Q4 2025 Keysight Technologies Inc Earnings Call

November 24, 2025

At any time during the conference you need to reach an operator. Please press star zero. This call's being recorded today Monday November 24, 2025 at 130 P. M Pacific time, I would now like to hand, the call over total innocence director of Investor Relations. Please go ahead Mrs.

Yeah.

Thank you and welcome everyone to key sites fourth quarter earnings conference call for fiscal year 2025, joining me are <unk> done a shake run key sites, President and CEO and Neil Dougherty our CFO during.

During the Q&A session. We will also be joined by <unk> President of the Communications solutions group and Jason Kary President of the electronic Industrial solutions group the press release and information to supplement today's discussion on our website at Investor Dot key site Dot com.

Under financial information and quarterly reports today's comments will refer to non-GAAP financial measures. We will also make reference to core growth, which excludes the impact of currency movements and acquisitions or divestitures completed within the last 12 months.

The most directly comparable GAAP financial metrics and reconciliations are on our website and all comparisons are on a year over year basis, unless otherwise noted.

We will make forward looking statements about the financial performance of the company on today's call. These statements are subject to risks and uncertainties and are only valid as of today, we assume no obligation to update them and encourage you to review our recent SEC filings for a more complete view of these.

The risks and other factors.

Lastly management is scheduled to participate in upcoming Investor conferences hosted by UBS and Barclays and now I will turn the call over to cities.

Good afternoon, everyone and thank you for joining us today <unk> delivered an outstanding fourth quarter results exceeding the high end of our guidance.

<unk> grew 14% revenue increased 10% and EPS rose 16%.

This was a strong finish to a year of building momentum full year orders and revenue rose, 8% and EPS increased 14%, surpassing our expectations and our long term model key sites leadership and differentiated solutions continue to drive demand across our <unk>.

<unk>.

Our portfolio is enabling major innovation waves shaping our markets.

AI and accelerated computing non terrestrial networks, <unk>, nextgen semiconductors and defense modernization.

We enter our fiscal 2026 with a strong solutions roadmap aligned to our customers' priorities a healthy pipeline of sales opportunities across our end markets and a broader set of capabilities.

In Q4, we advanced our software centric solution strategy with the acquisitions of Spirent Synopsys optical solutions group and answers power artist.

We're excited about the talent the technology and we expanded customer value, we can bring to the marketplace.

Our operating model continues to generate strong free cash flow, providing us the flexibility to invest in the organic growth of the business pursue select strategic acquisitions and return of capital to shareholders.

In fiscal 'twenty, five we achieved record free cash flow of $1 $3 billion, while investing in R&D, completing three acquisitions and returning approximately $375 million through buybacks.

Since the start of 2023, we have repurchased over $1 5 billion of shares or approximately 45% of free cash flow.

Today I am pleased to announce that our board has authorized an additional $1 $5 billion share repurchase program supporting our ongoing capital return.

Turning to business segments. The communication solutions group orders grew for the sixth straight quarter, delivering double digit order and high single digit revenue growth for the full year.

Speaker #1: There is the flexibility to invest in the organic growth of the business, pursue select strategic acquisitions, and return capital to shareholders. In fiscal 2025, we achieved record free cash flow of $1.3 billion while investing in R&D, completing three acquisitions, and returning approximately $375 million through buybacks.

Wireline orders and revenue grew double digits, both in Q4 and for the full year setting a new record for the business.

AI infrastructure, Buildout and rapid upgrades to the technology stack are driving greater design emulation and test intensity across multiple vectors our solutions span the entire workflow from silicon design to system validation and secure deployments the rapid scaling of AI workload.

Speaker #1: Since the start of 2023, we have repurchased over $1.5 billion of shares, or approximately 45% of free cash flow. Today, I am pleased to announce that our board has authorized an additional $1.5 billion share repurchase program, supporting our ongoing capital return.

<unk> is accelerating new designs across the technology stack from compute to networking interconnect memory and power.

These transitions require redesigns across AI silicon Dsp's switches and Transceivers all of which are enabled by key site solutions.

Speaker #1: Turning to business segments, the Communication Solutions Group's orders grew for the sixth straight quarter, delivering single-digit revenue growth for the full year, with double-digit orders and high year-over-year increases.

Optical speed refresh cycles are also gaining momentum moving from the 400 gig to 800 gig to one six terra.

Speaker #1: Wireline orders and revenue grew double digits both in Q4 and for the full year, setting a new record for the business. AI infrastructure buildouts and rapid upgrades to the technology stack are driving greater design, emulation, and test intensity across multiple vectors.

In Q4, we collaborated with Broadcom.

To validate Nextgen, one six terabyte networking silicon and custom AI accelerators.

Key side Silicon Photonic solutions continue to drive advancements in CPO and opioid technologies of the future with a breadth of key sites portfolio spanning physical layer solutions and AI emulation solutions built on technology acquired from Ixia, we're making a meaningful contribution to the entire.

Speaker #1: The entire workflow from silicon design to system validation and secure deployments. The rapid scaling of AI workloads is accelerating new designs across the technology stack from compute to networking, interconnect, memory, and power.

Ecosystem.

Speaker #1: These transitions in Keysight's silicon photonics solutions continue to drive advancements in CPO and LPO technologies of the future. With the breadth of Keysight's portfolio spanning physical layer solutions and AI emulation solutions, built on technologies acquired from Ixia, we're making a meaningful contribution to the entire ecosystem.

We're also capitalizing on robust demand from the scaling AI supply chain, including rack and cluster components Interconnects and AI accelerators. Additionally, key side is actively involved with industry leaders and growing number of consortium shaping the future of AI infrastructure.

Speaker #1: From 400 gig to 800 gig to 1.6 terabit: in Q4, we collaborated with Broadcom to validate next-gen 1.6 terabit networking. Our solutions span silicon and custom AI accelerators.

At the open compute project conference, we partnered with meta to demonstrate large scale validation of Gpus and networking prior to deployment into clusters.

The recently launched key side AI data center builder, one the data Center innovation Best product Award at the European Conference on connectivity in October of 2025.

Satish Dhanasekaran: Giving us the flexibility to invest in the organic growth of the business, pursue select strategic acquisitions, and return capital to shareholders. In fiscal 2025, we achieved record free cash flow of $1.3 billion while investing in R&D, completing three acquisitions, and returning approximately $375 million through buybacks. Since the start of 2023, we have repurchased over $1.5 billion of shares, or approximately 45% of free cash flow. Today, I am pleased to announce that our board has authorized an additional $1.5 billion share repurchase program, supporting our ongoing capital return. Turning to business segments, the Communication Solutions Group orders grew for the sixth straight quarter, delivering double-digit order and high single-digit revenue growth for the full year. Wireline orders and revenue grew double digits both in Q4 and for the full year, setting a new record for the business.

Turning to wireless orders and revenue grew high single digits for the full year and outperformed expectations driven by ongoing standards evolutions non terrestrial networks and early <unk> research, we saw steady <unk> demand continue with releases 18, and 19 of the standard.

Speaker #1: We're also capitalizing on robust demand from the scaling AI supply chain, including RAC and cluster components interconnects and AI accelerators. Additionally, Keysight is actively involved with industry leaders and a growing number of consortia shaping the future of AI infrastructure.

Which included enhanced uplink advanced Mimo and energy efficiency applications.

Speaker #1: At the Open Compute Project Conference, we partnered with Meta to demonstrate large-scale validation of GPUs and networking prior to deployment into clusters. The recently launched Keysight AI Data Center Builder won the Data Center Innovation Best Product Award at the European Conference on Connectivity in October 2025.

Momentum increased in non terrestrial networks, where we are engaged with industry, leading players to advanced direct to sell connectivity and newly or designs <unk> best in class precision location simulators expand key sites offering by providing the accuracy and the realism needed to enable the <unk>.

Generation of positioning navigation and timing use cases.

Speaker #1: Turning to wireless, orders and revenue grew high single digits for the full year and outperformed expectations, driven by ongoing standards evolutions, non-terrestrial networks, and early 6G research.

Six G. The industry is shifting from pure research to early pre standards designs.

We are engaged with market defining customers and are well positioned to intercept the industry's priorities.

Satish Dhanasekaran: AI infrastructure buildouts and rapid upgrades to the technology stack are driving greater design, emulation, and test intensity across multiple vectors. Our solutions span the entire workflow, from silicon design to system validation and secure deployments. The rapid scaling of AI workloads is accelerating new designs across the technology stack, from compute to networking, interconnect, memory, and power. These transitions require redesigns across AI silicon, DSPs, switches, and transceivers, all of which are enabled by Keysight Solutions. Optical speed refresh cycles are also gaining momentum, moving from the 400 gig to 800 gig to 1.6 tera. In Q4, we collaborated with Broadcom to validate next-gen 1.6 terabit networking silicon and custom AI accelerators. Keysight Silicon Photonics Solutions continue to drive advancements in CPO and LPO technologies of the future.

AI infrastructure buildouts and rapid upgrades to the technology stack are driving greater design, emulation, and test intensity across multiple vectors. Our solutions span the entire workflow, from silicon design to system validation and secure deployments. The rapid scaling of AI workloads is accelerating new designs across the technology stack, from compute to networking, interconnect, memory, and power. These transitions require redesigns across AI silicon, DSPs, switches, and transceivers, all of which are enabled by Keysight Solutions. Optical speed refresh cycles are also gaining momentum, moving from the 400 gig to 800 gig to 1.6 tera. In Q4, we collaborated with Broadcom to validate next-gen 1.6 terabit networking silicon and custom AI accelerators. Keysight Silicon Photonics Solutions continue to drive advancements in CPO and LPO technologies of the future.

Speaker #1: We saw steady 5G demand continue with releases 18 and 19 of the standard, which included enhanced uplink, advanced MIMO, and energy efficiency applications. Momentum increased in non-terrestrial networks, where we are engaged with industry-leading players to advance direct-to-cell connectivity and new LEO designs.

We doubled our 60 collaborations over the past year partnering with customers on several new applications, including channel sounding network modeling using digital twins fr three spectrum and advanced Mimo faced antenna design.

In aerospace defense and government, we generated record orders, while revenue increased by 8% for the year.

Speaker #1: Spiron's best-in-class precision location simulators expand Keysight's offering by providing the accuracy and realism needed to enable the next generation of positioning, navigation, and timing use cases.

In an increasingly competitive global security and defense landscape, we're seeing strong customer engagement for defense modernization enhanced deterrence capabilities and operational readiness.

Opportunities are expanding for key site as a traditional primes direct government entities and a growing contingent of neo primes and defense technology companies invest in emerging technologies in space and satellite.

Speaker #1: The industry is shifting from pure 6G research to early pre-standards designs. We are engaged with market-defining customers and are well-positioned to intercept the industry's priorities.

Panama systems and advanced antenna designs. This quarter, we secured key wins with U S. Prime contractors to accelerate automated device verification or advanced component analysis capabilities are enabling fast phased array antenna over the air characterization for space radar and tap.

Speaker #1: We doubled our 6G collaborations over the past year, partnering with customers on several new applications including channel sounding, network modeling, using digital twins, FR3 spectrum, and advanced MIMO phased antenna design.

Satish Dhanasekaran: With the breadth of Keysight's portfolio spanning physical layer solutions and AI emulation solutions built on technologies acquired from Ixia, we're making a meaningful contribution to the entire ecosystem. We're also capitalizing on robust demand from the scaling AI supply chain, including rack and cluster components, interconnects, and AI accelerators. Additionally, Keysight is actively involved with industry leaders and a growing number of consortia shaping the future of AI infrastructure. At the Open Compute Project Conference, we partnered with Meta to demonstrate large-scale validation of GPUs and networking prior to deployment into clusters. The recently launched Keysight AI Data Center Builder won the Data Center Innovation Best Product Award at the European Conference on Connectivity in October 2025. Turning to wireless, orders and revenue grew high single digits for the full year and outperformed expectations, driven by ongoing standards evolutions, non-terrestrial networks, and early 6G research.

With the breadth of Keysight's portfolio spanning physical layer solutions and AI emulation solutions built on technologies acquired from Ixia, we're making a meaningful contribution to the entire ecosystem. We're also capitalizing on robust demand from the scaling AI supply chain, including rack and cluster components, interconnects, and AI accelerators. Additionally, Keysight is actively involved with industry leaders and a growing number of consortia shaping the future of AI infrastructure. At the Open Compute Project Conference, we partnered with Meta to demonstrate large-scale validation of GPUs and networking prior to deployment into clusters. The recently launched Keysight AI Data Center Builder won the Data Center Innovation Best Product Award at the European Conference on Connectivity in October 2025. Turning to wireless, orders and revenue grew high single digits for the full year and outperformed expectations, driven by ongoing standards evolutions, non-terrestrial networks, and early 6G research.

Speaker #1: In aerospace, defense, and government, we generated record orders while revenue increased by 8% for the year. In an increasingly competitive global security and defense landscape, we're seeing strong customer engagement for defense modernization, enhanced deterrence capabilities, and operational readiness.

Nickel communication, we won a deal from a U S. Prime contractor for multiple solution spanning high performance spectrum analysis signal generation and network analysis for radar and air Defense applications in Europe momentum remains strong as multiple primes invest in radar Enzo and space.

Speaker #1: Opportunities are expanding for Keysight as traditional primes, direct government entities, and a growing contingent of neoprimes and defense technology companies invest in emerging technologies in space and satellite, autonomous systems, and advanced antenna designs.

Patients Ministry of defense in Allied Nations are leveraging our wideband signal recording capabilities to capture field data for lab analysis.

With decades of leadership across RF digital and optical technologies, plus a new federal focus capabilities from Spirent key side is well positioned to capture growing defense demand.

Speaker #1: This quarter, we secured key wins with U.S. prime contractors to accelerate automated device verification. Our advanced component analysis capabilities are enabling fast phased array antenna over-the-air characterization for space, radar, and tactical communication.

Now moving to electronic industrial solutions group orders and revenue both grew in Q4 and for the full year.

In our general electronics business orders grew for the fifth consecutive quarter and were up high single digit in Q4 and double digit for the full year led by strength in the broad electronics supply chain digital health and education, AI related innovation and investment fueled demand for our differentiated solutions.

Speaker #1: We won a deal from a U.S. prime contractor for multiple solutions spanning high-performance spectrum analysis, signal generation, and network analysis for radar and air defense applications.

Satish Dhanasekaran: We saw steady 5G demand continue with releases 18 and 19 of the standard, which included enhanced uplink, advanced MIMO, and energy efficiency applications. Momentum increased in non-terrestrial networks, where we are engaged with industry-leading players to advance direct-to-cell connectivity and new LEO designs. Spirent's best-in-class precision location simulators expand Keysight's offering by providing the accuracy and the realism needed to enable the next generation of positioning, navigation, and timing use cases. In 6G, the industry is shifting from pure research to early pre-standards designs. We are engaged with market-defining customers and are well-positioned to intercept the industry's priorities. We doubled our 6G collaborations over the past year, partnering with customers on several new applications, including channel sounding, network modeling using digital twins, FR3 spectrum, and advanced MIMO phased array antenna design. In aerospace, defense, and government, we generated record orders while revenue increased by 8% for the year.

We saw steady 5G demand continue with releases 18 and 19 of the standard, which included enhanced uplink, advanced MIMO, and energy efficiency applications. Momentum increased in non-terrestrial networks, where we are engaged with industry-leading players to advance direct-to-cell connectivity and new LEO designs. Spirent's best-in-class precision location simulators expand Keysight's offering by providing the accuracy and the realism needed to enable the next generation of positioning, navigation, and timing use cases. In 6G, the industry is shifting from pure research to early pre-standards designs. We are engaged with market-defining customers and are well-positioned to intercept the industry's priorities. We doubled our 6G collaborations over the past year, partnering with customers on several new applications, including channel sounding, network modeling using digital twins, FR3 spectrum, and advanced MIMO phased array antenna design. In aerospace, defense, and government, we generated record orders while revenue increased by 8% for the year.

Speaker #1: In Europe, momentum remains strong as multiple primes invest in radar, EMSO, and space applications. Ministries of Defense in allied nations are leveraging our wideband signal recording capabilities to capture field data for lab analysis.

For high speed, PCB interconnect and component test in digital health interoperability connectivity and latency challenges in the medical device and systems workflow are driving investment advanced research spending in semiconductor six G quantum and photonics initiatives.

Speaker #1: With decades of leadership across RF, digital, and optical technologies, plus a new federal focus on capabilities from Spiron, Keysight is well-positioned to capture growing defense demand.

He is also continuing at a steady rate, particularly outside of the U S, where we benefit from our global scale and local engagement in semiconductor the pace of innovation and investment remains robust.

Speaker #1: Now moving to the Electronic Industrial Solutions Group, orders and revenue both grew in Q4 and for the full year. In our General Electronics business, orders grew for the fifth consecutive quarter and were up high single digits in Q4 and double digits for the full year, led by strength in the broad electronic supply chain, digital health, and education.

Our semi business delivered solid order and revenue growth this quarter driven by steady demand for wafer test and lithography solutions as AI driven capacity expanded for leading edge nodes high bandwidth memory and silicon photonics.

Speaker #1: AI-related innovation and investment fuel demand for our differentiated solutions for high-speed PCB, interconnect, and component test. In digital health, interoperability, connectivity, and latency challenges in the medical device and systems workflow are driving investment.

As lithography and foundry customers expand your own advanced packaging offerings, we're enabling them to achieve unprecedented levels of precision and accuracy.

Our deep collaboration with the world's leading foundries and integrated device manufacturers as well as the respective customers allows us to identify and address your end to end needs from early R&D to wafer fabrication.

Speaker #1: Advanced research spending in semiconductor, 6G, quantum, and photonics initiatives is also continuing at a steady rate, particularly outside of the U.S., where we benefit from our global scale and local engagement.

Satish Dhanasekaran: In an increasingly competitive global security and defense landscape, we're seeing strong customer engagement for defense modernization, enhanced deterrence capabilities, and operational readiness. Opportunities are expanding for Keysight as traditional primes, direct government entities, and a growing contingent of neoprimes and defense technology companies invest in emerging technologies in space and satellite, autonomous systems, and advanced antenna designs. This quarter, we secured key wins with US prime contractors to accelerate automated device verification. Our advanced component analysis capabilities are enabling fast phased array antenna over-the-air characterization for space, radar, and tactical communication. We won a deal from a US prime contractor for multiple solutions spanning high-performance spectrum analysis, signal generation, and network analysis for radar and air defense applications. In Europe, momentum remains strong as multiple primes invest in radar, EMSO, and space applications.

