Knowles delivered a strong Q2, with revenue growth driven by broad-based demand across its Precision Devices and Medtech & Specialty Audio segments. Management highlighted that all core end markets—medtech, defense, industrial, and electrification—posted gains, citing robust design wins and a healthy backlog. CEO Jeffrey Niew called out the company’s ability to secure multiyear defense orders and ramp up production for industrial and energy applications. The continued outperformance in Precision Devices was supported by both original equipment manufacturer (OEM) and distribution channel partners, while Medtech saw steady growth despite some inventory-related headwinds. Factory productivity gains and improved product mix contributed to margin expansion, and management emphasized that bookings were particularly strong, setting the stage for continued momentum.
Is now the time to buy KN? Find out in our full research report (it’s free for active Edge members).
Knowles (KN) Q2 CY2026 Highlights:
- Revenue: $166.8 million vs analyst estimates of $157 million (14.3% year-on-year growth, 6.3% beat)
- Adjusted EPS: $0.33 vs analyst estimates of $0.31 (8.2% beat)
- Adjusted EBITDA: $41.8 million vs analyst estimates of $38 million (25.1% margin, 10% beat)
- Revenue Guidance for Q3 CY2026 is $172 million at the midpoint, above analyst estimates of $163.5 million
- Adjusted EPS guidance for Q3 CY2026 is $0.36 at the midpoint, above analyst estimates of $0.34
- Operating Margin: 15.2%, up from 12.3% in the same quarter last year
- Market Capitalization: $2.95 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is 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 Q2 Earnings Call
- Christopher Rolland (Susquehanna): Asked about the sequential growth outlook and moving parts in the Medtech & Specialty Audio segment. CEO Jeffrey Niew explained that Q4 will see slower growth in Medtech & Specialty Audio due to earlier inventory build, while Precision Devices should maintain momentum.
- Christopher Rolland (Susquehanna): Inquired about pricing dynamics and the impact of broader market tightness in passive components. Niew responded that Knowles’ products are less commoditized, allowing for stronger annual price increases this year amid robust demand.
- Bob Labick (CJS Securities): Sought clarity on drivers behind Precision Devices’ growth outside energy and the sustainability of recent order trends. Niew said growth was broad-based across markets and products, highlighting strong bookings and design wins.
- Bob Labick (CJS Securities): Asked about the M&A environment and Knowles’ appetite for acquisitions given strong organic growth. Niew said the company remains selective with M&A, focusing on opportunities that enhance core platforms, while Anderson noted ongoing share repurchases and debt reduction.
- Anthony Stoss (Craig-Hallum): Requested details on defense segment composition, especially the split between RF filters and capacitors. Niew clarified that filters are the larger contributor, with most filter revenue tied to defense, and described visibility into multiyear growth from new program awards.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will watch (1) the pace of large defense-related order intake and how quickly those translate into shipments; (2) evidence of sustained margin gains from improved pricing and product mix, particularly in Precision Devices; and (3) progress on capacity expansion and design wins in new industrial and energy applications. Continued execution on capital allocation and updates on potential acquisitions will also be key areas of focus.
Knowles currently trades at $35.80, down from $38.81 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).
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