Keysight Technologies, Inc.

What they do

Keysight sells hardware, software, and services used by engineers to design, validate, manufacture, deploy, and optimize electronic products and networks. Revenue comes primarily from research and development applications, with a smaller share from manufacturing and operations. The company serves approximately 40,000 end customers annually in over 100 countries, with a global direct sales force and application engineers.

Revenue drivers

• Communications Solutions Group (CSG) — Q3 FY2026 revenue was $1,345 million, up 43% year over year, driven by 56% growth in commercial communications and 14% growth in aerospace, defense, and government. This is Keysight's largest segment by revenue.
• Electronic Industrial Solutions Group (EISG) — Q3 FY2026 revenue was $501 million, up 21% year over year, with growth across semiconductor, general electronics, and automotive and energy markets.
• Services and other — Services and other revenue was $382 million in Q3 FY2026, compared with $329 million in Q3 FY2025, representing support, calibration, and related offerings tied to the installed base.
• Products — Product revenue was $1,464 million in Q3 FY2026, compared with $1,023 million a year earlier, reflecting demand for test and measurement hardware across end markets.

Recent performance

For the third quarter of fiscal 2026 ended July 31, 2026, revenue was $1.85 billion, up from $1.35 billion in the prior-year quarter. GAAP net income was $397 million, or $2.30 per diluted share, compared with $191 million, or $1.10 per diluted share, in Q3 FY2025. Non-GAAP net income was $531 million, or $3.07 per diluted share, versus $297 million, or $1.72 per diluted share, a year earlier. Cash flow from operations was $437 million, and free cash flow was $403 million. The company described the quarter as a record with orders over $2 billion for the second consecutive quarter.

Strategy

Keysight invests in research and development to align its portfolio with customer roadmaps and secular demand for engineering intensity. The company operates Keysight Labs for breakthrough hardware and software technologies and develops proprietary semiconductor and packaging technologies. It emphasizes a direct global sales channel with highly technical application engineers and close collaboration between sales and engineering. Management cites long-term drivers including the accelerating pace of technological innovation and engineering intensity across its end markets. The company also uses acquisitions and transitions to lower-cost regions as part of its operating model.

Risks

• Economic and demand volatility — Keysight states its business is sensitive to negative changes in general economic conditions, including inflation or potential recession, which can reduce customer purchasing power and lead to delayed or canceled orders.
• International operations — A majority of revenue comes from international operations, exposing Keysight to geopolitical tension, export control changes, and regional economic instability.
• Trade and tariff uncertainty — The company specifically cites increased tariff rates and reciprocal tariffs as factors that can increase costs and disrupt supply chains.
• Supply chain and inventory — Keysight notes risks of supply chain shortages, excess and obsolete inventory, and financial difficulties among suppliers and customers that can delay products or payments.

Outlook

For the fourth fiscal quarter of 2026, Keysight expects revenue of $1.930 billion to $1.950 billion, with the midpoint representing approximately 37% year-over-year growth. Non-GAAP earnings per share are guided to $3.34 to $3.40, based on a diluted share count of approximately 172 million. Management stated it remains confident in sustaining momentum and delivering long-term value creation. No GAAP-to-non-GAAP reconciliation for the forward quarter was provided because certain tax items are not currently estimable.