Keysight Technologies, Inc. (KEYS) Earnings Call Transcript & Summary

For important disclosures, please see the Morgan Stanley research disclosure website at morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. I'm Meta Marshall. I cover the networking space here at Morgan Stanley. We're delighted to have Keysight and Neil Dougherty, CFO, here with us today. Thanks so much for being here.

Yes. Thanks for having us.

Great. Maybe diving in, you've kind of seen a reacceleration or return to growth after a tough kind of 2024 really. As you think about emerging from that, has it changed your perspective on kind of what the market growth is?

Yes. I think at the highest level, the answer to that question is no, right? If you go back to 2023, our Analyst Day in March, we outlined what we thought was going to be kind of the over-the-cycle growth rates for the end markets in which we participate. So commercial comms, 4% to 6%. Certainly within that market, we've seen the mix shift between wireless and wireline here recently, but I don't know that it's changed our view on the overall growth rate of that market, again, over cycles. Aerospace defense market, that's growing GDP, GDP plus kind of rates, 3% to 4%. And then on the industrial side, again, similarly a 4% to 6% growth rate over time. And then at Keysight, we always look to outperform those market growth rates. And that's what's led us to put out the external targets in the 5% to 7% range for Keysight. And then I think if you want to go deeper than that, you need to look at what's happening in each one of these markets and the environment that we're in. And what we've said is that right now, we're expecting kind of a gradual recovery off of the trough that we've been over the last period of time. And some of that is because these end markets in which we serve. They're not coming out of this in phase with one another, we have different markets that are in different stages. And I think -- and if I step back from Keysight, that's been more of the norm is that the diversity of Keysight you tend to have some markets that are inflecting positively whereas others might be in various other states. So kind of stepping through them on the commercial comp side, we talk about wireless and wireline. Wireline, obviously, the high point at this point driven by AI and the evolution of Ethernet speeds and the investments that are happening in data center, we have a lot of touch points within that end market, clearly, the highlight of kind of our market exposure at this point. I think on the wireless side, what we're seeing is stability, albeit at a lower level than we were at in the '22 -- '21, '22 time frame. We are between 5G and 6G clearly. But there is -- we're still in the early instantiations of 5G. There are multiple revs of the standard that still need to come out before we get to 6G, they're going to drive incremental waves of investment in things like reducing power consumption, non-terrestrial networks, starting to think about AI at the edge are going to create opportunities for investment within the 5G ecosystem. And then we're already seeing the early stage research in 6G. So kind of stable at a lower level for now, and that's our base case as we think about it through the remainder of the year. On the aerospace defense side, I think we're bullish about the intermediate to long-term opportunity in aerospace defense. We're certainly seeing NATO allies commit to spend at a higher investment -- higher percentage of GDP. There seems to be broad political alignment between the Democrats and the Republicans in the U.S. on the need to invest in defense technology, which is good for us. In the short term, there could be turmoil, particularly when you see change in presidential administration. So we saw a little bit softer orders within the quarter. I think most of that is just things pushing out. We'll get those. We'll get that business here later in the year. We have a high degree of confidence in that.

Got it. I mean when you think about your kind of target longer-term growth rate of 5% to 7% versus an industry kind of growing 4% to 6%, does that excess growth come from market share gains or just participating in better markets?

Well, I guess by definition, it's share gain, obviously, if you're outgrowing the market. And I think because of the breadth of our portfolio, it's hard to say it's the latter because I think we actually see the opposite of that. Sometimes you'll see some competitors that have a narrow portfolio or a narrow market focus, and they underperform when that niche that they're in is on the downside, and they overperform when the niche that they're in is in the upside. We have such broad exposure to these end markets and a unique ability to service them end-to-end and up and down the stack. But I think it's that that's allowing us to outgrow the markets. We can bring complete solutions to the marketplace to address the specific challenges of these industries, whereas if they choose -- if our customers choose not to go to Keysight, in many cases, they're having to cobble together a solution that includes components from 3 or 4 of our competitors. And so that's a competitive differentiator for us, it allows us to more specifically target the challenges of the industries that we serve.

All right. Perfect. Maybe diving deeper into the AI opportunity for Keysight. We hosted a tech talk with you guys last year. You're talking about kind of a broad opportunity to participate in the AI market. Just where are you seeing the biggest opportunity today? And is it kind of concentrated or is it broadening out?

