Knowles (KN) investor relations material

Executive summary

• Q3 revenue rose 20.3% YoY to $184.0M; non-GAAP diluted EPS increased 15.2% to $0.38, and operating cash flow was $44.6M.

• Strong orders, design wins and demand across Medtech, Defense, Industrial and Electrification support continued growth; FY 2026 revenue is projected at $689M, up 16%.

Financial highlights

• Q3 revenue was $184.0M vs. $152.9M YoY; GAAP gross profit was $81.3M vs. $69.9M, and GAAP gross margin was 44.2% vs. 45.7%.

• Non-GAAP diluted EPS was $0.38 vs. $0.33 YoY; GAAP diluted EPS was $0.24 vs. $0.21.

• Operating cash flow increased 53.3% YoY to $44.6M; adjusted free cash flow was $42.6M vs. $23.3M.

• R&D expense was $10M, up $1M YoY; SG&A was $30M, up $4M, mainly on commissions, incentives and pulled-forward hiring.

• Interest expense fell to $1.6M from $2.3M YoY, reflecting lower average debt balances.

Outlook and guidance

• Q4 revenue guidance is $180M-$190M; operating cash flow is forecast at $60M-$70M and capex at $8M.

• Q4 diluted EPS guidance is $0.31-$0.35 GAAP and $0.39-$0.43 non-GAAP; adjusted EBIT margin guidance is 23%-25%.

• FY 2026 revenue is projected at $689M, up 16%; adjusted EBITDA growth is projected at 24%, above the high end of Investor Day target ranges.

• 2027 revenue and adjusted EBITDA growth are expected to exceed prior targets; MSA is expected to grow 2%-4% for the year.

• PD is expected to post strong YoY growth in H1 2027 but remain sequentially flat near-term due to capacity; new capacity is expected to be fully available in H2.