Knowles shares fell 3.6% after earnings, despite Q3 revenue and EPS reaching or exceeding the company’s own guidance. The likely concern is the outlook: hearing-health demand was pulled forward by earlier customer launches, while management’s 2027 growth expectations were positive but broad and did not provide specific targets in the available transcript.
- Q3 revenue was $184 million, up 20% year over year and above the high end of guidance; EPS was $0.38 and operating cash flow was $45 million, both at the high end of guidance.
- MedTech & Specialty Audio revenue rose 4% to $67 million. Management said AI-related hearing-health product launches shifted some customer demand earlier than usual, while still expecting the market to grow at historical rates in 2026.
- Precision Devices revenue increased 33% to $117 million. Its Q3 book-to-bill was 1.5, with orders of nearly $180 million; those orders included a $15 million defense RF-filter order to be delivered over 36 months.
- Knowles is adding capacity across most Precision Devices product lines; capacity is expected to start coming online in late Q1 and be fully available in the second half of 2027.
- The company repurchased $25 million of shares and reduced bank borrowings by $15 million in Q3. Management expects organic growth in 2027 to exceed its Investor Day targets, but the transcript provides no quantified 2027 outlook.
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