Knowles Corp (NYSE:KN) Q3 2025 Earnings: EPS Beat Overshadows Revenue Miss

Knowles Corp (NYSE:KN) has released its financial results for the third quarter of 2025, delivering a performance that narrowly missed revenue expectations while surpassing earnings estimates. The market responded positively to the report, with shares climbing in after-hours trading.

Earnings and Revenue Versus Estimates

The company's performance against analyst forecasts presents a mixed but ultimately well-received picture. While the top-line figure came in slightly below expectations, the bottom-line results demonstrated stronger-than-anticipated profitability.

• Q3 2025 Revenue: $152.9 million versus estimates of $153.5 million
• Q3 2025 Non-GAAP EPS: $0.33 per share versus estimates of $0.32 per share

The modest revenue shortfall was overshadowed by the earnings beat, which exceeded expectations by approximately 4%. This profitability was reflected in the company's improved gross margin, which expanded to 46.2% on a non-GAAP basis compared to 44.2% in the previous quarter.

Market Reaction and Price Action

Investors focused on the positive earnings surprise and the company's forward guidance, pushing the stock higher in after-market trading. The immediate price action suggests market participants are rewarding the company for its earnings outperformance and confident outlook despite the slight revenue miss. This reaction indicates that investors are placing greater emphasis on profitability and future growth prospects than on a minor top-line deviation.

Fourth Quarter Outlook and Analyst Comparisons

Management provided optimistic guidance for the current quarter ending December 31, 2025, projecting results that align with or exceed current analyst expectations.

• Q4 2025 Revenue Guidance: $151 to $161 million
• Analyst Q4 Revenue Estimate: $158.9 million
• Q4 2025 Non-GAAP EPS Guidance: $0.33 to $0.37 per share
• Analyst Q4 EPS Estimate: $0.35 per share

The company's revenue guidance range brackets the analyst consensus, while the EPS outlook suggests potential for another earnings beat if the company achieves the upper end of its forecast. This forward-looking confidence appears to be contributing to the positive market sentiment.

Press Release Highlights and Management Commentary

The quarterly report highlighted several positive operational and financial developments beyond the headline numbers. President and CEO Jeffrey Niew emphasized that the company delivered revenues, operating cash flow, and non-GAAP EPS all above the midpoint of their guided range. He noted strong execution across business units, resulting in sequential and year-over-year revenue growth.

The company demonstrated robust cash generation, with operating activities providing $29.1 million in the quarter. This financial strength enabled $20 million in share repurchases and $15 million in debt reduction, reflecting a balanced approach to capital allocation. Management expressed confidence in achieving full-year organic revenue growth of 6% for 2025 and expects organic growth at the high end of the 4-6% range for the coming year, citing strong design activity and a healthy backlog.

Conclusion

Knowles Corporation's third quarter results illustrate a company that is effectively managing profitability even as it navigates a slightly softer revenue environment. The market's positive reaction underscores investor appreciation for the earnings beat, solid guidance, and the company's strategic execution. With new design wins ramping and a substantial backlog, the company appears positioned for continued growth through the end of 2025 and into the next year.

For more detailed earnings information and analyst estimates, you can review the complete earnings and estimates data for Knowles Corp.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making investment decisions.