Good day, ladies and gentlemen, and welcome to the Keysight Technologies Fiscal Third Quarter 2025 Earnings Conference Call. My name is Regan, and I will be your lead operator today. [Operator Instructions] This call is being recorded today, Tuesday, August 19, 2025, at 1:30 p.m. Pacific time. I would now like to hand the call over to Paulina Sims, Director of Investor Relations. Please go ahead, Ms. Sims.

Thank you, and welcome, everyone, to Keysight's third quarter earnings conference call for fiscal year 2025. Joining me are Keysight's President and CEO, Satish Dhanasekaran; our CFO, Neil Dougherty, and our Senior Vice President of Global Sales, Steve Yoon. The press release and information to supplement today's discussion are on our website at investor.keysight.com under Financial Information and Quarterly Reports. Today's comments will refer to non-GAAP financial measures. We will also make reference to core growth, which excludes the impact of currency movements and acquisitions or divestitures completed within the last 12 months. The most directly comparable GAAP financial metrics and reconciliations are on our website, and all comparisons are on a year-over- year basis unless otherwise noted. We will make forward-looking statements about the financial performance of the company on today's call. These statements are subject to risks and uncertainties and are only valid as of today. We assume no obligation to update them and encourage you to review our recent SEC filings for a more complete view of these risks and other factors. Lastly, management is scheduled to participate in upcoming investor conferences hosted by Deutsche Bank, Citibank, JPMorgan and Goldman Sachs. And now I will turn the call over to Satish.

Good afternoon, everyone, and thank you for joining us today. In the third quarter, Keysight's strong execution resulted in 11% year- over-year increase in revenue to $1.4 billion and earnings per share of $1.72, both of which exceeded the high end of our guidance. On the demand front, orders increased by 7% with growth across both the CSG and EISG segments. We saw sustained AI momentum, strong growth in aerospace, defense, government and general electronics with stability in wireless and automotive. We're executing our strategy and capitalizing on opportunities across our end markets. The ongoing pace of innovation is driving deeper collaboration with customers. Based on our solid pipeline of opportunities and customer engagements, we're once again raising our outlook for the full fiscal year. Turning to the business segments. The Communications Solutions Group delivered solid order and revenue growth year-over-year. In wireline, our early recognition of AI as a transformative technology shift led us to make strategic investments a few years ago to align our portfolio to the multiyear innovation road map we saw unfolding. As the industry accelerates investments in compute, memory, networking and interconnect technologies, we're capitalizing today while investing to position Keysight for the long term. The emerging AI ecosystem is fueling massive growth in digital infrastructure, which in turn drives the need for rapid innovation across the technology stack. To meet this challenge, we're delivering advanced physical layer solutions and new silicon photonics capabilities that enhance R&D workflows and address customers' signal integrity and performance requirements. At the same time, networking technologies are advancing rapidly to keep pace with escalating performance needs. Our interconnect solutions are enabling this evolution, supporting scale-up and scale-out architectures with higher network speeds and more advanced switching capabilities. This quarter, we delivered the industry's first protocol layer solution for validating…

Thank you, Satish, and hello, everyone. Third quarter revenue of $1.352 billion was above the high end of our guidance range, up 11% on a reported basis or 9% on a core basis. Orders of $1.340 billion were up 7% on a reported basis or 6% on a core basis. Looking at our operational results for Q3, we reported gross margin of 64%, operating expenses of $526 million and operating margin of 25%, an increase of 60 basis points over last year. Turning to earnings. We achieved $297 million of net income and delivered earnings per share of $1.72, which increased 9% year- over-year. Our weighted average share count for the quarter was 173 million shares. Keysight's Q3 tariffs were in line with the estimates that we provided last quarter. We are making progress on our mitigation strategies, which include supply chain optimization as well as pricing and efficiency actions. Accounting for the longer execution time required for certain strategies and our quote to revenue cycle time, we are factoring in a lag for these actions to be fully realized in our results. Moving to the performance of our segments. The Communications Solutions Group generated third quarter revenue of $940 million, up 11% on a reported basis or 10% on a core basis. Commercial communications revenue of $644 million was up 13% driven by double-digit growth in both wireline and wireless. Aerospace, defense and government achieved revenue of $296 million, an increase of 8%. Altogether, CSG delivered 67% gross margin and 26% operating margin. The Electronic Industrial Solutions Group generated $412 million in revenue, an increase of 11% on a reported basis or 9% on a core basis with growth across automotive and energy, semiconductor and general electronics. EISG delivered 57% gross margin and 22% operating margin. Software and services…

Thanks, Neil. Regan, will you please give the instructions?

