Keysight Technologies, Inc.

Previous wording

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. This report contains forward-looking statements which include, but are not limited to predictions, future guidance, projections, beliefs, and expectations about the company’s trends, seasonality, cyclicality and growth in, and drivers of, the markets we sell into, our strategic direction, earnings from our foreign subsidiaries, remediation activities, new solution and service introductions, the ability of our solutions to meet market needs, changes to our manufacturing processes, the use of contract manufacturers, the impact of government regulations on our ability to conduct operations, our liquidity position, our ability to generate cash from operations, growth in our businesses, our investments, the potential impact of adopting new accounting pronouncements, our financial results, our purchase commitments, our contributions to our pension plans, the selection of discount rates and recognition of any gains or losses for our benefit plans, our cost-control activities, savings and headcount reduction recognized from our restructuring programs and other cost saving initiatives, other regulatory approvals, the integration of our completed acquisitions and other transactions, and our transition to lower-cost regions. The forward-looking statements involve risks and uncertainties that could cause Keysight’s results to differ materially from management’s current expectations. Such risks and uncertainties include, but are not limited to, the impact of global economic conditions such as inflation or potential recession, the impacts of increased trade tensions such as an imposition of or increase in tariffs and tightening of export control regulations, slowing demand for products or services, volatility in financial markets, reduced access to credit, changes in interest rates or currency exchange rates, the existence of political or economic instability, impacts of geopolitical tension and conflict in regions outside of the U.S., the impact of new and ongoing litigation, impacts related to net zero emissions commitments, and the impact of volatile weather caused by environmental conditions such as climate change. Our actual results could differ materially from the results contemplated by these forward-looking statements due to various factors, including but not limited to those risks and uncertainties discussed in Part II Item 1A and elsewhere in this Form 10-Q.

Current wording

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto included elsewhere in this Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended October 31, 2025. This report contains forward-looking statements which include, but are not limited to predictions, future guidance, projections, beliefs, and expectations about the company’s trends, seasonality, cyclicality and growth in, and drivers of, the markets we sell into, our strategic direction, earnings from our foreign subsidiaries, remediation activities, new solution and service introductions, the ability of our solutions to meet market needs, changes to our manufacturing processes, the use of contract manufacturers, the impact of government regulations on our ability to conduct operations, our liquidity position, our ability to generate cash from operations, growth in our businesses, our investments, the potential impact of adopting new accounting pronouncements, our financial results, our purchase commitments, our contributions to our pension plans, the selection of discount rates and recognition of any gains or losses for our benefit plans, our cost-control activities, savings and headcount reduction recognized from our restructuring programs and other cost saving initiatives, other regulatory approvals, the integration of our completed acquisitions and other transactions, and our transition to lower-cost regions. The forward-looking statements involve risks and uncertainties that could cause Keysight’s results to differ materially from management’s current expectations. Such risks and uncertainties include, but are not limited to, the impact of global economic conditions such as inflation or potential recession, the impacts of increased trade tensions such as an imposition of or increase in tariffs and tightening of export control regulations, slowing demand for products or services, volatility in financial markets, reduced access to credit, changes in interest rates or currency exchange rates, the existence of political or economic instability, impacts of geopolitical tension and conflict in regions outside of the U.S., the impact of new and ongoing litigation, impacts related to net zero emissions commitments, and the impact of volatile weather caused by environmental conditions such as climate change. Our actual results could differ materially from the results contemplated by these forward-looking statements due to various factors, including but not limited to those risks and uncertainties discussed in Part II Item 1A and elsewhere in this Form 10-Q. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law.

Previous wording

Keysight Technologies, Inc. (“we,” “us,” “our,” “Keysight” or “the company”), incorporated in Delaware on December 6, 2013, is a global innovator in the computing, communications and electronics markets, committed to advancing our customers’ business success by helping them solve critical challenges in the development and commercialization of their products and services. Our mission, “accelerating innovation to connect and secure the world,” speaks to the value we provide our customers in a world of ever-increasing technological complexity. We deliver this value through a broad range of design, emulation, and test solutions that address the critical challenges our customers face in bringing their innovations to market on ever-shorter schedules.

Current wording

Keysight Technologies, Inc. (“we,” “us,” “our,” “Keysight” or “the company”), incorporated in Delaware on December

Previous wording

In the fourth quarter of fiscal 2025, we acquired all of the outstanding common stock of Spirent Communications plc (“Spirent”) for $1,415 million, net of $127 million cash acquired, using existing cash. For the three and six months ended April 30, 2026, our acquisition of Spirent resulted in incremental revenue of $55 million and $143 million, respectively. In our discussion of changes in our results of operations, we have qualitatively disclosed the impact of the Spirent acquisition.

