Spirent Communications plc Annual Report 2024
Spirent Communications plc
Annual Report 2024
Beyond
Boundaries
Explore our spotlights featured throughout this
report to discover how Spirent, the leading
global provider of automated test and assurance
solutions for networks, cybersecurity and
positioning, is pushing beyond boundaries.
With a strong track record of innovation and a
dedicated team, Spirent is driving momentum and
expanding its reach with pioneering solutions that
shape the future across a wide range of industries.
Beyond Boundaries
Discover how in our spotlights
featured throughout this report
Strategic report
1. Our strategic roadmap
2. 2024 highlights
3. Investment case
4. Spirent at a glance
6. Spotlights
8. Chairman’s statement
10. Chief Executive Officer’s review
12. Spotlights
14. Our markets
16. Our business model
18. Spotlight on 5G
20. Our strategic priorities
22. Key performance indicators
24. Stakeholder engagement
28. Spotlights
30. Our people and culture
32. Sustainability
40. Operating review
48. Financial review
55. Principal risks and uncertainties
61. Non-financial and sustainability
information statement
Corporate governance
62. Chairman’s introduction
to governance
64. Board of Directors
66. Board statements
67. Directors’ statement on
corporate governance
74. Nomination Committee report
77. Audit Committee report
83. Report on Directors’
remuneration
109. Directors’ report
113. Directors’ responsibilities
statement
Financial statements
114. Independent auditor’s report
126. Consolidated income statement
127. Consolidated statement of
comprehensive income
128. Consolidated balance sheet
129. Consolidated statement of
changes in equity
130. Consolidated cash flow
statement
131. Notes to the consolidated
financial statements
171. Parent Company balance sheet
172. Parent Company statement
of changes in equity
173. Notes to the parent Company
financial statements
191. Full list of subsidiary undertakings
Other information
193. Financial history
195. Alternative performance
measures
197. Shareholder information
198. Glossary
200. Contact details
Our purpose and ambition
Spirent’s ambition is to be the global leader and trusted partner for innovative technology test
and assurance solutions.
Read more on pages 4 and 5
Delivering value across the lifecycle
We stand behind our customers’ promise to deliver a new generation of innovative products and
services to their customers. Our automated test and assurance solutions support them across every
phase of the lifecycle, from development in the lab to pre-deployment and live operation, ensuring
that new technologies deliver.
Read more on pages 14 to 17
Sustainability values
We manage our material sustainability impacts and opportunities in alignment with the values we have
captured in our FuturePositive programme:
Promise of a sustainable future
Net zero carbon
Promote diversity and invest in people
Operate responsibly
Be accountable and transparent
Read more on pages 32 to 39
Culture/values
Our values are the bedrock of our culture, guiding how we work with one another and our customers.
Our suite of flexible working practices supports employee wellbeing, reduces our carbon footprint,
creates office environments that encourage knowledge sharing, innovation and collaboration, and
helps us attract and retain talent.
Read more on pages 30 and 31
Strategic priorities
We are executing on our live network opportunities, diversifying our customer base to help reduce
cyclicality, increasing our recurring revenue streams, and driving services and solutions across our
portfolio. Our strategy is built on three pillars:
Read more on pages 20 and 21
Innovation for GrowthCustomer Centricity Operational Excellence
Our strategic roadmap
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
STRATEGIC REPORT
$479.0m
(2023 $477.0m)
Order intake
2
$312.1m
(2023 $293.7m)
Orderbook
1
$460.2m
(2023 $474.3m)
Revenue
72%
(2023 72%)
Gross margin
$46.2m
(2023 $45.2m)
Adjusted operating profit
3
$13.8m
(2023 $22.9m)
Reported profit before tax
7.75 ¢
(2023 7.5 5
¢
)
Adjusted basic earnings per share
4
$141.8m
(2023 $108.1m)
Closing cash
2024 highlights
Financial highlights
• Ongoing challenging market conditions impacted revenue
which was $460.2 million for the year (2023 $474.3 million).
• We have accelerated our focus on non-telco end
markets, with positive progress with hyperscaler
and enterprise customers, as well as more important
Financial Services wins.
• 6 per cent orderbook growth to $312.1 million
(2023 $293.7 million).
• Robust pricing, supply chain management and
product mix led to strong gross margin delivery being
maintained at 72 per cent (2023 72 per cent).
• Opex initiatives delivered considerable savings in 2024.
• Adjusted operating profit of $46.2 million slightly ahead
of 2023 (2023 $45.2 million). $18.2 million of transaction
costs caused the profit before tax to be down from
$22.9 million to $13.8 million.
• Strong balance sheet maintained, $141.8 million
cash (2023 $108.1 million after dividend payments
of $46.5 million and $71.6 million of share buybacks).
Operational highlights
• Important new product launches with immediate wins in
fast-growing markets, including Data Centre AI network
testing and PNT simulation for navigation warfare, lunar
missions and automotive positioning for vehicle safety.
• Secured multiple new logo wins in Financial Services,
successfully demonstrating our strategy to diversify
outside of telecoms and the broader applicability of
our lab and test automation portfolio.
• Secured several important lab to live lifecycle test,
automation and assurance wins with major Tier-1
service providers in Europe and continued to expand
our footprint across North American service providers
including multi-year deals.
• Secured 415 5G-related new contracts from 138
customers despite macroeconomic headwinds in the
telecommunications market.
• Continued to develop our world-leading Wi-Fi test solutions
business, bringing to market the most comprehensive
test solution for the next-generation, Wi-Fi 7 standards.
Notes
1. Orderbook is an alternative performance measure as defined on page 195.
2. Order intake represents commitments from customers in the period to purchase goods and/or services that will ultimately result in recognised revenue.
3. Before acquired intangible asset amortisation, share-based payment and other adjusting items amounting to $35.9 million in total (2023 $26.8 million).
4. Adjusted basic earnings per share is based on adjusted earnings as set out in note 11 of Notes to the full year consolidated financial statements.
Items with notes 1 to 4 are non-GAAP alternative performance measures; see pages 195 and 196 for more detail.
Despite ongoing challenging market conditions, fourth quarter trading saw a good uptick of order growth on the same
period in 2023. We saw early signs of market recovery as second half order growth mitigated the weaker first six months,
bringing the full year orders to a level comparable to 2023. As a result, we delivered 5 per cent revenue growth in the
second half of 2024.
On the 28 March 2024, the Boards of Keysight and Spirent announced that they had reached agreement on the terms of
a recommended cash offer for the entire issued ordinary share capital of Spirent.
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Investment case
Uniquely
positioned,
strategically and
operationally
Enduring market drivers
We are a critical enabler in the rapid shift to a hyperconnected
world, with robust market drivers that include migration to
5G and beyond, digital transformation initiatives in banking
and large enterprises, hyperscalers expanding into the telco
space and upgrading data centres for artificial intelligence
(AI) workloads, and location awareness as a key enabler.
Only vendor addressing the entire
technology lifecycle
We leverage the expertise and test methodologies developed
in the lab to address our customers’ live network test
and assurance challenges, enabling us to secure larger,
multi-year contracts that enhance our revenue visibility
and predictability and help reduce cyclicality.
Key enabler of 5G and
beyond transformation
Despite caution in the current macroeconomic environment,
operators’ investment in their complex 5G networks is
ultimately non-discretionary, with spectrum and network
capital investment commitments already in place. Our
opportunities from 5G Standalone, 5G Advanced and 5G
private network rollouts are still in their infancy.
Disciplined investment strategy
Our customer intimacy and governance around our
portfolio management ensure that we focus our investments
on the faster-growing market areas that are most critical
to our customers, both organically and through highly
selective, earnings-accretive acquisitions.
We go-to-market differently
Our customers are the world’s leading service providers,
technology companies and enterprises. We have evolved
our customer relationships, engaging in more consultative
selling and becoming a trusted partner that understands our
customers’ newer, larger business challenges and addresses
them with solutions and services, not just products.
Robust, sustainable operating model
We focus on retaining our key talent while pursuing a
policy of diversity and inclusion, fuelling collaboration
and leading-edge innovation. We maintain a proactive
approach to managing our supply chain. Our commitment
to sustainability led to us achieving CarbonNeutral
®
Company certification in 2024.
We are uniquely positioned to seize
opportunities, even in the face of
macroeconomic uncertainty, due
to the strength of our differentiated
model and proposition. Leveraging
our unique technology leadership
and subject matter expertise, we are
focused on market opportunities
with strong and enduring drivers,
and on further diversifying our
customer base to reduce cyclicality.
Our differentiated approach provides
us with distinct competitive advantages.
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STRATEGIC REPORT
Spirent at a glance
Global leader,
innovator and
trusted partner,
unlocking new
possibilities
Lifecycle Service Assurance
An established global leader in lab-based testing of
5G mobile core networks, cellular and Wi-Fi devices,
as well as in lab and test automation solutions for
the telecom industry and enterprises. The world-
class innovation of our Lifecycle Service Assurance
segment has enabled us to bring to market
“live” solutions that provide end-to-end visibility,
actionable insights and automated troubleshooting
to radically simplify turn-up and assurance
of complex networks and services, reducing
time and cost.
$181.0m
revenue in 2024
(2023 $199.1m)
Networks & Security
An industry leader in high-speed Ethernet/internet
protocol performance testing, our Networks &
Security segment develops test methodologies,
tools and services for virtualised networks, cloud
and artificial intelligence networking infrastructure,
application performance and proactive security
validation. As the acknowledged market leader in
global navigation satellite system test and simulation
solutions, we are applying our innovation and expertise
to emerging positioning, navigation and timing growth
opportunities, such as low earth orbit satellite systems.
$279.2m
revenue in 2024
(2023 $275.2m)
Read more on pages 40 to 43 Read more on pages 44 to 47
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Honolulu, HI
Calabasas, CA
Santa Clara, CA
Plano, TX
Frederick, MD Holmdel, NJ
Paignton, UK
Crawley, UK
Beijing, China
Bangalore, India
1,000+
customers served in 2024
9
significant
engineering sites
1,490
employees
50+
countries
Head office
Lifecycle Service Assurance
39%
Networks & Security
61%
Americas
60%
Asia Pacific
27%
EMEA
13%
Sustainability recognition
Revenue by
segment
Revenue by
geography
Revenue by
customer
Largest customer
7%
Other top ten customers
27%
Customers outside top ten
66%
Read more on pages 32 to 39
CDP rating 2024
Climate change: B
EcoVadis bronze
rating 2024
FTSE4Good
member 2024
CarbonNeutral
®
Company certification
2021, 2022, 2023, 2024
FTSE ESG 100
Select member
2024
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Resilient
Testing 5G resilience in
cloud-native networks
A major North American telecommunications and media provider has been seeking new ways to
rigorously test the resilience of its pre-deployed 5G Standalone (SA) core network. Partnering with
Spirent, the company embarked on an innovative programme to validate the robustness of its 5G
cloud-native architecture through chaos-based testing.
Utilising the Spirent Landslide™ CNF Resiliency Test Solution allows the operator to intentionally
introduce failure scenarios in its network, gaining critical insights into recovery mechanisms,
quality of experience, and automated response to disruptive events. Testing scenarios include
network and storage connection loss, central processing units and memory stresses, and
infrastructure resource depletion.
The success of the initiative is now part of an extended engagement with Spirent to further refine
test automation, ensure 5G core network robustness and prepare for scaling future deployments.
Spotlight:
Cloud-native resilience
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Revolutionising smart
manufacturing with 5G LAN
A major global data centre and 5G provider is driving innovation in smart manufacturing by
implementing a 5G local area network (LAN) solution with enhanced Ultra-Reliable and Low
Latency Communications, critical for the company’s manufacturing vision.
Embarking on a three-year project with Spirent’s Landslide solution, the provider is developing
a robust 5G infrastructure to support uninterrupted communication among robotic arms,
automated guided vehicles and other workstation devices, with seamless data exchange
without the need for traditional cabling. This 5G LAN setup brings unique advantages by
supporting AI and machine learning within the manufacturing environment, enabling data
slicing between different production lines for optimised workflow – a capability essential for
scaling automation.
The collaboration positions both companies as leaders in private 5G deployment, enabling
a next-generation, efficient manufacturing model that showcases the potential of 5G LAN in
transforming industrial production, serving as a model for similar initiatives in the APAC region
and beyond.
Smart
Spotlight:
Transform manufacturing
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STRATEGIC REPORT
Chairman’s statement
I am pleased to present our
Annual Report for the year
to 31 December 2024.
Spirent’s future as part of a larger firm and
a touch of regret
We announced on the 28 March 2024 a deal in which
Spirent would be sold to Keysight Technologies, Inc.
(“Keysight”). That deal was endorsed by our shareholders on
22 May 2024. On 2 December 2024, Keysight announced
that, to secure regulatory approval, it would divest our
High-Speed Ethernet business, a decision that would not
have been made but for the Keysight transaction. We
continue to work with interested regulators to secure the
clearances needed to complete the deal.
I am encouraged for the future of our employees as they
join a larger firm which will be able to take our products
and technology to a wider market. However, I must express
some personal regret. Spirent (originally Bowthorpe plc)
was founded in 1936 by Jack Bowthorpe and was originally
listed on the London Stock Exchange in 1955. My regret
is seeing another global technology and engineering
leader leave the London Stock Exchange as too many
other businesses have done in recent years. New owners
who see the intrinsic value of assets like Spirent will benefit
as the telecommunications market returns to growth. It
is my sincere hope that businesses such as Spirent will
continue to be started in the UK and will in time look to
list on the London Stock Exchange and help secure the
UK’s place as a global technology leader. To do so, the UK
market will need to attract investors who embrace future
technologies and support the risk taking required to grow
such businesses into global leaders.
