several significant shareholders, including institutional investors and company insiders. The largest shareholders are as follows:

Institutional Ownership

Institutional ownership plays a crucial role in the equity structure of Keysight Technologies. As of the latest data available, approximately 88.2% of Keysight's shares are held by institutional investors.

Insider Ownership

Insider ownership is another important aspect of Keysight's shareholder structure. Company executives and board members hold a combined total of approximately 3.15% of the company's shares.

Recent Stock Performance

As of July 31, 2024, Keysight Technologies has seen fluctuations in its stock price, with the following performance metrics:

Stock Repurchase Program

Keysight Technologies has an ongoing stock repurchase program, which was approved on March 6, 2023, allowing for the repurchase of up to $1.5 billion of its common stock. As of July 31, 2024, the company has repurchased shares worth approximately $751 million under this program.

Conclusion on Ownership Structure

Keysight Technologies, Inc. has a diverse ownership structure characterized by significant institutional ownership, active insider participation, and a robust stock repurchase program, reflecting strong investor confidence in the company.

Keysight Technologies, Inc. (KEYS) Mission Statement

Mission Statement Overview

Keysight Technologies, Inc. is dedicated to enabling its customers to accelerate innovation and deliver technology solutions. The company emphasizes its commitment to helping businesses develop new technologies, particularly in the realms of 5G, autonomous vehicles, and the Internet of Things (IoT).

Strategic Focus

As of 2024, Keysight focuses on several key strategic areas:

• Development of next-generation technologies including 5G and early 6G.
• Advancements in high-speed data center networks.
• Solutions for satellite networks and AI-driven applications.
• Support for electric vehicles (EV) and autonomous vehicle (AV) technologies.

Financial Performance Indicators

For the fiscal year ending July 31, 2024, Keysight reported the following financial metrics:

Market Engagement

Keysight's mission emphasizes the importance of maintaining high levels of customer engagement. Despite macroeconomic challenges, the company is committed to supporting long-term strategic initiatives across various sectors, including:

• Automotive and energy solutions.
• Semiconductor technologies.
• Digital health and industrial IoT.

Acquisitions and Growth Initiatives

In 2024, Keysight made significant acquisitions to bolster its mission and market reach:

• Acquisition of ESI Group for $935 million, enhancing its simulation capabilities.
• Acquisition of Riscure Holding B.V. for $78 million, expanding security assessment solutions.
• Acquisition of AnaPico AG for $117 million, targeting the automotive and aerospace sectors.

Future Outlook

Keysight Technologies anticipates continued investments in R&D focused on next-generation technologies. The company expects to fulfill 16% of its remaining performance obligations of approximately $570 million during the remainder of 2024, with the balance expected to be completed in subsequent years.

How Keysight Technologies, Inc. (KEYS) Works

Business Overview

Keysight Technologies, Inc. operates as a leading provider of electronic design automation (EDA) and test solutions for various sectors, including telecommunications, aerospace, defense, automotive, and semiconductor industries. The company is structured into two main groups: the Communications Solutions Group (CSG) and the Electronic Industrial Solutions Group (EISG).

Financial Performance

As of the third quarter ending July 31, 2024, Keysight reported total revenue of $1,217 million, representing a 12% decrease compared to $1,382 million for the same period in 2023. For the nine months ended July 31, 2024, revenue was $3,692 million, down 11% from $4,153 million in 2023.

Segment Performance

The revenue breakdown for the three and nine months ended July 31, 2024, shows that the CSG contributed approximately 70% of total revenue, while the EISG accounted for 30%.

Geographic Revenue Distribution

Revenue by geographic region for the nine months ended July 31, 2024 is as follows:

Net Income and Margins

Net income for the three months ended July 31, 2024, was reported at $389 million, a 35% increase compared to $288 million for the same period in 2023. However, the net income for the nine months decreased to $687 million, down 17% from $831 million in 2023.

The gross margin for Q3 2024 was 62.0%, down from 64.8% in Q3 2023. The operating margin also saw a decline to 16.8% from 26.4% year-over-year.

Research and Development (R&D)

R&D expenses increased to $226 million for Q3 2024, compared to $215 million in Q3 2023, representing a 5% increase. For the nine months, R&D expenses totaled $686 million, up from $664 million, which is a 3% increase.

Acquisitions and Strategic Initiatives

In the first quarter of fiscal 2024, Keysight acquired ESI Group for $935 million, which contributed $119 million to revenue over the nine months ended July 31, 2024. Additionally, Keysight acquired Riscure Holding B.V. for $78 million and AnaPico AG for $117 million during 2024, aimed at enhancing its capabilities in security assessments and expanding its market reach.

Market Trends and Challenges

Keysight has faced challenges due to macroeconomic factors, including high inflation and interest rates, which have affected demand in the manufacturing sector. Despite these challenges, the company continues to focus on key growth areas such as next-generation electric vehicles (EV), autonomous vehicles (AV), and advanced semiconductor technologies.

Income Tax Information

For the three months ended July 31, 2024, Keysight reported a provision for income taxes of $(176) million, resulting in an effective tax rate of (81.9)%. The company experienced a net discrete tax benefit of $179 million during this period.

Balance Sheet Highlights

As of July 31, 2024, Keysight reported total assets of $9,323 million, with total liabilities of $4,093 million. The company's stockholders' equity stood at $5,230 million, reflecting a strong financial position.

How Keysight Technologies, Inc. (KEYS) Makes Money

Revenue Streams

Keysight Technologies generates revenue through two primary segments: the Communications Solutions Group (CSG) and the Electronic Industrial Solutions Group (EISG). For the nine months ended July 31, 2024, total revenue amounted to $3,692 million, a decrease of 11% compared to the previous year.

Geographic Revenue Distribution

Revenue is also disaggregated by geographic region, which shows varying performance across the Americas, Europe, and Asia Pacific. For the three months ended July 31, 2024, revenue distribution was as follows:

Revenue Recognition

Keysight recognizes revenue at the point of sale or over time, depending on the nature of the product or service provided. For the nine months ended July 31, 2024:

Cost Structure and Profitability

For the nine months ended July 31, 2024, Keysight's total costs and expenses were $3,089 million, leading to an income from operations of $603 million and an operating margin of 16.3%.

Net Income and Earnings Per Share

For the nine months ended July 31, 2024, Keysight reported a net income of $687 million, translating to a diluted earnings per share of $3.92.

Acquisitions and Strategic Investments

In fiscal 2024, Keysight made strategic acquisitions to expand its capabilities, including:

• Acquisition of ESI Group for $935 million.
• Acquisition of Riscure for $78 million.
• Acquisition of AnaPico for $117 million.

These acquisitions are expected to enhance Keysight's market position and technology offerings, particularly in the semiconductor and automotive sectors.

Market Trends and Outlook

Despite a challenging macroeconomic environment characterized by high inflation and interest rates, Keysight anticipates continued investments in next-generation technologies such as 5G, AI, and IoT. The company remains focused on maintaining operational flexibility and deepening customer relationships to drive future growth.