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April 2017
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Keysight TechnologiesInvestor Presentation
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Safe HarborThis communication contains forward-looking statements as defined in the Securities Exchange Act of 1934 and is subject to the safe harbors created
therein. These forward-looking statements involve risks and uncertainties that could significantly affect the expected results and are based on certain key
assumptions. Due to such uncertainties and risks, no assurances can be given that such expectations will prove to have been correct, and readers are
cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. No representations or warranties are
made by Keysight, Ixia or any of their respective subsidiaries or affiliates as to the accuracy of any forward-looking statement. The forward-looking
statements contained herein include, but are not limited to, the manner in which the parties plan to effect the transaction; the expected benefits and costs of
the transaction; management plans relating to the transaction; the expected timing of the completion of the transaction; the parties’ ability to complete the
transaction considering the various closing conditions, including conditions related to regulatory and Ixia shareholder approvals; the plans, strategies and
objectives of management for future operations; product development, product extensions, product integration, complementary product offerings and
growth opportunities in certain business areas; the potential future financial impact of the transaction, including expected synergies; Keysight and Ixia's
individual or combined presence in growth markets; any other information or statements that refer to expectations, beliefs, plans, projections, objectives,
performance or other characterizations of future events or circumstances; and any assumptions underlying any of the foregoing. Actual results may differ
materially from those referred to in the forward-looking statements due to a number of important factors, including but not limited to the possibility that
expected benefits of the transaction may not materialize as expected; that the transaction may not be timely completed, if at all; that Keysight may not be
able to successfully integrate the solutions and employees of Keysight and Ixia or ensure the continued performance or growth of Ixia’s products or
solutions; that there may be unexpected costs, liabilities, charges or expenses resulting from the transaction. Many of these factors are beyond Keysight
and Ixia’s control. In addition to the risks above, other risks that Keysight faces include those detailed in Keysight’s filings with the Securities and Exchange
Commission, including, but not limited to, Keysight’s annual report on Form 10-K for the year ended October 31, 2016, Keysight’s quarterly report on Form
10-Q for the period ended January 31, 2017, and Keysight’s current report on Form 8-K filed with the Securities and Exchange Commission on March 20,
2017. Other risks that Ixia faces include those detailed in Ixia’s filings with the Securities and Exchange Commission, including, but not limited to, Ixia’s
annual report on Form 10-K for the year ended December 31, 2016.
Forward-looking statements are based on the beliefs and assumptions of Keysight’s management and on currently available information. Keysight
undertakes no responsibility to publicly update or revise any forward-looking statement. Statements contained herein describing documents and
agreements are summaries only and such summaries are qualified in their entirety by reference to such documents and agreements.
This presentation includes a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of the
business, for making operating decisions and for forecasting and planning for future periods. Non-GAAP measures exclude primarily the impacts of share-
based compensation, restructuring and related costs, separation and related costs, acquisition and integration costs, acquisition-related fair value
adjustments, asset impairments and non-cash intangible amortization. Also excluded are tax benefits or expenses that are not directly related to ongoing
operations and which are either isolated or cannot be expected to occur again with any regularity or predictability. The definitions of these non-GAAP
financial measures may differ from similarly titled measures used by others, and such non-GAAP measures should be considered supplemental to and not
a substitute for financial information prepared in accordance with GAAP. Keysight generally uses non-GAAP financial measures to facilitate management’s
comparisons to historic operating results, to competitors’ operating results and to guidance provided to investors. In addition, Keysight believes that the use
of these non-GAAP financial measures provides greater transparency to investors of information used by management in its financial and operational
decision-making.
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Agenda
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Executive Overview
Growth Initiatives
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• Diversified tail winds across 5G, IoT, Auto, Software, Services and Networking
• Organizational realignment to end markets
• Proven track record of operational excellence following separation
• R&D investment up over 200bps as percent of revenue since FY2014(3)
• Market share gains since 2014(1)
• Multiple levers to drive long-term 8-10% EPS(4) growth
• Ixia acquisition adds $485M(5) to the topline and $2.5B in incremental SAM
– $60M combined annual cost synergies; $50M achieved within 24 months
– $100M revenue synergies by year 5
• #1 market position in key software & hardware verticals(1)
• $15.5B electronics and communication SAM(2)
• 20%+ market share in core end markets(2)
Market Leader in Attractive Markets
Aligned to Critical Industry Growth
Themes
Strong Culture of Execution
Attractive Financial Model
Compelling Investor Value PropositionCommitment to Growing Long-Term Total Shareholder Returns
(1) Per Prime Data. Keysight core products
(2) Per company estimates for FY16. $15.5B SAM represents combined Keysight and Ixia SAM
(3) Non-GAAP measure. Refer to appendix for reconciliation
(4) Non-GAAP measure.
