Share count
88Mpeak FY2021
← All companies ← KMX Manual KNF → ← KEYS Electronic Components & Instruments KODK →
KN, Knowles Corporation
Knowles Corporation is focused on leveraging its unique technologies to design custom engineered solutions and then deliver them at scale for customers in high growth markets that value our solutions.
We design parts that perform unique, critical functions for innovative technologies.
In our Precision Devices ("PD") segment, our high-performance capacitors and RF filtering solutions enable some of the most demanding applications in the defense, industrial, medtech, and electrification/energy markets.
The business
What it sells, where the money comes from, the kind of company it is.
Revenue · FY2025
$593M
+7.2% YoY · −5% 5-yr CAGR
Vital signs · TTM, with 5-yr average
Revenue $614M 5-yr avg $590M
Revenue $153M +15.8% vs yr-ago qtr
Operating margin 10.4% yr-ago 3.0%
Net income $10M yr-ago ($2M)
Net margin 6.3% yr-ago −1.5%
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- Situation
- Serial acquirer. Goodwill and acquired intangibles are 39% of assets, with meaningful acquisition spending in 4 of the record's 10 years; much of what this business is was bought, at prices the record carries.
- What moves the needle
- Gross margin has run about 39% and operating margin about 9.4% through the cycle, a solid spread between what it charges and what the product costs to make. The operating margin has swung widely — from 3.8% to 19% — on a steadier 39% gross margin, so what moves it sits below the gross line, in operating spend and one-off charges more than in the cost of the product itself. Inventory runs near 17% of sales, so how fast it turns back into cash — and the risk of writing it down when demand softens — sits alongside the margin. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Return on capital has rarely cleared the cost of capital (median 5%, above 15% in 0 of 10 years). This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.
Every line is arithmetic on the company's filings, shown in full in the sections below.
Where the money comes from
read the 10-K →58% of revenue comes from outside the United States.
Revenue by geography, FY2025
- United States42%$249M
- Asia38%$226M
- Europe16%$95M
- Other Americas2%$12M
- Other2%$11M
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record
Ten years of arithmetic, read across the cycle.
The record, 2016–2025
realized figures from each filing · older years to the left| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Income statement | |||||||||||
| $756M | $744M | $827M | $855M | $764M | $868M | $479M | $457M | $554M | $593M | $614M | RevenueRevenue |
| 39% | 39% | 39% | 39% | 36% | 41% | 47% | 45% | 43% | 44% | 45% | Gross marginGross mgn |
| 20% | 17% | 17% | 17% | 17% | 17% | 22% | 28% | 26% | 24% | 24% | SG&A / revenueSG&A/rev |
| 12% | 13% | 12% | 11% | 12% | 11% | 6% | 7% | 7% | 7% | 7% | R&D / revenueR&D/rev |
| $45M | $40M | $78M | $81M | $29M | $116M | $91M | $43M | $52M | $70M | $82M | Operating incomeOp. inc. |
| 6.0% | 5.4% | 9.4% | 9.5% | 3.8% | 13.3% | 19.0% | 9.5% | 9.4% | 11.9% | 13.4% | Operating marginOp. mgn |
| ($42M) | $68M | $68M | $49M | $7M | $150M | ($430M) | $72M | ($238M) | $44M | $56M | Net incomeNet inc. |
| — | 16% | -7% | 25% | 56% | — | — | — | — | 23% | 17% | Effective tax rateTax rate |
| Cash flow & returns | |||||||||||
