Keysight Technologies (KEYS) Q3 2026 earnings summary

Executive summary

• Achieved record Q3 2026 results with revenue of $1.846B, up 36% year-over-year, and orders exceeding $2.09B, up 56% year-over-year, driven by strong execution and demand across all markets.

• Delivered double-digit growth across all business segments and regions, with margin expansion and record non-GAAP EPS of $3.07, up 79% year-over-year.

• Robust free cash flow of $403M and significant share repurchases of $210M in Q3; ended quarter with $2.62B in cash and equivalents.

• Integration of recent acquisitions completed ahead of schedule, with 80–90% of $100M cost synergies expected by year-end.

• Raised FY26 outlook, targeting revenue growth above 30% and non-GAAP EPS growth around 60%, citing momentum in AI infrastructure, advanced semiconductors, defense modernization, and next-gen communications.

Financial highlights

• Q3 2026 orders: $2.091B, up 56% year-over-year; revenue: $1.846B, up 36% year-over-year; gross margin 69%, operating margin 33.2%.

• Net income: $531M non-GAAP ($3.07 EPS), $397M GAAP ($2.30 EPS); free cash flow: $403M.

• Segment revenue: CSG $1.345B (+43%), EISG $501M (+21%).

• Regional revenue growth: Americas +29%, Europe +41%, Asia Pacific +42%.

• Software and services grew double digits, now 33% of revenue; annual recurring revenue is 24% of total.

Outlook and guidance

• Q4 2026 revenue expected at $1.93B–$1.95B (37% YoY growth at midpoint); Q4 non-GAAP EPS $3.34–$3.40.

• FY26 revenue growth projected at 32%, non-GAAP EPS growth at 60% at midpoint.

• Supply chain remains a governor for near-term revenue; long-term demand outlook remains strong due to technology trends and product refresh cycle.