Knowles Corporation is a leading provider of advanced micro-acoustic, audio processing, and precision device solutions, operating at scale with approximately 5,500 employees worldwide. The company leverages its technology portfolio to serve diverse end markets, with a business model focused on innovation and direct engagement with OEMs and contract manufacturers. Its competitive strength lies in a broad product offering and established presence across high-growth technology sectors.Generates revenue through ...

ITASCA, Ill.--(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 the date for the release of its fourth quarter and full year 2025 financial results. Fourth Quarter 2025 Conference Call and Webcast Knowles will issue its fourth quarter and full year 2025 financial results on February 5, 2026,. ...

I've spent a fair bit of time reviewing Knowles’ stock performance over the last year, and I'm not too surprised the stock has been up and down all year. The performance doesn't quite line up with the company'sI’m Emmanuel Onwusah—a financial analyst, writer, and recovering engineer. I hold FMVA® and BIDA® certifications from the Corporate Finance Institute, and I spend most of my time creating pitch decks, building models, analyzing companies, and trying to make sense of where value meets narrative. My bac ...

Core Insights - Harvey Partners has established a new position in Knowles Corporation, acquiring 622,500 shares valued at approximately $14.5 million, representing 1.3% of the fund's reportable U.S. equity assets as of September 30 [2][10] - Knowles Corporation's stock has increased by 20% over the past year, outperforming the S&P 500, which rose by 13% during the same period [3][10] Company Overview - Knowles Corporation is a leading provider of advanced micro-acoustic, audio, and precision device solutions, serving high-growth markets such as mobile communications, hearing health, and industrial electronics [6] - The company's market capitalization is approximately $2 billion, with a revenue of $573.5 million and a net income of $35.8 million for the trailing twelve months [4] Recent Performance - In the third quarter, Knowles reported a revenue growth of 7% year-over-year, reaching $152.9 million, with a gross margin of 45.7% and non-GAAP EPS of $0.33, exceeding guidance expectations [11] - The company anticipates 6% organic revenue growth for the year, with fourth-quarter revenue projected to increase by another 9% year-over-year [11] Investment Rationale - The new position by Harvey Partners indicates confidence in Knowles' diversified exposure to various end-markets, which may support steadier earnings despite potential softness in consumer hardware cycles [7] - Knowles generates revenue by designing, manufacturing, and selling audio and precision device components to original equipment manufacturers and distributors across multiple sectors, including consumer electronics, medtech, and industrial markets [9]

Core Insights - Ariel Investments reported a strong performance for its Mid Cap Value Strategy in Q3 2025, with a return of +9.62% gross of fees, outperforming both the Russell Midcap Value Index (+6.18%) and the Russell Midcap Index (+5.33%) [1] Company Performance - Knowles Corporation (NYSE:KN) experienced a one-month return of -4.95% but saw a 52-week gain of 16.68%, closing at $22.45 per share with a market capitalization of $1.928 billion as of November 27, 2025 [2] - In Q3 2025, Knowles Corporation reported revenue of $153 million, reflecting a 7% year-over-year increase [4] Market Position and Strategy - Knowles Corporation is recognized for its strong quarterly results, with healthy demand across key markets and a return to growth in its Precision Devices segment due to normalized channel inventories and improved operational efficiency [3] - The company has been returning capital to shareholders through share repurchases and is positioned to benefit from its focus on niche markets in hearing health and precision devices [3] Hedge Fund Interest - Knowles Corporation was held by 21 hedge fund portfolios at the end of Q3 2025, an increase from 17 in the previous quarter, indicating growing interest among institutional investors [4]

