Keysight at Citi’s Conference: Strategic Growth Insights

On Wednesday, 03 September 2025, Keysight Technologies (NYSE:KEYS) presented at Citi’s 2025 Global Technology, Media and Telecommunications Conference. The company discussed its strategic growth, highlighting increased growth expectations for fiscal year 2025 amid strong wireline and semiconductor performance. Despite challenges in the wireless segment, Keysight remains optimistic about future prospects.

Key Takeaways

• Keysight raised its fiscal year 2025 growth expectation to 7%, up from initial forecasts of 5%.
• Strong performance in wireline, driven by AI and advancements in 800G and 1.6 terabit technology.
• The software business now accounts for 25% of revenue, offering significant recurring revenue benefits.
• Ongoing strategic acquisitions aim to enhance capabilities in wireless networks and simulation technologies.
• The aerospace and defense sector remains stable, supported by U.S. and NATO defense spending.

Financial Results

• Fiscal year 2025 guidance increased from 5% to 7% growth.
• Recurring revenue approaches 30% of total revenue.
• Software contributes 25% of revenue, with gross margins higher than industrial segments.

Operational Updates

• Wireline Business: Experiencing double-digit growth, driven by AI and advancements in 800G technology.
• Wireless Business: Facing a decline but sustained by 5G evolution and new applications like non-terrestrial networks.
• Aerospace and Defense: Stable growth due to modernization and increased NATO spending.
• Software Business: Significant growth through internal and customer synergies.

Future Outlook

• Wireline: Continued momentum expected with transitions to higher speeds.
• Aerospace and Defense: Anticipated strength due to stable U.S. budgets and European commitments.
• Auto: Cautious outlook due to challenges in EV manufacturing, but investment continues in software-defined vehicles.
• 6G: Research is advancing, with commercialization expected by 2030.

Q&A Highlights

• 6G Opportunity: Growth expected by 2027-2028, focusing on non-terrestrial networks and AI integration.
• Share Gains: Strong R&D investment positions Keysight favorably for market recovery.
• Future Growth: Expansion anticipated in digital twins and data center emulation.

For further insights, please refer to the full transcript below.

Full transcript - Citi’s 2025 Global Technology, Media and Telecommunications Conference:

Unidentified speaker: For, for joining us for the, the Keysight fireside chat. I’m joined by Kailesh and Neil from Keysight. We will, do a couple questions here, and then we’ll take questions from the audience if, if folks have them. But maybe I’ll kick off, Neil, with you. Just maybe for folks, just kinda level set on your last earnings call.

Full year guidance was kind of at the higher end of your long term average. Yeah. So it’d be great to talk about what were some of the contributing factors, what’s working in driving sort of that better than expected performance?

Neil, Keysight: Yes, absolutely. It’s nice we’ve been able to take up our growth expectation for our fiscal twenty twenty five here two quarters in a row. We started the year last November thinking things would be at the lower end of our long term growth range, 5%. And then we increased that to 6% at the end of the second quarter and then to 7% here at the end of the third quarter. And I think a number of factors at play.

I think some of the areas that we expected to be strong, most notably wireline have been even stronger than expected. I think we expected a rebound in the semiconductor markets this fiscal year. Not only we’ve seen that, it’s maybe been a little bit more robust than we had forecast. And then the one area that maybe is directionally different than we expected is wireless, where I think our base case coming into the year was that after a couple of down years that this business would stabilize at a lower level and be more or less flat. And in actuality, we’ve gotten some nice growth.

It’s not growing at the same rates it was a couple of years ago, but it’s growing. It’s a big business for us north of $1,000,000,000 and enough to move the needle on growth rate for Keysight as an entire company. So generally speaking, I feel like things this year have been better than expected. I feel like as we enter FY 2026, those secular themes are aligning pretty well for us with maybe just a little bit of caution around tariffs and the fact that we’re still only four months or so removed from Liberation Day, if you will, four or five months removed from Liberation Day. And I don’t yet know that we’ve achieved a market equilibrium.

