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Keysight Technologies posted its strongest quarter on record for the second fiscal quarter of 2026, driven by surging demand across communications, aerospace, defense, automotive and semiconductor markets. The company reported more than $2bn in orders and raised its full-year outlook as customers continued investing in next-generation electronics and network infrastructure.

The results highlight continued investment in communications, semiconductors, AI infrastructure and 6G development — key markets for eeNews Europe readers. 

Communications and semiconductor demand drives growth

Revenue for the quarter reached $1.72bn, up 31% from $1.31bn a year earlier, while GAAP net income rose to $349m, or $2.02 per share. Non-GAAP earnings climbed to $497m, or $2.87 per share.

The company’s Communications Solutions Group delivered the largest contribution, with revenue climbing 35% year-on-year to $1.23bn. Commercial communications revenue surged 40%, reflecting ongoing investment in high-speed networking, wireless technologies and data centre infrastructure. Aerospace, defense and government revenue increased 24%.

Keysight’s Electronic Industrial Solutions Group also posted strong gains, with revenue rising 24% to $486m. The company said all major end markets — including automotive and energy, general electronics and semiconductor — delivered double-digit growth.

“Keysight delivered the strongest quarter in the company’s history, capping a record first half with all-time highs in orders, revenue, EPS, and free cash flow,” said Satish Dhanasekaran, President and CEO of Keysight. “The disciplined decisions and strategic investments we have made over the past several years are enabling us to capitalize on accelerating demand and outperform. With strong year-to-date momentum and a robust pipeline of opportunities, we are raising our expectations for fiscal 2026.”

Tariff refund boosts results

The quarter also included a significant one-off benefit linked to US tariff rulings. Following decisions by the US Supreme Court and the US Court of International Trade concerning tariffs imposed under the International Emergency Economic Powers Act (IEEPA), Keysight recorded a $100m receivable tied to tariff refunds and statutory interest.

The company said this resulted in offsets of $93m to cost of sales, $4m to operating expenses and $3m to interest income. At the same time, Keysight booked a $40m liability related to tariff surcharges previously collected from customers, reducing quarterly revenue accordingly.

Cash flow remained strong, with free cash flow reaching $472m for the quarter. Cash and equivalents totaled $2.43bn at the end of April.

For the third fiscal quarter, Keysight expects revenue between $1.73bn and $1.75bn, representing roughly 29% year-on-year growth at the midpoint. Non-GAAP earnings are forecast in the range of $2.43 to $2.49 per share.

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