Financial Data and Key Metrics Changes - In Q2 2025, the company reported revenue of $146 million, an increase of 8% year over year, and cash from operations of $36 million, both exceeding the high end of the guided range [8][14] - Earnings per share (EPS) for the quarter was $0.24, up 20% year over year [8][14] - Gross margins for the MedTech and Specialty Audio segment were 50.6%, down 280 basis points year over year, but improved 200 basis points sequentially [14][15] Business Line Data and Key Metrics Changes - MedTech and Specialty Audio revenue was $67 million, up 10% year over year, driven by increased demand in hearing health and specialty audio [9][14] - Precision Devices segment revenue was $79 million, up 6% year over year, with gross margins at 38.7%, an increase of 150 basis points from the previous year [10][16] Market Data and Key Metrics Changes - The primary end markets served, including medtech, defense, and industrial sectors, are expected to remain insulated from tariff impacts, with demand gaining strength [6][10] - Bookings trends in the Precision Device segment have shown positive growth for three consecutive quarters, indicating strong demand across various end markets [11][22] Company Strategy and Development Direction - The company is focused on leveraging unique technologies and creating custom products, aiming for organic growth acceleration in 2025 and beyond [12][13] - New product initiatives, such as the inductor line and specialty film production line, are expected to expand the total addressable market (TAM) and drive future growth [12][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the hearing health business and the overall strength of demand across segments, anticipating year-over-year growth for the full year 2025 [10][25] - The company is closely monitoring the industrial market, which has shown sensitivity to recessions but currently exhibits stable demand [6][10] Other Important Information - The company repurchased $30 million worth of shares in Q2, funded by strong cash generation from operations [12][18] - The net leverage ratio based on trailing twelve months adjusted EBITDA was 0.7x, with liquidity exceeding $350 million [18][42] Q&A Session Summary Question: What is providing the upside in guidance? - Management noted strong bookings in the Precision Device segment, with a book-to-bill ratio above 1.15, indicating broad-based demand across medical, defense, and industrial markets [22][25] Question: Any early thoughts on Q4? - While not providing specific guidance, management expects year-over-year and sequential growth in Q4 based on strong order activity [27][28] Question: Expectations for gross margin expansion? - Management anticipates gross margins to improve by at least 100 basis points in Q3, driven by capacity utilization in high-performance products [29] Question: Insights on M&A opportunities? - The M&A pipeline remains strong, with management being disciplined in pursuing opportunities that align with corporate strategy [39][40]

0 7 . 2 4 . 2 5 2 nd Quarter 2025 Earnings Release Supplemental Information Safe Harbor Forward Looking Statements This presentation 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 ...

[Executive Summary & Outlook](index=1&type=section&id=Executive%20Summary%20%26%20Outlook) [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) Knowles Corporation delivered strong Q2 2025 performance, exceeding the high end of guidance for revenue and cash flow from operating activities, with non-GAAP diluted EPS above the midpoint of guidance; the company repurchased $30 million of stock - Q2 2025 **revenue** and **cash flow from operating activities** exceeded the high end of guidance, with **non-GAAP diluted EPS** above the midpoint of guidance[3](index=3&type=chunk) - The company repurchased **$30 million of stock** in Q2[2](index=2&type=chunk)[3](index=3&type=chunk) | Metric (Millions USD) | Q2-25 | Q1-25 | Q2-24 | | :---------------- | :---- | :---- | :---- | | **Revenue (Millions USD)** | $145.9 | $132.2 | $135.2 | | **Gross Profit (Millions USD)** | $60.6 | $53.3 | $57.8 | | *(as % of Revenue)* | 41.5% | 40.3% | 42.8% | | **Non-GAAP Gross Profit (Millions USD)** | $64.5 | $55.0 | $59.8 | | *(as % of Revenue)* | 