Financial Health Snapshot
What does Keysight Technologies, Inc. latest financial snapshot show?
Strong. The strongest factor is free cash flow, while the main concern is debt, plus regulatory and tariff-related items.
For the latest verified period, April 30, 2026, the snapshot blends growth, profitability, cash generation, balance-sheet capacity, and capital efficiency. That gives students and investors a quick way to judge whether Keysight Technologies, Inc. is growing cleanly or relying more on leverage, and the mission context is here: Mission Statement, Vision, & Core Values (2026) of Keysight Technologies, Inc. (KEYS).
Free cash flow deserves deeper analysis first because it best shows how Keysight Technologies, Inc. turns earnings into usable cash.
Revenue and earnings quality
Are Keysight Technologies, Inc. revenue and earnings high quality?
Strong. The clearest confirmation is that revenue growth was matched by even faster operating income, net income, and EPS growth, while software, services, and recurring revenue improved visibility beyond one-time hardware sales.
Keysight Technologies, Inc. showed more than just bigger sales; it also showed better earnings conversion. Investors compare revenue durability with operating income, net income, and EPS across comparable periods because high-quality growth should turn into profit, not just top-line expansion. For related context, see Mission Statement, Vision, & Core Values (2026) of Keysight Technologies, Inc. (KEYS).
| Measure | Latest Period | Previous Period | Quality Test | Investor Meaning |
|---|---|---|---|---|
| Revenue | $172B in Q2 2026; 731% growth | Not supplied for the comparable quarter | Growth source is unclear in the supplied data, but software, services, and recurring revenue support visibility | Repeatable mix is more durable than one-time hardware sales |
| Operating Income | $40700M in Q2 2026; 6411% growth | Not supplied for the comparable quarter | Outpaced revenue growth | Operating leverage confirms stronger earnings quality |
| Net Income | $34900M in Q2 2026; 2420% growth | Not supplied for the comparable quarter | Confirmed by operating performance; no unusual-item detail was supplied | Final earnings still improved, so the profit result supports the revenue trend |
| Diluted EPS | $202 in Q2 2026; 2393% growth | Not supplied for the comparable quarter | Per-share growth was strong; share-count impact was not supplied | Shareholders captured the growth at the per-share level |
How durable is Keysight Technologies, Inc. revenue?
The strongest durability signal is recurring mix: software and services were 3700% of total revenue and annual recurring revenue reached 2900% of the total mix. The biggest limitation is customer and end-market cyclicality across semiconductor, communications, aerospace, and industrial test demand.
- Demand Quality: Recurring software, services, and annual recurring revenue improve visibility versus pure hardware sales.
- Pricing and Volume: The price-versus-volume split was not supplied; only segment revenue growth was provided.
- Diversification: No single customer represented more than 1000% of total revenue as of October 31, 2025, and revenue spans CSG and EISG.
That mix matters because steadier revenue usually converts into steadier cash flow.
Cash Quality
Are Keysight Technologies, Inc. profits supported by cash flow?
Yes. Keysight Technologies, Inc. showed stronger profitability in Q2 2026, with gross profit, EBIT, EBITDA, and net income all rising sharply, and free cash flow of $47200M plus operating cash flow growth of 1361% supporting reported earnings. The $9700M tax audit settlement helped net income, so quality is good but not purely recurring.
Keysight Technologies, Inc. is showing a strong spread between revenue and profit, but the quality of earnings matters here. Gross profit of $118B against cost of revenue of $53900M, operating income of $40700M against operating expenses of $77100M, and net income of $34900M against interest expense of $2500M and income tax expense of $6900M all point to solid operating performance, while cash flow confirms much of the result.
| Measure | Latest Period | Previous Period | Verified Driver | Investor Meaning |
|---|---|---|---|---|
| Gross Margin | Q2 2026 gross profit: $118B | Previous compatible margin not supplied | Gross profit growth of 1839% shows much stronger product economics, but no pricing or mix detail is provided. | Indicates stronger contribution from sales after direct costs. |
| Operating Margin | Q2 2026 operating income: $40700M | Previous compatible margin not supplied | EBIT growth of 8414% and EBITDA growth of 6717% indicate strong operating leverage, but the exact expense bridge is not supplied. | Suggests scale is helping operating efficiency. |
| Net Margin | Q2 2026 net income: $34900M | Previous compatible margin not supplied | $9700M favorable tax audit settlement helped net income, while interest expense of $2500M and income tax expense of $6900M remain separate profit items. | Shows final profitability is strong, but partly boosted by a one-time benefit. |
| Operating Cash Flow | Q2 2026 operating cash flow growth: 1361% | Previous compatible value not supplied | Working capital signals show receivables growth of 1182% and inventory growth of -095%, which should be watched alongside earnings. | Points to positive cash conversion, but the dollar amount is missing. |
| Free Cash Flow | Q2 2026 free cash flow: $47200M | Previous supplied value not supplied | Free cash flow growth of 1597% and growth capital expenditure of 1471% show strong cash generation despite reinvestment. | Leaves meaningful room for reinvestment, debt service, and other uses. |
What most affects Keysight Technologies, Inc. cash conversion?
