Revenue growth accelerated to 36.5% year-over-year in 2026Q3, with gross margin expanding 390 basis points to 65.9% and operating income growing 97% to $461M, reflecting strong operating leverage and a favorable software mix shift.
Keysight Technologies, Inc. (KEYS) annual income statement — 14-year revenue, gross profit & net income history
| Metric | TTM | Oct'25 | Oct'24 | Oct'23 | Oct'22 | Oct'21 | Oct'20 | Oct'19 | Oct'18 | Oct'17 | Oct'16 | Oct'15 | Oct'14 | Oct'13 | Oct'12 |
|---|
| Sales/Revenue | 6.58B | 5.38B | 4.98B | 5.46B | 5.42B | 4.94B | 4.22B | 4.3B | 3.88B | 3.19B | 2.92B | 2.86B | 2.93B | 2.89B | 3.31B |
| Revenue Growth % | 25.54% | 7.95% | -8.88% | 0.81% | 9.69% | 17.06% | -1.91% | 10.96% | 21.61% | 9.29% | 2.17% | -2.63% | 1.56% | -12.88% | - |
| Cost of Goods Sold | 2.32B | 2.04B | 1.85B | 1.93B | 1.97B | 1.87B | 1.69B | 1.77B | 1.77B | 1.49B | 1.29B | 1.27B | 1.31B | 1.26B | 1.43B |
| COGS % of Revenue | - | 37.92% | 37.08% | 35.36% | 36.35% | 37.89% | 39.99% | 41.11% | 45.56% | 46.79% | 44.35% | 44.43% | 44.77% | 43.8% | 43.26% |
| Gross Profit | 4.26B | 3.34B | 3.13B | 3.53B | 3.45B | 3.07B | 2.53B | 2.53B | 2.11B | 1.7B | 1.62B | 1.59B | 1.62B | 1.62B | 1.88B |
| Gross Margin % | 64.69% | 62.08% | 62.92% | 64.64% | 63.65% | 62.11% | 60.01% | 58.89% | 54.44% | 53.21% | 55.65% | 55.57% | 55.23% | 56.2% | 56.74% |
| Gross Profit Growth % | - | 6.51% | -11.3% | 2.38% | 12.41% | 21.16% | -0.04% | 20.04% | 24.4% | 4.5% | 2.33% | -2.04% | -0.18% | -13.72% | - |
| Operating Expenses | 2.92B | 2.39B | 2.3B | 2.17B | 2.12B | 1.99B | 1.77B | 1.82B | 2.5B | 1.55B | 1.22B | 1.16B | 1.15B | 1.13B | 1.15B |
| OpEx % of Revenue | - | 44.48% | 46.19% | 39.79% | 39.04% | 40.26% | 41.89% | 42.37% | 64.6% | 48.57% | 41.74% | 40.48% | 39.24% | 39.02% | 34.63% |
| Selling, General & Admin | 1.75B | 1.4B | 1.4B | 1.31B | 1.28B | 1.2B | 1.1B | 1.16B | 1.21B | 1.05B | 818M | 787M | 790M | 752M | 771M |
| SG&A % of Revenue | - | 26.05% | 28.02% | 23.92% | 23.67% | 24.19% | 25.99% | 26.84% | 31.07% | 32.89% | 28.03% | 27.56% | 26.93% | 26.04% | 23.26% |
| Research & Development | 1.19B | 1.01B | 919M | 882M | 841M | 811M | 715M | 688M | 624M | 507M | 425M | 387M | 361M | 375M | 377M |
| R&D % of Revenue | - | 18.73% | 18.46% | 16.14% | 15.52% | 16.41% | 16.94% | 15.99% | 16.09% | 15.9% | 14.56% | 13.55% | 12.31% | 12.98% | 11.37% |
| Other Operating Expenses | -4M | -16M | -14M | -15M | -8M | -17M | -44M | -20M | 676M | -7M | -25M | -18M | 0 | 0 | 0 |
| Operating Income | 1.33B | 948M | 833M | 1.36B | 1.33B | 1.08B | 765M | 711M | -394M | 148M | 406M | 431M | 469M | 496M | 733M |
| Operating Margin % | 20.25% | 17.64% | 16.73% | 24.85% | 24.61% | 21.86% | 18.12% | 16.52% | -10.16% | 4.64% | 13.91% | 15.09% | 15.99% | 17.17% | 22.11% |
| Operating Income Growth % | - | 13.81% | -38.66% | 1.8% | 23.52% | 41.18% | 7.59% | 280.46% | -366.22% | -63.55% | -5.8% | -8.1% | -5.44% | -32.33% | - |
