Knowles' Q3 Earnings Soar on Strong Operations, CMM Sale Boost

TL;DR

**Knowles is finally shedding its dead weight, and the CMM sale is paying off big time, making it a strong buy for long-term growth.**

AI Summary

Knowles Corp (KN) reported a significant increase in net earnings for the three and nine months ended September 30, 2025, primarily driven by improved continuing operations and a substantial reduction in losses from discontinued operations. Revenues for the three months ended September 30, 2025, increased to $152.9 million from $142.5 million in the prior year, a 7.3% rise. Net earnings surged to $17.4 million for the quarter, up from $0.5 million in Q3 2024. For the nine-month period, net earnings reached $23.2 million, a dramatic turnaround from a net loss of $256.3 million in the same period of 2024, largely due to the absence of a $262.5 million goodwill impairment charge in 2024 related to the Consumer MEMS Microphones (CMM) segment. The company completed the sale of its CMM segment to Syntiant Corp. on December 27, 2024, which significantly reduced discontinued operations losses from $269.3 million in the nine months ended September 30, 2024, to $2.2 million in 2025. Knowles also repurchased 3,120,574 shares of common stock for $55.0 million during the nine months ended September 30, 2025, demonstrating a commitment to shareholder returns. An impairment charge of $3.6 million was recorded for machinery and equipment associated with the MedTech & Specialty Audio segment.

Why It Matters

This filing signals a positive shift for Knowles, as the divestiture of the Consumer MEMS Microphones (CMM) segment has significantly de-risked the company and allowed it to focus on its higher-margin MedTech, Defense, and Industrial markets. The substantial increase in net earnings and revenue from continuing operations demonstrates the success of this strategic pivot, making the company more attractive to investors seeking stable growth in specialized electronic components. For employees, this focus could mean more investment in core areas and potentially more stable employment. Customers in the MedTech, Defense, and Industrial sectors can expect continued innovation and reliability from a more streamlined Knowles, potentially intensifying competition for rivals in these niche markets.

Risk Assessment

Risk Level: medium — While net earnings improved significantly, the company still faces a decline in cash and cash equivalents, which decreased by $37.6 million to $92.5 million for the nine months ended September 30, 2025, from $130.1 million at the beginning of the period. Additionally, the company recorded an impairment charge of $3.6 million on machinery and equipment in the MedTech & Specialty Audio segment, indicating potential asset valuation challenges or strategic shifts within its core business.

Analyst Insight

Investors should consider increasing their position in KN, as the company's strategic divestiture of the CMM segment has demonstrably improved profitability and focus. Monitor cash flow trends closely, but the strong earnings from continuing operations and ongoing share repurchase program suggest a healthy, shareholder-friendly trajectory.

Financial Highlights

debt To Equity

N/A

revenue

$152.9M

operating Margin

16.9%

total Assets

N/A

total Debt

N/A

net Income

$17.4M

eps

$0.20

gross Margin

45.7%

cash Position

$92.5M

revenue Growth

+7.3%

Revenue Breakdown

Key Numbers

• $152.9M — Q3 2025 Revenues (Increased from $142.5M in Q3 2024, a 7.3% rise.)
• $17.4M — Q3 2025 Net Earnings (Significantly up from $0.5M in Q3 2024.)
• $23.2M — YTD 2025 Net Earnings (Dramatic turnaround from a $256.3M net loss in YTD 2024.)
• $2.2M — YTD 2025 Loss from Discontinued Operations (Substantially reduced from $269.3M in YTD 2024.)
• $55.0M — YTD 2025 Common Stock Repurchases (Demonstrates commitment to shareholder returns, repurchasing 3,120,574 shares.)
• $3.6M — YTD 2025 Impairment Charge (Related to machinery and equipment in MedTech & Specialty Audio segment.)
• $92.5M — Cash and Cash Equivalents at Sep 30, 2025 (Decreased from $130.1M at Dec 31, 2024.)
• 85,151,884 — Common Shares Outstanding (As of October 24, 2025, reflecting share repurchases.)

