Keysight Technologies has recently released its 10-Q report, providing a detailed look at the company's financial condition and operational results for the three and nine months ended July 31, 2025. Keysight Technologies, Inc. is a global provider of electronic design and test solutions, operating in two segments: Communications Solutions Group and Electronic Industrial Solutions Group. The company offers a wide range of electronic testing and measurement equipment, software, and related services for various industries.
In the latest 10-Q, the company reported that its gross margin for the three months ended July 31, 2025, remained flat compared to the same period last year, while for the nine months ended July 31, 2025, it decreased by 1 percentage point. This decrease was primarily driven by the net impact of tariffs and unfavorable mix, partially offset by favorable pricing, higher revenue volume, and lower restructuring costs.
Research and development expenses for the three and nine months ended July 31, 2025, increased by 11 percent and 9 percent, respectively, compared to the same periods last year. This increase was primarily driven by continued investments in key growth opportunities in the company's end markets and leading-edge technologies, along with higher variable people-related costs.
Selling, general, and administrative expenses also saw an increase, with a 7 percent rise for the three months ended July 31, 2025, and a 2 percent rise for the nine months ended July 31, 2025. This rise was primarily driven by higher acquisition and integration costs, people-related costs, and infrastructure costs.
The company's operating margin for the three and nine months ended July 31, 2025, remained flat compared to the same periods last year, as the decrease in operating expenses as a percentage of revenue was offset by gross margin movements.
In terms of income taxes, the effective tax rate for the three and nine months ended July 31, 2025, was lower than the U.S. statutory federal income tax rate primarily due to a lower effective tax rate on foreign earnings, partially offset by U.S. taxes on those earnings and the impact of Pillar Two minimum taxes.
Additionally, the report highlighted that Keysight Technologies benefits from tax incentives in several jurisdictions, most significantly in Singapore and Malaysia. The impact of these tax incentives decreased income taxes by $49 million for the nine months ended July 31, 2025.
Furthermore, the report provided a detailed segment overview, with the Communications Solutions Group (CSG) reporting a revenue increase of 11% for the three months ended July 31, 2025, and 8% for the nine months ended July 31, 2025, compared to the same periods last year. The increase was primarily driven by higher investments in high-speed networks to support increasing demand for AI capabilities and higher investment in aerospace and defense solutions.
As a result of these announcements, the company's shares have moved -1.86% on the market, and are now trading at a price of $163.43. For the full picture, make sure to review Keysight Technologies's 10-Q report.