Yes. So first of all, I think we see the AI space is still highly concentrated, right? A lot of the activity is being driven by 4 or 5 names on the hyperscalers and then obviously the NVIDIA ecosystem. That being said, there are a lot of parallels as you think about Keysight's presence in that wireline space and how we enabled 5G, and I'll just draw that link for a second. If you think about 5G, we talked about serving all the component and chipset manufacturers, the folks that are making handsets, the folks that are making network equipment, including the big push into O-RAN and the disaggregation of the network, and then we have a smaller business, but we have a business with the service providers themselves. Now you just kind of take that framework and you think about it on the wireline side, we sell to the folks that are doing network silicon, we sell to the folks that are doing the optical transceiver space. We sell the folks making network equipment. And then we sell to the hyperscalers themselves. And so again, a lot -- and I skipped one, we also sell the folks that are doing connectivity, cabling and connectors. And so there are a lot of touch points within that ecosystem. But AI is kind of the broad driver that is driving wireline across the board. And so it's a unique ability to, again, service an ecosystem, not just at the physical layer where Keysight has been historically strong, but now with protocol level solutions as well.

Okay. I mean, I've used you guys as resources to kind of explain some of those data center technology. You guys have a lot of expertise kind of in-house. Just are there other areas of testing that your customers are asking you to get into as they try to kind of build these more complex networks?

Yes. I mean, absolutely. I think we're finding a lot of new touch points. And I'll give you an example, something that's exciting -- one of the more exciting things that we kind of market with still relatively small because the product has only been on the market here for a couple of quarters. But the hyperscalers are spending big dollars deploying these data centers. And what they want to be able to do is have a data center deployment be as efficient as possible. And so we've come up with a solution which we're selling to the hyperscale. This essentially allows them to model their AI workloads in a lab environment so they can fine-tune how the data flows across those networks, optimize the data center design and then ultimately deploy a more efficient network. So that's one example. There are others as well, but that's one that's already in the marketplace of how we -- where we were able to go in, see a challenge that an industry is facing, look at technology that exists across Keysight and provide a solution that addresses a specific challenge.

All right. Perfect. Maybe moving to the wireless side of the business. You kind of mentioned we're in between cycles, but we get this question of just where are we in terms of the 5G cycle? Has investment peaked? And just what kind of keeps 5G investment going as we wait until we get to the 6G?

Yes. So I mean, I think it's true. We've seen -- we've likely seen industry CapEx has peaked, right? The big nations have deployed their first 5G networks. There's still a lot of places where 5G is not available. So we'll continue to see 5G rollouts, but the big investments in China, in the U.S., in Japan and Korea have happened, right? Now it's important to note that we're still on the first instantiations of 5G. So just reminding everybody, you go back to prior versions, we had 3G, 3.5G, 3.9G, LTE, LTE-Advanced, 5G-Advanced is coming. So you asked what drives -- what's continuing to drive investment. And I think that's important. These are big markets. They're big markets for Keysight. And so while we've seen some pullback in our business over the past couple of years, this is still a big revenue driver for our company. And so they're investing in the additional technology development that's coming out in these new reps of the standards. So things like reduced capacity, reduce power usage, nonterrestrial networks, AI at the edge or early 6G research kind of trial balloons as you look forward to 6G being kind of defined in Rev 21 of the 3GPP standards. So there's -- and then -- so a lot of that is about adding feature sets and optimizing these 5G deployments that have already been made. And again, just putting into context, long, long cycles, we still have hundreds of millions of dollars of 4G business that we're doing. And so we're still in the middle of 5G is how I would likely describe it.

Okay. A question we tend to get is your exposure to R&D versus production on the wireless side. We've thought about 30% as a proxy kind of for the production exposure. But maybe it would be helpful to kind of outline the split and kind of any specific where kind of we should think about those like production exposures, particularly as we think about some recovery on that wireless [ side ].

