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Item 1A. Risk Factors

2025-12-17 compared with 2024-12-17 · 140 added, 78 removed, 364 unchanged (37% of the section changed)

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Risks Related to Our Business

Uncertainty in general economic conditions may adversely affect our operating results and financial condition.

Our business is sensitive to negative changes in general economic conditions, both inside and outside the United States.

Global and regional economic uncertainty, inflation and potential recession has and may continue to impact our business, resulting in:

Volatility and uncertainty in general economic conditions may adversely affect our operating results and financial condition.

Our business is sensitive to negative changes in general economic conditions, both inside and outside the U.S.

Global and regional economic volatility and uncertainty, inflation and potential recession has and may continue to impact our business, resulting in:

• increased cost to manufacture products or deliver solutions;

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• increased risk of excess and obsolete inventory;

• increased risk of supply chain shortages;

• increased price pressure on our solutions and services;

• greater risk of impairment to the value, and a detriment to the liquidity, of our future investment portfolio.

In addition, global and regional macroeconomic developments, such as increased unemployment, uncertainty related to future economic activity, volatility in financial markets, reduced access to credit, changing interest rates, volatility in capital markets, decreased liquidity, uncertain or destabilizing national elections and reactions to national election results, political violence and unrest in the U.S., the U.K., Europe, and Asia, and negative changes or volatility in general economic conditions in the U.S., Europe, and Asia could negatively affect our ability to conduct business in those territories.

In addition, global and regional macroeconomic developments, such as uncertainty related to future economic activity, increased tariff rates and reciprocal tariffs, volatility in financial and capital markets, reduced access to credit, changing interest rates, decreased liquidity, uncertain or destabilizing national elections and reactions to national election results, political violence and unrest in the U.S., the U.K., Europe, and Asia, and negative changes or volatility in general economic conditions in those regions could negatively affect our ability to conduct business in those territories.

Financial difficulties experienced by our suppliers and customers due to economic volatility could result in product delays, reduced purchasing power, delays in payment or inability to pay us, and inventory issues.

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However, there can be no assurances that our international sales will continue at existing levels or grow in accordance with our effort to increase foreign market penetration.

In addition, many of our employees, contract manufacturers, suppliers and manufacturing facilities are located outside the United States.

Accordingly, our future results could be harmed by a variety of factors, including, but not limited to:

In addition, many of our employees, contract manufacturers, suppliers and manufacturing facilities are located outside the U.S.

Accordingly, our future results could be negatively impacted by a variety of factors, including, but not limited to:

• inability to conduct business in certain countries or regions or with certain customers due to U.S.

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• inability to sell certain products, technologies, or services to countries, regions, facilities, or customers due to sanctions or trade restrictions;

• changes in a specific country's or region's political, economic or other conditions, including but not limited to changes that favor national interests and economic volatility;

• uncertainty regarding the U.S.

government’s announced tariffs, potential changes to existing tariffs and whether additional tariffs may be imposed, modified or suspended;

• changes in a specific country's or region's political, economic or other conditions, including but not limited to changes that favor national interests such as the imposition of or increase in tariffs and reciprocal tariffs, and economic volatility;

• negative consequences from changes in tax laws;

• difficulty in protecting intellectual property;

• difficulty in protecting and enforcing intellectual property rights;

• injunctions or exclusion orders related to intellectual property disputes;

• interruptions to transportation flows for delivery of parts to us and finished goods to our customers;

• supply chain disruptions;

• changes in foreign currency exchange rates;

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Economic and political policies favoring national interests could adversely affect our results of operations.

Nationalistic economic policies and political trends such as opposition to globalization and free trade, sanctions or trade restrictions, including those on advanced computing and semiconductor manufacturing, withdrawal from or re-negotiation of global trade agreements, tax policies that favor domestic industries and interests, and other similar actions may result in conflicting local or regional requirements, increased transaction costs, reduced ability to hire employees, reduced access to supplies and materials, reduced demand or access to customers, and inability to conduct our operations as they have been conducted historically.

Nationalistic economic policies and political trends such as sanctions or trade restrictions, including those on advanced computing and semiconductor manufacturing and design software, withdrawal from or re-negotiation of global trade agreements, increased tariffs and reciprocal tariffs, tax and local content policies that favor domestic industries and interests, changes to immigration laws or enforcement and other similar actions may result in conflicting local or regional requirements, increased transaction costs, reduced ability to hire employees, reduced access to components, supplies and materials, reduced demand or access to customers, and inability to conduct our operations as they have been conducted historically.

Each of these factors may adversely affect our business.

International trade disputes and increased tariffs between the United States and the United Kingdom, the European Union, Singapore, Malaysia and China, among other countries could substantially change our expectations and ability to operate in such jurisdictions as we have done historically.

Many of our suppliers, vendors, customers, partners, and other entities with whom we do business have strong ties to doing business in China.