So we’ll see.

Unidentified speaker: So when you think about next year, you think about that range, where do you see the pockets of outperformance, underperformance for sort of ’26 just at a high level?

Neil, Keysight: Yeah. I mean, I I I think we continue to see momentum on the wireline side of things. I think the transitions between the various speeds, 400 to 800, 1.6, those things are shrinking. The industry is working to find alternatives to the proprietary NVIDIA standard. And so all of those things are driving robust investment in research and development that’s benefiting Keysight and we would expect to end FY 2026.

I think aerospace defense is another area we expect to be strong, not just based on the size of The U. S. Budget, but based on the increasing spending commitments of our NATO allies in Europe. And so that tends to bode well. I think the area of caution continues to be auto.

We are seeing investment in the software defined vehicle side of that. So that’s autonomous driving, infotainment systems, in car electronics. But the EV side, the manufacturing side continues to be challenging. So that’s one area where

Kailash, Runs the largest segment, Keysight: I think we continue to be

Neil, Keysight: cautious as we enter FY ’26.

Unidentified speaker: Got it. Thank you for that. So Kailash, for those who don’t know, Kailash runs the largest segment for Keysight, approximately 70% of kind of the overall business, which includes kind of the commercial communications business as well as the aerospace defense business. So I I wanted to dig in a little bit more and kind of build on what Neil was saying. Maybe let’s talk a little bit about wireline and the AI build out.

And if we could just get into some of the detail around the specific applications, what kinds of customers are deploying, what kinds of technologies that’s driving some of the outside growth. So just putting a little bit more specificity around that, that’d be helpful.

Kailash, Runs the largest segment, Keysight: You bet. Yeah. We’re just over the last, eighteen months, twenty four months, AI driven acceleration is, really propelling our wireline business to to growth. Right? And we’ve put up some strong double digit growth numbers this year.

When you step back and look at this customer base, you have the chipset folks, people that are making the AI chips, GPU makers and so forth. They’re using our capabilities in their r and d labs to characterize, high speed interfaces. If it’s silicon photonics, they’re testing and validating designs of integrating optics into into wafer packages and and so forth. So there’s a lot of business, that we get from the chipset makers as you go and drive the different speed grades from 100 g to 400 g to 800 g. Then then when you kinda move up one level, all these chips go into components.

On every end of an optical cable, you have transceivers, converting opticals, electrical signal into optical signal and and vice versa on the other side, enabling these data center interconnects. Right? The data centers are kinda getting distributed. It’s going into areas where you have energy and power. That’s the that’s the constraint now.

And all of these data centers are interconnected, through through optical cabling, and you need switches and transceivers to at going at these speeds to enable those interconnects. And we help with those component designers with verifying their power, amplitude, many different KPI for, again, for different speed grades and and and standards. Then you go one level up from components. You have these functional subsystems. You have, the routers and the switches.

These are large scale network functioning blocks that go inside the data centers. And, think of the Ciscos and the Juniper networks of the world, and we’re enabling them with, emulation capabilities. We emulate Ethernet traffic, but we’re also emulating AI workloads and traffic for them. We’re emulating security constraints and considerations for them so that they’re if you’re a firewall maker, you’re testing and validating and and designing your your solutions to be vulnerable, to to not have any of these security vulnerabilities. And then right up at the top of the food chain, you have the hyperscalers.

And the hyperscalers, that’s been a new addition as AI has progressed. They’re putting data centers in these AI racks and clusters. They need to emulate these AI racks and clusters in their labs, and, they need to test for, performance, you know, latency of models, how long does it take to train models, how long, what kind of energy consumption is, is is how much energy is consumed when you train these models? Those kinds of experiments they do, and they have to do this, to ensure that whatever configuration AI data center configuration they’re coming up with, is all solid and optimized. They test for GPU utilization.