44.2% | 41.6% | 44.2% | | **Diluted (Loss) EPS (USD)** | $0.09 | $— | $0.05 | | **Non-GAAP Diluted EPS (USD)** | $0.24 | $0.18 | $0.20 | | **Net Cash Provided by Operating Activities (Millions USD)** | $36.4 | $1.3 | $24.9 | [Management Commentary](index=1&type=section&id=Management%20Commentary) Knowles' President and CEO, Jeffrey Niew, expressed satisfaction with Q2 performance, noting increased order activity in Precision Devices and consistent performance in MedTech and Specialty Audio, anticipating continued sequential and year-over-year growth - Precision Devices segment experienced continued increases in **order activity** and **backlog**, covering a broad range of end markets[4](index=4&type=chunk) - MedTech and Specialty Audio businesses performed as expected[4](index=4&type=chunk) - Anticipates continued **sequential and year-over-year growth** for Q3 and the remainder of 2025, driven by strong secular growth trends in MedTech, defense, and industrial markets, and a differentiated product portfolio to fuel revenue growth beyond 2025[4](index=4&type=chunk) [Q3 2025 Outlook](index=2&type=section&id=Q3%202025%20Outlook) The company provided Q3 2025 financial guidance, projecting revenue between $144 million and $154 million, non-GAAP diluted EPS of $0.29 to $0.33, and cash flow from operating activities of $20 million to $30 million | Metric | GAAP (Millions USD) | Adjustments (Millions USD) | Non-GAAP (Millions USD) | | :----------------------- | :---------------- | :---------------- | :---------------- | | **Revenue from Continuing Operations (Millions USD)** | $144 to $154 | — | $144 to $154 | | **Diluted EPS from Continuing Operations (USD)** | $0.18 to $0.22 | $0.11 | $0.29 to $0.33 | | **Net Cash Provided by Operating Activities (Millions USD)** | $20 to $30 | — | $20 to $30 | - Q3 2025 GAAP results are expected to include approximately **$0.06 per share** for stock-based compensation, **$0.04 per share** for intangible asset amortization, and **$0.01 per share** for production transfer costs, which will be excluded from non-GAAP results[7](index=7&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) [About Knowles](index=2&type=section&id=About%20Knowles) Knowles Corporation is a leading manufacturer of specialized electronic components, designing and producing mission-critical products for MedTech, defense, and industrial markets, known for high reliability, custom engineering, and scalable manufacturing - Knowles is a **leading manufacturer of specialized electronic components**, designing unique mission-critical parts for innovative technologies[11](index=11&type=chunk) - The company enables success in the most demanding applications within MedTech, defense, and industrial markets through **high reliability, custom engineering, and scalable manufacturing**[11](index=11&type=chunk) - Key products include **high-performance capacitors, RF and microwave filters, advanced MedTech microphones, balanced armature speakers, and miniaturized products**[12](index=12&type=chunk) - Founded in **1946**, headquartered in Itasca, Illinois, with operations in **11 countries**[12](index=12&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=Non-GAAP%20Financial%20Measures) Knowles uses non-GAAP financial measures to supplement GAAP results, assessing core operating performance and enabling consistent comparisons across reporting periods by excluding items like stock-based compensation, intangible asset amortization, and restructuring costs - Non-GAAP results are not in accordance with GAAP and should be considered a **supplement to, not a substitute for**, GAAP financial statements[8](index=8&type=chunk) - Knowles uses non-GAAP measures to evaluate **operating performance and financial results**, serving as a primary basis for business planning by eliminating items not reflective of core operating performance[8](index=8&type=chunk) - Common non-GAAP adjustments include **stock-based compensation, certain intangible asset amortization expense, impairment charges, restructuring, production transfer costs**, and other expenses management deems outside of core operating results[8](index=8&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statements of