Their ability to supply materials to us, buy products or services from us, or otherwise work with us is affected by their ability to do business in China.

If the U.S.’s relationship with China results in additional trade disputes, trade protection measures, retaliatory actions, tariffs and increased barriers, policies that favor domestic industries, or increased import or export licensing requirements or restrictions, then our deployment of resources in jurisdictions affected by such measures could be misaligned and our operations may be adversely affected due to such changes in the economic and political ecosystem in which our suppliers, vendors, customers, partners, and other entities with whom we do business operate.

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.

government has announced various modifications and delays to its tariff policy and further changes may be made in the future.

There has also been continuing litigation in the federal courts regarding the validity of the imposition of certain tariffs.

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.

Their ability to supply materials to us, buy products or services from us, or otherwise work with us is affected by their ability to do business in impacted countries.

Continued uncertainty around trade policy could substantially change our cost of operating in such jurisdictions.

Moreover, these tariffs and any other trade restrictions imposed on our customers or suppliers could adversely affect our financial results and position through reduced demand for our products and solutions, cancelled orders, supply chain disruptions, increased transaction costs, and increased expenses.

If the U.S.’ relationship with countries subject to increased tariffs results in additional trade disputes, trade protection measures, retaliatory actions and increased barriers, policies that favor domestic industries, or increased import or export licensing requirements or restrictions, then our deployment of resources in jurisdictions affected by such measures could be misaligned and our operations may be adversely affected.

Volatile geopolitical turmoil, including popular uprisings, regional conflicts, terrorism and war could result in market instability, which could negatively impact our business results.

We are a global company with international operations, and we sell our products and solutions in countries throughout the world.

Regional conflicts, including the Russian invasion of Ukraine, which resulted in economic sanctions and the decision to discontinue our operations in Russia, the war between Israel and Hamas, and the risk of increased tensions between China and Taiwan, could limit or prohibit our ability to transfer certain technologies, to sell our products and solutions, and could result in additional closure of facilities in sanctioned countries.

In addition, international conflict could further result in global or regional market instability;

Regional conflicts, including the Russian invasion of Ukraine, which resulted in economic sanctions and the decision to discontinue our operations in Russia, conflict in the Middle East, and the risk of increased tensions between China and Taiwan, could limit or prohibit our ability to transfer certain technologies, to sell our products and solutions, and could result in additional closure of facilities in sanctioned countries.

In addition, international conflict could further result in global or

regional market instability;

increased energy costs, which could increase the cost of manufacturing, selling and delivering products and solutions;

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In addition, our revenues and earnings forecasts for future fiscal quarters are often based on the expected seasonality or cyclicality of our markets.

However, due to factors such as inflation, the potential for recession, increased geopolitical tensions, including regional conflict and war, the markets we serve may experience increased volatility and may not experience the seasonality or cyclicality that we expect.

However, due to factors such as inflation, the potential for recession, trade barriers or restrictions, increased geopolitical tensions, including regional conflict and war, the markets we serve may experience increased volatility and may not experience the seasonality or cyclicality that we expect.

Our customers’ markets may also be affected by changes in the legal regulatory regime.

If our customers’ markets decline, orders may decline, may be delayed or cancelled, and we may not be able to collect on outstanding amounts due to us.

If our customers’ markets decline, orders may decline, may be delayed or cancelled, and we may not be able to collect outstanding amounts due to us.

Such declines could harm our financial position, results of operations, cash flows and stock price, and could limit our profitability.

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Since a significant portion of our operating expenses is relatively fixed in nature due to sales, R&D and manufacturing costs, if we were unable to respond quickly enough, these pricing pressures could further reduce our operating margins.

A decreased demand for our customers’ products or trade restrictions could adversely affect our results of operations.

A decreased demand for our customers’ products or trade barriers or restrictions could adversely affect our results of operations.

Our business depends on our customers’ ability to manufacture, design, and sell their products in the marketplace.

International trade disputes affecting our customers could adversely affect our business.

Tariffs on imports to or from China could increase the cost of our customers’ components and raw materials, which could make our customers’ products and services more expensive and could reduce demand for our customers’ products.

Protectionist and retaliatory trade measures by either China or the United States could limit our customers’ ability to sell their products and services and could reduce demand for our customers’ products.

Our customers and other entities in our customer chain could decide to take actions in response to international trade disputes that we could not foresee.

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.

government has announced various modifications and delays to its tariff policy and further changes may be made in the future.

There has also been continuing litigation in the federal courts regarding the validity of the imposition of certain tariffs.

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.

Increased tariffs on sales to or imports from impacted countries, including China, will increase the cost of our customers’ components and raw materials, which could make our customers’ products and services more expensive and could reduce demand for our customers’ products.

A decrease in demand or significant change in operations from our customers due to international trade disputes could adversely affect our operating results and financial condition.

