Knowles Corporation reported fourth‑quarter 2025 results that exceeded expectations, with revenue of $162.2 million, up 14% year‑over‑year, and a non‑GAAP gross margin of 45.3% (GAAP margin 44.7%). Non‑GAAP diluted earnings per share were $0.36, beating the consensus estimate of $0.35 by $0.01, while GAAP diluted EPS was $0.29. Cash provided by operating activities reached $47.2 million, surpassing the high end of the company’s guidance and underscoring strong working‑capital management.
The quarter’s performance was driven by a 23.2% year‑over‑year increase in the Precision Devices segment, which generated $89.7 million in revenue, and a modest 4.0% rise in the MedTech & Specialty Audio segment, which produced $72.5 million. The specialty film capacitor line is ramping, and a newly signed $75 million energy‑sector order is expected to begin shipping in 2026, positioning the company for margin expansion in the coming year.
The EPS beat was largely a result of disciplined cost control and a favorable product mix. Higher pricing power in the Precision Devices segment, combined with efficient manufacturing and lower raw‑material costs, allowed the company to maintain margins even as it expanded capacity for the specialty film line. The company’s focus on high‑margin industrial applications has also helped offset any pressure from legacy consumer‑audio products.
For the first quarter of 2026, Knowles is guiding revenue of $143 million to $153 million and non‑GAAP diluted EPS of $0.22 to $0.26. The guidance reflects confidence in continued demand from defense, medical, and electrification markets, while acknowledging headwinds such as higher scrap costs and production inefficiencies in the specialty film line. The company’s strategic shift toward high‑margin industrial technology and its U.S. manufacturing advantage are expected to sustain growth and margin expansion.
After the release, the market reacted positively, with the stock rising 1.73% in after‑hours trading and closing at $24.32. Analysts highlighted the earnings beat and revenue growth as key drivers of the favorable reaction, noting that the company’s strong execution and forward‑looking guidance signal robust near‑term prospects.
"2025 was a breakthrough year for Knowles," said President and CEO Jeffrey Niew. "We finished the year with fourth‑quarter revenues and cash from operations exceeding the high end of our guided range, and non‑GAAP diluted EPS from continuing operations above the mid‑point of our guided range. With revenue growth accelerating in the back half of 2025 and margins expanding year‑over‑year, we have entered 2026 with strong momentum."
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