What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-12-17 compared with 2024-12-17 · 427 added, 252 removed, 1505 unchanged (31% of the section changed)

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We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded ESI Group SA.

("ESI Group"), Riscure Holding B.V ("Riscure") and AnaPico AG ("AnaPico") from its assessment of internal control over financial reporting as of October 31, 2024, because they were acquired by the Company in purchase business combinations during 2024.

We have also excluded ESI Group, Riscure and AnaPico from our audit of internal control over financial reporting.

ESI Group is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 1% and 3%, respectively, while Riscure and AnaPico, wholly-owned subsidiaries, each constituted less than 1% of total assets and total revenues of the related consolidated financial statement amounts as of and for the year ended October 31, 2024.

As described in Management’s Report on Internal Control over Financial Reporting, management has excluded Spirent Communications plc (“Spirent”), Synopsys Inc.’s Optical Solutions Group (“OSG”) and Ansys, Inc.'s PowerArtist RTL business (“PowerArtist”) from its assessment of internal control over financial reporting as of October 31, 2025, because they were acquired by the Company in purchase business combinations during 2025.

We have also excluded Spirent, OSG and PowerArtist from our audit of internal control over financial reporting.

Spirent is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 3% and less than 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended October 31, 2025.

OSG and PowerArtist are wholly-owned subsidiaries whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent less than 1% and 1% of total assets, respectively and less than 1% and 1% of total revenues, respectively, of the related consolidated financial statement amounts as of and for the year ended October 31, 2025.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Acquisition of ESI Group SA - Valuation of Developed Technology and Customer Relationships

As described in Note 2 to the consolidated financial statements, on November 3, 2023, the Company acquired 50.6% of the share capital of ESI Group for $477 million, net of cash acquired, using existing cash.

During January 2024, the Company completed the acquisition of the remaining share capital of ESI Group for $458 million, using existing cash.

Of the acquired other intangible assets, $270 million of developed technology and $160 million of customer relationships were recorded.

The intangible assets were valued by management using different income approach methods, which included the multi-period excess earnings and with and without valuation methods for developed technology and customer relationships, respectively.

The significant assumptions used to estimate the fair value of the acquired intangible assets included revenue growth rates, earnings before interest and taxes, customer attrition rate, discount rate, obsolescence rate and total operating expenses.

The principal considerations for our determination that performing procedures relating to the valuation of developed technology and customer relationships acquired in the acquisition of ESI Group is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the developed technology and customer relationships acquired;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumption related to earnings before interest and taxes;

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Acquisition of Spirent – Valuation of Developed Technology and Certain Customer Relationships

As described in Note 2 to the consolidated financial statements, on October 15, 2025, the Company completed the acquisition of the entire share capital of Spirent for $1,564 million.

Of the acquired other intangible assets, $370 million was recorded related to developed technology and $145 million was recorded related to customer relationships.

In addition, the Company recorded developed technology of $295 million as assets held for sale in connection with the divestiture of those assets that occurred on October 16, 2025.

Developed technology was valued using the relief from royalty method and customer relationships were valued using the multi-period excess earnings method.

Significant assumptions related to developed technology included royalty rate, obsolescence rate, revenue growth rate, earnings before interest and taxes, discount rate, and total operating expenses.

Significant assumptions related to customer relationships included customer attrition rate, developed technology royalty rate, revenue growth rate, earnings before interest and taxes, discount rate, and total operating expenses.

The principal considerations for our determination that performing procedures relating to the valuation of developed technology and certain customer relationships acquired in the acquisition of Spirent is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the developed technology and certain customer relationships acquired;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to (a) the royalty rate and obsolescence rate for the developed technology classified as other intangible assets, (b) the obsolescence rate and discount rate for the developed technology classified as assets held for sale, and (c) the customer attrition rate and developed technology royalty rate for the customer relationships;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the developed technology and customer relationships acquired.

These procedures also included, among others (i) reading the purchase and divestiture agreements;

(ii) testing management’s process for developing the fair value estimate of the developed technology and certain customer relationships acquired;

(iii) evaluating the appropriateness of the relief from royalty and multi-period excess earnings methods used by management;

(iv) testing the completeness and accuracy of the underlying data used in the relief from royalty and multi-period excess earnings methods;

and (v) evaluating the reasonableness of the significant assumptions used by management related to (a) the royalty rate and obsolescence rate for the developed technology classified as other intangible assets, (b) the obsolescence rate and discount rate for the developed technology classified as assets held for sale, and (c) the customer attrition rate and developed technology royalty rate for the customer relationships.

Evaluating management’s assumption related to the customer attrition rate for the customer relationships involved considering (i) the current and past performance of the Spirent business and (ii) whether the assumption was consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating the (i) appropriateness of the relief from royalty and multi-period excess earnings methods and (ii) the reasonableness of (a) the royalty rate, obsolescence rate, and discount rate

assumptions for the developed technology and (b) the customer attrition rate and developed technology royalty rate assumption for the customer relationships.

Acquisition of the OSG Business – Valuation of Developed Technology

As described in Note 2 to the consolidated financial statements, on October 17, 2025, the Company acquired the OSG business for $581 million.

Of the acquired other intangible assets, $180 million was recorded related to developed technology.

Developed technology was valued using the relief from royalty method.

Significant assumptions related to developed technology included royalty rate, obsolescence rate, revenue growth rate, earnings before interest and taxes, discount rate, and total operating expenses.

The principal considerations for our determination that performing procedures relating to the valuation of developed technology acquired in the acquisition of the OSG business is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the developed technology acquired;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the royalty rate and obsolescence rate;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the developed technology acquired.

These procedures also included, among others (i) reading the purchase agreement;

(ii) testing management’s process for developing the fair value estimate of the developed technology and customer relationships acquired;

(iii) evaluating the appropriateness of the multi-period excess earnings and with and without valuation methods used by management;

(iv) testing the completeness and accuracy of the underlying data used in the multi-period excess earnings and with and without valuation methods;

and (v) evaluating the reasonableness of the significant assumption used by management related to earnings before interest and taxes.

Evaluating management's assumption related to earnings before interest and taxes involved considering (i) the current and past performance of ESI Group;

(ii) the consistency with external market and industry data;

and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the multi-period excess earnings and with and without valuation methods.

(ii) testing management’s process for developing the fair value estimate of the developed technology acquired;

(iii) evaluating the appropriateness of the relief from royalty method used by management;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to the royalty rate and obsolescence rate.

Professionals with specialized skill and knowledge were used to assist in evaluating the (i) appropriateness of the relief from royalty method and (ii) the reasonableness of the royalty rate and obsolescence rate assumptions.

/s/ PricewaterhouseCoopers LLP

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Other income (expense), net 200 35 ( 25 )

Income before taxes 865 1,357 1,285

Income from continuing operations before taxes 1,082 865 1,357

Provision for income tax 213 251 300

Net income from continuing operations, net of income taxes 869 614 1057

Net loss from discontinued operations, net of income taxes ( 19 ) — —

Net income $ 850 $ 614 $ 1,057

Basic net income (loss) per share:

Net income per share from continuing operations $ 5.04 $ 3.53 $ 5.95

Net loss per share from discontinued operations ( 0.11 ) — —

Net income per share $ 4.93 $ 3.53 $ 5.95

Basic $ 3.53 $ 5.95 $ 6.23

Diluted $ 3.51 $ 5.91 $ 6.18

Weighted average shares used in computing net income per share:

Diluted net income (loss) per share:

Net income per share from continuing operations $ 5.02 $ 3.51 $ 5.91

Net loss per share from discontinued operations ( 0.11 ) — —

Net income per share $ 4.91 $ 3.51 $ 5.91

Weighted average shares used in computing net income (loss) per share:

Basic 172 174 178

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Gains (losses) on derivative instruments, net of tax benefit (expense) of $( 1 ), $( 2 ) and $ 4

Amounts reclassified into earnings related to derivative instruments, net of tax benefit (expense) of $ 4 , $ 1 and zero

Amounts reclassified into earnings related to derivative instruments, net of tax benefit (expense) of $ 3 , $ 4 and $ 1

( 12 ) ( 7 ) ( 6 )

Foreign currency translation, net of tax benefit (expense) of zero

31 18 ( 165 )

Net defined benefit pension cost and post-retirement plan costs:

Change in net actuarial loss, net of tax benefit (expense) of $( 14 ), $ 10 and zero

Change in net actuarial loss, net of tax benefit (expense) of $( 7 ), $( 14 ) and $ 10

Change in net prior service cost, net of tax benefit of zero , zero and zero

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Current liabilities:

Current portion of long-term debt $ — $ 599

Accounts payable $ 355 $ 313

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Excess and obsolete inventory-related charges 43 35 27

Gain on sale of investments ( 21 ) — —

Unrealized loss (gain) on investments in equity securities ( 93 ) ( 8 ) ( 5 )

Other non-cash expenses (income), net 6 7 4

Changes in assets and liabilities, net of effects of businesses acquired:

Changes in assets and liabilities, net of effects of businesses acquired and divested:

Accounts receivable 23 71 14

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Interest rate swap agreement termination proceeds — — 107

Prepaid assets 14 7 ( 124 )

Tax receivables ( 202 ) ( 4 ) ( 30 )

Income taxes receivable 105 ( 202 ) ( 4 )

Other assets and liabilities ( 15 ) ( 99 ) 96

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Acquisitions of businesses and intangible assets, net of cash acquired ( 2,022 ) ( 681 ) ( 85 )

Purchase of investments ( 11 ) ( 7 ) ( 33 )

Proceeds from divestiture 399 — —

Proceeds from sale of investments 30 11 —

Other investing activities ( 7 ) ( 2 ) ( 7 )

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Other financing activities ( 2 ) ( 10 ) ( 3 )

Net cash used in financing activities ( 913 ) ( 687 ) ( 861 )

Net cash provided by (used in) financing activities 385 ( 913 ) ( 687 )

Effect of exchange rate movements 9 6 ( 2 )

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Other comprehensive income (loss), net of tax — — — — — — 102 — 102

ESI Group acquisition — — — — — — — 458 458

Issuance of common stock 1,237 — 66 — — — — — 66

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Repurchase of common stock, including excise tax — — — ( 2,975 ) ( 442 ) — — — ( 442 )

Acquisition of non-controlling interests — — 4 — — — — ( 462 ) (458)

Balance as of October 31, 2024 201,008 2 2,664 ( 28,424 ) ( 3,422 ) 6,225 ( 364 ) — 5,105

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Other comprehensive income (loss), net of tax — — — — — — 116 — 116

ESI Group acquisition — — — — — — — 458 458

Issuance of common stock 1,072 — 63 — — — — — 63

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Repurchase of common stock, including excise tax — — — ( 2,389 ) ( 377 ) — — — ( 377 )

Acquisition of non-controlling interests — — 4 — — — — ( 462 ) ( 458 )

Balance as of October 31, 2025 202,080 $ 2 $ 2,851 ( 30,813 ) $ ( 3,799 ) $ 7,075 $ ( 248 ) $ — $ 5,881

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Keysight Technologies, Inc.

