管理層發言
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. This call is being recorded today, Monday, February 23, 2026, at 01:30 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, and 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, and 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 have made over the last three years have strengthened our portfolio, deepened our customer relationships, and prepared us to capitalize on this unprecedented time. In Communication 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 with 800 gig and 1.6 terabits optics, alongside accelerated development of 3.2 terabits. 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 gig per lane to enable 3.2 terabits 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 their 800-gig and emerging 1.6-terabit modules with our recently introduced Digital Communication Analyzer and Lightwave Component Analyzer products providing precision measurements for standards compliance before 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 sustained 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 low-earth orbit satellites 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 the Los Angeles 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 RaySim 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 continue 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 start-ups and neoprimes 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 tailwind to our aerospace and defense business, and we're well positioned to capitalize on the 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 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's solutions address 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-power charging systems that meet the latest global and local standards. In summary, we're pleased with the start of 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 whenever 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.
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 $1.600 billion was up 23% on a reported basis with acquisitions adding 8 points and currency 1 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 Communications Solutions Group generated revenue of $1.124 billion, 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 $2.200 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's stock at an average price of approximately $207 for a total consideration of $87 million. Now 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 $1.690 billion to $1.710 billion, representing 30% year-over-year growth at the midpoint. We expect Q2 earnings per share to be in the range of $2.27 to $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 '26 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 '26 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?
分析師問答
The first question comes from Aaron Rakers with Wells Fargo.
Congrats on the quarter. I guess, my first question, Satish, when you outlined the growth drivers, I think it was four of them, predominantly driven by AI and what you're seeing around optical interconnect and such. 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 can provide on what you're seeing there would be greatly appreciated.
Thank you, Aaron. We're very excited about the quarter. The overall strength of the business is a key theme, and we will discuss several contributing factors. Specifically regarding your question, we estimated our AI exposure in Q4 of last year to be around 10% of overall company revenue. Additionally, this quarter we experienced substantial order growth that exceeded the average for the company. While the average order growth was 30%, the AI segment within our wireline operations performed significantly better. Our goal is to expand demand across our customer base, and we have doubled the number of customers driving that demand. When analyzing customer concentration, our two largest customers are still from non-AI sectors, indicating that demand is broadening globally across various applications. My earnings message focuses on detailing the different demand drivers and how Keysight integrates into those workflows. Both R&D and manufacturing sectors saw year-over-year growth, and we are pleased with the strong market performance, which we expect to sustain into this year.
Yes, that's very helpful. Neil, just to follow up, I'm interested in the significant incremental operating leverage you've created in the model over the last two quarters. I remember back during the Investor Day, you mentioned a target operating margin of around 31% to 32%. Considering the 20% growth we're experiencing this year, how do you see the current incremental operating margin leverage impacting the P&L moving forward?
Yes, I would refer you to our previous public statements. We have structured our business model to achieve 40% core leverage on growth that is in the mid-single digits or higher. In fact, this quarter, we achieved 41% leverage on significantly higher core growth. However, it's important to note that there were no tariffs in the base period, which means we are delivering that 40% incremental leverage while also absorbing the effects of tariffs. As we look ahead to the full fiscal year, we are again focusing on that 40% core growth as a baseline. Additionally, with the acquisitions we've taken on, we are currently operating at a much lower operating margin, which has a dilutive effect on our operating margin in this first year. Nevertheless, once we realize the $100 million in cost and other synergies, we anticipate these acquisitions will positively impact Keysight's overall operating margin. We are certainly progressing in that direction, but successfully executing on those acquisition synergies will be a crucial factor as we move forward.
Our next question comes from the line of Meta Marshall with Morgan Stanley.
Great. Congratulations on the quarter. As you observe the strength in AI orders, can you clarify whether those are from existing customers expanding their implementations or finding additional use cases? Or are you seeing an expansion in your customer base? With the emergence of neoclouds and other cloud builders in the market, are they contributing to this growth? It would be helpful to understand the difference between same-store sales and the expansion of your customer base.
Yes. Thank you, Meta. I mean, if you think about the customer base, silicon companies, anyone that's designing chips that go into data centers are obviously core customers of ours. The contributions we're making to them are growing. And then you look at the manufacturing ecosystem that feeds these companies also 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 and it's a small 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. And as we start to think about the business this quarter, especially more business internationally as well, including in Southeast Asia, where a lot of the manufacturing installed base is.
