NYSE:KEYS
Keysight Technologies, Inc.
A leader in precision electronic measurement tools enabling breakthroughs across industrial, automotive, and life sciences sectors.
Key Metrics
Investment Thesis
Bull Case
Strong operational cash flow of $1.41B allows the company to fund substantial R&D ($1.01B) and return capital via $375M in share repurchases, enhancing shareholder value. The critical nature of their products in semiconductor manufacturing and 5G infrastructure provides a stable revenue stream despite recent market volatility.
Bear Case
The company faces headwinds from declining revenue growth and a large goodwill impairment risk due to its aggressive acquisition history ($2.02B) and divestitures ($399M). High interest expense ($96M) combined with a substantial debt load ($2.53B long-term debt) could constrain flexibility in a rising rate environment.
About Keysight Technologies, Inc.
Keysight Technologies (KEYS) designs and manufactures electronic measurement instruments and software serving life sciences, industrial, automotive, and aerospace markets. The company provides critical solutions for semiconductor testing, signal analysis, and power supply management essential to global innovation cycles.
Analysis
Management Discussion
Despite a revenue dip to $4.98B in 2024, net income recovered to $850M in 2025, suggesting successful cost management or cyclical recovery. However, the massive divestiture activity ($399M) and significant non-cash adjustments (-$114M) alongside a large retained earnings deficit ($7.08B) require careful scrutiny regarding long-term capital allocation strategies.
Industry Overview
Keysight operates within the electronic measurement and instrumentation industry, a niche sector dominated by high barriers to entry due to stringent technical requirements and regulatory standards. Demand is driven by investments in R&D by major tech firms and automotive manufacturers seeking advanced testing solutions for next-generation connectivity and power electronics.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $5.46B | $4.98B | $5.38B |
| Cost of Revenue | $1.93B | $1.85B | $2.04B |
| Gross Profit | $3.53B | $3.13B | $3.34B |
| Operating Expenses | $2.17B | $2.30B | $2.46B |
| Operating Income | $1.36B | $833.0M | $876.0M |
| R&D | $882.0M | $919.0M | $1.01B |
| G&A | $1.31B | $1.40B | $1.47B |
| Stock-Based Comp | $135.0M | $137.0M | $162.0M |
| Depreciation | $120.0M | $126.0M | $131.0M |
| Amortization | $90.0M | $138.0M | $137.0M |
| Other OpEx | $-15.0M | $-14.0M | $-20.0M |
| Non-Operating Income | $-1.0M | $32.0M | $206.0M |
| Interest Expense | $78.0M | $84.0M | $96.0M |
| Interest Income | $102.0M | $81.0M | $102.0M |
| Pre-Tax Income | $1.36B | $865.0M | $1.08B |
| Income Tax | $300.0M | $251.0M | $213.0M |
| Continuing Ops | $1.06B | $614.0M | $869.0M |
| Discontinued Ops | $0 | $4.0M | $-19.0M |
| Net Income | $1.06B | $618.0M | $850.0M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $1.06B | $618.0M | $850.0M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $4.81B | $4.26B | $4.35B |
| Cash & Equivalents | $2.47B | $1.80B | $1.87B |
| Accounts Receivable | $900.0M | $857.0M | $939.0M |
| Inventory | $985.0M | $1.02B | $1.05B |
| Prepaid Expenses | $452.0M | $582.0M | $486.0M |
| Other Current Assets | $0 | $0 | $0 |
| Long-Term Assets | $3.87B | $5.01B | $6.95B |
| PP&E (Net) | $761.0M | $774.0M | $795.0M |
| Intangibles | $155.0M | $607.0M | $1.30B |
| Goodwill | $1.64B | $2.39B | $3.42B |
| Operating Leases | $226.0M | $234.0M | $236.0M |
| LT Investments | $81.0M | $110.0M | $211.0M |
| Other LT Assets | $1.01B | $889.0M | $983.0M |
| Total Assets | $8.68B | $9.27B | $11.30B |
| Current Liabilities | $2.05B | $1.43B | $1.85B |
| Accounts Payable | $286.0M | $313.0M | $355.0M |
| Current Debt | $599.0M | $0 | — |
| Current Leases | $40.0M | $43.0M | $51.0M |
| Taxes Payable | $49.0M | $45.0M | — |
| Other Current Liab | $1.07B | $1.03B | $1.44B |
| Long-Term Liabilities | $1.98B | $2.74B | $3.57B |
| Long-Term Debt | $1.20B | $1.79B | $2.53B |
| LT Operating Leases | $192.0M | $197.0M | $193.0M |
| Other LT Liab | $383.0M | $531.0M | $843.0M |
| Total Liabilities | $4.03B | $4.16B | $5.42B |
| Shareholders' Equity | $4.65B | $5.11B | $5.88B |
| Paid-In Capital | $2.49B | $2.66B | $2.85B |
| Retained Earnings | $5.61B | $6.22B | $7.08B |
| AOCI | $-466.0M | $-364.0M | $-248.0M |
| Total L&E | $8.68B | $9.27B | $11.30B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $1.06B | $618.0M | $850.0M |
| Non-Cash Adjustments | $-142.0M | $-382.0M | $-114.0M |
| Working Capital Changes | $493.0M | $816.0M | $673.0M |
| Cash from Operations | $1.41B | $1.05B | $1.41B |
| Capital Expenditures | $196.0M | $154.0M | $128.0M |
| Cash from Investing | $-288.0M | $-819.0M | $-1.73B |
| Share Buybacks | $702.0M | $439.0M | $375.0M |
| Cash from Financing | $-687.0M | $-913.0M | $385.0M |
| FX Effect | $-2.0M | $6.0M | $9.0M |
| Net Change in Cash | $431.0M | $-674.0M | $76.0M |
| Beginning Cash | $2.06B | $2.49B | $1.81B |
| Ending Cash | $2.49B | $1.81B | $1.89B |
Frequently Asked Questions
How does Keysight Technologies, Inc. make money?
The company operates through three primary segments: Electronic Measurement Instruments (EMI) providing oscilloscopes and spectrum analyzers; Electronic Test Solutions (ETS) focusing on power supplies and semiconductor testing equipment; and Digital Signal Processing (DSP) offering software-defined radio and measurement applications.
What are the main risks for KEYS?
Significant capital outflows from investing activities (-$1.73B) indicate heavy reliance on M&A (acquisitions of $2.02B) which carry integration risks and potential goodwill impairment issues given the large balance sheet ($3.42B goodwill). Revenue contraction in 2024 and high operating expenses ($2.46B) expose the stock to economic downturns affecting industrial and automotive clients.
What is KEYS's competitive advantage?
Keysight maintains a dominant market position with over 30 years of R&D leading to patented technologies that competitors struggle to replicate. Their extensive installed base creates high switching costs, while strong cash flow generation ($1.41B operating cash flow) supports continuous innovation and share buybacks.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.