Performance during the year
2024 has proven to be a year of two halves. Our first half
performance was weak as we continued to wrestle with a
constrained telecoms market, which very severely impacted
our two biggest customer segments, the telecom service
providers and the network equipment manufacturers.
The announcement of the transaction with Keysight
negatively impacted our performance even further as
we saw hesitancy as customers absorbed the news of
the acquisition.
A different
future
Sir Bill Thomas
Chairman
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STRATEGIC REPORT
However, in the second half of 2024 we began to see some of
our customers spending more freely and after a very positive
fourth quarter order intake performance, our orders for the
full year were very slightly ahead of the prior year.
It is a testament to our employees’ resilience and
continued dedication that we were able to continue releasing
market-leading products and solutions which deliver real
value to our customers. Revenue grew 5 per cent in the
second half of the year compared to the same period in
2023 and our orderbook backlog continued to grow. Full
year revenue closed at $460.2 million (2023 $474.3 million).
Adjusted operating profit increased by 2 per cent. Reported
profit before tax was down from $22.9 million to $13.8 million
due to transaction costs of $18.2 million.
We ended the year with cash of $141.8 million.
Our employees and the right culture
This year, the announcement of our deal with Keysight without
doubt caused considerable uncertainty for our customers and
our colleagues.
In spite of that uncertainty, I have been humbled by the
continued unstinting commitment of our colleagues. For some,
this is because we have long-serving employees who have
dedicated much of their careers to the Company, and they
are hugely committed to supporting the teams they have
hired, nurtured and promoted over the years. For others, their
motivation is to continue to deliver innovative world class
solutions and outcomes to our customers. On behalf of the
Board, I thank every one of our colleagues, no matter their
personal motivation, for continuing to innovate and deliver
world-leading products and solutions to our customers and
for continuing to build an environment in which individuals are
respected, challenged and supported to realise their potential.
Outlook
There now appears to be some strength returning to our core
markets. Our orderbook has started to see renewed growth.
The solutions we continued to invest in during constrained
times, are winning in the marketplace. I am confident that we
will pass the business to its new owners in good health and on
an upward trajectory.
I expect this will be my last note to shareholders as Chairman
of Spirent as an independent Company. It has been a
pleasure to serve in that role and I wish our employees well,
and I am certain that Keysight will be a good custodian of
Spirent’s business.
Sir Bill Thomas
Chairman
4 March 2025
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STRATEGIC REPORT
2024 was a year of two halves with
increasing progress seen in the latter
part of the year.
Despite macroeconomic challenges in the first half of the
year and some customer hesitancy due to the pending
acquisition by Keysight, we demonstrated resilience and
adaptability. By staying true to our strategic priorities
and focusing on our strengths, we rebounded strongly
in the second half, delivering value to our customers
and stakeholders alike.
The results in 2024 speak to the dedication of the whole
global Spirent team which has yet again demonstrated
its commitment and operational resilience in the face of a
challenging market environment while also working closely
with Keysight to conclude its acquisition of the Group. It
has been a very busy year in which we delivered a good
performance, and I would like to personally thank all of
Spirent’s staff for their continued support.
Market overview
The macroeconomic environment in 2024 continued to
present headwinds, particularly in the telecom sector,
with ongoing budget pressures and cautious capital
expenditures. Both the economic environment in China and
the ongoing trade compliance landscape continues to be
challenging. We saw material reduction in sales from China
whilst other parts of the global reach improved. Additionally,
the announcement of our acquisition by Keysight introduced
some hesitancy among customers in certain sectors.
However, our diversification strategy and steadfast
commitment to our core markets enabled us to navigate
these challenges effectively.
We capitalised on growth in high-potential future growth
areas, including AI-driven data centres, low earth orbit
(LEO) satellites, and positioning, navigation and timing
(PNT) technologies. These markets provided new avenues
for growth, allowing us to offset some of the cyclicality in
telecom spending.
Strategy
To realise our ambition to be the global leader and trusted
partner for innovative technology test and assurance
solutions, our strategic pillars remained: Customer Centricity,
Innovation for Growth and Operational Excellence.
Chief Executive Officer’s review
Order intake
1
$479.0m
(2023 $ 477.0m)
Orderbook
2
$312.1m
(2023 $293.7m)
Revenue
$460.2m
(2023 $474.3m)
Resilient growth
amidst change
Eric Updyke
Chief Executive Officer
Notes
1. Order intake represents commitments from customers in the period
to purchase goods and/or services that will ultimately result in
recognised revenue.
2. Orderbook is an alternative performance measure as defined
on page 195.
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Customer Centricity
Throughout the year, we deepened our relationships with
customers, providing solutions that addressed their most
pressing challenges. By broadening our customer base
and delivering measurable outcomes, we maintained
their trust during this period of transition. The Financial
Services sector stood out as a key area of growth, with
major wins underscoring the applicability of our lab and test
automation solutions.
Innovation for Growth
2024 marked a significant milestone in innovation with
the launch of our AI High-Speed Ethernet and PNT X™
platforms. The AI High-Speed Ethernet platform, the first
of its kind, has been well received, enabling customers to
address next-generation data centre challenges. Similarly,
the PNT X platform has strengthened our leadership in
positioning technologies, gaining traction in government,
LEO satellite and automotive markets.
Our investments in R&D and product innovation continued
to differentiate us, earning industry recognition such as the
Interop Tokyo “Grand Prize” for our AI emulation solution.
Operational Excellence
Cost-saving initiatives and real estate optimisation
measures ensured operational efficiency without
compromising on critical investments.
Unwavering focus on cash meant we closed the year
with a strong balance sheet.
Capital allocation approach
Our capital allocation policy remains unchanged. We invest
in R&D to maintain and expand our leadership positions
in the market, and in inorganic investments where we see
attractive opportunities that support our strategic growth
agenda, whilst maintaining a robust balance sheet.
Preparing for the future
As we look ahead to 2025 and the completion of the
acquisition by Keysight, we remain committed to supporting
our customers and employees through this transition. Our
strong foundation, innovative portfolio and talented team
position us well to maintain our leadership and deliver
sustainable value in the years to come.
Eric Updyke
Chief Executive Officer
4 March 2025
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Secure
New levels of testing capability
to help keep customer
transactions safe
Financial Services infrastructure is vital to our everyday lives, but with increasingly complex
traffic patterns and new security threats emerging daily, a leading global merchant acquirer
bank turned to Spirent to bolster its cyber defences. Enabling businesses around the world to
securely handle tens of thousands of e-commerce, mobile and point-of-sale payments every
day, it wanted to introduce real-world application and threat traffic generation to its testing
regime to test its next-generation firewalls.
With its extreme scalability, ease of use and flexibility to generate hyper-realistic application
traffic, the customer chose Spirent’s CyberFlood™, a sophisticated solution built for the complexity
of the modern threat landscape. It enables the customer to test its network security controls
under real-world conditions in a lab setting to safely identify and pre-empt potential attacks and
performance bottlenecks and optimise its defences accordingly, while also providing additional
benefits in terms of assurance, budgetary planning and important regulatory compliance.
Spotlight:
Bolster defences
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Empowering 5G core and MPLS
Services with high-performance
network solutions
One of India’s fastest-growing network equipment manufacturers is strengthening its position
in the global telecom market through an ambitious project to build a robust 5G core and deploy
over 10,000 nodes for multiprotocol label switching (MPLS)/virtual private network services.
With significant orders from leading service providers and government entities, the provider
sought a rigorous testing solution to validate its new 4G and 5G core offerings, ensuring high
performance and reliability for both domestic and international markets.
To achieve this, it needed a testing setup capable of replicating high-demand, real-world
conditions. Spirent’s Landslide and TestCenter
®
solutions provided a lab environment to
assess Layer 3, MPLS and segment routing features, enabling comprehensive testing across
varied network conditions and building confidence in the solutions before live deployment.
By validating the control and data planes of its network nodes, the company can confidently
demonstrate its products’ load-handling capabilities, essential for serving critical live networks.
Robust
Spotlight:
Ensure robustness
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STRATEGIC REPORT
Spirent invests to sustain
and expand our leadership
and support our profitable
growth in key technologies
and growth markets.
Our markets
Unlocking new
opportunities
We are evolving deeper and broader partnerships with
an increasingly diverse base of customers, helping them
address their larger business problems with innovative
solutions and services, not just products. We are leveraging
subject matter expertise gained from our leadership in
lab testing and validation to address our customers’ live
network challenges, as they advance towards complex
cloud-native 5G Standalone networks and employ
continuous integration and continuous delivery models.
We are applying our industry-leading expertise to key
emerging areas such as data centre networking to support
artificial intelligence (AI) workloads, 5G private networks,
automation and regulatory compliance testing for Financial
Services and low earth orbit (LEO) satellite constellations.
Diversifying our markets and our customers provides us with
new opportunities to grow and to build additional recurring
revenue streams that support sustainable, profitable growth.
Non-terrestrial networks and PNT
Market driver
Growth in non-terrestrial networks (NTN) and low earth
orbit (LEO) mega satellite constellations is exponential
with over 7,390 satellites in orbit, and over 100,000
satellites estimated to be in orbit by 2030, delivering
mobile broadband, emergency services and Internet
of Things connectivity directly to devices, while offering
resilient positioning, navigation and timing (PNT) and
Earth observation services. Being close to Earth, these
new LEO constellations enable more robust and secure
connectivity to remote, underserved communities,
mission-critical industries and military theatres.
Opportunities for Spirent
Space is an incredibly complex environment, so it is
critical to validate satellite communications and PNT
performance in the lab before deployment. Numerous
technology, performance and resilience challenges must
be tested, from signalling delays and timing variations
to large Doppler shifts and signal degradation from
atmospheric conditions and interference, through to
spoofing and jamming attacks.
Our response
Spirent, as the industry leader in satellite PNT and
end-to-end mobility testing, is well positioned to help
the industry deliver on NTN’s promises and bridge the
technology divide between satellite providers and
mobile operators. Spirent is already deeply engaged
with leading players across the ecosystem, helping
to test the complex performance and resiliency
requirements of a new generation of commercial
and military SATCOM and PNT services.
$5.24bn
Global PNT solution market spending by 2033,
growing at a compound annual growth rate (CAGR)
of 10.85 per cent from 2023 to 2033.
Source: Research and Markets, July 2023.
Emergency
<$100 million
SMS
+$100 million
Voice
+$1 billion
Data
+$10 billion
Source: Analysys Mason/NSR.
Analysys Mason estimate a $137 billion revenue opportunity (cumulative
between 2022 to 2032) for direct-to-device (D2D) SATCOM services.
3GPP
Release 17
3GPP
Release 18
20222023202420252026202720282029203020312032
60,000
50,000
40,000
30,000
20,000
10,000
0
USD million
Satellite D2D consumer segment revenue
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Data centre networking for AI
and 800G Ethernet
Market driver
The rapidly increasing appetite for applications
such as cloud computing, streaming services and
a new wave of AI workloads, especially generative
AI, are driving bandwidth demands ever higher.
Cloud service providers are redesigning their AI
infrastructure, with Ethernet adoption starting to
grow as the new AI networking fabric of choice, to
support large-scale learning clusters which require
high bandwidth, low latency connectivity, and for
inferences which require low latency.
This is all stimulating rapid evolution in Ethernet
backbones and interconnects in data centres
that underpin the cloud and provide support for
enterprises, driving refresh cycles from 400G to 800G,
as well as early 1.6 terabit research and development.
Opportunities for Spirent
With the rapid acceleration towards 800G and
the need to support novel AI traffic workloads,
customers are demanding higher-density testing
capabilities. Flexibility is needed to validate the
next generation of data centre AI fabrics, cloud
computing and streaming service, for performance
and latency of data centre switches, and for the
latest generation of terabit core routers.
Our response
Spirent has developed the industry’s first AI traffic
emulation platform for Ethernet and launched the
industry’s highest-density, award-winning multi-rate
800G high-speed Ethernet test solution, leveraging
our decades of leadership in Ethernet testing.
Spirent’s AI traffic emulation and 800G solutions helps
accelerate adoption across next-generation chipsets,
routers, switches, data centre fabrics and lays
the foundation for future 1.6 terabit evolution.
Financial Services – digital
transformation and
operational resilience
Market driver
Financial Services organisations are embarking on
large-scale digital transformation and automation
programmes driven by competitive pressures,
heightened security risks, legacy IT systems and
a heritage of costly and inefficient siloed labs and
manual testing processes.
This is compounded by the need for continuous
regulatory compliance and certification testing,
especially around operational resilience, while
meeting aggressive sustainability targets across
growing IT and data centre real estates.
Opportunities for Spirent
Manual methods for testing enterprise networks,
regulatory compliance and the provision of new
digital services are no longer viable because of the
complexity, speed and frequency at which increasingly
disaggregated networks need to be updated.
By automating test lab capabilities, world-leading
Financial Services companies will be able to
significantly accelerate delivery of new products,
version upgrades and services to their customers,
while ensuring strict compliance and benefiting
from major productivity gains and cost savings.
Our response
Spirent’s proven lab and test automation solutions are
fully applicable to these transformation programmes
and to continuous testing within enterprise sectors,
including Financial Services. This expanded market
opportunity for Spirent was further showcased by
a number of large deals won with a leading global
Financial Services organisation in 2024.
Banking, Financial Services and Insurance (BSFI)
market dynamics
$371.51bn
Digital transformation spending by 2033, growing at
a CAGR of 16.63 per cent from 2024 to 2033
1
.
$8.79bn
Robotic process automation spending by 2030
to automate repetitive tasks, streamline complex
processes, and reduce human errors, growing at
a CAGR of 39.4 per cent from 2023 to 2030
2
.
Sources:
1. Precedence Research.
2. Grand View Research.
Source: Dell’Oro Group AI Networks Report.
