楼氏 (KN) 2026年第三季度业绩电话会：营收增长20%，精密器件引领增长

楼氏电子（Knowles Corporation，纽约证券交易所代码：KN）公布2026财年第三季度营收为1.84亿美元，同比增长20%，超出其业绩指引区间的上限。精密器件业务领跑增长，同时强劲的订单和有限的产能塑造了管理层对2027财年的初步展望。

要点速览

• 第三季度营收同比增长20%至1.84亿美元。每股收益（EPS）增长15%至0.38美元，经营活动现金流达到4500万美元。
• 受医疗技术（MedTech）、国防、工业和电气化市场需求的推动，精密器件业务营收增长33%至1.17亿美元。
• 精密器件业务的订单出货比达到1.5，订单金额接近1.8亿美元。管理层表示，目前的订单排期已延伸至2027财年上半年。
• 楼氏电子预计第四季度营收为1.80亿美元至1.90亿美元，每股收益为0.39美元至0.43美元。按其中值计算，这两项指标均将同比增长14%。
• 精密器件大部分产品线的新增产能预计将于2027财年第一季度末开始投产，并于2027财年下半年全面释放。
• 在年度毛利率扩大和运营杠杆的推动下，管理层预计未来两到三年内调整后EBITDA利润率有望达到30%。

关键财务数据

除非公司另有说明，否则所有财务数据均按非GAAP持续经营业务基准列报（经营现金流除外）。

业务与运营表现

精密器件业务

精密器件业务是主要增长引擎。由于医疗技术、国防、工业和电气化四大终端市场的需求全面增加，该业务营收增长了33%。

在医疗技术领域，脉冲功率薄膜电容器在除颤器和放射治疗应用中的业务继续扩展。陶瓷电容器在下一代医疗成像和植入式设备中赢得了设计方案。

用于弹药和通信的射频（RF）滤波器、薄膜电容器及陶瓷电容器的国防需求保持强劲。在工业市场，陶瓷电容器和电容器组件扩大了在半导体设备等离子发生器中的应用。

订单金额接近1.8亿美元，订单出货比达到1.5。这包括此前披露的一笔针对某一国防客户的1500万美元射频滤波器订单，计划在36个月内完成交付。

楼氏电子正在增加大部分精密器件产品线的产能。管理层预计首批新增产能将于2027财年第一季度末投产，并于2027财年下半年全面释放。在此之前，该板块的产能利用率将接近满负荷。

医疗技术与特种声学业务

医疗技术与特种声学业务营收增长4%至6700万美元。管理层将本季度的部分需求归因于助听健康客户比往常稍早推出了具备AI功能的产品。

展望2027财年，管理层预计助听健康业务将保持历史增长率。然而，低利润率冲压业务收入的终止预计将对该板块营收造成2%至3%的逆风，且主要集中在上半年。尽管面临这一压力，管理层仍预计该板块全年增长率约为2%至4%，并指出毛利率可能比2026财年提高约一个百分点。

微型解决方案业务在2025财年创造了约100万美元的营收，预计2026财年将接近300万美元。管理层预计2027财年有望突破500万美元，2028财年突破1000万美元。

资本配置与利润率扩张

第三季度，楼氏电子回购了2500万美元的股票，并将银行借款减少了1500万美元，同时继续为有机增长提供资金支持。

管理层表示，自动化和运营改善正在扩大原Cornell特种薄膜业务的利润率。收购时其毛利率约为27%至28%，预计到2026财年末将达到35%左右的水平，并有希望进一步提升至40%以上。

公司还在寻求管理层认为可以补充有机增长的潜在收购机会，但尚未公布具体的交易。

管理层业绩指引

按其中值计算，第四季度营收和每股收益预计均将同比增长14%。管理层表示，每股收益展望反映了调整后EBITDA预计增长20%，但这被2025财年第四季度录得的0.03美元离散税收收益不再重现所部分抵消。

