是德科技 (KEYS) 2017 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Keysight Technologies Fiscal Fourth Quarter 2017 Earnings Conference Call. My name is Kirsten, and I will be your lead operator today. (Operator Instructions) Please note that this conference call is being recorded today, Wednesday, December 6, 2017, at 1:30 p.m. Pacific Time. I would now like to hand the conference over to Jason Kary, Vice President, Treasurer and Investor Relations. Please go ahead, Mr. Kary.

女士們先生們，美好的一天，歡迎參加是德科技 2017 財年第四季度收益電話會議。我叫克爾斯滕，今天我將擔任你們的首席接線員。 （操作員說明）請注意，本次電話會議將於今天（2017 年 12 月 6 日，星期三）下午 1:30 進行錄製。太平洋時間。我現在想將會議交給財務主管和投資者關係副總裁 Jason Kary。請繼續，卡里先生。

Thank you, and welcome, everyone, to Keysight's fourth quarter earnings conference call for fiscal year 2017. Joining me are Ron Nersesian, Keysight President and CEO; and Neil Dougherty, Keysight's Senior Vice President and CFO.

謝謝大家，並歡迎大家參加是德科技 2017 財年第四季度財報電話會議。與會的有是德科技總裁兼首席執行官 Ron Nersesian；是德科技高級副總裁兼首席財務官 Neil Dougherty。

Joining us in the Q&A session will be Satish Dhanasekaran, President of the Communications Solutions Group; Gooi Soon Chai, President of Electronic Industrial Solutions Group; John Page, President of the Services Solutions Group; Mark Pierpoint, acting President of the Ixia Solutions Group; and Mark Wallace, Senior Vice President of Worldwide Sales.

與我們一起參加問答環節的有通信解決方案集團總裁 Satish Dhanasekaran；電子工業解決方案集團總裁 Gooi Soon Chai；服務解決方案集團總裁 John Page； Ixia Solutions Group 代理總裁 Mark Pierpoint；以及全球銷售高級副總裁 Mark Wallace。

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

您可以在我們的網站 investor.keysight.com 上找到新聞稿和信息以補充今天的討論。在那裡，請單擊“財務信息”選項卡下的季度報告鏈接。在那裡，您會看到一份投資者介紹以及是德科技的部門業績。在本次電話會議之後，我們將在網站上發布準備好的評論副本。

Today's comments by Ron and Neil will refer to non-GAAP financial measures. You'll find the most directly comparable GAAP financial metrics and reconciliations on our website.

Ron 和 Neil 今天的評論將提及非 GAAP 財務指標。您會在我們的網站上找到最直接可比的 GAAP 財務指標和對賬。

We will make forward-looking statements about the financial performance of the company on today's call. These statements are subject to risks and uncertainties and are only valid as of today. The company assumes no obligation to update them. Please review the company's recent SEC filings for a more complete picture of our risks and other factors.

我們將在今天的電話會議上就公司的財務業績做出前瞻性陳述。這些聲明受風險和不確定性的影響，僅在今天有效。公司不承擔更新它們的義務。請查看公司最近向美國證券交易委員會提交的文件，以更全面地了解我們的風險和其他因素。

I would also note that management is scheduled to present at the Barclays Global Technology Media and Telecommunications Conference in San Francisco on December 7. We hope to see many of you there.

我還要指出，管理層計劃於 12 月 7 日在舊金山舉行的巴克萊全球技術媒體和電信會議上發表演講。我們希望能在那裡見到你們中的許多人。

And now I'd like to turn the call over to Ron.

現在我想把電話轉給羅恩。

Thank you, Jason, and thank you all for joining us. We will focus today's discussion on 3 key topics. First, we delivered an outstanding fourth quarter across the board. In total, orders grew 27% year-over-year to reach a record of over $1 billion, with core orders increasing 11%. We achieved 20% revenue growth and generated 20% operating margin and EPS of $0.71, which was $0.07 above the midpoint of our guidance and $0.02 above the high end. Second, our continued focus and commitment throughout the year generated strong results. We have continued to build momentum in key growth areas across multiple end markets, contributing to 3 consecutive quarters of accelerating core order growth. And third, our success this year demonstrates that our strategy is delivering results. We are well aligned with the needs of our customers, and we have a strong foundation to drive growth and earnings in 2018 and beyond.

謝謝你，傑森，感謝大家加入我們。我們將在今天的討論中集中討論 3 個關鍵主題。首先，我們全面交付了出色的第四季度。總體而言，訂單同比增長 27%，達到創紀錄的 10 億美元以上，其中核心訂單增長 11%。我們實現了 20% 的收入增長，並產生了 20% 的營業利潤率和 0.71 美元的每股收益，比我們的指導中點高出 0.07 美元，比高端高出 0.02 美元。其次，我們全年的持續關注和承諾產生了強勁的成果。我們繼續在多個終端市場的關鍵增長領域建立勢頭，連續三個季度加速核心訂單增長。第三，我們今年的成功表明我們的戰略正在取得成果。我們很好地滿足了客戶的需求，我們擁有堅實的基礎來推動 2018 年及以後的增長和盈利。

Let's begin with the review of Keysight's very strong fourth quarter performance. We achieved earnings of $0.71 per share, exceeding the high-end of our guidance. We grew orders by 27% to surpass $1 billion, a new record for Keysight, and grew revenue by 20% or 3% on a core basis. We are very pleased with our fourth quarter performance and execution, resulting in an outstanding close to a transformative year for Keysight.

讓我們首先回顧一下是德科技非常強勁的第四季度業績。我們實現了每股 0.71 美元的收益，超過了我們指引的上限。我們的訂單增長了 27%，超過 10 億美元，這是是德科技的新紀錄，並且核心收入增長了 20% 或 3%。我們對第四季度的業績和執行情況感到非常滿意，這使是德科技在即將迎來變革的一年中取得了出色的成績。

Beyond the numbers, we believe our execution in the fourth quarter is even more meaningful when considering the unimaginable challenges our team faced with the Santa Rosa wildfires in October. Personally, I am proud of how the Keysight team came together to help the community and each other to navigate through this challenging time as well as deliver a strong quarter. I'm inspired by their resiliency, acts of courage and generosity. I'd like to thank each and every member of the Keysight worldwide team for their unwavering support as well as thank all of our partners, customers and investors. Our Santa Rosa headquarters did incur some damage and was temporarily closed as it was in a mandatory evacuation zone, which did have an impact on our operations. Neil will discuss the specifics shortly, but I would highlight that Keysight is a global company with global operations, and our business performance worldwide remains strong.

除了數字之外，考慮到我們的團隊在 10 月份應對聖羅莎野火時所面臨的難以想像的挑戰，我們相信我們在第四季度的執行更有意義。就個人而言，我為 Keysight 團隊如何團結起來幫助社區和彼此度過這個充滿挑戰的時期並交付強勁的季度而感到自豪。我被他們的韌性、勇氣和慷慨所鼓舞。我要感謝是德科技全球團隊的每一位成員的堅定支持，並感謝我們所有的合作夥伴、客戶和投資者。我們的 Santa Rosa 總部確實受到了一些損壞，並且由於處於強制疏散區而暫時關閉，這確實對我們的運營產生了影響。 Neil 將很快討論具體細節，但我要強調的是，Keysight 是一家在全球開展業務的跨國公司，我們在全球的業務表現依然強勁。

Our record fourth quarter resulted in a strong finish to the fiscal year with a total order growth of 15% or 7% core growth and total revenue growth of 11% or 2% core. With our strong 2017 order performance, we are exiting the year with a strong backlog and a solid foundation to build upon as we move into 2018.

我們創紀錄的第四季度以強勁的成績結束了本財年，總訂單增長 15% 或 7% 核心增長，總收入增長 11% 或 2% 核心。憑藉我們 2017 年強勁的訂單表現，我們以大量積壓結束了這一年，並為我們進入 2018 年打下了堅實的基礎。

As we look to our markets, we continue to see increased investments in emerging technologies and overall healthy dynamics. Our strong results throughout the year demonstrate that our strategy is driving growth. We have focused on partnering with customers early and bringing solutions to market that enable them to validate and accelerate their designs. As a result, we are building momentum in key segments of the market that are undergoing technology transformations, such as 5G, next-generation WiFi, electronic warfare, high-speed data centers, and automotive and energy. We are seeing excellent adoption of our solutions, including software. Orders for our software solutions grew in the high single digits for the year to reach over $450 million, excluding Ixia.

當我們展望我們的市場時，我們繼續看到對新興技術和整體健康動態的投資增加。我們全年的強勁業績表明我們的戰略正在推動增長。我們專注於儘早與客戶合作並將解決方案推向市場，使他們能夠驗證和加速他們的設計。因此，我們正在經歷技術轉型的關鍵市場領域蓄勢待發，例如 5G、下一代 WiFi、電子戰、高速數據中心以及汽車和能源。我們看到我們的解決方案（包括軟件）得到了很好的採用。我們軟件解決方案的訂單在這一年以高個位數增長，達到超過 4.5 億美元，不包括 Ixia。

Keysight is at the heart of innovation processes in many dynamic end markets. Today, I will highlight the trends we see in 5G, auto and energy as well as aerospace and defense. 5G networks and devices will explore uncharted territory in frequency coverage, data rates, number of simultaneous users, spectral efficiency and reduced latency. This will allow providers to introduce new and potentially game-changing business models. Our early engagement with leading market makers and solutions-based go-to-market strategy have advanced Keysight to a leadership position. Orders for our 5G solutions grew to a new record in Q4, and we delivered high double-digit growth for the year. This is an area where we continue to invest in our partnerships and solutions in order to strengthen our position as the marketplace develops. We have teamed up with multiple industry leaders to successfully demonstrate industry first achievements that are important milestones towards making 5G commercialization a reality.

