Knowles Corporation Reports $2.0 Million Net Loss in Q1 2025

Knowles Corporation reported a net loss of $2.0 million, or $0.02 per share, for the first quarter of 2025, a significant decline from net earnings of $2.5 million, or $0.03 per share, in the same period last year. The company's revenues decreased slightly to $132.2 million from $133.3 million year-over-year, reflecting a 0.8% decline. The decrease in revenue was attributed to lower demand in the Precision Devices (PD) segment, particularly from the industrial and defense markets, although this was partially offset by increased demand in the MedTech & Specialty Audio (MSA) segment.

The company's gross profit remained relatively stable, increasing marginally to $53.3 million from $53.2 million, resulting in a gross profit margin of 40.3%, up from 39.9% in the prior year. However, operating earnings fell to $4.0 million from $5.0 million, primarily due to increased operating expenses, which rose to $49.3 million from $48.2 million. Notably, restructuring charges increased to $2.9 million in the first quarter of 2025, compared to $1.8 million in the same period last year, as the company undertook headcount reductions following the sale of its Consumer MEMS Microphones (CMM) segment.

In terms of strategic developments, Knowles completed the sale of its CMM segment to Syntiant Corp. on December 27, 2024, for approximately $141.9 million. This transaction included $63.6 million in cash and $77.2 million in preferred stock. The results of the CMM segment have been classified as discontinued operations, impacting the overall financial performance. The company is now focusing on its remaining segments, PD and MSA, which serve the defense, medtech, and industrial markets.

Operationally, Knowles reported a decrease in cash and cash equivalents, which fell to $101.9 million from $130.1 million at the end of 2024. The company also repurchased 300,768 shares of common stock for $5.0 million during the quarter, with $189.0 million remaining under its share repurchase program. Looking ahead, Knowles anticipates continued challenges in the market, including the impact of tariffs and global economic conditions, but remains focused on optimizing operations and managing costs to mitigate these risks. The company expects to maintain its strategic direction and continue investing in its core business segments.