Keysight Technologies 10-Q 2025-04-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER: 001-36334

KEYSIGHT TECHNOLOGIES, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Registrant’s telephone number, including area code: (800) 829-4444

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section13(a)of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of common stock outstanding at May 29, 2025 was 172,108,859.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(in millions, except per share data)

(Unaudited)

The accompanying notes are an integral part of these condensed consolidated financial statements.

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(in millions)

(Unaudited)

The accompanying notes are an integral part of these condensed consolidated financial statements.

KEYSIGHT TECHNOLOGIES, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(in millions, except par value and share data)

(Unaudited)

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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.

Impact of U.S. government tariffs

In April 2025, the U.S. government announced tariffs on products from all countries and additional reciprocal tariffs on certain countries. In response, China and other countries have announced retaliatory tariffs against certain imports from the United States. Subsequently, a 90-day pause was instituted on some of the previously announced tariffs. We continue to monitor and assess the impact of these tariffs on our financial results and have taken action across multiple vectors to reduce the incremental impact of tariffs on our operating results. Our multipronged mitigation approach spans our global manufacturing footprint and sourcing strategies, as well as pricing and cost actions. For additional discussion of risks related to tariffs and trade relations, please refer to the risk factor, in Part II, Item 1A. Risk Factors.

Three and six months ended April 30, 2025 and 2024

Total orders for the three and six months ended April 30, 2025 were $1,316 million and $2,579 million, respectively, an increase of 8 percent and 6 percent, respectively, compared to the same periods last year. For the three months ended April 30, 2025, foreign currency movements had an unfavorable impact of 1 percentage point and acquisitions had an immaterial impact on the year-over-year change. For the six months ended April 30, 2025, 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 change. For the three months ended April 30, 2025, orders increased in the Americas and Asia Pacific, partially offset by a decline in Europe. For the six months ended April 30, 2025, orders increased across all regions.

Revenue for the three and six months ended April 30, 2025 was $1,306 million and $2,604 million, respectively, an increase of 7 percent and 5 percent, respectively, compared to the same periods last year. For the three and six months ended April 30, 2025, foreign currency movements had an unfavorable impact of 1 percentage point and acquisitions had an immaterial impact on the year-over-year revenue change. For the three and six months ended April 30, 2025, revenue increased in both the Communications Solutions Group (“CSG”) and the Electronic Industrial Solutions Group (“EISG”). Revenue from CSG and EISG represented 70 percent and 30 percent, respectively, of total revenue for the three months ended April 30, 2025. Revenue from CSG and EISG represented 69 percent and 31 percent, respectively, of total revenue for the six months ended April 30, 2025.

Net income for the three and six months ended April 30, 2025 was $257 million and $426 million, respectively, compared to $126 million and $298 million, respectively, for the same periods last year. The increase in net income for the three months ended April 30, 2025 was primarily driven by gains on derivative instruments and higher revenue, partially offset by higher provision for income taxes, unfavorable mix, higher R&D expense and net losses on our equity investments. The increase in net income for the six months ended April 30, 2025 was primarily driven by higher revenue, gains on derivative instruments, lower provision for income taxes and net gains on our equity investments, partially offset by unfavorable mix and higher R&D expense.

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 tariffs, trade restrictions 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 and six months ended April 30, 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 and six months ended April 30, 2025 and 2024

A summary of our results is as follows:

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 and six months ended April 30, 2025 by geographic region and the impact of foreign currency movements as compared to the same period last year.

Refer to the “Segment Overview” section of Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations for additional information on changes in revenue during the three and six months ended April 30, 2025.

Gross Margin, Operating Margin and Income Before Taxes

Gross margin for the three months ended April 30, 2025 was flat compared to the same period last year, primarily driven by unfavorable mix, higher material costs, and impact of tariffs offset by favorable pricing and higher revenue volume. Gross margin for the six months ended April 30, 2025 decreased 1 percentage point compared to the same period last year, primarily driven by unfavorable mix and impact of tariffs, partially offset by favorable pricing, lower restructuring costs and higher revenue volume.

R&D expense for the three and six months ended April 30, 2025 increased 10 percent and 8 percent, respectively, compared to the same periods 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 and six months ended April 30, 2025 was flat compared to the same periods last year as lower infrastructure costs and amortization of acquisition-related balances were offset by higher acquisition and integration costs and travel costs.