(5) Based on FYE Dec-31, 2016 revenue4
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1939–1998: The Hewlett-Packard years
A company founded on electronic measurement innovation
1999–2013: The Agilent Technologies years
Spun off from HP, Agilent became the World’s Premier Measurement Company
2014: Keysight is launched
Focused singularly on electronic design and test solutions
History of Leadership and InnovationUnlocking measurement insights for over 75 years
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Keysight Today: Market & Technology Leader
Note: FY16 statistics are not pro forma for Ixia acquisition
(1) Free Cash Flow calculated as Operating Cash Flow less Capital Expenditures
(2) Non-GAAP measure. Refer to appendix for GAAP reconciliation. See non-GAAP Income from Operations divided by non-
GAAP revenue to derive operating margin
(3) Includes indirect channels
(4) Sites with greater than 70 manufacturing employees
FY16 Key Statistics
Electronic
Industrial
Solutions
Group
$0.8B, 26%
Services Solutions Group
$0.4B, 14%
Communication
Solutions Group
$1.7B, 60%
$2.9B
Business Overview
• Worldwide leader in high value, mission critical
electronic design and test solutions
• Relied on by the world’s leading technology
companies
• 75+ years of innovation, measurement science
expertise and deep customer relationships
Complementary Ixia Acquisition
Revenue Mix
• Industry pioneer and technology leader in network
test and visibility
• 400+ US and foreign patents issued or pending;
approximately 60% software related
• 700+ Software engineers
15 of the
Top 15 NEMS 47 of the
Top 50 Carriers 77 of the
Fortune 100
Customers
~30,000Number of customers(3)
100+Countries served
13Countries with R&D centers
3Manufacturing sites(4)
$325M Free Cash Flow(1),(2)
19%Operating Margin(2)
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Our Value to Customers – Unmatched in the Industry
Product Lifecycle
Automotive Electronics Wireless Base Stations Hyperscale &Data Centers
Internet of Things Smart Phones
Avionics Surveillance Radar Satellites
Enable our customers to bring breakthrough electronic products to market faster and at a
lower cost
Simulate Prototype Manufacture Optimize
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Driving shareholder returnsA Strong Financial Framework for Value Creation
• U.S. Cash
Generation
• Appropriate
Leverage
• Strategic Alignment
• Growth
• Value Creation
• Cost Structure
Flexibility
• Cost Reductions
• Margin Expansion
• R&D Investment
• SAM Expansion
• Profit Leverage
OrganicGrowth
Business ModelMergers &
AcquisitionsReturn of Capital
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•Commercial
Communications
•Aerospace,
Defense &
Government
•Automotive
•Energy
•General
Electronics
•Semiconductor
•Calibration
•Repair
•Remarketing
• Americas
• Europe
• Asia
• Japan
• Software
Technology
• Hardware
Technology
Organized to Grow
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Communications
Solutions Group
Electronic
Industrial
Solutions Group
Services
Solutions Group
Mike
Gasparian
Gooi Soon
Chai
John Page
Worldwide Sales
Mark
Wallace
Corporate
Planning and
Technology
Jay
Alexander
Aligned with End MarketsFirst to Market Trusted Advisor
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Strong Progress on Growth Initiatives
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Expand
Leadership in
T&M Software
Grow Services
Business by 50%
• Triple-digit 5G order growth in FY16
• Positioning Keysight as the market leader in 5G
• Collaborating with leading consortiums, universities, and
research institutes to define 5G standards and technologies
• Double-digit order growth in FY16
• Anite acquisition materially expanded software business
• Staffing of new software design center ahead of schedule
• 9% order growth in FY16
• New opportunities in multi-vendor support, asset
management, systems integration and training
• Continuing to win new multi-vendor business
Be First in 5G
Wireless
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Disciplined approach to capital investment
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Completed 3 - 4 Years Beyond
Return
of
Capital
Stabilize asIndependent Company
• Completed April 30, 2015
• 6 months ahead of schedule
Phase 1
Separate
Sustained 4% CAGRover Cycle