Current wording

In the fourth quarter of fiscal 2025, we acquired all of the outstanding common stock of Spirent Communications plc (“Spirent”) for $1,415 million, net of $127 million cash acquired, using existing cash. For the three and nine months ended July 31, 2026, our acquisition of Spirent resulted in incremental revenue of $61 million and $204 million, respectively. In our discussion of changes in our results of operations, we have qualitatively disclosed the impact of the Spirent acquisition.

Previous wording

Changes to U.S. tariff policy, which resulted in broad-based increases in tariff rates, impacted our financial results for the three and six months ended April 30, 2026. We continue to closely monitor and assess the potential impact of ongoing tariff actions on our results, and take steps across multiple vectors to reduce the impact. This multipronged mitigation approach spans our global manufacturing footprint and sourcing strategies, as well as pricing and cost actions.

Current wording

Changes to U.S. tariff policy which resulted in broad-based increases in tariff rates, IEEPA tariff refund claims, and related customer surcharge refunds impacted our financial results for the three and nine months ended July 31, 2026. We continue to closely monitor and assess the potential impact of ongoing tariff actions, including the recently introduced Section 301 “forced labor” tariffs, on our results, and take steps across multiple vectors to reduce the impact. This multipronged mitigation approach spans our global manufacturing footprint and sourcing strategies, as well as pricing and cost actions.

Previous wording

In February 2026, the Supreme Court of the United States (“U.S. Supreme Court”) determined that certain tariffs imposed pursuant to the International Emergency Economic Powers Act (“IEEPA”) were not authorized by law. Subsequent rulings by the U.S. Court of International Trade have directed the U.S. Customs and Border Protection to establish processes to effect refunds of certain tariffs previously collected. Based on these judicial determinations, for the three and six months ended April 30, 2026, we recorded a receivable of $100 million within “other current assets” in the condensed consolidated balance sheet, representing recovery of tariffs previously paid and statutory interest accrued, with corresponding offsets of $93 million to “cost of sales,” $4 million to “selling, general and administrative,” and $3 million to “interest income” in the condensed consolidated statement of operations. In addition, we recorded a $40 million liability within “other accrued liabilities” in the condensed consolidated balance sheet as a result of our decision to refund IEEPA tariff surcharges collected from our customers, with a corresponding reduction of revenue in the condensed consolidated statement of operations. For additional information regarding the basis of accounting for tariff refund claims, see Note 1, “Overview and Summary of Significant Accounting Policies,” to the condensed consolidated financial statements.

Current wording

In February 2026, the Supreme Court of the United States (“U.S. Supreme Court”) determined that certain tariffs imposed pursuant to the International Emergency Economic Powers Act (“IEEPA”) were not authorized by law. Subsequent rulings by the U.S. Court of International Trade have directed the U.S. Customs and Border Protection to establish processes to effect refunds of certain tariffs previously collected. Based on these judicial determinations, during the nine months ended July 31, 2026, we recorded a receivable of $100 million within “other current assets” in the condensed consolidated balance sheet, representing recovery of tariffs previously paid and statutory interest accrued, with corresponding offsets of $93 million to “cost of sales,” $4 million to “selling, general and administrative,” and $3 million to “interest income” in the condensed consolidated statement of operations. In addition, we recorded a $40 million liability within “other accrued liabilities” in the condensed consolidated balance sheet as a result of our decision to refund IEEPA tariff surcharges collected from our customers, with a corresponding reduction of revenue in the condensed consolidated statement of operations. During the three and nine months ended July 31, 2026, we received $37 million of refund proceeds, resulting in outstanding IEEPA tariff refund claims receivable of $64 million as of July 31, 2026. For additional information regarding the basis of accounting for tariff refund claims, see Note 1, “Overview and Summary of Significant Accounting Policies,” to the condensed consolidated financial statements. In our discussion of changes in our results of operations and segment overview, we have qualitatively disclosed the impact of the IEEPA tariff refund claims and related customer surcharge refunds.

Previous wording

Total orders for the three and six months ended April 30, 2026 were $2,051 million and $3,696 million, respectively, an increase of 56 percent and 43 percent, respectively, compared to the same periods last year. For both the three and six months ended April 30, 2026, foreign currency movements and acquisitions had a favorable impact of 1 percentage point and 7 percentage points, respectively, on the year-over-year change. For the three and six months ended April, 30, 2026 orders increased across all regions.