| EBITDA | 1.58B | 1.22B | 1.1B | 1.57B | 1.56B | 1.37B | 1.09B | 1.02B | -84M | 373M | 540M | 530M | 553M | 573M | 798M |
| EBITDA Margin % | 23.96% | 22.75% | 22.15% | 28.73% | 28.73% | 27.79% | 25.85% | 23.68% | -2.17% | 11.7% | 18.51% | 18.56% | 18.85% | 19.84% | 24.07% |
| EBITDA Growth % | 36.3% | 10.88% | -29.75% | 0.83% | 13.4% | 25.85% | 7.07% | 1313.1% | -122.52% | -30.93% | 1.89% | -4.16% | -3.49% | -28.2% | - |
| D&A (Non-Cash Add-back) | 244M | 275M | 270M | 212M | 223M | 293M | 326M | 308M | 310M | 225M | 134M | 99M | 84M | 77M | 65M |
| EBIT | 1.47B | 1.15B | 949M | 1.44B | 1.36B | 1.09B | 839M | 795M | -328M | 259M | 413M | 434M | 478M | 501M | 746M |
| Net Interest Income | -23M | 6M | -3M | 24M | -63M | -76M | -67M | -57M | -71M | -73M | -44M | -45M | -3M | 0 | 0 |
| Interest Income | 85M | 102M | 81M | 102M | 16M | 3M | 11M | 23M | 12M | 7M | 3M | 1M | 0 | 0 | 0 |
| Interest Expense | 108M | 96M | 84M | 78M | 79M | 79M | 78M | 80M | 83M | 80M | 47M | 46M | 3M | 0 | 0 |
| Other Income/Expense | 82M | 134M | 32M | -1M | -49M | -70M | -4M | 4M | -17M | 31M | -40M | -43M | 6M | 5M | 13M |
| Pretax Income | 1.42B | 1.08B | 865M | 1.36B | 1.28B | 1.01B | 761M | 715M | -411M | 179M | 366M | 388M | 475M | 501M | 746M |
| Pretax Margin % | 21.5% | 20.13% | 17.37% | 24.84% | 23.71% | 20.44% | 18.03% | 16.62% | -10.6% | 5.61% | 12.54% | 13.59% | 16.2% | 17.35% | 22.5% |
| Income Tax | 136M | 213M | 251M | 300M | 161M | 116M | 134M | 94M | -576M | 77M | 31M | -125M | 83M | 44M | -95M |
| Effective Tax Rate % | 9.61% | 19.69% | 29.02% | 22.11% | 12.53% | 11.49% | 17.61% | 13.15% | 140.15% | 43.02% | 8.47% | -32.22% | 17.47% | 8.78% | -12.73% |
| Net Income | 1.26B | 846M | 614M | 1.06B | 1.12B | 894M | 627M | 621M | 165M | 102M | 335M | 513M | 392M | 457M | 841M |
| Net Margin % | 19.08% | 15.74% | 12.33% | 19.34% | 20.74% | 18.09% | 14.85% | 14.43% | 4.25% | 3.2% | 11.48% | 17.96% | 13.37% | 15.82% | 25.37% |
| Net Income Growth % | 130.88% | 37.79% | -41.91% | -5.96% | 25.73% | 42.58% | 0.97% | 276.36% | 61.76% | -69.55% | -34.7% | 30.87% | -14.22% | -45.66% | - |
| Net Income (Continuing) | 1.28B | 869M | 614M | 1.06B | 1.12B | 894M | 627M | 621M | 165M | 102M | 335M | 513M | 392M | 457M | 841M |
| Discontinued Operations | -1000K | -23M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 7.26 | 4.88 | 3.51 | 5.91 | 6.18 | 4.78 | 3.32 | 3.25 | 0.86 | 0.56 | 1.95 | 3.00 | 2.35 | 2.74 | 5.04 |
| EPS Growth % | 131.21% | 39.03% | -40.61% | -4.37% | 29.29% | 43.98% | 2.15% | 277.91% | 53.57% | -71.28% | -35% | 27.66% | -14.23% | -45.63% | - |
| EPS (Basic) | - | 4.90 | 3.53 | 5.94 | 6.24 | 4.83 | 3.35 | 3.30 | 0.88 | 0.57 | 1.97 | 3.04 | 2.35 | 2.74 | 5.04 |
| Diluted Shares Outstanding | 173M | 173M | 175M | 179M | 182M | 187M | 189M | 191M | 191M | 182M | 172M | 171M | 167M | 166.82M | 166.82M |