Earnings](index=4&type=section&id=Consolidated%20Statements%20of%20Earnings) Knowles Corporation's consolidated statements of earnings present the company's financial performance for quarterly and six-month periods, including revenue, gross profit, operating earnings, and net earnings from continuing operations [Quarterly Performance](index=4&type=section&id=Quarterly%20Performance) In Q2 2025, the company reported revenue of $145.9 million, gross profit of $60.6 million, net earnings from continuing operations of $7.8 million, and diluted EPS of $0.09 | Metric (Millions USD) | Q2-25 | Q1-25 | Q2-24 | | :---------------- | :---- | :---- | :---- | | **Revenue (Millions USD)** | $145.9 | $132.2 | $135.2 | | **Cost of Goods Sold (Millions USD)** | $81.7 | $78.4 | $77.1 | | **Impairment Charges (Millions USD)** | $3.6 | — | — | | **Gross Profit (Millions USD)** | $60.6 | $53.3 | $57.8 | | **Research and Development Expenses (Millions USD)** | $10.0 | $9.7 | $9.6 | | **Selling and Administrative Expenses (Millions USD)** | $35.9 | $37.2 | $35.6 | | **Operating Earnings (Millions USD)** | $14.7 | $4.0 | $12.7 | | **Earnings from Continuing Operations (Millions USD)** | $7.8 | $(0.4) | $4.8 | | **Net Earnings (Loss) (Millions USD)** | $7.8 | $(2.0) | $(259.3) | | **Diluted EPS from Continuing Operations (USD)** | $0.09 | $— | $0.05 | [Six-Month Performance](index=5&type=section&id=Six-Month%20Performance) For the six months ended June 30, 2025, the company reported revenue of $278.1 million, gross profit of $113.9 million, net earnings from continuing operations of $7.4 million, and diluted EPS of $0.08 | Metric (Millions USD) | As of June 30, 2025 | As of June 30, 2024 | | :---------------- | :----------------- | :----------------- | | **Revenue (Millions USD)** | $278.1 | $268.5 | | **Cost of Goods Sold (Millions USD)** | $160.1 | $156.2 | | **Impairment Charges (Millions USD)** | $3.6 | — | | **Gross Profit (Millions USD)** | $113.9 | $111.0 | | **Research and Development Expenses (Millions USD)** | $19.7 | $19.0 | | **Selling and Administrative Expenses (Millions USD)** | $73.1 | $72.9 | | **Operating Earnings (Millions USD)** | $18.7 | $17.7 | | **Earnings from Continuing Operations (Millions USD)** | $7.4 | $3.8 | | **Net Earnings (Loss) (Millions USD)** | $5.8 | $(256.8) | | **Diluted EPS from Continuing Operations (USD)** | $0.08 | $0.04 | [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, Knowles reported total assets of $1,088.3 million, total liabilities of $342.0 million, and stockholders' equity of $746.1 million, with a decrease in cash and cash equivalents and a slight increase in inventories compared to December 31, 2024 | Metric (Millions USD) | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :------------- | | **Cash and Cash Equivalents (Millions USD)** | $103.2 | $130.1 | | **Accounts Receivable, Net (Millions USD)** | $101.1 | $105.0 | | **Inventories (Millions USD)** | $119.7 | $118.0 | | **Total Current Assets (Millions USD)** | $334.8 | $361.4 | | **Property, Plant and Equipment, Net (Millions USD)** | $127.2 | $130.1 | | **Goodwill (Millions USD)** | $270.1 | $269.8 | | **Intangible Assets, Net (Millions USD)** | $149.3 | $157.4 | | **Total Assets (Millions USD)** | $1,088.3 | $1,118.2 | | **Total Current Liabilities (Millions USD)** | $167.2 | $197.6 | | **Long-Term Debt (Millions USD)** | $119.0 | $134.0 | | **Total Liabilities (Millions USD)** | $342.0 | $362.2 | | **Total Stockholders' Equity (Millions USD)** | $746.1 | $756.0 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, Knowles reported net cash provided by operating activities of $37.7 million, net cash used in investing activities of $8.6 million, and net cash used in financing activities of $56.5 million, resulting in a net decrease in cash and cash equivalents of $26.9 million | Metric (Millions USD) | As of June 30, 2025 | As of June 30, 2024 | | :---------------- | :----------------- | :----------------- | | **Net Cash Provided by Operating Activities (Millions USD)** | $37.7 | $42.2 | | **Net Cash Used in Investing Activities (Millions USD)** | $(8.6) | $0.6 | | **Net Cash Used in Financing Activities (Millions USD)** | $(56.5) | $(46.0) | | **Effect of Exchange Rate Changes (Millions USD)** | $0.5 | $(0.1) | | **Net Decrease (Increase) in