So we’ve actually added more, capabilities, to our, core product portfolio to our wireline protocol, product portfolio to enable hyperscalers with these new capabilities. So all in all, we’re kind of expanding the ecosystem. We see a lot of startup companies come in, as well, and that’s been a a pretty positive growth driver for us.

Unidentified speaker: Great. Thank you. Sticking with the wireline business, when when we talk about sort of the business case, you know, the market is transitioning to higher speeds. We were at sort of 400, sort of 800 now sweet spot, and then we’re moving to 1.6 terabits. What what portion where we are where are we in the life cycle of that?

How much of the business today is kind of focused on certain speeds? And what do you see as the growth opportunity as people move to kind of 1.6 and and beyond?

Kailash, Runs the largest segment, Keysight: Yeah. The bulk of the business today is in 400 gs. The deployments are largely occurring in 400 gs. That opportunity has not peaked yet. And to Neil’s point, the these design cycles are getting compressed.

So there is an overlapping effect. So as 400 gs deployments are growing, we see 800 gs deployments also growing on a smaller scale. At this point, there is enough activity on 800 g r and d and early 1.6 tera r and d. So all of these are sort of happening in in parallel. Right?

I’d say 400 g deployments, that’s bulk of the business. 800 g deployments be starting a lot of r and d on 800 g and early r and d activities on 1.6 tera.

Unidentified speaker: Got it. Maybe let’s switch to the wireless business if we can. And and Neil kinda referenced this. I think most people realize five g is kinda largely behind it, but it has been kind of a period of of strength recently. What are the sort of pockets of growth, whether it’s kinda satellite, ORAN?

What are the areas you’re seeing that are kinda continuing to allow this market to kinda hang in there while we kinda bide our time for for a six g world?

Kailash, Runs the largest segment, Keysight: Yeah. I don’t know if I would say the five gs business is behind us. The strong growth rates growth years are are probably behind us. So what we you know, we’re obviously between cycles between the five gs and the six gs cycle. The business obviously over the last couple of years has experienced double digit decline.

So we’re coming off of those lows. There is ongoing evolution of the five gs standard that’s contributing to R and D activity in our customers’ labs. Also for the first time last year smartphone subscription started to grow and that elevates activity in the whole supply chain. You might be aware that we also enable component makers, whether you’re designing antennas for smartphones or other integrated circuits that go into a smartphone. Those all get a refresh when when subscriptions go up.

So there’s been an elevation of activity in the supply chain. So that’s kinda number one. Ongoing research in five g that’s going on. But MTN, non terrestrial network application, has been a a key focus area for many, many customers. There’s a a new ecosystem that’s brewing satellite network operators, you know, the big companies that are involved in putting up satellites, and that requires a lot of r and d activity.

And the margin for error there for a designer is very, very, very, very small, or, you know, you just can’t go take a prototype and put it up in the sky and then see if it works or not. All of these scenarios have to be emulated in your lab. And and we’re we’re enabling that r and d workflow, phased array antenna design, telemetry systems that go into satellites, camera modules, transmit receive systems. We emulate customers’ orbits. We emulate satellites.

We emulate ground stations, the communication links back and forth. So that’s been a positive area, and, it’s likely to continue as you move into into the six g space. And, and finally, six g research itself has started to pick up, and now we see, customers, transitioning from pure research into a more, development for pretrials. So that’s something that’s occurring that’s helped the business grow as well.

Unidentified speaker: Great. Thank you for that. I’m gonna switch gears and move away from networking, but maybe I’ll just ask the audience if there’s any questions around this piece of the business. Alright. I’ll take that as a no.

Maybe move into the the aerospace defense business, and and Neil touched on some of the kind of resilience you’re seeing in that business and growth in that business. But maybe talk a little bit about the core applications, getting a one level deeper in terms of where your differentiation is, and then maybe kind of what you’re seeing in the overall demand environment for that.

Kailash, Runs the largest segment, Keysight: Yeah. We’re excited about this business. It doesn’t get a lot of airtime, but it’s been a a pretty steady business for Keysight for for decades. So we’ve we’ve enabled key technologies and and and products of various defense departments and MODs through engagement with with prime contractors. Right?

