Core Insights - Keysight reported revenue of $1.35 billion for the quarter ended July 2025, reflecting an 11.1% increase year-over-year and surpassing the Zacks Consensus Estimate of $1.31 billion by 2.92% [1] - Earnings per share (EPS) for the quarter was $1.72, up from $1.57 in the same quarter last year, also exceeding the consensus EPS estimate of $1.68 by 2.38% [1] Revenue Breakdown - Communications Solutions Group generated $940 million, exceeding the average analyst estimate of $917.23 million, marking an 11% year-over-year increase [4] - Commercial Communications revenue reached $644 million, surpassing the average estimate of $617.75 million, with a year-over-year growth of 12.6% [4] - Aerospace, Defense & Government revenue was $296 million, slightly below the estimated $299.47 million, but still showing a 7.6% increase compared to the previous year [4] - Electronic Industrial Solutions Group reported $412 million, exceeding the average estimate of $396.45 million, representing an 11.4% year-over-year change [4] Operational Performance - Income from operations for the Electronic Industrial Solutions Group was $92 million, surpassing the average estimate of $88.33 million [4] - Income from operations for the Communications Solutions Group was $246 million, which was below the average estimate of $253.54 million [4] Stock Performance - Keysight's shares returned +0.9% over the past month, while the Zacks S&P 500 composite increased by +2.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Keysight (KEYS) reported quarterly earnings of $1.72 per share, exceeding the Zacks Consensus Estimate of $1.68 per share, and up from $1.57 per share a year ago, representing an earnings surprise of +2.38% [1] - The company achieved revenues of $1.35 billion for the quarter ended July 2025, surpassing the Zacks Consensus Estimate by 2.92%, and up from $1.22 billion year-over-year [2] - Keysight has consistently surpassed consensus EPS and revenue estimates over the last four quarters [2] Earnings Performance - The earnings surprise for the previous quarter was +3.66%, with actual earnings of $1.70 per share compared to an expected $1.64 per share [1] - The current consensus EPS estimate for the upcoming quarter is $1.78, with projected revenues of $1.38 billion, and for the current fiscal year, the EPS estimate is $7.01 on revenues of $5.28 billion [7] Stock Performance and Outlook - Keysight shares have increased approximately 2.4% since the beginning of the year, while the S&P 500 has gained 9.7% [3] - The company's Zacks Rank is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] - The outlook for Keysight's stock will depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] Industry Context - Keysight operates within the Zacks Electronics - Measuring Instruments industry, which is currently ranked in the top 24% of over 250 Zacks industries [8] - Historical data suggests that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8]

Financial Data and Key Metrics Changes - Keysight reported a revenue increase of 11% year over year to $1.4 billion and earnings per share of $1.72, exceeding guidance [6][21] - Orders increased by 7%, with growth across both the Communication Solutions Group (CSG) and Electronic Industrial Solutions Group (EISG) segments [6][21] - Gross margin was reported at 64%, with operating expenses of $526 million and an operating margin of 25%, reflecting a 60 basis point increase year over year [21] Business Segment Data and Key Metrics Changes - The Communication Solutions Group generated revenue of $940 million, up 11% year over year, with commercial communications revenue of $644 million, also up 13% [23] - The Electronic Industrial Solutions Group reported revenue of $412 million, an increase of 11% year over year, with growth across automotive, energy, semiconductor, and general electronics [23] - Software and services accounted for approximately 36% of total revenue, with annual recurring revenue at 28% [24] Market Data and Key Metrics Changes - The aerospace, defense, and government sectors showed robust demand due to elevated defense spending globally, particularly in the U.S. and Europe [11][12] - The wireless business remained stable, with momentum in non-terrestrial networks and continued R&D activity in 5G Advanced contributing to steady demand [10] - The semiconductor business experienced double-digit growth, driven by demand for wafer test solutions and advanced node technologies [17][92] Company Strategy and Development Direction - Keysight is capitalizing on opportunities in the AI ecosystem, focusing on advanced physical layer solutions and silicon photonics capabilities to enhance R&D workflows [8][9] - The company is engaged in early 6G research and shaping standards for its implementation, collaborating with industry leaders to drive innovation [11][86] - Keysight's strategy includes mitigating tariff impacts through supply chain optimization and pricing actions, while maintaining operational flexibility to invest and adapt [22][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand environment, noting that orders have accelerated and are slightly better than initial expectations [30][31] - The company anticipates continued growth in the aerospace and defense sectors, supported by robust backlogs and government budgets [55] - Despite challenges in the automotive sector, management remains optimistic about long-term growth driven by AI and other technological advancements [32][44] Other Important Information - Keysight generated cash flow from operations of $322 million and free cash flow of $291 million in Q3, with year-to-date free cash flow at $1.1 billion [25] - The company repurchased approximately 300,000 shares at an average price of $164, totaling $50 million [25] - The pending acquisition of Spirent is expected to close in the fiscal fourth quarter, with regulatory reviews progressing [25][80] Q&A Session Summary Question: Can you help investors understand your view of the end markets now? - Management noted strong order growth and positive customer activity despite geopolitical challenges, with AI and aerospace defense showing momentum [30][31] Question: What is supporting the revenue outlook into Q4? - Management indicated that timing of large deals impacted Q3 performance, but they expect more normal sequential seasonality in Q4 [34][35] Question: How should we think about the long-term growth rate? - Management suggested that while they initially expected low-end growth, recent performance has been better than expected, indicating bullish sentiment for fiscal 2026 [39][40] Question: What is the impact of tariffs on your business? - Management confirmed that tariffs are being mitigated through various strategies, and they expect to fully address the tariff impacts in the coming quarters [52][53] Question: Can you provide insights on the aerospace and defense market? - Management expressed confidence in ongoing programs and robust backlogs, with expectations for continued growth driven by government budgets [54][55] Question: What is the outlook for the semiconductor business? - Management highlighted strong demand for wafer test solutions and advanced technologies, indicating favorable growth prospects [92] Question: How is the mix between R&D and production testing evolving? - Management noted a shift towards more manufacturing exposure while still maintaining a strong R&D focus, benefiting from supply chain improvements [93][96]