| $74M | $57M | $52M | $54M | $61M | $63M | $54M | $47M | $50M | $36M | $37M | DepreciationDeprec. |
| $39M | $52M | $80M | $41M | $32M | $49M | $32M | $17M | $14M | $32M | $39M | CapexCapex |
| 5.1% | 6.9% | 9.7% | 4.8% | 4.2% | 5.6% | 6.7% | 3.7% | 2.5% | 5.4% | 6.3% | Capex / revenueCapex/rev |
| $0 | $3M | $18M | $69M | $0 | $79M | $700K | $137M | $0 | $0 | $0 | AcquisitionsAcquis. |
| — | — | $0 | $0 | $16M | $45M | $44M | $48M | $54M | $65M | — | BuybacksBuybacks |
| 3% | 3% | 6% | 4% | 1% | 8% | 7% | 4% | 5% | 6% | 8% | ROICROIC |
| -4% | 6% | 6% | 4% | 1% | 10% | -43% | 7% | -31% | 6% | 7% | Return on equityROE |
| −4% | 6% | 6% | 4% | 1% | 10% | −43% | 7% | −31% | 6% | 7% | Retained to equityRetained/eq |
| Balance sheet | |||||||||||
| $63M | $112M | $74M | $78M | $148M | $69M | $48M | $87M | $130M | $54M | $41M | Cash & investmentsCash+inv |
| $126M | $138M | $140M | $160M | $131M | $147M | $135M | $91M | $105M | $103M | $109M | ReceivablesReceiv. |
| $91M | $126M | $140M | $142M | $130M | $153M | $170M | $127M | $118M | $125M | $136M | InventoryInvent. |
| $66M | $86M | $77M | $88M | $70M | $91M | $41M | $36M | $59M | $43M | $45M | Accounts payablePayables |
| $152M | $178M | $203M | $214M | $191M | $209M | $263M | $182M | $165M | $185M | $201M | Operating working capitalOper. WC |
| $291M | $395M | $365M | $388M | $420M | $380M | $362M | $429M | $361M | $291M | $297M | Current assetsCur. assets |
| $132M | $152M | $142M | $152M | $297M | $166M | $99M | $165M | $198M | $106M | $91M | Current liabilitiesCur. liab. |
| 2.2× | 2.6× | 2.6× | 2.6× | 1.4× | 2.3× | 3.7× | 2.6× | 1.8× | 2.8× | 3.3× | Current ratioCurr. ratio |
| $872M | $885M | $888M | $910M | $910M | $941M | $201M | $271M | $270M | $270M | $270M | GoodwillGoodwill |
| $1.5B | $1.5B | $1.5B | $1.7B | $1.7B | $1.7B | $1.2B | $1.5B | $1.1B | $1.1B | $1.1B | Total assetsAssets |
| $298M | $193M | $158M | $157M | $165M | $70M | $45M | $271M | $203M | $114M | $131M | Total debtDebt |
| $235M | $81M | $85M | $78M | $17M | $1M | ($3M) | $184M | $72M | $60M | $90M | Net debt / (cash)Net debt |
| $1.0B | $1.1B | $1.2B | $1.3B | $1.3B | $1.5B | $993M | $1.0B | $756M | $776M | $780M | Shareholders’ equityEquity |
| 2.8% | 3.4% | 3.3% | 2.9% | 2.3% | 3.7% | 6.0% | 6.3% | 4.1% | 4.8% | 4.7% | Stock comp / revenueSBC/rev |
| — | $16M | — | — | — | — | $471M | — | $263M | — | — | Goodwill written downGW imp. |
| Per share | |||||||||||
| 89.2M | 90.5M | 91.2M | 93.4M | 92.9M | 94.7M | 92.8M | 91.6M | 90.1M | 88.0M | 87.7M | Shares out (diluted)Shares |
| $8.47 | $8.22 | $9.07 | $9.15 | $8.23 | $9.17 | $5.16 | $4.99 | $6.14 | $6.74 | $7.00 | Revenue / shareRev/sh |
| $-0.47 | $0.75 | $0.74 | $0.53 | $0.07 | $1.59 | $-4.63 | $0.79 | $-2.64 | $0.50 | $0.64 | EPS (diluted)EPS |
| $0.43 | $0.57 | $0.88 | $0.44 | $0.34 | $0.51 | $0.35 | $0.18 | $0.15 | $0.36 | $0.44 | Cap. spending / shareCapex/sh |
| $11.31 | $12.51 | $13.29 | $13.80 | $14.03 | $15.41 | $10.70 | $11.29 | $8.39 | $8.82 | $8.90 | Book value / shareBVPS |
Per-share growththe realized rate an owner's share compounded
| 9-yr | 5-yr | |
|---|---|---|
| Revenue / share | −2.5%/yr | −3.9%/yr |
| EPS | — | +47.9%/yr |
| Capital spending / share | −1.9%/yr | +1.2%/yr |
| Book value / share | −2.7%/yr | −8.9%/yr |
The record, charted
FY2016–2025Each measure over its full record; the current point and the worst year marked.
