diff --git a/go.mod b/go.mod
index 3fedeb10..8c387672 100644
--- a/go.mod
+++ b/go.mod
@@ -11,7 +11,7 @@ require (
 	k8s.io/code-generator v0.34.2
 	k8s.io/kube-openapi v0.0.0-20250710124328-f3f2b991d03b
 	knative.dev/hack v0.0.0-20251117013754-67a5b048bc27
-	knative.dev/pkg v0.0.0-20251118173915-745990698d3c
+	knative.dev/pkg v0.0.0-20251119125415-ab67eb7f8660
 )
 
 require (
diff --git a/go.sum b/go.sum
index 84bca11a..bb1ff1ad 100644
--- a/go.sum
+++ b/go.sum
@@ -186,8 +186,8 @@ k8s.io/utils v0.0.0-20250604170112-4c0f3b243397 h1:hwvWFiBzdWw1FhfY1FooPn3kzWuJ8
 k8s.io/utils v0.0.0-20250604170112-4c0f3b243397/go.mod h1:OLgZIPagt7ERELqWJFomSt595RzquPNLL48iOWgYOg0=
 knative.dev/hack v0.0.0-20251117013754-67a5b048bc27 h1:yPzDTKOFtSYHxgXB2N7+nWT/3doNqPNCbCf7Bf9PeAE=
 knative.dev/hack v0.0.0-20251117013754-67a5b048bc27/go.mod h1:L5RzHgbvam0u8QFHfzCX6MKxu/a/gIGEdaRBqNiVbl0=
-knative.dev/pkg v0.0.0-20251118173915-745990698d3c h1:khjCe035kZgoJqE9HwQTEjS/WZCKRpNPlNkbh6Yr+Gc=
-knative.dev/pkg v0.0.0-20251118173915-745990698d3c/go.mod h1:iVOYfi7BiB0jQEEiW3NUfBHVOjc0QIbdOqdNs47YEoI=
+knative.dev/pkg v0.0.0-20251119125415-ab67eb7f8660 h1:4lJPD8CTsOZ6cXFYkm3LtZ8bruSY9OQpyIFS6S5NPGQ=
+knative.dev/pkg v0.0.0-20251119125415-ab67eb7f8660/go.mod h1:iVOYfi7BiB0jQEEiW3NUfBHVOjc0QIbdOqdNs47YEoI=
 sigs.k8s.io/json v0.0.0-20241014173422-cfa47c3a1cc8 h1:gBQPwqORJ8d8/YNZWEjoZs7npUVDpVXUUOFfW6CgAqE=
 sigs.k8s.io/json v0.0.0-20241014173422-cfa47c3a1cc8/go.mod h1:mdzfpAEoE6DHQEN0uh9ZbOCuHbLK5wOm7dK4ctXE9Tg=
 sigs.k8s.io/randfill v1.0.0 h1:JfjMILfT8A6RbawdsK2JXGBR5AQVfd+9TbzrlneTyrU=
diff --git a/pkg/client/injection/reconciler/caching/v1alpha1/image/reconciler.go b/pkg/client/injection/reconciler/caching/v1alpha1/image/reconciler.go
index 9834058a..a324215b 100644
--- a/pkg/client/injection/reconciler/caching/v1alpha1/image/reconciler.go
+++ b/pkg/client/injection/reconciler/caching/v1alpha1/image/reconciler.go
@@ -317,6 +317,8 @@ func (r *reconcilerImpl) Reconcile(ctx context.Context, key string) error {
 			// This is a wrapped error, don't emit an event.
 		} else if ok, _ := controller.IsRequeueKey(reconcileEvent); ok {
 			// This is a wrapped error, don't emit an event.
+		} else if errors.IsConflict(reconcileEvent) {
+			// Conflict errors are expected, don't emit an event.
 		} else {
 			logger.Errorw("Returned an error", zap.Error(reconcileEvent))
 			r.Recorder.Event(resource, v1.EventTypeWarning, "InternalError", reconcileEvent.Error())
@@ -428,8 +430,10 @@ func (r *reconcilerImpl) updateFinalizersFilteredServerSideApply(ctx context.Con
 