In an increasingly competitive global security and defense landscape, we're seeing strong customer engagement for defense modernization, enhanced deterrence capabilities, and operational readiness. Opportunities are expanding for Keysight as traditional primes, direct government entities, and a growing contingent of neoprimes and defense technology companies invest in emerging technologies in space and satellite, autonomous systems, and advanced antenna designs. This quarter, we secured key wins with US prime contractors to accelerate automated device verification. Our advanced component analysis capabilities are enabling fast phased array antenna over-the-air characterization for space, radar, and tactical communication. We won a deal from a US prime contractor for multiple solutions spanning high-performance spectrum analysis, signal generation, and network analysis for radar and air defense applications. In Europe, momentum remains strong as multiple primes invest in radar, EMSO, and space applications.

This year, we saw a robust growth in silicon photonics, the investments that we initiated two years ago are allowing us to capture this inflection.

Speaker #1: In semiconductor, the pace of innovation and investment remains robust. Our semi business delivered solid order and revenue growth this quarter, driven by steady demand for wafer test and lithography solutions as AI-driven capacity expanded for leading-edge nodes, high-bandwidth memory, and silicon photonics.

While geopolitical and policy uncertainties remain the outlook for semiconductor capacity and investment in new technology roadmap remains positive in 2026.

In automotive despite mixed headlines we continue to empower customer innovation and demand has largely stabilized.

Speaker #1: As lithography and foundry customers expand their own advanced packaging offerings, we're enabling them to achieve unprecedented levels of precision and accuracy. Our deep collaboration with the world's leading foundries and integrated device manufacturers, as well as their respective customers, allows us to identify and address their end-to-end needs from early R&D to wafer fabrication.

We're also expanding into new opportunities and grid modernization, where our combination of physical layer power and protocol layer network expertise is a differentiator our portfolio of solution spans software defined vehicles, EV charging grid and manufacturing.

In vehicle network compliance and security remained customers' priorities as well as the design and test of new sensing architectures and optical connectivity.

Speaker #1: This year, we saw robust growth in silicon photonics. The investments that we initiated two years ago are allowing us to capture this inflection.

The recent acquisition of the optical solutions group expands our photonics portfolio as interconnect and photonics complexity increases across next generation of industrial and automotive applications.

Satish Dhanasekaran: The Ministry of Defense and allied nations are leveraging our wide-band signal recording capabilities to capture field data for lab analysis. With decades of leadership across RF, digital, and optical technologies, plus new federal-focused capabilities from Spirent, Keysight is well-positioned to capture growing defense demand. Now, moving to Electronic Industrial Solutions Group, orders and revenue both grew in Q4 and for the full year. In our general electronics business, orders grew for the fifth consecutive quarter, and we're up high single digit in Q4 and double digit for the full year, led by strength in the broad electronics supply chain, digital health, and education. AI-related innovation and investment fuel demand for our differentiated solutions for high-speed PCB, interconnect, and component test. In digital health, interoperability, connectivity, and latency challenges in the medical device and systems workflow are driving investment.

The Ministry of Defense and allied nations are leveraging our wide-band signal recording capabilities to capture field data for lab analysis. With decades of leadership across RF, digital, and optical technologies, plus new federal-focused capabilities from Spirent, Keysight is well-positioned to capture growing defense demand. Now, moving to Electronic Industrial Solutions Group, orders and revenue both grew in Q4 and for the full year. In our general electronics business, orders grew for the fifth consecutive quarter, and we're up high single digit in Q4 and double digit for the full year, led by strength in the broad electronics supply chain, digital health, and education. AI-related innovation and investment fuel demand for our differentiated solutions for high-speed PCB, interconnect, and component test. In digital health, interoperability, connectivity, and latency challenges in the medical device and systems workflow are driving investment.

Speaker #1: While geopolitical and policy uncertainties remain, the outlook for semiconductor capacity, investment, and the new technology roadmap remains positive in 2026. In automotive, despite mixed headlines, we continue to empower customer innovation, and demand has largely stabilized.

We continue to advance our go to market and customer engagement model to deepen long standing strategic relationships, while acquiring new customers and opportunities as the global supply chain shift.

Speaker #1: We're also expanding into new opportunities in grid modernization, where our combination of physical layer power and protocol layer network expertise is a differentiator. Our portfolio of solutions spans software-defined vehicles, EV charging, grid, and manufacturing.

Over the past year, our teams executed to over 150 strategic engagements with market defining innovators, while expanding our customer base with more than 3000, new logos.

Our key side world events reached thousands of customers globally, we actively participated in industry events, such as mobile World Congress and European microwave and over 30 standards bodies with industry leaders, we continue to maintain lifecycle engagement with our customers through our growing services business.

Speaker #1: In vehicle network compliance and security remain customers' priorities, as well as the design and test of new sensing architectures and optical connectivity. The recent acquisition of the optical solutions group expands our photonics portfolio as interconnect and photonics complexity increases across the next generation of industrial and automotive applications.

Which has reached record revenue fueled by robust demand for key sidecare premium offerings.

Speaker #1: We continue to advance our go-to-market and customer engagement model to deepen long-standing strategic relationships while acquiring new customers and opportunities as the global supply chain shifts.

Satish Dhanasekaran: Advanced research spending in semiconductor, 6G, quantum, and photonics initiatives is also continuing at a steady rate, particularly outside of the US, where we benefit from our global scale and local engagement. In semiconductor, the pace of innovation and investment remains robust. Our semi business delivered solid order and revenue growth this quarter, driven by steady demand for wafer test and lithography solutions as AI-driven capacity expanded for leading-edge nodes, high-bandwidth memory, and silicon photonics. As lithography and foundry customers expand their own advanced packaging offerings, we're enabling them to achieve unprecedented levels of precision and accuracy. Our deep collaboration with the world's leading foundries and integrated device manufacturers, as well as their respective customers, allows us to identify and address their end-to-end needs from early R&D to wafer fabrication. This year, we saw a robust growth in silicon photonics.

Advanced research spending in semiconductor, 6G, quantum, and photonics initiatives is also continuing at a steady rate, particularly outside of the US, where we benefit from our global scale and local engagement. In semiconductor, the pace of innovation and investment remains robust. Our semi business delivered solid order and revenue growth this quarter, driven by steady demand for wafer test and lithography solutions as AI-driven capacity expanded for leading-edge nodes, high-bandwidth memory, and silicon photonics. As lithography and foundry customers expand their own advanced packaging offerings, we're enabling them to achieve unprecedented levels of precision and accuracy. Our deep collaboration with the world's leading foundries and integrated device manufacturers, as well as their respective customers, allows us to identify and address their end-to-end needs from early R&D to wafer fabrication. This year, we saw a robust growth in silicon photonics.

In summary.

Full year 'twenty five marks a return to growth and as we look ahead. We are encouraged by the momentum in our business and end markets. The technologies reshaping our world directly matched T site strength and we're leaning in with a first to market solutions customer collaborations and operational discipline.

Speaker #1: Over the past year, our team's executed over 150 strategic engagements with market-defining innovators while expanding our customer base with more than 3,000 new logos.

Even in an uncertain environment, we're confident in the fundamentals of our business model and in our ability to deliver long term shareholder value.

Speaker #1: Our Keysight World events reached thousands of customers globally. We actively participated in industry events such as Mobile World Congress and European Microwave, as well as over 30 standards bodies with industry leaders.

I'll now turn it over to Neil to discuss our financial performance and outlook in more detail.

Speaker #1: We continue to maintain life cycle engagement with our customers through our growing services business, which has reached record revenue fueled by robust demand for Keysight Care Premium offerings.

Thank you <unk> and Hello, everyone.

Quarter revenue of $1 $419 million was above the high end of our guidance range up 10% on a reported basis or 9% on a core basis orders of $1 $533 million were up 14% on a reported basis or 12% on a core basis for.

Speaker #1: In summary, fiscal year 2025 marks a return to growth, and as we look ahead, we're encouraged by the momentum in our business and in markets.

Quarter results included $22 million in orders and $11 million of revenue from the recently completed acquisitions, while currency added $4 million to orders and $7 million to revenue.

Speaker #1: The technologies reshaping our world directly match Keysight's strength, and we're leaning in with our first-to-market solutions, customer collaborations, and operational discipline. Even in an uncertain environment, we're confident in the fundamentals of our business model and in our ability to deliver long-term shareholder value.

Satish Dhanasekaran: The investments that we initiated two years ago are allowing us to capture this inflection. While geopolitical and policy uncertainties remain, the outlook for semiconductor capacity and investment and new technology roadmap remains positive in 2026. In automotive, despite mixed headlines, we continue to empower customer innovation, and demand has largely stabilized. We're also expanding into new opportunities in grid modernization, where our combination of physical layer power and protocol layer network expertise is a differentiator. Our portfolio of solutions spans software-defined vehicles, EV, charging, grid, and manufacturing. In-vehicle network compliance and security remain customers' priorities, as well as the design and test of new sensing architectures and optical connectivity. The recent acquisition of the Optical Solutions Group expands our photonics portfolio as interconnect and photonics complexity increases across the next generation of industrial and automotive applications.

The investments that we initiated two years ago are allowing us to capture this inflection. While geopolitical and policy uncertainties remain, the outlook for semiconductor capacity and investment and new technology roadmap remains positive in 2026. In automotive, despite mixed headlines, we continue to empower customer innovation, and demand has largely stabilized. We're also expanding into new opportunities in grid modernization, where our combination of physical layer power and protocol layer network expertise is a differentiator. Our portfolio of solutions spans software-defined vehicles, EV, charging, grid, and manufacturing. In-vehicle network compliance and security remain customers' priorities, as well as the design and test of new sensing architectures and optical connectivity. The recent acquisition of the Optical Solutions Group expands our photonics portfolio as interconnect and photonics complexity increases across the next generation of industrial and automotive applications.

Looking at our operational results for Q4, we reported gross margin of 64% operating expenses of $539 million and.

Speaker #1: I'll now turn it over to Neil to discuss our financial performance and outlook in more detail.

<unk> margin of 26%, we generated $331 million of net income and delivered earnings per share of $1 91.

Speaker #1: Thank you, Satish, and hello.

Speaker #2: Everyone, fourth-quarter revenue of $1,419 million was above the high end of our guidance range, up 10% on a reported basis, or 9% on a core basis.

Which increased 16% year over year or.

Our weighted average share count for the quarter was 173 million shares.

For the full year <unk> generated revenue of $5 $375 million up 8% as reported or 7% on a core basis gross margin was 65% and operating margin was 26% FY 'twenty five earnings per share of $7 16 was up four.

Speaker #2: Orders of $1,533 million were up 14% on a reported basis or 12% on a core basis. Fourth quarter results included $22 million in orders and $11 million of revenue from the recently completed acquisitions, while currency added $4 million to orders and $7 million to revenue.

14%.

For the year <unk> delivered core operating leverage of 39% inclusive of tariff impacts moving to the performance of our segments. The communications solutions group generated fourth quarter revenue of $990 million up 11% on a reported basis or 9% on a core basis commercial.

Speaker #2: Looking at our operational results for Q4, we reported a gross margin of 64%, operating expenses of $539 million, and an operating margin of 26%. We generated $331 million of net income and delivered earnings per share of $1.91, which increased 16% year over year.

Satish Dhanasekaran: We continue to advance our go-to-market and customer engagement model to deepen long-standing strategic relationships, while acquiring new customers and opportunities as the global supply chain shifts. Over the past year, our teams executed over 150 strategic engagements with market-defining innovators, while expanding our customer base with more than 3,000 new logos. Our Keysight World events reached thousands of customers globally. We actively participated in industry events such as Mobile World Congress and European Microwave, and over 30 standards bodies with industry leaders. We continue to maintain lifecycle engagement with our customers through our growing services business, which has reached record revenue, fueled by robust demand for Keysight Care premium offerings. In summary, fiscal year 2025 marks a return to growth, and as we look ahead, we're encouraged by the momentum in our business and in markets.

We continue to advance our go-to-market and customer engagement model to deepen long-standing strategic relationships, while acquiring new customers and opportunities as the global supply chain shifts. Over the past year, our teams executed over 150 strategic engagements with market-defining innovators, while expanding our customer base with more than 3,000 new logos. Our Keysight World events reached thousands of customers globally. We actively participated in industry events such as Mobile World Congress and European Microwave, and over 30 standards bodies with industry leaders. We continue to maintain lifecycle engagement with our customers through our growing services business, which has reached record revenue, fueled by robust demand for Keysight Care premium offerings. In summary, fiscal year 2025 marks a return to growth, and as we look ahead, we're encouraged by the momentum in our business and in markets.

<unk> revenue of $660 million was up 12% driven by continued strength in wireline and growth in wireless aerospace defense and government achieved revenue of $330 million, an increase of 9% altogether CST delivered 66% gross margin and 27.

Speaker #2: Our weighted average share count for the quarter was 173 million shares. For the full year, Keysight generated revenue of $5,375 million, up 8% as reported, or 7% on a core basis.

7% operating margin.

Speaker #2: 65% and operating margin was 26%. Gross margin for FY '25 was $7.16 per share, up 14%. For the year, Keysight delivered core operating leverage of 39%, inclusive of tariff impacts.

The electronic industrial solutions group generated $429 million in revenue an increase of 9% on a reported basis or 8% on a core basis with growth in semiconductor and general electronics.

ISC delivered 60% gross margin and 25% operating margin.

Speaker #2: Moving to the performance of our segments, the Communications Solutions Group generated fourth quarter revenue of $990 million, up 11% on a reported basis or 9% on a core basis.

In FY 'twenty five software and services accounted for approximately 37% of key site revenue while annual recurring revenue was 29% of the total.

Speaker #2: Commercial communications revenue of $660 million was up 12%, driven by continued strength in wireline and growth in wireless. Aerospace defense and government achieved revenue of $330 million, an increase of 9%.

Satish Dhanasekaran: The technologies reshaping our world directly match Keysight's strength, and we're leaning in with our first-to-market solutions, customer collaborations, and operational discipline. Even in an uncertain environment, we're confident in the fundamentals of our business model and in our ability to deliver long-term shareholder value. I'll now turn it over to Neil to discuss our financial performance and outlook in more detail. Thank you, Satish, and hello, everyone. Fourth-quarter revenue of $1,419 million was above the high end of our guidance range, up 10% on a reported basis, or 9% on a core basis. Orders of $1,533 million were up 14% on a reported basis, or 12% on a core basis. Fourth-quarter results included $22 million in orders and $11 million of revenue from the recently completed acquisitions, while currency added $4 million to orders and $7 million to revenue.

The technologies reshaping our world directly match Keysight's strength, and we're leaning in with our first-to-market solutions, customer collaborations, and operational discipline. Even in an uncertain environment, we're confident in the fundamentals of our business model and in our ability to deliver long-term shareholder value. I'll now turn it over to Neil to discuss our financial performance and outlook in more detail.

Moving to the balance sheet and cash flow.

We ended the quarter with $1 $9 billion in cash and cash equivalents generally generating cash flow from operations of $225 million and free cash flow of $188 million.

Speaker #2: Altogether, CSG delivered a 66% gross margin and a 27% operating margin. The Electronic Industrial Solutions group generated $429 million in revenue, an increase of 9% on a reported basis or 8% on a core basis.

During the quarter, we deployed $1 7 billion for acquisitions.

We also repurchased 595000 shares at an average price of approximately $168 for a total consideration of $100 million.

Neil Dougherty: Thank you, Satish, and hello, everyone. Fourth-quarter revenue of $1,419 million was above the high end of our guidance range, up 10% on a reported basis, or 9% on a core basis. Orders of $1,533 million were up 14% on a reported basis, or 12% on a core basis. Fourth-quarter results included $22 million in orders and $11 million of revenue from the recently completed acquisitions, while currency added $4 million to orders and $7 million to revenue.

Full year share repurchases totaled $375 million or approximately 30% of the $1 3 billion and free cash flow generated this year.

Speaker #2: With growth in semiconductor and general electronics, EIC delivered a 60% gross margin and a 25% operating margin. In FY '25, software and services accounted for approximately 37% of Keysight's revenue, while annual recurring revenue was 29% of the total.

Now turning to our outlook for the first quarter of 2026, we expect revenue in the range of $1 $530 million.

Two $1.550 billion represented representing 19% year over year growth at the midpoint.

Speaker #2: Moving to the balance sheet and cash flow, we ended the quarter with $1.9 billion in cash and cash equivalents, generating cash flow from operations of $225 million and free cash flow of $188 million.

Excluding the recent acquisitions this guidance assumes 10% year over year revenue growth.

Satish Dhanasekaran: Looking at our operational results for Q4, we reported gross margin of 64%, operating expenses of $539 million, and operating margin of 26%. We generated $331 million of net income and delivered earnings per share of $1.91, which increased 16% year over year. Our weighted average share count for the quarter was 173 million shares. For the full year, Keysight generated revenue of $5,375 million, up 8% as reported, or 7% on a core basis. Gross margin was 65%, and operating margin was 26%. FY25 earnings per share of $7.16 was up 14%. For the year, Keysight delivered core operating leverage of 39%, inclusive of tariff impacts. Moving to the performance of our segments, the Communications Solutions Group generated fourth-quarter revenue of $990 million, up 11% on a reported basis, or 9% on a core basis.

Looking at our operational results for Q4, we reported gross margin of 64%, operating expenses of $539 million, and operating margin of 26%. We generated $331 million of net income and delivered earnings per share of $1.91, which increased 16% year over year. Our weighted average share count for the quarter was 173 million shares. For the full year, Keysight generated revenue of $5,375 million, up 8% as reported, or 7% on a core basis. Gross margin was 65%, and operating margin was 26%. FY25 earnings per share of $7.16 was up 14%. For the year, Keysight delivered core operating leverage of 39%, inclusive of tariff impacts. Moving to the performance of our segments, the Communications Solutions Group generated fourth-quarter revenue of $990 million, up 11% on a reported basis, or 9% on a core basis.

We expect Q1 earnings per share to be in the range of $1 95 to $2 <unk> based on a weighted diluted share count of approximately 173 million shares.

Speaker #2: During the quarter, we deployed $1.7 billion for acquisitions. We also repurchased 595,000 shares at an average price of approximately $168 for a total consideration of $100 million.

Key site enters FY 'twenty, six with strong backlog and a robust sales funnel as a result, we expect FY 'twenty six revenue growth, excluding acquisitions to be at or above the high end of our 5% to 7% long term target.

Speaker #2: Full-year share purchases totaled $375 million, or approximately 30% of the $1.3 billion in free cash flow generated this year. Now turning to our outlook.

