Good day, ladies and gentlemen, and welcome to Keysight Technologies Fiscal First Quarter 2026 Earnings Conference Call. My name is Victoria, and I will be your lead operator today. If at any time during the conference you need to reach an operator, please press star zero. This call is being recorded today, Monday, February 23rd, 2026, at 1:30 P.M. Pacific Time. I would now like to hand the call over to Liz Morali, Vice President of Investor Relations. Please go ahead, Ms. Morali. Good afternoon, thank you for joining us for Keysight's first quarter earnings conference call for fiscal year 2026. With me are Satish Dhanasekaran, President and CEO, and Neil Dougherty, Executive Vice President and CFO. Later, during the question and answer session, we will be joined by Kailash Narayanan, President of the Communications Solutions Group, and Steve Yoon, Senior Vice President of Global Sales. The press release and information to supplement today's discussion can be found on our investor relations website, investor.keysight.com. During today's discussion, we will make forward-looking statements about the financial performance of the company. Actual results may differ materially from those mentioned in these forward-looking statements as a result of risks and uncertainties. Information about these risks and uncertainties can be found in our most recent Forms 10-K and 10-Q filings with the SEC. We do not intend to update any forward-looking statements. In addition, we will refer to non-GAAP financial measures and reference core growth, which excludes the impact of acquisitions or divestitures completed within the last 12 months and currency movements. The most directly comparable GAAP financial metrics and reconciliations can be found on our investor relations website, and all comparisons are on a year-over-year basis unless otherwise noted. I will now turn the call over to Satish. Thank you, Liz, and welcome to the Keysight team. You're joining the company at an exciting time. Good afternoon to everyone listening in, thank you for joining us today. Since our last earnings call, we have seen further acceleration in demand with robust growth across business segments and key regions. During the first quarter, Keysight delivered outstanding results, with both revenue and earnings per share exceeding the high end of our guidance range. This performance reflects the execution of our strategic roadmap, alongside the convergence of several secular tailwinds. These include AI-driven technology transformations, next-generation connectivity, rising semiconductor complexity, and defense modernization. Our differentiated portfolio of solutions is helping customers address increasing design complexity, accelerate innovation, and move more quickly from concept to deployment. The investments we've made over the last three years have strengthened our portfolio, deepened our customer relationships, and prepared us to capitalize on this unprecedented time. In Communications Solutions, we saw robust order growth, outpacing revenue growth of 27% in the quarter, driven by both commercial communications and aerospace, defense, and government markets. First, to commercial communications. Wireline delivered record orders, surpassing wireless for the first time, and was driven by demand for both R&D and manufacturing solutions. This momentum was broad-based across compute, memory, interconnect, and networking technologies. This quarter marks the ninth consecutive quarter of wireline growth, with four fundamental drivers shaping demand into the future. First, AI infrastructure is rapidly scaling. Hyperscalers and their respective ecosystems are investing in designing and deploying scale-up and scale-out architectures. As these systems grow larger and more complex, there is an increasing need to validate performance across the entire infrastructure stack. Keysight's full stack portfolio across electrical, optical, RF, and network protocol technologies enables this end-to-end validation from early design through deployment. We're engaging with all the hyperscalers and their ecosystems early in the development cycle to further breakthrough innovations in AI infrastructure. Second, the industry is moving to higher speeds and Ethernet-based AI networking. AI workloads are driving rapid data center build-outs 800 GB and 1.6 T optics, alongside accelerated development of 3.2 T. The move to Ethernet-based AI fabrics for better interoperability is creating more test opportunities for Keysight. Our high-speed digital, optical, and protocol solutions are helping customers design and validate next-generation switching silicon, SerDes, and interconnects, reducing risk and accelerating time to deployment. In parallel, our arbitrary waveform generators and oscilloscopes are facilitating the move towards higher lane speeds, such as 448 GB per lane, to enable 3.2 T speeds. Third, optical interconnects are increasing in importance. Rising bandwidth and power demands in AI data centers are accelerating the adoption of optical interconnects to supplement copper. Keysight is assisting optical transceiver and module suppliers to ramp and design 800 GB and emerging 1.6 T modules with our recently introduced digital communication analyzer, Lightwave component analyzer products, providing precision measurements for standards compliance prior to deployment. Concurrently, customers are designing architectures around Co-packaged optics, Optical circuit switching, and Silicon photonics. Our differentiated optical capabilities, including tunable laser sources and polarization synthesizers, provide metrology-grade measurements for Silicon photonics workflows. Fourth, system-level validation and benchmarking are becoming essential. As AI clusters scale, our workload emulation solutions are assisting leading customers in solving their deployment challenges by emulating real AI workload and stress conditions. These four drivers create meaningful opportunities and sustain demand for our solutions as customers design, deploy, and scale next-generation AI systems around the world. Keysight's thought leadership and partnerships with industry leaders will be on display at the upcoming DesignCon and OFC events. Turning to wireless, we saw healthy growth in the quarter, driven by activity in non-terrestrial networks, 6G research, emerging AI at the edge applications, and continued stability in 5G. We're seeing a broadening of non-terrestrial network ecosystem as new LEOs and Direct-to-Cell services gain traction. Keysight's 5G emulation platforms have expanded their coverage to non-terrestrial network system use cases. This quarter, we achieved a live NR NTN connection with Samsung in a 3GPP-defined satellite frequency band, furthering standardization. The Spirent PNT portfolio further enhances our ability to serve this market with industry-leading satellite emulation