Other operating expense (income), net for the three and six months ended April 30, 2025 was income of $3 million and $11 million, respectively, compared to income of $3 million and $5 million, respectively, for the same periods last year.

Operating margin for the three months ended April 30, 2025 increased 1 percentage point compared to the same period last year, primarily driven by a decrease in operating expenses as a percentage of revenue. Operating margin for the six months ended April 30, 2025 was flat compared to the same period last year, primarily driven by a decrease in operating expenses as a percentage of revenue, partially offset by decline in gross margin.

Interest income for the three and six months ended April 30, 2025 was $21 million and $40 million, respectively, compared to $18 million and $41 million, respectively, for the same periods last year and primarily relates to interest earned on our cash balances. Interest expense for three and six months ended April 30, 2025 and 2024 was $20 million and $40 million, respectively, and primarily relates to interest on our senior notes.

Other income (expense), net for the three and six months ended April 30, 2025 was income of $112 million and $94 million, respectively, compared to zero and income of $5 million, respectively, for the same periods last year and primarily includes gains (losses) due to currency and derivative instruments, the change in fair value of our equity and other investments, income related to our defined benefit and post-retirement benefit plans, and income attributable to non-controlling interests. The increase in other income (expense), net for the three months ended April 30, 2025 is primarily driven by gains on derivative instruments (see Note 9, “Derivatives,” for additional information) and lower amortization of actuarial losses, partially offset by net losses on our equity investments. The increase in other income (expense), net for the six months ended April 30, 2025 is primarily driven by gains on derivative instruments (see Note 9, “Derivatives,” for additional information), net gains on our equity investments and lower amortization of actuarial losses.

As of April 30, 2025 and April 30, 2024 our headcount was approximately 15,400.

Income Taxes

The following table provides income tax details:

The effective tax rate for the three and six months ended April 30, 2025 was lower than the U.S. statutory federal income tax rate primarily due to a lower effective tax rate on foreign earnings, partially offset by U.S. taxes on those 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 global minimum tax framework, commonly referred to as Pillar Two, which established a minimum 15 percent income tax rate. Various countries have passed legislation to comply with the Pillar Two model rules. A subset of these rules became effective for Keysight in the current fiscal year. While we expect to meet transitional safe harbor requirements in most jurisdictions, there are a limited number of jurisdictions where we expect Pillar Two taxes to apply. The income tax provision for the three and six months ended April 30, 2025 included the effects of Pillar Two taxes based on currently enacted legislation and administrative guidance. We continue to closely monitor Pillar Two developments, including the release of additional administrative guidance and the U.S. response to Pillar Two.

The tax expense for the three and six months ended April 30, 2025 was lower compared to the same periods last year primarily due to a decrease in Global Intangible Low Taxed Income (“GILTI”) tax and a lower effective tax rate on foreign earnings.

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 was considered in the tax expense for the three and six months ended April 30, 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 our income tax liability.

The income tax expense for the three and six months ended April 30, 2025 included a net discrete expense of $11 million and $10 million, respectively. The income tax expense for the three and six months ended April 30, 2024 included a net discrete benefit of $1 million and a net discrete expense of $1 million, respectively. The discrete tax expense for the three and six months ended April 30, 2025 was higher compared to the same periods last year primarily due to the impact of tax rate changes in non-U.S. jurisdictions.

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 $33 million for the six months ended April 30, 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. Keysight’s U.S. federal income tax returns for 2021 and 2022 are currently under audit by the Internal Revenue Service (“IRS”). 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 adequate provisions 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 global services, 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, information technology, 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

CSG revenue for the three and six months ended April 30, 2025 increased 9 percent and 7 percent, respectively, compared to the same periods last year. Foreign currency movements had an unfavorable impact of 1 percentage point on the year-over-year revenue change for the three and six months ended April 30, 2025. Acquisitions had an immaterial and favorable impact of 1 percentage point, respectively, on the year-over-year revenue change for the three and six months ended April 30, 2025. Revenue grew across all regions and in both the commercial communications and the aerospace, defense, and government end markets for the three and six months ended April 30, 2025. The increase was primarily driven by higher investments in high-speed networks to support increasing demand for AI capabilities and 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 and six months ended April 30, 2025 increased 9 percent and 7 percent, respectively, year-over-year and represented 67 percent and 66 percent, respectively, of total CSG revenue. For the three months ended April 30, 2025, revenue increased in Asia Pacific and the Americas, and was flat in Europe. For the six months ended April 30, 2025, revenue grew across all regions. The year-over-year increase in revenue for the three and six months ended April 30, 2025 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 drove demand for our 400G/800G Ethernet solutions, both in R&D and manufacturing.