The recently completed acquisitions of Spirent, the optical solutions group empower artists are expected to contribute approximately $375 million of revenue in FY 'twenty six we are working to realize in excess of $100 million of synergies and other operational efficiencies across key site, even as we sustain.

Speaker #2: For the first quarter of 2026, we expect revenue in the range of $1,530 million to $1,550 million, representing 19% year-over-year growth at the midpoint.

Speaker #2: Excluding the recent acquisitions, this guidance assumes 10% year-over-year revenue growth. We expect Q1 earnings per share to be in the range of $1.95 to $2.01 based on a weighted diluted share count of approximately 173 million shares.

A critical investment in R&D to ensure our key sites expanded product portfolio intersects the growth opportunities in our markets.

The acquisitions are expected to be accretive to <unk> earnings 12 months post close while this implies some mild dilution in FY 'twenty six we expect the strength of our core business to enable FY 'twenty six EPS growth at or above our long term 10% target.

Speaker #2: Keysight entered FY '26 with a capital and robust sales funnel. As a result, we expect FY '26 revenue growth, excluding acquisitions, to be at or above the high end of our 5% to 7% long-term target.

Satish Dhanasekaran: Commercial communications revenue of $660 million was up 12%, driven by continued strength in wireline and growth in wireless. Aerospace, defense, and government achieved revenue of $330 million and an increase of 9%. Altogether, CSG delivered 66% gross margin, and 27% operating margin. The Electronic Industrial Solutions Group generated $429 million in revenue, an increase of 9% on a reported basis, or 8% on a core basis, with growth in semiconductor and general electronics. EIC delivered 60% gross margin, and 25% operating margin. In FY25, software and services accounted for approximately 37% of Keysight revenue, while annual recurring revenue was 29% of the total. Moving to the balance sheet and cash flow, we ended the quarter with $1.9 billion in cash and cash equivalents, generating cash flow from operations of $225 million, and free cash flow of $188 million. During the quarter, we deployed $1.7 billion for acquisitions.

Commercial communications revenue of $660 million was up 12%, driven by continued strength in wireline and growth in wireless. Aerospace, defense, and government achieved revenue of $330 million and an increase of 9%. Altogether, CSG delivered 66% gross margin, and 27% operating margin. The Electronic Industrial Solutions Group generated $429 million in revenue, an increase of 9% on a reported basis, or 8% on a core basis, with growth in semiconductor and general electronics. EIC delivered 60% gross margin, and 25% operating margin. In FY25, software and services accounted for approximately 37% of Keysight revenue, while annual recurring revenue was 29% of the total. Moving to the balance sheet and cash flow, we ended the quarter with $1.9 billion in cash and cash equivalents, generating cash flow from operations of $225 million, and free cash flow of $188 million. During the quarter, we deployed $1.7 billion for acquisitions.

Now a few additional modeling considerations for the year.

As expected key site enters FY 'twenty six having fully mitigated the impact of tariffs implemented in April.

Speaker #2: Acquisitions of Spirant, the optical solutions group, and Power Artist are expected to contribute approximately $375 million of revenue in FY '26. We are working to realize in excess of $100 million of synergies and other operational efficiencies across Keysight, even as we sustain critical investment in R&D to ensure Keysight's expanded product portfolio intersects the growth opportunities in our markets.

We now expect the August tariff increase to be fully mitigated in Q1, one quarter earlier than previously communicated.

These expectations are reflected in our guidance.

At current debt levels annual interest expense is expected to be approximately $110 million capital expenditures are expected to be approximately $160 million and we are modeling a 14% non-GAAP effective tax rate for FY 'twenty six in closing we ended our fiscal 2025 with outstanding result.

Speaker #2: The acquisitions are expected to be accretive to Keysight's earnings 12 months post-close. While this implies some mild dilution in FY '26, we expect the strength of our core business to enable FY '26 EPS growth at or above our long-term 10% target.

And expect the momentum to carry into 2026 technology innovation is driving demand for high performance solutions across a broad range of industries.

Speaker #2: Now a few additional modeling considerations for the year. As expected, Keysight enters FY '26 having fully mitigated the impact of tariffs implemented in April.

With our differentiated portfolio technology leadership, and durable financial model, we are well positioned to deliver sustained revenue and earnings growth with that I will now turn it back to Paulina for the Q&A.

Speaker #2: We now expect the August tariff increase to be fully mitigated in Q1, one quarter earlier than previously communicated. These expectations are reflected in our guidance.

Thank you Aneel Victoria will you please give the instructions for the Q&A.

Satish Dhanasekaran: We also repurchased 595,000 shares at an average price of approximately $168 for a total consideration of $100 million. Full-year share purchases totaled $375 million, or approximately 30% of the $1.3 billion in free cash flow generated this year. Now, turning to our outlook. For the first quarter of 2026, we expect revenue in the range of $1,530 million to $1,550 million, representing 19% year-over-year growth at the midpoint. Excluding the recent acquisitions, this guidance assumes 10% year-over-year revenue growth. We expect Q1 earnings per share to be in the range of $1.95 to $2.01, based on a weighted diluted share count of approximately 173 million shares. Keysight enters FY26 with strong backlog and a robust sales funnel. As a result, we expect FY26 revenue growth, excluding acquisitions, to be at or above the high end of our 5% to 7% long-term target.

We also repurchased 595,000 shares at an average price of approximately $168 for a total consideration of $100 million. Full-year share purchases totaled $375 million, or approximately 30% of the $1.3 billion in free cash flow generated this year. Now, turning to our outlook. For the first quarter of 2026, we expect revenue in the range of $1,530 million to $1,550 million, representing 19% year-over-year growth at the midpoint. Excluding the recent acquisitions, this guidance assumes 10% year-over-year revenue growth. We expect Q1 earnings per share to be in the range of $1.95 to $2.01, based on a weighted diluted share count of approximately 173 million shares. Keysight enters FY26 with strong backlog and a robust sales funnel. As a result, we expect FY26 revenue growth, excluding acquisitions, to be at or above the high end of our 5% to 7% long-term target.

Of course, ladies and gentlemen, if you would like to ask a question press Star one we ask that you. Please limit yourself to one question and then rejoin the queue. If you have a follow up to withdraw your question. Please press star two please hold while we compile the Q&A roster.

Speaker #2: At current debt levels, annual interest expense is expected to be approximately $110 million; capital expenditures are expected to be approximately $160 million; and we are modeling a 14% non-GAAP effective tax rate for FY '26.

Speaker #2: In closing, we ended our fiscal 2025 with outstanding results and expect the momentum to carry into 2026. Technology innovation is driving demand for high-performance solutions across a broad range of industries.

Okay.

Our first question comes from the line of Mehdi Hosseini with ESI.

Speaker #2: With our differentiated portfolio, technology leadership, and durable financial model, we are well positioned to deliver sustained revenue and earnings growth. With that, I will now turn it back to Paulena.

Your line is now open.

Yes.

Thanks for taking my question looking into the new fiscal year.

How do you see the wireless are trending.

Speaker #2: For the

Speaker #2: Thank you, Neil.

Has the current depressed for the past few years and I'm, just wondering if theres any catalysts on the horizon.

Speaker #1: Victoria, will you please give the instructions for the Q&A?

Speaker #2: Of course. Ladies and gentlemen, if you would like to ask a question, please press star one. We ask that you limit yourself to one question and then rejoin the queue if you have a follow-up.

Or should we assume FY 'twenty six wood will be similar to last year.

Trending slightly I don't have a photo.

Speaker #2: To withdraw your question, please press star two. Please hold while we compile the Q&A roster. Our first question comes from the line of Mehdi Hossein with SIG.

Yes wireless.

You may be.

We're quite pleased with the results in 25 across all our segments and just this return to growth across all our regions that we saw this quarter specific to commercial communications. We are equally excited about the opportunities that we have in nextgen nexsan connectivity compute semiconductor.

Satish Dhanasekaran: The recently completed acquisitions of Spirent, the Optical Solutions Group, and PowerArtist are expected to contribute approximately $375 million of revenue in FY26. We are working to realize in excess of $100 million of synergies and other operational efficiencies across Keysight, even as we sustain critical investment in R&D to ensure Keysight's expanded product portfolio intersects the growth opportunities in our markets. The acquisitions are expected to be accretive to Keysight's earnings 12 months post-close. While this implies some mild dilution in FY26, we expect the strength of our core business to enable FY26 EPS growth at or above our long-term 10% target. Now, a few additional modeling considerations for the year. As expected, Keysight enters FY26, having fully mitigated the impact of tariffs implemented in April. We now expect the August tariff increase to be fully mitigated in Q1, one quarter earlier than previously communicated.

The recently completed acquisitions of Spirent, the Optical Solutions Group, and PowerArtist are expected to contribute approximately $375 million of revenue in FY26. We are working to realize in excess of $100 million of synergies and other operational efficiencies across Keysight, even as we sustain critical investment in R&D to ensure Keysight's expanded product portfolio intersects the growth opportunities in our markets. The acquisitions are expected to be accretive to Keysight's earnings 12 months post-close. While this implies some mild dilution in FY26, we expect the strength of our core business to enable FY26 EPS growth at or above our long-term 10% target. Now, a few additional modeling considerations for the year. As expected, Keysight enters FY26, having fully mitigated the impact of tariffs implemented in April. We now expect the August tariff increase to be fully mitigated in Q1, one quarter earlier than previously communicated.

Speaker #3: Your line is now open.

And we see.

Speaker #4: Yes, thanks for taking the question. Looking into the new fiscal year, Satish, how do you see the wireless market trending? It has been somewhat depressed for the past few years, and I'm just wondering if there's any catalyst on the horizon that gets you excited, or should we assume FY '26 will be similar to last year, just trending sideways?

Four of these technologies.

We can really make meaningful contributions and grow our portfolio.

Specific to your question on wireless obviously wireless exceeded expectations this year.

In part driven by stabilization.

<unk>, which is normalized and then some of the advanced technology areas that we have made investments and starting to show. Some early early results even prior to 60 hitting inflection so I would say.

Speaker #4: I don't have a

Speaker #4: follow-up. Yeah, wireless,

Speaker #5: Quite pleased with the results. Thank you, Mehdi. We're 25 across all our segments and just this return to growth across all our regions that we saw this quarter.

We are optimistic about the wireless growth into 2026, well even ahead of the six key inflections that may occur in the later part of the later part of the decade.

Speaker #5: Specific to commercial communications, we're equally excited about the opportunities that we have in next-gen connectivity, compute, semiconductor, and we see a plethora of these technologies that we can really make meaningful contributions to and grow our portfolio.

Okay, and a quick follow up as you look into the adoption of one 6% with particular wire line would there be.

Satish Dhanasekaran: These expectations are reflected in our guidance. At current debt levels, annual interest expense is expected to be approximately $110 million. Capital expenditures are expected to be approximately $160 million, and we are modeling a 14% non-GAAP effective tax rate for FY26. In closing, we ended our fiscal 2025 with outstanding results and expect the momentum to carry into 2026. Technology innovation is driving demand for high-performance solutions across a broad range of industries. With our differentiated portfolio, technology leadership, and durable financial model, we are well-positioned to deliver sustained revenue and earnings growth. With that, I will now turn it back to Paulenier for the Q&A. Thank you, Neil. Victoria, will you please give the instructions for the Q&A? Of course. Ladies and gentlemen, if you'd like to ask a question, press star one.

These expectations are reflected in our guidance. At current debt levels, annual interest expense is expected to be approximately $110 million. Capital expenditures are expected to be approximately $160 million, and we are modeling a 14% non-GAAP effective tax rate for FY26. In closing, we ended our fiscal 2025 with outstanding results and expect the momentum to carry into 2026. Technology innovation is driving demand for high-performance solutions across a broad range of industries. With our differentiated portfolio, technology leadership, and durable financial model, we are well-positioned to deliver sustained revenue and earnings growth. With that, I will now turn it back to Paulenier for the Q&A.

Additional growth of growth acceleration for key side would there be any upgrades or emerging.

Speaker #5: Specific to your question on wireless, obviously wireless exceeded expectations this year. In part, driven by stabilization in 5G, which has normalized, and then some of the advanced technology areas that we've made investments in, starting to show some early results.

I'm asking the question because.

Is there anything with Keith and we get to those.

The rates.

There is any upgrade or a price change with a higher growth rate any color will be great.

I think we are.

As you know <unk> our strategy has been to.

Speaker #5: Even prior to 6G hitting inflection, I would say we are optimistic about the wireless growth into 2026, but even ahead of the 6G inflections that may occur in the later part of the decade.

To develop first to market solutions, which offer our customers.

Greater value and.

And the higher technological complexity I think it really plays to our strength.

Paulenier Sims: Thank you, Neil. Victoria, will you please give the instructions for the Q&A?

And with regard to the.

The wireline there is a plethora of inflicting technologies across the entire AI stack, including the networking one that you referenced.

Speaker #4: Okay. I have a quick follow-up. As you look into the adoption of the 1.6 terabit per second wireline, would there be an additional growth acceleration for Keysight?

Operator: Of course. Ladies and gentlemen, if you'd like to ask a question, press star one.We ask that you please limit yourself to one question and then rejoin the queue if you have a follow-up. To withdraw your question, please press star two. Please hold while we compile the Q&A roster. Our first question comes from the line of Mehdi Hosseini with SIG. Your line is now open.

We're well positioned to continue the momentum into 'twenty six.

Satish Dhanasekaran: We ask that you please limit yourself to one question and then rejoin the queue if you have a follow-up. To withdraw your question, please press star two. Please hold while we compile the Q&A roster. Our first question comes from the line of Mehdi Hosseini with SIG. Your line is now open. Yes, thanks for taking the question. Looking into the new fiscal year, Satish, how do you see the wireless trending? It has been kind of depressed for the past few years, and I'm just wondering if there's any catalyst on the horizon that gets you excited, or should we assume FY26 would be similar to the last year, just trending sideways? I don't have a follow-up. Yeah, wireless. Thank you, Mehdi.

Speaker #4: Would there be any upgrades? And I'm asking the question because speed is to the advantage of Keysight, and we get to those data rates.

Speaker #4: I wonder if there is any upgrade or a pricing strategy that would help with a higher growth rate. Any color would be appreciated.

Great. Thank you so much for your questions.

Our next question comes from the line of Nick <unk> with Jpmorgan.

Speaker #4: great. I

Your line is now.

Speaker #5: I think we're really, as you know, Mehdi, our strategy has been to develop first-to-market solutions, which offer our customers greater value and a higher technological complexity. I think it really plays to our strength.

Thank you.

Thank you for taking my questions and congrats on the strong outlook here.

As you mentioned sort of the order acceleration through the year, but still when I take out the acquired business and the contribution there was a significant acceleration quarter over quarter from July to October, but maybe if you can just sort of some quick details there a bit in terms of how much of that was attributable to maybe more wireline and specifically.

Mehdi Hosseini: Yes, thanks for taking the question. Looking into the new fiscal year, Satish, how do you see the wireless trending? It has been kind of depressed for the past few years, and I'm just wondering if there's any catalyst on the horizon that gets you excited, or should we assume FY26 would be similar to the last year, just trending sideways? I don't have a follow-up. Yeah, wireless.

Speaker #5: And with regard to the wireline, there's a plethora of inflecting technologies across the entire AI stack, including the networking one that you referenced. We're well positioned to continue the momentum into '26.

Related to production use cases related to R&D and what's sort of the driver of the significant exploration recalls.

Like you're not only sort of confident about the order outlook here, but you also have visibility into the pipeline of that remaining robust and have a quick follow up thank you.

Satish Dhanasekaran: Thank you, Mehdi. We're quite pleased with the results in 2025 across all our segments, and just this return to growth across all our regions that we saw this quarter. Specific to commercial communications, we're equally excited about the opportunities that we have in next-gen connectivity, compute, semiconductor, and we see a plethora of these technologies that we can really make meaningful contributions and grow our portfolio. Specific to your question on wireless, obviously, wireless exceeded expectations this year, in part driven by stabilization in 5G, which has normalized, and then some of the advanced technology areas that we've made investments in starting to show some early results, even prior to 6G hitting inflection. I would say we're optimistic about the wireless growth into 2026, but even ahead of the 6G inflections that may occur in the later part of the decade.

Satish Dhanasekaran: We're quite pleased with the results in 2025 across all our segments, and just this return to growth across all our regions that we saw this quarter. Specific to commercial communications, we're equally excited about the opportunities that we have in next-gen connectivity, compute, semiconductor, and we see a plethora of these technologies that we can really make meaningful contributions and grow our portfolio. Specific to your question on wireless, obviously, wireless exceeded expectations this year, in part driven by stabilization in 5G, which has normalized, and then some of the advanced technology areas that we've made investments in starting to show some early results, even prior to 6G hitting inflection. I would say we're optimistic about the wireless growth into 2026, but even ahead of the 6G inflections that may occur in the later part of the decade. Okay. A quick follow-up.

Speaker #2: Great. Thank you so much for your questions. Our next question comes from the line of Sumit Chatterjee with J.P. Morgan. Your line is now open.

Thank you stomach, yes, very pleased with the results in the in quarter, four and I may I may want to start by saying clearly the revenue outperformance was driven by the broad order strength that we saw with both our <unk> and ESG businesses growing double digits this quarter.

Speaker #2: open. Yep.

Speaker #6: Thank you. Thank you for taking my questions, and congrats on the strong outlook here. Satish, you mentioned sort of the order acceleration through the year, but still, when I take out the acquired business and the contribution there, there was a significant acceleration quarter over quarter from July to October.

And we also are quite pleased with the broad nature of this strength all of our regions grew.

And it's pretty broad and and.

Speaker #6: Maybe if you can just sort of go ahead into the details there a bit in terms of how much of that was attributable to maybe more wireline, and specifically related to production use cases, related to R&D, and what sort of the driver of the significant acceleration?

And the areas that we have really been focusing on in the portfolio with our growth initiatives.

Really kicked into early Ger is the way I would characterize this.

When we look a look ahead at the pipeline, we see a very robust pipeline, obviously, our visibility 60 to 90 days is pretty good and we see a robust set of pipeline that we can go execute and we're also seeing the underlying demand.

Speaker #6: Because it seems like you're not only sort of confident about the order outlook here, but you also have visibility into the pipeline of that remaining robust.

Speaker #6: And I have a quick follow-up. Thank

Speaker #6: you. Thank you,

Speaker #5: Sumit: Yeah, I’m very pleased with the results in Q4, and I may want to start by saying clearly that the revenue outperformance was driven by the broad order strength that we saw, with both our CSG and EISG businesses growing double digits this quarter.

