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Image source: The Motley Fool. Thursday, Oct. 22, 2026 - Vice President of Investor Relations - Sarah Cook - President and Chief Executive Officer - Jeffrey Niew - Senior Vice President and Chief Financial Officer - John Anderson Operator: Hello, everyone. Thank you for joining us, and welcome to the Third Quarter Knowles Corporation Earnings Conference Call. [Operator Instructions] I will now hand the conference over to Sarah Cook, Vice President of Investor Relations. Sarah, please go ahead. Sarah Cook: Thank you, and welcome to our third quarter 2026 earnings call. I'm Sarah Cook, Vice President of Investor Relations, and presenting with me today are Jeffrey Niew, our President and CEO; and John Anderson, our Senior Vice President and CFO. Our call today will include remarks about future expectations, plans and prospects for Knowles, which constitute forward-looking statements for purposes of the safe harbor provisions under applicable federal securities laws. Forward-looking statements in this call will include comments about demand for company products, anticipated trends in company sales, expenses and profits and involve a number of risks and uncertainties that could cause results to differ materially from current expectations. The company urges investors to review the risks and uncertainties in the company's SEC filings, including, but not limited to, the annual report on Form 10-K for the fiscal year ended December 31, 2025, periodic reports filed from time to time with the SEC and the risks and uncertainties identified in today's earnings release. All forward-looking statements are made as of the date of this call, and Knowles disclaims any duty to update such statements, except as required by law. In addition, pursuant to Reg G, any non-GAAP financial measures referenced during today's conference call can be found in our press release posted on our website at knowles.com and in our current report on Form 8-K filed today with the SEC. This will include a reconciliation to the most directly comparable GAAP measure. All financial references on this call will be on a non-GAAP continuing operations basis with the exception of cash from operations or unless otherwise indicated. We've made selected financial information available on webcast slides, which can be found in the Investor Relations section of our website. With that, let me turn the call over to Jeff, who will provide details on our results. Jeff? Jeffrey Niew: Thanks, Sarah, and thanks to all of you for joining us today. To start out, I would like to take a moment to thank the Knowles team for delivering an outstanding third quarter. We had strong performance across our business as demonstrated by our key financial metrics. Revenue was $184 million, up 20% year-over-year and above the high end of our guided range. EPS was $0.38 and cash generated from operations was $45 million, both at the high end of our guided range. These results reflect the strength of our execution and the positive momentum across our business. I believe our results continue to demonstrate that our focus on markets and products where we have significant competitive advantages is paying dividends and positions us well for future growth. In Q3, MedTech & Specialty Audio revenue was $67 million, up 4% year-over-year. Hearing health OEM customers typically launch new products annually in Q4. This year, however, we believe our customers' new products, which are implementing AI features, drove demand slightly earlier than usual. While this change in seasonality accelerated sales to earlier in the year, we continue to expect the hearing health market to grow at historical rates in 2026. Precision Devices delivered Q3 revenue of $117 million, up 33% year-over-year with strong demand across every major product line and end market we serve: MedTech, defense, industrial and electrification. Our close collaboration with customers continues to drive a robust pipeline of design wins as customers continue to choose our innovative and differentiated solutions. I believe our year-over-year growth demonstrates the strength of our strategy and the momentum across the business. On a base of strong revenue growth, orders remained robust. Precision Devices had a book-to-bill of 1.5 in Q3 with broad-based order strength across our key end markets, both among OEMs and with our distribution partners. Q3 orders in the PD segment were nearly $180 million, well above Q2 orders, reinforcing my confidence in continued growth. As noted on the Q2 earnings call, there was a $15 million order early in Q3 for RF filters for a defense customer that will be delivered over the next 36 months. I will now provide a little more color on the revenue and order strength across our PD end markets. In MedTech, our pulse power film capacitors continue to win in defibrillator and radiotherapy applications, while our ceramic capacitors are securing strong design wins in next-generation medical imaging and implantables. In defense, demand remains strong across all our product categories. Our RF filters, film and ceramic capacitors are in high demand in munitions and communications applications. We also serve a broad range of applications in industrial markets. As an example, our ceramic capacitors and capacitor assemblies are growing in use for plasma generators in semiconductor equipment. With strong orders, a healthy backlog and continued design wins, we are in the process of adding capacity across most of our Precision Devices product lines to support the demand. I expect this additional capacity to begin to come online in late Q1 with it being fully available in the second half of 2027. Our ability to continue to expand and meet increasing demand for our products is supported by our strong cash generation from operations. We have the ability to invest in growth while returning capital to shareholders and reducing debt. In the third quarter, we repurchased $25 million in shares and reduced outstanding bank borrowings by $15 million in addition to funding organic growth initiatives. Our strong balance sheet positions us well to support organic growth through disciplined capital investment and still pursue strategic accretive acquisitions. Before turning the call over to John to cover our financial results and provide our Q4 guidance, I would like to share my initial perspectives on 2027. Our strategy of combining unique technologies to create custom engineered solutions and then quickly ramping them at scale with a world-class operational capability is driving revenue growth in our core products and markets, margin expansion and strong cash flow. In 2027, as we add capacity, new design wins ramp and we fulfill our healthy backlog within our PD segment and our MSA segment continues to perform at historical growth levels, we expect organic growth to continue to exceed the revenue targets presented at our May 2025 Investor Day. I also believe we will be entering the next phase of revenue growth beyond our core, where we expect to have meaningful expansion of our SAM through the growth initiatives we outlined at our Investor Day. By following the same playbook we used in our core of investing in innovative technologies, using these technologies to develop customized solutions to solve our customers' problems and then scaling into high-volume production, we expect 3 fundamental paths to supplementing our core growth. First, we are developing new products such as attenuators and inductors for our existing markets. This is a great opportunity to provide a wider array of solutions to the markets and customers we already serve. Second, we are utilizing existing technologies and capabilities for new customers and markets as we are doing with our [ Micro Solutions ] group and with pulse power capacitors. The breadth of opportunities we are pursuing that leverage our core competencies continues to expand with limited expansion of OPEX to support this new business. Lastly, we are seeing the opportunity to meaningfully grow content with existing products and technology at current customers as we have discussed in hearing health and with integrated capacitor solutions. All these initiatives are expected to meaningfully expand our SAM, will complement our strong core, and I look forward to providing a more detailed outlook and updates on these initiatives and others in 2027. Now let me turn the call over to John for our financial results and our Q4 guidance. John Anderson: Thanks, Jeff. We reported third quarter revenues of $184 million, up 20% from the year-ago period and above the high end of our guidance range. EPS was $0.38 in the quarter, up $0.05 or 15% from the year-ago period and at the high end of our guidance range. Cash provided by operating activities was $45 million, also at the high end of our guidance range. In the MedTech & Specialty Audio segment, Q3 revenue was $67 million, up 4% compared with the year-ago period. Gross margins were 51.9%. The Precision Devices segment delivered third quarter revenues of $117 million, up 33% from the year-ago period. Increased demand from both OEM customers and our distribution channel partners resulted in strong growth in the 4 major markets we serve: MedTech, defense, industrial and electrification. Segment gross margins were 41.6%, up 10 basis points from the third quarter of 2025 on higher volume, partially offset by unfavorable inventory adjustments. On a total company basis, R&D expense in the quarter was $10 million, up $1 million compared to Q3 2025 on higher project spending in both MSA and PD segments. SG&A expenses were $30 million, up $4 million from prior year levels, driven primarily by higher sales commissions, higher incentive compensation expense and increased headcount as we pulled forward hiring primarily to support increased customer demand and new product initiatives. Interest expense for the quarter was $1.6 million, down $700,000 from the third quarter of 2025 due to lower average debt balances. Now I'll turn to our balance sheet and cash flow. In the third quarter, we generated $45 million in cash from operating activities and capital spending was $7 million. During the third quarter, we repurchased 695,000 shares at a total cost of $25 million. We exited the quarter with cash of $47 million and $116 million of borrowings under our revolving credit facility. Lastly, our net leverage ratio based on trailing 12 months adjusted