Knowles Corp. Beats Revenue Forecasts and Issues Strong Guidance
Knowles Corp. (NYSE:KN), a manufacturer of specialty electronic components, closed its 2025 fiscal year on a high note, reporting fourth-quarter results that surpassed analyst revenue expectations and providing an optimistic outlook for the current quarter.
The company’s performance indicates a successful pivot following the sale of its Consumer MEMS Microphone business in late 2024, positioning itself squarely as an industrial technology firm focused on higher-margin markets like medtech, defense, and industrial applications.
Fourth Quarter Financial Performance
For the quarter ended December 31, 2025, Knowles reported revenue of $162.2 million, a 13.8% increase compared to the $142.5 million reported in the same period last year. This figure came in above the analyst consensus estimate of approximately $160.9 million.
On the profitability front, the company’s non-GAAP diluted earnings per share (EPS) were $0.36. This result was essentially in line with analyst estimates, which had anticipated EPS of $0.3631.
Key financial highlights from the quarter include:
- Revenue: $162.2 million (vs. estimate of ~$160.9 million)
- Non-GAAP EPS: $0.36 (vs. estimate of $0.3631)
- Gross Margin Expansion: Non-GAAP gross margin improved to 45.3%, up from 44.1% in Q4 2024.
- Operating Cash Flow: Generated $47.2 million, a significant increase from $29.1 million in the prior quarter.
Market Reaction and Forward Guidance
The market’s initial reaction to the earnings release appears measured but positive. In the month leading up to the report, KN shares had appreciated nearly 9.8%, suggesting some investor optimism was already priced in. Following the announcement, after-hours trading showed little immediate movement, but the stock's weekly performance remains positive.
A significant driver of investor sentiment is likely the company’s guidance for the first quarter of 2026. Knowles provided a revenue outlook ranging from $143 million to $153 million, with a midpoint of $148 million. This midpoint is approximately 3.4% higher than the analyst consensus estimate of $143.2 million for Q1 2026.
The company also issued non-GAAP EPS guidance of $0.22 to $0.26 for the coming quarter, which compares favorably to current expectations. This confident forecast, coupled with the revenue beat, reinforces management’s message of entering the new year with strong momentum.
Strategic Transformation and Outlook
President and CEO Jeffrey Niew emphasized the completion of the company’s strategic transformation into a pure-play industrial technology business. He pointed to a strong backlog and new design wins as foundations for continued growth in 2026.
The full-year 2025 results underscore this transition, with revenue from continuing operations growing 7% to $593.2 million. Management highlighted robust cash generation, which allowed for further debt reduction and ongoing share repurchases.
Summary and Investor Considerations
Knowles Corp. delivered a solid quarter that met or exceeded key financial targets. The revenue beat and, more importantly, the above-consensus guidance for the current quarter suggest the company’s refocused strategy is gaining traction. The market’s generally positive performance in the weeks leading to the report reflects growing confidence in this turnaround narrative.
Investors will now watch for the company to execute on its Q1 guidance and continue its trajectory of margin expansion and cash flow generation as it capitalizes on opportunities in its core industrial end markets.
For a detailed look at future earnings estimates and historical performance, you can review the KN Earnings & Estimates page.
Disclaimer: This article is for informational purposes only and is not intended as investment advice. The author has no position in KN. All investment decisions involve risk, and readers should conduct their own research or consult with a qualified financial advisor before making any investment decisions.
