Logo
Keysight Technologies Inc

Keysight Technologies Inc (KEYS) Q1 2026 Earnings Call Transcript

Bullish Scientific & Technical Instruments 41.44B USA
Next Earnings
2026-05-18

Keysight Technologies, Inc. provides electronic design and test solutions worldwide. The company operates in two segments, Communications Solutions Group and Electronic Industrial Solutions Group. It offers oscilloscopes; electronic design automation software; instrument measurement and workflow software, application software testing, instrument control software and connectivity, and software testing; modular instruments; digital multimeters, phase noise measurement, power meters and power sensors, counters, LCR meters and impedance measurement products, and electrometers; spectrum, logic, noise figure, and network analyzers; and protocol analyzers and exercisers, bit error ratio testers, AC and DC power analyzers, materials test equipment, device current waveform analyzers, and curve tracers. It also provides signal, waveform, and function generators; arbitrary waveform generators, DC power supplies, and DC electronic loads; wireless drive test, radio access and core network test, wireless analyzers, wireless network emulators, channel emulations, and over-the-air test; application and threat intelligence, cloud test, 5G NR base station test, cyber training simulators, network test hardware, protocol and load test, network security test, and network modeling; bypass switches, cloud visibility and synchronization, network and application monitoring, and network packet brokers and taps; and application-specific test systems, in-circuit test systems, parametric test, laser interferometers and calibration systems, monolithic laser combiners and precision optics, photonic test and measurement products, MMIC millimeter-wave and microwave devices, and accessories. In addition, it offers product support, technical and application support, installation, training, engineering, and integration services. The company was founded in 1939 and is headquartered in Santa Rosa, California.

Keysight posted record Q1 results with revenue and EPS above guidance, raised full-year growth expectations, and schedules significant acquisitions synergies and buybacks.

⭐ Key Highlights

Q1 Revenue and Earnings
Q1 revenue of $1.60B (+23% YoY) and EPS of $2.17, both well above the high end of guidance.
Orders and Growth by Segment
Total orders $1.645B, up 30% YoY; Communications Solutions and EISG each delivered double-digit growth, with CSG up 27% and EISG up 15% YoY.
Acquisitions and Synergies
Acquisitions added 8 points to revenue; synergy run-rate target (> $100M) remains on track with ERP migration timing influencing realization.
Guidance and Outlook
Q2 revenue guidance of $1.69–$1.71B and EPS $2.27–$2.33; full-year 2026 base case raised to just above 20% total revenue and earnings growth.
Cash Flow and Shareholder Returns
Strong cash conversion with $441M operating cash flow and $407M free cash flow; $87M spent on buybacks; $1.5B buyback authorization announced.

✔Positive Signals

  • Record first quarter revenue and EPS beating high end of guidance
  • Orders up 30% YoY with broad-based strength across segments
  • Acquisitions contributing revenue; synergies on track
  • Strong free cash flow and ongoing share repurchases
  • Raised full-year growth guidance to just above 20%

✖Negative Signals

  • Tariffs uncertainty and potential impact on outlook
  • Acquisition-related margin dilution in the near term before synergies
  • Integration execution risk and ERP migration timeline delaying some synergies
  • Short-term visibility limitations beyond the next couple quarters
  • Macro and geopolitical risks impacting defense and supply chains

📊Financial Results

  • Total revenue $1.60B in Q1, up 23% YoY; core revenue growth 14% excluding acquisitions and currency
  • Total GAAP gross margin 66.7%, up 90 bps year over year
  • Operating margin 27.4%, up 20 bps; core operating margin 28.9%, up 170 bps driven by core leverage of 41%
  • Net income $376M and EPS $2.17, up 19% YoY
  • Cash flow from operations $441M; free cash flow $407M; $87M spent on share repurchases

🔮Future Guidance

  • Q2 revenue expected of $1.69–$1.71B; Q2 EPS guidance $2.27–$2.33
  • Full-year fiscal 2026 revenue and earnings growth expected to be just above 20% (all-in)
  • Acquisition-related revenue guidance unchanged at $375M for fiscal 2026
  • Synergy target remains >$100M in run-rate cost synergies; realization weighted to late 2026 due to ERP migration
  • Tariff impact not included in guidance; still assessing potential effects

💡Interesting Insights

  • AI demand is broadening beyond hyperscalers to a wider customer base and geographies, with AI-driven validation across full stack driving incremental opportunities
  • NTN and 6G developments are positioning Keysight to capture wireless growth beyond traditional 5G, with multiple industry collaborations and standards progress

Detailed Analysis

AI-generated summary of Keysight Technologies Inc earnings call transcript.

Keysight delivered a robust first quarter, with revenue of $1.60B (+23% YoY) and EPS of $2.17, supported by 30% order growth and broad-based strength across Communications Solutions, EISG, and non-AC business lines. The company highlighted AI-driven demand, expansion into higher-speed networking, and defense modernization as secular tailwinds, while acquisitions contributed revenue and are on track to generate over $100M in run-rate synergies. Management raised the full-year guidance to just above 20% growth in total revenue and earnings, and provided a constructive Q2 outlook of $1.69–$1.71B in revenue and $2.27–$2.33 in EPS. Cash flow remained strong, enabling continued buybacks ($87M in Q1) and a $1.5B buyback authorization. Overall, the tone was confident on continued momentum, tempered by ongoing integration and macro risks such as tariffs and supply chain dynamics.

Get Real-Time Earnings Call Alerts for Keysight Technologies Inc

Create a free MarketAlerts account to add KEYS to your watchlist and receive instant AI-powered alerts when new earnings call transcripts, insider trades, and technical signals are detected.

Create Free Account Browse All Companies
Other MarketAlerts Features
Technical Recognition Insider Signals #1 Stock Watchlist AI-Powered Signals Smart Screener AI-Trade Search