Celestica Inc. (CLS) Exceeds Q3 Earnings Guidance
Earnings Release Date: October 27, 2025
Key Points
- Revenue: $3.19 billion, up 28% YoY (Q3 2024 – $2.50 billion).
- GAAP EPS: $2.31 (vs $0.75 last year).
- Adjusted EPS (non-GAAP): $1.58 (vs $1.04 last year), up 52% YoY, above the high end of guidance ($1.37–$1.53).
- GAAP operating margin: 10.2%; Adjusted operating margin: 7.6% (vs 6.8% in Q3 2024).
- GAAP effective tax rate: 14%; Adjusted effective tax rate: 20%.
- Free cash flow: $88.9 million (vs $76.8 million a year ago).
Against Street Expectations:
- EPS $1.58 vs $1.51 est → beat by $0.07.
- Revenue $3.19 B vs $3.07 B est → beat by ~4%.
Quarter Highlights
- Strong top-line performance: Revenue up 28% YoY, driven by continued strength in Communications and AI data center infrastructure demand.
- CCS segment: Revenue $2.41 B (+43% YoY); margin 8.3% (vs 7.6%).
- ATS segment: Revenue $0.78 B (–4% YoY); margin 5.5% (vs 4.9%).
- Hardware Platform Solutions: Revenue ≈ $1.4 B (+79% YoY).
- Operating leverage: Gross margin 13.0% (+260 bps YoY); operating margin 10.2% (+470 bps YoY).
- GAAP net income: $267.8 M (vs $89.5 M).
- Cash provided by operations: $126.2 M; Free cash flow $88.9 M.
CEO Statement
“We achieved very strong results in the third quarter, with revenue of $3.19 billion and adjusted EPS of $1.58, representing growth of 28% and 52%, respectively, each exceeding the high end of our guidance ranges,” said Rob Mionis, President and CEO of Celestica.
“Driven by these strong results and a demand environment that continues to strengthen, we are raising our 2025 outlook and introducing 2026 guidance reflecting sustained AI data center growth.”
Guidance & Outlook
Q4 2025 Guidance:
- Revenue: $3.325 B – $3.575 B.
- Adjusted EPS: $1.65 – $1.81.
- Adjusted operating margin: 7.6% (at midpoint).
- Tax rate: ≈ 20%.
2025 Annual Outlook (raised):
- Revenue: $12.2 B (previous $11.55 B).
- Adjusted EPS: $5.90 (previous $5.50).
- Free cash flow: $425 M (previous $400 M).
- Operating margin: 7.4% (unchanged).
2026 Annual Outlook (new):
- Revenue: $16.0 B (+31%).
- Adjusted EPS: $8.20 (+39%).
- Adjusted operating margin: 7.8%.
- Free cash flow: $500 M.
Celestica’s guidance assumes no material changes to tariffs or trade restrictions and continued strength in AI-related infrastructure spending.
Financial Summary
| Metric | Q3 2025 | Q3 2024 |
|---|---|---|
| Revenue | $3.19 B | $2.50 B |
| Gross Margin | 13.0% | 10.4% |
| Operating Margin | 10.2% | 5.5% |
| Adjusted Operating Margin | 7.6% | 6.8% |
| Net Income (GAAP) | $267.8 M | $89.5 M |
| Adjusted Net Income | $183.1 M | $123.8 M |
| GAAP EPS | $2.31 | $0.75 |
| Adjusted EPS | $1.58 | $1.04 |
| Free Cash Flow | $88.9 M | $76.8 M |
| Effective Tax Rate | 14% | 28% |
Capital Return
- NCIB renewal: Intends to file a new Normal Course Issuer Bid in Q4 2025 to repurchase up to 5% of public float.
- Share count: 115 M outstanding (–1% YoY).
- No dividend declared.
About Celestica
Celestica Inc. (NYSE, TSX: CLS) is a global leader in design, engineering, manufacturing, and supply chain solutions for AI data centers and advanced technology infrastructure. The company operates through two segments: Advanced Technology Solutions (ATS) and Connectivity & Cloud Solutions (CCS), serving aerospace, industrial, healthtech, capital equipment, and communications markets worldwide. Headquartered in Toronto, Canada.
Key Takeaways
- Exceptional growth: Revenue +28% YoY and EPS +52% YoY — both above guidance.
- Margin expansion: Adjusted operating margin rose to 7.6% from 6.8%.
- CCS strength: Communications and AI data center demand drove 43% segment growth.
- ATS weakness: Aerospace and industrial orders soft, down 4%.
- Guidance raised: Full-year 2025 and new 2026 outlook both increased materially.
- Capital return: New share repurchase plan expected in Q4.
- Risks: Heavy exposure to AI and communications could amplify volatility if spending slows.
- Overall: Celestica delivered record results and raised its multi-year outlook, positioning itself as a key AI infrastructure beneficiary.