01—Abstract
Summary
Summary of the 10-Q filed June 4, 2026. Cited figures are marked; the original filing is the authoritative source.
Keysight Technologies, Inc. reported strong financial performance for the six months ended April 30, 2026, driven by significant revenue growth across both its Communications Solutions Group (CSG) and Electronic Industrial Solutions Group (EISG).
Total revenue increased by 27% year-over-year to $3.317 billiona, fueled by strong demand in AI-driven technologies, high-speed networks, and aerospace and defense solutions. Net income saw a substantial increase of 48% to $630 million, benefiting from higher revenue, favorable product mix, and a significant tax benefit related to a favorable audit settlement. The company's financial health remains robust, with operating cash flow of $942 million for the period.
Keysight also continued its strategic growth through acquisitions, notably the acquisition of Spirent Communications plc and Synopsys' Optical Solutions Group, which contributed to revenue growth and expanded its market reach. The company also announced a new $1.5 billionb stock repurchase program, underscoring its commitment to returning value to shareholders.
02—Key points
Key Highlights
- Total revenue increased by 27% to $3.317 billion for the six months ended April 30, 2026, compared to the prior year.
- Net income grew by 48% to $630 million for the six months ended April 30, 2026.
- Gross margin improved to 65.5% for the six months ended April 30, 2026, up from 62.7% in the prior year, driven by higher revenue, favorable mix, and IEEPA tariff refunds.
- Cash flow from operating activities was strong at $942 million for the six months ended April 30, 2026.
- The company completed the acquisitions of Spirent Communications plc and Synopsys' Optical Solutions Group, contributing to revenue growth and strategic expansion.
- A new stock repurchase program of up to $1.5 billion was approved, demonstrating a commitment to shareholder returns.
- A significant tax benefit of $87 million from discrete items, including a favorable audit settlement, positively impacted net income for the six months ended April 30, 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Keysight Technologies, Inc. kept $0.20.
- Revenue$1.72B100.0%
- Cost of revenue−$539.0M31.4%
- Gross profit$1.18B68.6%
- Operating costs−$771.0M44.9%
- Operating income$407.0M23.7%
- Interest, other & tax−$58.0M3.4%
- Net income$349.0M20.3%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed June 4, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $1.72B$1.31B | +31.5% |
| Cost of Revenue | $539.00M$492.00M | +9.6% |
| Gross Profit | $1.18B$814.00M | +44.7% |
| R&D Expenses | $320.00M$250.00M | +28.0% |
| SG&A Expenses | $456.00M$360.00M | +26.7% |
| Operating Expenses | $1.31B$1.10B | +19.2% |
| Operating Income | $407.00M$207.00M | +96.6% |
| Net Income | $349.00M$257.00M | +35.8% |
| EPS (Basic) | $2.04$1.49 | +36.9% |
| EPS (Diluted) | $2.02$1.49 | +35.6% |
| Shares Outstanding (Basic) | 171.00M172.00M | −0.6% |
| Shares Outstanding (Diluted) | 173.00M173.00M | 0.0% |
05—Questions
Frequently Asked Questions
What were the main drivers of revenue growth in the current period?
Revenue growth was primarily driven by strong demand in high-speed networks to support AI capabilities, continued customer R&D spend in next-generation technologies like 5G/6G, quantum computing, and data center expansion. The acquisitions of Spirent Communications plc and Synopsys' Optical Solutions Group also significantly contributed to the revenue increase.
How did the IEEPA tariff refund claims impact the financial results?
The favorable U.S. Supreme Court decision on IEEPA tariffs resulted in a receivable of $100 million for tariffs previously paid and accrued interest, with corresponding offsets to cost of sales, SG&A, and interest income. Additionally, a $40 million liability was recorded for customer surcharge refunds. This resulted in a net positive impact on income from operations for the period.
What is the company's strategy regarding shareholder returns?
Keysight Technologies demonstrates its commitment to shareholder returns through its newly approved $1.5 billion stock repurchase program. This program allows the company to repurchase its outstanding shares of common stock, indicating confidence in its financial position and future prospects.
Are there any significant legal proceedings that could impact the company?
Keysight is involved in ongoing litigation, notably with Centripetal Networks, concerning patent infringement allegations. While Keysight is aggressively defending these claims and has seen favorable outcomes in some jurisdictions, the outcome of litigation is inherently uncertain and could result in significant costs or adverse judgments.
06—Continue