Current wording

Total orders for the three and nine months ended July 31, 2026 were $2,091 million and $5,787 million, respectively, an increase of 56 percent and 48 percent, respectively, compared to the same periods last year. Foreign currency movements had an unfavorable impact of 1 percentage point and an immaterial impact, respectively, on the year-over-year change for the three and nine months ended July 31, 2026. Acquisitions had a favorable impact of 5 percentage points and 6 percentage points, respectively, on the year-over-year change for the three and nine months ended July 31, 2026. For the three and nine months ended July 31, 2026, orders increased across all regions.

Previous wording

Revenue for the three and six months ended April 30, 2026 was $1,717 million and $3,317 million, respectively, an increase of 31 percent and 27 percent, respectively, compared to the same periods last year. For both the three and six months ended April 30, 2026, foreign currency movements and acquisitions had a favorable impact of 1 percentage point and 7 percentage points, respectively, on the year-over-year change. For both periods, revenue increased in the Communications Solutions Group (“CSG”) and the Electronic Industrial Solutions Group (“EISG”). Revenue from CSG and EISG represented 72 percent and 28 percent, respectively, of total revenue for the three months ended April 30, 2026. Revenue from CSG and EISG represented 71 percent and 29 percent, respectively, of total revenue for the six months ended April 30, 2026.

Current wording

Revenue for the three and nine months ended July 31, 2026 was $1,846 million and $5,163 million, respectively, an increase of 36 percent and 31 percent, respectively, compared to the same periods last year. Foreign currency movements had an immaterial impact and a favorable impact of 1 percentage point, respectively, on the year-over-year change for the three and nine months ended July 31, 2026. Acquisitions had a favorable impact of 6 percentage points and 7 percentage points, respectively, on the year-over-year change for the three and nine months ended July 31, 2026. For both periods, revenue increased in the Communications Solutions Group (“CSG”) and the Electronic Industrial Solutions Group (“EISG”). Revenue from CSG and EISG represented 73 percent and 27 percent, respectively, of total revenue for the three months ended July 31, 2026. Revenue from CSG and EISG represented 72 percent and 28 percent, respectively, of total revenue for the nine months ended July 31, 2026.

Previous wording

Net income for the three and six months ended April 30, 2026 was $349 million and $630 million, respectively, compared to $257 million and $426 million, respectively, for the same periods last year. The increase in net income for the three months ended April 30, 2026 was primarily driven by higher revenue, favorable mix, andnet IEEPA tariff refund claims, partially offset by previous year net gains on derivative instruments, higher people-related costs, incremental costs from acquired businesses, higher amortization of acquisition-related balances, and the impact of ongoing tariffs. The increase in net income for the six months ended April 30, 2026 was primarily driven by higher revenue, favorable mix, higher net income tax benefit, andnet IEEPA tariff refund claims, partially offset by incremental costs from acquired businesses, higher people-related costs, net losses on equity investment, higher amortization of acquisition-related balances, and the impact of ongoing tariffs.

Current wording

Net income for the three and nine months ended July 31, 2026 was $397 million and $1,027 million, respectively, compared to $191 million and $617 million, respectively, for the same periods last year. The increase in net income for the three months ended July 31, 2026 was primarily driven by higher revenue and favorable mix, partially offset by incremental costs from acquired businesses, higher people-related costs, higher amortization of acquisition-related balances and higher net income tax expense. The increase in net income for the nine months ended July 31, 2026 was primarily driven by higher revenue, favorable mix, lower net income tax expense, and net IEEPA tariff refund claims, partially offset by incremental costs from acquired businesses, higher people-related costs, higher amortization of acquisition-related balances, net losses on equity investments, and the impact of ongoing tariffs.

Previous wording

Cash flows generated from operating activities were $942 million and $862 million, respectively, for the six months ended April 30, 2026 and 2025. Refer to the “Financial Condition” section of Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations for additional information.

Current wording

Cash flows generated from operating activities were $1,379 million and $1,184 million, respectively, for the nine months ended July 31, 2026 and 2025. Refer to the “Financial Condition” section of Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations for additional information.

