Keysight Technologies Posts 37% Revenue Growth and 79% EPS Surge in Record Q3 2026 on AI-Driven Demand

Keysight Technologies reported fiscal third-quarter results on August 18 that marked its second consecutive record quarter, with revenue of $1.85 billion, up 37% from $1.35 billion a year earlier, and non-GAAP earnings per share of $3.07, up 79% from $1.72. GAAP net income rose to $397 million, or $2.30 per share, compared with $191 million, or $1.10 per share, in Q3 2025. Orders exceeded $2 billion for the second straight quarter, supported by surging AI infrastructure spending, with wireline orders more than doubling year over year and the commercial communications segment posting its first billion-dollar quarter.

The Communications Solutions Group generated $1.345 billion in revenue, up 43% on a reported basis, while the Electronic Industrial Solutions Group contributed $501 million, up 21%, with record orders and revenue across all three of its sub-markets. Aerospace, Defense and Government revenue grew 14% to $339 million. Operating margins reached 33.2%, above the company's long-term targets, and free cash flow was $403 million, up from $291 million a year ago.

Keysight repurchased approximately 640,000 shares at an average price of $326, totaling $210 million in the quarter. For Q4, management guided revenue of $1.930 billion to $1.950 billion, representing roughly 37% year-over-year growth at the midpoint, and non-GAAP EPS of $3.34 to $3.40, with the full-year outlook improved. A robust backlog and book-to-bill ratio above one are expected to support revenue momentum through at least 2028, though supply chain constraints remain a near-term cap on converting demand into revenue.

Shares rose on the results, and options markets showed elevated activity in both calls and puts following the announcement.