Keysight's 36% Revenue Surge Faces a Supply Test

Keysight Technologies' fiscal third-quarter revenue rose 36.5% from a year earlier, the fastest reported growth in the company's recent ten-year history. That record is real, but the more useful question is whether demand can keep growing after acquisitions, currency effects and supply constraints are separated from the headline number.

Keysight reported $1.846 billion of revenue for the quarter ended July 31, 2026, up from $1.352 billion a year earlier. BTI's calculation from those figures produces growth of 36.54%, consistent with the company's rounded 36% disclosure. The Trefis analysis found a median quarterly growth rate of about 8.9% across the previous 40 quarters and identified the prior high as 36.4% in fiscal second-quarter 2021. The new record therefore exceeded the old one by only 0.1 percentage point.

Management said core revenue, which excludes acquisition and currency effects, grew 31%. That is slower than reported growth but still far above Keysight's usual pace. The distinction matters because investors should not treat every dollar added through an acquisition or exchange-rate movement as evidence that underlying customer demand accelerated by the full 36.5%.

Communications produced most of the increase. Revenue in the Communications Solutions Group rose 43% to $1.345 billion. Commercial communications revenue jumped 56%, helped by wireline demand tied to faster network speeds, AI infrastructure and silicon photonics. The Electronic Industrial Solutions Group grew 21% to $501 million, with increases across semiconductor, general electronics, and automotive and energy markets.

The income and cash figures confirm that growth was not limited to sales. GAAP net income more than doubled to $397 million from $191 million, and diluted GAAP earnings per share rose to $2.30 from $1.10. Non-GAAP earnings per share increased to $3.07 from $1.72. Operating cash flow reached $437 million and free cash flow was $403 million, compared with $322 million and $291 million, respectively, a year earlier.

Orders were even stronger than revenue, reaching $2.091 billion versus $1.340 billion in the prior-year quarter. That backlog support helped management guide fiscal fourth-quarter revenue to $1.93 billion to $1.95 billion. The midpoint implies about 37% year-over-year growth, with non-GAAP earnings per share expected between $3.34 and $3.40.

Supply is the main near-term constraint. Management warned that component availability could limit how quickly orders become revenue over the next several quarters. That makes the next report a test of conversion, not simply demand. Strong orders can coexist with delayed shipments, higher working capital and customer timing risk.

Keysight shares had gained 86.2% in the year through October 22, according to the source analysis. After that rise, maintaining roughly 37% revenue growth matters more than setting a record by one tenth of a percentage point. Investors should focus on core growth, order conversion and free cash flow when Keysight reports its October quarter in November.