(“we,” “us,” “Keysight” or the “company”), incorporated in Delaware on December 6, 2013, is a global innovator in the computing, communications and electronics market, committed to advancing our customers’ business success by helping them solve critical challenges in the development and commercialization of their products and services.

(“we,” “us,” “Keysight” or the “company”), incorporated in Delaware on December 6, 2013, is a global innovator in the computing, communications and electronics markets, committed to advancing our customers’ business success by helping them solve critical challenges in the development and commercialization of their products and services.

Our mission, “ accelerating innovation to connect and secure the world,” speaks to the value we provide our customers in a world of ever-increasing technological complexity.

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All significant inter-company transactions have been eliminated.

The consolidated financial statements also reflect the impact of non-controlling interests.

Non-controlling interests do not have a significant impact on the consolidated results of operations;

There was no non-controlling interest for the years ended October 31, 2025 and 2023.

The consolidated financial statements for the year ended October 31, 2024 reflect the impact of non-controlling interests.

Non-controlling interests did not have a significant impact on the consolidated results of operations;

therefore, net income attributable to non-controlling interests for the year ended October 31, 2024 of $ 4 million is not presented separately and is included in “other income (expense), net” in the consolidated statements of operations.

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Our professional services may be sold on a time and material basis (e.g., consulting) or on a fixed-fee basis (e.g., non-recurring engineering).

We also generate revenues from a combination of products and services (“custom solutions”), including combinations of hardware, software, software subscriptions, installation, professional services, and other support services.

Custom solutions provide the customer with a combination of hardware, software and professional services to meet customers' unique specifications and are accounted for as one performance obligation.

For our contracts with customers, we account for individual performance obligations separately if they are distinct.

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We periodically evaluate available information, both internal and external, relative to such contingencies and adjust this accrual as necessary.

If a loss is reasonably possible but not probable, or if the amount cannot be reasonably estimated, we disclose the nature of the contingency and, where practicable, an estimate of the possible loss or range of loss.

Taxes on income.

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We classify the liability for unrecognized tax benefits as current to the extent that the company anticipates payment (or receipt) of cash within one year.

Interest and penalties related to uncertain tax positions are recognized in the “provision for income taxes.” Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we are unable to estimate the range of possible changes to the balance of our unrecognized tax benefits.

Interest and penalties related to uncertain tax positions are recognized in “provision for income taxes.” Given the number of years and numerous matters that remain subject to examination in various tax jurisdictions, we are unable to estimate the range of possible changes to the balance of our unrecognized tax benefits.

See Note 5, “Income Taxes,” for additional information.

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An organization may choose to bypass the qualitative assessment for any indefinite-lived intangible asset in any period and proceed directly to calculating its fair value.

We review IPR&D for impairment annually or whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.

See Note 2, “Acquisitions,” and Note 7, “Goodwill and Other Intangible Assets,” for additional information about our goodwill and other intangible assets.

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Grants in form of tax credits related to capital expenditures are recognized as a reduction to property, plant and equipment with a corresponding reduction to depreciation expense over the expected useful life of the related asset.

Grants received from new or existing arrangements in 2024 and 2023 were $ 8 million and $ 4 million, respectively, and are recorded as an offset to “research and development” in the consolidated statement of operations.

Grant proceeds receivable as of October 31, 2024 and 2023 were $ 6 million and $ 5 million, respectively, and are recorded in “other current assets” in the consolidated balance sheet.

Grant proceeds received prior to Keysight meeting the conditions of the grant are recorded in “other accrued liabilities” and “other long-term liabilities” in the consolidated balance sheet and were $ 4 million as of October 31, 2024 and not material as of October 31, 2023.

Grant income recorded in “other income (expense), net” in the consolidated statement of operations was not material for fiscal year 2024 and 2023.

Grants received from new or existing arrangements in 2025, 2024, and 2023 were $ 2 million, $ 8 million, and $ 4 million, respectively, and are included as an offset to “research and development” in the consolidated statement of operations.

Grant proceeds receivable as of October 31, 2025 and 2024 were $ 5 million and $ 6 million, respectively, and are included in “other current assets” in the consolidated balance sheet.

Grant proceeds received prior to Keysight meeting the conditions of the grant are included in “other accrued liabilities” and “other long-term liabilities” in the consolidated balance sheet and were $ 6 million as of October 31, 2025 and $ 4 million as of October 31, 2024.

Grant income included in “other operating income (expense), net” in the consolidated statement of operations was not material for fiscal 2025, 2024, and 2023.

Tax credits related to capital expenditures reduced property, plant and equipment by $ 1 million and $ 7 million in 2025 and 2024, respectively.

Investments with readily determinable fair values and trading securities are reported at fair value.

Investments with readily determinable fair values are reported at fair value.

Equity investments without readily determinable fair values are measured at cost with adjustments for observable changes in price or impairments.

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The company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable.

There were no impairments recognized in 2025, 2024, and 2023.

Fair value of financial instruments.

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The fair value of long-term equity investments is determined using quoted market prices for those securities when available.

For those long-term equity investments accounted for under the equity method or a measurement alternative, the carrying value approximates estimated fair value.

For those long-term equity investments accounted for under a measurement alternative, the carrying value approximates estimated fair value.

The fair value of foreign currency contracts used for hedging purposes is estimated internally by using inputs tied to active markets.

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Credit risk is mitigated through collateral, such as letters of credit, bank guarantees, or payment terms like cash in advance.

N o single customer accounted for more than 10 percent of accounts receivabl e as of October 31, 2024 or 2023.

No single customer accounted for more than 10 percent of accounts receivable as of October 31, 2025 or 2024.

Derivative instruments.

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dollars using current exchange rates at the balance sheet date;

revenue and expenses are translated using monthly exchange rates that approximate average exchange rates.

revenue and expenses are translated using monthly exchange

rates that approximate average exchange rates.

Resulting translation adjustments are reported as a separate component of “accumulated other comprehensive income (loss)” in stockholders' equity in our consolidated balance sheet.

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Revenue and expenses are generally remeasured at monthly exchange rates that approximate average exchange rates.

Gains or losses from foreign currency re-measurement are included in “net income.” Net gains or losses resulting from foreign currency asset and liability remeasurement transactions are reported in other income (expense), net and were a $ 19 million gain in 2024, a $ 49 million loss in 2023 and a $ 1 million loss in 2022.

Gains or losses from foreign currency re-measurement are included in “net income.” Net gains or losses resulting from foreign currency asset and liability remeasurement transactions are reported in “other income (expense), net” and were a $ 47 million gain in 2025, a $ 19 million gain in 2024, and a $ 49 million loss in 2023.

See Note 9, “Derivatives” for additional information.

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Improvements to Reportable Segment Disclosures.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance which will require us to disclose significant segment expenses and other segment items used by the Chief Operating Decision Maker ("CODM") on an annual and interim basis as well as provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

Additionally, we will be required to disclose the title and position of the CODM.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance which requires us to disclose significant segment expenses and other segment items used by the Chief Operating Decision Maker (“CODM”) on an annual and interim basis as well as provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

Additionally, we are required to disclose the title and position of the CODM.

The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

This ASU will have no impact on our results of operations, cash flows or financial condition.

We will apply the amendments in this ASU retrospectively to all prior period disclosures presented in the financial statements upon adoption.

We adopted this guidance during 2025 (see Note 16).

ASU 2023-09, Income Taxes (Topic 740):

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Other amendments to GAAP that do not require adoption until a future date are not expected to have a material impact on our consolidated financial statements upon adoption.

ACQUISITIONS AND DIVESTITURES

2025 Acquisitions

Acquisition of Spirent Communications plc

On October 15, 2025 , we completed the acquisition of the entire share capital of Spirent Communications plc (“Spirent”) for $ 1,564 million, using existing cash, which reflects cash consideration of 199 pence (pounds sterling) per Spirent share, and includes $ 14 million consideration for outstanding awards and unvested options under Spirent’s compensation plans.

Total purchase consideration was determined as follows:

(in millions)

Cash consideration, net of cash acquired, outstanding awards, and currency impact $ 1,415

Consideration for share-based awards 14

Cash and cash equivalents assumed upon acquisition 127

Currency impact 8

Total consideration $ 1,564

For the year ended October 31, 2025, revenue and net loss attributable to Spirent from the acquisition date was $ 9 million and $ 40 million, respectively, including the loss on discontinued operations of $ 19 million.

The Spirent acquisition was accounted for in accordance with the authoritative accounting guidance.

The acquired assets and assumed liabilities were recorded at their estimated fair values.

We determined the estimated fair values with the assistance of valuations performed by third-party specialists, discounted cash flow analysis, and estimates made by management.

The acquisition of Spirent complements our position in communications test and expands our serviceable available market.

These factors, among others, contributed to a purchase price in excess of the estimated fair value of Spirent's net identifiable assets acquired (see summary of net assets below), and, as a result, we have recorded goodwill in connection with this transaction.

Goodwill of $ 653 million and $ 45 million was assigned to the Communications Solutions Group (“CSG”) and Electronic Industrial Solutions Group (“EISG”) reportable segments, respectively, reflecting the expected benefits and synergies that are likely to be realized from the Spirent acquisition.

We do not expect the goodwill recognized or any potential impairment charges in the future to be deductible for income tax purposes.

A portion of the overall purchase price was allocated to acquired intangible assets.

Amortization expense associated with acquired intangible assets is not deductible for tax purposes.

Therefore, a deferred tax liability of $ 168 million was established primarily for the future amortization of these intangibles and is included in “other long-term liabilities” in the table below.