Whether it is the volume of the pipeline or the velocity of the pipeline with the conversion rate the sort of metrics that we track, including the quality of the pipeline.

Mehdi Hosseini: Okay. A quick follow-up. As we look into the adoption of 1.6 TB per second wireline, would there be an additional growth or growth acceleration for Keysight? Would there be any upgrade? I'm asking the question because speed is to the advention of Keysight, and we get to those data rates. I wonder if there's any upgrade or pricing that would help with a higher growth rate. Any color would be great.

Satish Dhanasekaran: As we look into the adoption of 1.6 TB per second wireline, would there be an additional growth or growth acceleration for Keysight? Would there be any upgrade? I'm asking the question because speed is to the advention of Keysight, and we get to those data rates. I wonder if there's any upgrade or pricing that would help with a higher growth rate. Any color would be great. I think we really, as you know, Mehdi, our strategy has been to develop first-to-market solutions, which offer our customers greater value, and the higher technological complexity, I think, it really plays to our strength. With regard to the wireline, there's a plethora of inflecting technologies across the entire AI stack, including the networking one that you referenced, where we're well-positioned to continue the momentum into 2026. Great. Thank you so much for your questions.

They are all trending up so we feel good about this and we reflected that in our guide.

Speaker #5: And we are also quite pleased with the broad nature of the strength. All our regions grew, and it's pretty broad. The areas that we have really been focusing on in our portfolio, along with our growth initiatives, have really kicked into early gear, is the way I would characterize this.

Okay, and maybe quickly just for Neil Neil you outlined the synergy expectation here can you just give us a bit more details in terms of how to think about what sort of required for the acquisitions to grow from EPS accretive to potentially the operating margins of those acquired with <unk> being similar to the corporate.

Satish Dhanasekaran: I think we really, as you know, Mehdi, our strategy has been to develop first-to-market solutions, which offer our customers greater value, and the higher technological complexity, I think, it really plays to our strength. With regard to the wireline, there's a plethora of inflecting technologies across the entire AI stack, including the networking one that you referenced, where we're well-positioned to continue the momentum into 2026.

Speaker #5: And then when we look ahead, the pipeline we see a very robust pipeline. Obviously, our visibility 60 to 90 days is pretty good, and we see a robust set of pipeline that we can go execute.

Average or being operating margin accretive in the future.

Yes, absolutely so as I said in their prepared remarks, we are working to generate a $100 million of run rate synergies and other operational efficiencies across key side certainly the majority of that the large majority of that is coming from synergies as we integrate these acquisitions.

Speaker #5: And we're also seeing the underlying demand, whether it is the volume of the pipeline, the velocity of the pipeline, or the conversion rate—these are sort of metrics that we track, including the quality of the pipeline.

Those of you that have covered key set for a while know that our integrations are complete.

Speaker #5: They're all trending up, so we feel good about this, and we reflected that in our guidance.

We do a thorough integration that tends to take us on the average 12 to 18 months to complete.

Operator: Great. Thank you so much for your questions. Our next question comes from the line of Samik Chatterjee with JPMorgan. Your line is now open.

Speaker #6: Okay. And maybe quickly just for Neil, you outlined the synergy expectation here. Can you just give us a bit more details in terms of how to think about what’s required for the acquisitions to go from EPS at Creative to potentially the operating margins of those acquired businesses being similar to the corporate average or being operating margin at Creative in the future?

And a significant driver of cost synergies for US is when we get systems alignment getting getting these acquisitions into our ERP environment is a is a big driver and that does take time. So I think as we think about FY 'twenty six relatively low realized synergies in these first few quarters until we can get to that.

Satish Dhanasekaran: Our next question comes from the line of Samik Chatterjee with JPMorgan. Your line is now open. Hi. Yep. Thank you. Thank you for taking my questions, and congrats on the strong outlook here. Satish, you mentioned sort of the order acceleration through the year, but still, when I take out the acquired business and the contribution there, there was a significant acceleration quarter over quarter from July to October. Maybe if you can just sort of go into the details there a bit in terms of how much of that was attributable to maybe more wireline, and specifically relative to production use cases, relative to R&D, and what's sort of the driver of the significant acceleration, because it seems like you're not only sort of confident about the order outlook here, but you also have a visibility into the pipeline of that remaining robust.

Samik Chatterjee: Hi. Yep. Thank you. Thank you for taking my questions, and congrats on the strong outlook here. Satish, you mentioned sort of the order acceleration through the year, but still, when I take out the acquired business and the contribution there, there was a significant acceleration quarter over quarter from July to October. Maybe if you can just sort of go into the details there a bit in terms of how much of that was attributable to maybe more wireline, and specifically relative to production use cases, relative to R&D, and what's sort of the driver of the significant acceleration, because it seems like you're not only sort of confident about the order outlook here, but you also have a visibility into the pipeline of that remaining robust. I have a quick follow-up. Thank you.

To that Cutover point and then later in the year I think youll see a step a step function improvements in terms of synergy realization within a longer tail.

Speaker #3: Yeah, absolutely. So, as I said in the prepared remarks, we're working to generate $100 million of run-rate synergies and other operational efficiencies across Keysight.

Smaller synergy realization into into 'twenty seven.

Speaker #3: Certainly, the majority of that, the large majority of that, is coming from synergies as we integrate these acquisitions. Those of you that have covered Keysight for a while will know that our integrations are complete and we do a thorough integration that tends to take us, on average, 12 to 18 months to complete.

Okay. Thank you.

Thank you.

Thank you for your questions.

Our next question is from the line of Andrew Spinola with UBS.

Your line is now open.

Okay.

Speaker #3: And a significant driver of cost synergies for us is when we get systems aligned. Getting these acquisitions into our ERP environment is a big driver.

Thank you I wanted to ask a question on the wireline business.

Satish Dhanasekaran: I have a quick follow-up. Thank you. Thank you, Samik. Yeah, very pleased with the results in Q4. I may want to start by saying, clearly, the revenue outperformance was driven by the broad order strength that we saw with both our CSG and EIC businesses growing double digits this quarter. We also are quite pleased with the broad nature of the strength. All our regions grew, and it's pretty broad. The areas that we have really been focusing on in the portfolio with our growth initiatives have really kicked into early gear, is the way I would characterize this. When we look ahead at the pipeline, we see a very robust pipeline. Obviously, our visibility, 60 to 90 days, is pretty good, and we see a robust set of pipeline that we can go execute.

Generally when we think about your R&D business.

Satish Dhanasekaran: Thank you, Samik. Yeah, very pleased with the results in Q4. I may want to start by saying, clearly, the revenue outperformance was driven by the broad order strength that we saw with both our CSG and EIC businesses growing double digits this quarter. We also are quite pleased with the broad nature of the strength. All our regions grew, and it's pretty broad. The areas that we have really been focusing on in the portfolio with our growth initiatives have really kicked into early gear, is the way I would characterize this.

Speaker #3: And that does take time. So I think as you think about FY '26, relatively low realized synergies in these first few quarters until we can get to that cutover point.

Sure Raj in front of the actual deployment of the <unk>.

Whereby a few years now.

We think about <unk> coming in 2030, it needs to be spending in 2017. So I'm wondering how should we think about wireline Hawaii.

Speaker #3: And then later in the year, I think you'll see a step-function improvement in terms of synergy realization, with then a longer tail of smaller synergy realization into.

The hyperscale builds going on pretty active right now and we're just starting to see your wireline business pick up in the last few quarters. So I'm wondering what what's different about the timing on the wireline business with the Hyperscale and what does that tell us about maybe the visibility of the longevity of the spend.

Speaker #3: '27. Okay.

Speaker #6: Thank you.

Speaker #5: Thank

Speaker #2: Thank you for your

Speaker #2: Questions. Our next question is from the line of Andrew Spinella with UBS. Your line is now open.

Yes, I'd say Thats a good question, Andrew I'd say this couple of going on.

There's a couple of things going on obviously, the AI cluster and infrastructure build outs are occurring.

When we look ahead at the pipeline, we see a very robust pipeline. Obviously, our visibility, 60 to 90 days, is pretty good, and we see a robust set of pipeline that we can go execute. We're also seeing the underlying demand, whether it is the volume of the pipeline, the velocity of the pipeline, or the conversion rate, the sort of metrics that we track, including the quality of the pipeline. They're all trending up. We feel good about this, and we reflected that in our guide.

Speaker #4: Thank you. I wanted to ask a question on the wireline business. Generally, when we think about your R&D business, it sort of runs in front of the actual deployment of the hardware by a few years.

Driven by the Hyperscale or spend.

So the entire supply chain is sort of locking in grid and trying to deconstruct a constrained supply environment. So there is there is some.

Satish Dhanasekaran: We're also seeing the underlying demand, whether it is the volume of the pipeline, the velocity of the pipeline, or the conversion rate, the sort of metrics that we track, including the quality of the pipeline. They're all trending up. We feel good about this, and we reflected that in our guide. Okay. Maybe quickly, just for Neil. Neil, you outlined the synergy expectation here. Can you just give us a bit more detail in terms of how to think about what's required for the acquisitions to go from EPS accretive to potentially the operating margins of those acquired businesses being similar to the corporate average or being operating margin accretive in the future? Yeah, absolutely. As I said in the prepared remarks, we're working to generate $100 million of run rate synergies and other operational efficiencies across Keysight.

Speaker #4: And we think about 6G coming in 2030; it needs to be spending in 2070. So I'm wondering, how should we think about wireline? A lot of the hyperscaler build is going on pretty actively right now, and we're really just starting to see your wireline business pick up in the last few quarters.

Some of the impact positive impact to our business from that dynamic, but the longer term overarching theme is the underlying waves of technology across the entire stack all the way from compute to memory storage too to.

Samik Chatterjee: Okay. Maybe quickly, just for Neil. Neil, you outlined the synergy expectation here. Can you just give us a bit more detail in terms of how to think about what's required for the acquisitions to go from EPS accretive to potentially the operating margins of those acquired businesses being similar to the corporate average or being operating margin accretive in the future?

Speaker #4: So I'm wondering what's different about the timing on the wireline business with the hyperscalers, and what does that tell us about maybe the visibility in the longevity of this spend?

To the infrastructure itself when it all comes together I think we're making significantly bigger contributions and participating in that.

Speaker #5: Yeah, I'd say there's a good question, Andrew. I'd say there's a couple of things going on. There's a couple of things going on. Obviously, the AI cluster and infrastructure build-outs that are occurring driven by the hyperscaler spend.

Second our long term trend from an R&D perspective, and so we feel good about both these opportunities in the short and medium in the medium term.

Neil Dougherty: Yeah, absolutely. As I said in the prepared remarks, we're working to generate $100 million of run rate synergies and other operational efficiencies across Keysight. Certainly, the majority of that, the large majority of that, is coming from synergies as we integrate these acquisitions. Those of you that have covered Keysight for a while will know that our integrations are complete, and we do a thorough integration that tends to take us on average 12 to 18 months to complete.

Okay. Thank you very much.

Thank you.

Speaker #5: So the entire supply chain is sort of locking in grid and trying to deconstrain a constrained supply environment. So there's some positive impact to our business from that dynamic.

Thank you for your question.

Our next question comes from the line of at this Malik with Citi.

Satish Dhanasekaran: Certainly, the majority of that, the large majority of that, is coming from synergies as we integrate these acquisitions. Those of you that have covered Keysight for a while will know that our integrations are complete, and we do a thorough integration that tends to take us on average 12 to 18 months to complete. A significant driver of cost synergies for us is when we get systems aligned, and getting these acquisitions into our ERP environment is a big driver, and that does take time. I think as you think about FY26, relatively low realized synergies in these first few quarters until we can get to that cutover point. Later in the year, I think you'll see a step function improvement in terms of synergy realization, with then a longer tail of smaller synergy realization into 2027. Okay. Thank you. Thank you.

Your line is now open.

Hi, Thank you for taking my question I have a question for thesis.

Speaker #5: But the longer-term overarching theme is the underlying waves of technology across the entire stack, all the way from compute to memory, to storage, to the infrastructure itself.

<unk> announced 1 billion strategic investment in Nokia developing AI powered network for future <unk> infrastructure.

A significant driver of cost synergies for us is when we get systems aligned, and getting these acquisitions into our ERP environment is a big driver, and that does take time. I think as you think about FY26, relatively low realized synergies in these first few quarters until we can get to that cutover point. Later in the year, I think you'll see a step function improvement in terms of synergy realization, with then a longer tail of smaller synergy realization into 2027.

And I heard you say that the later part of the ticket for 16 in terms of the adoption like why wouldn't it be factor.

Speaker #5: When it all comes together, I think we're making significantly bigger contributions and participating in that secular long-term trend from an R&D perspective. So we feel good about both these opportunities in the short and medium term.

The AI guys are supporting fat.

Faster adoption of <unk> 16, just kind of help us out.

Anything changed with respect to your view on the infection in 16.

Yes.

Speaker #4: Okay. Thank you very much.

Good question I think when we think about.

Speaker #5: Thank you.

Any big technology role.

Speaker #2: Thank you for your question. Our next question comes from the line of Etis Malik with City. Your line is now open.

Adjusted generational role, we start to look at where the standards are and that's often a good mile marker for how deployments will occur and so when we think about the standardization, we're thinking 'twenty eight 'twenty nine ish timeframe when that when that process.

Samik Chatterjee: Okay. Thank you. Thank you.

Speaker #6: Hi. Thank you for taking my question. I have a question regarding the $1 billion strategic investment in Satish. Satish, NVIDIA announced Nokia is developing AI-powered networks for future 6G RAN infrastructure.

Satish Dhanasekaran: Thank you for your questions. Our next question is from the line of Andrew Spinola with UBS. Your line is now open. Thank you. I wanted to ask a question on the wireline business. Generally, when we think about your R&D business, it sort of runs in front of the actual deployment of the hardware by a few years. We think about 6G coming in 2030, it needs to be spending in 2027. I'm wondering, how should we think about wireline? A lot of the hyperscaler build is going on pretty actively right now, and really just starting to see your wireline business pick up in the last few quarters. I'm wondering what's different about the timing on the wireline business with the hyperscalers, and what does that tell us about maybe the visibility and the longevity of this spend?

Operator: Thank you for your questions. Our next question is from the line of Andrew Spinola with UBS. Your line is now open.

Comes to some level of maturity before global deployments they occur but.

Andrew Spinola: Thank you. I wanted to ask a question on the wireline business. Generally, when we think about your R&D business, it sort of runs in front of the actual deployment of the hardware by a few years. We think about 6G coming in 2030, it needs to be spending in 2027. I'm wondering, how should we think about wireline? A lot of the hyperscaler build is going on pretty actively right now, and really just starting to see your wireline business pick up in the last few quarters. I'm wondering what's different about the timing on the wireline business with the hyperscalers, and what does that tell us about maybe the visibility and the longevity of this spend?

Speaker #6: And I heard you still say that the later part of 6G, in terms of the adoption for this decade. Why wouldn't it be faster if the AI guys are supporting faster adoption of 6G?

But specific to our portfolio, we are quite excited by the new opportunities the changing technology stack presence itself and I'll have kailash make a couple of comments on.

Speaker #6: Just kind of help us out. Has anything changed with respect to your view on the inflection in 6G?

Some of the collaborations that we're currently engaged in that we feel like will result in meaningful upside to the company.

Thank you Joseph.

Speaker #3: Yeah, good question. I think when we think about any big technology role, such as a generational role, we start to look at where the standards are.

We are working with <unk>.

Operators to your point and helping them evaluate how gpus and AI accelerators can be deployed and ran environments.

Speaker #3: And that's often a good mile marker for how deployments will occur. So, when we think about the standardization, we're thinking 28, 29-ish timeframe when that process comes to some level of maturity before global deployments may occur.

We have a solution portfolio that we have launched recently that allows them to model a concurrent Oran and AI workloads in partnership with Nvidia and an ecosystem of U S. Operators recently, we also launched a solution to bring the concurrent.

Satish Dhanasekaran: Yeah, I'd say that's a good question, Andrew. I'd say there's a couple of things going on. There's a couple of things going on. Obviously, the AI cluster and infrastructure build-outs that are occurring are driven by the hyperscaler spend. The entire supply chain is sort of locking in grid and trying to deconstrain a constrained supply environment. There's some of our impact, positive impact to our business from that dynamic. The longer-term overarching theme is the underlying waves of technology across the entire stack, all the way from compute to memory to storage to the infrastructure itself. When it all comes together, I think we're making significantly bigger contributions and participating in that secular long-term trend from an R&D perspective. We feel good about both these opportunities in the short and medium term. Okay. Thank you very much. Thank you. Thank you for your question.

Speaker #3: But specific to our portfolio, we're quite excited by the new opportunities the changing technology stack presents. I'll have Kailash make a couple of comments on some of the collaborations that we're currently engaged in, which we feel will result in meaningful upside.

Exploration of compute as well as connectivity infrastructure using some of our wireline as well as wireless portfolio. All of this is exciting and we are enabling the industry further the <unk> standard.

Speaker #6: Thank you,

Speaker #6: Etis. See, we are working with the company operators to your point in helping them evaluate how GPUs and AI accelerators can be deployed and run in environments.

Thank you.

Thank you for your question.

Our next question comes from the line of Rob Mason with Baird.

Your line is now open.

Speaker #6: So we have a solution portfolio that we have launched recently that allows them to model concurrent RAN and AI workloads in partnership with NVIDIA and an ecosystem of U.S. operators.

Hi, yes, good afternoon.

My first question was going to direct to cities I was.

If you could just speak to the positioning business that you require that you did acquire with the spirit acquisition. It does look like that's really new capability that you bring into the portfolio you made mention of it some in the aerospace defense commentary, but I'm just curious how you see that.

Speaker #6: Recently, we also launched a solution to bring the concurrent exploration of compute as well as connectivity infrastructure using some of our wireline as well as wireless portfolio.

Andrew Spinola: Okay. Thank you very much.

Satish Dhanasekaran: Thank you.

Operator: Thank you for your question. Our next question comes from the line of Atis Malik with Citi. Your line is now open. Hi.

Technology layering across the portfolio of applicability in and where do you think.

Satish Dhanasekaran: Our next question comes from the line of Atis Malik with Citi. Your line is now open. Hi. Thank you for taking my question. I have a question for Satish. Satish, NVIDIA announced $1 billion strategic investment in Nokia developing AI-powered networks for future 6G RAN infrastructure. I heard you still say that the later part of this decade for 6G. In terms of the adoption, why wouldn't it be faster if the AI guys are supporting faster adoption of 6G? Just kind of help us out. Has anything changed with respect to your view on the inflection in 6G? Yeah, it is a good question. I think when we think about any big technology role, such as a generational role, we start to look at where the standards are. That's often a good mile marker for how deployments will occur.