| Basic Shares Outstanding | 173M | 173M | 174M | 178M | 180M | 185M | 187M | 188M | 187M | 180M | 170M | 169M | 167M | 166.82M | 166.82M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying KEYS stock.
For fiscal year 2025, Keysight Technologies, Inc. (KEYS) reported total revenue of $5.38B. This represents a 62.1% increase compared to $3.31B in 2012.
Keysight Technologies, Inc. (KEYS) is profitable, generating $846.0M in net income for the fiscal year ending 2025 with a net profit margin of 15.7%.
Keysight Technologies, Inc. (KEYS) reported an operating income of $948.0M, resulting in an operating profit margin of 17.6%. This margin reflects the operational efficiency of the business before interest and taxes.
Keysight Technologies, Inc. (KEYS) generated $3.34B in gross profit for the year, representing a gross profit margin of 62.1%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
China export controls exposure
Metrics are mathematically derived from official filings.
Revenue Momentum Accelerates on AI Infrastructure
According to recent quarterly filings, KEYS revenue surged 36.5% year-over-year in 2026Q3 to $1.8B, marking the third consecutive quarter of accelerating growth from 3.1% in 2025Q1.
The sequential acceleration from 23.3% in 2026Q1 to 36.5% in 2026Q3 suggests demand is broadening beyond the traditional communications cycle, likely driven by AI data center build-outs requiring 800G and 1.6T Ethernet testing. The revenue base has expanded from $1.2B in 2024Q2 to $1.8B in 2026Q3, a 50% increase over nine quarters, indicating the company is capturing a disproportionate share of R&D-intensive capital spending. However, the sustainability of this trajectory depends on whether the AI-related demand is a one-time infrastructure build or a recurring replacement cycle, which warrants monitoring of order backlog trends in subsequent quarters.
Gross Margin Expansion Signals Software Mix Shift
As reported in financial statements, KEYS gross margin improved to 65.9% in 2026Q3 from 62.0% in 2024Q3, a 390 basis point expansion that appears tied to higher software and services revenue.
The gross margin trajectory shows a clear upward trend, with 2026Q2 reaching 68.6% before settling at 65.9% in 2026Q3, suggesting the integration of ESI Group and the shift toward virtual prototyping is enhancing the revenue mix. This margin level is significantly above the peer average of approximately 45% for hardware-focused companies like MKSI and COHR, indicating KEYS' proprietary ASICs and software lock-in provide pricing power. The fluctuation between 61.2% and 68.6% over the past ten quarters suggests some cyclicality, but the overall upward bias implies structural improvement rather than a temporary benefit.
Operating Leverage Amplifies Revenue Growth
Based on reported figures, KEYS operating income grew 97% year-over-year in 2026Q3 to $461M, far outpacing the 36.5% revenue growth, demonstrating significant operating leverage.
