Keysight Technologies reported first‑quarter 2026 results that surpassed expectations, with revenue of $1.600 billion—up 23% from the $1.300 billion reported in Q1 2025—and adjusted earnings per share of $2.17, beating the consensus estimate of $1.99 by $0.18 (a 9.05% beat). The company’s top‑line growth was driven by strong demand in its Communications Solutions Group (CSG) and Electronic Industrial Solutions Group (EISG), whose revenues rose to $1.124 billion and $476 million, respectively, compared with $883 million and $415 million in the same quarter a year earlier.
The earnings beat was supported by a mix of higher‑margin contracts and the impact of recent acquisitions that broadened Keysight’s software and photonics capabilities. Gross margin expanded to 66.7%, up 90 basis points from the prior year, while operating margin held at 27.4%, reflecting disciplined cost management amid a higher mix of high‑margin AI and defense solutions. The company’s core business segments posted double‑digit growth, with CSG revenue up 24% and EISG revenue up 14% YoY.
Management raised its outlook for the second quarter, projecting revenue of $1.690 billion to $1.710 billion—approximately 30% year‑over‑year growth—and adjusted EPS of $2.27 to $2.33. The guidance reflects confidence in sustained demand for AI data‑center infrastructure, commercial communications, and aerospace‑defense markets, and signals that the company expects to continue benefiting from the strategic acquisitions that have added new product lines and customer bases.
Satish Dhanasekaran, Keysight’s President and CEO, said the company had “a strong start to the fiscal year with outstanding results that exceeded our expectations” and that the investments made over the past three years were “enabling us to capitalize on continued momentum in our markets and deliver value.” Chief Financial Officer Neil Dougherty noted that the quarter’s “record results” were driven by a 90‑basis‑point lift in gross margin and a one‑point gain from currency, underscoring the company’s pricing power and operational leverage.
The company faces potential headwinds from the Supreme Court ruling on IEEPA tariffs, which could affect certain product lines, but it also benefits from tailwinds such as robust demand for AI infrastructure, defense modernization, and a shift toward wireline orders in commercial communications. These dynamics suggest that while some regulatory uncertainty remains, the overall growth trajectory is supported by strong market demand and a diversified product portfolio.
Investors reacted positively to the results, with the market acknowledging the company’s strong earnings beat, margin expansion, and optimistic guidance. The announcement reinforced Keysight’s position as a key enabler of high‑speed digital and AI infrastructure, and it highlighted the company’s continued focus on high‑growth segments and strategic acquisitions.
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