KNOWLES (KN) Earnings Date & Reports

Key Takeaways

• Knowles reported third-quarter 2026 revenue of $184.0 million, up 20% year over year and ahead of the $172.1 million consensus estimate.
• Non-GAAP (adjusted) diluted earnings per share (EPS) came in at $0.38, beating the $0.36 consensus and rising 15% from $0.33 a year earlier.
• The Precision Devices segment led growth, with revenue up roughly 33% to $117 million on strong demand across Medtech, Defense, Industrial, and Electrification.
• Fourth-quarter guidance topped Wall Street forecasts, projecting revenue of $180 million to $190 million and non-GAAP diluted EPS of $0.39 to $0.43.
• Shares climbed about 3% in after-hours trading following the announcement.

Earnings Context and Why It Matters

Knowles Corporation is a specialty electronic components manufacturer that designs high-performance capacitors, radio frequency (RF) filters, advanced medtech microphones, and balanced armature speakers. After divesting its Consumer MEMS (micro-electromechanical systems) Microphones business in December 2024, the company has refocused on higher-margin precision components serving Medtech, Defense, Industrial, and Electrification markets. This quarterly report matters because it tests whether that strategic repositioning can translate into sustained, profitable growth. A beat-and-raise quarter would confirm that demand momentum, particularly in Precision Devices, remains intact and that the company's custom-engineered product strategy is resonating with customers.

Reported Results

Knowles reported third-quarter 2026 revenue of $184.0 million, a 20% increase from $152.9 million in the prior-year period and above the $172.1 million consensus estimate. Non-GAAP diluted earnings per share (EPS) reached $0.38, exceeding the $0.36 consensus and up 15% from $0.33 a year earlier. Net income attributable to common shareholders was $21.6 million, while operating cash flow strengthened to $44.6 million from $29.1 million in the year-ago quarter.

Segment results were driven by Precision Devices, where revenue surged roughly 33% to $117 million on broad demand across all four major end markets. The company's book-to-bill ratio (a measure comparing new orders to completed billings) in Precision Devices remained above one for an eighth consecutive quarter, reaching 1.5, signaling continued order strength. MedTech & Specialty Audio revenue rose about 4% to $67 million. Management issued fourth-quarter guidance above consensus, calling for revenue of $180 million to $190 million and non-GAAP diluted EPS of $0.39 to $0.43, implying roughly 16% full-year 2026 revenue growth at the midpoint.

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Market Reaction and Investor Sentiment

The market responded favorably to the beat-and-raise quarter, with Knowles shares rising roughly 3% in after-hours trading. Investor sentiment has been buoyed by the company's accelerating revenue growth, improving Precision Devices book-to-bill ratio, and above-consensus fourth-quarter guidance. The report reinforced confidence in the company's post-divestiture strategy and its exposure to secular growth trends across Medtech, Defense, Industrial, and Electrification. Key factors that supported sentiment included the eighth consecutive quarter of a book-to-bill ratio above one in Precision Devices and management's expectation for full-year 2026 revenue growth of approximately 16%.

Forward Outlook and Key Factors to Monitor

Looking ahead, investors will be watching whether Knowles can sustain its elevated order momentum and convert it into continued revenue and margin expansion. Management's fourth-quarter guidance implies roughly 14% year-over-year revenue growth at the midpoint, with non-GAAP diluted EPS of $0.39 to $0.43.

Several factors deserve monitoring. First, the book-to-bill ratio in Precision Devices will be a key indicator of demand durability, given its eight-quarter streak above one. Second, gross margin trends across both segments will signal how effectively the company manages production volumes and capacity utilization as revenue scales.

Additionally, investors may track the ramp of new product lines, including specialty film and radio frequency (RF) filter programs, as well as any updates on tariffs, which management has previously characterized as representing less than 5% of revenue. Balance sheet strength, share repurchases, and progress on debt reduction remain secondary but relevant considerations for evaluating the company's long-term financial flexibility.

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