Q3 FY2026
Filed Oct 22, 2026Q3 Revenues Increased 20% on a Year over Year Basis to $184 million; 2026 Full year revenue estimated at $689 million, up 16% vs 2025
Q3 revenue was $184.0 million, up 20% year over year as stated by the Company, while GAAP operating earnings were $30.7 million, non-GAAP diluted earnings per share were $0.38, and net cash provided by operating activities was $44.6 million. The Company stated that revenue exceeded the high end of guidance and that non-GAAP diluted EPS and cash from operations were at the high end of guided ranges.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 revenuesGAAP | $184M | – | 20% |
| Q3 2026 gross profitGAAP | $81.3M | – | – |
| Q3 2026 gross profit as % of revenuesGAAP | 44.2% | – | – |
| Q3 2026 non-GAAP gross profitnon-GAAP | $83.3M | – | – |
| Q3 2026 non-GAAP gross profit as % of revenuesnon-GAAP | 45.3% | – | – |
| Q3 2026 operating expensesGAAP | $50.6M | – | – |
| Q3 2026 non-GAAP operating expensesnon-GAAP | $40.1M | – | – |
| Q3 2026 operating earningsGAAP | $30.7M | – | – |
| Q3 2026 earnings from continuing operations before interest and income taxesGAAP | $29.4M | – | – |
| Q3 2026 adjusted earnings from continuing operations before interest and income taxesnon-GAAP | $42.4M | – | – |
| Q3 2026 adjusted earnings from continuing operations before interest and income taxes as % of revenuesnon-GAAP | 23.0% | – | – |
| Q3 2026 Adjusted EBITDAnon-GAAP | $48.3M | – | – |
| Q3 2026 Adjusted EBITDA as % of revenuesnon-GAAP | 26.3% | – | – |
| Q3 2026 earnings from continuing operationsGAAP | $21.2M | – | – |
| Q3 2026 net earningsGAAP | $21.6M | – | – |
| Q3 2026 diluted earnings per share from continuing operationsGAAP | $0.24 | – | – |
| Q3 2026 non-GAAP diluted earnings per sharenon-GAAP | $0.38 | – | – |
| Q3 2026 net earnings per share, dilutedGAAP | $0.25 | – | – |
| Q3 2026 net cash provided by operating activitiesGAAP | $44.6M | – | – |
| Q3 2026 adjusted free cash flownon-GAAP | $42.6M | – | – |
| Q3 2026 adjusted free cash flow as a % of revenuesnon-GAAP | 23.2% | – | – |
| Nine months ended September 30, 2026 revenuesGAAP | $503.9M | – | – |
| Nine months ended September 30, 2026 gross profitGAAP | $223M | – | – |
| Nine months ended September 30, 2026 gross profit as % of revenuesGAAP | 44.3% | – | – |
| Nine months ended September 30, 2026 non-GAAP gross profitnon-GAAP | $228.7M | – | – |
| Nine months ended September 30, 2026 operating earningsGAAP | $71.3M | – | – |
| Nine months ended September 30, 2026 adjusted earnings from continuing operations before interest and income taxesnon-GAAP | $108.6M | – | – |
| Nine months ended September 30, 2026 Adjusted EBITDAnon-GAAP | $125.4M | – | – |
| Nine months ended September 30, 2026 net earningsGAAP | $50.7M | – | – |
| Nine months ended September 30, 2026 diluted earnings per share from continuing operationsGAAP | $0.58 | – | – |
| Nine months ended September 30, 2026 non-GAAP diluted earnings per sharenon-GAAP | $0.98 | – | – |
| Nine months ended September 30, 2026 net cash provided by operating activitiesGAAP | $72.1M | – | – |
| Nine months ended September 30, 2026 adjusted free cash flownon-GAAP | $62.4M | – | – |
Q4 2026 outlook
- Revenue$180 to $190 million
- NoteGAAP diluted earnings per share from continuing operations: $0.31 to $0.35
- NoteNon-GAAP diluted earnings per share from continuing operations: $0.39 to $0.43
- NoteNet cash provided by operating activities: $60 to $70 million
- Note2026 Full year revenue estimated at $689 million, up 16% vs 2025
- NoteQ4 2026 GAAP results from continuing operations are expected to include approximately $0.06 per share in stock-based compensation expense, $0.04 per share in intangibles amortization expense, $0.02 per share for differences related to the GAAP effective tax rate, and $0.02 per share for other adjustments, partially offset by $0.06 per share in Syntiant dividend income.
Capital returns
- Repurchase of common stock: $47.5 million for the nine months ended September 30, 2026.
- Treasury stock - at cost: $(318.4) million at September 30, 2026.
- No dividend amount was reported.
What drove it
- The Company stated that total Company revenue grew 20% year over year in the third quarter.
- The Company stated that its Precision Devices book-to-bill ratio remained above one for the eighth consecutive quarter.
- Management cited strong growth across Medtech, Defense, Industrial, and Electrification.
- Management cited the strength of bookings, new design wins ramping up, and favorable long-term secular trends in its markets.
- Q3 production transfer costs were $1.1 million, compared with $0.8 million in Q2 2026 and $0.6 million in Q3 2025.
Concerns
- Q3 GAAP gross profit as a percentage of revenues was 44.2%, compared with 44.7% in Q2 2026 and 45.7% in Q3 2025.
- Q3 non-GAAP gross profit as a percentage of revenues was 45.3%, compared with 45.4% in Q2 2026 and 46.2% in Q3 2025.
- Inventories were $150.3 million at September 30, 2026, compared with $124.6 million at December 31, 2025.
- Receivables were $122.5 million at September 30, 2026, compared with $102.8 million at December 31, 2025.
- The Company identified risks including quality issues, inventory built in advance of anticipated customer orders, tariffs, raw-material and component costs and availability, new product ramps, customer concentration, and geopolitical uncertainties.
What to watch
- Q4 2026 revenue guidance of $180 to $190 million.
- Q4 2026 non-GAAP diluted earnings per share guidance of $0.39 to $0.43.
- Q4 2026 net cash provided by operating activities guidance of $60 to $70 million.
- Whether the Precision Devices book-to-bill ratio remains above one.
- The pace of bookings and new design-win ramps cited by management.
- Full-year 2026 revenue estimated at $689 million, up 16% vs 2025.
Balance sheet and cash flow
- Cash and cash equivalents: $46.6 million at September 30, 2026; $54.2 million at December 31, 2025.
- Long-term debt: $116.0 million at September 30, 2026; $114.0 million at December 31, 2025.
- Receivables, net: $122.5 million at September 30, 2026; $102.8 million at December 31, 2025.
- Inventories: $150.3 million at September 30, 2026; $124.6 million at December 31, 2025.
- Capital expenditures: $(24.6) million for the nine months ended September 30, 2026; $(16.8) million for the nine months ended September 30, 2025.
- Net cash used in financing activities: $(54.9) million for the nine months ended September 30, 2026; $(88.6) million for the nine months ended September 30, 2025.
- Net decrease in cash and cash equivalents: $(7.6) million for the nine months ended September 30, 2026; $(37.6) million for the nine months ended September 30, 2025.
Analysis
Knowles reported Q3 2026 revenue of $184.0 million, compared with $166.8 million in Q2 2026 and $152.9 million in Q3 2025. The Company stated that Q3 revenue increased 20% year over year and exceeded the high end of its guidance. Management attributed performance to growth across Medtech, Defense, Industrial, and Electrification, while stating that the Precision Devices book-to-bill ratio remained above one for the eighth consecutive quarter.
Profitability improved in dollars. Q3 GAAP gross profit was $81.3 million, operating earnings were $30.7 million, and earnings from continuing operations were $21.2 million. Adjusted earnings from continuing operations before interest and income taxes were $42.4 million and Adjusted EBITDA was $48.3 million. However, GAAP gross profit as a percentage of revenues was 44.2%, compared with 44.7% in Q2 2026 and 45.7% in Q3 2025. Non-GAAP gross profit as a percentage of revenues was 45.3%, compared with 45.4% and 46.2%, respectively.
Cash generation strengthened in the quarter. Net cash provided by operating activities was $44.6 million, compared with $28.2 million in Q2 2026 and $29.1 million in Q3 2025, and adjusted free cash flow was $42.6 million. For the first nine months, net cash provided by operating activities was $72.1 million and capital expenditures were $(24.6) million. The Company repurchased $47.5 million of common stock during the nine-month period. Cash and cash equivalents were $46.6 million and long-term debt was $116.0 million at September 30, 2026.
The balance sheet also showed receivables of $122.5 million and inventories of $150.3 million at September 30, 2026, compared with $102.8 million and $124.6 million, respectively, at December 31, 2025. The filing identifies risks around inventory built in advance of anticipated orders, input availability and costs, tariffs, new product ramps, customer concentration, and geopolitical uncertainty. These working-capital balances and the conversion of bookings into revenue remain relevant measures alongside the stated order strength.
For Q4 2026, Knowles guided revenue to $180 to $190 million, GAAP diluted earnings per share from continuing operations to $0.31 to $0.35, non-GAAP diluted earnings per share to $0.39 to $0.43, and net cash provided by operating activities to $60 to $70 million. The Company estimated full-year 2026 revenue of $689 million, up 16% versus 2025. Management stated that bookings, design wins ramping up, and secular market trends support its expectation to continue exceeding the revenue and adjusted EBITDA growth targets presented at its May 2025 Investor Day.
Management, verbatim
Third quarter revenue exceeded the high end of our guidance, while non-GAAP diluted EPS and cash from operations were at the high end of our guided ranges.
Jeffrey Niew, President and CEO of Knowles
Total Company revenue grew 20% year over year in the third quarter, and our book-to-bill ratio in Precision Devices remained above one for the eighth consecutive quarter, reflecting continued order strength.
Jeffrey Niew, President and CEO of Knowles
Given the strength of our bookings, the number of new design wins ramping up, and favorable long-term secular trends in our markets, as I look forward to 2027, I expect us to continue exceeding the revenue and adjusted EBITDA growth targets presented at our May 2025 Investor Day to drive long-term shareholder value.
Jeffrey Niew, President and CEO of Knowles
Not in the filing
stated, not guessed- Segment-level revenue, segment-level year-over-year changes, and segment-level quarter-over-quarter changes were not reported.
- Prior-quarter and prior-year percentage changes were not printed for most individual financial statement line items.
- Q4 2026 guidance for gross margin, operating expenses, and tax rate was not reported.
- Full-year 2026 guidance for diluted earnings per share, cash flow, gross margin, operating expenses, and tax rate was not reported.
- Dividend information was not reported.
- A previous-release outlook was not provided, so no comparison with prior guidance is available.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.