在許多充滿活力的終端市場中，是德科技處於創新過程的核心。今天，我將重點介紹我們在 5G、汽車和能源以及航空航天和國防領域看到的趨勢。 5G 網絡和設備將在頻率覆蓋範圍、數據速率、並髮用戶數量、頻譜效率和減少延遲方面探索未知領域。這將使供應商能夠引入新的和可能改變遊戲規則的商業模式。我們與領先的做市商的早期合作和基於解決方案的上市戰略使是德科技取得了領先地位。我們 5G 解決方案的訂單在第四季度創下新紀錄，我們在這一年實現了兩位數的高增長。這是我們繼續投資我們的合作夥伴關係和解決方案的領域，以隨著市場的發展加強我們的地位。我們與多家行業領導者合作，成功展示了行業領先的成果，這些成果是實現 5G 商業化的重要里程碑。

By leveraging our core strengths and our acquisitions of Anite and AT4 wireless, we have developed groundbreaking solutions and established a leadership position in 5G. Auto and energy is a another key area where we are building momentum as technology advancements transform the market.

通過利用我們的核心優勢以及對 Anite 和 AT4 wireless 的收購，我們開發了突破性的解決方案並在 5G 領域確立了領導地位。隨著技術進步改變市場，汽車和能源是我們正在建立勢頭的另一個關鍵領域。

Keysight has achieved double-digit order growth with our automotive and energy solutions for 4 consecutive quarters. While there are several trends driving development activities across multiple dimensions at once in this end market, including the increasing content of electric vehicles, electric and hybrid-powered cars and radar technologies for autonomous driving. Autonomous driving in itself encompasses a spectrum of technologies. At one end, there are driver-assisted features that include lane centering, parallel parking and collision avoidance. At the most advanced end, there is the next-generation vehicle with full self-driving capabilities, which will need multiple sensors, high-power computing, artificial intelligence and communications infrastructure to support real-time information flow.

是德科技的汽車和能源解決方案連續 4 個季度實現了兩位數的訂單增長。雖然在這個終端市場中有多種趨勢同時推動多個維度的開發活動，包括電動汽車、電動和混合動力汽車以及用於自動駕駛的雷達技術的內容不斷增加。自動駕駛本身包含一系列技術。一方面，有駕駛員輔助功能，包括車道居中、平行停車和避免碰撞。在最先進的一端，是具有完全自動駕駛功能的下一代汽車，需要多個傳感器、高功率計算、人工智能和通信基礎設施來支持實時信息流。

With this broad development landscape, we believe we will see continued R&D investments in auto and energy for many years to come.

鑑於這種廣闊的發展前景，我們相信我們將在未來許多年看到對汽車和能源的持續研發投資。

Accordingly, we are intensifying our focus on this key growth area and investing to expand our presence. We introduced over 70 new solutions for the auto and energy market since October of last year. Just last month, we opened an automotive solutions center in the Detroit area that features an electronic test and measurement lab, a training facility and a fully equipped vehicle test bay, which complements our automotive solutions centers in Germany, Silicon Valley and other strategic locations. Additionally, we recently expanded our auto and energy solutions offerings with our acquisition of Scienlab, which is based in Germany and serves a Tier 1 customer base. This acquisition strategically expands our global footprint and solutions portfolio, allowing end-to-end solutions for hybrid and electric vehicles and battery test solutions. In the aerospace and defense end market, electronic warfare and defending against malicious actors looking to take advantage of security gaps in electronic and digital communications are growing in importance. Aerospace and defense technologies need to keep advancing in order to stay ahead of commercially available technology evolutions. And this is driving innovation across multiple dimensions. For example, in communications, new breakthrough frequency domains need to be explored. Additionally, aerospace and defense needs to be on the cutting edge of software-defined radios, future generations of satellite communications and private mobile ad hoc networks. Keysight provides the industry's most advanced electronic warfare and radar testing solutions and has been a long-standing leader in this market. While delayed budget approvals in the U.S. impacted our aerospace and defense growth in the first 3 quarters of 2017, we exited the year with strong Q4 aerospace defense orders, growing 20% year-over-year. The timing of annual budget approvals is always a concern. However, over the long term, we remain bullish on both our market position in aerospace and defense and the prospect for increasing U.S. defense spending.

因此，我們正在加強對這一關鍵增長領域的關注，並投資擴大我們的業務。自去年 10 月以來，我們為汽車和能源市場推出了 70 多個新解決方案。就在上個月，我們在底特律地區開設了一個汽車解決方案中心，該中心設有一個電子測試和測量實驗室、一個培訓設施和一個設備齊全的車輛測試台，與我們在德國、矽谷和其他戰略地點的汽車解決方案中心形成互補。此外，我們最近通過收購總部位於德國並服務於一級客戶群的 Scienlab 擴大了我們的汽車和能源解決方案產品。此次收購戰略性地擴大了我們的全球足跡和解決方案組合，為混合動力和電動汽車以及電池測試解決方案提供端到端解決方案。在航空航天和國防終端市場，電子戰和防禦惡意行為者利用電子和數字通信中的安全漏洞變得越來越重要。航空航天和國防技術需要不斷進步，才能保持領先於商用技術的發展。這正在推動多個維度的創新。例如，在通信領域，需要探索新的突破性頻域。此外，航空航天和國防需要走在軟件定義無線電、未來幾代衛星通信和專用移動自組織網絡的前沿。是德科技提供業界最先進的電子戰和雷達測試解決方案，長期以來一直是該市場的領導者。雖然美國延遲的預算批准影響了我們 2017 年前 3 季度的航空航天和國防增長，但我們以強勁的第四季度航空航天國防訂單結束了這一年，同比增長 20%。年度預算批准的時機始終是一個問題。然而，從長遠來看，我們仍然看好我們在航空航天和國防領域的市場地位以及增加美國國防開支的前景。

In closing, our clear vision, continued focus and commitment led to our strong results for the quarter and year. We have consistently delivered on our commitments and are very pleased with our steady progress to transform and position Keysight for growth. We are executing on our strategy to create value for our customers and shareholders and driving growth across multiple avenues of emerging technology trends.

最後，我們清晰的願景、持續的專注和承諾使我們在本季度和年度取得了強勁的業績。我們始終如一地兌現我們的承諾，並對我們在轉型和定位是德科技以實現增長方面的穩步進展感到非常高興。我們正在執行我們的戰略，為我們的客戶和股東創造價值，並通過新興技術趨勢的多種途徑推動增長。

This year, we continue to increase investments in R&D while expanding our technology portfolio and markets inorganically with several acquisitions. We believe these investments already delivering results and are well aligned with growing market trends, where customers are investing in next-generation digital and electronic technologies. We are poised to continue to drive growth in earnings as these long-term trends evolve and look forward to sharing our progress with you along the way.

今年，我們繼續增加對研發的投資，同時通過幾次收購以無機方式擴展我們的技術組合和市場。我們相信這些投資已經取得成果，並且與不斷增長的市場趨勢保持一致，客戶正在投資下一代數字和電子技術。隨著這些長期趨勢的發展，我們準備繼續推動收益增長，並期待在此過程中與您分享我們的進展。

With that, I will turn the call over to Neil for a detailed review of our financial performance and outlook.

有了這個，我將把電話轉給尼爾，讓他詳細審查我們的財務業績和前景。

Thank you, Ron, and hello, everyone. Today, we reported fourth quarter GAAP revenue of $878 million and non-GAAP revenue of $902 million, which excludes the impact of the acquisition-related fair value adjustments to Ixia's deferred revenue balance. Core revenue, which excludes the impact of currency and revenue from acquisitions completed within the last 12 months, grew 3% year-over-year, and core orders grew 11%. Regionally, order growth was strong across all geographies, whereas core revenue declined 3% in the Americas and grew 6% in Europe, 11% in Japan and 7% in the rest of Asia.

謝謝你，羅恩，大家好。今天，我們報告第四季度 GAAP 收入為 8.78 億美元，非 GAAP 收入為 9.02 億美元，其中不包括與收購相關的公允價值調整對 Ixia 遞延收入餘額的影響。核心收入（不包括貨幣影響和過去 12 個月內完成的收購收入）同比增長 3%，核心訂單增長 11%。從地區來看，所有地區的訂單增長都很強勁，而美洲的核心收入下降了 3%，歐洲增長了 6%，日本增長了 11%，亞洲其他地區增長了 7%。

Looking at our operational results. Gross margin was 61.9%, a year-over-year increase of 440 basis points, driven by favorable core product mix and the addition of Ixia. For the quarter, operating expenses totaled $377 million compared with $290 million in the same period last year, reflecting the addition of Ixia and ongoing R&D and sales investments. This resulted in fourth quarter operating margin of 20.1%, up from 18.9% last year. We reported net income of $135 million, up 22% over last year and $0.71 in earnings per share, which was $0.02 above the high end of our guidance range. We ended the quarter with a weighted average diluted share count of 189 million shares.