ROIC
6%low FY2020
Gross margin
44%low FY2020
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
FY2025 10-K · source on SEC EDGAR →
Will it survive?
- Interest expense not tagged in the data
What this means
No usable interest-expense line was tagged in the filing data, but the balance sheet carries real net debt — so the interest burden here is unknown, not absent. Read the debt on the net-debt check below.
- How heavy is the debt, net of cash? $60M · 0.9× operating profitModest net debtCash $54M − debt $114M
What this means
Netting $54M of cash and short-term investments against $114M of debt leaves $60M owed, about 0.9× a year's operating profit (1.6× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Long (60+ days)DSO 63 + DIO 137 − DPO 47 days
What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.
Is it a good business?
- Below average through the cycle10-yr median, range 1%–8%; 6% latest = NOPAT $54M ÷ invested capital $836MIndustry peers: median -8%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 6% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Not enough dataIndustry peers: median 2%
What this means
The filing data didn't include the inputs for this check.
- Not enough data
What this means
The filing data didn't include the inputs for this check.
How is the cash used?
- Not enough data
What this means
The filing data didn't include the inputs for this check.
- Investing or harvesting? 0.88×MaintainingCapex $32M ÷ depreciation $36M
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 2 of 6 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size MissRevenue ≥ $2B · $593M
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity PassCurrent ratio ≥ 2× · 2.75×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt PassDebt ≤ working capital · $114M vs $186M WC
What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability MissA profit every year (10-yr record) · 3 loss years
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record MissUninterrupted dividends · none paid
What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth MissEarnings +33% over the record · −229%
What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-0.47/share (latest year $0.52), the averaged base the calculator's gate runs on, and book value is $9.07/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2016–2025
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 7 of 10
What this means
Lost money in 3 year(s), look at what happened there before trusting the average.
- Return on capital ≥ 15% 0 of 10 yrs
What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 7% → 10% (3-yr avg ends)
In the filing’s words The margin widened even though the filing names price competition — the gain came from volume or cost, not pricing power. Read where.
What this means
Through the cycle the operating margin widened — about 7% early to 10% lately, median 9% — pricing power intact or improving.
- Reinvestment, incremental ROIC returns capital
What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
- Worst year 2020 · 3.8% op. margin
What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Share count −0.1%/yr
What this means
Roughly flat share count, little dilution, little buyback.
- How management talks about it Owner’s terms
What this means
The record and the register agree: capital is compounding and the filing reasons in an owner’s terms — per-share value, return on capital, the long term — not a promoter’s.
Does AI threaten the moat?
Low contestabilityThe moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.
In its own filing A competitive risk, new this year
Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.
“In addition, our competitors may be more effective at using AI in their operations, products and services, which may put us at a competitive disadvantage.”
AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of the latest quarter, Mar 31, 2026Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
Current assets$297M
- Cash & short-term investments$41M
- Receivables$109M
- Inventory$136M
- Other current assets$11M
Current liabilities$91M
- Accounts payable$45M
- Other current liabilities$46M
Current ratio3.27×all current assets ÷ what's due · Graham looked for 2×
Quick ratio1.77×stricter: inventory excluded
Cash ratio0.45×strictest: cash alone against what's due
Working capital$207Mthe cushion left after near-term bills
Revenue, latest quarter vs. a year ago+15.8%the freshest read on whether the business is still growing
Current ratio, recent quarters2.4× → 3.3×
Deeper floors
Tangible book value$373Mequity stripped of goodwill & intangibles
Debt incl. operating leases$151M$20M of it operating leases
From the company's latest filing.
Debt maturity
the debt note, SEC EDGAR →Not how much it owes, but when it falls due, and against what. The ladder the company files, beside cash on hand and a year's owner earnings.
Bars scaled to the largest single year.