This is this has been going on for multiple years. What we do there is you could think of our applications our our products serving four different applications. One is defense modernization investment in electromagnetic spectrum operations. If you’re building a next generation system, it’s got communication systems. It’s got jamming, anti jamming systems.

It needs to withstand signals in in different directions. It’s got radar. So not only do you need to design and test these solutions, you also need to see how it would operate in a in a in a in a theater, in a forward looking in a field theater. And you need to ensure that your your system is not is not jammed by an enemy signal, things like that. So we help customers design those systems in the lab, in their labs.

So that’s something that we do. We also enable space and and satellite applications. So this is some we we built a common core technology in our comms group, and we parlay that. We leverage that into aerospace and defense. All of the technologies are for for dual purpose, dual use.

So here, we’re enabling next generation of GPS satellites. We’re enabling new LEO satellite constellations. We’re enabling interoperability between commercial satellite systems as well as, you know, defense satellite systems, where where that that might be applicable. So that’s another category. We also are in in field operations in a forward looking area.

If you need to construct a network, there is gear that you need to, use to ensure that, those networks are viable and, operational, so we participate in that in that space. And finally, one of the things that’s gaining a lot more interest is government research and funding into areas like cybersecurity. You have, applications like quantum. So these are probably the the big category areas that, we serve with our with our portfolio.

Unidentified speaker: Thanks for that. In terms of the strength financially you’re seeing, how much of this is just the playing out of your existing backlog versus, you know, we’ve seen a lot about the rearmament of Europe and kind of expanded budgets going forward. Like maybe talk about maybe, Neil, this a question for you, but just kind of the mix of that demand around aerospace and defense and kind of where it’s coming for in immediate term and then kind of over the more medium term.

Neil, Keysight: Yes. I mean, we’ve said that our business is historically a little bit more than 50% U. S. And a little bit less than 50% ex U. S.

Is the rough geographic split. I mean, I think on the positive side now, we’ve seen about eight or nine consecutive years of increasing U. S. Defense budgets across presidents of two both political parties. So there’s been a nice stability on U.

S. Side and a recognition of the need to continue to invest, particularly in defense technology. And so that stability has been helpful. I think the change that’s coming, as I mentioned earlier, is this increased commitment from NATO allies primarily in Europe to spend on defense at a greater percentage of GDP. And they’re going to layer into those spend rates over the course of the next decade.

But these prolonged commitments. And I think that opportunity is really more in front of us. I think we’re starting to see the early engagements with the big aerospace defense contractors in Europe. These are companies with which we’ve had longstanding relationships. But it takes a while, right, from budgets to programs to proposals to quotes to orders and ultimately to revenue when we’re engaging in that process.

But I do think this is an opportunity that’s very much in front of us and should be a catalyst to hopefully enable increased growth in this portion of our business.

Unidentified speaker: Great. Maybe turning to the other side of the business, the Electronics and Industrial side, been a pretty stable business, kinda growing quite nicely over the last couple of quarters. What have been sort of the the big drivers of growth there? And then do you expect this robustness to kinda continue going forward?

Neil, Keysight: Yes. I’ll start and then I don’t know if Kailesh might have some things to add. I think I’d say two kind of themes. Well, first of all, we the semi market had been kind of down for a prolonged period of time and we’d expected a bounce back in semi that we’ve in fact gotten things like high bandwidth memory, silicon photonics, the move to smaller process architectures are drivers there. And certainly, there is a correlation between those catalysts and what’s happening in the AI space in commercial comms.

And I think we’re seeing a similar halo effect from kind of AI and wireline also into this general electronics business, where a lot of the less sexy, if you will, but underlying things, things like PC boards and interconnects and cables and that kind of stuff that maybe doesn’t draw attention from Kailesh and his team, but there’s a broad set of largely Asia based manufacturers that are making that stuff and they’re benefiting from the volume impacts of the build out of these data center environments. And and we’re seeing that same we’re seeing similar uplift from these wireline in advanced research as well, which is also often in the education environments, we’re in the treasury and the general electronics market. So I think those themes are constant across both of our businesses and certainly helping us on the electronic industrial side.

