Celestica Raises Growth Outlook for 2026 After Record First Quarter Performance
First Quarter Results Exceed Expectations and Set New Milestones
Celestica’s first quarter of 2026 saw revenues hit $4.05 billion, a sharp 53% increase over Q1 2025, and both GAAP and adjusted earnings reached new highs. The company’s adjusted operating margin (non-GAAP) rose to 8.0%, up from 7.1% a year earlier, while adjusted EPS (non-GAAP) soared to $2.16, exceeding the high end of guidance. CEO Rob Mionis noted these results as “a new milestone for the company,” driven by accelerating growth in the Connectivity & Cloud Solutions (CCS) segment and margin improvement across the business.
| Q1 2026 Actual | Q1 2026 Guidance | Q1 2025 Actual |
|---|---|---|
| Revenue: $4.05B | $3.85B - $4.15B | $2.65B |
| Adj. Operating Margin: 8.0% | 7.8% (midpoint) | 7.1% |
| Adj. EPS: $2.16 | $1.95 - $2.15 | $1.20 |
| GAAP EPS: $1.83 | N/A | $0.74 |
| Free Cash Flow: $137.9M | N/A | $93.6M |
Profitability and Return on Capital Show Strong Momentum
The company’s Q1 2026 adjusted return on invested capital (ROIC, non-GAAP) surged to 49.8%, compared to 31.5% in Q1 2025. Free cash flow reached $137.9 million, supporting ongoing investment and share repurchases. Both the CCS segment (up 76% year-over-year) and the Advanced Technology Solutions (ATS) segment made positive contributions, with the CCS margin climbing to 8.6% and ATS to 6.0%.
2026 Annual Outlook Raised on Strengthening Demand and Program Wins
Building on its momentum, Celestica upgraded its full-year 2026 guidance, projecting:
- Revenue: $19.0B (previously $17.0B)
- Adjusted EPS: $10.15 (previously $8.75)
- Adjusted Operating Margin: 8.1% (previously 7.8%)
- Free Cash Flow: Unchanged at $500M
Credit Facility Upsized to Support Strategic Initiatives
To back its expansion, Celestica amended its senior secured credit facility, increasing total capacity to $2.5 billion. This bolstered liquidity aligns with the company's business scale, with the revolver commitment jumping from $750 million to $1.75 billion and the term A loan refinanced and extended to April 2031.
Segment Performance and Business Highlights
| Segment | Revenue (Q1 2026) | Y/Y Change | Margin (Q1 2026) | Margin (Q1 2025) |
|---|---|---|---|---|
| CCS | $3.24B | +76% | 8.6% | 8.0% |
| ATS | $0.81B | Flat | 6.0% | 5.0% |
- Hardware Platform Solutions (HPS) revenues rose 63% year-over-year to $1.7B.
- New CPO switch program awarded, ramping in 2027 for AI-optimized data center networks.
2026 Second Quarter and Beyond: Growth Trajectory Continues
For Q2 2026, management expects revenues of $4.15–$4.45 billion and adjusted EPS of $2.14–$2.34, signalling continued momentum. The annual revenue goal implies more than $6.5 billion in year-over-year growth for 2026, with visibility improving for further significant gains in 2027 as new contracts come online.
Key Takeaway: Metrics Confirm Strength, But Execution Will Be Watched
Celestica’s first quarter performance not only shattered prior records but also underpinned the company’s higher forward guidance. With record margins, robust free cash flow, and expanded credit capacity, Celestica appears well-positioned amid accelerating demand for AI and data center solutions. Investors and market watchers should monitor execution on recently won programs and large-scale production ramps expected in 2027, as these will determine whether Celestica can sustain—and even exceed—current momentum in a rapidly evolving tech landscape.
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