[Operator Instructions] Our first question comes from the line of Mark Delaney of Goldman Sachs.

Satish, on past calls, you'd characterize your expectation for a recovery in the end markets overall as gradual. I don't think I heard you use that word today. So maybe you can help investors to better understand your view of the end markets now and to what extent it's better than you'd previously expected.

Yes. Thank you, Mark. A strong quarter, clearly, and we're feeling good about the funnel and the customer activity despite the overhang from tariffs and the sort of geopolitical environment we find ourselves in. And if you look at the performance of our order growth, again, has accelerated as we've gone through the year. So from that perspective, we're feeling good about how the year is progressing slightly even better than what we expected at the beginning of the year. However, if you look at the end markets and you look at the multiple dimensions of the end markets and you'd say, are all end markets up into the right? Not quite, right? I would say AI has clearly been a continuing theme of momentum. Aerospace, defense, as we expected that things would recover after the administration change and other things manifest itself. And wireless is tracking slightly ahead of expectations. EISG is returning to growth. All in all, feeling good about the situation, although just the caution is that we still have challenges with the automotive and some end market dynamics.

Helpful overview. My second question was just trying to better understand orders and what you're seeing and putting that into context with the revenue outlook. I think orders were up high single digits, but the book-to-bill was just below 1, and then you guided 4Q revenue up sequentially. So maybe just help us better understand what's supporting that revenue outlook into 4Q. Is there turns business or backlog that supports it? Or maybe there's some pass-through tariff revenue that's coming in. And just any more framing of what's driving the revenue in the fourth quarter compared to the bookings would be helpful.

Yes. I think some of that is a function of kind of the timing of big deals. We actually had a reasonably large system integration deal. We got -- where we got customer acceptance literally on the last day of Q3. So that elevated and drove some of the outperformance in the third quarter but obviously pulled that out of Q4 and muted the quarter -- the sequential seasonality from Q3 to Q4 versus what we would typically see. But I think as we look forward, we expect more normal sequential seasonality on the order front than we're going to see on the revenue front, again, because of the timing of some of these big deals.

Our next question comes from the line of Aaron Rakers of Wells Fargo.

I do have a follow-up as well. I guess first, Neil, as we kind of think about the revenue growth and the recovery in the business, the order growth dynamics, I guess, appreciating that you're not giving guidance out into next year. But at the Analyst Day that you had hosted a while back, you talked about a 5% to 7% top line growth rate as kind of the long-term model. Is that how we should kind of think about the story playing out at this point as we look out into fiscal '26? Or is there an opportunity to maybe see the potential for revenue to grow still a little bit above that level?

Yes. I mean I think looking to this year as maybe just a start, we started the year talking about the gradual recovery, and we're looking for revenue growth this year at the low end of that 5% to 7% range. And as Satish has just indicated, things have unfolded slightly better than our expectation, and we've been able to raise that revenue expectation for the full year each of the last 2 quarters. I think as -- again, as Satish just mentioned, numerous of our end markets are in recovery and others are still kind of more stable at lower levels. But I think, generally speaking, the feeling around the building is that we're bullish going into '26 with one big caveat around tariffs and macroeconomic, right? We're still pretty early into this process, and I don't think the market has fully absorbed the impact of this new tariff environment. And so I think we'll have more to say on '26 in 3 months. But right now, we're really focused on executing and delivering Q4 but are generally positive on what we're seeing in our end markets.

Yes. I appreciate that, Neil. And then just as a quick follow-up, Satish, we've talked a lot -- a lot of investors often ask me like Keysight, the AI story. You've talked about not just scale-out but also now scale-up 1.6T and so on and so forth. So the wireline business, I'm just -- I'm curious, how do you respond to investors kind of asking what's the mix of the contribution that really AI drives to the Keysight story? And how do you see the durability of that strong demand looking forward?

