If everybody can go ahead and please take their seats. We're going to go ahead and get started with the next session. Thanks everyone for joining us. For those of you who don't know me, I'm Matt Niknam, Communications Infrastructure, Networking, and Hardware Analyst here at Truist, and we're very pleased to be joined by Keysight Technologies. We've got EVP and CFO, Neil Dougherty, as well as SVP and President of the Communication Solutions Group, Kailash Narayanan, joining us. Thank you for being here. Thank you. Maybe just to start, from a high level, Keysight's the market leader in test and measurement. You've recently described yourself as a design enablement partner across the full innovation life cycle. For investors who may be newer to the story, how would you define what Keysight actually does today from a high level? Yeah. Why don't I start, and I can let Kailash add on? I always joke, if I was describing it to my mother, I would say that, at the highest level, Keysight provides tools, hardware and software tools, and solutions to industries that employ electrical engineers. At a fundamental level, that's what we do. Right now, that's being driven by the wireline ecosystems, at the AI data center specifically, the migration right now from 5G to 5G-Advanced, but soon to 6G, advancements in aerospace defense, broader electronics ecosystems, autonomous driving, and semiconductor advancement are kind of the big industries in which we serve. We serve those industries, again, primarily in the R&D lab. More than half of our revenues come from sales into our customers' R&D labs, where we're enabling the design ecosystem from measurement of core physical layer measurements, all the way up through protocol layer and application layer software solutions. Also in solutions in manufacturing, testing electronics at the end of the manufacturing line for functionality, and then a smaller portion of our business in operational or post-deployment type applications. I don't know if you want to add anything to that, but We'll pivot to Kailash's domain. Communication Solutions Group, it's about three-quarters of sales at Keysight. Two different businesses. You've got commercial comms. You've also got aerospace defense. Can you walk us through what sits under you, how the organization's structured, and your top priorities as you head into fiscal 2027? Well, it's a good time for Keysight. It's a good time for the Communication Solutions Group business. As you've identified, we have the commercial comms business and the aerospace and defense business. While it might sound like a different business, yes, they are serving two different end markets, but a lot of the solutions that we build is driven by common R&D and is applicable to both markets. I want to say that. These two business segments are externally reported. Within commercial communications, we break it down into wireless and wireline. We have organizations and multiple Vice Presidents running those entities. We serve customers from chipset players, both in the wireless and wireline space. Think of the Intels and the Qualcomms and the NVIDIAs and the Broadcoms and the Marvells and so on and so forth. You have device makers. Think of the Samsungs and the Apples of the world. You have network equipment makers, the Ciscos, the Junipers, the Ericssons and the Nokias, the contract manufacturers, mobile network operators, hyperscalers, satellite network operators. This is sort of the business that commercial communication spans. Then within aerospace and defense, we have multiple segments, space satellite, radar, threat emulation, general comms. I've got multiple VPs covering that. My group is responsible for everything from technology investments, capital allocation that we need to make for core technology development, as well as products. We're responsible for coming up with a product strategy, the products and the solution roadmaps, how it intercepts market windows. My team also leads the product engineering, so engineering sits under me. All the launches we're responsible for to intercept the market windows of our key customers. We have sales enablement and business development functions that work in concert with our global sales organization to take these products to market and serve our end markets. Maybe just to sort of broaden the question, in terms of top priorities for you both as you sort of close out fiscal 2026 and head into fiscal 2027, if you can maybe outline high-level priorities. For me, the key things, obviously, we are looking to sustain the momentum that we have established over the last couple of years in AI. The speed transition to 3.2T is starting to occur. There's quite a bit of R&D activity in silicon photonics, co-packaged optics, and so forth. So it will be important to sustain that. From a 6G and a wireless perspective, things will start to ramp towards the end of next year and into 2028. Getting ready for that inflecting market is going to be important. That's a key priority. Of course, in aerospace and defense, we see expansion in EU. We see expansion in the Americas. We see this new emerging ecosystem of defense technology startups. So that's an exciting application and a market segment for us to capitalize on. So those are probably the key priorities for me, you know? Yeah. As I think about it, I think about, in particular over the short horizon that you've talked about, is how do we maximize our capture of the market opportunity that's in front of us. So when I think about it through that lens, I think there are a number of things that we need to do. First of all, we need to continue to execute