Keysight Technologies (NYSE:KEYS) announced on Monday, Nov. 24, that it ended its fiscal year with its best quarterly results since the economic downturn two years ago.
The Santa Rosa-based electronics test and measurement equipment and software company reported a 14% increase in orders, a 10% increase in revenue to $1.42 billion, and a 16% increase in adjusted earnings per share. These results can be attributed to demand for artificial intelligence data center testing, early 6G research, defense modernization, and three major acquisitions completed in October.
Revenue for the quarter ended Oct. 31 was $1.42 billion, up 10% from a year ago and well above the Zacks Investment Research consensus estimate of $1.39 billion. Adjusted earnings per share rose 16% to $1.91, beating expectations of $1.85.
The company’s Communications Solutions group posted revenue of $990 million, beating expectations of $965 million, and its Electronic Industrial Solutions group posted revenue of $429 million, compared to expectations of $414 million.
“Keysight delivered strong fourth-quarter results that exceeded the high end of our guidance, with orders up 14%, revenue up 10% and EPS up 16%,” President and CEO Satish Dhanasekaran said on an earnings call Monday.
For the full year, sales increased 8% to $5.375 billion, adjusted earnings per share increased 14% to $7.16, and free cash flow reached a record high of $1.3 billion.
Executives highlighted accelerating demand related to artificial intelligence and next-generation technologies. Dhanasekaran said that “about half of our wireline business” is now tied to the AI ecosystem, with customers advancing in 400G, 800G and 1.6T technologies simultaneously, noting billions and trillions of bits of data that can be processed.
The recent acquisition of Spirent Communications has been called a “crown jewel” due to its unique satellite simulation and positioning capabilities, which are critical for autonomous systems, aerospace, and defense, among other things. Chief Financial Officer Neil Doherty said the three completed acquisitions (Spirent, Synopsys’ Optical Solutions Group and Ansys’ Power Artist) are expected to contribute approximately $375 million to revenue in fiscal 2026.
In the wireless space, Keysight has “doubled our 6G collaborations in the past year,” Narayanan said, partnering on channel sounding, digital twin network modeling, terahertz spectrum research and advanced MIMO phased array antenna design. A phased array is an antenna array with multiple antennas. MIMO stands for multiple input multiple output.
6G is currently in early research and is the next generation standard for mobile phones and other wireless communications, following 5G. We aim to deliver speeds of 2030 terabits per second, ultra-low latency (delay between request and response), and native integration of AI, sensing, and connectivity.
The aerospace, defense and government sector achieved record orders and saw an 8% increase in annual revenue, boosted by “defense modernization, enhanced deterrence and operational readiness,” Dhanasekaran added.
For fiscal 2026, management expects revenue growth above the high end of its long-term target of 5% to 7%, with particular strengths in AI infrastructure, next-generation networking, and semiconductors. Although the company’s previous operating margin target of 31% to 32% is expected to take longer to achieve due to the economic downturn in 2023-2024, Doherty emphasized the company’s “durable financial model” to support sustained growth.
Keysight also announced a new $1.5 billion stock repurchase authorization. Since 2023, the company has completed more than $1.5 billion in such acquisitions, representing approximately 45% of its free cash flow generated.
“Technology innovation is driving demand for high-performance solutions across a wide range of industries,” said Dougherty. “With our differentiated portfolio, technology leadership and durable financial model, we are well positioned to deliver sustainable revenue and profit growth.”
In other company news, the board has elected former Fortinet CFO Keith Jensen to the company’s board of directors.
Keysight stock rose nearly 3% to $177.67 on Monday.
Jeff Quackenbush joined North Bay Business Journal in May 1999. Mainly responsible for wine, construction, and real estate. Contact jeff@nbbj.news or 707-521-4256.