Key Players & Entities

• Knowles Corp (company) — Registrant and leading manufacturer of specialty electronic components
• Syntiant Corp. (company) — Purchaser of Knowles' Consumer MEMS Microphones (CMM) segment
• SEC (regulator) — Securities and Exchange Commission, governing body for financial filings
• $152.9 million (dollar_amount) — Revenues for the three months ended September 30, 2025
• $17.4 million (dollar_amount) — Net earnings for the three months ended September 30, 2025
• $23.2 million (dollar_amount) — Net earnings for the nine months ended September 30, 2025
• $256.3 million (dollar_amount) — Net loss for the nine months ended September 30, 2024
• $262.5 million (dollar_amount) — Goodwill impairment charge in 2024 related to CMM segment
• $55.0 million (dollar_amount) — Amount spent on common stock repurchases during the nine months ended September 30, 2025
• $3.6 million (dollar_amount) — Impairment charge for machinery and equipment in MedTech & Specialty Audio segment

FAQ

Risk Factors

• Dependence on Key Customers and Suppliers [medium — operational]: The company's success is tied to its ability to maintain strong relationships with key customers and suppliers. Any disruption in these relationships, such as the sale of the CMM segment to Syntiant Corp., could impact future revenue streams and operational stability. The company also leases facilities to Syntiant, creating an interdependency.
• Financing and Credit Risk with Syntiant [medium — financial]: Knowles provided $6.4 million in financing to Syntiant for the CMM segment sale, which carries interest rate risk and a maturity date of March 28, 2029. The balance was $5.9 million as of September 30, 2025. This exposes Knowles to potential credit risk if Syntiant defaults.
• Impairment of Assets [low — operational]: An impairment charge of $3.6 million was recorded for machinery and equipment associated with the MedTech & Specialty Audio segment due to a sale for a nominal price. This indicates potential overvaluation or obsolescence of assets within this segment.
• Impact of Discontinued Operations Sale [medium — market]: The sale of the Consumer MEMS Microphones (CMM) segment to Syntiant Corp. has significantly altered the company's operational and financial structure. While reducing losses, it also means a loss of revenue and potential future growth from that segment.

Industry Context

Knowles Corporation operates in the specialty electronic components market, focusing on high-performance capacitors, RF filters, advanced microphones, speakers, and miniaturization products. The company serves demanding applications in medtech, defense, and industrial markets. Key trends include the increasing demand for sophisticated components in medical devices, the ongoing need for advanced communication technologies, and the drive for miniaturization across various electronic products.

Regulatory Implications

The company must comply with various financial reporting regulations, including those from the SEC. Recent accounting standard updates (ASU 2023-07 and ASU 2023-09) require enhanced disclosures regarding segment information and income tax reporting, which Knowles has adopted or will adopt. Compliance with these standards is crucial for maintaining investor confidence and avoiding penalties.

What Investors Should Do

1. Monitor the performance of the MedTech & Specialty Audio segment.
2. Analyze the impact of the Syntiant financing and separation costs.
3. Evaluate the effectiveness of the share repurchase program.
4. Assess the company's cash flow generation and liquidity.

Key Dates

• 2025-09-30: End of Q3 2025 — Reported $152.9M in revenue and $17.4M in net earnings, showing significant improvement over the prior year.
• 2024-12-27: Sale of Consumer MEMS Microphones (CMM) segment — Completed the sale to Syntiant Corp., which significantly reduced losses from discontinued operations and impacted the company's segment reporting.
• 2025-02-13: Share repurchase authorization increase — Board increased share repurchase authorization by up to $150.0 million, signaling confidence and commitment to shareholder returns.
• 2025-09-30: Consolidated Balance Sheet Date — Cash and cash equivalents stood at $92.5M, a decrease from $130.1M at year-end 2024.

Glossary

Discontinued Operations

Represents the results of a business segment that has been sold or is classified as held for sale. Its financial results are reported separately from continuing operations. (The significant reduction in losses from discontinued operations, due to the sale of the CMM segment, is a primary driver of the improved net earnings for 2025.)

Goodwill Impairment Charge

An accounting charge taken when the carrying value of goodwill on a company's balance sheet exceeds its fair value, indicating a loss in value. (The absence of a $262.5 million goodwill impairment charge in 2025, which was present in 2024 for the CMM segment, is a key reason for the dramatic turnaround in year-to-date net earnings.)

Share Repurchase Program

A program where a company buys back its own shares from the open market, reducing the number of outstanding shares. (Knowles repurchased $55.0 million of common stock year-to-date, demonstrating a commitment to returning capital to shareholders and potentially increasing EPS.)

Impairment Charge (Machinery and Equipment)

A charge recorded when the carrying amount of an asset exceeds its recoverable amount, typically due to damage, obsolescence, or a decline in market value. (A $3.6 million impairment charge was recognized for MedTech & Specialty Audio segment assets, indicating a write-down to fair value.)

Weighted-average common shares outstanding

The average number of shares of common stock outstanding during a period, adjusted for dilutive securities. (The number of shares outstanding impacts earnings per share calculations. The company's share repurchases have likely reduced this number, potentially boosting EPS.)