Previous wording

Our first-to-market solutions strategy enables customers to develop new technologies and accelerate innovation and provides a platform for Keysight's long-term growth. Our customers are expected to continue to make R&D investments in certain next-generation technologies and applications, including evolution of 5G, early 6G, quantum computing, high-speed data center networks and infrastructure, satellite networks, artificial intelligence (“AI”), industrial internet of things (“IoT”), defense modernization, next generation electric vehicles, and autonomous vehicles. We continue to engage actively with our customers and closely monitor the macroeconomic environment, including tariffs, trade restrictions and tightening of export control regulations, monetary and fiscal policies, and geopolitical tensions. We remain confident in the long-term secular growth trends of our markets and our ability to outperform in a variety of market conditions.

Current wording

Our first-to-market solutions strategy enables customers to develop new technologies, accelerate innovation while providing a platform for Keysight's long-term growth. Our customers are expected to continue to make R&D investments in certain next-generation technologies and applications, including advancing 5G, early 6G, quantum computing, high-speed data center networks and infrastructure, non-terrestrial networks, AI, industrial internet of things, defense modernization, next generation electric vehicles, and autonomous vehicles. We continue to engage actively with our customers and closely monitor the macroeconomic environment, including tariffs, trade restrictions and tightening of export control regulations, monetary and fiscal policies, and geopolitical tensions. We remain confident in the long-term secular growth trends of our markets and our ability to outperform in a variety of market conditions.

Previous wording

There were no material changes during the three and six months ended April 30, 2026 to the critical accounting estimates described in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.

Current wording

During the nine months ended July 31, 2026, there were no material changes to the critical accounting estimates described in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2025.

Previous wording

Our revenues, costs and expenses, and monetary assets and liabilities are exposed to changes in foreign currency exchange rates due to our global operating, investing, and financing activities. We hedge revenues, expenses, and balance sheet exposures that are not denominated in the functional currencies of our subsidiaries on a short-term and anticipated basis. The result of these hedging activities are included in the condensed consolidated balance sheet and condensed consolidated statement of operations. We may experience some fluctuations within individual lines of the condensed consolidated balance sheet and condensed consolidated statement of operations because our hedging program is not designed to offset the currency movements in each category of revenues, expenses, and monetary assets and liabilities. Our cash flow hedging program is designed to hedge short-term currency movements based on a rolling period of up to twelve months. Therefore, we are exposed to currency fluctuations over the longer term. To the extent that we are required to pay for all, or portions, of an acquisition price in foreign currencies, we may enter into foreign exchange contracts to reduce the risk that currency movements will impact the U.S. dollar cost of the transaction.

Current wording

Our revenues, costs and expenses, and monetary assets and liabilities are exposed to changes in foreign currency exchange rates due to our global operating, investing, and financing activities. We hedge revenues, expenses, and balance sheet exposures that are not denominated in the functional currencies of our subsidiaries on a short-term and anticipated basis. The results of these hedging activities are included in the condensed consolidated balance sheet and condensed consolidated statement of operations. We may experience some fluctuations within individual lines of the condensed consolidated balance sheet and condensed consolidated statement of operations because our hedging program is not designed to offset the currency movements in each category of revenues, expenses, and monetary assets and liabilities. Our cash flow hedging program is designed to hedge short-term currency movements based on a rolling period of up to twelve months. Therefore, we are exposed to currency fluctuations over the longer term. To the extent that we are required to pay for all, or portions, of an acquisition price in foreign currencies, we may enter into foreign exchange contracts to reduce the risk that currency movements will impact the U.S. dollar cost of the transaction.

Previous wording

Results from Operations - Three and six months ended April 30, 2026 and 2025

Current wording

Results from Operations - Three and nine months ended July 31, 2026 and 2025

Previous wording

The following table presents the percentage change in revenue by geographic region for the three and six months ended April 30, 2026 and the impact of foreign currency movements as compared to the same periods last year.

Current wording

The following table presents the percentage change in revenue by geographic region for the three and nine months ended July 31, 2026 and the impact of foreign currency movements as compared to the same periods last year.

Previous wording

Refer to the “Segment Overview” section of Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations for additional information on changes in revenue during the three and six months ended April 30, 2026.

Current wording

Refer to the “Segment Overview” section of Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations for additional information on changes in revenue during the three and nine months ended July 31, 2026.

Previous wording

Gross margin for the three and six months ended April 30, 2026 increased 6 percentage points and 3 percentage points, respectively, compared to the same periods last year, primarily driven by net IEEPA tariff refund claims, higher revenue volume, favorable mix, and incremental gross margin impact from acquisitions, partially offset by higher amortization of acquisition-related balances, higher people-related costs, and the impact of ongoing tariffs.