EBITDA was 0.4x, and we have liquidity of more than $330 million as measured by cash plus unused capacity under our revolving credit facility. Moving to our Q4 guidance. For the fourth quarter of 2026, revenues are expected to be between $180 million and $190 million, up 14% year-over-year at the midpoint. R&D expenses are expected to be between $10 million and $12 million. Selling and administrative expenses are expected to be within the range of $29 million to $31 million. We're projecting adjusted EBIT margin for the quarter to be within the range of 23% to 25%. Interest expense in Q4 is estimated at $1.5 million, and we expect an effective tax rate of 15% to 19%. We're projecting EPS to be within the range of $0.39 to $0.43 per share, up $0.05 or 14% year-over-year at the midpoint, driven by a 20% increase in adjusted EBITDA, partially offset by the absence of a $0.03 discrete tax benefit, which was included in Q4 2025. This assumes weighted average shares outstanding during the quarter of 87 million on a fully diluted basis. We're projecting cash from operating activities to be within the range of $60 million to $70 million. Capital spending is expected to be $8 million. We expect full year capital spending to be approximately 5% of revenues. Looking ahead, we expect capital spending to be above our historic range of 3% to 5%, increasing to 5% to 7% of revenues in 2027 as we continue to make investments in capacity to support increased customer demand in the Precision Devices segment. The strong growth and financial results we've achieved through the first 3 quarters of '26, combined with a robust backlog and increased order activity, give me confidence in our ability to deliver 2026 revenue growth of 16% at the midpoint of our guidance range and adjusted EBITDA growth of 24% over 2025 levels, with both metrics well above the high end of the target ranges that we provided at our May 2025 Investor Day. I'll now turn the call back over to the operator for the Q&A portion of our call. Operator? Operator: [Operator Instructions] Your first question is from the line of Anthony Stoss with Craig-Hallum. Anthony Stoss: Congrats again on just solid and continued execution. Jeff, I'd love to hear your thoughts. You gave a little bit of a preamble on 2027. Maybe you can expand on that a little bit in terms of order visibility kind of entering into the first half of 2027. Then I have a couple of follow-ups. Jeffrey Niew: Yes. So let me just say at a top level, if you look sector by sector or market by market that we're in, what we're seeing is just extremely high design activity. And whether it be for faster, more precision, getting more output, new innovative features, all the applications we're involved in, people are asking for more customized stuff. It's a trend that we're just clearly seeing now. And our product portfolio is well positioned to take advantage of this. I mean it's very well positioned. Now to take it to '27, let me break it down by the segments, right? First, MSA. MSA, we expect next year, the hearing health business is going to perform at historical levels again. We will have a little bit of a headwind, I'd say, primarily in the first half. I think we mentioned this before on stamping that we had this -- when we sold the consumer business, we have a supplier. We're at the last time buy at the end of this year. There'll be no revenue, and that's about a headwind of about 2% to 3% next year, especially more in the first half, I would say, than the back half. But the Micro Solutions business, as we talked about, should start accelerating in the back half. So overall, we'll still probably be in that 2% to 4% for the full year, although it might be down a little bit in the first half. Now PD, let's say, the book-to-bill, again, in the second quarter was very strong. But the orders we're taking now, it was 1.5 in Q3. The orders we're taking in Q3 are already being scheduled into the first half of next year. But we are at a point where we are pretty close to capacity constraint. So while we're going to have very strong year-over-year growth in the first half with PD, I think sequentially, it's going to be relatively flat because of capacity constraints. And so I think that's probably the one thing. And one thing I think on -- just to be clear on the MSA thing, yes, it may be a little bit of a headwind to stamping. But remember that stamping was on a cost-plus basis. It doesn't generate a lot of EBIT. So it won't affect the EBIT and the margin should be better. John Anderson: Yes. I think gross margins, Tony, this year, we've talked about kind of for MSA in that low 50% range, and expect that maybe a little 1% or so higher in '27 over '26. Jeffrey Niew: So bottom line is on this, we expect strong year-over-year growth in the first half. But sequentially, it's probably going to be -- especially in the first quarter, might be slightly down, like PD being flat sequentially because of capacity constraints with MSA being slightly down. Anthony Stoss: Just to be clear, and maybe this is a better question for John. Last year, it seems like seasonal, your March quarter was typically down 5% sequentially. Are you saying it's only going to be down a little bit, like 1%, 2% sequentially? Jeffrey Niew: I think that's a fair guess, somewhere in that -- it's slightly down sequentially based on the guide that we have... John Anderson: Tony, were you talking about the MSA segment or total Knowles? Anthony Stoss: Total Knowles. Jeffrey Niew: Yes. It will be down slightly sequentially, but still, if you look at the year-over-year number, it's way up. And again, MSA being slightly down, right, because of the stamping business going away, PD being flat capacity constrained because we're pretty much running all out. Anthony Stoss: Got it. No, it's a good problem to have. And then my last question, Jeff, I'd love to hear kind of an update on the energy order, the trajectory and what you're seeing from that customer. Jeffrey Niew: Yes. I mean the business is fully ramped. We're outputting like as expected. And so now we've got about 6, 7 more quarters of delivery of this order. I think if I look at the numbers, it's performing in terms of the margins and the output as expected. I really put -- I really call out to the team. I mean this was like a Herculean effort to ramp with this speed and this amount of volume, but it's going very well. Operator: Your next question is from the line of Christopher Rolland with Susquehanna. Christopher Rolland: Mine is around looking at Knowles kind of through the cycle here. I think everybody is benefiting from the cycle, longer lead times, longer bookings, people worrying about short capacity and perhaps even safety stock building. How much do you think this is a part of your business? Or conversely, do you think what we're seeing here is really more representative of something through cycle? Maybe if you could put the larger picture in focus for us. Jeffrey Niew: So let me just first say based on the markets. If I think about the markets that we participate in, and I think I said this, in medical, I do not see that there's safety stock or that this is going to grow through a cycle. We've got a lot of great new design wins. I think it's sustainable. We're not seeing in medical that there's a concern here. Then I go to defense, I would argue that there's probably an opportunity for an acceleration from even where we are in terms of defense in the next 12 to 18 months as budgets around the world are increasing for both the U.S. as well as allies, the replacement of munitions, there's a lot of things going on here that says that this is going to continue to maybe even accelerate. And so that's about 60% of our business or so right there as a company. Electrification is what it is, and is -- I would say, we still expect growth next year. We have some EV business. We expect that to be up again next year. We've got a lot of great design wins as well as the energy order. I don't see a lot of concerns there. So it really comes back down to industrial. And if you look at it, there are some pockets here where I would sit there and say, okay, maybe this isn't sustainable, like semiconductor equipment, how long will that last? But we are not really overly reliant on one market. And I can tell you, when I look at our distribution partners, they do not have a lot of inventory. They're not holding excess inventory like we saw happen in '22. And I think this goes back to kind of the discussion of what's different between back then and '22. In '22, we had lead times of 15 weeks and some of the competitors, like say, ceramic capacitor guys had 60-week lead times. Our lead times are now long, not driven by AI. They're driven by our demand in our core markets. And so I think, generally speaking, we're going to be pretty good going forward through the cycle. John Anderson: Chris, just to clarify, too, that Jeff mentioned roughly 60% of our business is Med and defense and Med includes the hearing health business. Christopher Rolland: Yes. Yes. Okay. Perfect. And then as I look at some of the implied fourth quarter stuff around gross margin, it looks like that's up nicely. Maybe any puts and takes into next year as well, that would be appreciated. John Anderson: Chris, you're right. I mean in terms of gross margin, if you kind of take the guidance, the components of the guidance that I gave, you can back into gross margin, and it's just above 46% at the midpoint of the guidance that I gave. I think there's room to continue to expand gross margins. Our target is 100 basis points a year. But kind of exiting this year, again, the guidance I provided is just a touch above 46%, but there is room to increase that next year. Jeffrey Niew: Yes. I would just add one more thing, Chris, on that, as I'm kind of looking at the numbers here. I think we're going to exit above -- well above 25% on EBITDA margins this year. And I think John said this before, but I mean, we clearly see the path over the midterm now to get to 30% EBITDA margins. John Anderson: Yes. If you take what I said, the gross margin alone, we think there's 100 basis points of improvement annually. And then we're going to get operating leverage of 50 to 100 basis points with the growth that we have. So yes, you can see a path there within 2 to 3 years going from where we are just a little north of 25% this year to 30%. Operator: Your next question is from the line of Tristan