Keysight's Q3 Earnings Surpass Estimates, Revenues Rise Y/Y

Core Insights - Keysight Technologies, Inc. (KEYS) reported strong third-quarter fiscal 2025 results, with both net income and revenues exceeding the Zacks Consensus Estimate, driven by growth in the AI data-center market and aerospace, defense, and government sectors [1][2][3] Financial Performance - Net income on a GAAP basis was $191 million or $1.10 per share, down from $389 million or $2.22 per share in the year-ago quarter. Non-GAAP net income was $297 million or $1.72 per share, compared to $275 million or $1.57 in the prior-year quarter, surpassing the Zacks Consensus Estimate by 4 cents [2] - Quarterly net sales increased to $1.35 billion from $1.22 billion year-over-year, exceeding guidance and the Zacks Consensus Estimate by $38 million. Total orders rose 7% year-over-year to $1.34 billion [3][8] Segment Performance - The Communication Solutions Group (CSG) generated $940 million in revenues, an 11% increase from $847 million in the prior-year quarter, driven by demand for AI data-center network solutions and applications [4] - The Electronic Industrial Solutions Group (EISG) saw revenues rise to $412 million from $370 million, supported by investments in AI-driven technologies and growth in the semiconductor vertical [5] Regional Performance - Asia-Pacific revenues reached $569 million, up from $496 million year-over-year. Revenues from the Americas increased by 13% to $566 million, while European revenues were $217 million, down 2% from the previous year [6] Profitability Metrics - Non-GAAP gross profit totaled $864 million with gross margins of 63.9%, compared to $781 million and 64.1% in the year-ago quarter. Non-GAAP operating margin improved to 25% from 24.4% [7] Cash Flow and Outlook - Keysight generated $322 million in cash from operating activities, up from $255 million a year ago. As of July 31, 2025, the company had $2.63 billion in cash and cash equivalents and $2.53 billion in long-term debt [9] - For the fourth quarter of fiscal 2025, Keysight expects revenues between $1.37 billion and $1.39 billion, with non-GAAP earnings per share estimated between $1.79 and $1.85 [10]