If the U.S.’ relationship with countries subject to increased tariffs results in additional trade disputes, trade protection measures, retaliatory actions and increased barriers, policies that favor domestic industries, or increased import or export licensing requirements or restrictions, we could suffer additional unforeseen adverse effects on our operating results and financial condition.

Our customers and suppliers have at times become subject to U.S.

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In addition, many of the markets in which we operate are seasonal and cyclical.

Without the timely introduction of new solutions, services and enhancements, our solutions and services will become technologically obsolete over time, in which case our revenue and operating results would suffer.

Without the timely introduction of new solutions, services and enhancements, our solutions and services will become technologically obsolete over time, in which case our revenue and

operating results would suffer.

Our ability to offer new solutions and services and to deploy them in a timely manner depend on several factors, including, but not limited to, our ability to:

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On a regular basis, we review the existing technologies available in the market and identify strategic new technologies to develop and invest in.

We devote significant resources to develop new technologies in the communications, aerospace and defense, automotive and Internet of Things.

We devote significant resources to develop new technologies in communications, aerospace and defense, automotive and the Internet of Things.

We invest in R&D, grow and deepen relationships with customers and suppliers, and direct our corporate and operational resources to develop innovative technologies.

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Failure to adjust our purchases due to changing market conditions or failure to estimate our customers ’ demand could adversely affect our income.

Our income could be harmed if we are unable to adjust our purchases to address market fluctuations, including those caused by volatile global economic conditions, geopolitical conflict, or the seasonal or cyclical nature of the markets in which

Our income could be harmed if we are unable to adjust our purchases to address market fluctuations, including those caused by volatile global economic conditions including the impact of tariffs and reciprocal tariffs, geopolitical conflict, or the seasonal or cyclical nature of the markets in which we operate.

The sale of our solutions and services are dependent, to a large degree, on customers whose industries are subject to seasonal or cyclical trends in the demand for their products.

For example, the consumer electronics market is particularly volatile, making demand difficult to anticipate.

Making such estimations in an economic climate affected by inflation or potential recession, fluctuations in global currency, geopolitical tension and war is particularly difficult as increased volatility may impact seasonal trends making it more difficult to anticipate demand fluctuations.

Making such estimations in an economic climate affected by trade barriers, inflation or potential recession, fluctuations in global currency, geopolitical tension and war is particularly difficult as increased volatility may impact seasonal trends making it more difficult to anticipate demand fluctuations.

Supply chain fluctuations could impact our ability to purchase parts and components.

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Since IT is critical to our operations, any failure of our IT providers to perform could impair our ability to operate effectively.

Problems with manufacturing or IT outsourcing could result in lower revenues and unrealized efficiencies and could impact our results of operations and stock price.

Problems with manufacturing or IT outsourcing could result in lower revenues and unrealized

efficiencies and could impact our results of operations and stock price.

Much of our outsourcing takes place in developing countries and, as a result, may be subject to heightened geopolitical uncertainty.

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Because we cannot immediately adapt our production capacity and related cost structures to rapidly changing market conditions, when demand is lower than our expectations, our manufacturing capacity will likely exceed our production requirements.

During a general market upturn or an upturn in our business, if we cannot increase our manufacturing capacity to meet product demand, we will not be able to fulfill orders in a timely manner, which could lead to order cancellations, contract breaches or indemnification obligations.

During an economic downturn, if we had excess manufacturing capacity, our fixed costs associated with excess manufacturing capacity would adversely affect our income, margins and operating results.

By contrast, if, during a general market upturn or an upturn in our business, we cannot increase our manufacturing capacity to meet product demand, we will not be able to fulfill all orders in a timely manner, which could lead to order cancellations, contract breaches or indemnification obligations.

This inability could materially and adversely limit our ability to improve our income, margins and operating results.

By contrast, if, during an economic downturn, we had excess manufacturing capacity, then our fixed costs associated with excess manufacturing capacity would adversely affect our income, margins and operating results.

Key customers or large orders may expose us to additional business and legal risks that could have a material adverse impact on our operating results and financial condition .

As a global company, we have key customers all over the world, although no one customer makes up more than 10 percent of our revenue.

Sales to those customers could be reduced or eliminated as a result of failure to respond to customer needs, reduced customer demand, increased sales to our competitors, inability to manufacture or ship products and solutions, supply chain constraints, trade restrictions, sanctions and embargoes.

We have experienced forced reductions in sales and been prevented from selling large orders to certain key customers due to trade restrictions, which we have been able to mitigate with the addition of new customers and new business.

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Acquisitions and strategic alliances may require us to integrate a different company culture, management team, employees and business infrastructure into our existing operations without impacting the business operations of the newly acquired company.

We may have difficulty developing, manufacturing and marketing the products of a newly acquired company in a way that enhances performance and expands the markets of the newly acquired company.

We may have difficulty developing, manufacturing and

marketing the products of a newly acquired company in a way that enhances performance and expands the markets of the newly acquired company.