Gerra with Baird. Tyler Bomba: This is Tyler Bomba on for Tristan. Looking into 2027, could you give us a sense of which of the newer growth platforms that you outlined in the prepared remarks are closest to contributing meaningful revenue? Are you starting to get production orders that give you better visibility on the timing across those different platforms? Jeffrey Niew: Yes. So here's what I'd say is I'll give you a little bit of color on this, but I think this is going to be a great topic for an Investor Day sometime next year, right, as we kind of move forward. But let me kind of talk about it a little bit. First, I'd say if you look at our Micro Solutions group from MSA, we really have now a list as long as my arm of opportunities. We're really starting to actually have to kind of push back on customers. We talked about this. We had about $1 million worth of revenue in 2025. We'll have $2 million to $3 million, probably going to closer to $3 million this year. I see a clear path north of $5 million next year. And then if you look in '28, it should be north of $10 million and maybe even more. And so I'd say that one is really coming along well. I would sit there and say the pulse power opportunity, it's a matter now of really of our execution. There are so many new applications, whether it be downhole applications, there's all different types of things in terms of even beyond the energy that we've discussed kind of a lot. So I think -- and that's ready to go. And I mean, it's a question of when the customers will start ordering in some of these new applications. I'm really encouraged. I mean, like we have not talked about this at all. We introduced a line of attenuators, now this is primarily for defense, takes some time, but super encouraged by the initial reaction we're getting from attenuators. I'm super encouraged by inductors. So a lot of good stuff coming here. I think I would just say this, what we're seeing is a meaningful expansion of our SAM with all these things we're doing beyond the core that will supplement that growth. And that's why we're feeling more and more compelled to kind of call that out. I think we'll raise some numbers around that probably sometime in the new year. Tyler Bomba: Great. Well, looking forward to that. With -- for my follow-up, with the energy order now fully ramped, are you seeing discussions around follow-on orders or similar applications with different customers that could sustain growth beyond this initial $75 million order? Jeffrey Niew: Let me give you the short answer. Yes. Let me give you a little more color, a little bit longer answer. I think we're still 6 to 7 quarters out from completing this order. I think there's a possibility that we get another order like that follows right on, but there may be a small gap. I think from my perspective, we have so many growth opportunities that are even beyond this energy order. I think not that I don't want to focus on this because this could be a big upside to our numbers in '28, '29 and beyond. But I mean, it's a great opportunity for us. And hopefully, we'll -- as we get further along in delivering this order, we'll be able to talk more about what the next -- what comes beyond. Operator: Your next question is from the line of Bob Labick with CJS. Bob Labick: Congratulations on really strong results. Also exciting news that you're adding capacity here due to all the demand and that you're kind of bumping up. And obviously, we've talked about the energy order on the call already. You've stood up a fully automated production facility recently kind of state-of-the-art for this energy order. What have you learned from that process? And how can you apply that to the incremental capacity you want to add and also just other Knowles facilities already in the footprint of manufacturing? Jeffrey Niew: I mean that's a great question, Bob. I think what we've learned from the whole ramp-up of this automation is that we have a lot of margin expansion opportunity within that factory. I think that's what we've learned. I think part of that, John has kind of alluded to that within the Cornell, former Cornell business, that we acquired, the specialty film business, we think there are great opportunities for margin expansion. I don't know if it applies as much because we really are applying these kind of learnings to every one of our facilities as we go along. But for sure, in this area, we're going to be adding more automation in order to improve yields, lower our overhead and make the Cornell business more profitable. I think we've alluded to this when we bought that business. It was in the 27%, 28% gross margin. It's exiting the year in the mid-30s now with a clear path above 40%. And so we're seeing all the things that we expected from that. I think what we're hoping is we can find another acquisition that is a 1 plus 1 equals 3 and be a real home run that is like another Cornell over the next year or two that really makes sense for us. Bob Labick: And then obviously, you gave a nice initial look to 2027. And in general, in the economy and kind of the macro, there's obviously a lot of inflationary pressures right now. How is Knowles positioned based on the kind of current inflationary market? And how would this project into 2027 for you, if at all? Jeffrey Niew: I think we're positioned very well. I think just to state, first off, we have an excellent operations team globally that focus on value creation every year. So they're looking for ways to reduce costs, reduce -- improve yields. We have that going on. That's an ongoing thing. I think we've alluded to this. I think the pricing environment is positive and the direction we're heading with the customers with. Generally speaking, we are a critical piece of the bill of materials, but we're not an overly large portion of our bill of materials to our customers. And so moderate pricing every year increases are pretty much what we do. I wouldn't say we do it with every customer across every single segment, but we are looking at this on a continual basis. And I think, generally speaking, we're in a very good position to be able to handle inflationary pressures. I don't know... John Anderson: Yes. Bob, just to add to that. I mean, I talked about the potential to increase gross margins 100 basis points. The levers are really price, capacity utilization and productivity on the factory floor. Those are the 3 components. And there's a piece of both of those that will benefit us in 2027. Operator: There are no further questions at this time. This concludes today's call. Thank you for attending. 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This article first appeared on GuruFocus. - Revenue: $184 million, up 20% year over year, above the high end of guidance. - EPS: $0.38, up $0.05 or 15% year over year, at the high end of guidance. - Cash from Operations: $45 million, at the high end of guidance. - MedTech and Specialty Audio Revenue: $67 million, up 4% year over year. - MedTech and Specialty Audio Gross Margin: 51.9%. - Precision Devices Revenue: $117 million, up 33% year over year. - Precision Devices Gross Margin: 41.6%, up 10 basis points year over year on higher volume, partially offset by unfavorable inventory adjustments. - Precision Devices Book-to-Bill: 1.5 in Q3, with orders of nearly $180 million. - R&D Expense: $10 million, up $1 million year over year on higher project spending. - SG&A Expenses: $30 million, up $4 million year over year on higher sales commissions, incentive compensation, and headcount. - Interest Expense: $1.6 million, down $700,000 year over year on lower average debt balances. - Capital Spending: $7 million in Q3; full year expected at approximately 5% of revenues. - Share Repurchases: 695,000 shares repurchased for $25 million; $15 million of bank borrowings reduced. - Cash and Debt: $47 million cash; $116 million borrowings under revolving credit facility. - Net Leverage Ratio: 0.4 times trailing 12-month adjusted EBITDA; liquidity over $330 million. - Q4 Revenue Guidance: $180 million to $190 million, up 14% year over year at the midpoint. - Q4 EPS Guidance: $0.39 to $0.43, up $0.05 or 14% year over year at the midpoint. - Q4 Adjusted EBIT Margin Guidance: 23% to 25%. - Q4 Cash from Operations Guidance: $60 million to $70 million; capital spending of $8 million. - Full Year 2026 Outlook: Revenue growth of 16% and adjusted EBITDA growth of 24% at the midpoint, both above the high end of Investor Day targets. - Warning! GuruFocus has detected 3 Warning Sign with KN. - Is KN fairly valued? Test your thesis with our free DCF calculator. Release Date: October 22, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Revenue grew 20% year over year to $184 million, exceeding the high end of guidance. - EPS increased 15% year over year to $0.38, at the high end of guidance. - Precision Devices segment revenue surged 33% year over year to $117 million with strong demand across all end markets. - Book-to-bill ratio in Precision Devices was 1.5, indicating robust order momentum. - Strong cash flow from operations of $45 million and a net leverage ratio of 0.4x provide financial flexibility. - Capacity constraints in Precision Devices are expected to limit sequential growth in the first half of 2027. - The exit of the stamping business will create a 2-3% revenue headwind in 2027, particularly in the first half. - Capital spending is expected to rise to 5-7% of revenues in 2027, up from the historical 3-5% range, impacting free cash flow. - Gross margin expansion may be partially offset by unfavorable inventory adjustments and higher costs. - Potential macroeconomic pressures and inflationary trends could impact pricing and demand. Q: Anthony Stoss (Craig-Hallum) asked for an expanded view of 2027, including order visibility entering the first half of the year.A: CEO Jeffrey Niew said design activity is extremely high across all markets, with customers increasingly requesting customized solutions. For MSA, hearing health should perform at historical levels, though a stamping last-time-buy creates a 2% to 3% headwind, mostly in the first half, while microsolutions accelerates in the back half; full-year MSA growth should be roughly 2% to 4%. For PD, Q3 book-to-bill was 1.5 and orders are already being scheduled into the first half of 2027, but the business is near capacity constraints, so year-over-year growth will be strong while sequential growth is roughly flat. CFO John