Great. As a follow-up regarding aerospace and defense, we have been hearing about budget increases for some time. We are now beginning to witness a significant acceleration in your numbers. Do you think this marks the start of a new trajectory, or could this be a sustained new run rate for the business?
That's a great question. The answer has two parts. First, we are observing the impact of last year's administrative changes, along with some budget uncertainties that delayed spending. Many of these programs began to contribute to our end-of-year spending. This indicates an increase in demand for our aerospace defense business. Looking ahead, we see a rise in defense spending in Europe, which was strong this quarter and is expected to continue. In addition, U.S. prime contractors are investing more in organic research and development as well as adding capacity. This is a shift from past behavior. With our comprehensive portfolio, including EMSO, space, satellite radar, and our PNT business from Spirent, we can significantly impact our customers. We believe the budgets are very supportive in this sector, and we are well-positioned for growth.
Our next question comes from the line of Tim Long with Barclays.
Two, if I could, as well. Maybe Satish, for you. Obviously, a lot of traction in AI. You covered a lot of the key use cases. You mentioned some of the emerging ones, CPO, LPO, 448 per lane, you could probably also throw more scale-up Ethernet. You mentioned Ethernet's good, maybe more scale across Ethernet. So when you look at kind of this next phase here, are you seeing some of these newer use cases and technologies as being fully additive to what's going on? So maybe if you can just talk about some of the 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, a good quarter. But maybe just talk higher level about that trend and how you see that contributing as the company gets more recurring in the model and some of the software pieces that you're adding, what do you think that does to gross margins or operating margins as the model moves forward?
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 sort of coming at pretty much an unprecedented rate, what was a well-defined two-, three-year-long technology refresh cycles, I mean, now are happening concurrently. And I think the 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 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. So there is an economic value for the AI clusters that can be unlocked. And so it really plays to the strength that Keysight has had. And so when we started our strategic focus that I called out at the Investor Day in 2023, this is what we were shooting for. And given 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 would be difficult for product-driven organizations, which may have products here and there. But I think having that breadth of portfolio and the technology to go provide solutions is a huge differentiator for us, one I believe is sustainable as we look into the future.
Yes. At a broader level, we are enabling new AI racks and clusters, with hundreds of new components being designed and invented for them. Our physical layer portfolio supports early R&D through to manufacturing of these components, while our protocol layer portfolio allows us to emulate these clusters and racks at scale even before live deployments. This is one aspect of our work. Satish mentioned the overlapping technology waves and the accelerated pace of technology cycles. The reason for this acceleration includes several technologies, such as silicon photonics, along with parallel innovations in optics and electrical transmission. There’s also innovation in long-haul and short-haul perspectives, as well as scale-up and scale-out networks, with new components being developed. We are attracting not only our traditional customers but also deepening our relationships with start-ups and other players in the field, all of whom are innovating for power, speed, and density. This activity is layering on typical cycles we would see in a wireline or IT dynamic, and we are experiencing significant concurrent growth. We are excited to showcase many of these innovations this week at DesignCon and again at OFC in mid-March.
Yes. This is Neil. Regarding your comments on software and services, we are focused on increasing the proportion of our business that comes from software organically. This shift toward software occurs gradually, and we have also pursued acquisitions to support this effort. We acquired ESI a few years ago, and recently completed the acquisitions of Spirent, as well as the optical design and PowerArtist businesses. Collectively, these acquisitions have contributed to a higher software mix, adding about three points to Keysight's overall software mix. On the organic side, our hardware segments are currently growing rapidly, which may slow the shift toward software. However, from a margin perspective, we have a well-differentiated portfolio that aligns with key trends in AI, data centers, and soon 6G, which should positively impact our gross margins.
Our next question comes from the line of Mark Delaney with Goldman Sachs.
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 '26. I think that's all-in, not organic. Please correct me if I'm wrong. But it does seem to imply that there's a little bit of a moderation in the second half. And I realize it's coming off of a very robust first quarter and second quarter guidance. But if you could 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 the end markets are generally doing well, but just trying to reconcile that with what might be implied in your comments for full year revenue.