The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date:

October 15, 2025

(in millions)

Cash and cash equivalents $ 127

Accounts receivable 71

Assets held for sale 433

Other current assets 28

Property, plant and equipment 28

Operating lease right-of-use assets 11

Other intangible assets 528

Other assets 8

Total assets acquired 1,972

Accounts payable ( 13 )

Employee compensation and benefits ( 40 )

Deferred revenue ( 44 )

Operating lease liabilities ( 3 )

Liabilities held for sale ( 34 )

Other accrued liabilities ( 70 )

Long-term deferred revenue ( 14 )

Long-term operating lease liabilities ( 9 )

Other long-term liabilities ( 181 )

Net assets acquired $ 1,564

Assets and liabilities held for sale primarily included Spirent’s high-speed ethernet, network security, and channel emulation business lines, which were sold to Viavi Solutions Inc.

(“Viavi”) in connection with satisfying the regulatory conditions set out as part of the Spirent acquisition.

Assets held for sale primarily comprises goodwill of $ 55 million, other intangible assets of $ 346 million, consisting primarily of developed technology of $ 295 million and customer relationships of $ 50 million, inventory of $ 26 million, and other assets of $ 6 million allocated to the divestiture on the relative fair value basis.

Developed technology and customer relationships were valued using the relief from royalty and multi-period excess earnings valuation methods, respectively.

Liabilities held for sale primarily represents deferred revenue and other accruals.

See “Spirent-related divestiture” below for further details.

The fair values of cash and cash equivalents, accounts receivable, other current assets, accounts payable, employee compensation and benefits, and deferred revenue were generally determined using historical carrying values given the short-term nature of these assets and liabilities.

The fair values of acquired inventory, property, plant and equipment, and intangible assets were determined with the input from third-party valuation specialists.

The fair values of certain other assets and liabilities were determined internally using historical carrying values and estimates made by management.

In connection with the acquisition and determination of the fair values of acquired assets and assumed liabilities, the company is in the process of obtaining additional information to refine its initial fair value estimates related to income taxes, intangible assets, inventory, and property, plant and equipment.

We expect to finalize this allocation in the second quarter of fiscal year 2026.

As additional information becomes available, we may revise the preliminary purchase price allocation during the remainder of the measurement period (which will not exceed 12 months from the acquisition date).

Any such revisions or changes may be material.

Valuation of Intangible Assets Acquired

The components of intangible assets acquired in connection with the Spirent acquisition were as follows:

Estimated Fair Value Estimated useful life Valuation Method

(in millions) (in years)

Developed technology $ 370 6 Relief from royalty

Customer relationships 145 8 Multi-period excess earnings

Backlog 9 1 Multi-period excess earnings

Trademark/Tradename 4 1 Relief from royalty

Total intangible assets $ 528

As noted above, the intangible assets were valued using various income approach methods and significant assumptions.

Significant assumptions related to developed technology included royalty rate, obsolescence rate, revenue growth rate, earnings before interest and taxes, discount rate, and total operating expenses.

Similar significant assumptions were used to value developed technology and customer relationships included in assets held for sale for the Spirent-related divestiture.

Acquisition and integration costs directly related to the Spirent acquisition are included in selling, general and administrative and other income (expense), net and were $ 42 million for the year ended October 31, 2025.

For the year ended October 31, 2025, we incurred $ 7 million of acquisition-related compensation expense to redeem certain of Spirent's outstanding unvested stock awards as of the date of the acquisition that were determined to relate to post-merger service periods.

Spirent-related divestiture

On October 16, 2025, we sold Spirent’s high-speed ethernet, network security, and channel emulation business lines for $ 399 million to Viavi, resulting in an immaterial pre-tax loss.

In connection with the sale, we agreed to provide transitional services to the buyer on a short-term basis.

We do not have any material continuing involvement with this business and have presented its results in discontinued operations.

The following table summarizes the selected financial information of discontinued operations:

October 31, 2025

(in millions)

Net loss from discontinued operations before income taxes $ ( 6 )

Provision for income taxes (see Note 5, “Income Taxes”) ( 13 )

Net loss from discontinued operations, net of income taxes $ ( 19 )

Net loss from discontinued operations before income taxes includes $ 5 million of acquisition-related compensation to redeem certain outstanding unvested stock awards as of the date of the acquisition that were determined to relate to post-merger service periods.

Acquisition of Synopsys’ Optical Solutions Group

On October 17, 2025 , we acquired the Optical Solutions Group business (“OSG”) from Synopsys, Inc.

for $ 581 million, using existing cash, including $ 3 million consideration for outstanding awards and unvested options under Synopsys’ compensation plans.

For the year ended October 31, 2025, the OSG acquisition had an immaterial impact on our revenue and net earnings.

The OSG acquisition was accounted for in accordance with the authoritative accounting guidance.

The acquired assets and assumed liabilities were recorded at their estimated fair values.

We determined the estimated fair values with the assistance of valuations performed by third-party specialists, discounted cash flow analysis, and estimates made by management.

The acquisition of OSG expands our design engineering software portfolio and computer-aided engineering capabilities, enabling customers to take innovative designs to market faster.

These factors, among others, contributed to a purchase price in excess of the estimated fair value of OSG's net identifiable assets acquired (see summary of net assets below), and, as a result, we have recorded goodwill in connection with this transaction.

Goodwill of $ 67 million and $ 231 million was assigned to the CSG and EISG reportable segments, respectively, reflecting the expected benefits and synergies that are likely to be realized from the OSG acquisition.

We do not expect the goodwill recognized or any potential impairment charges in the future to be deductible for income tax purposes.

The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the closing date:

October 17, 2025

(in millions)

Accounts receivable $ 15

Other current assets 1

Property, plant and equipment

Operating lease right-of-use assets 2

Other intangible assets 275

Total assets acquired 592

Deferred revenue ( 8 )

Operating lease liabilities ( 1 )

Long-term deferred revenue ( 1 )

Long-term operating lease liabilities ( 1 )

Net assets acquired $ 581

The fair values of accounts receivable, other current assets, and deferred revenue were generally determined using historical carrying values given the short-term nature of these assets and liabilities.

The fair values of intangible assets were determined with the input from third-party valuation specialists.

The fair values of certain other assets and liabilities were determined internally using historical carrying values and estimates made by management.

We expect to finalize this allocation in the second quarter of fiscal year 2026.

Any such revisions or changes may be material.

Valuation of Intangible Assets Acquired

The components of intangible assets acquired in connection with the OSG acquisition were as follows:

Estimated Fair Value Estimated useful life Valuation Method

(in millions) (in years)

Developed technology $ 180 6 Relief from royalty

Customer relationships 86 8 Multi-period excess earnings

Backlog 3 2 Multi-period excess earnings

Trademark/Tradename 1 1 Relief from royalty

Total amortizable intangible assets 270

In-process research and development 5 Relief from royalty

Total intangible assets $ 275

As noted above, the intangible assets were valued using various income approach methods and significant assumptions.

Significant assumptions related to developed technology included royalty rate, obsolescence rate, revenue growth rate, earnings before interest and taxes, discount rate, and total operating expenses.

The in-process research and development was valued by discounting forecasted cash flows directly related to the products expecting to result from the projects, net of returns on contributory assets.

A discount rate of 11% was used to value the research and development projects to reflect the additional risks inherent in the acquired projects.

The primary in-process projects acquired relate to next generation products which will be released in the near future.

Total costs to complete for all OSG in-process research and development were estimated at approximately $ 2 million as of the close date.

Acquisition and integration costs directly related to the OSG acquisition are included in selling, general and administrative expenses and were $ 18 million for the year ended October 31, 2025.

For the year ended October 31, 2025, we incurred $ 1 million of acquisition-related compensation expense to redeem certain of Synopsys’ outstanding unvested stock awards as of the date of the acquisition that were determined to relate to post-merger service periods.

Acquisition of Ansys’ PowerArtist

On October 17, 2025 , we acquired PowerArtist business from Ansys, Inc.

for $ 26 million, expanding our design engineering software portfolio and computer-aided engineering capabilities, enabling customers to take innovative designs to market faster.

We recognized goodwill and other intangible assets of $ 2 million and $ 17 million, respectively, based on the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed.

Goodwill was assigned to the CSG and EISG reportable segments, reflecting the expected benefits and synergies that are likely to be realized from the acquisition.

We do not expect the goodwill recognized or any potential impairment charges in the future to be deductible for income tax purposes.

2024 Acquisitions

Acquisition of ESI Group SA

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During January 2024, we completed the acquisition of the remaining share capital of ESI Group for $ 458 million, using existing cash.

The company entered into put/call agreements valued at $ 7 million for certain ESI Group equity awards, subject to a holding period that may extend beyond the explicit vesting period, for the right to receive a cash payment equal to the public tender offer consideration of 155 euros per share, which was substantially paid in the third quarter of fiscal year 2024.

The company entered into put/call agreements valued at $ 7 million for certain ESI Group equity awards, subject to a holding period that may extend beyond the explicit vesting period, for the right to receive a cash payment equal to the public tender offer consideration of 155 euros per share, which was fully paid as of the third quarter of fiscal year 2025.

For the year ended October 31, 2024, ESI Group's net revenue was $ 141 million and net loss attributable to Keysight shareholders was $ 68 million.

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These factors, among others, contributed to a purchase price in excess of the estimated fair value of ESI Group's net identifiable assets acquired (see summary of net assets below), and, as a result, we have recorded goodwill in connection with this transaction.

Goodwill was assigned to the Communications Solutions Group (“CSG”) and the Electronic Industrial Solutions Group (“EISG”) reportable segments, based on the expected benefits and synergies that are likely to be realized from the ESI Group acquisition.

Goodwill was assigned to the CSG and EISG reportable segments, based on the expected benefits and synergies that are likely to be realized from the ESI Group acquisition.

We do not expect the goodwill recognized or any potential impairment charges in the future to be deductible for income tax purposes.

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The fair values of cash and cash equivalents, short-term investments, accounts receivable, other current assets, accounts payable, employee compensation and benefits, and deferred revenue were generally determined using historical carrying values given the short-term nature of these assets and liabilities.

The fair value for intangible assets was determined with the input from third-party valuation specialists.

The fair values of intangible assets were determined with the input from third-party valuation specialists.

The fair values of property, plant and equipment and certain other liabilities were determined internally using historical carrying values and estimates made by management.

During the second quarter of fiscal year 2024, the company decreased the deferred tax liability and goodwill by $ 8 million primarily for a timing difference in the recognition of research and development expenses.

During the third quarter of fiscal year 2024, the company increased income and other taxes payable and other long-term liabilities by $ 3 million and $ 5 million, respectively, offset against goodwill, primarily for tax liabilities and uncertain tax positions.

Valuation of Intangible Assets Acquired

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Backlog 15 3 Multi-period excess earnings

Trademarks/Tradename 2 2 Relief from royalty

Trademark/Tradename 2 2 Relief from royalty

Total amortizable intangible assets 447

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Total costs to complete for all ESI Group in-process research and development were estimated at approximately $ 7 million as of the close date.