Year-Over-Year Comparison

Knowles Corporation has demonstrated a significant financial recovery compared to the prior year's nine-month period. Revenue for the nine months ended September 30, 2025, increased to $431.0 million from $411.0 million in 2024, a 4.9% rise. Most notably, net earnings have swung from a substantial loss of $256.3 million in YTD 2024 to a profit of $23.2 million in YTD 2025, primarily due to the absence of a large goodwill impairment charge related to the divested CMM segment. Losses from discontinued operations have also plummeted from $269.3 million to $2.2 million, reflecting the successful sale of the CMM business.

Key Financial Figures

• $0.01 — ange on which registered Common stock, $0.01 par value per share KN New York Stock E

Filing Documents

• kn-20250930.htm (10-Q) — 1614KB
• a2025930exhibit311.htm (EX-31.1) — 11KB
• a2025930exhibit312.htm (EX-31.2) — 11KB
• a2025930exhibit321.htm (EX-32.1) — 8KB
• 0001587523-25-000079.txt ( ) — 8337KB
• kn-20250930.xsd (EX-101.SCH) — 42KB
• kn-20250930_cal.xml (EX-101.CAL) — 83KB
• kn-20250930_def.xml (EX-101.DEF) — 313KB
• kn-20250930_lab.xml (EX-101.LAB) — 717KB
• kn-20250930_pre.xml (EX-101.PRE) — 554KB
• kn-20250930_htm.xml (XML) — 1103KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION 1 Item 1.

Financial Statements

Financial Statements 1 Consolidated Statements of Earnings (unaudited) for the three and nin e months ended September 30, 2025 and 2024 1 Consolidated Statements of Comprehensive Earnings (unaudited) for the three and nine months ended September 30, 2025 and 2024 2 Consolidated Balance Sheets (unaudited) at September 30, 2025 and December 31, 2024 3 Consolidated Statements of Stockholders' Equity (unaudited) for the three and nine months ended September 30, 2025 and 2024 4 Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2025 and 2024 6

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 7

Forward-Looking Statements

Forward-Looking Statements 25 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 26 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 43 Item 4.

Controls and Procedures

Controls and Procedures 43

— OTHER INFORMATION

PART II — OTHER INFORMATION 43 Item 1.

Legal Proceedings

Legal Proceedings 43 Item 1A.

Risk Factors

Risk Factors 43 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 44 Item 5. Other Information 44 Item 6. Exhibits 45

SIGNATURES

SIGNATURES 46 Table of Contents

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements KNOWLES CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS (in millions, except per share amounts) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenues $ 152.9 $ 142.5 $ 431.0 $ 411.0 Cost of goods sold 82.8 79.5 242.9 235.7 Impairment charges — — 3.6 — Restructuring charges - cost of goods sold 0.2 0.1 0.7 1.4 Gross profit 69.9 62.9 183.8 173.9 Research and development expenses 10.0 10.2 29.7 29.2 Selling and administrative expenses 34.0 33.9 107.1 106.8 Restructuring charges 0.1 0.1 2.5 1.5 Operating expenses 44.1 44.2 139.3 137.5 Operating earnings 25.8 18.7 44.5 36.4 Interest expense, net 2.3 3.9 7.5 12.9 Other expense, net 1.2 2.6 2.6 2.5 Earnings before income taxes and discontinued operations 22.3 12.2 34.4 21.0 Provision for income taxes 4.3 3.0 9.0 8.0 Earnings from continuing operations 18.0 9.2 25.4 13.0 Loss from discontinued operations, net ( 0.6 ) ( 8.7 ) ( 2.2 ) ( 269.3 ) Net earnings (loss) $ 17.4 $ 0.5 $ 23.2 $ ( 256.3 ) Earnings per share from continuing operations: Basic $ 0.21 $ 0.10 $ 0.29 $ 0.15 Diluted $ 0.21 $ 0.10 $ 0.29 $ 0.14 Loss per share from discontinued operations: Basic $ ( 0.01 ) $ ( 0.09 ) $ ( 0.02 ) $ ( 3.02 ) Diluted $ ( 0.01 ) $ ( 0.09 ) $ ( 0.03 ) $ ( 2.98 ) Net earnings (loss) per share: Basic $ 0.20 $ 0.01 $ 0.27 $ ( 2.87 ) Diluted $ 0.20 $ 0.01 $ 0.26 $ ( 2.84 ) Weighted-average common shares outstanding: Basic 85.8 88.7 86.8 89.2 Diluted 87.3 89.7 88.1 90.2 See accompanying Notes to Consolidated Financial Statements 1 Table of Contents KNOWLES CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (in millions) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net earnings (loss) $ 17.4 $ 0.5 $ 23.2 $ ( 256.3 ) Other comprehensive (loss) earnings, net of tax Foreign currency translation 0.4 17.1 6.5 10.5 Employee benefit plans:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. Basis of Presentation Background - Knowles Corporation (NYSE:KN) is a leading manufacturer of specialty electronic components. The Company designs parts that perform unique and critical functions for innovative technologies. Through extreme reliability, custom engineering, and scalable manufacturing, the Company enables businesses to succeed in the most demanding applications across medtech, defense, and industrial markets. Knowles high performance capacitors, radio frequency ("RF") and microwave filters, advanced medtech microphones, balanced armature speakers, and miniaturization products enable and enhance the performance of customer products. The Company's focus on the customer, combined with unique technology, proprietary manufacturing techniques, and global operational expertise enable it to deliver innovative solutions across multiple applications. References to "Knowles," "the Company," "we," "our," and "us" refer to Knowles Corporation and its consolidated subsidiaries. Financial Statement Presentation - The accompanying unaudited interim Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by U.S. generally accepted accounting principles ("GAAP" or "U.S. GAAP") for complete financial statements. These unaudited interim Consolidated Financial Statements should therefore be read in conjunction with the Consolidated Financial Statements and Notes thereto for the year ended December 31, 2024 included in the Company's Annual Report on Form 10-K. The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions that affect amounts reported in the Consolidated Financial Statements and accompanyin