• M&A as priority use of cash
– Anite (closed Aug 2015)
– Electroservices (closed Aug 2015)
– Ixia (announced January 2017)
Phase 2
Return to Growth
Balanced Returnof Capital
• Return of capital tied to US cash generation
• Appropriate leverage and commitment to investment grade credit metrics
• Opportunistic M&A
Phase 3
Return Capital
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The
Example
Disciplined and Well-Defined Criteria for Acquisitions
• Aligns with strategic growth priorities
• Delivers higher gross margin R&D or software solutions
• Expands Served Addressable Market (SAM)
• Focuses on faster growing market segments or adds key technology
• Expected ROIC materially above cost of capital
• Expected to be quickly accretive
• Valuation aligns with appropriate market multiples
Strategic
Alignment
Value
Creation
Growth
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Long-Term Expectations
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RevenueGrowth
Op MarginIncremental
ProfitabilityOver the Cycle
Sustainable
4% CAGR
40% on
growth of 4%
or greater
Average
operating margin
of >20%*
Committed Return of Capital
Yields 8-10% EPS* Growth
* Non-GAAP
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Agenda
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Executive Overview
Growth Initiatives
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Leadership in Attractive Markets
SegmentsCommunications
Solutions Group
Electronic
Industrial
Solutions Group
Services
Solutions
GroupIxia(1)
End MarketsCommercial
Communications
Aerospace,
Defense &
Government
Electronic
IndustrialServices
Test &
VisibilityTOTAL
Revenue(2) $1B $0.7B $0.8B $0.4B $0.5B $3.4B
Market Size(3,5) $4B $3B $4B $2B $2.5B $15.5B
Market Share(3) 25% 23% 20% 20% 19% 22%
Long-term
Market Growth(4)1-2% 2-3% 2-3% 2-3% 14-17% 4-5%(6)
(1) Per Ixia filings and company estimates
(2) FY16 presented on a Non-GAAP basis. Refer to appendix for GAAP reconciliation
(3) Per Company estimates for FY16
(4) Market growth per Company estimates; average over 3-5 years
(5) Includes network test; excludes network assurance
(6) Weighted-average growth rate of end markets
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(1) Per Prime Data and Company estimates
(2) RF/Microwave design simulation software
Core Platforms Market Position(1)
Simulation Software(2) #1
Network Analyzers #1
Signal Analyzers #1
Signal Sources #1
Oscilloscopes #2
One Box Testers #3
Market Leader in Key Software & Instrument Platforms
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Growth Drivers
Commercial Communications• Evolving standards – 5G
• All data, all the time
• Internet of Things (IoT)
Aerospace, Defense &
Government
• World instability
• Defense modernization
Automotive & Energy• Evolving battery technologies
• Connected car
General Electronics • Consumer electronics demand
Semiconductor• Technology evolution
• China investment
Services • Customer outsourcing
Multiple Growth Drivers Provide Diversification
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Be first in
5G wireless
Growth Strategies
Expand leadership in
T&M software
Grow services
business
Extend into network
test and visibility
Growth Strategies
Software-centric solutions | Organic R&D investments | Strategic M&A
Growth Strategies Aligned to Key Market Themes
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First in 5G Wireless
Source: Company estimates and Cisco Visual Networking Index forecast, Mobile World
Congress 2017, 3GPP
Unprecedented Wireless Demand Accelerated Industry 5G Deployment Timeline
Keysight Positioned to Lead
30bn+ connected devices by 2020
10x mobile data in five years
• IoT consuming exponential amount of instantaneous data
• Disruptive auto and medical applications
• Public service sector services (fire, police) adopting wireless
technologies
• Triple-digit 5G order growth in FY2016
• >10 targeted simulation and prototype 5G solutions launched in
the last year
• Collaborating with 30+ partners worldwide on research and trials
• Frost & Sullivan 2016 Global T&M: Company of the Year Award
5G Deployment expected 2019
Pre-commercial North American deployment
mid-2017
Worldwide carrier trials begin 2H 2017
5G standards set by 2018
5G in 2019
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Expand Leadership in T&M Software
