Knowles (NYSE:KN) executives said the company delivered fourth-quarter and full-year 2025 results above its outlook as the business continued its shift following a portfolio transformation completed at the end of 2024. Management highlighted strength across end markets, improved demand visibility as channel inventories normalized, and a growing backlog supported by bookings above shipments.
Fourth-quarter performance exceeded guidance
President and CEO Jeffrey Niew said the fourth quarter capped what he called a “breakthrough year,” with results that exceeded the company’s Investor Day expectations. For the fourth quarter, Knowles reported revenue of $162 million, up 14% year-over-year and above the high end of its guided range. Non-GAAP EPS was $0.36, up 33% from the year-ago period, and cash from operations totaled $47 million, which also exceeded the high end of guidance.
Segment results: steady MedTech & Specialty Audio, accelerating Precision Devices
In the MedTech & Specialty Audio segment, fourth-quarter revenue was $73 million, up 4% year-over-year. Niew said Knowles continues to be known in hearing health for technology and reliability, with customers depending on solutions that improve comfort of fit and performance while using extremely low power. He said the company is winning next-generation designs for MEMS microphones and balanced armature speakers, and sees an opportunity to increase “content per device” in next-generation hearing health products.
Anderson added that the segment’s fourth-quarter revenue was driven by increased shipment volume. For the full year, MedTech & Specialty Audio revenue increased 4% versus the prior year, which Anderson attributed primarily to growth in Specialty Audio and higher shipment volume of stamped metal cans. Fourth-quarter gross margin was 51.9%, up slightly year-over-year.
In Precision Devices, fourth-quarter revenue was $90 million, up 23% year-over-year. Niew said the company saw strength across key end markets as channel inventory levels normalized and orders aligned with end-market demand, leading to an acceleration in the second half of the year. Full-year Precision Devices revenue grew 10% year-over-year, exceeding the segment’s Investor Day organic growth target.
Precision Devices gross margin was 40.1% in the quarter. Anderson said higher end-market demand and production volumes in ceramic capacitors and RF/microwave products increased factory utilization, but this was partially offset by higher scrap costs and production inefficiencies tied to the specialty film line. He said he expects continued margin improvement in 2026 as specialty film operational initiatives are realized.
End-market commentary: defense, medical, industrial, energy
Management described broad-based end-market growth within Precision Devices, citing MedTech, Defense, Industrial, EV, and Energy as areas of year-over-year revenue growth. Niew characterized defense as “strong,” noting that Knowles is a sole-source supplier on a number of programs with growing order volumes across applications such as radar, communications, and munitions. He also said defense spending is increasing and shifting toward electronic warfare, where Knowles’ products are in demand.
In medical, Niew referenced repeat orders and production across multiple product lines including high-performance ceramic capacitors and pulse power film capacitors, citing rising use of medical devices and treatments. In industrial markets, he said capacitors serve a diverse set of applications, from robotics to welding and induction heating, and in Q&A he added the company is seeing more industrial momentum than it did six months earlier. He also described energy as an “exciting opportunity,” tied to high-volume pulse power capacitors.
On bookings, Niew said the company posted another quarter of healthy orders, with a book-to-bill greater than 1x, and later specified a 1.06x book-to-bill even in a “very strong shipment quarter.” He also said January bookings were “very strong.” Management said customer collaboration has produced a robust pipeline of design wins.
Specialty film and energy order: ramp expected by end of Q2
On the company’s large energy-related opportunity tied to the specialty film capacitor line, Niew said the program is expected to be “fully ramped” by the end of Q2, with a modest contribution in Q1 and sequential growth from Q1 to Q2. In response to analyst questions, he said the customer base for specialty film is broadening beyond medical applications (including defibrillators and radiotherapy) into areas such as downhole fracking and military applications like railguns.
Niew said the company’s expectation for specialty film, including the energy order, remains in the $50 million to $65 million revenue range for 2026. He also provided detail on the production buildout in Greenville, South Carolina, saying equipment was being moved in and the company has teams onsite to support the ramp, with a goal to increase output 10x in the next five months from current levels. He said the capacity is being configured alongside the existing specialty film line, with separation between a low-mix, high-volume production area and the higher-mix standard specialty film line, and that automation and other changes should help longer-term productivity.
Full-year results and first-quarter outlook
For full-year 2025, Knowles reported revenue of $593 million, up 7% year-over-year, and non-GAAP EPS of $1.11, up 21%. Anderson said adjusted EBITDA from continuing operations was $140 million, up 9% from 2024, and cash from operations was $114 million, or 19.2% of revenue.
Knowles exited the fourth quarter with $54 million in cash and $114 million of borrowings under its revolving credit facility. Fourth-quarter capital spending was $15 million, and Anderson said the company expects to continue investments associated with capacity expansion related to the large energy order received in 2025.
For the first quarter of 2026, management guided to:
- Revenue: $145 million to $153 million (up 12% year-over-year at the midpoint)
- R&D expense: $9 million to $11 million
- SG&A expense: $25 million to $27 million
- Adjusted EBIT margin: 18% to 20%
- Interest expense: about $2 million
- Effective tax rate: 15% to 19%
- EPS: $0.22 to $0.26 (up 33% year-over-year at the midpoint)
- Capital spending: about $10 million
Niew said the first quarter is typically seasonally lower, but he expects strong year-over-year growth. He also pointed to cash generation and a “very strong balance sheet,” which he said gives the company flexibility to pursue synergistic acquisitions and continue share repurchases. Anderson said a robust backlog and increased order activity underpin management’s confidence in continued revenue, earnings, and cash flow growth into 2026 and beyond.
About Knowles (NYSE:KN)
Knowles Corporation (NYSE: KN) is a leading developer and manufacturer of advanced micro-acoustic, audio processing and precision device solutions. The company’s product portfolio includes microelectromechanical systems (MEMS) microphones, balanced armature receivers, acoustic filters, and custom audio processing integrated circuits. These solutions are designed to enable clear speech, enhanced voice capture and intelligent audio performance in a variety of end markets.
Founded in 1946, Knowles has evolved from its roots in vacuum tube components to become a pure-play audio technology provider following its spin-off from Dover Corporation in 2014.