Cash and Cash Equivalents (Millions USD)** | $(26.9) | $(3.3) | | **Cash and Cash Equivalents at End of Period (Millions USD)** | $103.2 | $84.0 | - Cash flow from operating activities is primarily influenced by adjustments for **net earnings, depreciation and amortization, stock-based compensation, and deferred income taxes**[37](index=37&type=chunk) - Cash outflow from financing activities primarily due to **repayment of revolving credit facility, repurchase of common stock, and tax payments for vested restricted stock and performance share units**[37](index=37&type=chunk) [GAAP to Non-GAAP Reconciliations](index=6&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) [Income Statement Reconciliations](index=6&type=section&id=Income%20Statement%20Reconciliations) Knowles provides detailed reconciliations of GAAP to non-GAAP income statement items to illustrate core financial performance by excluding specific non-core operating items such as stock-based compensation, intangible asset amortization, impairment charges, and restructuring costs | Metric (Millions USD) | Q2-25 | Q1-25 | Q2-24 | As of June 30, 2025 | As of June 30, 2024 | | :---------------- | :---- | :---- | :---- | :----------------- | :----------------- | | **GAAP Gross Profit (Millions USD)** | $60.6 | $53.3 | $57.8 | $113.9 | $111.0 | | *Stock-Based Compensation Expense (Millions USD)* | 0.3 | 0.5 | 0.4 | 0.8 | 0.8 | | *Impairment Charges (Millions USD)* | 3.6 | — | — | 3.6 | — | | **Non-GAAP Gross Profit (Millions USD)** | $64.5 | $55.0 | $59.8 | $119.5 | $117.7 | | **Non-GAAP Gross Profit as % of Revenue** | 44.2% | 41.6% | 44.2% | 43.0% | 43.8% | | **GAAP Operating Expenses (Millions USD)** | $45.9 | $49.3 | $45.1 | $95.2 | $93.3 | | *Stock-Based Compensation Expense (Millions USD)* | (6.0) | (9.7) | (5.5) | (15.7) | (10.2) | | *Intangible Asset Amortization Expense (Millions USD)* | (4.1) | (4.0) | (4.2) | (8.1) | (8.6) | | **Non-GAAP Operating Expenses (Millions USD)** | $36.2 | $33.1 | $33.9 | $69.3 | $68.6 | | **Adjusted EBITDA (Millions USD)** | $32.7 | $26.7 | $30.3 | $59.4 | $58.8 | | **Adjusted EBITDA as % of Revenue** | 22.4% | 20.2% | 22.4% | 21.4% | 21.9% | | **GAAP Net Earnings from Continuing Operations (Millions USD)** | $7.8 | $(0.4) | $4.8 | $7.4 | $3.8 | | **Non-GAAP Diluted EPS (USD)** | $0.24 | $0.18 | $0.20 | $0.41 | $0.38 | - Non-GAAP adjustments include **stock-based compensation expense, intangible asset amortization expense, impairment charges, restructuring charges, production transfer costs, acquisition-related costs, and transition service credits**[32](index=32&type=chunk) [Cash Flow Reconciliations](index=11&type=section&id=Cash%20Flow%20Reconciliations) Knowles provides reconciliations of GAAP cash flow metrics to non-GAAP adjusted free cash flow, better measuring cash generated from continuing operations available for debt repayment, acquisitions, and share repurchases | Metric (Millions USD) | Q2-25 | Q1-25 | Q2-24 | As of June 30, 2025 | As of June 30, 2024 | | :---------------- | :---- | :---- | :---- | :----------------- | :----------------- | | **Net Cash Provided by Operating Activities (Millions USD)** | $36.4 | $1.3 | $24.9 | $37.7 | $42.2 | | *Less: Amounts used in discontinued operations (Millions USD)* | 8.3 | 21.0 | 1.3 | 29.3 | 0.2 | | **Non-GAAP Net Cash from Continuing Operations (Millions USD)** | $44.7 | $22.3 | $26.2 | $67.0 | $42.4 | | **Capital Expenditures (Millions USD)** | $(5.1) | $(4.0) | $(3.2) | $(9.1) | $(6.6) | | *Less: Capital expenditures from discontinued operations (Millions USD)* | — | — | 0.2 | — | 0.7 | | **Non-GAAP Capital Expenditures from Continuing Operations (Millions USD)** | $(5.1) | $(4.0) | $(3.0) | $(9.1) | $(5.9) | | **Adjusted Free Cash Flow (Millions USD)** | $39.6 | $18.3 | $23.2 | $57.9 | $36.5 | | **Adjusted Free Cash Flow as % of Revenue** | 27.1% | 13.8% | 17.2% | 20.8% | 13.6% | - Adjusted free cash flow is defined as **non-GAAP net cash from continuing operations less non-GAAP capital expenditures from continuing operations**[39](index=39&type=chunk) [Additional Information](index=2&type=section&id=Additional%20Information) [Webcast and Conference Call Information](index=2&type=section&id=Webcast%20and%20Conference%20Call%20Information) Knowles