Knowles 2025 Q2 Earnings Strong Performance as Net Income Swings 103%

Knowles Corporation posted robust fiscal 2025 Q2 earnings, showcasing a significant rebound in profitability. The earnings report revealed that the company exceeded revenue expectations, marking an 8% year-over-year increase. Guidance for the third quarter remains optimistic, with projected revenue ranging from $144 million to $154 million and adjusted EPS between $0.29 and $0.33. The company's strategic focus on growth in MedTech and Specialty Audio segments continues to drive positive results, aligning with its broader market ambitions.

Revenue
The total revenue of Knowles increased by 7.9% to $145.90 million in 2025 Q2, up from $135.20 million in 2024 Q2.

Earnings/Net Income
Knowles returned to profitability with EPS of $0.09 in 2025 Q2, reversing from a loss of $2.90 per share in 2024 Q2 (103.1% positive change). Meanwhile, the company achieved a remarkable turnaround with net income of $7.80 million in 2025 Q2, representing a 103.0% positive swing from the net loss of $-259.30 million in 2024 Q2. The EPS reflects a positive financial recovery.

Price Action
The stock price of Knowles has edged down 1.00% during the latest trading day, has jumped 12.95% during the most recent full trading week, and has surged 16.36% month-to-date.

Post-Earnings Price Action Review
The investment strategy of purchasing Knowles stocks when revenue exceeds expectations and holding for 30 days yielded a 31.36% return, which underperformed the benchmark return of 87.35%. The strategy's Sharpe ratio was 0.17, indicating a moderate risk-adjusted return. Despite having a maximum drawdown of 0% and a volatility of 32.31%, the strategy maintained a low-risk profile. However, it did not capitalize on broader market gains, suggesting potential improvements in strategic timing and market analysis are necessary to enhance performance.

CEO Commentary
Jeffrey Niew, CEO of Knowles Corporation, highlighted the company's strong performance in the second quarter of 2025, with revenues exceeding the high end of the guided range at $146 million, an 8% year-over-year increase. He noted robust growth in the Precision Devices segment, driven by increased order activity and backlog across various markets, particularly in MedTech and Specialty Audio. Niew expressed confidence in the company's strategic positioning within the medical-technology, defense, and industrial markets, emphasizing the potential for continued organic growth and higher margins due to an expanding portfolio of differentiated products.

Guidance
Knowles Corporation expects third-quarter 2025 revenues to range between $144 million and $154 million, with adjusted EPS projected between $0.29 and $0.33. The company anticipates continued sequential and year-over-year growth, supported by strong market demand and operational momentum, while also guiding net cash provided by operating activities to be between $20 million and $30 million.

Additional News
In a strategic move to enhance shareholder value, Knowles Corporation repurchased $30 million in shares during Q2 2025, reinforcing its commitment to capital returns. The repurchase was facilitated by robust cash flow, with the company generating $36 million in net cash from operations, exceeding its guidance. Additionally, Knowles is focusing on expanding its high-performance product offerings in MedTech, Defense, and Industrial sectors, which positions the company for accelerated growth. With strong order activity in the Precision Devices segment, Knowles is set to leverage its expanding portfolio to drive future market success.