Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Unaudited)

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q and our Annual Report on Form 10-K. This report contains forward-looking statements which include but are not limited to predictions, future guidance, projections, beliefs, and expectations about the company’s trends, seasonality, cyclicality and growth in, and drivers of, the markets we sell into, our strategic direction, earnings from our foreign subsidiaries, remediation activities, new solution and service introductions, the ability of our solutions to meet market needs, changes to our manufacturing processes, the use of contract manufacturers, the impact of government regulations on our ability to conduct operations, our liquidity position, our ability to generate cash from operations, growth in our businesses, our investments, the potential impact of adopting new accounting pronouncements, our financial results, our purchase commitments, our contributions to our pension plans, the selection of discount rates and recognition of any gains or losses for our benefit plans, our cost-control activities, savings and headcount reduction recognized from our restructuring programs and other cost saving initiatives, and other regulatory approvals, the integration of our completed acquisitions and other transactions, and our transition to lower-cost regions. The forward-looking statements 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, the impact of global economic conditions such as inflation or potential recession, slowing demand for products or services, volatility in financial markets, reduced access to credit, changes in interest rates, the existence of political or economic instability, uncertainty related to the impact of national elections results in the U.S., U.K., and Europe, impacts of geopolitical tension and conflict in regions outside of the U.S., the impacts of increased trade tensions such as an imposition of or increase in tariffs and tightening of export control regulations, the impact of new and ongoing litigation, impacts related to net zero emissions commitments, and the impact of volatile weather caused by environmental conditions such as climate change. Our actual results could differ materially from the results contemplated by these forward-looking statements due to various factors, including but not limited to those risks and uncertainties discussed in Part II Item 1A and elsewhere in this Form 10-Q.

Basis of Presentation

The financial information presented in this Form 10-Q is not audited and is not necessarily indicative of our future consolidated financial position, results of operations or cash flows. Our fiscal year-end is October 31, and our fiscal quarters end on January 31, April 30 and July 31. Unless otherwise stated, these dates refer to our fiscal year and fiscal quarter periods.

Overview and Executive Summary

Keysight Technologies, Inc. (“we,” “us,” “our,” “Keysight” or “the company”), incorporated in Delaware on December 6, 2013, is a global innovator in the computing, communications and electronics market, committed to advancing our customers’ business success by helping them solve critical challenges in the development and commercialization of their products and services. Our mission, “accelerating innovation to connect and secure the world,” speaks to the value we provide our customers in a world of ever-increasing technological complexity. We deliver this value through a broad range of design and test solutions that address the critical challenges our customers face in bringing their innovations to market on ever-shorter schedules.

We invest in research and development (“R&D”) to align our business with available markets and position the company for growth. Our R&D efforts focus on the development of new software and hardware products, as well as improvements to existing products, and solutions aligned to the industries that we serve. We anticipate that we will continue to have significant R&D expenditures in order to maintain our competitive position with a continuous flow of innovative, high-quality software, solutions, products and services. We remain committed to investment in R&D and have focused our development efforts on strategic opportunities to capture future growth.

Three months ended January 31, 2025 and 2024

Total orders for the three months ended January 31, 2025 were $1,263 million, an increase of 4 percent compared to the same period last year. Foreign currency movements had an unfavorable impact of 1 percentage point, and acquisitions had a favorable impact of 1 percentage point, on the year-over-year order change. For the three months ended January 31, 2025, orders increased in Asia Pacific and Europe, partially offset by a decline in the Americas.

Revenue for the three months ended January 31, 2025 was $1,298 million, an increase of 3 percent compared to the same period last year. Foreign currency movements had an unfavorable impact of 1 percentage point, and acquisitions had an immaterial impact, on the year-over-year revenue change. A revenue increase in the Communications Solutions Group (“CSG”) was partially offset by a slight decline in the Electronic Industrial Solutions Group (“EISG”). Revenue from CSG and EISG represented 68 percent and 32 percent, respectively, of total revenue for the three months ended January 31, 2025.

Net income for the three months ended January 31, 2025 was $169 million, compared to $172 million for the same period last year. The decrease in net income for the three months ended January 31, 2025 was primarily driven by losses on derivative instruments, unfavorable mix, and higher R&D expense, partially offset by higher revenue, lower provision for income taxes and net gains on our equity investments.