capabilities. Concurrently, we're seeing an uptick in activity across the wireless supply chain, driven by AI edge devices and supply chain resilience priorities of manufacturers around the globe. Early 6G R&D engagements expanded as the industry prepares for large-scale technology demos at LA Olympics in 2028, solidifying our view of commercialization by 2030. This quarter, Keysight collaborated with MediaTek to progress standards around integrated sensing and communication use cases. In addition, we registered multiple wins for our newly launched RaceSIM AI RAN offering, which makes possible the emulation of real-world network environments to train AI models for network functions. Keysight will be showcasing its end-to-end solutions portfolio for the wireless ecosystem at Mobile World Congress 2026 in Barcelona, along with a number of industry leaders. Turning to aerospace, defense, and government, we saw record quarter one orders and growth across all regions, driven by heightened global focus on deterrence and defense modernization priorities. Orders reflected a mix of program expansions, production automation, and new system deployments across spectrum operations, space and satellite, and radar applications. Keysight's high-precision and purpose-built RF and digital solutions and automation capabilities are ideally suited for these applications with stringent mission-critical performance requirements. U.S. primes continued to develop precision capabilities and ramped radar production in the quarter. We secured multiple wins in North America for Keysight's high-performance threat emulators to meet critical spectrum operation requirements. Our digital transceiver module payload testing capability was chosen by a Canadian prime contractor for space and satellite applications. We continue to expand collaborations with defense technology startups and new primes as governments look to accelerate innovation around new applications in satellites, drones, and autonomous systems. We also saw a robust, broad-based activity in Europe, supported by rising defense budgets and elevated national security priorities aimed at strengthening regional sovereignty. Keysight is actively engaged with multiple European primes and government agencies in the areas of signal detection and recording, radar phased array antenna characterization, over-the-air 5G field deployments, and precision angle-of-arrival characterization applications. Our newly acquired PNT portfolio had a solid quarter as aerospace defense organizations depend on technology to test anti-jam and anti-spoof avionics in contested environments. The increase in global defense spending represents a structural trade tailwind to our aerospace and defense business, and we're well-positioned to capitalize on this sustained demand going forward. Moving to Electronic Industrial Solutions Group, orders grew for the third consecutive quarter, and revenue was a record. Orders and revenue both grew double digits across all three EISG markets of general electronics, semiconductors, and automotive and energy. In our general electronics business, growth was driven by ongoing momentum in AI-related innovation and infrastructure investments across the global supply chain. In particular, the increasing complexity of high-performance PCBs with higher density interconnects, multilayer architectures, faster speeds, and tighter tolerances is driving greater test intensity. Keysight Solutions addresses customer needs across all major PCB design standards. By investing ahead of the curve, we're leading in both R&D and production, with increasing speed and higher frequency measurement capabilities. Digital health again grew with wins spanning medical device manufacturing, R&D, and biomedical research. In education and advanced research, lower funding in the U.S. was offset by strength in Asia as sovereign programs step up investments in semiconductor research and workforce development. In our semiconductor business, the pace of investment accelerated. High-Bandwidth Memory and a broader AI-driven capacity expansion led to robust demand for our wafer-level test and characterization solutions. Silicon photonics programs and production timelines across major foundry customers are picking up speed and intensity. Keysight's deep photonics and semiconductor expertise, as well as our broad R&D and production portfolio, make us the partner of choice. The outlook for the year has reflected in our customers' latest technology roadmaps, and capacity plans has improved sequentially. Lastly, in automotive and energy, the overall business environment was stable as orders grew for the second consecutive quarter. While the end market remains mixed, we had healthy annual renewals in our ESI simulation portfolio, as well as key wins with leading EV and robotaxi customers in software-defined, vehicle-related manufacturing. EV and charging R&D investment by OEMs and test labs was stable sequentially. We recently introduced two new megawatt charging solutions that enable customers to reduce design time and deliver reliable, high-powered charging systems that meet the latest global and local standards. In summary, we're pleased with the start to the year and have confidence in our ability to outperform, grounded in our strong pipeline of solutions and go-to-market momentum. Keysight serves a diversified set of end markets, which allows us to capture growth wherever it emerges. As AI investment inflects, we're leveraging our strengths to capitalize on that momentum. Importantly, the same core strengths driving our success today are the ones that position us for future inflection points. As new growth opportunities develop, we're built to identify them, respond quickly, and outperform. We see a broad and expanding set of opportunities ahead and remain confident in our ability to convert them into sustained growth and value creation. I'll now pass it on to Neil to provide additional details on our financial performance for Q1. Neil? Thank you, Satish, and hello, everyone. We achieved record results in Q1, well above the high end of our guidance range, fueled by strong growth across our businesses as we continue to meet increased customer demand for our portfolio of technology solutions. First quarter total company revenue of $1.6 billion was up 23% on a reported basis, with acquisitions adding eight points and currency one point. On a core basis, excluding those items, revenue grew 14%. Orders of $1.645 billion were up 30% on a reported basis and up 22% on a core basis. Gross margin was 66.7%, up 90 basis points, driven by favorable product mix, including the addition of higher gross margin revenues from our recent acquisitions. Operating expenses were $628 million, in line with our expectations, as we continued investments in next-generation R&D. Operating margin was 27.4%, up 20 basis