 	updated, err := patcher.Patch(ctx, resource.Name, types.ApplyPatchType, patch, patchOpts)
 	if err != nil {
-		r.Recorder.Eventf(resource, v1.EventTypeWarning, "FinalizerUpdateFailed",
-			"Failed to update finalizers for %q via server-side apply: %v", resource.Name, err)
+		if !errors.IsConflict(err) {
+			r.Recorder.Eventf(resource, v1.EventTypeWarning, "FinalizerUpdateFailed",
+				"Failed to update finalizers for %q via server-side apply: %v", resource.Name, err)
+		}
 	} else {
 		r.Recorder.Eventf(updated, v1.EventTypeNormal, "FinalizerUpdate",
 			"Updated finalizers for %q via server-side apply", resource.GetName())
@@ -481,8 +485,10 @@ func (r *reconcilerImpl) updateFinalizersFilteredMergePatch(ctx context.Context,
 	resourceName := resource.Name
 	updated, err := patcher.Patch(ctx, resourceName, types.MergePatchType, patch, metav1.PatchOptions{})
 	if err != nil {
-		r.Recorder.Eventf(existing, v1.EventTypeWarning, "FinalizerUpdateFailed",
-			"Failed to update finalizers for %q: %v", resourceName, err)
+		if !errors.IsConflict(err) {
+			r.Recorder.Eventf(existing, v1.EventTypeWarning, "FinalizerUpdateFailed",
+				"Failed to update finalizers for %q: %v", resourceName, err)
+		}
 	} else {
 		r.Recorder.Eventf(updated, v1.EventTypeNormal, "FinalizerUpdate",
 			"Updated %q finalizers", resource.GetName())
diff --git a/vendor/knative.dev/pkg/codegen/cmd/injection-gen/generators/reconciler/reconciler_reconciler.go b/vendor/knative.dev/pkg/codegen/cmd/injection-gen/generators/reconciler/reconciler_reconciler.go
index 40ee904f..b7c11b55 100644
--- a/vendor/knative.dev/pkg/codegen/cmd/injection-gen/generators/reconciler/reconciler_reconciler.go
+++ b/vendor/knative.dev/pkg/codegen/cmd/injection-gen/generators/reconciler/reconciler_reconciler.go
@@ -134,6 +134,10 @@ func (g *reconcilerReconcilerGenerator) GenerateType(c *generator.Context, t *ty
 			Package: "k8s.io/apimachinery/pkg/api/errors",
 			Name:    "IsNotFound",
 		}),
+		"apierrsIsConflict": c.Universe.Function(types.Name{
+			Package: "k8s.io/apimachinery/pkg/api/errors",
+			Name:    "IsConflict",
+		}),
 		"metav1GetOptions": c.Universe.Function(types.Name{
 			Package: "k8s.io/apimachinery/pkg/apis/meta/v1",
 			Name:    "GetOptions",
@@ -573,6 +577,8 @@ func (r *reconcilerImpl) Reconcile(ctx {{.contextContext|raw}}, key string) erro
 			// This is a wrapped error, don't emit an event.
 		} else if ok, _ := {{ .controllerIsRequeueKey|raw }}(reconcileEvent); ok {
 			// This is a wrapped error, don't emit an event.
+		} else if {{ .apierrsIsConflict|raw }}(reconcileEvent) {
+			// Conflict errors are expected, don't emit an event.
 		} else {
 			logger.Errorw("Returned an error", zap.Error(reconcileEvent))
 			r.Recorder.Event(resource, {{.corev1EventTypeWarning|raw}}, "InternalError", reconcileEvent.Error())
@@ -698,8 +704,10 @@ func (r *reconcilerImpl) updateFinalizersFilteredServerSideApply(ctx {{.contextC
 