We have discussed extensively over the years how we manage our business. We usually have strong visibility for the upcoming quarter, decent visibility for two quarters out, and then it diminishes after that. Currently, we experienced significant order and revenue growth in Q1, and we are entering Q2 with a strong sales funnel. Therefore, we are confident in the guidance we provided for the second quarter. This funnel visibility now extends into Q3, but we have less clarity regarding Q4. To set expectations, we believe we can achieve over 20% business growth this year in total. While there is potential for upside if we maintain the same momentum as seen in Q1 and Q2, our base case for organic growth remains well above our long-term model, even in the latter half of the year, and we will monitor how it evolves throughout the year.
Okay. No, helpful context. My other question was on supply chain, just given how strong the business is running in terms 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, Mark. We've prepared for the scale of the business based on the conversations we've had with customers over the past year. I mentioned that 2025 would be a year of building momentum for us, and that has really helped us as we embrace this compounding momentum. Our team is doing an excellent job of scaling in a disciplined manner as we move forward. Regarding memory, we don't have significant volume usage for the high-demand, high-bandwidth memories used in AI and other areas, so we're not heavily exposed there. However, we are seeing some margin increases as memory prices rise, and we've accounted for that in our outlook and guidance. We continue to monitor the situation and feel confident in our ability to execute over the next couple of quarters, and we'll keep planning accordingly.
Our next question comes from the line of Andrew Spinola with UBS.
I wanted to ask 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 able to see any price increases, any improvements in pricing? Or is the size of the customers affected? And can you also talk about just how the market is, given how quickly it's moving, how many competitors are you against in a lot of these end markets, how competitive are they just given how fast this market is moving?
Yes, thank you, Andrew. Keysight’s competitive edge lies in our focus on being a solutions-oriented company. While many competitors offer products in the marketplace, our advantage comes from having our own in-house technology stack, which especially differentiates us in advanced technologies, such as those involving 1.6 terabits and beyond, as well as new converging optical and electrical technologies. Speed is crucial in this ecosystem. As you've noted, customers are eager for innovation, and our capacity to keep up with their needs through our products and solutions is vital. We are also engaged in various global standards organizations, which grants us a unique perspective to not only deliver products but also stay ahead of our customers' expectations, something they value. However, we do not take this for granted. We diligently ensure that our ecosystem of customers is supported, with teams working worldwide each day. Regarding new technologies and product introductions, our aim is to create competitive offerings that also enhance our gross margins, and we are confident in the value creation from our business in AI and across our entire portfolio.
Got it. And then you had mentioned on the prior call 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 continued improvement in demand?
I think largely improvements in demand for sure. And as the AI infrastructure is starting to get deployed at scale, we're starting to see that scale build, right, and people are manufacturing more with confidence, maybe on the front end of it, people are trying to get their designs correct and trying to deploy things that have high quality. And now I think the confidence is improving and therefore, the scale is building.
Our next question comes from the line of Atif Malik with Citigroup.
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.
Yes. Thank you, Atif. It's been an exciting year for wireless already. We started the year having returned the business to growth last year, high single-digit growth. And this year, we're off to a robust start, surpassing our expectations even for since the beginning of the year. And one of the legs of that is really this non-terrestrial networks, the use of satellite technologies for commercial direct-to-device type of applications. But if you take a big-picture view, we see networks are getting multidimensional, right, and integrating terrestrial, airborne, satellite communications more seamlessly and with the infrastructure also with sensing and other technologies is going to be part of this vision for 6G. And so the early work that we've done with standards has positioned us well, and 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.
Our next question comes from the line of Andrew Spinola with UBS.
I wanted to ask 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 able to see any price increases, any improvements in pricing? Or is the size of the customers affected? And can you also talk about just how the market is, given how quickly it's moving, how many competitors are you against in a lot of these end markets, how competitive are they just given how fast this market is moving?
Yes. The first quarter was good, and we’re realizing good demand across the board. We’ve seen our pricing strategy hold, but it's important to note that the competitive landscape can shift rapidly, especially given the speed of innovation in the AI sector. We're always watching closely to ensure we stay ahead.
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.