Keysight Technologies, Inc.

Digital transformation and innovation · Technology obsolescence and evolution

Failure to introduce successful new solutions and services in a timely manner to address increased competition, rapid technological changes, and changing industry standards could result in our solutions and services becoming technologically obsolete over time.

Technology infrastructure · Cloud services and data center operations

We rely on several centralized IT systems as well as cloud-based service providers to provide solutions and services, maintain financial records, retain sensitive data. Our IT systems and those of our service providers may be susceptible to damage, disruptions, instability, or shutdowns.

Innovation and product development · Product development and randd investment risks

Our future operating results may fluctuate significantly if our investments in innovative technologies are not as profitable as we anticipate. We devote significant resources to develop new technologies in communications, aerospace and defense, automotive and the Internet of Things.

Market position and competition · Pricing pressure and margin compression

If, as a result of increased leverage, customer pressures require us to reduce our pricing such that our gross margins are diminished, we could decide not to sell our solutions under such less favorable terms. In such an environment, pricing pressures could intensify and further reduce our operating margins.

Market position and competition · Industry consolidation and market concentration

Industry consolidation and consolidation among our customer base may lead to increased competition and may harm our operating results. There is potential for industry consolidation in our markets. As companies attempt to expand, strengthen or hold their market positions, companies could be acquired or may be unable to continue operations.

Market position and competition · Competitive pressure and market share loss

Failure to introduce successful new solutions and services in a timely manner to address increased competition, rapid technological changes, and changing industry standards could result in our solutions and services becoming obsolete.

Strategic execution · Merger acquisition and divestiture risks

Our acquisitions, strategic alliances, joint ventures, internal reorganizations and divestitures may result in financial results that are different than expected. As a result of such transactions, our financial results may differ from our own or the investment community's expectations.

Reputation and brand · Brand damage and negative publicity

If we experience a significant cybersecurity attack or disruption in our IT systems or our products, our business, reputation, and operating results could be adversely affected. Such attacks could result in loss of confidence in our products, loss of orders, and loss in revenue.

Reputation and brand · Esg environmental social governance performance

Our commitment to net zero emissions in company operations by fiscal year 2040 will be subject to significant costs and regulations. Failing to achieve the company's net zero or science-based targets commitments could result in regulatory non-compliance, shareholder lawsuits and damage to our reputation.

Corporate governance · Internal controls and risk management

Our internal controls may be determined to be ineffective, which may adversely affect investor confidence in our company. We devote significant resources and time to comply with various internal control over financial reporting requirements, including the Sarbanes Oxley Act of 2002.

Supply chain and procurement · Raw material availability and cost volatility

Failure to adjust our purchases due to changing market conditions or failure to estimate our customers' demand could adversely affect our income. Supply chain fluctuations could impact our ability to purchase parts and components. Some parts require custom design and may not be readily available from alternate suppliers.

Human capital and workforce · Key personnel dependence and succession

Our future success depends partly on the continued service of our key research, engineering, sales, marketing, manufacturing, executive and administrative personnel, including personnel joining our company through acquisitions.

Human capital and workforce · Talent acquisition and retention

Our business will suffer if we are not able to retain and hire key personnel. Our future success depends partly on the continued service of our key research, engineering, sales, marketing, manufacturing, executive and administrative personnel.

Supply chain and procurement · Geographic concentration of suppliers

Many of our suppliers, vendors, customers, partners, and other entities with whom we do business have strong ties to doing business in China and other countries impacted by the increased tariffs. We centralize most of our accounting processes at two locations: India and Malaysia.

International and currency · Currency hedging and derivatives

Our hedging programs are designed to reduce, but not entirely eliminate, within any given 12-month period, the impact of currency exchange rate movements. However, for expenses beyond a 12-month period, our hedging strategy will not mitigate our exchange rate risk.

Capital structure and performance · Debt management and refinancing

We have outstanding debt and may incur other debt in the future, which could adversely affect our financial condition, liquidity and results of operations. Our incurrence of debt, and increases in our aggregate levels of debt, may adversely affect our operating results and financial condition.

International and currency · International operations and emerging markets

Because we operate our businesses and sell our solutions worldwide, our businesses are subject to risks associated with doing business internationally. We anticipate that revenue from international operations will continue to represent a majority of our total revenue.

International and currency · Transfer pricing and taxation

Intercompany transactions associated with the sale of inventory, services, intellectual property and cost sharing arrangements are complex and affect our tax liabilities. The calculation of our tax liabilities involves uncertainties in the application of complex tax laws and regulations in multiple jurisdictions.

Geopolitical and trade · Trade policies tariffs and sanctions

There have been recent and ongoing changes to U.S. tariff policy, resulting in broad-based increases in tariff rates. Commencing in the second quarter of fiscal 2025, new U.S. tariffs applying to imports from all countries were announced, including significantly higher rates on imports from China. In response, several countries, including China, have imposed or threatened to impose retaliatory measures on imports from the U.S.

Geopolitical and trade · Regulatory and policy uncertainty

Uncertainty regarding the U.S. government's announced tariffs, potential changes to existing tariffs and whether additional tariffs may be imposed, modified or suspended; unexpected changes in regulatory requirements; conflicting regulatory requirements within the jurisdictions in which we operate.