就2026财年全年而言，楼氏电子预计按指引区间中值计算营收增长16%，调整后EBITDA较2025财年增长24%。全年资本支出预计约占营收的5%。

2027财年，随着楼氏电子扩大精密器件产能，资本支出占营收的比例预计将增至5%至7%。管理层预计有机增长仍将高于其在2025年5月投资者日上提出的营收目标。

在定价、产能利用率和工厂生产力的支持下，管理层还预计年度毛利率将改善约100个基点。额外的50至100个基点的运营杠杆有助于在两到三年内将调整后EBITDA利润率从2026财年末的25%以上提升至30%左右。

风险与关注要点

• 精密器件业务产能接近满负荷，在2027财年期间新产能到位之前，这可能会限制环比增长。
• 尽管同比强劲增长，管理层预计2027财年初期精密器件业务营收环比将大致持平。
• 冲压业务收入的终止将拖累医疗技术与特种声学的销售额，尤其是在2027财年上半年，不过由于该业务按成本加成模式运营，管理层预计对EBIT的影响有限。
• 助听健康产品的提前发布将部分需求转移到了2026财年第三季度，改变了以往的季节性特征。
• 管理层指出，半导体设备是一个当前需求持续性尚存在不确定性的工业终端市场。
• 后续可能获得能源订单，但管理层警告称，在当前订单完成后可能会出现空窗期。

分析师问答环节要点

管理层表示，公司总营收在2027财年第一季度可能会出现环比微幅下降，分析师给出的约1%至2%的降幅预测被认为是合理的假设。公司仍预计实现强劲的同比增长，其中精密器件业务受产能制约，医疗技术与特种声学业务受到冲压业务收入退出的影响。

能源订单已全面量产，在产量和利润率方面均符合预期。楼氏电子预计还将维持六到七个季度的交付。管理层确认正就后续业务机会进行讨论，这可能会在2028财年、2029财年及以后带来上行空间，但尚未提供确切的订单展望。

关于需求的持续性，管理层表示未看到医疗市场出现实质性安全库存积压的迹象。管理层还指出，分销合作伙伴并未持有类似于2022年水平的过剩库存。据管理层称，国防需求可能会在未来12到18个月内加速增长，而医疗和国防（包括助听健康）约占公司营收的60%。

除核心产品外，楼氏电子强调微型解决方案、脉冲功率电容器、衰减器和电感器有助于拓展其可服务的目标市场（SAM）。管理层预计将在2027财年期间提供更详细的预估目标。

业绩电话会议完整文字实录

完整财报电话会议逐字稿

管理层陈述

Operator

Hello, everyone. Thank you for joining us, and welcome to the Third Quarter Knowles Corporation Earnings Conference Call. [Operator Instructions] I will now hand the conference over to Sarah Cook, Vice President of Investor Relations. Sarah, please go ahead.

Sarah Cook

Thank you, and welcome to our third quarter 2026 earnings call. I'm Sarah Cook, Vice President of Investor Relations, and presenting with me today are Jeffrey Niew, our President and CEO; and John Anderson, our Senior Vice President and CFO. Our call today will include remarks about future expectations, plans and prospects for Knowles, which constitute forward-looking statements for purposes of the safe harbor provisions under applicable federal securities laws.

Forward-looking statements in this call will include comments about demand for company products, anticipated trends in company sales, expenses and profits and involve a number of risks and uncertainties that could cause results to differ materially from current expectations. The company urges investors to review the risks and uncertainties in the company's SEC filings, including, but not limited to, the annual report on Form 10-K for the fiscal year ended December 31, 2025, periodic reports filed from time to time with the SEC and the risks and uncertainties identified in today's earnings release.

All forward-looking statements are made as of the date of this call, and Knowles disclaims any duty to update such statements, except as required by law. In addition, pursuant to Reg G, any non-GAAP financial measures referenced during today's conference call can be found in our press release posted on our website at knowles.com and in our current report on Form 8-K filed today with the SEC. This will include a reconciliation to the most directly comparable GAAP measure.

