Keysight Technologies designs and manufactures electronic test equipment for the world's most complex engineering problems, and the company spent fiscal 2025 rebuilding a stalled growth profile. The first half of fiscal 2026 has converted that rebuild into the fastest revenue expansion in the company's modern history. The central debate is no longer whether demand has returned. It is whether the Spirent Communications acquisition, closed in mid-October 2025 after a contested regulatory process, can sustain growth in the high thirties percent without the tariff refunds that flattered the prior year, and whether the stock at roughly $331 per share already prices the answer in.
The defining event of the period is the Spirent deal itself. Keysight paid roughly $1.415 billion, net of cash acquired, for the United Kingdom based test and assurance business, and did so only after the U.S. Department of Justice forced a $425 million divestiture of Spirent's high-speed Ethernet testing, network security testing, and RF channel emulation lines to rival Viavi Solutions. The retained portfolio, satellite emulation, positioning and timing, and network automation, landed inside the Communications Solutions Group at the exact moment commercial communications orders for AI infrastructure and non-terrestrial networks were accelerating. The result is a structurally different company: Q3 revenue rose 36 percent on orders that topped $2 billion for the second consecutive record quarter.
The tension sits in the quality of that earnings inflection. The operating margin printed in Q3 exceeded the long-term target of 31 to 32 percent by a wide margin. But the base year was flattered by a $100 million IEEPA tariff refund receivable, and a portion of the margin step-up reflects mix from the higher-margin software and services businesses. If the 2026 comparisons strip out refund tailwinds and the order pace moderates toward the high teens, the multiple has little margin for error.
The catalyst that resolves the debate is the fiscal fourth quarter, expected to be reported in late November 2026. Management has guided Q4 revenue to a range implying growth of roughly 37 percent, with full-year revenue growth of 32 percent. A fourth consecutive quarter of orders above two billion is the confirm.