Speaker #6: All of this is exciting, and we are further enabling the industry to move the 6G standard forward. Thank you.

Key sites relationships can add incremental value to that.

That capability.

Atif Malik: Thank you for taking my question. I have a question for Satish. Satish, NVIDIA announced $1 billion strategic investment in Nokia developing AI-powered networks for future 6G RAN infrastructure. I heard you still say that the later part of this decade for 6G. In terms of the adoption, why wouldn't it be faster if the AI guys are supporting faster adoption of 6G? Just kind of help us out. Has anything changed with respect to your view on the inflection in 6G?

Yes. Thank you Rob Great question I'm very excited to answer it as you can you can probably sense.

Speaker #5: Thank

Speaker #5: Thank you. Thank you for your

Speaker #2: Our next question comes from the line of Rob Mason with Baird. Your line is now open.

Positioning is a crown jewel right inside the spirent portfolio very unique capabilities with regard to positioning navigation and time and you might say what does it do what is the products really do well at simulate and emulate.

Speaker #2: open. Yes.

Speaker #6: Good afternoon. My first question was going to be directed to Satish. I was curious if you could just speak to the positioning business that you're acquiring—that you did acquire with the Spirit acquisition.

Satellite environments in the lab I used to be an engineer at Motorola and even dating back to my time as an engineer of used.

Speaker #6: It does look like that's a really new capability that you bring into the portfolio. You made mention of it some in the aerospace defense commentary, but I'm just curious how you see that technology layering across the portfolio applicability and where you think key site relationships can add incremental value to that capability?

Satish Dhanasekaran: Yeah, it is a good question. I think when we think about any big technology role, such as a generational role, we start to look at where the standards are. That's often a good mile marker for how deployments will occur. When we think about the standardization, we're thinking '28, '29-ish timeframe when that process comes to some level of maturity before global deployments may occur. Specific to our portfolio, we're quite excited by the new opportunities, the changing technology stack presents itself. I'll have Kailash make a couple of comments on some of the collaborations that we're currently engaged in that we feel like will result in meaningful upside to the company.

These tools and I'm, a big fan of these tools inside the key site environment I think it takes a completely different upgraded opportunity set because of our different end market exposure I would just start with automotive being an example.

Try to look at autonomous systems.

Speaker #5: Thank you, Rob. Great question. I'm very excited to answer it, as you can probably sense. Positioning is a crown jewel, right, inside the Spiron portfolio.

Integrated sensing and communication in the context of <unk> aerospace.

Satish Dhanasekaran: When we think about the standardization, we're thinking '28, '29-ish timeframe when that process comes to some level of maturity before global deployments may occur. Specific to our portfolio, we're quite excited by the new opportunities, the changing technology stack presents itself. I'll have Kailash make a couple of comments on some of the collaborations that we're currently engaged in that we feel like will result in meaningful upside to the company. Thank you, Atis. We are working with operators, to your point, in helping them evaluate how GPUs and AI accelerators can be deployed in RAN environments. We have a solution portfolio that we have launched recently that allows them to model concurrent RAN and AI workloads in partnership with NVIDIA and an ecosystem of US operators.

Defense with jamming spoofing and a whole bunch of new considerations that the that the security environment now requires.

Speaker #5: Very unique capabilities with regard to positioning, navigation, and time. And you might say, what does it do? What do the products really do? Well, it simulates and emulates satellite environments.

Get excited by it it will take us some time to get it all plugged together into our solutions portfolio.

Speaker #5: In the lab, I used to be an engineer at Motorola. And even dating back to my time as an engineer, I've used these tools.

This has been a gap in our portfolio and one we feel really good about.

Speaker #5: And I'm a big fan of these tools. Inside the Keysight environment, I think it takes a completely different upgraded opportunity set because of our different end market exposure.

About embracing I was just meeting with the team.

We could go and are very excited I can say and maybe Carlos can give you a little bit more color on some specific applications that we're already starting to build into our value proposition.

Kailash Narayanan: Thank you, Atis. We are working with operators, to your point, in helping them evaluate how GPUs and AI accelerators can be deployed in RAN environments. We have a solution portfolio that we have launched recently that allows them to model concurrent RAN and AI workloads in partnership with NVIDIA and an ecosystem of US operators. Recently, we also launched a solution to bring the concurrent exploration of compute as well as connectivity infrastructure using some of our wireline as well as wireless portfolio. All of this is exciting, and we are enabling the industry further the 6G standard forward.

Speaker #5: I would just start with automotive being an example. You start to look at autonomous systems and integrated sensing and communication in the context of 6G.

Yes, Thanks station.

The Leo and MTN application scale, we obviously see significant opportunities to offer additional value to our customer base.

Speaker #5: Aerospace defense with jamming, spoofing, and a whole bunch of new considerations that the security environment now requires. I'm quite excited by it. It'll take us some time to get it all plumbed together into our solutions portfolio.

Looking to bundling in some of these capabilities with our classic physical and <unk> and.

And protocol layer solutions and clearly this is an upside for us cities talked about MTN design activity gaining momentum. What this does is it enhances our portfolio that we already have.

Speaker #5: But this has been a gap in our portfolio, and one we feel really good about embracing. I was just meeting with the team a week ago and I'm very excited, as you can see.

Satish Dhanasekaran: Recently, we also launched a solution to bring the concurrent exploration of compute as well as connectivity infrastructure using some of our wireline as well as wireless portfolio. All of this is exciting, and we are enabling the industry further the 6G standard forward. Thank you. Thank you. Thank you for your question. Our next question comes from the line of Rob Mason with Baird. Your line is now open. Yes, good afternoon. My first question was going to direct to Satish. I was curious if you could just speak to the positioning business that you did acquire with the Spirent acquisition. It does look like that's really new capability that you're bringing to the portfolio.

From testing antennas on satellites to.

Speaker #5: A bit more color on some specific applications that were already starting to build into our value.

Going into satellite constellation emulation orbital emulation channel emulation, and so forth so plenty of applications here to bundle this capability.

Speaker #5: proposition.

Speaker #6: Yeah. Thank you, Satish.

Atif Malik: Thank you.

Speaker #6: And as the Leo and NTN applications scale, we obviously see significant opportunities to offer additional value to our customer base. We're looking to bundle in some of these capabilities with our classic physical and protocol layer solutions.

Satish Dhanasekaran: Thank you.

A key sites portfolio, that's going to drive that business, both in our aerospace defense as well as wireless markets.

Operator: Thank you for your question. Our next question comes from the line of Rob Mason with Baird. Your line is now open.

That's very helpful.

So just as a follow up.

Rob Mason: Yes, good afternoon. My first question was going to direct to Satish. I was curious if you could just speak to the positioning business that you did acquire with the Spirent acquisition. It does look like that's really new capability that you're bringing to the portfolio. You made mention of it some in the aerospace defense commentary, but I'm just curious how you see that technology layering across the portfolio applicability, and where do you think Keysight's relationships can add incremental value to that capability?

Neil.

I'm just going to see if you could provide a little help on the maybe the cadence of how the M&A Contra revenue contribution folds in this year just look like the first quarter guided contributions.

Speaker #6: And clearly, this is an upside for us. Satish talked about NTN design activity gaining momentum. What this does is enhance our portfolio that we already have, from testing antennas on satellites to going into satellite constellation emulation, orbital emulation, channel emulation, and so forth.

Above the run rate I know spirit in particular had more second half weighted calendar second half weighted revenue, but how should we think about the cadence.

Satish Dhanasekaran: You made mention of it some in the aerospace defense commentary, but I'm just curious how you see that technology layering across the portfolio applicability, and where do you think Keysight's relationships can add incremental value to that capability? Yeah, thank you, Rob. Great question. I'm very excited to answer it, as you can probably sense. Positioning is a crown jewel, right, inside this current portfolio. Very unique capabilities with regard to positioning, navigation, and time. You might say, "What does it do? What does the product truly do?" Well, it simulates and emulates satellite environments in the lab. I used to be an engineer at Motorola, and even dating back to my time as an engineer, I've used these tools, and I'm a big fan of these tools.

For the year.

Yes.

Revenue from the acquisitions first of all rough rough estimates at this point about 75% of the <unk> about 25% of the ISG from a seasonality perspective.

Speaker #6: So, plenty of applications here to bundle this capability portfolio. That's what we're talking about, both in our aerospace defense as well as wireless markets.

It does skew a little bit more heavily towards Q1 versus the remainder of the year, we have approaching 30% here.

Satish Dhanasekaran: Yeah, thank you, Rob. Great question. I'm very excited to answer it, as you can probably sense. Positioning is a crown jewel, right, inside this current portfolio. Very unique capabilities with regard to positioning, navigation, and time. You might say, "What does it do? What does the product truly do?" Well, it simulates and emulates satellite environments in the lab. I used to be an engineer at Motorola, and even dating back to my time as an engineer, I've used these tools, and I'm a big fan of these tools.

Speaker #6: That's very helpful. Just as a follow-up, Neil, I was going to see if you could provide a little help on maybe the cadence of how the M&A revenue contribution folds in this year.

Here in the first quarter, and then with the remaining three quarters.

More or less equal to one another and I just would the small caveat. We're obviously basing that on how these businesses behaved in there in their prior environments and recognize that.

Speaker #6: It just looked like the first-quarter guided contributions were above the run rate. I know Spirit, in particular, had more second-half weighted revenue, but how should we think about the cadence for the...

Particularly as we bring people onto their sales forces onto our sales structures things are likely going to relatively quickly start to shift and start to align with key sites. So we'll have to see how that plays out but right now we're modeling close to 30% in Q1 and relatively evenly thereafter.

Speaker #6: year? Yeah.

Speaker #4: Acquisitions for Saul are roughly estimated at this point to be about 75% of the CSG and about 25% of the EISG from a seasonality perspective.

Satish Dhanasekaran: Inside the Keysight environment, I think it takes a completely different upgraded opportunity set because of our different end market exposure. I would just start with automotive being an example. You start to look at autonomous systems, integrated sensing, and communication in the context of 6G, aerospace defense with jamming, spoofing, and a whole bunch of new considerations that the security environment now requires. Quite excited by it. It'll take us some time to get it all plumbed together into our solutions portfolio. This has been a gap in our portfolio and one we feel really good about embracing. I was just meeting with the team a week ago and very excited, as I can say, and a bit more color on some specific applications that we're already starting to build into our value proposition. Yeah, thank you, Satish.

Inside the Keysight environment, I think it takes a completely different upgraded opportunity set because of our different end market exposure. I would just start with automotive being an example. You start to look at autonomous systems, integrated sensing, and communication in the context of 6G, aerospace defense with jamming, spoofing, and a whole bunch of new considerations that the security environment now requires. Quite excited by it. It'll take us some time to get it all plumbed together into our solutions portfolio. This has been a gap in our portfolio and one we feel really good about embracing. I was just meeting with the team a week ago and very excited, as I can say, and a bit more color on some specific applications that we're already starting to build into our value proposition.

Speaker #4: It does skew a little bit more heavily towards Q1 versus the remainder of the year. We have an approaching 30% here in the first quarter, and then with the remaining three quarters more or less equal to one another.

Thank you.

Thank you for your questions.

Our next question comes from the line.

David Ridley Lane with Bank of America.

Your line is now open.

Speaker #4: Now, I just would add the small caveat: we're obviously basing that on how these businesses behaved in their prior environments and recognize that, particularly as we bring people onto our sales forces and into our sales structures, things are likely going to relatively quickly start to shift and align with key sites.

Thank you.

I wanted to dive into that sort of commentary that.

You'll have 10 plus percent adjusted EPS growth, even with the dilution.

Very bright and sort of thinking we're not talking about significant EPS dilution any way to sort of.

Speaker #4: So we'll have to see how that plays out. But right now, we're modeling close to 30% in Q1 and relatively evenly thereafter.

Put some parameters on that yes.

Yes.

We described it in the prepared remarks it mild so I think you can think of on a percentage basis is low single digits.

Speaker #6: Thank you.

Speaker #2: Thank you for your questions. Our next question comes from the line of David Ridley Lane with Bank of America. Your line is now open.

And then the other.

Yes. The other question I had just on the.

Kailash Narayanan: Yeah, thank you, Satish. As the LEO and NTN applications scale, we obviously see significant opportunities to offer additional value to our customer base. We're looking to bundle in some of these capabilities with our classic physical and protocol layer solutions. Clearly, this is an upside for us. Satish talked about NTN design activity gaining momentum. What this does is it enhances our portfolio that we already have from testing antennas on satellites to going into satellite constellation emulation, orbital emulation, channel emulation, and so forth. Plenty of applications here to bundle this capability into Keysight's portfolio. That's going to drive business both in our aerospace, defense, and wireless markets.

Satish Dhanasekaran: As the LEO and NTN applications scale, we obviously see significant opportunities to offer additional value to our customer base. We're looking to bundle in some of these capabilities with our classic physical and protocol layer solutions. Clearly, this is an upside for us. Satish talked about NTN design activity gaining momentum. What this does is it enhances our portfolio that we already have from testing antennas on satellites to going into satellite constellation emulation, orbital emulation, channel emulation, and so forth. Plenty of applications here to bundle this capability into Keysight's portfolio. That's going to drive business both in our aerospace, defense, and wireless markets. That's very helpful. Just as a follow-up, Neil, I was going to see if you could provide a little help on maybe the cadence of how the M&A revenue contribution folds in this year.

<unk> contribution is.

Does that core common.

Commentary that you were talking about.

Speaker #6: Thank you. I wanted to dive into that sort of commentary that you'll have 10-plus percent just GPS growth even with dilution. Am I right in sort of thinking we're not talking about significant EPS dilution?

In terms of the organic revenue growth.

Sort of fit with the historical Sir.

<unk> plus percent incremental margins or how should we think about the contribution of the M&A front.

Speaker #6: Any way to sort of put some parameters on that?

Synergy benefit versus your core incrementals as with framing up the entire fiscal year. Thank you.

Speaker #4: Yeah. I mean, I described it in the prepared remarks as mild. So I think you could think of, on a percentage basis, as low single.

Yes, so obviously, it's piracy covenant of public companies you could go look.

Speaker #4: digits. And

Those businesses, where as we inherited them or operating a profit levels that were significantly lower than key sites, but we have committed that on a post integration basis. We expect an accretive decrease eight operating margins. So over that 12 to 18 month period of time, we're going to make a pretty significant increase in driving.

Speaker #6: And then the other question I had just on the contribution is, is that core commentary that you were talking about in terms of the organic revenue growth fit with the historical sort of 40%-ish plus percent incremental margins?

Rob Mason: That's very helpful. Just as a follow-up, Neil, I was going to see if you could provide a little help on maybe the cadence of how the M&A revenue contribution folds in this year. It just looked like the first quarter guided contributions above the run rate. I know Spirent, in particular, had more second-half weighted, calendar second-half weighted revenue. How should we think about the cadence for the year?

Improved profitability in those businesses via this $100 million.

Speaker #6: Or how should we think about the contribution of the M&A synergy benefit versus your core incrementals as we're framing up the entire fiscal year?

Synergy and other efficiency capture and the and the core businesses I think 40% incremental is the right way to continue to think about our business.

Satish Dhanasekaran: It just looked like the first quarter guided contributions above the run rate. I know Spirent, in particular, had more second-half weighted, calendar second-half weighted revenue. How should we think about the cadence for the year? Yeah, the revenue from the acquisitions, for rough estimates at this point, about 75% into CSG, about 25% into EISG from a seasonality perspective. It does skew a little bit more heavily towards Q1 versus the remainder of the year. We have approaching 30% here in the first quarter, with the remaining three quarters more or less equal to one another.

Speaker #6: Thank

The one.

Speaker #6: you. Yeah.

The thing that you need to factor in is tariffs, which again, we're still lapping where there is still not fully in our run rate, but as you saw this year, we came very close to delivering to the 40% or incremental while absorbing tariffs in the second half. So that's the right way to this the right way to think about our business, but the tariffs do provide a marginal incremental.

Speaker #4: So obviously, Spiron's a public company, so you could go look. Those businesses, as we inherited them, were operating at profit levels that were significantly lower than key sites.

Neil Dougherty: Yeah, the revenue from the acquisitions, for rough estimates at this point, about 75% into CSG, about 25% into EISG from a seasonality perspective. It does skew a little bit more heavily towards Q1 versus the remainder of the year. We have approaching 30% here in the first quarter, with the remaining three quarters more or less equal to one another. Now, just with the small caveat, we're obviously basing that on how these businesses behaved in their prior environments and recognize that, particularly as we bring people onto our, their sales forces onto our sales structures, things are likely going to relatively quickly start to shift and start to align with Keysight. We'll have to see how that plays out. Right now, we're modeling close to 30% in Q1 and relatively evenly thereafter.

Speaker #4: But we have committed that, on a post-integration basis, we expect them to get creative and decrease site operating margins. So, over that 12 to 18-month period, we're going to make a pretty significant increase in driving improved profitability in those businesses via this $100 million synergy and other efficiency capture.

Headwind.

Thank you very much.

Thank you for your questions.

Our next question comes from the line of Mark Delaney with Goldman Sachs.

Satish Dhanasekaran: Now, just with the small caveat, we're obviously basing that on how these businesses behaved in their prior environments and recognize that, particularly as we bring people onto our, their sales forces onto our sales structures, things are likely going to relatively quickly start to shift and start to align with Keysight. We'll have to see how that plays out. Right now, we're modeling close to 30% in Q1 and relatively evenly thereafter. Thank you. Thank you for your questions. Our next question comes from the line of David Ridley Lane with Bank of America. Your line is now open. Thank you. I wanted to dive into that sort of commentary that you'll have 10-plus percent just EPS growth even with the dilution. Am I right in sort of thinking we're not talking about significant EPS dilution? Any way to sort of put some parameters on that? Yeah.

Speaker #4: And the core businesses, I think 40% incremental is the right way to continue to think about our business. The one thing that you need to factor in is tariffs, which, again, we're still lapping with.

Your line is now open.

Yes, good afternoon, and thank you very much for taking my question.

In your prepared remarks, you said that for the full year you'd expect your revenue growth to be at or above the high end of the 5% to 7% target model as you think about some of the different businesses.

Speaker #4: They're still not fully in our run rate. But as you saw this year, we came very close to delivering the 40% core incremental while absorbing tariffs in the second half.

