Keysight Technologies delivered a record-breaking first quarter of fiscal 2026, with revenue surging 23% year-over-year to $1.60 billion, driven by robust demand in AI infrastructure, semiconductors, commercial communications, and aerospace defense. Orders rose 30% to $1.645 billion, non-GAAP EPS climbed to $2.17, and the company issued aggressive guidance for Q2 expecting around 30% revenue growth and 35% EPS expansion. This marks a clear inflection point after prior softer periods, fueled by secular trends in next-generation connectivity, AI data centers, and high-speed testing solutions, propelling the stock to all-time highs near $305 and a market cap exceeding $51 billion.
Keysight Technologies Accelerates Back into Strong Growth Mode
Keysight Technologies has decisively shifted momentum, posting standout results that signal a robust return to meaningful expansion after a period of more moderated performance in recent years. The company’s latest quarterly figures highlight broad-based acceleration across its core markets, underscoring its pivotal role in enabling cutting-edge technologies.
In the first fiscal quarter ended January 31, 2026, Keysight achieved record revenue of $1.60 billion, a substantial 23% increase from $1.298 billion in the comparable prior-year period. This top-line surge outpaced expectations and reflected contributions from both organic growth and strategic acquisitions, which added meaningful lift. On a core basis, excluding those impacts, revenue still expanded impressively by 14%.
Breaking down the performance by segment reveals the depth of the recovery. The Communications Solutions Group (CSG), which forms the largest portion of the business, generated $1.124 billion in revenue, up 27% year-over-year. Within CSG, commercial communications led the charge with 33% growth, propelled by escalating investments in AI-driven data centers, edge AI applications, advanced wireless technologies including 5G advancements and preparations for 6G, and non-terrestrial networks. Aerospace, defense, and government end markets contributed an 18% increase, supported by ongoing modernization efforts and heightened requirements for sophisticated testing in secure communications and radar systems.
The Electronic Industrial Solutions Group (EISG) also delivered solid results, posting $476 million in revenue, a 15% rise from the previous year. Growth here was consistent across key verticals, including automotive and energy, general electronics, and particularly semiconductors, where demand for precise validation tools remains elevated amid complex chip designs and high-volume production ramps.
Orders provided further evidence of strengthening demand pipelines, reaching $1.645 billion for the quarter—a 30% year-over-year increase on a reported basis and 22% on a core basis. This record level of bookings points to sustained momentum heading into subsequent periods and validates management’s strategy of heavy investment in R&D over the past several years to capture emerging opportunities.
Profitability metrics also reflected operational leverage and favorable mix shifts. GAAP net income rose sharply to $281 million, or $1.63 per diluted share, compared with $169 million, or $0.97 per share, in the prior year—boosted in part by a favorable income tax position. On a non-GAAP basis, net income advanced to $376 million, translating to EPS of $2.17, up from $1.82 and surpassing consensus forecasts. Gross margins held strong at approximately 66.7%, with operating margins expanding modestly despite continued spending on innovation.
Cash generation remained a highlight, with operating cash flow at $441 million and free cash flow at $407 million, both showing healthy year-over-year improvement. The balance sheet stays solid, ending the period with $2.20 billion in cash, cash equivalents, and restricted cash.
Looking ahead, Keysight’s outlook underscores confidence in continued acceleration. For the second fiscal quarter of 2026, management guided revenue to a range of $1.690 billion to $1.710 billion, implying roughly 30% year-over-year growth at the midpoint. Non-GAAP EPS is projected between $2.27 and $2.33, representing about 35% expansion and well above prior street estimates. This forward view highlights expectations for ongoing tailwinds from AI infrastructure buildouts, semiconductor test intensity, high-speed interface validation, and defense-related programs.
The surge in performance has translated directly to shareholder returns. Following the earnings release, shares of Keysight climbed dramatically, reaching all-time highs around $305 and pushing the market capitalization above $51 billion. Over the past 52 weeks, the stock has delivered gains approaching 88%, reflecting investor recognition of the company’s reaccelerated trajectory.
Several structural drivers underpin this resurgence. The explosion in AI computing demands sophisticated validation across data center hardware, from high-bandwidth memory and advanced packaging to PCIe and emerging UALink standards. Keysight’s portfolio of oscilloscopes, signal analyzers, and protocol test tools positions it as a critical enabler in these areas. Similarly, the push toward next-generation wireless and satellite connectivity requires extensive simulation and measurement capabilities, where Keysight maintains leadership.
In semiconductors, the complexity of next-gen nodes and heterogeneous integration drives higher test content per device. Automotive electrification and autonomy trends further bolster EISG demand, as do industrial electronics requiring precise power and signal integrity analysis.
While external factors like potential trade policy shifts introduce some uncertainty, the underlying secular trends in electronics innovation appear durable. Keysight’s focus on expanding its addressable market through organic innovation and targeted acquisitions has built a more resilient platform capable of capitalizing on these cycles.
This return to growth is not merely a rebound but a demonstration of strategic execution paying off. With double-digit expansion across segments, record orders, and ambitious forward guidance, Keysight is firmly reestablished on a high-growth path, benefiting from its indispensable position in the electronics ecosystem.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial recommendations, or a solicitation to buy or sell securities. Market conditions can change rapidly, and past performance is not indicative of future results. Investors should conduct their own research and consult qualified professionals before making decisions.