Yes. So I tend to think about 30% is the rough exposure for manufacturing at the Keysight level. And what we tend to see is higher exposure to manufacturing on the industrial side of our businesses than on the communication side of our business. So the -- we haven't put out a number, but on the wireless side, it's less than 30%. And on the wireline side, it's historically been even more heavily skewed towards R&D than on wireless. I think it's well noted over the past several years that Keysight has gotten out of the handset manufacturing test business. We have no exposure to testing handsets at this point in time. So what are we doing in the manufacturing space? We're testing components and chips. They go into handsets, they go into network equipment, and then we do some of the network equipment test and manufacturing as well. And essentially, we're focusing on places where the cost of failure is relatively high. And so the cost of failure of components and chipsets are high because the handset players have a lot of power, and you don't want to be the reason why big handset manufacturers had a challenge, right? And so there's a lot of risk in the game, so they test those components and chipsets to a very high degree. Cost of failure on a piece of network equipment is high because once you deploy it out in the field, you got to send somebody out. They got to climb up a tower, there's a big repair cost. The cost of failure in handset market is very low because there's handset store on the next corner for just about everybody in the developed world. And you couple that with the fact that the failure rates are so low, that it's easier to place the rare broken handset than it is to -- it's cheaper than testing, doing a complex level of tests. So we've walked away from that market and are focusing on areas where there's more value add.

Okay. And the sign that I'm getting old, I'm going to ask you about 6G which I figured I would never have to ask about. Can you just outline how you see that opportunity today. Just kind of what are the milestones we should be thinking of? Or when can we really be having a conversation about 6G and just do you see that -- you gained a lot of share in 5G. Just how do you see the competitive environment shaping up for 6G?

Yes. I mean I think -- first of all, so where are we in 6G? At Keysight, we think about 6G deployment from a commercial perspective probably happening sometime 2029, 2030 maybe with some reasonably sized trials in '28, people sometimes point to the L.A. Olympics in '28 is a place where you might see some sort of a reasonable trial of 6G technology. And so from a Keysight perspective, if you think about developing all of the, again, components, devices, network equipment that are going to meet a deployment sometime in the 2029 time frame. And us, as a provider into the R&D labs, you need to back up 24 to 36 months. That puts you somewhere '26, '27, we're likely to see meaningful ramp. Now what we are already seeing today, and we have a 6G business that we measure in the kind of high tens of millions of dollars kind of -- it's -- we characterize capital R little D, right? This is research. They're working with standards bodies to define what 6G is going to look like, what's going to be included? What are -- how do they meet some of the physics challenges that are likely to exist as you move from 5G to 6G. And so we're starting to see that activity. As you noted, we gained significant share during 5G. And all I'll say is, I think we feel pretty good about our positioning going into 6G. I think one of the benefits of Keysight and the work that we've done to improve our financial model over the years is we've just kind of been through the downside of the cycle, but we still maintain operating margins 25%, 26%. We generated close to $1 billion of cash last year. And we did that without taking our foot off the gas in R&D. And so we have been very focused on making sure, internally within Keysight, that we hit those 6G market windows, and we have the right portfolio of products coming to market over, say, the next 12 to 24 months to capture the market window. So we feel pretty good about where we're positioned, but it's very early days.

Okay. Moving back to aerospace and defense. This has clearly been a strong market for you guys over the years. You mentioned kind of everything we're seeing currently in the political environment might affect timing. But generally, you see kind of a strong environment. Just what kind of gives you confidence that this can continue to be a source of strength?

Yes. I mean I think -- I touched on a couple of things, right? It's -- the left and the right in the U.S. don't agree on a lot. But we have now seen 7 or 8 consecutive U.S. budgets with the increases in defense spending. And of course, that's across both the Trump and Biden administrations, both various combinations of control in Congress. And so there's this political alignment. And I think there's a recognition that in the world of modern warfare there are significant technology gaps in the U.S. that need to be plugged and they're working to address those. And not just in the U.S., similar investments are being made around the world. Obviously, you saw during the first Trump administration, him starting to put pressure on NATO allies to meet their commitments in terms of defense spending as a percent of GDP. So we've seen that start to happen and now there's further pressure for them to increase. And I think there's continued nervousness about the -- particularly over the last week or so about the Russia and Ukraine situation and Europe may be having to take greater responsibility for securing defense within Europe. And so I think we're likely to see increased spending across the allies and sustained investment, particularly on the technology side of things here in the U.S. And so again, the business can be a little bit difficult to call quarter-to-quarter because you're dealing with governments, you're dealing with politics, but it tends to be easier to call over the longer term for these reasons and the fact that a lot -- once you're in these programs, they can be decades, long kinds of programs. So there's a stability factor that comes with that.

Okay. And just reminding investors of kind of what that A&D business looks like between the U.S. and international?