(1) Per Company estimates
Business Update
Growth Strategy
Expand simulation business
— Address growth opportunities in High-Speed Digital and
Power design
Deliver solutions focused on growth segments
— Deliver R&D (prototype test) solutions focused on growth
segments such as 5G Communications, Power, and
Automotive
Grow subscriptions and services
— Implement software capabilities to enable revenue growth
from subscriptions and from services
1
2
3
• $2B market for electronic test software, ~7% CAGR(1)
• Double digit order growth in FY16
• Software revenues over $400M
• New software design center staffed ahead of schedule
4Pursue selective acquisitions
— Increasing overall software content
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Grow Services Business by 50%
2016
$402M Revenue
(9% order growth)
2020
$600M Revenue
CalibrationUsed
Equipment
Repair
Used
Equipment Calibration
“Plus”
Repair
Grow Core Add New Services
Expand Multi-Vendor
Calibration Business
Build and Deploy Professional
Services
Launch and
Expand Asset Management
Leverage Portfolio
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A Combination of
Complementary
Strengths
Industry pioneer and
recognized leader in
network test; a leader in
network visibility solutions
Deep expertise in IP
network assessment,
excellent customer
relationships, software-
centric business & team
Extend into Network Test and Visibility
A global leader in
communications with the
ability to deliver
end-to-end solutions
across the network and up
and down the stack
Scale and operational
excellence to drive
revenue and
profit growth
A software-centric team to
enable further
transformation and value
creation
A global leader in
measurement
instrumentation and
software for physical and
protocol layer testing
Deep expertise in wireless
technology, strong
worldwide sales
presence, proven
operational discipline
Creating a compelling innovation engine with Ixia to drive growth
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Electrical, RF & Optical Test
High value communication capabilities across the network and throughout the stack
Keysight as a Platform for Accelerated Growth
Fro
m h
ardw
are
to s
oftw
are
Physical
Layer 1
Transport
Layers 2, 3, 4
Application
and Control
Layers 5, 6, 7 Mobile
Network
Test
Network and Application
Testing, Visibility,
and Security
Keysight Classic AniteIxia
Mob
ile D
evic
e
Test
Bas
e S
tatio
n E
mul
atio
n
Driv
e Te
st
Cus
tom
er E
xper
ienc
e M
anag
emen
t
Stack Layers
Channel Emulation
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Synergistic Combination with Ixia
Driving the Opportunity in Visibility(1)
Growing the Enterprise Mix(1)
Financial Impact and Outlook
• Accretive to top-line growth
– SAM expansion and go-to-market leverage driving
$50M in revenue synergies by year three and
$100M by year five
• Annual cost savings of $60M resulting from
infrastructure rationalization and supply chain
efficiencies
– Expect to achieve $50M of cost savings within 24
months
• Growth and operating model discipline drive
sustainable cash flow and superior performance
throughout the business cycle
• Commitment to rapid deleveraging and investment
grade credit
– ~2x Gross Debt / Adjusted EBITDA leverage within
24 months
Network
Test
72%
Network
Visibility
28%
Enterprise and
Government
35%
Network Equipment Manufacturers
42%
Service
Providers
23%
$485M
$485M
Ixia FY16 Revenue
(1) Refer to appendix for Ixia supplemental disclosures. Note that the enterprise sales mix information is
prepared based primarily on amounts invoiced to Ixia’s customers.
(2) Adjusted EBITDA calculated as Non-GAAP Operating Income plus depreciation, excluding amortization of
intangibles24
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FY16 Combined Financial Overview
58%Gross Margin(1)
14%R&D % of Revenue(1)
19%Operating Margin(1)
$325MFree Cash Flow(1)
$2.9BRevenue(1)
61%Gross Margin(1)
15%R&D % of Revenue(1)
18%Operating Margin(1),(2)
$397MFree Cash Flow(1)
$3.4BRevenue(1)
Note: Figures represent non-GAAP measures. Combined figures represent summation of Keysight’s FYE
October 31, 2016 and Ixia’s FYE December 31, 2016. Excludes PF transaction adjustments
(1) Non-GAAP measure. Refer to appendix for GAAP reconciliation. Gross margin, operating margin, and R&D
% of revenue excludes stock-based compensation for Ixia.
