Keysight 2025 Q3 Earnings Strong Revenue Growth, EPS Declines

Keysight (KEYS) reported its fiscal 2025 Q3 earnings on August 19th, 2025, showcasing strong revenue growth despite a significant decline in earnings per share. The results marked a notable performance in the context of ongoing trade challenges and macroeconomic uncertainties.

Revenue
Keysight's total revenue increased by 11.1% year-over-year, reaching $1.35 billion in 2025 Q3 compared to $1.22 billion in the same period in 2024. This growth was driven by sustained AI momentum and strong performance across aerospace, defense, and general electronics markets.

Earnings/Net Income
Despite the revenue increase, Keysight’s EPS declined by 50.2% to $1.11 in 2025 Q3, compared to $2.23 in 2024 Q3. Similarly, net income dropped to $191 million in 2025 Q3, down from $389 million in 2024 Q3. The company, however, has maintained profitability for 12 consecutive years, underscoring its resilience in the corresponding fiscal quarter. The significant drop in EPS highlights the challenges in maintaining earnings growth despite revenue expansion.

Price Action
In the latest trading day, Keysight’s stock price edged down 0.93%, while it dropped 2.16% during the most recent full trading week. However, the stock showed a 0.63% increase month-to-date.

Post-Earnings Price Action Review
Keysight’s shares showed no return over the past three years when purchased on the day after its revenue raise was announced and held for 30 days. The strategy generated an average annual return of 0.00% with no excess return, underperforming the benchmark. The Sharpe ratio and maximum drawdown were both zero, indicating that the strategy carried neither risk nor reward during this period.

CEO Commentary
Satish C. Dhanasekaran, President and CEO, highlighted Keysight's strong Q3 performance, noting the 11% revenue growth to $1.4 billion and EPS of $1.72, which exceeded guidance. He emphasized the sustained momentum in AI, growth in aerospace, defense, and general electronics, and stability in wireless and automotive sectors. Keysight's strategic investments in AI-related technologies, including advanced silicon photonics and interconnect solutions, are enabling innovation across customer workflows. The company’s collaboration with industry leaders in modeling AI infrastructure and advancing 6G research positions Keysight for long-term opportunities. Despite trade challenges, Dhanasekaran expressed optimism about the business, citing a resilient demand environment, robust backlog, and confidence in navigating macroeconomic uncertainties while maintaining healthy margins and free cash flow generation.

Guidance
Keysight raised full-year growth expectations, projecting Q4 revenue between $1.370 billion and $1.390 billion, with EPS of $1.79 to $1.85. This guidance reflects annual revenue growth of 7% and EPS growth of approximately 13% at the midpoint. The guidance assumes full mitigation of tariff impacts by mid-2026 and stable macroeconomic conditions.

Additional News
Within the past three weeks, several non-earnings-related news items garnered attention. A notable development was the intensifying global competition in the power semiconductor industry, as Chinese companies are closing the technological gap with Japanese firms. Additionally, Brazil's finance minister expressed concerns about the U.S. linking trade issues with the domestic political situation involving President Luiz Inácio Lula da Silva. Lastly, in the tech sector, a significant milestone was marked by the successful deployment of China's first large-scale quantum communication network, signaling advancements in secure data transmission capabilities.