Summary of Knowles (NYSE:KN) FY Conference Call Company Overview - Knowles operates in two distinct segments: - **Precision Devices**: Approximately 54% of revenues in 2024, expected to rise to 56-57% in 2025. This segment includes high-performance capacitors and RF filters [3][4]. - **Microphones and Receivers (MSA)**: Primarily focused on hearing health, with about 80% of this segment related to hearing aids [4]. Financial Performance - Historical revenue CAGR from 2017 to 2024 is about 8%, with half from organic growth and half from acquisitions [9]. - EBITDA CAGR during the same period is approximately 11%, driven by margin expansion and operating leverage [9]. - Current EBITDA margins are around 24%, with a target of 30% over the next three to five years [8][11]. Market Segmentation - **Med Tech**: Accounts for about 50% of the business, including hearing health [4]. - **Defense**: Represents about 21% of revenues, with increasing defense budgets globally [4][14]. - **Industrial**: Comprises the remaining third, including energy and electrification applications [4]. Growth Strategy - Focus on organic growth supplemented by M&A opportunities, particularly in the Precision Devices segment, which is highly fragmented [6][17]. - Recent acquisition of Cornell Dubilier for $265 million, enhancing the capacitor business [7]. - Anticipated revenue growth of 8-10% annually, with 4-6% from organic growth and 4% from acquisitions [10][17]. Key Trends and Opportunities - Aging population driving demand for hearing aids, with Knowles holding a 60% market share in this segment [12]. - Increased demand for energy solutions, particularly in alternative energy, supported by AI and automation trends [12][26]. - Significant order of $75 million from a customer in the alternative energy sector, expected to contribute $25 million in growth [12][13][26]. Capital Allocation - Capital investments typically range from 3-5% of revenues, expected to be higher this year due to the energy order [20][21]. - Share buybacks are a priority, with $55 million repurchased this year and over $200 million in the last couple of years [21][22]. - M&A remains a focal point, with a disciplined approach to ensure high returns on investments [22][23]. Challenges and Considerations - The company has exited lower-margin businesses, including a consumer electronics segment heavily reliant on Apple, to focus on higher-margin opportunities [5][6]. - The hearing aid market faces challenges with customer satisfaction and product effectiveness, impacting potential growth [27][28][29]. Conclusion - Knowles is positioned for growth with a strong balance sheet, a focus on high-margin markets, and a disciplined approach to capital allocation and acquisitions. The company is optimistic about its growth prospects, both organically and through strategic acquisitions [30][31].

Financial Performance - Revenues for Q3 2025 were $152.9 million, an increase of $10.4 million or 7.3% compared to Q3 2024's $142.5 million[108] - Gross profit for Q3 2025 was $69.9 million, up $7.0 million or 11.1% from $62.9 million in Q3 2024, with a gross profit margin of 45.7%[111] - Earnings from continuing operations for Q3 2025 were $18.0 million, an increase of $8.8 million compared to $9.2 million in Q3 2024[120] - Adjusted earnings before interest and income taxes (Adjusted EBIT) for Q3 2025 were $34.5 million, an increase of $4.5 million from $30.0 million in Q3 2024[122] - Non-GAAP diluted earnings per share from continuing operations were $0.33 for Q3 2025, compared to $0.27 for Q3 2024, an improvement of $0.06[125] - Revenues for the nine months ended September 30, 2025 were $431.0 million, an increase of $20.0 million or 4.9% compared to $411.0 million in 2024[127] - Gross profit for the nine months ended September 30, 2025 was $183.8 million, reflecting an increase of $9.9 million or 5.7% from $173.9 million in 2024[132] - Non-GAAP gross profit for the same period was $190.2 million, up $7.7 million or 4.2% from $182.5 million in 2024[133] - Earnings from continuing operations improved to $25.4 million for the nine months ended September 30, 2025, compared to $13.0 million in 2024, an increase of $12.4 million[140] - Diluted earnings per share from continuing operations increased to $0.29 for the nine months ended September 30, 2025, up from $0.14 in 2024[144] - Adjusted EBIT for the nine months ended September 30, 2025 was $83.9 million, an increase of $5.4 million from $78.5 million in 2024[142] Expenses - Research and development expenses for Q3 2025 were $10.0 million, a decrease of $0.2 million or 2.0% from $10.2 million in Q3 2024[113] - Selling and administrative expenses for Q3 2025 were $34.0 million, a slight increase of $0.1 million or 0.3% from $33.9 million in Q3 2024[114] - Research and development expenses rose to $29.7 million, a $0.5 million increase or 1.7% from $29.2 million in 2024[134] - Selling and administrative expenses were $107.1 million, a slight increase of $0.3 million or 0.3% compared to $106.8 million in 2024[135] - Interest expense decreased significantly to $7.5 million, down $5.4 million from $12.9 million in 2024[136] Taxation - The effective tax rate for Q3 2025 was 19.3%, down from 24.6% in Q3 2024, primarily due to the mix of earnings and losses by taxing jurisdictions[117] - The effective tax rate (ETR) for the nine months ended September 30, 2025 was 26.2%, a decrease from 38.1% in 2024[138] Segment Performance - Revenues for the Precision Devices segment were $88.2 million in Q3 2025, an increase of $9.4 million or 11.9% from $78.8 million in Q3 2024[152] - Adjusted earnings from continuing operations before interest and income taxes for the Precision Devices segment were $20.2 million in Q3 2025, up from $16.1 million in Q3 2024, an increase of 25.5%[154] - Revenues for the MedTech & Specialty Audio segment were $64.7 million in Q3 2025, an increase of $1.0 million or 1.6% from $63.7 million in Q3 2024[156] - Adjusted earnings from continuing operations before interest and income taxes for the MedTech & Specialty Audio segment were $26.2 million in Q3 2025, slightly up from $26.1 million in Q3 2024[158] - Precision Devices (PD) revenues increased by $12.0 million or 5.3% to $239.2 million for the nine months ended September 30, 2025, compared to $227.2 million in 2024[160] - PD's earnings before interest and income taxes (EBIT) rose to $25.7 million with a margin of 10.7%, up from $10.5 million and 4.6% in the prior year[161] - Adjusted EBIT for PD was $44.8 million, reflecting a $7.1 million increase and an adjusted EBIT margin of 18.7%, compared to 16.6% in 2024[162] - MedTech & Specialty Audio (MSA) revenues grew by $8.0 million or 4.4% to $191.8 million for the nine months ended September 30, 2025[164] - MSA's EBIT decreased by $6.6 million to $65.3 million, with a margin of 34.0%, down from 39.1% in the previous year[165] Cash Flow and Shareholder Returns - Adjusted free cash flow increased to $81.2 million in 2025, representing 18.8% of revenues, compared to $63.5 million or 15.5% in 2024[177] - Cash and cash equivalents totaled $92.5 million as of September 30, 2025, down from $130.1 million at the end of 2024[168] - The company repurchased 3,120,574 shares for $55.0 million during the nine months ended September 30, 2025, compared to 1,686,253 shares for $29.5 million in 2024[170] - Cash flows from operating activities were $66.8 million in 2025, a decrease from $95.0 million in 2024, primarily due to supplier obligations and separation costs[171] Corporate Actions and Legal Matters - The divestiture of the Consumer MEMS Microphones segment supports the company's transformation into an industrial technology company focused on defense, medtech, and industrial markets[102] - The company completed the sale of the CMM segment to Syntiant for approximately $141.9 million on December 27, 2024[169] - The company is involved in various legal proceedings, claims, and investigations as part of its ordinary business operations[178] Accounting and Risk - The financial statements are prepared in accordance with U.S. GAAP, requiring estimates and assumptions related to assets, liabilities, revenues, and expenses[179] - There are no material changes in the company's previously reported critical accounting estimates[180] - Recent accounting standards are not expected to significantly impact the company's revenue, earnings, or liquidity[181] - There were no material changes to the market risk exposure information disclosed in the Annual Report for the year ended December 31, 2024[182]

