AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Measurement heritage, a large installed base, technical distribution and customer-specific integration support an established expertise advantage. Experienced staff and strong orders corroborate commercial relevance, although relative superiority is not independently measured.
durability · 2/4 · Long employee tenure and knowledge-transfer programs support continuity. Continued dependence on key personnel and licensing intellectual property to others limit confidence in lasting exclusion of alternatives.
customer dependency · 2/4 · Customization, integration and support create credible workflow dependence. Actual contract-liability revenue supports ongoing engagement indirectly, but does not establish renewals or severe switching penalties; alternative sourcing remains possible.
erosion resilience · 2/4 · Strong order growth beyond the disclosed acquisition contribution and favorable patent appeal outcomes support resilience. Current capacity constraints and intellectual property licensing create vulnerabilities; potential cancellations are not treated as realized losses.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Collected tariff surcharges demonstrate realized cost pass-through, extending beyond announced pricing actions. The $40 million refund liability reduces revenue and limits evidence that these increases were durable; broader base-price realization is undisclosed.
retention · 2/4 · Customer-specific implementations, software support and $515 million of revenue recognized from opening contract liabilities support engagement indirectly. These disclosures do not measure repeat-customer retention or renewal rates, and customers may switch when delivery is delayed.
margin resilience · 3/4 · CSG demonstrated higher gross and operating margins despite higher personnel costs and ongoing tariffs. Volume, mix, acquisitions and tariff refunds explain the gains, supporting operating resilience without proving that pricing caused it or that the outcome is exceptional and durable.
contractual freedom · 2/4 · Implemented pricing actions, collected surcharges and the disclosed decision to refund them demonstrate some practical discretion over pricing and customer terms. Existing-contract repricing rights and limits remain undisclosed, preventing a stronger assessment.
Predictability92
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 7.31
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 2.61
Financial strength86
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 86.03
- netDebtEbitGrade
- 84.91
- interestCoverageGrade
- 73.86
- currentRatioGrade
- 100.00
- Debt / FCF (x)
- 1.98
- Net debt / operating income (x)
- 0.75
- Interest coverage (x)
- 9.13
- Current ratio (x)
- 2.35
Capital allocation97
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 22.61
- 3-year average dilution (%)
- -1.50
- 3-year average SBC / revenue (%)
- 2.75
- cashConversionGrade
- 100.00
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Nine-month operating cash flow of $1,379 million covered $97 million of capital expenditures and $520 million of repurchase cash outflows, alongside $181 million of share-based compensation. Rising supplier commitments and substantial acquisition spending introduce risk; acquired revenue is demonstrated, but acquisition returns and buyback value creation are not.
incentive alignment · 3/4 · Completed FY2023–2025 TSR awards paid zero after substantial index underperformance, demonstrating an operative downside consequence. Operating-margin awards paid 100.3%, and an adopted mandatory clawback strengthens accountability. Non-GAAP exclusions and absent actual ownership amounts limit the assessment.
execution · 3/4 · Strong 2026 order and revenue growth, improved cash generation and realized acquired revenue support execution through indirect operating outcomes. The earlier revenue downturn, capacity constraints and acquisition contributions temper attribution to management skill.
governance · 2/4 · Separate CEO and chair roles, independent committees and an adopted clawback support oversight. Restrictions on special meetings, director removal and board replacement during the declassification transition materially constrain shareholder authority.
Evidence
Our legacy of over 80 years of contribution in measurement science and the resulting breadth of our products and solutions yields a large, global installed base.
Business / Competitive Advantages / measurement heritage and installed base · Filed 17/12/2025
Keysight employs a comprehensive global direct sales channel with experienced management and highly technical sales and application engineers, including a strong local presence in both developed and emerging markets.
Business / Competitive Advantages / technical sales channel · Filed 17/12/2025
Accordingly, we have implemented structured knowledge transfer programs designed to retain critical expertise and maintain business continuity.
Human Capital / knowledge transfer programs · Filed 26/01/2026
As of October 31, 2025, the average tenure of our employees is 12.4 years.
Human Capital / average employee tenure · Filed 26/01/2026
Our three-year average employee turnover rate was approximately 6.2 percent.
Human Capital / employee turnover · Filed 26/01/2026
Total orders for the three and nine months ended July 31, 2026 were $2,091 million and $5,787 million, respectively, an increase of 56 percent and 48 percent, respectively, compared to the same periods last year.