provides details for investors to access the company's quarterly financial conference call webcast and replay, including timing, access links, and conference ID - Investors can listen to the company's quarterly financial conference call live or via replay at **http://investor.knowles.com**[9](index=9&type=chunk) - The live webcast begins at **3:30 p.m. Central Time**, with a replay available after **7:00 p.m. Central Time**[9](index=9&type=chunk) - Conference call replay is available by dialing **(800) 770-2030** or **(609) 800-9909**, conference ID **8193117**, valid until July 31[10](index=10&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements, as defined by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, based on current information and management's expectations, forecasts, and assumptions, involving risks and uncertainties that could cause actual results to differ materially from expectations - Forward-looking statements are based on **currently available information and management's expectations, forecasts, and assumptions**, involving risks and uncertainties that could cause actual results to differ materially from expectations[15](index=15&type=chunk) - Risks and uncertainties include, but are not limited to: **failure to realize strategic and financial benefits from the CMM divestiture, stock price volatility, fluctuations in operating results and cash flows, product quality issues, inventory risks, global economic instability (inflation, rising interest rates, geopolitical uncertainties), changes in laws and regulations, ability to reduce operating expenses, customer qualifications, intellectual property, cybersecurity incidents, raw material costs and availability, new product introductions, reliance on a few large customers, increased competition, trade tensions, financial risks (currency fluctuations, credit risk, commodity price fluctuations), and changes in tax laws**[15](index=15&type=chunk) - Knowles assumes **no intention or obligation to update or revise any forward-looking statements**, unless required by law[15](index=15&type=chunk)

Core Insights - Knowles Corporation has launched High-Q Ceramic Core Inductors aimed at enhancing RF efficiency and signal integrity in critical applications within medical, defense, and industrial sectors [1][2]. Product Features - The new inductors are engineered to minimize signal loss, delivering high energy efficiency and consistent inductance across a wide frequency range, which is crucial for maintaining signal integrity in high-frequency designs [2][3]. - Key features include reduced signal loss for enhanced RF efficiency, high self-resonance frequency for excellent performance at higher frequency ranges, and high reliability suitable for rigorous operational environments [6]. Market Impact - The introduction of these inductors represents a strategic expansion of Knowles' Ceramic Capacitors portfolio, allowing for simplified circuit design and providing customers with better insights into essential applications [2][4]. - In critical markets such as medical imaging and defense, the performance characteristics of these inductors contribute to improved outcomes, including sharper diagnostic images and more reliable systems [4].

Core Insights - The article discusses the current trend of investors focusing on high-growth sectors such as AI and electric vehicles (EVs), emphasizing the importance of maximizing returns on investments [1]. Group 1: Analyst Background - The analyst has a background in petroleum and gas engineering and has transitioned into finance, driven by an interest in business growth and market reactions [1]. - The analyst holds FMVA® and BIDA® certifications from the Corporate Finance Institute, indicating a strong foundation in financial analysis [1]. - The focus areas include technology, infrastructure, and internet services, with a preference for companies that exhibit strong fundamentals and growth potential [1]. Group 2: Investment Philosophy - The article aims to foster thoughtful discussions around stocks, emphasizing long-term returns over short-term market fluctuations [1]. - The content is designed to connect with other investors who share a similar focus on sustainable investment strategies [1].