Well, first, I'll answer your second question. We're well positioned with momentum to capitalize on this long-term opportunity with AI. I'm probably more convinced now that this is going to play out, and we're well positioned than I was maybe 18 months ago when we started down this path. So that's point number one. The second thing I would say is when you think about AI, it's going to have contribution across multiple end markets over time. But clearly, wireline is the area where we start to see the early demand, and we are picking up on that inflection. I expect to finish wireline business up double digits, strong double digits this year, commercial comms up double digits, and it's a function of the underlying AI demand. And I would say that the AI demand, in particular, one of the things that -- it's really hard to sort of tease that out as unique AI demand because you have this sort of entrenched ecosystem of customers, whether it is NEMs or silicon designers or hyperscalers, that have been customers of Keysight's capabilities for a long time. But clearly, their business with us is growing and has continued to grow through this period, and AI has been the incremental driver there. But equally, as this year has progressed, we've added new customer start-up activity, and this industry is picking up and -- new cloud providers. So all in all, feeling good about our ability to grow and not just a quarter or 2, but over the long term as well.

Our next question comes from the line of Meta Marshall of Morgan Stanley.

A couple of questions for me. Maybe just first, if you could just kind of outline where the tariffs are kind of -- or like which part of the tariffs are most substantial for you guys and then just if the mitigation is -- that you plan on doing is kind of moving around production or pricing. And then just a second question for me just on aerospace and defense. Just clearly, a lot of spending happening in that market right now. Is this something where we should see this market kind of continue to accelerate? Or is this kind of a good level because it just takes years for these programs to kind of get into place?

Yes. Thanks, Meta. Why don't I take the tariff question and then I'll let Satish address the aerospace, defense question. So with regard to the tariffs, we have a largely Southeast Asia-based supply chain. As you know, most of -- our largest plant from a finished goods manufacturing standpoint is in Malaysia, but we have other significant manufacturing -- offshore manufacturing operations in the EU as well as in Japan. And I would also note that we do, do significant manufacturing in the U.S. You know that we do ICE fabrication here a lot. We do manufacturing for some of our high-end aerospace, defense solutions. And then a lot of our high-end new product introductions actually start with U.S.-based manufacturing before moving to a higher-volume location. And so we do have a geographically diverse manufacturing footprint, which gets to the second part of your question and the actions that we're taking to mitigate the tariffs. And it really is a multipronged approach, looking at various supply chain strategies up to and including potentially shifting manufacturing, probably more focused on making sure right now that we are appropriately utilizing capacity that's already in place rather than dramatically shifting capacity from one location to another, but we'll see how that develops our time. Obviously, looking at supplier relationships, cost efficiencies and then to the extent that there's residual amounts, looking to pass those costs on to our customers to protect our financial results via both price increases and tariff surcharges for our U.S. customers. So it's a multipronged approach. And again, I would just say that -- just reiterate the points that we made in our prepared remarks, that we expect to have the tariff impact from April fully mitigated during Q1. We've taken incremental actions to mitigate the August increase and should have that mitigated on a dollars basis and on a run rate basis sometime during the first half of this fiscal year. So we feel like we've got it well handled.

So Meta, I think I reiterate the point number one is we're confident in our ability to mitigate the tariff situation and that we've started to make good progress organizationally towards that. With regard to aerospace, defense, first and foremost, I would say the starting point for the year was slower given the administration change and continuing resolution. And now being on this call, I sort of foreshadowed that I wouldn't be surprised if some of the demand comes back in the second half, and it's exactly the way it's played out. But again, what we're seeing now is sort of ongoing programs or existing programs that were in the pipeline that are flushing out. The backlog for some of the prime contractors continues to be robust and strengthening, which is again, foreshadowing positive environment subject to budgets. I think the U.S. situation is pretty well understood. And typically, it's a majority part of our business. So we factor that into our growth rates. I think what's a new dynamic, frankly, which is hard to quantify just yet, is the impact of the European spend that could have on to this over the long term, right? And that's where we started to see some healthy business this quarter. And I think some of these programs will continue to play out as we move forward. But we remain confident in some of the capabilities we bring in terms of radar, EW, space satellite. And as we think about some of the NDAA priorities that have emerged, we have multiple places where we make contributions. The Golden Dome of the United States that's been announced, should that be funded, will also be -- give us additional opportunities to make contribution. So overall, feeling good about the contributions we're making, and we feel like we can keep increasing it. Now again, this is a function of government budgets. So maybe the pace of acceleration of growth may not be as quick as some of the commercial markets we experience, but it's one of the more steadier value creators for the company.

Our next question comes from the line of Tim Long of Barclays.

