Keysight Technologies : Second Quarter 2024 Quarterly Results Presentation

Keysight Technologies

Q2 Fiscal Year 2024 Results

May 20, 2024

Safe Harbor

This communication contains forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbors created therein. Statements preceded by, followed by, or that otherwise include the words

"anticipate," "assume," "plan," "estimate," "expect," "guidance," "intend," "implied," "target," "believe," "outlook," and similar words or expressions, or future or

conditional verbs such as "will," "should," "would," "may," or "could", or statements regarding the company's goals, priorities, anticipated revenues, anticipated demand, growth opportunities, customer service and innovation plans, new product introductions, anticipated financial condition, anticipated gross and operating margins, future earnings, the anticipated continued strengths and expected growth of the markets the company sells into, and future operations, earnings, and tax rates are intended to identify forward-looking statements. Keysight disclaims any intention to, and undertakes no responsibility to, update or revise any forward looking statement, whether as a result of new information, a future event, or otherwise. The forward-looking statements contained herein include, but are not limited to, predictions, guidance, projections, assumptions, beliefs, opinions, and expectations regarding the company's future goals, revenues, financial condition, earnings, and operations that involve risks and uncertainties that could cause Keysight's results to differ materially from those expressed in such statements. Such risks and uncertainties include, but are not limited to, impacts of global economic conditions such as inflation or recession, volatility in financial markets, reduced access to credit, increased interest rates, slowing demand for products or services; impacts of US export control regulations; impacts of geopolitical tension and conflict; impacts related to net-zero emissions commitments; customer purchasing decisions and timing; order cancellations. For additional risks and uncertainties that could impact Keysight's actual results, please see our latest Form 10-K filed with the SEC on December 15, 2023 and our latest Form 10-Q filed with the SEC on March 05, 2024, included but not limited to the discussion under "Risk Factors" therein, which may be viewed at www.sec.gov.

This presentation includes a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of the business, for making operating decisions and for forecasting and planning for future periods. Non-GAAP measures exclude primarily the impacts of amortization of acquisition-related balances, share-based compensation, acquisition and integration costs, restructuring and related costs, and any one-time adjustments that may have a material effect on the Company's expenses and income from operations calculated in accordance with GAAP. Also excluded are tax benefits or expenses that are not directly related to ongoing operations and which are either isolated or cannot be expected to occur again with any regularity or predictability. For future periods, most of these excluded amounts pertain to events that have not yet occurred and are not currently possible to estimate with a reasonable degree of accuracy. This limits our ability to provide a reconciliation of the expected non-GAAP earnings per share to the GAAP equivalent. The definitions of these non-GAAP financial measures may differ from similarly titled measures used by others, and such non-GAAP measures should be considered supplemental to and not a substitute for financial information prepared in accordance with GAAP. Keysight generally uses non-GAAP financial measures to

facilitate management's comparisons to historic operating results, to competitors' operating results and to guidance provided to investors. In addition, Keysight

believes that the use of these non-GAAP financial measures provides greater transparency to investors of information used by management in its financial and operational decision-making. Refer to last slide for more details on the use of non-GAAP financial measures.

2

Q2'24 Highlights

Results demonstrated strong execution in a

1 market environment that ​was largely unchanged vs. Q1

• Second quarter revenue of $1.2B and earnings per share of $1.41 exceeded the high end of the guidance range​.​
• Selling, General and Administrative expenses were well-managed and declined year-over-year by 10% (-$29M) excluding acquisitions.
• Core operating margin* of 25% outperformed the Keysight financial model despite lower year- over-year revenue.​

Orders were in line with Q1 sequentially with

2 pockets of stability and growth​​

• Orders were in line with Q1, while declining versus the prior year on ongoing market normalization.
• Commercial Communication orders grew year-over-year for the first time after 6 consecutive quarters of declines on strength in AI-related data center network and infrastructure solutions.​
• Wireless investment was relatively stable and focused on the evolution of 5G standards, non- terrestrial networks, and Open RAN applications.
• Electronic Industrial end markets were mixed as manufacturing and Asia-related demand remained soft, offsetting stability in other areas.​

Continued to execute our strategy and deliver on

3 our commitments to customers and shareholders ​ ​

• Announced intent to acquire Spirent Communications and closed acquisition of Riscure.
• Software and services increased to ~39% of revenue and growth outpaced overall Keysight.
• Q2'24 share repurchases totaled ~300,000 shares for a total consideration of $46M​.