Half of the Ethernet switch port shipments in AI back-end networks
are to be 800Gbps by 2025 and 1,600Gbps in 2028, showing a
very fast migration to the highest speeds available in the market.
Forecast (2024–2029) – Data centre AI back-end
Ethernet networks
2024 2025 2026 2027 2028 2029
Port Shipments in Millions
≤100Gbps 200Gbps 400Gbps 800Gbps
1,600Gbps ≥3,200Gbps
15
Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Our business model
Empowering industry leaders
to innovate faster and smarter
We accelerate our customers’ technology journeys from
concept to reality. We empower them to innovate faster
and smarter across every phase of the lab to live lifecycle,
from development to operation.
Using our
resources
effectively
Financial strength
To invest in research
and development
Intellectual property
Protected IP and patents
Organisational capital
Unique systems and processes
Human capital
Talented and driven workforce
Social capital
Strong partnerships with
customers and suppliers
O
p
t
i
m
i
s
e
u
s
e
r
e
x
p
e
r
i
e
n
c
e
A
c
c
e
l
e
r
a
t
e
t
i
m
e
t
o
m
a
r
k
e
t
R
e
d
u
c
e
c
o
s
t
a
n
d
c
o
m
p
l
e
x
i
t
y
O
p
e
r
a
t
e
D
e
v
e
l
o
p
D
e
p
l
o
y
Harden
security
defences
Lab
Live
16
Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Innovate with confidence
Telecom and
financial digital
transformation
AI networking
and 800G for
data centres
The next wave
of 5G, Wi-Fi and
the cloud
Non-terrestrial
networks and
LEO satellites
Spirent’s unique value
We Unblock
development for
faster releases
Our automated test and digital
twin solutions realistically model
real-world networks so providers
can rapidly validate new concepts
for artificial intelligence (AI) data
centre networking, 5G Standalone/
Advanced, Wi-Fi 7, next-generation
positioning, non-terrestrial networks
(NTN), and more. Our managed
solutions offer our critical technology
and methodology skills and expertise,
allowing customers to streamline
their labs and testing.
We Unlock
agility and
cost savings
Our continuous testing solutions
and automated test frameworks
empower our diversified customer
base across industries such as
telecom and Financial Services
to transform legacy testing
workflows and silos into automated,
collaborative test environments.
This enables supplier ecosystems
to work together seamlessly,
improving agility, accelerating
releases and increasing resource
and energy efficiency.
We Unleash
new services
and revenues
Our active continuous monitoring
solutions create a foundation
for a new generation of AI, NTN,
5G, Wi-Fi 7, and positioning
services that offer high-growth
revenue opportunities. We enable
service differentiation across new
dimensions: latency, loss, security,
scalability and managed service
level agreements. Our proactive,
automated root cause isolation
allows customer issues to be resolved
before customers are impacted.
17
Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Spotlight on 5G
Enterprise private 5G networks and AI
The market for enterprise private networks saw steady
adoption throughout 2024 thanks to rising demand from
sectors such as manufacturing, transport and mining, and
their growing willingness to invest in high-performance,
secure and resilient networks to guarantee business
outcomes. Demand is also steadily growing in other
sectors such as government and military and healthcare
as awareness of the benefits has increased and access
to devices and spectrum has improved.
This growth in enterprise private networks and requirements
to support sovereign AI will also fuel associated investment
in cloud and edge computing. It is already clear that many
enterprises have strict requirements for assuring security
and data privacy on site. At the same time, many of the most
compelling use cases, especially those using latency-sensitive
or AI-driven applications, will benefit from the performance
gains derived from local application processing.
Our strategy is well aligned to help our customers unleash the
revenue potential of private 5G, secure edge computing
and AI. As an acknowledged industry leader in 5G core
and cloud-native network testing, offering innovative
solutions such as automated and continuous testing and
assurance, together with flexible business models such as
Test-as-a-Service, Spirent is helping enterprises unlock new
business outcomes and operators and suppliers deliver new
premium and assured revenue-generating services.
5G Standalone early adopters reap
the rewards
In 2024, the deployment of 5G Standalone (SA) networks
continued to progress, but at a cautious and uneven pace as
operators worldwide grapple with the formidable technical
challenges and cost of deploying and integrating new,
cloud-native 5G core technologies. However, 151 operators
are already investing in 5G SA networks with 65 now commercially
launched as they focus on advanced revenue-generating use
cases for enterprise and consumer customers which simply
cannot be supported without the move to 5G SA.
Early adopting operators are already reporting benefits
of greater go-to-market agility, improved costs, energy
efficiencies and new revenue streams being unlocked.
Combined with the growing maturity of the 5G SA device
ecosystem and increasing commercial interest in new 5G SA
enabled use cases, growth is forecast to gradually accelerate
from 2025, especially in mission-critical enterprise private
networks, government and military use cases, non-terrestrial
networks and fixed wireless access, all representing near-term
areas of opportunity for Spirent.
Looking ahead, the introduction of 5G Advanced, defined
initially under the 3GPP Release 18 standard, is expected
to serve as a transitional phase between 5G and future
6G networks throughout the second half of the decade,
introducing artificial intelligence (AI) into the network and
providing an enduring test and assurance opportunity
for Spirent.
5G Standalone
unleashes the
full feature rich
potential of 5G
technology
Service providers’ key focus
will be on 5G SA and Advanced
for the rest of the decade as
they deploy new capabilities to
unlock the full potential of 5G.
Stephen Douglas
Head of Market Strategy
18
Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Lifecycle Service
Assurance
Helping customers unleash
new forms of differentiation
and transformational value.
As focus continues to shift towards
5G SA and Advanced to fully realise
5G’s potential, guaranteeing reliable
performance and meeting service
level agreements (SLAs) is becoming
key to ensure new revenue streams
and competitive advantage.
With the new complexity
from cloudification, AI and
a transformation of many
integration, deployment and
operational workflows, demand is
growing for network automation
and continuous test and assurance
across the 5G lab to live lifecycle.
Our market leadership in 5G core
cloud-native network testing,
our vendor-independent status
and cutting-edge expertise in
automation and continuous test
and assurance uniquely positions
us to help the industry make the
move to true 5G with confidence.
Spirent’s global leadership in
automated 5G core testing was
again showcased in 2024 with
leading operators, equipment
manufacturers and cloud
providers, with over 50 unique
customer engagements, including
multi-country and national Tier-1
operators, helping them transition
from lab to live for 5G network
transformation.
Networks & Security
Helping customers unlock
increased agility and faster
time to market.
The growth in 5G deployments, the
move to SA with its disaggregated,
cloud-native architecture and
the rise of GenAI highlights the
dependency on a high-capacity,
tightly synchronised, low-latency
and secure internet protocol
transport network capable of
supporting thousands of additional
cell sites, new edge locations
and geographically distributed
data centres.
Spirent’s high-speed Ethernet
and application-aware security
testing leadership was enhanced
in 2024 by the addition of cloud-
native function (CNF) resilience
and chaos-based testing to its
core network test solution to
continuously test the impact of
CNF performance on the delivery
of 5G SA services.
Spirent’s 5G telco cloud
leadership was highlighted in
2024 at a major North American
telecommunications and media
provider, helping it rigorously test
the resilience and robustness of
its new 5G SA cloud-native core
network, safely accelerating its
time to launch.
Managed Solutions
Helping customers reduce risks
and gain subject matter expertise.
5G’s increased complexity and
utilisation of the cloud, combined
with an exponential increase
in the velocity and volume of
software releases, inconsistent
tools and processes, and a lack of
in-house expertise, presents major
challenges to our customers.
Managed Solutions help address
these challenges by offering
our unparalleled subject matter
expertise, tools and methodologies
as a service, enabling an
innovation pipeline between
development and operations.
Spirent’s Managed Solutions
leadership was showcased in
2024 at a leading European
operator with a growing edge
computing footprint, which
utilised Spirent’s field-testing
managed solution to assess the
performance and robustness of
its nationwide homegrown and
cloud hyperscaler provided edge
network for 5G services, including
low-latency applications.
$41.4bn
Forecasted 5G SA core and
telco network cloud
infrastructure spend
between 2025 and 2028
1
343
Commercial 5G launches
out of 619 operators
investing in 5G
2
65
Commercial 5G SA
launches with another
87 operators currently
investing towards 5G
SA
3
Sources
1. Omdia (September 2024).
2. Global Mobile Suppliers Association (GSA) (November 2024).
3. GSA (November 2024).
4. Analysys Mason (November 2024).
>75,000
Private 5G/LTE networks by 2029
4
19
Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Customer Centricity
We are
focused on
three strategic
priorities
1,000+
customers served in 2024
What we achieved
In 2024, we strengthened our customer relationships
during a year marked by macroeconomic uncertainty
and acquisition related hesitancy. Our emphasis
on delivering outcomes and value resonated with
customers, allowing us to broaden our reach.
Significant achievements include:
• Expanding our market presence among existing
customers while successfully diversifying into
new segments.
• More wins in Financial Services that
highlight the effectiveness of our lab and test
automation solutions.
• Strategic growth in hyperscaler and enterprise
customer segments, demonstrating the broad
applicability of our offerings.
Priorities for 2025
• Continue driving our shift from selling product
features to delivering outcome-based solutions.
• Further diversify our customer base, reducing
cyclicality and enhancing resilience.
• Expand strategic partnerships to address
customers’ pressing challenges, such as
automation and efficiency goals.
• Build on landmark deals to secure additional
high-impact services opportunities.
To realise our ambition to be the
global leader and trusted partner
for innovative technology test and
assurance solutions, we are focused
on three strategic priorities, or pillars:
Customer Centricity
Our mindset of customer centricity enables us to take a
broader role on our customers’ behalf, solving their larger,
most pressing problems and adding more value.
Innovation for Growth
We must continue to relentlessly innovate and invest to stay
ahead on key, emerging technologies, and to maintain
market leadership.
Operational Excellence
Our focus on operational excellence and upholding our core
values is a key differentiator that enables our sustainable,
profitable growth.
Our achievements in 2024 reflect
our unwavering focus on delivering
value, driving innovation and
fostering operational excellence.
These pillars will guide us as
we maintain our leadership
in the technology test and
assurance space.
Eric Updyke
Chief Executive Officer
Our strategic priorities
20
Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Innovation for Growth Operational Excellence
What we achieved
Our commitment to innovation positioned us for
success in 2024. Key milestones included:
• Launching our AI High-Speed Ethernet platform,
the first of its kind, addressing critical data centre
and AI networking challenges.
• Introducing the PNT X platform, which solidified
our leadership in positioning, navigation and
timing (PNT) technologies across diverse sectors,
including government and LEO satellites.
• Maintaining leadership in Wi-Fi testing
with enhanced solutions for Wi-Fi 7 and
Test-as-a-Service offerings.
• Expanding our High-Speed Ethernet portfolio,
including recognition for our 800G solutions and
early adoption of 1.6 terabit testing capabilities.
Priorities for 2025
• Scale our service delivery capabilities and
increase software content in our solutions.
• Capitalise on opportunities in emerging markets
such as AI-driven data centres and private
5G networks.
• Maintain leadership in high-speed Ethernet
innovation and expand into new verticals.
• Deepen our investment in PNT technologies
for automotive and aerospace applications.
$99.0m
(2023 $102.4m)
costs in research and
development in 2024,
representing
21.5%
(2023 21.6%)
of revenue
What we achieved
We focused on ensuring operational resilience while
maintaining critical investments. Highlights include:
• Targeted cost-saving measures and real
estate optimisation, supporting both efficiency
and sustainability.
• Organisational alignment to improve
collaboration and streamline R&D oversight.
Priorities for 2025
• Continue to stay close to our customers and
provide the necessary support as they develop
and rollout their development plans.
• Continue to invest and launch new products.
• Safeguard our financial flexibility to navigate
ongoing macroeconomic challenges.
21
Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Key performance indicators
Book to bill
1
Ratio
104
Revenue
$ million
$460.2m
Adjusted operating profit
2
$ million
$46.2m
Adjusted operating margin
3
%
10.0%
Performance
in a difficult
environment
Spirent’s strategy focuses on medium to long-term growth
and therefore its achievement cannot be measured by just
looking at performance in 2024 compared to the prior year;
trends over a number of years must also be considered.
Executive Director remuneration is linked to certain financial,
strategic and operational key performance indicators (KPIs)
with further information available in the Report on Directors’
Remuneration on pages 83 to 108.
103
2120
103
101
111
22 23
522.4
607.5
474.3
576.0
2120 22 23
103.5
118.5
2120
129.5
45.2
22 23
19.8
2120
21.3
9.5
20.6
22 23
104
24
460.2
24
46.2
24
10.0
24
Reason for measurement
The ratio of orders booked
to revenue recognised is a
measure of the visibility of
future revenue at current
levels of activity and
provides an indication of the
underlying trend in Spirent’s
future revenue stream.
Reason for measurement
Spirent monitors growth in
revenue as this shows how
successful Spirent has been
in expanding its markets and
growing its customer base.
Reason for measurement
Adjusted operating profit
is the measure used
to evaluate the overall
performance of the Group
as well as each of the
operating segments.
Reason for measurement
Adjusted operating margin
is a measure of the Group’s
profitability. Spirent operates
in markets which have high
operating returns and strives
to achieve best-in-class
operating margin compared
with its peers.
Reason for measurement
Long-term growth in
adjusted basic EPS
is a fundamental
driver to increasing
shareholder value.
Reason for measurement
To maintain its competitive
position, Spirent must invest
at suitable levels to support
further organic growth
initiatives in line with the
strategic objectives, whilst
driving improved productivity
and effectiveness.
Reason for measurement
Spirent’s success is
dependent on its talented
employees and retaining
them is extremely important.
Voluntary employee turnover
compared to the industry
average is the measure used
to assess how well the Group
has performed.
