Knowles (KN) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $153.1 million, up 16% year-over-year, driven by strong demand, new product introductions, and design wins across MedTech & Specialty Audio and Precision Devices segments.

• Non-GAAP diluted EPS increased 50% year-over-year to $0.27, reflecting higher volume, margin expansion, and lower interest expense.

• Net earnings from continuing operations were $11.3 million, up from a loss of $0.4 million in Q1 2025.

• Cash generated by operating activities was $1.3 million, seasonally low but expected to improve for the full year.

• Strong secular growth in MedTech, Defense, Industrial, and Electrification markets, with a healthy backlog and new design wins positioning for continued growth.

Financial highlights

• Gross profit for Q1 2026 was $67.1 million (43.8% margin), up from $53.3 million (40.3%) in Q1 2025; non-GAAP gross profit was $69.7 million (45.5% margin).

• Adjusted EBITDA for Q1 2026 was $35.3 million (23.1% margin), up from $26.7 million (20.2%) in Q1 2025.

• R&D expense was $11.7 million, up 20.6% year-over-year; SG&A was $39.4 million, up 5.9%.

• Interest expense declined to $1.5 million from $2.7 million, due to debt repayments.

• Adjusted free cash flow was negative $3.1 million, compared to positive $18.3 million in Q1 2025, due to higher capital expenditures and working capital needs.

Outlook and guidance

• Q2 2026 revenue guidance is $152–$162 million, with non-GAAP diluted EPS expected at $0.28–$0.32 and GAAP EPS at $0.18–$0.22.

• Net cash from operating activities for Q2 2026 projected at $20–$30 million.

• Full year 2026 revenue growth expected above the high end of the 4%–6% organic target.

• Capital expenditures for 2026 projected at 4%–5% of revenues, focused on capacity expansion.

• 2026 adjusted EBITDA expected to exceed the 10%–14% cumulative annual growth target.