Knowles Corp
For the period ended Sep 30, 2026. Filed Oct 27, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Oct 27, 2026
KN$31.27+3.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-07-28.
0001587523-26-000030
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-27.
0001587523-26-000035
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 125 previous paragraphs and 120 current paragraphs.
62 unchanged; 44 reworded; 14 added; 18 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Earnings from continuing operations for the third quarter of 2026 was $21.2 million, compared with $18.0 million for the third quarter of 2025, an improvement of $3.2 million. As described above, the improvement is primarily due to higher gross profit, partially offset by higher operating expenses and income tax expense.
Current report
Non-GAAP diluted earnings per share from continuing operations was $0.38 for the third quarter of 2026, compared with $0.33 for the third quarter of 2025, an improvement of $0.05. As described above, the improvement is primarily due to higher non-GAAP gross profit, partially offset by higher non-GAAP operating expenses and non-GAAP income tax expense.
Current report
Results of Operations for the Nine Months Ended September 30, 2026 compared with the Nine Months Ended September 30, 2025
Current report
COGS for the nine months ended September 30, 2026 was $280.2 million, compared with $242.9 million for the nine months ended September 30, 2025, an increase of $37.3 million or 15.4%. This increase was primarily due to higher shipping volumes, increased production transfer costs in our ceramic capacitor business, and higher factory costs.
Current report
Non-GAAP gross profit for the nine months ended September 30, 2026 was $228.7 million, compared with $190.2 million for the nine months ended September 30, 2025, an increase of $38.5 million or 20.2%. Non-GAAP gross profit margin for the nine months ended September 30, 2026 was 45.4% compared with 44.1% for the nine months ended September 30, 2025. The increases in non-GAAP gross profit and non-GAAP gross profit margin were primarily due to higher shipping volumes and pricing, partially offset by higher factory costs.
Current report
Adjusted earnings before interest and income taxes from continuing operations for the nine months ended September 30, 2026 was $108.6 million, compared with $83.9 million for the nine months ended September 30, 2025, an increase of $24.7 million. Adjusted EBIT margin for the nine months ended September 30, 2026 was 21.6%, compared with 19.5% for the nine months ended September 30, 2025. The increases in Adjusted EBIT and Adjusted EBIT margin were primarily due to higher non-GAAP gross profit, partially offset by higher non-GAAP operating expenses.
Current report
Diluted earnings per share from continuing operations was$0.58 for thenine months ended September 30, 2026, compared with$0.29 for thenine months ended September 30, 2025, an improvementof $0.29. As described above, the improvement is primarily due to higher gross profit, partially offset by higher operating expenses.
Current report
Non-GAAP diluted earnings per share from continuing operations was $0.98 for the nine months ended September 30, 2026, compared with $0.75 for the nine months ended September 30, 2025, an improvement of $0.23. As described above, the improvement is primarily due to higher non-GAAP gross profit, partially offset by higher non-GAAP operating expenses and non-GAAP income tax expense.
Current report
PD EBIT was $22.0 million for the third quarter of 2026, compared with $14.3 million for the third quarter of 2025, an increase of $7.7 million. EBIT margin for the third quarter of 2026 was 18.8%, compared to 16.2% for the third quarter of 2025. The increases were due to higher gross profit, partially offset by higher operating expenses driven by additional headcount to support future growth, sales commissions, and incentive compensation. The gross profit increase was primarily driven by higher shipping volumes and pricing, partially offset by non-recurring inventory adjustments, unfavorable product mix, increased production transfer costs in our ceramic capacitor business, and higher factory costs.
Current report
PD Adjusted EBIT was $28.7 million for the third quarter of 2026, compared with $20.2 million for the third quarter of 2025, an increase of $8.5 million. Adjusted EBIT margin for the third quarter of 2026 was 24.5%, compared with 22.9% for the third quarter of 2025. The increases were due to higher non-GAAP gross profit, partially offset by higher non-GAAP operating expenses driven by additional headcount to support future growth, sales commissions, and incentive compensation. The non-GAAP gross profit increase was primarily driven by higher shipping volumes and pricing, partially offset by non-recurring inventory adjustments, unfavorable product mix, and higher factory costs.
Current report
MSA EBIT was $24.1 million for the third quarter of 2026, compared with $25.0 million for the third quarter of 2025, a decrease of $0.9 million. EBIT margin for the third quarter of 2026 was 36.0%, compared with 38.6% for the third quarter of 2025. The decreases in EBIT and EBIT margin were primarily due to higher operating expenses driven by incentive compensation, partially offset by higher gross profit. The increase in gross profit was driven by higher shipping volumes and favorable product mix, partially offset by lower pricing and higher factory costs.
Current report
MSA Adjusted EBIT was $25.8 million for the third quarter of 2026, compared with $26.2 million for the third quarter of 2025, a decrease of $0.4 million. Adjusted EBIT margin for the third quarter of 2026 was 38.5%, compared to 40.5% for the third quarter of 2025. The decreases in adjusted EBIT and adjusted EBIT margin were primarily due to higher non-GAAP operating expenses driven by incentive compensation, partially offset by higher non-GAAP gross profit. Higher non-GAAP gross profit was driven by higher shipping volumes and favorable product mix, partially offset by lower pricing and higher factory costs.
Current report
Segment Results of Operations for the Nine Months Ended September 30, 2026 compared with the Nine Months Ended September 30, 2025
Current report
PD EBIT was $43.5 million for the nine months ended September 30, 2026, compared with $25.7 million for the nine months ended September 30, 2025, an increase of $17.8 million. EBIT margin for the nine months ended September 30, 2026 was 14.5%, compared to 10.7% for the nine months ended September 30, 2025. The increases were due to higher gross profit, partially offset by higher operating expenses driven by additional headcount to support future growth, sales commissions, and incentive compensation. The gross profit increase was primarily driven by higher shipping volumes and pricing, partially offset by unfavorable product mix, higher production transfer costs in our ceramic capacitor business, and higher factory costs.