看看我們的運營結果。毛利率為 61.9%，同比增長 440 個基點，這得益於有利的核心產品組合和 Ixia 的加入。本季度，運營支出總計 3.77 億美元，而去年同期為 2.9 億美元，反映了 Ixia 的增加以及正在進行的研發和銷售投資。這導致第四季度營業利潤率為 20.1%，高於去年的 18.9%。我們公佈的淨收入為 1.35 億美元，比去年增長 22%，每股收益為 0.71 美元，比我們指導範圍的上限高出 0.02 美元。本季度末，我們的加權平均稀釋股數為 1.89 億股。

Moving to the performance of our segments. Our Communications Solutions Group, or CSG, includes 2 primary end markets. First is the commercial communications end market that reported revenue of $280 million, up 10% compared with last year's fourth quarter, driven by R&D solutions for new technologies, including 5G, 4.9G, LTE-Advanced and WiFi test. CSG also includes our aerospace, defense and government end markets, which generated revenue of $182 million in Q4 compared with $188 million in the same quarter last year.

轉向我們細分市場的表現。我們的通信解決方案集團 (CSG) 包括 2 個主要終端市場。首先是商業通信終端市場，在5G、4.9G、LTE-Advanced和WiFi測試等新技術研發解決方案的推動下，報告收入為2.8億美元，比去年第四季度增長10%。 CSG 還包括我們的航空航天、國防和政府終端市場，這些市場在第四季度創造了 1.82 億美元的收入，而去年同期為 1.88 億美元。

Total CSG revenue for the quarter was $462 million or 4% growth with 62.9% gross margin and 21.3% operating margin.

本季度 CSG 總收入為 4.62 億美元或增長 4%，毛利率為 62.9%，營業利潤率為 21.3%。

Our Electronic Industrial Solutions Group, or EISG, generated fourth quarter revenue of $206 million, up 3% from last year. Automotive and energy led the growth, followed closely by general electronics measurement. EISG reported gross margin of 61.3% and operating margin of 21.8%.

我們的電子工業解決方案集團 (EISG) 第四季度收入為 2.06 億美元，比去年增長 3%。汽車和能源引領增長，緊隨其後的是通用電子測量。 EISG 報告毛利率為 61.3%，營業利潤率為 21.8%。

Our Ixia Solutions Group generated revenue of $124 million, gross margin of 76.2% and an operating margin of 16.4%. ISG revenue was above the level implied in our guidance for the quarter. ISG saw solid demand for its high-speed Ethernet test solutions, including 400 gig and strong orders for its security and applications solutions. Additionally, visibility sales through its service provided to customers were strong, offset by softness in enterprise accounts.

我們的 Ixia Solutions Group 創造了 1.24 億美元的收入，毛利率為 76.2%，營業利潤率為 16.4%。 ISG 收入高於我們本季度指引中暗示的水平。 ISG 看到對其高速以太網測試解決方案的強勁需求，包括 400 gig 以及對其安全和應用解決方案的強勁訂單。此外，通過其向客戶提供的服務實現的知名度銷售強勁，但被企業客戶的疲軟所抵消。

Lastly, the Services Solutions Group, or SSG, revenue grew 2% year-over-year to reach $110 million. Revenue growth for SSG was driven by an increase in sales for both calibration and remarketed solutions. This brings our SSG revenue for the year to $419 million, up 4% over last year. In the fourth quarter, SSG reported gross margin of 42.6% and operating margin of 16.3%.

最後，服務解決方案集團 (SSG) 的收入同比增長 2%，達到 1.1 億美元。 SSG 的收入增長受到校準和再營銷解決方案銷售額增長的推動。這使我們今年的 SSG 收入達到 4.19 億美元，比去年增長 4%。第四季度，SSG 的毛利率為 42.6%，營業利潤率為 16.3%。

As Ron highlighted, overall, we are pleased with our performance and execution as a company for the 2017 fiscal year. Revenue for the year totaled $3.2 billion, and gross margin improved 230 basis points to 60.0%. To fuel innovation and strengthen our market position in strategic areas, we continue to invest in R&D and made several acquisitions. At the same time, we remained within our operating model, delivering 19.1% operating margin and reporting non-GAAP net income after taxes of $462 million or $2.53 per share.

正如 Ron 強調的那樣，總體而言，我們對公司 2017 財年的業績和執行感到滿意。全年收入總計 32 億美元，毛利率提高 230 個基點至 60.0%。為了推動創新並加強我們在戰略領域的市場地位，我們繼續投資於研發並進行了多項收購。與此同時，我們保持了我們的運營模式，實現了 19.1% 的運營利潤率，並且報告的非 GAAP 稅後淨收入為 4.62 億美元或每股 2.53 美元。

Moving to the balance sheet and cash flow. We ended our fiscal year 2017 with $818 million in cash and cash equivalents compared with $873 million last quarter. Our quarter-end cash balance reflects a $40 million paydown of our term loan, $60 million net cash used for the acquisition of Scienlab and a $68 million payment for a Malaysian tax liability, which we continue to actively dispute. We generated $64 million in cash flow from operations in the fourth quarter and invested $18 million in capital purchases. This brings our free cash flow for the quarter to $46 million.

轉向資產負債表和現金流量。我們在 2017 財年結束時擁有 8.18 億美元的現金和現金等價物，而上一季度為 8.73 億美元。我們的季度末現金餘額反映了 4,000 萬美元的定期貸款還款、用於收購 Scienlab 的 6,000 萬美元淨現金以及 6,800 萬美元的馬來西亞納稅義務付款，我們繼續積極爭論。我們在第四季度產生了 6400 萬美元的運營現金流，並投資了 1800 萬美元用於資本購買。這使我們本季度的自由現金流達到 4600 萬美元。

Turning to our outlook and guidance. We are encouraged by the healthy market dynamics, strong order growth and increased backlog we saw in the fourth quarter as well as our strong funnel of future opportunities. However, as Ron noted, Keysight was impacted by the Northern California wildfires. Our headquarters was under mandatory evacuation for more than 3 weeks. And while direct fire damage to our core facilities was limited, especially when compared to the immediate surrounding area, our buildings did experience some smoke and other fire-related environmental impacts. Since regaining access to our site, our focus has been on returning manufacturing to full production. Over the intermediate term, we expect the fire to have no net impact on our business results, but the disruption will impact the seasonality of revenue in the next few quarters. For this reason, we are taking the unusual step of focusing our guidance on the first half of FY '18.

轉向我們的展望和指導。我們對第四季度健康的市場動態、強勁的訂單增長和增加的積壓以及我們強大的未來機會漏斗感到鼓舞。然而，正如 Ron 指出的那樣，Keysight 受到了北加州野火的影響。我們的總部被強制疏散了 3 個多星期。雖然火災對我們的核心設施造成的直接破壞有限，尤其是與周邊地區相比，但我們的建築確實受到了一些煙霧和其他與火災相關的環境影響。自從重新訪問我們的網站以來，我們的重點一直是讓製造業恢復全面生產。從中期來看，我們預計火災不會對我們的業務結果產生淨影響，但中斷將影響未來幾個季度收入的季節性。出於這個原因，我們正在採取不尋常的步驟，將我們的指導重點放在 18 財年的上半年。

For the first half of the year, we currently expect non-GAAP revenue to be approximately $1.775 billion, with non-GAAP earnings per share of $1.29 based on a weighted diluted share count of approximately 190 million shares and a non-GAAP tax rate of 17%. As we look at the expected seasonality within the half, we currently expect first quarter non-GAAP revenue to be in the range of $780 million to $820 million, with non-GAAP EPS in the range of $0.29 to $0.43. Assuming Q1 performance at the midpoint, the balance of $975 million of revenue and $0.93 of EPS will end in Q2 to reach our guidance for the first half of non-GAAP revenue of $1.775 billion and non-GAAP earnings per share of $1.29. As Ron mentioned in his opening remarks, we have built a strong foundation and remain confident in our ability to drive revenue and earnings growth in 2018 while continuing to create value for our customers.

今年上半年，我們目前預計非 GAAP 收入約為 17.75 億美元，非 GAAP 每股收益為 1.29 美元，基於約 1.9 億股的加權稀釋股數和非 GAAP 稅率為17%。當我們查看上半年的預期季節性時，我們目前預計第一季度非 GAAP 收入在 7.8 億美元至 8.2 億美元之間，非 GAAP 每股收益在 0.29 美元至 0.43 美元之間。假設第一季度業績處於中點，9.75 億美元的收入和 0.93 美元的每股收益將在第二季度結束，以達到我們對上半年非 GAAP 收入 17.75 億美元和非 GAAP 每股收益 1.29 美元的指導。正如羅恩在開場白中提到的那樣，我們已經建立了堅實的基礎，並且對我們在 2018 年推動收入和盈利增長同時繼續為客戶創造價值的能力充滿信心。

With that, I will now turn it back to Jason for the Q&A.

