Keysight Technologies generated $1.006 billion of Commercial Communications revenue in fiscal Q3 2026, up 56% from $644 million, as demand across its communications portfolio helped drive record quarterly results. Commercial Communications alone accounted for approximately 55% of Keysight’s $1.846 billion of total quarterly revenue.
The growth drove a substantial increase in the Communications Solutions Group, which includes Keysight’s communications and aerospace, defense and government activities. CSG revenue increased 43% to $1.345 billion from $940 million.
Profit increased much faster than segment revenue. CSG operating income surged to $458 million from $246 million, an increase of approximately 86%, while operating margin expanded 800 basis points to 34% from 26%. Gross margin increased to 71% from 67%.
Keysight’s other major segment also delivered substantial margin expansion. Electronic Industrial Solutions Group revenue rose 21% to $501 million, while operating income increased to $155 million from $92 million and operating margin expanded to 31% from 22%.
Total Q3 revenue increased approximately 37% to $1.846 billion from $1.352 billion, while GAAP net income more than doubled to $397 million from $191 million. Non-GAAP net income reached $531 million, or $3.07 per share, compared with $297 million, or $1.72 per share.
Order growth was even stronger. Quarterly orders increased 56% to $2.091 billion from $1.340 billion, marking Keysight’s second consecutive record quarter with orders above $2 billion. The company entered the next quarter with orders running approximately $245 million above reported Q3 revenue.
For the first nine months of fiscal 2026, orders reached $5.787 billion compared with $3.919 billion, while revenue increased to $5.163 billion from $3.956 billion.
Cash generation also accelerated. Q3 operating cash flow increased to $437 million from $322 million, while free cash flow rose 38% to $403 million from $291 million. Free cash flow represented nearly 22% of quarterly revenue.
Keysight ended July with $2.62 billion of cash, cash equivalents and restricted cash, providing significant financial resources as it invests across communications, AI infrastructure, semiconductor, aerospace and defense, automotive and industrial markets.
Management expects the elevated growth rate to continue into the fiscal fourth quarter. Revenue is projected at $1.93 billion to $1.95 billion, with the midpoint representing approximately 37% year-over-year growth. Non-GAAP EPS is expected at $3.34 to $3.40.
The Commercial Communications performance is particularly significant because revenue growth was accompanied by much stronger operating leverage across CSG. The segment’s 43% revenue increase translated into an 86% increase in operating income, while record orders suggest customer demand continues to run ahead of current revenue recognition.
KEY QUOTES:
“Keysight’s record Q3 results and outlook reflect the growing relevance of our strategy and portfolio, which is enabling customers to solve complex engineering challenges across our end markets. We remain confident in our ability to sustain our momentum and deliver long-term value creation.”
Satish Dhanasekaran, President and CEO of Keysight Technologies
