Oct 22, 2026 earnings call — Strong Q3 growth and capacity expansion
Revenue was $184 million, up 20% year-over-year and above the high end of our guided range.
Revenue $0.2B (est $0.2B) · EPS $0.38 (est $0.36) · Next-quarter revenue outlook $0.2B–$0.2B
Key quotes
"Revenue was $184 million, up 20% year-over-year and above the high end of our guided range."
"Precision Devices had a book-to-bill of 1.5 in Q3 with broad-based order strength across our key end markets, both among OEMs and with our distribution partners."
"We're projecting adjusted EBIT margin for the quarter to be within the range of 23% to 25%."
Analyst Q&A 4
2027 order visibility and energy order
Q (Anthony Stoss · Craig-Hallum): He asked how orders look entering the first half of 2027 and for an update on the energy order and its trajectory.
A: Management said design activity is very high across markets. They expect strong year-over-year growth in the first half of 2027, but a slight sequential decline due to a 2% to 3% stamping headwind and PD capacity constraints. The energy order is fully ramped and will deliver for about 6 to 7 more quarters, performing as expected.
"So bottom line is on this, we expect strong year-over-year growth in the first half." — Jeffrey Niew (CEO)
Is demand cyclical or sustainable; margins
Q (Christopher Rolland · Susquehanna): He asked whether current demand is cyclical or more sustainable through a normal cycle, and for puts and takes on gross margin next year.
A: Management said medical and defense demand looks sustainable and together are roughly 60% of the business, while some industrial pockets may be less certain. They expect gross margin just above 46% at the guidance midpoint, target 100 basis points of gross margin improvement per year, and see a path to roughly 30% EBITDA margins over a few years while exiting well above 25% this year.
"If you take what I said, the gross margin alone, we think there's 100 basis points of improvement annually." — John Anderson (CFO)
Which new products will drive revenue next
Q (Tyler Bomba · Baird): He asked which new growth platforms are closest to meaningful revenue and whether there are follow-on orders beyond the energy order.
A: Management said Micro Solutions is scaling: about $1 million in 2025, roughly $2 million to $3 million this year, a clear path north of $5 million next year and north of $10 million in 2028. They said pulse power, attenuators and inductors are encouraging, and there could be another energy order after the current one, though they are still 6 to 7 quarters from completing the present order.
"I see a clear path north of $5 million next year." — Jeffrey Niew (CEO)
Automation learnings and inflation
Q (Bob Labick · CJS): He asked what was learned from the automated production for the energy order and how it will apply elsewhere, and how Knowles is positioned for inflation into 2027.
A: Management said the automation ramp showed meaningful margin expansion opportunity and they will add automation to improve yields and lower overhead across facilities, making the Cornell business more profitable. They noted Cornell moved from 27% to 28% when acquired to mid-30s now with a clear path above 40%, and that the company is positioned to handle inflation through pricing, capacity utilization and factory productivity.
"I think what we've learned from the whole ramp-up of this automation is that we have a lot of margin expansion opportunity within that factory." — Jeffrey Niew (CEO)