Keysight Technologies, Inc. Goldman Sachs Communacopia + Technology Conference 2026

Okay, great. Thank you everybody for joining us on the fourth and final day of our Communacopia + Technology Conference. My name is Mark Delaney. I have the pleasure of covering Keysight, and yet again this year, I'm really happy to have Keysight with us at the conference. With us from Keysight, we have Satish Dhanasekaran, Keysight's President and CEO, and Neil Dougherty, the CFO. Thank you both for joining us.

Thanks for having us. Thank you.

Keysight's a really fascinating company, provides design, emulation, and test solutions across both hardware and software. A large percent of the company's over $7 billion of annual revenue is tied to customer R&D applications. Maybe, Satish, you can start. Talk a bit about what's allowed Keysight to be so successful and be a key part of customer workflows in end markets that includes communications, aerospace defense, auto, and industrial.

Well, thank you, Mark. Again, this is a case of a business that has been around for 80 years, from HP and Agilent, but really got reinvented as we were able to spin out and be independent and invest in our future. The core of the strategy has always been, how do we take a business that was largely hardware-oriented business and a product business, and transform it into a solutions business? Not an easy thing to do, but that's the journey we've been on. That involved protecting the core right to win and right to play for your customer base, which has known you for the core measurement tools and the metrology, but also pursuing a smart diversification strategy to add into applications that are much more mission-critical and more valuable for our customers. That invariably involved adding more software and solutions content.

Going higher in the stack that you described from physical layer to application layer and into protocol layer and application layer really allows us to provide that cohesive portfolio. What we really benefit from with the breadth we have is the ability to take that R&D investment that we make towards the portfolio and monetize it over multiple end markets. Because ultimately, we serve engineers. Electrical engineers are our customers around the world.

Well, we've seen evidence of the success the company's having with the last few earnings reports. Last two quarters', orders a bit over $2 billion in each quarter. Company said orders could grow sequentially again next quarter. What's driving that growth? Yeah, we're seeing a confluence of end markets that are inflecting simultaneously.

We started to see that first with the wireline parts of our market that was starting to grow with AI. Defense technology is becoming a bigger priority in today's geopolitical environment. Europe investing in its own sovereign technology as a trend. Our industrial end markets, which tend to sort of have a bigger exposure to manufacturing and PMI, is also doing very well with all of the build-outs that are happening globally. So we're benefiting from a number of tailwinds. We invested to have the portfolio and the differentiation, and we're benefiting from having the right portfolio meeting great markets at this moment.

Neil, maybe one for you on this topic. As you think about the guidance you gave into the fourth quarter, some sequential growth, given how strong demand is, and we've been hearing all week around the data center market in particular being quite robust and you guys have been seeing that too, is there a reason that orders shouldn't grow more than normal sequential seasonality in 4Q?

Yeah, Mark, I guess my first response to that is you're already seeing that strength in the $2 billion quarters that we've just put up already in the year-over-year growth that we put up through the first three quarters of the year. So I think that strength continues. Do we see a further acceleration at this point? Maybe, but right now our base case is that you're going to see the strength continue, which should result in a normal seasonal uplift as we move from Q3 to Q4.

Neil, staying with you, as you think about modeling revenue. You had orders of $2 billion. That's a nicely positive book to bill.

Yeah. Should investors be anticipating that at some point next year, revenue hits that $2 billion level as well?

Yeah, certainly that's the trajectory we're on. We're a little bit supply chain constrained at the current environment. We guided Q4 to $1.94 billion of revenue, which is up almost $100 million from where we were in Q3. That's clearly the trajectory. Given the supply chain situation, things are a little bit nonlinear. We expect them to be a little bit nonlinear, so exactly when we burst through that $2 billion limit, or $2 billion revenue per quarter threshold is a little uncertain, but certainly that's the trajectory that we're on.

Yeah. Satish, maybe talk a little bit more around the supply chain constraints. It was a topic on the last earnings call, but any color you can share on that?

Yeah. I think we're executing very well, is the headline. I do think that every time we plan for a certain supply level, the demand keeps coming in harder, and that's a good problem to have. When you look at the macro supply environment today, whether it's for PCBs or components, you're often in environments where larger players are sucking up big chunks of capacity from the supply chain. The flexibility to respond in the short term just is not there. So we're planning ahead. That's why I said on the earnings call, we're taking an 18-month view of supply and making some investments with our supply chain and in our own internal supply chain, to be able to meet the demand across these markets. We feel really good about the portfolio as well.