Keysight Technologies, Inc. (NYSE:KEYS) Q1 2023 Earnings Call Transcript

Satish Dhanasekaran: Yes. Across the businesses, we’re obviously looking to create value for our customers and that value expectations go up with time, greater solutions, content, greater — software obviously increases the gross margin. You see that in our CSG business, 67% gross margin. So, we’ll continue to drive that up. On the EISG business, slightly lower software content, higher mix of manufacturing offerings traditionally. But equally, our emphasis on creating solutions is not diminished. We’re in fact, adding more software content, even to our semi manufacturing test systems, we’re providing more analytics capabilities, and we have strong customer uptake for those. So, over time, as we come off this inflationary impacts of the supply chain and other things that we’ve talked about, I would continue to expect more margin upside and look forward to sharing some of that with you at the Investor Day.

Operator: There are no more questions, so I’ll pass the call back over to the management team for closing remarks.

Satish Dhanasekaran: Yes. Thank you, and thank you all for joining. Keysight delivered another strong quarter, revenue up 10%, strong gross margins at 65%, operating profit 30%, free cash flow of greater than $300 million. And we continue to remain focused on actively collaborating with our customer — customers across the multiple end markets we serve as they navigate these dynamic conditions, which gives us the confidence in our ability to outperform. Again, we have a diversified end market exposure, strong solutions portfolio that’s growing, strength of backlog, strong cash position and a strong balance sheet. And all of these enable us to invest to realize our long-term growth strategies. But we’re doing so with the fiscal discipline and prudent operational initiatives that we have in place. We look forward to seeing you all in New York on March 7th. And I’m excited to share the future growth strategy moving forward. Thank you.

Operator: That concludes the conference call. Thank you for your participation. You may now disconnect your lines.