Company Reports

Keysight Technologies reported upside to its July-quarter guidance on the top and bottom lines, and guided to more strong growth in the October quarter. Guidance now implies 32% revenue growth in fiscal 2026, up from management's prior guide of "high-20%" growth.

We see Keysight Technologies as the leader in communications testing and measurement solutions, and offers a vendor-agnostic way to invest in the rapidly growing 5G and high-speed networking markets. In our view, Keysight has the strongest and broadest communications testing capabilities in the market, inclusive of hardware, software, and services. We think a comprehensive portfolio allows Keysight to act as a strategic partner to its customers, enabling new designs and accelerating time to market for network operators, network equipment OEMs, device OEMs, and suppliers.

We see Keysight Technologies as the leader in communications testing and measurement solutions, and offers a vendor-agnostic way to invest in the rapidly growing 5G and high-speed networking markets. In our view, Keysight has the strongest and broadest communications testing capabilities in the market, inclusive of hardware, software, and services. We think a comprehensive portfolio allows Keysight to act as a strategic partner to its customers, enabling new designs and accelerating time to market for network operators, network equipment OEMs, device OEMs, and suppliers.

Keysight Technologies' April-quarter results were strong, and management raised its full-year outlook. Sales rose 32% year over year to $1.72 billion. Non-GAAP operating margin rose 820 basis points year on year to 33.3%. Management now expects fiscal 2026 growth in the high-20% range.

Keysight Technologies' January-quarter results handily beat management guidance, and the April-quarter outlook was strong. Management nearly doubled its organic growth guidance for fiscal 2026, now expecting more than 20% total reported growth, including inorganic contributions of about 7%.

We see Keysight Technologies as the leader in communications testing and measurement solutions, and offers a vendor-agnostic way to invest in the rapidly growing 5G and high-speed networking markets. In our view, Keysight has the strongest and broadest communications testing capabilities in the market, inclusive of hardware, software, and services. We think a comprehensive portfolio allows Keysight to act as a strategic partner to its customers, enabling new designs and accelerating time to market for network operators, network equipment OEMs, device OEMs, and suppliers.

Keysight Technologies hosted us for a tour of their booth at the Consumer Electronics Show in Las Vegas this week. The firm exhibited several autonomous and software-defined vehicle testing solutions, ranging from simulation, to design, to cybersecurity.

We see Keysight Technologies as the leader in communications testing and measurement solutions, and offers a vendor-agnostic way to invest in the rapidly growing 5G and high-speed networking markets. In our view, Keysight has the strongest and broadest communications testing capabilities in the market, inclusive of hardware, software, and services. We think a comprehensive portfolio allows Keysight to act as a strategic partner to its customers, enabling new designs and accelerating time to market for network operators, network equipment OEMs, device OEMs, and suppliers.

Keysight Technologies' October-quarter results beat the top end of guidance, with sales rising 10% year over year to $1.42 billion. Management guided to strong organic growth next quarter, on top of first full quarter contribution from the acquisition of Spirent and assets from Synopsys and Ansys.

Keysight Technologies' fiscal third-quarter results beat management guidance on the top and bottom lines. Revenue rose 11% year over year and 4% sequentially to $1.35 billion. Fourth-quarter guidance implies further sequential growth, with a sales midpoint of $1.38 billion.

Keysight Technologies' April quarter results beat management guidance, highlighted by revenue rising 7% year over year to $1.31 billion. July quarter guidance calls for modest sequential revenue growth, and management raised its fiscal 2025 revenue growth guidance to 6%, from 5%.

Keysight Technologies' January-quarter results beat management guidance on the top and bottom lines. Quarterly revenue rose 3% year over year to $1.30 billion. Management maintained its guidance for 5% revenue growth and 10% earnings growth in fiscal 2025.

We visited Keysight Technologies' booth at CES 2025. Keysight exhibited several solutions for automotive testing, including for electric vehicles, charging infrastructure, and connected cars. Keysight's exhibits spanned research and development as well as manufacturing testing.