Removed paragraphs (18)
Previous report
Recent Developments
Previous report
The tariff environment remains highly dynamic. On February 20, 2026, a Supreme Court ruling invalidated certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). Knowles submitted refund requests and has, to date, received a portion of previously paid IEEPA tariffs. However, as a relatively small percentage of our products were subject to IEEPA tariffs, cash refunds received were not material. We will continue to monitor developments on tariff policy and evaluate any changes to the applicability of tariffs to our business as the occur.
Previous report
Earnings from continuing operations for the second quarter of 2026 was $18.4 million, compared with $7.8 million for the second quarter of 2025, an improvement of $10.6 million. As described above, the improvement is primarily due to higher gross profit, lower interest expense, and lower other expense, partially offset by higher operating expenses and higher income tax expense.
Previous report
Non-GAAP diluted earnings per share from continuing operations was $0.33 for the second quarter of 2026, compared with $0.24 for the second quarter of 2025, an improvement of $0.09. As described above, the improvement is primarily due to higher non-GAAP gross profit, partially offset by higher non-GAAP operating expenses.
Previous report
Results of Operations for the Six Months Ended June 30, 2026 compared with the Six Months Ended June 30, 2025
Previous report
COGS for the six months ended June 30, 2026 was $178.0 million, compared with $160.1 million for the six months ended June 30, 2025, an increase of $17.9 million or 11.2%. This increase was primarily due to higher shipping volumes and higher production transfer costs in our ceramic capacitor business, partially offset by favorable product mix in our MSA segment.
Previous report
Impairment Charges
Previous report
Non-GAAP gross profit for the six months ended June 30, 2026 was $145.4 million, compared with $119.5 million for the six months ended June 30, 2025, an increase of $25.9 million or 21.7%. Non-GAAP gross profit margin for the six months ended June 30, 2026 was 45.5% compared with 43.0% for the six months ended June 30, 2025. The increases in non-GAAP gross profit and non-GAAP gross profit margin were primarily due to higher shipping volumes, increased factory capacity utilization, pricing in the PD segment, and favorable product mix in our MSA segment.
Previous report
Adjusted earnings before interest and income taxes from continuing operations for the six months ended June 30, 2026 was $66.2 million, compared with $49.4 million for the six months ended June 30, 2025, an increase of $16.8 million. Adjusted EBIT margin for the six months ended June 30, 2026 was 20.7%, compared with 17.8% for the six months ended June 30, 2025. The increases in Adjusted EBIT and Adjusted EBIT margin were primarily due to higher non-GAAP gross profit, partially offset by higher non-GAAP operating expenses.
Previous report
Diluted earnings per share from continuing operations was$0.34 for thesix months ended June 30, 2026, compared with$0.08 for thesix months ended June 30, 2025, an improvementof $0.26. As described above, the improvement is primarily due to higher gross profit, partially offset by higher operating expenses.
Previous report
Non-GAAP diluted earnings per share from continuing operations was $0.60 for the six months ended June 30, 2026, compared with $0.42 for the six months ended June 30, 2025, an improvement of $0.18. As described above, the improvement is primarily due to higher non-GAAP gross profit, partially offset by higher non-GAAP operating expenses.
Previous report
(8) In the third quarter of 2025, the Company modified its calculation method of non-GAAP diluted average shares outstanding to exclude the potential dilution impact from performance share units ("PSUs") as these equity awards have not yet been earned. Our PSUs are market-based awards and fluctuate based on the Company's total shareholder return performance relative to the Russell 2000 during the measurement period. The calculation methodology change in non-GAAP diluted average shares outstanding increased non-GAAP diluted earnings per share by $0.01 for the six months ended June 30, 2025.
Previous report
PD EBIT was $13.9 million for the second quarter of 2026, compared with $8.2 million for the second quarter of 2025, an increase of $5.7 million. EBIT margin for the second quarter of 2026 was 14.1%, compared to 10.4% for the second quarter of 2025. The increases were due to higher gross profit, partially offset by higher operating expenses driven by higher commissions, additional headcount to support future growth, and higher incentive compensation. The gross profit increase was primarily driven by higher shipping volumes and pricing, partially offset by increased production transfer costs in our ceramic capacitor business.
Previous report
PD Adjusted EBIT was $20.3 million for the second quarter of 2026, compared with $13.9 million for the second quarter of 2025, an increase of $6.4 million. Adjusted EBIT margin for the second quarter of 2026 was 20.7%, compared with 17.7% for the second quarter of 2025. The increases were due to higher non-GAAP gross profit, partially offset by higher non-GAAP operating expenses driven by higher commissions, additional headcount to support new product initiatives, and higher incentive compensation. The non-GAAP gross profit increase was primarily driven by higher shipping volumes and pricing.
Previous report
MSA EBIT was $26.3 million for the second quarter of 2026, compared with $21.0 million for the second quarter of 2025, an increase of $5.3 million. EBIT margin for the second quarter of 2026 was 38.4%, compared with 31.2% for the second quarter of 2025. The increases in EBIT and EBIT margin were primarily due to higher gross profit, partially offset by higher operating expenses driven by higher incentive compensation. The increase in gross profit was driven by impairment charges recorded in 2025 that did not recur in 2026, increased factory capacity utilization, and higher shipping volumes, partially offset by unfavorable product mix.
Previous report
MSA Adjusted EBIT was $27.6 million for the second quarter of 2026, compared with $26.1 million for the second quarter of 2025, an increase of $1.5 million. Adjusted EBIT margin for the second quarter of 2026 was 40.3%, compared to 38.7% for the second quarter of 2025. The increases in adjusted EBIT and adjusted EBIT margin were primarily due to higher non-GAAP gross profit, partially offset by higher operating expenses driven by higher incentive compensation. Higher non-GAAP gross profit was driven by increased factory capacity utilization and higher shipping volumes, partially offset by unfavorable product mix.