有了這個，我現在將把它轉回 Jason 進行問答。

Thank you, Neil. Kirsten, could you please give the instructions for the Q&A?

謝謝你，尼爾。 Kirsten，你能給出問答的說明嗎？

(Operator Instructions) Our first question comes from the line of Vijay Bhagavath from Deutsche Bank.

（操作員說明）我們的第一個問題來自德意志銀行的 Vijay Bhagavath。

Hope you guys can hear me okay.

希望你們能聽到我的聲音。

Yes, Vijay. No problem.

是的，維杰。沒問題。

Yes. Excellent. Ron, Neil, we wish you all well with the fire damage recovery. My question is, you don't guide for the full year, but give us kind of qualitative color, if you could, on some of the big growth areas for next year, which will be around 5G testing, also industrial IoT, semis testing and the likes so that we get a qualitative demand picture from you for the full year.

是的。出色的。羅恩、尼爾，我們希望你們在火災傷害恢復方面一切順利。我的問題是，你沒有提供全年的指導，但如果可以的話，給我們一些定性的顏色，關於明年的一些大增長領域，這將圍繞 5G 測試、工業物聯網、半成品測試等等，以便我們從您那裡獲得全年的定性需求情況。

Sure. If you take a look at Q4, our 5G orders were over 50% -- had 50% growth. And for the year, it was in the upper double digits north of 50%. So we continue to see very strong 5G demand. We're winning business that we didn't win in 4G by combining not only the new innovations at Keysight but also combining those with innovations from Anite and AT4 wireless, which is why we did those 2 acquisitions. Aerospace defense, while for the year the orders were roughly flat, accelerated and had 20% growth in Q4. Now if you remember Q1 of last year, Q1 was very light. So we would anticipate strong order growth for aerospace defense in Q1. We also see an accelerating picture in overall commercial communications, which includes 5G, where we saw a double-digit growth in the quarter. Our automotive and energy growth initiative had 18% growth in Q4 and over 20% growth for fiscal year '17. And we think that, that is another long-term trend. And the last thing that I'll mention is modular. So when you compare us to some of the other players in the industries, our modular growth for the year was -- for orders, was 18%. And it even accelerated where Q4 was over 20%. So looking at all these factors, when you look at 5G, when you look at commercial communications and other wireless, you look at automotive and energy, you look at our progress in software, you look at our building modular base, that's why we feel very confident in guiding for the half. Also, you probably have noticed that we built up a good bit of backlog. And we'll be burning that -- burning a bunch of that backlog go off in the first half. Yes, we're going to shift our seasonality. Q1 will be a little lighter, and Q2 will be a little heavier, but we're very confident with our backlog and our market positions that we'll be able to meet or exceed our half 1 guidance.

當然。如果你看一下第四季度，我們的 5G 訂單超過 50%——增長了 50%。而這一年，它處於 50% 以北的兩位數以上。因此，我們繼續看到非常強勁的 5G 需求。我們正在贏得我們在 4G 中沒有贏得的業務，不僅將是德科技的新創新結合起來，還將這些創新與 Anite 和 AT4 無線的創新相結合，這就是我們進行這兩項收購的原因。航空航天國防雖然全年訂單基本持平，但在第四季度加速增長並增長了 20%。現在，如果你還記得去年第一季度，第一季度非常輕。因此，我們預計第一季度航空航天國防訂單將強勁增長。我們還看到整體商業通信的加速發展，其中包括 5G，我們在本季度看到了兩位數的增長。我們的汽車和能源增長計劃在第四季度增長了 18%，在 17 財年增長了 20% 以上。我們認為，這是另一個長期趨勢。我要提到的最後一件事是模塊化。因此，當您將我們與行業中的其他一些參與者進行比較時，我們今年的模塊化增長是——訂單增長 18%。它甚至在第四季度超過 20% 的地方加速。所以看看所有這些因素，當你看 5G，當你看商業通信和其他無線，你看汽車和能源，你看我們在軟件方面的進步，你看我們構建模塊化基礎，這就是為什麼我們覺得很有信心指導了一半。此外，您可能已經註意到我們積壓了大量工作。我們會把它燒掉——在上半年燒掉一堆積壓的工作。是的，我們將改變我們的季節性。第一季度會輕一點，第二季度會重一點，但我們對我們的積壓和我們的市場地位非常有信心，我們將能夠達到或超過我們的一半 1 指導。

Okay, that's truly helpful. A quick follow-on for Neil. Software and modular in terms of product mix is one of the stories on the stock. So question for you, Neil, is the improvement in software and modular in the product mix, when could we start it impacting the gross margin line? Would it be second half or closer to second half of next year?

好的，這真的很有幫助。尼爾的快速跟進。產品組合方面的軟件和模塊化是股票的故事之一。所以問題是，Neil，產品組合中軟件和模塊化的改進，我們什麼時候可以開始影響毛利率？是明年下半年還是接近下半年？

Well, you did see a 440 basis point increase in our gross margins in FY '17. Now some of that was driven by the addition of Ixia, which is obviously a high gross margin business, but we also saw favorable mix shift within the core business, driven by the types of things that you're talking about. Not only the increased -- the above-average growth rate of our software and modular businesses but also the continued migration of our revenue towards more of our customers' R&D labs and away from their manufacturing lines. So I think you are seeing that already, and I think you will continue to see it as we move forward.

嗯，你確實看到我們 17 財年的毛利率增長了 440 個基點。現在，其中一些是由 Ixia 的加入推動的，這顯然是一項高毛利率業務，但我們也看到了核心業務中有利的組合轉變，這是由你所談論的事物類型驅動的。不僅是我們的軟件和模塊化業務的增長率高於平均水平，而且我們的收入繼續向更多客戶的研發實驗室轉移，並遠離他們的生產線。所以我認為您已經看到了這一點，並且我認為隨著我們的前進，您將繼續看到它。

And our next question comes from the line of Stanley Kovler from Citi Research.

我們的下一個問題來自花旗研究部的 Stanley Kovler。

My sentiments as well to the team on the ground and the recovery efforts. So wanted to ask you guys, just in terms of the outlook for the first half. Can you help us understand what safeguards you might have for orders that you've secured, just given the seasonality and concerns around potential customer cancellations or things like that? And then I just have a quick follow-up.

我對當地團隊和恢復工作的看法。所以想問你們，就上半年的前景而言。考慮到季節性和對潛在客戶取消或類似情況的擔憂，您能否幫助我們了解您對已獲得的訂單可能有哪些保障措施？然後我只是快速跟進。

Sure. Well, first of all, we had a lot of calls from our customers asking what they could do to help us, which was very rewarding. And we've gone out and talked to all of them. When you're talking about $100 million ship, you're talking about 2 weeks' worth of shipments for our company. It's not that big in the grand scheme of things, but we have worked with every customer. We've realized exactly when they need their products. Most of them are getting them. And the ones that aren't, we're basically prioritizing for folks that could accept products 2 to 3 weeks later, so -- wherein we feel very comfortable with that. Also, as the incoming order rate has been high, as you've heard, the 11% organic growth for the quarter and you see our market position and our ability to win over the competition, we feel very strongly about the guidance and our ability to preserve customers.

當然。好吧，首先，我們接到了很多客戶的電話，詢問他們可以做些什麼來幫助我們，這是非常有益的。我們已經出去和他們所有人談過了。當您談論價值 1 億美元的船舶時，您指的是我們公司 2 週的出貨量。這在宏偉的計劃中並沒有那麼大，但我們已經與每一位客戶合作過。我們已經準確地意識到他們何時需要他們的產品。他們中的大多數人都得到了它們。而那些不是的，我們基本上優先考慮那些可以在 2 到 3 週後接受產品的人，所以 - 我們對此感到非常舒服。此外，由於新訂單率一直很高，正如您所聽到的那樣，本季度有機增長 11%，並且您看到了我們的市場地位和我們贏得競爭的能力，我們對指導和我們的能力感到非常強烈以維護客戶。

And as a follow-up, I wanted to ask you, just in terms of the tax reform implications, what does it mean for you guys? Have you tried to quantify it on an earnings basis or the potential to repatriate some of your cash from overseas? Would -- in that scenario, would you prioritize deleveraging, M&A, cash return? How should we think about that? Good luck.

作為後續行動，我想問你們，就稅收改革的影響而言，這對你們意味著什麼？您是否嘗試過根據收入或從海外匯回部分現金的可能性對其進行量化？在那種情況下，你會優先考慮去槓桿化、併購、現金回報嗎？我們應該如何考慮？祝你好運。

Sure. Well, thank you, Stanley. First of all, obviously, if the tax reform does go through, which I think everybody expects it will go through in one form or the other, that would make a very large percentage of our cash accessible to us at the exact same tax rate or very, very close. So we're excited about that. That gives us more leverage. That's been one of the things in the longer term that makes it hard to give back cash to our investors in the form of share buybacks or in dividends. But that constraint will be released. Our first priority is to delever 500 -- roughly $550 million after the acquisition of Ixia. We've already delevered by hundreds of millions of dollars. We'll continue to meet our commitments and do that, but this opens up the opportunity in the future to have a board decision on how and -- if and how we return cash to the shareholders.