The wireline wireless ISG can you give us a better sense of which one do you think will grow.

Speaker #4: So it's the right way to think about our business. But the tariffs do provide a marginal incremental headwind.

At that level or above and any end markets or micro a little bit slower and then build up to that.

Rob Mason: Thank you.

Operator: Thank you for your questions. Our next question comes from the line of David Ridley Lane with Bank of America. Your line is now open.

Speaker #6: Thank you very much.

Consolidated view that you've provided.

Speaker #2: Thank you for your questions. Our next question comes from the line of Mark Delaney with Goldman Sachs. Your line is now open.

Yes, I mean, I think <unk> already provided you some color on the markets I think as.

As you think about wireline.

David Ridley-Lane: Thank you. I wanted to dive into that sort of commentary that you'll have 10-plus percent just EPS growth even with the dilution. Am I right in sort of thinking we're not talking about significant EPS dilution? Any way to sort of put some parameters on that?

We're clearly benefiting from the from the investment wave and AI I think we would.

Speaker #7: Yes. Good afternoon. Thank you very much.

Speaker #7: For taking my question, open. In your prepared remarks, you said that for the full year, you'd expect your revenue growth to be at or above the high end of the 5 to 7 percent target model.

We would think that AI is positioned to.

Be a significant growth driver for the company going forward I think if you think about wireless.

Speaker #7: As you think about some of the different businesses—A&D, Wireline, Wireless, EISG—can you give us a better sense of which ones you think will grow at that level or above in any markets that might grow a little bit slower and build up to that consolidated view that you...

Cities as already commented, but I think we.

We do see growth from where we are at these levels. So you could think about wireless growing in line with our targeted growth levels for our commercial comps, which was 4% to 6% I think in the industrial businesses I think you've got.

Neil Dougherty: Yeah. I mean, I described it in the prepared remarks as mild. I think you could think of, on a percentage basis, as low single digits.

Satish Dhanasekaran: I mean, I described it in the prepared remarks as mild. I think you could think of, on a percentage basis, as low single digits. The other question I had just on the contribution is, is that core commentary that you were talking about in terms of the organic revenue growth sort of fit with the historical sort of 40% plus incremental margins? Or how should we think about the contribution of the M&A synergy benefit versus your core incrementals as we're framing up the entire fiscal year? Thank you. Yeah. Obviously, Spirent's a public company, so you could go look. Those businesses, as we inherited them, were operating at profit levels that were significantly lower than Keysight's. We have committed that on a post-integration basis, we expect a creative decrease in Keysight operating margins.

David Ridley-Lane: The other question I had just on the contribution is, is that core commentary that you were talking about in terms of the organic revenue growth sort of fit with the historical sort of 40% plus incremental margins? Or how should we think about the contribution of the M&A synergy benefit versus your core incrementals as we're framing up the entire fiscal year? Thank you.

I think the 4% to 6% is probably the right way to think about it with strength in semi and gems being offset by some continued questions and automotive is the way I would think about it.

Speaker #7: provided? I mean, yeah.

Speaker #4: I mean, I think Satish has already provided you some color on the markets. As you think about Wireline, we’re clearly benefiting from the investment wave in AI.

My follow up was on tariffs Neil you said, you expect to fully offset the Argos Taro sooner than you previously expected can you just provide some more contractors to what's allowing <unk> to achieve that so much sooner. Thank you.

Speaker #4: I think we would agree that AI is positioned to be a significant growth driver for the company going forward. If you think about wireless, Satish has already commented, but we do see growth from where we are at these levels.

Yes, I mean, there are a couple of things so first of all.

Last quarter, we guided you to.

Speaker #4: So you could think about wireless growing in line with our targeted growth levels for commercial comms, which was 4 to 6 percent. I think in the industrial businesses, I think you've got—I think the 4 to 6 percent is probably the right way to think about it with strength in semi and gems being offset by kind of some continued questions in automotive is the way I would think about

If you took our comments from Bay Adelaide <unk> from from August we guided you to an annualized tariff range of $150 million to $175 million and now it looks like we're trending towards the lower end of that range. So I think thats a benefit and then with the strength of our business.

Neil Dougherty: Yeah. Obviously, Spirent's a public company, so you could go look. Those businesses, as we inherited them, were operating at profit levels that were significantly lower than Keysight's. We have committed that on a post-integration basis, we expect a creative decrease in Keysight operating margins. Over that 12 to 18-month period of time, we're going to make a pretty significant increase in driving improved profitability in those businesses via this $100 million synergy and other efficiency capture. In the core businesses, I think 40% incremental is the right way to continue to think about our business.

Our pricing and surcharges mitigation are ramping a little faster than expected and we're going to be able to offset those tariffs again on a dollars basis. One quarter ahead of ahead of what was previously communicated.

Speaker #4: it. Yeah.

Speaker #7: It's my follow-up on tariffs. Neil, you said you expect to fully offset the August tariff sooner than you previously expected. Can you just provide some more context as to what's allowing Keysight to achieve that somewhat sooner?

Satish Dhanasekaran: Over that 12 to 18-month period of time, we're going to make a pretty significant increase in driving improved profitability in those businesses via this $100 million synergy and other efficiency capture. In the core businesses, I think 40% incremental is the right way to continue to think about our business. The one thing that you need to factor in is tariffs, which, again, we're still lapping. They're still not fully in our run rate. As you saw this year, we came very close to delivering to the 40% core incremental while absorbing tariffs in the second half. It's the right way to think about our business, but the tariffs do provide a marginal incremental headwind. Thank you very much. Thank you for your questions. Our next question comes from the line of Mark Delaney with Goldman Sachs.

The other part that I would add Mark is also we decided intentionally to honor all outstanding.

Speaker #7: Thank

Speaker #7: you. Yeah.

Speaker #4: I mean, a couple of things. So first of all, last quarter, we guided you to, if you took our comments from May, added a number of comments from August, we guided you to an annualized tariff range of $150 million to $175 million.

<unk> pre tariff that was in our backlog.

Actively we've been some of the shipments have all gone out and saw our forward looking exposure at zero tariffs. If you will is much smaller now.

The one thing that you need to factor in is tariffs, which, again, we're still lapping. They're still not fully in our run rate. As you saw this year, we came very close to delivering to the 40% core incremental while absorbing tariffs in the second half. It's the right way to think about our business, but the tariffs do provide a marginal incremental headwind.

Speaker #4: And now it looks like we're trending towards the lower end of that range, too. I think that's a benefit. And then, with the strength of our business, our pricing and surcharging mitigations are ramping a little faster than expected.

Thank you.

Thank you. Thank you for your questions.

Our next question comes from the line of Aaron Rakers with Wells Fargo.

Speaker #4: And we're going to be able to offset those tariffs again on a dollars basis, one quarter ahead of what was previously communicated. The other part that I would add, Mark, is that we also decided intentionally to honor all outstanding orders pre-tariff that were in our backlog.

David Ridley-Lane: Thank you very much.

Operator: Thank you for your questions. Our next question comes from the line of Mark Delaney with Goldman Sachs. Your line is now open.

Your line is now open.

Yes, thanks for taking the questions and congrats on the resolve.

Neal I wanted to ask you about the operating margin I know this feels like a long time ago, but back at the analyst day in 2023, you've talked about.

Satish Dhanasekaran: Your line is now open. Yes, good afternoon. Thank you very much for taking my question. In your prepared remarks, you said that for the full year, you'd expect your revenue growth to be at or above the high end of the 5% to 7% target model. As you think about some of the different businesses: A&D, Wireline, Wireless, EISG, can you give us a better sense of which one do you think will grow at that level or above? Any markets that might grow a little bit slower and build up to that consolidated view that you provided? Yeah. I mean, I think Satish has already provided you some color on the markets. I think as you think about Wireline, that we're clearly benefiting from the investment wave in AI.

Mark Delaney: Yes, good afternoon. Thank you very much for taking my question. In your prepared remarks, you said that for the full year, you'd expect your revenue growth to be at or above the high end of the 5% to 7% target model. As you think about some of the different businesses: A&D, Wireline, Wireless, EISG, can you give us a better sense of which one do you think will grow at that level or above? Any markets that might grow a little bit slower and build up to that consolidated view that you provided?

Speaker #4: So effectively, we've been some of the shipments have all gone out. And so our forward-looking exposure at zero tariffs, if you will, is much smaller.

31% to 32% operating margin I think the initial target with by fiscal 2006.

Given the operating incremental leverage that you are seeing in the model layering in the acquisitions that you're doing in driving accretion over time from that.

Speaker #4: now. Thank

How are you thinking about the achievement of getting to that 31% to 32% and Thats something that you think we could see in fiscal 'twenty six or do you think.

Speaker #7: you.

Speaker #2: Thank you for your questions. Our next question comes from the line of Aaron Rikers with Wells Fargo. Your line is now open.

Might still be a little bit farther out and I have a quick follow up.

Neil Dougherty: Yeah. I mean, I think Satish has already provided you some color on the markets. I think as you think about Wireline, that we're clearly benefiting from the investment wave in AI. I think we would think that AI is positioned to be a significant growth driver for the company going forward. I think if you think about wireless, Satish has already commented, but I think we do see growth from where we are at these levels. You could think about wireless growing in line with our targeted growth levels for commercial comms, which was 4% to 6%. I think in the industrial businesses, I think you've got the 4% to 6% is probably the right way to think about it, with strength in semi and gems being offset by kind of some continued questions. Automotive is the way I would think about it.

Speaker #8: Yeah. Yeah. Thanks for taking the questions, and congrats on the results. Neil, I wanted to ask you about the operating margin. I know this feels like a long time ago, but back at the Analyst Day in 2023, you talked about attaining a 31% to 32% operating margin.

Yes, I definitely think it's further out in fact it was.

<unk>.

We took 26 essentially off the table when our business went into the downturn over the 23 to 24 period, obviously that was not something that we had contemplated when we made that commitment our business was operating at 29% operating margin when we made the 31% to 32%.

Satish Dhanasekaran: I think we would think that AI is positioned to be a significant growth driver for the company going forward. I think if you think about wireless, Satish has already commented, but I think we do see growth from where we are at these levels. You could think about wireless growing in line with our targeted growth levels for commercial comms, which was 4% to 6%. I think in the industrial businesses, I think you've got the 4% to 6% is probably the right way to think about it, with strength in semi and gems being offset by kind of some continued questions. Automotive is the way I would think about it. My follow-up was on tariffs. Neil, you said you expect to fully offset the August tariff sooner than you previously expected.

Speaker #8: I think the initial target was by fiscal 2026. Given the operating incremental leverage that you're seeing in the model, layering in the acquisitions that you're doing, and driving accretion over time from that, how are you thinking about the achievement of getting to that 31% to 32%?

When we put that number out there.

Since that time, obviously, we've seen a correction in our business as we as evidenced this year businesses, returning to growth where Baxter delivering strong incrementals.

Speaker #8: Is that something that you think we could see in fiscal 2026, or do you think that might still be a little bit farther out?

We have an incremental opportunity here with these acquisitions that we brought in as we realize value capture from those I think all of those things.

Speaker #8: And I have a quick

Speaker #8: follow-up. Yeah.

Speaker #4: No, I definitely think it's further out. In fact, we took 26 essentially off the table when our business went into the downturn over the '23 to '24 period.

Will enable us to deliver a strong profit strong growth and profitability and earnings over the timeframe, but it will take us a while to climb back from these current 'twenty, 6% levels to the levels. We were contemplating when we were at 29% back in fiscal 'twenty three.

Mark Delaney: My follow-up was on tariffs. Neil, you said you expect to fully offset the August tariff sooner than you previously expected. Can you just provide some more context as to what's allowing Keysight to achieve that so much sooner? Thank you.

Speaker #4: Obviously, that was not something that we had contemplated when we made that commitment. Our business was operating at a 29% operating margin when we made that commitment to 31% to 32% when we put that number out there.

And just to add to what Neil said.

Satish Dhanasekaran: Can you just provide some more context as to what's allowing Keysight to achieve that so much sooner? Thank you. Yeah, I mean, a couple of things. First of all, last quarter, we guided you to, if you took our comments from May and added a number of comments from August, we guided you to an annualized tariff range of $150 to 175 million. Now it looks like we're trending towards the lower end of that range, so I think that's a benefit. With the strength of our business, our pricing and surcharging mitigations are ramping a little faster than expected, and we're going to be able to offset those tariffs again on a dollars basis one quarter ahead of what was previously communicated.

The fundamental tenants.

Our value creation that I laid out when it comes off our business model and operating model remain intact, including the downside performance that we Delaware during a downturn so those fundamentals remain intact.

Neil Dougherty: Yeah, I mean, a couple of things. First of all, last quarter, we guided you to, if you took our comments from May and added a number of comments from August, we guided you to an annualized tariff range of $150 to 175 million. Now it looks like we're trending towards the lower end of that range, so I think that's a benefit. With the strength of our business, our pricing and surcharging mitigations are ramping a little faster than expected, and we're going to be able to offset those tariffs again on a dollars basis one quarter ahead of what was previously communicated.

Speaker #4: Since that time, obviously, we've seen a correction in our business. As we've evidenced this year, business is returning to growth. We're back to delivering strong incrementals.

Speaker #4: We have an incremental opportunity here with these acquisitions that we've brought in as we realize value capture from those. I think all of those things will enable us to deliver strong growth, profitability, and earnings over the timeframe.

Really excited about the opportunities for growth.

For driving growth and capturing upside in the market, including the value creation Incrementals, we can deliver from the acquisitions post integration.

Speaker #4: But it will take us a while to climb back from these current 26% levels to the levels we were contemplating when we were at 29% back in fiscal 23.

Yes, yes very clear.

A quick follow up just maybe more thematically, we've talked a lot about 800 to 160 <unk>.

Turning to hear you guys talk a bit more about.

Speaker #8: Aaron, just to add to what Neil said, the fundamental tenets of our value creation that I laid out in terms of our business model and operating model remain intact.

Satish Dhanasekaran: The other part that I would add, Mark, is also we decided intentionally to honor all outstanding orders pre-tariff that were in our backlog. Effectively, some of the shipments have all gone out. Our forward-looking exposure at zero tariffs, if you will, is much smaller now. Thank you. Thank you. Thank you for your questions. Our next question comes from the line of Aaron Rakers with Wells Fargo. Your line is now open. Yeah. Yeah. Thanks for taking the questions, and congrats on the results. Neil, I wanted to ask you about the operating margin. I know this feels like a long time ago, but back at the analyst day in 2023, you talked about attaining a 31% to 32% operating margin. I think the initial target was by fiscal 2026.

Pervasive Lee about Silicon Photonics, and I am curious of what your thoughts are with regards to that when do we expect to see the volume deployments from the market appreciated here on the R&D side I'm just.

Speaker #8: Including the downside performance that we delivered during the downturn. So those fundamentals remain intact. Equally excited about the opportunities for driving growth and capturing upside in the market, including the value creation incrementals we can deliver from the acquisitions

Curious to how you see that because theres a lot of discussion around scale of scale across networking and AI and obviously you are at the tip of the spirit of some of those those architecture shift. Thank you.

Mark Delaney: Thank you.

Yes, I'll have kailash make some comments and then maybe Jason can follow up on the silicon photonics as well.

Speaker #8: post-integration. Yeah.

Satish Dhanasekaran: Thank you.

Yeah.

Thanks institution clearly there is a scale element to it right now the demand is up for high speed Silicon optics interconnect accelerators.

Speaker #3: Yeah. Very clear. And then as a quick follow-up, and just maybe more thematically, we talk a lot about $800 billion to $1.6 trillion. I'm starting to hear you guys talk a bit more pervasively about Silicon Photonics.

Operator: Thank you for your questions. Our next question comes from the line of Aaron Rakers with Wells Fargo. Your line is now open.

Aaron Rakers: Yeah. Yeah. Thanks for taking the questions, and congrats on the results. Neil, I wanted to ask you about the operating margin. I know this feels like a long time ago, but back at the analyst day in 2023, you talked about attaining a 31% to 32% operating margin. I think the initial target was by fiscal 2026. Given the operating incremental leverage that you're seeing in the model, layering in the acquisitions that you're doing, and driving accretion over time from that, how are you thinking about the achievement of getting to that 31% to 32%? Is that something that you think we could see in fiscal 2026, or do you think that might still be a little bit farther out? I have a quick follow-up.

<unk> silicon and so forth and this is driving both the design and R&D activity that we're we're enabling as well as validating many of these racks that have lots of Gpus complex cabling interconnect in networking, we're participating and validating those as well so theres a scale element.

Speaker #3: And I'm curious about your thoughts regarding that. When do we expect to see the volume deployments from the market? Appreciating you're on the R&D side.

Speaker #3: I'm just curious how you see that, because there's a lot of discussion around scale-up, scale-up cross-networking, and AI. Obviously, you're at the tip of the spear in some of those architecture shifts.

Satish Dhanasekaran: Given the operating incremental leverage that you're seeing in the model, layering in the acquisitions that you're doing, and driving accretion over time from that, how are you thinking about the achievement of getting to that 31% to 32%? Is that something that you think we could see in fiscal 2026, or do you think that might still be a little bit farther out? I have a quick follow-up. Yeah. No, I definitely think it's further out. In fact, we took 2026 essentially off the table when our business went into the downturn over the 2023 to 2024 period. Obviously, that was not something that we had contemplated when we made that commitment. Our business was operating at 29% operating margin when we made the 31% to 32% when we put that number out there.

And your question about.

Speaker #3: Thank you.

The speeds clearly we're seeing a design refresh that is occurring throughout the network and this is occurring at a faster pace. We are seeing concurrent activity in 400 G 800, G and one six terra the one six terabits wave.

Speaker #4: Kyle, make some comments, and then maybe Jason can follow up on the Silicon Photonics as well. Yeah, I'll have.

Speaker #8: Yeah. Thank you, Satish. Clearly, there is a scale element to it. Right now, the demand is up for high-speed silicon optics, interconnects, accelerators, custom silicon, and so forth.

Ahead of US we demonstrated.

Neil Dougherty: Yeah. No, I definitely think it's further out. In fact, we took 2026 essentially off the table when our business went into the downturn over the 2023 to 2024 period. Obviously, that was not something that we had contemplated when we made that commitment. Our business was operating at 29% operating margin when we made the 31% to 32% when we put that number out there. Since that time, obviously, we've seen a correction in our business. As evidenced this year, business is returning to growth. We're back to delivering strong incrementals. We have an incremental opportunity here with these acquisitions that we brought in as we realize value capture from those. I think all of those things will enable us to deliver strong growth, profitability, and earnings over the time frame. It will take us a while to climb back from these current 26% levels to the levels we were contemplating when we were at 29% back in fiscal 2023.