points. We delivered net income of $376 million and earnings per share of $2.17, both up 19%. This result was driven by strength in our core business, which delivered operating margin of 28.9%, up 170 basis points year-over-year, as a result of 41% core operating leverage. Moving to the segments, the Communication Solutions Group generated revenue of $1,124 million, up 27% on a reported basis and up 16% on a core basis, with a gross margin of 68.5% and operating margin of 27.5%. Within CSG, the commercial communications business generated revenue of $758 million, up 33%, with growth in wireless and wireline. Aerospace, Defense, and Government achieved revenue of $366 million, an increase of 18%. The Electronic Industrial Solutions Group generated $476 million in revenue, an increase of 15%, with growth across all three markets: general electronics, semiconductors, and automotive. EISG delivered gross margin of 62.4% and operating margin of 27.2%. Software and services accounted for approximately 40% of Keysight revenue, while annual recurring revenue was 29% of total mix. Moving to the balance sheet and cash flow, we ended the quarter with approximately $2.2 billion in cash and cash equivalents, generating cash flow from operations of $441 million and free cash flow of $407 million. This quarter, we repurchased approximately 420,000 shares of Keysight stock at an average price of approximately $207, for a total consideration of $87 million. Turning to our outlook. Today's guidance does not contemplate any impact from the recently announced Supreme Court decision regarding tariffs, which we are still assessing. For the second quarter of 2026, we expect revenue in the range of $1.69 billion-$1.71 billion, representing 30% year-over-year growth at the midpoint. We expect Q2 earnings per share to be in the range of $2.27-$2.33, representing 35% year-over-year growth at the midpoint. This guidance is based on a weighted diluted share count of approximately 173 million shares. From an acquisition perspective, the integrations are on track, and we are excited about the expanded opportunities we have to serve customers. Our expectation for $375 million in acquisition-related revenue for fiscal 2026 is unchanged. Our synergy target of more than $100 million in run rate cost synergies and other operational efficiencies also remains unchanged, with realization heavily weighted to late in 2026, given our timeline for ERP migration. As you heard from Satish, we are highly encouraged by the strength of our portfolio and the direction of our end markets. With the visibility we currently have, our base case for fiscal 2026 has increased, as we now expect total annual revenue and earnings growth just above 20%. In closing, we started fiscal 2026 with outstanding results, and we see solid momentum into Q2 as we contemplate the remainder of the year. With that, I will turn the call over to Liz to begin the Q&A session. Thank you, Neil. Victoria, will you please provide the instructions for the Q&A session? Of course. Ladies and gentlemen, if you would like to ask a question, please press star one. We ask that you limit yourself to one question and one follow-up. To withdraw your question, press the pound sign. Please hold while we compile the Q&A roster. The first question comes from the line of Aaron Rakers with Wells Fargo. Aaron, your line is now open. Yeah, thanks for taking the question. Congrats on the quarter. I guess my first question, you know, Satish, when you outlined the growth drivers, I think it was four of them, you know, predominantly driven by AI and what you're seeing around optical interconnect and such. You know, with the wireline business now surpassing the wireless business, I'm curious if there's an ability to unpack how much those are contributing to the business, how much they're necessarily growing. Any color you could provide on what you're seeing there would be greatly appreciated. Thank you, Aaron. Yes, we're very excited by the quarter. You know, broad strength is sort of the theme for the business, and we'll, we'll unpack a number of the drivers. Particular to your question, you know, roughly, we sized our AI exposure last year at the, in Q4, to be just about 10% of the company revenue. On top of that, this quarter, on that run rate, I should say, we had robust order growth and significantly above company average. The company average order growth was 30%, so significantly above that, and for the AI business, inside of the wireline, inside of the wireline parts of our operation. The name of the game is really about broadening of demand across our customer base, right? We've doubled the number of customers that are present at that demand. If you look at the, through the lens of customer concentration at the company level, you know, our top customers, top two are still non-AI customers, so it again reflects the broadening of demand across the globe and across the applications that we have, and that's what we attempt to do on my earnings message is to really break out the various demand drivers and how Keysight is plugged in to those different parts of those workflows. If you just look at it on an R&D and manufacturing basis, I mean, both R&D and manufacturing grew year-over-year, so we're quite pleased by the strength that we're seeing in the marketplace, and we think that strength continues into this year. Yeah, very helpful. Neil, as a quick follow-up, I'm curious, in these last two quarters, you've, you've driven significant amount of incremental operating leverage to the model. I, I know it's a little bit dated, but going back to the Investor Day, you had talked about, like, a low, I think it was 31%-32% operating margin target. I, I'm curious, as, as we progress through this year with 20% growth, how you, how you view the current kind of operating, incremental operating margin leverage in the P&L from here. Thank you. Yeah, I guess I would, I would point you back to statements that we've made publicly. We've designed our business model about delivering a 40% core leverage on, on, on growth that's in the mid-single digits or better. In fact, this quarter, we delivered 41% leverage, obviously on significantly higher growth, core growth, but keeping in mind there were no tariffs in the base period, right? You're, you're delivering that 40% incremental leverage while absorbing the impact of tariffs. I think as we think about the full fiscal year, again, pointing you to that 40% core, core growth is, is kind of the starting point. We have noted that the acquisitions, as we, as we inherited them, were operating at a significantly lower operating margin. They're dilutive to operating margin here in this first year, but once we get that $100 million of cost and other synergies out, we expect them to be accretive to Keysight's overall operating margin. We're certainly moving in that