Knowles (KN) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue reached $166.8 million, up 14.3% year-over-year, driven by strong demand in Precision Devices, MedTech, Defense, Industrial, and Electrification markets, surpassing guidance.

• Non-GAAP diluted EPS increased 38% year-over-year to $0.33, reflecting higher volume, margin expansion, and lower interest expense.

• Net cash from operations was $28.2 million in Q2 2026, with increased working capital to support inventory build.

• Book-to-bill ratio exceeded one for the seventh consecutive quarter, indicating strong demand and robust backlog.

• Strong organic growth and momentum in new platforms, with multiple new design wins ramping across end markets.

Financial highlights

• Q2 2026 gross profit was $74.6 million (44.7% margin), up from $60.6 million (41.5%) in Q2 2025; non-GAAP gross margin improved to 45.4%.

• Adjusted EBITDA for Q2 2026 was $41.8 million (25.1% margin), up from $32.7 million (22.4%) year-over-year.

• Net earnings for Q2 2026 were $19.4 million, up from $7.8 million in Q2 2025.

• Adjusted free cash flow for Q2 2026 was $22.9 million (13.7% of revenues).

• Non-GAAP operating expenses were $40.1 million (24.0% margin), up from $36.2 million (24.8% margin) year-over-year.

Outlook and guidance

• Q3 2026 revenue expected between $167 million and $177 million, with non-GAAP diluted EPS guidance of $0.34–$0.38.

• Q3 2026 net cash from operations projected at $35–$45 million.

• Full-year 2026 revenue growth expected at 10–12%, with adjusted EBITDA growth over 20% and capital expenditures about 5% of revenues.

• Management anticipates exceeding organic growth targets for 2027 and remaining in compliance with all debt covenants.