Keysight shares jump 4% as Q4 revenue guidance beats estimates

Keysight Technologies reported Q3 adjusted EPS of $3.07 on revenue of $1.85 billion, beating estimates, and guided Q4 revenue above consensus.

Keysight said a rapid buildout of AI data centers is boosting demand for its software and tools, lifting third-quarter revenue for its communications solutions segment by 43 percent, according to Reuters.

Keysight's overall revenue for the quarter ended July 31 grew 36.5 percent year over year to $1.85 billion, while adjusted profit rose to $3.07 per share. That beat analysts' expectations for profit of $2.48 per share and revenue of $1.74 billion, per LSEG data. Net income came in at $397 million, or $2.30 per share on a GAAP basis.

The Santa Rosa, California-based company expects fourth-quarter adjusted profit in the range of $3.34 to $3.40 per share and revenue of $1.93 billion to $1.95 billion, versus analyst expectations of $2.70 per share and $1.81 billion. Shares rose 4.5 percent in extended trading after initially falling more than 3 percent.

The communications solutions segment, accounting for two-thirds of overall revenue, manufactures transceivers and other components used in data centers. The segment's 43 percent growth reflects sustained capital expenditure among hyperscale operators building out AI infrastructure, a trend that has also lifted peers such as Broadcom and Applied Materials in recent quarters.

Metric	Actual	Consensus	Beat/Miss
Revenue	$1.85B	$1.74B	+6.3%
Adjusted EPS	$3.07	$2.48	+$0.59
Comm Solutions Rev	+43% YoY	—	—

Keysight's guidance implies fourth-quarter revenue growth of roughly 4 to 5 percent sequentially, a faster pace than the 3 percent sequential gain delivered in Q3. The company's electronic design, testing and simulation software is used by chipmakers, telecommunications firms and automakers, giving it exposure across multiple AI-adjacent end markets.

The results arrive as investors reassess the durability of AI infrastructure spending. Anthropic's disclosure last week that Q2 revenue surged at least 14-fold year over year reinforced expectations that massive AI capital expenditure will be sustained, supporting demand for test and measurement equipment from Keysight and its competitors.

The better-than-expected outlook suggests management expects AI data center demand to accelerate into the fiscal year-end. Investors will watch the company's Q4 earnings call in November for updated segment margins and commentary on order momentum from hyperscale customers.

This article is for informational purposes only and does not constitute investment advice.