direction, but, you know, executing on those acquisition synergies will be a key driver as we move forward. Yeah. Thank you, guys. Thank you for your questions. Our next question comes from the line of Meta Marshall with Morgan Stanley. Your line is now open. Hi, Meta. Great, thanks. Hey, congrats on the quarter. I guess just as you see kind of, strength in the AI orders, trying to get a sense of, you know, is that customers, you know, same customers expanding their implementations with you or kind of finding more use cases, or just kind of, are you finding a broadening of the customer base? Like, with some of these neoclouds or kind of other cloud builders coming into the market, are they kind of, adding to the growth? Just trying to get, you know, more of like a, the same store sales, versus kind of expanding customer base there would be helpful. Thanks. Yeah. Thank you, Meta. I mean, if you think about the customer base, you know, silicon companies, anyone that's designing chips that go into data centers are obviously a core customers of ours. The contributions we're making to them is growing. Then you look at, you know, manufacturing ecosystem that feeds these companies also, you know, largely known customer base, but where we are able to leverage our channel and really expand the contributions we're making to them. We've had a focus on hyperscalers that's also expanding, and I think the last customer set is a newer one, which is the neoclouds that you referenced. It's a smaller part of the business today, but growing. What's also interesting as we looked at the customer base through the lens of our regional footprint is, if you went back a year ago, probably a lot more of the business in the U.S. As we start to think about the business, you know, this quarter, especially more business internationally as well, including in Southeast Asia, where a lot of the manufacturing, install base is. Great. As a follow-up, just on the aerospace and defense, you know, we've been hearing about kind of budgets stepping up for a while. This is kind of the, you know, we're starting to really see it in acceleration in your guys's numbers. Do you view this as kind of the beginning of a trajectory, or this could be kind of a, a new run rate for this business? Thanks. That's a great, great question. I think there's two parts to the answer. One is, what happened the quarter and what we are looking, as we look over the horizon could be the case. As far as this quarter is concerned, you know, we, we started to see the effects of last year, where we had an administration change and coupled with some budget uncertainties that delayed spend and all of that started to, most of these programs started to come in, at, by, through the end of the year spend, if you will. So that, that reflects the upside and the demand side of the, for our aerospace defense business. As we look ahead into the pipeline and even further out, what we're seeing is increasing defense spending in Europe, and we also saw very strong European defense spend this quarter, and we expect that to continue. We're also seeing prime contractors in the U.S. investing more in organic R&D and also investing more in capacity ads. So I, I think that's another lever that is different than in the past. With the breadth of the portfolio we had around Mars Science Laboratory and space and satellite radar, now combined with our PNT business from Spirent, we can make a broader impact to these customers, and we, we think the budgets are very supportive in this business, and we're well positioned there. Great. Thank you. Thank you. Thank you for your questions. Our next question comes from the line of Tim Long with Barclays. Tim, your line is now open. Thank you. Two, if I could as well. Maybe Satish, for you, you know, obviously, you know, a lot of traction in AI. You covered, you know, a lot of the key use cases. You mentioned some of the emerging ones, you know, CPO, LPO, SiPhy, 448 per lane. You could probably also throw more scale up Ethernet. You mentioned Ethernet's good, maybe more scale across Ethernet. When you look at, you know, kind of this next phase here, are you seeing, you know, some of these newer use cases and technologies, you know, as being fully additive to, to what's going on? Maybe if you can just, you know, talk about some of the, you know, emerging ones and how meaningful they can be to that bucket. And then, second, maybe Neil, one for you. Appreciate the incremental margin conversation, 40% software services in the quarter. I know there was some probably ESI in there, it was a good quarter, but, maybe just talk higher level about that trend and how you see that, you know, contributing, as the company gets more, you know, recurring in the model and some of these software pieces that you're adding, what you think that does to, you know, gross margins or operating margins as, as the model moves forward. Thank you. Thank you, Tim. I'll just make some broad remarks, and I'll have Kailash make some specific comments on what he's seeing in the business. I think at the high level, what we're seeing is concurrent, parallel technology waves that are coming at pretty much an unprecedented rate. You know, what was a well-defined two, three-year-long technology refresh cycles, I mean, now are happening concurrently. I think that pace of innovation, when you combine that with the complexity of the technologies, and some of them are competing, right? You can look at electrical versus optical, and so the, the race is on, and I think the economic value that can be unlocked from having a technology that goes faster at a lower power is there. There is a economic value for the AI clusters that can be unlocked. It really plays to the strength that Keysight has had. When we started our strategic focus that I called out at the Investor Day in 2023, this is what we were shooting for. Given the, the full stack offerings we have, the physical layer tools and the emulation capabilities, we're now able to bring that to bear to new emerging use cases in a way that, you know, would be difficult for a product-driven organizations, which may have, you know, products here and there. I think having that breadth of portfolio and the technology to go do, you know, provide solutions is a huge differentiator for us. One, I believe, is sustainable as we look into the future. Yeah, at a broader level, what we're doing is enabling these new AI racks and clusters. What we see is hundreds of components, new components are getting designed and invented that are going into these racks and clusters. With our physical layer portfolio, we're able to help in early R&D, all the way to manufacturing of these components. With our protocol layer portfolio, we're able to emulate these clusters and racks at scale, even before a deployment, live deployments happen. That's one dimension of this. Satish