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) In connection with the sale of CMM, the Company provided financing of $ 6.4 million to Syntiant, which was utilized to fund Syntiant's requirement to have $ 40.0 million of cash on its balance sheet at closing. This note is junior to Syntiant's debt financing and matures on March 28, 2029 and bears interest at the prime rate until six months after the closing date of the sale, at which time the interest rate increased to 13.0 %. The balance of this note was $ 5.9 million and $ 6.4 million as of September 30, 2025 and December 31, 2024, respectively, and is classified within "Other assets and deferred charges" on the Consolidated Balance Sheet. The Company shares in certain separation costs with Syntiant related to the sale of CMM pursuant to a credit for up to $ 13.5 million, which it may apply to specified separation costs post-closing. The balance of the separation credit was $ 6.2 million and $ 13.5 million at September 30, 2025 and December 31, 2024, respectively and is classified within "Other accrued expenses" on the Consolidated Balance Sheet. As the balance of the separation credit is now below the $ 6.5 million contractual threshold, future costs will be shared equally by the Company and Syntiant. The Company leases portions of its facilities to Syntiant, for which lease payments to date of $ 2.6 million have been applied to the separation credit. The Company also subleases portions of its manufacturing facilities to Syntiant at cost. The portion of operating lease right-of-use assets subleased by Syntiant totaled $ 5.2 million and $ 0.3 million at September 30, 2025 and December 31, 2024, respectively. The Company recognized revenue totaling $ 4.4 million and $ 12.7 million during the three and nine months ended September 30, 2025, respectively, related to transactions with Syntiant. These revenues are reflected in the results of the MedTech & Specialty Audio segment. Receivables, net include

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 2. Recent Accounting Standards In November 2023, the Financial Accounting Standards Board ("FAB") issued Accounting Standards Update ("ASU") 2023-07 to expand reportable segment disclosure requirements. This guidance requires that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss. Additionally, this standard requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The Company retroactively adopted this standard beginning with its annual reporting for the year ended December 31, 2024 and its interim reporting for the three months ended March 31, 2025. See Note 15. Segment Information. In December 2023, the FASB issued ASU 2023-09 to enhance the transparency of income tax disclosures. This guidance requires that public business entities disclose, on an annual basis, specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. A public business entity is required to provide an explanation, if not otherwise evident, of the individual reconciling items disclosed, such as the nature, effect, and underlying causes and the judgment used in categorizing the reconciling items. This guidance also requires that all entities disclose, on an annual basis, the amount of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes and the amount of income taxes paid (net of refunds received) disaggregated by those individual jurisdictions equal to or greater than 5 percent of the total. This standard is effective for the Company for its annual reporting for

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Results of the Company's discontinued operations were as follows: Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2025 2024 2025 2024 Revenues $ — $ 72.8 $ — $ 208.9 Cost of goods sold — 53.4 — 154.1 Gain on sale of fixed assets — — — ( 1.1 ) Gross profit — 19.4 — 55.9 Research

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