Our aerospace, defense, and government end market revenue for the three and six months ended April 30, 2025 increased 9 percent and 7 percent, respectively, year-over-year and represented 33 percent and 34 percent, respectively, of total CSG revenue. For the three months ended April 30, 2025, revenue growth in Asia Pacific and Europe was partially offset by a decline in the Americas. For the six months ended April 30, 2025, revenue grew across all regions. The year-over-year increase

in revenue was primarily driven by strong growth in space and satellite solutions and continued investments in radar and spectrum operations.

Gross Margin and Operating Margin

Gross margin for the three months ended April 30, 2025 decreased 1 percentage point compared to the same period last year as unfavorable mix, higher material costs, and impact of tariffs was partially offset by favorable pricing and higher revenue volume. Gross margin for the six months ended April 30, 2025 decreased 1 percentage point compared to same period last year as unfavorable mix and higher material costs was partially offset by favorable pricing and higher revenue volume.

R&D expense for the three and six months ended April 30, 2025 increased 13 percent and 12 percent, respectively, compared to the same periods 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 April 30, 2025 increased 3 percent compared to the same period last year, primarily driven by higher infrastructure costs. Selling, general and administrative expense for the six months ended April 30, 2025 increased 2 percent compared to the same period last year, primarily driven by higher infrastructure costs and incremental costs from acquired businesses.

Other operating expense (income), net for the three months ended April 30, 2025 and 2024 was income of $2 million and $3 million, respectively. Other operating expense (income), net for the six months ended April 30, 2025 and 2024 was income of $8 million and $5 million, respectively.

Operating margin for the three and six months ended April 30, 2025 decreased 1 percentage point and was flat, respectively, compared to the same periods last year, primarily due to decline in gross margin, partially offset by lower operating expenses as a percentage of revenue.

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

EISG revenue for the three and six months ended April 30, 2025 increased 5 percent and 1 percent, respectively, compared to the same periods 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 for the three and six months ended April 30, 2025. For the three and six months ended April 30, 2025, revenue increased in the Americas and Asia Pacific, partially offset by a decline in Europe. The revenue increase reflects mixed demand across the electronic industrial markets with an increase in semiconductor measurements and general electronics measurement, partially offset by a decline in automotive and energy. Despite delays in near-term spending, driven by macroeconomic uncertainties, customer engagement remained 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

Gross margin for the three months ended April 30, 2025 increased 1 percentage point compared to the same period last year, primarily driven by favorable pricing, partially offset by unfavorable mix, higher material costs, and impact of tariffs. Gross margin for the six months ended April 30, 2025 decreased 1 percentage point compared to the same period last year, primarily driven by unfavorable mix, partially offset by favorable pricing.

R&D expense for the three and six months ended April 30, 2025 increased 1 percent compared to the same periods 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 and six months ended April 30, 2025 decreased 6 percent and 5 percent, respectively, compared to the same periods last year, primarily driven by lower infrastructure costs.

Other operating expense (income), net for the three months ended April 30, 2025 and 2024 was income of $1 million and zero, respectively. Other operating expense (income), net for the six months ended April 30, 2025 and 2024 was income of $3 million and zero, respectively.

Operating margin for the three months ended April 30, 2025 increased 4 percentage points compared to the same period last year, primarily driven by lower operating expenses as a percentage of revenue and gross margin gains. Operating margin for the six months ended April 30, 2025 was flat compared to the same period last year, as lower operating expenses as a percentage of revenue were offset by gross margin declines.

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:

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 $424 million during the six months ended April 30, 2025 compared to the same period last year.

• Net income for the six months ended April 30, 2025 increased $128 million compared to the same period last year. Non-cash adjustments to net income were $31 million lower, primarily due to a $31 million increase in deferred tax benefit, a $17 million increase in unrealized gains on equity and other investments, and a $6 million decrease in amortization, partially offset by a $16 million increase in share-based compensation expense, $4 million increase in excess and obsolete inventory-related charges, and $3 million increase in other non-cash expenses.