Previous report
Segment Results of Operations for the Six Months Ended June 30, 2026 compared with the Six Months Ended June 30, 2025
Previous report
PD EBIT was $21.5 million for the six months ended June 30, 2026, compared with $11.4 million for the six months ended June 30, 2025, an increase of $10.1 million. EBIT margin for the six months ended June 30, 2026 was 11.7%, compared to 7.5% for the six months ended June 30, 2025. The increases were due to higher gross profit, partially offset by higher operating expenses driven by higher commissions, additional headcount to support future growth, and higher incentive compensation. The gross profit increase was primarily driven by higher shipping volumes, pricing, and increased factory capacity utilization, partially offset by higher production transfer costs in our ceramic capacitor business and unfavorable product mix.
Reworded paragraphs (44)
Previous wording
Revenues for the second quarter of 2026 were $166.8 million, compared with $145.9 million for the second quarter of 2025, an increase of $20.9 million or 14.3%. Precision Devices ("PD") revenues increased $19.8 million due to higher demand in the industrial, electrification, medtech, and defense markets, as well as higher average pricing. MedTech & Specialty Audio ("MSA") revenues increased $1.1 million, primarily due to higher shipping volumes into the hearing health market, partially offset by lower shipping volumes into the specialty audio market.
Current wording
Revenues for the third quarter of 2026 were $184.0 million, compared with $152.9 million for the third quarter of 2025, an increase of $31.1 million or 20.3%. Precision Devices ("PD") revenues increased $28.8 million due to higher demand in the electrification, industrial, defense, and medtech markets, as well as higher pricing. MedTech & Specialty Audio ("MSA") revenues increased $2.3 million, primarily due to higher shipping volumes into the hearing health market, partially offset by lower shipping volumes into the specialty audio market.
Previous wording
Cost of goods sold ("COGS") for the second quarter of 2026 was $92.1 million, compared with $81.7 million for the second quarter of 2025, an increase of $10.4 million or 12.7%. This increase was primarily due to higher shipping volumes, unfavorable product mix, and increased production transfer costs in our ceramic capacitor business.
Current wording
Cost of goods sold ("COGS") for the third quarter of 2026 was $102.2 million, compared with $82.8 million for the third quarter of 2025, an increase of $19.4 million or 23.4%. This increase was primarily due to higher shipping volumes, non-recurruing inventory adjustments, higher factory costs, unfavorable product mix, and increased production transfer costs in our ceramic capacitor business.
Previous wording
During the second quarter of 2026, we recorded restructuring charges of $0.1 million within Gross profit and $0.1 million within Operating expenses related primarily to headcount reductions within our PD segment. No restructuring charges were recorded during the second quarter of 2025. For additional information, refer to Note 8. Restructuring and Related Activities to our Consolidated Financial Statements.
Current wording
During the third quarter of 2026, we recorded restructuring charges of $0.5 million within Gross profit and $0.1 million within Operating expenses related primarily to headcount reductions within our PD segment. During the third quarter of 2025, we recorded restructuring charges of $0.3 million related primarily to headcount reductions across the Company to rightsize operations subsequent to the sale of CMM. For additional information, refer to Note 8. Restructuring and Related Activities to our Consolidated Financial Statements.
Previous wording
Gross profit for the second quarter of 2026 was $74.6 million, compared with $60.6 million for the second quarter of 2025, an increase of $14.0 million or 23.1%. Gross profit margin (gross profit as a percentage of revenues) for the second quarter of 2026 was 44.7%, compared with 41.5% for the second quarter of 2025. The increases in gross profit and gross profit margin were primarily due to higher shipping volumes, impairment charges in 2025 that did not recur in 2026, pricing, and increased factory capacity utilization, partially offset by unfavorable product mix and increased production transfer costs in our ceramic capacitor business.
Current wording
Gross profit for the third quarter of 2026 was $81.3 million, compared with $69.9 million for the third quarter of 2025, an increase of $11.4 million or 16.3%. Gross profit margin (gross profit as a percentage of revenues) for the third quarter of 2026 was 44.2%, compared with 45.7% for the third quarter of 2025. The increase in gross profit was primarily due to higher shipping volumes. The decrease in gross profit margin was primarily due to non-recurring inventory adjustments, higher factory costs, unfavorable product mix, and increased production transfer costs in our ceramic capacitor business, partially offset by higher pricing.
Previous wording
Non-GAAP gross profit for the second quarter of 2026 was $75.7 million, compared with $64.5 million for the second quarter of 2025, an increase of $11.2 million or 17.4%. Non-GAAP gross profit margin (non-GAAP gross profit as a percentage of revenues) for the second quarter of 2026 was 45.4% compared with 44.2% for the second quarter of 2025. The increases in non-GAAP gross profit and non-GAAP gross profit margin were primarily due to higher shipping volumes, pricing, and increased factory capacity utilization, partially offset by unfavorable product mix.
Current wording
Non-GAAP gross profit for the third quarter of 2026 was $83.3 million, compared with $70.7 million for the third quarter of 2025, an increase of $12.6 million or 17.8%. Non-GAAP gross profit margin (non-GAAP gross profit as a percentage of revenues) for the third quarter of 2026 was 45.3% compared with 46.2% for the third quarter of 2025. The increase in non-GAAP gross profit was primarily due to higher shipping volumes. The decrease in non-GAAP gross profit margin was primarily due to non-recurring inventory adjustments, higher factory costs, and unfavorable product mix, partially offset by higher pricing.
Previous wording
Research and development expenses for the second quarter of 2026 were $10.6 million, compared with $10.0 million for the second quarter of 2025, an increase of $0.6 million or 6.0%. Research and development expenses as a percentage of revenues for the second quarter of 2026 and 2025 were 6.4% and 6.9%, respectively. The increase in expenses was primarily driven by increased development activities related to new products and applications.
Current wording
Research and development expenses for the third quarter of 2026 were $11.1 million, compared with $10.0 million for the third quarter of 2025, an increase of $1.1 million or 11.0%. Research and development expenses as a percentage of revenues for the third quarter of 2026 and 2025 were 6.0% and 6.5%, respectively. The increase in expenses was primarily driven by increased development activities related to new products and applications.
Previous wording
Selling and administrative expenses for the second quarter of 2026 were $39.2 million, compared with $35.9 million for the second quarter of 2025, an increase of $3.3 million or 9.2%. Selling and administrative expenses as a percentage of revenues for the second quarter of 2026 and 2025 were 23.5% and 24.6%, respectively. The increase in expenses was primarily driven by higher commissions, an increase to our deferred compensation liability, higher incentive compensation, additional headcount within the PD segment to support future growth, and annual merit increases. The decrease in expenses as a percentage of revenues was driven by higher revenues.
Current wording
Selling and administrative expenses for the third quarter of 2026 were $39.4 million, compared with $34.0 million for the third quarter of 2025, an increase of $5.4 million or 15.9%. Selling and administrative expenses as a percentage of revenues for the third quarter of 2026 and 2025 were 21.4% and 22.2%, respectively. The increase in expenses was primarily driven by incentive compensation, stock-based compensation, sales commissions, additional headcount within the PD segment to support future growth, and annual merit increases. The decrease in expenses as a percentage of revenues was driven by higher revenues.
Previous wording
Interest expense for the second quarter of 2026 was $1.7 million, compared with $2.5 million for the second quarter of 2025, a decrease of $0.8 million. The decrease is primarily due to the absence of imputed interest expense in 2026 on our Seller Note from the CD acquisition, which was paid in full in 2025. For additional information on borrowings and interest expense, refer to Note 9. Borrowings to our Consolidated Financial Statements.
Current wording
Interest expense for the third quarter of 2026 was $1.6 million, compared with $2.3 million for the third quarter of 2025, a decrease of $0.7 million. The decrease is primarily due to the absence of imputed interest expense in 2026 on our Seller Note from the CD acquisition, which was paid in full in 2025. For additional information on borrowings and interest expense, refer to Note 9. Borrowings to our Consolidated Financial Statements.
Previous wording
Other expense for the second quarter of 2026 was $0.4 million, compared with expense of $0.9 million for the second quarter of 2025, a change of $0.5 million. Expense in 2026 and 2025 is primarily due to unfavorable foreign currency exchange rate changes, partially offset by unrealized gains in our investment balances.
Current wording
Other expense for the third quarter of 2026 was $1.3 million, compared with $1.2 million for the third quarter of 2025, a change of $0.1 million. Expense in 2026 is primarily due to unfavorable foreign currency exchange rate changes. Expense in 2025 is primarily due to unfavorable foreign currency exchange rate changes, partially offset by unrealized gains in our investment balances.
Previous wording
The effective tax rate ("ETR") from continuing operations for the second quarter of 2026 and 2025 was 18.6% and 31.0%, respectively. The ETR from continuing operations for the second quarter of 2026 and 2025 includes discrete items totaling $0.9 million of tax benefit and $0.1 million of tax expense, respectively. The discrete items impacting the tax provision for 2026 and 2025 are primarily attributable to stock-based compensation. Absent the discrete items, the ETR from continuing operations for the second quarter of 2026 and 2025 was 22.6% and 30.1%, respectively. The Company accrues taxes in various countries where it generates income and applies a valuation allowance in other jurisdictions, which resulted in the provision for the second quarter of 2026 and 2025. The change in the ETR from was due to the mix of earnings and losses by taxing jurisdictions and net discrete items, primarily stock-based compensation.
Current wording
The effective tax rate ("ETR") from continuing operations for the third quarter of 2026 and 2025 was 23.7% and 19.3%, respectively. The ETR from continuing operations for the third quarter of 2025 includes a discrete impact of $0.2 million of tax expense. The discrete items impacting the tax provision for 2025 are primarily attributable to stock-based compensation and the deferred tax impact of a tax rate change. Absent the discrete items, the ETR from continuing operations for the third quarter of 2025 was 18.4%. The Company accrues taxes in various countries where it generates income and applies a valuation allowance in other jurisdictions, which resulted in the provision for the third quarter of 2026 and 2025. The change in the ETR was due to the mix of earnings and losses by taxing jurisdictions.
Previous wording
The non-GAAP ETR from continuing operations for the second quarter of 2026 and 2025 was 16.9% and 15.9%, respectively. The non-GAAP ETR from continuing operations includes no discrete impact for the second quarter of 2026 or 2025. The change in the non-GAAP ETR was primarily due to decreased utilization of foreign tax credits and the mix of earnings and losses by taxing jurisdictions.
Current wording
The non-GAAP ETR from continuing operations for the third quarter of 2026 and 2025 was 18.6% and 10.2%, respectively. The non-GAAP ETR from continuing operations for the third quarter 2025 includes a discrete impact of $0.1 million of tax expense. Absent the discrete item, the non-GAAP ETR for the third quarter of 2025 was 9.9%. The change in the non-GAAP ETR was primarily due to a decreased utilization of foreign tax credits and the mix of earnings and losses by taxing jurisdictions.
Previous wording
Earnings from continuing operations before interest and income taxes ("EBIT") for the second quarter of 2026 was $24.3 million, compared with $13.8 million for the second quarter of 2025, an increase of $10.5 million. EBIT margin (EBIT as a percentage of revenues) for the second quarter of 2026 was 14.6%, compared with 9.5% for the second quarter of 2025. The increases in EBIT and EBIT margin were primarily due to higher gross profit, partially offset by higher operating expenses.
Current wording
Earnings from continuing operations before interest and income taxes ("EBIT") for the third quarter of 2026 was $29.4 million, compared with $24.6 million for the third quarter of 2025, an increase of $4.8 million. EBIT margin (EBIT as a percentage of revenues) for the third quarter of 2026 was 16.0%, compared with 16.1% for the third quarter of 2025. The increase in EBIT was primarily due to higher gross profit. The decrease in EBIT margin was primarily due to higher operating expenses, partially offset by higher revenues.
Previous wording
Adjusted earnings before interest and income taxes ("Adjusted EBIT") from continuing operations for the second quarter of 2026 was $36.1 million, compared with $27.7 million for the second quarter of 2025, an increase of $8.4 million. Adjusted EBIT margin (Adjusted EBIT from continuing operations as a percentage of revenues) for the second quarter of 2026 was 21.6%, compared with 19.0% for the second quarter of 2025. The increases in Adjusted EBIT and Adjusted EBIT margin were primarily due to higher non-GAAP gross profit, partially offset by higher non-GAAP operating expenses.
Current wording
Adjusted earnings before interest and income taxes ("Adjusted EBIT") from continuing operations for the third quarter of 2026 was $42.4 million, compared with $34.5 million for the third quarter of 2025, an increase of $7.9 million. Adjusted EBIT margin (Adjusted EBIT from continuing operations as a percentage of revenues) for the third quarter of 2026 was 23.0%, compared with 22.6% for the third quarter of 2025. The increases in Adjusted EBIT and Adjusted EBIT margin were primarily due to higher non-GAAP gross profit and higher revenues, partially offset by higher non-GAAP operating expenses.
Previous wording
Earnings from Discontinued Operations, net
Current wording
Earnings (Loss) from Discontinued Operations, net
Previous wording
We recorded earnings from discontinued operations of $1.0 million for the second quarter of 2026, which was driven by final adjustments to the CMM sale transaction. There was no activity for discontinued operations for the second quarter of 2025. For additional information, refer to Note 3. Discontinued Operations to our Consolidated Financial Statements.
Current wording
We recorded earnings from discontinued operations of $0.4 million for the third quarter of 2026 and a loss of $0.6 million for the third quarter of 2025, which were driven by updates to estimates regarding certain tax liabilities related to CMM's historical operations. For additional information, refer to Note 3. Discontinued Operations to our Consolidated Financial Statements.
Previous wording
Diluted earnings per share from continuing operations was$0.21 for the second quarter of 2026, compared with$0.09 for the second quarter of 2025, an improvementof $0.12. As described above, the improvement is primarily due to higher gross profit, partially offset by higher operating expenses.
Current wording
Diluted earnings per share from continuing operations was$0.24 for the third quarter of 2026, compared with$0.21 for the third quarter of 2025, an improvementof $0.03. As described above, the improvement is primarily due to higher gross profit, partially offset by higher operating expenses and income tax expense.
Previous wording
Revenues for the six months ended June 30, 2026 were $319.9 million, compared with $278.1 million for the six months ended June 30, 2025, an increase of $41.8 million or 15.0%. PD revenues increased $32.4 million due to higher demand in the industrial, electrification, defense, and medtech markets, as well as higher average pricing. MSA revenues increased $9.4 million, primarily due to higher shipping volumes into the hearing health market, partially offset by lower shipping volumes into the specialty audio market.
Current wording
Revenues for the nine months ended September 30, 2026 were $503.9 million, compared with $431.0 million for the nine months ended September 30, 2025, an increase of $72.9 million or 16.9%. PD revenues increased $61.2 million due to higher demand in the industrial, electrification, defense, and medtech markets, as well as higher pricing. MSA revenues increased $11.7 million, primarily due to higher shipping volumes into the hearing health market, partially offset by lower shipping volumes into the specialty audio market.
Previous wording
During the six months ended June 30, 2025, we recorded an impairment charge of $3.6 million to write down the carrying value of certain machinery and equipment to fair value. For additional information, refer to Note 1. Basis of Presentation to our Consolidated Financial Statements
Current wording
During the nine months ended September 30, 2025, we recorded an impairment charge of $3.6 million to write down the carrying value of certain machinery and equipment to fair value. For additional information, refer to Note 1. Basis of Presentation to our Consolidated Financial Statements.
Previous wording
During the six months ended June 30, 2026, we recorded restructuring charges of $0.2 million within Gross profit and $0.2 million within Operating expenses related primarily to headcount reductions within our PD segment.
Current wording
During the nine months ended September 30, 2026, we recorded restructuring charges of $0.7 million within Gross profit and $0.3 million within Operating expenses related primarily to headcount reductions within our PD segment.
Previous wording
During the six months ended June 30, 2025, we recorded restructuring charges of $0.5 million within Gross profit and $2.4 million within Operating expenses related to headcount reductions across the Company to rightsize operating expenses subsequent to the sale of the CMM business. For additional information, refer to Note 8. Restructuring and Related Activities to our Consolidated Financial Statements.
Current wording
During the nine months ended September 30, 2025, we recorded restructuring charges of $0.7 million within Gross profit and $2.5 million within Operating expenses primarily related to headcount reductions across the Company to rightsize operations subsequent to the sale of CMM. For additional information, refer to Note 8. Restructuring and Related Activities to our Consolidated Financial Statements.
Previous wording
Gross profit for the six months ended June 30, 2026 was $141.7 million, compared with $113.9 million for the six months ended June 30, 2025, an increase of $27.8 million or 24.4%. Gross profit margin for the six months ended June 30, 2026 was 44.3%, compared with 41.0% for the six months ended June 30, 2025. The increases in gross profit and gross profit margin were primarily due to higher shipping volumes, impairment charges in 2025 that did not recur in 2026, increased factory capacity utilization, pricing in the PD segment, and favorable product mix in our MSA segment, partially offset by higher production transfer costs in our ceramic capacitor business.
Current wording
Gross profit for the nine months ended September 30, 2026 was $223.0 million, compared with $183.8 million for the nine months ended September 30, 2025, an increase of $39.2 million or 21.3%. Gross profit margin for the nine months ended September 30, 2026 was 44.3%, compared with 42.6% for the nine months ended September 30, 2025. The increases in gross profit and gross profit margin were primarily due to higher shipping volumes, impairment charges in 2025 that did not recur in 2026, and higher pricing, partially offset by increased production transfer costs in our ceramic capacitor business and higher factory costs.
Previous wording
Research and development expenses for the six months ended June 30, 2026 were $22.3 million, compared with $19.7 million for the six months ended June 30, 2025, an increase of $2.6 million or 13.2%. Research and development expenses as a percentage of revenues for the six months ended June 30, 2026 and 2025 were 7.0% and 7.1%, respectively. The increase in expenses was primarily driven by increased development activities related to new products and applications.
Current wording
Research and development expenses for the nine months ended September 30, 2026 were $33.4 million, compared with $29.7 million for the nine months ended September 30, 2025, an increase of $3.7 million or 12.5%. Research and development expenses as a percentage of revenues for the nine months ended September 30, 2026 and 2025 were 6.6% and 6.9%, respectively. The increase in expenses was primarily driven by increased development activities related to new products and applications.
Previous wording
Selling and administrative expenses for the six months ended June 30, 2026 were $78.6 million, compared with $73.1 million for the six months ended June 30, 2025, an increase of $5.5 million or 7.5%. Selling and administrative expenses as a percentage of revenues for the six months ended June 30, 2026 and 2025 were 24.6% and 26.3%, respectively. The increase in expenses was primarily driven by higher commissions, additional headcount within the PD segment to support future growth, annual merit increases, higher incentive compensation, and a change in our deferred compensation liability. The decrease in expenses as a percentage of revenues was driven by higher revenues.
Current wording
Selling and administrative expenses for the nine months ended September 30, 2026 were $118.0 million, compared with $107.1 million for the nine months ended September 30, 2025, an increase of $10.9 million or 10.2%. Selling and administrative expenses as a percentage of revenues for the nine months ended September 30, 2026 and 2025 were 23.4% and 24.8%, respectively. The increase in expenses was primarily driven by incentive compensation, sales commissions, additional headcount within the PD segment to support future growth, annual merit increases, stock-based compensation, and travel. The decrease in expenses as a percentage of revenues was driven by higher revenues.
Previous wording
Interest expense for the six months ended June 30, 2026 was $3.2 million, compared with $5.2 million for the six months ended June 30, 2025, a decrease of $2.0 million. The decrease is primarily due to the absence of imputed interest expense in 2026 on our Seller Note from the CD acquisition, which was paid in full in 2025. For additional information on borrowings and interest expense, refer to Note 9. Borrowings to our Consolidated Financial Statements.
Current wording
Interest expense for the nine months ended September 30, 2026 was $4.8 million, compared with $7.5 million for the nine months ended September 30, 2025, a decrease of $2.7 million. The decrease is primarily due to the absence of imputed interest expense in 2026 on our Seller Note from the CD acquisition, which was paid in full in 2025. For additional information on borrowings and interest expense, refer to Note 9. Borrowings to our Consolidated Financial Statements.
Previous wording
Other expense for the six months ended June 30, 2026 was $3.8 million, compared with expense of $1.4 million for the six months ended June 30, 2025, a change of $2.4 million. Expense in 2026 and 2025 is primarily due to unfavorable foreign currency changes, partially offset by unrealized gains in our investment balances.
Current wording
Other expense for the nine months ended September 30, 2026 was $5.1 million, compared with $2.6 million for the nine months ended September 30, 2025, a change of $2.5 million. Expense in 2026 and 2025 is primarily due to unfavorable foreign currency changes, partially offset by unrealized gains in our investment balances.
Previous wording
The ETR from continuing operations for the six months ended June 30, 2026 and 2025 was 11.6% and 38.8%, respectively. The ETR from continuing operations for the six months ended June 30, 2026 and 2025 includes discrete items totaling $4.7 million and $0.3 million of tax benefit, respectively. The discrete items impacting the tax benefit and provision for 2026 and 2025 are primarily attributable to stock-based compensation. Absent the discrete items, the ETR from continuing operations for the six months ended June 30, 2026 and 2025 was 25.6% and 41.3%, respectively. The Company accrues taxes in various countries where it generates income and applies a valuation allowance in other jurisdictions, which resulted in the provision for the six months ended June 30, 2026 and 2025. The change in the ETR was due to the mix of earnings and losses by taxing jurisdictions and net discrete items, primarily stock-based compensation.
Current wording
The ETR from continuing operations for the nine months ended September 30, 2026 and 2025 was 17.1% and 26.2%, respectively. The ETR from continuing operations for the nine months ended September 30, 2026 and 2025 includes discrete items totaling $4.7 million and $0.1 million of tax benefit, respectively. The discrete items impacting the tax benefit and provision for 2026 and 2025 are primarily attributable to stock-based compensation. Absent the discrete items, the ETR from continuing operations for the nine months ended September 30, 2026 and 2025 was 24.8% and 26.5%, respectively. The Company accrues taxes in various countries where it generates income and applies a valuation allowance in other jurisdictions, which resulted in the provision for the nine months ended September 30, 2026 and 2025. The change in the ETR was due to the mix of earnings and losses by taxing jurisdictions and net discrete items, primarily stock-based compensation.
Previous wording
The non-GAAP ETR from continuing operations for the six months ended June 30, 2026 and 2025 was 16.8% and 15.4%, respectively. The non-GAAP ETR from continuing operations includes discrete items totaling $0.1 million of tax benefit and no discrete impact for the six months ended June 30, 2026 and 2025, respectively. Absent the discrete items, the non-GAAP ETR from continuing operations for six months ended June 30, 2026 and 2025 was 17.0% and 15.4%, respectively. The change in the non-GAAP ETR was primarily due to decreased utilization of foreign tax credits and the mix of earnings and losses by taxing jurisdictions.
Current wording
The non-GAAP ETR from continuing operations for the nine months ended September 30, 2026 and 2025 was 17.5% and 13.2%, respectively. The non-GAAP ETR from continuing operations includes discrete items totaling $0.1 million of tax benefit and $0.1 million of tax expense for the nine months ended September 30, 2026 and 2025, respectively. Absent the discrete items, the non-GAAP ETR from continuing operations for nine months ended September 30, 2026 and 2025 was 17.6% and 13.1%, respectively. The change in the non-GAAP ETR was primarily due to a decreased utilization of foreign tax credits and the mix of earnings and losses by taxing jurisdictions.
Previous wording
Earnings from continuing operations for the six months ended June 30, 2026 was $29.7 million, compared to $7.4 million for the six months ended June 30, 2025, an improvement of $22.3 million. As described above, the improvement is primarily due to higher gross profit, lower interest expense, and lower income tax expense, partially offset by higher operating expenses and higher other expense.
Current wording
Earnings from continuing operations for the nine months ended September 30, 2026 was $50.9 million, compared to $25.4 million for the nine months ended September 30, 2025, an improvement of $25.5 million. As described above, the improvement is primarily due to higher gross profit, partially offset by higher operating expenses.
Previous wording
Earnings from continuing operations before interest and income taxes for the six months ended June 30, 2026 was $36.8 million, compared with $17.3 million for the six months ended June 30, 2025, an increase of $19.5 million. EBIT margin for the six months ended June 30, 2026 was 11.5%, compared with 6.2% for the six months ended June 30, 2025. The increases in EBIT and EBIT margin were primarily due to higher gross profit, partially offset by higher operating expenses.
Current wording
Earnings from continuing operations before interest and income taxes for the nine months ended September 30, 2026 was $66.2 million, compared with $41.9 million for the nine months ended September 30, 2025, an increase of $24.3 million. EBIT margin for the nine months ended September 30, 2026 was 13.1%, compared with 9.7% for the nine months ended September 30, 2025. The increases in EBIT and EBIT margin were primarily due to higher gross profit, partially offset by higher operating expenses.
Previous wording
We recorded a loss from discontinued operations of $0.6 million for the six months ended June 30, 2026 and a loss of $1.6 million for the six months ended June 30, 2025. The loss from discontinued operations for the six months ended June 30, 2026 was driven by updates to estimates regarding certain tax liabilities related to CMM's historical operations, partially offset by final adjustments to the CMM sale transaction. The loss from discontinued operations for the six months ended June 30, 2025 was primarily driven by unfavorable working capital adjustments for the disposal of CMM. For additional information, refer to Note 3. Discontinued Operations to our Consolidated Financial Statements.
Current wording
We recorded a loss from discontinued operations of $0.2 million and $2.2 million for the nine months ended September 30, 2026 and 2025, respectively. The loss from discontinued operations for the nine months ended September 30, 2026 was driven by updates to estimates regarding certain tax liabilities related to CMM's historical operations, partially offset by final adjustments to the CMM sale transaction. The loss from discontinued operations for the nine months ended September 30, 2025 was primarily driven by unfavorable working capital adjustments for the disposal of CMM. For additional information, refer to Note 3. Discontinued Operations to our Consolidated Financial Statements.
Previous wording
(4) Other expenses include foreign currency exchange rate impacts on restructuring balances. Other expenses for the three and six months ending June 30, 2026 also includes foreign currency exchange rate adjustments related to certain balances retained subsequent to the disposal of CMM; these adjustments were not deemed material for 2025 periods.
Current wording
(4) Other expenses include foreign currency exchange rate impacts on restructuring balances. Other expenses in 2026 also include foreign currency exchange rate adjustments related to certain balances retained subsequent to the disposal of CMM; these adjustments were not deemed material for 2025 periods.
Previous wording
PD revenues were $98.3 million for the second quarter of 2026, compared with $78.5 million for the second quarter of 2025, an increase of $19.8 million or 25.2%. Revenues increaseddue to higher demand in the industrial, electrification, medtech, and defense markets, as well as higher average pricing.
Current wording
PD revenues were $117.0 million for the third quarter of 2026, compared with $88.2 million for the third quarter of 2025, an increase of $28.8 million or 32.7%. Revenues increaseddue to higher demand in the electrification, industrial, defense, and medtech markets, as well as higher pricing.
Previous wording
MSA revenues were $68.5 million for the second quarter of 2026, compared with $67.4 million for the second quarter of 2025, an increase of $1.1 million or 1.6%. Revenues increased primarily due to higher shipping volumes into the hearing health market, partially offset by lower shipping volumes into the specialty audio market.
Current wording
MSA revenues were $67.0 million for the third quarter of 2026, compared with $64.7 million for the third quarter of 2025, an increase of $2.3 million or 3.6%. Revenues increased primarily due to higher shipping volumes into the hearing health market, partially offset by lower shipping volumes into the specialty audio market.
Previous wording
PD revenues were $183.4 million for the six months ended June 30, 2026, compared with $151.0 million for the six months ended June 30, 2025, an increase of $32.4 million or 21.5%. Revenues increased due to higher demand in the industrial, electrification, defense, and medtech markets, as well as higher average pricing.
Current wording
PD revenues were $300.4 million for the nine months ended September 30, 2026, compared with $239.2 million for the nine months ended September 30, 2025, an increase of $61.2 million or 25.6%. Revenues increased due to higher demand in the industrial, electrification, defense, and medtech markets, as well as higher pricing.
Previous wording
PD Adjusted EBIT was $35.4 million for the six months ended June 30, 2026, compared with $24.6 million for the six months ended June 30, 2025, an increase of $10.8 million. Adjusted EBIT margin for the six months ended June 30, 2026 was 19.3%, compared with 16.3% for the six months ended June 30, 2025. The increases were due to higher non-GAAP gross profit, partially offset by higher non-GAAP operating expenses driven by higher commissions, additional headcount to support future growth, and higher incentive compensation. The non-GAAP gross profit increase was driven by higher shipping volumes, pricing, and increased factory capacity utilization, partially offset by unfavorable product mix.
Current wording
PD Adjusted EBIT was $64.1 million for the nine months ended September 30, 2026, compared with $44.8 million for the nine months ended September 30, 2025, an increase of $19.3 million. Adjusted EBIT margin for the nine months ended September 30, 2026 was 21.3%, compared with 18.7% for the nine months ended September 30, 2025. The increases were due to higher non-GAAP gross profit, partially offset by higher non-GAAP operating expenses driven by additional headcount to support future growth, sales commissions, and incentive compensation. The non-GAAP gross profit increase was driven by higher shipping volumes and pricing, partially offset by unfavorable product mix and higher factory costs.
Previous wording
MSA revenues were $136.5 million for the six months ended June 30, 2026, compared with $127.1 million for the six months ended June 30, 2025, an increase of $9.4 million or 7.4%. Revenues increased primarily due to higher shipping volumes into the hearing health market, partially offset by lower shipping volumes into the specialty audio market.
Current wording
MSA revenues were $203.5 million for the nine months ended September 30, 2026, compared with $191.8 million for the nine months ended September 30, 2025, an increase of $11.7 million or 6.1%. Revenues increased primarily due to higher shipping volumes into the hearing health market, partially offset by lower shipping volumes into the specialty audio market.
Previous wording
MSA EBIT was $52.3 million for the six months ended June 30, 2026, compared with $40.3 million for the six months ended June 30, 2025, an increase of $12.0 million. EBIT margin for the six months ended June 30, 2026 was 38.3%, compared with 31.7% for the six months ended June 30, 2025. The increases in EBIT and EBIT margin were primarily due to higher gross profit, partially offset by higher operating expense driven by higher incentive compensation. The increase in gross profit was driven by higher shipping volumes, impairment charges in 2025 that did not recur in 2026, favorable product mix, and increased factory capacity utilization, partially offset by lower average pricing.
Current wording
MSA EBIT was $76.4 million for the nine months ended September 30, 2026, compared with $65.3 million for the nine months ended September 30, 2025, an increase of $11.1 million. EBIT margin for the nine months ended September 30, 2026 was 37.5%, compared with 34.0% for the nine months ended September 30, 2025. The increases in EBIT and EBIT margin were primarily due to higher gross profit, partially offset by higher operating expense driven by incentive compensation. The increase in gross profit was driven by higher shipping volumes, impairment charges in 2025 that did not recur in 2026, and favorable product mix, partially offset by higher factory costs and lower pricing.
Previous wording
MSA Adjusted EBIT was $55.3 million for the six months ended June 30, 2026, compared with $47.4 million for the six months ended June 30, 2025, an increase of $7.9 million. Adjusted EBIT margin for the six months ended June 30, 2026 was 40.5%, compared to 37.3% for the six months ended June 30, 2025. The increases in adjusted EBIT and adjusted EBIT margin were primarily due to higher non-GAAP gross profit, partially offset by higher non-GAAP operating expense driven by higher incentive compensation. The increase in gross profit was driven by higher shipping volumes, favorable product mix, and increased factory capacity utilization, partially offset by lower average pricing.
Current wording
MSA Adjusted EBIT was $81.1 million for the nine months ended September 30, 2026, compared with $73.6 million for the nine months ended September 30, 2025, an increase of $7.5 million. Adjusted EBIT margin for the nine months ended September 30, 2026 was 39.9%, compared to 38.4% for the nine months ended September 30, 2025. The increases in adjusted EBIT and adjusted EBIT margin were primarily due to higher non-GAAP gross profit, partially offset by higher non-GAAP operating expense driven by incentive compensation. The increase in gross profit was driven by higher shipping volumes and favorable product mix, partially offset by higher factory costs and lower pricing.
Previous wording
On December 27, 2024, we completed the sale of CMM to Syntiant for approximately $140.8 million in total consideration, consisting of $63.6 million in cash ($58.0 million net of cash sold) and Syntiant Series D-2 preferred stock with a fair value of $77.2 million. For additional information, refer to Note 3. Discontinued Operations to our Consolidated Financial Statements. The Company shares in certain separation costs pursuant to a credit for up to $13.5 million that Syntiant may apply to specified separation costs post-closing. For additional information, refer to Note 1. Basis of Presentation.
Current wording
On December 27, 2024, we completed the sale of CMM to Syntiant for approximately $140.8 million in total consideration, consisting of $63.6 million in cash ($58.0 million net of cash sold) and Syntiant Series D-2 preferred stock with a fair value of $77.2 million. For additional information, refer to Note 3. Discontinued Operations to our Consolidated Financial Statements. The Company shared in certain separation costs pursuant to a credit for up to $13.5 million that Syntiant applied to specified separation costs post-closing. For additional information, refer to Note 1. Basis of Presentation.
Previous wording
On February 24, 2020, we announced that our Board of Directors had authorized a share repurchase program of up to $100.0 million of our common stock. On April 28, 2022, we announced that our Board of Directors had increased the authorization by up to $150.0 million in additional aggregate value. On February 13, 2025, the Company announced another authorization increase of up to $150.0 million in additional aggregate value, for a total of $400.0 million of aggregate value. At June 30, 2026, we have $106.5 million remaining that may yet be repurchased under our share repurchase program. The timing and amount of any shares repurchased will be determined by us based on our evaluation of market conditions and other factors, and will be made in accordance with applicable securities laws in either the open market or in privately negotiated transactions. We are not obligated to purchase any shares under the program, and the program may be suspended or discontinued at any time. Any shares repurchased will be held as treasury stock. During the six months ended June 30, 2026 and 2025, the Company repurchased 692,369 and 2,182,462 shares of common stock, respectively, for a total of $22.5 million and $35.0 million, respectively.
Current wording
We maintain a share repurchase program, that was initially approved by the Board of Directors in February 2020, authorizing the repurchase of up to $100.0 million of our common stock. The share repurchase program does not have an expiration date, and the Board of Directors has authorized the expansion of the program over the years. The authorization was increased by $150.0 million in April 2022, and increased by an additional $150.0 million in February 2025, for a total of $400.0 million in aggregate value. At September 30, 2026, we have $81.5 million remaining that may yet be repurchased under our share repurchase program. The timing and amount of any shares repurchased will be determined by us based on our evaluation of market conditions and other factors, and will be made in accordance with applicable securities laws in either the open market or in privately negotiated transactions. We are not obligated to purchase any shares under the program, and the program may be suspended or discontinued at any time. Any shares repurchased will be held as treasury stock. During the nine months ended September 30, 2026 and 2025, the Company repurchased 1,387,421 and 3,120,574 shares of common stock, respectively, for a total of $47.5 million and $55.0 million, respectively.
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Previous report — wording carried elsewhere
During the second quarter of 2025, we recorded an impairment charge of $3.6 million to write down the carrying value of certain machinery and equipment to fair value. For additional information, refer to Note 1. Basis of Presentation to our Consolidated Financial Statements.