Knowles (KN)·Q4 2025 Earnings Summary

Knowles Beats on Both Lines as Precision Devices Accelerates, Stock Up

February 5, 2026 · by Fintool AI Agent

Knowles Corporation (NYSE: KN) delivered a strong Q4 2025, beating both revenue and EPS estimates as the Precision Devices segment posted accelerating growth. Revenue came in at $162.2M, 8.8% above the $149M consensus, while non-GAAP EPS of $0.36 topped expectations of $0.31 by 17% . The stock rose 1.7% on the day to $24.73, extending its 52-week run from a low of $12.19.

Did Knowles Beat Earnings?

Yes — Knowles beat on both revenue and EPS for the fourth consecutive quarter.

*Values retrieved from S&P Global.

Full-year 2025 results were equally strong: revenue of $593.2M (+7.2% YoY) exceeded the high end of the company's 5-year organic growth target, while non-GAAP EPS of $1.11 grew 21% from $0.92 in FY2024 .

What Drove the Beat?

Precision Devices was the star of the quarter, with revenue accelerating +23% YoY to $89.7M as distribution channel inventory normalized . The segment's Adjusted EBITDA margin expanded to 23.4% from 20.5% a year ago on higher factory capacity utilization .

MedTech & Specialty Audio delivered steady growth of +4% YoY to $72.5M, driven by increased hearing health shipment volumes. EBITDA margins held flat at 42.6% .

Segment Performance

The 2025 revenue mix was 55% Precision Devices and 45% MedTech, reflecting the faster growth in the components business .

What Did Management Guide?

Management issued Q1 2026 guidance above the low end of consensus expectations:

*Values retrieved from S&P Global.

The midpoint of revenue guidance ($148M) implies a ~9% YoY decline from Q4's strong $162.2M, reflecting typical Q1 seasonality.

Long-Term Targets Reiterated

For 2026-2029, management reiterated its growth algorithm :

• Revenue CAGR: 8-10%
• Adjusted EBITDA CAGR: 10-14%
• Cash from Operations: 16-20% of revenue

The components of this growth include 6-8% from Precision Devices, 2-4% from MedTech & Specialty Audio, and 4% from acquisitions .

How Did the Stock React?

Knowles shares rose +1.7% to $24.73 on the day of the earnings release, with the stock trading near its 52-week high of $25.57. The aftermarket quote was $24.74, essentially flat.

The stock has more than doubled from its 52-week low, reflecting the successful transformation from a consumer MEMS microphone business to an industrial technology leader focused on MedTech, Defense, Industrial, and Energy markets .

What Changed From Last Quarter?

Precision Devices momentum accelerated. After Q3 showed signs of inventory normalization, Q4 confirmed the trend with 23% YoY growth vs. 21% in Q3 .

Margin expansion continues. Adjusted EBITDA margin reached 25.5% in Q4, up from 24.4% a year ago, as operating leverage kicked in from higher volumes .

Balance sheet strength. Net debt leverage fell to just 0.4x trailing EBITDA, with $114M of debt and $54M cash . The company has $340M+ of liquidity to support its M&A-focused capital allocation strategy .

Historical Financial Trends

Revenue grew sequentially every quarter in 2025, with EPS doubling from Q1 to Q4.

Capital Allocation Priorities

Management reiterated its capital deployment framework :

1. M&A: Focal point of strategy, targeting acquisitions accretive in first 12 months. The 2024 Cornell Dubilier acquisition demonstrates this approach.
2. Organic Investment: 4-5% of revenues over a cycle for new business and product innovation
3. Share Repurchases: $271M executed on a $400M authorization through Q4 2025, with an opportunistic approach going forward

The company has repurchased 12 million shares since 2022, representing about 12% of shares outstanding .

Q&A Highlights: What Did Management Say?

Energy Order and Specialty Film Ramp

The marquee topic on the call was the large energy order announced in 2025. CEO Jeff Niew confirmed the capacity buildout in Greenville, South Carolina is on track:

"We're going to ramp this up 10x in the next five months from where we are today. By the end of Q2, full-volume production that we committed to."

The specialty film product line, including energy, is expected to generate $50-65M in revenue in 2026 . CFO John Anderson noted Q1 will see "very modest" contribution, with the ramp driving sequential growth into Q2 .

Book-to-Bill Remains Strong

Q4 book-to-bill was 1.06x — notable given the strong $90M shipment quarter in Precision Devices . January bookings were also described as "very strong" .

Capacity Concerns Emerging

When asked about component shortages, CEO Niew acknowledged capacity is becoming a topic:

"We are starting to see some concerns as we enter towards the back half of the year that we got to make sure we're prepared for all the orders we're receiving."

Microsolutions Medical Opportunity

CEO Niew expressed increased confidence in the microsolutions initiative — leveraging hearing health R&D for broader medical applications:

"I'm incrementally more positive about this than I was two quarters ago. We got a lot of new medical applications where we're collecting NREs at this moment that we should start ramping into higher volume production in 2027."

Industrial Market Momentum

Industrial is showing "more momentum than six months ago" — a positive surprise given prior concerns about inventory overhang .

Margin Expansion Potential

CFO Anderson noted potential for 50-75 bps of margin expansion in the back half of 2026 as the specialty film line reaches higher production volumes .

Key Risks and Watchpoints

• Customer concentration: The company depends on a limited number of large customers across both segments
• Tariff exposure: Management flagged escalating trade tensions and new tariffs as a risk factor
• Acquisition integration: The Cornell Dubilier integration is ongoing with production transfer costs still flowing through
• Energy ramp execution: 10x capacity scale-up in 5 months is aggressive; any delays could impact 2026 revenue targets
• Q1 seasonality: Guidance implies typical Q1 softness after a strong Q4

Summary

Knowles delivered a strong Q4 2025 with beats on both lines, driven by Precision Devices acceleration as distribution inventory normalized. The company's transformation to an industrial technology leader is yielding results — revenue CAGR of 8% since 2017, expanding margins, and a fortress balance sheet with 0.4x leverage.

The key 2026 catalyst is the energy order ramp: a 10x capacity expansion in Greenville, SC by end of Q2 is expected to drive $50-65M in specialty film revenue this year . With book-to-bill of 1.06x, strong January bookings, and emerging capacity concerns, demand appears robust heading into 2026 . Q1 2026 guidance is in line with expectations, and long-term targets of 8-10% revenue growth and 10-14% EBITDA growth remain intact.

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Analysis based on Knowles Q4 2025 earnings release and earnings call transcript, February 5, 2026. Consensus estimates from S&P Global.