Keysight Technologies Inc (NYSE:KEYS) stock rose 4.07% (As on May 21, 11:22:00 AM UTC-4, Source: Google Finance) after the company beat Wall Street expectations for second-quarter revenue and profit, driven by strong sales in its communications segment. The company saw strong sales for its communications equipment from both commercial customers and clients in aerospace, defense and government sectors, with segment sales reaching $913 million, up 9% from last year. The Santa Rosa, California-based company also reported 5% increase in quarterly revenue to $393 million in its electronic industrial business, helped by artificial intelligence-powered demand from semiconductor and general electronics companies. This growth offset weakness in automotive demand, as the company faced ongoing challenges from muted R&D activity in EV battery development. Non-GAAP net income was $295 million, compared with $247 million in the second quarter of 2024. Cash flow from operations was $484 million, compared to $110 million last year. Free cash flow was $457 million, compared to $74 million in the second quarter of 2024. As of April 30, 2025, cash and cash equivalents totaled $3.12 billion.

KEYS in the second quarter of FY25 has reported the adjusted earnings per share of $1.70, beating the analysts’ estimates for the adjusted earnings per share of $1.65, according to data compiled by LSEG. The company had reported the adjusted revenue growth of 7.4 percent to $1.31 billion in the second quarter of FY25, beating the analysts’ estimates for revenue of $1.28 billion. Orders grew 8% to $1.316 billion, driven by strong demand for AI solutions and healthy growth in the aerospace, defense, and government sectors. The company’s operating margin improved to 25.2%, representing a 100 basis point increase year-over-year. Core operating margin, which adjusts for acquisitions and currency impacts, reached 25.6%, up 140 basis points from the previous year. Keysight’s business model, accounting for 36% of overall revenue in Q2, while recurring revenue represented 28% of the total. The company repurchased approximately 1 million shares for a total consideration of $150 million during the quarter.

Keysight also raised its full-year revenue growth target to the midpoint of its long-term range of 5% to 7%, compared to a previous forecast at the lower end of that range.

For the third quarter, Keysight expects revenue between $1.305 billion and $1.325 billion, compared to the $1.3 billion consensus. The company forecasts adjusted EPS of $1.63 to $1.69, largely in line with analysts’ $1.69 estimate.