8-K: Knowles Corp Reports 20% Q3 Revenue Growth, Strong Outlook

Knowles Corporation announced strong third-quarter 2026 financial results, with revenue increasing 20% year-over-year to $184 million, driven by demand across key markets, and provided an optimistic outlook for Q4 and full-year 2026.

Summary

• Knowles Corporation reported Q3 2026 revenues of $184 million, a 20% increase year-over-year.
• Net cash from operations for Q3 2026 was $45 million.
• Full-year 2026 revenue is estimated at $689 million, representing 16% growth compared to 2025.
• The company expects Q4 2026 revenues to be between $180 million and $190 million.
• Non-GAAP diluted EPS for Q3 2026 was $0.38, up from $0.33 in Q3 2025.
• The company anticipates continued revenue and adjusted EBITDA growth exceeding targets in 2027.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a positive report, with strong year-over-year revenue growth and a positive outlook for the upcoming quarter and full year. The company is exceeding growth targets and demonstrating robust operational performance.

Positives

• Total company revenue grew 20% year-over-year in Q3 2026 to $184 million.
• Book-to-bill ratio in Precision Devices remained above one for the eighth consecutive quarter, indicating strong order strength.
• Strong growth was achieved across Medtech, Defense, Industrial, and Electrification markets.
• Full-year 2026 revenue is projected to grow 16% to $689 million.
• Net cash from operations was $45 million in Q3 2026, up from $29 million in Q3 2025.
• Non-GAAP diluted EPS for Q3 2026 was $0.38, an increase from $0.33 in the prior year.
• The company expects to continue exceeding revenue and adjusted EBITDA growth targets in 2027.

Negatives

• Gross profit margin decreased to 44.2% in Q3 2026 from 45.7% in Q3 2025.
• MedTech & Specialty Audio segment Adjusted EBITDA margin decreased by 210 basis points year-over-year to 41.6% in Q3 2026, impacted by inventory reserves and increased R&D/OPEX.
• Inventories increased to $150.3 million as of September 30, 2026, from $124.6 million as of December 31, 2025.

Risks

• Fluctuations in stock's market price.
• Fluctuations in operating results and cash flows.
• Ability to prevent or identify quality issues in products and promptly remedy them.
• Risks associated with increasing inventories in advance of anticipated orders.
• Escalating international trade tensions, new or increased tariffs, and trade wars.
• Impact of changes to laws and regulations affecting product/service offerings in different regions.
• Ability to achieve reductions in operating expenses.
• Disruption caused by cybersecurity incidents.

Future Outlook

For the fourth quarter ending December 31, 2026, the company expects revenues from continuing operations to be between $180 million and $190 million, with non-GAAP diluted earnings per share between $0.39 and $0.43. Net cash provided by operating activities is projected to be between $60 million and $70 million. Looking ahead to 2027, the company expects to continue exceeding the revenue and adjusted EBITDA growth targets presented at its May 2025 Investor Day.

Management Comments

• "Total Company revenue grew 20% year over year in the third quarter, and our book-to-bill ratio in Precision Devices remained above one for the eighth consecutive quarter, reflecting continued order strength."
• "By executing our strategy—leveraging our differentiated technologies, developing custom products through close customer collaboration, and scaling production with our world-class operational capabilities—we delivered strong growth across the four major markets we serve: Medtech, Defense, Industrial, and Electrification."
• "Given the strength of our bookings, the number of new design wins ramping up, and favorable long-term secular trends in our markets, as I look forward to 2027, I expect us to continue exceeding the revenue and adjusted EBITDA growth targets presented at our May 2025 Investor Day to drive long-term shareholder value."

Industry Context

StockSavvy.ai notes that Knowles Corporation operates in the specialty electronic components market, serving critical functions in Medtech, Defense, Industrial, and Electrification sectors. The reported growth aligns with broader trends of increasing demand for advanced components in these high-growth areas.

Comparison to Industry Standards

• No direct comparisons to specific industry benchmarks or competitors were provided in the filing.
• The company's book-to-bill ratio in Precision Devices remaining above one for eight consecutive quarters suggests strong demand relative to current production capacity, which is a positive indicator within the component manufacturing industry.

Stakeholder Impact

• Shareholders: Potential for increased value due to exceeding growth targets and positive future outlook.
• Employees: Continued growth may lead to job security and potential for expansion.
• Customers: Continued supply of critical components for Medtech, Defense, Industrial, and Electrification markets.
• Suppliers: Increased demand for raw materials and components due to higher production volumes.

Next Steps

• Continue executing strategy leveraging differentiated technologies and customer collaboration.
• Scale production with world-class operational capabilities.
• Focus on driving long-term shareholder value by exceeding revenue and adjusted EBITDA growth targets in 2027.

Key Dates

Recommendation

The company is demonstrating strong growth and a positive outlook, exceeding previous guidance. However, the slight decrease in gross margin and segment-specific EBITDA margin, along with increased inventory levels, warrants a cautious 'hold' rating until these trends are further clarified and sustained growth is confirmed.

Keywords

specialty electronic components, capacitors, RF filters, medtech microphones, balanced armature speakers, Precision Devices, MedTech, Defense