Unidentified speaker: Great. And then let’s talk a little bit about your software business and kind of what you’ve done to grow it. It’s now a billion dollar business Yeah. Roughly or so. And so it’d be great to talk kinda how you use it, the various flavors it comes in, where is it adding value, and just sort of educating us all a little bit more about kind of the value both certainly provides value financially to Keysight and shareholders, but kind of the value drivers and for customers as well.

Neil, Keysight: Do you wanna take that? Or

Kailash, Runs the largest segment, Keysight: Yeah. So when you when you think about the software, right, we have software that’s built into our core products. We call that instrument firmware. It’s needed to operate the instrument. There are some measurements that KPI and measurements that you provide.

Obviously, we monetize that aspect as part of our physical layer portfolio. But then where the software really kicks in is in our protocol layer portfolio where we emulate a wireless stack or a wireline wireline stack. The software content in in those solutions are a lot it’s it’s significantly higher relative to our physical layer portfolio. And they can also turn independently, meaning we provide a solution to our customer with software and that software gets revved on a semiannual basis. Actually, we rev it multiple times a year, but they you know, we have support and renewal contracts just on the software because you have to now keep up with all of the the standards, whether it’s in in wireless, it’s about, you know, five g advanced, release 19, and and so on and so forth.

If it’s nonterrestial network, we may have to update, the software stack, to change the communication signal and latency requirements, etcetera. So all of that drives ARR and software content on the wireless stack. Similarly, on the wireline stack, there’s a number of networking protocols. It’s it’s Ethernet, but if you look at the scale up architectures within a rack, you have extreme short reach. You have, medium reach.

You have very short reach. You have, you know, PCIe, CXL, of standards, you know, memory to memory, memory to controller, GPU to GPU. All of these, component communications are governed by protocols, which, again, are largely software driven. So we we enable our customers by providing those capabilities and refreshing those capabilities, keeping up with those standards. And then you have our our simulation portfolio, which is stand alone software, and that’s used largely by chip designers and component designers to model electrical conditions, thermal conditions, multiphysics types of simulations.

That’s at the component level. So, I mean, that’s sort of how that pyramid gets built. You’ve got a large physical layer portfolio with core measurement capabilities, and then you have the protocol layer, which is pretty heavy in software that can that can turn. And and then you have a standalone software portfolio, which is also an ARR subscription based business.

Unidentified speaker: And is there synergy across the various stacks and and different portfolios that allow you

Kailash, Runs the largest segment, Keysight: to drive greater customer impact than also greater financial impact? There’s there’s definitely r and d’s internal r and d synergy that we we drive, especially between our simulation software and the physical layer portfolio. And there’s also some level of customer synergy,

Unidentified speaker: but this is something that we’re exploring on an ongoing basis. Yeah. And then, Neil, for you, when you think about this software business, talk about, obviously, the financial benefits and then where it can help you from a margin perspective?

Neil, Keysight: Yes, certainly. So as you said, 25 of the company’s revenue is software, about just under 40% of software and services. And so those two businesses have both each have significant recurring component. So we’re approaching 30% recurring revenue. Obviously, that brings us stability to our business.

And we also find that these businesses bring a non insignificant margin benefit, right? The software business definitely skews heavier in the CSG side of the business than in the industrial side. We see that reflected in the gross margins of that business, which tend be several points higher. And so I think as we look forward, we continue to look to ways to expand the portfolio with some pending acquisitions to expand that engineering software component of our business. I think we continue to see our customers, the entire industry talks about shifting left, right?

Our customers want to do more work in simulation and in emulation in the software space before they build expensive prototypes. And we’re working to build the portfolio for us to essentially follow them on that shift left and enable them and then draw or enable migration from the simulation and emulation to the real world via our test and measurement tools and provide provide a migration path.

