Knowles delivered year-on-year growth in the first quarter, with management attributing results to strong demand across its MedTech and Specialty Audio segment as well as the Precision Devices segment. CEO Jeffrey Niew emphasized that new product introductions by customers, especially in hearing health, and robust activity in defense and industrial markets contributed to revenue gains. The company credited its ability to deliver custom-engineered solutions for blue-chip customers as a key differentiator. Niew noted, “Our strategy of leveraging our unique technologies to design custom engineered solutions and then delivering them at scale … is proving to be a powerful combination.”
Is now the time to buy KN? Find out in our full research report (it’s free for active Edge members).
Knowles (KN) Q1 CY2026 Highlights:
- Revenue: $153.1 million vs analyst estimates of $147.4 million (15.8% year-on-year growth, 3.9% beat)
- Adjusted EPS: $0.27 vs analyst estimates of $0.24 (13.7% beat)
- Adjusted EBITDA: $35.3 million vs analyst estimates of $30.7 million (23.1% margin, 15% beat)
- Revenue Guidance for Q2 CY2026 is $157 million at the midpoint, above analyst estimates of $153.5 million
- Adjusted EPS guidance for Q2 CY2026 is $0.30 at the midpoint, above analyst estimates of $0.30
- Operating Margin: 11.8%, up from 5.8% in the same quarter last year
- Market Capitalization: $2.60 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Knowles’s Q1 Earnings Call
- Christopher Rolland (Susquehanna): Asked about new design wins and their impact on lifetime value. CEO Jeffrey Niew described growth as broad-based across medical, industrial, and defense, highlighting the company’s ability to solve complex problems and quickly scale production.
- Christopher Rolland (Susquehanna): Inquired about pricing strategy and margin drivers. Niew and CFO John Anderson explained that targeted price increases in Precision Devices and improved capacity utilization are driving gross margin expansion, with limited pricing opportunity in MedTech and Specialty Audio.
- Robert Labick (CJS Securities): Sought updates on specialty film pilot programs and their conversion to larger orders. Niew outlined ongoing pilot deliveries and confirmed that the energy order ramp is on track, projecting it will be a key margin contributor later in the year.
- Anthony Stoss (Craig-Hallum): Asked about the sustainability of gross margin and pricing power into 2027. Niew stated that while pricing gains will likely remain within the 2%-4% range, demand across all divisions is strong, and margins are expected to improve further.
- Tristan Gerra (Baird): Queried about factory utilization and customer appetite for long-term supply agreements. Niew reported average utilization rates near 80% and said defense customers are increasingly seeking multi-year contracts, though most current orders will ship within twelve months.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team is watching (1) the full ramp and margin impact of the large energy sector order, (2) progress in negotiating and booking longer-term defense contracts amid ongoing geopolitical uncertainty, and (3) sustained order momentum and capacity utilization across both Precision Devices and MedTech and Specialty Audio. Expansion into next-generation product design wins and stable input costs will also be important markers of execution.
Knowles currently trades at $30.36, down from $31.27 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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