Group 1 - The article emphasizes the importance of enabling Javascript and cookies in browsers to prevent access issues [1] - It mentions that users with ad-blockers may face restrictions when trying to access the content [1]

Group 1 - The article does not provide any specific content related to a company or industry [1]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $153 million, representing a 7% increase year over year, and EPS was $0.33, up 22% year over year [4][11] - Cash from operations was $29 million, exceeding the midpoint of the guidance range [4][11] - Gross margins for the MedTech and specialty audio segment were 53%, flat compared to the previous year, while Precision Devices segment gross margins improved to 41.5%, up 150 basis points year over year [11][12] Business Line Data and Key Metrics Changes - MedTech and specialty audio revenue was $65 million, up 2% year over year, driven by increased demand in the specialty audio market [5][11] - Precision Devices segment revenue was $88 million, up 12% year over year, with growth across all end markets including MedTech, defense, industrial, and EV and energy [5][12] Market Data and Key Metrics Changes - The defense market showed particularly strong growth, with design wins outpacing other end markets [6][12] - Channel inventories are now at normalized levels, matching orders to end market demand [7] Company Strategy and Development Direction - The company is focused on leveraging unique technologies to design custom engineered solutions and deliver them at scale [4][10] - Future growth opportunities are anticipated in the specialty film production expansion and strong secular growth trends in end markets [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in organic growth rates at the high end of the stated range of 4% to 6% for the total company in 2026, supported by a healthy backlog of orders [8][9] - The company expects to finish 2025 strong with revenue and EPS growth accelerating in the second half of the year [8][9] Other Important Information - The company purchased $20 million in shares and reduced outstanding bank borrowings by $15 million during the quarter [9][13] - The net leverage ratio based on trailing 12 months adjusted EBITDA was 0.6 times, with liquidity exceeding $350 million [14] Q&A Session Summary Question: Update on specialty film capacity and demand outlook - Management indicated that the specialty film line is expected to generate $25 to $30 million this year, with additional orders anticipated, leading to a projected $55 to $60 million next year [20][21] Question: Design activity and growth expectations for segments - Management expects MedTech and specialty audio growth in 2026 to be in the 2% to 4% range, while Precision Devices may exceed the high end of the 6% to 8% growth range [23][24] Question: Update on M&A environment - The M&A environment has improved, with more assets available and lower interest rate expectations, but the company remains disciplined in its approach [33][34] Question: Impact of palladium prices on gross margins - The company has pre-buys in place for palladium, mitigating immediate impacts on gross margins, and is monitoring the situation closely [38][39] Question: Specialty film gross margin improvements - Management expects sequential improvement in specialty film gross margins from Q3 to Q4, with significant improvements anticipated by mid to late Q2 of next year [45][46]