Financial Data and Key Metrics Changes - Revenue for Q4 was $162 million, up 14% year-over-year, exceeding the high end of guidance [4][10] - EPS for Q4 was $0.36, up 33% from the previous year [4][10] - Full year revenue was $593 million, up 7% year-over-year, also exceeding guidance [10][14] - Cash from operations was $47 million in Q4, above the high end of guidance [10][14] Business Segment Data and Key Metrics Changes - MedTech and specialty audio revenue for Q4 was $73 million, up 4% year-over-year, with full year revenue at $264 million, also up 4% [5][10] - Precision devices segment revenue for Q4 was $90 million, up 23% year-over-year, with full year revenue growing 10% [6][10] - Gross margins for MedTech and specialty audio were 51.9% in Q4, while precision devices had gross margins of 40.1% [10][11] Market Data and Key Metrics Changes - Strong demand was noted across key end markets including MedTech, defense, industrial, EV, and energy [6][8] - Book-to-bill ratio was reported at 1.06, indicating healthy demand [32] Company Strategy and Development Direction - The company is focused on leveraging unique technologies to design custom-engineered solutions for high-growth markets [4][9] - Plans for continued organic revenue growth above historic levels were emphasized, with a focus on synergistic acquisitions and share buybacks [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to achieve revenue, earnings, and cash flow growth, supported by a robust backlog and increased order activity [16] - The company anticipates strong year-over-year growth in Q1, despite it being a seasonally low quarter [9][15] Other Important Information - The company is transitioning to an industrial technology focus, moving away from traditional gross margin guidance [28] - Capital spending for Q1 is expected to be $10 million, with continued investments in capacity expansion related to energy orders [15] Q&A Session Summary Question: Update on energy order and thin-film capacitor products - Management expects full ramp-up of energy orders by the end of Q2, with revenue expectations in the $50-$65 million range for 2026 [21][38] Question: Gross margin guidance for March and June quarters - Management indicated a focus on revenue guidance rather than gross margin, with expectations of 45%-50% gross margins for the full year 2025 [28][29] Question: Fastest growing markets for 2026 - Key markets identified include defense, MedTech, industrial, EV, and energy, with strong bookings supporting growth [32][33] Question: Production buildout for energy orders - The company is on track to ramp up production significantly in the next five months, with a focus on low-mix production for energy orders [38][39] Question: Supply-demand dynamics in industrial - Management expects strong industrial shipments in the first half of 2026, with growth anticipated for the full year [46][48]

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]