Keysight Technologies (KEYS) Reports Beat-and-Raise Q2 2025 Results, Shares Pop 6% After the Bell

On May 20, 2025, Keysight Technologies Inc. (NYSE: KEYS) reported robust fiscal second-quarter earnings, sending shares up 5.92%

Keysight Technologies Inc. (NYSE:KEYS) shares rose 5.92% in after-hours trading on Monday after the electronic measurement firm beat analysts' expectations for second-quarter earnings and revenue. The company also raised its full-year growth outlook.

After market close, shares traded up 5.92% to $172.44. At market close, the stock was priced at $162.80.

The Santa Rosa-based firm reported adjusted earnings of $1.70 per share on revenue of $1.31 billion for the quarter. Analysts surveyed by Bloomberg had expected earnings of $1.64 per share on revenue of $1.28 billion.

GAAP net income came in at $257 million, or $1.49 per share, compared to $126 million, or $0.72 per share, in the same quarter last year. Non-GAAP net income reached $295 million, up from $247 million in Q2 2024.

Segment Growth Drives Gains

Keysight's largest business unit, the Communications Solutions Group (CSG), reported a 9% increase in revenue to $913 million. This was driven by equal 9% growth in both commercial communications and the aerospace, defense, and government sectors.

The Electronic Industrial Solutions Group (EISG) contributed $393 million in revenue, a 5% year-over-year increment. Growth in semiconductors and general electronics helped offset a decline in the automotive and energy sub-segments.

Strong Cash Flow and Liquidity

The company saw a sharp increase in free cash flow, which reached $457 million, a significant rise from $74 million in the prior year. Cash flow from operations amounted to $484 million. Keysight ended the quarter with $3.12 billion in cash and cash equivalents, highlighting its strong liquidity position.

Outlook Shows Continued Demand

For the third fiscal quarter ending in July 2025, Keysight anticipates revenue to be in the range of $1.305 billion to $1.325 billion. Non-GAAP earnings per share are projected to fall between $1.63 and $1.69. These figures align with or exceed analysts' current expectations, suggesting sustained momentum.

"We are pleased to report strong second-quarter results, reflecting disciplined execution and close alignment with our customers as they drive innovation across next-generation communications and industrials applications," said CEO Satish Dhanasekaran.

"Due to the macroeconomic environment, we remain cautious in our outlook for the second half of the year. However, we are raising our full-year revenue growth outlook to the midpoint of our 5–7% long-term target range, and we anticipate non-GAAP earnings per share to be at the high end of the prior outlook range."

Despite the challenges, Dhanasekaran highlighted a healthy opportunity pipeline, setting the stage for continued performance in the coming quarters.

"Despite the turbulent macroeconomic environment, we are navigating the challenges and demonstrating resilience. We remain committed to driving sustainable, long-term growth and value creation for our stakeholders," concluded Dhanasekaran.

As of May 20, 2025, Keysight's year-to-date return was 1.35%, outperforming the S&P 500's 1.00% return. However, over a longer horizon, Keysight has underperformed the index, with a 1-year return of 1.91% compared to the S&P’s 11.91%. Over three and five years, KEYS returned 18.14% and 58.18%, respectively, versus 52.27% and 99.91% for the benchmark.