on our R&D programs, make sure that we get those products to market at a time that intersects the needs of our customers. Increasingly right now, it means that we're managing a supply chain, both in terms of ramping up our own internal capacity, as well as working with our suppliers to ensure the supply that we need to convert robust demand into revenue on a short horizon. It's working with our sales force on tactical issues around, again, intersecting this market opportunity, making sure that we're selling high in the organization's VP to VP level connections at market-making customers, that we're not missing any opportunities, we're out there doing the hunting for opportunities, and finding the opportunities. When you talk about that short horizon, I come down to core execution around intersecting this market opportunity and really maximizing our value capture over that short horizon. So obviously, execution against a very strong market backdrop. You've had orders now that have grown 50%, round abouts, organically the second straight quarter. You've discussed a still very robust pipeline. Can you help us think about how much of the improvement's Keysight specific, in terms of new products, go-to-market changes, relative to just the end markets that are simply spending more? Yeah. I think both of those things are working in concert with another, right? Certainly, we're being aided by a very strong market. But if we weren't executing, and we did not have a differentiated product portfolio, our ability to intersect that robust market demand would not be what it is today. We are benefiting right now from decisions that were made two, three, four years ago, when we first recognized this transition that was happening in the AI space and the investments that we made over that period of time to have the product portfolio, the solutions portfolio that we have today. I think those two things go hand in hand. I think we have a very differentiated portfolio, in the marketplace. I think we are doing our best to work at the same pace that our customers are working at, and keeping in mind that these design inflections or these technology inflections, the time between them is compressing, right? There's a need to work at a very rapid and increasing pace, and I think we're succeeding in doing that. I don't know if you have anything to add to that. Yeah. Maybe just as an example of how those R&D investments are translating into key products that the market wants. The Keysight AI Data Center Builder is a product that we launched about 18 months ago. There is no precedent for that type of a product. And by engaging with these market-defining customers, we were able to identify an unmet need, which was essentially to allow them to benchmark all of their AI infrastructure. It's a multi-vendor infrastructure that they're deploying in their data centers, and they need to benchmark. They need to see how many tokens per second are you able to deliver with a certain rack or with a certain cluster. What kind of network topologies work? What is the energy consumption of different types of hardware that they're implementing in their data centers? And this is a product that we came up with. There wasn't any in the market up until that point. And we're seeing a lot of traction for those types of products, right? So it's all the investments that we've made over the last several years. Non-terrestrial networks is another application, so pretty excited about where we are. Why don't we go down the AI path? So wireline revenue exceeded wireless for the first time, I believe, this past quarter. And you frame the AI opportunity around four pillars. There's infrastructure scaling, speed transition, silicon photonics, and system-level emulation. Which of the four pillars is maybe the largest, most material today, and how does this evolve over time? All of these four pillars are, at the moment, generating revenue for us, generating business for us. But maybe before I get into that, at the highest level, our customers' innovation cadence is increasing. The number of product SKUs that our customers are building and developing, it's unprecedented. That innovation is driving a lot of investment in key solutions and products from us. The complexity of what our customers are doing is also increasing. Going from 100 Gbps to 200 Gbps per lane to 400 Gbps per lane drives enormous complexity in terms of the design considerations that customers have to factor. You think about coupling, interference, losses, signals that are not traversing just one PC board, multiple PC boards, interconnects, cable assemblies, and so on and so forth. All of this is driving complexity, and our customers are deploying all of this at scale at the same time. It is not just they are investing in R&D, but they are deploying it at scale, which is driving solutions in the manufacturing application. If I look at those four things, the speed transition is very important. It is playing out now. 1.6T is gaining a lot of traction. We are leading in that space, and we expect that to continue next year. There is a 3.2T R&D that is already underway. As you go into higher speeds, silicon photonics, there is quite a bit of R&D investment that is going on there. That is occurring. Everything, when it comes to systems emulation, it is not only that it needs to be tested in isolation or validated in isolation, you have to look at how these data centers and these clusters work together. If you are trying to deploy a chip, it could be a network chip, it could be a GPU, it could be a compute tray you are deploying into a data center, you need to see how