The acquired company may not enhance the performance of our businesses or product lines such that we do not realize the value from expected synergies.

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Our ability to grow revenues, earnings and cash flow depends in part upon our ability to identify and successfully acquire and integrate businesses at appropriate prices and realize anticipated synergies and business performance.

Appropriate targets for acquisition are difficult to identify and complete for a variety of reasons, including, but not limited to, limited due

diligence, high valuations, difficulty obtaining business and intellectual property evaluations, other interested parties, negotiations of the definitive documentation, satisfaction of closing conditions, the need to obtain antitrust or other regulatory approvals on acceptable terms, and availability of funding.

Identifying appropriate acquisition targets and closing acquisitions can be difficult for a variety of reasons, including, but not limited to, limited due diligence, high valuations, difficulty obtaining business and intellectual property evaluations, other interested parties, negotiations of the definitive documentation, satisfaction of closing conditions, the need to obtain antitrust or other regulatory approvals on acceptable terms, and availability of funding.

The inability to close appropriate acquisitions on acceptable terms could adversely impact our growth rate, revenue, and financial performance.

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

We currently have outstanding debt as well as availability to borrow under a revolving credit facility.

We currently have outstanding debt as well as availability to borrow under the Revolving Credit Facility.

We may borrow additional amounts in the future and use the proceeds from any future borrowing for general corporate purposes, future acquisitions, expansion of our business or repurchases of our outstanding shares of common stock.

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• limiting our flexibility in planning for, or reacting to, changes in our business and the industry.

Our current revolving credit facility imposes restrictions on us, including restrictions on our ability to create liens on our assets and the ability of our subsidiaries to incur indebtedness, and requires us to maintain compliance with specified financial ratios.

Our Revolving Credit Facility imposes restrictions on us, including restrictions on our ability to create liens on our assets and the ability of our subsidiaries to incur indebtedness, and requires us to maintain compliance with specified financial ratios.

Our ability to comply with these ratios may be affected by events beyond our control.

In addition, the indenture governing our senior notes contains covenants that may adversely affect our ability to incur certain liens.

In addition, the indentures governing our senior notes contain covenants that may adversely affect our ability to incur certain liens.

If we breach any of the covenants and do not obtain a waiver from the lenders, then, subject to applicable cure periods, our outstanding indebtedness could be declared immediately due and payable.

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The calculation of our tax liabilities involves uncertainties in the application of complex tax laws and regulations in multiple jurisdictions.

The outcomes of these tax examinations could have an adverse

effect on our operating results and financial condition.

The outcomes of these tax examinations could have an adverse effect on our operating results and financial condition.

Due to the complexity of tax contingencies, the ultimate resolution of any tax matters related to operations may result in payments greater or less than amounts accrued.

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We cannot give any assurance as to what our effective tax rate will be in the future because, among other things, there is uncertainty regarding the tax policies of the jurisdictions where we operate.

Changes in tax laws, such as tax reform in the United States or changes in tax laws resulting from the Organization for Economic Co-operation and Development’s (“OECD”) multi-jurisdictional plan of action to address “base erosion and profit shifting” and the taxation of the “Digital Economy,” could impact our effective tax rate.

Changes in tax laws, such as tax reform in the U.S.

or changes in tax laws resulting from the Organization for Economic Co-operation and Development’s (“OECD”) multi-jurisdictional plan of action to address “base erosion and profit shifting” and the taxation of the “Digital Economy,” could impact our effective tax rate.

On June 14, 2019, the U.S.

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The tax regulations contained language which disallowed GILTI tax deductions for intangible asset amortization resulting from the Singapore restructuring completed in 2018.

During the third quarter of fiscal year 2024, the company concluded, in response to recent U.S.

During the third quarter of fiscal year 2024, we concluded, in response to recent U.S.

Supreme Court decisions on a number of relevant cases, the evolving global tax landscape and other changes in circumstances, that Treasury exceeded regulatory authority and the intangible asset amortization should be deductible.

The company amended its U.S.

We amended our U.S.

federal income tax returns for the open tax years to claim the deduction and recognized the discrete benefit in the consolidated financial statements.

The GILTI tax benefit for the fiscal year 2024 amortization is included in the annual effective tax rate, and the Singapore intangible assets will continue to be amortized for GILTI tax purposes until 2033.

The company believes the position meets the more likely than not recognition threshold.

The company intends to vigorously defend its position.

The Singapore intangible assets will continue to be amortized for GILTI tax purposes until 2033.

We believe the position meets the more likely than not recognition threshold.

On January 23, 2025, we filed a lawsuit against the United States of America in the United States Court of Federal Claims seeking a tax refund of $107 million, or such greater amount allowed by law, plus any other amount, including interest and cost, allowed by law.

We intend to vigorously defend our position.

The outcome cannot be predicted with certainty.