Outlook

Our first-to-market solutions strategy enables customers to develop new technologies and accelerate innovation and provides a platform for Keysight's long-term growth. Our customers are expected to continue to make R&D investments in certain next-generation technologies and applications, including evolution of 5G, early 6G, high-speed data center networks and infrastructure, satellite networks, Artificial Intelligence (“AI”), industrial internet of things (“IoT”), defense modernization, and next generation electric vehicles (“EV”) and autonomous vehicles (“AV”). We continue to engage actively with our customers and closely monitor the current macroeconomic environment, including trade restrictions, tariffs and tightening of export control regulations, monetary and fiscal policies, and geopolitical tensions. We remain confident in the long-term secular growth trends of our markets and our ability to outperform in a variety of market conditions.

Critical Accounting Policies and Estimates

There were no material changes during the three months ended January 31, 2025 to the critical accounting estimates described in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024.

Adoption of New Accounting Pronouncements

See Note 1, “Overview and Summary of Significant Accounting Policies,” to the condensed consolidated financial statements for a description of new accounting pronouncements.

Currency Exchange Rate Exposure

Our revenues, costs and expenses, and monetary assets and liabilities are exposed to changes in foreign currency exchange rates as a result of our global operating, investing and financing activities. We hedge revenues, expenses, and balance sheet exposures that are not denominated in the functional currencies of our subsidiaries on a short-term and anticipated basis. The result of the hedging has been included in the condensed consolidated balance sheet and condensed consolidated statement of operations. We experience some fluctuations within individual lines of the condensed consolidated balance sheet and condensed consolidated statement of operations because our hedging program is not designed to offset the currency movements in each category of revenues, expenses, monetary assets and liabilities. Our cash flow hedging program is designed to hedge short-term currency movements based on a rolling period of up to twelve months. Therefore, we are exposed to currency fluctuations over the longer term. To the extent that we are required to pay for all, or portions, of an acquisition price in foreign currencies, we may enter into foreign exchange contracts to reduce the risk that currency movements will impact the U.S. dollar cost of the transaction.

Results from Operations - Three months ended January 31, 2025 and 2024

A summary of our results is as follows:

									Three Months Ended																		Year-over-Year
									January 31,																		Change
															2025						2024												Three Months
															(in millions, except margin data)
Revenue															$	1,298					$	1,259											3%
Gross margin															63.1		%				64.6		%										(1) ppt
Research and development															$	249					$	232											7%
Percentage of revenue															19		%				18		%										1 ppt
Selling, general and administrative															$	361					$	362											—
Percentage of revenue															28		%				29		%										(1) ppt
Other operating expense (income), net															$	(8)					$	(2)											365%
Income from operations															$	218					$	221											(2)%
Operating margin															16.8		%				17.6		%										(1) ppt
Interest income															$	19					$	23											(16)%
Interest expense															$	(20)					$	(20)											(1)%
Other income (expense), net															$	(18)					$	5											—
Income before taxes															$	199					$	229											(13)%
Provision for income taxes															$	30					$	57											(47)%
Net income															$	169					$	172											(2)%

Revenue

Revenue is recognized upon transfer of control of the promised products or services to customers in an amount that reflects the consideration we expect to receive in exchange for those products or services. Returns are recorded in the period received from the customer and historically have not been material.

The following table provides the percent change in revenue for the three months ended January 31, 2025 by geographic region and the impact of foreign currency movements as compared to the same period last year.

															Year-over-Year Change
									Three Months Ended
									January 31, 2025
Geographic Region															Actual						Currency Impact Favorable (Unfavorable)
Americas															7%						—
Europe															1%						(1) ppt
Asia Pacific															(1)%						(1) ppt
Total revenue															3%						(1) ppt

Gross Margin, Operating Margin and Income Before Taxes

Gross margin for the three months ended January 31, 2025 decreased 1 percentage point compared to the same period last year, primarily driven by unfavorable mix, partially offset by lower restructuring costs.

R&D expense for the three months ended January 31, 2025 increased 7 percent compared to the same period last year, primarily driven by continued investments in key growth opportunities in our end markets and leading-edge technologies and incremental costs from acquired businesses.