Unidentified speaker: That’s great. Any other questions for the audience? I’m gonna move forward. K. Maybe just talk about some of those m and a deals.

You’ve got a couple things that are kinda pending closure. It’d be great to just understand or refresh for folks kinda where those stand. And maybe just what those were, what their strategic rationale is because the announcements were a couple months behind us.

Neil, Keysight: Yeah. A few months now. So we have we actually have three three pending acquisitions all tied up in kind of various levels of regulatory approval. The first one was Keysight’s acquisition of Spirent. This is a business that’s going to get a SAM expansion into live wireless networks as well as into precision location to precision GPS types of markets.

We believe those precision GPS markets are going to be critical as we migrate into six gs. They’re important for automotive markets as you think about autonomous driving. They’re important for aerospace defense end markets. So again, direct applicability into a number of the markets in which we play. That acquisition is as we said, it’s migrating through various states of regulatory approval.

The big outstanding element at this point is approval from China. Those discussions are going well. And again, we expect to get that acquisition closed by the end of our current quarter. Now we have two businesses that we are buying as a result of the combination between Synopsys and ANSYS, similarly tied up in regulatory approval. Both of those will be additions to our design engineering software portfolio.

One is around optical simulation, the optical solutions group out of Synopsys. Again, we have RF and Microwave EDA business. We have Physical Air, computer aided engineering business that we acquired when we bought ESI, and now you’re getting optical modeling capabilities via this business. And then the second one is Ansys’ Power Artist business, which essentially gets us power simulation and emulation capabilities. And so again, working to build out a more robust set of kind of multiphysics capabilities for simulation and emulation to enable our customers.

Unidentified speaker: That’s great. And so assuming those are closing, as you said, how should we think about capital priorities for 2026, deleveraging, capital return? Maybe talk a little bit about how you guys analyze what your opportunities are and what your

Neil, Keysight: Yes, it’s a great question. So first of all, these acquisitions are not going to stress us from a leverage perspective. We’re still going to remain below our two turns leverage target going forward. And I think if there was one benefit that came out of the relatively prolonged regulatory approval processes that the underlying businesses continue to throw off large amounts of cash. And so we’re not going to be in any way restrained from a capital allocation strategy position even as we close these acquisitions.

So I think first and foremost, we’re going to be focused on making sure we capture value from these acquisitions that have been in process for a while. Want to get the integrations underway, get those value capture efforts underway before we move on to the next thing. But I think once we’re off and running on that, I think the we really have the full suite of opportunities in front of us. I think you’ll see us continue to return capital via our buyback program, at least at the anti dilutive level. And as you’ve seen from us over the past couple of years, we’ve tended to be significantly more aggressive than that.

So we’ll continue to strike the right balance, continue to look to ways expand our end markets via M and A while being proactive with returning capital. Really no constraints from a from a capital allocation standpoint.

Unidentified speaker: Great. All right. Any other questions from the audience? Take that as no. Oh, yes.

Go ahead. Alright. Here.

Kailash, Runs the largest segment, Keysight: How do you help in

Unidentified speaker: general this framework relative to what we’ve seen prior iterations? That was the question. What do we need it for? Are we using five g enough already? What is the time frame?

Kailash, Runs the largest segment, Keysight: Yeah. Thank you. Thank you for the question. We’re Repeat the question just because it wasn’t on

Unidentified speaker: the Yeah.

Kailash, Runs the largest segment, Keysight: I guess the question is, how do you sort of frame the six g opportunity? Have we do we not have enough five g? When is six g gonna take off, if I’m paraphrasing? So this the next generation six g is is nothing new from how the industry progresses. So every ten years, there’s a a generation improvement in the in the wireless space, and this has been continuing since since one g.

And we have we’re right now between cycles, five g and six g. Five g standard progression continues. The deployments continue. There is more some of these newer applications like non terrestrial networks are are giving it a a boost, if you will. And and let’s not forget that even four g is only about 70 of the world.