Reason for measurement
Free cash flow is a measure
of the quality of Spirent’s
earnings. The aim is to
achieve a high conversion
of earnings into cash.
Performance
Order intake was
greater than revenue in the
year resulting in a book
to bill ratio of 104 as we
continue to win larger,
longer-term contracts that
improve revenue visibility
and build repeatable
business (2023 101).
Performance
3 per cent revenue
decrease in 2024, following
a 21.9 per cent decrease
in 2023. 5G is expected to
be a strong driver of future
business across our solution
portfolio in the mid term;
however, during the year,
customers delayed their
investments to manage
economic challenges.
Performance
Adjusted operating profit
increased to $46.2 million,
from $45.2 million in 2023,
as a result of improved
trading conditions,
particularly in the final
quarter of the year and
continued focus on
cost control.
Performance
The increase in adjusted
operating margin to
10.0 per cent, from 9.5
per cent in 2023, reflects
the improved trading
conditions, particularly in
the final quarter of the year
and continued focus on
cost control.
Performance
Spirent aims to achieve
growth in adjusted basic
EPS. Part of the Executive
Directors’ remuneration is
dependent on achieving EPS
targets. In 2024, adjusted
basic EPS remained
comparable to 2023.
Performance
In 2024, product
development costs of $99.0
million (2023 $102.4 million)
benefited from transferring
North American activities to
lower-cost regions.
Performance
Our 2024 voluntary
turnover rate of 5.3 per
cent remains well below
the global industry average
of 11.7 per cent.
Performance
Free cash flow in 2024 was
positive at $54.3 million.
Free cash flow conversion
for 2024 was 122 per
cent of adjusted earnings
(2023 54 per cent).
Relevance to strategy
The book to bill ratio is an
indicator of the underpin to
future revenue and whether
activity levels are rising or
slowing, and therefore how
effective we have been in the
execution of our strategy.
Relevance to strategy
Revenue demonstrates
the effectiveness of our
strategy: our success in
expanding our markets both
organically and through
acquisition; maintaining
technology leadership; and
our strong relationships with
our customers, all of which
ensure that we continue to
win and maintain business.
Relevance to strategy
Adjusted operating profit
indicates our financial
strength and our ability
to invest in the business to
support the growth agenda.
Relevance to strategy
Adjusted operating margin is
a measure of how successful
we are in our overall strategy
and demonstrates our ability
to improve profitability
through efficient operations
whilst being mindful of the
need to invest for the future.
Relevance to strategy
Adjusted basic earnings per
share is a measure of how
successful we are in our
strategy and ultimately how
Spirent increases value for
its shareholders.
Relevance to strategy
It is critical that Spirent’s
product development
investment keeps pace
with the speed of change
in technology, and that
it is directed at the right
key technology areas;
this enables us to expand
our markets and to
maintain our technology
leadership position.
Relevance to strategy
We cannot avoid the fact
that some of our employees
will move on but we can
avoid a skills shortage by
appropriately managing,
recognising and rewarding
our people. Voluntary
employee turnover is a
measure of how successful
Spirent is in its strategy of
retaining and investing in
its people.
Relevance to strategy
Having strong free cash
flow reflects Spirent’s ability
to generate funds for future
investment. It provides
financial strength and
flexibility and the ability to
pay sustainable dividends
to our shareholders.
STRATEGIC REPORT
22
Spirent Communications plc Annual Report 2024
Adjusted basic earnings
per share
4
(EPS)
Cents
7.75¢
Product development costs
as a percentage of revenue
%
21.5%
Voluntary employee turnover
%
5.3%
Free cash flow
5
$ million
$54.3m
7.75
24
21.5
24
5.3
24
54.3
24
Notes
1. Ratio of orders booked to
revenue recognised in the period.
2. Before acquired intangible
asset amortisation, share-based
payment and other adjusting
items amounting to $35.9 million
in total (2023 $26.8 million).
3. Adjusted operating profit as
a percentage of revenue in
the period.
4. Adjusted basic earnings
per share is based on
adjusted earnings as set
out in note 11 of Notes to
the full year consolidated
financial statements.
5. Cash flow generated from
operations, less tax and net
capital expenditure, after interest
paid and/or received, payment
of lease liabilities, finance
lease payments received and
excluding acquisition related
other adjusting items and
one-off contributions to the UK
pension scheme.
Items with notes 1 to 5 are
non-GAAP alternative performance
measures; see pages 195 and 196
for more detail.
Reason for measurement
The ratio of orders booked
to revenue recognised is a
measure of the visibility of
future revenue at current
levels of activity and
provides an indication of the
underlying trend in Spirent’s
future revenue stream.
Reason for measurement
Spirent monitors growth in
revenue as this shows how
successful Spirent has been
in expanding its markets and
growing its customer base.
Reason for measurement
Adjusted operating profit
is the measure used
to evaluate the overall
performance of the Group
as well as each of the
operating segments.
Reason for measurement
Adjusted operating margin
is a measure of the Group’s
profitability. Spirent operates
in markets which have high
operating returns and strives
to achieve best-in-class
operating margin compared
with its peers.
Reason for measurement
Long-term growth in
adjusted basic EPS
is a fundamental
driver to increasing
shareholder value.
Reason for measurement
To maintain its competitive
position, Spirent must invest
at suitable levels to support
further organic growth
initiatives in line with the
strategic objectives, whilst
driving improved productivity
and effectiveness.
Reason for measurement
Spirent’s success is
dependent on its talented
employees and retaining
them is extremely important.
Voluntary employee turnover
compared to the industry
average is the measure used
to assess how well the Group
has performed.
Reason for measurement
Free cash flow is a measure
of the quality of Spirent’s
earnings. The aim is to
achieve a high conversion
of earnings into cash.
Performance
Order intake was
greater than revenue in the
year resulting in a book
to bill ratio of 104 as we
continue to win larger,
longer-term contracts that
improve revenue visibility
and build repeatable
business (2023 101).
Performance
3 per cent revenue
decrease in 2024, following
a 21.9 per cent decrease
in 2023. 5G is expected to
be a strong driver of future
business across our solution
portfolio in the mid term;
however, during the year,
customers delayed their
investments to manage
economic challenges.
Performance
Adjusted operating profit
increased to $46.2 million,
from $45.2 million in 2023,
as a result of improved
trading conditions,
particularly in the final
quarter of the year and
continued focus on
cost control.
Performance
The increase in adjusted
operating margin to
10.0 per cent, from 9.5
per cent in 2023, reflects
the improved trading
conditions, particularly in
the final quarter of the year
and continued focus on
cost control.
Performance
Spirent aims to achieve
growth in adjusted basic
EPS. Part of the Executive
Directors’ remuneration is
dependent on achieving EPS
targets. In 2024, adjusted
basic EPS remained
comparable to 2023.
Performance
In 2024, product
development costs of $99.0
million (2023 $102.4 million)
benefited from transferring
North American activities to
lower-cost regions.
Performance
Our 2024 voluntary
turnover rate of 5.3 per
cent remains well below
the global industry average
of 11.7 per cent.
Performance
Free cash flow in 2024 was
positive at $54.3 million.
Free cash flow conversion
for 2024 was 122 per
cent of adjusted earnings
(2023 54 per cent).
Relevance to strategy
The book to bill ratio is an
indicator of the underpin to
future revenue and whether
activity levels are rising or
slowing, and therefore how
effective we have been in the
execution of our strategy.
Relevance to strategy
Revenue demonstrates
the effectiveness of our
strategy: our success in
expanding our markets both
organically and through
acquisition; maintaining
technology leadership; and
our strong relationships with
our customers, all of which
ensure that we continue to
win and maintain business.
Relevance to strategy
Adjusted operating profit
indicates our financial
strength and our ability
to invest in the business to
support the growth agenda.
Relevance to strategy
Adjusted operating margin is
a measure of how successful
we are in our overall strategy
and demonstrates our ability
to improve profitability
through efficient operations
whilst being mindful of the
need to invest for the future.
Relevance to strategy
Adjusted basic earnings per
share is a measure of how
successful we are in our
strategy and ultimately how
Spirent increases value for
its shareholders.
Relevance to strategy
It is critical that Spirent’s
product development
investment keeps pace
with the speed of change
in technology, and that
it is directed at the right
key technology areas;
this enables us to expand
our markets and to
maintain our technology
leadership position.
Relevance to strategy
We cannot avoid the fact
that some of our employees
will move on but we can
avoid a skills shortage by
appropriately managing,
recognising and rewarding
our people. Voluntary
employee turnover is a
measure of how successful
Spirent is in its strategy of
retaining and investing in
its people.
Relevance to strategy
Having strong free cash
flow reflects Spirent’s ability
to generate funds for future
investment. It provides
financial strength and
flexibility and the ability to
pay sustainable dividends
to our shareholders.
14.68
2120
18.86
7.55
16.59
22 23
19.7
2120
18.3
21.6
19.7
22 23
6.7
2120
10.1
5.6
7.2
22 23
102.6
2120
91.9
103.8
23.7
22 23
STRATEGIC REPORT
23
Spirent Communications plc Annual Report 2024
Stakeholder engagement
Considering
stakeholders
in key business
decisions
Directors are bound by their duties under the
Companies Act 2006 (the “2006 Act”), but the
principles underpinning Section 172 are not only
considered at Board level, they form part of
everything we do as a Company.
Supported by the Company Secretary & General
Counsel, the Board, management and all those
tasked with preparation of Board materials,
must give consideration to relevant stakeholders
in matters requiring decision making, including
strategic decisions.
The following pages comprise our Section
172(1) Statement and set out how the Board
has, in performing its duties over the course of
the year, had regard to the matters set out in
Section 172(1) (a) to (f) of the 2006 Act, giving
details of how each key stakeholder has been
engaged and considered, including examples
of how stakeholders were considered in key
Board decisions. Further information can also
be found throughout the Strategic Report.
Impact of Keysight offer
The offer announced by Keysight Technologies,
Inc. (“Keysight”) in March 2024, which was
approved by shareholders in May 2024, has
impacted our engagement approach across all
stakeholders, often restricting engagement with
shareholders on the regulatory review aspects
due to price sensitivity, whilst necessitating
additional communication streams to provide
employee and customer comfort.
For the first time, we also engaged the services
of a specialist external proxy voting agency to
ensure the correct messaging during the Court
and General Meeting voting process, which
ultimately brought about a successful conclusion
to that process, with over 98 per cent of votes cast
in favour of each resolution. However, changes
in the share register following the offer have also
made engagement on remuneration matters
more complex, as many of the shareholders who
voted against the Remuneration Policy and LTIP
arrangements at the 2024 AGM are no longer on
the share register.
No successful business
can operate in isolation.
Without a thorough
understanding of its key
stakeholders and their
differing perspectives,
a business will struggle
to deliver sustainable
long-term growth to
shareholders and
other stakeholders.
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Spirent Communications plc Annual Report 2024
Shareholders
Spirent is committed to engaging with
current and potential shareholders
through continued transparent and
effective communication, where it is
able to.
Topics covered
• Financial performance.
• Capital management and distribution.
• Long-term sustainability strategy.
• Corporate governance and stewardship.
• Executive remuneration, including share plans and
application of Remuneration Policy.
• Ensuring the correct messaging during the Court and
General Meeting voting process.
• Communicating the potential impact of the Keysight
offer and ongoing processes, including progress of the
regulatory reviews in UK, USA and China.
How we listen and engage
• Open door policy with investors: CEO and CFO regularly
meet investors virtually and, when possible, face-to-face.
• The Annual General Meeting (AGM) and related follow-up.
• Remuneration Committee Chair further consulting with
shareholders on application of the Group’s approved
Executive Director Remuneration Policy and share
plan changes.
• Enlisting a specialist external proxy voting agency to
ensure the correct messaging during the May 2024 Court
and General Meeting voting process, which ultimately led
to a successful voting outcome.
Current year highlights including Board decision
making and Section 172 considerations
• All resolutions successfully passed at 2024 AGM, following
extensive shareholder consultation on Remuneration
Policy and share plan changes.
• Directors fully available to answer shareholder questions
at the AGM.
• Reviewing payment of dividends, aligned to profitability
and cash flow, in the context of the Keysight offer.
• Broker updates to the Board on market sentiment, as well
as presentations to the Board on investor feedback and
share register analysis.
• Successful voting outcome of the May 2024 Court and
General Meeting voting process, with over 98 per cent of
votes cast in favour of each resolution.
• Further ongoing engagement with major shareholders on
application of approved Remuneration Policy and share
plan changes, including use of restricted shares, in 2025.
Employees
We are a people business and our
circa 1,500 colleagues around the
world are fundamental to the
long-term success of our Company.
Topics covered
• Reinforcing understanding of our mission, vision, values
and strategy.
• Ensuring employees understand what is expected of them
and know the role they play in our success.
• Spending quality time with line managers so that they
feel listened to and supported, enabling employees to
feel confident that they have the skills to do their job
well, while identifying potential training needs for their
future development.
• Making sure that employees feel part of a thriving
Spirent community.
• Communicating the potential impact of the Keysight offer
on employees and providing appropriate reassurance.
How we listen and engage
• Global and regional internal communication and
collaboration platforms to provide access to information
for all colleagues.
• Learning and knowledge sharing forums for our
technology and sales communities.
• Biannual colleague engagement surveys to monitor
developments in workforce sentiment.
• Engagement events with global and local management
representatives, including Non-executive Directors.
• In respect of the ongoing Keysight offer, additional town
halls and CEO videos.
Current year highlights including Board decision
making and Section 172 considerations
• Biannual employee surveys achieved consistently strong
response rates, indicating a highly engaged workforce,
with an average of 79 per cent of our total employee
population responding per survey, based on the feedback
received, both quantitatively and over 800 free text
comments per survey.
• Management Matters engagement programme to
support people managers within the business.
