- Keysight delivered strong financial performance with $5.4 billion in revenue, a 10% increase from the previous year.
- The company achieved a record non-GAAP net income of $1.4 billion, or $7.63 per share, up 22% over fiscal year 2021.
- Keysight invested $813 million in R&D and improved operating margin by 140 basis points to 29%.
- The company continued to transform into a software-centric solutions provider, despite global supply chain challenges and geopolitical headwinds.
- Keysight's focus on customer success and innovation led to strong revenue growth in key areas such as 5G/6G, automotive and energy, semiconductor, software, and services.
- The company's commitment to corporate social responsibility and sustainability is reflected in its inclusion on major ESG indices and recognition for supporting healthy families and communities.
- Keysight is confident in its business resilience and ability to outperform the market as it navigates short-term uncertainties and capitalizes on long-term growth trends.
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.
Sincerely,
Satish Dhanasekaran
President & Chief Executive Officer
January 23, 2023
Read the original letter here.