talked about the overlapping technology waves, the acceleration of the speed of these technology cycles. The reason that's happening is, you talked about a bunch of technologies, silicon photonics. There's parallel innovation going on in optics and electrical, electrical transmission. There's also innovation from a long-haul, short-haul perspective, scale-up, scale-out, networks, and new components are getting designed, right? We're attracting not just the regular customers, where we're deepening our engagements with, but startup companies and other players, neoclouds, they're coming in, and they're inventing for power, speed, and density. All of this is sort of layering on existing typical cycles that we would see in a, in a wireline type of an IT, type of a dynamic. We're seeing a lot more of that go on concurrently, and that's driving a lot of growth. We're excited, you know, to showcase many of these innovations this week at the DesignCon, and in a month from now at the OFC as well, in mid-March. Yeah, as this is Neil, just with regard to your comments on software and services. As you know, we've looked to, you know, grow the proportion of our business coming from software organically. That, that mix shift towards software happens relatively slowly, and we've looked to supplement that with acquisitions. We made the acquisition of ESI a few years back, and obviously recently we just completed not just Spirent, but the Optical Design and PowerArtist businesses. Together, those acquisitions have above average software mix, added about three points to the overall software mix for Keysight. You know, the, the interesting thing, if you think about the organic side, is right now the hardware portions of our businesses are growing quite aggressively. That I think that slows some of that mix shift. I think from a margin perspective, though, we have a highly differentiated portfolio that's aligned to these secular themes around AI and data center and, and soon to be 6G, which, you know, should, in the end, be gross margin positive as well. Okay. Thank you, guys. Thank you, Tim. Thank you for your questions. Our next question comes from the line of Mark Delaney with Goldman Sachs. Your line is now open. Yes, good afternoon, and thank you very much for taking the questions. First question, I was hoping to better understand the company's expectations for the second half of the year. I think, Neil, you spoke about a little over 20% top line growth as your new expectation for fiscal 2026. Think that's all in, not, not organic. Please correct me if I'm wrong, but, but it does seem to imply that- That's correct. Yes, all in. There's a little bit of... Okay, yeah, it seems, seems to imply there might be a little bit of moderation in the second half. I realize it's coming off of a very robust 1Q and 2Q guidance. If you can speak a bit more on what you're trying to assume in your second half guidance and how much visibility you might have, because the orders are strong. It seems like, you know, the end markets are generally doing well, but they're just trying to reconcile that with what might be implied in your comments for full year revenue. Yeah, I mean, I guess, you know, we've talked at length over the years about how we manage our business, and that we generally have really strong visibility one quarter out, pretty decent visibility two quarters out, and then it falls off, you know, beyond that. You know, I, I think here we are, we obviously have very strong order and revenue growth here in Q1. We have a strong funnel here as we, as we enter Q2, so we feel really good about the guidance that we put out for the second quarter. That funnel visibility extends now out into Q3, then with, again, you know, a little bit, a little bit less, less clarity as it relates to the back of the half, back half or to, to Q4. I think looking to put guardrails on it, you know, we, we believe that, again, on an all-in basis, we can grow the business 20%, a little over 20% this year. Is there opportunity for upside if we can sustain the same level of momentum that we see in Q1 and Q2? Absolutely, but our base case is at this point for, you know, organic growth that is, you know, substantially above our long-term model, even in the back half of the year, and we'll see, we'll see how it develops as we, as we move through the year. Okay. No, helpful context. The other question was on supply chain, just given how strong the business is running, you know, in terms of, of demand and volumes, maybe speak about your ability to get enough supply, overall, but if you could also speak specifically to getting enough DRAM and memory, because that's an area that's been, somewhat tight in particular. Thank you. Yeah, thank you, Mark. You know, we've, we've prepared for sort of the scale of the business, given the conversations we're having from the customers last year. You know, I think I made a comment that 2025 was a year of building momentum for us, and I think that's really helped us prepare for this compounding momentum that's now upon us. Our team is doing a great job scaling, but also in a disciplined manner, as we, as we look forward. As far as memory is concerned, you know, we're not, you know, you know, we don't have volume usage for these, high in demand, high bandwidth kind of memories that are used in AI and other areas. So given that, we're not, we're not necessarily exposed to that. Now, you know, there is some on the margin, prices are going up on memories. We've factored that into our outlook and guide, and we keep monitoring this, but we feel good about our ability to execute the next couple of quarters at, and then we'll, we'll keep planning that way. Thank you. Thank you. We'll take the next question. Thank you for your questions. Our next question comes from the line of Andrew Spinola with UBS. Your line is now open. Thank you. I wanted to ask a, a high-level question about the competitive landscape in your AI business. Just given the strength of the demand there, what does the pricing look like in that market? Are you, are you able to see any, any price ups, any improvements in pricing, or is the size of the customers affected? Can you also talk about just how the market is, given how quickly it's moving, you know, how many competitors are you, you know, against in, in a lot of these end markets? How competitive are they, just given the, the, the, how fast this market is moving? Yeah, Andrew, thank you. I, I'd just say, you know, Keysight's competitive advantage, is that we are designed to be a solutions-oriented company. While there are a lot of product, you know, based competitors, that play into the marketplace in general with tools, you know, our strength, you know, is enhanced 'cause we have our own in-house tech stack that gives us the differentiation, especially in advanced technologies, when you start to think