Selling, general and administrative expense for the three months ended January 31, 2025 was flat compared to the same period last year as lower amortization of acquisition-related balances and lower people-related costs resulting from the flexibility of our operating model and cost efficiency actions were offset by higher acquisition and integration costs and incremental costs from acquired businesses.

Other operating expense (income), net for the three months ended January 31, 2025 was income of $8 million compared to income of $2 million for the same period last year.

Operating margin for the three months ended January 31, 2025 decreased 1 percentage point compared to the same period last year, primarily driven by gross margin declines, partially offset by a decrease in operating expenses as a percentage of revenue.

Interest income for the three months ended January 31, 2025 was $19 million compared to $23 million for the same period last year and primarily relates to interest earned on our cash balances. Interest expense for both the three months ended January 31, 2025 and 2024 was $20 million and primarily relates to interest on our senior notes.

Other income (expense), net for the three months ended January 31, 2025 was expense of $18 million compared to income of $5 million for the same period last year and primarily includes income related to our defined benefit and post-retirement benefit plans, gains (losses) due to currency and derivative instruments, the change in fair value of our equity and other investments, and income attributable to non-controlling interests. The decrease in other income (expense), net for the three months ended January 31, 2025 is primarily driven by losses on derivative instruments (see Note 9, “Derivatives,” for additional information), partially offset by net gains on our equity investments.

As of January 31, 2025, our headcount was approximately 15,400 compared to approximately 15,500 at January 31, 2024.

Income Taxes

The following table provides income tax details:

									Three Months Ended
									January 31,
															2025						2024
															(in millions, except percentages)
Income before taxes															$	199					$	229
Provision for income taxes															$	30					$	57
Effective tax rate															15.3		%				24.5		%

The effective tax rate for the three months ended January 31, 2025 was lower than the statutory federal income tax rate primarily due to a lower effective tax rate on foreign earnings, partially offset by U.S. taxes on foreign earnings and the impact of Pillar Two minimum taxes.

The Organization for Economic Cooperation and Development (“OECD”) reached agreement among certain member countries to implement a minimum 15 percent tax rate on certain multinational enterprises, commonly referred to as Pillar Two. Assorted countries have enacted legislation to adopt Pillar Two model rules. A subset of rules are effective for Keysight in the current year, with the remaining rules effective as of November 1, 2025. While Keysight expects to qualify for transitional safe harbor relief in most jurisdictions in which Pillar Two rules are in effect, there are a limited number of jurisdictions where Keysight expects Pillar Two minimum taxes to potentially apply. The income tax provision for the three months ended January 31, 2025 includes the effects of Pillar Two minimum taxes based on currently enacted legislation and administrative guidance. Keysight continues to closely monitor Pillar Two developments, including the release of additional administrative guidance and the U.S. response to Pillar Two minimum taxes.

The tax expense for the three months ended January 31, 2025 was lower compared to the same period last year, primarily due to decreases in Global Intangible Low Taxed Income (“GILTI”) tax and income before taxes.

On June 14, 2019, the U.S. Department of the Treasury (“Treasury”) issued final regulations relating to GILTI under IRC § 951A (the “tax regulations”). The tax regulations contained language that disallowed GILTI tax deductions for intangible asset amortization resulting from the Singapore restructuring completed in 2018. In the third quarter of 2024, we concluded that Treasury exceeded its regulatory authority, and the intangible asset amortization should be deductible. We amended our U.S. federal income tax returns for the open tax years to claim the deduction and filed a lawsuit seeking a tax refund. See Note 13, “Commitments and Contingencies,” for additional information. The GILTI tax benefit resulting from the current year intangible amortization is considered in the tax expense for the three months ended January 31, 2025, but not in the comparable period. The Singapore intangible assets will continue to be amortized for GILTI tax purposes until 2033. If we are ultimately unsuccessful in defending our refund claim, we will be required to reverse the benefit previously recorded, which would most likely result in a material increase in the effective tax rate and income tax liability.

The income tax expense for the three months ended January 31, 2025 included a net discrete benefit of $1 million. The income tax expense for the three months ended January 31, 2024 included a net discrete expense of $2 million.

Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore and Malaysia. The tax incentives provide lower rates of taxation on certain classes of income and require thresholds of investments and employment in those jurisdictions. The Malaysia tax incentive expires October 31, 2025. The Singapore tax incentive expires July 31, 2029. The impact of the tax incentives decreased income taxes by $12 million for the three months ended January 31, 2025.