Anderson added that MSA gross margins should be up about a point in 2027 versus 2026. Q: Anthony Stoss (Craig-Hallum) asked whether the March quarter would be down only slightly sequentially versus the typical 5% seasonal decline.A: CEO Jeffrey Niew said total Knowles would be down slightly sequentially, still up significantly year over year, with MSA slightly down due to the stamping business going away and PD flat because it is capacity constrained and running all out. Q: Christopher Rolland (Susquehanna) asked how much of current demand reflects cycle-driven safety stock building versus sustainable through-cycle growth.A: CEO Jeffrey Niew said medical shows no signs of safety stock and is supported by new design wins, while defense could accelerate over the next 12 to 18 months as global budgets rise and munitions are replaced. Electrification should still grow next year, leaving industrial as the main question, with pockets like semiconductor equipment potentially less sustainable. He noted distribution partners are not holding excess inventory as in 2022, and current long lead times are driven by core market demand rather than AI. CFO John Anderson clarified that roughly 60% of the business is medical (including hearing health) and defense. Q: Christopher Rolland (Susquehanna) asked about the puts and takes for gross margin in the fourth quarter and into next year.A: CFO John Anderson said Q4 gross margin is just above 46% at the midpoint of guidance, with room to expand. The target is 100 basis points of gross margin improvement per year, plus 50 to 100 basis points of operating leverage, providing a path from just above 25% EBITDA margin this year to 30% within two to three years. CEO Jeffrey Niew added that Knowles will exit 2026 well above 25% EBITDA margins. Q: Tristan Gerra (Baird) asked which newer growth platforms are closest to contributing meaningful revenue and whether production orders provide better visibility on timing.A: CEO Jeffrey Niew said the Micro Solutions Group has a long list of opportunities and is already pushing back on customers; revenue was about $1 million in 2025, should approach $3 million this year, has a clear path north of $5 million next year, and should exceed $10 million in 2028. Pulse power is now a matter of execution across many new applications, and initial customer reaction to new attenuators for defense and to inductors is encouraging. He said the company will likely lay out numbers around this SAM expansion in the new year. Q: Tristan Gerra (Baird) asked whether follow-on orders or similar applications with different customers could sustain growth beyond the initial $75 million energy order.A: CEO Jeffrey Niew said yes. There are still six to seven quarters of deliveries remaining on the current order, and another order could follow right on, though there may be a small gap. He said this could be a big upside to numbers in 2028, 2029 and beyond, and the company hopes to share more as deliveries progress. Q: Robert Labick (CJS Securities) asked what Knowles learned from standing up the fully automated production facility for the energy order and how those lessons apply to incremental capacity and other facilities.A: CEO Jeffrey Niew said the ramp revealed significant margin expansion opportunity within that factory, and the company will add more automation to improve yields and lower overhead. The acquired Cornell specialty film business entered at 27% to 28% gross margin, is exiting the year in the mid-30s, and has a clear path above 40%. He said Knowles hopes to find another acquisition with similar 1 plus 1 equals 3 potential over the next year or two. Q: Robert Labick (CJS Securities) asked how Knowles is positioned against current inflationary pressures and how that projects into 2027.A: CEO Jeffrey Niew said the company is positioned very well, with an operations team focused on cost reduction and yield improvement every year. Pricing is positive: Knowles products are critical but not a large share of customers' bill of materials, so moderate annual price increases are typical. CFO John Anderson added that the levers for 100 basis points of gross margin improvement are price, capacity utilization and factory productivity, and both will benefit 2027. Q: Anthony Stoss (Craig-Hallum) asked for an update on the energy order's trajectory and what Knowles is seeing from that customer.A: CEO Jeffrey Niew said the business is fully ramped and performing as expected in terms of margins and output, with about six to seven more quarters of deliveries. He credited the team for a Herculean effort to ramp the volume so quickly. Q: Anthony Stoss (Craig-Hallum) followed up on the 2027 outlook for the MSA segment and the impact of the stamping business.A: CEO Jeffrey Niew said the stamping headwind is about 2% to 3% next year, weighted to the first half, but because stamping was on a cost-plus basis and generated little profit, it will not affect EBIT and margins should improve. CFO John Anderson said MSA gross margins, in the low 50% range this year, should be about a point higher in 2027. Q: Christopher Rolland (Susquehanna) asked about the durability of demand in the context of longer lead times and bookings across the industry.A: CEO Jeffrey Niew said the current environment differs from 2022, when lead times reached 15 weeks and some ceramic capacitor competitors had 60-week lead times. Today's longer lead times For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Q3 Revenues Increased 20% on a Year over Year Basis to $184 million Q3 Net Cash from Operations was $45 million 2026 Full year revenue estimated at $689 million, up 16% vs 2025 ITASCA, Ill., October 22, 2026--(BUSINESS WIRE)--Knowles Corporation (NYSE: KN), a leading manufacturer of specialty electronic components, including high performance capacitors, radio frequency ("RF") filters, advanced medtech microphones, and balanced armature speakers, today announced results for the quarter ended September 30, 2026. "Third quarter revenue exceeded the high end of our guidance, while non-GAAP diluted EPS and cash from operations were at the high end of our guided ranges," said Jeffrey Niew, President and CEO of Knowles. "Total Company revenue grew 20% year over year in the third quarter, and our book-to-bill ratio in Precision Devices remained above one for the eighth consecutive quarter, reflecting continued order strength," Mr. Niew continued. "By executing our strategy—leveraging our differentiated technologies, developing custom products through close customer collaboration, and scaling production with our world-class operational capabilities—we delivered strong growth across the four major markets we serve: Medtech, Defense, Industrial, and Electrification. Additionally, at the mid-point of our fourth quarter guided range, full year 2026 revenue is expected to grow 16%. I am pleased with the Company's performance and excited about the opportunities ahead." Mr. Niew stated, "Given the strength of our bookings, the number of new design wins ramping up, and favorable long-term secular trends in our markets, as I look forward to 2027, I expect us to continue exceeding the revenue and adjusted EBITDA growth targets presented at our May 2025 Investor Day to drive long-term shareholder value." Financial Highlights The following table highlights the Company's financial performance on both a GAAP and supplemental non-GAAP basis for continuing operations* with the exception of Net cash provided by operating activities (in millions, except per share data): | Q3-26 | Q2-26 | Q3-25 Revenues | $184.0 | $166.8 | $152.9 Gross profit | $81.3 | $74.6 | $69.9 (as a % of revenues) | 44.2% | 44.7% | 45.7% Non-GAAP gross profit | $83.3 | $75.7 | $70.7 (as a % of revenues) | 45.3% | 45.4% | 46.2% Diluted earnings per share** | $0.24 | $0.21 | $0.21 Non-GAAP diluted earnings per share | $0.38 | $0.33 | $0.33 Net cash provided by operating activities | $44.6 | $28.2 | $29.1 * Continuing operations excludes the results of the Consumer MEMS Microphones reporting business, which was divested in December 2024. ** Current period results include $0.06 per share in stock-based compensation expense, $0.04 per share in intangibles amortization expense, $0.01 per share in restructuring charges, $0.01 per share in production transfer costs, and $0.02 per share for differences related to the GAAP effective tax rate excluded from non-GAAP results. Fourth Quarter 2026 Outlook The forward looking guidance for the quarter ending December 31, 2026 on a continuing operations basis, with the exception of Net cash provided by operating activities, is as follows: | GAAP | Adjustments | Non-GAAP Revenues from continuing operations | $180 to $190 million | — | $180 to $190 million Diluted earnings per share from continuing operations | $0.31 to $0.35 | $0.08 | $0.39 to $0.43 Net cash provided by operating activities | $60 to $70 million | — | $60 to $70 million Q4 2026 GAAP results from continuing operations are expected to include approximately $0.06 per share in stock-based compensation expense, $0.04 per share in intangibles amortization expense, $0.02 per share for differences related to the GAAP effective tax rate, and $0.02 per share for other adjustments, partially offset by $0.06 per share in Syntiant dividend income. These items are excluded from non-GAAP results. Non-GAAP Financial Measures In addition to the GAAP results included in this press release, Knowles has presented supplemental non-GAAP gross profit, earnings before interest and income taxes, adjusted earnings before interest and income taxes, earnings before interest, income taxes, depreciation, and amortization, adjusted earnings before interest, income taxes, depreciation, and amortization, non-GAAP diluted earnings per share, free cash flow, as well as other metrics on a non-GAAP basis that exclude certain amounts that are included in the most directly comparable GAAP measure to facilitate evaluation of Knowles' operating performance. Non-GAAP results are not presented in accordance with GAAP. Non-GAAP information should be considered a supplement to, and not a substitute for, financial statements prepared in accordance with GAAP. In addition, the non-GAAP financial measures included in this press release do not have standard meanings and may vary from similarly titled non-GAAP financial measures used by other companies. Knowles believes that non-GAAP measures are useful as supplements to its GAAP results of operations to evaluate certain aspects of its operations and financial performance, and its management team primarily focuses on non-GAAP items in evaluating Knowles' performance for business planning purposes. Knowles also believes that these measures assist it with comparing its performance between various reporting periods on a consistent basis, as these measures remove from operating results the impact of items that, in Knowles' opinion, do not reflect its core operating performance including, for example, stock-based compensation, certain intangibles amortization expense, impairment charges, restructuring, production transfer costs, and other charges which management considers to be outside our core operating results. Knowles believes that its presentation of these non-GAAP financial measures is useful because it provides investors and securities analysts with the same information that Knowles uses internally for purposes of assessing its core operating performance. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, see the reconciliation table accompanying this release. Webcast and Conference Call Information Investors can listen to a live or replay webcast of the Company's quarterly financial conference call at http://investor.knowles.com. The live webcast will begin today at 3:30 p.m. Central time. The webcast replay will be available after 7:00 p.m. Central time today accessible via the Knowles website at http://investor.knowles.com for a limited time. About Knowles Knowles is a leading manufacturer of specialty electronic components. We design parts that perform unique, critical functions for innovative technologies. Through extreme reliability, custom engineering, and scalable manufacturing, we enable businesses to succeed in the most demanding applications across medtech, defense, and industrial markets. Our high-performance capacitors, RF microwave filters, advanced medtech microphones, balanced armature speakers, and miniaturization products enable and enhance the performance of technologies with the power to change, improve, and save lives. Founded in 1946 and headquartered in Itasca, Illinois, Knowles has grown into a global organization with employees spanning 11 countries. For more information, please visit knowles.com. Forward-Looking Statements This news release contains forward-looking statements within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, such as statements about our future plans, objectives, expectations, financial performance, and continued business operations. The words "believe," "expect," "anticipate," "project," "estimate," "budget," "continue," "could," "intend," "may," "plan," "potential," "predict," "seek," "should," "will," "would," "objective," "forecast," "goal," "guidance," "outlook," "effort," "target," and similar expressions, among others, generally identify forward-looking statements, which speak only as of the date the statements were made. The statements in this presentation are based on currently available information and the current expectations, forecasts, and assumptions of Knowles' management concerning risks and uncertainties that could cause actual outcomes or results to differ materially from those outcomes or results that are projected, anticipated, or implied in these statements. Other risks and uncertainties include, but are not limited to: fluctuations in our stock's market price; fluctuations in operating results and cash flows; our ability to prevent or identify quality issues in our products or to promptly remedy any such issues that are identified; risks associated with increasing our inventories in advance of anticipated orders by customers; escalating international trade tensions, new or increased tariffs and trade wars among countries; the impact of changes to laws and regulations that affect the Company's ability to offer products or services to customers in different regions; our ability to achieve reductions in our operating expenses; the ability to qualify our products and facilities with customers; our ability to obtain, enforce, defend or monetize our intellectual property rights; disruption caused by a cybersecurity incident, including a cyber-attack, cyber breach, theft, or other unauthorized access (the risk of which could be exacerbated by geopolitical tensions); increases in the costs of critical raw materials and components; availability of raw materials and components; managing new product ramps and introductions for our customers; our dependence on a limited number of large customers; our ability to maintain and expand our existing relationships with leading OEMs in order to maintain and increase our revenue; increasing competition and new entrants in the market for our products; our ability to develop new or enhanced products or technologies in a timely manner that achieve market acceptance; global economic instability, including due to inflation, rising interest rates, or the impacts of geopolitical uncertainties (including the impact of the conflict with Iran); financial risks, including risks relating to currency fluctuations, credit risks and fluctuations in the market value of the Company; a sustained decline in our stock price and market capitalization may result in the impairment of certain intangible or long-lived assets; market risk associated with fluctuations in commodity prices, particularly for various precious metals used in our manufacturing operation, changes in tax laws, changes in tax rates and exposure to additional tax liabilities; and other risks, relevant factors, and uncertainties identified in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, subsequent Reports on Forms 10-Q and 8-K and our other filings we make with the U.S. Securities and Exchange Commission. Knowles disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. INVESTOR SUPPLEMENT - THIRD QUARTER 2026KNOWLES CORPORATIONCONSOLIDATED STATEMENTS OF EARNINGS(in millions, except per share amounts)(unaudited) | | Quarter Ended September 30, 2026 | | June 30, 2026 | | September 30, 2025 Revenues | $ | 184.0 | | | $ | 166.8 | | | $ | 152.9 | Cost of goods sold | | 102.2 | | | | 92.1 | | | | 82.8 | Restructuring charges - cost of goods sold | | 0.5 | | | | 0.1 | | | | 0.2 | Gross profit | | 81.3 | | | | 74.6 | | | | 69.9 | Research and development expenses | | 11.1 | | | | 10.6 | | | | 10.0 | Selling and administrative expenses | | 39.4 | | | | 39.2 | | | | 34.0 | Restructuring charges | | 0.1 | | | | 0.1 | | | | 0.1 | Operating expenses | | 50.6 | | | | 49.9 | | | | 44.1 | Operating earnings | | 30.7 | | | | 24.7 | | | | 25.8 | Interest expense, net | | 1.6 | | | | 1.7 | | | | 2.3 | Other expense, net | | 1.3 | | | | 0.4 | | | | 1.2 | Earnings before income taxes and discontinued operations | | 27.8 | | | | 22.6 | | | | 22.3 | Provision for income taxes | | 6.6 | | | | 4.2 | | | | 4.3 | Earnings from continuing operations | | 21.2 | | | | 18.4 | | | | 18.0 | Earnings (loss) from discontinued operations, net | | 0.4 | | | | 1.0 | | | | (0.6 | ) Net earnings | $ | 21.6 | | | $ | 19.4 | | | $ | 17.4 | | | | | | Earnings per share from continuing operations: | | | | | Basic | $ | 0.25 | | | $ | 0.21 | | | $ | 0.21 | Diluted | $ | 0.24 | | | $ | 0.21 | | | $ | 0.21 | | | | | | Earnings (loss) per share from discontinued operations: | | | | | Basic | $ | — | | | $ | 0.02 | | | $ | (0.01 | ) Diluted | $ | 0.01 | | | $ | 0.01 | | | $ | (0.01 | ) | | | | | Net earnings per share: | | | | | Basic | $ | 0.25 | | | $ | 0.23 | | | $ | 0.20 | Diluted | $ | 0.25 | | | $ | 0.22 | | | $ | 0.20 | | | | | | Weighted-average common shares outstanding: | | | | | Basic | | 85.3 | | | | 85.7 | | | | 85.8 | Diluted | | 87.7 | | | | 87.9 | | | | 87.3 | KNOWLES CORPORATIONCONSOLIDATED STATEMENTS OF EARNINGS(in millions, except per share amounts)(unaudited) | | Nine Months Ended September 30, 2026 | | September 30, 2025 Revenues | $ | 503.9 | | | $ | 431.0 | Cost of goods sold | | 280.2 | | | | 242.9 | Impairment charges | | — | | | | 3.6 | Restructuring charges - cost of goods sold | | 0.7 | | | | 0.7 | Gross profit | | 223.0 | | | | 183.8 | Research and development expenses | | 33.4 | | | | 29.7 | Selling and administrative expenses | | 118.0 | | | | 107.1 | Restructuring charges | | 0.3 | | | | 2.5 | Operating expenses | | 151.7 | | | | 139.3 | Operating earnings | | 71.3 | | | | 44.5 | Interest expense, net | | 4.8 | | | | 7.5 | Other expense, net | | 5.1 | | | | 2.6 | Earnings before income taxes and discontinued operations | | 61.4 | | | | 34.4 | Provision for income taxes | | 10.5 | | | | 9.0 | Earnings from continuing operations | | 50.9 | | | | 25.4 | Loss from discontinued operations, net | | (0.2 | ) | | | (2.2 | ) Net earnings | $ | 50.7 | | | $ | 23.2 | | | | Earnings per share from continuing operations: | | | Basic | $ | 0.60 | | | $ | 0.29 | Diluted | $ | 0.58 | | | $ | 0.29 | | | | Loss per share from discontinued operations: | | | Basic | $ | (0.01 | ) | | $ | (0.02 | ) Diluted | $ | — | | | $ | (0.03 | ) | | | Net earnings per share: | | | Basic | $ | 0.59 | | | $ | 0.27 | Diluted | $ | 0.58 | | | $ | 0.26 | | | | Weighted-average common shares outstanding: | | | Basic | | 85.5 | | | | 86.8 | Diluted | | 87.9 | | | | 88.1 | KNOWLES CORPORATIONRECONCILIATION OF GAAP FINANCIAL MEASURES TO NON-GAAP FINANCIAL MEASURES (1)(in millions, except per share amounts)(unaudited) | | | | Quarter Ended | | Nine Months Ended | September 30, 2026 | | June 30, 2026 | | September 30, 2025 | | September 30, 2026 | | September 30, 2025 Gross profit | $ | 81.3 | | | $ | 74.6 | | | $ | 69.9 | | | $ | 223.0 | | | $ | 183.8 | Gross profit as % of revenues | | 44.2 | % | | | 44.7 | % | | | 45.7 | % | | | 44.3 | % | | | 42.6 | % Stock-based compensation expense | | 0.4 | | | | 0.4 | | | | 0.3 | | | | 1.3 | | | | 1.1 | Impairment charges | | — | | | | — | | | | — | | | | — | | | | 3.6 | Restructuring charges | | 0.5 | | | | 0.1 | | | | 0.2 | | | | 0.7 | | | | 0.7 | Production transfer costs (2) | | 1.1 | | | | 0.8 | | | | 0.6 | | | | 2.8 | | | | 0.9 | Transition services credit (3) | | — | | | | (0.2 | ) | | | (0.3 | ) | | | (0.5 | ) | | | (0.7 | ) Other (4) | | — | | | | — | | | | — | | | | 1.4 | | | | 0.8 | Non-GAAP gross profit | $ | 83.3 | | | $ | 75.7 | | | $ | 70.7 | | | $ | 228.7 | | | $ | 190.2 | Non-GAAP gross profit as % of revenues | | 45.3 | % | | | 45.4 | % | | | 46.2 | % | | | 45.4 | % | | | 44.1 | % Research and development expenses | $ | 11.1 | | | $ | 10.6 | | | $ | 10.0 | | | $ | 33.4 | | | $ | 29.7 | Stock-based compensation expense | | (0.6 | ) | | | (0.6 | ) | | | (0.7 | ) | | | (2.7 | ) | | | (2.6 | ) Intangibles amortization expense | | (0.6 | ) | | | (0.6 | ) | | | (0.6 | ) | | | (1.8 | ) | | | (1.8 | ) Transition services credit (3) | | — | | | | — | | | | — | | | | — | | | | 0.1 | Other (4) | | — | | | | — | | | | 0.1 | | | | — | | | | 0.2 | Non-GAAP research and development expenses | $ | 9.9 | | | $ | 9.4 | | | $ | 8.8 | | | $ | 28.9 | | | $ | 25.6 | Selling and administrative expenses | $ | 39.4 | | | $ | 39.2 | | | $ | 34.0 | | | $ | 118.0 | | | $ | 107.1 | Stock-based compensation expense | | (5.8 | ) | | | (5.2 | ) | | | (4.9 | ) | | | (19.4 | ) | | | (18.7 | ) Intangibles amortization expense | | (3.4 | ) | | | (3.4 | ) | | | (3.4 | ) | | | (10.2 | ) | | | (10.3 | ) Production transfer costs (2) | | — | | | | — | | | | — | | | | — | | | | (0.1 | ) Acquisition-related costs (5) | | — | | | | — | | | | 0.1 | | | | — | | | | (0.6 | ) Transition services credit (3) | | — | | | | 0.1 | | | | 0.2 | | | | 0.3 | | | | 0.9 | Other (4) | | — | | | | — | | | | — | | | | — | | | | 0.2 | Non-GAAP selling and administrative expenses | $ | 30.2 | | | $ | 30.7 | | | $ | 26.0 | | | $ | 88.7 | | | $ | 78.5 | Operating expenses | $ | 50.6 | | | $ | 49.9 | | | $ | 44.1 | | | $ | 151.7 | | | $ | 139.3 | Stock-based compensation expense | | (6.4 | ) | | | (5.8 | ) | | | (5.6 | ) | | | (22.1 | ) | | | (21.3 | ) Intangibles amortization expense | | (4.0 | ) | | | (4.0 | ) | | | (4.0 | ) | | | (12.0 | ) | | | (12.1 | ) Restructuring charges | | (0.1 | ) | | | (0.1 | ) | | | (0.1 | ) | | | (0.3 | ) | | | (2.5 | ) Production transfer costs (2) | | — | | | | — | | | | — | | | | — | | | | (0.1 | ) Acquisition-related costs (5) | | — | | | | — | | | | 0.1 | | | | — | | | | (0.6 | ) Transition services credit (3) | | — | | | | 0.1 | | | | 0.2 | | | | 0.3 | | | | 1.0 | Other (4) | | — | | | | — | | | | 0.1 | | | | — | | | | 0.4 | Non-GAAP operating expenses | $ | 40.1 | | | $ | 40.1 | | | $ | 34.8 | | | $ | 117.6 | | | $ | 104.1 | Net earnings from continuing operations | $ | 21.2 | | | $ | 18.4 | | | $ | 18.0 | | | $ | 50.9 | | | $ | 25.4 | Interest expense, net | | 1.6 | | | | 1.7 | | | | 2.3 | | | | 4.8 | | | | 7.5 | Provision for income taxes | | 6.6 | | | | 4.2 | | | | 4.3 | | | | 10.5 | | | | 9.0 | Earnings from continuing operations before interest and income taxes | | 29.4 | | | | 24.3 | | | | 24.6 | | | | 66.2 | | | | 41.9 | Earnings from continuing operations before interest and income taxes as % of revenues | | 16.0 | % | | | 14.6 | % | | | 16.1 | % | | | 13.1 | % | | | 9.7 | % Stock-based compensation expense | | 6.8 | | | | 6.2 | | | | 5.9 | | | | 23.4 | | | | 22.4 | Intangibles amortization expense | | 4.0 | | | | 4.0 | | | | 4.0 | | | | 12.0 | | | | 12.1 | Impairment charges | | — | | | | — | | | | — | | | | — | | | | 3.6 | Restructuring charges | | 0.6 | | | | 0.2 | | | | 0.3 | | | | 1.0 | | | | 3.2 | Production transfer costs (2) | | 1.1 | | | | 0.8 | | | | 0.6 | | | | 2.8 | | | | 1.0 | Acquisition-related costs (5) | | — | | | | — | | | | (0.1 | ) | | | — | | | | 0.6 | Transition services credit (3) | | — | | | | (0.3 | ) | | | (0.5 | ) | | | (0.8 | ) | | | (1.7 | ) Other (4) | | 0.5 | | | | 0.9 | | | | (0.3 | ) | | | 4.0 | | | | 0.8 | Adjusted earnings from continuing operations before interest and income taxes | $ | 42.4 | | | $ | 36.1 | | | $ | 34.5 | | | $ | 108.6 | | | $ | 83.9 | Adjusted earnings from continuing operations before interest and income taxes as % of revenues | | 23.0 | % | | | 21.6 | % | | | 22.6 | % | | | 21.6 | % | | | 19.5 | % Net earnings from continuing operations | $ | 21.2 | | | $ | 18.4 | | | $ | 18.0 | | | $ | 50.9 | | | $ | 25.4 | Interest expense, net | | 1.6 | | | | 1.7 | | | | 2.3 | | | | 4.8 | | | | 7.5 | Provision for income taxes | | 6.6 | | | | 4.2 | | | | 4.3 | | | | 10.5 | | | | 9.0 | Earnings from continuing operations before interest and income taxes | | 29.4 | | | | 24.3 | | | | 24.6 | | | | 66.2 | | | | 41.9 | Non-GAAP reconciling adjustments (6) | | 13.0 | | | | 11.8 | | | | 9.9 | | | | 42.4 | | | | 42.0 | Depreciation expense | | 5.9 | | | | 5.7 | | | | 5.0 | | | | 16.8 | | | | 15.0 | Adjusted earnings from continuing operations before interest, income taxes, depreciation, and amortization ("Adjusted EBITDA") | $ | 48.3 | | | $ | 41.8 | | | $ | 39.5 | | | $ | 125.4 | | | $ | 98.9 | Adjusted EBITDA as a % of revenues | | 26.3 | % | | | 25.1 | % | | | 25.8 | % | | | 24.9 | % | | | 22.9 | % | | | | | | | | | | | | | | | | | | | Quarter Ended | | Nine Months Ended | September 30, 2026 | | June 30, 2026 | | September 30, 2025 | | September 30, 2026 | | September 30, 2025 Provision for income taxes | $ | 6.6 | | | $ | 4.2 | | | $ | 4.3 | | | $ | 10.5 | | | $ | 9.0 | Income tax effects of non-GAAP reconciling adjustments (7) | | 1.0 | | | | 1.6 | | | | (1.0 | ) | | | 7.7 | | | | 1.1 | Non-GAAP provision for income taxes | $ | 7.6 | | | $ | 5.8 | | | $ | 3.3 | | | $ | 18.2 | | | $ | 10.1 | | | | | | | | | | Net earnings from continuing operations | $ | 21.2 | | | $ | 18.4 | | | $ | 18.0 | | | $ | 50.9 | | | $ | 25.4 | Non-GAAP reconciling adjustments (6) | | 13.0 | | | | 11.8 | | | | 9.9 | | | | 42.4 | | | | 42.0 | Income tax effects of non-GAAP reconciling adjustments (7) | | 1.0 | | | | 1.6 | | | | (1.0 | ) | | | 7.7 | | | | 1.1 | Non-GAAP net earnings | $ | 33.2 | | | $ | 28.6 | | | $ | 28.9 | | | $ | 85.6 | | | $ | 66.3 | | | | | | | | | | Diluted earnings per share from continuing operations | $ | 0.24 | | | $ | 0.21 | | | $ | 0.21 | | | $ | 0.58 | | | $ | 0.29 | Earnings per share non-GAAP reconciling adjustment (6) (7) | | 0.14 | | | | 0.12 | | | | 0.12 | | | | 0.40 | | | | 0.46 | Non-GAAP diluted earnings per share | $ | 0.38 | | | $ | 0.33 | | | $ | 0.33 | | | $ | 0.98 | | | $ | 0.75 | | | | | | | | | | Diluted average shares outstanding | | 87.7 | | | | 87.9 | | | | 87.3 | | | | 87.9 | | | | 88.1 | Non-GAAP adjustment (8) | | (0.8 | ) | | | (0.4 | ) | | | 0.6 | | | | (0.6 | ) | | | 0.7 | Non-GAAP diluted average shares outstanding (8) | | 86.9 | | | | 87.5 | | | | 87.9 | | | | 87.3 | | | | 88.8 | Notes: (1) | In addition to the GAAP financial measures included herein, Knowles has presented certain non-GAAP financial measures that exclude certain amounts that are included in the most directly comparable GAAP measures. Knowles believes that non-GAAP measures are useful as supplements to its GAAP results of operations to evaluate certain aspects of its operations and financial performance, and its management team primarily focuses on non-GAAP items in evaluating Knowles' performance for business planning purposes. Knowles also believes that these measures assist it with comparing its performance between various reporting periods on a consistent basis, as these measures remove from operating results the impact of items that, in Knowles' opinion, do not reflect its core operating performance. Knowles believes that its presentation of non-GAAP financial measures is useful because it provides investors and securities analysts with the same information that Knowles uses internally for purposes of assessing its core operating performance. (2) | Production transfer costs represent duplicate costs incurred to migrate manufacturing to existing facilities. (3) | Transition services represent amounts charged to Syntiant in connection with post-closing transition and separation costs. (4) | Other expenses include foreign currency exchange rate impacts on restructuring balances. Other expenses in 2026 also include foreign currency exchange rate adjustments related to certain balances retained subsequent to the disposal of CMM; these adjustments were not deemed material for 2025 periods. (5) | These expenses include ongoing costs to facilitate integration of the Cornell Dubilier acquisition by the Precision Devices segment. (6) | The non-GAAP reconciling adjustments include stock-based compensation expense, intangibles amortization expense, impairment charges, restructuring charges, production transfer costs, acquisition-related costs, and other expenses, partially offset by a credit to transition services. (7) | Income tax effects of non-GAAP reconciling adjustments are calculated using the applicable tax rates in the jurisdictions of the underlying adjustments. (8) | The number of shares used in the diluted average shares outstanding calculations on a non-GAAP basis excludes the impact of stock-based compensation expense expected to be incurred in future periods and not yet recognized in the financial statements, which would otherwise be assumed to be used to repurchase shares under the GAAP treasury stock method. Non-GAAP diluted average shares outstanding also excludes the impact of certain equity awards that are not yet earned. KNOWLES CORPORATIONCONSOLIDATED BALANCE SHEETS(in millions, except share and per share amounts)(unaudited) | | | | September 30, 2026 | | December 31, 2025 Current assets: | | | Cash and cash equivalents | $ | 46.6 | | | $ | 54.2 | Receivables, net of allowances of $0.4 and $0.0 | | 122.5 | | | | 102.8 | Inventories | | 150.3 | | | | 124.6 | Prepaid and other current assets | | 10.7 | | | | 9.8 | Total current assets | | 330.1 | | | | 291.4 | Property, plant, and equipment, net | | 145.9 | | | | 140.2 | Goodwill | | 270.3 | | | | 270.3 | Intangible assets, net | | 129.1 | | | | 141.1 | Operating lease right-of-use assets | | 17.6 | | | | 19.1 | Investment in affiliate | | 83.4 | | | | 83.4 | Other assets and deferred charges | | 98.8 | | | | 105.6 | Total assets | $ | 1,075.2 | | | $ | 1,051.1 | | | | Current liabilities: | | | Accounts payable | $ | 44.6 | | | $ | 42.9 | Accrued compensation and employee benefits | | 30.8 | | | | 29.7 | Operating lease liabilities | | 4.4 | | | | 4.1 | Other accrued expenses | | 25.5 | | | | 28.2 | Federal and other taxes on income | | 7.1 | | | | 1.0 | Total current liabilities | | 112.4 | | | | 105.9 | Long-term debt | | 116.0 | | | | 114.0 | Deferred income taxes | | 1.1 | | | | 1.1 | Long-term operating lease liabilities | | 13.9 | | | | 16.1 | Other liabilities | | 33.5 | | | | 38.2 | Commitments and contingencies | | | Stockholders' equity: | | | Preferred stock - $0.01 par value; 10,000,000 shares authorized; none issued | | — | | | | — | Common stock - $0.01 par value; 400,000,000 shares authorized; 100,872,803 and 84,720,988 shares issued and outstanding at September 30, 