I have 2 as well, maybe one for Satish and one for Neil. Satish, maybe just go back to wireless. You talked about it being stable, but it sounded like double-digit growth in the quarter. Was that largely just the compares? Or maybe if you can just walk us through some of the areas that are kind of keeping the wireless-related businesses afloat. And then Neil, I'll just give it to you now. Could you just touch on kind of moving parts around this incremental margin of 40% that you talk about? It seems like you might come in a little bit below this year. But when we start looking into the future, maybe walk us through the moving parts around how we should think about that incremental margin number.

Tim, thank you. Yes, we had a strong revenue quarter. Again, it's a function of recovering market conditions in wireless that have remained depressed for so long. And year-to-date, we're slightly ahead of what we expected in terms of order growth. And really, the story is of standard progression, Release 18, more R&D spend and some increasing activity we see as AI starts to move to the edge and there's more activity on AI applications on mobile-type devices. There's a lot more standards-driven capabilities that are being promoted that creates some opportunity for us. The nonterrestrial network activity with satellite operators and mobile operators that are partnering, I think that's continuing to grow and then some early 6G research activities around the globe where customers are starting to put pen to paper and starting to design their systems. So all of these are -- have been things we've been discussing. And while the supply chain -- typical smartphone supply chain still remains subdued.

Yes. And Tim, to your second question about how to think about the incrementals, I still think that going forward, over the longer term, the 40% incremental is the right way to think about the business. Obviously, there was a big kind of shock to the system this quarter with -- or this year with the tariffs, which had not previously been considered in our model. Once those, however, are included in the baseline and we lap them this time next year, you kind of get back to the point where they're in the baseline and you're able to continue to grow your -- as you grow your business mid-single digits or better, you would deliver that 40% incremental. I would point out that if you look Q2, Q3 and our guide for Q4, the 3 quarters where we've achieved that mid-single-digit growth rate, and you strip out the tariff impact, we actually are overachieving that 40% incremental. So it's still something that we're tracking. And again, we're absorbing the tariffs this year, which are, again, new and unexpected and at the same time, have been able to raise our EPS growth estimates for the year. So definitely a continued focus on efficiencies and cost management. And again, I think that 40% incremental is the right way to think about the business long term, but the tariffs will limit our ability to deliver it until we get them into the baseline.

Our next question comes from [ Mehe Horseni ] of SIG.

It's actually Mehdi Hosseini. I also have 2 multipart questions. It was 9 months ago, you guys were talking about wireline business bringing in more than $2 billion of orders. And the commentary over the past couple of quarters suggests that order activity for wireline has remained strong. So my question is, can you put some color around the dollar value of orders or business revenue that is coming in assuming that you had more than $2 billion of orders 9 months ago? And in that context, how should we think about sustainability of wireline orders? And I have a follow-up.

Yes. Mehdi, I would say that I don't remember sizing it, but let me maybe take a step back and say that if you go back in time and you look at our commercial communications business, I would say that a bigger chunk of the business was wireless, and wireline was a smaller part of the business. And what is still -- what has since ensued is wireless has normalized since the 2022 peak 5G levels and is pretty stable, while wireline has continued to grow. And this year, I expect to finish the business with a record bookings and a solid pipeline of opportunities as we go into next year. So you might say, well, what's really driving all this activity if we have -- because there's the -- obviously, the data center CapEx investments that we all know about. And so you're really asking at the core of it how sustainable are these. But if you think about the nature of the AI workload and the progression of it, it's going from just these ChatGPT-type applications into more agentic workflows and is poised to, I think, make substantial contributions to productivity for both companies and individuals. And as that plays out, the underlying economics of adopting the latest technology and the pressure to accelerate innovation, we continue to see that as probably a sustaining driver looking as far out into '28 and '30 even. Some of the early look that we're getting engaging with our customers on memory, topology enhancements, compute enhancements, networking, speeds and interconnect, what used to be a 2-, 3-, 4-year sort of refresh cycle is being pulled in, which really creates a steady road map for us to keep working with our customers and engage. So a, I feel good about the market opportunity; b, I also feel good about Keysight's ability to intercept that and outperform.

Okay. And then the second question maybe is for Neil. I see both CSG and EISG revenues were up 11% each on a year-over-year basis. But CSG had kind of flattish operating margin, but EISG had more than 200 basis points of increase in operating margin. And my question is, is CSG where most of the tariffs are being felt? And is there also a mix that is favoring EISG with the margin expansion on a year-over-year basis?

Yes. I think the second part of that is definitely true that we've talked about in the past how there's a greater disparity of gross margins within the EISG portfolio. So they have the ability to benefit from mix shifts. With regard to the tariffs, I mean, certainly, tariffs are impacting both of our businesses. There might be a slight skew there within -- towards CSG, but I think that's reasonably equally spread across the 2 portfolios.