• Employee wellbeing programmes refreshed with
improved access to support, ranging from awareness
campaigns to mental health first aid training.
• Regular updates from the CEO on the Keysight offer
process and timeline, including via global town halls
and videos, with positive employee feedback.
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Spirent Communications plc Annual Report 2024
Stakeholder engagement continued
Customers
Providing solutions and services
to help our customers keep their
promises to their customers.
Topics covered
• Understanding the challenges our customers face.
• Developing solutions and services to help our customers
to manage the complexity of their devices, networks
and services.
• Working collaboratively with customers and their partners.
• Potential impact of the Keysight offer on current products
and services.
How we listen and engage
• Investment in an agile, collaborative organisation so that
we can be responsive to customer needs.
• Regular client updates and acting on their feedback.
• Extension of our thought leadership to stay ahead in key
technologies in sustainable growth areas.
• Client/customer calls or meetings to communicate the
potential impact of the Keysight offer.
Current year highlights including Board decision
making and Section 172 considerations
• Awards won at 2024 Lightwave Innovation Reviews (Lab/
Production Test Equipment and Field Test Equipment) and
2024 Interop Tokyo Best of Show (Testing Grand Prize,
Testing Special Prize and People’s Choice Prize). Named a
2024 IoT Evolution 5G Leadership Award winner.
• Acceleration of our digital-first marketing approach with
targeted always-on digital marketing campaigns to grow
interaction and drive demand.
• Continued expansion of our library of downloadable
resources with high-quality, targeted content to share
thought leadership and technological expertise.
• Extending geographical reach and customer
engagement through an ever-expanding social media
networking programme.
• Feedback from client/customer calls or meetings to
communicate the potential impact of the Keysight offer
reported to the Board.
Suppliers
Spirent engages with a number of
different suppliers across the business.
Topics covered
• Long-term trusted partnerships facilitating real
margin improvement.
• Strong working relationships.
• Collaboration.
• Fair contract and payment terms.
• Management of relationships through global supply
chain disruption.
• Potential impact of the Keysight offer on current supply chain.
How we listen and engage
• Active management and monitoring of key suppliers and
supply chain trends.
• Meetings held with key suppliers.
• Supplier surveys as an embedded part of the
procurement process.
• Supplier Code of Conduct assessments.
• Supplier calls or meetings to communicate the potential
impact of the Keysight offer.
Current year highlights including Board decision
making and Section 172 considerations
• Re-working of the supply chain audit programme.
• Feedback from supplier calls or meetings to communicate
the potential impact of the Keysight offer reported to
the Board.
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Spirent Communications plc Annual Report 2024
The world around us
Spirent has a diverse network
throughout the world around us
which is critical to the ongoing
success of the business, from
governments and regulators
to educational facilities and
our local communities.
Topics covered
• Being mindful of our environmental impact.
• Being a responsible corporate citizen.
• Supporting our local communities through
charitable giving.
• Being a trusted partner to customers around the world.
• Providing work experience and early career
development programmes.
• Engaging with global think tanks and trade associations
to understand research priorities or opportunities and
offer expertise to shape policy and industry positions.
• Participating in global thought leadership conferences
and roundtable events.
How we listen and engage
• Participation in environmental reporting surveys.
• Enhancement of reporting framework to ensure
compliance with Task Force on Climate-related Financial
Disclosures (TCFD) requirements.
• Apprenticeship, graduate and work experience
schemes to encourage a diverse pipeline of new and
developing talent.
Current year highlights, including Board decision
making and Section 172 considerations
• Continuing to expand our early career talent programme,
after launching a new internal network and an
engineering development programme.
• Ongoing flexible working to reduce real estate footprint
and carbon emissions, with reporting to and monitoring
by the Board.
STRATEGIC REPORT
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Spirent Communications plc Annual Report 2024
Transformative
Transitioning from lab to live
for network transformation
In response to a government mandate, a major UK telecommunications provider embarked
on a complex journey to replace vendor equipment throughout its core network and
modernise its network architecture, moving to a cloud-based environment.
The transition required extensive validation using Spirent’s Landslide core network test
solution in the lab and Spirent’s VisionWorks™ active assurance solution in the pre-production
environment before progressing to the production network. This phased service activation
approach enabled the operator to validate each network upgrade with real customer
loads in segregated parts of the network, ensuring it could handle 6 million subscribers per
migration iteration before reaching full-scale deployment to ultimately support 30+ million
subscribers on the upgraded network.
As this transformative journey continues, Spirent’s solutions have proven invaluable,
enabling the operator to achieve reliable, scalable 5G services across its network – an
exemplary model of lab to live network transformation and collaboration between vendor
and operator.
Spotlight:
Enable transition
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Spirent Communications plc Annual Report 2024
Overcoming network
challenges in AI data centres
Leading technology services provider World Wide Technology (WWT) offers clients
across industries its innovative Artificial Intelligence Proving Ground as a dynamic lab
environment to accelerate, secure and scale their AI journeys. To help IT teams evaluate and
test AI infrastructures in WWT’s one-of-a-kind lab environment, WWT recognised the need to
add Spirent’s industry-first high-density test solution capable of emulating realistic AI workloads
over Ethernet.
Ethernet is the backbone of the cloud and the ability to emulate realistic AI traffic workloads
and test their impact on AI data centre networks and interconnects is key. The pioneering
Spirent solution stood out for WWT because of its capacity to realistically emulate high-performance
AI processing unit traffic patterns using an enhanced form of Ethernet. This enables data centre
customers to validate their Ethernet infrastructure’s capability to support large AI workloads,
while avoiding the considerable challenges associated with deploying and managing
xPU-based server farms as testing frameworks.
Innovative
Spotlight:
Innovate for AI
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Spirent Communications plc Annual Report 2024
Our people and culture
An engaging
and inclusive
culture
Spirent takes pride in fostering a
supportive and inclusive environment
where employees can truly thrive,
recognising that our people are the
driving force behind our success.
comments per survey, we implemented several initiatives to
strengthen engagement and communication. These include:
• Launching the Bowthorpe Awards programme: A monthly
recognition initiative celebrating innovation across
the business.
• Facilitating leadership connections: Hosting a series
of executive site visits and in-person town hall meetings,
enabling leaders to engage directly with employees and
address their questions.
• Introducing the CEO Update video series: A new
communication channel providing timely updates on
our acquisition progress.
In addition, we celebrated our Positioning Technologies
business retaining its internationally recognised Investors
in People Platinum status for We Invest in People and
Gold status for We Invest in Wellbeing. These achievements
highlight our commitment to fostering a culture that
empowers and supports our employees through people-
focused practices and wellbeing initiatives, resulting in high
levels of engagement and satisfaction.
Diversity and inclusion strategy
2024 priorities
Equitable pay
Our focus on pay equity continues. We have fully embedded
pay parity analysis into our business-as-usual
compensation review.
Invest in leadership development
Our commitment to continuous learning is key to the
success of both our employees and our business. Through
well-structured learning and development programmes,
we offer a wide range of technology and commercial
training opportunities, ensuring our employees have the
tools they need to excel. In 2024, we took this commitment
a step further by introducing our Leadership Essentials
programme. Recognising the critical role leaders play in
shaping the employee experience at Spirent, this initiative
was designed to equip our first-time people managers
with the knowledge and skills to inspire and empower their
teams to succeed. We are proud of the managers from
around the globe who have completed the programme,
further strengthening leadership and fostering a culture
of growth and collaboration across our organisation.
Celebrating diversity, inclusivity, and giving back
In 2024, our Spirent Celebrates initiative continued to evolve,
showcasing the diversity of our global workforce. This year,
we honoured a variety of cultures, holidays, causes and
awareness days, including Golden Week, Pride, Diwali,
Great Union Day and International Volunteering Day.
Complementing these celebrations, our Charitable Giving
programmes – including Company Match, Volunteer Time
Off and Local Charity Support – enabled our employees to
create a meaningful contribution by supporting causes close
to their hearts and giving back to their local communities.
Additionally, our annual Step Challenge inspired employees
to collectively clock up over 60 million steps, raising $9,900
for charities of their choice.
The way we work
Our values are the cornerstone of our culture, guiding how
we collaborate and build relationships with both colleagues
and customers. We prioritise employee wellbeing while
fostering innovation, collaboration and knowledge sharing.
This balanced approach has enabled us to retain and
develop talent, at levels exceeding comparable industry
averages, as we navigate the ongoing Keysight acquisition
of Spirent.
Measuring our engagement
We are committed to prioritising what matters most to our
employees by cultivating psychological safety, encouraging
open and honest feedback and striving for continuous
improvement. Our biannual employee engagement survey
is a vital tool in this effort, and in 2024 we maintained
consistently high participation levels across the organisation
with an average of 79 per cent of our total employee
population responding per survey. Based on the feedback
we received, both quantitatively and over 800 free text
Our values
Join forces
Collaborate with customers, partners and
employees to drive success.
Find a better way
Create new possibilities and make change happen.
Play to win
Aim high and win responsibly.
Inspire, challenge and coach
Enable and empower our people.
Take ownership
Embrace responsibility and seek to deliver impact
wherever you go.
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Spirent Communications plc Annual Report 2024
Bringing our
culture to life
Our #LifeAtSpirent campaign shines a spotlight on
the exceptional talent within Spirent, offering external
audiences an authentic view of who we are, how
we work and what matters most to us. This initiative
emphasises our commitment to Spirent’s core values,
career development, diversity and inclusion, employee
benefits, sustainability and more. Complementing this,
our Get to Know employee spotlight series deepens
connections across our global teams, fostering a
stronger sense of community and collaboration.
Our culture in action:
empowering leadership
development
“ The course was highly interactive!
I came away with the knowledge,
skills, and renewed confidence
to successfully manage my team
and help each member flourish.”
Yang Hu – Senior Services
Delivery Manager
“ It was great to converse with my
peers from across the world. I
feel better equipped to provide
my team with constructive
feedback and help in setting
meaningful goals.”
Dorothy Litowinsky – Renewal &
Quotes, Manager (Americas)
“ The key takeaway for me
was delegation. The ability to
effectively empower others
will allow me to devote more
time to supporting and leading
my team.”
Francois Surinx – Regional
Sales Director
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Spirent Communications plc Annual Report 2024
Sustainability
D
e
l
i
v
e
r
a
s
u
s
t
a
i
n
a
b
l
e
f
u
t
u
r
e
O
p
e
r
a
t
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w
i
t
h
i
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g
r
i
t
y
About
FuturePositive
FuturePositive is our
sustainability programme.
Through this programme, we have embedded the highest
standards of environmental management, social practices
and corporate governance in our business and supply
chain and help our customers tackle important global
sustainability challenges.
Promote diversity
and invest in people
Our promise
We will take action on diversity and set clear expectations.
We will attract and develop talent and skills to drive
innovation and support long-term sustainable growth.
We will also enable and embed flexible working across
all our operations.
Vision
Our solutions will help deliver
on the promise of a sustainable
future for all.
We will operate with integrity,
respecting the environment and
people everywhere.
Promise of a
sustainable future
Our promise
We will showcase the environmental
benefits that our solutions deliver for
customers and embed sustainability
into our go-to-market strategy.
Net zero
carbon
Our promise
We will maintain
CarbonNeutral
®
Company
certification and work
towards net zero carbon
by 2035 through energy
efficiency, 100 per cent
renewable electricity and
carbon offsets.
Operate
responsibly
Our promise
We will maintain ISO
14001 certification at key
sites globally and work
towards sending zero
waste to landfill. We will
embed circular economy
principles in our product
design and reduce
sustainability impacts
in our supply chain.
Be accountable
and transparent
Our promise
We will expand our sustainability
governance structures and reporting, and
communicate regularly with staff on
FuturePositive targets and progress.
Our sustainability strategy is
focused on five key missions:
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Spirent Communications plc Annual Report 2024
STRATEGIC REPORT
Progress in 2024
Key achievements
• Net zero carbon: We maintained CarbonNeutral
®
Company certification for Scope 1 and 2 and
some Scope 3 emissions.
• Invest in people: We retained our Platinum
Investors in People accreditation for our
Positioning business.
• Leadership training: Extended our Leadership
Essentials training across the Company.
• Environmental management system: We
maintained our ISO 14001 certification.
• Supplier sustainability: We conducted more than
200 supplier ESG assessments, focused on our top
suppliers by spend and “Risk A” vendors (vendors
who supply mission-critical goods and services
for our products and customer solutions).
We look to create long-term value for our shareholders by:
• protecting our reputation and ability to grow;
• focusing on winning business from customers who
value strong environmental, social and governance
(ESG) performance;
• enhancing our efficiency;
• enabling our people to work productively in a safe and
inclusive environment;
• helping us to attract and retain diverse talent, and
encouraging employees to take pride in working for us; and
• reducing the risk of incidents and their associated costs.
Our material sustainability issues
During 2024 we updated our sustainability materiality
analysis. Using a risk-based approach, we analysed key
ESG trends as well as insights from peers and customers
to ensure our ESG programmes are focused on the most
important issues.
The review confirmed the relevance of material issues
identified in previous iterations, as well as identifying
three new topics: responsible technology (including AI),
biodiversity, as well as sustainable resource use and
sourcing, which is priority theme within our Operate
Responsibly programme.
The issue of flexible working has been incorporated into the
wider-ranging topic of health and wellbeing. The topics of
supply chain diversity, mineral sourcing, conflict minerals
and impact investing also increased in significance.
Climate change and net zero remain priority issues,
including the role our solutions can play in helping our
customers reduce their impacts. Diversity, equity and
inclusion, and staff health and wellbeing continue to be
important, along with responsible business practices,
sustainable product design, supply chain management
(including climate change and human and labour rights)
and information security and cybersecurity. Water use
is an emerging issue, especially in raw materials and
manufacturing in supply chains.