All financial references on this call will be on a non-GAAP continuing operations basis with the exception of cash from operations or unless otherwise indicated. We've made selected financial information available on webcast slides, which can be found in the Investor Relations section of our website. With that, let me turn the call over to Jeff, who will provide details on our results. Jeff?

Jeffrey Niew

Thanks, Sarah, and thanks to all of you for joining us today. To start out, I would like to take a moment to thank the Knowles team for delivering an outstanding third quarter. We had strong performance across our business as demonstrated by our key financial metrics. Revenue was $184 million, up 20% year-over-year and above the high end of our guided range. EPS was $0.38 and cash generated from operations was $45 million, both at the high end of our guided range. These results reflect the strength of our execution and the positive momentum across our business. I believe our results continue to demonstrate that our focus on markets and products where we have significant competitive advantages is paying dividends and positions us well for future growth.

In Q3, MedTech & Specialty Audio revenue was $67 million, up 4% year-over-year. Hearing health OEM customers typically launch new products annually in Q4. This year, however, we believe our customers' new products, which are implementing AI features, drove demand slightly earlier than usual. While this change in seasonality accelerated sales to earlier in the year, we continue to expect the hearing health market to grow at historical rates in 2026.

Precision Devices delivered Q3 revenue of $117 million, up 33% year-over-year with strong demand across every major product line and end market we serve: MedTech, defense, industrial and electrification. Our close collaboration with customers continues to drive a robust pipeline of design wins as customers continue to choose our innovative and differentiated solutions. I believe our year-over-year growth demonstrates the strength of our strategy and the momentum across the business.

On a base of strong revenue growth, orders remained robust. 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. Q3 orders in the PD segment were nearly $180 million, well above Q2 orders, reinforcing my confidence in continued growth. As noted on the Q2 earnings call, there was a $15 million order early in Q3 for RF filters for a defense customer that will be delivered over the next 36 months.

I will now provide a little more color on the revenue and order strength across our PD end markets. In MedTech, our pulse power film capacitors continue to win in defibrillator and radiotherapy applications, while our ceramic capacitors are securing strong design wins in next-generation medical imaging and implantables. In defense, demand remains strong across all our product categories. Our RF filters, film and ceramic capacitors are in high demand in munitions and communications applications. We also serve a broad range of applications in industrial markets. As an example, our ceramic capacitors and capacitor assemblies are growing in use for plasma generators in semiconductor equipment.

With strong orders, a healthy backlog and continued design wins, we are in the process of adding capacity across most of our Precision Devices product lines to support the demand. I expect this additional capacity to begin to come online in late Q1 with it being fully available in the second half of 2027. Our ability to continue to expand and meet increasing demand for our products is supported by our strong cash generation from operations. We have the ability to invest in growth while returning capital to shareholders and reducing debt.

In the third quarter, we repurchased $25 million in shares and reduced outstanding bank borrowings by $15 million in addition to funding organic growth initiatives. Our strong balance sheet positions us well to support organic growth through disciplined capital investment and still pursue strategic accretive acquisitions.

Before turning the call over to John to cover our financial results and provide our Q4 guidance, I would like to share my initial perspectives on 2027. Our strategy of combining unique technologies to create custom engineered solutions and then quickly ramping them at scale with a world-class operational capability is driving revenue growth in our core products and markets, margin expansion and strong cash flow.

In 2027, as we add capacity, new design wins ramp and we fulfill our healthy backlog within our PD segment and our MSA segment continues to perform at historical growth levels, we expect organic growth to continue to exceed the revenue targets presented at our May 2025 Investor Day. I also believe we will be entering the next phase of revenue growth beyond our core, where we expect to have meaningful expansion of our SAM through the growth initiatives we outlined at our Investor Day.

By following the same playbook we used in our core of investing in innovative technologies, using these technologies to develop customized solutions to solve our customers' problems and then scaling into high-volume production, we expect 3 fundamental paths to supplementing our core growth. First, we are developing new products such as attenuators and inductors for our existing markets. This is a great opportunity to provide a wider array of solutions to the markets and customers we already serve.