當然。好吧，謝謝你，斯坦利。首先，很明顯，如果稅制改革真的通過了，我認為每個人都希望它以一種或另一種形式通過，那將使我們可以以完全相同的稅率獲得很大一部分現金，或者非常非常接近。所以我們對此感到興奮。這給了我們更多的影響力。從長遠來看，這是導致很難以股票回購或股息的形式向投資者返還現金的原因之一。但這種約束將被釋放。我們的首要任務是減少 500——在收購 Ixia 後大約 5.5 億美元。我們已經減少了數億美元。我們將繼續履行我們的承諾並做到這一點，但這為未來提供了機會，讓董事會決定我們如何以及 - 是否以及如何向股東返還現金。

Yes. I don't have a ton to add, maybe just a couple of comments. So first, I'd just make note of a statement that I made in my prepared remarks about us modeling a 17% tax rate for the first half of the year. And that's based on the integration work we've done for Ixia to date. And that is pre any tax reform. And so we're already ahead of where we expected to be with regard to taxes post the acquisition of Ixia. As Ron has mentioned, the biggest benefit we see from the potential tax reform is the access to capital that it could provide. Obviously, the reduction in the U.S. tax rate that's being proposed to approximately 20%, we see as being net favorable for growth and should have a positive impact on our end markets, but the biggest direct impact for us is access to capital. The #1 priority will be to hit the approximately $240 million from incremental delevering that we have to do. We've got a plan in place to do that with or without tax reform, and then we can talk about the priority there. We then begin to start to return cash to shareholders.

是的。我沒有太多要補充的，也許只是一些評論。因此，首先，我只想記下我在準備好的評論中所做的關於我們為今年上半年建模 17% 稅率的聲明。這是基於我們迄今為止為 Ixia 所做的集成工作。那是任何稅制改革之前的事情。因此，在收購 Ixia 後，我們在稅收方面已經領先於預期。正如 Ron 所提到的，我們從潛在的稅收改革中看到的最大好處是可以獲得它可以提供的資本。顯然，提議將美國稅率降低至約 20%，我們認為這對增長有利，應該對我們的終端市場產生積極影響，但對我們來說最大的直接影響是獲得資本。第一要務是通過我們必須做的增量去槓桿化來達到大約 2.4 億美元。無論有沒有稅制改革，我們都有一個計劃來做到這一點，然後我們可以討論那裡的優先事項。然後我們開始開始向股東返還現金。

And our next question comes from the line of Patrick Newton from Stifel.

我們的下一個問題來自 Stifel 的 Patrick Newton。

Ron and Neil, first off, I guess, my condolences to those in the Keysight family that experienced loss in the Santa Rosa fire. Jumping into the questions. I guess, Neil, can you elaborate a little bit more on the half year guidance? I can absolutely understand how fires disrupted seasonal trends and deliveries near term, but I'm hoping for a little more detail on how this may impact seasonality in the back half of the year or visibility in the back half of the year? And are you implying the effects of the fire are greater in out quarters? Meaning that maybe some of the smoke damage could have some shipment shortages or impacts from longer term? And then Ron, along the same lines, thinking out longer term, I think last quarter, you talked about EPS growth approximating 10% in FY '18, and I'm wondering if there's any change to that expectation.

Ron 和 Neil，首先，我想，我向在聖羅莎火災中遭受損失的 Keysight 家族成員表示哀悼。跳入問題。我想，尼爾，你能詳細說明半年的指導嗎？我完全可以理解火災如何擾亂季節性趨勢和近期交付，但我希望能更詳細地了解這將如何影響下半年的季節性或下半年的能見度？你是在暗示火災的影響在外面的地方更大嗎？這意味著一些煙霧損壞可能會造成一些裝運短缺或長期影響？然後羅恩，按照同樣的思路，從長遠考慮，我想上個季度，你談到 18 財年每股收益增長接近 10%，我想知道這一預期是否有任何變化。

Sure. I'll start with the end. No, there's no change to what we had said about EPS growth. Overall, for the year, for 2018, we expect there to be no net impact at all from the fire. But just to put it in context, we had 119 employees who did lose their homes. So it has been a pretty big effort here, and we had to make sure that our employees not only tended to the company, but also could tend to their families. But right now, we already have 90% of our Santa Rosa facility -- operations facility up and running. And that's only a fraction of the total manufacturing that we have in the company. We have to do some cleaning and calibration of some equipment and things like that, but we're very pleased at where we are. We're actually ahead of where we expected to be at this point.

當然。我將從結尾開始。不，我們之前所說的每股收益增長沒有變化。總體而言，對於 2018 年這一年，我們預計火災不會產生任何淨影響。但就上下文而言，我們有 119 名員工確實失去了家園。所以這是一個相當大的努力，我們必須確保我們的員工不僅要照顧公司，還要照顧他們的家人。但現在，我們已經有 90% 的聖羅莎設施——運營設施已啟動並運行。這只是我們公司全部製造業的一小部分。我們必須對一些設備進行一些清潔和校準之類的事情，但我們對我們所處的位置感到非常滿意。我們實際上領先於我們在這一點上的預期。

Yes, as it relates to the guidance, at this point, we don't have any significant concerns about our ability to get product to customers. Again, we're working actively with them to communicate to them what our delivery schedules are like. And we're working to accelerate recovery from the production disruption as quickly as possible. I think, as you look at the first half, we expect to be mostly whole by the end of the first half. There are some small lingering amounts that carry into Q3 in terms of catch-up, but those numbers are relatively small. And then certainly, by Q4, we're back to normal seasonality. So we really see the disruption as over the next 3 quarters, but really what you're seeing is primarily a shift from Q1 into Q2 with some small amounts lingering into Q3 and back to normal by Q4. It is not right now impacting incoming orders in any way. And as Ron had said, our customers have been very gracious, I guess, and asking what they can do to help us through this period of difficulty.

是的，因為它與指導有關，在這一點上，我們對我們向客戶提供產品的能力沒有任何重大擔憂。同樣，我們正在積極與他們合作，向他們傳達我們的交貨時間表。我們正在努力盡快從生產中斷中恢復過來。我認為，當你看上半場時，我們預計到上半場結束時大部分都是完整的。就追趕而言，有一些小的揮之不去的數量進入第三季度，但這些數字相對較小。當然，到第四季度，我們又回到了正常的季節性。所以我們確實看到了未來 3 個季度的中斷，但實際上你看到的主要是從第一季度到第二季度的轉變，一些少量的資金在第三季度徘徊，並在第四季度恢復正常。它現在不會以任何方式影響新訂單。正如羅恩所說，我猜我們的客戶非常親切，並詢問他們可以做些什麼來幫助我們度過這段困難時期。

And if you take a look at the total effect, as Neil said, we're going to ship less in Q1 and more in Q2. Outside of that, there may be -- we're talking roughly $30 million that may linger into Q3, but our goal is to obviously make that 0. We're not saying that we can do that yet. We'll make sure that we can get that done before we'd make a public commitment. Also, just to let you know, we're here at the Santa Rosa site right now doing this conference call with you. And it's great to see all of our operations people here and really charged up at helping the company and how fast we've been up. We have hundreds of machines here, and every single one of our machines and everything is -- there is no damage to them that we found. So things -- we're very pleased with how things have progressed since the fires have stopped.

如果你看一下總體效果，正如尼爾所說，我們將在第一季度減少出貨量，在第二季度增加出貨量。除此之外，可能還有 - 我們正在談論大約 3000 萬美元可能會持續到第三季度，但我們的目標顯然是將其變為 0。我們並不是說我們可以做到這一點。在我們做出公開承諾之前，我們將確保我們能夠完成這項工作。另外，只是想讓你知道，我們現在正在 Santa Rosa 網站上與你進行這個電話會議。很高興看到我們所有的運營人員都在這裡，並且真正積極地幫助公司以及我們的發展速度。我們這裡有數百台機器，我們的每一台機器和所有東西都——我們發現它們沒有損壞。所以事情 - 我們對火災停止後的進展情況感到非常滿意。

I appreciate the details. And I guess, the CSG and EISG segments both performing quite well. So I did kind of want to nitpick on your services side with core growth of 0%. If we kind of back up to your Analyst Day, you had been targeting an 8% CAGR in services. And I believe a -- or a $600 million revenue target by 2020. I'm curious as to how you reaccelerate growth and how we should think about that longer-term target for hitting that $600 million in service revenue.

我很欣賞細節。我猜，CSG 和 EISG 部分都表現不錯。所以我確實有點想在你的服務方面挑剔，核心增長為 0%。如果我們回到你的分析師日，你的目標是服務的複合年增長率為 8%。我相信到 2020 年有一個或 6 億美元的收入目標。我很好奇你如何重新加速增長，以及我們應該如何考慮實現 6 億美元服務收入的長期目標。

Yes. Good question, Patrick. First of all, let me just make a statement. First, when we went ahead and we said we were going to get to that 8% growth for services, we anticipated doing acquisitions to putting capability in certain areas and then to leverage that new capability and quickly expand and grow. What we found is that the acquisitions that were out there with the prices and the prices demanded by the companies that were selling really did not provide a good return to Keysight shareholders. So we've decided to build some of that capability as opposed to buying the capability and just adding to it. It's a much better return for the shareholders, but it will take a little longer to get to that numbers. But I'm going to let John talk a little bit about the progress that has been made and what he plans to do.