• The aggregate change in accounts receivable, inventory and accounts payable provided net cash of $112 million during the first six months of fiscal 2025 compared to net cash provided of $60 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 $131 million during the first six months of fiscal 2025 compared to net cash used of $144 million in the same period last year, primarily driven by lower income and other tax payments, net of accruals, changes in derivative assets and liabilities (see Note 9, “Derivatives,” for additional information), an increase in deferred revenue, higher payroll-related accruals, net of payments, and changes in other assets and liabilities.

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 $565 million during the six months ended April 30, 2025 compared to the same period last year, primarily driven by $556 million, net of cash acquired, used in the prior year for payments towards acquisitions, including $477 million paid for acquisition of the controlling block of ESI Group SA (“ESI Group”) shares and $24 million decrease in cash used for purchases of property, plant and equipment, partially offset by a $15 million increase in cash used in 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 provided by financing activities increased $1,136 million during the six months ended April 30, 2025 compared to the same period last year, primarily driven by $748 million of proceeds from the issuance of the 2030 Senior Notes, $458

million used in the prior year for the acquisition of the non-controlling interest in ESI Group, and $24 million used in the prior year for repayment of debt assumed as part of the ESI Group acquisition, partially offset by $89 million higher treasury stock repurchases and a $5 million increase in cash used in other net financing activities.

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 $260 million remained as of April 30, 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 and Debt Facilities

Senior Notes

2030 Senior Notes

In April 2025, the company issued an aggregate principal amount of $750 million in unsecured senior notes (“2030 Senior Notes”). The 2030 Senior Notes were issued at 99.760 percent of their principal amount. The notes will mature on July 30, 2030 and bear interest at a fixed rate of 5.35 percent per annum. The interest is payable semi-annually on January 30 and July 30, commencing on January 30, 2026. We incurred issuance costs of $7 million in connection with the 2030 Senior Notes that, along with the debt discount, are being amortized to interest expense over the term of the senior notes.

There have been no changes to the principal, maturity, interest rates and interest payment terms of our other senior notes during the six months ended April 30, 2025 as compared to the senior notes described in our Annual Report on Form 10-K for the fiscal year ended October 31, 2024.

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 0.1 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 April 30, 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 six months ended April 30, 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. On May 8, 2025, the Bridge Facility was decreased to 752 million pounds sterling. In connection with this decrease, the net proceeds from the 2030 Senior Notes have been restricted to support a planned acquisition and are held in a designated money market fund. We incurred costs in connection with the Bridge Facility of $7 million that have been fully amortized to interest expense. As of April 30, 2025 and October 31, 2024, we had no borrowings outstanding under the Bridge Facility.

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

Cash and cash requirements

Cash

Cash and cash equivalents held in the U.S. increased to $3,135 million as of April 30, 2025 from $1,814 million as of October 31, 2024 and included the proceeds from the 2030 Senior Notes. See Note 10, “Debt,” for additional information.

Our cash and cash equivalents mainly consist of investments in institutional money market funds investments, short-term deposits held at major global financial institutions, and similar short duration instruments with original maturities of three months 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 third quarter 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 calendar year 2025.

Our senior notes obligations increased to $2,550 million as of April 30, 2025 from $1,800 million as of October 31, 2024, and interest payments on senior notes increased to $626 million as of April 30, 2025 from $453 million as of October 31, 2024, driven by issuance of the 2030 Senior Notes. See Note 10, “Debt,” for additional information.

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 six months ended April 30, 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 $6 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 April 30, 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.

