Core Viewpoint - Interface significantly outperformed Wall Street expectations in Q2 2025, reporting non-GAAP EPS of $0.60 and GAAP revenue of $375.5 million, indicating strong sales momentum and improved profitability [1][5]. Financial Performance - Non-GAAP EPS was $0.60, exceeding the estimate of $0.47, and up 50% from $0.40 in Q2 2024 [2]. - GAAP revenue reached $375.5 million, surpassing the estimate of $360.74 million and reflecting an 8.3% increase from $346.6 million in Q2 2024 [2]. - Gross profit margin improved to 39.4%, up 4.0 percentage points from 35.4% in the previous year [2][7]. - Operating income was $52.0 million, a 36.1% increase from $38.2 million in Q2 2024 [2]. - Net income rose to $32.6 million, up 44.3% from $22.6 million in the same quarter last year [2]. Business Model and Focus Areas - Interface specializes in modular carpet tiles and resilient flooring products, focusing on design innovation and sustainability [3]. - The company prioritizes sustainability leadership, market diversification, innovative product design, robust supply chain management, and expanding its resilient flooring portfolio [4]. Market Performance - The Americas segment led revenue growth with an 11.4% year-over-year increase, while operating income for this segment rose 82.2% [5]. - The EAAA segment saw a 3.4% revenue growth, but operating income fell 71.8%, indicating regional economic challenges [6]. Profitability Drivers - Gross margin expansion contributed significantly to profitability, driven by higher pricing, better product mix, and increased manufacturing volumes [7]. - SG&A expenses increased by 10.8%, attributed to higher commissions and compensation linked to sales performance [7]. Order and Backlog Trends - Consolidated currency-neutral orders increased by 2.9% year-over-year, with a 12% rise in backlog at the end of Q1 [8]. - Key market segments such as healthcare and education saw billings grow by 28% and 11% respectively, supporting market diversification efforts [11]. Balance Sheet Strength - Cash holdings rose to $121.7 million, a 22.6% increase since December 2024, while net debt decreased to $182.7 million, resulting in a net leverage ratio of 0.9 times [9]. Sustainability and Product Strategy - Sustainability is central to Interface's strategy, with a goal to become carbon-negative by 2040 [10]. - The company continues to invest in product innovation, launching new styles in its modular carpet and resilient flooring lines [12][13]. Future Guidance - Management raised full-year guidance for net sales to between $1.37 billion and $1.39 billion, and adjusted gross profit margin to 37.7% [14]. - For Q3, expected GAAP net sales are between $350 million and $360 million, with an adjusted gross margin of 38.0% [14].