The biggest factor is strong free cash flow generation, supported by higher operating profit, though the tax settlement and working-capital shifts mean part of the cash quality story is not purely recurring.
- Main Driver: Operating leverage and free cash flow strength look structural, but the $9700M tax benefit makes this quarter unusually strong.
- Evidence Gap: The supplied data does not include operating cash flow dollars or capex dollars.
- Metric to Monitor: Watch operating cash flow, free cash flow, and receivables growth next.
If you’re using this topic for a paper or case study, a structured SWOT Analysis, PESTLE Analysis, or Business Model Canvas can help you organize the research into clear arguments. For more context on the company’s direction, see Mission Statement, Vision, & Core Values (2026) of Keysight Technologies, Inc. (KEYS).
Balance Sheet Strength
Does Keysight Technologies, Inc. have enough balance sheet strength and liquidity to support its obligations and investment needs?
Strong. Keysight Technologies, Inc. has large cash, current assets above current liabilities, and modest net debt, so liquidity is solid. The main protection is $241B in cash and cash equivalents; the main financing concern is the size of short-term debt and acquisition-related intangibles.
Cash helps, but it does not tell the whole story. For Keysight Technologies, Inc., the real test is whether working capital, asset quality, debt service, solvency, liquidity, and refinancing all line up together. The balance sheet looks capable, but investors still need to watch how much of the asset base depends on acquired intangibles and how much debt sits near term. For a broader investor view, see Exploring Keysight Technologies, Inc. (KEYS) Investor Profile: Who's Buying and Why?
| Area | Latest Evidence | Assessment | Investor Meaning |
|---|---|---|---|
| Cash and Working Capital | Cash and cash equivalents: $241B; cash and short term investments: $241B; total current assets: $504B; total current liabilities: $265B; net receivables: $102B; inventory: $104B; deferred revenue: $73700M; deferred revenue non current: $25100M. | Strong | Near-term obligations look manageable without forcing a cut in investment. |
| Total and Net Debt | Short term debt: $69900M; long term debt: $183B; capital lease obligations: $22800M; total debt: $276B; net debt: $34700M. | Mixed | Leverage is present, but cash leaves net debt modest and keeps flexibility intact. |
| Debt Service and Refinancing | Keysight Technologies, Inc. issued $60000M in 4.95% notes due 2034; net debt is modest relative to cash, but short-term debt still needs rollover support. | Strong | Interest and refinancing risk look contained, though debt timing still matters. |
| Asset Quality | Total assets: $1174B; goodwill: $347B; intangible assets: $117B; goodwill and intangible assets: $464B; property plant equipment net: $96100M. | Mixed | The asset base is large, but acquisition-related intangibles raise impairment and quality risk. |
| Liabilities and Equity | Total liabilities: $541B; total stockholders equity: $633B. | Strong | Equity exceeds liabilities, giving a broad capital base to absorb shocks. |
Which balance-sheet risk matters most for Keysight Technologies, Inc.?
The biggest risk is asset quality, especially the $464B tied up in goodwill and intangible assets. That is more important than liquidity right now because it could pressure book value if acquired assets underperform.
- Current Exposure: Current assets of $504B versus current liabilities of $265B show a strong near-term cushion.
- Protection: Cash and cash equivalents of $241B provide the clearest buffer against short-term stress.
- Warning Signal: Watch the $69900M short term debt and any change in goodwill or intangible asset values.
Capital Efficiency
Is Keysight Technologies, Inc. using capital efficiently without stressing finances?
Mixed. Keysight Technologies, Inc. appears able to fund reinvestment internally, but capital efficiency is not clearly strong because buybacks, acquisitions, R&D, and debt all compete for cash.