Vision
Our solutions will help deliver
on the promise of a sustainable
future for all.
We will operate with integrity,
respecting the environment
and people everywhere.
During 2024 we undertook
a wide-ranging ESG review
of our suppliers, assessing the
disclosures of more than 200
of our most important vendors
against nine priority categories.
Angus Iveson
Company Secretary & General Counsel
We manage our material sustainability impacts and
opportunities through our FuturePositive programme.
Our comprehensive programme not only ensures we
comply with legislation and stakeholder expectations but
has positive social and environmental impacts for customers
and for our own business.
The Board has designated the CEO as the Board member
responsible for ESG matters within the Group. We have
appointed Brite Green as an ESG adviser.
The Board is given updates on our sustainability
programme, FuturePositive, as needed through
presentations from the CEO, the Company Secretary, and
other senior managers responsible for key aspects of the
programme. The Audit Committee also receives frequent
updates on risk throughout the year, including cybersecurity.
Sustainability at Spirent
We are committed to embedding the highest standards of
environmental management, social practices and governance
into our operations and products and across our supply chain.
O
p
e
r
a
t
e
w
i
t
h
i
n
t
e
g
r
i
t
y
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Spirent Communications plc Annual Report 2024
Sustainability continued
Sustainability at Spirent continued
Policies
Spirent maintains a suite of responsible business policies
which commit the Group to compliance with high standards
of ethics and business integrity, environmental management
and employee and community welfare.
Deliver a sustainable future
We aim to showcase the environmental benefits that our
solutions deliver for customers and embed sustainability into
our go-to-market strategy.
This year we worked with customers across the project
lifecycle to help them improve their sustainability performance.
From working with equipment manufacturers to test and
validate new, more efficient components for 5G, to our work
with lab and network operators to automate and streamline
operations, Spirent is helping to drive the transition to a low
carbon economy.
You can read more in our Sustainability Report which is
available on our website at corporate.spirent.com.
Be net zero carbon
During 2024, we maintained our CarbonNeutral
®
Company
certification with Climate Impact Partners for our Scope 1
and 2 and some Scope 3 emissions sources, which include
electricity transmission and distribution, waste from building
operations, business travel and homeworking. We continue
to work towards achieving net zero carbon (i.e. all emission
sources in Scope 1, 2 and 3, for which we are responsible)
by 2035. In 2024 we continued to implement our net zero
carbon roadmap, which will deliver our short-term carbon
reduction targets through energy efficiency, office and
lab consolidation, 100 per cent renewable electricity and
contractual mechanisms.
We continued to source all our electricity from renewable
sources during 2024. This included on-site generation at our
Paignton site, low carbon electricity contracts at our Paignton
and Berlin sites, and the purchase of Energy Attribute
Certificates (EACs) for all remaining purchased electricity.
When purchasing EACs and carbon credits, we have
conducted due diligence to give us comfort as to their
quality and traceability. We have only selected those from
high-quality and reputable projects which are independently
verified to recognised global standards. We have worked with
Climate Impact Partners to source carbon credits in line with
our regional emissions and to purchase national EACs based
on our energy usage in each country we operate in. Full
details of the projects are set out in our Sustainability Report
which is available on our website at corporate.spirent.com.
Last year we announced our new Lab and Estates strategy.
We anticipate that this will deliver considerable energy
and carbon savings by migrating our on-premise labs to
a more efficient, low-carbon, colocation centre operated
by Lynnwood, a third-party. During 2024 we migrated
lab equipment from our San Jose lab and some from our
Calabasas site. We paused a number of other equipment
moves due to the acquisition process.
Energy use
Spirent is within scope of the Streamlined Energy and Carbon
Reporting (SECR) Regulations. Spirent’s total global energy
use decreased by 4.7 per cent in 2024 to 12,202MWh (2023
12,807MWh). This is due to the continued rationalisation of our
estate and transition of some labs to a third-party colocation
facility. Gas use decreased in the year by around 18 per cent to
330MWh (2023 402MWh) due to reductions in consumption at
our Calabasas site in the second half of the year. Total energy
usage in the UK during 2024 was 825MWh (2023 742MWh).
UK energy use comprises Gas: 85MWh, purchased electricity:
697MWh, onsite generation from renewables: 85MWh. Within
the UK, our energy intensity per m
2
was 252kWh/m
2
. This has
increased from 197kWh/m
2
in 2023 due to the closure of two
low energy-use administrative offices. UK energy use is 6.8 per
cent of our global total.
Greenhouse gas emissions
Spirent is committed to combating climate change
and reporting our progress. Our total Scope 1 and 2
(location-based) emissions decreased by 9 per cent from
2023, and our emissions per $ million of revenue reduced
by 6.3 per cent. We have reduced our total location-based
emissions by 43.7 per cent since our 2014 baseline. Carbon
emissions arising from our UK operations in 2024 were
160 tonnes CO
2
e (2023 142 tonnes CO
2
e). Emissions
from UK operations represent 4.2 per cent of the Group’s
total worldwide.
Due to our purchasing 100 per cent renewable electricity,
our market-based emissions are significantly lower
than our location-based total: 60.4 tonnes CO
2
e in
2024 (2023 58.5 tonnes CO
2
e).
The total Scope 3 emissions for the year is around 31,400
tonnes CO
2
e with the largest component of our Scope 3
footprint coming from customer use of our products. A full
breakdown by source is set out in our Sustainability Report
which is available on our website at corporate.spirent.com.
The Group responded to the Carbon Disclosure Project in
2024, completing the Climate Change and Supply Chain
questionnaires. In 2024, we maintained a climate change
rating of B (Management) (2023 B).
2024
Tonnes
CO
2
e
2023
Tonnes
CO
2
e
Emissions from:
Combustion of fuel and operation
of facilities (Scope 1)
60.4 73.6
Electricity, heat, steam and
cooling purchased for own use
(Scope 2)
3,755.3 4,118.8
Total emissions (Scope 1 and 2) 3,815.7 4,192.4
Scope 3 31,426 28,426
Total emissions (Scope 1, 2 and 3) 35,242 32,618
Emissions intensity metrics:
Normalised per FTE employee 2.56 2.53
Normalised per square metre of
gross internal area of our facilities
0.117 0.121
Normalised per $ million
of revenues
8.29 8.84
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Spirent Communications plc Annual Report 2024
Methodology
Reporting on emission sources is required under the
Companies Act 2006 (Strategic Report and Directors’
Report) Regulations 2013 and these sources fall within our
consolidated financial statements. We have reported on all
the emission sources that the Group is responsible for and
which fall within our consolidated financial statements.
We do not have any responsibility for any emission
sources that are not included in our consolidated financial
statements. We report our emissions using the location-based
methodology. We have used the GHG Protocol Corporate
Accounting and Reporting Standard (Revised Edition), along
with data gathered to fulfil our requirements under these
regulations, and the most recent emission factors available:
UK Government GHG Conversion Factors for Company
Reporting 2024 for the UK, US EPA 2024 eGrid emissions
factors for the applicable individual states in the US, and the
latest emissions factors for all other countries were sourced
from the International Energy Agency’s 2024 data set.
Performance against targets
The Group has set a target to reduce energy use by 25 per
cent from 2019 levels by the end of 2025. In 2024 our energy
use was 4.7 per cent lower than the previous year and 15.6
per cent lower than our 2019 baseline. Our energy reduction
initiatives have been impacted by the Keysight acquisition as
we have slowed the pace of transition of our labs to 100 per
cent renewable energy data centre.
As part of our target to achieve net zero by 2035, we have
also set an interim target to reduce carbon emissions across
Scope 1, 2 and 3 by 15 per cent from a 2022 baseline. We
have reduced emissions by 29 per cent and are on track to
meet this.
Energy Savings Opportunity Scheme (ESOS)
Spirent qualifies for ESOS. We completed an ESOS
compliant energy audit for Phase 3 and submitted the
relevant disclosure to the Environment Agency. Anticipating
the completion of the Company’s acquisition in 2025,
we submitted a nil return for the new energy action plan
requirement as future energy reduction initiatives will take
place within Keysight’s carbon reduction strategy.
Task Force on Climate-related
Financial Disclosures (TCFD)
Climate change creates new risks and opportunities for
companies. In accordance with the requirements of Listing
Rule 9.8.6R, Spirent has provided disclosures against all 11
disclosure recommendations that span four key areas of
governance, strategy and climate change scenario analysis,
risk management, and metrics and targets. These disclosures
also meet the mandatory CFD requirements and form part of
the NFSI statement.
Governance and risk management
The Board considers sustainability issues (including climate
change) and oversees the consideration of climate-related
risks and opportunities under the TCFD disclosure requirements,
as well as monitoring progress against our FuturePositive
sustainability strategy, including climate-related goals
and targets.
A detailed review of how climate change may impact
our business in the future was completed in 2021 and the
assumptions and findings were reviewed in 2024, with only
minor changes being made. There have been no significant
changes in our operations or assumptions since 2022 and we
believe that this analysis still adequately reflects our position.
The significant climate-related risks and opportunities were
initially identified via an analysis conducted by a sustainability
consultant which considered physical, regulatory and
commercial factors across various scenarios, all of which were
examined through a senior manager workshop, including
Executive Directors, General Managers of our business units
and supply chain, and Operational Executives. These are
reviewed on an ongoing basis by the Executive Director-led
ESG Management Committee, the Audit Committee and
its Risk Sub-Committee, as part of our business risk and
financial planning processes, with the CEO having overall
responsibility for sustainability matters. The materiality of
the potential climate impact is assessed using the Group’s
materiality criteria.
Over the course of 2024, a small number of customers have
engaged with us on the importance of climate change, and
we have incorporated their expectations into our materiality,
strategy and reporting planning.
Strategy
Spirent recognises the importance of climate change as an
environmental threat that the world faces, and as such we
have carefully considered the impact of such risk across our
operations. Climate risks are entirely integrated into our risk
management process.
We have identified the following risks across a variety of
time horizons. The risks consider the potential for increased
exposure to extreme weather events at a Group location
or key supply chain site. In addition, likely changes to
the regulatory system in which the Group operates have
been considered.
For the purpose of evaluating climate change-related risks,
the Group has defined the following time horizons, which also
ensure that other timeframes, such as business planning and
viability, are aligned:
Short term Medium term Long term
0–2 years 2–10 years 10+ years
In consideration to Tables A1.1 and A1.2 of the TCFD
Implementation Guidance 2021, we have considered all
climate-related risk themes and their potential impact on
the Group, the most important of which are as follows:
Transitional risks
It is expected that there will likely be a large and radical
change in global markets, with a drive to shift quickly towards
renewables and away from fossil fuels, resulting in increased
carbon taxes across all regions in the short and medium
term. This may result in associated increased costs. Starting
in the short term, costs are likely to increase by an immaterial
amount due to higher investment requirements in low carbon
technology and expected additional carbon-related levies
and we also expect additional administrative burden on the
business, likely increasing the costs for resource to deliver
and report.
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Spirent Communications plc Annual Report 2024
Sustainability continued
Task Force on Climate-related
Financial Disclosures (TCFD) continued
Transitional risks continued
We have modelled the impact of carbon credits using a price
per tonne CO
2
e of up to £250 and the impact is not material.
Transitional risks are also unlikely to lead to any impairments
or write-offs. We expect to purchase carbon credits in the
short to medium term in line with our commitment to achieve
CarbonNeutral
®
Company certification, but expect energy
efficiency and renewable energy to reduce the requirement
for carbon credits as we progress towards net zero carbon
in 2035. We have reviewed these modelling assumptions
(including the price of carbon credits) during this year and
believe they remain appropriate.
In addition, we have agreed a programme to reduce
our indirect carbon emissions. A key area is the use of our
products and we will draw on a range of approaches to help
reduce our impact in this area. These include our continued
migration from hardware to software test solutions and the
use of more efficient white-box hardware, improved energy
management in our bespoke hardware, supporting customers
with test automation and scheduling, and improved data
about how our products are used.
We also work closely with our supply chain, and set requirements
to reduce and report carbon emissions through supplier
sustainability agreements. During 2024, we have assessed
the carbon emissions data and climate change management
of more than 200 key suppliers, and have scored each supplier
based on the completeness and maturity of their ESG disclosures.
During 2025 we will engage with these suppliers to seek
further information and encourage action towards alignment
with our net zero target.
Physical risks
Acute
Considering the potential of increasing intensity and frequency
of storms and concentrated rainfall events, and frequency of
wildfires, we have assessed that these risks would possibly
cause some disruption to operations. Wildfire risks are most
relevant to our operations in Calabasas, CA, (which have been
indirectly affected by the recent wildfires) and flooding in our
principal contract manufacturer, based in Thailand.
In the medium to long term, risks include Spirent site damage
to building and infrastructure, lost time and productivity and
any associated increased cost of insurance.
Additionally, a major supplier disruption event is a possible
key risk, causing an outage for a period of time which we
assess as causing possible delays to customer shipments
and the timing of revenue recognition.
Spirent has mitigation plans for each of these physical
risks identified, which have been developed as part of
longstanding business continuity and disaster recovery plans.
Spirent engineering centres are situated in various different
locations allowing a level of flexibility and agility should
one site become affected. We endeavour to dual source
key components wherever possible. Additionally, the Group
has appropriate business interruption insurance in place.
Chronic
Higher peak and average temperatures are likely to result
in increased energy demand and cooling capacity required
for lab and office environments. This could lead to increased
capital expenditure to expand or upgrade cooling equipment
across multiple Spirent sites in the medium-term. In addition,
increased heatwaves and droughts could have an impact in
the short- to medium-term on the health of more vulnerable
employees and their families, possibly resulting in higher staff
absence levels.
It is possible that the rise in average temperatures may
reduce natural gas use for space heating. Additionally, there is
already a market opportunity for existing products, relating to
the provision of emerging energy-efficient Spirent products.