The open tax years for the U.S. federal income tax return and most state income tax returns are from November 1, 2019 through the current tax year. For the majority of our non-U.S. entities, the open tax years are from November 1, 2019 through the current tax year.

At this time, management does not believe that the outcome of any future or currently ongoing examination will have a material impact on our consolidated financial statements. We believe that we have an adequate provision for any adjustments that may result from tax examinations. However, the outcome of tax examinations cannot be predicted with certainty. Given the numerous tax years and matters that remain subject to examination in various tax jurisdictions, the ultimate resolution of current and future tax examinations could be inconsistent with management’s current expectations. If that were to occur, it could have an impact on our effective tax rate in the period in which such examinations are resolved.

We are subject to income taxes in the U.S. and several countries globally. Changes in tax law, tax rates, or in the amount of earnings in countries with differing tax rates may affect certain deferred tax assets and liabilities recorded and our effective tax rate.

We do not recognize deferred taxes for temporary differences expected to impact the GILTI tax expense in future years. We recognize the tax expense related to GILTI in each year in which the tax is incurred.

Segment Overview

We have two reportable operating segments, CSG and EISG. The profitability of each of the segments is measured after excluding share-based compensation expense, amortization of acquisition-related balances, acquisition and integration costs, restructuring costs, interest income, interest expense and other items.

A significant portion of the segments' expenses arise from allocated corporate charges, expenses related to our centralized sales force, and service, marketing and technology functions that are provided to the segments in order to realize economies of scale and to efficiently use resources. Corporate charges include legal, accounting, real estate, insurance services, information technology services, treasury and other corporate infrastructure expenses. Segment allocations are determined on a basis that we consider to be a reasonable reflection of the utilization of services provided to, or benefits received by, the segments. Newly acquired businesses are not allocated these charges until integrated into our shared services and corporate infrastructure.

Communications Solutions Group (“CSG”)

CSG serves customers spanning the global commercial communications and aerospace, defense, and government end markets. The group’s solutions consist of electronic design and test software, instrumentation, systems, and related services. These solutions are used in the simulation, design, validation, manufacturing, installation, and optimization of communication systems in wireless, wireline, enterprise, and aerospace, defense, and government end markets. In addition, the group provides automated software test solutions to automatically identify, build, and execute tests critical to digital business success and a strong customer experience.

Revenue

									Three Months Ended																		Year- over-Year
									January 31,																		Change
															2025						2024												Three Months
															(in millions)
Total revenue															$	883					$	839											5%

CSG revenue for the three months ended January 31, 2025 increased 5 percent compared to the same period last year. Foreign currency movements had an unfavorable impact of 1 percentage point, and acquisitions had a favorable impact of 1 percentage point, on the year-over-year revenue change. Revenue grew across all regions and in both the commercial communications and the aerospace, defense, and government end markets. The increase was primarily driven by higher investments in high-speed networks to support increasing demand for AI capabilities coupled with higher investment in aerospace and defense solutions. Our customers continued to make R&D investments in next-generation technologies and applications, including AI-driven data center expansion, ongoing 5G standards development and deployment, 400G/800G/Ethernet, development of new communications technologies (e.g., 6G, Open Radio Access Networks, commercial non-terrestrial networks, quantum), high-speed networking and major defense and government programs worldwide.

Our commercial communications end market revenue for the three months ended January 31, 2025 increased 5 percent year-over-year and represented 65 percent of total CSG revenue. Revenue grew across all regions. The year-over-year increase in revenue was primarily driven by R&D investments in terabit solutions and expanding 400G/800G transceiver manufacturing capacity to meet rising demand for AI capabilities. We continued to see investments in high-speed networks due to increasing need for AI capabilities in the data center infrastructure ecosystem, which is driving demand for our 400G/800G/Ethernet solutions, both in R&D and manufacturing.

Our aerospace, defense, and government end market revenue for the three months ended January 31, 2025 increased 5 percent year-over-year and represented 35 percent of total CSG revenue. Revenue growth in the Americas and Asia Pacific was partially offset by a decline in Europe. The year-over-year increase in revenue was primarily driven by strong growth in space and satellite solutions coupled with continued investments in radar and spectrum operations. We continue to see investments in radar and spectrum operations, space and satellite solutions and signal monitoring.