Speaker #8: And this is driving both design and R&D activity that we're enabling as well as validating many of these racks that have lots of GPUs, complex cabling, interconnect, and networking; we're participating in validating those as well.

This year, our solutions to enable 1632.

As we outlined in our prepared remarks, we enabled broadcom with their $1 six terabyte silicon and what's interesting is there are multiple challenges that the industry is facing right now some customers are pushing speed other customers are pushing.

Speaker #8: So there's a scale element, and your question about the speeds—clearly, we're seeing a design refresh that is occurring throughout the network. This is happening at a faster pace; we are seeing concurrent activity in 400G, 800G, and 1.6T.

Decrease in power at the same speed yet another group of customers are working on improving density at the same speed and all of this is occurring concurrently that's driving a lot of R&D activity and design emulation intense test intensity that we're able to enable the industry.

Satish Dhanasekaran: Since that time, obviously, we've seen a correction in our business. As evidenced this year, business is returning to growth. We're back to delivering strong incrementals. We have an incremental opportunity here with these acquisitions that we brought in as we realize value capture from those. I think all of those things will enable us to deliver strong growth, profitability, and earnings over the time frame. It will take us a while to climb back from these current 26% levels to the levels we were contemplating when we were at 29% back in fiscal 2023. Aaron, just to add to what Neil said, the fundamental tenets of our value creation that I laid out in terms of our business model and operating model remain intact, including the downside performance that we delivered during the downturn. Those fundamentals remain intact.

Speaker #8: The 1.6 terabit wave is still ahead of us. We demonstrated this year a solution to enable 1.6, 3.2 as we outlined in our prepared remarks.

Yes, Thanks, Cai less so.

So I think he gave you a very robust overview of what's happening on the R&D side and the beauty of these items, we have the ability to address customers' workflows, all the way from R&D and <unk>.

Speaker #8: We enabled Broadcom with their 1.6 terabit silicon. What’s interesting is that there are multiple challenges the industry is facing right now. Some customers are pushing for speed.

Validation in the manufacturing and so we're certainly seeing the benefit of it.

Satish Dhanasekaran: Aaron, just to add to what Neil said, the fundamental tenets of our value creation that I laid out in terms of our business model and operating model remain intact, including the downside performance that we delivered during the downturn. Those fundamentals remain intact. Equally excited about the opportunities for driving growth and capturing upside in the market, including the value creation incrementals we can deliver from the acquisitions post-integration.

Speaker #8: Other customers are pushing to decrease power at the same speed; yet another group of customers is working on improving density at the same speed.

Driven investments come through in some of our semi businesses, where a foundry investment as you know Aaron has.

Has been happening on the front end of this year, we have sold.

Double digit number of systems to foundry customers on the Silicon Photonics side I would say, it's still early days and we expect continued growth next year from Silicon Photonics as capacity continues to expand and move like you said from from R&D to commercial production.

Speaker #8: And all of this is occurring concurrently. That's driving a lot of R&D activity and design emulation intense test intensity that we're able to enable the industry with.

Satish Dhanasekaran: Equally excited about the opportunities for driving growth and capturing upside in the market, including the value creation incrementals we can deliver from the acquisitions post-integration. Yep. Yep. Very clear. As a quick follow-up, and just maybe more thematically, we talk a lot about 800 to 1.6T. Starting to hear you guys talk a bit more pervasively about Silicon Photonics. I'm curious of what your thoughts are with regards to that. When do we expect to see the volume deployments from the market appreciating here on the R&D side? I'm just curious to how you see that because there's a lot of discussion around scale-up, scale-across networking, and AI. Obviously, you're at the tip of the spear in some of those architecture shifts. Thank you. Yeah. I'll have Kailash make some comments, and then maybe Jason can follow up on the Silicon Photonics as well.

Speaker #4: Yeah. Thanks, Kyle. So I think he gave you a very robust overview of what's happening on the R&D side. The beauty of Keysight is we have the ability to address customers' workflows all the way from R&D into validation and into manufacturing.

Yes, Thank you guys.

Aaron Rakers: Yep. Yep. Very clear. As a quick follow-up, and just maybe more thematically, we talk a lot about 800 to 1.6T. Starting to hear you guys talk a bit more pervasively about Silicon Photonics. I'm curious of what your thoughts are with regards to that. When do we expect to see the volume deployments from the market appreciating here on the R&D side? I'm just curious to how you see that because there's a lot of discussion around scale-up, scale-across networking, and AI. Obviously, you're at the tip of the spear in some of those architecture shifts. Thank you.

Thank you for your questions.

Our next question comes from the line of Neil Marshall with Morgan Stanley.

Speaker #4: And so we're certainly seeing the benefit of AI-driven investments come through in some of our semi-businesses, where foundry investment, as you know, Aaron, has been happening on the front end this year.

Line is now open great.

Yeah, Thanks, Hey, Brian a.

A couple of a couple of questions. Thank you Justin in terms of.

Speaker #4: We've sold a double-digit number of systems to foundry customers on the Silicon Photonics side. I would say it's still early days, and we expect continued growth next year from Silicon Photonics.

The strength that you saw in aerospace and defense could you speak to is this just kind of the the broadening of budgets than expected out of some of kind of the allies is this new program.

Neil Dougherty: Yeah. I'll have Kailash make some comments, and then maybe Jason can follow up on the Silicon Photonics as well.

Speaker #4: As capacity continues to expand and move, like you said, from R&D to commercial production.

Just kind of a little bit of where you saw that strength.

And then maybe as a follow up noted kind of the positive uptick in the auto order.

Speaker #3: Yep. Thank you, guys.

Satish Dhanasekaran: Yeah. Thank you, Satish. Clearly, there is a scale element to it. Right now, the demand is up for high-speed silicon optics interconnect accelerators, custom silicon, and so forth. This is driving both design and R&D activity that we're enabling, as well as validating many of these racks that have lots of GPUs, complex cabling, interconnect, and networking. We're participating in validating those as well. There's a scale element. Your question about the speeds, clearly, we're seeing a design refresh that is occurring throughout the network. This is occurring at a faster pace. We are seeing concurrent activity in 400G, 800G, and 1.6 tera. The 1.6 terabit wave is still ahead of us. We demonstrated this year solutions to enable 1.6, 3.2, as we outlined in our prepared remarks. We enabled Broadcom with their 1.6 terabit silicon.

Kailash Narayanan: Yeah. Thank you, Satish. Clearly, there is a scale element to it. Right now, the demand is up for high-speed silicon optics interconnect accelerators, custom silicon, and so forth. This is driving both design and R&D activity that we're enabling, as well as validating many of these racks that have lots of GPUs, complex cabling, interconnect, and networking. We're participating in validating those as well. There's a scale element. Your question about the speeds, clearly, we're seeing a design refresh that is occurring throughout the network. This is occurring at a faster pace. We are seeing concurrent activity in 400G, 800G, and 1.6 tera. The 1.6 terabit wave is still ahead of us. We demonstrated this year solutions to enable 1.6, 3.2, as we outlined in our prepared remarks.

Speaker #1: Thank you for your questions. Our next question comes from the line of Mia Marshall with Morgan Stanley. The line is now open.

Year over year. So just wondering where you are starting to see some green shoots on the auto side.

We'll answer that meta I was expecting you to ask me the size my AI business, but I was ready to do that but since you Didnt ask me I'm going to skip forward to the aerospace defense business. So record record bookings. This year built backlog again, and I think it's a year where with site.

Speaker #6: Great. Good. Thanks. And congratulations for a couple of questions for you.

Speaker #3: Thank you.

Speaker #6: Just in terms of the strength that you saw in aerospace and defense, could you speak to whether this is kind of the broadening of budgets that you had been expecting out of some of the allies?

Considerable noise in the system I would just say in the quarter. One we had this entire.

Speaker #6: Is this new program just kind of a little bit of where you saw that strength? And then maybe as a follow-up, I noted the positive uptick in the auto orders.

Our situation with administration change, which we knew there was going to be a challenging situation for our U S business and I also predicted that things will improve as the as the year went by and it did and then as we looked at Q4, we had the situation with continuing resolution.

Speaker #6: Year over year, and so just wondering where you're starting to see some green shoots on the auto side. Thanks.

Speaker #4: Yeah. We'll answer that, Matt. I was expecting you to ask me the size of my AI business, but I was ready to do that, but since you didn't ask me, I'm going to skip forward to the aerospace defense business.

Spending environment from a direct government, which was a bit more moderated, but our prime contractor business was good and I also.

We enabled Broadcom with their 1.6 terabit silicon. What's interesting is there are multiple challenges that the industry is facing right now. Some customers are pushing speed. Other customers are pushing decrease in power at the same speed. Yet another group of customers are working on improving density at the same speed. All of this is occurring concurrently. That's driving a lot of R&D activity, design emulation, and test intensity that we're able to enable the industry with.

Speaker #4: So record bookings this year built backlog again. And I think it's a year with considerable noise in the system. I would just say that in Q1, we had this entire situation with the administration change, which we knew was going to be a challenging situation for our business.

Satish Dhanasekaran: What's interesting is there are multiple challenges that the industry is facing right now. Some customers are pushing speed. Other customers are pushing decrease in power at the same speed. Yet another group of customers are working on improving density at the same speed. All of this is occurring concurrently. That's driving a lot of R&D activity, design emulation, and test intensity that we're able to enable the industry with. Yeah. Thanks, Kailash. I think he gave you a very robust overview of what's happening on the R&D side. The beauty of Keysight is we have the ability to address customers' workflows all the way from R&D into validation and into manufacturing.

We saw strength in Europe in particular.

I think this whole deterrence.

And the associated technologies, our portfolio is well positioned with that and then defense technology in general with new primes, and others coming up with faster more nimbler platforms.

<unk> key site solutions as well so we feel good about our.

Speaker #4: And I also predicted that things would improve as the year went by. And it did. And then, as we looked at Q4, we had the situation with the continuing resolution and the spending environment from the direct government, which was a bit more moderated.

Our portfolio in the future focus as we have said before.

Jason Kary: Yeah. Thanks, Kailash. I think he gave you a very robust overview of what's happening on the R&D side. The beauty of Keysight is we have the ability to address customers' workflows all the way from R&D into validation and into manufacturing. We're certainly seeing the benefit of AI-driven investments come through in some of our semi businesses where foundry investment, as you know, Aaron, has been happening on the front end this year. We've sold a double-digit number of systems to foundry customers on the Silicon Photonics side. I would say it's still early days, and we expect continued growth next year from Silicon Photonics as capacity continues to expand and move, like you said, from R&D to commercial production.

This is one of those businesses that is quite quite easier sort of to call on a long term basis, and really tough to call on a quarterly basis, but our pipeline looks solid as we go into 'twenty six.

Speaker #4: But our prime contractor business was good, and I also saw strength in Europe in particular. I think this whole deterrence and the associated technologies portfolio is well positioned with that.

Jason make some comments on automotive.

Thanks for the question, yes, so as we move through this year, we saw our automotive and energy business reached some level of stability at current levels.

Satish Dhanasekaran: We're certainly seeing the benefit of AI-driven investments come through in some of our semi businesses where foundry investment, as you know, Aaron, has been happening on the front end this year. We've sold a double-digit number of systems to foundry customers on the Silicon Photonics side. I would say it's still early days, and we expect continued growth next year from Silicon Photonics as capacity continues to expand and move, like you said, from R&D to commercial production. Thank you, guys. Thank you for your questions. Our next question comes from the line of Neil Marshall with Morgan Stanley. Your line is now open. Great. Good. Thanks. And congrats on the order. A couple of questions for you. Thank you.

Speaker #4: And then defense technology in general, with Neil Dougherty and others coming up with faster, more nimble platforms, are adopting Keysight solutions as well. So we felt good about our portfolio and the future focus.

Our orders were still down for the full year as we expected they did grow.

Year over year in Q4, we benefited frankly from a fairly soft compare last year.

In Q4, but it was great to see that all sub segments of the business grew across software defined vehicle or electric vehicle ESI and even on the manufacturing side, a small amount of growth so investments happening more in the software defined vehicle space in vehicle network advanced connectivity advanced sensing in radar as well as.

Speaker #4: As we have said before, this is one of those businesses that is quite easier, sort of, to call on a long-term basis and really tough to call on a quarterly basis.

Aaron Rakers: Thank you, guys.

Operator: Thank you for your questions. Our next question comes from the line of Neil Marshall with Morgan Stanley. Your line is now open.

Speaker #4: But our pipeline looks solid as we go into '26. We'll have Jason make some comments on automotive.

Continued healthy chip design software renewals within.

Speaker #3: Hi, Mita. Thanks for the question. Yes, as we move through this year, we saw our automotive and energy business reach some level of stability at current levels.

Within the quarter were healthy and we're seeing on the <unk> and grid side.

Meta Marshall: Great. Good. Thanks. And congrats on the order. A couple of questions for you.

<unk> and grid stimulation activity and solutions are really customer priorities and then depending on the manufacturing and some capacity investment side too sorry.

Speaker #3: While orders were still down for the full year as we expected, they did grow. Year-over-year in Q4, we benefited, frankly, from a fairly soft compare last year.

Satish Dhanasekaran: Thank you.

Meta Marshall: Just in terms of the strength that you saw in aerospace and defense, could you speak to is this kind of the broadening of budgets that you had been expecting out of some of kind of the allies? Is this new program just kind of a little bit of where you saw that strength? Maybe as a follow-up, noted kind of the positive uptick in the auto orders year over year. Just wondering where you're starting to see some green shoots on the auto side. Thanks.

Satish Dhanasekaran: Just in terms of the strength that you saw in aerospace and defense, could you speak to is this kind of the broadening of budgets that you had been expecting out of some of kind of the allies? Is this new program just kind of a little bit of where you saw that strength? Maybe as a follow-up, noted kind of the positive uptick in the auto orders year over year. Just wondering where you're starting to see some green shoots on the auto side. Thanks. Yeah. We'll answer that matter. I was expecting you to ask me to size my AI business, but I was ready to do that. Since you didn't ask me, I'm going to skip forward to the aerospace defense business. Record bookings this year, built backlog again.

Software defined vehicle electronics.

<unk> new customers within the quarter so.

Speaker #3: In Q4, it was great to see that all subsegments of the business grew across software-defined vehicles, our electric vehicle, ESI, and even on the manufacturing side, a small amount of growth.

Good to see things stabilize from here, we're not calling an inflection, but we'll see how things progress here going into FY 'twenty six.

Thank you.

Speaker #3: So investments are happening, particularly in the software-defined vehicle space and vehicle network, advanced connectivity, advanced sensing and radar, as well as continued healthy chip design software renewals.

Thank you for your questions.

Our next question comes from the line of Tim long with Barclays.

Your line is now open.

Satish Dhanasekaran: Yeah. We'll answer that matter. I was expecting you to ask me to size my AI business, but I was ready to do that. Since you didn't ask me, I'm going to skip forward to the aerospace defense business. Record bookings this year, built backlog again. I think it's a year where, with considerable noise in the system, I would just say in Q1, we had this entire situation with administration change, which we knew that was going to be a challenging situation for our business. I also predicted that things would improve as the year went by, and it did.

Speaker #3: Within the quarter, we're healthy. We're seeing, on the EV and grid side, that charging and grid simulation activity and solutions are really customer priorities.

Thank you.

<unk> wasn't going to ask about scaling AI business, but it sounds like your answer it so let's start with that one.

Speaker #3: And then even in manufacturing, some capacity investments tied to software-defined vehicle electronics, and a few new customers within the quarter. So, it is good to see things stabilize from here.

If you don't mind, maybe just give us an idea of when you look at wireline and <unk> and kind of the overall business.

Satish Dhanasekaran: I think it's a year where, with considerable noise in the system, I would just say in Q1, we had this entire situation with administration change, which we knew that was going to be a challenging situation for our business. I also predicted that things would improve as the year went by, and it did. As we looked at Q4, we had the situation with continuing resolution, spending environment from a direct government, which was a bit more moderated. Our prime contractor business was good, and we saw strength in Europe, in particular. I think this whole deterrence and the associated technologies, our portfolio is well positioned with that. Defense technology in general, with Neoprimes and others coming up with faster, more nimble platforms, are adopting Keysight solutions as well. We feel good about our portfolio and the future focus.

Kind of what's it doing for you and then secondly.

If you could just talk about software and services, 37% on the year I think in the slideshow Cisco on up another 300 basis points with.

Speaker #3: We're not falling into inflection, but we'll see how things progress here going into FY.

Speaker #3: '26.

Speaker #4: Thank

Speaker #4: you.

With the M&A. So it gets you to 40% a pretty healthy number.

Whats the outlook for moving that with the M&A and kind of the way things are going in AI.

Speaker #1: Thank you for your questions. Our next question comes from the line of Tim Long with Barclays. Your line is now open.

In software overall.

As we looked at Q4, we had the situation with continuing resolution, spending environment from a direct government, which was a bit more moderated. Our prime contractor business was good, and we saw strength in Europe, in particular. I think this whole deterrence and the associated technologies, our portfolio is well positioned with that. Defense technology in general, with Neoprimes and others coming up with faster, more nimble platforms, are adopting Keysight solutions as well. We feel good about our portfolio and the future focus. As we have said before, this is one of those businesses that is quite easier sort of to call on a long-term basis and really tough to call on a quarterly basis. Our pipeline looks solid as we go into 2026. We'll have Jason make some comments on automotive.

Thinking that we'll see a continued move upward in in kind of the complexion of the business coming from the software and services side. Thank you.

Speaker #3: Thank you. Keisha, I wasn't going to ask about scaling the AI business, but it sounds like you'll answer it, so let's start with that one.

Speaker #3: If you don't mind, maybe just give us an idea of when you look at wireline and semis, and kind of the overall business, what's it doing for you?

Thank you Tim first I would say that our wireline business had a record year growing double digits. This year and if you look at the plethora of contributions that we're making towards next Gen technologies.

Speaker #3: And then secondly, if you could just talk about software and services — 37% on the year. I think in the slideshow it says going up another 300 basis points.

That are attributable to this entire AI ecosystem, and AI clusters, and the additional infrastructure thats being built.

Speaker #3: With the M&A, it gets you to 40%, a pretty healthy number. What's the outlook for moving that with the M&A and kind of the way things are going in AI and software overall?

I'd say its roughly half of our wireline business is seeing that impact because it is again, it's a broad set of portfolio of tools that we bring across physical and protocol layers of emulation, so and the wireline business a key side is.