Yes. So our business, we -- at the highest level, you'd say, made 50% U.S., 50% international. But I think you need to then take into account that a lot of the allies are buying product out of U.S. programs. So cut it a different way, you'd say maybe 65% of the business for us, is in some way linked to U.S. programs, even if the end destination is an offshore entity.

All right. Perfect. Maybe on the fiscal Q1 call last week, you talked about kind of broadening the customer base of ESI, one of your acquisitions you did last year or might have been late 2023. You talked about broadening that customer base into aerospace and defense and kind of other areas of the business. Can you just remind the audience of kind of what ESI does and just the process of selling that business into other verticals?

Yes, absolutely. So maybe step back even a step further, Keysight is working to build out a franchise around design engineering software. We've had a long-term presence in that space back into the early 1990s with our RF and Microwave EDA business. We have the #1 franchise in RF and Microwave EDA. But what we recognize is that our engineering customer, particularly as the ability to do digital twins and model and emulate various different types of systems, as the simulation and emulation models have gotten dramatically better over the last several years. There's a desire for our engineering customers to spend more time upfront in the design process. Simulating, emulating digital twinning, if you want to use it as a verb because those models are so much better before they build expensive prototypes. And so what we're looking to do is connect that ecosystem, get Keysight -- get customers using Keysight simulation and emulation tools, but we need a broader portfolio of them before they build prototypes and ideally build by Keysight's hardware and software solutions to test physical prototypes. And so with that EDA business as a core, we went out and bought ESI, which is a kind of a physical modeling capability that was focused in the auto industry. The #1 market was in crash test but that gives them the ability to model complex physical types of things to deal with things like heat and vibration. And so a lot of core capability that we directly apply to a market which we're already focused on in automotive, but we see is extensible into these broader modeling capabilities and had direct extensibility into industrial and aerospace defense end markets. So that business has been with us now for about a year. It's a high recurring revenue software business. And I think we've seen that play out as expected. I did say on the call that the one kind of downside, if you will, was with the auto markets being depressed, we had -- we didn't see quite as much upsell as we were expecting. But we were able to offset some of that because we're starting to see uptick with these aerospace defense customers and industrial customers adopting this tool. A bit of a longer sales cycle, particularly when you're taking a tool that's primarily been focused on one industry. Introducing it to a brand-new set of players, but we're pleased with the traction that we're getting. And then just continuing the thought about Keysight building this design engineering platform, we have a couple of additional pending acquisitions out of the Synopsys, Ansys acquisition, buying optical simulation tools and power simulation tools again, as we look to build a more robust suite of simulation and emulation capabilities.

Okay. Perfect. Kind of rounding out the businesses on EISG, you've seen strength from the memory markets over the past couple of quarters. Obviously, the EV market, as you just mentioned, has been a laggard. Just kind of where do you see the prospects of that business? And just where do kind of foundry or kind of this decoupling of the semi market, kind of how does that play into the opportunity?

Yes. So if you think about our Industrial business, we kind of subsegment into the 3 areas: automotive, semiconductor and then broad general electronics and I'll touch on each of those. I think we'll start with the one that's, as you say, the laggard. I think we can even further subsegment our auto business into the third that's historically been manufacturing-driven, the third that's roughly EV driven and then what we call the software-defined vehicle. And so the manufacturing B piece, we test populated PC boards that go into all kinds of vehicles, ICE, electric, it doesn't really matter. You can think of all of the electronic content that's in these vehicles. That business has been soft now for 12 to 18 months as manufacturing production volumes have fallen off, have a high degree of confidence, given the differential of our solution that when those markets recover, we will recover with them. On the EV side, I think that market has also been soft. I think OEMs are questioning the need to make the big investments in battery development when it looks like they're going to be relatively low-cost ways to purchase batteries. And so I think there's an industry question out there about do the auto OEMs around the world feel this is technology they need to own or is it technology they're going to buy. And I don't think the industry has decided on that. So I think that's a watch-for for us. I think the good news is that business is -- has been soft now for a while. So we're significantly de-risked. Not a lot of downside. We may miss out on future upside, but there's not a lot of downside from where we are today. And then the software-defined vehicle. And in that, we would include everything from ADAS to in-car networks to the complex infotainment system, the complex sensor networks that are in vehicles. That business has been pretty stable throughout this whole time. And particularly as we look to ADAS, I think there's a lot of positive things to come. Moving on from auto into semi. I think we're starting to see a rebound in semi, particularly on our parametric test portion of our business, that's a foundry business. Some of these big foundry programs in Arizona and Texas and Ohio that were on hold are starting to pick back up, and we're starting to see -- and not just in the U.S. and other places around the world, we're starting to see kind of a reinvestment in semi capacity. I think the intermediate to long-term outlook on semi is great, not just driven by AI and 6G, but just the digitization of everything. And so we're pretty optimistic about that market. And that leads you into this general electronics market, which is kind of a -- if it's not aerospace, defense, it's not communications, it's not auto and it's not semi, all the other electronics around the world fit into this general electronics bucket. So it's a really, really broad set of things. We've seen strength recently in medtech. We've seen strength in advanced research in the education markets. We've seen -- outside of China, we've seen normalization of the distribution channel, which has been challenged over the last 18 to 18-ish months, still a couple of quarters probably to go to get normalization of the channel in China but feel pretty good that we've kind of worked through some of the challenges in that space and are seeing some positive signs.