是的。好問題，帕特里克。首先，讓我聲明一下。首先，當我們繼續前進並表示我們將實現 8% 的服務增長時，我們預計會進行收購以在某些領域投入能力，然後利用這種新能力並迅速擴張和增長。我們發現，以收購價格和出售公司要求的價格進行的收購併沒有為是德科技的股東帶來良好的回報。因此，我們決定構建其中的一些功能，而不是購買這些功能並只是添加它。這對股東來說是一個更好的回報，但要達到這個數字還需要更長的時間。但我要讓 John 談一談已經取得的進展以及他打算做什麼。

Sure. Thanks for that question, Patrick. Yes, so overall, the SSG segment showed 4% growth for the year, which is actually a record revenue number for SSG ever. Q4 was building on that traction, and that was a all-time record for our quarter 4 revenue as well. So we continue to gain traction. We are as confident as ever about the long-term direction of the services business and the opportunities that exist there. As Ron mentioned, part of the plan was always to have inorganic sprinkled in with organic growth to enable certain capabilities and accelerate growth in certain portions around the world. The opportunities to find good targets at reasonable prices has been harder than we thought so that has had to shift to a more of an organic methodology to hit those growth numbers. But we're very confident about it. And we see the areas that we're really focused on, with multivendor managed services growing strongly, with our remarketing organization growing strongly, with the reaction from customers to these offerings and expanding on what they're asking Keysight to do for them, being very strong as well. So it's a good story. It's just going to take a little bit longer than we had originally expected when we expected more M&A activity.

當然。謝謝你提出這個問題，帕特里克。是的，總的來說，SSG 部門今年增長了 4%，這實際上是 SSG 有史以來創紀錄的收入數字。第四季度建立在這種牽引力之上，這也是我們第四季度收入的歷史記錄。所以我們繼續獲得牽引力。我們一如既往地對服務業務的長期方向和其中存在的機會充滿信心。正如 Ron 所提到的，計劃的一部分始終是讓無機增長與有機增長相結合，以實現某些能力並加速全球某些地區的增長。以合理的價格找到好的目標的機會比我們想像的要難，因此必須轉向更有機的方法來實現這些增長數字。但我們對此非常有信心。我們看到了我們真正關注的領域，多供應商託管服務強勁增長，我們的再營銷組織強勁增長，客戶對這些產品的反應以及他們要求是德科技為他們做的事情不斷擴展，成為也很強大。所以這是一個好故事。當我們預期會有更多的併購活動時，這只會比我們原先預期的要長一點。

Let me just also put that into context. Overall, with Keysight, we remain committed to the model that we talked about before. We talked about in September 2015, in 3 to 4 years, getting to a 4% growth and 40% incrementals. We see a very clear path to get to that model early and deliver that in FY '18. As you know, the 4 quarters of -- in the 4 quarters of FY '17, our core growth accelerated from 2% to 4% to 7% to 11% core growth. And with all that, there are some puts and takes. Some of the growth initiatives are running a little bit hotter than we expect, most of them, and we're able to make up for that services gap.

讓我也把它放在上下文中。總的來說，通過是德科技，我們仍然致力於我們之前談到的模型。我們在 2015 年 9 月談到，在 3 到 4 年內，實現 4% 的增長和 40% 的增量。我們看到了一條非常清晰的路徑，可以儘早獲得該模型並在 18 財年交付該模型。如您所知，在 17 財年的四個季度中，我們的核心增長從 2% 加速到 4%，核心增長從 7% 加速到 11%。除此之外，還有一些投入和投入。一些增長計劃的運行比我們預期的要熱一些，其中大部分，我們能夠彌補服務差距。

And our next question comes from the line of Farhan Ahmad from Crédit Suisse.

我們的下一個問題來自 Crédit Suisse 的 Farhan Ahmad。

I kind of just wanted to ask Vijay's question in a different way. You had stronger than seasonal growth in orders in fourth quarter, much stronger than anytime you have had in the past. So can you just talk about, relative to what you see the seasonal trends, which are the areas where you see -- saw very strong growth?

我只是想以不同的方式問 Vijay 的問題。第四季度的訂單增長強於季節性，比過去任何時候都強得多。那麼，相對於你所看到的季節性趨勢，你能談談你看到的哪些領域——增長非常強勁嗎？

Yes. I mean, our order growth was very strong across the board in the fourth quarter. We saw order growth across all geographies. We saw order growth across all of our end segments. We saw a pretty strong rebound in aerospace defense. Ron mentioned that in his script, 20% growth -- order growth in aerospace defense, which offset the sharp decline we saw earlier in this fiscal year. We saw a very strong growth in 5G, a very strong growth in modular, software growth, auto and energy. Semi orders were up. Commercial communications. It was very, very broad-based across virtually all end markets, all geographies, very strong end markets. And we really feel it's driven by our strong market position and really the decisions we've made multiple years ago to identify these market opportunities and invest.

是的。我的意思是，第四季度我們的訂單增長非常強勁。我們看到所有地區的訂單都在增長。我們看到所有終端細分市場的訂單都在增長。我們看到航空航天防禦領域出現了相當強勁的反彈。羅恩在他的劇本中提到，20% 的增長——航空航天防禦訂單的增長，抵消了我們在本財年早些時候看到的急劇下降。我們看到 5G 的增長非常強勁，模塊化、軟件增長、汽車和能源領域的增長非常強勁。半成品訂單增加。商業通訊。它的基礎非常非常廣泛，幾乎涵蓋所有終端市場、所有地區、非常強大的終端市場。我們真的覺得這是由我們強大的市場地位以及我們多年前做出的確定這些市場機會和投資的決定所驅動的。

Yes. And this is Mark Wallace. Just add to that, we've gone through all the industries, as was noted, 11% core order growth with positive order growth in every single region. And then when you start to look at the breakdown of customers, we saw double-digit order growth with our largest customers. These are the same industry leaders that we're engaging with early on developing new solutions. And by the way, these engagements are sustaining, when we start down a path around some new technology development, it creates additional opportunities for us to continue to work with them. So our largest customers were up 20%. And as you may recall, early in the year, we put an emphasis on our capability in digital marketing and increasing our frontline sales capacity. So our smallest customers, our emerging accounts and the long tail of customers was also up double-digit during the quarter as well. So just to reiterate what Neil said, our results are very strong and well balanced.

是的。這是馬克華萊士。除此之外，正如所指出的那樣，我們已經遍歷了所有行業，核心訂單增長 11%，每個地區的訂單增長均為正。然後，當您開始查看客戶細分時，我們看到最大客戶的訂單出現兩位數的增長。這些都是我們在早期開發新解決方案時與之合作的行業領導者。順便說一下，當我們開始圍繞一些新技術開發的道路時，這些參與是持續的，它為我們創造了更多的機會繼續與他們合作。所以我們最大的客戶增長了 20%。你可能還記得，今年年初，我們強調了我們在數字營銷方面的能力，並提高了我們的一線銷售能力。因此，我們最小的客戶、新興客戶和長尾客戶在本季度也增長了兩位數。因此，重申一下尼爾所說的話，我們的結果非常強勁且平衡。

Nice thing about this is these aren't things that happened just by chance. These are literally the programs that we put in place, the growth initiatives we identified 3 years ago that we focused on as well as the sales and marketing programs that we focused on. And that's where we're seeing very strong results.

好消息是這些並不是偶然發生的事情。這些實際上是我們實施的計劃、我們 3 年前確定的我們關注的增長計劃以及我們關注的銷售和營銷計劃。這就是我們看到非常強勁結果的地方。

You also talked about modular growing very strongly for you this year. Can you just talk about what are some of the factors which are driving your modular business to be so much stronger than some of the others in the industry?

您還談到了今年對您來說非常強勁的模塊化增長。您能否談談推動您的模塊化業務比業內其他一些公司強大得多的一些因素？

Well, I think a lot of the modular business is also in the wireless business or 5G and even 4G. And our strength and our differentiation in the wireless area from our decades and decades of expertise helps us solve problems that we will say some other companies may get stuck with. And when we go head to head, we win a very, very high percentage of the time. So we're starting to see modular in that area, but it's not at the expense where we're losing one box solution sales to the point where we're not getting any growth. When you add them together, we're still getting 11% organic growth in Q4. So we're very pleased with that. What's happening is some people are trying to move towards 5G or wireless, and we were moving towards modular, and we're clearly winning.

好吧，我認為很多模塊化業務也在無線業務或 5G 甚至 4G 中。我們的實力和我們在無線領域的差異化來自我們數十年和數十年的專業知識，幫助我們解決了我們會說其他一些公司可能會遇到的問題。當我們正面交鋒時，我們獲勝的概率非常非常高。因此，我們開始在該領域看到模塊化，但這並不是以我們失去單盒解決方案銷售到我們沒有任何增長的地步為代價的。當你將它們加在一起時，我們在第四季度仍然實現了 11% 的有機增長。所以我們對此非常滿意。正在發生的事情是一些人正在嘗試轉向 5G 或無線，而我們正在轉向模塊化，我們顯然正在取得勝利。

(Operator Instructions) Our next question comes from the line of Brandon Couillard from Jefferies.