We have identified a number of areas of opportunity in the short-
term to reduce the energy footprint of our solutions in order to
support competitive advantage as well as opportunities to
reduce costs and improve efficiencies, especially from estates
consolidation and automation within our labs. We also expect
that a greater focus on climate change will increase our
resilience from climate-related weather events, both within
our estate and across our supply chain, through resilience
planning and upgraded infrastructure as well as enhanced
preparedness and response procedures.
We also recognise our role in supporting clients to develop new
technology. We recognise that there may be opportunities
for new use cases for our existing test solutions to support
climate mitigation, in particular in the area of lab automation
and consolidation.
The Group is still exploring the opportunities that climate
change presents and therefore they have not been
incorporated into the modelling.
Scenario analysis
This was last reviewed in 2024 as part of the sustainability
materiality review, with only minor adjustments made.
The scenarios are aligned to the IPCC representation
concentration pathway (RPC) models. Given the period of
time we anticipate any impacts occurring, we do not believe
these scenarios have materially changed, although the United
States recent withdrawal from the Paris Climate Accord may
delay the adoption of low carbon technologies and policies,
as well as increase the likelihood of physical climate impacts.
We have defined modelling assumptions for both scenarios
for each relevant risk category in order to assess the financial
and commercial impact to the Group. The impact of each of
the risks identified above has been assessed, quantified and
considered in two climate change-related scenarios:
• aggressive mitigation – emissions halved by 2050, average
temperature increase of 1.5°C; and
• strong mitigation – emissions stabilised at half of today’s
emissions by 2080, average temperature increase of 2.4°C.
These scenarios were selected as they would include the
most aggressive policy responses (which are likely to have the
greatest impact on our business in the next three to five years)
and because we believe that aiming to limit climate change
to 1.5°C still remains the right policy objective.
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Spirent Communications plc Annual Report 2024
In terms of modelling horizon, we have considered the
impacts over the short, medium and long term, and with
regard to the occurrence of the risks identified and also in
comparing with the horizons adopted by peers, the most
appropriate time horizon to model is 15 years, which covers
short- to long-term). The most recent strategic three-year
plans have been extrapolated to form the base case
long-term plans from which to sensitise, using growth rates
and assumptions consistent with other forward-looking
financial statement items (goodwill impairment, viability)
and assumptions.
Given the modelling horizon, there is not likely to be a
significant difference between the two scenarios in relation to
our exposure to physical risks – a change of 1.5°C is expected
by 2030 under all scenarios, with the same likelihood and
distribution of extreme weather events and chronic changes
in weather patterns and temperatures. The major differences
appear between 2040 and 2080, which falls outside of the
scope of our long-term plans and provides sufficient time for
the business to adapt if required. In terms of transitional risk,
we do expect a difference between the two scenarios, most
notably in the size of increases to energy costs and the size of
anticipated carbon tariffs across all regions.
Based on the modelling we have performed and given
the significant financial headroom Spirent has, the relative
magnitude of the impact the risks present, the mitigation
plans, and the insurance cover in place, it is not anticipated
that the climate-related risks identified will have a material
impact in the short term, being less than 5 per cent of
revenue. The longer-term impact on the organisation’s
strategy and plans is currently being further assessed
but initial analysis does not suggest a significant financial
impact. Therefore, Spirent is considered resilient to climate
change-related scenarios.
Opportunities
As part of the scenario process, a number of opportunities
have been identified:
• reduction in costs and efficiency, especially in relation to
office estate and automation in labs;
• improved resilience from physical and transitionary risks;
• additional testing opportunities to support the development
of new technologies to mitigate and adapt to a changing
climate; and
• expanding demand for test solutions that help
reduce customer emissions, including lab automation
and efficiency.
Metrics and targets
We monitor carbon emissions sources that fall within Scope 1,
2 and 3 and report our carbon emissions annually within the
Annual Report and Sustainability Report (see page 34). We
have considered cross-industry climate-related metrics and
do not consider these to be material. The Executive Directors’
2024 performance share awards also include relevant
climate-related metrics and targets.
We have set clear targets to source electricity from 100 per
cent renewable sources, and work towards net zero carbon
by 2035. We have targeted a 25 per cent reduction in our
energy usage by 2025.
We have set a science-based target which commits us to a
short-term emissions reduction target of 15 per cent by the
end of 2025 and a medium-term target of 39 per cent by
2030. We will continue to evaluate whether additional metrics
and targets are required as part of our existing business
strategy and risk management processes, in particular
in relation to supply chain risks, as we further refine our
longer-term strategy and plans.
During the year, we have not identified any additional targets
and metrics to monitor.
Promote diversity and invest in people
We aim to take action on diversity. We will attract and develop
talent and skills, and support long-term sustainable growth.
Despite the initiatives and progress detailed below, due to
workforce reductions and limited hiring across the Group, our
diversity metrics remained flat compared to 2023.
Diversity in talent acquisition
We have a mature platform to support diversity in talent
acquisition which includes family-friendly benefits, and
support early career development and leadership. We
continued our partnerships with Historically Black Colleges
and Universities (HBCUs), Morgan State University and Prairie
View A&M University. In light of the acquisition process we
have undertaken very limited hiring.
Early career development
Spirent’s early career programme offers a structured
pathway into a career in technology through internships,
apprenticeships and university sponsorships. Our early
career pathway incorporates resources, tools and training
for managers and early career staff to help young, talented
people start a career in technology.
We operate research partnerships with universities across
the world through our Academia programme, and support
undergrad, post-grad and post-doctorate students in
their research.
Equality and diversity
The Group employs a diverse workforce and prides itself on
providing equal opportunities for all. High value is placed
on rewarding our people for their commitment, integrity
and service. Our commitment to being a fair and inclusive
workplace is governed by our Business Ethics and HR Policies
which ensure that no one is discriminated against, directly or
indirectly, on the grounds of colour, race, ethnic and national
origins, sexual orientation or gender, marital status, disability,
religion or belief, being a part-time employee, or age.
More detail can be found in our Sustainability Report
available on our website at corporate.spirent.com.
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Spirent Communications plc Annual Report 2024
Sustainability continued
Promote diversity and invest in people continued
Equality and diversity continued
At 31 December 2024, our gender diversity was:
Level of organisation
Female
Male
Other or no gender reported
Total
Board 3 38% 5 62% — — 8
Executive management
1
4 40% 6 60% — — 10
Senior management
2
6 9% 59 91% — — 65
Total employees 344 23% 1,146 77% — — 1,490
Notes
1. The data for executive management includes the CFO and direct reports to the CEO only, excluding executive assistants.
2. The data for senior management includes all other Vice Presidents (including Regional Sales VPs and Client Partner Executives) and Senior Directors.
The Board is committed to increasing the representation of women on boards and in other leadership roles. This work will
continue with a focus on developing diversity of all types in executive and senior management roles and throughout the
talent pipeline.
We aim to support our
employees to progress
personally and professionally
by investing in career
development, diversity and
inclusion initiatives, and health
and wellness programmes.
Ann Menard
Global Head of Human Resources
Gender pay gap
Having fewer than 250 employees in the UK, Spirent is
not currently required to comply with the Gender Pay Gap
Reporting Regulations introduced in 2017. However, data
for the 5 April 2024 snapshot date has been collected on
a voluntary basis and is set out in our Sustainability Report.
Business ethics and human rights
Spirent’s values and principles are set out in the Group’s
Business Ethics Policy. These principles apply to all dealings
with our customers, suppliers and other stakeholders, and
are considered in pre-contract due diligence and monitored
through ongoing supplier audits.
The Group has a zero-tolerance approach to all forms of
bribery and corruption. As a UK-registered Company, Spirent
Communications plc is bound by the laws of the UK, including
the Bribery Act 2010, in respect of its conduct both at home
and abroad. In addition, we will uphold all laws relevant to
countering bribery and corruption, including the US Foreign
Corrupt Practices Act, as well as human rights protection,
in all jurisdictions in which we operate.
Regular anti-bribery training is required to be taken by
certain employees.
Health and safety
The Board has designated the CFO as the Board member
responsible for health and safety within the Group and
procedures are in place for incidents to be reported through
the Audit Committee to the Board as necessary.
The health and safety risk profile for the Group remained
low during 2024, with no reported accidents (2023 nil). There
were no reportable accidents under the RIDDOR or required
hospitalisations during the year.
Training and skills
Spirent provides all its employees with a wide range of
technical and business training opportunities. We manage
training through personal development plans which are
assessed by all managers and updated periodically. During
2024, we rolled out training globally on the use of artificial
intelligence through a network of AI champions.
STEM initiatives and community impact projects
Spirent actively encourages its employees to become
STEM (science, technology, engineering and mathematics)
Ambassadors around the globe.
We provide all our employees with volunteering time off to
make a positive contribution to the communities in which
they work.
Through financial donations and volunteering, Spirent has
continued to support community projects worldwide.
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Spirent Communications plc Annual Report 2024
Operate responsibly
We operate with integrity. Over the last few years we have
worked towards implementing ISO 14001 management
system practices globally and achieving zero waste to landfill.
We have achieved ISO 14001 certification at 13 of our major
sites in EMEA and the US. We have incorporated circular
economy principles in our product design and reduced the
sustainability impacts of our supply chain.
In 2024, we published an eco-profile (a detailed disclosure
of the environmental performance of the product) for the
PNT X, a new product from our Positioning business. We also
completed more than 200 supplier sustainability assessments
for our most important vendors.
Vendor assessment and auditing
Vendors are required to abide by our Code of Conduct which
sets out our expectations for environmental management,
labour and human rights, health and safety, and business
ethics. They are assessed using a detailed questionnaire.
During 2024 we developed a new supplier ESG assessment
framework, which uses information from vendors’ public
disclosures to score their maturity across nine categories,
including commitment to sustainability, policies, modern
slavery and human trafficking, carbon emissions and
climate change, compliance, reputation and legal standing,
management systems and certifications, responsible material
sourcing, and responsible supply chain management.
We assessed more than 200 of our key suppliers and
“Risk A” vendors across the year. During 2025 we will
engage with these suppliers to obtain more information
and encourage them to more closely align their efforts
with our ESG objectives. More details can be found in our
Sustainability Report which is available on our website at
corporate.spirent.com.
Modern slavery and human trafficking
We comply with the requirements of the UK Modern Slavery
Act 2015 and the California Transparency in Supply Chains
Act 2010. We require slavery and human trafficking to be
eradicated from our direct supply chain for the products
we sell, and we monitor suppliers by performing regular
evaluation surveys to assure ourselves of each supplier’s
commitment in this area.
Spirent’s full Statement on Modern Slavery and Human
Trafficking can be found on the Company’s website at
corporate.spirent.com.
Electronic waste and use of hazardous materials
Spirent’s business units comply with the EU’s Waste Electrical
and Electronic Equipment Regulations 2013, the EU’s
Restriction of Hazardous Substances (RoHS) Directive,
the Battery Directive and the California Electronic Waste
Recycling Programme.
Conflict minerals
The Group is not directly required to comply with or report
under Section 1502 of the Dodd-Frank Act or the US Conflict
Minerals Law. However, it has robust procedures in place
to ensure that it would be in compliance if it were brought
within the scope of this legislation. The Group is subject to the
EU’s Directive on Conflict Minerals; we are monitoring the
development of the legislation and are confident our existing
practices meet the specifications required.
Information security
Spirent takes data security and privacy seriously. We
continually review the security of our data systems and
procedures in order to comply with all legislation and so we
can react to areas of heightened risk promptly and effectively.
We operate robust information security procedures and
our Applications & Security business (based at Plano and
Santa Clara) and our Positioning Technologies business
(based in Paignton) operate ISO 27001 certified information
management systems.
Our procedures restrict the type and quantity of confidential
information collected and stored and there are robust
procedures in place to protect customer data from
unauthorised access and disclosure.
Periodic information security risk assessments are performed,
and training is provided to staff with the aim of preventing
information security breaches. We have a whistleblowing
procedure in place for staff to report information security
or any other concerns.
Spirent has implemented a response procedure to manage
breaches of confidential information if they were to occur.
Confidential waste is shredded if in hard copy and certificates
of destruction are provided for electronic storage devices
disposed of at end of life.
Be accountable and transparent
We aim to communicate regularly with staff on our
FuturePositive strategy and the progress made.
The Board and Audit Committee oversaw our climate change
and sustainability programme.
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Spirent Communications plc Annual Report 2024
Note
1. Before other adjusting items of $1.2 million charged in 2024 (2023 $6.1 million). See note 3.
Operating review
Revenue
$181.0m
(2023 $199.1m)
Adjusted operating profit
1
$14.6m
(2023 $16.9m)
Lifecycle Service
Assurance
Our Lifecycle Service Assurance
portfolio boasts the industry’s
most comprehensive set of
end‑to‑end solutions aimed
at accelerating customers’
initiatives as they develop, deploy
and optimise new devices,
technologies and services. From
lab environment transformations
to pre‑production and live
networks, we dramatically
reduce the time, costs and risks
associated with bringing new
technologies such as 5G
Standalone (SA) and Wi‑Fi 7 to
market.
2024 performance highlights
• Important strategic wins with enterprise
customers, including Financial Services,
demonstrating greater diversity in our customer
base that will mitigate risks associated with
cyclical incumbency and drive future growth.
• Despite continuing 5G SA delays towards
commercial deployments during 2024, our
industry‑leading Landslide 5G Core test solution,
which is pivotal for 5G SA and 5G Advanced, was
selected by over 50 customers including Tier‑1
operators, hyperscalers and equipment vendors.
• Large multi‑year order growth at customers
where we have an incumbency.
• Good order growth in Europe with Tier‑1 telecom
service providers for lab and test automation.