it performs in the context of multiple racks and multiple data centers. That is driving a lot of demand for our system-level emulation. As I mentioned, all of this is getting deployed at scale, which is driving manufacturing. At this point, I would say, speed transitions and system emulation is driving a lot of today's business and, of course, the AI expansion, silicon photonics, still in the R&D realm, and that is something that we would expect to scale over the next several years. Yeah. Got it. I want to hit on a little bit more in terms of AI and the wireline conversation. Hyperscalers today, I believe were framed as, in terms of direct exposure, roughly 10% of sales, but there is a lot more that they drive downstream. I think that was talked about a little bit on the last call. With custom silicon proliferating, the stacks becoming a little bit more heterogeneous, how does that affect your business and your customer count? Maybe just secondarily to that, where do the frontier models and neo clouds fit within that picture? Yeah, it is a good question. The hyperscalers' direct business is a small percent of total revenue. They do drive multiple times that in terms of downstream ecosystem business. Our business is very highly correlated to the CapEx that is being deployed. Each of these hyperscalers have their own ecosystem. When you look at a particular hyperscaler, you might have heard of this terminology, MSA. This is the multi-source agreement. There is an alliance that is led by a hyperscaler or a leading chip vendor, and there is an ecosystem that is built around that. They tend to specify the types of solutions that need to be used in the workflow. We engage our R&D teams, my engineering teams engage with hyperscaler engineering teams and every other member of that ecosystem directly in helping them drive that workflow. It's not just one ecosystem, it's multiple ecosystems that's driving this business, driven by a central hyperscaler or a chip manufacturer. Neo clouds and these frontier model folks are part of that ecosystem. They could be part of multiple hyperscaler ecosystems. They could be part of a single hyperscaler ecosystem. But we've seen our business grow with them as well, and the number of players that are part of this AI business continues to expand for us. When you think through AI network emulation, high-speed digital validation, let me just play devil's advocate, what prevents a well-resourced hyperscaler from building that capability internally? That's always been the case, and it has happened in the past, and it still happens now in the margin. Our business that we have today and the growth that we have today is already factoring in and in the middle of those dynamics. But I will say that there's a couple of things. If it's only software specific, it's probably a little easier. But with the speed grades going from 100 to 200 to 400 to 800, getting into silicon photonics and needing to emulate everything, not just simulate. Simulation, you can write a software program on a PC, and you can do some of that simulation. But when we talk about emulation, it's about doing it and emulating a hyperrealistic environment. This is where we're differentiated. It requires a lot of hardware investment, and then that's where it may not be worth somebody's time to really invest in that. And we have exposure to the entire market, multiple hyperscaler ecosystems, so we're able to bring in a rich set of insights that might not be available to one segment. Those are things that are differentiating. And you also have to remember that it's in the hyperscalers' interest to enable an ecosystem. And when they enable an ecosystem, if they're the ones that are building the test solutions and so forth, they're going to have to support it. They have to keep up with it and all of that. If it's one or two players, they can do it. But if it's multiple players, it gets prohibitively expensive, and it's not core to what they're doing. That's where we have a unique offering and a differentiated play to the market. Let's pivot to wireless. I think if this were a decade or 15 years ago, we probably would have led with wireless, and we would have spent a lot more time. It's nice to see such a broadening in terms of end markets. On wireless, 3GPP has set, I believe, March of 2029 for the first 6G standard. You've said customers are moving from exploratory research into more funded development programs. Can you help map the revenue ramp for us from 6G in terms of when you start to see test spend inflecting? How the shape of that maybe ramp compares to the 5G cycle. Yeah. As you pointed out, we are seeing that funding transition from research institutes, universities into funded programs. Our customers are now involved in product research and early product development, and we're seeing traditional players, the network equipment makers, the device and the wireless modem makers all start to gear up for commercialization in late 2029 and into 2030. Our 6G wireless business has been growing steadily. It grew again this year, and we expect to see this inflect in the first half of 2028, in readiness for the Olympics. There may be some pre-standard showcasing of 6G technologies. Throughout next year, there's going to be a steady cadence of engagements and investments as well. We're engaged with all of the leading customers. We're seeing new players from a non-terrestrial networks perspective. I would expect the shape to be fairly similar to 5G. 5G was commercialized in 2019/ 2020. These generations happen once in 10 years, and we're leading up to that. That's sort of how I expect this to