KEYSKeysight Technologies

International trade disputes There have been recent and increased ongoing changes to U.S. tariff policy, resulting in broad-based increases in tariff rates. Commencing in the second quarter of fiscal 2025, new U.S. tariffs between applying to imports from all countries were announced, including significantly higher rates on imports from China. In response, several countries, including China, have imposed or threatened to impose retaliatory measures on imports from the United States U.S. The U.S. government has announced various modifications and delays to its tariff policy and further changes may be made in the United Kingdom, future. There has also been continuing litigation in the European Union, Singapore, Malaysia and China, among other countries could substantially change our expectations and ability to operate in such jurisdictions as we have done historically. federal courts regarding the validity of the imposition of certain tariffs. Many of our suppliers, vendors, customers, partners, and other entities with whom we do business have strong ties to doing business in China. China and other countries impacted by the increased tariffs. Their ability to supply materials to us, buy products or services from us, or otherwise work with us is affected by their ability to do business in China. impacted countries. Continued uncertainty around trade policy could substantially change our cost of operating in such jurisdictions. Moreover, these tariffs and any other trade restrictions imposed on our customers or suppliers could adversely affect our financial results and position through reduced demand for our products and solutions, cancelled orders, supply chain disruptions, increased transaction costs, and increased expenses. If the U.S.’s U.S.’ relationship with China countries subject to increased tariffs results in additional trade disputes, trade protection measures, retaliatory actions, tariffs actions and increased barriers, policies that favor domestic industries, or increased import or export licensing requirements or restrictions, then our deployment of resources in jurisdictions affected by such measures could be misaligned and our operations may be adversely affected due to such changes in the economic and political ecosystem in which our suppliers, vendors, customers, partners, and other entities with whom we do business operate. affected.

We are subject to income taxes in the U.S. and various other countries globally. Changes in tax law, tax rates, or in the composition of earnings in countries with differing tax rates may affect deferred tax assets and liabilities recorded and our future effective tax rate. The Organization for Economic Cooperation and Development (“OECD”) reached agreement among various certain member countries to implement a global minimum 15 percent tax rate on certain multinational enterprises, framework, commonly referred to as Pillar Two. Numerous Two, which established a minimum 15 percent income tax rate. Various countries have enacted passed legislation to adopt comply with the Pillar Two model rules. A subset of the these rules will be became effective for Keysight as in the current fiscal year. While we expect to meet transitional safe harbor requirements in most jurisdictions, there are a limited number of November 1, 2024, with the remaining rules effective as of November 1, 2025. Keysight continues to analyze the jurisdictions where we expect Pillar Two model rules and monitor developments. taxes to apply. The income tax provision for the year ended October 31, 2025 includes the effects of Pillar Two could have taxes, resulting in a material impact on our effective tax rate in fiscal year 2025, primarily offsetting the reduction to our effective income tax rate from our tax incentives. expense of $13 million.

On January 1, 2022, Centripetal Networks filed a lawsuit in Federal District Court in Virginia, alleging that certain Keysight products infringe certain of Centripetal’s patents. We challenged the validity of claims of eight of these patents at the U.S. Patent and Trademark Office, with all or most claims being found invalid in each patent. Centripetal is appealing seven of these results. In addition, in February 2022 Centripetal filed complaints in Germany alleging infringement of certain three of Centripetal’s German patents, patents. Keysight challenged the validity of the claims of these patents in German nullity or European Patent Office (“EPO”) opposition procedures. Two of the three patents were invalidated, and in the appeals process has ended. The third patent had all but one claim invalidated at trial and is under appeal. In April 2022 2022, Centripetal filed a complaint with the International Trade Commission (“ITC”) requesting that they investigate whether Keysight violated Section 337 of the Tariff Act (“Section 337”) and should be enjoined from importing certain products that are manufactured outside of the U.S. and which are alleged to infringe Centripetal patents. On December 5, 2023, the ITC issued its Notice of Determination that Keysight did not unfairly import products in violation of Section 337 and the investigation was terminated. Centripetal has appealed this determination. The lawsuit in Federal District Court in Virginia is stayed pending the finalization of appeals of the ITC findings and validity challenges. On August 21, 2024, Keysight was served in Germany with a complaint filed in the Unified Patent Court alleging that certain Keysight products sold in Germany, France, Italy Italy, and the Netherlands infringe a European Centripetal patent. In December 2025, the court issued its written determination that Keysight did not infringe the patent. Keysight also challenged the validity of the patent using EPO opposition procedures, and the EPO revoked the patent in its hearing in November 2025. We deny the allegations and are aggressively defending each case.

Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance which will require requires us to disclose significant segment expenses and other segment items used by the Chief Operating Decision Maker ("CODM") (“CODM”) on an annual and interim basis as well as provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, we will be are required to disclose the title and position of the CODM. The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. This ASU will have no impact on our results of operations, cash flows or financial condition. We will apply the amendments in adopted this ASU retrospectively to all prior period disclosures presented in the financial statements upon adoption. guidance during 2025 (see Note 16).