So, you know, five g has a has a long way to go. We see research on on any next generation sort of pick up one or one or two years after the previous generation peaks. So we’ve seen six g research, occur over the last two two years. It’s largely been concentrated with the academia and institutions, but now we’re seeing a shift. Commercial entities are starting to, explore topics.

The first, six g standards meeting occurred in in Seoul in March. Many topics were, were discussed, but there are four key themes. Right? One is nonterrestrial networks. Satellite connectivity and terrestrial networks are gonna have to coexist.

So that’s one. Second thing is AI, AI in networks, AI in in devices. So that’s that’s a topic that’s getting a lot of attention and exploration. Third is, spectrum, new spectrum. What’s been code there’s a code word here for, new spectrum, f r three, which is between f r one and f r two.

It’s, sort of the sweet spot to give you more bandwidth, but also practical from an implementation point of view. And then then there’s a fourth application, integrated sensing and communications, where communication signals are being used to sense size shapes of objects, again, enabling robotics and automation types of applications. So all of this is spurring even more research and and development. And what customers are likely to do, what the industry will do over the next couple years, to three years is do a lot of pretrials and pre standards development. The standard is expected to be formalized in March 2029 and and then commercialization probably a year or year and a half

So you’re looking at commercial commercialization by the end of the decade, but a lot of activities will build up to that. And we would expect to see some meaningful contribution and growth from ’6 towards the ’27 and and into ’28. Any

Unidentified speaker: other questions from the audience?

Unidentified speaker: Here’s a brief comment on share gains at not all your competitors or Apple to Apple for two, but at your system, but then some of the ones that are in the public markets. What share do you think you’ve gained in any stand out business segments?

Kailash, Runs the largest segment, Keysight: We have the broadest. I don’t know if I can comment on specific share gains relative to specific competitors. But I will say that we’ve had a we have the broadest portfolio. We have the deepest portfolio on the wireless side, wireline side, aerospace and defense and some of the other markets as well. And as the and we have the deepest engagements with market defining customers in in all these areas.

And, you think about electrical you know, physical layer technologies, electrical, digital, optical, you know, we we have that covered. From a stack point of view, we cover everything from layer one all the way to the application layer. And with with aerospace and defense, we’re able to participate in different areas, defense monetization space satellite and and government research types of things. So I think overall, we have a and we’ve been consistently spending, you know, more in r and d than any of our our competitors. Some of the the the revenues, we we our r and d budgets exceed revenues of some of our our competitors.

So overall, I think it’s positioned us well as the market has recovered and as some of these secular trends have progressed, it’s helped us pick up some share.

Unidentified speaker: On next year, given your of m and a

Unidentified speaker: target, the opportunities you see and or the artificial layer looking five years out, is there a basic target we can start to envision? Are they gonna be more equal in size in terms of your risk opportunities? We’ll have to hear some comments about the term.

Neil, Keysight: You’re about hardware versus software or protocol versus physical layer?

Kailash, Runs the largest segment, Keysight: We know, you’re gonna have the the pro the physical layer business, you could say it’s it’s always there. It’s steady. Everything finally needs to connect to the physical world. It’s about digital optical and microwave millimeter wave signals. But we do see more expansion in protocol and application layers.

Application layers, particularly digital twins. I mean, you think about that, most of our customers, satellite customers, data center customers, they want to emulate things. They wanna simulate things not just at the component level, but they wanna simulate the whole data center. How will an entire data center perform, you know, when you inject it with these types of AI workloads? So those are driving new requirements and new capabilities that we’re offering customers and will continue to offer customers, and I’ll see.

I I I do see that expanding as as we move forward in addition to, you know, what we have in in physical and protocol. Yeah.

Unidentified speaker: Well, thanks. I think we’re out of time. You, gentlemen, for sharing with us today and We attending our appreciate it as always. And thank you all for your questions. Thank you.

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