Knowles Stock Earnings Reports

Knowles reported a strong start to 2026 with Q1 revenue of $153M (up 16% YoY) and non-GAAP EPS of $0.27 (up 50% YoY), both at or above guidance. Key drivers were robust demand across Precision Devices (PD) and Medtech & Specialty Audio (MSA). MSA revenue was $68M (+14% YoY) driven by hearing-health new product ramps; management expects MSA to grow in line with historical 2%–4% in 2026. PD revenue was $85M (+17% YoY) with broad-based strength across defense, medical, industrial and electrification; book-to-bill was strong at 1.19 (sixth consecutive quarter >1). Gross margins expanded materially in Q1 (MSA 53.5%, PD 39.2%) driven by better capacity utilization and favorable mix, though MSA margins are expected to remain ~51% for the year. Management is ramping a large specialty film “energy” order (>$25M remaining this year) that will weigh on near-term PD margins but should drive margin improvement in H2 2026 and into 2027. Company guidance for Q2 2026: revenue $152M–$162M, adjusted EBIT margin 20%–22%, EPS $0.28–$0.32, cash from operations $20M–$30M, capex ~$8M; full-year capex expected ~4%–5% of revenue. Balance sheet: $41M cash, $131M drawn on revolver, net leverage ~0.6x adjusted EBITDA, >$310M liquidity. Management repurchased 276k shares for $7.5M in Q1. Management stated they expect 2026 revenue growth to be above the high end of their previously stated organic targets and believe momentum is sustainable due to secular tailwinds, engineering-led custom solutions and scalable manufacturing.