Knowles (KN) Q4 2025 earnings summary

Executive summary

• Completed transformation into a high-margin industrial technology leader, focusing on MedTech, Defense, Industrial, and Energy markets, and exceeding Investor Day expectations.

• Q4 2025 revenue rose 14% year-over-year to $162.2 million, surpassing guidance; full-year 2025 revenue was $593.2 million, up 7.2%.

• Full-year non-GAAP diluted EPS was $1.11, up 20.7% year-over-year; Q4 non-GAAP EPS was $0.36, up 33%.

• Strong cash generation with $114 million net cash from operations for 2025, representing 19.2% of revenues.

• Robust backlog, new design wins, and major energy order position the company for continued growth in 2026.

Financial highlights

• Q4 2025 gross margin was 51.9% (non-GAAP: 45.3%); full-year non-GAAP gross margin was 44.5%.

• Adjusted EBITDA for 2025 was $140.2 million, 23.6% of revenues, up 9% year-over-year.

• SG&A expenses in Q4 were $27 million, up $2 million due to higher incentive compensation.

• Ended Q4 with $54 million in cash and $114 million in borrowings under the revolving credit facility.

• Capital expenditures for 2025 were $32.1 million, or 5.4% of revenues.

Outlook and guidance

• Q1 2026 revenue guidance: $143–$153 million; non-GAAP diluted EPS expected between $0.22 and $0.26.

• Q1 2026 adjusted EBIT margin projected at 18%-20%; R&D expenses expected between $9 million and $11 million; SG&A between $25 million and $27 million.

• 2026–2029 targets: 8–10% revenue CAGR, 10–14% adjusted EBITDA CAGR, and 16–20% cash from operations as a percentage of revenue.

• Full-year capital spending to support capacity expansion, especially for large energy orders.

• Positioned for continued strong organic revenue growth above historic levels in 2026.