8-K: Knowles Corp Reports Strong Q2 2026 Results, Exceeds Guidance

Knowles Corporation announced robust second quarter 2026 financial results, with revenues up 14% year-over-year to $166.8 million and diluted EPS reaching $0.21.

Summary

• Knowles Corporation reported second quarter 2026 revenues of $166.8 million, a 14% increase year-over-year, exceeding the high end of their guidance.
• Diluted Earnings Per Share (EPS) from continuing operations was $0.21, up $0.12 year-over-year.
• Non-GAAP Diluted EPS from continuing operations increased by 38% year-over-year to $0.33.
• Net Cash from Operations for the quarter was $28.2 million.
• The company provided an outlook for Q3 2026, expecting revenues between $167 million and $177 million, and Non-GAAP Diluted EPS between $0.34 and $0.38.
• For the full year 2026, Knowles expects revenue growth of 10-12% and adjusted EBITDA growth of over 20%.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a positive report, with strong revenue growth, exceeding EPS guidance, and a robust outlook for the remainder of 2026 and into 2027, indicating solid operational performance and market position.

Positives

• Revenue growth of 14% year-over-year to $167 million in Q2 2026.
• Diluted EPS from continuing operations increased by $0.12 year-over-year to $0.21.
• Non-GAAP Diluted EPS from continuing operations saw a significant 38% year-over-year increase to $0.33.
• The Precision Devices segment experienced year-over-year revenue growth across all end markets: Medtech, Defense, Industrial, and Electrification.
• Book-to-bill ratio has been greater than one for seven consecutive quarters, indicating strong demand.
• Full-year 2026 revenue growth is projected at 10-12%, with adjusted EBITDA growth exceeding 20%.
• Positive outlook for 2027, with expectations to exceed organic growth targets due to strong bookings and secular growth trends.

Negatives

• Net cash from operations decreased to $28.2 million in Q2 2026 from $36.4 million in Q2 2025, attributed to increased inventory build to support future demand.
• The company's balance sheet shows an increase in inventories to $147.1 million from $124.6 million at the end of 2025.

Risks

• Fluctuations in stock's market price.
• Fluctuations in operating results and cash flows.
• Ability to prevent or identify quality issues in products and promptly remedy them.
• Risks associated with increasing inventories in advance of anticipated orders.
• Escalating international trade tensions, new or increased tariffs, and trade wars.
• Impact of changes to laws and regulations affecting product/service offerings in different regions.
• Ability to achieve reductions in operating expenses.
• Disruption caused by cybersecurity incidents.

Future Outlook

For the third quarter of 2026, Knowles expects revenues between $167 million and $177 million, and Non-GAAP Diluted EPS between $0.34 and $0.38. For the full year 2026, the company projects revenue growth of 10-12% and adjusted EBITDA growth exceeding 20%. Management anticipates exceeding organic growth targets for 2027 based on strong bookings and market trends.

Management Comments

• "We delivered second quarter revenues exceeding the high end of our guided range. Non-GAAP diluted EPS was above the high end of our guided range and cash from operations was within the guided range."
• "I am very pleased with the Company's performance in the first half of 2026. Within the Precision Devices segment, we saw year over year revenue growth across all our end markets: Medtech, Defense, Industrial, and Electrification, as we execute our strategy of leveraging our unique technologies, creating custom products through our customer application intimacy, and then scaling into production with our world-class operational capabilities."
• "Our total company revenue grew 14% on a year over year basis in the second quarter and this was our seventh consecutive quarter where the book to bill was greater than one."
• "With our bookings increasing every quarter over the past twelve months, numerous new design wins ramping across multiple end markets, and a very healthy backlog of existing orders, we now expect 2026 revenues will grow at a rate of 10-12% with adjusted EBITDA growth of more than 20%."
• "Looking ahead to 2027, given the magnitude of our bookings coupled with strong long-term secular growth trends in the markets we participate in, I expect we will exceed the organic growth targets we presented at our May 2025 Investor Day. I am excited about the growth opportunities that lie ahead and am confident in our ability to continue to drive long-term value for our shareholders."

Industry Context

StockSavvy.ai notes that Knowles Corporation's performance in Q2 2026, particularly the 14% revenue growth and strong book-to-bill ratio, aligns with positive trends in specialized electronic components driven by demand in Medtech, Defense, Industrial, and Electrification markets. The company's strategy of leveraging unique technologies and customer intimacy appears to be yielding results in these high-growth sectors.

Stakeholder Impact

• Shareholders: Positive outlook and exceeding guidance suggests potential for continued value creation.
• Employees: Strong performance and growth may lead to increased job security and potential for bonuses or raises.
• Customers: Continued supply of high-performance components for demanding applications.
• Suppliers: Increased demand for raw materials and components due to higher production volumes.

Next Steps

• Continue executing strategy of leveraging unique technologies and customer intimacy.
• Scale custom products into production.
• Monitor and manage inventory levels to support expected demand.
• Continue to drive long-term value for shareholders.

Key Dates

Recommendation

The company delivered strong results and provided a positive outlook, exceeding expectations. However, the increase in inventory and the general risks outlined in the filing warrant a cautious 'hold' recommendation until further clarity on macroeconomic factors and sustained execution is observed.

Keywords

specialty electronic components, Precision Devices, Medtech, Defense, Industrial, Electrification, capacitors, RF filters