about 1.6 T and beyond, as an example, or you're looking at new optical and electrical technologies converging, speed is very important for this ecosystem. As you noted, you know, customers are, are racing with for innovation, and our ability to keep pace with them, with the products and solutions they need, is key. We also participate in a number of standards bodies across, across the globe, and that gives us a very unique vantage point to not just provide products, but be really staying ahead of our customers, and that's what they appreciate. Having said that, we don't take that for granted. We work hard to make sure our, our customers and the ecosystem are supported, and we have, we have teams around the world that work with our customers every day. With regard to new technologies, as our new products come out, you know, our goal is to design things that are competitive, but also have the ability to grow our gross margins, and we feel good about the value creation associated with our business in AI and actually the entire portfolio. Got it. Then you had mentioned on the, the prior call, that last quarter, that you were operating in a constrained environment. I'm just wondering if any of the acceleration in top line in Q2 is a representation of some of those constraints coming off, or is this just general, you know, continued improvement in demand? I think largely, improvements in demand for sure. As the AI infrastructure is starting to get deployed at scale, we're starting to see that scale build, right? People are manufacturing, more with confidence, maybe on the front end of it. You know, people are trying to get their designs correct, you know, and trying to deploy things that have high quality. Now I think the confidence is improving, and therefore the scale is building. Thank you very much. Thank you. Thank you for your questions. Our next question comes from the line of Atif Malik with Citigroup. Your line is now open. Hi, thank you for taking my question. Great job on the results. Satish, you spoke about NTN ecosystem and new LEOs. I'm curious if you have some sort of a TAM number for these new kind of projects. Yeah, thank you, Atif. You know, you know, it's been an exciting year for wireless already. You know, we started the year, having returned the business to growth last year, high single-digit growth. This year we're off to a robust start, you know, surpassing our expectations even for since the beginning of the year. One of the legs of that is really this non-terrestrial networks, the use of satellite technologies for commercial direct, direct-to-device type of applications. If you take a big picture view, you know, we see networks are getting multidimensional, right? Integrating terrestrial airborne satellite communications more seamlessly, and with the infrastructure also, with sensing and other technologies, going to be part of this vision for 6G. The early work that we've done with standards is positioned as well, and, well, we've had a couple of wins even this quarter that sustains the momentum in this business. It's a little bit too early to sort of size that as a TAM, but we feel good about our ability to grow our wireless business this year, based on NTN, but also eventually 6G and other applications. Great. As a follow-up to Neil. Neil, can you talk about the linearity of the orders in Q1, and are you expecting orders to outpace revenues in Q2? Yeah, I mean, I think, you know, we saw pretty, pretty strong demand from the outset in Q1, and that was sustained, you know, throughout the quarter. You know, not a whole lot to be, to be gleaned from the linearity within the quarter other than broad strength. I think as we think about the second quarter, obviously you can see through our guide of $1.7 billion of revenue, that the timing of some bigger deals is going to be shipping in Q2, that I think is likely going to kind of bring orders and revenue close, close, close to, to close together. Either side of one, I would call it. Thank you. Thank you. Thank you for your questions. Thank you. Our next question comes from the line of Mehdi Hosseini with SIG. Your line is now open. Yes, thanks for, excuse me. Thanks for taking my question. I have two follow-ups for me. One, Neil, in the past, you have defined your overall business by a mix of software and hardware, R&D, and high volume manufacturing. In all the acquisitions of the past two years, where are we with those two mixes? I have a follow-up. Yeah, so the hardware, software and services was 40% within the quarter. Software specifically is, you know, above 25%, so 26%-27% in that range. If on the software-hardware mix, you know, I think we are seeing a little bit of a, you know, a little bit more manufacturing opportunity here in the wireline space with the data center build-out. We've talked to that, about that kind of being 60/10 over the long term, and we're probably a little bit below 60 R&D at the moment in the current environment. Okay, great. My follow-up is for the team. You've had a number of sequential growth, a number of quarters with sequential growth in the wireline. I'm under the impression that most of it is driven by a scale-out. If I'm correct with the assumption, when do you think opportunities in a scale-out would materialize, and can you help us understand the size of the TAM or market opportunities? A scale-out versus a scale-up. Uh, Mehdi, let me take that. Yeah, let me take that question. This is Kailash. Uh, we're seeing opportunities in scale up as well as, uh, scale out. Uh, so clearly, as these, uh, clusters and racks are put together, there is an expansion. We're capitalizing on that scale. Uh, but not just that, uh, to your earlier question about, uh, uh, R&D, there's quite a bit of activity at this moment going on, uh, from, uh, from the perspective of one point six terabit R&D, as well as four 48 GB per lane and three point two tera R&D. Uh, we are seeing expansion in those, uh, areas as well. So scale up and scale out are, are opportunities for us in both R&D and manufacturing. Got it. Thank you for details. Thank you, Mehdi. Thank you for your questions. Our next question comes from the line of Samik Chatterjee with JP Morgan. Your line is now open. Hi. Thanks for taking my question. Hope you can hear me- Hi, Samik, your, your volume is very low. Can you hear me now? Samik, if you're using, if you're using AirPods or anything like that. Samik, You may need to disconnect and use your handphone. Hi, can you hear me now? Much better, Samik, but still, you may have to speak up. Thank you. Okay. Sorry, Satish, about that. Maybe just starting off, I mean, the $100 million increase in revenue from in the guide that you're incorporating, clearly that's very high end relative to when... Even if I go back and look at Keysight historically. I know you spoke a lot about the drivers, but wondering