Steelcase (SCS) Q4 2025 earnings summary

Executive summary

• Fiscal 2025 adjusted EPS reached $1.12, exceeding guidance, with adjusted operating margin at 5% and 7% in the Americas; net income was $120.7M, and orders rose 4% overall, led by 6% growth in the Americas.

• Achieved 11 consecutive quarters of year-over-year gross margin expansion, improving over 500 basis points since fiscal 2022.

• Strong demand from large corporate and government customers, with positive signals in corporate real estate and office leasing activity.

• Strategic priorities include workplace transformation, expanding reach in education, healthcare, and SMBs, and strengthening profitability through operational efficiencies and cost reductions.

• Market share gains in the Americas, with robust win rates and growth across multiple industries and customer segments.

Financial highlights

• Fiscal 2025 revenue was $3.17B, with adjusted operating income of $158.4M and an adjusted operating income margin of 5.0%.

• Adjusted EBITDA for FY2025 was $262.3M (8.3% of revenue); net income was $121M.

• Free cash flow for FY2025 was $102M, with $149M in operating cash flow and $47M in capital expenditures.

• Q4 revenue was $788M, with adjusted EPS of $0.26 (including $0.11 from favorable tax items); Q4 gross margin improved 70 bps to 31.9%.

• Total liquidity at year-end was $558M, exceeding total debt of $447M.

Outlook and guidance

• Fiscal 2026 targets mid-single-digit organic revenue growth and modest adjusted operating margin improvement, assuming stable macro conditions.

• Q1 fiscal 2026 revenue expected between $760M-$785M (4–9% growth); adjusted EPS guidance is $0.13-$0.17, with gross margin projected at 33%.

• International segment targeting break-even adjusted operating income for fiscal 2026, with losses in H1 offset by H2 profitability.

• Capital expenditures and capitalized cloud computing costs projected at $70M-$80M for fiscal 2026.

• Mid-term (3–4 years) targets include 4–6% average annual organic revenue growth, 6–7% adjusted operating income margin, and free cash flow at ~5% of revenue.