🧾 What This Document Is

This is an earnings release filed as an 8-K by Knowles Corporation. Think of it as their official quarterly report card for investors. It’s not just numbers—it includes management’s commentary, future guidance, and explanations of how they measure success. The key takeaway? They’re sharing their Q1 2026 results and telling Wall Street what to expect next.

🏢 What The Company Does

In simple terms, Knowles makes tiny, high-tech components that are critical for advanced devices. They’re not a consumer brand you’d see in a store. Instead, they supply essential parts to companies in Medtech (medical devices), Defense, Industrial, and Electrification markets. Their products include specialized capacitors, radio frequency filters, and advanced microphones used in hearing aids.

👉 Why it matters: Their business is tied to high-growth, high-reliability sectors. When they do well, it’s often a sign that these important industries are investing and innovating.

💰 Q1 2026 Financial Highlights

The first quarter was strong, with clear growth compared to last year. Here’s a quick snapshot:

Metric	Q1 2026	Q1 2025	Change
Revenue	$153.1 million	$132.2 million	+16%
GAAP Gross Margin	43.8%	40.3%	+3.5 pts
Non-GAAP Diluted EPS	$0.27	$0.18	+50%

👉 The big story: Revenue grew double-digits, and profitability expanded significantly. The company explicitly notes this revenue growth exceeds its own five-year annual target, which is a great start to the year.

🚀 Management’s Commentary & Strategy

CEO Jeffrey Niew is clearly pleased. He highlights three key drivers:

1. Unique Technology & Customer Intimacy: They design custom solutions, not just off-the-shelf parts.
2. Strong End Markets: Medtech, defense, and industrial sectors are experiencing "secular growth trends" (long-term, powerful growth waves).
3. Operational Excellence: They can efficiently scale these custom designs into mass production.

👉 He also signals confidence: With a "very healthy backlog" and new design wins, they now expect 2026 growth to be above the high-end of their previous annual targets.

🔮 Looking Ahead: Q2 2026 Outlook

Here’s what management expects for the next quarter (April-June 2026):

Metric	Q2 2026 Guidance (Non-GAAP)
Revenue	$152 million to $162 million
Diluted EPS	$0.28 to $0.32

👉 What this signals: They expect stable to slightly growing revenue and higher profits compared to Q1. This guidance suggests they believe the strong momentum will continue.

💡 Understanding Non-GAAP vs. GAAP

Knowles (like many companies) reports two sets of numbers. GAAP is the standard, required accounting. Non-GAAP is a management view that strips out "one-time" or non-cash costs they believe don't reflect core operations.

Common adjustments include:

• Stock-based compensation: A non-cash expense for paying employees in stock.
• Amortization of intangibles: The gradual accounting cost of past acquisitions.
• Production transfer costs: One-time expenses from moving manufacturing.

👉 Why they do it: They say it helps investors compare performance consistently, period to period. Your job as an investor is to look at both: GAAP for the full picture, Non-GAAP to understand what management focuses on.

⚖️ The Big Picture: Strengths & Risks

👍 Strengths:

• Powerful Growth: 16% revenue growth in a single quarter is impressive.
• Margin Expansion: Making more profit on each dollar of sales.
• Strategic Positioning: Serving critical, high-growth industries.
• Positive Momentum: Backlog and design wins point to a healthy future.

⚠️ Potential Risks to Watch:

• Economic Sensitivity: Defense and industrial budgets can change.
• Execution Risk: Can they keep scaling operations smoothly?
• Customer Concentration: How reliant are they on a few big customers?
• The "Non-GAAP" Gap: Note that GAAP EPS was only $0.13 in Q1, while Non-GAAP was $0.27. The difference is large, so it’s important to understand the adjustments.

📞 Contact & Conference Call

For follow-up questions, the Investor Relations contact is: Sarah Cook | Email: [email protected]

The company hosted a live webcast and conference call on April 23, 2026, at 3:30 PM Central Time to discuss these results. Replays were made available.

🧠 The Analogy

Think of Knowles like a specialized high-performance engine part supplier for Formula 1 teams. They don't make the whole car; they make the critical, custom-designed components that let the car perform at its absolute peak. Their strong results mean both their technology is top-tier and that their "teams" (medtech, defense, etc.) are investing heavily to win.

🧩 Final Takeaway

Knowles started 2026 with a bang, delivering double-digit revenue growth and strong profits by capitalizing on its niche in essential, high-tech industries. Their confident outlook suggests this is just the beginning, making them a company to watch in the specialty components space.