Keysight Technologies Inc. Reports Impressive Q1 2026 Financial Results
1. Overview
Keysight Technologies, Inc., a prominent innovator in the computing, communications, and electronics sectors, announced its financial results for the first quarter of fiscal year 2026. The company continues to demonstrate robust growth driven by strategic acquisitions, increased demand for advanced technologies, and a solid focus on research and development.
In this report, we analyze the key financial metrics, strategic movements, and market conditions that have influenced Keysight's performance.
2. Financial Highlights
Strong Revenue Growth
For the three months ending January 31, 2026, Keysight reported total orders of $1,645 million, a remarkable 30% increase year-over-year. The revenue for the quarter reached $1,600 million, marking a 23% increase compared to the same period in the previous year. This growth was bolstered by favorable foreign currency movements and contributions from the acquisition of Spirent Communications plc, which added $88 million to quarterly revenue.
| Mar 2025 | Mar 2026 | |
|---|---|---|
Net Income | 611M | 962M |
Profit | 607M | 962M |
Net Income Discontinued | 0 | -19M |
Net Income Continuing | 611M | 981M |
Income Tax Expense | 224M | 100M |
Pretax Income | 835M | 1.08B |
Non-operating Income | 5M | 175M |
Operating Income | 830M | 906M |
Revenue | 5.01B | 5.67B |
Costs and Expenses | 4.18B | 4.77B |
Cost of Revenue | 1.87B | 2.16B |
Operating Expenses | 2.31B | 2.60B |
Research & Development | 936M | 1.06B |
Selling, General & Administrative | 1.39B | 1.56B |
Other Operating Expenses | -20M | -15M |
Net Income and Operating Performance
Keysight's net income for Q1 2026 surged to $281 million, up from $169 million in Q1 2025. This impressive increase was primarily attributed to higher revenue, a favorable income tax benefit from an audit settlement, and gains on derivative instruments. However, the growth was somewhat tempered by costs associated with acquired businesses and net losses on equity investments.
The operating income for the quarter was $248 million, reflecting the company’s commitment to managing its cost structure effectively while investing in future growth.
Segment Performance
Keysight operates through two main segments: the Communications Solutions Group (CSG) and the Electronic Industrial Solutions Group (EISG).
Communications Solutions Group (CSG)
The CSG segment reported a 27% year-over-year increase in revenue, driven by heightened demand in high-speed networks and ongoing investments in next-generation technologies such as AI and 5G. This segment is crucial as it serves customers in commercial communications and government markets.
Electronic Industrial Solutions Group (EISG)
The EISG segment experienced a 15% year-over-year increase in revenue, fueled by demand for advanced semiconductor technologies and software-defined vehicles, particularly in Europe and Asia Pacific. This growth reflects Keysight's ability to adapt to the evolving needs of diverse end markets.
3. Financial Condition
Balance Sheet Insights
As of January 31, 2026, Keysight's total assets stood at $11.48 billion, an increase from $9.38 billion in the previous year. The company’s strong asset base is supported by a solid liquidity position, with $2.17 billion in cash and equivalents.
| Mar 2025 | Mar 2026 | |
|---|---|---|
Total Assets | 9.38B | 11.48B |
Total Current Assets | 4.45B | 4.70B |
Cash and Equivalents | 2.06B | 2.17B |
Net Inventories | 1.03B | 1.04B |
Accounts Receivable | 797M | 914M |
Prepaid Expenses | 560M | 561M |
Total Non-current Assets | 4.93B | 6.78B |
Intangible Assets | 2.91B | 4.72B |
Long-term Investments | 147M | 147M |
Non-current Deferred Tax Assets | 365M | 330M |
Net PP&E | 764M | 757M |
Lease Assets | 224M | 229M |
Other Non-current Assets | 521M | 592M |
Total Liabilities and Equity | 9.38B | 11.48B |
Total Liabilities | 4.2B | 5.27B |
Total Current Liabilities | 1.50B | 1.80B |
Accounts Payable and Accrued Liabilities | 673M | 859M |
Current Debt | 43M | 52M |
Current Deferred Revenue | 594M | 729M |
Other Current Liabilities | 199M | 165M |
Total Non-current Liabilities | 2.69B | 3.47B |
Long-term Debt | 1.79B | 2.53B |
Non-current Deferred Revenue | 209M | 237M |
Other Non-current Liabilities | 692M | 700M |
Total Equity and Non-controlling Interests | 5.18B | 6.20B |
Total Equity | 5.18B | 6.20B |
Cash Flow Dynamics
Keysight reported a net change in cash of $305 million for the quarter, aided by robust operating cash flows which totaled $441 million. This increase reflects the company's strong financial health, despite investments in acquisitions and treasury stock repurchases.
| Mar 2025 | Mar 2026 | |
|---|---|---|
Net Change in Cash | 312M | 118M |
Effect of Exchange Rate Changes | -10M | 24M |
Net Cash from Operating Activities | 1.10B | 1.47B |
Operating Profit | 611M | 962M |
Adjustment to Operating Profit | 491M | 510M |
Net Cash from Investing Activities | -341M | -1.73B |
Business & Interest in Affiliates | 203M | 1.63B |
Investments | 22M | -37M |
Productive Assets | 139M | 130M |
Other Investing Activities | 23M | -6M |
Net Cash from Financing Activities | -439M | 360M |
Debt | -25M | 748M |
Equity Issuance/Repurchase | -360M | -325M |
Other Financing Activities | -54M | -63M |
4. Shareholder Returns and Stock Repurchase Program
In November 2025, Keysight's board approved a stock repurchase program authorizing the buyback of up to $1,500 million of its common stock. As of January 31, 2026, approximately $1,413 million remains available under this program, reflecting the company’s commitment to returning value to shareholders.
5. Strategic Considerations
Acquisition of Spirent Communications
The acquisition of Spirent Communications plc for $1,415 million has been a significant driver of Keysight's growth. This strategic move not only enhanced the company’s revenue but also expanded its capabilities in the testing and validation of new technologies.
Navigating Tariff Challenges
Changes in U.S. tariff policy have posed challenges for Keysight, impacting its financial results. The company is actively monitoring the situation and implementing strategies to mitigate potential adverse effects across its global operations.
6. Outlook
Looking ahead, Keysight remains optimistic about its growth trajectory. The company anticipates continued investments in next-generation technologies, including 5G, AI, and autonomous vehicles, confirming its commitment to innovation. Keysight's leadership is confident in its ability to navigate various market conditions effectively while leveraging its strong position in the industry.
In summary, Keysight Technologies has delivered an impressive performance in Q1 2026, marked by strong revenue growth, strategic acquisitions, and a robust financial condition. The company is well-positioned to capitalize on emerging market trends and to continue its legacy of innovation in the technology sector.