MD&A / total orders for three and nine months ended July 31, 2026 · Filed 02/09/2026
Acquisitions had a favorable impact of 5 percentage points and 6 percentage points, respectively, on the year-over-year change for the three and nine months ended July 31, 2026.
MD&A / acquisition contribution to order growth · Filed 02/09/2026
Furthermore, some of our intellectual property is licensed to others, which allows them to compete with us using that intellectual property.
Risk Factors / intellectual property licensed to others · Filed 02/09/2026
If we fail to retain key personnel and are unable to hire highly qualified replacements, we may not be able to meet key objectives, such as launching effective product innovations, meeting financial goals, and maintaining or expanding our business.
Risk Factors / key personnel retention · Filed 02/09/2026
We have experienced a substantial increase in order volumes, which, combined with manufacturing capacity constraints and ongoing supply chain challenges, could result in extended lead times for new orders and, in some cases, delays in shipping products to customers by their requested ship dates.
Risk Factors / increased orders and capacity constraints · Filed 02/09/2026
As a result of these extended lead times, our customers may seek to cancel or reduce existing orders, particularly if they are able to obtain products with shorter lead times from our competitors or open market, and if their own end-market demand declines.
Risk Factors / potential cancellations and alternative suppliers · Filed 02/09/2026
We also generate revenues from a combination of products and services (“custom solutions”), including combinations of hardware, software, software subscriptions, installation, professional services, and other support services to meet customers’ unique specifications.
Revenue recognition / customer-specific combinations of products and services · Filed 17/12/2025
•Professional services, including installation, training, and engineering services, optimize equipment and solution adoption, utilization, and integration into customers’ unique environments.
Business / professional services and customer integration · Filed 17/12/2024
Our global scale is complemented by localized presence with trained engineers and technicians delivering our services via regional support centers located near customers or on-site teams.
Business / local service engineers and support centers · Filed 17/12/2024
Technical support for software and when-and-if available software updates and upgrades are sold either together with our software licenses and software subscriptions, or separately as part of our customer support programs.
Revenue recognition / software support programs · Filed 17/12/2025
Revenue recognized from contract liabilities for the three and nine months ended July 31, 2026 was $112 million and $515 million, respectively, based on balances at October 31, 2025, and for the three and nine months ended July 31, 2025 was $103 million and $446 million, respectively, based on balances at October 31, 2024.
Revenue / recognition of beginning-period contract liabilities · Filed 02/09/2026
While backlog on any particular date can be an indicator of short-term revenue performance, it is not necessarily a reliable indicator of medium or long-term revenue performance.
Business / limitations of backlog as a long-term indicator · Filed 17/12/2025
In addition, we recorded a $40 million liability within “other accrued liabilities” in the condensed consolidated balance sheet as a result of our decision to refund IEEPA tariff surcharges collected from our customers, with a corresponding reduction of revenue in the condensed consolidated statement of operations.
Tariffs / collected customer surcharges and refund decision · Filed 02/09/2026
This multipronged mitigation approach spans our global manufacturing footprint and sourcing strategies, as well as pricing and cost actions.
MD&A / tariff mitigation through pricing and cost actions · Filed 17/12/2025
Gross Margin and Operating Margin Three Months Ended Nine Months Ended Year- over-Year July 31, July 31, Change 2026 2025 2026 2025 Three Months Nine Months (in millions, except percentages) Gross margin 70.8 % 66.7 % 71.2 % 67.2 % 4 ppts 4 ppts Research and development $ 222 $ 176 $ 651 $ 519 26% 26% Selling, general and administrative $ 275 $ 210 $ 812 $ 609 31% 33% Other operating expense (income), net $ (2) $ (3) $ (7) $ (11) (24)% (32)% Income from operations $ 458 $ 246 $ 1,178 $ 722 87% 63% Operating margin 34.0 % 26.1 % 31.8 % 26.4 % 8 ppts 5 ppts Gross margin for the three months ended July 31, 2026 increased 4 percentage points compared to the same period last year, primarily driven by higher revenue volume, favorable mix, and incremental gross margin impact from acquisitions, partially offset by higher people-related costs.