Acquisition and integration costs directly related to the ESI Group acquisition were recorded in research and development, selling, general and administrative, other operating expense (income), net and other income (expense), net and were $ 39 million for the year ended October 31, 2024.

Acquisition and integration costs directly related to the ESI Group acquisition are included in research and development, selling, general and administrative, other operating expense (income), net and other income (expense), net and were $ 39 million for the year ended October 31, 2024.

For the year ended October 31, 2024, we incurred $ 10 million of acquisition-related compensation expense to redeem certain of ESI Group's outstanding unvested stock awards as of the date of the acquisition that were determined to relate to post-merger service periods.

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(“Riscure”) for $ 78 million, net of cash acquired, expanding our automated security assessment capabilities and solutions for semiconductors, embedded systems, and connected devices.

We recognized goodwill and other intangible assets of $ 52 million and $ 35 million, respectively, based on the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed.

We recognized goodwill and other intangible assets of $ 52 million and $ 35 million, respectively, based on the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed.

Goodwill was assigned to the CSG reportable segment, based on the expected benefits and synergies that are likely to be realized from the Riscure acquisition.

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On June 12, 2024 , we acquired all the outstanding share capital of AnaPico AG (“AnaPico”) for $ 117 million, net of cash acquired, accelerating our strategy to expand our customer base in commercial communications, automotive, aerospace, defense, and government markets.

We recognized goodwill and other intangible assets of $ 60 million and $ 53 million, respectively, based on the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed.

We recognized goodwill and other intangible assets of $ 60 million and $ 53 million, respectively, based on the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed.

The identified intangible assets primarily consist of developed technology of $ 28 million, customer relationships of $ 12 million, backlog of $ 1 million, and in-process research and development of $ 12 million.

The estimated useful lives of developed technology is 9 years, customer relationships is 9 years, and backlog is 1 year.

Goodwill was assigned to the CSG and the EISG reportable segments, based on the expected benefits and synergies that are likely to be realized from the AnaPico acquisition.

Goodwill was assigned to the CSG and EISG reportable segments, based on the expected benefits and synergies that are likely to be realized from the AnaPico acquisition.

We do not expect the goodwill recognized or any potential impairment charges in the future to be deductible for income tax purposes.

2023 Acquisitions

During the year ended October 31, 2023, we acquired Cliosoft, Inc.

(“Cliosoft”) for $ 85 million, net of $ 15 million cash acquired.

Cliosoft's data and intellectual property management tools enhance our portfolio of electronic design automation solutions.

Based on the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed, we recognized additions to goodwill and other intangible assets of $ 56 million and $ 56 million, respectively.

The identified intangible assets primarily consist of developed technology of $ 41 million, customer relationships of $ 13 million and backlog of $ 2 million.

The estimated useful lives of developed technology range between 6 to 7 years, customer relationships is 6 years, and backlog is 3 years.

Goodwill for the acquisition was assigned to the CSG and EISG operating segments using the relative fair value allocation approach.

Supplemental Pro Forma Information (Unaudited)

The following represents pro forma operating results as if ESI Group had been included in the company's consolidated statements of operations as of the beginning of fiscal 2023:

The following represents pro forma operating results as if Spirent and OSG had been consolidated effective at the beginning of fiscal 2024, and ESI Group had been consolidated effective at the beginning of fiscal 2023:

Year Ended October 31,

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Net income per share - Diluted $ 5.20 $ 2.49

The unaudited pro forma financial information for the years ended October 31, 2024 and 2023 combines the historical results of Keysight and ESI Group for the years ended October 31, 2024 and 2023, assuming that the companies were combined as of November 1, 2022 and includes business combination accounting effects from the acquisition including amortization charges from acquired intangible assets and tax-related effects.

Losses resulting from our foreign exchange contracts to hedge the ESI Group acquisition price of $18 million and $45 million were included in 2024 and 2023, respectively.

The unaudited pro forma financial information for the fiscal years 2025 and 2024 combines the historical results of Keysight, Spirent, OSG, and ESI Group, assuming Spirent and OSG were combined as of November 1, 2023, and ESI Group was combined as of November 1, 2022.

The pro forma information includes business combination accounting effects from the acquisition including amortization and depreciation charges from acquired intangible assets and property, plant and equipment, stock-based compensation expense, acquisition-related transaction costs, and tax-related effects.

Gains resulting from our foreign exchange contracts to hedge the Spirent acquisition price of $ 51 million and $ 23 million were included in 2025 and 2024, respectively.

Losses resulting from our foreign exchange contracts to hedge the ESI Group acquisition price of $ 18 million was included in 2024.

The pro forma information as presented above is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2024.

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Ending balance $ 884

For the fiscal years 2025, 2024, and 2023, the revenue recognized from the contract liability balances as of October 31, 2024, 2023, and 2022 was $ 513 million, $ 541 million, and $ 490 million, respectively.

Remaining Performance Obligations

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Description of Keysight’s Share-Based Plans

Incentive compensation plans.

The 2014 Equity and Incentive Compensation Plan (“2014 Stock Plan”) was adopted on July 16, 2014 and became effective on November 1, 2014.

It was subsequently amended and restated by our board of directors on September 29, 2014, January 22, 2015, November 16, 2017 and November 16, 2023, with the most recent amendments taking effect on March 21, 2024, following stockholders approval.

It has been subsequently amended and restated multiple times by our board of directors with the most recent amendments taking effect on March 21, 2024, following stockholders approval.

The maximum number of shares of common stock that may be issued under the plan is 28 million.

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RSUs under our share-based plans are granted to directors, executives, and employees.

The estimated fair value of the restricted stock unit awards granted under the 2014 Stock Plan is determined based on the market price of Keysight common

stock on the date of grant.

The estimated fair value of the RSUs granted under the 2014 Stock Plan is determined based on the market price of Keysight common stock on the date of

RSUs generally vest, with some exceptions, at a rate of 25 percent per year over a period of four years from the date of grant.

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Participants in this program are entitled to receive unrestricted company shares after a three-year performance period, contingent upon the achievement of metrics and targets set by the Compensation and Human Capital Committee at the beginning of the performance period.

These metrics may include total shareholder return (“TSR”), financial metrics like operating margin (“OM”), earnings per share (“EPS”), and others.

These metrics may include total shareholder return (“TSR”), financial metrics like operating margin (“OM”), cost synergies, and others.

For TSR-based awards the peer group comparisons are set at the beginning of the performance period, while OM targets are set each year in the first quarter of the respective year.

The final payout under the LTP Program may range from zero to 200 percent of the target award based on actual performance.

During fiscal year 2022, the Compensation and Human Capital Committee approved performance retention awards with a target earnings per share (“EPS”) goal over a three-year performance period to select members of our leadership team.

The performance targets are set each half year.

The payout range of the award is zero or 100 percent, with no additional payout for performance above target.

The Employee Stock Purchase Plan (“ESPP”) was adopted on July 16, 2014, and became effective on November 1, 2014.

The ESPP was adopted on July 16, 2014 and became effective on November 1, 2014.

It was amended and restated effective March 21, 2024.

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Income tax benefit realized from exercised stock options and similar awards $ 2 $ 3 $ 6

For the year ended October 31, 2024, the total share-based compensation expense includes $ 10 million of ESI Group acquisition-related compensation to redeem certain outstanding unvested stock awards as of the date of the acquisition that were determined to relate to post-merger service periods.

For 2025 and 2024, total share-based compensation expense includes $ 8 million and $ 10 million, respectively, of acquisition-related compensation to redeem certain outstanding unvested stock awards as of the date of the acquisition that were determined to relate to post-merger service periods.

Valuation Assumptions

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Volatility of Keysight shares 32 % 29 % 35 %

Volatility of index 18 % 25 % 23 %

Price-wise correlation with index 69 % 75 % 67 %

Volatility of peer group 31 % 18 % 25 %

Price-wise correlation with peer group 31 % 69 % 75 %

The above assumptions reflect the impact of a change in the peer group comparison for the performance awards granted in fiscal year 2025 from the S&P 500 index to the individual constituents of the S&P 500 index.

Share-based Payment Award Activity

Employee Stock Options

We have no t granted any stock options since fiscal 2015.

In 2024, 0.1 million options were exercised with an intrinsic value of $ 8 million at an average exercise price per share of $ 31 .

In 2023 and 2022, options exercised had an intrinsic value of $ 15 million and $ 11 million, with an average exercise price per share of $ 30 and $ 25 , respectively.

As of October 31, 2024, options outstanding were not material.

Non-vested Awards

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As of October 31, 2025, the unrecognized share-based compensation cost for non-vested stock awards was approximately $ 163 million, which is expected to be amortized over a weighted average period of 2.2 years.

This includes $ 20 million of unrecognized compensation cost related to replacement awards that were granted to certain employees from the Spirent and OSG acquisitions to convert their unvested equity awards based on an exchange ratio as defined in the purchase agreement.

Unrecognized share-based compensation cost does not include expense for financial metrics-based performance awards for which the targets have not yet been set.

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Total provision for income taxes $ 213 $ 251 $ 300

In addition, included in net loss from discontinued operations is income tax expense of $ 13 million for 2025 related to the divestiture of Spirent’s high-speed ethernet, network security, and channel emulation business lines to Viavi.

See Note 2, “Acquisitions,” for additional information.

The following table presents the components of the deferred tax assets and liabilities:

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Total deferred tax assets, net of deferred tax liabilities $ 157 $ 214

The decrease in deferred tax assets in 2024 as compared to 2023 primarily relates to a decrease in the tax rate applied to intangible assets in Singapore based on the new incentive tax rate, partially offset by an increase in deferred tax assets due to the capitalization of research and experimental expenditures for the U.S.

tax filing group.

The increase in deferred tax liabilities in 2024 as compared to 2023 primarily relates to intangible assets for acquired entities recognized in purchase accounting which are not deductible for tax purposes when amortized.

The increase in deferred tax assets in 2025 as compared to 2024 primarily relates to additional U.K.

capital losses from the Spirent acquisition and the capitalization of research and experimental expenditures for the U.S.

tax filing group, partially offset by a decrease in deferred tax assets due to the amortization of intangibles in Singapore.

The increase in deferred tax liabilities in 2025 as compared to 2024 primarily relates to intangible assets from the Spirent acquisition recognized in purchase accounting which are not deductible for tax purposes when amortized.

In October 2025, we completed the acquisition of Spirent.