Current wording

Gross margin for the three months ended July 31, 2026 increased 4 percentage points compared to the same period last year, primarily driven by higher revenue volume, favorable mix, and incremental gross margin impact from acquisitions, partially offset by higher people-related costs and higher amortization of acquisition-related balances. Gross margin for the nine months ended July 31, 2026 increased 3 percentage points compared to the same period last year, primarily driven by higher revenue volume, favorable mix, net IEEPA tariff refund claims, and incremental gross margin impact from acquisitions, partially offset by higher amortization of acquisition-related balances, higher people-related costs, and the impact of ongoing tariffs.

Previous wording

R&D expense for the three and six months ended April 30, 2026 increased 28 percent and 25 percent, respectively, compared to the same periods last year, primarily driven by incremental costs from acquired businesses, higher variable people-related costs, and continued investments in key growth opportunities in our end markets and leading-edge technologies.

Current wording

R&D expense for both the three and nine months ended July 31, 2026 increased 25 percent compared to the same periods last year, primarily driven by incremental costs from acquired businesses, higher variable people-related costs, and continued investments in key growth opportunities in our end markets and leading-edge technologies.

Previous wording

Selling, general and administrative expense for the three and six months ended April 30, 2026 increased 26 percent and 25 percent, respectively, compared to the same periods last year, primarily driven by incremental costs from acquired businesses, higher people-related costs, higher amortization of acquisition-related balances, and higher selling and marketing costs, partially offset by lower acquisition and integration costs.

Current wording

Selling, general and administrative expense for both the three and nine months ended July 31, 2026 increased 26 percent compared to the same periods last year, primarily driven by incremental costs from acquired businesses, higher people-related costs, higher amortization of acquisition-related balances, and higher selling, marketing, and infrastructure costs, partially offset by lower acquisition and integration costs.

Previous wording

Other operating expense (income), net for the three and six months ended April 30, 2026 was income of $5 million and $8 million, respectively, compared to income of $3 million and $11 million, respectively, for the same periods last year.

Current wording

Other operating expense (income), net for the three and nine months ended July 31, 2026 was income of $3 million and $11 million, respectively, compared to income of $4 million and $15 million, respectively, for the same periods last year.

Previous wording

Operating margin for the three months ended April 30, 2026 increased 8 percentage points compared to the same period last year, primarily due to gross margin gains and lower operating expenses as a percentage of sales. Operating margin for the six months ended April 30, 2026 increased 3 percentage points compared to the same period last year, primarily due to gross margin gains.

Current wording

Operating margin for the three and nine months ended July 31, 2026 increased 8 percentage points and 5 percentage points, respectively, compared to the same periods last year, primarily due to gross margin gains and lower operating expenses as a percentage of sales.

Previous wording

Interest income for the three and six months ended April 30, 2026 was $18 million and $34 million, respectively, compared to $21 million and $40 million, respectively, for the same periods last year and primarily relates to interest earned on our cash balances. Interest expense for three and six months ended April 30, 2026 was $25 million and $54 million, respectively, compared to $20 million and $40 million, respectively, for the same periods last year and primarily relates to interest on our senior notes.

Current wording

Interest income for the three and nine months ended July 31, 2026 was $20 million and $54 million, respectively, compared to $31 million and $71 million, respectively, for the same periods last year and primarily relates to interest earned on our cash balances. Interest expense for the three and nine months ended July 31, 2026 was $26 million and $80 million, respectively, compared to $28 million and $68 million, respectively, for the same periods last year and primarily relates to interest on our senior notes.

Previous wording

Other income (expense), net for the three and six months ended April 30, 2026 was income of $18 million and expense of $19 million, respectively, compared to income of $112 million and $94 million, respectively, for the same periods last year. The decrease in other income, net for the three months ended April 30, 2026 is primarily driven by previous year net gains on derivative instruments (see Note 9, “Derivatives,” for additional information), partially offset by net gains on equity investments and lower amortization of actuarial losses. The increase in other expense, net for the six months ended April 30, 2026 is primarily driven by net losses on equity investments and previous year net gains on derivative instruments (see Note 9, “Derivatives,” for additional information), partially offset by lower amortization of actuarial losses.

Current wording

Other income (expense), net for the three and nine months ended July 31, 2026 was income of $22 million and $3 million, respectively, compared to income of $4 million and $98 million, respectively, for the same periods last year. The increase in other income, net for the three months ended July 31, 2026 was primarily driven by lower net losses on derivative instruments and lower amortization of actuarial losses, partially offset by lower net gains on equity investments. The decrease in other income, net for the nine months ended July 31, 2026 was primarily driven by higher net losses on investments and higher net losses on derivative instruments, partially offset by lower amortization of actuarial losses.

