8-K: Keysight Technologies Reports Record Q2 2026 Results, Raises Full-Year Outlook

Keysight Technologies announced record-breaking financial results for its second fiscal quarter ended April 30, 2026, with all-time highs in orders, revenue, EPS, and free cash flow, leading to an upward revision of its full-year 2026 outlook.

Summary

• Keysight Technologies reported its strongest quarter ever for Q2 2026, achieving record levels in orders, revenue, earnings per share (EPS), and free cash flow.
• Revenue for the quarter reached $1.72 billion, a significant increase from $1.31 billion in Q2 2025.
• GAAP net income was $349 million ($2.02 per share), up from $257 million ($1.49 per share) in the prior year's second quarter.
• Non-GAAP net income rose to $497 million ($2.87 per share) from $295 million ($1.70 per share) year-over-year.
• Cash flow from operations was $501 million, and free cash flow was $472 million.
• The Communications Solutions Group (CSG) saw revenue grow 35% to $1.231 billion, while the Electronic Industrial Solutions Group (EISG) revenue increased 24% to $486 million.
• The company recorded a $100 million receivable related to IEEPA tariff refunds, with a $40 million liability for surcharges refunded to customers.
• Keysight is raising its full-year 2026 outlook and expects Q3 2026 revenue between $1.730 billion and $1.750 billion, with non-GAAP EPS projected at $2.43 to $2.49.

Sentiment

Score: 9

Explanation: StockSavvy.ai views this as a very positive filing, with record-breaking results across multiple key metrics and a raised full-year outlook, indicating strong operational execution and market position.

Positives

• Record-breaking quarter with all-time highs in orders, revenue, EPS, and free cash flow.
• Revenue increased by 31% year-over-year to $1.72 billion.
• Significant growth in both key segments: CSG up 35% and EISG up 24%.
• Strong cash flow generation with $501 million from operations and $472 million in free cash flow.
• Raised full-year fiscal 2026 outlook due to strong year-to-date momentum and robust pipeline.
• Improved gross and operating margins in both CSG (74% and 33%) and EISG (68% and 33%) compared to the prior year.

Negatives

• The company recorded a $40 million liability representing the refund of tariff surcharges collected from customers, which reduced revenue.
• While not explicitly negative, the filing notes that non-GAAP financial measures may not be comparable to similarly titled measures used by other companies.

Risks

• Impacts of global economic conditions such as inflation or recession.
• Slowing demand for products or services.
• Volatility in financial markets and reduced access to credit.
• Increased interest rates.
• Impacts of geopolitical tension and conflict outside of the U.S.
• Export control regulations and compliance.
• Customer purchasing decisions and timing.
• Tariff and trade policy impacts and order cancellations.

Future Outlook

Keysight expects revenue for the third fiscal quarter of 2026 to be in the range of $1.730 billion to $1.750 billion, representing approximately 29% year-over-year growth at the midpoint. Non-GAAP earnings per share for Q3 2026 are projected to be between $2.43 and $2.49.

Management Comments

• "Keysight delivered the strongest quarter in the company's history, capping a record first half with all-time highs in orders, revenue, EPS, and free cash flow."
• "The disciplined decisions and strategic investments we have made over the past several years are enabling us to capitalize on accelerating demand and outperform."
• "With strong year-to-date momentum and a robust pipeline of opportunities, we are raising our expectations for fiscal 2026."

Industry Context

StockSavvy.ai notes that Keysight's strong performance in Q2 2026, particularly the significant revenue growth in both its Communications Solutions Group and Electronic Industrial Solutions Group, reflects continued demand in key technology sectors like 5G, automotive, and semiconductor testing, outpacing broader economic uncertainties.

Comparison to Industry Standards

• Keysight's Q2 2026 revenue growth of 31% significantly outpaces the typical growth rates seen in the broader semiconductor test and measurement industry, which often experiences more cyclicality.
• The company's reported non-GAAP EPS of $2.87 for Q2 2026 demonstrates strong profitability, a key metric that investors use to compare performance against peers like Teradyne and Advantest, though specific peer comparisons are not detailed in this filing.

Legal Proceedings

• The company recorded a receivable of $100 million related to IEEPA tariff refunds following a Supreme Court determination that certain tariffs were not authorized by law.
• A $40 million liability was recorded for the refund of tariff surcharges collected from customers.

Stakeholder Impact

• Shareholders are likely to benefit from the record financial performance, increased EPS, and raised full-year outlook, potentially leading to positive stock performance.
• Customers will benefit from the refund of tariff surcharges, reducing their costs.
• Employees may see continued opportunities and stability given the company's strong performance and growth trajectory.

Next Steps

• Management will present further details on Q2 FY2026 financial results and Q3 FY2026 outlook during an investor conference call on May 19, 2026.
• The company will continue to capitalize on accelerating demand and strategic investments.
• Keysight will monitor global economic conditions, geopolitical tensions, and trade policies for potential impacts.

Key Dates

Recommendation

The filing demonstrates exceptional performance with record-breaking results, significant year-over-year growth across key metrics, and a raised full-year outlook. The strong execution in both major business segments, coupled with robust free cash flow generation, provides a compelling case for a strong buy recommendation.

Keywords

Keysight Technologies, Q2 2026 Earnings, Financial Results, Revenue Growth, EPS, Free Cash Flow, Communications Solutions, Electronic Industrial Solutions