Keysight 2025 Q2 Earnings Strong Growth as Net Income Doubles

Keysight (KEYS) reported its fiscal 2025 Q2 earnings on Jun 03rd, 2025. The results surpassed expectations, with revenue reaching $1.31 billion, reflecting a 7.4% increase from the previous year. The company's earnings guidance for Q3 FY2025 was also raised, indicating a robust growth trajectory. For the full year, Keysight anticipates a revenue growth of 5% to 7%, with annual EPS growth projected to slightly exceed 10%, showcasing confidence in its operational resilience and order backlog.

Revenue
Keysight's total revenue for 2025 Q2 reached $1.31 billion, marking a 7.4% increase from $1.22 billion in the previous year. The Measurement Solutions segment contributed $1.31 billion, while the Communications Solutions Group (CSG) added $913 million. The Electronic Industrial Solutions Group (EISG) generated $393 million. This diverse revenue performance highlights the company's continued strength across its business segments.

Earnings/Net Income
Keysight's earnings per share (EPS) surged by 104.1% to $1.49 in 2025 Q2, up from $0.73 in the same quarter of the previous year. Net income saw a similar increase, reaching $257 million in 2025 Q2, compared to $126 million in 2024 Q2. This impressive growth in EPS indicates a strong financial performance for the quarter.

Post-Earnings Price Action Review
The investment strategy of buying Keysight shares upon revenue beats and holding them for 30 days has yielded moderate returns, albeit with considerable volatility and risk. The strategy's compound annual growth rate (CAGR) stood at 8.89%, underperforming the benchmark by 20.63 percentage points. Despite this, the strategy's maximum drawdown reached -42.55%, and its Sharpe ratio was 0.29, which underscores the importance of risk management in such a volatile environment. This highlights the need for investors to carefully assess their risk tolerance and incorporate robust risk management techniques, especially when engaging with such strategies. The overall challenging risk-return profile of this strategy serves as a reminder of the complexities involved in navigating volatile market conditions.

CEO Commentary
Satish Dhanasekaran, President and CEO of Keysight Technologies, expressed satisfaction with the strong second quarter results, highlighting that revenue of $1.306 billion and earnings per share of $1.70 exceeded guidance. He noted robust demand driven by commercial communications and aerospace sectors, as well as a healthy pipeline of opportunities despite macroeconomic uncertainties. Dhanasekaran emphasized the company's focus on long-term investments, a diversified global supply chain, and an agile operational model to navigate challenges. He conveyed optimism regarding the company's market position and the potential for sustained growth, particularly in high-performance computing and AI-driven infrastructure.

Guidance
For Q3 FY2025, Keysight anticipates revenue in the range of $1.305 billion to $1.325 billion and expects non-GAAP earnings per share between $1.63 and $1.69. The company raised its full-year growth expectations to align with its long-term target of 5% to 7%, with annual EPS growth projected to slightly exceed 10%. Keysight's guidance reflects confidence in its order backlog and operational resilience amid anticipated tariff impacts.

Additional News
Keysight Technologies announced executive leadership transitions, appointing Ingrid Estrada as Senior Vice President of Corporate Infrastructure and Operations, and Jodi Juskie as Senior Vice President and Chief People Officer. These changes follow the planned retirement of Gooi Soon Chai, a long-time executive. Additionally, Keysight's participation in the 2025 IEEE MTT-S International Microwave Symposium (IMS) highlights its commitment to innovation in RF and Microwave sectors. The company is also involved in the planned cash acquisition of Spirent Communications, subject to antitrust clearance, with the DOJ requiring Keysight to divest certain Spirent businesses.