Financial Data and Key Metrics Changes - Keysight reported a revenue increase of 11% year over year to $1.4 billion and earnings per share of $1.72, exceeding guidance [5][20] - Orders increased by 7%, with growth across both the Communication Solutions Group (CSG) and Electronic Industrial Solutions Group (EISG) segments [5][20] - Gross margin was reported at 64%, with operating margin at 25%, reflecting a 60 basis point increase year over year [20] Business Segment Data and Key Metrics Changes - CSG generated revenue of $940 million, up 11% year over year, with commercial communications revenue of $644 million, also up 13% [22] - EISG revenue reached $412 million, an 11% increase year over year, with growth across automotive, energy, semiconductor, and general electronics [22] - CSG delivered a gross margin of 67% and an operating margin of 26%, while EISG had a gross margin of 57% and an operating margin of 22% [22] Market Data and Key Metrics Changes - The aerospace, defense, and government sectors saw robust demand due to elevated defense spending globally, particularly in the U.S. and Europe [11][12] - The wireless business remained stable, with momentum in non-terrestrial networks and continued R&D activity in 5G Advanced [10] - Demand in the automotive sector improved sequentially, with stable year-over-year performance [15] Company Strategy and Development Direction - Keysight is capitalizing on the ongoing AI momentum and investing in advanced physical layer solutions and silicon photonics capabilities [6][7] - The company is focused on leading the industry into the next generation of innovation, particularly in 6G research and development [10][11] - Keysight's strategy includes enhancing collaboration with customers and leveraging a solid pipeline of opportunities [6][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the evolving trade and tariff environment while maintaining healthy margins and strong free cash flow [19] - The demand environment remains resilient despite macroeconomic uncertainties, leading to an upward revision of the full-year growth outlook [25] - Management noted that while some end markets are recovering, challenges remain in sectors like automotive [29] Other Important Information - Keysight's cash flow from operations was $322 million, with free cash flow of $291 million for the quarter [23] - The company repurchased approximately 300,000 shares at an average price of $164, totaling $50 million [23] - The pending acquisition of Spirent is expected to close in the fiscal fourth quarter, with regulatory reviews progressing [23][24] Q&A Session Summary Question: Can you help investors understand your view of the end markets now? - Management noted strong order growth and positive customer activity despite geopolitical challenges, indicating a better-than-expected performance [28][29] Question: What is supporting the revenue outlook into Q4? - Management highlighted the timing of large deals and expected more normal sequential seasonality in orders compared to revenue [31][32] Question: How should we think about the long-term growth rate? - Management indicated a bullish outlook for fiscal 2026, with a focus on executing Q4 and navigating tariff impacts [38] Question: What is the contribution of AI to Keysight's story? - Management emphasized that AI is driving demand across multiple end markets, particularly in wireline, with expectations for continued growth [40][41] Question: Can you outline the tariff impacts? - Management clarified that tariffs are expected to increase exposure by approximately $75 million annually, with mitigation strategies in place [48][51] Question: What is the outlook for the aerospace and defense market? - Management expressed confidence in ongoing demand due to robust backlogs and government budgets, with a steady growth trajectory expected [52][54] Question: How is the semiconductor business performing? - Management noted strong growth in the semiconductor business, driven by advanced nodes and increased customer interest in silicon photonics [90][91] Question: What is the impact of tariffs on orders? - Management stated that there has been no material pull-in of orders due to tariff changes, and demand profiles remain stable [104][105]