Second, we are utilizing existing technologies and capabilities for new customers and markets as we are doing with our [ Micro Solutions ] group and with pulse power capacitors. The breadth of opportunities we are pursuing that leverage our core competencies continues to expand with limited expansion of OPEX to support this new business. Lastly, we are seeing the opportunity to meaningfully grow content with existing products and technology at current customers as we have discussed in hearing health and with integrated capacitor solutions.

All these initiatives are expected to meaningfully expand our SAM, will complement our strong core, and I look forward to providing a more detailed outlook and updates on these initiatives and others in 2027. Now let me turn the call over to John for our financial results and our Q4 guidance.

John Anderson

Thanks, Jeff. We reported third quarter revenues of $184 million, up 20% from the year-ago period and above the high end of our guidance range. EPS was $0.38 in the quarter, up $0.05 or 15% from the year-ago period and at the high end of our guidance range. Cash provided by operating activities was $45 million, also at the high end of our guidance range.

In the MedTech & Specialty Audio segment, Q3 revenue was $67 million, up 4% compared with the year-ago period. Gross margins were 51.9%. The Precision Devices segment delivered third quarter revenues of $117 million, up 33% from the year-ago period. Increased demand from both OEM customers and our distribution channel partners resulted in strong growth in the 4 major markets we serve: MedTech, defense, industrial and electrification. Segment gross margins were 41.6%, up 10 basis points from the third quarter of 2025 on higher volume, partially offset by unfavorable inventory adjustments.

On a total company basis, R&D expense in the quarter was $10 million, up $1 million compared to Q3 2025 on higher project spending in both MSA and PD segments. SG&A expenses were $30 million, up $4 million from prior year levels, driven primarily by higher sales commissions, higher incentive compensation expense and increased headcount as we pulled forward hiring primarily to support increased customer demand and new product initiatives. Interest expense for the quarter was $1.6 million, down $700,000 from the third quarter of 2025 due to lower average debt balances.

Now I'll turn to our balance sheet and cash flow. In the third quarter, we generated $45 million in cash from operating activities and capital spending was $7 million. During the third quarter, we repurchased 695,000 shares at a total cost of $25 million. We exited the quarter with cash of $47 million and $116 million of borrowings under our revolving credit facility. Lastly, our net leverage ratio based on trailing 12 months adjusted EBITDA was 0.4x, and we have liquidity of more than $330 million as measured by cash plus unused capacity under our revolving credit facility.

Moving to our Q4 guidance. For the fourth quarter of 2026, revenues are expected to be between $180 million and $190 million, up 14% year-over-year at the midpoint. R&D expenses are expected to be between $10 million and $12 million. Selling and administrative expenses are expected to be within the range of $29 million to $31 million. We're projecting adjusted EBIT margin for the quarter to be within the range of 23% to 25%. Interest expense in Q4 is estimated at $1.5 million, and we expect an effective tax rate of 15% to 19%.

We're projecting EPS to be within the range of $0.39 to $0.43 per share, up $0.05 or 14% year-over-year at the midpoint, driven by a 20% increase in adjusted EBITDA, partially offset by the absence of a $0.03 discrete tax benefit, which was included in Q4 2025. This assumes weighted average shares outstanding during the quarter of 87 million on a fully diluted basis.

We're projecting cash from operating activities to be within the range of $60 million to $70 million. Capital spending is expected to be $8 million. We expect full year capital spending to be approximately 5% of revenues. Looking ahead, we expect capital spending to be above our historic range of 3% to 5%, increasing to 5% to 7% of revenues in 2027 as we continue to make investments in capacity to support increased customer demand in the Precision Devices segment.

The strong growth and financial results we've achieved through the first 3 quarters of '26, combined with a robust backlog and increased order activity, give me confidence in our ability to deliver 2026 revenue growth of 16% at the midpoint of our guidance range and adjusted EBITDA growth of 24% over 2025 levels, with both metrics well above the high end of the target ranges that we provided at our May 2025 Investor Day.

