Keysight Technologies
Q1 Fiscal Year 2017 Results
February 16, 2017
Keysight Technologies Q1 Fiscal Year 2017 Results February 16, 2017 - - PowerPoint PPT Presentation
Keysight Technologies Q1 Fiscal Year 2017 Results February 16, 2017 Safe Harbor This presentation contains forward-looking statements (including, without limitation, information and future guidance on the companys goals, priorities,
February 16, 2017
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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, earnings, the company’s ability to pay dividends, ability to access capital markets, the continued strengths and 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, unforeseen changes in the strength of
customer purchasing decisions and timing, timing and ability to close Ixia acquisition, and the risk that we are not able to realize the savings or benefits expected from integration and restructuring activities. The words “anticipate,” “plan,” “estimate,” “expect,” “intend,” “will,” “should,” “forecast,” “project,” and similar expressions, as they relate to the company, are intended to identify forward-looking statements. In addition, 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 October 31, 2016. Forward-looking statements are based
responsibility to publicly update or revise any forward-looking statement. This presentation and the Q&A that follows include forward-looking, non-GAAP measures. Non-GAAP measures 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, Japan pension settlement gain and non-cash intangible amortization. Also excluded are 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. Most of these excluded amounts pertain to events that have not yet occurred and are not currently possible to estimate with a reasonable degree
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Page 679 761 707 806 695 100 200 300 400 500 600 700 800 900 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 $ millions
Orders
726 735 718 751 726 100 200 300 400 500 600 700 800 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17
$ millions
Non-GAAP Revenue**
$0.55 $0.61 $0.63 $0.64 $0.57 $0.50 $0.52 $0.54 $0.56 $0.58 $0.60 $0.62 $0.64 $0.66
Q1'16 Q2'16 Q3'16 Q4'16 Q1'17
Non-GAAP EPS **
* Core growth excludes the impact of currency and acquisitions ** Reconciliations to closest GAAP equivalent provided
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(0% core*)
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Measurement Solutions 87%
Americas 36% Europe 20% Asia Pacific 44%
CSG 60% EISG 26% SSG 14%
Page 309 340 327 330 321 100 200 300 400 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17
$ millions
Asia Pacific
143 137 122 128 144 20 40 60 80 100 120 140 160 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17
$ millions
Europe
274 258 269 293 261 50 100 150 200 250 300 350 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17
$ millions
Americas Q1’17 Y/Y Non-GAAP Revenue Growth**
by softness in ADG and EIS
strength in EIS (parametric test) offset by softness in ADG and CC.
SS partially offset by softness in EIS.
and SS
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* Core revenue growth excludes the impact of currency and acquisitions ** Reconciliations to closest GAAP equivalent provided Key: ADG – Aerospace, Defense & Government CC – Commercial Communications EIS – Electronic Industrial Solutions SS – Services Solutions
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resolution impacting US, while Russia and China remain soft.
*Core revenue growth excludes the impact of currency and acquisitions ** Reconciliations to closest GAAP equivalent provided
$440 $446 $424 $442 $434 $0 $100 $200 $300 $400 $500 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 $ millions
$78 $84 $77 $75 $72 $65 $70 $75 $80 $85 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 $ millions
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Pacific ex-Japan and Japan
and Japan
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*Core revenue growth excludes the impact of currency and acquisitions
$191 $193 $191 $201 $192 $0 $50 $100 $150 $200 $250 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 $ millions
$38 $40 $44 $47 $42 $0 $10 $20 $30 $40 $50 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 $ millions
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*Core revenue growth excludes the impact of currency and acquisitions
$95 $96 $103 $108 $100 $0 $20 $40 $60 $80 $100 $120 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 $ millions
$13 $11 $19 $20 $14 $0 $5 $10 $15 $20 $25 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 $ millions
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Commercial Communications 35% Aerospace, Defense & Government 25% Electronic Industrial 26% Services 14%
By End Market
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Commercial Communications $254M +2% Aerospace, Defense & Government $180M
Electronic Industrial $192M 0% Services $100M +5% Total* $726M 0%
* Reconciliations to closest GAAP equivalent provided
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Refer to our Safe Harbor slide for the risks on forward-looking statements
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The preliminary reconciliation from GAAP to non-GAAP operating margin is estimated based on our current information
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The preliminary reconciliation from GAAP to non-GAAP net income is estimated based on our current information
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The preliminary reconciliation from GAAP to non-GAAP core revenue is estimated based on our current information
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The preliminary reconciliation from GAAP to non-GAAP revenue by segment and region is estimated based on our current information
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The preliminary reconciliation of non-GAAP core revenue by segment and region is estimated based on our current information
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The preliminary reconciliation of segment revenue is based on our current information.
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The preliminary reconciliation of GAAP to non-GAAP revenue by region is based on our current information.
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The preliminary non-GAAP revenue by end market information is estimated based on our current information.
Percent Percent Q1'17 Q1'16 Inc/(Dec) Q1'17 Q1'16 Q1'17 Q1'16 Inc/(Dec) Aerospace, Defense & Government 180 $ 191 $
— $ — 180 $ 191 $
Commercial Communications 254 244 4% — 5 254 249 2% Electronic Industrial 192 191 — % — — 192 191 — % Services 100 95 5% — — 100 95 5% Total Revenue 726 $ 721 $ 1% — 5 $ 726 $ 726 $ — % Non-GAAP revenue is defined to exclude the fair value adjustments to the Anite acquisition-related deferred revenue balances.
PRELIMINARY
GAAP Revenue Non-GAAP Revenue
KEYSIGHT TECHNOLOGIES, INC. RECONCILIATION OF NON-GAAP REVENUE BY END MARKET (In millions) (Unaudited)
Acquisition-related fair value adjs