FY 2019 A L L S E G M E N T S N O W I N C L U D E S E R V I C E - - PowerPoint PPT Presentation

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FY 2019 A L L S E G M E N T S N O W I N C L U D E S E R V I C E - - PowerPoint PPT Presentation

Oct 03, 2023 303 likes •390 views

Services Solutions Group (SSG) aligned to Communications Solutions Group (CSG) and Electronic Industrial Solutions Group (EISG) FY 2019 A L L S E G M E N T S N O W I N C L U D E S E R V I C E S Electronic Industrial Communications Ixia

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Services Solutions Group (SSG) aligned to Communications Solutions Group (CSG) and Electronic Industrial Solutions Group (EISG)

FY 2019

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A L L S E G M E N T S N O W I N C L U D E S E R V I C E S

Communications Solutions Ixia Solutions Electronic Industrial Solutions

+ + + +

Commercial Communications Aerospace, Defense & Government Automotive General Electronics Semiconductor Network Visibility Network Test

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Communications Solutions Group (CSG) Commercial Communications Aerospace, Defense & Government Electronic Industrial Solutions Group (EISG) Automotive, Energy, General Electronics, Semiconductor

Markets Served Prior Reporting Segments

Ixia Solutions Group (ISG)

Network Test, Visibility and Security (incl. services)

Services Solutions Group (SSG)

Commercial Communications, Aerospace, Defense & Government Automotive, Energy, General Electronics, Semiconductor

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C S G A N D E I S G N O W I N C L U D E S E R V I C E S

Prior Reporting Segments New Reporting Segments

The ISG segment previously included services and remains unchanged

Electronic Industrial Solutions Group (EISG) Communications Solutions Group (CSG) Ixia Solutions Group (ISG) Electronic Industrial Solutions Group (EISG) Communications Solutions Group (CSG) Ixia Solutions Group (ISG) Services Solutions Group (SSG)

Markets Served

Automotive, Energy, General Electronics, Semiconductor, including Services Commercial Communications Aerospace, Defense & Government, including Services

Network Test, Visibility and Security (incl. Services)

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▪ Where can I find additional information related to this announced segment reporting change? ▪ The Form 8-K, press release and historical restated financials can be found on the Keysight Investor Relations website (www.investor.keysight.com). ▪ When will this new segment reporting be effective? ▪ Q1 FY’19 will be the first quarter reported by the new segments. ▪ Why change now? ▪ The alignment of services to the CSG and EISG segments is a logical next step in Keysight’s customer solutions oriented go-to-market strategy to fully reflect our services delivery within the markets served. ▪ With this change, all elements of our customer solutions, including software, hardware and now services, will be managed within our industry-focused business groups, further enabling services growth. ▪ All three segments now reflect a consistent go-to-market strategy and reporting that includes services. ▪ Does this change impact the reporting for the Ixia Solutions Group segment? ▪ No, the Ixia Solutions Group (ISG) already included services and is aligned with this reporting structure. ▪ Keysight previously highlighted a material opportunity for growth in services. How does this segment reporting change impact that opportunity and the prior goals? ▪ The goal to materially grow Keysight’s services remains unchanged and continues to be a priority both at the corporate and segment levels. The alignment of our services

  • fferings with the industry solutions groups further enables services revenue growth.

▪ Is this just a reporting change or also an operating change? ▪ The accountability for solutions and services results is now aligned with the respective group presidents on both a reporting and operational basis. John Page remains the president of Keysight’s global services operations and continues to report to the CEO. ▪ Going forward will you disclose the percentage or amount of services within CSG and EISG? ▪ Segment reporting and end market revenue reporting will now include services. The services portion of the business will not be separately disclosed.

