Knowles(US:KN)2026-02-05 21:05Financial Performance - Fourth quarter revenues from continuing operations increased 14% year over year to $162 million, exceeding the high end of the guided range[1] - Full year revenues from continuing operations rose 7% year over year to $593.2 million, surpassing the high end of the five-year organic growth target[3] - Fourth quarter net cash from operations was $47 million, exceeding the high end of the guided range, with full year net cash from operations totaling $114 million or 19.2% of revenues[1][3] - Revenues for the year ended December 31, 2025, increased to $593.2 million, up from $553.5 million in 2024, representing a growth of 7.5%[20] - Operating earnings rose to $70.3 million for the year ended December 31, 2025, compared to $51.8 million in 2024, marking a significant increase of 35.5%[20] - Net earnings for the year ended December 31, 2025, were $44.2 million, a recovery from a net loss of $237.8 million in 2024[20] - Earnings per share from continuing operations increased to $0.59 (basic) and $0.58 (diluted) for the year ended December 31, 2025, compared to $0.26 for both in 2024[20] - Adjusted EBITDA for the year ended December 31, 2025, was $140.2 million, representing an increase from $128.5 million in 2024, with an adjusted EBITDA margin of 23.6%[21] - Non-GAAP net earnings for the year ended December 31, 2025, were $97.7 million, compared to $83.9 million in 2024, reflecting a growth of 16.5%[23] Profitability Metrics - Gross profit for Q4 2025 was $72.5 million, representing 44.7% of revenues, an increase from 42.7% in Q4 2024[6] - Gross profit for the year ended December 31, 2025, was $256.3 million, with a gross profit margin of 43.2%, compared to $234.8 million and 42.4% in 2024[21] - Non-GAAP diluted earnings per share for Q4 2025 was $0.36, compared to $0.27 in Q4 2024, reflecting a significant year-over-year increase[6] Cash Flow and Assets - Adjusted free cash flow for the year ended December 31, 2025, was $114.4 million, representing an increase from $93.8 million in 2024[31] - The company experienced a net cash provided by operating activities of $114.0 million in 2025, compared to $130.1 million in 2024, a decrease of 12.4%[31] - Total current assets decreased to $291.4 million in 2025 from $361.4 million in 2024, primarily due to a reduction in cash and cash equivalents[26] - Cash and cash equivalents at the end of 2025 were $54.2 million, down from $130.1 million at the end of 2024, indicating a decrease of 58.3%[28] - Total assets of the company decreased to $1,051.1 million in 2025 from $1,118.2 million in 2024, a decline of 6.0%[26] Expenses and Investments - Research and development expenses for Q4 2025 were $10.5 million, slightly up from $10.3 million in Q4 2024, reflecting ongoing investment in innovation[18] - Research and development expenses for the year ended December 31, 2025, were $40.2 million, slightly up from $39.5 million in 2024[21] - Selling and administrative expenses remained stable at $142.8 million for the year ended December 31, 2025, compared to $142.0 million in 2024[20] - Capital expenditures for 2025 were $32.1 million, up from $13.6 million in 2024, indicating a 135.3% increase[31] Liabilities and Equity - Total liabilities decreased to $275.2 million in 2025 from $335.6 million in 2024, reflecting a reduction in current liabilities[26] - Stockholders' equity increased to $775.8 million in 2025 from $756.0 million in 2024, reflecting a growth of 2.4%[26] - The company recorded impairment charges of $3.6 million for the year ended December 31, 2025, compared to none in 2024[20] Future Outlook - The company expects Q1 2026 revenues from continuing operations to be between $143 million and $153 million, with diluted earnings per share projected between $0.09 and $0.13[9] - Knowles completed the divestiture of its Consumer MEMS Microphone business in December 2024, positioning itself as a high-margin Industrial Technology company[5] - The company has a strong backlog of existing orders and new design wins expected to go into full production, indicating confidence in achieving strong revenue and earnings growth in 2026[4] - Knowles aims to leverage its unique technologies and operational capabilities to drive significant value for shareholders in the coming years[5]