Quantitative and qualitative disclosures about market risk appear in “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in Part II of our Annual Report on Form 10-K for the fiscal year ended October 31, 2024. There were no material changes during the six months ended April 30, 2025 to this information reported in our 2024 Annual Report on Form 10-K.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the second quarter of fiscal 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

On January 1, 2022, Centripetal Networks filed a lawsuit in Federal District Court in Virginia, alleging that certain Keysight products infringe certain of Centripetal’s patents. In addition, in February 2022 Centripetal filed complaints in Germany alleging infringement of certain of Centripetal’s German patents, and in April 2022 Centripetal filed a complaint with the International Trade Commission (“ITC”) requesting that they investigate whether Keysight violated Section 337 of the Tariff Act (“Section 337”) and should be enjoined from importing certain products that are manufactured outside of the U.S. and which are alleged to infringe Centripetal patents. On December 5, 2023, the ITC issued its Notice of Determination that Keysight did not unfairly import products in violation of Section 337 and the investigation was terminated. Centripetal has appealed this determination. On August 21, 2024, Keysight was served in Germany with a complaint filed in the Unified Patent Court alleging that certain Keysight products sold in Germany, France, Italy and the Netherlands infringe a European Centripetal patent. We deny the allegations and are aggressively defending each case.

On June 14, 2019, the U.S. Department of the Treasury (“Treasury”) issued final regulations relating to Global Intangible Low Taxed Income (“GILTI”) under IRC § 951A (the “tax regulations”). The tax regulations contained language which disallowed GILTI tax deductions for intangible asset amortization resulting from the Singapore restructuring completed in 2018. During the third quarter of fiscal year 2024, we concluded, in response to recent U.S. Supreme Court decisions on a number of relevant cases, the evolving global tax landscape and other changes in circumstances, that Treasury exceeded its regulatory authority and the intangible asset amortization should be deductible. In response, we amended our U.S. federal income tax returns for the open tax years to claim the deduction and recognized the discrete benefit in the condensed consolidated financial statements. We believe the position meets the more likely than not recognition threshold.

On January 23, 2025, we filed a lawsuit against the United States of America in the United States Court of Federal Claims seeking a tax refund of $107 million, or such greater amount allowed by law, plus any other amount, including interest and cost, allowed by law. We intend to vigorously defend our position. The outcome cannot be predicted with certainty. If we are ultimately unsuccessful in defending our refund claim, we will be required to reverse the benefit previously recorded, most likely resulting in a material increase in the effective tax rate and income tax liability.

Although there are no matters pending that we currently believe are probable and reasonably possible of having a material impact to our business, consolidated financial position, or results of operations or cash flows, the outcome of litigation is inherently uncertain and is difficult to predict. An adverse outcome in any outstanding lawsuit or proceeding could result in significant monetary damages or injunctive relief. If adverse results are above management’s expectations or are unforeseen, management may not have accrued for the liability, which could impact our results in future periods.

We are also involved in lawsuits, claims, investigations and other proceedings, including, but not limited to, patent, commercial and environmental matters, which arise in the ordinary course of business.

Risks, Uncertainties and Other Factors That May Affect Future Results

Risks Related to Our Business

Uncertainty in general economic conditions may adversely affect our operating results and financial condition.

Our business is sensitive to negative changes in general economic conditions, both inside and outside the U.S. Global and regional economic uncertainty, inflation and potential recession has and may continue to impact our business, resulting in:

• increased cost to manufacture products or deliver solutions;

• reduced customer purchasing power;

• reduced demand for our solutions and services and reduced, delayed or canceled orders;

• increased risk of excess and obsolete inventory;

• increased risk of supply chain shortages;

• increased price pressure on our solutions and services; and

• greater risk of impairment to the value, and a detriment to the liquidity, of our future investment portfolio.

In addition, global and regional macroeconomic developments, such as uncertainty related to future economic activity, increased tariff rates and reciprocal tariffs, volatility in financial and capital markets, reduced access to credit, changing interest rates, decreased liquidity, uncertain or destabilizing national elections and reactions to national election results, political violence and unrest in the U.S., the U.K., Europe, and Asia, and negative changes or volatility in general economic conditions in those regions could negatively affect our ability to conduct business in those territories. Financial difficulties experienced by our suppliers and customers due to economic volatility could result in product delays, reduced purchasing power, delays in payment or inability to pay us, and inventory issues. Economic risks related to accounts receivable could result in delays in collection and greater bad debt expense.

Economic, political, and other risks associated with international sales and operations could adversely affect our results of operations.

