Knowles Corporation (KN) reported a 20% year-over-year increase in trailing twelve-month EBITDA to $132.6 million, as the electronics components manufacturer accelerates its portfolio shift toward high-margin segments. Speaking at the 17th Annual Midwest IDEAS Conference on August 26, 2026, CEO Jeff Niew outlined a strategy aimed at pushing EBITDA margins from the current mid-20% range to 30% over the next 36 months.
The company’s LTM revenue reached $635 million, with organic growth exceeding 10% in the past two to three years, outpacing its historical 4% to 5% range. Knowles projects 2025 revenue at approximately $600 million, reflecting an 8% compound annual growth rate from 2017 through 2025 when including acquisitions. Precision Device revenue, which includes RF filters and capacitors, is growing at more than 15%, compared with a targeted 6% to 8% range.
EBITDA margins are tracking toward the 24% range by year-end and are expected to exit above 25%, supported by gross margins of 45.26% in the LTM period. Hearing health gross margins exceed 50%, with EBITDA margins above 40%. The Cornell Dubilier acquisition, completed for $263 million, has seen gross margins improve from 27% at purchase to the mid-35% range, with management targeting 45% to 50% long-term. The company achieved $8 million in price increases in the first year, surpassing initial targets of $3 million to $4 million.
Knowles’ defense segment, generating about $85 million in annual revenue, remains 98% focused on military applications, including electronic warfare, radar, and missile systems such as Patriot missiles. The company operates five North American facilities primarily serving medical and defense customers, alongside three Asian plants for higher labor-content products. All manufacturing is conducted in-house, with capital expenditures running at 3% to 5% of revenue.
Niew emphasized disciplined capital allocation, stating that acquisitions must demonstrate clear synergies before proceeding. "If I cannot articulate one plus one equals three and demonstrate that I can deliver on that, I am not going to spend shareholders' money on something that is not going to pay back," he said. Knowles’ net leverage ratio stood at about 0.5 turns in the second quarter, with a current ratio of 3.2 and near-zero net debt projected for late 2025 or early 2026.