if you can sort of share your views about how much of that is the confluence of different technology, sort of inflections that are happening at the same time, relative to Keysight maybe participating a lot more in manufacturing and a lot more relevant in the manufacturing based on both organic as well as the inorganic development? Just trying to parse out. I mean, we've seen you go through multiple, sort of cycles before, but the magnitude of the increase here in revenue seems a bit unprecedented. Just break that down for us if you can. Thank you. I have a follow-up. Yeah, thank you. Samik, you know, Neil may have some comments on, you know, sequential, sequential math, but I'll just say, you know, at the highest level, you know, we see this compounding momentum this year. This is because a number of these tailwinds that have been sort of the underpinning so far growth strategy, whether it be next-gen, you know, semi or connectivity with wireless or semiconductor defense modernization and AI or in the wireline sector. All of these are coming together, and one where we are perfectly in a great position to capitalize through the differentiation of what solutions we have. We feel really good about the fundamentals in the business, and the team is executing very well. I'll maybe have Steve make some comments on the pipeline and sort of the, you know, the volume and the quality of how the pipeline is progressing as we, as we see it, and that I'll maybe give you some additional color. Thanks, Satish. Well, let me start by saying it's a great time to be in Keysight sales organization right now. This was the highest quarter ever, and excluding acquisitions, our second highest on record, which is unprecedented for a quarter one for Keysight. This was also our seventh consecutive quarter of year-over-year order growth. I think this momentum that we're seeing now started building about a year ago when we delivered 8% growth year-over-year in Q2. Our focus throughout has been to broaden engagement across our key customer base, strengthening our partnerships, and gaining that early visibility into strategic programs where we can shape their requirements and capture key technology inflections. I think we're doing that, just, with the, the evidence is there, and it's showing up in our funnel dynamics, as Satish was alluding to. In my 36 years with the company, this is one of the strongest funnels I've ever seen across the four dimensions that I track, which is short-term funnel, long-term funnel, funnel intake, and funnel velocity. Both our total funnel and new funnel intake are at all-time highs, and our late-stage funnel is up high double digits. This really provides a strong near-term visibility for this quarter, which gives us great confidence going into the second half as well. I'm also excited about our robust NPI pipeline, as well as new synergistic opportunities we have now with our recent acquisitions, especially Spirent. Together, they position us with the right solutions at the right time, and we're engaging with the right customers and right market makers and their ecosystem to capture this opportunities ahead. Got it. Got it. Thank you. For my follow-up, Satish, I've received this question from a couple of investors, so I thought I'd ask you directly in terms of get your thoughts on this. Sure. A few investors have asked about sort of your software business and how we should think about the disruption fields from AI itself to the software capabilities that you offer your customers, both sort of on, on box and off box, as in attached to the hardware, as well as what you offer as standalone software, how to think about the AI disruption risk relative to those, software solutions. Thank you. Thank you, Samik. I, I think, look, we've been very clear since launch of the company that we're a software-centric, but a solutions company. As a solutions company, our focus has always been on our customers' toughest problems and solving them better than they can solve it internally or better than they can solve it with anybody else. This has been the, the work that we have been doing, and it's work in progress, and we continue to deepen our relationship with our customers. I would really welcome you to join us at the DesignCon or Mobile World Congress or, or OFC, where you can see the work we're doing with industry to really progress standardization and progress technology. It's a, it's a collaborative model, one where having the tech stack that's differentiated gives our customers an advantage. I don't look at our business as sort of like a software business or a hardware business. It's a solutions business where software is part of the value proposition. Now, there is a section of our business where we have design tools, where we're unique in those design tools, where we enable our customers to simulate. Underlying the, the competitive advantage there is not some workflow enabler, but it's really deep physics, deep physics that has been built over decades, right? Even the optical business that we just acquired from Synopsys, you know, has been around for multiple decades, and it's not as simple as Maxwell's equation, right? It is, it is a whole bunch of deep physics that enables people to model the real world, and we'll have to stay on top of it. Obviously, we're investing to keep building new capabilities and expanding into new use cases. I would, you know, not, not go as far as saying we're not, we're not looking at AI. We are, in fact, embedding more AI into those tools to make them, easier for our customers to use and, for them to simulate more complex things. That's the, that's the path we're currently on. Thank you. Thanks for taking my questions. Thank you, Samik. Thank you for your questions. Our next question comes from the line of Rob Mason with Baird. Your line is now open. Yes, good evening, and again, congrats on, on the good results. Satish, a number of times you, you, again, talked about how quickly the pace of innovation is moving, these design cycles compressing. I guess there's nowhere, you know, that's more evident in, in your wireline business. As you think about moving 800 GB to 1.6 T, and now, you know, 3.2 T on the research side, can you just frame for us, you know, how much, you know, recapitalization versus upgrade type activity that mix is involved there? I'm just curious, just given the pace that it's on, does that spend cycle change from what it typically or what you have experienced in the past? I think, you know, this has always been the question, you know, that's on people's minds. When, when 100 GB was done and we were moving to 400 GB, obviously there is a little bit of, you know, customers moving to 400 GB, so they buy more 400 GB tools and they buy a little less 100 GB tools, and that's always the case. What we're currently seeing is concurrent designs, where the 800 GB