Keysight Technologies Inc. (NYSE: KEYS) Stock: Beats Q225 Estimates, Lifts Growth Outlook

TLDR

Keysight reported Q2 earnings of $1.70 per share, beating the $1.64 estimate. Revenue hit $1.31 billion, topping Wall Street’s $1.28 billion forecast. Strong growth came from both the Communications and Electronic Industrial segments. Free cash flow jumped to $457 million from $74 million last year. Shares rose over 5% after hours following strong guidance for Q3 2025.

On May 20, 2025, Keysight Technologies Inc. (NYSE: KEYS) reported robust fiscal second-quarter earnings, sending shares up 5.92% in after-hours trading to $172.44. At market close, the stock was priced at $162.80.

Keysight Technologies, Inc. (KEYS)

The Santa Rosa-based electronic measurement firm posted adjusted earnings of $1.70 per share, exceeding the $1.64 consensus from analysts. Revenue for the quarter stood at $1.31 billion, outpacing Wall Street’s $1.28 billion projection and marking a 7% increase year-over-year.

GAAP net income climbed to $257 million, or $1.49 per share, compared to $126 million, or $0.72 per share, in the same quarter last year. Non-GAAP net income rose to $295 million from $247 million in Q2 2024.

Segment Growth Drives Momentum

Keysight’s Communications Solutions Group (CSG), its largest business unit, reported a 9% revenue increase to $913 million. This included an equal 9% growth in both commercial communications and the aerospace, defense, and government sectors.

The Electronic Industrial Solutions Group (EISG) delivered $393 million in revenue, up 5% from a year ago. Growth in semiconductors and general electronics helped offset a decline in the automotive and energy sub-segments.

Cash Flow and Liquidity Strengthen

The company posted a sharp increase in free cash flow, reaching $457 million, a notable rise from $74 million in the prior year. Cash flow from operations totaled $484 million. Keysight ended the quarter with $3.12 billion in cash and cash equivalents, highlighting its strong liquidity position.

Outlook Signals Steady Demand

For the third fiscal quarter ending in July 2025, Keysight forecasts revenue between $1.305 billion and $1.325 billion. Non-GAAP earnings per share are projected to be in the range of $1.63 to $1.69. These figures align with or exceed analysts’ current expectations, pointing to sustained momentum.

CEO Satish Dhanasekaran credited the performance to disciplined execution and customer alignment, stating the company is raising its full-year growth outlook to the midpoint of its 5–7% long-term target range. Despite ongoing macroeconomic challenges, management emphasized a healthy opportunity pipeline.

Market Returns Show Modest Performance

As of May 20, 2025, Keysight’s year-to-date return stood at 1.35%, outperforming the S&P 500’s 1.00% return. However, over a longer horizon, Keysight has underperformed the index, with a 1-year return of 1.91% compared to the S&P’s 11.91%. Over three and five years, KEYS returned 18.14% and 58.18%, respectively, versus 52.27% and 99.91% for the benchmark.

 

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