2026, respectively, and 99,651,892 and 84,887,498 shares issued and outstanding at December 31, 2025, respectively | | 1.0 | | | | 1.0 | Treasury stock - at cost; 16,151,815 and 14,764,394 shares at September 30, 2026 and December 31, 2025, respectively | | (318.4 | ) | | | (270.7 | ) Additional paid-in capital | | 1,753.9 | | | | 1,739.6 | Accumulated deficit | | (518.7 | ) | | | (569.4 | ) Accumulated other comprehensive loss | | (119.5 | ) | | | (124.7 | ) Total stockholders' equity | | 798.3 | | | | 775.8 | Total liabilities and stockholders' equity | $ | 1,075.2 | | | $ | 1,051.1 | KNOWLES CORPORATIONCONSOLIDATED STATEMENTS OF CASH FLOWS(in millions)(unaudited) | | Nine Months Ended September 30, | | 2026 | | | | 2025 | Operating Activities | | | Net earnings | $ | 50.7 | | | $ | 23.2 | Adjustments to reconcile net earnings to cash from operating activities: Depreciation and amortization | | 28.8 | | | | 27.1 | Stock-based compensation | | 23.4 | | | | 22.4 | Deferred income taxes | | 7.8 | | | | 4.3 | Non-cash interest expense and amortization of debt issuance costs | | 0.4 | | | | 4.2 | Impairment charges on fixed assets | | — | | | | 3.6 | (Gain) loss on sale of business | | (0.8 | ) | | | 1.6 | Loss on sale of fixed assets | | 0.1 | | | | 0.1 | Other, net | | 6.9 | | | | 5.2 | Changes in assets and liabilities (excluding effects of foreign exchange): | | | Receivables, net | | (20.0 | ) | | | (3.8 | ) Inventories | | (26.5 | ) | | | (4.8 | ) Prepaid and other current assets | | (1.8 | ) | | | (1.5 | ) Accounts payable | | 2.3 | | | | (20.8 | ) Accrued compensation and employee benefits | | 1.1 | | | | (3.4 | ) Other accrued expenses | | (7.0 | ) | | | (7.8 | ) Accrued taxes | | 5.6 | | | | 3.2 | Other non-current assets and non-current liabilities | | 1.1 | | | | 14.0 | Net cash provided by operating activities | | 72.1 | | | | 66.8 | | | | Investing Activities | | | Capital expenditures | | (24.6 | ) | | | (16.8 | ) Purchase of investments | | — | | | | (1.6 | ) Proceeds from the sale of investments | | — | | | | 1.6 | Proceeds from seller loan repayment | | — | | | | 0.5 | Net cash used in investing activities | | (24.6 | ) | | | (16.3 | ) | | | Financing Activities | | | Borrowings under revolving credit facility | | 105.0 | | | | — | Proceeds from exercise of stock options | | 5.8 | | | | 3.9 | Payments under revolving credit facility | | (103.0 | ) | | | (30.0 | ) Repurchase of common stock | | (47.5 | ) | | | (55.0 | ) Tax on restricted stock and performance share unit vesting and stock option exercises | | (14.9 | ) | | | (7.1 | ) Payments of finance lease obligations | | (0.3 | ) | | | (0.4 | ) Net cash used in financing activities | | (54.9 | ) | | | (88.6 | ) | | | Effect of exchange rate changes on cash and cash equivalents | | (0.2 | ) | | | 0.5 | | | | Net decrease in cash and cash equivalents | | (7.6 | ) | | | (37.6 | ) Cash and cash equivalents at beginning of period | | 54.2 | | | | 130.1 | Cash and cash equivalents at end of period | $ | 46.6 | | | $ | 92.5 | KNOWLES CORPORATIONRECONCILIATION OF GAAP CASH FLOW MEASURES TO NON-GAAP CASH FLOW MEASURES (1)(in millions, except per share amounts)(unaudited) | | | | Quarter Ended | | Nine Months Ended | September 30, 2026 | | June 30, 2026 | | September 30, 2025 | | September 30, 2026 | | September 30, 2025 Net cash provided by (used in) by operating activities | $ | 44.6 | | | $ | 28.2 | | | $ | 29.1 | | | $ | 72.1 | | | $ | 66.8 | Amounts utilized by discontinued operations | | 5.3 | | | | 1.2 | | | | 1.9 | | | | 14.9 | | | | 31.2 | Non-GAAP net cash attributable to continuing operations | | 49.9 | | | | 29.4 | | | | 31.0 | | | | 87.0 | | | | 98.0 | | | | | | | | | | Capital expenditures | | (7.3 | ) | | | (6.5 | ) | | | (7.7 | ) | | | (24.6 | ) | | | (16.8 | ) Amounts attributable to discontinued operations | | — | | | | — | | | | — | | | | — | | | | — | Non-GAAP capital expenditures attributable to continuing operations | | (7.3 | ) | | | (6.5 | ) | | | (7.7 | ) | | | (24.6 | ) | | | (16.8 | ) | | | | | | | | | Non-GAAP net cash attributable to continuing operations | | 49.9 | | | | 29.4 | | | | 31.0 | | | | 87.0 | | | | 98.0 | Non-GAAP capital expenditures attributable to continuing operations | | (7.3 | ) | | | (6.5 | ) | | | (7.7 | ) | | | (24.6 | ) | | | (16.8 | ) Adjusted free cash flow | $ | 42.6 | | | $ | 22.9 | | | $ | 23.3 | | | $ | 62.4 | | | $ | 81.2 | Adjusted free cash flow as a % of revenues | | 23.2 | % | | | 13.7 | % | | | 15.2 | % | | | 12.4 | % | | | 18.8 | % (1) | In addition to measuring cash flow generation based on the operating, investing, and financing classifications included in the Consolidated Statement of Cash Flows, Knowles also measures adjusted free cash flow and adjusted free cash flow as a percentage of revenues. Adjusted free cash flow is defined as non-GAAP net cash attributable to continuing operations less non-GAAP capital expenditures attributable to continuing operations. Non-GAAP net cash attributable to continuing operations is defined as net cash provided by operating activities less amounts generated or utilized by discontinued operations. Non-GAAP capital expenditures attributable to continuing operations is defined as capital expenditures less amounts attributable to discontinued operations. Knowles believes these measures are helpful in measuring its cash generated from its continuing operations that is available to repay debt, fund acquisitions, and repurchase Knowles common stock. Adjusted free cash flow and adjusted free cash flow as a percentage of revenues are not presented in accordance with GAAP and may not be comparable to similarly titled measures used by other companies in our industry. As such, adjusted free cash flow and adjusted free cash flow as a percentage of revenues should not be considered in isolation from, or as an alternative to, any other liquidity measures determined in accordance with GAAP. View source version on businesswire.com: https://www.businesswire.com/news/home/20261022038782/en/ Contacts Financial Contact: Sarah Cook Knowles Investor Relations Email: [email protected]

Electronic components manufacturer Knowles (NYSE:KN) reported Q3 2026 results beating Wall Street's revenue expectations , with sales up 20.3% year on year to $184 million. On top of that, next quarter's revenue guidance ($185 million at the midpoint) was surprisingly good and 6% above what analysts were expecting. Its non-GAAP profit of $0.38 per share was 6.3% above analysts' consensus estimates. Is now the time to buy Knowles? Find out in our full research report. - Revenue: $184 million vs analyst estimates of $172.1 million (20.3% year-on-year growth, 6.9% beat) - Adjusted EPS: $0.38 vs analyst estimates of $0.36 (6.3% beat) - Adjusted EBITDA: $48.3 million vs analyst estimates of $45 million (26.3% margin, 7.3% beat) - Revenue Guidance for Q4 2026 is $185 million at the midpoint, above analyst estimates of $174.6 million - Adjusted EPS guidance for Q4 2026 is $0.41 at the midpoint, above analyst estimates of $0.38 - Operating Margin: 16.7%, in line with the same quarter last year - Free Cash Flow Margin: 23.2%, up from 14% in the same quarter last year - Market Capitalization: $2.98 billion "Total Company revenue grew 20% year over year in the third quarter, and our book-to-bill ratio in Precision Devices remained above one for the eighth consecutive quarter, reflecting continued order strength," Mr. Niew continued. "By executing our strategy—leveraging our differentiated technologies, developing custom products through close customer collaboration, and scaling production with our world-class operational capabilities—we delivered strong growth across the four major markets we serve: Medtech, Defense, Industrial, and Electrification. Additionally, at the mid-point of our fourth quarter guided range, full year 2026 revenue is expected to grow 16%. I am pleased with the Company's performance and excited about the opportunities ahead." With roots dating back to 1946 and a focus on components that must perform flawlessly in critical situations, Knowles (NYSE:KN) designs and manufactures specialized electronic components like high-performance capacitors, microphones, and speakers for medical technology, defense, and industrial applications. A company's long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. With $666.1 million in revenue over the past 12 months, Knowles is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels. As you can see below, Knowles's demand was weak over the last five years. Its sales fell by 5.4% annually, a tough starting point for our analysis. We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Knowles's annualized revenue growth of 3.1% over the last two years is above its five-year trend, which is encouraging. This quarter, Knowles reported robust year-on-year revenue growth of 20.3%, and its $184 million of revenue topped Wall Street estimates by 6.9%. Company management is currently guiding for a 14.1% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 5.9% over the next 12 months, an improvement versus the last two years. This projection is above average for the sector and suggests its newer products and services will fuel better top-line performance. ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you're unstoppable. These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE. Knowles has been an efficient company over the last five years. It was one of the more profitable businesses in the business services sector, boasting an average adjusted operating margin of 16.1%. Analyzing the trend in its profitability, Knowles's adjusted operating margin rose by 2.2 percentage points over the last five years, showing its efficiency has improved. This quarter, Knowles generated an adjusted operating margin profit margin of 20.4%, in line with the same quarter last year. This indicates the company's overall cost structure has been relatively stable. Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions. Sadly for Knowles, its EPS and revenue declined by 1.7% and 5.4% annually over the last five years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, Knowles's low margin of safety could leave its stock price susceptible to large downswings. Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business. For Knowles, its two-year annual EPS growth of 16.9% was higher than its five-year trend. This acceleration made it one of the faster-growing business services companies in recent history. In Q3, Knowles reported adjusted EPS of $0.38, up from $0.33 in the same quarter last year. This print beat analysts' estimates by 6.3%. Over the next 12 months, Wall Street expects Knowles's full-year EPS to grow 17.5% from $1.34 to $1.58. We were impressed by how significantly Knowles blew past analysts' EPS guidance for next quarter expectations this quarter. We were also excited its revenue outperformed Wall Street's estimates by a wide margin. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 4.7% to $34.96 immediately after reporting. Knowles may have had a good quarter, but does that mean you should invest right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.

