01—Abstract
Summary
Summary of the 8-K filed August 18, 2026. Cited figures are marked; the original filing is the authoritative source.
Keysight Technologies (KEYS) reported fiscal Q3 2026 results (quarter ended July 31, 2026) that were sharply higher year over year.
Revenue reached $1.846 billiona, up 36% from $1.352 billion, and orders came in at $2.091 billion, marking a second consecutive record quarter above $2 billion. GAAP net income rose to $397 million ($2.30 diluted EPS) from $191 million ($1.10), and non-GAAP EPS was $3.07 versus $1.72. Growth was led by the Communications Solutions Group (revenue up 43% to $1.345 billion, with commercial communications up 56%), while the Electronic Industrial Solutions Group grew 21% to $501 million.
Operating margin in CSG expanded to 34% from 26%. Cash generation was strong, with operating cash flow of $437 millionb and free cash flow of $403 million for the quarter, versus $291 million a year earlier. Nine-month free cash flow reached $1.282 billion.
The company ended the quarter with $2.62 billionc in cash and equivalents, and it returned capital through $520 million of nine-month treasury stock repurchases. Total debt stood at about $2.52 billion, including a $700 million current portion, which the company will need to address over the coming year.
Management guided fiscal Q4 2026 revenue to $1.930d–$1.950 billion, implying roughly 37% year-over-year growth at the midpoint, and non-GAAP EPS of $3.34–$3.40 on about 172 million diluted shares. The guidance points to continued momentum, though investors should note that the results are preliminary and unaudited, that guidance depends on forward-looking assumptions, and that the filing does not reconcile the GAAP EPS outlook to non-GAAP because of tax items that cannot yet be estimated.
02—Key points
Key Highlights
- Q3 FY26 revenue of $1.846B rose 36% YoY from $1.352B, and orders of $2.091B marked a second straight record quarter above $2B.
- GAAP diluted EPS more than doubled to $2.30 from $1.10, while non-GAAP EPS rose to $3.07 from $1.72.
- Communications Solutions Group revenue grew 43% to $1.345B, with commercial communications up 56% and operating margin expanding to 34% from 26%.
- Electronic Industrial Solutions Group revenue grew 21% to $501M, with operating margin up to 31% from 22%.
- Q3 free cash flow was $403M, up from $291M, and nine-month free cash flow reached $1.282B versus $1.094B.
- Q4 FY26 revenue guidance of $1.930–$1.950B implies roughly 37% YoY growth at the midpoint, with non-GAAP EPS guided to $3.34–$3.40.
- Balance sheet shows $2.62B in cash, while total debt is about $2.52B, including a $700M current maturity; nine-month buybacks totaled $520M.
03—Questions
Frequently Asked Questions
What drove the large year-over-year increase in Keysight's Q3 FY2026 revenue?
Revenue grew 36% to $1.846 billion, led by the Communications Solutions Group, which rose 43% on 56% growth in commercial communications and 14% growth in aerospace, defense, and government. The Electronic Industrial Solutions Group added 21% growth, with strength in semiconductor, general electronics, and automotive and energy markets.
How strong were orders, and why does that matter?
Orders were $2.091 billion in the quarter, up from $1.340 billion a year earlier, and this is the second consecutive quarter above $2 billion. Orders above revenue (book-to-bill of roughly 1.13) suggest the backlog is growing, which supports the Q4 revenue outlook.
Are the GAAP and non-GAAP earnings figures consistent, and what is excluded?
GAAP diluted EPS was $2.30 and non-GAAP EPS was $3.07. The gap mainly reflects amortization of acquisition-related intangibles ($0.42), share-based compensation ($0.27), acquisition and integration costs ($0.16), and restructuring ($0.03), partly offset by a $0.06 gain on investments and a tax adjustment at a 14% non-GAAP rate. Management notes these excluded items are real expenses that affect cash and GAAP results.
What is the outlook, and what risks should investors watch?
Q4 FY26 revenue is guided to $1.930–$1.950 billion and non-GAAP EPS to $3.34–$3.40. Risks cited include macroeconomic conditions, customer purchasing timing, export controls, geopolitical tensions, tariffs, and order cancellations. The GAAP EPS outlook is not reconciled because of uncertain tax items.
How is the company's balance sheet and capital allocation position?
Cash and equivalents were $2.605 billion at quarter-end, against total debt of about $2.52 billion, with $700 million classified as current. Keysight repurchased $520 million of stock in the first nine months and generated $1.282 billion in free cash flow, which funded buybacks and debt management.
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