Q3 2026 Keysight Technologies Inc Earnings Call Transcript
Key Points
- Record Q3 results with orders up 56%, revenue up 36%, and EPS up 79%, driven by broad-based growth across all markets.
- Strong AI infrastructure demand, with Wireline orders more than doubling year-over-year and the commercial communications business achieving its first billion-dollar quarter.
- Aerospace, Defense and Government orders grew double digits, supported by defense modernization and new security architectures, with a durable multi-year demand cycle expected.
- Electronic Industrial Solutions Group delivered record orders and revenue, with double-digit growth across all three markets (General Electronics, Semiconductor, Automotive and Energy).
- Raised Q4 and full-year fiscal 2026 outlook, with expectations for continued strong growth and margin expansion, supported by a record pipeline and new customer additions.
- Supply chain constraints are limiting the ability to convert demand into revenue, with incoming parts under high demand and a less flexible supply environment.
- Aerospace, Defense and Government revenue growth slowed sequentially, though the company attributes this to quarter-to-quarter perturbations and supply chain issues.
- The company faces potential margin pressure from one-time tariff impacts in fiscal 2026 that will not repeat, which could affect future profitability comparisons.
- Software and services revenue mix declined to 33% of total revenue, as hardware growth outpaces software and services growth, potentially impacting long-term recurring revenue goals.
- The company's ability to meet demand is constrained by supply chain limitations, which may persist for the next two quarters and could hinder revenue growth.
Ladies and gentlemen, and welcome to Keysight Technologies fiscal third quarter 2026 earnings conference call. My name is Hilary and I will be your lead operator today. (Operator Instructions) This call is being recorded today, Tuesday, August 18, 2026, at 1:30 PM pacific time.
I would now like to hand the call over to Liz Morali, Vice President of Investor Relations. Please go ahead, Ms. Morali.
Good afternoon, and thank you for joining us for Keysight's third quarter earnings conference call for fiscal year 2026. Joining me on today's call are Satish Dhanasekaran, President and CEO; Neil Dougherty, Executive Vice President and CFO; Kailash Narayanan, President of the Communication Solutions Group; Jason Kary, President of the Electronic Industrial Solutions Group; and Steve Yoon, Senior Vice President of Global Sales.
Following the prepared remarks from Satish and Neil, we will conduct a question-and-answer session. The press release and information to supplement today's
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