Keysight Technologies Reports 3% Revenue Growth to $1.298 Billion in Q1 FY 2025

Keysight Technologies, Inc. reported its financial results for the first quarter of fiscal year 2025, ending January 31, 2025, revealing a total revenue of $1.298 billion, a 3% increase from $1.259 billion in the same period last year. The growth was primarily driven by a 5% increase in the Communications Solutions Group (CSG), which accounted for 68% of total revenue, while the Electronic Industrial Solutions Group (EISG) saw a slight decline of 1%. Net income for the quarter was $169 million, down from $172 million year-over-year, reflecting challenges such as losses on derivative instruments and increased research and development expenses.

The company’s operating expenses totaled $1.080 billion, up from $1.038 billion in the prior year, with research and development costs rising by 7% to $249 million. The increase in R&D spending is attributed to ongoing investments in key growth opportunities and technologies. Despite the rise in expenses, the operating income was $218 million, slightly lower than the $221 million reported in the previous year, resulting in an operating margin of 16.8%, down from 17.6%.

In terms of strategic developments, Keysight completed the acquisition of ESI Group SA, acquiring 50.6% of its shares for $477 million in November 2023 and the remaining shares for $458 million in January 2024. This acquisition is expected to enhance Keysight's capabilities in the electronic design automation market. The company also announced plans to acquire Spirent Communications PLC for approximately $1.463 billion, which is anticipated to close in the first half of fiscal year 2025, subject to regulatory approvals.

Operationally, Keysight's headcount as of January 31, 2025, was approximately 15,400, a slight decrease from 15,500 a year earlier. The company reported total orders of $1.263 billion for the quarter, a 4% increase year-over-year, with growth in Asia Pacific and Europe, although orders in the Americas declined. The company continues to monitor macroeconomic conditions, including trade restrictions and geopolitical tensions, which may impact future performance.

Looking ahead, Keysight remains optimistic about its growth prospects, particularly in next-generation technologies such as 5G, AI, and electric vehicles. The company is committed to maintaining its first-to-market solutions strategy and expects to continue investing in R&D to drive innovation. However, it acknowledges potential challenges from economic volatility and market conditions that could affect customer demand and operational performance.