MD&A / CSG gross and operating margins and three-month drivers · Filed 02/09/2026
Gross margin for the nine months ended July 31, 2026 increased 4 percentage points compared to the same period last year, primarily driven by higher revenue volume, favorable mix, net IEEPA tariff refund claims, and incremental gross margin impact from acquisitions, partially offset by higher people-related costs and the impact of ongoing tariffs.
MD&A / nine-month CSG gross margin drivers · Filed 02/09/2026
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (in millions) (Unaudited) Nine Months Ended July 31, 2026 2025 Cash flows from operating activities: Net income $ 1,027 $ 617 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 116 97 Amortization 202 104 Share-based compensation 181 129 Deferred tax expense (benefit) (28) (58) Excess and obsolete inventory-related charges 29 30 Gain on sale of investments (6) — Unrealized loss (gain) on investments 38 (39) Other non-cash expenses (income), net 13 5 Changes in assets and liabilities, net of effects of businesses acquired: Accounts receivable (138) 173 Inventory (26) (21) Accounts payable 72 29 Employee compensation and benefits (20) (8) Deferred revenue 64 (12) Income taxes payable (63) 42 Other assets and liabilities (82) 96 Net cash provided by operating activities 1,379 1,184 Cash flows from investing activities: Investments in property, plant and equipment (97) (90) Acquisitions of businesses and intangible assets, net of cash acquired (33) (3) Purchase of investments (27) (4) Proceeds from sale of investments 22 — Net cash used in investing activities (135) (97) Cash flows from financing activities: Proceeds from issuance of common stock under employee stock plans 68 63 Payment of taxes related to net share settlement of equity awards (41) (38) Treasury stock repurchases, including excise tax payments (520) (278) Proceeds from issuance of long-term debt — 748 Payment of acquisition-related consideration (21) — Debt issuance costs (1) (8) Net cash provided by (used in) financing activities (515) 487 Effect of exchange rate movements 3 9 Net increase in cash, cash equivalents, and restricted cash 732 1,583 Cash, cash equivalents, and restricted cash at beginning of period 1,890 1,814 Cash, cash equivalents, and restricted cash at end of period $ 2,622 $ 3,397 Supplemental cash flow information: Interest payments $ 90 $ 39 Income tax paid, net $ 127 $ 74 Investments in property, plant and equipment included in accounts payable $ 18 $ 19 The accompanying notes are an integral part of these condensed consolidated financial statements.
Condensed consolidated statement of cash flows / nine months ended July 31 · Filed 02/09/2026
13. COMMITMENTS AND CONTINGENCIES Commitments As of July 31, 2026, our non-cancellable commitments to contract manufacturers and suppliers were $704 million, compared to $450 million as of October 31, 2025.
Note 13 / non-cancellable supplier commitments · Filed 02/09/2026
The increase was primarily driven by advance purchase orders placed to support fulfillment of a strong order backlog.
Note 13 / purpose of increased purchase commitments · Filed 02/09/2026
Acquisition of Spirent Communications plc In the fourth quarter of fiscal 2025, we acquired all of the outstanding common stock of Spirent Communications plc (“Spirent”) for $1,415 million, net of $127 million cash acquired, using existing cash.
MD&A / Spirent acquisition consideration and funding · Filed 02/09/2026
For the three and nine months ended July 31, 2026, our acquisition of Spirent resulted in incremental revenue of $61 million and $204 million, respectively.
MD&A / incremental Spirent revenue · Filed 02/09/2026
FISCAL YEAR 2025 SHORT TERM INCENTIVE PLAN RESULTS Metrics H1 Achievement % of Target H2 Achievement % of Target Non-GAAP EPS 104.0 107.9 Keysight Non-GAAP Revenue Growth 101.4 102.8 Non-GAAP CSG Revenue Growth 102.6 103.9 Non-GAAP ESI Revenue Growth 88.2 82.1 Non-GAAP KGSO Revenue Growth 101.2 103.9 KGSO Order Plan 98.2 105.0 Keysight Worldwide Quota (“WWQ”) 98.8 102.7 viii 2026 Proxy Statement TABLE OF CONTENTS LONG-TERM PERFORMANCE PLAN (“LTP”) RESULTS Fiscal Year 2023 - Fiscal Year 2025 PSU Grants: TSR TSR Relative to S&P 500 Total Return Index for FY23-FY25 Pay-for-Performance Results Threshold (25% Payout) Target (100% Payout) Maximum (200% Payout) 40 percentage points below index Equals Index 40 percentage points above index S&P 500 Total Return Index 76.0% Keysight TSR 1.45% 74.55 ppts below Index 0.0% Payout Fiscal Year 2023 - Fiscal Year 2025 PSU Grants: Non-GAAP Operating Margin (“Non-GAAP OM”) Non-GAAP OM Goals for FY23-FY25 Actual OM Achievement Year Threshold (50% Payout) Target (100% Payout) Maximum (200% Payout) 5 points below annual Non-GAAP OM plan Achievement of annual Non-GAAP OM plan 5 points above annual Non-GAAP OM plan 2023 24.8% 29.8% 34.8% 30.3% 2024 22.4% 27.4% 32.4% 26.3% 2025 20.9% 25.9% 30.9% 26.0% 100.3% Payout See the “Compensation Discussion and Analysis” section of this Proxy Statement for more information.