Previous wording

As of April 30, 2026 and 2025, our headcount was approximately 16,500 and 15,400, respectively. The increase is primarily driven by acquisitions.

Current wording

As of July 31, 2026 and 2025, our headcount was approximately 16,600 and 15,500, respectively. The increase is primarily driven by acquisitions.

Previous wording

For the three and six months ended April 30, 2026, we recorded income tax expense of $69 million and an income tax benefit of $14 million, respectively, resulting in an effective tax rate of 16.5 percent and (2.3 percent), respectively. For the three and six months ended April 30, 2025, we recorded an income tax expense of $63 million and $93 million, respectively, resulting in an effective tax rate of 19.5 percent and 17.9 percent, respectively. The effective tax rate is generally lower than the U.S. federal statutory rate of 21 percent primarily due to favorable tax rates on certain earnings from operations in lower tax jurisdictions, partially offset by U.S. tax on Global Intangible Low-Taxed Income (“GILTI”).

Current wording

For the three and nine months ended July 31, 2026, we recorded income tax expense of $80 million and $66 million, respectively, resulting in an effective tax rate of 16.7 percent and 6.0 percent, respectively. For the three and nine months ended July 31, 2025, we recorded income tax expense of $50 million and $143 million, respectively, resulting in an effective tax rate of 20.8 percent and 18.8 percent, respectively. The effective tax rate is generally lower than the U.S. federal statutory rate of 21 percent primarily due to favorable tax rates on certain earnings from operations in lower tax jurisdictions, partially offset by U.S. tax on Global Intangible Low-Taxed Income (“GILTI”) inclusions and other taxes on foreign income.

Previous wording

For the six months ended April 30, 2026, we recorded net income tax benefits of $87 million from discrete items, driven by a $97 million net benefit from a favorable audit settlement and a $12 million release of reserves due to the expiration of the statute of limitations. These items were partially offset by a $15 million expense related to IEEPA tariff refund claims and $10 million expense from unrecognized tax benefits recorded in the second quarter.

Current wording

For the three months ended July 31, 2026, we recorded net income tax expense of $12 million from discrete items, driven primarily by a valuation allowance recorded against the deferred tax asset related to California research tax credits now limited under state tax legislation and expense from unrecognized tax benefits. For the nine months ended July 31, 2026, we recorded net income tax benefits of $74 million from discrete items, driven by a $97 million net benefit from a favorable audit settlement and a $19 million release of reserves due to the expiration of the statute of limitations, including interest and penalties. These items were partially offset by a $15 million expense related to IEEPA tariff refund claims, $21 million expense from unrecognized tax benefits, and $6 million of other immaterial discrete items recorded for the period.

Previous wording

As of April 30, 2026 and October 31, 2025, our long-term income tax liabilities for unrecognized tax benefits were $185 million and $241 million, respectively. The decrease primarily reflected the release of $68 million of uncertain tax positions in connection with an audit settlement in January 2026 as well as a $12 million release of reserves due to the expiration of the statute of limitations, partially offset by current year increases of $25 million.

Current wording

As of July 31, 2026 and October 31, 2025, our long-term income tax liabilities from unrecognized tax benefits were $194 million and $241 million, respectively. The decrease primarily reflected the release of $68 million of uncertain tax positions in connection with an audit settlement in January 2026 as well as a $12 million release of reserves due to the expiration of the statute of limitations, partially offset by current year increases.

Previous wording

CSG revenue for the three and six months ended April 30, 2026 grew across all regions and in both the commercial communications and the aerospace, defense, and government end markets The increase in revenue was primarily driven by demand in high-speed networks to support the growing need for AI capabilities and aerospace and defense solutions. Our customers continued their R&D spend in next-generation technologies and applications, including AI-driven data center expansion, ongoing 5G standards development and deployment, 400G/800G//1.6 terabit Ethernet, development of new communications technologies (e.g., 6G, Open Radio Access Networks, commercial non-terrestrial networks, quantum), high-speed networking, and major defense and government programs worldwide.

Current wording

CSG revenue for the three and nine months ended July 31, 2026 grew across all regions and in both the commercial communications and the aerospace, defense, and government end markets. The increase in revenue was primarily driven by demand in high-speed networks to support the growing need for AI capabilities and aerospace and defense solutions. Our customers continued their R&D spend in next-generation technologies and applications, including AI-driven data center expansion, ongoing 5G standards development and deployment, 400G/800G/1.6 terabit Ethernet, development of new communications technologies (e.g., 6G, Open Radio Access Networks, commercial non-terrestrial networks, quantum), high-speed networking, and major defense and government programs worldwide.

