Keysight Technologies Inc (NYSE:KEYS) stock rose 6.01% (As on November 20, 11:48:01 AM UTC-4, Source: Google Finance) after the company reported fourth quarter earnings that beat expectations and provided strong guidance. Non-GAAP net income was $288 million compared with $352 million in the fourth quarter of 2023. Cash flow from operations was $359 million, compared with $378 million last year. Free cash flow was $328 million, compared with $340 million in the fourth quarter of 2023. As of October 31, 2024, cash and cash equivalents totaled $1.80 billion.

Moreover, Orders increased 1 percent year-over-year and grew 8 percent sequentially. Communication Solutions Group orders grew for the second consecutive quarter driven by ongoing strength in AI and a strong year-end in aerospace, defense and government. EISG orders were mixed with year-over-year growth in semiconductor and general electronics offset by automotive market headwinds. Recurring software and services revenue was 30% of total, up ~600bps y/y. FY24 share repurchases totaled ~3 million shares for a total of $439M. In addition, the company has completed acquisitions of ESI, Riscure, AnaPico and Easics in FY24 and has entered agreements to acquire Spirent Communications and Synopsys’ Optical Solutions Group. There is sustained R&D investment (~17% of revenue) despite a challenging macro environment.

KEYS in the fourth quarter of FY 24 has reported the adjusted earnings per share of $1.65, beating the analysts’ estimates for the adjusted earnings per share of $1.57. The company had reported the adjusted revenue growth of 35.9 percent to $1.29 billion in the fourth quarter of FY 24, beating the analysts’ estimates for revenue of $1.26 billion. Communications Solutions Group (CSG) reported revenue of $894 million in the fourth quarter, flat over last year, reflecting 4 percent growth in commercial communications driven by AI-related investment, while aerospace, defense, and government declined 6 percent versus a record high quarter last year. Electronic Industrial Solutions Group (EISG) reported revenue of $393 million in the fourth quarter, down 6 percent over last year, reflecting ongoing constraint in manufacturing-related customer spending. SG&A declined 3% y/y in Q4, and declined 7% y/y for the full year when excluding acquisitions reflecting operating model cost flexibility and proactive actions.

For the first quarter of fiscal 2025, Keysight forecast adjusted earnings of $1.65 to $1.71 per share on revenue between $1.265 billion and $1.285 billion. Both ranges were above Wall Street estimates of $1.55 EPS and $1.237 billion in revenue. The company expected 2025 capital expenditures to be of approximately $150M.