Keysight Technologies Stock Earnings Reports

Keysight reported a record fiscal Q2 with broad-based strength across its businesses driven largely by AI-related demand. Orders were $2.051B (+56% YoY), revenue $1.717B (+31% reported; +24% core), EPS $2.87 (+69%), and free cash flow a record $472M. Management raised fiscal 2026 revenue guidance to high-20s percent growth based on a strong start and a healthy pipeline; Q3 revenue is guided to $1.730B–$1.750B (≈29% YoY at midpoint) and Q3 EPS to $2.43–$2.49. Key growth drivers: wireline (AI data center scale, speed transitions, optical/photonic demand, and system-level emulation), wireless (NTN/LEO and early 6G work), semiconductor (advanced nodes, silicon photonics, wafer test wins), and aerospace & defense (radar, spectrum operations, PNT). AI-related business in H1 already exceeded full-year 2025 levels (management sized it at $500M–$600M). Adjustments from a U.S. Supreme Court decision on IEEPA tariffs reduced reported Q2 revenue by $40M and costs/expenses by $97M (management also provided adjusted metrics showing core gross margin ~67.6%). Acquisitions remain on track to contribute ~$375M FY'26 revenue and >$100M in cost synergies (≈80% run-rate expected by year-end). Balance sheet and capital deployment: cash of $2.412B, record operating cash flow $501M, $220M of share repurchases in the quarter, and FY'26 capex guide raised to ~$200M to support product ramp and demand. Management notes backlog and bookings remain healthy (majority convert within ~6 months), funnel velocity and conversion are improving, and supply-chain execution is being actively managed. Risks include timing/mix of revenue conversion, NPI ramp execution, and macro/supply uncertainties.