Keysight Technologies, Inc.

Keysight reported fiscal Q3 2026 orders of $2.091 billion, up 56% reported and up 52% core; revenue of $1.846 billion, up 36% reported and up 31% core; gross margin of 69%; operating margin of 33.2%, up 820 basis points year over year; net income of $531 million; and EPS of $3.07. Segment revenue was $1.345 billion for Communications Solutions Group, up 43%, including Commercial Communications revenue of $1.006 billion, up 56%, and Aerospace, Defense and Government revenue of $339 million, up 14%; Electronic Industrial Solutions Group revenue was $501 million, up 21%. For Q4 2026, management guided to revenue of $1.930 billion to $1.950 billion and EPS of $3.34 to $3.40; at the midpoint this implies about 37% revenue growth and about 76% EPS growth year over year. For full-year fiscal 2026, they said the guide implies revenue growth of 32% and EPS growth of approximately 60% at the midpoint. Cash flow from operations was $437 million and free cash flow was $403 million, with $2.605 billion in cash and cash equivalents.

Satish Dhanasekaran said the quarter reflected “outstanding” execution and broad-based growth across markets, with momentum in AI infrastructure, advanced semiconductors, defense modernization, and next-generation communications. He emphasized that Keysight is investing ahead of structural growth opportunities and sees 6G as a larger opportunity than 5G, while also highlighting expanding AI test intensity across a more heterogeneous ecosystem. His tone was confident and upbeat, repeatedly stressing long-term positioning and continued pipeline growth.

Neil Dougherty said Q3 results exceeded the high end of guidance and that margins expanded meaningfully because differentiated solutions are resonating with customers. He cited gross margin of 69%, operating margin of 33.2%, core operating margin of 34.7%, cash flow from operations of $437 million, and free cash flow of $403 million. He also noted $210 million of share repurchases in the quarter, $517 million year to date, and said integration of recent acquisitions is largely complete, with 80% to 90% of the planned $100 million in cost synergies expected to be realized on a run-rate basis exiting the fiscal year.

Analysts focused on 6G timing and opportunity, AI-driven wireline growth, testing density, margin sustainability, supply constraints, and the mix between R&D and production. Management said 6G should be a larger opportunity than 5G, with standards targeted for March 2029, and that AI is still in early stages with wireline demand expanding and pipeline growth remaining strong. On margins and supply, Neil said upper-60% gross margins appear sustainable, but supply chain limitations—especially incoming parts—could remain a governor on revenue conversion for several quarters, while Satish said demand is not the limiter. They also said hyperscalers are important strategically but represent roughly 10% of business directly, and that software/services are growing double digits even though hardware is growing faster.