I'll now turn the call back over to the operator for the Q&A portion of our call.

Operator?

Operator

[Operator Instructions] Your first question is from the line of Anthony Stoss with Craig-Hallum.

分析师问答

Anthony Stoss

Congrats again on just solid and continued execution. Jeff, I'd love to hear your thoughts. You gave a little bit of a preamble on 2027. Maybe you can expand on that a little bit in terms of order visibility kind of entering into the first half of 2027. Then I have a couple of follow-ups.

Jeffrey Niew

Yes. So let me just say at a top level, if you look sector by sector or market by market that we're in, what we're seeing is just extremely high design activity. And whether it be for faster, more precision, getting more output, new innovative features, all the applications we're involved in, people are asking for more customized stuff. It's a trend that we're just clearly seeing now. And our product portfolio is well positioned to take advantage of this. I mean it's very well positioned.

Now to take it to '27, let me break it down by the segments, right? First, MSA. MSA, we expect next year, the hearing health business is going to perform at historical levels again. We will have a little bit of a headwind, I'd say, primarily in the first half. I think we mentioned this before on stamping that we had this -- when we sold the consumer business, we have a supplier. We're at the last time buy at the end of this year. There'll be no revenue, and that's about a headwind of about 2% to 3% next year, especially more in the first half, I would say, than the back half. But the Micro Solutions business, as we talked about, should start accelerating in the back half. So overall, we'll still probably be in that 2% to 4% for the full year, although it might be down a little bit in the first half.

Now PD, let's say, the book-to-bill, again, in the second quarter was very strong. But the orders we're taking now, it was 1.5 in Q3. The orders we're taking in Q3 are already being scheduled into the first half of next year. But we are at a point where we are pretty close to capacity constraint. So while we're going to have very strong year-over-year growth in the first half with PD, I think sequentially, it's going to be relatively flat because of capacity constraints.

And so I think that's probably the one thing. And one thing I think on -- just to be clear on the MSA thing, yes, it may be a little bit of a headwind to stamping. But remember that stamping was on a cost-plus basis. It doesn't generate a lot of EBIT. So it won't affect the EBIT and the margin should be better.

John Anderson

Yes. I think gross margins, Tony, this year, we've talked about kind of for MSA in that low 50% range, and expect that maybe a little 1% or so higher in '27 over '26.

Jeffrey Niew

So bottom line is on this, we expect strong year-over-year growth in the first half. But sequentially, it's probably going to be -- especially in the first quarter, might be slightly down, like PD being flat sequentially because of capacity constraints with MSA being slightly down.

Anthony Stoss

Just to be clear, and maybe this is a better question for John. Last year, it seems like seasonal, your March quarter was typically down 5% sequentially. Are you saying it's only going to be down a little bit, like 1%, 2% sequentially?

Jeffrey Niew

I think that's a fair guess, somewhere in that -- it's slightly down sequentially based on the guide that we have...

John Anderson

Tony, were you talking about the MSA segment or total Knowles?

Anthony Stoss

Total Knowles.

Jeffrey Niew

Yes. It will be down slightly sequentially, but still, if you look at the year-over-year number, it's way up. And again, MSA being slightly down, right, because of the stamping business going away, PD being flat capacity constrained because we're pretty much running all out.

Anthony Stoss

Got it. No, it's a good problem to have. And then my last question, Jeff, I'd love to hear kind of an update on the energy order, the trajectory and what you're seeing from that customer.

Jeffrey Niew

Yes. I mean the business is fully ramped. We're outputting like as expected. And so now we've got about 6, 7 more quarters of delivery of this order. I think if I look at the numbers, it's performing in terms of the margins and the output as expected. I really put -- I really call out to the team. I mean this was like a Herculean effort to ramp with this speed and this amount of volume, but it's going very well.

Operator

Your next question is from the line of Christopher Rolland with Susquehanna.