Compensation / fiscal 2025 short-term and completed three-year performance results · Filed 26/01/2026
Non-GAAP OM excludes, primarily the impacts of amortization of acquisition-related balances, share-based compensation, acquisition and integration costs, restructuring and related costs, non-recurring items such as goodwill impairment, legal settlement, gain/loss on divestitures and others.
Compensation / exclusions from operating-margin incentive measure · Filed 26/01/2026
The Recovery Policy applies to performance-based incentive compensation received on or after October 2, 2023, and provides for the mandatory recovery from current and former executive officers of erroneously awarded incentive compensation in the event of an accounting restatement of the Company’s financial statements regardless of fault or misconduct.
Compensation / adopted mandatory recovery policy · Filed 26/01/2026
Highlights of our Fiscal Year 2025 governance practices include, among others: Board Composition • Every director has senior leadership experience • Average Board tenure of 7 years and 7 months (as of January 31, 2026) Board Independence • Nine of ten continuing directors and director nominees are independent • Separate CEO and Board Chair • Lead Independent Director with clearly defined role • Independent standing Board committees • Regular meetings of our independent directors without management present • Annual evaluation of the Chief Executive Officer (“CEO”) by independent directors Board Processes • Procedures for stockholders to communicate directly with the Board • Annual advisory vote on executive compensation • Annual board and committee self-assessment process • Stockholder outreach program Corporate Governance Policies • Stock ownership guidelines for executive officers and directors • Risk oversight by the Board and its committees • Policies prohibiting hedging, short selling and pledging of our common stock for all employees and directors • Periodic review of committee charters and Corporate Governance Guidelines • Compensation and Human Capital Committee oversight of human capital management matters • Board oversight of corporate responsibility programs, environmental risks and opportunities STOCKHOLDER COMMUNICATION Stockholder communication is essential to our ongoing review of our corporate environmental, social, governance and executive compensation programs and practices.
Governance practices / board independence, leadership and policies · Filed 26/01/2026
The co-existence of directors serving differing terms will make the replacement of incumbent directors during this interim period more challenging; •a provision that shareholders may only remove directors with cause; provided, however that upon completion of the declassification exercise in 2029 referenced above, this provision will allow for the removal of directors with or without cause; and •the ability of our directors, and not shareholders, to fill vacancies on our board of directors.
Risk Factors / transitional board classification and director removal restrictions · Filed 02/09/2026
•the inability of our shareholders to call a special meeting;
Risk Factors / shareholders cannot call special meetings · Filed 02/09/2026
Revenue for the three and nine months ended July 31, 2026 was $1,846 million and $5,163 million, respectively, an increase of 36 percent and 31 percent, respectively, compared to the same periods last year.
MD&A / total revenue growth · Filed 02/09/2026
Revenue was $5,375 million, $4,979 million, and $5,464 million in 2025, 2024, and 2023, respectively.
MD&A / fiscal 2023–2025 revenue history · Filed 17/12/2025
On October 16, 2025, we sold Spirent’s high-speed ethernet, network security, and channel emulation business lines for $399 million to Viavi.
Acquisitions / sale of specified Spirent businesses to Viavi · Filed 02/09/2026
Centripetal appealed seven of these findings, and as of July 2026, the Federal Circuit Court of Appeals affirmed the USPTO’s decision of invalidating all claims of four challenged patents and all but four claims of a fifth patent.
Commitments and contingencies / patent appeal outcomes · Filed 02/09/2026
