Keysight (KEYS) Q3 FY2026 Earnings Call: AI Demand Drives 36% Revenue Growth
Source Tradingkey
Key Takeaways
- Keysight Technologies (NYSE: KEYS) reported fiscal Q3 2026 revenue of $1.846 billion, up 36% year over year on a reported basis and 31% on a core basis.
- Orders reached $2.91 billion, rising 56% reported and 52% core. Management said demand was broad-based, with no unusual order pull-ins.
- Operating margin expanded 820 basis points to 33.2%, while net income was $531 million and earnings per share were $3.07.
- Commercial communications delivered its first $1 billion revenue quarter, led by wireline growth tied to AI data center development and manufacturing. Wireline revenue exceeded wireless revenue for the first time.
- Management expects fiscal Q4 revenue of $1.930 billion to $1.950 billion and EPS of $3.34 to $3.40. At the midpoints, these imply year-over-year growth of 37% and approximately 76%, respectively.
- Demand is not the near-term constraint, according to management. Component availability and supply-chain capacity could limit the conversion of backlog into revenue over the next two quarters.
Key Financial Data
| Metric | Fiscal Q3 2026 | Year-over-year change / context |
|---|---|---|
| Orders | $2.91 billion | Up 56% reported; up 52% core |
| Revenue | $1.846 billion | Up 36% reported; up 31% core |
| Gross margin | 69.0% | Management views the upper-60% range as sustainable, subject to mix |
| Operating expenses | $661 million | — |
| Operating margin | 33.2% | Up 820 basis points |
| Net income | $531 million | — |
| EPS | $3.07 | — |
| Operating cash flow | $437 million | Company remains on track for record fiscal 2026 operating cash flow |
| Free cash flow | $403 million | — |
| Cash and cash equivalents | $2.605 billion | Quarter-end balance |
| Share repurchases | $210 million | Approximately 640,000 shares at an average price near $326 |
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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