Interface (TILE) Q1 2025 earnings summary

Executive summary

• Net sales reached $297.4 million in Q1 2025, up 2.6% year-over-year and 4.1% currency-neutral, with strong growth in the Americas and double-digit gains in healthcare and education billings, partially offset by EAAA softness and currency headwinds.

• Adjusted EPS was $0.25, up from $0.24, while GAAP EPS was $0.22; adjusted net income was $14.6 million.

• The One Interface strategy and appointment of a new VP of Global Product Category Management are driving innovation, operational simplification, and margin expansion.

• Sustainability initiatives advanced, including investment in captured carbon for manufacturing and a 4% reduction in GHG emissions, supporting carbon-negative goals by 2040.

• Management highlighted a strong balance sheet, healthy liquidity, and continued focus on long-term value creation.

Financial highlights

• Q1 2025 net sales: $297.4 million, up 2.6% year-over-year; currency-neutral net sales: $302 million.

• Adjusted gross margin was 37.7%, down 82 bps year-over-year due to higher manufacturing and freight costs; GAAP gross margin was 37.3%.

• Adjusted operating income was $25.5 million (8.6% of net sales), flat year-over-year; adjusted EBITDA was $37.0 million (12.4% of net sales), down from $38.8 million.

• Net income was $13.0 million ($0.22 per diluted share), down from $14.2 million ($0.24 per share) in the prior year quarter.

• Cash from operations was $11.7 million; capital expenditures were $7.5 million; cash and cash equivalents stood at $97.8 million.

Outlook and guidance

• Q2 2025 net sales expected at $355–$365 million, with adjusted gross margin forecast at 37.2% and SG&A around $90 million.

• Full-year 2025 net sales guidance raised to $1.340–$1.365 billion, adjusted gross margin 37.2–37.4%, and SG&A ~26% of sales.

• Tariff impacts of $10–$15 million annualized are expected to be offset by pricing and productivity, already reflected in guidance.

• Liquidity is expected to be sufficient for the next 12 months and to meet long-term obligations.

• Capital expenditures for the full year projected at $45 million.