（操作員說明）我們的下一個問題來自 Jefferies 的 Brandon Couillard。

Ron, would love to hop back to the aerospace and defense business and sort of get your qualitative comments on how the U.S. is trending, whether you saw the U.S. orders turn the corner, recognizing that revenue was still down year-over-year, but it would have been much better if you've kind of say we've turned the corner in the U.S.?

羅恩，很想回到航空航天和國防業務，並獲得您對美國趨勢的定性評論，您是否看到美國訂單出現轉機，認識到收入仍在同比下降，但是如果你說我們已經在美國度過了難關，那會好得多嗎？

Yes. I'll let Mark talk about the budget process and where we are and what it needs, but we're very pleased with the 20% order growth in Q4. Obviously, if you look at where the compare is for Q1, we expect to see some nice growth numbers in Q1, but I'll let Mark talk through the budget process that leads us to be very confident in where we are.

是的。我會讓 Mark 談談預算流程以及我們所處的位置以及它需要什麼，但我們對第四季度 20% 的訂單增長感到非常滿意。顯然，如果你看看第一季度的比較情況，我們預計第一季度會看到一些不錯的增長數字，但我會讓馬克談談預算過程，這讓我們對自己的位置非常有信心。

Yes. Thanks, Ron. Brandon, so we had a very strong Q4, 20% order growth, and this was predicted back in the early part of the year as we saw the change of administration. So it really happened the way we thought it would. And where we find ourselves today, as we all know, is we're waiting for the budget to be signed if the deadline's coming up later this week. So that means there's a high likelihood there will be a pushout, a delay, which means probably some continuing resolution probably into the first couple months of the next calendar year. Because that doesn't allow for new program starts, it may have some short-term impact. But again, we're operating on last year's budget as part of continuing resolution. And it's very likely that a budget will be approved in 2018 probably for multiyear. And it's believed, with bipartisan support, that it will include a sizable U.S. Department of Defense increase, which is beneficial to Keysight because of our strong position in the U.S. DOD. So what I'd summarize is that we have very strong customer relationships in this segment. We have a leading position with new technology development and deployment, like electronic warfare that Ron mentioned in his opening comments. We have a very robust funnel. And therefore, our outlook over the medium and long term for aerospace defense is very strong.

是的。謝謝，羅恩。布蘭登，所以我們的第四季度非常強勁，訂單增長了 20%，這是在我們看到管理變更時早在今年年初就預測到的。所以它確實按照我們的預期發生了。眾所周知，我們今天所處的位置是，如果截止日期在本週晚些時候到來，我們正在等待簽署預算。因此，這意味著很有可能會推出、延遲，這意味著可能會在下一個日曆年的前幾個月內繼續解決問題。因為這不允許啟動新程序，所以它可能會產生一些短期影響。但同樣，作為持續解決方案的一部分，我們正在按照去年的預算運營。很可能會在 2018 年批准一項可能持續多年的預算。人們相信，在兩黨的支持下，這將包括美國國防部的大幅增加，這對是德科技有利，因為我們在美國國防部的地位穩固。所以我要總結的是，我們在這一領域擁有非常強大的客戶關係。我們在新技術開發和部署方面處於領先地位，例如羅恩在開場白中提到的電子戰。我們有一個非常強大的漏斗。因此，我們對航空航天防禦的中長期前景非常看好。

Then one for Neil. Turn to the fourth quarter cash flow. Free cash flow conversion was a little bit lighter than I guess we would've thought. As we look out to '18, I think the outsized pension outlays that you've been absorbing last couple of years, I think those are supposed to expire. Are there any other one-timers or headwinds that we should think about as we sort of think about the full year next year and perhaps some expectation that, that conversion can improve from here?

然後一個給尼爾。轉向第四季度的現金流。自由現金流轉換比我想的要輕一些。當我們展望 18 年時，我認為你過去幾年一直在吸收的巨額養老金支出，我認為這些支出應該會到期。在我們考慮明年的全年時，是否還有其他一次性或逆風我們應該考慮，也許有些期望，這種轉換可以從這裡改善？

Yes. So a couple of comments. So first of all, as you look at FY '17 -- or excuse me, Q4, you're right, our free cash flow was lower in the quarter, and the primary driver of that was this Malaysian tax payment that we need to make. Again, we're continuing to actively dispute that. We believe the facts very much line up favorably for us. And hopefully, that will ultimately be resolved to our benefit, but those things can take time. I think, as you look forward to FY '18, first of all, know that cash flow conversion is an area of focus for us. We will continue to see some additional pension funding requirements as we move forward. I think the other thing that will continue to be a bit of a drag on cash flow, at least through the first half, is the remainder of the Ixia integration. And as we look to realize the synergies associated with that acquisition, again, we've committed to deliver $10 million per quarter by Q3 of next year, and we're on track to do that, but there will be some cash costs associated with recognizing those synergies. I think, once we get beyond that, we're going to be in a much better position to start converting profit to cash flow in a more aggressive fashion and narrowing the gap between our overall levels of profitability and cash flow.

是的。所以有幾點評論。因此，首先，當您查看 17 財年時——或者對不起，第四季度，您是對的，本季度我們的自由現金流量較低，其主要驅動因素是我們需要繳納的馬來西亞稅款製作。同樣，我們將繼續積極對此提出異議。我們相信事實對我們非常有利。希望這最終會得到解決，對我們有利，但這些事情可能需要時間。我認為，當你期待 18 財年時，首先要知道現金流轉換是我們關注的一個領域。隨著我們的前進，我們將繼續看到一些額外的養老金資金需求。我認為至少在上半年會繼續拖累現金流的另一件事是 Ixia 整合的剩餘部分。當我們希望實現與該收購相關的協同效應時，我們再次承諾到明年第三季度每季度交付 1000 萬美元，我們正在按計劃實現這一目標，但會產生一些現金成本認識到這些協同作用。我認為，一旦我們超越了這一點，我們將能夠更好地開始以更積極的方式將利潤轉化為現金流，並縮小我們整體盈利水平與現金流之間的差距。

I'll just add to that, as mentioned, the Malaysian tax issue, we believe our case is very, very strong. And unfortunately, with the Malaysian government, the way that it works is you pay upfront before you have your day in court, if you will, where -- which is not the case in other regions of the world. So if it works out the way that we think, we could see a reversal of that cash position.

我只是補充一點，如前所述，馬來西亞的稅收問題，我們相信我們的理由非常非常有力。不幸的是，對於馬來西亞政府，它的運作方式是你在出庭前預先支付費用，如果你願意的話，在世界其他地區並非如此。因此，如果它按照我們的想法發展，我們可能會看到現金頭寸的逆轉。

And our next question comes from the line of Richard Eastman from Robert W. Baird.

我們的下一個問題來自羅伯特·W·貝爾德 (Robert W. Baird) 的理查德·伊士曼 (Richard Eastman)。

Ron or Neil, could you perhaps bracket maybe what the core growth might look like first half versus second half of '18? And the math -- my math kind of suggest that maybe core growth is 3% or a little shy of that in the first half. And then it seems like it would need to pick up in the second half, but you're going to have tougher comps. So maybe you could just walk us through maybe the timing there.

Ron 或 Neil，您能否將 18 年上半年和下半年的核心增長情況放在一起？數學——我的數學表明上半年核心增長率可能為 3% 或略低。然後它似乎需要在下半場回升，但你會有更艱難的比賽。所以也許你可以帶我們了解一下那裡的時間安排。

Yes. Thanks, Rick. We deliberately didn't break down the guidance for the first half between core and noncore. The reality is we've got an awful lot of moving pieces, more so than usual here as we move through the first half. We're very confident in our ability to get to that first half number that we put out there, but we haven't broken it down any further. I think, as you look at the full year, as Ron mentioned, we see a clear path to get to the long-term operating model for the year of delivering 4% core growth with 40% incrementals. And so as you think about the year, I think we expect to do at least that well, but we haven't broken it down here for the first half.

是的。謝謝，瑞克。我們故意沒有打破核心和非核心之間的上半年指導。現實情況是我們有很多移動的部分，在我們上半場移動時比往常更多。我們非常有信心能夠達到我們公佈的上半場數據，但我們還沒有進一步細分。我認為，正如羅恩提到的那樣，當你回顧全年時，我們看到了一條清晰的道路，可以實現今年的長期運營模式，實現 4% 的核心增長和 40% 的增量。所以當你考慮這一年時，我認為我們至少希望做得那麼好，但我們還沒有在上半年將其分解。

And can I -- just in the mix there, I'd -- can I ask you, has any of the revenue outlook for Ixia, has that moved around a bit? In other words, it sounds like the core order growth here heading into fiscal '18 is stronger. Is my sense correct that maybe a little bit of Ixia revenue falls out? Maybe business condition's weaker? I think you mentioned enterprise visibility weaker? And offsetting that might be a bit of an acceleration in core growth?