Return analysis needs leverage, asset intensity, capex, working capital, and outside funding in view. Keysight Technologies, Inc. can look efficient on cash generation and still face pressure if acquisitions, buybacks, and product investment rise faster than operating cash flow. Exploring Keysight Technologies, Inc. (KEYS) Investor Profile: Who's Buying and Why? helps frame the ownership angle.
| Capital Measure | Latest Evidence | Quality Test | Investor Meaning |
|---|---|---|---|
| ROIC | Unavailable in the supplied data. | Operating margins and capital efficiency cannot be verified from the prompt alone. | Investors cannot confirm whether invested capital is creating operating value from the provided figures. |
| ROE and ROA | Unavailable in the supplied data. | No compatible period values were provided, so leverage and asset efficiency cannot be judged directly. | Shareholder return quality and asset use remain unclear without ROE and ROA. |
| Maintenance and Growth Investment | $32,000M in R&D expenses, 561% R&D expense growth, plus AI, 6G, optical, chiplet, automotive, and EDA software launches. | The evidence supports growth-oriented reinvestment, but it does not separate maintenance spending from expansion spending. | Keysight Technologies, Inc. is putting substantial capital into product and software development to extend customer design workflows. |
| Internal Funding Capacity | $47,200M in free cash flow in Q2 2026, $30,700M returned to shareholders via 120M shares repurchased, $150B authorization still active, 000% dividends per share growth, $1,500M Spirent Communications acquisition, Synopsys Optical Solutions Group acquisition, Ansys PowerArtist acquisition, and $60000M in 495% notes due 2034. | Investment appears partly internally funded, but the debt-financed capital structure and acquisition activity show some reliance on external capital and balance-sheet capacity. | Cash generation supports reinvestment and buybacks, yet leverage and deal spending could reduce flexibility if cash flow weakens. |
Are Keysight Technologies, Inc.'s returns on capital sustainable?
Likely, if software-centric margins and design-workflow expansion keep cash flow strong. The main weakening condition is heavier acquisition funding or debt pressure that crowds out R&D and buybacks.
- Operating Source: Software-centric solutions and deeper customer design workflow penetration support capital efficiency.
- Funding Requirement: The largest verified need is ongoing R&D plus acquisitions and buybacks.
- Durability Test: Sustainability weakens if free cash flow no longer covers reinvestment and shareholder returns without rising debt.
Financial Resilience
How resilient is Keysight Technologies, Inc. (KEYS), and which warning signs matter most?
Keysight Technologies, Inc. (KEYS) looks Mixed. The main buffer is its diversified customer base, software and services mix, and strong liquidity. The most important verified warning sign is geopolitical and export-control pressure that can delay orders or limit customer access.
Keysight Technologies, Inc. can still fund operations and core investment if conditions tighten, but resilience is not unlimited. The company has $2.41B in cash and cash equivalents and $472.00M of free cash flow in Q2 2026, which helps protect debt service and working capital. For mission and strategy context, see Mission Statement, Vision, & Core Values (2026) of Keysight Technologies, Inc. (KEYS).
| Pressure | Financial Effect | Existing Protection | Warning Signal |
|---|---|---|---|
| Revenue or Margin Pressure | Export controls and geopolitical tensions in semiconductor and communications markets can slow orders, stretch sales timing, and reduce operating leverage, which can weigh on earnings, cash flow, and debt capacity. | Diversified customers, no single customer represented more than 1000% of total revenue, and software and services at 3700% of total revenue support visibility. | Watch for weaker revenue, margin compression, or falling cash flow tied to export-control impact. |
| Working-Capital or Investment Pressure | Longer lead times for aerospace and semiconductor products can tie up inventory and receivables and absorb cash if demand stays strong and builds move ahead of collections. | About 10,000 suppliers across more than 60 countries, manufacturing in Malaysia, the US, Germany, and Japan, and the Chennai, India expansion support supply continuity. | Monitor operating cash flow, inventory growth, and any rise in lead times beyond the current 3-to-6-month window. |
| Interest or Refinancing Pressure | Higher rates or tighter financing could reduce free cash flow available for investment if liabilities or funding needs rise, especially when legal or refund obligations move from timing issues into cash use. | Cash reserves and recent free cash flow provide a cushion, and the US DOJ antitrust lawsuit over the Spirent merger was resolved by a consent decree and divestiture, showing execution risk can be managed. | Watch debt, interest burden, maturity timing, and liquidity if cash balances or free cash flow weaken. |
Which financial warning signs should investors monitor at Keysight Technologies, Inc.?
The top signals are export-control-driven order weakness, longer lead times that lift working capital, and rising tariff refund liabilities. The current tariff items look like timing and liability risks, not confirmed deterioration; a drop in revenue or cash flow would be the clearer warning.