Okay. Got it. Maybe kind of moving on to the P&L. Just on operating margins, your target is 31% to 32%. But you mentioned kind of achievement of that might slip past 2026. Just what are some of the factors in considering -- kind of thinking about operating margin expansion? Are 40% incrementals on 5% growth rate still kind of the way to think about that.

Yes. So a couple of important points in there. So we did put out the 31% to 32% operating margin target on our Analyst Day in '23. Not the best timing in the world, considering what happened in the markets and the quarters that followed that. But we're not backing off of that target. I think it's pretty clear at this point that we're going to have to push out the time line from '26 but we definitely see a path to get there. Our base model calls for us to look for 40% operating leverage when our businesses grow 5% or more. And so I think that is still an accurate way to think about it. But one of the things you can see through looking through our history that there are points in time where growth is materially above 5%. And when it is materially above 5%, we can often overachieve on that 40% incremental. So if you start thinking about closing the gap from where we are today in the mid- to high 20s up to 31% or 32%, if you want to accelerate that, we're going to need some periods of time where growth accelerates. I think the other thing that can help us is as we get these acquisitions closed and start to fold them into our business, both the Spirent business, which is a pending acquisition that has north of 70% gross margins and then the 2 businesses that we're buying out of the Synopsys, Ansys acquisition, those are software businesses with very high gross margins as well. So to the extent that we can leverage our sales channel, leverage our low-cost back office, those things to have a chance to -- on a post-integration basis to turbocharge earnings growth.

Got it. Maybe just a question, obviously, very topical this week just around tariffs and how to kind of think about where your exposure lies or kind of how to contextualize how you're looking to mitigate any potential exposure?

Yes. I don't have a crystal ball, right? It's a crazy time, but I can say that Keysight, as a whole, we do not have measurable exposure in Canada, Mexico or China. So we're not worried about direct first level tariff impacts from those regions. We're more worried about macro or industry-specific impacts, which, frankly, could be positive or negative. The negative, I think is obvious, but as people potentially look to make investments to shift supply chains in response to tariffs, there could be some positive responses as well. I think as Trump talks about broader tariffs or reciprocal tariffs, our primary finished goods manufacturing is in Malaysia. And so we'll be watching that very carefully. There are other areas around the world where we do some manufacturing. And so I think it can -- the devil is in the details, not just which country, but how are those tariffs structured? Do they target specific industries? How do they deal with U.S. content, all of those things? And we're monitoring the situation very closely thinking about potential contingencies, but right now, not taking any specific actions.

Got it. Okay. I maybe want to spend the last bit of this time. You have a number -- you've been very acquisitive. You have a number of acquisitions that are kind of pending. Just kind of status of the pending acquisitions maybe to start with.