Previous wording

Our commercial communications end market revenue for the three and six months ended April 30, 2026 increased 40 percent and 36 percent, respectively, year-over-year and represented 70 percent and 69 percent, respectively, of total CSG revenue. For both three and six months ended April 30, 2026, revenue grew across all regions. The year-over-year increase in revenue was primarily driven by our customers R&D spend in terabit solutions and expanding 400G/800G/1.6 terabit transceiver manufacturing capacity to meet rising demand for AI capabilities. We continued to see investments in high-speed networks due to increasing need for AI capabilities in the data center infrastructure ecosystem, which drove demand for our 400G/800G/1.6 terabit Ethernet solutions, both in R&D and manufacturing.

Current wording

Our commercial communications end market revenue for the three and nine months ended July 31, 2026 increased 56 percent and 43 percent, respectively, compared to the same periods last year and represented 75 percent and 71 percent, respectively, of total CSG revenue. For both the three and nine months ended July 31, 2026, revenue grew across all regions. The year-over-year increase in revenue was primarily driven by our customers R&D spend in terabit solutions and expanding 400G/800G/1.6 terabit transceiver manufacturing capacity to meet rising demand for AI capabilities. We continued to see investments in high-speed networks due to increasing need for AI capabilities in the data center infrastructure ecosystem, which drove demand for our 400G/800G/1.6 terabit Ethernet solutions, both in R&D and manufacturing.

Previous wording

Our aerospace, defense, and government end market revenue for the three and six months ended April 30, 2026 increased 24 percent and 21 percent, respectively, year-over-year and represented 30 percent and 31 percent, respectively, of total CSG revenue. For both the three and six months ended April 30, 2026, revenue growth in the Americas and Europe was partially offset by a decline in Asia Pacific. The year-over-year increase in revenue was primarily driven by strong growth in radar and spectrum operations coupled with space and satellite solutions. We continue to see investments in defense modernization and emerging technologies.

Current wording

Our aerospace, defense, and government end market revenue for the three and nine months ended July 31, 2026 increased 14 percent and 19 percent, respectively, compared to the same periods last year and represented 25 percent and 29 percent, respectively, of total CSG revenue. For both the three and nine months ended July 31, 2026, revenue growth in the Americas and Europe was partially offset by a decline in Asia Pacific. The year-over-year increase in revenue was primarily driven by strong growth in radar and spectrum operations coupled with space and satellite solutions. We continue to see investments in defense modernization and emerging technologies.

Previous wording

R&D expense for the three and six months ended April 30, 2026 increased 29 percent and 25 percent, respectively, compared to the same periods last year, primarily driven by incremental costs from acquired businesses, higher variable people-related costs, and continued investments in key growth opportunities in our end markets and leading-edge technologies.

Current wording

R&D expense for both the three and nine months ended July 31, 2026 increased 26 percent compared to the same periods last year, primarily driven by incremental costs from acquired businesses, higher variable people-related costs, and continued investments in key growth opportunities in our end markets and leading-edge technologies.

Previous wording

Selling, general and administrative expense for the three and six months ended April 30, 2026 increased 38 percent and 35 percent, respectively, compared to the same periods last year, primarily driven byincremental costs from acquired businesses and higher people-related, selling, and marketing costs.

Current wording

Selling, general and administrative expense for the three and nine months ended July 31, 2026 increased 31 percent and 33 percent, respectively, compared to the same periods last year, primarily driven byincremental costs from acquired businesses, higher people-related costs, and higher selling, marketing, and infrastructure costs.

Previous wording

Operating margin for the three months ended April 30, 2026 increased 8 percentage points compared to the same period last year, driven by gross margin gains and lower operating expenses as a percentage of sales. Operating margin for the six months ended April 30, 2026 increased 4 percentage points compared to the same period last year, primarily driven by gross margin gains.

Current wording

Operating margin for the three and nine months ended July 31, 2026 increased 8 percentage points and 5 percentage points, respectively, compared to the same periods last year, driven by gross margin gains and lower operating expenses as a percentage of sales.

Previous wording

EISG revenue for the three and six months ended April 30, 2026 increased in Asia Pacific and Europe, partially offset by a decline in the Americas. Revenue increased across all markets. The increase in revenue was driven by AI-driven demand for advanced semiconductor technologies and fabrication capacity, next-generation printed circuit board (“PCB”) interconnects, software-defined vehicles and autonomous driving and digital health.