(2) See combined non-GAAP Income from Operations divided by combined non-GAAP Keysight revenue and
GAAP Ixia revenue to derive combined operating margin. Excludes expected synergies
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Key Messages
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Technology and market leader in
ever-evolving technology market
4% revenue CAGR
Deliver >20% operating margin
8-10% EPS growth
Transformation
Objectives
Over the Cycle*Leader in profitable
market
Target fast growing areas
and expand Served Addressable
Market (SAM)
Proven operating performance
and cash generation across cycles
Transform for
growth
Strong business
model
* Non-GAAP measure
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Modular Form Factor
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43%Other
Modular
57%PXI/AXIe
Modular
Fast Growing ModularSmall Portion of Total Market
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2014 Modular Solutions Market
$1.1 Billion*
2016 Total Design & Test Market
$13 Billion*
* Per Company estimates. Excludes SAM expansion from expected acquisition of Ixia
0
2
4
6
8
10
12
14
16
18
2015 2016 2017 2018 2019 2020
$B$625M*
PXI/AXIe
Modular
15% CAGR*
to 2020
PXI/AXIe
Modular
15% CAGR*
Keysight’s double-digit growth
continued in FY16
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“X-Chips” Chipset
• Highly integrated
• High performance
• Low power
Handheld
Feature Rich Box
Modular
Proprietary technology
developed by central
Keysight Labs, manufactured
at in-house semiconductor
fab, and deployed into all
three form factors
Investments Leveraged into Multiple Form FactorsProvides Competitive Differentiation
• R&D
• Validation
• Complex device manufacturing
• Full measurement set
• One-button measurements
• Shared lab equipment
• Manufacturing
• R&D
• Validation
• Small footprint
• Flexible configuration
• Multi-channel applications
• Installation
• Maintenance
• Portability
• Harsh environments
Customer Best ForForm Factor
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Reconciliations
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Keysight Non-GAAP gross margin reconciliation
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Year Ended
October 31, 2016
( in millions)
GAAP Gross Profit 1,624$ 56%
Intangible amortization 38
Share-based compensation 11
Acquisition and integration costs 2
Acquisition related fair value adjustments 12
Other 2
Non-GAAP Gross Profit 1,689$ 58%
GAAP Revenue 2,918$
Non-GAAP Revenue 2,930$
Gross Margin %
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Keysight Non-GAAP operating margin reconciliation
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Year Ended
October 31, 2016
( in millions)
Income from operations, as reported 406$
Intangible amortization 44
Share-based compensation 49
Acquisition and integration costs 18
Acquisition-related fair value adjustments 12
Separation and related costs 24
Restructuring and related costs —
Other (7)
Non-GAAP income from operations 546$
GAAP Operating Margin 14%
Non-GAAP Operating Margin 19%
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Keysight Non-GAAP research and development expenses reconciliation
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October 31, 2016 October 31, 2014
Research and Development expense, as reported 425$ 361$
Share-based compensation (8) (7)
Acquisition and integration costs (1) -
Separation and related costs - (2)
Restructuring and related costs - 1
Other - (1)
Non-GAAP Research and Development expense 416$ 352$
GAAP Revenue 2,918$ 2,933$
R&D as a % of GAAP Revenue 14.6% 12.3%
Non-GAAP Revenue 2,930$ 2,933$
R&D as a % of Non-GAAP Revenue 14.2% 12.0%
Year Ended
( in millions)
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Keysight Non GAAP revenue by end market reconciliation
Aerospace, Defense & Government 740$ — 740$
Commercial Communications 1,000 12 1,012
Electronic Industrial 776 — 776
Services 402 — 402
Total Keysight Revenue 2,918$ 12$ 2,930$
Non-GAAP revenue is defined to exclude the fair value adjustments to the Anite acquisition-related deferred revenue balances.
FY16, (in millions)
GAAP Revenue
Acquisition-
related
fair value adjs Non-GAAP Revenue
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Keysight Free cash flow reconciliation
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Keysight Non GAAP revenue reconciliation FY16,
(in millions)
GAAP Revenue 2,918$
Acquisition-related fair value adjustments 12
Non-GAAP Revenue 2,930$
Year Ended
October 31, 2016
(in millions)
Net cash provided by operating activities 416$
Less: Investments in property, plant and equipment (91)
Free cash flow 325$
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