If we are ultimately unsuccessful in defending our position, we may be required to reverse the benefit previously recorded, which may impact our financial statements and our profitability in the quarter in which such a reversal is required.

If we are ultimately unsuccessful in defending our refund claim, we will be required to reverse the benefit previously recorded, most likely resulting in a material increase in the effective tax rate and income tax liability.

If tax laws or incentives change or cease to be in effect, our income taxes could increase significantly.

We are subject to federal, state, and local taxes in the United States and numerous foreign jurisdictions.

We are subject to federal, state, and local taxes in the U.S.

and numerous foreign jurisdictions.

We devote significant resources to evaluating our tax positions and our worldwide provision for taxes.

Any changes to the positions we have taken could result in an impact to our financial statements.

Our financial results and tax treatment are susceptible to changes in tax, accounting, and other laws, including the Inflation Reduction Act and The Tax Cuts and Jobs Act in the U.S, regulations, principles, and interpretations in the United States and in other jurisdictions where we do business.

Our financial results and tax treatment are susceptible to changes in tax,

accounting, and other laws, including the Tax Cuts and Jobs Act, the Inflation Reduction Act and the One Big Beautiful Bill Act in the U.S, regulations, principles, and interpretations in the U.S.

and in other jurisdictions where we do business.

With the existence of economic and political policies that favor domestic interests, it is possible that more countries will enact tax laws that either increase the tax rates, or reduce or change the tax incentives available to multinational companies.

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Keysight benefits from tax incentives in several jurisdictions, most significantly in Singapore and Malaysia.

The Malaysia tax incentive expires October 31, 2025.

The former Singapore tax incentive expired July 31, 2024.

We entered into a new Singapore tax incentive agreement effective August 1, 2024.

The tax incentives provide lower rates of taxation on certain classes of income and require thresholds of investments and employment in those jurisdictions.

The Singapore tax incentive expires on July 31, 2029.

The Malaysia tax incentive expired on October 31, 2025.

These tax incentives provide lower rates of taxation on certain classes of income and require thresholds of investments and employment in those jurisdictions.

If we cannot or do not wish to satisfy all or portions of the tax incentives conditions, we will lose the related tax incentives and could be required to refund the benefits that the tax incentives previously provided.

We believe that we will satisfy such conditions, but cannot guarantee that the tax environment will not change or that such conditions will be satisfied.

Our taxes could increase if the existing Malaysia incentive is revoked or not renewed upon expiration.

We cannot guarantee that we will qualify for any new incentive regime that may exist going forward.

As a result, our effective tax rate could be higher than it would have been had we renewed the tax incentive and could harm our operating results after tax.

Our taxes could increase if the existing Malaysia and/or Singapore incentive is revoked or not renewed upon expiration.

We are in the process of renewing our Malaysia tax incentive and believe that we will obtain the renewal from the taxing authorities.

However, we cannot guarantee that we will be granted the Malaysian tax incentive and the timing of when we can renew our incentive rate.

We also cannot guarantee that we will qualify for any new incentive regime that may exist going forward.

As a result, our effective tax rate could be higher than it would have been if we had renewed or been granted renewal of the tax incentive, which could harm our operating results after tax.

If we suffer a loss to our factories, facilities or distribution system due to a catastrophic event, including events caused by the effects of climate change, our operations could be significantly harmed.

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If any of these facilities were to experience a catastrophic loss, it could disrupt our operations, delay production, shipments and revenue and result in large expenses to repair or replace the facility.

Since we have consolidated our manufacturing facilities, we are more likely to experience an interruption to our operations in

the event of a catastrophe in any one location.

Since we have consolidated our manufacturing facilities, we are more likely to experience an interruption to our operations in the event of a catastrophe in any one location.

Although we carry insurance for property damage and business interruption, we do not carry insurance or financial reserves for interruptions or potential losses arising from earthquakes or terrorism.

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Achieving net zero emissions goals and targets may entail compliance with evolving laws and regulatory requirements, which may cause us to change or reconfigure facilities and operations to meet regulatory standards.

If operations are out of compliance, we may be subject to civil or criminal actions, fines and penalties and be required to make significant changes to facilities and operations and temporarily or permanently shut down non-compliant operations, which could result in business disruption and significant unexpected expense, delays in or inability to develop, manufacture and ship products and solutions, customer dissatisfaction, loss of revenue and damage to our reputation.

disruption and significant unexpected expense, delays in or inability to develop, manufacture and ship products and solutions, customer dissatisfaction, loss of revenue and damage to our reputation.

If we are unable to sufficiently reduce Scope 1 and Scope 2 emissions through energy reduction measures or our investments in renewable energy are not successful, we may fail to achieve our net zero emission commitment by fiscal year 2040.

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On January 1, 2022, Centripetal Networks filed a lawsuit in Federal District Court in Virginia, alleging that certain Keysight products infringe certain of Centripetal’s patents.