Okay. And with EISG, that's where software and services mix is richer, and that's where you get a margin uplift. That's the mix that you are referring to, correct?

No, CSG has a higher mix of software certainly than EISG given the kind of the use of software within that communications portfolio. I think if you look at the hardware portfolio within EISG, they have some of our highest-margin products, but then they also have more of our distribution-level projects, lower end-level technology, which tend to have lower gross margins associated with them. So it's a bit of a -- within the hardware portfolio, it's a broader dispersion. Again, there is a skew within the tariff portfolio towards CSG, but it's not huge.

Our next question comes from David Ridley-Lane of Bank of America.

Just want to make sure that we're on the same page for the tariffs. So it was $75 million before August adds another $75 million. And just to clarify, I think you were expecting about $25 million net this quarter or 80 basis points. That's what you saw? And what is the expectation baked into the fourth quarter guide? So just how much are we looking at in total? And what's in the [indiscernible]?

Yes. Just to review the numbers. So what we said a quarter ago, $75 million to $100 million annually and the incremental $75 million as a result of the August increases. So that takes you to $150 million to $175 million is the range that we're looking at. Our impact in Q3 was in line with those numbers that we just communicated. In Q4, we'll see tariff -- the tariff expense go up as a result of the tariff increases. But luckily, our tariff mitigations are starting to ramp as well. So while we will continue to see on a dollars basis an unfavorable impact from Q4, it's only slightly larger than what's in Q3. You see an increase in tariff expense but a ramping of the mitigation actions.

Got it. Perfect. And then I guess one kind of question around the 2 -- now that the Synopsys and Ansys acquisition is actually complete, is there any color that you can give us in terms of size or magnitude for the 2 businesses that you'll be acquiring out of that?

I think let me take that. I think from a strategic perspective, we really like the fit to our simulation portfolio. We've talked about that. At this point, any questions with regard to timing or details are better directed to the Synopsys team because even though they have closed the deal with Ansys, the regulatory -- there's still some regulatory process that's underway that would take some time for us to conclude. And so any questions on that regard might be better directed to Synopsys at this time.

Our next question comes from Rob Jamieson of Vertical Research Partners.

Just to follow up with David's question on PowerArtist and optical solutions. Just kind of back to some of the comments you made on simulation software and software demand on the AI side. What are these 2 assets going to bring into the EDA side of your portfolio? And like how does this enhance your offering going forward?

Yes. I think if you think about our RF-EDA, the simplest way to think about it is we're leaders in RF and high-speed digital kind of simulations and part of those workflows. I think the optical is a really good complement to that. And in general, power and power efficiency is becoming so important to customers. And so some of the critical IP being part of the portfolio is a good thing because they fit our long-term direction and our ability to sort of create more synergies with these capabilities inside the company.

Okay. And then just with the comments on the 6G research initiatives gaining some traction. Can you provide us a little thought on customer engagement time lines and when 6G might become a more meaningful revenue contributor? And how are you thinking about balancing continued 5G optimization versus 6G investment priorities as we look ahead?

That's a really good question. In the most recent 3GPP plenary meeting in Prague, started to finalize what Release 20 or the early version of 6G might look like. And one of the things that -- my take away was it reinforced the industry alignment for -- from 5G bands to 6G, which I think is a really good trend for us because of the -- it's not a break and it's an evolution and a flow on some of the themes that we have been working with customers on, whether it is to lower latency for AI applications, increase energy efficiency or nonterrestrial networks and integrate satellite connectivity with terrestrial networks. So all those themes play out and our strength in 5G. And so we're thinking about our platforms and architectures from this perspective, and it's glad to see that being reinforced from a standardization. We start to see customers exploring various facets of 6G because it's not clear yet which spectrum or what topology will be generated, but we start to see some activity with customers related to building up their IP for an eventual 6G rollout, right? So that's where the action to date is occurring. As I said in my prepared remarks, we're still years away from rollout, but I think the R&D activity will only continue to grow as we move forward.

Our next question comes from Rob Mason of Baird.

Your semiconductor business grew double digits in the quarter. You sound quite pleased with the results. It has been a choppier environment for some in the front-end semicap space. And I'm just curious, maybe walk through or remind us why you're not maybe seeing as much volatility in that business. And I just kind of wanted to confirm as well just your outlook is for growth here in the fourth quarter as well.