Business Transformation - Knowles is transforming into a high-reliability, high-performance industrial technology company[9, 30] - The sale of the Consumer MEMS Microphones (CMM) business changes the company's market mix, eliminating the consumer mobile market and aiming for higher growth and margins[9, 31] Financial Performance & Metrics - The company's 2023 pro forma revenue is $560 million[5] - The 2023 pro forma adjusted EBITDA margin is 21%[5] - 2023 revenue for Precision Devices is $221 million with 22% adjusted EBITDA margins[17, 18] - 2023 revenue for MedTech & Specialty Audio is $230 million with 42% adjusted EBITDA margins[19] - Q3 2024 revenue is guided at $139 to $143 million[25] - Q4 2024 revenue is expected to be in the range of $140 to $150 million[27] Capital Allocation - The company has liquidity of over $300 million to support acquisition growth[23] - Capital investments are anticipated to be 3-5% of revenues to support new business and product innovation[23]

Knowles' Strategic Transformation and Financial Performance - Knowles is transitioning into an industrial technology company with over 95% of revenue from MedTech, Defense & Industrial markets[10] - From 2017 to 2024, Knowles achieved an 8% revenue CAGR and an 11% adjusted EBITDA CAGR from continuing operations[12, 219, 221] - Knowles' adjusted EBITDA margin expanded by 400 bps from 19% in 2017 to 23% in 2024[12, 223] Segment Performance and Market Focus - In 2024, Precision Devices contributed $300 million in revenue with 20% adjusted EBITDA margins[48] - MedTech & Specialty Audio generated $254 million in revenue in 2024 with 44% adjusted EBITDA margins[167] - MedTech accounted for 48% of Knowles' total revenue in 2024[22, 33] - Defense & Aerospace represented 21% of Knowles' total revenue in 2024[22, 40] - Industrial made up 27% of Knowles' total revenue in 2024[22, 42] - Electrification/Energy contributed 4% of Knowles' total revenue in 2024[22, 44] Future Outlook and Growth Strategy - Knowles projects a revenue CAGR of 8-10% and an adjusted EBITDA CAGR of 10-14% over the next 5 years[12, 226, 231, 232] - The company anticipates organic revenue growth of 4-6% and aims for 4% growth through acquisitions[226, 229] - Knowles targets cash from operations to be 16-20% of revenue[226]

Knowles (KN) 2025 Investor Day Summary Company Overview - Knowles has transformed into a premier industrial technology company focusing on high-performance electronic components, particularly in the medtech, defense, and industrial markets [9][15][12] - The company operates two main segments: Precision Devices (54% of revenue) and MedTech and Specialty Audio (46% of revenue) [16] Financial Performance - Knowles achieved a revenue CAGR of 8% and adjusted EBITDA CAGR of 11% from 2017 to 2024 [10] - Future expectations include a revenue CAGR of 8% to 10% and adjusted EBITDA margins improving by 300 to 500 basis points, leading to an adjusted EBITDA CAGR of 10% to 14% [11] - The company anticipates organic growth to be higher than historic rates starting in 2025 [12] Market Segments and Growth Drivers MedTech - The medtech market is expected to grow at a CAGR of 4% to 6% [24] - Knowles provides capacitors for medical imaging and life-saving therapies, with a focus on implantable devices [25][21] - The aging population and increasing healthcare expenditures are driving demand [21] Defense - Over 20% of Knowles' revenue comes from defense applications, with a projected market growth of 3% to 5% CAGR [22][26] - Products include RF filters and capacitors for military applications, ensuring reliable communications and energy sources for harsh environments [22] Industrial - The industrial market is expected to grow at a CAGR of 4% to 6% [27] - Knowles' capacitors support automation solutions and energy conversion needs in manufacturing [27] Electrification and Energy - The electrification market is projected to grow at 8% to 10% [27] - Knowles is expanding its film capacitors into energy sectors, securing significant orders [28] Competitive Advantages - Knowles emphasizes deep engineering expertise, customization capabilities, and a strong supply chain [17][20] - The company has a history of strategic acquisitions to enhance its product offerings and market reach [14][13] Product Innovations - Knowles is known for high-performance ceramic capacitors and RF microwave solutions, which are critical in demanding applications [35][41] - The company is expanding its product line to include ceramic inductors, enhancing