In addition, in February 2022, Centripetal filed complaints in Germany alleging infringement of certain of Centripetal’s German patents, and in April 2022, Centripetal filed a complaint with the International Trade Commission (“ITC”) requesting that they investigate whether Keysight violated Section 337 of the Tariff Act (“Section 337”) and should be enjoined from importing certain products that are manufactured outside of the U.S.

We challenged the validity of claims of eight of these patents at the U.S.

Patent and Trademark Office, with all or most claims being found invalid in each patent.

Centripetal is appealing seven of these results.

In addition, in February 2022, Centripetal filed complaints in Germany alleging infringement of three of Centripetal’s German patents.

Keysight challenged the validity of the claims of these patents in German nullity or European Patent Office (“EPO”) opposition procedures.

Two of the three patents were invalidated and the appeals process has ended.

The third patent had all but one claim invalidated at trial and is under appeal.

In April 2022, Centripetal filed a complaint with the International Trade Commission (“ITC”) requesting that they investigate whether Keysight violated Section 337 of the Tariff Act (“Section 337”) and should be enjoined from importing certain products that are manufactured outside of the U.S.

which are alleged to infringe Centripetal patents.

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Centripetal has appealed this determination.

The lawsuit in Federal District Court in Virginia is stayed pending the finalization of appeals of the ITC findings and validity challenges.

On August 21, 2024, Keysight was served in Germany with a complaint filed in the Unified Patent Court alleging that certain Keysight products sold in Germany, France, Italy and the Netherlands infringe a European Centripetal patent.

In December 2025, the court issued its written determination that Keysight did not infringe the patent.

Keysight also challenged the validity of the patent using EPO opposition procedures, and the EPO revoked the patent in its hearing in November 2025.

Although we deny the allegations and are aggressively defending each case, the outcome of existing proceedings, lawsuits and claims may differ from our expectations because the outcomes of litigation are often difficult to reliably predict.

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Claims of intellectual property infringement could cause us to enter into a costly or restrictive license agreement (which may not be available under acceptable terms, or at all), require us to redesign certain of our solutions (which would be costly and time-consuming) and/or subject us to significant damages or an injunction against the development, sale and importation of certain solutions or services.

In certain of our businesses, we rely on third-party

intellectual property licenses, and we cannot ensure that these licenses will be available to us in the future on terms favorable to us or at all.

In certain of our businesses, we rely on third-party intellectual property licenses, and we cannot ensure that these licenses will be available to us in the future on terms favorable to us or at all.

Third parties may infringe our intellectual property rights, and we may suffer competitive injury or expend significant resources enforcing our intellectual property rights.

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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 such as intellectual property, proprietary business information, and data related to customers, suppliers, and business partners, process orders, manage inventory, process shipments to customers and operate other critical functions.

The ongoing maintenance and security of this information is pertinent to the success of our business operations and our strategic goals.

The ongoing maintenance and security of this information is important to the success of our business operations and our strategic goals.

Despite the implementation of network security measures by us and our third-party service providers, our network and our data may be vulnerable to cybersecurity attacks, computer viruses, break-ins and similar disruptions.

Our network security measures include, but are not limited to, the implementation of firewalls, antivirus protection, patches, log monitors, routine backups, offsite storage, network audits, employee training and routine updates and modifications.

Despite our efforts and those of our service providers to create these security barriers, as new threats emerge it is virtually impossible to entirely eliminate this risk.

Despite our efforts and those of our service providers to create these security barriers, as new threats emerge, including the use of artificial intelligence by threat actors, it is virtually impossible to entirely eliminate this risk.

Cybersecurity attacks are evolving and include, but are not limited to, ransomware attacks, malicious software, attempts to gain unauthorized access to data, and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information and corruption of data.

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Such attacks could lead to disruptions to our customers’ operations or processes, system downtime, financial loss, loss of their intellectual property, business information and proprietary data, or corruption of data, which could impact Keysight’s reputation, and result in loss of confidence in our products, loss of orders, and loss in revenue, which could materially impact our financial results.

We proactively scan for vulnerabilities in our product lines.

When vulnerabilities are discovered, we respond with a predefined Product Security Response Process to address the vulnerability, but we cannot eliminate the possibility of a successful cybersecurity attack or exploitation of undiscovered vulnerabilities.

We proactively scan for vulnerabilities in our products and address them to minimize the potential for exploitation.

We cannot eliminate the possibility of a successful cybersecurity attack or exploitation of undiscovered or not yet remediated vulnerabilities impacting our internal systems and/or those of our customers.

In an effort to improve information security, governments may enact rules, regulations, standards and attestation requirements.

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The failure to comply with such requirements, once enacted, may result in lost orders, reduced revenue, fines, penalties and damage to our reputation.

