On this page of StockholderLetter.com we present the 1/23/2023 shareholder letter from Keysight Technologies, Inc. — ticker symbol KEYS. Reading current and past KEYS letters to shareholders can bring important insights into the investment thesis.

 •  1/23/2023 Letter Continued (Full PDF)
 •  1/29/2024 KEYS Stockholder Letter
 •  1/27/2025 KEYS Stockholder Letter
 •  1/26/2026 KEYS Stockholder Letter
 •  More "Industrial Machinery & Equipment" Category Stockholder Letters
 •  KEYS Benford's Law Stock Score = 97

KEYS 1/23/2023 Shareholder/Stockholder Letter Transcript:

ANNUAL REPORT 2022
ACCELERATE INNOVATION TO CONNECT & SECURE THE WORLD


Keysight Technologies Inc.
1400 Fountaingrove Parkway
Santa Rosa California 95403
Satish Dhanasekaran
President, & Chief Executive Officer
January 23, 2023
To our stockholders,
Keysight delivered exceptional results in fiscal year 2022, illustrating our continued progress in transforming the
company to a software-centric solutions provider. Despite strong geopolitical headwinds and global supply chain
challenges, we delivered revenue of $5.4 billion, up 10 percent, and achieved non-GAAP net income of $1.4 billion,
or a record $7.63 per share   up 22 percent over fiscal year 2021. We invested $813 million in R&D while improving
operating margin by 140 basis points to 29 percent. Throughout the year, we remained focused on long-term
differentiation and on engaging with customers around their future needs.
Beyond our record financial results, it   s important to note that Keysight   s fiscal year 2022 accomplishments reflect
the leadership and contributions of Ron Nersesian, who retired as President and Chief Executive Officer (CEO) in
April and transitioned to the role of executive chairman of the Board. Ron   s effective and purposeful leadership
provided a strong, lasting foundation for the company   s success. I am honored to succeed Ron as President and CEO.
We continued to accelerate innovation and enable meaningful outcomes for customers. Demand for Keysight   s
differentiated solutions remained strong across key growth areas, including 5G/6G, automotive and energy,
semiconductor, software, and services. Around the world, customers value our collaboration and our software-centric
solutions strategy which contribute to their market leadership. This was reflected in strong revenue growth in both
our Communications Solutions Group (CSG) and the Electronic Industrial Solutions Group (EISG), and our ability
to leverage industry-leading, first-to-market solutions that enable expansion across communications and technology
ecosystems.
CSG delivered strong revenue, despite geopolitical headwinds and delays in US defense budget appropriations. Key
growth drivers included ongoing investments in 5G standards, new spectrum, growing deployments around the
world, and steady evolution from 400G to 800G to terabit ethernet. We had another record year for 5G orders as
Keysight   s market-leading solutions continued to provide the industry with new capabilities needed for development
of next-generation devices, as well as wireless and wireline networks.
In EISG, we delivered strong revenue growth as we capitalized on continued investments across our target markets.
In automotive, we were pleased with the continued adoption of our solutions portfolio as OEMs and their suppliers
focused on strategic new mobility investments. This scenario drove key wins for Keysight. In addition,
automotive-focused semiconductor companies added capabilities to support EV and AV applications, which we view
as a favorable long-term dynamic.
In our semiconductor solutions business, we saw sustained demand for our wafer test solutions and precision
positioning capabilities, which enabled the realization of advanced process nodes. In general electronics, demand
remained strong and broad-based across Industrial IoT and digital health, as well as education and advanced research
markets.
With software and Services as an integral part of our solutions strategy, revenue growth this year continued to outpace
Keysight overall and drove annual recurring revenue to approximately $1.2 billion. Software and services again
represented just over one-third of Keysight   s total revenue for the year. Keysight   s focus on customer success and
innovation is driving our development of first-to-market, high-value solutions.
In support of our corporate social responsibility (CSR) goals, our entire organization remains steadfast in our
commitment to help build a better planet. Keysight   s sustainably-developed solutions help our customers meet their
own CSR objectives and deliver breakthrough innovations in areas such as clean technology, social impact and
wellness, and safety and security. We are acutely aware of the need to maintain transparency, including reporting
frameworks our key stakeholders expect, and preparations for pending worldwide environmental, social, and
governance (ESG) mandatory reporting legislation.

Keysight continued to be listed on major ESG indices, and earned many other recognitions during the year, including
being listed on Barron   s 100 Most Sustainable Companies in America and Investor   s Business Daily   s 100 Best ESG
Companies. JUST Capital recognized Keysight in its Top 100 U.S. Companies Supporting Healthy Families and
Communities, and we were named an industry leader for the fourth consecutive year in its 2022 rankings of
America   s Most JUST Companies.
We were honored to place 10th on Fortune   s Best Workplaces in Technology    list, and to be named to Fortune   s
100 Best Companies to Work For. We also released our first Diversity, Equity, and Inclusion Report, as we renewed
and strengthened Keysight   s longstanding commitment to being a great place to work for our global workforce of
about 15,000.
Such recognition exemplifies our unique and collaborative culture, which is truly a competitive advantage and a
testament to the Keysight Leadership Model. I couldn   t be prouder of our team. I am thankful to our employees for
their contributions, commitment, and strong track record of execution. In today   s economic environment, I remain
confident in the resilience of our business and the flexibility of our operating model.
We enter 2023 with confidence in our ability to continue to outperform the market as we execute through short-term
uncertainties and capitalize on long-term secular growth trends across our diverse end-markets.



 1/23/2023 Letter Continued (Full PDF)