# Knowles Corp (KN)

Informational only - not investment advice.

CIK: 0001587523
SIC: 3651 Household Audio & Video Equipment
SIC breadcrumb: [Manufacturing](/division/D/) > [Electronic And Other Electrical Equipment And Components, Except Computer Equipment](/major-group/36/) > [SIC 3651 Household Audio & Video Equipment](/industry/3651/)
Latest 10-K filed: 2026-02-09
SEC page: https://www.sec.gov/edgar/browse/?CIK=1587523
Filing source: https://www.sec.gov/Archives/edgar/data/1587523/000158752326000005/kn-20251231.htm

## At a glance

FY2025 · period end 2025-12-31 · filed 2026-02-09 · accession 0001587523-26-000005 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001587523.json

| Metric | Value | FY | Provenance |
| --- | ---: | ---: | --- |
| Revenue | 593,200,000 USD | 2025 | verified |
| Net income | 44,200,000 USD | 2025 | verified |
| Assets | 1,051,100,000 USD | 2025 | verified |
| Net margin | 7.45% | 2025 | computed |
| Operating margin | 11.85% | 2025 | computed |
| Revenue YoY | +7.17% | 2025 | computed |
| ROE | 5.70% | 2025 | computed |

Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity.

No market price, no rating, no forecast on this site. Not investment advice.

### Peer percentile fingerprint

| Ratio | KN | Peer median | Percentile | N |
| --- | ---: | ---: | ---: | ---: |
| Net margin | 7.5% | 4.4% | 59 | 135 |
| Operating margin | 11.9% | 4.4% | 68 | 128 |
| Revenue growth | 7.2% | 10.2% | 42 | 142 |
| ROE | 5.7% | 5.4% | 51 | 136 |
| ROA | 4.2% | 2.7% | 56 | 143 |
| Liabilities / equity | 0.35 | 0.81 | 26 | 138 |
| Current ratio | 2.75 | 2.59 | 58 | 144 |

Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC major-group 36 Electronic And Other Electrical Equipment And Components, Except Computer Equipment, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.

## Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
| --- | ---: | --- | ---: | --- |
| Revenue | 593200000 | USD | 2025 | 2026-02-09 |
| Net income | 44200000 | USD | 2025 | 2026-02-09 |
| Assets | 1051100000 | USD | 2025 | 2026-02-09 |

## Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-09. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001587523.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Revenue | 755,700,000 | 744,200,000 | 826,900,000 | 854,800,000 | 764,300,000 | 868,100,000 | 478,800,000 | 456,800,000 | 553,500,000 | 593,200,000 |
| Net income | -42,300,000 | 68,300,000 | 67,700,000 | 49,100,000 | 6,600,000 | 150,400,000 | -430,100,000 | 72,400,000 | -237,800,000 | 44,200,000 |
| Operating income | 45,000,000 | 39,900,000 | 77,800,000 | 81,200,000 | 29,200,000 | 115,800,000 | 90,800,000 | 43,400,000 | 51,800,000 | 70,300,000 |
| Gross profit | 295,700,000 | 286,000,000 | 322,600,000 | 328,000,000 | 271,200,000 | 359,500,000 | 227,000,000 | 203,800,000 | 234,800,000 | 256,300,000 |
| Diluted EPS | -0.47 | 0.75 | 0.74 | 0.53 | 0.07 | 1.59 | -4.63 | 0.79 | -2.64 | 0.50 |
| Capital expenditures | 38,700,000 | 51,600,000 | 80,100,000 | 41,200,000 | 31,900,000 | 48,600,000 | 32,100,000 | 16,900,000 | 13,600,000 | 32,100,000 |
| Share buybacks |  |  | 0.00 | 0.00 | 16,200,000 | 44,500,000 | 44,000,000 | 47,500,000 | 53,700,000 | 65,000,000 |
| Assets | 1,515,000,000 | 1,549,800,000 | 1,547,900,000 | 1,654,600,000 | 1,654,900,000 | 1,731,600,000 | 1,183,900,000 | 1,462,800,000 | 1,118,200,000 | 1,051,100,000 |
| Stockholders' equity | 1,008,400,000 | 1,132,100,000 | 1,211,600,000 | 1,288,500,000 | 1,303,500,000 | 1,459,500,000 | 992,900,000 | 1,034,100,000 | 756,000,000 | 775,800,000 |
| Cash and cash equivalents | 63,400,000 | 111,700,000 | 73,500,000 | 78,400,000 | 147,800,000 | 68,900,000 | 48,200,000 | 87,300,000 | 130,100,000 | 54,200,000 |

### Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Net margin | -5.60% | 9.18% | 8.19% | 5.74% | 0.86% | 17.33% | -89.83% | 15.85% | -42.96% | 7.45% |
| Operating margin | 5.95% | 5.36% | 9.41% | 9.50% | 3.82% | 13.34% | 18.96% | 9.50% | 9.36% | 11.85% |
| Return on equity | -4.19% | 6.03% | 5.59% | 3.81% | 0.51% | 10.30% | -43.32% | 7.00% | -31.46% | 5.70% |
| Return on assets | -2.79% | 4.41% | 4.37% | 2.97% | 0.40% | 8.69% | -36.33% | 4.95% | -21.27% | 4.21% |
| Liabilities / equity | 0.50 | 0.37 | 0.28 | 0.28 | 0.27 | 0.19 | 0.19 | 0.41 | 0.48 | 0.35 |
| Current ratio | 2.20 | 2.60 | 2.57 | 2.56 | 1.41 | 2.29 | 3.66 | 2.61 | 1.83 | 2.75 |

## As-reported value updates

10 tracked differences above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period.

Ledger: /company/KN/revisions/


## Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-28. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001587523.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

| Quarter | End date | Revenue | Net income | Diluted EPS | Method |
| --- | --- | ---: | ---: | ---: | --- |
| 2022-Q2 | 2022-06-30 |  |  | -2.64 | reported discrete quarter |
| 2022-Q3 | 2022-09-30 |  |  | 0.03 | reported discrete quarter |
| 2023-Q1 | 2023-03-31 |  |  | -0.06 | reported discrete quarter |
| 2023-Q2 | 2023-06-30 | 173,000,000 | 13,600,000 | 0.15 | reported discrete quarter |
| 2023-Q3 | 2023-09-30 | 175,100,000 | 16,600,000 | 0.18 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 215,200,000 | 47,400,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2024-Q1 | 2024-03-31 | 196,400,000 | 2,500,000 | 0.03 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 204,700,000 | -259,300,000 | -2.90 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 142,500,000 | 500,000 | 0.01 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 142,500,000 | 18,500,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2025-Q1 | 2025-03-31 | 132,200,000 | -2,000,000 | -0.02 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 145,900,000 | 7,800,000 | 0.09 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 152,900,000 | 17,400,000 | 0.20 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 162,200,000 | 21,000,000 |  | derived Q4 = FY annual - nine-month YTD |
| 2026-Q1 | 2026-03-31 | 153,100,000 | 9,700,000 | 0.11 | reported discrete quarter |

## Filed narrative (10-K & 10-Q)

## Business

Verbatim Item 1 Business section from KN's latest 10-K: [/company/KN/business/](/company/KN/business/).

## Risk Factors

Verbatim Item 1A Risk Factors from KN's latest 10-K: [/company/KN/risk-factors/](/company/KN/risk-factors/).

## Latest quarter (10-Q)

Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1587523/000158752326000030/kn-20260630.htm

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high
Filing date: 2026-07-28
Report date: 2026-06-30

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related Notes included elsewhere in this Quarterly Report on Form 10-Q.

Overview

We are a leading manufacturer of specialty electronic components. We design parts that perform unique and critical functions for innovative technologies. Through extreme reliability, custom engineering, and scalable manufacturing, we enable businesses to succeed in the most demanding applications across medtech, defense, industrial, and electrification markets. Our high performance capacitors, radio frequency ("RF") filters, advanced medtech microphones, and balanced armature speakers enable and enhance the performance of technologies with the power to change, improve, and save lives. Our focus on the customer, combined with unique technology, proprietary manufacturing techniques, and global operational expertise, enables us to deliver customized solutions across multiple applications. References to "Knowles," the "Company," "we," "our," or "us" refer to Knowles Corporation and its consolidated subsidiaries, unless the context otherwise requires.

We sell our products directly to original equipment manufacturers ("OEMs") and to their contract manufacturers and suppliers and through distributors worldwide.

Recent Developments

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.

Non-GAAP Financial Measures

In addition to the GAAP financial measures included in this item, we have presented certain non-GAAP financial measures. We use non-GAAP measures as supplements to our GAAP results of operations in evaluating certain aspects of our business, and our executive management team and Board of Directors focus on non-GAAP items as key measures of our performance for business planning purposes. These measures assist us in comparing our performance between various reporting periods on a consistent basis, as these measures remove from operating results the impact of items that, in our opinion, do not reflect our core operating performance. We believe that our presentation of non-GAAP financial measures is useful because it provides investors and securities analysts with the same information that we use internally for purposes of assessing our core operating performance. The Company does not consider these non-GAAP financial measures to be a substitute for the information provided by GAAP financial results. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, see the reconciliation included herein.

Results of Operations for the Three Months Ended June 30, 2026 compared with the Three Months Ended June 30, 2025

[[GREPCENT_TABLE]]
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[[/GREPCENT_TABLE]]

Revenues

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.

Cost of Goods Sold

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.

Impairment Charges

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.

Restructuring Charges

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.

Gross Profit and Non-GAAP Gross Profit

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.

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.

Research and Development Expenses

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.

Selling and Administrative Expenses

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.

Interest Expense, net

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.

Other Expense, net

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.

Provision for Income Taxes and Non-GAAP Provision for Income Taxes

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.

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.

Earnings from Continuing Operations

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.

Earnings and Adjusted Earnings from Continuing Operations Before Interest and Income Taxes

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.

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 2

[Excerpt truncated for page length; source filing is linked above.]

## Latest 10-K MD&A (excerpt)

Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/1587523/000158752326000005/kn-20251231.htm
Complete FY 2025 MD&A: /company/KN/mda/fy2025/

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture.
Confidence: high
Filing date: 2026-02-09
Report date: 2025-12-31

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The discussion and analysis presented below refer to and should be read in conjunction with our audited Consolidated Financial Statements and related notes under Item 8. "Financial Statements and Supplementary Data." The following discussion contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those made, projected, or implied in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Form 10-K, particularly in “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements.”

Management’s discussion and analysis, which we refer to as “MD&A,” of our results of operations, financial condition, and cash flows should be read together with the audited Consolidated Financial Statements and accompanying notes included under Item 8. "Financial Statements and Supplementary Data," to provide an understanding of our financial condition, changes in financial condition, and results of our operations. We believe the assumptions underlying the Consolidated Financial Statements are reasonable. However, the Consolidated Financial Statements included herein may not necessarily reflect our results of operations, financial position, and cash flows in the future.

Our Business

We are a leading manufacturer of specialty electronic components. We design parts that perform unique and critical functions for innovative technologies. Through extreme reliability, custom engineering, and scalable manufacturing, we enable businesses to succeed in the most demanding applications across medtech, defense, industrial, and electrification/energy markets. Our high performance capacitors, radio frequency ("RF") filters, advanced medtech microphones, and balanced armature speakers enable and enhance the performance of technologies with the power to change, improve, and save lives. Our focus on the customer, combined with unique technology, proprietary manufacturing techniques, and global operational expertise, enables us to deliver customized solutions across multiple applications. References to "Knowles," the "Company," "we," "our," or "us" refer to Knowles Corporation and its consolidated subsidiaries, unless the context otherwise requires.

We sell our products directly to original equipment manufacturers ("OEMs") and to their contract manufacturers and suppliers and through distributors worldwide.

Recent Developments

In May 2025, we held an investor day to announce the progress that we have made on our transformation into a premier industrial technology company. Our strategic plan over the last five years was deliberate and paced, starting with a significant shift in investing in research and development and capital expenditures on core technologies. This resulted in a reduction in investment in the consumer market, and an increased investment in our MSA and PD segments. We have aligned our product profile toward the medtech, defense, industrial, and electrification/energy markets, where we see favorable trends. As we focus on what we do best, designing custom engineered products and delivering them at scale for customers and markets that value our solutions, we believe that we are well-positioned for future growth.

Our Business Segments

At December 31, 2025, we had two reporting segments: (i) PD and (ii) MSA. These segments were determined in accordance with Financial Accounting Standards Board Accounting Standards Codification 280 - Segment Reporting. These segments are aligned around similar product applications serving our key end markets to enhance focus on end market growth strategies.

•PD Segment

Our PD segment specializes in the custom design and delivery of high performance capacitor products and RF solutions primarily serving the defense, industrial, medtech, and electrification/energy markets. PD has sales, support, and engineering facilities in North America, Europe, and Asia as well as manufacturing facilities in North America and Asia.

22

Table of Contents

•MSA Segment

Our MSA segment designs and manufactures balanced armature speakers and microphones used in hearing health and specialty audio applications that serve the medtech and industrial markets. MSA has sales, support, and engineering facilities in North America, Europe, and Asia, as well as manufacturing facilities in Asia.

Non-GAAP Financial Measures

In addition to the generally accepted accounting principles ("GAAP") financial measures included in this item, we have presented certain non-GAAP financial measures. We use non-GAAP measures as supplements to our GAAP results of operations in evaluating certain aspects of our business, and our executive management team and Board of Directors focus on non-GAAP items as key measures of our performance for business planning purposes. These measures assist us in comparing our performance between various reporting periods on a consistent basis, as these measures remove from operating results the impact of items that, in our opinion, do not reflect our core operating performance. We believe that our presentation of non-GAAP financial measures is useful because it provides investors and securities analysts with the same information that we use internally for purposes of assessing our core operating performance. The Company does not consider these non-GAAP financial measures to be a substitute for the information provided by GAAP financial results. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, see the reconciliation included herein.

23

Table of Contents

Results of Operations

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[[/GREPCENT_TABLE]]

Revenues

Revenues for the year ended December 31, 2025 were $593.2 million, compared with $553.5 million for the year ended December 31, 2024, an increase of $39.7 million or 7.2%. PD revenues increased $28.9 million due to higher demand from the medtech, defense, electrification/energy, and industrial markets, as well as higher average pricing. MSA revenues increased $10.8 million, primarily due to higher shipping volumes of metal cans that we manufacture and sell to Syntiant as part of our supply agreement associated with the sale of CMM, and higher shipping volumes into the specialty audio market, partially offset by lower average pricing on mature products.

Cost of Goods Sold

Cost of goods sold ("COGS") for the year ended December 31, 2025 was $332.5 million, compared with $316.8 million for the year ended December 31, 2024, an increase of $15.7 million or 5.0%. This increase was primarily due to higher shipping volumes, unfavorable product mix, and lower than expected yields in our CD business as we ramped up our specialty film product line, partially offset by company-wide product cost reductions, increased factory capacity utilization in our ceramic capacitor and RF filter businesses, a reduction of CD-related acquisition and production transfer costs, and lower precious metal costs.

Impairment Charges

During the year ended December 31, 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. Summary of Significant Accounting Policies to our Consolidated Financial Statements.

Restructuring Charges

During the year ended December 31, 2025, we recorded restructuring charges of $0.8 million within Gross profit and $3.0 million within Operating expenses, primarily related to headcount reductions across the Company to rightsize operating expenses subsequent to the sale of CMM. For additional information, refer to Note 9. Restructuring and Related Activities to our Consolidated Financial Statements.

24

Table of Contents

During the year ended December 31, 2024, we recorded restructuring charges of $2.0 million related to headcount reductions and $1.4 million for costs associated with transferring certain capacitors manufacturing to existing facilities to further optimize operations within our PD segment. These actions resulted in restructuring charges of $1.9 million within Gross profit and $1.5 million within Operating expenses. For additional information, refer to Note 9. Restructuring and Related Activities to our Consolidated Financial Statements.

Gross Profit and Non-GAAP Gross Profit

Gross profit for the year ended December 31, 2025 was $256.3 million, compared with $234.8 million for the year ended December 31, 2024, an increase of $21.5 million or 9.2%. Gross profit margin (gross profit as a percentage of revenues) for the year ended December 31, 2025 was 43.2%, compared with 42.4% for the year ended December 31, 2024. The increase in gross profit and gross profit margin were primarily due to higher shipping volumes, company-wide product cost reductions, increased factory capacity utilization in our ceramic capacitor and RF filter businesses, a reduction of CD-related acquisition and production transfer costs, higher average pricing in PD, and lower precious metal costs, partially offset by unfavorable product mix, lower-than-expected yields in our CD business as we ramped up our specialty film product line, lower average pricing on mature products in the MSA business, and impairment charges in 2025.

Non-GAAP gross profit for the year ended December 31, 2025 was $263.7 million, compared with $245.4 million for the year ended December 31, 2024, an increase of $18.3 million or 7.5%. Non-GAAP gross profit margin (non-GAAP gross profit as a percentage of revenues) for the year ended December 31, 2025 was 44.5%, compared with 44.3% for the year ended December 31, 2024. The increases in non-GAAP gross profit and non-GAAP gross profit margin were primarily due to higher shipping volumes, company-wide product cost reductions, increased factory capacity utilization in our ceramic capacitor and RF filter businesses, higher average pricing in PD, and lower precious metal costs, partially offset by unfavorable product mix, lower-than-expected yields in our CD business as we ramped up our specialty film product line, and lower average pricing on mature products in the MSA business.

Research and Development Expenses

Research and development expenses for the years ended December 31, 2025 and 2024 were $40.2 million and $39.5 million, respectively, an increase of $0.7 million or 1.8%. Research and development expenses as a percentage of revenues for the years ended December 31, 2025 and 2024 was 6.8% and 7.1%. The increase in expenses was primarily driven by increased development activities as we

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]

Read the full FY 2025 MD&A: /company/KN/mda/fy2025/
All MD&A years: /company/KN/mda/


## MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.

- [FY 2024 MD&A](/company/KN/mda/fy2024/): filed 2025-02-13; accession 0001587523-25-000010 (https://www.sec.gov/Archives/edgar/data/1587523/000158752325000010/kn-20241231.htm)
- [FY 2023 MD&A](/company/KN/mda/fy2023/): filed 2024-02-21; accession 0001587523-24-000017 (https://www.sec.gov/Archives/edgar/data/1587523/000158752324000017/kn-20231231.htm)
- [FY 2022 MD&A](/company/KN/mda/fy2022/): filed 2023-02-09; accession 0001587523-23-000021 (https://www.sec.gov/Archives/edgar/data/1587523/000158752323000021/kn-20221231.htm)
- [FY 2021 MD&A](/company/KN/mda/fy2021/): filed 2022-02-09; accession 0001587523-22-000005 (https://www.sec.gov/Archives/edgar/data/1587523/000158752322000005/kn-20211231.htm)




## Macro cross-references

Indicators mapped to this company's SIC classification (industry 3651 Household Audio & Video Equipment) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim.

- [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index
- [TCU](/indicator/TCU/): Capacity Utilization: Total Index
- [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities
- [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product
- [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate
- [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private
- [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm

Macro-to-micro threads including this sector: [Inflation (CPI / PCE / PPI)](/thread/inflation-cpi-pce-ppi/), [US labor market](/thread/us-labor-market/), [Growth & output](/thread/growth-output/), [Money & trade](/thread/money-trade/), [Government finances](/thread/government-finances/), [Sector employment](/thread/sector-employment/), [Industrial orders & inventories](/thread/industrial-orders/), [Trade & external](/thread/trade-external/).

All macro indicators: /indicators/


## For LLMs & downloads

Markdown twin: /company/KN.md · JSON record: /company/KN.json · verified financials: /company/KN/financials.json / /company/KN/financials.csv · machine TOC for the whole site: /llms.txt