*Core excludes the impact of foreign currency changes and businesses acquired or divested within the last twelve months. Reconciliations provided for non-GAAP financial measures.

3

Q2'24 Non-GAAP Financial Highlights

	Orders	Revenue	Operating Margin	EPS
	$1.219B	$1.216B	24.2%	$1.41
	-8%y/y(-9%core*)	-13%y/y(-14% core*)	-620 basis points y/y	-34%y/y

* Core growth excludes the impact of currency, acquisitions or divestitures closed in last twelve months.	4
Reconciliations to closest GAAP equivalent provided for current period for all non-GAAP measures. For prior periods, please refer to investor.keysight.com.

Revenue by Segment & by Region

Q2'24 Revenue: $1.216B

5

Revenue Trend by Region

-5% y/y (-6% core*): Revenue decline in		-1% y/y (-8% core*): Revenue declines in
CC, growth in ADG and EI.		ADG; CC and EI flat.

* Core revenue growth excludes the impact of currency, acquisitions or divestitures closed in last twelve months.

-23% y/y (-22% core*): Revenue declines

in EI, ADG and CC.

Key:
ADG - Aerospace, Defense & Government	6
CC - Commercial Communications

EI - Electronic Industrial Solutions

Q2'24 Communications Solutions Group Highlights

Revenue

$840M

-10% y/y (-11% core*)

Operating Margin

26.5%

-190 basis points y/y

• Strong gross margin of 68.0% despite y/y revenue decline​
• Commercial Communications: Revenue declined vs. strong compare, while orders grew year-over-year and sequentially driven by AI-driven data center network and infrastructure; wireless was stable with pockets of investment in 5G standards, non-terrestrial networks and Open RAN applications. ​
• Aerospace, Defense & Government: Revenue declined vs. strong compare as investment continued in radar/spectrum operations, space and satellite, and signal monitoring with healthy demand from the U.S. government and primes.

* Core revenue growth excludes the impact of currency, acquisitions or divestitures closed in last twelve months.	7
Segment revenue and income from operations are consistent with the non-GAAP financial measures slide, refer last slide for details.

Q2'24 Electronic Industrial Solutions Group Highlights

Revenue

$376M

-17% y/y (-21% core*)

Operating Margin

19.0%

-1,550 basis points y/y

• Automotive: Revenue was sequentially stable excluding acquisitions; the European EV funnel remains steady with a second key win this quarter.
• Semiconductor: Large industry fab projects continue to be delayed into late
  CY24 and 2025. Demand for Keysight's proprietary interferometry systems was steady, and memory-related wafer test demand improved.
• General Electronics: Consumer electronics, manufacturing and distribution demand remained constrained, while advanced research, digital health and high- speed interconnect testing was steady.

* Core revenue growth excludes the impact of currency, acquisitions or divestitures closed in last twelve months.	8
Segment revenue and income from operations are consistent with the non-GAAP financial measures slide, refer last slide for details.

Q2'24 Revenue By End Market

End Market	Revenue	YoY %
Commercial	$563M	-10%
Communications
Aerospace, Defense &	$277M	-11%
Government
Electronic Industrial	$376M	-17%
Solutions
Total	$1,216M	-13%

9

FY23 Non-GAAP Highlights & Annual Trend

	Orders	Revenue	Operating Margin	EPS
	$5.190B	$5.464B	30.2%	$8.33
	4% CAGR	6% CAGR	+620 basis points	15% CAGR

4-year CAGR from 2019 to 2023. Reconciliations to closest GAAP equivalent provided for all non-GAAP measures. Non-GAAP revenue excludes the impact of fair-	10
value adjustments to acquisition-related deferred revenue balances for FY19. For prior periods, please refer to investor.keysight.com.