Interface (NASDAQ:TILE) executives highlighted a “record year” in 2025, citing all-time highs in net sales, adjusted operating income and adjusted EBITDA as the company continued executing its “One Interface” strategy. On the company’s fourth-quarter and full-year 2025 earnings call, CEO Laurel Hurd said results were driven by broad-based regional and segment growth, price and volume gains across all three product categories, and operational improvements that lifted profitability.
One Interface strategy drives sales momentum
Hurd said the One Interface strategy, introduced in 2023, centers on strengthening global functions to support local selling teams, improving commercial productivity, expanding margins through global supply chain management and simplification, and leading in design, performance and sustainability.
Interface also emphasized growth in healthcare and education. Hurd said global healthcare billings increased 21% year-over-year in 2025, with double-digit gains in the Americas and EAAA. Education billings rose 8% for the year, which she attributed in part to expanded offerings at more approachable price points. Corporate office billings were “up slightly” for the year, while retail was described as choppy and softer in the fourth quarter.
Product innovation: noravant launch and accessible price points
Interface announced the launch of “noravant,” a PVC-free rubber sheet platform intended to compete in the premium end of the vinyl sheet category. Hurd said the initial product, “noravant timber,” is positioned as the industry’s first wood grain design in rubber flooring and is aimed at applications including patient rooms, classrooms, corridors and waiting areas.
Management said noravant is a multi-year growth platform, but noted the longer selling cycle in the nora business. Hurd said the company expects noravant timber to begin contributing to growth in the fourth quarter of 2026 and build over time. During the Q&A, management said it could contribute about $5 million to $10 million in 2026 and expand thereafter. In a later response, Hurd said the new category “could deliver somewhere $50 million-$100 million over the next five years,” while emphasizing that innovation takes time and additional designs are planned.
Beyond noravant, Hurd said Interface has been expanding its addressable market with collections at more approachable price points while maintaining premium design leadership. She cited the Open Air collection in carpet tile and a 3-mm LVT offering, describing these as largely incremental and supportive of market share gains. In response to an analyst question, Hurd said the company continues to build on its Open Air/Open Collective platform with new colors and styles and expects to launch a new collection mid-year 2026.
Manufacturing, automation and sustainability initiatives
On operations, Hurd said Interface continued to strengthen and globalize its manufacturing and supply chain team in 2025. She highlighted automation and robotics investments that improved efficiency and expanded margins, including automated material handling and other labor-intensive steps in U.S. carpet tile operations and automation in noraplan production. Interface said it is extending robotic solutions to facilities in Europe and Australia and further automating cutting and packaging processes.
Sustainability remained a central theme. Hurd said Interface offers low-carbon products, high recycled and bio-based material content, and tools such as a Carbon Calculator and carbon footprint data on floor plans. She noted that in 2025 the company unveiled a cradle-to-gate carbon negative rubber prototype and began incorporating captured carbon in U.S. and European carpet tile manufacturing processes, along with external recognition including Newsweek’s Most Responsible Companies list and inclusion for the 28th consecutive year in GlobeScan and ERM’s Sustainability Leaders Survey.
Fourth-quarter and full-year financial results
CFO Bruce Hausmann reported fourth-quarter net sales of $349.4 million, up 4.3% as reported and 1.6% on a currency-neutral basis. He said fourth-quarter currency-neutral net sales were flat in the Americas, against a strong prior-year comparison, and up 4.1% in EAAA.
Adjusted gross margin in the fourth quarter was 38.6%, up 169 basis points, driven by favorable pricing and product mix, partially offset by higher input costs. Hausmann said the quarter included a non-recurring inventory reserve adjustment that benefited adjusted gross margin by about 80 basis points and will not recur. Adjusted SG&A expenses were $96.6 million, up from $90.8 million, primarily due to foreign exchange translation, higher salary and fringe costs, and higher variable compensation tied to increased sales and profits.
Adjusted operating income rose 16.7% to $38.2 million, while adjusted EBITDA increased 8.2% to $49.8 million. Adjusted EPS was $0.49, up from $0.34, and included a non-recurring tax benefit tied to the release of a $2.9 million valuation allowance related primarily to foreign tax credits. Hausmann said this added $0.05 to fourth-quarter and full-year adjusted EPS and is not expected to recur.
For the full year, Interface reported net sales of $1.39 billion, up 5.4% as reported and up 4.3% on a currency-neutral basis. Currency-neutral net sales increased 5.5% in the Americas and 2.4% in EAAA. Full-year adjusted gross margin rose to 39%, up 187 basis points, reflecting pricing, improved mix and manufacturing efficiencies, partially offset by higher input costs. The full-year figure included a non-recurring inventory reserve adjustment worth about 50 basis points; excluding it, adjusted gross margin would have been approximately 38.5%.
Adjusted SG&A expenses were $366.7 million, up from $346.7 million, and flat year-over-year as a percentage of net sales. Full-year adjusted operating income climbed 22.9% to $173.8 million, adjusted EBITDA increased 15.3% to $217.9 million, and adjusted EPS rose 33% to $1.94.
Capital allocation and 2026 outlook
Hausmann outlined a “balanced capital allocation strategy” that prioritizes investment in innovation and productivity, conservative leverage management, evaluation of potential M&A opportunities aligned with strategy, and returning excess cash through dividends and share repurchases.
- Cash from operating activities was $167.9 million in 2025, up from $148.4 million in 2024.
- Capital expenditures were $46.2 million in 2025 and are expected to rise to about $55 million in 2026, including equipment for noravant and additional automation.
- Interface amended and extended its syndicated credit facility to 2030, added a $170 million term loan facility, and used that and cash on hand to redeem $300 million of senior notes due 2028. The company repaid about $124 million of debt during 2025.
- The company repurchased $13 million of stock in the fourth quarter and $18.2 million for the full year.
- The board approved an increase in the quarterly dividend to $0.03 per share from $0.02 per share.
On the outlook, management said Interface entered 2026 with solid orders and a healthy backlog, up 7% year-to-date, while noting macro uncertainty and a competitive industry environment. Hausmann also noted fiscal 2026 will include 53 weeks, which the company expects to add approximately $5 million to $10 million to full-year net sales.
Interface guided for first-quarter 2026 net sales of $315 million to $325 million, adjusted gross margin of about 38%, adjusted SG&A of about $94 million, adjusted interest and other expense of about $4 million, an adjusted effective tax rate of about 18%, and diluted share count of about 59.1 million. For full-year 2026, the company forecast net sales of $1.42 billion to $1.46 billion, adjusted gross margin of about 38.5% to 39%, adjusted SG&A of about 26.2% to 26.4% of net sales, adjusted interest and other expense of about $16 million, an adjusted tax rate of about 25% to 26%, and capital spending of about $55 million.
About Interface (NASDAQ:TILE)
Interface, Inc (NASDAQ: TILE) is a global manufacturer of modular flooring and resilient commercial flooring solutions. The company specializes in carpet tiles, luxury vinyl tile (LVT) and other environmentally responsible hard-surface products designed for use in corporate, education, healthcare, hospitality and retail environments. Interface’s portfolio also includes broadloom carpet, rubber flooring and acoustic underlays, all engineered to meet performance, design and sustainability requirements in modern interior spaces.
Founded in 1973 by Ray C.