Gross Margin and Operating Margin

									Three Months Ended																		Year- over-Year
									January 31,																		Change
															2025						2024												Three Months
															(in millions, except margin data)
Gross margin															68.0		%				68.4		%										—
Research and development															$	168					$	152											10%
Selling, general and administrative															$	198					$	197											1%
Other operating expense (income), net															$	(6)					$	(2)											213%
Income from operations															$	240					$	226											6%
Operating margin															27.2		%				27.0		%										—

Gross margin for the three months ended January 31, 2025 was flat compared to same period last year as unfavorable mix was offset by higher revenue volume.

R&D expense for the three months ended January 31, 2025 increased 10 percent compared to the same period last year, primarily driven by continued investments in key growth opportunities in our end markets and leading-edge technologies and incremental costs from acquired businesses.

Selling, general and administrative expense for the three months ended January 31, 2025 increased 1 percent compared to the same period last year, primarily driven by incremental costs from acquired businesses.

Other operating expense (income), net for the three months ended January 31, 2025 was income of $6 million compared to income of $2 million for the same period last year.

Operating margin for the three months ended January 31, 2025 was flat compared to the same period last year as lower operating expenses as a percentage of revenue were offset by a slight decrease in gross margin.

Electronic Industrial Solutions Group (“EISG”)

EISG serves customers across a diverse set of end markets focused on automotive and energy, semiconductor solutions, and general electronics. The group's solutions consist of electronic design, test and simulation software, instrumentation, systems, and related services. These solutions are used in the simulation, design, validation, manufacturing, installation, and optimization of electronic equipment. The group also provides automated software test solutions to automatically identify, build, and execute tests critical to digital business success and a strong customer experience. In addition, the group provides software with integrated simulation capabilities and automated software test solutions to automatically identify, build, and execute tests critical to digital business success and a strong customer experience.

Revenue

									Three Months Ended																		Year-over-Year
									January 31,																		Change
															2025						2024												Three Months
															(in millions)
Total revenue															$	415					$	420											(1)%

EISG revenue for the three months ended January 31, 2025 decreased 1 percent compared to the same period last year. Foreign currency movements had an unfavorable impact of 1 percentage point, and acquisitions had an immaterial impact, on the year-over-year revenue change. Revenue declined in Asia Pacific, partially offset by growth in the Americas, and Europe was flat. The revenue decline reflects mixed demand across the electronic industrial markets with declines in automotive and energy, partially offset by increases in semiconductor measurements. Despite delays in near-term spending, driven by macroeconomic challenges, including inflationary pressures and trade restrictions, customer engagement remains high as they continued to progress in key long-term strategic initiatives, such as R&D for software-defined vehicles and autonomous driving, industrial IoT, digital health, fab capacity, and AI-driven demand for advanced semiconductor technologies.

Gross Margin and Operating Margin

									Three Months Ended																		Year-over-Year
									January 31,																		Change
															2025						2024												Three Months
															(in millions, except margin data)
Gross margin															61.1		%				64.9		%										(4) ppts
Research and development															$	62					$	62											1%
Selling, general and administrative															$	79					$	82											(4)%
Other operating expense (income), net															$	(2)					$	—											—
Income from operations															$	114					$	129											(11)%
Operating margin															27.4		%				30.6		%										(3) ppts

Gross margin for the three months ended January 31, 2025 decreased 4 percentage points compared to the same period last year, primarily driven by unfavorable mix.

R&D expense for the three months ended January 31, 2025 increased 1 percent compared to the same period last year, primarily driven by continued investments in key growth opportunities in our end markets and leading-edge technologies.

Selling, general and administrative expense for the three months ended January 31, 2025 decreased 4 percent compared to the same period last year, primarily driven by lower infrastructure costs resulting from the flexibility of our operating model and cost efficiency measures.

Other operating expense (income), net for the three months ended January 31, 2025 was income of $2 million compared to zero for the same period last year.

Operating margin for the three months ended January 31, 2025 decreased 3 percentage points compared to the same period last year, primarily driven by gross margin declines, partially offset by lower operating expenses as a percentage of revenue.

Financial Condition

Liquidity and Capital Resources

Our liquidity is affected by many factors, including normal ongoing operations of our business and fluctuations due to global economics and markets. Our cash balances are generated and held in many locations throughout the world. Under certain circumstances, U.S. and local government regulations may limit our ability to move cash balances to meet cash needs.

Overview of Cash Flows

Our key cash flow activities were as follows:

			Three Months Ended
			January 31,
			2025						2024
			(in millions)
Net cash provided by operating activities			$	378					$	328
Net cash used in investing activities			$	(33)					$	(511)
Net cash used in financing activities			$	(74)					$	(548)

Operating Activities

Cash flows from operating activities can fluctuate significantly from period to period due to working capital needs, the timing of payments for income taxes, variable pay, pension funding, and other items that impact reported cash flows.

Net cash provided by operating activities increased $50 million during the three months ended January 31, 2025 compared to the same period last year.

• Net income for the three months ended January 31, 2025 decreased $3 million compared to the same period last year. Non-cash adjustments to net income were $35 million lower, primarily due to a $33 million increase in unrealized gains on equity and other investments and a $16 million increase in deferred tax benefit, partially offset by a $14 million increase in share-based compensation expense.

• The aggregate change in accounts receivable, inventory and accounts payable provided net cash of $11 million during the first three months of fiscal 2025 compared to net cash provided of $83 million in the same period last year. The amount of cash flow generated from or used by the aggregate of accounts receivable, inventory and accounts payable depends upon the cash conversion cycle, which represents the number of days that elapse from the day we pay for the purchase of raw materials and components to the collection of cash from our customers and can be significantly impacted by the timing of shipments and purchases, as well as collections and payments in a period.

• Movements in other assets and liabilities provided net cash of $107 million during the first three months of fiscal 2025 compared to net cash used of $53 million in the same period last year, primarily driven by changes in derivative assets and liabilities (see Note 9, “Derivatives,” for additional information), lower variable compensation and other payroll-related payments and an increase in deferred revenue, partially offset by lower income and other tax accruals, net of payments.

Investing Activities

Our investing activities primarily include investments in property, plant and equipment and acquisitions of businesses to support our strategy and growth.

Net cash used in investing activities decreased $478 million during the three months ended January 31, 2025 compared to the same period last year, primarily driven by $477 million, net of cash acquired, used in the prior year for the acquisition of the controlling block of ESI Group SA (“ESI Group”) shares, $15 million decrease in cash used for purchases of property, plant and equipment, partially offset by $14 million decline in cash proceeds from other net investing activities.

Financing Activities

Our financing activities primarily include proceeds from issuance of common stock under employee stock plans, tax payments related to net share settlement of equity awards, issuances and repayment of debt and related costs, treasury stock repurchases, and transactions with non-controlling interests in partially owned consolidated subsidiaries.

Net cash used in financing activities decreased $474 million during the three months ended January 31, 2025 compared to the same period last year, primarily driven by $458 million used in the prior year for the acquisition of the non-controlling interest in ESI Group and $18 million lower treasury stock repurchases.

Treasury Stock Repurchases

On March 6, 2023, our board of directors approved a stock repurchase program authorizing the purchase of up to $1,500 million of the company’s common stock, of which $410 million remained as of January 31, 2025. The stock repurchase program may be commenced, suspended or discontinued at any time at the company’s discretion and does not have an expiration date. See “Issuer Purchases of Equity Securities” under Part II Item 2 for additional information.

Debt

			January 31, 2025						October 31, 2024
			(in millions)
Total debt (par value)			$	1,800					$	1,800
Revolving Credit Facility			$	750					$	750
Bridge Facility			£	1,232					£	1,232

Revolving Credit Facility

On July 30, 2021, we entered into an amended and restated credit agreement (the “Revolving Credit Facility”), which provides a $750 million five-year unsecured revolving credit facility that expires on July 30, 2026. Borrowings under the facility bear an annual interest rate of SOFR + 1.1 percent along with a facility fee of 0.125 percent per annum. In addition, the Revolving Credit Facility permits the company, subject to certain customary conditions, on one or more occasions to request to increase the total commitments under the Revolving Credit Facility by up to $250 million in the aggregate. We may use amounts borrowed under the Revolving Credit Facility for general corporate purposes. As of January 31, 2025 and October 31, 2024, we had no borrowings outstanding under the Revolving Credit Facility. We were in compliance with the covenants of the Revolving Credit Facility during the three months ended January 31, 2025.

Bridge Facility

On March 28, 2024, we entered into a bridge credit agreement (the “Bridge Facility”) pursuant to which certain lenders agreed to provide a senior unsecured bridge credit facility of up to 1,350 million pounds sterling for the purpose of providing the financing to support a planned acquisition. On July 25, 2024, the Bridge Facility was decreased to 1,232 million pounds sterling. We incurred costs in connection with the Bridge Facility of $7 million that are included in “other current assets” in the condensed consolidated balance sheet and are being amortized to interest expense over the term of the Bridge Facility.

See Note 10, “Debt,” for additional information.

Cash and cash requirements

Cash

			January 31, 2025						October 31, 2024
			(in millions)
Cash, cash equivalents and restricted cash			$	2,077					$	1,814
U.S.			$	650					$	626
Non-U.S.			$	1,427					$	1,188

Our cash and cash equivalents mainly consist of investments in institutional money market funds, short-term deposits held at major global financial institutions and similar short duration instruments with original maturities of 90 days or less. We continuously monitor the creditworthiness of the financial institutions and money market fund asset managers with whom we invest our funds. We utilize a variety of funding strategies in an effort to ensure that our worldwide cash is available in the locations in which it is needed. Most significant international locations have access to internal funding through an offshore cash pool for working capital needs. In addition, a few locations that are unable to access internal funding have access to temporary local overdraft and short-term working capital lines of credit.

Cash requirements

We have cash requirements to support working capital needs, capital expenditures, business acquisitions, contractual obligations, commitments, principal and interest payments on debt, and other liquidity requirements associated with our operations. We generally intend to use available cash and funds generated from our operations to meet these cash requirements. In the event that additional liquidity is required, we may also borrow under the Revolving Credit Facility or Bridge Facility and/or issue new debt.

On March 28, 2024, we announced our intention to acquire the entire share capital of Spirent Communications PLC (“Spirent”) for cash consideration of 199 pence per Spirent share, which reflects a valuation of $1,463 million on a fully diluted basis. Spirent shareholders will also be entitled to receive a special dividend of 2.5 pence per Spirent share, in lieu of any final

dividend for the year ended December 31, 2023 (together with the cash consideration of 199 pence per share). The acquisition is expected to be completed during the first half of fiscal year 2025, subject to regulatory clearances.

On September 19, 2024, Keysight announced that it had entered into a definitive agreement with Synopsys, Inc. (“Synopsys”) to acquire Synopsys’ Optical Solutions Group, a leading developer of optical design and analysis software tools. The transaction is subject to customary closing conditions, including review by regulatory authorities and the successful closing of Synopsys’ proposed acquisition of Ansys, which is pending regulatory approvals and is expected to close in the first half of 2025.

There were no other material changes to the cash requirements from our Annual Report on Form 10-K for the fiscal year ended October 31, 2024.

During the three months ended January 31, 2025, there were no material changes to our uncertain tax positions from our Annual Report on Form 10-K for the fiscal year ended October 31, 2024. We believe that we have an adequate provision for any adjustments that may result from tax examinations. However, the outcome of tax examinations cannot be predicted with certainty. Given the numerous tax years and matters that remain subject to examination in various tax jurisdictions, the ultimate resolution of current and future tax examinations could be inconsistent with management’s current expectations.

For the remainder of fiscal 2025, we do not expect to contribute to our U.S. defined benefit plan and U.S. post-retirement benefit plan, and expect to contribute $7 million to our non-U.S. defined benefit plans. The amounts we contribute depend upon, among other things, legal requirements, underlying asset returns, the plan’s funded status, the anticipated tax deductibility of the contribution, local practices, market conditions, interest rates and other factors. See Note 11, “Retirement Plans and Post-Retirement Benefit Plans,” for additional information.

We expect capital spending to be approximately $150 million in 2025, primarily for investments in capacity expansion and technology investments.

As of January 31, 2025, we believe our cash and cash equivalents, cash generated from operations, and our ability to access capital markets and credit lines will satisfy our cash needs for the foreseeable future both globally and domestically.