is being ramped and 1.6 is being accelerated in R&D, and customers are talking about how do they get to 3.2 as well, right? It is a, you know, the next couple of years, we see this concurrency continuing just because all this content ultimately has to go into the AI clusters, where you're really having to have the right networking fabric to match with the compute that's there in these clusters. It's not good enough to have a great compute chip, but maybe not, not an equivalent throughput on the networking side. It's really the system level problem, and we feel good about not just one portfolio that, that addresses that, but we feel good about our portfolio that we have for the wireline ecosystem. It's highly differentiated. That's helpful. Just as a follow-up, I, I know you've only owned the Spirent businesses, OSG, I guess, as well, a short time, but can you give us a feel for, at least within the, the first half of this year, yet maybe how those businesses are tracking on a pro forma basis, from a growth standpoint? Yeah, I would just say, you know, as I said last quarter, we took, we took a pretty conservative approach in terms of how we plan for those businesses this year from a growth perspective, given the broad scale integration activity that's going to be going ongoing, and the acquisitions right now are right in line with our own expectations. We remain on track to deliver the $375 million of revenue that we communicated last year, and our synergy realization is also tracking to plan. Thanks. We'll take our last couple of questions, please. Of course. Our next question comes from the line of Robert Jamieson with Vertical Research Partners. Rob, your line is now open. Thanks for taking my questions. Just wanted to base, on AI just quickly and the expansion, the customer base, customer base that you're talking about. You know, we've heard you talk about it prior, like, and what you saw in 5G, where it started with a handful of customers and grew to hundreds. You know, I guess what I'm trying to ask today is, like, where are we on that path today? You know, like, is this still early innings? Really what I'm trying to do here is try to pair some of the comments from a couple of quarters ago, when you all talked about, you know, some of the trends you were seeing in the AI ecosystem and how they were sustainable all the way out to 2028 and beyond. you know, especially as we move from the data center to edge and access layers. Just would love to kind of understand where you think we are in that customer expansion, you know, base, and if this is still, like, early innings, compared to, like, your prior cycles in, like, 5G? Yeah, I think, you know, Rob, from everything we can see, there's one thing we can take away is AI is going to have a material impact to the rate of innovation across our end markets. When we think about it through that lens, yeah, you can always say, well, things have been slow. When you take a long-term view, I think this acceleration that we see in adoption of technology is going to continue, and we're in a great position to enable the leading innovators around the world. Even with the expansion that we've seen in customers to date, we still are largely servicing, you know, call it the U.S.-based, U.S. hyperscaler-based demand. I, you know, we're starting to hear about more sovereign investments around the globe that are yet to come. You know, use cases where AI starts to intersect with some of our other businesses as well. Those are still largely ahead of us, and we feel good about our position today, and we continue to invest to realize future opportunities. Perfect. Then just, you know, really strong free cash flow performance, Neil. You know, how are you thinking about prioritization between M&A, organic reinvestment, and buybacks in year 2026? Just, what does the current pipeline look like? You know, any changes in valuation environment, and, you know, any color on the types of assets you'd be looking to kind of add to the portfolio would be helpful. Yeah, I mean, I, you know, I, I don't think our priorities have changed. Our number one priority by far is still to invest in the organic growth of our business. Obviously, participating in these AI, rapidly moving AI markets takes a lot of investment, and as Satish mentioned, the investments that we've made over the last two to three years are really enabling our success today. We're similarly going to be making some investments to scale capacity and make sure that we are, you know, capturing all the opportunities that are here in front of us. I think beyond that, we continue to look to strike a balance between returning capital to investors and adding value through M&A. Our immediate focus in the M&A side is on, on, you know, the capturing value for the three acquisitions that we've just closed. We're, we're hard at work on that, but at the same time, we're starting to rebuild a funnel of opportunities, you know, across our end markets, that, that can potentially, create value into the future. Yeah, I wanna also add our board of, our board has authorized a $1.5 billion, you know, stock buyback authorization that we have, as well as a way of returning capital. Excellent. All good to hear. Thank you very much. Thank you. Thank you. Thank you for your questions. Our next question comes from line of David Ridley-Lane with Bank of America. Your line is now open. Thank you. I'll just ask a simple one just to make sure that, you know, we're hearing the message that you're delivering. Why now, right? What I think I've heard over the course of this call is that manufacturing kicked in, but tell me if I'm wrong on that, and just why are the orders all of a sudden hitting right now? Yeah. David, I would say that the 2025 was a year we built momentum in the business. Now what we're experiencing is a broad-based demand across all our businesses and across our regions as well. It's broad-based. Yes, for the AI business, if you look at it, there's continuing demand in R&D, manufacturing is becoming important to customers. Obviously, that's the case. If you take our aerospace and defense business, that's got nothing to do with, you know, manufacturing in the same way you think about it in the wireline side of things. Our wireless business was up. Our EISG business was up. No, that makes sense. Thank you, Evan, for taking the question. Thank you. Thank you, David. That concludes our last Q&A session for today. I would like to turn the call back over to Liz Morali for any closing remarks. Thank you, Victoria, and thank you all for joining us today. A replay of today's call will be available on the investor relations website later today, and we appreciate your interest in Keysight. Thank you, ladies and gentlemen, for your participation in today's conference. This concludes today's call. You may now disconnect. Have a wonderful day.