Export Controls Hit Orders
Geopolitical tensions and export controls could slow semiconductor and communications demand. Keysight Technologies, Inc. is partly buffered by diversification and software and services, but the next metric is export-control impact on revenue and order timing.
Working Capital Stays Elevated
Supply chain lead times remain at a 3-to-6-month window for some products, which can trap cash in inventory and receivables. The offset is a broad supplier base and global manufacturing footprint. Monitor operating cash flow and inventory growth.
Tariff Refund Liability Grows
Keysight Technologies, Inc. filed a $10000M IEEPA tariff refund and recorded a $4000M liability for customer tariff surcharge refunds. Cash of $2.41B and Q2 2026 free cash flow of $472.00M help, but liability movement needs close tracking.
Financial Health Scorecard
What does Keysight Technologies, Inc.’s financial health mean for investors?
Keysight Technologies, Inc. gets an overall Mixed-Strong scorecard. The strongest factor is cash generation, while the weakest is balance sheet and regulatory sensitivity. The most important condition for the investment case is whether recurring revenue and free cash flow stay strong enough to absorb debt and integration pressure. See Mission Statement, Vision, & Core Values (2026) of Keysight Technologies, Inc. (KEYS).
| Financial Factor | Rating | Evidence and Investor Meaning |
|---|---|---|
| Revenue and Earnings Quality | Strong | TTM Revenue: $609B and FY 2025 revenue of $537B show scale and growth. Annual recurring revenue at 2900% of the mix and no single customer above 1000% support durability. |
| Profitability and Cash | Strong | Q2 2026 Net Income: $34900M, Net Income (TTM): $105B, and Free Cash Flow (Q2 2026): $47200M point to strong conversion. The $9700M tax settlement benefit is nonrecurring. |
| Balance Sheet and Liquidity | Mixed | Cash And Cash Equivalents: $241B and Total Current Assets: $504B provide liquidity, but Total Debt: $276B and Net Debt: $34700M keep leverage and refinancing risk relevant. |
| Capital Efficiency | Strong | $30700M repurchases in Q2 2026, a $150B repurchase authorization, $32000M of R&D spending, and strategy-led acquisitions show active capital use backed by cash generation. |
| Financial Resilience | Mixed | Export controls, 3-to-6-month lead times, and tariff refund exposure create pressure, but supplier diversity, manufacturing footprint, cash, and recurring mix help absorb shocks. |
- What Supports the Thesis: Strong revenue growth, recurring mix, and free cash flow give Keysight Technologies, Inc. a durable earnings and funding base.
- What Challenges the Thesis: Debt, tariff items, export controls, and acquisition integration add uncertainty to cash use and operating flexibility.
- What to Monitor: Free Cash Flow, Total Debt, Annual Recurring Revenue.
Forecasts and scenario analysis should focus on whether recurring demand and cash conversion stay high enough to support debt service, buybacks, and valuation assumptions.
FAQ
What Do Investors Ask About 's Financial Health?
Investors most often ask about the company's revenue quality, profitability, cash generation, debt, liquidity, capital efficiency, and ability to withstand financial pressure.
How much free cash flow does Keysight generate?
Keysight reported Free Cash Flow (Q2 2026): $47200M and Free Cash Flow Growth: 1597% for 2026-04-30 That cash flow supports reinvestment, acquisitions, and buybacks, but investors should compare future free cash flow with working capital, capex, and debt needs
Does Keysight have enough cash for debt?
On 2026-04-30, Keysight had Cash And Cash Equivalents: $241B, Total Debt: $276B, and Net Debt: $34700M Cash is substantial, but total debt remains slightly higher than cash, so refinancing needs and short-term debt should stay on the watch list
Are Keysight's margins supported by recurring revenue?
Keysight's recurring mix helps margin visibility because software and services accounted for 3700% of total revenue and annual recurring revenue reached 2900% of the total mix Still, margin durability also depends on hardware demand, R&D spending, pricing, acquisition integration, and tariff-related items
How do buybacks affect Keysight's financial health?
Keysight returned $30700M through 120M shares repurchased during Q2 2026, and a $150B repurchase authorization remains active Buybacks can support per-share results, but they should be weighed against debt, acquisitions, R&D, and free cash flow consistency
What risks could pressure Keysight's balance sheet?
Key financial pressure points include export-control risk, 3-to-6-month lead times for aerospace and semiconductor products, and tariff items including a $10000M IEEPA refund filing and $4000M customer refund liability Cash, supplier diversity, and recurring revenue provide partial buffers