Yes. As you know, our semiconductor business is the wafer stage. And so as wafer starts are occurring globally, it does benefit from some of the sovereign trends. People are characterizing wafers even ahead of production. So that's another sort of tailwind for the business. And also, it's a business which benefits from some of the advanced nodes, new memory topologies, HBMs and recent increased customer interest on silicon photonics we view as favorable drivers for our semi business. So just to also be clear, the business did experience a decline in '24 driven by some of these -- the normalization of demand. So it was not immune to that. So it's getting some lift from the increased activity plus some of these advanced AI-driven demand that's favorably -- that's a favorable driver for this business.

I see. That's helpful. Satish, if we could just shift over to the wireline business. Last quarter, you shed a little more light just on the mix between the R&D test and production test that's occurring in that business. And it shifted a little bit towards production test just as that's such a high-growth area. I'm just curious as that mix has shifted, has your visibility changed at all? Is it giving you more visibility, less visibility? Just how we should think about that evolution there.

Yes. That's a good question. I mean I think when we started to think about it last year, let's say, at this earnings call, I call the environment constrained and, again, constrained from a supply chain perspective. And what's really played out over the last few quarters is that the unlocking of the supply chain through investments that are coming. And I think that's a process that's still to play out, and we're clearly benefiting from that. So that's probably skewed our mix of traditionally predominant R&D business to include a bit more of manufacturing exposure. But we're nowhere close to the company exposure from a manufacturing standpoint in this business. It's still R&D oriented. And what we also see, which is favorable, which speaks to the visibility comment is, again, last year, this time, I would have said this is a highly concentrated business for us because we had a few customers driving the action. And what's playing out is the broadening of the business even in the wireline ecosystem with new customers and start-up activity. But even across the company, as you think about the general electronics and semiconductor getting some of the tailwinds from the AI trend, it's again, a positive dynamic for the business.

Our next question comes from Samik Chatterjee of JPMorgan.

Priyanka on for Samik. I have a couple of questions. Starting off with the AI story. For wireline optics, how much of the R&D investment is already on 1.6T, 3.2T and beyond compared to legacy speeds like 100 gig or 800 gig?

I think for wireline, I would say broad comment with different exposures. But I'd say the 100 gig is fairly stable. It's sort of a run rate business. The 400, 800 gig are the ones where the majority of the volumes are, and 1.6 and beyond is still in research/early deployment. So that probably directionally gets you there.

All right. Can you also shed a little bit of light on the customer segments in your data center business? For example, how big hyperscalers are versus semiconductors and then integrators and assemblers?

Yes. I think as we -- I don't know that we've split up the business quite the way you've asked us to. But I think you think of the activity in the supply chain remains strong as it's starting to unlock supply constraints. So that's a factor. And then the R&D spend is -- probably the better way to look at it is where the majority of the demand that we see for a broad set of tools and capabilities that Keysight provides.

Our next question comes from Adam Thalhimer of Thompson, Davis.

Congrats on the beat and raise. I wanted to ask about the impact of tariffs on orders. Do you think that net-net, tariffs have pulled forward some orders or pushed them out?

Thanks for that question. At this point, throughout the quarter, we did not see any material pull-in of orders due to the tariff changes that was going to happen in August.

We have not seen any also -- following up, we have not seen any material change to the demand profile from the tariffs just yet.

Great. And then, Satish, I wanted to follow up. You talked about AI impacting other markets besides wireline. What do you think the next market is? And when do you think you could see material orders from that?

Yes. I think we said we started to see some impact in the general electronics and in semiconductors. I think semiconductor feels like that's going to happen given the trend of embracing silicon photonics and co-optics and other things. It just seems logical that, that's going to flow. I think the thing we're watching for is the general electronics business because it tends to be a broader business with manufacturing exposure and other things. And so I still think that's still in the early innings that's playing out. But then longer term, you think about the possibilities of how AI intercepts our customers' engineering workflow or possibilities of how AI could intercept defense applications or security applications or in automotive or in our wireless business even. So there's a lot more excitement there than there is activity right now, which -- but we're starting to engage customers and have discussions with them about what Keysight can do to enable their success.

Thank you. That will conclude our question-and-answer session for today. I would like to turn the call back over to Paulina Sims for any closing comments.

Thank you, Regan, and thank you all for joining us today. Have an awesome day.

Thank you. That will conclude today's call. Thank you for your participation. You may now disconnect your line.