Keysight’s second quarter was marked by robust demand across its diverse portfolio, exceeding Wall Street’s expectations and resulting in a positive market reaction. Management attributed the performance to accelerating growth in AI data center infrastructure, strength in commercial communications, and sustained momentum in aerospace, defense, and semiconductor end markets. CEO Satish Dhanasekaran emphasized that “this quarter, Keysight announced new scale up validation solutions for performance characterization,” and highlighted record bookings, particularly in AI-related wireline solutions, as core drivers of the quarter’s results.
Is now the time to buy KEYS? Find out in our full research report (it’s free for active Edge members).
Keysight (KEYS) Q1 CY2026 Highlights:
- Revenue: $1.72 billion vs analyst estimates of $1.70 billion (31.5% year-on-year growth, 0.8% beat)
- Adjusted EPS: $2.87 vs analyst estimates of $2.32 (23.7% beat)
- Adjusted EBITDA: $608.7 million vs analyst estimates of $503.1 million (35.4% margin, 21% beat)
- Revenue Guidance for Q2 CY2026 is $1.74 billion at the midpoint, above analyst estimates of $1.65 billion
- Adjusted EPS guidance for Q2 CY2026 is $2.46 at the midpoint, above analyst estimates of $2.16
- Operating Margin: 23.7%, up from 15.8% in the same quarter last year
- Market Capitalization: $59.26 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Keysight’s Q1 Earnings Call
-
Mehdi Hosseini (SIG) questioned whether the company’s backlog duration would extend given the higher order rates. CEO Satish Dhanasekaran clarified that backlog policy remains unchanged, with most orders still recognized within six months, even as AI-related bookings accelerate.
-
Andrew Spanola (UBS) asked about the Q3 revenue guide and drivers of sequential trends. CFO Neil Dougherty explained that Q3 revenues are expected to be largely in line with Q2, with growth weighted to the second half due to backlog and new product ramps.
-
Aaron Rakers (Wells Fargo) sought clarity on whether the company’s long-term growth algorithm should be updated given AI momentum. Dhanasekaran responded that organic growth remains fundamental and that expanding technology trends and new market entries are expected to drive a multiyear runway, but refrained from providing new long-term targets.
-
Meta Marshall (Morgan Stanley) inquired about incremental margins and the mix of production versus R&D business in AI. Dougherty attributed higher incremental margins to the current high growth rate, while Dhanasekaran said both R&D and manufacturing components have doubled, but the split remains approximately 70% R&D, 30% manufacturing in wireline AI.
-
Mark Delaney (Goldman Sachs) asked about the scale and future of non-terrestrial networks and LEO satellite opportunities. Management confirmed these are still a small part of revenue today but expect the commercial and defense satellite ecosystem to drive future growth as more constellations and use cases emerge.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the pace at which AI data center and wireline product ramps convert backlog into revenue, (2) execution on new product introductions and the integration of recent acquisitions, and (3) further expansion in aerospace, defense, and semiconductor orders. Sustained customer urgency in AI infrastructure and successful scaling of new technology domains will be important markers for continued momentum.
Keysight currently trades at $346.18, in line with $344.11 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
Our Favorite Stocks Right Now
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum - both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks - FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
