What is the market's earnings forecast for Knowles next quarter?

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What were the key takeaways from Knowles’s earnings call?

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Did Knowles beat or miss consensus estimates last quarter?

What is Knowles's gross profit margin?

- **Revenue & Profit Growth**: Q3 revenue up 7% YoY to $153 million, EPS up 22% to $0.33, driven by Precision Devices (12% YoY) and specialty film expansion.
- **Specialty Film Momentum**: 2025 revenue expected $55-60 million, with $25 million from new energy order. Sequential margin improvement Q3-Q4, full ramp in Q3 2026.
- **2026 Outlook**: Organic growth at high end of 4-6%, with Precision Devices targeting 6-8% growth. Medtech segment to grow 2-4%.
- **Cash Management**: $20 million share buyback and $15 million debt reduction, with net leverage ratio of 0.6x.
- **Strategic Initiatives**: Expanding specialty film capacity, pursuing accretive M&A, and maintaining disciplined cost management.

**【CEO Summary Section】**
- **Revenue Growth**: Q3 2025 revenue of $153 million, up 7% YoY, with EPS of $0.33, up 22% YoY. Cash from operations was $29 million.
- **Segment Performance**: 
  - Medtech & Specialty Audio: $65 million (2% YoY growth), driven by operational excellence and new product adoption.
  - Precision Devices: $88 million (12% YoY growth), with strong defense and EV market demand. Defense bookings outpaced other segments.
- **Specialty Film Expansion**: Q3 bookings exceeded $25 million, with expected 2025 revenue of $55-60 million. Capacity expansion underway to meet demand.
- **Cash Management**: $20 million share buyback and $15 million debt reduction. Net leverage ratio of 0.6x with $350 million liquidity.
- **2026 Outlook**: Organic growth at high end of 4-6% range, driven by defense, EV, and specialty film. Medtech segment expected to grow 2-4%, Precision Devices 6-8%.

**【CFO Financial Commentary】**
- **Financial Highlights**: GAAP EPS of $0.33, at high end of guidance. Medtech gross margin 53%, Precision Devices 41.5% (up 150bps YoY due to higher capacity utilization).
- **Cost Management**: R&D flat YoY at $9 million; SG&A up $2 million due to merit and incentive costs. Interest expense down $2 million YoY.
- **Q4 Guidance**: Revenue $151-161 million (9% YoY midpoint), EPS $0.33-0.37. Operating cash flow 16-20% of revenue. Capital spending ~5% of revenue for capacity expansion.
- **Tax Outlook**: 7-11% for Q4, rising to 15-19% in 2026.

**【Q&A Key Highlights】**
- **Specialty Film**: 2025 revenue expected $55-60 million, with $25 million from energy order ramping in Q2 2026. Sequential margin improvement Q3-Q4, full benefit in Q3 2026.
- **M&A Strategy**: Focused on accretive acquisitions with clear strategic fit. Pipeline active but disciplined in execution.
- **Palladium Impact**: Prebuy positions mitigate near-term cost increases. No immediate margin impact, but monitoring for 2026 discussions.
- **Book-to-Bill**: Q3 PD segment at 1.0, second-highest bookings in 4 quarters. Defense and distribution channels strong.
- **Gross Margin Leverage**: 35-40% drop-through on incremental revenue, with specialty film driving 2026 margin expansion.

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