Due in the next 12 months$0the first rung: what must be repaid or rolled over within the year
Within two years$0the near wall, the part most exposed to today’s credit conditions
Biggest single year$114Min 2028the lumpiest maturity, where a refinancing, if needed, is largest
Due over the next five years$114Mthe near slice; the balance sheet carries $114M of debt in all
Maturity schedule extracted from the company’s Dec 31, 2025 annual report and reconciled to the balance-sheet debt.
Acquisitions & goodwill
from the balance sheet & the 10-year cash-flow recordGoodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.
Goodwill & intangibles$411M39% of all assets; the premium carried on the balance sheet for businesses acquired
Against book equity35%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital
Cash spent acquiring$306Mover 10 years buying other businesses, against $387M of capital spent building
$750M written down across 3 years (2017, 2022, 2024): goodwill the company has already conceded it overpaid for, charged against earnings. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.
Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.
Management, ownership & pay
read the proxy →From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.
| Fiscal year | Pay, as filed | “Actually paid” | Net income |
|---|---|---|---|
| 2021 | $9.0M | $12.7M | $150M |
| 2022 | $5.5M | −$146k | ($430M) |
| 2023 | $6.4M | $6.0M | $72M |
| 2024 | $6.9M | $8.5M | ($238M) |
| 2025 | $8.7M | $10.9M | $44M |
Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Net income is the whole business's, as filed, for the same fiscal years.
- Insider ownership2.2%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
- Stock-based compensation$28M
The slice of the business handed to employees in shares this year, 5% of revenue, equal to 40% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Inverting the record
Invert: instead of why Knowles Corporation is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.
2 of the 3 tests turned up something to look into; the other 1 came back clean.
- Look hereDid receivables and inventory outpace sales?29% → 40% of sales
Receivables and inventory grew from $217M to $245M while revenue grew −19%: working capital is climbing faster than sales (29% of revenue then, 40% now). That can mean customers paying slower, stock building up, or revenue pulled forward. The filing's cash-flow and receivables notes say which.
- Look hereAre "one-time" charges a yearly habit?7 of 10 years
Management took an impairment or write-down in 7 of the last 10 years, $1.3B in all. Taken across the majority of the record, the "one-time" label is wearing thin — ask whether these are past deals coming due rather than genuinely isolated events. Read it beside the goodwill the company still carries.
And these came back clean
- Is it less profitable than it was?
Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.
What an owner would ask, FY2025
read the 10-K →- Which reported numbers are a judgment call?Management names Revenue recognition, Income taxes, Inventory as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →
The questions the record and the charts do not answer on their own; each carries the figure and the place to look.
Peers, Electronic Components & Instruments
The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| SONOSonos Inc. | $1.4B | 44% | -1.4% | -15% | 5% |
| FORMFormFactor | $785M | 40% | 8.4% | 7% | 12% |
| PLUGPlug Power Inc. | $710M | -34% | -92.0% | -50% | -70% |
| KNKnowles Corporation | $593M | 40% | 9.5% | 5% | — |
| LYTSLSI Industries Inc. | $573M | 25% | 4.3% | 8% | 5% |
| AIOTPowerFleet Inc. | $444M | 50% | -7.1% | -8% | -2% |
| MVSTMicrovast Holdings Inc. | $428M | 10% | -34.8% | -30% | -9% |
| HLITHarmonic Inc. | $361M | 50% | 3.5% | 3% | 2% |
| Group median | — | 40% | 1.0% | -3% | — |
The price
What a price has to assume.
What the price implies
reverse-DCFKnowles Corporation is profitable, but its owner-earnings base could not be formed from this filing’s tagged data (operating cash flow or capital spending is missing), so the owner-earnings reverse-DCF has no base to grow. We read the price from both ends instead: type a price to see the profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.
$
The assumptions
Revenue, delivered−7%/yr’20→’25
Enter a price to run it.
Owner earnings it must reach—
Margin the price demands—
Owner-earnings margin today—
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.
Cite: Owner Scorecard, "Knowles Corporation (KN), the owner's record," https://ownerscorecard.com/c/KN, data as of 2026-07-09.
Manual order: ← KMX its page in the Manual KNF →
Industry order: ← KEYS the Electronic Components & Instruments chapter KODK →