Keysight Technologies announced on December 16, 2025 that its flagship electronic design automation platform, Advanced Design System (ADS), now includes AI‑powered Chat and Copilot assistants. The new assistants are bundled with the ADS 2026 Update 1 and are designed to answer questions, automate repetitive tasks, and streamline complex multi‑domain workflows directly within the on‑premises software environment.
The assistants leverage language models fine‑tuned on Keysight’s design expertise and are engineered to protect enterprise data by remaining fully on‑premises. This security posture addresses a key concern for customers in highly regulated sectors such as semiconductors and defense, where cloud‑based AI solutions are often rejected.
By adding these AI capabilities, Keysight aims to deepen its software moat and capture higher‑margin, recurring revenue from design‑to‑test customers. The assistants reduce the learning curve for new users, accelerate design cycles, and lock in customers earlier in the product development cycle—factors that position Keysight to compete more directly with software‑centric EDA vendors like Cadence and Synopsys.
Keysight’s Q4 2025 earnings, released on November 24, 2025, showed revenue of $1.42 billion, up 10% year‑over‑year, and a non‑GAAP EPS of $1.91, up 16% year‑over‑year. The company’s gross margin of 64% and operating margin of 26% reflected strong pricing power and disciplined cost control, enabling the earnings beat of $0.24 per share against analyst expectations of $1.67. The revenue growth was driven by robust demand in core segments, while margin expansion was largely attributable to a higher mix of high‑margin software and services contracts.
The AI assistants are offered at no additional cost to existing ADS subscribers, reinforcing Keysight’s strategy to grow its software and services segment, which accounted for approximately 37% of total FY 2025 revenue. By embedding AI directly into the design workflow, Keysight is expected to increase software adoption, enhance customer stickiness, and generate incremental recurring revenue as customers integrate the assistants into their design processes.
Management highlighted the strategic importance of the launch. CEO Satish Dhanasekaran said the company’s “outstanding quarter and strong close to the fiscal year” was a testament to its “leadership and differentiated solutions.” Nilesh Kamdar, Design and Verification Business Unit Lead, emphasized that on‑premises AI deployment “eliminates the barrier” for design teams to explore AI, thereby amplifying the value of existing tools. Analyst sentiment reflected confidence, with Morgan Stanley raising its price target to $227 on December 17 and Baird lifting its target to $210 on November 26, citing the company’s strong earnings beat and AI‑driven growth prospects.
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