 	updated, err := patcher.Patch(ctx, resource.Name, {{.typesApplyPatchType|raw}}, patch, patchOpts)
 	if err != nil {
-		r.Recorder.Eventf(resource, {{.corev1EventTypeWarning|raw}}, "FinalizerUpdateFailed",
-			"Failed to update finalizers for %q via server-side apply: %v", resource.Name, err)
+		if !{{ .apierrsIsConflict|raw }}(err) {
+			r.Recorder.Eventf(resource, {{.corev1EventTypeWarning|raw}}, "FinalizerUpdateFailed",
+				"Failed to update finalizers for %q via server-side apply: %v", resource.Name, err)
+		}
 	} else {
 		r.Recorder.Eventf(updated, {{.corev1EventTypeNormal|raw}}, "FinalizerUpdate",
 			"Updated finalizers for %q via server-side apply", resource.GetName())
@@ -754,8 +762,10 @@ func (r *reconcilerImpl) updateFinalizersFilteredMergePatch(ctx {{.contextContex
 	resourceName := resource.Name
 	updated, err := patcher.Patch(ctx, resourceName, {{.typesMergePatchType|raw}}, patch, {{.metav1PatchOptions|raw}}{})
 	if err != nil {
-		r.Recorder.Eventf(existing, {{.corev1EventTypeWarning|raw}}, "FinalizerUpdateFailed",
-			"Failed to update finalizers for %q: %v", resourceName, err)
+		if !{{ .apierrsIsConflict|raw }}(err) {
+			r.Recorder.Eventf(existing, {{.corev1EventTypeWarning|raw}}, "FinalizerUpdateFailed",
+				"Failed to update finalizers for %q: %v", resourceName, err)
+		}
 	} else {
 		r.Recorder.Eventf(updated, {{.corev1EventTypeNormal|raw}}, "FinalizerUpdate",
 			"Updated %q finalizers", resource.GetName())
diff --git a/vendor/knative.dev/pkg/controller/controller.go b/vendor/knative.dev/pkg/controller/controller.go
index 6091f55f..184462d0 100644
--- a/vendor/knative.dev/pkg/controller/controller.go
+++ b/vendor/knative.dev/pkg/controller/controller.go
@@ -28,6 +28,7 @@ import (
 
 	"go.uber.org/zap"
 	"go.uber.org/zap/zapcore"
+	apierrors "k8s.io/apimachinery/pkg/api/errors"
 	metav1 "k8s.io/apimachinery/pkg/apis/meta/v1"
 	"k8s.io/apimachinery/pkg/runtime/schema"
 	"k8s.io/apimachinery/pkg/types"
@@ -532,23 +533,31 @@ func (c *Impl) processNextWorkItem() bool {
 }
 
 func (c *Impl) handleErr(logger *zap.SugaredLogger, err error, key types.NamespacedName, startTime time.Time) {
-	if IsSkipKey(err) {
+	// Check if we should skip this key or if the queue is shutting down.
+	// We check shutdown here since controller Run might have exited by now
+	// (since while this item was being processed, queue.Len==0).
+	if IsSkipKey(err) || c.workQueue.ShuttingDown() {
 		c.workQueue.Forget(key)
 		return
 	}
+
 	if ok, delay := IsRequeueKey(err); ok {
 		c.workQueue.AddAfter(key, delay)
 		logger.Debugf("Requeuing key %s (by request) after %v (depth: %d)", safeKey(key), delay, c.workQueue.Len())
 		return
 	}
 
+	// Conflict errors are expected, requeue to retry
+	if apierrors.IsConflict(err) {
+		logger.Debugw("Reconcile conflict", zap.Duration("duration", time.Since(startTime)))
+		c.workQueue.AddRateLimited(key)
+		return
+	}
+
 	logger.Errorw("Reconcile error", zap.Duration("duration", time.Since(startTime)), zap.Error(err))
 
 	// Re-queue the key if it's a transient error.
-	// We want to check that the queue is shutting down here
-	// since controller Run might have exited by now (since while this item was
-	// being processed, queue.Len==0).
-	if !IsPermanentError(err) && !c.workQueue.ShuttingDown() {
+	if !IsPermanentError(err) {
 		c.workQueue.AddRateLimited(key)
 		logger.Debugf("Requeuing key %s due to non-permanent error (depth: %d)", safeKey(key), c.workQueue.Len())
 		return
diff --git a/vendor/modules.txt b/vendor/modules.txt
index d1023592..cbe66f16 100644
--- a/vendor/modules.txt
+++ b/vendor/modules.txt
@@ -733,7 +733,7 @@ k8s.io/utils/trace
 # knative.dev/hack v0.0.0-20251117013754-67a5b048bc27
 ## explicit; go 1.24
 knative.dev/hack
-# knative.dev/pkg v0.0.0-20251118173915-745990698d3c
+# knative.dev/pkg v0.0.0-20251119125415-ab67eb7f8660
 ## explicit; go 1.24.0
 knative.dev/pkg/apis
 knative.dev/pkg/apis/duck