As part of purchase accounting, we recorded net deferred tax liabilities of $ 168 million.

This consists of $286 million of valuation allowance and $168 million of deferred tax liabilities primarily related to intangibles recorded in the Spirent purchase accounting, offset by net operating loss, capital loss, and credit carryforwards of $286 million.

As of October 31, 2025, there was a deferred tax liability of $ 19 million for the tax liability expected to be imposed upon the repatriation of unremitted foreign earnings that are not considered indefinitely reinvested.

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Such assessment is required on a jurisdiction-by-jurisdiction basis.

The $ 218 million valuation allowances as of October 31, 2024 and 2023 were mainly related to net operating losses in Luxembourg, capital losses and net operating losses in the U.K., and California research credits from acquired entities that are subject to change in ownership limitations.

The $ 497 million valuation allowances as of October 31, 2025 were mainly related to net operating losses in Luxembourg, capital losses, and net operating losses in the U.K., as well as California research credits from acquired entities that are subject to change in ownership limitations.

As of October 31, 2025, there were U.S.

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Of the total U.S.

state net operating loss carryforwards, $ 48 million were subject to change of ownership limitations under various state tax provisions and were subject to valuation allowance.

state net operating loss carryforwards, $ 48 million was subject to change of ownership limitations under various state tax provisions and subject to valuation allowance.

state net operating loss carryforwards will begin to expire in 2027, which will result in an immaterial tax impact if not utilized.

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The remaining loss consisted of $683 million that will expire in years beginning 2028 through 2044 if not utilized and $ 241 million that can be carried forward indefinitely.

Of the $ 978 million of foreign net operating loss carryforward, $691 million were subject to a valuation allowance.

Of the $ 925 million of foreign net operating loss carryforward, $690 million is subject to a valuation allowance.

As of October 31, 2025, there were foreign capital loss carryforwards of $ 1,195 million that can be carried forward indefinitely and $ 4 million of tax credits in foreign jurisdictions that can be carried forward indefinitely.

9 unchanged sentences

research credits ( 20 ) ( 21 ) ( 22 )

share-based compensation ( 2 ) ( 5 ) ( 16 )

officers’ compensation limitation 7 5 6

Share-based compensation 12 7 2

tax on foreign earnings 57 43 139

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prior year GILTI tax deduction refund claim — ( 165 ) —

Pillar Two 13 — —

Other, net 6 4 ( 3 )

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The effective tax rate was 20 percent, 29 percent, and 22 percent for 2025, 2024, and 2023, respectively.

The tax rate in 2025 was lower than the U.S.

statutory rate, primarily due to a lower effective tax rate on foreign earnings and the utilization of foreign tax credits, offset by U.S.

taxes on GILTI inclusion, and the impact of Pillar Two minimum taxes.

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law in the U.S.

The OBBBA includes numerous provisions that affect corporate taxation, including changes to bonus depreciation, the expensing of domestic research costs, and modifications to certain U.S.

international tax rules.

The company has analyzed the impacts of the OBBBA and reflected them in the current period.

These impacts do not have a material effect on the tax rate for the year ended October 31, 2025.

The majority of the tax law changes will take effect in future years.

The OECD reached agreement among certain member countries to implement a global minimum tax framework, commonly referred to as Pillar Two, which established a minimum 15 percent income tax rate.

Various countries have passed legislation to comply with the Pillar Two model rules.

A subset of these rules became effective for Keysight in the current fiscal year.

While we expect to meet transitional safe harbor requirements in most jurisdictions, there are a limited number of jurisdictions where we expect Pillar Two taxes to apply.

The income tax provision for the year ended October 31, 2025 includes the effects of Pillar Two taxes, resulting in tax expense of $13 million.

The decrease in the effective tax rate of 9 percentage points from 2024 to 2025 was primarily due to the absence of the 2024 one-time income tax items in 2025, partially offset by the increase of taxes on the impact of Pillar Two minimum taxes.

The tax rate in 2024 was higher than the U.S.

statutory rate primarily due to a one-time income tax charge of $ 315 million required to adjust Singapore deferred tax asset values to an incentive tax rate.

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

The Singapore tax incentive provides lower rates of taxation on certain classes of income and requires thresholds of investments and employment.

The 2024 income tax charge was partially offset by a one-time income tax benefit of $ 165 million related to Global Intangible Low Taxed Income (“GILTI”) tax deductions for intangible asset amortization.

Keysight concluded that U.S.

Department of the Treasury exceeded its regulatory authority in issuing tax regulations disallowing these deductions under IRC

The company amended its U.S.

federal income tax returns for the open tax years to claim GILTI tax deductions.

The tax receivable resulting from the amended returns is reflected in “other assets” and “other current assets” in the consolidated balance sheet.

The annual tax impact of the amortization of the intangible assets will continue to be recognized until 2033.

The company believes the position meets the more likely than not recognition threshold and intends to vigorously defend its 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.

The 2024 income tax charge was also partially offset by a one-time income tax benefit of $61 million for the release of tax reserves related to the successful appeal of a Malaysia income tax assessment.

In the fourth quarter of 2017, Keysight was assessed and paid income tax and penalties in Malaysia on gains related to the transfer of intellectual property rights and recorded a tax reserve on the assessed amount.

The Court of Appeal in Malaysia ruled in Keysight’s favor on May 24, 2024, and the company received a refund of the income tax and penalties.

The 7 percentage point increase in the effective tax rate from 2023 to 2024 was primarily due to these one-time income tax items in 2024.

statutory rate primarily due to the impact of a one-time income tax charge to decrease deferred tax asset values from the Singapore statutory tax rate to an incentive tax rate, partially offset by a one-time income tax benefit related to the GILTI tax deductions for intangible asset amortization and the release of tax reserves related to Malaysia income tax assessment appeal.

The tax rate in 2023 was higher than the U.S.

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tax imposed on those non-U.S.

The tax rate in 2022 was lower than the U.S.

statutory rate primarily due to the proportion of worldwide earnings that are taxed at lower statutory tax rates in non-U.S.

jurisdictions, partially offset by U.S.

tax imposed on earnings in non-U.S.

jurisdictions.

The increase in the effective tax rate of 9 percent from 2022 to 2023 was primarily due to a 5 percent increase from U.S.

tax capitalization of research and experimental expenditures in 2023.

The increase in the effective tax rate of 7 percentage points from 2023 to 2024 was primarily due to the one-time income tax items in 2024.

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

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

The Malaysia tax incentive expires October 31, 2025.

The Singapore tax incentive expires July 31, 2029.

The breakdown between current and long-term income tax assets and liabilities, excluding deferred tax assets and liabilities, was as follows for the years 2024 and 2023:

(in millions)

Current income tax assets (included within other current assets) $ 175 $ 78

Current income tax liabilities (included within income and other taxes payable) ( 45 ) ( 49 )

Long-term income tax assets (included within other assets) 140 53

Long-term income tax liabilities (included within other long-term liabilities) ( 219 ) ( 210 )

Total $ 51 $ ( 128 )

The Singapore tax incentive expires July 31, 2029 while the Malaysia tax incentive expired on October 31, 2025.

We are in the process of renewing our Malaysia tax incentive.

The calculation of our tax liabilities involves uncertainties in the application of complex tax law and regulations in a multitude of jurisdictions.

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Of this amount, $ 150 million would impact our effective tax rate.

Approximately $ 1 million of the unrecognized tax benefits was related to acquisitions, which if recognized within certain agreed upon time periods, would result in the recognition of an offsetting indemnification asset.

Cumulatively, interest and penalties accrued as of 2025, 2024, and 2023 were $ 49 million, $ 38 million, and $ 41 million, respectively.

We recognized a tax benefit for interest and penalties related to unrecognized tax benefits in 2024 of $ 6 million, which included a tax benefit of $ 16 million for penalties released due to settlements, offset by tax expense of $ 10 million for interest and penalties accrued in the current year.

We recorded an additional $ 3 million of interest and penalties related to unrecognized tax benefits in 2024 through purchase accounting related to acquisitions.

We recognized tax expense of $ 5 million and $ 3 million for interest and penalties related to unrecognized tax benefits in 2023 and 2022, respectively.

We recognized a tax benefit for interest and penalties, related to unrecognized tax benefits in 2025 of $ 11 million,

which included a tax benefit of $ 2 million for penalties released due to statute lapses, offset by tax expense of $ 13 million for interest and penalties accrued in the current year.

We recognized tax benefit of $ 6 million and tax expense of $ 5 million for interest and penalties related to unrecognized tax benefits in 2024 and 2023, respectively.

The open tax years for the U.S.

federal income tax return and most state income tax returns are from November 1, 2019 through the current tax year.

federal income tax return and most state income tax returns are from fiscal year ending October 31, 2020 through the current tax year.

For the majority of our non-U.S.

entities, the open tax years are from November 1, 2019 through the current tax year.

At this time, management does not believe that the outcome of any future or currently ongoing examination will have a material impact on our consolidated financial statements.

entities, the open tax years are from fiscal year ending October 31, 2020 through the current tax year.

At this time, management does not believe that the outcome of any future or current examination will have a material impact on our consolidated financial statements.

We believe that we have an adequate provision for any adjustments that may result from tax examinations.

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If that were to occur, it could have an impact on our effective tax rate in the period in which such examinations are resolved.

NET INCOME PER SHARE

The following table presents the calculation of basic and diluted net income per share:

NET INCOME (LOSS) PER SHARE

The following table presents the calculation of basic and diluted net income (loss) per share:

Year Ended October 31,

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(in millions, except per-share amounts)

Net income from continuing operations, net of income taxes $ 869 $ 614 $ 1,057

Net loss from discontinued operations, net of income taxes ( 19 ) — —

Net income $ 850 $ 614 $ 1,057

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Diluted weighted-average shares 173 175 179

Net income per share - basic $ 3.53 $ 5.95 $ 6.23

Net income per share - diluted $ 3.51 $ 5.91 $ 6.18

Basic net income (loss) per share:

Net income per share from continuing operations $ 5.04 $ 3.53 $ 5.95

Net loss per share from discontinued operations ( 0.11 ) — —

Net income per share $ 4.93 $ 3.53 $ 5.95

Diluted net income (loss) per share:

Net income per share from continuing operations $ 5.02 $ 3.51 $ 5.91

Net loss per share from discontinued operations ( 0.11 ) — —

Net income per share $ 4.91 $ 3.51 $ 5.91

Potentially dilutive shares whose effect would have been antidilutive are excluded from the computation of diluted net income per share.