The operating margin expanded from 15.3% in 2025Q4 to 25.0% in 2026Q3, a 970 basis point improvement, while R&D and SG&A expenses grew at a slower pace than revenue. Specifically, R&D increased from $258M to $312M (21% growth) and SG&A from $399M to $446M (12% growth) over the same period, versus revenue growth of 29%, indicating the fixed-cost base is being spread over a larger revenue base. This leverage suggests that KEYS is not proportionally scaling its engineering and sales overhead, which may indicate efficiency gains from software-led delivery models, though investors should monitor whether this pace of expense discipline is sustainable as the company invests in 6G and AI capabilities.
Earnings Quality Strengthens Despite SBC Dilution
According to SEC filings, KEYS net income reached $397M in 2026Q3 with diluted EPS of $2.29, while stock-based compensation of $47M represented only 2.5% of revenue, a manageable drag.
The earnings quality appears solid as net income growth of 108% year-over-year in 2026Q3 is supported by operational improvements rather than one-time items, with the tax rate remaining stable across quarters. However, the 2024Q4 net loss of -$73M and negative EPS of -$0.42 stands out as an anomaly, likely driven by a discrete tax charge or impairment, which warrants scrutiny but does not appear to reflect ongoing operational deterioration. The SBC expense has fluctuated between $26M and $76M quarterly, with the 2026Q1 spike to $76M potentially indicating a large equity grant, but the recent decline to $47M suggests dilution is being managed, and the gap between EPS of $2.29 and the reported $3.07 beat in the recent quarter may indicate additional non-operating gains that require further investigation.
R&D Discipline Balances Growth and Margin
As reported in financial statements, KEYS R&D spending rose to $312M in 2026Q3, but as a percentage of revenue it fell to 16.9% from 18.6% a year earlier, reflecting disciplined cost control.
The cost structure shows a deliberate balance between investing in future technologies and protecting margins, with R&D growing 25% year-over-year but at a slower pace than the 36.5% revenue growth. SG&A expenses grew only 12% year-over-year to $446M, suggesting management is leveraging existing sales infrastructure rather than proportionally expanding headcount, which may indicate improved productivity from software-led sales. The COGS line increased from $518M to $630M (22% growth), which is below revenue growth, confirming that the gross margin expansion is driven by both pricing power and a favorable product mix shift toward higher-margin software and services.
2026Q1 Marks Operational Turning Point
Based on reported figures, KEYS operating income jumped from $217M in 2025Q4 to $248M in 2026Q1, then surged to $461M by 2026Q3, signaling a clear inflection in profitability.
The inflection appears to have begun in 2026Q1, when revenue growth accelerated to 23.3% and operating margin expanded to 15.5% from 15.3%, but the true breakout occurred in 2026Q2 and 2026Q3 as operating margin reached 23.7% and 25.0% respectively. This period coincides with the integration of ESI Group and the ramp in AI-related Ethernet testing demand, suggesting the company's strategic pivot toward software and virtual prototyping is now translating into tangible financial results. The lasting impact is that KEYS has reset its margin baseline from the mid-teens to the mid-20s, which may indicate a structural shift in the business model rather than a cyclical peak, though the durability of this margin level will depend on sustaining the AI demand cycle.
China Export Controls Threaten Growth Durability
The most significant risk to KEYS' accelerating growth is the tightening US export controls on high-end RF and semiconductor testing equipment to China, which historically accounts for over 40% of revenue.
While the recent quarter's 36.5% revenue growth is impressive, it may be partially front-loaded as customers in China accelerate purchases ahead of potential restrictions, creating a pull-forward effect that could reverse in subsequent quarters. The gross margin expansion to 65.9% could also be vulnerable if the company is forced to shift sales toward lower-margin domestic or European customers who have more negotiating power. Additionally, the operating leverage that drove margins to 25.0% may work in reverse if revenue growth decelerates, as the fixed R&D base of $312M cannot be quickly scaled back without sacrificing the 6G and AI product roadmap, potentially leading to a sharp margin compression similar to the 2024Q4 loss when revenue declined.