Keysight Technologies (Keysight Technologies (KEYS)) is having a good Wednesday. The electronic test and measurement company reported fiscal second-quarter results that blew past Wall Street expectations and raised its full-year outlook, sending shares higher in premarket trading.
Here's the headline number: earnings of $2.87 per share, comfortably above the $2.32 analysts were looking for. Revenue came in at $1.72 billion, up 31% from a year ago and a hair above the $1.71 billion estimate. But the real story is in the orders — they jumped 56% year-over-year to more than $2 billion, fueled by strength in the company's Business Communications Solutions segment.
Keysight also generated a record $472 million in free cash flow during the quarter and ended the period with over $2.4 billion in cash and equivalents. Not bad for a company that makes oscilloscopes and network test gear.
The big driver here is artificial intelligence. Management said momentum in AI-related business has already surpassed full-year 2025 levels, thanks to growing demand for data center scaling, optical interconnects, and AI system validation tools. In other words, as companies build out AI infrastructure, they need Keysight's equipment to make sure everything works.
That AI wave is showing up across multiple segments. In wireline communications, Keysight is benefiting from the shift to 800G and 1.6T architectures, plus early work on 3.2T technologies. The wireless business is seeing solid demand from non-terrestrial networks, 6G research, and satellite connectivity. Aerospace, defense, and government markets are growing thanks to radar systems, spectrum management, and modernization programs, including U.S. Air Force contracts for advanced flight line testing.
The Electronic Industrial Solutions Group had a record quarter for both orders and revenue, driven by semiconductor, automotive, energy, and broader electronics markets. Semiconductor demand remains strong, fueled by AI workloads, advanced-node chip development, silicon photonics, and wafer-level testing. Automotive and energy orders increased for the third straight quarter, supported by software-defined vehicles, EV charging infrastructure, in-vehicle connectivity, cybersecurity, and over-the-air validation.
Looking ahead, Keysight expects third-quarter earnings between $2.43 and $2.49 per share, well above the $2.14 analyst estimate. Revenue is forecast at $1.73 billion to $1.75 billion, versus expectations of $1.64 billion. For the full fiscal year 2026, the company raised its outlook and now expects revenue growth in the high-20% range, citing strong demand visibility and a robust customer pipeline.
Shares were up 2.29% at $352.00 in premarket trading Wednesday. Not a moonshot, but for a company that's already up big this year, it's a solid vote of confidence from the market.