In addition, our IT systems and those of our service providers may be susceptible to damage, disruptions, instability, or shutdowns due to power outages, hardware failures, telecommunication failures, user errors, implementation of new operational systems or software or upgrades to existing systems and software, catastrophes, or other unforeseen events.

Such events could result in the disruption of business processes, network degradation and system downtime, along with the potential that a third

party will exploit our critical assets, such as intellectual property, proprietary business information and data related to our customers, suppliers and business partners.

In addition, our IT systems and those of our service providers may be susceptible to damage, disruptions, instability, or shutdowns due to power outages, hardware failures, telecommunication failures, user errors, cybersecurity attacks, hacking, sabotage, acts of vandalism, implementation of new operational systems or software or upgrades to existing systems and software, catastrophes, or other unforeseen events.

Such events could result in the disruption of business processes, network degradation and system downtime, along with the potential that a third party will exploit our critical assets, such as intellectual property, proprietary business information and data related to our customers, suppliers and business partners.

Further, such events could result in loss of revenue, loss of or reduction in purchase orders, inability to report financial information, litigation, regulatory fines and penalties, and other damage that could have a material impact on our business operations.

To the extent that such disruptions occur, our customers and partners may lose confidence in our solutions, and we may lose business or brand reputation, resulting in a material and adverse effect on our business operating results and financial condition.

Our business is exposed to risks associated with the use of AI tools.

We continue to evaluate and, where appropriate, integrate AI technologies into our product offerings and internal operations to enhance innovation, efficiency, and customer value.

While AI presents opportunities for advancement, its adoption also introduces a range of risks that could adversely impact our business, financial condition, and results of operations.

These risks include, but are not limited to, competitive disadvantages if peers more effectively leverage AI to accelerate innovation, product development, or operational performance.

The use of AI may also expose us to legal, regulatory, and reputational risks, particularly in jurisdictions with evolving or inconsistent regulatory frameworks governing AI, data privacy, and cybersecurity.

Additionally, the deployment of AI tools, whether by us or by customers using our AI-enabled solutions may result in unintended consequences such as biased or inaccurate outputs, loss or compromise of confidential information or intellectual property, and challenges in asserting or defending intellectual property rights.

These risks may be amplified by increasing regulatory scrutiny and potential compliance obligations, which could result in increased costs or limitations on our ability to deploy AI technologies.

There can be no assurance that our use of AI will yield the anticipated benefits or that we will be able to effectively mitigate the associated risks.

Our business will suffer if we are not able to retain and hire key personnel.

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If we fail to retain key personnel and are unable to hire highly qualified replacements, we may not be able to meet key objectives, such as launching effective product innovations, meeting financial goals and maintaining or expanding our business.

We rely occasionally on hiring qualified international candidates or transferring employees between the United States and several foreign countries.

The immigration process can be subject to frequent changes and limitations.

We may experience difficulty in obtaining work authorizations for some of our employees that are foreign nationals transferring to the United States and other key countries where we operate, which could negatively impact our ability to strategically locate our personnel.

Changes to immigration policies and quotas impacting the granting of visas for higher education candidates and knowledge-based workers in many jurisdictions where we operate could impact our ability to recruit and retain the highly-trained and accomplished talent needed to maintain our operations.

If we fail to maintain satisfactory compliance with certain regulations, we may be subject to substantial negative financial consequences and civil or criminal penalties.

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We are also regulated under a number of international, federal, state and local laws regarding recycling, product packaging and product content requirements.

We apply strict standards for protection of the environment and occupational health and safety inside and outside the United States, even where not subject to regulation imposed by foreign governments.

We apply strict standards for protection of the environment and occupational health and safety inside and outside the U.S., even where not subject to regulation imposed by foreign governments.

We believe that our properties and operations at our facilities comply in all material respects with applicable environmental and occupational health and safety laws.

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If we fail to comply with GDPR or other data privacy regulation, we may be subject to significant financial fines and civil or criminal penalties, and may suffer damage to our reputation or brand, which could adversely affect our business and financial results.

In January 2025, the U.S.

government issued executive orders prohibiting illegal Diversity, Equity and Inclusion (“DEI”) programs, policies and activities, and has increased scrutiny of companies’ DEI initiatives.

Keysight has long had a policy of providing equal employment opportunity for all employees.

Although we believe that our policies and programs comply with the law in all jurisdictions in which we operate, there can be no assurance that the current administration in the U.S.

will not deem certain company policies and programs to be illegal DEI.

Such a determination could result in extended investigations, litigation, fines, penalties, and damage to our reputation or brand and could adversely affect our operations and our business results.

In addition, our products and operations are also often subject to the rules of industrial standards bodies, like the International Standards Organization, as well as regulation by other agencies such as the U.S.

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Although we actively maintain policies and procedures designed to ensure ongoing compliance with these laws and regulations, there can be no assurance that our employees, contractors or agents will not violate these policies and procedures.