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Total $ 2,918 $ 1,614 $ 1,304 $ 2,084 $ 1,477 $ 607

In 2024, we recognized additions to goodwill and other intangible assets of $ 738 million and $ 582 million, respectively, based on the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed from the acquisition of ESI Group and other acquisition activity.

In 2025, we recognized additions to goodwill and other intangible assets of $ 1,001 million and $ 821 million, respectively, based on the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed from the acquisitions of Spirent, OSG, and other acquisition activity.

See Note 2, “Acquisitions,” for additional information.

During the year ended October 31, 2025, we transferred $ 33 million from in-process R&D to developed technology as projects were successfully completed.

During the year ended October 31, 2024, foreign exchange translation had a favorable impact of $ 8 million on other intangible assets.

In 2024, we recognized additions to goodwill and other intangible assets of $ 738 million and $ 582 million, respectively, based on the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed from the acquisition of ESI Group and other acquisition activity.

See Note 2, “Acquisitions,” for additional information.

During the year ended October 31, 2025, other intangible assets increased $ 13 million due to foreign exchange translation impact.

Amortization of other intangible assets was $ 137 million in 2025, $ 138 million in 2024, and $ 90 million in 2023.

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Our indefinite-lived intangible assets are generally in-process research and development (“IPR&D”) intangible assets.

No impairments of indefinite-lived intangible assets were recorded in 2024.

We had no IPR&D intangible assets as of October 31, 2023 and 2022.

No impairments of indefinite-lived intangible assets were recorded in 2025 and 2024.

We had no IPR&D intangible assets as of October 31, 2023.

We review long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate.

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Total liabilities measured at fair value $ 48 $ — $ 48 $ — $ — $ 40 $ — $ 40 $ — $ —

In 2024, we purchased an equity investment for $ 10 million.

Our money market funds and equity investments with readily determinable fair values are measured at fair value using quoted market prices and, therefore, are classified within Level 1 of the fair value hierarchy.

Equity and fixed income investments or convertible notes without readily determinable fair values that are either measured at cost, adjusted for observable changes in price or impairments, or accounted for under a measurement alternative are not categorized in the fair value hierarchy and are presented as “investments - other” in the table above.

Equity and fixed income investments, or convertible notes without readily determinable fair values that are either measured at cost, adjusted for observable changes in price or impairments, or accounted for under a measurement alternative, and company-owned life insurance contracts measured at cash surrender value are not categorized in the fair value hierarchy and are presented as “investments - other” in the table above.

Our deferred compensation liability is classified as Level 2 because the inputs used in the calculations are observable, although the values are not directly based on quoted market prices.

Our derivative financial instruments are classified within Level 2 as there is not an active market for each hedge contract, but the inputs used to calculate the value of the instruments are tied to active markets.

Equity investments, including securities that are earmarked to pay the deferred compensation liability, are reported at fair value, with gains or losses resulting from changes in fair value recognized in earnings.

The changes in fair value of equity investments are recorded within “other income (expense), net” in the consolidated statement of operations.

Certain derivative instruments are reported at fair value, with unrealized gains and losses, net of tax, included in “accumulated other comprehensive income (loss).”

All of our investments are subject to periodic impairment review.

The impairment analysis requires judgment to identify events or circumstances that would likely have a significant adverse effect on the future value of the investment.

There were no impairments recognized in 2024, 2023 and 2022.

Realized gains and losses from the sale of investments are recorded in earnings.

There were no realized gains or losses from the sale of investments in 2024, 2023 and 2022.

Net unrealized gain (loss) on our equity and other investments was as follows:

Net realized and unrealized gain on our equity and other investments was as follows:

Year Ended October 31,

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(in millions)

Net unrealized gain (loss) on equity and other investments still held $ 15 $ 7 $ ( 36 )

Net unrealized gain on equity and other investments still held $ 98 $ 15 $ 7

Realized gain on sale of investments $ 21 $ — $ —

Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

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The future cash flows used in the analysis are based on internal cash flow projections based on our long-range plans and include significant assumptions by management.

Long Lived Assets

In 2022, our held and used long-lived assets in Russia with a carrying amount of $ 3 million were written down to a fair value of zero, resulting from an impairment of assets that were expected to generate zero cash flows in the future, and was recorded within “other operating expense (income), net” in the consolidated statement of operations.

We are exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of our business.

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The contract term allowed us to lock in a treasury rate on anticipated debt issuances.

These derivative instruments were designated and qualified as cash flow hedges under the criteria prescribed in the authoritative guidance.

These derivative instruments were designated and qualified as cash flow hedges.

The changes in fair value of these derivative instruments were recognized in “accumulated other comprehensive income (loss).” In 2023, we terminated the interest rate swap agreements, resulting in a deferred gain of $ 107 million recognized in “accumulated other comprehensive income (loss)” that is being amortized to interest expense over the term of the 2034 Senior Notes.

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Changes in value of the derivative are recognized in “other income (expense), net” in the consolidated statement of operations in the current period along with the offsetting foreign currency gain or loss on the underlying assets or liabilities.

In connection with the acquisition of Spirent, we entered into foreign exchange forward contracts to mitigate the currency exchange risk associated with the payment of the purchase price in pounds sterling.

The aggregate notional amount of the currencies hedged was 1.2 billion pounds sterling.

These foreign exchange contracts did not qualify for hedge accounting treatment and were not designated as hedging instruments.

During the year ended October 31, 2025, the settlement of these contracts provided $ 74 million in cash, resulting in a gain of $ 51 million recorded in “other income (expense), net” in the consolidated statement of operations.

In connection with the acquisition of the ESI Group, we entered into foreign exchange forward contracts to mitigate the currency exchange risk associated with the payment of the purchase price in euros.

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During the year ended October 31, 2024, these foreign exchange forward contracts were settled using existing cash of $ 63 million, resulting in a loss of $ 18 million recorded in “other income (expense), net” in the consolidated statement of operations.

During the third quarter of fiscal year 2024, we entered into foreign exchange forward contracts with an aggregate notional amount of 1.2 billion pounds sterling to mitigate the currency exchange risk associated with a planned acquisition.

These foreign exchange contracts do not qualify for hedge accounting treatment and are not designated as hedging instruments.

The resulting net unrealized gain on outstanding contracts was $ 23 million and was recorded in “other income (expense), net” in the consolidated statement of operations and in “other current assets” on the consolidated balance sheet for the year ended October 31, 2024.

Our use of derivative instruments exposes us to credit risk to the extent that the counterparties may be unable to meet the terms of the agreement.

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The weighted average lease term of our operating leases was 6.5 years, 7.0 years, and 7.8 years as of October 31, 2025, 2024, and 2023, respectively.

The weighted average discount rate of our operating leases was 3 percent as of October 31, 2024, 2023 and 2022.

The weighted average discount rate of our operating leases was 4 percent as of October 31, 2025 and 3 percent in 2024 and 2023.

The following table summarizes the components of our lease cost:

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Sublease income and finance lease costs were immaterial for the years ended October 31, 2025, 2024, and 2023.

Right-of-use (“ROU”) asset impairments were $ 2 million in 2022 related to the discontinuance of our Russia operations.

Supplemental information related to our operating leases was as follows:

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As of October 31, 2025, we did not have material leases that have not yet commenced.

Rental income from the lease of excess facilities was $ 10 million, $ 10 million and $ 11 million for the years ended October 31, 2024, 2023 and 2022, respectively, and is included in “other operating expense (income), net.” Other lessor arrangements were immaterial.

Rental income from the lease of excess facilities was $ 10 million for the years ended October 31, 2025, 2024, and 2023.

It is included in “other operating expense (income), net.” Other lessor arrangements were immaterial.

The following table summarizes the components of our debt:

(in millions)

2024 Senior Notes at 4.55 % ($ 600 face amount less unamortized costs of zero and $ 1 )

2027 Senior Notes at 4.60 % ($ 700 face amount less unamortized costs of $ 1 and $ 2 )

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2030 Senior Notes at 5.35 % ($ 750 face amount less unamortized costs of $ 7 )

2034 Senior Notes at 4.95 % ($ 600 face amount less unamortized costs of $ 6 and $ 6 )

Total Debt $ 2,534 $ 1,790

Current portion of long-term debt — 599

Long-Term Debt $ 1,790 $ 1,195

2027 Senior Notes

In October 2014, the company issued an aggregate principal amount of $ 600 million in unsecured senior notes (“2024 Senior Notes”).

These notes matured on October 30, 2024 and were fully repaid.

2027 Senior Notes

In April 2017, the company issued an aggregate principal amount of $ 700 million in unsecured senior notes (“2027 Senior Notes”).

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2030 Senior Notes

In April 2025, the company issued an aggregate principal amount of $ 750 million in unsecured senior notes (“2030 Senior Notes”).

The 2030 Senior Notes were issued at 99.760 percent of their principal amount.

The notes will mature on July 30, 2030 and bear interest at a fixed rate of 5.35 percent per annum.

The interest is payable semi-annually on January 30 and July 30, commencing on January 30, 2026.

We incurred issuance costs of $ 7 million in connection with the 2030 Senior Notes that, along with the debt discount, are being amortized to interest expense over the term of the senior notes.

2034 Senior Notes

In October 2024, the company issued an aggregate principal amount of $ 600 million in unsecured senior notes (“2034 Senior Notes”).

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We incurred issuance costs of $ 6 million in connection with the 2034 Senior Notes that, along with the debt discount, are being amortized to interest expense over the term of the senior notes.

In 2020, we entered into forward-starting interest rate swaps with an aggregate notional amount of $ 600 million, in connection with future interest payments on our 2034 Senior Notes issued in October 2024.

In 2023, we terminated the interest rate swap agreements, resulting in a deferred gain of $ 107 million recognized in “accumulated other comprehensive income (loss),” which is being amortized to interest expense over the term of the 2034 Senior Notes.

See Note 9, “Derivatives,” for additional information.

The above senior notes are unsecured and rank equally in right of payment with all of our other senior unsecured indebtedness.

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Revolving Credit Facility

On July 30, 2021 , we entered into an amended and restated credit agreement (the “Revolving Credit Facility”) which provides a $ 750 million five-year unsecured revolving credit facility that expires on July 30, 2026 with an annual interest rate of LIBOR + 1 percent along with a facility fee of 0.125 percent per annum.

On February 17, 2023, we entered into the first amendment to the Revolving Credit Facility to change the annual interest rate from LIBOR + 1 percent to SOFR + 1.1 percent.

On July 30, 2021 , we entered into an amended and restated credit agreement (the “Revolving Credit Facility”), which provided a $ 750 million five-year unsecured revolving credit facility that expires on July 30, 2026 .

Borrowings under the facility bear an annual interest rate of SOFR + 1.1 percent, including a facility fee of 0.1 percent per annum.

In addition, the Revolving Credit Facility permits the company, subject to certain customary conditions, on one or more occasions to request to increase the total commitments under the Revolving Credit Facility by up to $ 250 million in the aggregate.

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Bridge Facility

On March 28, 2024 , we entered into a bridge credit agreement (the “Bridge Facility”) pursuant to which certain lenders agreed to provide a senior unsecured 364 -day bridge credit facility of up to 1,350 million pounds sterling for the purpose of providing the financing to support a planned acquisition.

On July 25, 2024, the Bridge Facility was decreased to 1,232 million pounds sterling.

We incurred costs in connection with the Bridge Facility of $ 7 million that are included in “other current assets” in the consolidated balance sheet and are being amortized to “interest expense” over the term of the Bridge Facility.

On March 28, 2024 , we entered into a bridge credit agreement (the “Bridge Facility”) pursuant to which certain lenders agreed to provide a senior unsecured bridge credit facility of up to 1,350 million pounds sterling for the purpose of providing the financing to support a planned acquisition.

On July 25, 2024, the Bridge Facility decreased to 1,232 million pounds sterling.

On May 8, 2025, the Bridge Facility further decreased to 752 million pounds sterling and on September 25, 2025 the Bridge Facility was terminated.

We incurred costs in connection with the Bridge Facility of $ 7 million that have been fully amortized to interest expense.

Letters of Credit

As of October 31, 2024 and 2023, we had $ 43 million and $ 41 million, respectively, of outstanding letters of credit and surety bonds that were issued by various lenders.

ESI Group debt and credit facility assumed

As part of the ESI Group acquisition, we assumed debt of $ 24 million, of which $ 10 million was payable within one year.

The debt included a syndicated loan of $ 11 million payable through yearly installments until April 2025 with an annual interest rate of EURIBOR + 2 to 2.5 percent .

We also assumed various fixed interest rate state-guaranteed loans and other bank borrowings of $ 13 million.

During the year ended October 31, 2024, we repaid the debt assumed as part of the acquisition.

As part of the ESI Group acquisition, we assumed a revolving credit facility of 10 million euros that was subsequently terminated in April 2024.

As of October 31, 2025 and 2024, we had $ 60 million and $ 43 million, respectively, of outstanding standby letters of credit, custom bonds, and surety bonds.

RETIREMENT PLANS AND POST-RETIREMENT BENEFIT PLANS

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Post-Retirement Benefit Plan, gains and losses are amortized using a separate layer for each year’s gains and losses.

During the year ended October 31, 2023 and October 31, 2022, we recognized a settlement gain of $ 1 million in our Japan defined benefit plan and a settlement loss of $ 9 million in our U.K.

defined benefit plan, respectively, as the lump-sum payments in the respective plans were more than the sum of the service cost and interest cost components of net periodic benefit cost (“the threshold amount”).

For the years ended October 31, 2025, 2024, and 2023, components of net periodic benefit cost (benefit) and other amounts recognized in other comprehensive income consisted of:

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Amortization:

Net actuarial loss

9 9 11 9 9 24 ( 1 ) 2 1

Net actuarial loss (gain) 6 9 9 ( 4 ) 9 9 ( 1 ) ( 1 ) 2

Prior service credit

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Net actuarial loss (gain) $ ( 19 ) $ ( 23 ) $ 14 $ ( 26 ) $ ( 43 ) $ 32 $ ( 12 ) $ ( 3 ) $ ( 5 )

Net prior service cost/(credit) 2 — — — — — — — —

Net prior service cost — 2 — — — — — — —

Amortization:

Net actuarial loss ( 9 ) ( 9 ) ( 11 ) ( 9 ) ( 9 ) ( 24 ) 1 ( 2 ) ( 1 )

Net actuarial loss (gain) ( 6 ) ( 9 ) ( 9 ) 4 ( 9 ) ( 9 ) 1 1 ( 2 )

Prior service credit — — — — — — — — 1

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Employer contributions — 1 13 13 — —

Settlements — ( 1 ) — ( 3 ) — —

Benefits paid ( 60 ) ( 56 ) ( 44 ) ( 46 ) ( 15 ) ( 15 )

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Interest cost 38 40 35 36 8 8

Settlements — ( 1 ) — ( 3 ) — —

Actuarial loss (gain) 10 84 ( 13 ) 52 ( 2 ) 18

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Retirement and post-retirement benefits ( 5 ) ( 5 ) ( 37 ) ( 43 ) — —

Net asset (liability) $ 4 $ ( 12 ) $ 240 $ 175 $ 23 $ 17

Net asset $ 20 $ 4 $ 295 $ 240 $ 39 $ 23

Amounts recognized in accumulated other comprehensive (income) loss:

Actuarial losses (gains) $ 28 $ 54 $ 328 $ 352 $ ( 24 ) $ ( 13 )

Prior service cost (credits) 2 — — — — —

Prior service cost 2 2 — — — —

Total $ 30 $ 56 $ 328 $ 352 $ ( 24 ) $ ( 13 )

The change in benefit obligations for the U.S.

defined benefit plans for 2024 was primarily driven by changes in discount rates, and for 2023 was primarily driven by changes in discount rates, partially offset by changes in demographic assumptions.

The change in the benefit obligation for the U.S.

defined benefit plans for 2025 was primarily driven by actuarial losses from changes in demographic assumptions, partially offset by gains due to plan experience, and 2024 was primarily driven by changes in discount rates.

The change in the benefit obligation for the non-U.S.

defined benefit plans for 2025 was primarily driven by currency losses, partially offset by changes in discount rates, and 2024 was primarily driven by changes in discount rates.

The change in benefit obligations for the U.S.

post-retirement benefit plan for 2024 was primarily driven by changes in discount and retiree mortality rates and for 2023 was primarily driven by changes in discount rates.

post-retirement benefit plan for 2025 was primarily driven by changes in anticipated future utilization of reimbursement benefit, partially offset by changes in discount rates, and 2024 was primarily driven by changes in discount and retiree mortality rates.

Investment policies and strategies as of October 31, 2025 .

In the U.S., our RP Plan target asset allocations are approximately 60 percent growth funds, primarily equities, and approximately 40 percent fixed income investments and in the U.S.

In the U.S., our RP target asset allocations are approximately 60 percent growth funds, primarily equities, and approximately 40 percent fixed income investments and in the U.S.

Post-Retirement Benefit Plan, target asset allocations are approximately 70 percent growth funds, primarily equities, and approximately 30 percent fixed income investments.

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and earn performance rates of return in accordance with the benchmarks adopted for each asset class.

Outside of the U.S., our target asset allocation is from 11 to 70 percent equities, from 30 to 54 percent fixed income investments, and from zero to 47 percent insurance contracts and cash.

Outside of the U.S., other than for the U.K.

defined benefit plan, our target asset allocation is from 41 to 70 percent equities, from 30 to 54 percent fixed income investments, and from zero to 5 percent cash.

The target asset allocation for the U.K.

plan is 100 percent insurance contracts.

All plans’ assets are broadly diversified.

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defined benefit plan and classified it as “other investments.” In December 2021, we completed the second phase of the same contract.

In June 2025, we completed the third and final phase of the same contract.

The insurance buy-in contract is similar to an annuity contract, which matches cash flows with future benefit payments for a specific group of pensioners with the obligation remaining with the plan.

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(in millions)

Cash and cash equivalents $ 7 $ — $ 7 $ — $ —

Equity 366 — — — 366

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(in millions)

Cash and cash equivalents $ — $ — $ — $ — $ —

Equity 422 — — — 422

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Balance, beginning of year $ 247 $ 233

Unrealized gains (losses) 15 ( 19 )

Unrealized gains 8 15

Purchases, sales, issuances and settlements ( 18 ) ( 17 )

Transfers in (out) — —

Transfers in 254 —

Currency impact 3 16

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Cash and cash equivalents $ 1,873 $ 1,796

Restricted cash included in other current assets 15 —

Restricted cash included in other assets 2 18

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Total inventory $ 1,050 $ 1,022

Inventory-related excess and obsolescence charges recorded in “cost of products” were $ 35 million in 2024 and $ 27 million in 2023 and 2022.

Inventory-related excess and obsolescence charges recorded in “cost of products” were $ 43 million in 2025, $ 35 million in 2024, and $ 27 million in 2023.

We record excess and obsolete inventory charges for inventory at our sites and at our contract manufacturers and suppliers, where we have non-cancellable purchase commitments.

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Property, plant and equipment, net $ 795 $ 774

Asset impairments were zero in 2024, zero in 2023 and $ 1 million in 2022.

Asset impairments were zero in 2025, 2024, and 2023.

Depreciation expense was $ 131 million in 2025, $ 126 million in 2024, and $ 120 million in 2023.

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Prepaid assets include deposits paid in advance to contract manufacturers of $ 176 million and $ 200 million as of October 31, 2025 and 2024, respectively.

The increase in tax receivables in 2024 as compared to 2023 was primarily due to a one-time discrete tax benefit.

The tax receivables in 2024 includes a one-time discrete tax benefit.

See Note 5, “Income Taxes,” for additional information.

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Total other assets $ 610 $ 521

The increase in tax receivables in 2024 as compared to 2023 was primarily due to a one-time discrete tax benefit.

The tax receivables in 2025 and 2024 includes a one-time discrete tax benefit.

See Note 5, “Income Taxes,” for additional information.

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As of October 31, 2025, our non-cancellable purchase commitments were approximately $ 450 million.

We expect to fulfill most of our purchase commitments for inventory within one year or based on mutually agreed terms.

We expect to fulfill most of our purchase commitments for inventory within one year.

Other purchase commitments.

Other purchase commitments primarily relate to software as a service and other professional services contracts.

As of October 31, 2024, our non-cancellable contractual obligations related to these contracts were approximately $ 96 million.

As of October 31, 2025, our non-cancellable contractual obligations related to these contracts were approximately $ 111 million, most of which are expected to be fulfilled within two years.

We also have long-term power purchase agreements to purchase power at predominantly variable prices.

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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.

and 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.

We deny the allegations and are aggressively defending each case.

Although there are no matters pending that we currently believe are probable and reasonably possible of having a material impact to our business, consolidated financial position, or results of operations or cash flows, the outcome of litigation is inherently uncertain and is difficult to predict.

