Electronic measurement provider Keysight (NYSE: KEYS) beat Wall Street’s revenue expectations in Q1 CY2026, with sales up 31.5% year on year to $1.72 billion. On top of that, next quarter’s revenue guidance ($1.74 billion at the midpoint) was surprisingly good and 5.3% above what analysts were expecting. Its non-GAAP profit of $2.87 per share was 23.7% above analysts’ consensus estimates.
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Keysight (KEYS) Q1 CY2026 Highlights:
- Revenue: $1.72 billion vs analyst estimates of $1.7 billion (31.5% year-on-year growth, 0.8% beat)
- Adjusted EPS: $2.87 vs analyst estimates of $2.32 (23.7% beat)
- Adjusted Operating Income: $465 million vs analyst estimates of $466.7 million (27.1% margin, in line)
- Revenue Guidance for Q2 CY2026 is $1.74 billion at the midpoint, above analyst estimates of $1.65 billion
- Adjusted EPS guidance for Q2 CY2026 is $2.46 at the midpoint, above analyst estimates of $2.16
- Operating Margin: 23.7%, up from 15.8% in the same quarter last year
- Free Cash Flow Margin: 27.5%, down from 35% in the same quarter last year
- Market Capitalization: $58.39 billion
Company Overview
Spun off from Hewlett-Packard in 2014, Keysight (NYSE: KEYS) offers electronic measurement products for use in various sectors.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Keysight’s 5.6% annualized revenue growth over the last five years was tepid. This fell short of our benchmark for the industrials sector and is a tough starting point for our analysis.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Keysight’s annualized revenue growth of 8.5% over the last two years is above its five-year trend, suggesting some bright spots. 
This quarter, Keysight reported wonderful year-on-year revenue growth of 31.5%, and its $1.72 billion of revenue exceeded Wall Street’s estimates by 0.8%. Company management is currently guiding for a 28.7% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 13.1% over the next 12 months, an improvement versus the last two years. This projection is noteworthy and indicates its newer products and services will fuel better top-line performance.
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Operating Margin
Keysight has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 21%. This result isn’t surprising as its high gross margin gives it a favorable starting point.
Analyzing the trend in its profitability, Keysight’s operating margin decreased by 5.8 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
This quarter, Keysight generated an operating margin profit margin of 23.7%, up 7.9 percentage points year on year. The increase was solid, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Keysight’s EPS grew at 8.8% compounded annual growth rate over the last five years, higher than its 5.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Diving into the nuances of Keysight’s earnings can give us a better understanding of its performance. A five-year view shows that Keysight has repurchased its stock, shrinking its share count by 7.5%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings. 
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
For Keysight, its two-year annual EPS growth of 9.6% is similar to its five-year trend, implying stable earnings power.
In Q1, Keysight reported adjusted EPS of $2.87, up from $1.70 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Keysight’s full-year EPS of $8.67 to grow 10.6%.
Key Takeaways from Keysight’s Q1 Results
We were impressed by Keysight’s optimistic EPS guidance for next quarter, which blew past analysts’ expectations. We were also glad its EPS outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 8.1% to $372.92 immediately following the results.
Indeed, Keysight had a rock-solid quarterly earnings result, but is this stock a good investment here? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