its power management capabilities [50][51] Hearing Health Market - The hearing aid market represents approximately $6.5 billion, with Knowles being a leading provider of transducers [78] - The market is expected to grow due to favorable demographics and increased access to hearing healthcare [82][84] - Knowles has a strong presence in the market, with established relationships with major manufacturers [82] Conclusion - Knowles is well-positioned for future growth through its focus on high-performance products, strategic market segments, and innovative solutions [15][53] - The company aims to leverage its strong balance sheet for organic growth and strategic acquisitions while maintaining robust cash flow [11][15]

Summary of Dover's Conference Call Company Overview - **Company**: Dover Corporation - **Event**: 2025 Conference Call - **Date**: May 13, 2025 Key Points Acquisition of Secora - Dover announced the acquisition of Secora, a global leader in precision measurement solutions based in Germany, with an enterprise value of approximately EUR 550 million [2][3] - Expected revenues from Secora are projected to exceed EUR 100 million this year, with a margin profile consistent with Dover's Pumps and Process Solutions segment [3][4] - The acquisition is seen as complementary to Dover's Polymer Processing platform, enhancing technology and recurring revenue opportunities [4][5] Financial Profile and Growth - Dover has invested over $1 billion in its polymer processing platform over the past decade, including the acquisition of Secora [5] - Secora's customer base includes blue-chip companies, providing opportunities for cross-selling, particularly in the wire and cable market, which benefits from global electrification investments [6][7] Capital Allocation and M&A Strategy - Dover has $1.8 billion in cash, with the Secora acquisition utilizing only a third of that amount, indicating potential for further M&A activity [11][12] - The company is engaged in discussions for various small tuck-in acquisitions, although no imminent deals are expected [12][13] Supply Chain and Production - Dover is assessing the potential shift of production and supply chains to the U.S. due to tariff discussions, but current exposure to China is limited (5% of revenue and 6% of cost) [19][21] - The company maintains a flexible supply chain strategy, allowing for adaptability in response to market conditions [22][32] Biopharma and Medical Segment - The biopharma segment generated mid-200 million in revenue in 2024, with expectations for double-digit growth moving forward [38][39] - The growth is attributed to a recovery in demand rather than merely a comp issue, indicating a fundamental demand increase [41][42] Clean Energy and CO2 Systems - Dover's clean energy segment, particularly in LNG, is expected to grow significantly, driven by favorable market conditions and technology investments [60][61] - The CO2 systems business is also experiencing growth, with global revenues projected in the mid-200 million range for 2024 [50][54] Automation Investments - Dover is focusing on automation across all segments, with significant capital allocated to enhance productivity and efficiency [34][36] - The company has seen substantial benefits from past automation investments, particularly in the capital goods sector [36] Thermal Connectors and Data Centers - The thermal connectors segment for liquid cooling in data centers is projected to exceed $30 million in 2024, with strong growth anticipated due to increased demand for high-performance computing [75][76] - The shift from air to liquid cooling is accelerating demand, driven by higher energy requirements from new chip technologies [79][80] European Heat Pumps - There is a positive outlook for the European heat pump market, with signs of demand recovery after a period of destocking [89][90] - The company is optimistic about growth opportunities in various markets, including HVAC and district energy systems [90] Additional Insights - Dover's management is closely monitoring macroeconomic conditions and their impact on demand, particularly in the context of tariffs and supply chain dynamics [32][33] - The company remains committed to its capital expenditure plans and is not altering its guidance despite market uncertainties [31][32] This summary encapsulates the key discussions and insights from Dover's conference call, highlighting the company's strategic initiatives, financial outlook, and market positioning across various segments.