Because we operate our businesses and sell our solutions worldwide, our businesses are subject to risks associated with doing business internationally. We anticipate that revenue from international operations will continue to represent a majority of our total revenue. However, there can be no assurances that our international sales will continue at existing levels or grow in accordance with our effort to increase foreign market penetration. In addition, many of our employees, contract manufacturers, suppliers and manufacturing facilities are located outside the U.S. Accordingly, our future results could be harmed by a variety of factors, including, but not limited to:

• inability to conduct business in certain countries or regions or with certain customers due to U.S. sanctions or trade restrictions;

• inability to sell certain products, technologies, or services to countries, regions, facilities, or customers due to sanctions or trade restrictions;

• changes in a specific country's or region's political, economic or other conditions, including but not limited to changes that favor national interests such as the imposition of or increase in tariffs and reciprocal tariffs, and economic volatility;

• negative consequences from changes in tax laws;

• difficulty in protecting intellectual property;

• injunctions or exclusion orders related to intellectual property disputes;

• interruptions to transportation flows for delivery of parts to us and finished goods to our customers;

• supply chain disruptions;

• changes in foreign currency exchange rates;

• difficulty in staffing and managing foreign operations;

• local competition;

• differing labor regulations;

• unexpected changes in regulatory requirements;

• conflicting regulatory requirements within the jurisdictions in which we operate;

• inadequate local infrastructure;

• potential incidences of corruption and fraudulent business practices; and

• volatile geopolitical turmoil, including popular uprisings, regional conflicts, terrorism, and war.

We centralize most of our accounting processes at two locations: India and Malaysia. If conditions change in those countries, it may adversely affect operations, including impairing our ability to pay our suppliers. Our results of operations, as well as our liquidity, may be adversely affected and possible delays may occur in reporting financial results.

Further, even if we are able to successfully manage the risks of international operations, our business may be adversely affected if our business partners are not able to successfully manage similar risks.

Economic and political policies favoring national interests could adversely affect our results of operations.

Nationalistic economic policies and political trends such as opposition to globalization and free trade, sanctions or trade restrictions, including those on advanced computing and semiconductor manufacturing, withdrawal from or re-negotiation of global trade agreements, increased tariffs and reciprocal tariffs, tax policies that favor domestic industries and interests, and other similar actions may result in conflicting local or regional requirements, increased transaction costs, reduced ability to hire employees, reduced access to components, supplies and materials, reduced demand or access to customers, and inability to conduct our operations as they have been conducted historically. Each of these factors may adversely affect our business.

On April 2, 2025, the U.S. government announced a “reciprocal tariff” policy that set a 10 percent baseline tariff on all countries, effective April 5, 2025, and a higher individualized reciprocal higher tariff on the countries with which the U.S. has the largest trade deficits that took effect on April 9, 2025. Tariffs on imports coming from China have increased to a substantially higher rate than those imposed on other countries, and China has imposed retaliatory measures on certain imports from the U.S. Other countries subject to new or increased tariffs have taken or may take similar actions. On April 9, 2025, the U.S. government announced that the individualized “reciprocal tariff” policy will be paused for 90 days on trading partners who did not retaliate after such policy took effect. Many of our suppliers, vendors, customers, partners, and other entities with whom we do business have strong ties to doing business in China and other countries impacted by the increased tariffs. Their ability to supply materials to us, buy products or services from us, or otherwise work with us is affected by their ability to do business in impacted countries. These increased tariffs and reciprocal tariffs could substantially change our cost of operating in such jurisdictions. Moreover, these tariffs and any other trade restrictions imposed on our customers or suppliers could adversely affect our financial results and position through reduced demand for our products and solutions, cancelled orders, supply chain disruptions, increased transaction costs, and increased expenses. If the U.S.’ relationship with countries subject to increased tariffs results in additional trade disputes, trade protection measures, retaliatory actions and increased barriers, policies that favor domestic industries, or increased import or export licensing requirements or restrictions, then our deployment of resources in jurisdictions affected by such measures could be misaligned and our operations may be adversely affected.

Volatile geopolitical turmoil, including popular uprisings, regional conflicts, terrorism and war could result in market instability, which could negatively impact our business results.

We are a global company with international operations, and we sell our products and solutions in countries throughout the world. Regional conflicts, including the Russian invasion of Ukraine, which resulted in economic sanctions and the decision to discontinue our operations in Russia, the

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Rule 10b5-1 Trading plans

During the three months ended April 30, 2025, the following directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(c) of Regulation S-K.

During the three months ended April 30, 2025, there were no terminations of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement.”

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

KEYSIGHT TECHNOLOGIES, INC.