- Interested in Knowles Corporation? Here are five stocks we like better. - Knowles delivered a strong third quarter: Revenue rose 20% year over year to $184 million, exceeding guidance, while adjusted EPS increased 15% to $0.38 and operating cash flow reached $45 million. - Precision Devices led growth, with revenue up 33%, a 1.5 book-to-bill ratio and orders nearing $180 million. The company is expanding capacity, but constraints may limit sequential growth in the first half of 2027. - Management issued a positive outlook: Fourth-quarter revenue is projected at $180 million to $190 million, and Knowles expects continued margin expansion, with a path toward a 30% medium-term EBITDA margin while investing more heavily in capacity during 2027. - J.B. Hunt's Stock Plunges After Market Misprices Profit Warning Knowles (NYSE:KN) reported third-quarter 2026 revenue of $184 million, up 20% from a year earlier and above the high end of its guidance range, as demand accelerated across its precision devices portfolio. Adjusted earnings per share were $0.38, up 15% year over year, while cash from operating activities reached $45 million. President and Chief Executive Officer Jeffrey Niew said the results reflected execution across the company's businesses and continued momentum in markets where Knowles believes it has differentiated products. The company's precision devices segment posted revenue growth of 33%, while its med tech and specialty audio segment grew 4%. → The AI Buildout Is Only 15% Complete—Here Is Where the Next Dollar Actually Goes - 3 Nimble Free Cash Flow Names With Light Assets Precision devices revenue totaled $117 million in the third quarter, with growth driven by demand across med tech, defense, industrial and electrification markets. The segment recorded a book-to-bill ratio of 1.5, and quarterly orders approached $180 million, according to Niew. "Our close collaboration with customers continues to drive a robust pipeline of design wins as customers continue to choose our innovative and differentiated solutions," Niew said. → GM Beat and Added a $20 Billion Buyback—Why Did the Stock Fall? - Accelerant's Take-Private Deal Raises a Bigger Question for Insurance Stocks The company cited demand for pulse-power film capacitors used in defibrillator and radiotherapy applications, ceramic capacitors for medical imaging and implantable devices, and products serving defense communications and munitions applications. In industrial markets, Knowles said ceramic capacitors and capacitor assemblies are gaining use in plasma generators and semiconductor equipment. Knowles is adding capacity across most precision devices product lines to address demand. Niew said the added capacity is expected to begin coming online late in the first quarter and be fully available during the second half of 2027. Until then, capacity constraints are expected to limit sequential growth in precision devices during the first half of 2027, even as year-over-year growth remains strong. → Tech Stocks Took a Hit—These 2 Pharma Stocks Are Near New Highs The company also said a previously disclosed $15 million defense order for RF filters, received early in the third quarter, will be delivered over 36 months. Med tech and specialty audio revenue was $67 million, up 4% from the prior-year quarter. Niew said hearing-health original equipment manufacturer customers typically introduce new products in the fourth quarter, but demand shifted somewhat earlier this year as customers introduced products incorporating artificial intelligence features. Despite the seasonal timing shift, management said it continues to expect the hearing-health market to grow at historical rates in 2026. For 2027, Niew said the business should perform at historical levels, though the company expects a 2% to 3% revenue headwind, particularly in the first half, from the expiration of a supplier's last-time-buy arrangement tied to the divested consumer business. Management said the lost stamping revenue was on a cost-plus basis and is not expected to have a substantial effect on EBIT. Chief Financial Officer John Anderson said med tech and specialty audio gross margin could rise by about one percentage point in 2027 from the low-50% range discussed for 2026. Third-quarter gross margin in med tech and specialty audio was 51.9%. Precision devices gross margin was 41.6%, up 10 basis points from a year earlier, as higher volume was partly offset by unfavorable inventory adjustments. Research and development expense rose to $10 million from $9 million a year earlier, reflecting higher project spending in both segments. Selling, general and administrative expense increased by $4 million to $30 million, due primarily to higher sales commissions, incentive compensation and additional headcount supporting demand and new product initiatives. Knowles generated $45 million in operating cash flow and spent $7 million on capital expenditures during the quarter. It also repurchased 695,000 shares for $25 million and reduced bank borrowings by $15 million. The company ended the quarter with $47 million in cash, $116 million drawn under its revolving credit facility and more than $330 million in liquidity. Anderson said capital spending is expected to rise to 5% to 7% of revenue in 2027, above the company's historical 3% to 5% range, as Knowles invests in precision devices capacity. Management also said it expects to continue pursuing strategic acquisitions while funding internal growth investments, returning capital to shareholders and reducing debt. For the fourth quarter, Knowles forecast revenue of $180 million to $190 million, representing 14% year-over-year growth at the midpoint. The company projected adjusted EBIT margin of 23% to 25%, adjusted EPS of $0.39 to $0.43, and operating cash flow of $60 million to $70 million. - R&D expense is expected to be $10 million to $12 million. - Selling and administrative expense is expected to be $29 million to $31 million. - Interest expense is projected at $1.5 million. - The effective tax rate is expected to be 15% to 19%. - Capital spending is projected at $8 million in the fourth quarter and about 5% of full-year revenue. For the full year, Anderson said the company expects revenue growth of 16% at the midpoint of its guidance and adjusted EBITDA growth of 24% over 2025. Both measures would exceed the upper end of the targets presented at Knowles' May 2025 investor day, he said. Management said it sees continued margin expansion potential. Anderson said the company's fourth-quarter guidance implies gross margin slightly above 46% at the midpoint and that Knowles sees room for roughly 100 basis points of annual gross-margin improvement, supplemented by operating leverage. Niew said the company expects to exit 2026 above 25% EBITDA margin and sees a path toward 30% over the medium term. Looking beyond its core markets, Knowles highlighted opportunities in its Micro Solutions Group, pulse-power capacitors, attenuators and inductors. Niew said Micro Solutions Group revenue was about $1 million in 2025, could approach $3 million in 2026, exceed $5 million in 2027 and rise above $10 million in 2028. He said management plans to provide more detail on these growth initiatives during 2027. Knowles Corporation (NYSE: KN) is a global manufacturer of advanced electronic components and solutions for audio, communications, medical, industrial and other specialized applications. The company develops products that support sound capture, audio processing, signal management and high-performance connectivity in a range of electronic devices and systems. Its portfolio includes microelectromechanical systems (MEMS) microphones, audio processors, speakers, receivers, balanced armature drivers and other acoustic components. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "What Knowles (KN) Said on Its Q3 Earnings Call" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Knowles (KN) came out with quarterly earnings of $0.38 per share, beating the Zacks Consensus Estimate of $0.36 per share. This compares to earnings of $0.33 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +5.56%. A quarter ago, it was expected that this maker acoustic components such as microphones would post earnings of $0.3 per share when it actually produced earnings of $0.33, delivering a surprise of +10%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Knowles, which belongs to the Zacks Communication - Components industry, posted revenues of $184 million for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 6.79%. This compares to year-ago revenues of $152.9 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Knowles shares have added about 63% since the beginning of the year versus the S&P 500's gain of 13.3%. While Knowles has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Knowles was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.38 on $174 million in revenues for the coming quarter and $1.34 on $666.2 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Communication - Components is currently in the top 22% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Corning (GLW), another stock in the same industry, has yet to report results for the quarter ended September 2026. The results are expected to be released on October 27. This specialty glass maker is expected to post quarterly earnings of $0.88 per share in its upcoming report, which represents a year-over-year change of +31.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Corning's revenues are expected to be $5 billion, up 17% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Knowles Corporation (KN) : Free Stock Analysis Report Corning Incorporated (GLW) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research