Keysight Technologies Reports Second Quarter 2020 Results

Strong operating margin and free cash flow despite COVID-19 supply chain disruption

SANTA ROSA, Calif., May 26, 2020

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Keysight Technologies, Inc. (NYSE: KEYS) today reported financial results for the second fiscal quarter of 2020 ended April 30, 2020.

"Keysight delivered strong operating margin and free cash flow due to solid execution in a challenging environment. While supply chain disruptions dampened our revenue performance during the second half of the quarter, which includes April, our results demonstrated the resiliency of our operating model and durable cash generation as we reached a record cash balance of $1.8 billion," said Ron Nersesian, Keysight's Chairman, President and CEO. "Keysight is committed to the health and safety of our employees, customers and suppliers and acted quickly to implement risk mitigation measures in response to the pandemic. After site closures and limited capacity in March and April, we are pleased to announce that we are re-opening sites and ramping our production, which we expect to be back to 100% capacity by the end of the third quarter."

Second Quarter Financial Summary

  • Orders were $1,089 million, compared with $1,121 million last year, a decrease of 3%.GAAP revenue was $895 million, compared with $1,090 million last year. Non-GAAP revenue decreased 18 percent on a core basis, which excludes the impact of foreign currency changes and revenue associated with businesses acquired or divested within the last twelve months.
  • GAAP revenue was $895 million, compared with $1,090 million last year. Non-GAAP revenue decreased 18 percent on a core basis, which excludes the impact of foreign currency changes and revenue associated with businesses acquired or divested within the last twelve months.
  • GAAP net income was $71 million, or $0.37 per share, compared with GAAP net income of $153 million, or $0.80 per share, in the second quarter of 2019.
  • Non-GAAP net income was $148 million, or $0.78 per share, compared with $233 million, or $1.22 per share in the second quarter of 2019.
  • As of April 30, 2020, cash and cash equivalents totaled $1.841 billion.

Reporting Segments

  • Communications Solutions Group (CSG)
    • CSG reported second quarter revenue of $653 million, down 18 percent, due to supply chain disruption related to the COVID-19 pandemic. From a demand perspective, investment continued in next-generation technologies such as 5G and 400G driving record 5G orders in the quarter; demand was strong in the U.S. for Aerospace Defense and Government solutions.
  • Electronic Industrial Solutions Group (EISG)
    • EISG reported revenue of $242 million in the second quarter, down 19 percent, due to supply chain disruption related to the COVID-19 pandemic. General electronics, education and automotive markets were weak, slightly offset by continued foundry investment in advanced process node technologies.


After site closures resulted in limited production capacity in March and April, Keysight's production operations and those of its suppliers are now ramping capacity.  Continued progress is expected in the third quarter with third-quarter revenue, operating margin and earnings expected to be in line with, or better than, the most recent quarter.  These expectations are based on the order funnel and a strong backlog position, and assume limited incremental supply chain constraints or disruption from additional shutdowns or a second wave of the pandemic.


Keysight's management will present more details about its second quarter FY2020 financial results and its third quarter FY2020 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 to the call at under the "Upcoming Events" section and select "Q2 2020 Keysight Technologies Inc. Earnings Conference Call" to participate or dial +1 833-968-2178 (U.S. only) or +1 778-560-2837 (International) and enter passcode 2171516.

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 after the call and remain available for one week.  The replay may be accessed by dialing +1 800-585-8367 (or +1 416-621-4642 from outside the U.S.) and entering passcode 2171516.

Forward-Looking Statements

This communication contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created therein. These forward-looking statements involve risks and uncertainties that could significantly affect the expected results and are based on certain key assumptions of Keysight's management and on currently available information. Due to such uncertainties and risks, no assurances can be given that such expectations or assumptions will prove to have been correct, and readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Keysight undertakes no responsibility to publicly update or revise any forward-looking statement. The forward-looking statements contained herein include, but are not limited to, information and future guidance on the company's goals, priorities, revenues, demand, financial condition, earnings, impacts of US export control regulations,  the expected growth of the markets the company sells into, operations, operating earnings, and tax rates that 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, changes in the demand for current and new products, technologies, and services; customer purchasing decisions and timing; the risk that we are not able to realize the savings or benefits expected from integration or restructuring activities; increased trade tension and tightening of export control regulations; impact on the supply chain causing delays in our ability to manufacture or deliver products and solutions to customers, the impact of social distancing requirements, slowdown in customer purchasing, order cancelations, a second wave of infection resulting in additional government mandated shutdowns, and labor shortages caused by pandemic conditions such as the novel coronavirus (COVID-19).  The words "estimate," "expect," "intend," "will," "should," "forecast," and similar expressions, as they relate to the company, are intended to identify forward-looking statements.

In addition to the risks above, other risks that Keysight faces include those detailed in Keysight's filings with the Securities and Exchange Commission, including our Form 10-K for the fiscal year ended Oct. 31, 2019 and Keysight's quarterly report on Form 10-Q for the period ended January 31, 2020.

Segment Data

Segment data reflects the results of our reportable segments under our management reporting system. Segment revenue excludes the impact of fair value adjustments to acquisition-related deferred revenue balances. Segment data are provided on page 6 of the attached tables.

Use of Non-GAAP Financial Measures

In addition to financial information prepared in accordance with U.S. GAAP ("GAAP"), this document also contains certain non-GAAP financial measures based on management's view of performance, including:

  • Non-GAAP Core Revenue
  • Non-GAAP Net Income
  • Non-GAAP Net Income per share

Income per share is based on weighted average diluted share count. See the attached supplemental schedules for reconciliations of each non-GAAP financial measure to its most directly comparable GAAP financial measure for the three months ended April 30, 2020. Following the reconciliations is a discussion of the items adjusted from our non-GAAP financial measures and the company's reasons for including or excluding certain categories of income or expenses from our non-GAAP results.

About Keysight Technologies

Keysight Technologies, Inc. (NYSE: KEYS) is a leading technology company that helps enterprises, service providers and governments accelerate innovation to connect and secure the world. Keysight's solutions optimize networks and bring electronic products to market faster and at a lower cost with offerings from design simulation, to prototype validation, to manufacturing test, to optimization in networks and cloud environments. Customers span the worldwide communications ecosystem, aerospace and defense, automotive, energy, semiconductor and general electronics end markets. Keysight generated revenues of $4.3B in fiscal year 2019. More information is available at

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Editorial Contact:

Denise Idone
+1 941 888-2388

Investor Contact:

Jason Kary
+1 707-577-6916


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Second Quarter Fiscal 2020

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