Keysight Technologies, Inc.

Annual recurring revenue reached approximately $1.5 billion in FY2024 (roughly 30% of total), supported by software subscriptions, calibration contracts, and multi-year service agreements. The remaining approximately 70% of revenue is project-based hardware tied to customer capex cycles, creating meaningful year-to-year variability demonstrated by the FY2024 contraction.

The Communications Solutions Group represented approximately 70% of FY2025 revenue, with the Electronic Industrial Solutions Group contributing the remaining roughly 30%. Within CSG, commercial communications, aerospace/defense/government, and data center testing provide sub-segment balance but do not constitute independent end markets with uncorrelated demand patterns.

In FY2025, the Americas and Asia Pacific each contributed approximately 42% of revenue, with Europe at roughly 16%, reflecting a balanced two-hemisphere footprint with meaningful European operations. Asia revenue spans China, Japan, South Korea, and Southeast Asia, though China-specific exposure introduces geopolitical risk not fully mitigated by regional diversification.

Keysight targets non-GAAP operating margins of 31-32% at mid-cycle, supported by a growing software and services mix with structurally higher margins than hardware. R&D investment has run near 19% of revenue in FY2024-FY2025, a relatively fixed cost base that limits operating leverage during revenue contractions.

Approximately 30% of revenue is recurring (FY2024 ARR approximately $1.5B) via subscriptions and calibration/support contracts; the balance is hardware serving mission-critical engineering workflows across chip validation, wireless conformance testing, and defense qualification. The project-based hardware majority introduces transactional variability not typical of a fully subscription-led model.