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Keysight Technologies Inc (KEYS) Q4 2024 Earnings Call Highlights: Navigating Challenges with ...

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4 min read

In This Article:

  • Fourth Quarter Revenue: $1.287 billion, down 2% year-over-year.

  • Full Year Revenue: $4.979 billion, down 9% year-over-year.

  • Gross Margin: 64.5% for Q4; 65% for the full year.

  • Operating Margin: 26% for Q4; 26.5% for the full year.

  • Net Income: $288 million for Q4; $1.1 billion for the full year.

  • Earnings Per Share (EPS): $1.65 for Q4; $6.27 for the full year.

  • Free Cash Flow: Over $900 million for the full year.

  • Share Repurchases: $150 million in Q4; $439 million for the full year.

  • Communications Solutions Group Revenue: $894 million in Q4, flat year-over-year.

  • Electronic Industrial Solutions Group Revenue: $393 million in Q4, down 6% year-over-year.

  • Software and Services Revenue: Grew 8% in Q4, accounting for 39% of total revenue.

  • Annual Recurring Revenue from Software and Services: Grew 16% to approximately $1.5 billion.

  • Cash and Cash Equivalents: $1.8 billion at the end of Q4.

  • Q1 2025 Revenue Outlook: $1.265 billion to $1.285 billion.

  • Q1 2025 EPS Outlook: $1.65 to $1.71.

Release Date: November 19, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Keysight Technologies Inc (NYSE:KEYS) delivered fourth-quarter revenue and earnings per share above the high end of their guidance range.

  • Orders grew 1% year over year and 8% sequentially, driven by strength in AI and strong year-end bookings in the US aerospace, defense, and government business.

  • The company demonstrated resilience by delivering 26% operating profit and over $900 million in free cash flow, returning approximately 50% of free cash flow to shareholders through repurchases.

  • Keysight Technologies Inc (NYSE:KEYS) progressed its software-centric solution strategy, investing in organic growth opportunities through innovation and industry collaborations.

  • Revenues from software and services grew 8% this quarter, accounting for 39% of total revenue, with annual recurring revenue from these segments growing 16%.

Negative Points

  • Full-year revenue of $4.979 billion was down 9% as reported or down 12% on a core basis.

  • Operating expenses increased by 5% year over year, impacting overall profitability.

  • The Electronic Industrial Solutions Group saw revenue decline year over year, with automotive market headwinds contributing to the downturn.

  • The company anticipates continued challenges in the automotive sector, with headwinds expected to persist into 2025.

  • Gross margin for the full year was down 60 basis points compared to the prior year, reflecting some pressure on profitability.

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