Keysight’s third quarter results were met with a positive market reaction, reflecting growth across multiple end markets and strong order momentum. Management attributed revenue gains to robust demand in AI infrastructure, next-generation communications, and defense modernization. CEO Satish Dhanasekaran emphasized, “Orders grew 14%, revenue increased 10%, and EPS rose 16%.” The company also benefited from contributions by recent acquisitions, which expanded its software-centric solutions and enhanced its positioning in critical technology domains. Growth in both the Communications Solutions and Electronic Industrial Solutions groups was cited as broad-based, with notable strength in wireline and wireless applications.
Is now the time to buy KEYS? Find out in our full research report (it’s free for active Edge members).
Keysight (KEYS) Q3 CY2025 Highlights:
- Revenue: $1.42 billion vs analyst estimates of $1.38 billion (10.3% year-on-year growth, 2.5% beat)
- Adjusted EPS: $1.91 vs analyst estimates of $1.83 (4.2% beat)
- Adjusted EBITDA: $407 million vs analyst estimates of $388.4 million (28.7% margin, 4.8% beat)
- Revenue Guidance for Q4 CY2025 is $1.54 billion at the midpoint, above analyst estimates of $1.43 billion
- Adjusted EPS guidance for Q4 CY2025 is $1.98 at the midpoint, above analyst estimates of $1.84
- Operating Margin: 15.3%, down from 17.9% in the same quarter last year
- Backlog: $2.62 billion at quarter end, up 10.2% year on year
- Market Capitalization: $33.89 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 Q3 Earnings Call
- Mehdi Hosseini (SIG) asked about the outlook for wireless and catalysts for growth. CEO Satish Dhanasekaran responded that wireless exceeded expectations and is expected to grow in 2026, even before 6G reaches an inflection point.
- Samik Chatterjee (JPMorgan) explored the drivers behind accelerated order growth, particularly excluding acquisitions. CEO Dhanasekaran emphasized broad-based order strength across segments and regions, with robust pipeline visibility into next quarter.
- Rob Mason (Baird) inquired about the strategic value of Spirent’s positioning technology. Dhanasekaran and President Kailesh Narayanan described it as a “crown jewel” that enhances Keysight’s portfolio in automotive and aerospace, with bundling opportunities for satellite and antenna testing.
- Mark Delaney (Goldman Sachs) asked how different business lines are expected to contribute to overall growth. CFO Neil Dougherty highlighted AI-driven wireline strength, steady wireless growth, and stable industrial markets, noting that AI is a significant growth driver for the company.
- Tim Long (Barclays) questioned the trajectory of software and services revenue following acquisitions. CEO Dhanasekaran indicated that software and services are expected to reach 40% of total revenue, supported by the enhanced portfolio and customer lifecycle value.
Catalysts in Upcoming Quarters
In the quarters ahead, the StockStory team will focus on (1) Keysight’s ability to sustain momentum in AI and communications test solutions, (2) the pace and impact of integration and synergy capture from recent acquisitions, and (3) progress in margin recovery as tariff mitigation strategies take full effect. Execution on new product introductions and expansion in defense and industrial end markets will also be important markers to watch.
Keysight currently trades at $197.27, up from $177.67 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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