Executive Summary
Steelcase reported Q2 2025 revenue of $855.8 million and GAAP net income of $63.1 million (GAAP EPS $0.51), with adjusted EPS of $0.39. The quarter showed a modest organic growth in the Americas (driven by education and large corporate/government segments) but softer demand internationally, resulting in a blended top-line that was essentially flat year-over-year (YoY) at about +0.1% and +17.7% QoQ escalation from Q1. Margin discipline and cost-reduction initiatives contributed to margin expansion, with gross margin at 34.5% and operating margin at 10.5%, aided by favorable mix and efficiency actions such as line moves and a distribution-center optimization. Trailing four-quarter adjusted EBITDA reached $285 million (9.1% of revenue), underscoring Steelcase’s capacity to generate cash while pursuing growth investments. The company deployed capital through a land sale (~$44 million gain, offset in non-GAAP numbers) and returned ~$45 million to shareholders in the first half via buybacks and dividends. Management reiterates a four-pillar strategy: lead the transformation of the workplace, diversify customer/market segments, improve profitability, and use the business as a force for good, with education, healthcare, and government as key growth vectors. They also flag ERP deployment risk at the start of the next fiscal year and potential near-term shipment timing shifts related to that transition, which could affect Q4 vs Q1 dynamics. Overall, the setup remains constructive for the back half of FY2025 contingent on order timing and ERP execution.
Key Performance Indicators
QoQ: 276.57% | YoY:119.51%
QoQ: 478.90% | YoY:129.45%
QoQ: 452.55% | YoY:121.74%
Key Insights
Revenue: $855.8M (+0.14% YoY; +17.7% QoQ). Gross Profit: $295.4M; Gross Margin: 34.5%. Operating Income: $90.0M; Operating Margin: 10.5%. Net Income: $63.1M; Net Margin: 7.37%. EPS: GAAP $0.51; Adjusted EPS $0.39 (YoY growth ~26%). EBITDA: $112.3M (EBITDA Margin ~13.12%). Free Cash Flow: $95.6M. Cash & Short-Term Investments: $335.8M. Total Debt: $610.8M; Net Debt: $314.2M. Trailing Four-Quarter Adjusted EBITDA: $285M (~9.1% of revenue). Backlog: Approximately flat; Americas orders +3% YoY; ...
Financial Highlights
Revenue: $855.8M (+0.14% YoY; +17.7% QoQ). Gross Profit: $295.4M; Gross Margin: 34.5%. Operating Income: $90.0M; Operating Margin: 10.5%. Net Income: $63.1M; Net Margin: 7.37%. EPS: GAAP $0.51; Adjusted EPS $0.39 (YoY growth ~26%). EBITDA: $112.3M (EBITDA Margin ~13.12%). Free Cash Flow: $95.6M. Cash & Short-Term Investments: $335.8M. Total Debt: $610.8M; Net Debt: $314.2M. Trailing Four-Quarter Adjusted EBITDA: $285M (~9.1% of revenue). Backlog: Approximately flat; Americas orders +3% YoY; International orders -11% YoY. Backdrop: project-driven growth supports the workplace transformation narrative; large corporate order timing remains the primary swing factor.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
855.80M |
0.14% |
17.67% |
| Gross Profit |
295.40M |
4.23% |
22.37% |
| Operating Income |
90.00M |
119.51% |
276.57% |
| Net Income |
63.10M |
129.45% |
478.90% |
| EPS |
0.51 |
121.74% |
452.55% |
Key Financial Ratios
operatingProfitMargin
10.5%
operatingCashFlowPerShare
$0.91
freeCashFlowPerShare
$0.8
dividendPayoutRatio
18.5%
Management Commentary
Key insights from management in the Q2 earnings call: 1) Strategy emphasis: "Our strategy has four pillars. First to lead the transformation of the workplace. Second to diversify the customer and market segments we serve. Third is to improve our profitability. And fourth to use our business as a force for good." 2) Diversification and education: "the education segment led this growth with a very strong quarter from our Smith System business, which grew 18% year-over-year" and a broader focus on healthcare, SMBs, and government. 3) Americas momentum and international softness: "Americas delivered $13 million of adjusted operating income improvement... 3% organic revenue growth" while international performance benefited from restructuring actions and cost controls but remained soft. 4) Project vs continuing orders: "we believe the growth in our project business is reflective of how we are leading the transformation of the workplace, as evidenced by our strong win rates and estimated market share gains over the last year in the Americas." 5) ERP transition risk: management highlighted potential back-end effects of a new ERP system going live at the start of the next fiscal year, which could pull shipments into Q4 or shift into Q1 of the next year. 6) Market signals: comments on West Coast tech waking up and India showing strong growth in APAC, plus dealer feedback suggesting improving near-term demand in the West.
"Our strategy has four pillars. First to lead the transformation of the workplace. Second to diversify the customer and market segments we serve. Third is to improve our profitability. And fourth to use our business as a force for good."
— Sara Armbruster
"We believe the growth in our project business is reflective of how we are leading the transformation of the workplace, as evidenced by our strong win rates and estimated market share gains over the last year in the Americas."
— Dave Sylvester
Forward Guidance
Q3 guidance anticipates revenue of $785M-$810M, representing 1%-5% organic growth year-over-year, with adjusted EPS of $0.21-$0.25 (vs. $0.29 prior year, which included ~$0.09 of one-time benefits). Gross margin expected at 32.5%-33.0%; operating expenses of $225M-$230M (including $4.3M amortization); interest and other non-operating items around $2M; effective tax rate near 27%. Management reiterated potential upside to the upper end of FY2025 adjusted EPS if orders from key corporate customers materialize as expected. Key risks cited include the timing of large orders and delivery dates in the Americas, and ERP implementation cutover effects that could shift shipments across quarters (Q4 into Q1 next year). Monitoring points for investors: pipeline strength in large corporate and government channels; geographic diversification progress (especially India, APAC, and Europe) and ERP-driven operational execution.