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Keysight (KEYS) Up 2.5% 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 2.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Keysight due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.
Keysight Q2 Earnings Surpass Estimates on Solid Revenue Growth
Keysight reported mixed second-quarter fiscal 2026 results, with the bottom line beating the Zacks Consensus Estimate while the top line missing the same.
The leading electronic design and testing solution provider reported a 31% year-over-year increase in revenues, driven by strong demand from artificial intelligence (AI) data centers, semiconductor, wireless and defense markets. Growing investments in advanced networking and chip technologies also supported the company’s top-line growth.
Net Income
Net income on a GAAP basis was $349 million or $2.02 per share compared with $257 million or $1.49 per share in the prior-year quarter. Strong top-line growth boosted the bottom line during the quarter.
Non-GAAP net income in the reported quarter was $497 million or $2.87 per share compared with $295 million or $1.70 per share in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate by 54 cents.
Revenues
Net sales during the quarter increased to $1.72 billion from $1.31 billion in the year-ago quarter. owing to a healthy growth in both the Communication Solutions Group (CSG) and Electronic Industrial Solutions Group (EISG) segments. The top line missed the Zacks Consensus Estimate by 0.07%. Total orders were $2.05 billion compared with $1.32 billion in the year-ago quarter.
CSG generated $1.23 billion in revenues, up from the year-ago quarter’s $913 million. The 35% year-over-year growth was primarily driven by healthy growth in both wireline and wireless, AI data center expansion, and rising investments in next-generation wireless (5G/6G and NTN).
EISG segment’s revenues increased to $486 million from $393 million in the prior-year quarter. Growth was driven by strong AI-related investments, higher demand for wafer and lithography solutions for advanced chip development and growth in software-defined vehicles, cybersecurity and EV charging solutions.
Region-wise, Asia-Pacific revenues aggregated $746 million compared with $573 million in the prior-year quarter. The company reported a 26% year-over-year improvement in revenues from the Americas to $644 million. Revenues from Europe were $327 million, up 47% from the year-ago quarter's $223 million.
During the quarter, revenues from Aerospace, Defense and Government increased to $373 million from $301 million in the year-ago quarter. The company reported a 40% year-over-year improvement in revenues from the Commercial Communications to $858 million. Electronic Industrial generated $486 million in revenues, up from the year-ago quarter’s $393 million.
Other Details
During the quarter, the company’s non-GAAP gross profit totaled $1.24 billion, up from $844 million in the year-ago quarter, with gross margins of 72.3% and 64.6%, respectively. Non-GAAP operating income totaled $572 million compared with $328 million in the year-ago period, with operating margins of 33.3% and 25.2%, respectively.
CSG reported a non-GAAP operating income of $411 million compared with $236 million in the year-ago period. EISG non-GAAP operating income increased to $161 million from $92 million in the prior-year quarter.
Cash Flow & Liquidity
In the second quarter of fiscal 2026, Keysight generated $501 million of net cash from operating activities compared with $484 million in the year-ago quarter. As of April 30, 2026, the company had $2.41 billion in cash and cash equivalents and $1.83 billion of long-term debt.
Outlook
For the third quarter of fiscal 2026, Keysight expects revenues in the range of $1.73-$1.75 billion. Non-GAAP earnings per share are estimated to be between $2.43 and $2.49.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 12.21% due to these changes.
VGM Scores
Currently, Keysight has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a score of F on the value side, putting it in the lowest quintile 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. It comes with little surprise Keysight has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
View the Zacks #1 Rank List
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Keysight (KEYS) Up 2.5% 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 2.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Keysight due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important catalysts.
Keysight Q2 Earnings Surpass Estimates on Solid Revenue Growth
Keysight reported mixed second-quarter fiscal 2026 results, with the bottom line beating the Zacks Consensus Estimate while the top line missing the same.
The leading electronic design and testing solution provider reported a 31% year-over-year increase in revenues, driven by strong demand from artificial intelligence (AI) data centers, semiconductor, wireless and defense markets. Growing investments in advanced networking and chip technologies also supported the company’s top-line growth.
Net Income
Net income on a GAAP basis was $349 million or $2.02 per share compared with $257 million or $1.49 per share in the prior-year quarter. Strong top-line growth boosted the bottom line during the quarter.
Non-GAAP net income in the reported quarter was $497 million or $2.87 per share compared with $295 million or $1.70 per share in the prior-year quarter. The bottom line surpassed the Zacks Consensus Estimate by 54 cents.
Revenues
Net sales during the quarter increased to $1.72 billion from $1.31 billion in the year-ago quarter. owing to a healthy growth in both the Communication Solutions Group (CSG) and Electronic Industrial Solutions Group (EISG) segments. The top line missed the Zacks Consensus Estimate by 0.07%. Total orders were $2.05 billion compared with $1.32 billion in the year-ago quarter.
CSG generated $1.23 billion in revenues, up from the year-ago quarter’s $913 million. The 35% year-over-year growth was primarily driven by healthy growth in both wireline and wireless, AI data center expansion, and rising investments in next-generation wireless (5G/6G and NTN).
EISG segment’s revenues increased to $486 million from $393 million in the prior-year quarter. Growth was driven by strong AI-related investments, higher demand for wafer and lithography solutions for advanced chip development and growth in software-defined vehicles, cybersecurity and EV charging solutions.
Region-wise, Asia-Pacific revenues aggregated $746 million compared with $573 million in the prior-year quarter. The company reported a 26% year-over-year improvement in revenues from the Americas to $644 million. Revenues from Europe were $327 million, up 47% from the year-ago quarter's $223 million.
During the quarter, revenues from Aerospace, Defense and Government increased to $373 million from $301 million in the year-ago quarter. The company reported a 40% year-over-year improvement in revenues from the Commercial Communications to $858 million. Electronic Industrial generated $486 million in revenues, up from the year-ago quarter’s $393 million.
Other Details
During the quarter, the company’s non-GAAP gross profit totaled $1.24 billion, up from $844 million in the year-ago quarter, with gross margins of 72.3% and 64.6%, respectively. Non-GAAP operating income totaled $572 million compared with $328 million in the year-ago period, with operating margins of 33.3% and 25.2%, respectively.
CSG reported a non-GAAP operating income of $411 million compared with $236 million in the year-ago period. EISG non-GAAP operating income increased to $161 million from $92 million in the prior-year quarter.
Cash Flow & Liquidity
In the second quarter of fiscal 2026, Keysight generated $501 million of net cash from operating activities compared with $484 million in the year-ago quarter. As of April 30, 2026, the company had $2.41 billion in cash and cash equivalents and $1.83 billion of long-term debt.
Outlook
For the third quarter of fiscal 2026, Keysight expects revenues in the range of $1.73-$1.75 billion. Non-GAAP earnings per share are estimated to be between $2.43 and $2.49.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 12.21% due to these changes.
VGM Scores
Currently, Keysight has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a score of F on the value side, putting it in the lowest quintile 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. It comes with little surprise Keysight has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.