Violations of these laws and regulations could result in fines and penalties, criminal sanctions, restrictions on our business conduct and on our ability to offer our solutions in one or more

countries, and could also materially affect our brand, ability to attract and retain employees, international operations, business and operating results.

Violations of these laws and regulations could result in fines and penalties, criminal sanctions, restrictions on our business conduct and on our ability to offer our solutions in one or more countries, and could also materially affect our brand, ability to attract and retain employees, international operations, business and operating results.

Our business and financial results may be adversely affected by various legal and regulatory proceedings.

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On January 1, 2022, Centripetal Networks filed a lawsuit in Federal District Court in Virginia, alleging that certain Keysight products infringe certain of Centripetal’s patents.

In addition, in February 2022, Centripetal filed complaints in Germany alleging infringement of certain of Centripetal’s German patents, and in April 2022, Centripetal filed a complaint with the International Trade Commission (“ITC”) requesting that they investigate whether Keysight violated Section 377 of the Tariff Act and should be enjoined from importing certain products that are manufactured outside of the U.S.

We challenged the validity of claims of eight of these patents at the U.S.

Patent and Trademark Office, with all or most claims being found invalid in each patent.

Centripetal is appealing seven of these results.

In addition, in February 2022, Centripetal filed complaints in Germany alleging infringement of three of Centripetal’s German patents.

Keysight challenged the validity of the claims of these patents in German nullity or EPO opposition procedures.

Two of the three patents were invalidated, and the appeals process has ended.

The third patent had all but one claim invalidated at trial and is under appeal.

In April 2022, Centripetal filed a complaint with the ITC requesting that they investigate whether Keysight violated Section 377 of the Tariff Act and should be enjoined from importing certain products that are manufactured outside of the U.S.

and alleged to infringe Centripetal patents.

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Centripetal has appealed this determination.

The lawsuit in Federal District Court in Virginia is stayed pending the finalization of appeals of the ITC findings and validity challenges.

In December 2025, the court issued its written determination that Keysight did not infringe the patent.

Keysight also challenged the validity of the patent using EPO opposition procedures, and the EPO revoked the patent in its hearing in November 2025.

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The Federal Pension Protection Act of 2006 requires that certain capitalization levels be maintained in each of the U.S.

plans, and there may be similar funding requirements in the plans outside the United States.

plans, and there may be similar funding

requirements in the plans outside the U.S.

Because it is unknown what the investment return on and the fair value of our pension assets will be in future years or what interest rates and discount rates may be at any point in time, no assurances can be given that applicable law will not require us to make future material plan contributions.

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Agilent has assigned its rights and obligations under this agreement to Keysight in respect to facilities transferred to us in the separation.

As a result, HP

will have access to a limited number of our properties to perform remediation.

As a result, HP will have access to a limited number of our properties to perform remediation.

Although HP agreed to minimize interference with on-site operations at such properties, remediation activities and subsurface contamination may require us to incur unreimbursed costs and could harm on-site operations and the future use and value of the properties.

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As a result, we may become subject to liabilities for environmental contamination, and these liabilities may be substantial.

Although our policy is to apply strict standards for environmental protection at our sites inside and outside the United States, even if the sites outside the United States are not subject to regulations imposed by foreign governments, we may not be aware of all conditions that could subject us to liability.

Although our policy is to apply strict standards for environmental protection at our sites inside and outside the U.S., even if the sites outside the U.S.

are not subject to regulations imposed by foreign governments, we may not be aware of all conditions that could subject us to liability.

Risks Related to Our Common Stock

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• changes to our tax rate that may affect our profitability;

• new or expanded trade restrictions;

• new or expanded trade barriers, tariffs and restrictions;

• economic conditions such as inflation or recession;

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We do not currently pay dividends on our common stock.

The payment of any dividends in the future, and the timing and amount thereof, to our stockholders fall within the discretion of our board of directors.

The payment of any dividends in the future, and the timing and amount thereof, fall within the discretion of our board of directors.

The board’s decisions regarding the payment of dividends will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in our debt, industry practice, legal requirements, regulatory constraints and other factors that our board of directors deem relevant.

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Our amended and restated certificate of incorporation designates that the state courts in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our shareholders, which could discourage lawsuits against the company and our directors and officers.

Our amended and restated certificate of incorporation provide that unless the board of directors otherwise determines, the state courts in the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal court for the District of Delaware, will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of a fiduciary duty owed by any of our directors or officers to the company or our shareholders, any action asserting a claim against us or any of our directors or officers arising pursuant to any provision of the

DGCL or Keysight's amended and restated certificate of incorporation or bylaws, or any action asserting a claim against us or any of our directors or officers governed by the internal affairs doctrine.

This exclusive forum provision may limit the ability of our shareholders to bring a claim in a judicial forum that such shareholders find favorable for disputes with us or our directors or officers, which may discourage such lawsuits against us and our directors and officers.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors