Free cash flow generation remains highly erratic, swinging from a 39.7% margin in 2023Q4 to a negative 2.0% in 2025Q1, complicating the sustainability of aggressive share repurchases.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 |
|---|
| Cash from Operations | 112M | 114M | 130.1M | 122.7M | 86.3M | 182.1M | 128.1M | 123.9M | 98.5M | 92.9M | 107.5M | 78.4M | 115.5M | 174.29M | 189.56M |
| Operating CF Margin % | - | 19.22% | 23.51% | 26.86% | 18.02% | 20.98% | 16.76% | 14.49% | 11.91% | 12.48% | 14.23% | 9.23% | 10.12% | 14.35% | 16.96% |
| Operating CF Growth % | -118.07% | -12.38% | 6.03% | 42.18% | -52.61% | 42.15% | 3.39% | 25.79% | 6.03% | -13.58% | 37.12% | -32.12% | -33.73% | -8.05% | - |
| Net Income | 46.2M | 44.2M | 23.4M | 65.6M | -430.1M | 150.2M | 2.9M | 49.7M | 65.6M | 6.5M | 19.8M | 16.5M | -87M | 105.81M | 79.1M |
| Depreciation & Amortization | 36.5M | 36.3M | 37.6M | 26.2M | 53.9M | 62.5M | 60.6M | 54.4M | 52.4M | 53.8M | 69M | 76.9M | 151.6M | 130.91M | 114.88M |
| Stock-Based Compensation | 16.7M | 28.4M | 0 | 0 | 28.6M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 9.4M | 8.9M | 9.5M | -40.3M | 1.6M | -61.2M | -2.6M | -700K | 8.7M | -30.1M | 4M | -25M | 1.2M | -30.04M | -16.7M |
| Other Non-Cash Items | -16.5M | 13.9M | 32.3M | 45.4M | 479.7M | 44.3M | 44.5M | 34.2M | 32.5M | 62.3M | -7M | 25.9M | 26.5M | 11.24M | -306K |
| Working Capital Changes | 4.9M | -17.7M | 27.3M | 25.8M | -47.4M | -13.7M | 22.7M | -13.7M | -60.7M | 400K | 21.7M | -15.9M | 23.2M | -43.63M | 12.59M |
| Change in Receivables | 4.2M | 1.1M | 4M | 12.7M | 11.1M | -12.3M | 29M | -17.8M | -300K | 2.4M | 35.9M | 45.2M | -24.3M | -6.79M | -20.93M |
| Change in Inventory | -14.6M | -5.1M | 1.6M | 11.5M | -22.8M | -20.7M | 16.7M | -300K | -15.7M | -34M | 21.9M | 11.7M | -18.2M | -14.14M | -15.48M |
| Change in Payables | 2.8M | -18M | 25M | 6.2M | -41.2M | 17.2M | -17.5M | 12.1M | -6.3M | 4.9M | -26.6M | -42.7M | 38M | -16.05M | 36.3M |
| Cash from Investing | -38.9M | -31.6M | 45.2M | -141.6M | -32.7M | -129.6M | -35.1M | -110.5M | -88M | 69.5M | 5.9M | -95.2M | -93.1M | -108.67M | -115.6M |
| Capital Expenditures | -38.9M | -32.1M | -13.6M | -17.2M | -32.1M | -48.6M | -31.9M | -41.2M | -80.1M | -51.6M | -38.7M | -64.6M | -99.9M | -105.28M | -145.65M |
| CapEx % of Revenue | 8.44% | 5.41% | 2.46% | 3.77% | 6.7% | 5.6% | 4.17% | 4.82% | 9.69% | 6.93% | 5.12% | 7.6% | 8.75% | 8.67% | 13.03% |
| Acquisitions | 0 | 0 | 58M | -124.4M | -600K | -77.9M | 300K | -69.3M | -7.9M | 121.1M | 42.6M | -34.6M | 300K | 5.16M | 3.95M |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 0 | 500K | 800K | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -8.55M | 26.09M |
| Cash from Financing | -134.5M | -158.9M | -132M | 58.2M | -73.2M | -131.4M | -23.9M | -8.5M | -48.6M | -117.9M | -109.9M | 26.1M | -71.4M | 29.33M | -90.04M |
| Debt Issued (Net) | -78.1M | -93.2M | -77.5M | 110.3M | -29.8M | 67.7M | -3.4M | -9M | -43.4M | -116.1M | -147.5M | 28.3M | 396.7M | -574.07M | -886.83M |
| Equity Issued (Net) | -53.9M | -58.3M | -47.9M | -45.9M | -36.5M | -18.9M | 139.78M | 9.8M | 500K | 3.3M | 39.1M | 0 | 100K | 0 | 0 |
| Dividends Paid | 0 | -6.2M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -67.5M | -65M | -53.7M | -47.5M | -44M | -44.5M | -16.2M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -2.5M | -1.2M | -6.6M | -6.2M | -6.9M | -180.2M | -160.28M | -9.3M | -5.7M | -5.1M | -1.5M | -2.2M | -468.2M | 603.4M | 796.79M |
| Net Change in Cash | -60.9M | -75.9M | 42.8M | 39.1M | -20.7M | -78.9M | 69.4M | 4.9M | -38.2M | 48.3M | 2.9M | 8.1M | -50.4M | 95.29M | -16M |
| Free Cash Flow | 73.1M | 81.9M | 116.5M | 105.5M | 54.2M | 133.5M | 96.2M | 82.7M | 18.4M | 41.3M | 68.8M | 15.3M | 31.6M | 69.01M | 43.91M |
| FCF Margin % | 15.86% | 13.81% | 21.05% | 23.1% | 11.32% | 15.38% | 12.59% | 9.67% | 2.23% | 5.55% | 9.1% | 1.8% | 2.77% | 5.68% | 3.93% |
| FCF Growth % | -26.83% | -29.7% | 10.43% | 94.65% | -59.4% | 38.77% | 16.32% | 349.46% | -55.45% | -39.97% | 349.67% | -51.58% | -54.21% | 57.17% | - |
| FCF per Share | - | 0.94 | 1.29 | 1.15 | 0.59 | 1.41 | 1.04 | 0.89 | 0.20 | 0.46 | 0.77 | 0.18 | 0.37 | 0.81 | 0.52 |
| FCF Conversion (FCF/Net Income) | 1.58x | 2.58x | -0.54x | 1.69x | -0.20x | 1.21x | 19.41x | 2.52x | 1.49x | 15.48x | -6.44x | -0.34x | -1.33x | 1.65x | 2.40x |
| Interest Paid | 4M | 0 | 12M | 5.4M | 3.6M | 7.4M | 8.1M | 7.5M | 9M | 11.3M | 12.2M | 11.2M | 6.7M | 46M | 59.7M |
| Taxes Paid | 4.6M | 0 | 14.9M | 10.6M | 6.2M | 16.1M | 16.8M | 12.1M | 18M | 13.1M | 4.2M | 19.3M | 20.9M | 20.7M | 15.2M |
Consumer electronics demand volatility
As reported in recent financial filings, Knowles exhibits a highly erratic relationship between net income and operating cash flow, with the OCF/NI ratio swinging from a negative 0.65 in 2025Q1 to an extreme 18.86 in 2024Q3, suggesting significant non-cash distortions and periodic accounting adjustments.
The wide variance between net income and cash generation indicates that reported earnings are frequently impacted by non-operating charges or significant working capital swings. Investors should monitor whether this divergence is a structural feature of the company's accounting or merely a reflection of the lumpy nature of its design-win-driven revenue model.
Based on quarterly cash flow statements, Knowles' free cash flow trajectory remains inconsistent, with margins fluctuating from a peak of 39.7% in 2023Q4 to a negative 2.0% in 2025Q1, highlighting the company's struggle to maintain cash conversion efficiency during periods of lower consumer electronics demand.
The volatility in FCF margins appears to correlate with the company's high fixed-cost base and the cyclical nature of its Audio segment. This suggests that the firm's ability to generate surplus cash is highly sensitive to volume throughput, making it difficult to rely on FCF as a predictable indicator of long-term value creation.
According to recent SEC filings, Knowles maintains a disciplined approach to capital expenditure, with CapEx/Revenue ratios generally hovering between 2.3% and 9.4%, suggesting that the company is not currently over-investing in its manufacturing footprint despite the ongoing strategic pivot toward higher-margin precision devices.
The relatively low capital intensity implies that the company's existing MEMS fabrication facilities are sufficient to support current demand levels without requiring massive reinvestment. However, analysts should watch for any sudden spikes in CapEx that might indicate a need to modernize production lines to remain competitive in the specialized medtech and defense markets.
As evidenced by the provided financial data, working capital changes have been a significant driver of cash flow variance, with a notable $32.1 million inflow in 2023Q4 followed by a $22.6 million outflow in 2025Q1, reflecting the challenges of managing inventory and receivables in a volatile demand environment.
These fluctuations suggest that Knowles' cash position is susceptible to the timing of OEM orders and the subsequent buildup of inventory. Investors should investigate whether these working capital movements are indicative of supply chain inefficiencies or simply the result of the company's efforts to manage its exposure to shifting consumer electronics cycles.
Based on reported figures, Knowles has consistently utilized cash for share repurchases, including a $30.0 million outflow in 2025Q2, even during quarters where operating cash flow was under pressure, which may indicate a management priority to support the stock price despite inconsistent internal cash generation.
The commitment to share buybacks, contrasted with the volatility in free cash flow, warrants further investigation into the company's long-term capital allocation strategy. It appears that management is prioritizing shareholder returns, which may limit the dry powder available for further strategic acquisitions or R&D investments in the Precision Devices segment.
Quick answers to the most common questions about buying KN stock.
Knowles Corporation (KN) generated $114.0M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Knowles Corporation (KN) generated $81.9M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Knowles Corporation (KN) spent $32.1M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Knowles Corporation (KN) returned $6.2M to shareholders via cash dividends and spent $65.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.