Q3 2025 Financial Performance - Q3 revenue reached $1.352 billion, an increase of 11% year-over-year[5, 6, 11] - Earnings per share (EPS) stood at $1.72, reflecting a 9% year-over-year growth[5, 6] - Core operating margin increased by 110 basis points year-over-year to 25.4%[5] - YTD free cash flow amounted to $1.1 billion[5] Segment and Regional Revenue - Communications Solutions Group (CSG) revenue was $940 million, up 11% year-over-year[21] - Electronic Industrial Solutions Group (EISG) revenue was $412 million, also up 11% year-over-year[26, 33] - Americas region revenue grew by 13% year-over-year[15, 39] - Asia Pacific region revenue increased by 15% year-over-year[19, 39] Forward Guidance and Outlook - The company raised its full-year outlook, expecting revenue growth of 7% and non-GAAP EPS growth of approximately 13% for FY25[5] - Q4 2025 revenue is guided to be between $1.370 billion and $1.390 billion, with non-GAAP EPS between $1.79 and $1.85[34] Strategic Initiatives and Tariff Mitigation - The company is progressing with regulatory clearances for the Spirent acquisition, expecting closure in Q4 FY25[5] - The company is actioning a multi-pronged approach to reduce the impact of tariffs, with an incremental gross impact of tariff increases announced on August 1 being $75 million on an annualized basis[5]

Financial Performance - Keysight Technologies reported third quarter revenue of $1.35 billion, a 11% increase from $1.22 billion in the same quarter of 2024[5] - GAAP net income for the third quarter was $191 million, or $1.10 per share, compared to $389 million, or $2.22 per share, in the third quarter of 2024[5] - Non-GAAP net income was $297 million, or $1.72 per share, up from $275 million, or $1.57 per share, in the third quarter of 2024[5] - Total revenue for Q3 2025 was $1,352 million, an increase of 11% from $1,217 million in Q3 2024[30] - Non-GAAP net income for the nine months ended July 31, 2025, was $909 million, up from $808 million in the same period last year, reflecting a 12% increase[22] - The company reported a diluted EPS of $3.56 for the nine months ended July 31, 2025, compared to $3.92 in the same period of 2024[22] Segment Performance - The Communications Solutions Group (CSG) generated $940 million in revenue, reflecting an 11% year-over-year growth, with 13% growth in commercial communications[3] - The Electronic Industrial Solutions Group (EISG) reported revenue of $412 million, also up 11% from the prior year, driven by growth in semiconductor and automotive sectors[3] - The Communications Solutions Group reported revenue of $940 million in Q3 2025, an 11% increase from $847 million in Q3 2024[25] - The Electronic Industrial Solutions Group also saw revenue growth of 11%, reaching $412 million in Q3 2025, compared to $370 million in Q3 2024[26] Cash Flow and Assets - Cash flow from operations was $322 million, compared to $255 million in the same period last year, while free cash flow increased to $291 million from $222 million[5] - Operating cash flow increased significantly to $1,184 million, up 71% from $693 million in the prior year[19] - Free cash flow for the nine months ended July 31, 2025, was $1,094 million, compared to $577 million in the same period last year, representing an increase of 90%[28] - Cash, cash equivalents, and restricted cash at the end of the period totaled $3,397 million, up from $1,649 million at the end of the previous year[19] - As of July 31, 2025, Keysight's cash, cash equivalents, and restricted cash totaled $3.40 billion[5] - Total assets increased to $10.651 billion as of July 31, 2025, up from $9.269 billion on October 31, 2024[17] Future Outlook - Keysight expects fourth quarter revenue to be between $1.370 billion and $1.390 billion, with non-GAAP earnings per share projected to be between $1.79 and $1.85[4] - For fiscal year 2025, revenue growth is anticipated to be approximately 7%, with non-GAAP earnings per share growth expected to be around 13%[4] - The company plans to continue investing in property, plant, and equipment, with $90 million spent in the nine months ended July 31, 2025[19] Year-over-Year Comparison - For the nine months ended July 31, 2025, net income was $617 million, a decrease of 10% compared to $687 million for the same period in 2024[19]

