Keysight Technologies, Inc. (NYSE:KEYS) Q3 2020 Earnings Conference Call - Final Transcript

Aug 20, 2020 • 04:30 pm ET


Keysight Technologies, Inc. (NYSE:KEYS) Q3 2020 Earnings Conference Call - Final Transcript


Loading Event

Loading Transcript


Good day, ladies and gentlemen, and welcome to the Keysight Technologies Fiscal Third Quarter 2020 Earnings Conference Call. My name is Chris, and I'll be your lead operator today. [Operator instructions] Please note that this call is being recorded today, Wednesday, August 20, 2020, at 1:30 Pacific Time.

I would now like to turn the conference over to Jason Kary, Vice President, Treasurer, and Investor Relations. Please go ahead, Mr. Kary.

Jason Kary

Thank you, and welcome, everyone, to Keysight's third quarter earnings conference call for fiscal year 2020. Joining me are Ron Nersesian, Keysight's Chairman, President, and CEO; and Neil Dougherty, Keysight's Senior Vice President and CFO. Joining us in the Q&A session will be Mark Wallace, Senior Vice President of Worldwide Sales; and Satish Dhanasekaran, President of the Communications Solutions Group.

You can find the press release and information to supplement today's discussion on our website at While there, please click on the link for quarterly reports under the Financial Information tab. There you'll find an investor presentation along with Keysight's segment results. Following this conference call, we will post a copy of the prepared remarks to the website.

Today's comments by Ron and Neil will refer to non-GAAP financial measures. We will also make references to core growth, which excludes the impact of currency movements and acquisitions or divestitures completed within the last 12 months. You will find the most directly comparable GAAP financial metrics and reconciliations on our website. We will make forward-looking statements about the financial performance of the Company on today's call. These statements are subject to risks and uncertainties and are only valid as of today. The Company assumes no obligation to update them. Please review the Company's recent SEC filings for a more complete picture of our risks and other factors.

Lastly, I would note that the management team is scheduled to participate in upcoming virtual investor conferences in September, hosted by Jefferies, Citibank, and Deutsche Bank.

And now I will turn the call over to Ron.

Ron Nersesian

Thank you, Jason, and thank you all for joining us. Keysight delivered stronger-than-expected third quarter results, demonstrating the exceptional resilience of our business for the second quarter in a row despite ongoing macro challenges. I am proud of how the Keysight team rapidly adapted to a new operating environment while delivering on our commitments to our customers, partners, and shareholders.

Today, I'll focus my formal comments on three key headlines for the quarter. First, we delivered stronger-than-expected third quarter results with solid gross margin and record operating margin. Our differentiated solutions drove steady demand through the quarter, and our operational execution was exceptional as we ramp production capacity to nearly 100% by quarter end. Second, despite the ongoing pandemic uncertainty, we remain confident in our differentiated leadership position and the long-term secular growth trends driving our markets. The past two quarters have demonstrated the resilience of the Keysight leadership model, which we believe provides a durable competitive advantage for the long term. And third, despite near-term macro