Current wording

EISG revenue for the three months ended July 31, 2026 grew across all regions. EISG revenue for the nine months ended July 31, 2026 increased in Asia Pacific and Europe, partially offset by a decline in the Americas. Revenue increased across all markets. The increase in revenue was driven by AI-driven demand for advanced semiconductor technologies and fabrication capacity, next-generation printed circuit board interconnects and capacitors, software-defined vehicles and autonomous driving, and digital health.

Previous wording

Gross margin for the three and six months ended April 30, 2026 increased 7 percentage points and 4 percentage points, respectively, compared to the same periods last year, primarily driven bynet IEEPA tariff refund claims, higher revenue volume, favorable mix, and incremental gross margin impact from acquisitions, partially offset by higher people-related costs and the impact of ongoing tariffs.

Current wording

Gross margin for the three months ended July 31, 2026 increased 7 percentage points compared to the same period last year, primarily driven byhigher revenue volume, favorable mix, and incremental gross margin impact from acquisitions, partially offset by higher people-related costs. Gross margin for the nine months ended July 31, 2026 increased 5 percentage points compared to the same period last year, primarily driven byhigher revenue volume, favorable mix, net IEEPA tariff refund claims, and incremental gross margin impact from acquisitions, partially offset by higher people-related costs and the impact of ongoing tariffs.

Previous wording

R&D expense for both the three and six months ended April 30, 2026 increased 22 percent compared to the same periods last year, primarily driven by continued investments in key growth opportunities in our end markets and leading-edge technologies, incremental costs from acquired businesses, andhigher variable people-related costs.

Current wording

R&D expense for the three and nine months ended July 31, 2026 increased 16 percent and 20 percent, respectively, compared to the same periods last year, primarily driven by continued investments in key growth opportunities in our end markets and leading-edge technologies, incremental costs from acquired businesses, andhigher variable people-related costs.

Previous wording

Selling, general and administrative expense for both the three and six months ended April 30, 2026 increased 17 percent compared to the same periods last year, primarily driven byincremental costs from acquired businesses and higher people-related, selling, and marketing costs.

Current wording

Selling, general and administrative expense for the three and nine months ended July 31, 2026 increased 13 percent and 15 percent, respectively, compared to the same periods last year, primarily driven byincremental costs from acquired businesses, higher people-related costs, and higher selling, marketing, and infrastructure costs.

Previous wording

Other operating expense (income), net for the three and six months ended April 30, 2026 was income of $3 million and $5 million, respectively. Other operating expense (income), net for the three and six months ended April 30, 2025 was income of $2 million and $8 million, respectively.

Current wording

Other operating expense (income), net for the three and nine months ended July 31, 2026 was income of $1 million and $3 million, respectively, compared to income of $2 million and $5 million, respectively, for the same periods last year.

Previous wording

Operating margin for the three months ended April 30, 2026 increased 10 percentage points compared to the same period last year, driven by gross margin gains and lower operating expenses as a percentage of sales. Operating margin for the six months ended April 30, 2026 increased 5 percentage points compared to the same period last year, primarily driven by gross margin gains.

Current wording

Operating margin for the three and nine months ended July 31, 2026 increased 9 percentage points and 6 percentage points, respectively, compared to the same periods last year, driven by gross margin gains and lower operating expenses as a percentage of sales.

Previous wording

Net cash provided by operating activities increased $80 million during the six months ended April 30, 2026 compared to the same period last year.

Current wording

Net cash provided by operating activities increased $195 million during the nine months ended July 31, 2026 compared to the same period last year.

Previous wording

•Net income for the six months ended April 30, 2026 increased by $204 million compared to the same period last year. Non-cash adjustments to net income increased by $192 million, primarily due to a $71 million increase in net unrealized losses on investments in equity securities, a $65 million increase in amortization, a $36 million increase in share-based compensation expense, a $13 million increase in depreciation expense, and a $10 million decrease in deferred tax benefit, partially offset by a $6 million gain on sale of investments.

Current wording

•Net income for the nine months ended July 31, 2026 increased by $410 million compared to the same period last year. Non-cash adjustments to net income increased by $277 million, primarily due to a $98 million increase in amortization, a $77 million increase in net unrealized losses on investments, a $52 million increase in share-based compensation expense, a $30 million decrease in deferred tax benefit, a $19 million increase in depreciation expense, and a $7 million increase in other non-cash expenses, partially offset by a $6 million gain on sale of investments.