Knowles(US:KN)2025-10-23 20:05Revenue and Earnings Performance - Third quarter revenues from continuing operations increased by 7% year over year to $153 million[1] - The company expects year-over-year revenue growth of 9% in the fourth quarter[1] - Revenues for the nine months ended September 30, 2025, increased to $431.0 million, up from $411.0 million in the same period of 2024, representing a growth of 4.9%[21] - For Q4 2025, the revenue guidance is set between $151 million and $161 million[6] - The company anticipates organic revenue growth of 6% for the full year 2025[3] Profitability Metrics - Non-GAAP diluted earnings per share for Q3 2025 was $0.33, compared to $0.24 in Q2 2025[4] - Gross profit for Q3 2025 was $69.9 million, representing 45.7% of revenues[4] - Operating earnings rose to $44.5 million for the nine months ended September 30, 2025, compared to $36.4 million in 2024, marking a significant increase of 22.3%[21] - Net earnings for the nine months ended September 30, 2025, were $23.2 million, a substantial recovery from a net loss of $256.3 million in the same period of 2024[21] - Earnings per share from continuing operations increased to $0.29 for the nine months ended September 30, 2025, compared to $0.15 in 2024, representing a growth of 93.3%[21] Cash Flow and Financial Management - Net cash from operations was $29 million, at the high end of the guided range[2] - For the quarter ended September 30, 2025, net cash provided by operating activities was $29.1 million, a decrease from $36.4 million in the previous quarter[35] - Non-GAAP net cash attributable to continuing operations for the same quarter was $31.0 million, compared to $44.7 million in the previous quarter[35] - Adjusted free cash flow for the quarter was $23.3 million, representing 15.2% of revenues, down from 27.1% in the previous quarter[35] - For the nine months ended September 30, 2025, non-GAAP net cash attributable to continuing operations totaled $98.0 million, up from $72.9 million in the same period of 2024[35] Expenses and Cost Management - Research and development expenses for the nine months ended September 30, 2025, were $29.7 million, slightly up from $29.2 million in 2024[21] - Selling and administrative expenses increased to $107.1 million for the nine months ended September 30, 2025, compared to $106.8 million in 2024[21] - Interest expense, net, decreased to $7.5 million for the nine months ended September 30, 2025, down from $12.9 million in 2024, indicating improved financial management[21] Shareholder Actions and Debt Management - The company plans to repurchase $20 million in shares and reduce debt by $15 million[2] - The company repurchased $55.0 million of common stock during the nine months ended September 30, 2025, compared to $29.5 million in the same period of 2024[33] - Total liabilities decreased to $336.4 million as of September 30, 2025, from $358.4 million at the end of 2024[30] - The company’s accumulated deficit improved to $(590.4) million as of September 30, 2025, from $(613.6) million at the end of 2024[30] Overall Financial Health - The gross profit margin as a percentage of revenues improved to 42.6% for the nine months ended September 30, 2025, compared to 42.3% in 2024[21] - Non-GAAP net earnings for the same quarter were $28.9 million, compared to $21.2 million in the prior quarter, reflecting a 36.5% increase[25] - Diluted earnings per share from continuing operations rose to $0.21, up from $0.09 in the previous quarter, marking a 133.3% increase[25] - The company utilized $1.9 million from discontinued operations in the latest quarter, compared to $8.3 million in the previous quarter[35] - Adjusted free cash flow for the nine months ended September 30, 2025, was $81.2 million, compared to $63.5 million in the same period of 2024[35] - Knowles Corporation emphasizes that adjusted free cash flow is a key measure for assessing cash available for debt repayment, acquisitions, and stock repurchases[35]