We retain our $157 per share fair value estimate for wide-moat Keysight Technologies with our long-term thesis intact after good October-quarter results. Keysight’s revenue declined in fiscal 2024 behind weaker end-market demand, but we expect a return to mid-single-digit growth in fiscal 2025 and beyond. Management’s growth outlook for fiscal 2025 was a little light compared with our model, but we view a return to growth positively nonetheless. We expect demand to remain mixed across Keysight’s end markets in 2025, with strength in wired data center connectivity offset by softer demand for wireless telecom spending and electric vehicle investment. Keysight looks fairly valued to us. Shares rose nearly 10% in after-hours trading on guidance that beat FactSet consensus, but was more in line with our own model.

We think Keysight Technologies is the leader in communications testing and measurement solutions, and offers a vendor-agnostic way to invest in the rapidly growing 5G and high-speed networking markets. In our view, Keysight has the strongest and broadest communications testing capabilities in the market, inclusive of hardware, software, and services. We think a comprehensive portfolio allows Keysight to act as a strategic partner to its customers, enabling new designs and accelerating time to market for network operators, network equipment OEMs, device OEMs, and suppliers.

We maintain our $157 fair value estimate for shares of wide-moat Keysight Technologies with our medium-term recovery thesis intact. Keysight’s fiscal third quarter results and fiscal fourth quarter guidance beat our model, and we see both indicating the green shoots of a demand recovery. Keysight has seen weak results in fiscal 2024 stemming from slower orders from communications and industrial customers. We see this downturn as short-term and market-driven. We continue to like the firm’s position for long-term growth as the best-of-breed provider of communications testing equipment, which also underpins our wide moat rating. Shares jumped 10% after hours on positive results and guidance, coming right up to our fair value estimate.

We maintain our $157 fair value estimate for shares of wide-moat Keysight Technologies as we believe our long-term thesis is intact after the firm reported fiscal second-quarter results. Keysight continues to see weaker demand across its served markets, led by commercial communications. We expect soft results through the fiscal year and a multiyear rebound across fiscal 2025 and 2026. Fiscal second-quarter results were slightly above our expectations, while fiscal third-quarter guidance was modestly below our model. Overall, our view on Keysight’s longer-term opportunity is unchanged. We continue to see the firm as well-positioned with a comprehensive communications testing portfolio and good adjacent opportunities in cars and semiconductors. We see shares as fairly valued.

We think Keysight Technologies is the leader in communications testing and measurement solutions, and offers a vendor-agnostic way to invest in the rapidly growing 5G and high-speed networking markets. In our view, Keysight has the strongest and broadest communications testing capabilities in the market, inclusive of hardware, software, and services. We think a comprehensive portfolio allows Keysight to act as a strategic partner to its customers, enabling new designs and accelerating time to market for network operators, network equipment OEMs, device OEMs, and suppliers.

We trim our fair value estimate for shares of wide-moat Keysight Technologies to $157 per share, from $166, to reflect a softer short-term environment than we’d previously modeled. Keysight’s results came in above the top end of management guidance, but fiscal second-quarter guidance just missed our model, and management’s outlook for the fiscal second half was below our forecast. Keysight continues to face softer customer spending, particularly in its wireless communications and industrial markets. We still like the firm’s relatively stronger demand in aerospace, defense, and government customers, and it’s seeing some upside in data center spending from artificial intelligence, or AI. We continue to expect stronger long-term results from Keysight and appreciate its moaty, comprehensive portfolio for communications testing. Shares slid commensurate to our fair value trim after the results were reported, and we see the stock as fairly valued.

We think Keysight Technologies is the leader in communications testing and measurement solutions, and offers a vendor-agnostic way to invest in the rapidly growing 5G and high-speed networking markets. In our view, Keysight has the strongest and broadest communications testing capabilities in the market, inclusive of hardware, software, and services. We think a comprehensive portfolio allows Keysight to act as a strategic partner to its customers, enabling new designs and accelerating time to market for network operators, network equipment OEMs, device OEMs, and suppliers.