Keysight Technologies reported its strongest quarter on record for fiscal Q2 2026, driven by surging demand across communications infrastructure, aerospace and defense, semiconductor validation, and AI-related electronic test workloads. The company posted more than $2 billion in quarterly orders and raised its full-year outlook, signaling continued momentum in network infrastructure investment cycles.
Revenue for the quarter reached $1.72 billion, up 31% year-over-year, while non-GAAP earnings per share climbed to $2.87 from $1.70 a year earlier. Free cash flow totaled $472 million.
The company’s Keysight Technologies Communications Solutions Group (CSG) remained the primary growth engine, generating $1.231 billion in quarterly revenue, up 35% year-over-year. Commercial communications revenue increased 40%, reflecting continued operator and hyperscaler investment in high-speed networking, AI infrastructure, optical transport, wireless systems, and next-generation data center architectures. Aerospace, defense, and government communications revenue rose 24%.
For the networking sector, the results underscore the breadth of infrastructure upgrades now underway across AI data centers, 800G/1.6T optical interconnects, Open RAN, satellite communications, and advanced wireless research. Keysight has increasingly positioned itself as a foundational supplier of validation and measurement platforms used throughout the AI infrastructure stack — from silicon bring-up and high-speed SerDes characterization to coherent optics, Ethernet validation, PCIe, UCIe, and RF system testing.
CEO Satish Dhanasekaran said the company’s “disciplined decisions and strategic investments” are enabling it to capitalize on accelerating demand trends and outperform broader markets.
The quarter also reflected continued strength in semiconductor-related testing activity. Keysight’s Electronic Industrial Solutions Group (EISG) reported revenue of $486 million, up 24% year-over-year, with double-digit growth across automotive, energy, general electronics, and semiconductor markets. The semiconductor segment remains strategically important as AI accelerators, custom ASICs, chiplets, co-packaged optics, and advanced packaging technologies increase demand for sophisticated validation tools.
A notable one-time financial item during the quarter involved refunds tied to prior U.S. tariffs imposed under the International Emergency Economic Powers Act (IEEPA). Keysight recorded a $100 million receivable associated with tariff recoveries and related interest following U.S. court rulings invalidating portions of the tariff program. The company also recorded a $40 million liability tied to refunding tariff surcharges previously collected from customers.
Looking ahead, Keysight Technologies expects fiscal Q3 2026 revenue between $1.73 billion and $1.75 billion, representing roughly 29% year-over-year growth at the midpoint.
From a communications infrastructure perspective, the results reinforce how AI-driven scaling is reshaping the test and measurement market itself. As hyperscalers deploy increasingly complex GPU clusters, optical fabrics, and high-radix switching architectures, validation and interoperability testing are becoming critical bottlenecks. Companies like Keysight Technologies are benefiting not only from traditional telecom spending cycles, but also from the rapid convergence of AI compute, networking, optics, and advanced semiconductor design.Keysight Technologies reported its strongest quarter on record for fiscal Q2 2026, driven by surging demand across communications infrastructure, aerospace and defense, semiconductor validation, and AI-related electronic test workloads. The company posted more than $2 billion in quarterly orders and raised its full-year outlook, signaling continued momentum in network infrastructure investment cycles.
Revenue for the quarter reached $1.72 billion, up 31% year-over-year, while non-GAAP earnings per share climbed to $2.87 from $1.70 a year earlier. Free cash flow totaled $472 million.
The company’s Keysight Technologies Communications Solutions Group (CSG) remained the primary growth engine, generating $1.231 billion in quarterly revenue, up 35% year-over-year. Commercial communications revenue increased 40%, reflecting continued operator and hyperscaler investment in high-speed networking, AI infrastructure, optical transport, wireless systems, and next-generation data center architectures. Aerospace, defense, and government communications revenue rose 24%.
For the networking sector, the results underscore the breadth of infrastructure upgrades now underway across AI data centers, 800G/1.6T optical interconnects, Open RAN, satellite communications, and advanced wireless research. Keysight has increasingly positioned itself as a foundational supplier of validation and measurement platforms used throughout the AI infrastructure stack — from silicon bring-up and high-speed SerDes characterization to coherent optics, Ethernet validation, PCIe, UCIe, and RF system testing.
CEO Satish Dhanasekaran said the company’s “disciplined decisions and strategic investments” are enabling it to capitalize on accelerating demand trends and outperform broader markets.
The quarter also reflected continued strength in semiconductor-related testing activity. Keysight’s Electronic Industrial Solutions Group (EISG) reported revenue of $486 million, up 24% year-over-year, with double-digit growth across automotive, energy, general electronics, and semiconductor markets. The semiconductor segment remains strategically important as AI accelerators, custom ASICs, chiplets, co-packaged optics, and advanced packaging technologies increase demand for sophisticated validation tools.
A notable one-time financial item during the quarter involved refunds tied to prior U.S. tariffs imposed under the International Emergency Economic Powers Act (IEEPA). Keysight recorded a $100 million receivable associated with tariff recoveries and related interest following U.S. court rulings invalidating portions of the tariff program. The company also recorded a $40 million liability tied to refunding tariff surcharges previously collected from customers.
Looking ahead, Keysight Technologies expects fiscal Q3 2026 revenue between $1.73 billion and $1.75 billion, representing roughly 29% year-over-year growth at the midpoint.
From a communications infrastructure perspective, the results reinforce how AI-driven scaling is reshaping the test and measurement market itself. As hyperscalers deploy increasingly complex GPU clusters, optical fabrics, and high-radix switching architectures, validation and interoperability testing are becoming critical bottlenecks. Companies like Keysight Technologies are benefiting not only from traditional telecom spending cycles, but also from the rapid convergence of AI compute, networking, optics, and advanced semiconductor design.