Group 1 - The author is a self-taught value investor with two decades of investing experience, focusing on value investing through case studies in the ASEAN and US regions [1] - The author has served as a Board member of a Malaysia listed company for several decades, providing a unique perspective on investment opportunities [1] - A value investing book titled "Do you really want to master value investing?" is available on Amazon, indicating the author's commitment to educating others in the field [1] Group 2 - The article does not provide specific investment recommendations or advice, emphasizing that past performance is not indicative of future results [2] - The views expressed in the article may not reflect those of Seeking Alpha as a whole, highlighting the independent nature of the author's analysis [2] - The author has no current or planned investment positions in any of the companies mentioned, ensuring an unbiased perspective [2]

Core Viewpoint - Keysight Technologies, Inc. is expected to report third-quarter fiscal 2025 results on August 19, with anticipated revenue growth driven by various market strengths and collaborations [1][11]. Group 1: Revenue Expectations - Keysight is projected to report revenues of $1.31 billion for the third quarter, reflecting a year-over-year increase from $1.22 billion [7][11]. - The Communications Solutions Group segment is estimated to generate $909.4 million, indicating a 7.4% year-over-year growth [6]. - Revenues from the Electronic Industrial Solutions Group are expected to reach $401.3 million [6]. Group 2: Collaborations and Innovations - Keysight's collaboration with AMD involves the use of its solutions for testing electrical compliance for pre-production AMD server CPUs, enhancing demand for its products [3]. - The partnership with Synopsis aims to streamline the migration of analog and RF circuits to new process nodes, which is expected to accelerate time to market and increase demand for Keysight's solutions [4]. - Keysight's deployment of the Quantum Control System in Fujitsu's 256-qubit superconducting quantum computer and the delivery of a large commercial quantum control system to a Japanese institute highlight its advancements in Quantum Computing [5]. Group 3: Earnings Insights - The consensus estimate for adjusted earnings per share is $1.68, an increase from $1.57 reported a year ago [7][11]. - Keysight's Earnings ESP is 0.00%, indicating no definitive prediction for an earnings beat in the upcoming quarter [9].

Core Insights - Analysts project that Keysight (KEYS) will report quarterly earnings of $1.68 per share, reflecting a 7% year-over-year increase [1] - Revenue is expected to reach $1.31 billion, marking a 7.9% increase from the same quarter last year [1] Earnings Estimates - The consensus EPS estimate has been revised 0.8% lower over the last 30 days, indicating a reevaluation by analysts [2] - Revisions to earnings projections are crucial for predicting investor behavior and short-term stock performance [3] Revenue Projections - Revenue from the Communications Solutions Group is estimated at $917.23 million, an increase of 8.3% year over year [5] - Revenue from Commercial Communications is projected at $617.75 million, reflecting an 8% increase from the prior-year quarter [5] - Revenue from Aerospace, Defense & Government is estimated at $299.47 million, suggesting an 8.9% year-over-year increase [6] - Revenue from the Electronic Industrial Solutions Group is expected to reach $396.45 million, indicating a 7.2% increase year over year [6] Income from Operations - Income from operations for the Electronic Industrial Solutions Group is projected at $88.33 million, up from $74.00 million a year ago [7] - Income from operations for the Communications Solutions Group is expected to be $253.54 million, compared to $223.00 million in the same quarter last year [7] Stock Performance - Over the past month, Keysight shares have returned +6.2%, outperforming the Zacks S&P 500 composite's +3.5% change [8] - Keysight holds a Zacks Rank 3 (Hold), suggesting performance alignment with the overall market in the upcoming period [8]

Group 1 - The stock of Keysight Technologies, Inc. (KEYS) is experiencing significant attention due to high implied volatility in the options market, particularly for the Aug 15, 2025 $270.00 Put option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a substantial move in Keysight Technologies' stock, potentially due to an upcoming event [2] - Keysight Technologies currently holds a Zacks Rank 3 (Hold) in the Electronics - Measuring Instruments industry, which is in the top 24% of the Zacks Industry Rank [3] Group 2 - Over the past 60 days, no analysts have raised their earnings estimates for the current quarter, while three analysts have lowered their estimates, resulting in a decrease of the Zacks Consensus Estimate from $1.72 to $1.68 per share [3] - The high implied volatility may indicate a trading opportunity, as options traders often seek to sell premium on options with elevated implied volatility, aiming for the underlying stock to not move as much as expected at expiration [4]