evolve. There are newer applications for sure. In addition to the traditional smartphone type of use case, you have integrated sensing and communications, you have non-terrestrial networks. Those might add some modulation to the shape of the market and how it evolves, but those are all net additive to us. That's sort of how we see it. Among, you mentioned ISAC, you mentioned non-terrestrial networks, I think there is a mention of AI- RAN as well. Is there any one of those that maybe expands your addressable content the most and maybe gives you a little bit more incremental opportunity? What gets you excited among those? All of them are unique and are pretty exciting. All of those applications expand our opportunity. When you think about application of AI to help with the RAN network, this is about customers deploying AI algorithms and testing those algorithms for not just regular network and mobility functions, but energy efficiency, traffic steering, beamforming, scheduling, all of this. We provide an emulated environment to help validate those algorithms. You also have to see how AI traffic and the regular network wireless traffic coexist, how it degrades the performance of the network. All of this requires a new validation, new emulation that customers have to perform in their lab. So that is pretty exciting. Integrated sensing and communication, again, a new additive opportunity. All new devices outside of smartphones, whether they are flying objects or whatnot, have to be sensed, have to be communicated with, they need to be controlled, they need to be maneuvered. They are going to be connected to satellites and base stations and other devices, again, creating more opportunities for us. Non-terrestrial networks is a pretty exciting number of constellations going up, number of frequency bands going up, number of use cases, broadband use cases, direct-to-cell connectivity going up. So that is expanding our opportunities as well. If I were to pick one that is driving, we are generating business in all three of these use cases now, but something that is more commercial now is non-terrestrial networks. So that is driving business for us. The rest, we expect to gain traction over the next few years. Let us pivot to the other piece of CSG on aerospace defense, and I will open it up to both. That segment grew about 14% last quarter. It is about a quarter of the CSG business. Can you talk about how much of the multi-year cycle that you have talked about is European sovereign budgets relative to U.S. modernization? Because it seems like there is a lot going on in terms of long-term tailwinds. Maybe we could just parse through some of the drivers you are seeing for that business. It's all of that, right? Our U.S. business has expanded at strong double digits. It's a pretty big base. We're seeing the large primes continue to spend. The defense budgets obviously has gone up. The research and development portion of the defense budget is also going up. That drives a lot of business for us. EU is growing even faster, but it's on a smaller base, and we expect that to be a multi-year secular trend. We're building more capabilities over there to enable those applications. Then you have these defense technology startups that I alluded to earlier. It's a new emerging economy, if you will, within the aerospace and defense space. These companies are not dependent on government budgets. They're product companies, VC-funded, and they're moving kind of at the pace of Silicon Valley companies. It's a new set of opportunities, and it's almost a slightly different pool of capital that we're able to tap into. All of these are driving business. The LEO, from an application point of view, it's new satellites, it's coexistence of commercial satellites versus custom-purpose satellites for other purposes, general communication infrastructure, cybersecurity, threat simulation, the portfolio that we added from the Spirent acquisition, position, navigation, and timing, that is driving a whole set of new use cases. We feel like not only are there tailwinds from a market point of view, but the portfolio that we have and the portfolio we've built is enabling us to capitalize on that growth. As we sort of round out the business, Neil, if you can give us a quick update on what you're seeing across the EISG business, across some of the key business lines. Yeah, absolutely. I think first of all, EISG is definitely benefiting from a halo effect from the broader data center build-out. We see that in the semiconductor portion of our business where high bandwidth memory and advanced logic chips eventually destined for the data center are driving semiconductor volumes and then, in turn, driving demand for Keysight semiconductor solutions as a growth driver. We have specific solutions in the semi space pointed at silicon photonics, which are finding a home in this market. I think in our general electronics business, again, a very broad set of exposures in terms of end markets. We see strength in markets like digital health and education, both in kind of teaching labs as well as advanced research. But beyond that, in the manufacturing side, again, kind of basic electronic componentry, again, destined for the data center, manufacturing of transistors and capacitors and PC boards. These are all things that Jason and his business are helping to test, either in the design lab or in manufacturing. And again, with the data center CapEx being as the ultimate driver of that demand. I think on the automotive side, that business also has grown nicely this year. The demand there is coming from what we broadly define as