Christopher Rolland

Mine is around looking at Knowles kind of through the cycle here. I think everybody is benefiting from the cycle, longer lead times, longer bookings, people worrying about short capacity and perhaps even safety stock building. How much do you think this is a part of your business? Or conversely, do you think what we're seeing here is really more representative of something through cycle? Maybe if you could put the larger picture in focus for us.

Jeffrey Niew

So let me just first say based on the markets. If I think about the markets that we participate in, and I think I said this, in medical, I do not see that there's safety stock or that this is going to grow through a cycle. We've got a lot of great new design wins. I think it's sustainable. We're not seeing in medical that there's a concern here.

Then I go to defense, I would argue that there's probably an opportunity for an acceleration from even where we are in terms of defense in the next 12 to 18 months as budgets around the world are increasing for both the U.S. as well as allies, the replacement of munitions, there's a lot of things going on here that says that this is going to continue to maybe even accelerate. And so that's about 60% of our business or so right there as a company.

Electrification is what it is, and is -- I would say, we still expect growth next year. We have some EV business. We expect that to be up again next year. We've got a lot of great design wins as well as the energy order. I don't see a lot of concerns there. So it really comes back down to industrial. And if you look at it, there are some pockets here where I would sit there and say, okay, maybe this isn't sustainable, like semiconductor equipment, how long will that last?

But we are not really overly reliant on one market. And I can tell you, when I look at our distribution partners, they do not have a lot of inventory. They're not holding excess inventory like we saw happen in '22. And I think this goes back to kind of the discussion of what's different between back then and '22. In '22, we had lead times of 15 weeks and some of the competitors, like say, ceramic capacitor guys had 60-week lead times. Our lead times are now long, not driven by AI. They're driven by our demand in our core markets. And so I think, generally speaking, we're going to be pretty good going forward through the cycle.

John Anderson

Chris, just to clarify, too, that Jeff mentioned roughly 60% of our business is Med and defense and Med includes the hearing health business.

Christopher Rolland

Yes. Yes. Okay. Perfect. And then as I look at some of the implied fourth quarter stuff around gross margin, it looks like that's up nicely. Maybe any puts and takes into next year as well, that would be appreciated.

John Anderson

Chris, you're right. I mean in terms of gross margin, if you kind of take the guidance, the components of the guidance that I gave, you can back into gross margin, and it's just above 46% at the midpoint of the guidance that I gave. I think there's room to continue to expand gross margins. Our target is 100 basis points a year. But kind of exiting this year, again, the guidance I provided is just a touch above 46%, but there is room to increase that next year.

Jeffrey Niew

Yes. I would just add one more thing, Chris, on that, as I'm kind of looking at the numbers here. I think we're going to exit above -- well above 25% on EBITDA margins this year. And I think John said this before, but I mean, we clearly see the path over the midterm now to get to 30% EBITDA margins.

John Anderson

Yes. If you take what I said, the gross margin alone, we think there's 100 basis points of improvement annually. And then we're going to get operating leverage of 50 to 100 basis points with the growth that we have. So yes, you can see a path there within 2 to 3 years going from where we are just a little north of 25% this year to 30%.

Operator

Your next question is from the line of Tristan Gerra with Baird.

Tyler Bomba

This is Tyler Bomba on for Tristan. Looking into 2027, could you give us a sense of which of the newer growth platforms that you outlined in the prepared remarks are closest to contributing meaningful revenue? Are you starting to get production orders that give you better visibility on the timing across those different platforms?

Jeffrey Niew

Yes. So here's what I'd say is I'll give you a little bit of color on this, but I think this is going to be a great topic for an Investor Day sometime next year, right, as we kind of move forward. But let me kind of talk about it a little bit.

First, I'd say if you look at our Micro Solutions group from MSA, we really have now a list as long as my arm of opportunities. We're really starting to actually have to kind of push back on customers. We talked about this. We had about $1 million worth of revenue in 2025. We'll have $2 million to $3 million, probably going to closer to $3 million this year. I see a clear path north of $5 million next year. And then if you look in '28, it should be north of $10 million and maybe even more. And so I'd say that one is really coming along well.

