10-Q · April 28, 2026
Knowles reported Q1 2026 revenue of $153.1 million, up $20.9 million or 15.8% versus Q1 2025, with gross profit of $67.1 million and gross margin expanding to 43.8% from 40.3% year-over-year. GAAP diluted EPS from…
Earnings analysis · 10-Q
KN earnings analysis
Filed July 28, 2026 · Our reading of the company's report
The latest report
Knowles posted a strong Q2: revenue grew 14.3% year over year to $166.8 million, gross margin rose 320 basis points to 44.7%, and GAAP diluted EPS from continuing operations increased to $0.21 from $0.09. Precision…
Read full summary
Knowles posted a strong Q2: revenue grew 14.3% year over year to $166.8 million, gross margin rose 320 basis points to 44.7%, and GAAP diluted EPS from continuing operations increased to $0.21 from $0.09. Precision Devices led growth with 25.2% revenue expansion, while MSA modestly grew revenue and retained a 40.3% adjusted EBIT margin. The principal offset is cash conversion: first-half adjusted free cash flow dropped $38.1 million year over year to $19.8 million amid working-capital usage and elevated capacity-expansion capex; the filing contains no updated revenue or EPS guidance.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.21
What stood out
-
Revenue accelerated sequentially and year over year
Q2 revenue was $166.8 million, up $20.9 million (14.3%) from $145.9 million a year earlier and up $13.7 million (8.9%) from Q1 2026 revenue of $153.1 million.
-
Margins expanded materially
GAAP gross margin expanded to 44.7% from 41.5% a year ago and 43.8% in Q1 2026. GAAP EBIT margin rose to 14.6% from 9.5% year over year, supported by volume, pricing, utilization, and the absence of the prior-year $3.6 million impairment.
-
EPS more than doubled year over year
GAAP diluted EPS from continuing operations increased to $0.21 from $0.09 a year earlier and $0.11 in Q1 2026; non-GAAP diluted EPS was $0.33, up from $0.24.
-
Precision Devices was the growth engine
Precision Devices delivered $98.3 million of revenue, up $19.8 million (25.2%), while adjusted EBIT increased to $20.3 million from $13.9 million and adjusted margin rose to 20.7% from 17.7%.
-
MSA held growth and strong profitability
MedTech & Specialty Audio revenue increased to $68.5 million from $67.4 million, while adjusted EBIT rose to $27.6 million from $26.1 million and adjusted margin reached 40.3%.
-
Substantial repurchase capacity remains
The company has $106.5 million remaining under its repurchase authorization after repurchasing $22.5 million, or 692,369 shares, in the first six months of 2026.
What to watch
-
Cash conversion weakened sharply
Six-month adjusted free cash flow fell to $19.8 million, or 6.2% of revenue, from $57.9 million, or 20.8%, a year earlier. Management attributed the decline to working-capital investment, loss of a prior-year customer prepayment, and higher capex.
-
Higher capex and working-capital use pressure cash
Six-month operating cash flow declined to $27.5 million from $37.7 million while capital expenditures increased to $17.3 million from $9.1 million, reflecting PD capacity expansion.
-
Ceramic transfer costs and mix remain headwinds
Q2 production-transfer costs in the ceramic-capacitor business were $0.8 million versus $0.2 million a year ago; management also cited unfavorable product mix and increased transfer costs as COGS headwinds.
Management's outlook
The 10-Q provides no revenue or EPS guidance. Management expects 2026 capital expenditures to be approximately 5% of revenue, driven by Precision Devices capacity expansion, including the specialty-film product line.
Earlier filings 4
10-Q · April 29, 2025
Knowles reported Q1 2025 revenue of $132.2 million, roughly flat (-$1.1M) versus Q1 2024 ($133.3M), but swung to a net loss of $2.0 million (diluted EPS $(0.02)) compared with net earnings of $2.5 million (EPS $0.03) in…
10-K · February 13, 2025
Knowles positions itself as a specialty electronic components leader focused on higher-value PD (capacitors, RF filters) and MSA (balanced armature speakers, microphones) markets and completed the divestiture of its…
10-Q · July 31, 2024
Knowles reported Q2 revenue of $204.7M, up $31.7M (+18.3%) versus $173.0M a year ago, but reported a large GAAP net loss and non-cash goodwill impairment. Management recorded a $249.4M goodwill impairment related to the…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.