the software-defined vehicles. This is in-car networks, in-car security, autonomous driving, in-car sensing that is driving a growth in that space. Then we're pivoting some of our solutions there that have been focused more on the electric vehicle solution, looking at new market opportunities and distributed grid power generation types of applications. And so, yeah, seeing broad growth across that portfolio as well. So I want to maybe dig in a little bit more to financials, and you've been pretty explicit that supply, not demand, is the governor. Yeah. Currently, yes. Currently, right. Can we talk a little bit about how much revenue is effectively being pushed out? I know obviously this is in light of supply chain constraints Keysight and everybody else is experiencing. What does the fix look like? Is it incremental CapEx, second sourcing, product redesigns, and is there any visibility into when this stops being an effective limiter of revenue? Yeah. Well, there's a lot in that question. Yeah. Let me try and take those a little bit at a time. First of all, maybe start by talking about the progress that we're making. If you look at the four quarters of this year, we started this year with $1.6 billion of revenue in Q1. We did a little north of $1.7 billion in Q2, almost $1.85 billion in Q3. We've guided to $1.94 billion in Q4, and we are very successfully ramping our production and our supply chain to meet the demand. Is it going as fast as we would like? No. Are we still supply constrained relative to demand constrained? The answer to that question is yes. You were trying to get a sense of how much revenue is pushing out, and I can give you a lens with which to think about that. We, generally speaking, have a six-month order acceptance policy, so the overwhelming majority of our orders outside of software, like time-based revenue, convert from orders to revenue within six months. Under that lens, if you looked and said, hey, we did just under or just over $2.05 billion in orders in Q2, you would have expected that to flush to revenue by the fourth quarter. We've guided to $1.94 billion. So there's somewhere around $100 million of revenue, probably less when you take into account software and longer-dated portions of our business that is pushed out beyond the six-month delivery window. So that's one lens with which to think about it. But if you take that same lens and look at it differently, our second-half revenues are in excess of our first-half orders. If you look at over just a little bit longer horizon, a half, we are keeping pace. I would quantify it in this approaching $100 million. In terms of the solutions, I think it is a little bit of all of the above. We have added capacity. We have taken up our CapEx estimates for this year as we add internal capacity that is largely pointed at ramping new product introductions that have been immediately and very robustly accepted by this AI marketplace. We are seeing kind of unprecedentedly fast ramps of products coming out of R&D. We are having to ramp that from kind of prototype and demo volumes to full-scale production faster than we typically have to do, and we are adding capacity to make that happen. With our suppliers, we are entering into longer-term purchase agreements going out 18 months. Currently, at this point in time, we are redesigning board layouts in certain cases. If you cannot get part A, but part B is very similar, and with a relatively minor board turn, you can qualify a more readily available part. We are doing that. Qualifying second and third sources in some cases. I think one thing that is important to note is Keysight is a high-mix, relatively low-volume manufacturer. I do not need a million of anything. We tend to talk in terms of thousands, maybe tens of thousands. Those are easier problems to solve, and I think we have a good track record of managing through these types of supply chain disruptions. In terms of timeline, it is hard to know when you are in it. I would think over the next several quarters, we will continue to make progress, much as we have over the last several quarters, and eventually see supply and demand equalize. As we have said, when Satish and I talk about this, it is a good problem to have. The biggest problem is not so much that the supply side, is that the demand forecast, we keep having to increment it north, and it is those incremental increases that the supply chain is struggling with. They can still provide the base volumes, but it is the repeated upward revisions that they are struggling with. That is a great problem to have. Let us talk a little about profitability. Your operating margin last quarter was, I believe, around 33%. Revenue growth has obviously been very strong. It is a little bit ahead of where your long-term targets were, I believe in the low 30s. Yeah. You've talked about 40% incremental margins when growth exceeds 5%. How are you thinking about the longer-term model? Is there timing around any updates to that long-term op margin outlook you've provided? As you think about some of the incremental, or outpacing some of the faster growth that you're seeing, reinvesting some of that into higher R&D and capacity investment. Yeah. Again, I think a lot of those things are true. First of all, we're very pleased that we've met the long-term commitments that we outlined at our 2023 Analyst Day as it relates to gross margin and operating margin, in fact, exceeding them for this fiscal year. So that's a great outcome. Very pleased to deliver that. I think as we look forward, we continue to see that the business has a strong ability to drive incrementals, certainly