Financial Performance - Revenues for Q1 2025 were $132.2 million, a decrease of 0.8% from $133.3 million in Q1 2024[98] - Gross profit for Q1 2025 was $53.3 million, an increase of 0.2% from $53.2 million in Q1 2024, with a gross profit margin of 40.3%[102] - Non-GAAP gross profit for Q1 2025 was $55.0 million, a decrease of 5.0% from $57.9 million in Q1 2024, with a non-GAAP gross profit margin of 41.6%[103] - Loss from continuing operations improved to $0.4 million in Q1 2025, compared to a loss of $1.0 million in Q1 2024[110] - Adjusted earnings before interest and income taxes (Adjusted EBIT) decreased to $21.7 million in Q1 2025 from $23.3 million in Q1 2024[112] - Diluted loss per share from continuing operations was nil in Q1 2025, an improvement from a loss of $0.01 in Q1 2024[114] - The company reported a non-GAAP net earnings of $16.2 million for Q1 2025, compared to $17.0 million in Q1 2024[116] Expenses - Research and development expenses increased by 3.2% to $9.7 million in Q1 2025, representing 7.3% of revenues[104] - Selling and administrative expenses decreased by 0.3% to $37.2 million in Q1 2025, representing 28.1% of revenues[105] Segment Performance - For Q1 2025, Precision Devices (PD) revenues were $72.5 million, a decrease of $1.8 million or 2.4% from $74.3 million in Q1 2024[121] - PD EBIT for Q1 2025 was $3.2 million, an increase of $5.3 million from a loss of $2.1 million in Q1 2024, resulting in an EBIT margin of 4.4%[122] - Adjusted EBIT for PD was $10.7 million in Q1 2025, up from $9.8 million in Q1 2024, with an adjusted EBIT margin of 14.8%[123] - MedTech & Specialty Audio (MSA) revenues increased to $59.7 million in Q1 2025, up $0.7 million or 1.2% from $59.0 million in Q1 2024[125] - MSA EBIT decreased to $19.3 million in Q1 2025, down $3.5 million or 15.4% from $22.8 million in Q1 2024, with an EBIT margin of 32.3%[126] - Adjusted EBIT for MSA was $21.3 million in Q1 2025, compared to $23.8 million in Q1 2024, resulting in an adjusted EBIT margin of 35.7%[127] Cash Flow and Capital Management - Cash and cash equivalents totaled $101.9 million as of March 31, 2025, down from $130.1 million at December 31, 2024[129] - In Q1 2025, net cash provided by operating activities was $1.3 million, a decrease from $17.3 million in Q1 2024[132] - Cash used in investing activities in Q1 2025 was $(3.5) million, compared to $3.8 million in Q1 2024[132] - Cash used in financing activities in Q1 2025 totaled $(26.2) million, significantly higher than $13.6 million in Q1 2024[132] - Adjusted free cash flow for Q1 2025 was $18.3 million, up from $13.3 million in Q1 2024, representing an increase of 37.6%[138] - Adjusted free cash flow as a percentage of revenues was 13.8% in Q1 2025, compared to 10.0% in Q1 2024[138] - The decrease in cash provided by operating activities in 2025 was primarily due to $21.0 million in payments to settle supplier obligations and separation costs[133] - Customer prepayments of $19.8 million partially offset the unfavorable changes in working capital in 2025[138] - Cash used in financing activities included $15.0 million in payments on the revolving credit facility and $5.0 million in common stock repurchases[136] Corporate Actions - The divestiture of the Consumer MEMS Microphones business for approximately $150.0 million supports the company's transformation into an industrial technology company[91] - The company completed the sale of the CMM segment to Syntiant for approximately $141.9 million on December 27, 2024[130] - The company has $189.0 million remaining for share repurchases under its authorized program as of March 31, 2025[131] Taxation - The effective tax rate from continuing operations for Q1 2025 was 150.0%, compared to 200.0% in Q1 2024[108] Capital Expenditures - Capital expenditures in 2025 are expected to be in the range of 4% to 6% of revenues[135]