Yes. So I think, again, kind of stepping back, we've always had a desire to continue to grow our business profitably through M&A. I think we're disciplined acquirers. And so if you go back to '21, '22, valuations were sky high. We didn't do a lot of deals of size, right? We did some tuck-ins here or there and kind of bided our time. And I think we're pleased that as this market correction in our space has come, I talked earlier about keeping our foot on the gas from an R&D perspective, the other thing we were able to do is maintain dry powder and act on some acquisitions. You mentioned DSI, software acquisition, Spirent, the Ansys -- Synopsys, Ansys acquisitions and get some opportunities that we felt were pretty favorable valuations and better return hurdles. And so I think we paid -- that patience, that discipline is set to pay for itself. I think we have 3 deals right now that are tied up in various regulatory schemes. First is Keysight's acquisition of Spirent. We are working very hard to get that acquisition closed by the end of our first half, which would be April 30. We did announce earlier this week that there is -- we announced previously, there's a divestiture that's going to be required to get that acquisition closed. We now have signed contract with the buyer, VIAVI to buy the high-speed Ethernet business and security business that is part of Spirent. And so we're continuing to work with. There's a decision date for the CMA coming up on March 13. So we're continuing to work with the regulatory authorities to advance towards that April 30 date. Synopsys, Ansys, similarly, they're working through their process. I believe I saw an announcement this morning that they got a decision out of the CMA that's positive. They've gone and raised capital. So again, I think we take that as a positive sign that their confidence is increasing. And -- but these things are unpredictable. So we're both -- we're all continuing to work it and advance it, and we'll see.

Okay. Can I just ask a clarifying question there. Just the size of the business is -- what you sold? The entire network and security business out of Spirent or just a portion?

Well, so let's talk about what we -- I believe the precision location business was actually managed within that security portfolio. So what -- primarily what we're keeping are the 2 things we most coveted their network assurance business, which is a business on deployed networks that is a kind of a gap in our portfolio and precision location, which we believe is going to be increasingly important as you move from 5G to 6G as well as in these aerospace defense end markets having this precision location capability.

Okay. All right. Any questions from the audience?

I just wanted to ask about [indiscernible] aerospace and defense. I think investors might have a misunderstanding of the exposure that perhaps it's subject to risk of DOGE efficiency improvements that the U.S. government is trying to make. I think you guys also have a very large foreign exposure. And my guess is the things that you guys attack in the U.S. are strategic areas for the U.S. to invest, but maybe you could just speak a little bit about that.

Yes. So as I said earlier, about half of the exposure is to the rest of the world and about half of it is U.S. both direct to the government as well as to the prime contractors. I think obviously, the DOGE has not yet really turned it's focused to the Pentagon. But I would say that based on what we know today, we're not overwhelmingly concerned, right? I think they're going to look for gross inefficiencies in the procurement process within the DOD but are unlikely to target the kinds of technology-driven investments, advancing things like electromagnetic spectrum operations, communications networks, these secure communications networks. The types of things that are necessary and modern warfare, I think, are unlikely to be the targets of DOGE. So never say never. We -- honest answer, as I said earlier, there's a lot of chaos. We don't really know. But right now, we do not have a tremendous concern about exposure from things like DOGE. Again, the broad political alignment in the U.S. and new commitments externally to invest in defense technology. And I think that bodes well for Keysight going forward. So we're bullish on the outlook over the intermediate to long term.

All right. Perfect. Maybe last question that we're kind of asking everybody at the conference. Just how are you using AI internally within Keysight? And -- or how are you looking to use it over the next couple of years?

Yes, it's a great question. I think we have kicked off an AI initiative within Keysight that has 3 prongs. So the first one we've already kind of talked about, which is Keysight as -- or AI as an end market, right? How do we maximize Keysight's participation in this market boom that's being driven by AI. We've talked a lot about that. The second prong of this 3-pronged approach is how do we use AI within our complex solutions to provide better outcomes for our customers, right? The -- as many of you know, AI is really about manipulating large data repositories and the solutions that we make [indiscernible] tremendous amounts of data, a high-end precision instrument would sample at the rate of 200 billion precision measurements per second. So you do have a big data problem. And so the question is how do you use AI within these test and evaluation environments to provide better outcomes to your customers. And so we've got a stream that's on that. And then the third one is how do you use kind of AI within the 4 walls of Keysight to drive efficiency, right? And I think we're in the early stages, but I think the most promising areas focus on the efficiency of our software coders, for example, or how do we mine our sales ERPs to get -- for the most robust customer information so that we can turbocharge our sales and funnel development environment. But -- and then beyond that, you start to look at things like G&A infrastructure, finance, HR, how do you use AI tools to drive cost efficiencies within the environment.

All right. Perfect. We're excited to see what comes up for Keysight, and thanks so much for being here today.

Appreciate it. Thank you.