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Keysight (KEYS) Up 5% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Keysight (KEYS - Free Report) . Shares have added about 5% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Keysight due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Keysight Technologies Inc. before we dive into how investors and analysts have reacted as of late.
Keysight reported strong fourth-quarter fiscal 2025 results, wherein both bottom and top lines beat the Zacks Consensus Estimate. Based in Santa Rosa, CA, the leading electronic design and testing solution provider reported higher year-over-year revenues, backed by strength in the AI data-center market, aerospace, defense and government end markets. Management’s focus on expanding its business through collaborations with established sector players is another positive.
Net Income of KEYS
Net income on a GAAP basis was $229 million or $1.33 per share against a GAAP net loss of $73 million or 42 cents per share in the year-ago quarter.
Non-GAAP net income in the reported quarter was $331 million or $1.91 per share compared with $288 million or $1.65 in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate by 6 cents.
KEYS’ Q4 Revenues
Quarterly net sales improved to $1.42 billion from the year-ago quarter’s $1.29 billion, exceeding the high end of the guidance. Total orders increased 14% year over year to $1.53 billion. The company is witnessing incrementally positive signals in its sales funnel and customer engagement. The top line beat the Zacks Consensus Estimate by $29 million.
Communication Solutions Group (CSG) generated $990 million in revenues, up from the year-ago quarter’s $894 million. The 11% year-over-year growth was primarily driven by healthy traction in the commercial communications end market, induced by strong demand for AI data-center network solutions and applications, non-terrestrial networks, 5G Advanced and early 6G research. Aerospace, defense and government end markets grew backed by healthy demand trends in the space, satellite and security/defense communications growth. The growing defense modernization initiative is a positive factor. The top line beat our estimate of $965 million.
The Electronic Industrial Solutions Group (EISG) segment’s revenues increased to $429 million from $393 million in the prior-year quarter. Growing investment in AI-driven advanced nodes, high-bandwidth memory and silicon photonics is induced by high AI-performance requirements driving growth in the semiconductor vertical. Strength in industrial and digital health is driving growth in the general electronics vertical. The top line beat our revenue estimate of $414.2 million.
Region-wise, Asia-Pacific revenues aggregated $581 million compared with $508 million in the prior-year quarter. The company reported a 6% year-over-year improvement in revenues from the Americas to $581 million. Revenues from Europe were $257 million, up 12% from the year-ago quarter's $230 million.
Other Details of KEYS
During the quarter, the company’s non-GAAP gross profit totaled $912 million compared with $829 million in the year-ago quarter, with gross margins of 64.3% and 64.5%, respectively. The non-GAAP operating margin was 26.3%, up from 25.8% in the prior-year quarter.
CSG reported a non-GAAP operating margin of 26.7%, down 120 basis points (bps) year over year. EISG reported a non-GAAP operating margin of 25.4%, up 430 bps year over year, largely due to a higher mix of software.
Cash Flow & Liquidity of KEYS
During the quarter, Keysight generated $225 million in cash from operating activities compared with $359 million a year ago. As of Sept. 30, 2025, the company had $1.9 billion in cash and cash equivalents and $2.53 billion of long-term debt.
KEYS’ Outlook
For the fourth quarter of fiscal 2025, Keysight expects revenues in the range of $1.53-$1.55 billion. Non-GAAP earnings per share are estimated to be between $1.95 and $2.01.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
VGM Scores
At this time, Keysight has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock has a score of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Keysight has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Keysight (KEYS) Up 5% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Keysight (KEYS - Free Report) . Shares have added about 5% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Keysight due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent catalysts for Keysight Technologies Inc. before we dive into how investors and analysts have reacted as of late.
Keysight's Q4 Earnings Surpass Estimates, Revenues Rise Y/Y
Keysight reported strong fourth-quarter fiscal 2025 results, wherein both bottom and top lines beat the Zacks Consensus Estimate. Based in Santa Rosa, CA, the leading electronic design and testing solution provider reported higher year-over-year revenues, backed by strength in the AI data-center market, aerospace, defense and government end markets. Management’s focus on expanding its business through collaborations with established sector players is another positive.
Net Income of KEYS
Net income on a GAAP basis was $229 million or $1.33 per share against a GAAP net loss of $73 million or 42 cents per share in the year-ago quarter.
Non-GAAP net income in the reported quarter was $331 million or $1.91 per share compared with $288 million or $1.65 in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate by 6 cents.
KEYS’ Q4 Revenues
Quarterly net sales improved to $1.42 billion from the year-ago quarter’s $1.29 billion, exceeding the high end of the guidance. Total orders increased 14% year over year to $1.53 billion. The company is witnessing incrementally positive signals in its sales funnel and customer engagement. The top line beat the Zacks Consensus Estimate by $29 million.
Communication Solutions Group (CSG) generated $990 million in revenues, up from the year-ago quarter’s $894 million. The 11% year-over-year growth was primarily driven by healthy traction in the commercial communications end market, induced by strong demand for AI data-center network solutions and applications, non-terrestrial networks, 5G Advanced and early 6G research. Aerospace, defense and government end markets grew backed by healthy demand trends in the space, satellite and security/defense communications growth. The growing defense modernization initiative is a positive factor. The top line beat our estimate of $965 million.
The Electronic Industrial Solutions Group (EISG) segment’s revenues increased to $429 million from $393 million in the prior-year quarter. Growing investment in AI-driven advanced nodes, high-bandwidth memory and silicon photonics is induced by high AI-performance requirements driving growth in the semiconductor vertical. Strength in industrial and digital health is driving growth in the general electronics vertical. The top line beat our revenue estimate of $414.2 million.
Region-wise, Asia-Pacific revenues aggregated $581 million compared with $508 million in the prior-year quarter. The company reported a 6% year-over-year improvement in revenues from the Americas to $581 million. Revenues from Europe were $257 million, up 12% from the year-ago quarter's $230 million.
Other Details of KEYS
During the quarter, the company’s non-GAAP gross profit totaled $912 million compared with $829 million in the year-ago quarter, with gross margins of 64.3% and 64.5%, respectively. The non-GAAP operating margin was 26.3%, up from 25.8% in the prior-year quarter.
CSG reported a non-GAAP operating margin of 26.7%, down 120 basis points (bps) year over year. EISG reported a non-GAAP operating margin of 25.4%, up 430 bps year over year, largely due to a higher mix of software.
Cash Flow & Liquidity of KEYS
During the quarter, Keysight generated $225 million in cash from operating activities compared with $359 million a year ago. As of Sept. 30, 2025, the company had $1.9 billion in cash and cash equivalents and $2.53 billion of long-term debt.
KEYS’ Outlook
For the fourth quarter of fiscal 2025, Keysight expects revenues in the range of $1.53-$1.55 billion. Non-GAAP earnings per share are estimated to be between $1.95 and $2.01.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
VGM Scores
At this time, Keysight has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock has a score of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Keysight has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.