at these growth rates, which are well above 5%, in excess of the 40% target that we've laid out there. That gets back to the differentiation of our portfolio. As you have just noted, competing in these AI ecosystems and maximizing the revenue opportunity that is in front of us is expensive, right? We're investing in sales resources, we're investing in R&D, we're investing in capacity, we're investing in inventory to make sure that we capitalize on the opportunity that's in front of us. I do remain bullish on our opportunity to continue to drive incrementals at or above that 40% level. We completed three acquisitions at the beginning of this fiscal year. We've got them meaningfully integrated at this point, which is going to provide an incremental roughly $50 million of cost synergies going into next year, which will help with the incrementals as well. Great. Let's talk a little bit about capital allocation. You've ended the quarter, I believe, with $2.6 billion in cash, gross leverage under two. You've done, I believe, about $500 million+ of buybacks year to date. How do you think about uses of excess cash between organic investment, maybe working capital to support some of the accelerating growth, M&A, buybacks? Maybe if you could just help us prioritize those. Yeah. First of all, I'd say that we think of ourselves as first and foremost an organic growth company. We're going to continue to invest in driving that organic growth. I've highlighted a couple times today as the priority. We want to maximize the opportunity that's in front of us, and you see us investing in our. Traditionally, that's meant R&D and sales investments. I think increasingly in this environment, it's capacity, it's supply chain investments to again make sure we do that short-term optimization. I think, as I just said, you'll see us continue to lean into R&D and to continue to build on this differentiated and broad portfolio that we have. Beyond that, we look to strike a balance between value-creating M&A and returning capital to shareholders. I think we have a robust funnel of opportunities. Continue to look to ways to plug technology gaps in our portfolio or expand into nearly adjacent SAM, but to expand the sandbox in which we're playing. Beyond that, we're committed to, at a bare minimum, be anti-dilutive with our buyback. If you look over the course of the last five years or so, you can see that we've been significantly more aggressive than that with our buyback program. I think a balanced approach, but focused on organic growth first. As we sort of come up on time, two questions. First one, open-ended question to both. What do you think the market most misunderstands about Keysight today? I'll take that. I think the indispensable nature of the solutions that we offer, especially as technical complexity of what our customers are trying to do in various end markets go up. That is probably underappreciated. When you think of connecting a user to a satellite that's traveling at 27,000 km an hour. The connection between the user and the satellite doesn't last for more than a few minutes. The wireless infrastructure today is not designed for something like that. A whole host of conditions have to be designed for, they need to be emulated, they need to be put in the lab environment. You can't launch a satellite without enough design validation, testing, everything. All of that needs to happen in the lab, and we provide capabilities to enable our customers to do that. That goes for non-terrestrial networks, that goes for AI clusters, things like that. I think the indispensable nature of what we provide, especially as technical complexity of our customers' activities goes up, probably is not appreciated as much. I don't know. I think that's a great answer. Maybe the only other thing that I would add to that would be the uniqueness of the breadth of our portfolio. There aren't any other companies in this space that have the breadth of solutions, physical layer, protocol layer, application layer, across multiple ecosystems, wireless, wireline, aerospace defense, automotive, semiconductor. We have a really unique portfolio, and I think it gives us a perspective on the end markets that our customers value and that further informs the decisions that we make and the solutions that we bring to market. Great. Then last question. If we're sitting here 12 months from now, what would you point to as key milestones or accomplishments that would indicate successful execution of Keysight's strategy and business model? I kind of talked about my priorities, sustaining the growth momentum in AI, capturing these next speed transitions, ensuring the industry has enablement for moving into optics. We've got many number of products in the pipeline that are about to be launched. We have internal milestones in terms of when to launch them, where to land them in terms of key customers. So I'd be looking at that. Some of that we may be able to communicate externally only after the fact, but that's kind of what I'm looking at. Many wins in these new defense technology startups, expansion in both Americas and E.U. from a defense application perspective. Again, many new products that are coming out. 6G, as we talked about, is going to start to inflect towards the end of 2027 and into 2028, landing all of those key engagements with the key products that intercept markets. Those are probably the things that I'm going to look for, and you'll probably see it in our PRs and other things when they happen. Okay. It's a great place to end it. All right. Thank you both. Thank you so much, Matt. Appreciate it. Thank you, Matt.