Keysight Technologies (KEYS) Q2 2026 earnings summary

Executive summary

• Achieved record Q2 2026 results with orders up 56% year-over-year to over $2 billion and revenue up 31% to $1.72 billion, driven by strong demand and strategic investments.

• Delivered double-digit growth across all business segments and key regions, with margin expansion and record free cash flow of $472 million.

• Raised full-year fiscal 2026 outlook, now projecting revenue growth in the high 20s percent and non-GAAP EPS growth well above long-term targets, supported by a strong pipeline.

Financial highlights

• Q2 revenue: $1.72 billion, up 31% year-over-year; orders: $2.051 billion, up 56%.

• Non-GAAP net income: $497 million ($2.87 per share), up 69% year-over-year; GAAP net income: $349 million ($2.02 per share).

• Gross margin: 72.3% reported; CSG gross margin 74%, EISG gross margin 68%.

• Operating margin: 33.3% non-GAAP, up 820 bps year-over-year; CSG and EISG operating margins at 33%.

• Free cash flow: $472 million; cash, cash equivalents, and restricted cash totaled $2.43 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; full-year outlook raised due to strong year-to-date performance.

• FY26 capital expenditures expected to be $200 million.

• Sequential revenue increase expected into Q4.

• Non-GAAP tax rate of 14% assumed for Q3 2026 and FY26.