I would sit there and say the pulse power opportunity, it's a matter now of really of our execution. There are so many new applications, whether it be downhole applications, there's all different types of things in terms of even beyond the energy that we've discussed kind of a lot. So I think -- and that's ready to go. And I mean, it's a question of when the customers will start ordering in some of these new applications.

I'm really encouraged. I mean, like we have not talked about this at all. We introduced a line of attenuators, now this is primarily for defense, takes some time, but super encouraged by the initial reaction we're getting from attenuators. I'm super encouraged by inductors. So a lot of good stuff coming here.

I think I would just say this, what we're seeing is a meaningful expansion of our SAM with all these things we're doing beyond the core that will supplement that growth. And that's why we're feeling more and more compelled to kind of call that out. I think we'll raise some numbers around that probably sometime in the new year.

Tyler Bomba

Great. Well, looking forward to that. With -- for my follow-up, with the energy order now fully ramped, are you seeing discussions around follow-on orders or similar applications with different customers that could sustain growth beyond this initial $75 million order?

Jeffrey Niew

Let me give you the short answer. Yes. Let me give you a little more color, a little bit longer answer. I think we're still 6 to 7 quarters out from completing this order. I think there's a possibility that we get another order like that follows right on, but there may be a small gap. I think from my perspective, we have so many growth opportunities that are even beyond this energy order. I think not that I don't want to focus on this because this could be a big upside to our numbers in '28, '29 and beyond. But I mean, it's a great opportunity for us. And hopefully, we'll -- as we get further along in delivering this order, we'll be able to talk more about what the next -- what comes beyond.

Operator

Your next question is from the line of Bob Labick with CJS.

Bob Labick

Congratulations on really strong results. Also exciting news that you're adding capacity here due to all the demand and that you're kind of bumping up. And obviously, we've talked about the energy order on the call already. You've stood up a fully automated production facility recently kind of state-of-the-art for this energy order. What have you learned from that process? And how can you apply that to the incremental capacity you want to add and also just other Knowles facilities already in the footprint of manufacturing?

Jeffrey Niew

I mean that's a great question, Bob. 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. I think that's what we've learned. I think part of that, John has kind of alluded to that within the Cornell, former Cornell business, that we acquired, the specialty film business, we think there are great opportunities for margin expansion.

I don't know if it applies as much because we really are applying these kind of learnings to every one of our facilities as we go along. But for sure, in this area, we're going to be adding more automation in order to improve yields, lower our overhead and make the Cornell business more profitable.

I think we've alluded to this when we bought that business. It was in the 27%, 28% gross margin. It's exiting the year in the mid-30s now with a clear path above 40%. And so we're seeing all the things that we expected from that. I think what we're hoping is we can find another acquisition that is a 1 plus 1 equals 3 and be a real home run that is like another Cornell over the next year or two that really makes sense for us.

Bob Labick

And then obviously, you gave a nice initial look to 2027. And in general, in the economy and kind of the macro, there's obviously a lot of inflationary pressures right now. How is Knowles positioned based on the kind of current inflationary market? And how would this project into 2027 for you, if at all?

Jeffrey Niew

I think we're positioned very well. I think just to state, first off, we have an excellent operations team globally that focus on value creation every year. So they're looking for ways to reduce costs, reduce -- improve yields. We have that going on. That's an ongoing thing.

I think we've alluded to this. I think the pricing environment is positive and the direction we're heading with the customers with. Generally speaking, we are a critical piece of the bill of materials, but we're not an overly large portion of our bill of materials to our customers. And so moderate pricing every year increases are pretty much what we do.

I wouldn't say we do it with every customer across every single segment, but we are looking at this on a continual basis. And I think, generally speaking, we're in a very good position to be able to handle inflationary pressures. I don't know...

John Anderson

Yes. Bob, just to add to that. I mean, I talked about the potential to increase gross margins 100 basis points. The levers are really price, capacity utilization and productivity on the factory floor. Those are the 3 components. And there's a piece of both of those that will benefit us in 2027.

Operator

There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.