Keysight Technologies Inc. (KEYS) Stock

Understand Keysight Technologies Inc.: how it makes money

Keysight sells test and measurement hardware, EDA software, and software-defined test platforms to telecom, aerospace, defense, automotive, and semiconductor firms. Communications test is the core at 72% of revenue, with a recurring software and services layer that is growing but still only 33% of the total.

Keysight collects its fee at the design-and-verification step. Every new chip, wireless standard, radar, or EV platform must pass through its instruments and software before it ships, so revenue tracks where multi-year R&D budgets flow rather than end-product unit volumes.

Business quality (Strong): Strong. Revenue up 31% YoY, gross margin 69%, operating margin 24%, and the 50.4x P/E sits 2% below the 51.4x industry average. Growth and margin profile support a premium valuation.

Valuation: At 50× earnings, KEYS trades in line with the Measuring & Control Equipment average (51×).

Bull case

• AI and 6G widen the funnel: Management reported that AI infrastructure is expanding wireline demand and pipeline activity, and separately sees the 6G opportunity as larger than 5G. Together these extend the revenue runway well beyond the current 5G deployment cycle, adding a second growth engine on top of existing telecom test.
• Pipeline at all-time high: After three consecutive record quarters, the sales pipeline still reached an all-time high. For a test-equipment maker where orders lead revenue by several quarters, this signals near-term visibility that goes beyond the 31% YoY top-line already printed.
• Fair share for 31% growth: At a 50.4x P/E, the stock trades 2% below the 51.4x Measuring & Control Equipment industry average while growing revenue 31% YoY. The premium for growth is not excessive relative to peers in the same sector.

Bear case

• Supply chain is a throttle: Management flagged that supply-chain conditions are less flexible and require active supplier deconstraint efforts. In a hardware-heavy business with 69% gross margins, component shortages can force order pull-ins or price concessions that compress the margin cushion.
• Recurring mix is eroding: Software and services are growing slower than hardware and now comprise 33% of revenue versus 40% previously. A lower recurring share makes the quarterly print more lumpy and reduces the predictability investors typically pay a premium for.
• Competition is tightening at the edge: Management noted that incoming components face heightened competition across the ecosystem. If rival test vendors or in-house solutions gain traction in automotive or data-center validation, Keysight's 72%-concentrated communications franchise could see pricing pressure.

Keysight Technologies Inc. earnings call transcripts

• KEYS Q3 FY26 earnings call transcript (reported 2026-08-18) · analysis
• KEYS Q2 FY26 earnings call transcript (reported 2026-05-19) · analysis
• KEYS Q4 FY25 earnings call transcript (reported 2025-11-24) · analysis
• KEYS Q3 FY25 earnings call transcript (reported 2025-08-19) · analysis
• KEYS Q2 FY25 earnings call transcript (reported 2025-05-20) · analysis
• KEYS Q1 FY25 earnings call transcript (reported 2025-02-25) · analysis

All KEYS earnings calls

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