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Keysight reported fiscal third-quarter revenue of $1.846 billion, up 36% year over year, while orders rose 56% to $2.91 billion
In sum – what to know:
AI drives test intensity – Higher data rates, lower latency, and increasingly heterogeneous architectures are increasing testing, emulation, and interoperability requirements.
Supply limits revenue – Keysight says demand is not the constraint, but component availability and supply-chain capacity could limit revenue conversion over the next two quarters.
6G builds early – AI-RAN, integrated sensing and communications, and non-terrestrial networks are creating early opportunities for Keysight’s validation portfolio.
Keysight Technologies is seeing strong testing demand alongside AI infrastructure investment, with increasingly complex architectures expanding opportunities across R&D and manufacturing.
The company reported fiscal third-quarter revenue of $1.846 billion, up 36% year over year, while orders rose 56% to $2.91 billion. During the company’s earnings call, management said demand was broad-based, with no unusual pull-ins, and expects fourth-quarter revenue of $1.93 billion to $1.95 billion.
The strongest growth is coming from Commercial Communications, which generated its first $1 billion revenue quarter. Wireline revenue exceeded wireless revenue for the first time, with wireline growth led by activity associated with AI data-center development and manufacturing.
The shift is also changing the nature of Keysight’s opportunity. Management said wireline has historically been heavily weighted toward R&D, but the addition of manufacturing activity supporting the AI data-center build-out has moved the mix toward production. The company said the longer-term mix is now roughly two-thirds R&D and one-third manufacturing, although quarterly results can vary.
Kailash Narayanan, president of the Communications Solutions Group, said higher data rates and lower latency are shrinking design margins. Customers can no longer guarantee performance solely by design and also need to test in production.
The architectures being tested are becoming more heterogeneous. Keysight said customers are working with combinations of GPUs, CPUs and DPUs, while the number of protocols at different layers of the stack is increasing. Chiplet architectures are also creating interoperability requirements that need to be emulated and tested.
Keysight is addressing these requirements across multiple levels. Narayanan described capabilities ranging from signal-level testing to bit-level validation and protocol- and packet-level workload emulation. Customers are also using emulation to stress-test chips and examine how they perform when cores are activated under higher power and higher speeds.
The increased complexity is also affecting manufacturing. Management highlighted higher test intensity at the component level as customers deal with higher frequencies, greater data throughput, and tighter tolerances. In semiconductor, Keysight is seeing capacity expansion across advanced nodes, memory, and silicon photonics.
The company is also participating in the transition toward higher-speed technologies. Management said 800G remains an underlying technology while 1.6T is scaling, with Keysight currently ramping production of 1.6T. Customers are already engaging the company on 3.2T, according to the firm’s president and CEO Satish Dhanasekaran.
At the same time, Keysight’s ability to convert demand into revenue is increasingly being affected by supply. Dhanasekaran said supply chain would remain the “governor” of near-term revenue, while Keysight’s chief financial officer Neil Dougherty said demand is not the limiter.
Dougherty said the supply situation is likely to remain a governor of Keysight’s ability to convert demand into revenue for the next two quarters.
Alongside AI infrastructure, Keysight is also working on emerging 6G technologies. Management highlighted AI-RAN, integrated sensing and communications, and non-terrestrial networks. Its solutions are designed to provide insights from the radio channel, network, device, and satellite emulators for early 6G use cases.
The company did not provide a specific 6G revenue timeline or quantify the potential market opportunity during the call. Instead, management emphasized that Keysight is working early with industry leaders as candidate technologies and architectures develop.