我可以 - 就在那裡混合，我可以 - 我可以問你，Ixia 的收入前景有什麼變化嗎？換句話說，這聽起來像是進入 18 財年的核心訂單增長更為強勁。我的感覺是否正確，Ixia 的收入可能會下降一點點？也許經營狀況較弱？我想你提到企業知名度較弱？抵消這可能是核心增長的一點加速？

Well, last quarter, we talked about the relative market weakness that Ixia was seeing. And to some extent, that is continuing. That being said, Q4 was better than what we had modeled into our guidance 3 months ago for Ixia. So at the margin, things are a little bit better than they were 3 months ago for Ixia. And they tend to be seasonally very strong in the fourth calendar quarter. And so we're going through that period right now, but we definitely haven't seen any deterioration of the Ixia end markets over the last 3 months. If anything, they're a little bit better at the margin, but we both have an awful lot of backlog over the course of the last year. We feel like we're very well positioned going into the end of the fiscal year, especially on a core basis, where as you noted, orders have grown 11% this most recent quarter.

好吧，上個季度，我們談到了 Ixia 所看到的相對市場疲軟。在某種程度上，這種情況仍在繼續。話雖這麼說，第 4 季度比我們 3 個月前為 Ixia 制定的指導模型要好。因此，在邊際上，Ixia 的情況比 3 個月前好一點。而且它們在第四個日曆季度往往季節性很強。所以我們現在正在經歷那個時期，但在過去 3 個月裡我們絕對沒有看到 Ixia 終端市場有任何惡化。如果有的話，他們的利潤率要好一些，但在去年的過程中我們都有大量積壓。我們覺得我們在進入本財年末時處於非常有利的位置，特別是在核心基礎上，正如您所指出的，最近一個季度的訂單增長了 11%。

Okay. And just last question for me then. I'm sorry. Within the EISG business, how did the semi business, parametric test business do in the quarter? I mean, I presume you're lapping some pretty heavy big comps. And what's the outlook there and maybe the trend line look like on the semi test side?

好的。然後是我的最後一個問題。對不起。在 EISG 業務中，半成品業務、參數測試業務在本季度表現如何？我的意思是，我假設您正在製作一些非常重的大型伴奏。那裡的前景如何，也許趨勢線在半測試方面看起來像什麼？

Well, I'll just say, in the semi test side, we saw double-digit order growth, which was very good. It's funny. It's very hard to predict. We always say, "Oh, this is the last quarter. We're going to get orders," and we keep hitting double-digit numbers. But again, when you look at it as a total of our business, it's less than 10% of our total business. So we have the ability to buffer that a bit. I'll turn it over to Mark for some other comments.

好吧，我就說，在半測試方面，我們看到了兩位數的訂單增長，這非常好。這很有趣。很難預測。我們總是說，“哦，這是最後一個季度了。我們會收到訂單的，”我們不斷地達到兩位數的數字。但同樣，當你將其視為我們業務的總和時，它還不到我們總業務的 10%。所以我們有能力緩沖一點。我會將其轉交給馬克徵求其他意見。

Yes. I'll just add to that. The blistering growth that we saw in the first half from a lot of the fabs building capacity and upgrading their process for a lot of the products that are shipping now with smart devices, smartphones, they're moving into a production kind of mode versus the investment. But as we've spoken about, I think, many times on these calls, the opportunities in China with the indigenous semiconductor capabilities are very strong. And we're continuing to see those. And the other thing to remember is that our solutions set into the fabs is pretty diverse. Everything from nano positioning tools to parametric testers to general purpose. So -- and services as well. We're selling a lot of managed services to these organizations as well. So the outlooks continue to look pretty good.

是的。我會補充一點。我們在上半年看到的快速增長來自許多晶圓廠的產能建設和升級他們的工藝，這些產品現在通過智能設備、智能手機發貨，他們正在進入一種生產模式，而不是投資。但正如我們多次談到的那樣，我認為，在這些電話會議上，中國擁有本土半導體能力的機會非常大。我們將繼續看到這些。另一件要記住的事情是，我們在晶圓廠中設置的解決方案非常多樣化。從納米定位工具到參數測試儀再到通用的一切。所以——還有服務。我們也向這些組織出售大量託管服務。因此，前景繼續看起來不錯。

And we also have some new solutions that are going in for, let's just say, at a lower price point for a slightly lower performance point that we never had before, which makes us very competitive for others trying to come in and take that business.

而且我們也有一些新的解決方案，可以說，以更低的價格點和我們以前從未有過的略低的性能點，這使我們對於其他試圖進入並開展這項業務的人來說非常有競爭力。

Has the other pieces in industrial and the auto and energy within the EISG business have grown? Has the gross margin contribution there also expanded such that when semi test finally does flatten out some, will there be a noticeable impact to the gross margin line for EISG? Or have we kind of closed the gap there on profit contribution?

EISG 業務中的其他工業、汽車和能源業務是否有所增長？那裡的毛利率貢獻是否也擴大了，以至於當半測試最終確實趨於平緩時，是否會對 EISG 的毛利率線產生明顯影響？或者我們是否縮小了利潤貢獻方面的差距？

I'm going to turn this question over to Gooi Soon Chai, who is on the phone with us from Asia and runs EISG.

我要把這個問題交給 Gooi Soon Chai，他正在亞洲與我們通電話並負責 EISG。

Okay. Thank you, Ron. I think -- let me just take a step back and look at EISG overall business segment. We have 3 major business segment within EISG, which is the general electronic, and then second segment is the automotive energy. And the third segment is around semiconductor. And you are precisely correct that, from a mix perspective, the best gross margin business that we have essentially comes from the semi business. But again, I think, as what Mark has alluded to, even if we expect some moderation in semiconductor, we do have enough diversity in our semi portfolio to at least navigate through for any major perturbation, so to say. Because within the semi, we do have offering in the parametric, which is very much focused on the next-generation process nodes. We also have good relationship with the -- some of the semi equipment manufacturer, like currently, we're working on some of the newer program, like the EOB program, which we expect to continue to grow in 2018 and 2019. And then looking beyond that, we also have other offering in the wafer ecosystem. So that's one. Now going back to the other 2 segment. For the general electronic area, what we see growing is actually is the IoT application. And we're focusing a lot on the value add. So our solution goes not only for the manufacturing ecosystem, but also moving into the design and prototyping. And that's really where we're getting better margin, okay? And in the case of automotive and energy, right, as, again, I think Ron mentioned in his -- the initial part of the discussion, is that it's expanding, but we're also moving into a new field, like power, electronics and power battery testing with the acquisition of Scienlab. So some work really is now being done to improve gross margin definitely, but we do expect that as we continue growing, we will do beyond just expanding the top line. We're also focusing on leveraging the scale of Keysight and derive some gross margin improvement over the long run. Okay. So hopefully, that gave you context of what it is in the EISG.

好的。謝謝你，羅恩。我想——讓我退後一步，看看 EISG 的整體業務部門。我們在EISG裡面有3個主要的業務板塊，就是通用電子，然後第二個板塊就是汽車能源。第三部分圍繞半導體。你說得對，從混合的角度來看，我們擁有的最好的毛利率業務基本上來自半導體業務。但我再次認為，正如馬克所暗示的那樣，即使我們預計半導體會有所緩和，我們的半導體產品組合中確實有足夠的多樣性，至少可以應對任何重大擾動，可以這麼說。因為在半成品中，我們確實提供了參數化產品，它非常關注下一代工藝節點。我們也與一些半設備製造商有著良好的關係，比如目前，我們正在研究一些較新的項目，比如 EOB 項目，我們預計該項目將在 2018 年和 2019 年繼續增長。然後看看除此之外，我們還在晶圓生態系統中提供其他產品。這就是一個。現在回到另外兩個部分。對於一般的電子領域，我們看到增長的其實是物聯網應用。我們非常關注增值。因此，我們的解決方案不僅適用於製造生態系統，還適用於設計和原型製作。這真的是我們獲得更好利潤的地方，好嗎？就汽車和能源而言，正確的，正如羅恩在他的討論的最初部分提到的那樣，它正在擴大，但我們也在進入一個新領域，比如電力、電子收購Scienlab，進行動力電池測試。因此，現在確實確實在做一些工作來提高毛利率，但我們確實希望隨著我們的持續增長，我們所做的不僅僅是擴大收入。我們還專注於利用是德科技的規模，並從長遠來看提高毛利率。好的。希望這能讓您了解 EISG 中的內容。

That concludes our question-and-answer session for today. I would like to turn the conference back over to Jason Kary for any closing remarks.

今天的問答環節到此結束。我想將會議轉回給 Jason Kary，聽取任何閉幕詞。

Thank you, Kirsten. I'd actually like to turn it over to Ron now for his comments just to wrap us up here.

謝謝你，克爾斯滕。實際上，我現在想將其轉交給 Ron，徵求他的意見，讓我們在這裡總結一下。

Thank you very much, Jason, and thank you, everyone, for being on the call. But the best thanks go out to all the employees that have worked very hard to get us in this position where we have production flowing and that we have generated record orders for the company in over $1 billion record gross margin for the company as well as 11% core growth. We're very pleased at the direction and the position of the company right now, and I wish you all a great day.

傑森，非常感謝你，也感謝大家接聽電話。但最感謝的是所有員工，他們非常努力地工作，讓我們處於生產流動的位置，我們為公司創造了創紀錄的訂單，為公司創造了超過 10 億美元的創紀錄毛利率，以及 11核心增長百分比。我們對公司目前的方向和地位感到非常滿意，祝大家度過愉快的一天。

This concludes today's conference call. Thank you for your participation. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。