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Link to spreadsheet

Revenue by Segment & Submarket Restated for Services Solutions Group Realignment (Unaudited)

Revenue (in millions) Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 FY16 FY17 FY18 Communications Solutions Group 513 $ 519 $ 503 $ 525 $ 510 $ 502 $ 504 $ 548 $ 500 $ 627 $ 604 $ 661 $ 2,060 $ 2,064 $ 2,392 $ Aerospace, Defense & Government 225 225 210 227 216 205 204 223 216 254 246 256 887 848 972 Commercial Communications 288 294 293 298 294 297 300 325 284 373 358 405 1,173 1,216 1,420 Electronic Industrial Solutions Group 213 216 215 226 216 244 239 230 229 282 285 275 870 929 1,071 Ixia Solutions Group

  • 12

120 124 127 90 119 115

  • 256

451 TOTAL(1) 726 $ 735 $ 718 $ 751 $ 726 $ 758 $ 863 $ 902 $ 856 $ 999 $ 1,008 $ 1,051 $ 2,930 $ 3,249 $ 3,914 $ YoY % Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 FY16 FY17 FY18 Communications Solutions Group

  • 1%
  • 3%

0% 4%

  • 2%

25% 20% 21%

  • 0%

16% Aerospace, Defense & Government

  • 4%
  • 9%
  • 2%
  • 2%

0% 24% 20% 15%

  • 4%

15% Commercial Communications

  • 2%

1% 2% 9%

  • 4%

26% 19% 25%

  • 4%

17% Electronic Industrial Solutions Group

  • 1%

13% 11% 2% 6% 15% 20% 20%

  • 7%

15% Ixia Solutions Group

  • 623%
  • 1%
  • 7%
  • 76%

TOTAL(2)

  • 0%

3% 20% 20% 18% 32% 17% 16%

  • 11%

20% (1) Non-GAAP revenue. Reconciliation to GAAP equivalent provided. (2) Historical segment revenue growth not adjusted for FX or acquisitions.

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Restated for Services Solutions Group realignment (Unaudited, in millions)

Link to spreadsheet

Revenue (in millions) Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 FY16 FY17 FY18 Aerospace, Defense & Government 225 $ 225 $ 210 $ 227 $ 216 $ 205 $ 204 $ 223 $ 216 $ 254 $ 246 $ 256 $ 887 $ 848 $ 972 $ Commercial Communications 283 290 290 298 294 296 300 325 284 372 358 405 1,161 1,215 1,419 Electronic Industrial 213 216 215 226 216 244 239 230 229 282 285 275 870 929 1,071 Ixia

  • 8

89 100 108 82 115 111

  • 197

416 Total GAAP Revenue 721 731 715 751 726 753 832 878 837 990 1,004 1,047 2,918 3,189 3,878 Commercial Communications 5 4 3

  • 1
  • 1
  • 12

1 1 Ixia

  • 4

31 24 19 8 4 4

  • 59

35 Total acquisition related fair value adjustments 5 4 3

  • 5

31 24 19 9 4 4 12 60 36 Aerospace, Defense & Government 225 225 210 227 216 205 204 223 216 254 246 256 887 848 972 Commercial Communications 288 294 293 298 294 297 300 325 284 373 358 405 1,173 1,216 1,420 Electronic Industrial 213 216 215 226 216 244 239 230 229 282 285 275 870 929 1,071 Ixia

  • 12

120 124 127 90 119 115

  • 256

451 Total Non-GAAP Revenue 726 $ 735 $ 718 $ 751 $ 726 $ 758 $ 863 $ 902 $ 856 $ 999 $ 1,008 $ 1,051 $ 2,930 $ 3,249 $ 3,914 $ Non-GAAP revenue excludes the fair value adjustments to Anite and Ixia acquisition-related deferred revenue balances.

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Restatements with reconciliations are available in spreadsheet form and can be found on the Keysight IR Web site at www.investor.Keysight.com or by clicking here. This spreadsheet contains the following:

➢ Multi-year segment and submarket revenue trends. Commercial Communications, Aerospace Defense and Government, Communication Solutions Group (CSG), Electronic Solutions Group (EISG), and Ixia Solutions Group (ISG) ➢ 3 year Keysight non-GAAP P&L restated for ASU 2017-07 ➢ 3 year CSG P&L restated for ASU 2017-07 and the Services Solutions Group (SSG) Realignment ➢ 3 year EISG P&L restated for ASU 2017-07 and the Services Solutions Group (SSG) Realignment ➢ 2 year ISG P&L restated for ASU 2017-07 from the date of acquisition, April 18, 2017

ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost