Revenue Growth Outpaces Guidance, Driven by Cloud and AI Infrastructure
Celestica (NYSE, TSX: CLS) reported third quarter 2025 revenue of $3.19 billion, an increase of 28% compared to Q3 2024. This growth exceeded management’s high-end guidance, highlighting continued momentum in data center infrastructure and advanced technology solutions. CEO Rob Mionis pointed to particularly strong performance from Celestica’s Connectivity & Cloud Solutions (CCS) segment, with segment revenue surging 43% year-over-year, underscoring significant customer investment in AI-related data centers.
| Segment | Q3 2025 Revenue (B) | % Change YoY |
|---|---|---|
| Connectivity & Cloud Solutions (CCS) | $2.41 | +43% |
| Hardware Platform Solutions (within CCS) | $1.40 | +79% |
| Advanced Technology Solutions (ATS) | $0.78 | -4% |
Margins Reach Record Highs on Strong Execution
Celestica posted a GAAP operating margin of 10.2%, up sharply from 5.5% last year. Adjusted operating margin climbed to 7.6%, also setting a company record and beating guidance midpoints. Non-GAAP adjusted earnings per share (EPS) jumped to $1.58 (up from $1.04 in Q3 2024), comfortably surpassing guidance.
| Q3 2025 Metric | Actual | Guidance Range |
|---|---|---|
| Revenue (B) | $3.19 | $2.88 – $3.13 |
| Adjusted Operating Margin | 7.6% | 7.4% midpoint |
| Adjusted EPS | $1.58 | $1.37 – $1.53 |
2025 and 2026 Outlook Raised Significantly
Following these results, management raised full-year 2025 revenue guidance to $12.2 billion (up from $11.55B) and increased non-GAAP adjusted EPS expectations to $5.90 (up from $5.50). Celestica also introduced its 2026 annual outlook, projecting $16.0 billion in revenue (+31% year-over-year) and $8.20 in adjusted EPS (+39%). Adjusted operating margin is expected to further improve to 7.8% in 2026, reflecting both demand growth and operational leverage. These upgrades underscore confidence in Celestica’s pipeline, especially with continued robust demand from hyperscalers and AI data center customers.
| Outlook | 2025 Prior | 2025 Updated | 2026 Projected |
|---|---|---|---|
| Revenue (B) | $11.55 | $12.20 | $16.00 |
| Adjusted EPS | $5.50 | $5.90 | $8.20 |
| Free Cash Flow (M) | $400 | $425 | $500 |
| Adj. Operating Margin | 7.4% | 7.4% | 7.8% |
Capital Return Initiatives and Financial Strength Highlighted
Celestica plans to launch a new normal course issuer bid (NCIB), allowing it to repurchase up to 5% of its outstanding common shares, a move reflecting management’s confidence in long-term value creation. Balance sheet strength continues with $305.9 million in cash at quarter-end and $88.9 million in Q3 free cash flow, up 16% year-over-year. Adjusted return on invested capital (ROIC) stood at 37.5%, well above historical averages and reflecting both profitability gains and asset efficiency.
Key Takeaways for Investors: Strong Execution and Growing Market Opportunity
Celestica’s Q3 results mark a continuation of its strong growth trajectory, powered by customer investments in AI and data center infrastructure. The company’s willingness to raise annual and multi-year forecasts signals a high level of visibility and operational momentum. Investors should note management’s emphasis on the CCS segment, especially as AI-driven demand shapes the company’s long-term opportunity set.
With upgraded guidance and capital return plans, Celestica has set expectations high for both the remainder of 2025 and 2026. The upcoming Investor and Analyst Day, along with continued updates on demand trends in AI and data centers, will be key events to watch for further validation of this positive trajectory.
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