Satish Dhanasekaran: As we have said before, this is one of those businesses that is quite easier sort of to call on a long-term basis and really tough to call on a quarterly basis. Our pipeline looks solid as we go into 2026. We'll have Jason make some comments on automotive. Hi, Mita. Thanks for the question. Yes, as we moved through this year, we saw our automotive and energy business reach some level of stability at current levels. While orders were still down for the full year, as we expected, they did grow year over year in Q4. We benefited, frankly, from a fairly soft compare last year in Q4, but it was great to see that all subsegments of the business grew across software-defined vehicle, our electric vehicle, ESI, and even on the manufacturing side, a small amount of growth.

Speaker #3: Are you thinking that we'll see a continued move upward in the complexion of the business coming from the software and services side?

If you look at the commercial communications.

Speaker #3: Thank

Speaker #3: you. Thank you,

It's a little under half of the business with wireless still being a little lower half so that sort of gets you to see it and that part of the business is growing strongly with robust adoption from customers.

Speaker #4: Tim, of course, I would say that our wireline business had a record year, growing doubly just this year. If you look at the plethora of contributions that we're making towards next-gen technologies, that are attributable to this entire AI ecosystem and AI clusters, and their visual infrastructure that's being built, I would say it's roughly half of our wireline business that is seeing that impact.

Jason Kary: Hi, Mita. Thanks for the question. Yes, as we moved through this year, we saw our automotive and energy business reach some level of stability at current levels. While orders were still down for the full year, as we expected, they did grow year over year in Q4. We benefited, frankly, from a fairly soft compare last year in Q4, but it was great to see that all subsegments of the business grew across software-defined vehicle, our electric vehicle, ESI, and even on the manufacturing side, a small amount of growth. Investment's happening more in the software-defined vehicle space and vehicle network, advanced connectivity, advanced sensing and radar, as well as continued healthy chip design software renewals within the quarter were healthy.

Across the across those.

The entire tech stack that we referenced before.

The second part of the question is really about software and services and this has been a focused area of strategy for us.

For a long period of time and there is more upside for us as we move forward.

Speaker #4: Again, it's a broad set of portfolio of tools that we bring across physical and protocol layers of emulation. The wireline business of Keysight is, if you look at the commercial communications, it's a little under half of the business, with wireless still being a little over half.

Obviously, the addition of the optical solutions group and Spirent and power artist.

Satish Dhanasekaran: Investment's happening more in the software-defined vehicle space and vehicle network, advanced connectivity, advanced sensing and radar, as well as continued healthy chip design software renewals within the quarter were healthy. We're seeing on the EV and grid side, charging and grid simulation activity and solutions are really customer priorities. Even in manufacturing, some capacity investment side to software-defined vehicle electronics and a few new customers within the quarter. Good to see things stabilize from here. We're not calling an inflection, but we'll see how things progress here going into FY26. Thank you. Thank you for your questions. Our next question comes from the line of Tim Long with Barclays. Your line is now open. Thank you. Satish, I wasn't going to ask about scaling the AI business, but it sounds like you'll answer it.

Give us a meaningful uplift right away, but also the ability to continue to add more content and create lifecycle value for customers and capture that value for the P&L. So we're quite excited by that as we as we look forward.

Speaker #4: So, that sort of gets you to see it. And that part of the business is growing strongly, with robust adoption from customers across the entire tech stack that we referenced before.

We're seeing on the EV and grid side, charging and grid simulation activity and solutions are really customer priorities. Even in manufacturing, some capacity investment side to software-defined vehicle electronics and a few new customers within the quarter. Good to see things stabilize from here. We're not calling an inflection, but we'll see how things progress here going into FY26.

Thank you very much.

Thank you for your questions.

Our next question comes from the line of Rob Jamieson with vertical research partners.

Speaker #4: The second part of the question is really about software and services, and this has been a focused area of strategy for us for a long period of time.

Your line is now open.

Hey, guys congrats on the collateral.

Speaker #4: And there is more upside for us as we move forward. Obviously, the addition of the optical solutions group, Spirent, and the Power Artist gives us a meaningful uplift right away, but also the ability to continue to add more content, create lifecycle value for customers, and capture that value for the P&L.

So just wanted to touch on R&D and investment just approaching 19% of sales this year.

Satish Dhanasekaran: Thank you.

Operator: Thank you for your questions. Our next question comes from the line of Tim Long with Barclays. Your line is now open.

Can you just talk a little bit about where we're investing the most heavily whether that's AI and data center or some of the <unk>, we talked about last quarter.

And that as we look ahead, how should we think about R&D intensity going forward, just with Syrian Loosens group empowered.

Tim Long: Thank you. Satish, I wasn't going to ask about scaling the AI business, but it sounds like you'll answer it. Let's start with that one, if you don't mind. Maybe just give us an idea of when you look at wireline and semis and kind of the overall business, kind of what's it doing for you. Secondly, if you could just talk about software and services, 37% on the year. I think in the slideshow, it says going up another 300 basis points with the M&A. It gets you to 40%, a pretty healthy number. What's the outlook for moving that with the M&A and kind of the way things are going in AI and software overall? Are you thinking that we'll see a continued move upward in kind of the complexion of the business coming from the software and services side? Thank you.

Speaker #4: So we're quite excited by that as we look forward.

Just given the software nature, there and wanted to.

Speaker #3: Thank you very much.

Our competitive advantage is just how should we think about.

Satish Dhanasekaran: Let's start with that one, if you don't mind. Maybe just give us an idea of when you look at wireline and semis and kind of the overall business, kind of what's it doing for you. Secondly, if you could just talk about software and services, 37% on the year. I think in the slideshow, it says going up another 300 basis points with the M&A. It gets you to 40%, a pretty healthy number. What's the outlook for moving that with the M&A and kind of the way things are going in AI and software overall? Are you thinking that we'll see a continued move upward in kind of the complexion of the business coming from the software and services side? Thank you. Thank you, Tim. First, I would say that our wireline business had a record year growing doubly just this year.

Speaker #1: Thank you for your questions. Our next question comes from the line of Rob Jamieson with Vertical Research Partners. Your line is now open.

Prioritization here going forward.

Yes, Thank you well first I would say that.

When we look at the entire portfolio.

Speaker #5: Hey, guys. Congrats on the quarter. Open.

Speaker #5: Hey, guys. Congrats on the quarter. Open. Hey, Rob. I just wanted to touch on R&D and some of the investment. We're approaching 19% of sales this year.

Speaker #4: Hi,

We have a cohesive portfolio of physical layer protocol layer emulation and into applications, such as space and we.

Speaker #5: Can you first just talk a little bit about where you're investing the most heavily, whether that's AI and data center or some of the 5G advanced stuff that we talked about last quarter?

We see opportunities in the physical layer to refresh our portfolio of offerings as the new technologies come in and customers are ready for adoption. So we're in between that refresh phase of investment right now and over the next 18 months feel really good about the new product introductions that are that we have that it will.

Speaker #5: And then as we look ahead, how should we think about R&D intensity going forward, just with Xperian, Optical Solutions Group, and Power Artist? Just given the software nature there and wanting to keep your competitive advantage, just how should we think about prioritization going forward?

Continuing to work on and so you're seeing that not only in the traditional wireless but also in defense technology and in AI, So youre seeing a little bit of increase in.

Satish Dhanasekaran: Thank you, Tim. First, I would say that our wireline business had a record year growing doubly just this year. If you look at the plethora of contributions that we're making towards next-gen technologies that are attributable to this entire AI ecosystem, AI clusters, and the additional infrastructure that's being built, I would say it's roughly half of our wireline business is seeing that impact because it's a broad set of portfolio of tools that we bring across physical and protocol layers of emulation. The wireline business of Keysight is, if you look at the commercial communications, a little under half of the business, with wireless still being a little over half. That sort of gets you to see it.

Speaker #5: forward? Yeah.

Speaker #4: Thank you. Well, first, I would say that when we look at the entire portfolio, we have a cohesive portfolio of the physical layer, protocol layer, emulations, and into applications such as the design space.

Satish Dhanasekaran: If you look at the plethora of contributions that we're making towards next-gen technologies that are attributable to this entire AI ecosystem, AI clusters, and the additional infrastructure that's being built, I would say it's roughly half of our wireline business is seeing that impact because it's a broad set of portfolio of tools that we bring across physical and protocol layers of emulation. The wireline business of Keysight is, if you look at the commercial communications, a little under half of the business, with wireless still being a little over half. That sort of gets you to see it. That part of the business is growing strongly with robust adoption from customers across the entire tech stack that we referenced before. The second part of the question is really about software and services.

In R&D spending associated with that but I do believe that.

Each of these products and solutions are going to are going to help us outperform our markets under a range of conditions. So that's why we're doing it.

Speaker #4: And we see opportunities in the physical layer to refresh our portfolio of offerings as the new technologies come in and customers are ready for adoption.

With regard to yes. Your point is well taken with regard to the software assets. They typically run north of our company average.

Speaker #4: So we're in between that refresh phase of investment right now. And over the next 18 months, I feel really good about the new product introductions that we have and that we're continuing to work on.

So I'll, let the yield sort of help you with the modeling of it yes.

Yes, I mean, I think as we think about integration as we said in some of our prior comments. The primary areas of focus are on leveraging our go to market leveraging our back office.

Speaker #4: And so you're seeing that not only in the traditional wireless, but also in different technology and in AI. So you're seeing a little bit of increase in R&D spending associated with that.

That being said there may be some opportunities as we believe this incentive.

That part of the business is growing strongly with robust adoption from customers across the entire tech stack that we referenced before. The second part of the question is really about software and services. This has been a focused area of strategy for us for a long period of time. There is more upside for us as we move forward. Obviously, the addition of the Optical Solutions Group, Spirent, and PowerArtist give us a meaningful uplift right away, but also the ability to continue to add more content and create lifecycle value for customers and capture that value for the P&L. We're quite excited by that as we look forward.

And the portfolio to align and share some cost.

Speaker #4: But I do believe that each of these products and solutions are going to help us outperform our markets under a range of conditions. And that's why we're doing it.

But.

Primarily we're looking for leverage in other parts of the P&L.

Okay. That's.

That's helpful. Thank you and then just a free cash flow to solid again this quarter anything to call out in terms of some of the drivers or levers there.

Speaker #4: With regard to, yes, your point is well taken. With regard to the software assets, they're typically run north of our company average. And so I'll let Neil sort of help you with the modeling of it.

Satish Dhanasekaran: This has been a focused area of strategy for us for a long period of time. There is more upside for us as we move forward. Obviously, the addition of the Optical Solutions Group, Spirent, and PowerArtist give us a meaningful uplift right away, but also the ability to continue to add more content and create lifecycle value for customers and capture that value for the P&L. We're quite excited by that as we look forward. Thank you very much. Thank you for your questions. Our next question comes from the line of Rob Jamieson with Vertical Research Partners. Your line is now open. Hey, guys. Congrats on the quarter. Hey, Rob. Hey. Just wanted to touch on R&D and just some of the investment, just approaching 19% of sales this year.

Look into 2016.

How should we think about conversion.

For the full year I know, you've probably got some acquisition related cash expenses, but would you still expected to be above.

Speaker #3: Yeah. I mean, I think as we think about integration, as we said in some of our prior comments, the primary areas of focus are on leveraging our go-to-market and our back office. That being said, there may be some opportunities, as we breathe these things into the portfolio, to align and share some costs.

Yes.

90, plus percent long term.

Conversion rates that you're targeting.

Yes, I mean, I think we expect continue to expect good good conversion of non-GAAP net income into into profitability oriented into free cash flow. That's how we track it as you know we do we.

Tim Long: Thank you very much.

Operator: Thank you for your questions. Our next question comes from the line of Rob Jamieson with Vertical Research Partners. Your line is now open.

Speaker #3: But primarily, we're looking for leverage in other parts of the...

Speaker #3: P&L. Okay.

We will see some additional integration related expenses.

Speaker #5: Yeah, that's helpful. Thank you. And then just free cash flow, just follow it again this quarter. Anything to call out in terms of some of the drivers or levers there?

We'll put some pressure on our free cash flow conversion during the during the year, but again I think.

Rob Jamieson: Hey, guys. Congrats on the quarter.

Satish Dhanasekaran: Hey, Rob.

Rob Jamieson: Hey. Just wanted to touch on R&D and just some of the investment, just approaching 19% of sales this year. Can you first just talk a little bit about where you're investing the most heavily, whether that's AI and data center or some of the 5G advanced stuff that we talked about last quarter? As we look ahead, how should we think about R&D intensity going forward just with Spirent, Optical Solutions Group, and PowerArtist, just given the software nature there and wanting to keep your competitive advantage? Just how should we think about prioritization there going forward?

Speaker #5: '26, just how should we think about conversion for the full year? I know you've probably got some acquisition-related cash expense in, but would you still expect to be above that 90-plus percent long-term conversion rate that you're targeting?

I think if we step back and think about it from the Grand scheme of things relatively.

So a small proportion of the overall total and therefore, we'd still expect strong free cash flow conversion next year.

Satish Dhanasekaran: Can you first just talk a little bit about where you're investing the most heavily, whether that's AI and data center or some of the 5G advanced stuff that we talked about last quarter? As we look ahead, how should we think about R&D intensity going forward just with Spirent, Optical Solutions Group, and PowerArtist, just given the software nature there and wanting to keep your competitive advantage? Just how should we think about prioritization there going forward? Yeah. Thank you. Well, first, I would say that when we look at the entire portfolio, we have a cohesive portfolio of physical layer, protocol layer emulations, and into applications just in the design space. We see opportunities in the physical layer to refresh our portfolio of offerings as the new technologies come in and customers are ready for adoption.

Great. Thanks for taking my question.

Thank you for your questions.

Speaker #3: Yeah. I mean, I think we continue to expect good conversion of non-GAAP net income into profitability or into free cash flow. That's how we track it.

That concludes our question and answer session for today I would like to turn the call back to <unk> for any closing remarks.

Okay.

Thank you Victoria and thank you all for joining us today and have a good day.

Speaker #3: As you know, we will see some additional integration-related expenses that will put some pressure on free cash flow conversion during the year.

Satish Dhanasekaran: Yeah. Thank you. Well, first, I would say that when we look at the entire portfolio, we have a cohesive portfolio of physical layer, protocol layer emulations, and into applications just in the design space. We see opportunities in the physical layer to refresh our portfolio of offerings as the new technologies come in and customers are ready for adoption. We're in between that refresh phase of investment right now. Over the next 18 months, feel really good about the new product introductions that we have that we're continuing to work on.

That concludes.

Our conference call you May now disconnect your line.

Speaker #3: But again, I think if we step back and think about it from the grand scheme of things, relatively a small proportion of the overall total, and therefore we'd still expect strong free cash flow conversion next year.

Speaker #5: Great. Thank you for taking my question.

Speaker #1: Thank you for your questions. That concludes our question-and-answer session for today. I would like to turn the call back to Paulina Sims for any closing remarks.

Satish Dhanasekaran: We're in between that refresh phase of investment right now. Over the next 18 months, feel really good about the new product introductions that we have that we're continuing to work on. You're seeing that not only in the traditional wireless, but also in defense technology, and in AI. You're seeing a little bit of increase in R&D spending associated with that. I do believe that each of these products and solutions are going to help us outperform our markets under a range of conditions. That's why we're doing it. Your point is well taken with regard to the software assets. They typically run north of our company average. I'll let Neil sort of help you with the modeling of it. Yeah.

Speaker #1: remarks. Thank you, Victoria.

Speaker #6: And thank you all for joining us today. Have a good day.

You're seeing that not only in the traditional wireless, but also in defense technology, and in AI. You're seeing a little bit of increase in R&D spending associated with that. I do believe that each of these products and solutions are going to help us outperform our markets under a range of conditions. That's why we're doing it. Your point is well taken with regard to the software assets. They typically run north of our company average. I'll let Neil sort of help you with the modeling of it.

Neil Dougherty: Yeah. I mean, I think as we think about integration, as we said in some of our prior comments, the primary areas of focus are on leveraging our go-to-market, leveraging our back office. That being said, there may be some opportunities as we breathe these things into the portfolio to align and share some costs. Primarily, we're looking for leverage in other parts of the P&L.

Satish Dhanasekaran: I mean, I think as we think about integration, as we said in some of our prior comments, the primary areas of focus are on leveraging our go-to-market, leveraging our back office. That being said, there may be some opportunities as we breathe these things into the portfolio to align and share some costs. Primarily, we're looking for leverage in other parts of the P&L. Okay. That's helpful. Thank you. Just a free cash flow, just solid again this quarter. Anything to call out in terms of some of the drivers or levers there? As we look into 2026, just how should we think about conversion for the full year? I know you've probably got some acquisition-related cash expenses, but would you still expect to be above that 90+% long-term conversion rate that you're targeting? Yeah.

Rob Jamieson: Okay. That's helpful. Thank you. Just a free cash flow, just solid again this quarter. Anything to call out in terms of some of the drivers or levers there? As we look into 2026, just how should we think about conversion for the full year? I know you've probably got some acquisition-related cash expenses, but would you still expect to be above that 90+% long-term conversion rate that you're targeting?

Neil Dougherty: Yeah. I mean, I think we continue to expect good conversion of non-GAAP net income into profitability or into free cash flow. That's how we track it. As you know, we will see some additional integration-related expenses that will put some pressure on free cash flow conversion during the year. Again, I think if we step back and think about it from the grand scheme of things, relatively a small proportion of the overall total, and therefore, we'd still expect strong free cash flow conversion next year.

Satish Dhanasekaran: I mean, I think we continue to expect good conversion of non-GAAP net income into profitability or into free cash flow. That's how we track it. As you know, we will see some additional integration-related expenses that will put some pressure on free cash flow conversion during the year. Again, I think if we step back and think about it from the grand scheme of things, relatively a small proportion of the overall total, and therefore, we'd still expect strong free cash flow conversion next year. Great. Thank you for taking my questions. Thank you for your questions. That concludes our question-and-answer session for today. I would like to turn the call back to Paulenier Sims for any closing remarks. Thank you, Victoria. Thank you all for joining us today. Have a good day. That concludes our conference call. You may now disconnect your line.

Rob Jamieson: Great. Thank you for taking my questions.

Operator: Thank you for your questions. That concludes our question-and-answer session for today. I would like to turn the call back to Paulenier Sims for any closing remarks.

Paulenier Sims: Thank you, Victoria. Thank you all for joining us today. Have a good day.

Operator: That concludes our conference call. You may now disconnect your line.

Q4 2025 Keysight Technologies Inc Earnings Call

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