• As a result of the ongoing challenging telecom
market in 2024, trading performance was
reduced compared to 2023. We did however
see order pipeline momentum in the latter part
of the year.
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40
Spirent Communications plc Annual Report 2024
FWA benchmarking
Validating fixed wireless access
performance nationwide
Challenge:
A leading US telecom operator is expanding its fixed
wireless access (FWA) services, aiming to deliver high‑
speed 5G internet directly to the homes of subscribers
across the country. With data rates and performance
important in attracting and retaining customers, the
operator was determined to ensure its offerings met
advertised data rates and performance levels.
Solution:
The operator partnered with Spirent to conduct
comprehensive tests across several major cities,
measuring data, video and gaming performance. The
study provided a side‑by‑side comparison with other
operators, highlighting the effects of mobility, peak
usage times and varied spectrum strategies on FWA
reliability. Equipped with Spirent’s granular field‑testing
data, the operator was able to validate that its services
met market expectations, while also pinpointing
opportunities for optimisation and adjustments that
could further enhance user experience.
Impact:
This comprehensive test data is offering invaluable
insights beyond high‑level crowdsourced statistics,
with specific metrics on 5G link performance directly
relevant to the operator’s network. Empowered by
the unique value of the results, the operator plans
to expand this testing initiative to additional cities
during 2025.
Strategy
Our Lifecycle Service Assurance strategy is: 1) deliver
a leading active assurance platform for 5G and next‑
generation service delivery and user experience assurance;
2) help service providers and enterprises automate critical
lab environments and test activities, as the industry moves
towards an always‑on continuous test environment; and
3) leverage our product offerings, together with our unique
test and assurance expertise, to deliver a new portfolio of
outcome‑driven service offerings. Three key attributes set
Spirent apart in the Lifecycle Service Assurance market:
Automation
Automation continues to become a growing priority across
both the telecom ecosystem and enterprises, with the
objective of improving agility and operational efficiency.
Legacy labs, testing and service assurance activities have
been mostly siloed, manual, reactive and time consuming.
As continuous integration and continuous delivery (CI/CD)
principles become mainstream, automated testing and
assurance are becoming essential to support the CI/CD
model across all layers. Automation enables use cases such
as lab transformation, new service activation, continuous
monitoring and automated troubleshooting to be seamlessly
integrated with network management systems, with a goal
of establishing fully autonomous operations. Spirent is at the
forefront of this journey.
Coverage
Spirent is the only vendor to offer both lab and live solutions
as both a contiguous and continuous test offering. With the
broadest coverage in the industry, from the user device
into the radio access network, across the cloud and mobile
backhaul, and into the mobile core, our solutions provide the
broadest end‑to‑end visibility in the industry. The breadth and
depth of our expertise and our portfolio enables us to quickly
address net‑new opportunities including direct‑to‑device
communications from non‑terrestrial networks and
next‑generation access networks.
Analytics
Spirent continues to advance our machine learning (ML)
and artificial intelligence (AI) based analysis providing
actionable insights that allow our customers to detect,
isolate and eliminate potential service interruptions or
degradations before subscribers are impacted. This in turn
allows rapid reduction in mean time to repair by alleviating
the unnecessary escalations typically found in traditional
operational support models.
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Spirent Communications plc Annual Report 2024
What we test and assure
Our Lifecycle Service Assurance offerings support the full
lifecycle for any new technology rollout. From pre‑production
test and validation to post‑production troubleshooting, to
transforming labs and processes into agile continuous test
environments through automation, we help our customers
maximise the monetisation of any new technology and reduce
costs. The following key areas were instrumental in growing
pipeline and offer continued expansion opportunities into
2025 and beyond:
Enterprise and telecom lab
transformation (automation)
Enterprises and telecom providers are prioritising
digitisation programmes aimed at improving efficiency,
reducing costs and meeting regulatory requirements.
The automation of lab environments, testing, lifecycle
management activities and network operations is at the
heart of these programmes. Spirent’s lab and test automation
solutions enable customers to consolidate and transform
physical labs into web accessible resources for remote,
automated testing. In 2024 we won multiple lab automation
deals with enterprise and telecom providers, creating
a platform to upsell a broader array of our test solutions
including security and cloud‑native resilience.
Operating review continued
5G core
For both standalone and non‑standalone flavours of
5G, Spirent provides continuous testing capability across
the entire lifecycle for any initiative. Beginning with the
network equipment manufacturer, through service provider
deployments and enterprise service consumption, our 5G
offering bridges the gaps traditionally found between the
develop, deploy and operate phases of a new technology.
Focus areas include 3GPP network function testing,
interoperability, performance and security testing. In 2024 we
enhanced our 5G core solution with support for cloud‑native
resilience testing to support service providers to safely operate
their 5G networks on private or public cloud infrastructure.
Wi-Fi
Following the acquisition of octoScope in 2021, Spirent is the
market leader in Wi‑Fi test and certification. With the adoption
of Wi‑Fi 6E in full swing and Wi‑Fi 7 released in 2024,
Spirent enhanced its early support for Wi‑Fi 7 testing during
2024 to provide automated testbeds specifically designed
to comprehensively test access points, devices and mesh
systems, revolutionising testing for a range of devices, from
phones and virtual reality goggles to refrigerators and drones.
Lifecycle Service Assurance continued
Cloud‑native
network testing
Ensuring network resilience
in critical situations
Challenge:
Preparing for 5G nationwide rollout, a leading Turkish
telecommunications and digital services provider
needed to ensure robust emergency connectivity
for a region prone to earthquakes, where natural
disasters can overwhelm networks with simultaneous
calls. Serving over 40 million subscribers, the operator
wanted to enhance its core network’s resilience to
support critical communication during seismic events.
Solution:
Partnering with Spirent, the provider deployed the
Landslide solution to simulate peak emergency traffic,
enabling it to test core network performance under
controlled, disaster‑like conditions. By replicating high‑
stress scenarios, the operator can verify its network’s
ability to handle sudden surges in demand, supporting
essential communication without interruption.
Impact:
With this capability, the operator can assure subscribers
that emergency calls will reach loved ones or services
when needed most. Typically, testing is only performed
in a lab environment, but with Landslide’s capabilities,
the service provider obtained government and
regulatory approval to perform testing on the live
network during scheduled maintenance windows,
elevating preparedness standards.
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Spirent Communications plc Annual Report 2024
Performance
Lifecycle Service Assurance revenue was $181.0 million and
was impacted during the first half of the year by continuing
macroeconomic challenges, which saw our telecom
customers enforce strict cost discipline and delay spending,
especially towards 5G. In the fourth quarter we saw positive
signs that spending is beginning to return in our major
addressable markets.
The impact was primarily felt on our wireless (5G radio)
test portfolio as service providers delayed 5G coverage
expansions, but we saw positive momentum around our
mobility (5G core) solutions as leading operators prepare
for their 5G SA upgrades, including several large multi‑
year orders.
We saw strong progress in our lab and test automation
portfolio as we continued to expand capabilities, allowing
us to move into adjacent enterprise markets, with multiple
new orders from Financial Services organisations
demonstrating the broader applicability and market
opportunity of our portfolio.
Accomplishments
Our lab to live portfolio for 5G SA core networks continued
to expand, with the addition of cloud‑native function (CNF)
resilience testing to our market‑leading Spirent Landslide
solution to continuously test the impact of CNF performance
on the delivery of 5G SA services, allowing service providers
to safely operate their 5G networks on private or public
cloud infrastructure.
We continued to grow our automated lab to live footprint
through multiple orders with Tier‑1 service providers
in Europe and North America, to support them on their
transition and ongoing lifecycle management of 5G SA
including 5G core, security and CNF resilience testing, lab
transformation and continuous delivery integration.
We continued to advance our diversification strategy
towards enterprises and specifically Financial Services,
with multiple new orders for our market‑leading lab
transformation and automation portfolio to support their
digital transformation programmes and time‑critical
regulatory compliance requirements.
Spirent’s industry‑leading automated modular test
platform for Wi‑Fi devices, Octobox™ added significant
enhancements for Wi‑Fi 7 testing including the world’s first
pre‑configured automated testbed, designed specifically
to accelerate testing, validating and optimising the
performance of consumer endpoint devices connected to
Wi‑Fi 7, which revolutionises the testing for a large range
of devices, from phones and virtual reality goggles to
refrigerators and drones.
Our diversification strategy is
continuing to rapidly advance
and deliver results, and in 2024
we secured multiple new wins for
Financial Services automation
and test, representing important
progress as we develop a growing
pipeline and reputation in
this segment.
Doug Roberts
General Manager, Lifecycle Service Assurance
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Spirent Communications plc Annual Report 2024
Note
1. Before other adjusting items of $1.3 million charged in 2024
(2023 $7.3 million). See note 3.
Operating review continued
Revenue
$279.2m
(2023 $275.2m)
Adjusted operating profit
1
$44.9m
(2023 $39.0m)
Networks & Security
Networks & Security is a world
leader in high‑speed Ethernet/
internet protocol (IP) performance
testing and automotive Ethernet,
and develops test methodologies,
tools and services for virtualised
networks and data centre
connectivity fabrics, including
AI and the cloud. We provide
consulting services, test tools,
methodologies and proactive
security validation solutions.
We are leveraging our world
leadership in global navigation
satellite system (GNSS) simulation
solutions and services as we
expand further into the broader
positioning, navigation and
timing (PNT) market including
low earth orbit (LEO) satellites
and autonomous vehicles.
2024 performance highlights
• We continued to demonstrate our leadership in
800G high‑speed Ethernet testing which is critical
for the evolution of data centres to underpin AI
growth, including orders with leading network
infrastructure suppliers and cloud hyperscalers,
and won the industry’s coveted Interop Best
of Show Award 2024 “Grand Prize” for our AI
emulation solution.
• We released our new Positioning test and
simulation product (PNT X) in April to underpin
our market leadership and see new opportunities
in the emerging LEO satellite market.
• We continued to expand our Positioning
business into civil aviation and automotive
verticals, including supporting the creation of
a groundbreaking new automotive positioning
standard in China, which has global implications
for the automotive sector.
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AI traffic simulation testing over Ethernet
Validating hyperscaler’s high‑speed Ethernet network for AI workloads
Challenge:
As AI is transforming the industry, a leading AI‑focused
hyperscaler building the next‑generation public cloud
needed to perform critical 800G Ethernet fabric testing
and assurance, to ensure optimal performance for
AI workloads.
Solution:
Identifying Spirent as a leading Ethernet innovator, the
hyperscaler selected Spirent’s B3 800G™ Appliance
to help it optimise the performance of high‑speed
Ethernet infrastructure required to support AI‑driven
applications. Hyperscalers globally are continuing
to scale rapidly to meet the dramatic demand for
accelerated compute solutions, critical for training and
serving the most sophisticated AI models. By utilising
Spirent’s 800G Ethernet solution, this hyperscaler now
has a rigorous, high‑scale testing capacity to evaluate
bandwidth and resource utilisation.
Impact:
The Spirent solution will help the hyperscaler to test and
validate its infrastructure’s readiness for bandwidth‑
intensive AI workloads, while maintaining optimal
network efficiency, balancing efficiency and sustainability,
and monetising its AI Ethernet infrastructure investments.
This will help accelerate 800G deployments and enable
the networking industry to power new applications
running AI and machine learning.
Strategy
We are maintaining and expanding our market leadership
in high‑speed Ethernet test, with a focus on diversifying our
customer base into data centres and enterprises, driving
growth through involvement in all stages of next‑generation
network and cloud infrastructure development, from
verification of pre‑silicon and silicon to high‑density,
high‑capacity systems.
We are working to drive industry standards that enable
rapid adoption of technologies such as generative artificial
intelligence (AI), post‑quantum cryptography, cloud, secure
access service edge (SASE)/zero trust and automotive
Ethernet, expanding our test domain expertise and delivering
more managed services.
We are addressing additional enterprise and government
demands through partnerships with network equipment
manufacturers, cloud providers and service providers on
performance and security validation essential for their
development and deployment, with solutions and services
addressing AI data centres, telecom IP‑transport networks,
enterprise networking, cloud and edge computing and
SASE environments.
We are building on our global PNT test leadership, extending
our reach and influence as the trusted partner of researchers,
developers and integrators in the field of PNT technology.
Our broad portfolio of solutions and managed services
is increasingly multi‑sensor oriented, assuring that our
customers in growth segments such as civil aviation, LEO
satellites, chipsets and automotive technologies are able to
achieve their PNT ambitions.
We are leveraging our subject expertise gained from
design and verification of GNSS technologies in the lab
into geospatial prediction services to help ensure safe and
reliable navigation of vehicles and aircraft including drones
and devices.
What we test and assure
High-speed Ethernet/IP, cloud and virtualisation
Our high‑speed Ethernet/IP, cloud and virtualisation test
solutions enable network vendors, carriers and cloud
service providers to test the performance and security of
next‑generation networks, applications and data centre
connectivity fabrics by simulating real‑world conditions in the
lab and on the network. Our portfolio addresses physical data
centres and virtualised networks, applications and services.
Our solutions enable architects, developers and test engineers
to create and transmit complex and high‑capacity traffic
and safely assess the performance, scalability and resilience
of their products. Our customers benefit from our wide
network of industry partnerships and active contributor role in
standards development, enabling them to leverage the latest
technology and best practices.
Applications performance and cybersecurity
Spirent is a single source for security assurance of all network
infrastructure elements. We provide comprehensive security
and performance validation capabilities covering all elements
of any production environment: physical and virtual security
domains, distributed edge, 5G and Internet of Things use
cases, whether legacy or virtualised and cloud. Our flexible
solutions and services offerings provide hyper‑realistic
assessment based on real‑world application, service
and threat traffic emulation.
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Spirent Communications plc Annual Report 2024