Keysight Technologies (KEYS) investor relations material

Executive summary

• Achieved record Q2 2026 results with revenue of $1.717 billion, up 31% year-over-year, and orders exceeding $2 billion, up 56%, driven by strong demand in AI, data centers, communications, and defense.

• Net income for Q2 2026 was $349 million (GAAP), up 35% year-over-year; non-GAAP net income was $497 million, with EPS up 69%.

• Free cash flow reached a record $472 million, supported by robust performance across all segments and regions.

• Raised full-year fiscal 2026 outlook, now projecting revenue growth in the high 20s percent, with strong pipeline and momentum.

• Growth was further supported by recent acquisitions and strategic investments.

Financial highlights

• Q2 2026 revenue: $1.717 billion, up 31% year-over-year; orders: $2.051 billion, up 56%.

• GAAP net income: $349 million ($2.02 per share); non-GAAP net income: $497 million ($2.87 per share).

• Gross margin: 72.3% non-GAAP (up from 64.6%); GAAP gross margin: 68.6% (up 6 points year-over-year).

• Operating margin: 33.3% non-GAAP (up from 25.2%); GAAP operating margin: 23.7% (up 8 points year-over-year).

• Free cash flow: $472 million; cash and equivalents: $2.4 billion as of April 30, 2026.

Outlook and guidance

• Q3 2026 revenue guidance: $1.73–$1.75 billion, up 29% year-over-year at midpoint; non-GAAP EPS: $2.43–$2.49.

• FY26 revenue growth expected in the high 20s% range; capital expenditures projected at $200 million.

• Management remains confident in long-term secular growth trends, citing ongoing R&D investments in 5G/6G, AI, quantum computing, and defense modernization.

• Cash and cash equivalents of $2.4 billion expected to meet foreseeable needs.

• Sequential revenue increase expected into Q4.