Keysight Technologies has recently released its 10-Q report, providing a detailed look into the company's financial performance. Keysight Technologies, Inc. offers electronic design and test solutions globally, operating in two segments: Communications Solutions Group and Electronic Industrial Solutions Group. The company provides a wide range of products and services, including oscilloscopes, electronic design automation software, instrument measurement software, and modular instruments. Additionally, it offers product support, technical services, and integration services.
In the 10-Q report, the company's gross margin for the three months ended April 30, 2025, remained flat compared to the same period last year, primarily due to unfavorable mix, higher material costs, and the impact of tariffs, offset by favorable pricing and higher revenue volume. The gross margin for the six months ended April 30, 2025, decreased by 1 percentage point compared to the same period last year, driven by unfavorable mix and the impact of tariffs, partially offset by favorable pricing, lower restructuring costs, and higher revenue volume.
Research and development (R&D) expense for the three and six months ended April 30, 2025, increased by 10% and 8%, respectively, compared to the same periods last year, primarily due to continued investments in key growth opportunities in the company's end markets and leading-edge technologies, along with incremental costs from acquired businesses.
Selling, general and administrative expense for the three and six months ended April 30, 2025, remained flat compared to the same periods last year, as lower infrastructure costs and amortization of acquisition-related balances were offset by higher acquisition and integration costs and travel costs.
The operating margin for the three months ended April 30, 2025, increased by 1 percentage point compared to the same period last year, primarily due to a decrease in operating expenses as a percentage of revenue. The operating margin for the six months ended April 30, 2025, remained flat compared to the same period last year, primarily due to a decrease in operating expenses as a percentage of revenue, partially offset by a decline in gross margin.
Interest income for the three and six months ended April 30, 2025, was $21 million and $40 million, respectively, compared to $18 million and $41 million, respectively, for the same periods last year, primarily relating to interest earned on the company's cash balances. Interest expense for the same periods was $20 million and $40 million, respectively, primarily relating to interest on the company's senior notes.
Other income (expense), net for the three and six months ended April 30, 2025, was income of $112 million and $94 million, respectively, compared to zero and income of $5 million, respectively, for the same periods last year. This primarily includes gains (losses) due to currency and derivative instruments, the change in fair value of equity and other investments, income related to defined benefit and post-retirement benefit plans, and income attributable to non-controlling interests.
The effective tax rate for the three and six months ended April 30, 2025, was lower than the U.S. statutory federal income tax rate, primarily due to a lower effective tax rate on foreign earnings, partially offset by U.S. taxes on those earnings and the impact of Pillar Two minimum taxes.
Keysight Technologies' Communication Solutions Group (CSG) revenue for the three and six months ended April 30, 2025, increased by 9% and 7%, respectively, compared to the same periods last year. The revenue growth was driven by higher investments in high-speed networks to support increasing demand for AI capabilities and higher investment in aerospace and defense solutions.
In addition, CSG's commercial communications end market revenue for the same periods increased by 9% and 7%, respectively, driven by R&D investments in terabit solutions and expanding 400G/800G transceiver manufacturing capacity. The aerospace, defense, and government end market revenue also increased by 9% and 7%, respectively, primarily driven by strong growth in space and satellite solutions and continued investments in radar and spectrum operations.
As a result of these announcements, the company's shares have moved 1.63% on the market, and are now trading at a price of $160.945. If you want to know more, read the company's complete 10-Q report here.