On June 14, 2019, the U.S.

Treasury issued final regulations relating to GILTI under the tax regulations.

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, 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 its regulatory authority and the intangible asset amortization should be deductible.

In response, 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.

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 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.

Although there are no matters pending that we currently believe are probable and reasonably possible of having a material impact to our business, consolidated financial position, results of operations, or cash flows, the outcome of litigation is inherently uncertain and is difficult to predict.

An adverse outcome in any outstanding lawsuit or proceeding could result in significant monetary damages or injunctive relief.

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Stock Repurchase Program

On March 6, 2023, our board of directors approved a stock repurchase program authorizing the purchase of up to $ 1,500 million of the company’s common stock, of which $ 485 million remained as of October 31, 2024.

On March 6, 2023, our board of directors approved a stock repurchase program authorizing the purchase of up to $ 1,500 million of the company’s common stock.

On November 24, 2025, our board of directors approved a new stock repurchase program authorizing the purchase of up to $ 1,500 million of the company’s common stock, replacing the previously approved March 2023 program, under which $ 110 million remained as of October 31, 2025.

Under our stock repurchase program, shares may be purchased from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases, privately negotiated transactions, or other means.

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In 2024, we repurchased 2,974,967 shares of common stock for $ 439 million and accrued $ 3 million related to excise tax levied on share repurchases, net of issuances.

In 2022, we repurchased 5,442,280 shares of common stock for $ 849 million.

All such shares and related costs are held as treasury stock and accounted for at the trade date using the cost method.

In 2023, we repurchased 4,913,548 shares of common stock for $ 702 million and accrued $ 4 million related to excise tax levied on share repurchases, net of issuances.

Accumulated other comprehensive loss

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( 264 ) ( 317 )

Gains (losses) on derivative instruments, net of tax (expense) of $( 23 ) and $( 25 )

Gains on derivative instruments, net of tax (expense) of $( 21 ) and $( 23 )

Total accumulated other comprehensive loss $ ( 248 ) $ ( 364 )

Changes in accumulated other comprehensive loss by component and related tax effects were as follows:

Net defined benefit pension cost and post-retirement plan costs:

Foreign currency translation Actuarial losses Prior service credits Gains (losses) on derivatives Total

Foreign currency translation Net defined benefit pension cost and post-retirement plan costs Gains (losses) on derivatives Total

(in millions)

At October 31, 2023 $ ( 167 ) $ ( 388 ) $ 89 $ ( 466 )

Other comprehensive income (loss) before reclassifications 18 ( 39 ) — ( 19 ) ( 40 )

Other comprehensive income before reclassifications 31 69 9 109

Amounts reclassified out of accumulated other comprehensive gain (loss) — 16 ( 11 ) 5

Tax benefit (expense) — ( 14 ) 2 ( 12 )

Other comprehensive income (loss) 18 ( 9 ) — ( 21 ) ( 12 )

Other comprehensive income 31 71 — 102

At October 31, 2024 ( 136 ) ( 317 ) 89 ( 364 )

Other comprehensive income (loss) before reclassifications 31 71 ( 2 ) 9 109

Other comprehensive income before reclassifications 70 58 6 134

Amounts reclassified out of accumulated other comprehensive gain (loss) — 2 ( 15 ) ( 13 )

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(in millions)

Gain (loss) on derivatives $ 10 $ 8 Cost of products

Gain on derivatives $ 1 $ 10 Cost of products

3 — Selling, general and administrative

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SEGMENT INFORMATION

Our operating segments were determined based primarily on how the chief operating decision maker views and evaluates our operations.

Segment operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to each segment and to assess performance.

Our operating segments were determined based primarily on how the Chief Operating Decision Maker (“CODM”), President and Chief Executive Officer , views and evaluates our operations.

Other factors, including market separation and customer specific applications, go-to-market channels, products and services, and manufacturing are considered in determining the formation of these operating segments.

Descriptions of our two reportable segments are as follows:

The Communications Solutions Group (“CSG”) serves customers spanning the global commercial communications and aerospace, defense, and government end markets.

The group’s solutions consist of electronic design and test software, instrumentation, systems, and related services.

These solutions are used in the simulation, design, validation, manufacturing,

installation, and optimization of communication systems in wireless, wireline, enterprise, and aerospace, defense, and government end markets.

In addition, the group provides automated software test solutions to automatically identify, build, and execute tests critical to digital business success and a strong customer experience.

The Electronic Industrial Solutions Group (“EISG”) serves customers across a diverse set of end markets focused on automotive and energy, semiconductor solutions, and general electronics.

The group’s solutions consist of electronic design, test and simulation software, instrumentation, systems, and related services.

These solutions are used in the simulation, design, validation, manufacturing, installation, and optimization of electronic equipment.

In addition, the group provides automated software test solutions to automatically identify, build, and execute tests critical to digital business success and a strong customer experience.

Our recent acquisition of ESI Group expands our application layer portfolio with simulation capabilities in automotive and general electronics sectors.

The CODM is regularly provided with and reviews segment revenues and segment income from operations to support decision-making, set strategic goals, allocate resources, and evaluate each segment’s progress against the company’s plan.

The CODM also reviews and approves budgets, including capital expenditures, at the segment level.

The segment results are not necessarily in conformity with GAAP and exclude items such as share-based compensation expense, amortization of acquisition-related balances, acquisition and integration costs, restructuring costs, interest income, interest expense, and other items.

A significant portion of the segments’ expenses arise from allocated corporate charges, as well as expenses related to our centralized sales force, and service, marketing and technology functions that we have historically provided to the segments in order to realize economies of scale and to efficiently use resources.

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Newly acquired businesses are not allocated these charges until integrated into our shared services and corporate infrastructure.

The following tables reflect the results of our reportable segments under our management reporting system.

These results are not necessarily in conformity with GAAP.

The performance of each segment is measured based on several metrics, including income from operations.

These results are used, in part, by the chief operating decision maker in evaluating the performance of, and in allocating resources to, each of the segments.

The profitability of each of the segments is measured after excluding share-based compensation expense, amortization of acquisition-related balances, acquisition and integration costs, restructuring costs, interest income, interest expense and other items as noted in the reconciliations below.

Descriptions of our two reportable segments are as follows:

The Communications Solutions Group (“CSG”) serves customers spanning the global commercial communications and aerospace, defense, and government end markets.

The group’s solutions consist of electronic design and test software, instrumentation, systems, and related services.

These solutions are used in the design, simulation, validation, manufacturing, installation, and optimization of communication systems in wireless, wireline (data center networking), enterprise, and aerospace, defense, and government end markets.

Our recent acquisition of Spirent adds wireless network test and assurance and positioning technology solutions to our portfolio, complementing our design, validation, and performance offerings to deliver end-to-end solutions to our customers.

The Electronic Industrial Solutions Group (“EISG”) serves customers across a diverse set of end markets focused on automotive and energy, semiconductor solutions, and general electronics.

The group's solutions consist of electronic design, test and simulation software, instrumentation, systems, computer-aided engineering solutions, and related services.

These solutions are used in the design, simulation, validation, manufacturing, installation, and optimization of electronic equipment.

The following tables reflect the results of our reportable segments and significant segment expenses as defined above.

CSG EISG Total

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Year ended October 31, 2025:

Total and segment revenue $ 3,420 $ 1,559 $ 4,979

Revenue $ 3,726 $ 1,649 $ 5,375

Cost of sales $ 1,235 $ 667 $ 1,901

Research and development $ 697 $ 258 $ 954

Selling, general and administrative $ 822 $ 325 $ 1,147

Other operating expenses (income) $ ( 14 ) $ ( 7 ) $ ( 20 )

Segment income from operations $ 986 $ 407 $ 1,393

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Year ended October 31, 2024:

Total and segment revenue $ 3,685 $ 1,779 $ 5,464

Revenue $ 3,420 $ 1,559 $ 4,979

Cost of sales $ 1,107 $ 626 $ 1,733

Research and development $ 618 $ 253 $ 871

Selling, general and administrative $ 784 $ 327 $ 1,111

Other operating expenses (income) $ ( 10 ) $ ( 4 ) $ ( 14 )

Segment income from operations $ 921 $ 357 $ 1,278

1 unchanged sentence

Year ended October 31, 2023:

Total and segment revenue $ 3,803 $ 1,617 $ 5,420

Revenue $ 3,685 $ 1,779 $ 5,464

Cost of sales $ 1,190 $ 678 $ 1,868

Research and development $ 618 $ 224 $ 842

Selling, general and administrative $ 821 $ 300 $ 1,120

Other operating expenses (income) $ ( 11 ) $ ( 4 ) $ ( 15 )

Segment income from operations $ 1,068 $ 581 $ 1,649

Depreciation expense $ 81 $ 39 $ 120

The following table reconciles reportable segments’ income from operations to our total enterprise income before taxes:

Amounts in table above may not total due to rounding.

The following table reconciles reportable segments’ income from operations to our income before taxes as reported:

Year Ended October 31,

10 unchanged sentences

Other income (expense), net 200 35 ( 25 )

Income before taxes, as reported $ 865 $ 1,357 $ 1,285

Income from continuing operations before taxes, as reported $ 1,082 $ 865 $ 1,357

“Restructuring and other” includes legal expenses of $ 17 million and $ 23 million in 2024 and 2023, respectively.

17 unchanged sentences

Total assets $ 11,301 $ 9,269

The increase in segment assets for the year ended October 31, 2024 was primarily due to additions in assets acquired as part of the ESI Group acquisition and an increase in tax receivables due to a one-time discrete tax benefit, partially offset by a one-time income tax charge to decrease the deferred tax assets values from the Singapore statutory tax rate to an incentive tax rate.

See Note 2, “Acquisitions,” and Note 5, “Income Taxes,” for additional information.

Segment assets include goodwill and gross other intangible assets, accounts receivable, inventory, property, plant and equipment, and other assets.

Unallocated assets primarily consist of cash and cash equivalents, deferred tax assets, long-term investments, accumulated amortization of other intangible assets, pension assets, and other assets.

The increase in segment assets for the year ended October 31, 2025 was primarily due to additions in assets acquired as part of the 2025 acquisitions.

See Note 2, “Acquisitions,” for additional information.

The following tables present summarized information for revenue and long-lived assets by country.

6 unchanged sentences

Year ended October 31, 2023 $ 1,928 $ 1,005 $ 2,531 $ 5,464

States Japan Rest of the

States Japan Germany Rest of the

(in millions)

4 unchanged sentences

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 8. Financial Statements and Supplementary Data